EXHIBIT 10(z)
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AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of March 10, 2000,
Among
SOTHEBY'S HOLDINGS, INC.,
SOTHEBY'S, INC.,
OATSHARE LIMITED,
SOTHEBY'S,
THE LENDERS NAMED HEREIN
and
THE CHASE MANHATTAN BANK
as Administrative Agent, Collateral Agent and Issuing Bank
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms.............................................................................1
SECTION 1.02. Terms Generally..........................................................................16
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments..............................................................................17
SECTION 2.02. Loans....................................................................................18
SECTION 2.03. Letters of Credit........................................................................19
SECTION 2.04. Standby Borrowing Procedure..............................................................23
SECTION 2.05. Refinancings.............................................................................23
SECTION 2.06. Fees.....................................................................................24
SECTION 2.07. Repayment of Loans.......................................................................25
SECTION 2.08. Interest on Loans........................................................................25
SECTION 2.09. Default Interest.........................................................................25
SECTION 2.10. Alternate Rate of Interest...............................................................26
SECTION 2.11. Termination and Reduction of Commitments.................................................26
SECTION 2.12. Prepayment...............................................................................26
SECTION 2.13. Reserve Requirements; Change in Circumstances............................................27
SECTION 2.14. Change in Legality.......................................................................28
SECTION 2.15. Indemnity................................................................................29
SECTION 2.16. Pro Rata Treatment.......................................................................30
SECTION 2.17. Sharing of Setoffs.......................................................................30
SECTION 2.18. Payments.................................................................................31
SECTION 2.19. Taxes....................................................................................31
SECTION 2.20. Assignment of Commitments Under Certain
Circumstances...............................................................33
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. Corporate Existence and Good Standing....................................................33
SECTION 3.02. Corporate Power, Authorization and Compliance
with the Law.................................................................34
SECTION 3.03. Financial Information; Absence of Material
Adverse Change...............................................................34
SECTION 3.04. Employee Benefit Plans...................................................................34
SECTION 3.05. Environmental Matters....................................................................35
SECTION 3.06. Litigation...............................................................................35
SECTION 3.07. Taxes....................................................................................35
SECTION 3.08. Subsidiaries.............................................................................35
SECTION 3.09. Investment Company Act...................................................................35
SECTION 3.10. No Material Misstatements................................................................35
SECTION 3.11. Federal Reserve Regulations..............................................................35
SECTION 3.12. Title to Properties......................................................................36
SECTION 3.13. Use of Proceeds..........................................................................36
SECTION 3.14. Security Documents.......................................................................36
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ARTICLE IV
CONDITIONS OF LENDING
SECTION 4.01. Each Borrowing Date......................................................................37
SECTION 4.02. Initial Borrowing Date...................................................................37
ARTICLE V
AFFIRMATIVE COVENANTS
SECTION 5.01. Financial Statements.....................................................................38
SECTION 5.02. Payment of Obligations...................................................................39
SECTION 5.03. Maintain Property and Insurance..........................................................39
SECTION 5.04. Maintain Existence.......................................................................39
SECTION 5.05. Compliance with Laws.....................................................................40
SECTION 5.06. Inspection...............................................................................40
SECTION 5.07. ERISA....................................................................................40
SECTION 5.08. Collateral and Borrowing Base Evaluations................................................40
SECTION 5.09. Further Assurances.......................................................................40
SECTION 5.10. Art Loans................................................................................41
SECTION 5.11. York Avenue Property.....................................................................41
ARTICLE VI
NEGATIVE COVENANTS
SECTION 6.01. Liens....................................................................................42
SECTION 6.02. Subsidiary Indebtedness..................................................................43
SECTION 6.03. Consolidations, Mergers, and Sales of Assets.............................................43
SECTION 6.04. Lines of Business........................................................................44
SECTION 6.05. Transactions with Affiliates.............................................................44
SECTION 6.06. Restrictions on Dividends................................................................44
SECTION 6.07. Consolidated Leverage Ratio..............................................................44
SECTION 6.08. Adjusted Consolidated Net Worth..........................................................44
SECTION 6.09. Consolidated Coverage Ratio..............................................................44
SECTION 6.10. Restricted Payments; Certain Payments in
Respect of Indebtedness......................................................44
SECTION 6.11. Art Loans................................................................................44
ARTICLE VII
EVENTS OF DEFAULT.......................................................................................45
ARTICLE VIII
THE AGENTS..............................................................................................48
ARTICLE IX
GUARANTEE
SECTION 9.01. Guarantee................................................................................50
SECTION 9.02. Obligations Unconditional................................................................50
SECTION 9.03. Reinstatement............................................................................51
SECTION 9.04. Subrogation..............................................................................51
SECTION 9.05. Remedies.................................................................................51
SECTION 9.06. Continuing Guarantee.....................................................................51
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ARTICLE X
MISCELLANEOUS
SECTION 10.01. Notices.................................................................................51
SECTION 10.02. Survival of Agreement...................................................................52
SECTION 10.03. Binding Effect..........................................................................52
SECTION 10.04. Successors and Assigns..................................................................52
SECTION 10.05. Expenses; Indemnity.....................................................................55
SECTION 10.06. Right of Setoff.........................................................................56
SECTION 10.07. Applicable Law..........................................................................56
SECTION 10.08. Waivers; Amendment......................................................................56
SECTION 10.09. Interest Rate Limitation................................................................56
SECTION 10.10. Entire Agreement........................................................................57
SECTION 10.11. Waiver of Jury Trial....................................................................57
SECTION 10.12. Severability............................................................................57
SECTION 10.13. Judgment Currency.......................................................................57
SECTION 10.14. Counterparts............................................................................58
SECTION 10.15. Headings................................................................................58
SECTION 10.16. Jurisdiction; Consent to Service of Process.............................................58
SECTION 10.17. Confidentiality.........................................................................59
SECTION 10.18. Release of Liens and Guarantees.........................................................59
Exhibit A-5 Form of Standby Borrowing Request
Exhibit B Administrative Questionnaire
Exhibit C Form of Assignment and Acceptance
Exhibit D-1 Form of Opinion of Weil, Gotshal & Xxxxxx LLP
Exhibit D-2 Form of Opinion of Freshfields
Exhibit E Form of Perfection Certificate
Exhibit F Form of Subsidiary Guarantee Agreement
Schedule 1.01A Other Obligations
Schedule 1.01B Specified Assets
Schedule 2.01 Commitments
Schedule 3.08 Subsidiaries
Schedule 6.01 Liens
AMENDED AND RESTATED CREDIT AGREEMENT (this
"Agreement") dated as of March 10, 2000, among
SOTHEBY'S HOLDINGS, INC., a Michigan corporation
("Holdings"), SOTHEBY'S, INC., a New York
corporation, OATSHARE LIMITED, a company registered
in England, and SOTHEBY'S, a company registered in
England (each referred to individually as a
"Borrower" and collectively as the "Borrowers"); the
lenders listed in Schedule 2.01 hereto or
subsequently becoming parties hereto as provided
herein (the "Lenders"); and THE CHASE MANHATTAN BANK,
a New York banking corporation, as administrative
agent (in such capacity, the "Administrative Agent")
and as collateral agent (in such capacity, the
"Collateral Agent") for the Lenders and as the
issuing bank (in such capacity, the "Issuing Bank").
WHEREAS the parties hereto have previously entered into a
Credit Agreement dated as of August 3, 1994 (the "Original Credit Agreement");
WHEREAS the Original Credit Agreement was amended and restated
by the Amendment and Restatement dated as of July 11, 1996 (the "Existing
Agreement");
WHEREAS the Borrowers have requested the Lenders and the Agent
to amend and restate the Existing Agreement in the form of this Amended and
Restated Credit Agreement and, upon the terms set forth herein, to extend credit
to enable the Borrowers to borrow on a revolving credit basis on and after the
date hereof and at any time and from time to time prior to the Maturity Date (as
herein defined) a principal amount not in excess of $300,000,000 or an
equivalent amount in Sterling at any time outstanding, subject to the Borrowing
Base referred to herein. The proceeds of such borrowings are to be used for
general corporate purposes including, without limitation, refinancing commercial
paper or other borrowings and providing funds for capital expenditures and
working capital. The Lenders are willing to enter into this Amended and Restated
Credit Agreement and to extend such credit to the Borrowers on the terms and
subject to the conditions herein set forth.
Accordingly, the parties hereto agree as follows:
ARTICLE I. DEFINITIONS
SECTION 1.01. DEFINED TERMS. As used in this Agreement,
the following terms shall have the meanings specified below:
"ABR BORROWING" shall mean a Borrowing comprised of ABR
Loans.
"ABR LOAN" shall mean any Standby Loan bearing interest at a
rate determined by reference to the Alternate Base Rate in accordance with the
provisions of Article II.
"ADJUSTED CONSOLIDATED NET WORTH" shall mean at any date
Consolidated Net Worth at such date minus, to the extent not reflected in
Consolidated Net Worth and without duplication, the aggregate amount of (a) all
payments made by Holdings and the Subsidiaries in respect of
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Litigation Liabilities, (b) all accounting reserves established by Holdings and
the Subsidiaries in respect of anticipated Litigation Liabilities, (c) all
amounts escrowed or otherwise segregated from the general assets of Holdings and
the Subsidiaries to provide for Litigation Liabilities and (d) all amounts that
Holdings and the Subsidiaries have become obligated to pay, but have not yet
paid, pursuant to fines, judgments, settlements or agreements entered into in
respect of Litigation Liabilities.
"ADMINISTRATIVE FEES" shall have the meaning assigned to
such term in Section 2.06(b).
"ADMINISTRATIVE QUESTIONNAIRE" shall mean an Administrative
Questionnaire in the form of Exhibit B hereto.
"AFFILIATE" shall mean, as to any person, another person
(other than a subsidiary of such first person) that directly, or indirectly
through one or more intermediaries, Controls or is Controlled by or is under
common Control with such first person.
"AGENTS" shall mean the Administrative Agent and the
Collateral Agent.
"ALTERNATE BASE RATE" shall mean, for any day, a rate per
annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to the
greater of (a) the Prime Rate in effect on such day and (b) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1%. For purposes hereof, "PRIME
RATE" shall mean the rate of interest per annum publicly announced from time to
time by the Administrative Agent as its prime rate in effect at its principal
office in New York City; each change in the Prime Rate shall be effective on the
date such change is publicly announced as effective. "FEDERAL FUNDS EFFECTIVE
RATE" shall mean, for any day, the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published on the next succeeding Business Day by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day which is a Business Day, the average of the quotations for the day of
such transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it. If for any reason the
Administrative Agent shall have determined (which determination shall be
conclusive absent manifest error) that it is unable to ascertain the Federal
Funds Effective Rate for any reason, including the inability of the
Administrative Agent to obtain sufficient quotations in accordance with the
terms thereof, the Alternate Base Rate shall be determined without regard to
clause (b) of the first sentence of this definition until the circumstances
giving rise to such inability no longer exist.
"ALTERNATIVE CURRENCY" shall mean Sterling.
"ALTERNATIVE CURRENCY BORROWING" shall mean a Borrowing
comprised of Alternative Currency Loans.
"ALTERNATIVE CURRENCY EQUIVALENT" shall mean, with respect to
an amount of Dollars on any date in relation to the Alternative Currency, the
amount of the Alternative Currency that may be purchased with such amount of
Dollars at the Spot Exchange Rate with respect to Dollars on such date.
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"ALTERNATIVE CURRENCY LOAN" shall mean any Loan denominated
in the Alternative Currency.
"APPLICABLE MARGIN" shall mean on any date, with respect to
ABR Loans and Eurocurrency Loans, the applicable spreads set forth below based
upon the ratings of S&P and Xxxxx'x applicable on such date to the senior,
unsecured, non-credit enhanced long-term debt for borrowed money of Holdings
(the "Index Debt"):
ABR EUROCURRENCY
SPREAD LOAN SPREAD
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CATEGORY 1
BBB/Baa2 0 1.00%
-
CATEGORY 2
BBB-/Baa3 .50% 1.50%
CATEGORY 3
BBB-/Baa3 1.00% 2.00%
PROVIDED, HOWEVER, that for the first six months following the date hereof, the
Applicable Margins with respect to ABR Loans and Eurocurrency Loans shall not be
less than those corresponding to Category 2 in the table above. For purposes of
determining the Applicable Margin, (a) if S&P or Xxxxx'x shall not have in
effect a rating for Index Debt because of an action (or failure to take action)
on the part of Holdings or any Subsidiary, then such rating agency will be
deemed to have established a rating for Index Debt in Category 3, (b) if the
ratings established or deemed to have been established by S&P and Xxxxx'x shall
fall within different Categories, the Applicable Margin shall be determined by
reference to the ratings in the inferior (or numerically higher) Category; and
(c) if any rating established or deemed to have been established by S&P or
Xxxxx'x shall be changed (other than as a result of a change in the rating
system of either S&P or Xxxxx'x), such change shall be effective as of the date
on which such change is first announced by the rating agency making such change.
Each change in the Applicable Margin shall apply to all Loans that are
outstanding at any time during the period commencing on the effective date of
such change and ending on the date immediately preceding the effective date of
the next such change. If (a) the rating system of S&P or Xxxxx'x shall change,
(b) any such rating agency shall cease to be in the business of rating corporate
debt obligations or (c) any such rating agency shall otherwise cease to have in
effect a rating for Index Debt (other than because of an action (or failure to
take action) on the part of Holdings or any Subsidiary) then the Borrowers and
the Lenders shall negotiate in good faith to amend the references to specific
ratings in this definition to reflect such changed rating system or the non-
availability of ratings from such rating agency, and pending any such amendment
the Applicable Margin shall be determined by reference to the ratings in effect
immediately prior to such change or cessation.
"APPLICABLE PERCENTAGE" shall mean, with respect to any Lender
at any time, the percentage of the Total Commitment represented by such Lender's
Commitment at such time. If the Commitments have terminated or expired, the
Applicable Percentages shall be determined based upon the Commitments most
recently in effect, giving effect to any assignments.
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"ART LOANS" shall mean loans made by the Lending Subsidiaries
to customers of Holdings and the Subsidiaries, to finance the purchase or
carrying of, or in anticipation of the potential sale of, or secured by, works
of art.
"ASSIGNED DOLLAR VALUE" shall mean, in respect of any
Borrowing, Letter of Credit or LC Disbursement denominated in the Alternative
Currency, the Dollar Equivalent thereof determined based upon the applicable
Spot Exchange Rate as of the Denomination Date for such Borrowing, Letter of
Credit or LC Disbursement.
"ASSIGNMENT AND ACCEPTANCE AGREEMENT" shall mean an assignment
and acceptance agreement entered into by a Lender and an assignee, and accepted
by the Administrative Agent and, where required, the Borrowers, in the form of
Exhibit C or such other form as shall be approved by the Administrative Agent.
"BOARD" shall mean the Board of Governors of the Federal
Reserve System of the United States.
"BORROWERS" shall mean Sotheby's Holdings, Inc., Sotheby's,
Inc., Oatshare Limited and Sotheby's.
"BORROWING" shall mean a group of Loans of a single Type
made by the Lenders.
"BORROWING BASE" shall mean, at any time, an amount equal to
the sum of (a) the aggregate outstanding principal amount of all Art Loans that
are (i) owned by Lending Subsidiaries that are Domestic Subsidiaries and (ii)
subject to perfected, first priority pledges or security interests in favor of
the Collateral Agent created under the Security Documents to secure the
Obligations, as contemplated by the definition of "Collateral and Guarantee
Requirement", (b) the lesser of (i) the aggregate outstanding principal amount
of Borrowings of Oatshare Limited and Sotheby's and (ii) the aggregate
outstanding principal amount of all Art Loans that are (A) owned by Sotheby's
Financial Services Ltd. and (B) subject to perfected, first priority pledges or
security interests in favor of the Collateral Agent created under the Security
Documents to secure the Obligations of Oatshare Limited and Sotheby's, as
contemplated by the definition of "Collateral and Guarantee Requirement", and
(c) an amount equal to 15% of Consolidated Net Tangible Assets, it being
understood that this clause (c) will be determined by reference to the most
recent Borrowing Base Certificate.
"BORROWING BASE CERTIFICATE" shall mean a certificate in a
form approved by the Administrative Agent, together with all attachments
contemplated thereby.
"BORROWING REQUEST" shall mean a request by a Borrower for a
Loan.
"BUSINESS DAY" shall mean any day (other than a day which is a
Saturday, Sunday or legal holiday in the State of New York) on which banks are
open for business in New York City; PROVIDED, HOWEVER, that, when used in
connection with a Eurocurrency Loan, the term "BUSINESS DAY" shall also exclude
any day on which banks are not open for dealings in deposits in Dollars or
Sterling, as the case may be, in the London interbank market.
"CAPITAL LEASE OBLIGATIONS" of any person shall mean the
obligations of such person to pay rent or other amounts under any lease of (or
other arrangement conveying the right to use) real or personal
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property, or a combination thereof, which obligations are required to be
classified and accounted for as capital leases on a balance sheet of such person
under GAAP and, for the purposes of this Agreement, the amount of such
obligations at any time shall be the capitalized amount thereof at such time
determined in accordance with GAAP.
A "CHANGE IN CONTROL" shall be deemed to have occurred if (a)
A. Xxxxxx Xxxxxxx shall sell, transfer or otherwise dispose of shares of capital
stock of Holdings and, following such sale, transfer or other disposition shall
not beneficially own, directly or indirectly, shares of capital stock of
Holdings representing more than 50% of the aggregate ordinary voting power
represented by all the issued and outstanding capital stock of Holdings, unless
the Lenders shall have been notified, at least 20 days prior to such sale,
transfer or other disposition, of the identity of the intended transferee and
the Required Lenders have delivered to Holdings a notice of their approval of
such transferee; or (b) a majority of the seats (other than vacant seats) on the
Board of Directors shall be occupied by persons other than Continuing Directors.
"CLOSING DATE" shall mean the date of this Agreement.
"CODE" shall mean the Internal Revenue Code of 1986, as the
same may be amended from time to time.
"COLLATERAL" shall mean any and all "Collateral", as defined
in any applicable Security Document.
"COLLATERAL AND GUARANTEE REQUIREMENT" shall mean, at any
time, that the following requirements shall be satisfied at and as of such time:
(i) a Subsidiary Guarantee Agreement (or a supplement
thereto) shall have been executed by each Domestic Subsidiary
existing at such time, other than any Borrower, shall have
been delivered to the Collateral Agent and shall be in full
force and effect;
(ii) one or more Pledge Agreements (or supplements
thereto) shall have been duly executed and delivered by
Holdings, each Domestic Subsidiary existing at such time and
Sotheby's Financial Services Ltd. and there shall have been
duly and validly pledged to the Collateral Agent thereunder,
for the ratable benefit of the holders of the Obligations (and
the holders of the Senior Notes, to the extent required under
the Senior Note Indenture after giving effect to baskets and
exceptions provided for therein in a manner satisfactory to
the Collateral Agent) (A) all the outstanding Equity Interests
(other than Equity Interests in any Foreign Subsidiary) owned
directly by Holdings or any Domestic Subsidiary, (B) 65% of
the outstanding voting Equity Interests, and 100% of the
outstanding non-voting Equity Interests (or, in each case,
such lesser percentages as shall be owned by Holdings and the
Domestic Subsidiaries) in each Foreign Subsidiary owned in
whole or in part directly by Holdings or any Domestic
Subsidiary, (C) all Art Loans and other Indebtedness owed to
Holdings or any Domestic Subsidiary and (D) solely as security
for the Obligations of Oatshare Limited and Sotheby's, all Art
Loans
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and other Indebtedness owed to Sotheby's Financial Services
Ltd.; and all steps required under applicable law or
reasonably requested by the Collateral Agent to ensure that
the Pledge Agreements create valid, first priority, perfected
Liens on all the Collateral subject thereto shall have been
taken to the satisfaction of the Collateral Agent, it being
understood that to the extent effective under applicable law,
perfection on the Art Loans will be accomplished by means of
filings under the Uniform Commercial Code or other applicable
statutes, PROVIDED that if the Collateral Agent shall deliver
to Holdings a notice stating that the Collateral Agent
believes (x) that the financial condition of Holdings and the
Subsidiaries has deteriorated and (y) that the interests of
the Lenders would be more effectively protected if the
Collateral Agent possessed the instruments evidencing the Art
Loans, Holdings will cause each Lending Subsidiary promptly to
deliver such instruments to the Collateral Agent, accompanied
by undated instruments of transfer satisfactory to the
Collateral Agent and executed in blank by the appropriate
Lending Subsidiary;
(iii) the Security Agreement (or supplements thereto)
(and, with respect to any trademark, a Trademark Security
Agreement) shall have been duly executed and delivered by
Holdings and each Domestic Subsidiary existing at such time
and there shall have been subjected to security interests in
favor of the Collateral Agent thereunder, for the ratable
benefit of the holders of the Obligations (and the holders of
the Senior Notes, to the extent required under the Senior Note
Indenture after giving effect to baskets and exceptions
provided for therein in a manner satisfactory to the
Collateral Agent), all the tangible and intangible assets of
Holdings and each Domestic Subsidiary (including all Art Loans
and other Indebtedness owed to Holdings or any Domestic
Subsidiary) in which security interests can be created under
the Uniform Commercial Code as in effect in the State of New
York or other applicable law, and all documents and
instruments, including UCC financing statements, required by
law or reasonably requested by the Collateral Agent to be
filed, registered or recorded to create and perfect the Liens
intended to be created by the Security Agreement and the
Trademark Security Agreement shall have been filed, registered
or recorded (or arrangements satisfactory to the Collateral
Agent for such filing, registration or recording shall have
been made);
(iv) the Collateral Agent shall have received (A)
counterparts of a Mortgage with respect to each Mortgaged
Property, duly executed and delivered by the record owner of
such Mortgaged Property, (B) at the reasonable request of the
Collateral Agent or the Required Lenders, in the case of each
Mortgaged Property with a book or fair market value in excess
of $1,000,000, a policy or policies of title insurance issued
by a nationally recognized title insurance company insuring
the Lien of each such Mortgage as a valid first Lien on the
Mortgaged Property described therein, free of any other Liens
except as expressly permitted by Section 6.01, together with
endorsements, coinsurance and reinsurance, and (C) such
surveys, abstracts, legal opinions and other documents as the
Collateral Agent or the Required Lenders may reasonably
request with respect to any such Mortgage or Mortgaged
Property;
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(v) the Indemnity, Subrogation and Contribution
Agreement (or a supplement thereto) shall have been executed
by Holdings and each Domestic Subsidiary party to the
Guarantee Agreement or any Security Document, shall have been
delivered to the Collateral Agent and shall be in full force
and effect; and
(vi) each Borrower shall have obtained all consents
and approvals required to be obtained by it in connection with
the execution and delivery of all Security Documents to which
it is a party, the performance of its obligations thereunder
and the creation by it of the Liens provided for therein.
The foregoing definition shall not require the creation or perfection of pledges
of or security interests in (a) the Specified Assets or (b) particular assets of
Holdings and the Subsidiaries if and for so long as, in the judgment of the
Administrative Agent with respect to this clause (b), the cost or effort to
create or perfect such pledges or security interests in such assets, or the
effort to do so, shall be excessive in view of the benefits to be obtained by
the Lenders therefrom. The Administrative Agent may grant extensions of time for
the perfection of security interests in or the obtaining of title insurance with
respect to particular assets (including extensions beyond the Initial Borrowing
Date for the perfection of security interests in assets of Holdings and the
Subsidiaries on such date) where it determines that perfection cannot be
accomplished without undue effort or expense by the time or times at which it
would otherwise be required by this Agreement or the Security Documents.
"COMMITMENT" shall mean, with respect to each Lender, the
commitment of such Lender hereunder as set forth in Schedule 2.01 hereto, as
such Lender's Commitment may be permanently terminated or reduced from time to
time pursuant to Section 2.11.
"COMMITMENT FEE PERCENTAGE" shall mean, on any date, the
applicable percentage set forth below based upon the ratings of S&P and Moody's
applicable on such date to the Index Debt:
COMMITMENT
FEE
PERCENTAGE
----------
CATEGORY 1
BBB/Baa2 .250%
CATEGORY 2
BBB-/Baa3 .375%
CATEGORY 3
BBB-/Baa3 .500%
PROVIDED, HOWEVER, that for the first six months following the date hereof, the
Commitment Fee Percentage shall not be less than the percentage corresponding to
Category 2 in the table above. For purposes of the foregoing, (a) if S&P or
Moody's shall not have in effect a rating for Index Debt because of an action
(or failure to take action) on the part of Holdings or any Subsidiary, then such
rating agency will be deemed to have established a rating for Index Debt in
Category 3;
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(b) if the ratings established or deemed to have been established by S&P and
Moody's shall fall within different Categories, the Commitment Fee Percentage
shall be determined by reference to the rating in the inferior (or numerically
higher) Category; and (c) if any rating established or deemed to have been
established by S&P or Moody's shall be changed (other than as a result of a
change in the rating system of S&P or Moody's), such change shall be effective
as of the date on which such change is first announced by the rating agency
making such change. Each change in the Commitment Fee Percentage shall apply
during the period commencing on the effective date of such change and ending on
the date immediately preceding the effective date of the next such change. If
(a) the rating system of S&P or Moody's shall change, (b) any such rating agency
shall cease to be in the business of rating corporate debt obligations or (c)
any such rating agency shall otherwise cease to have in effect a rating for
Index Debt (other than because of an action (or failure to take action) on the
part of Holdings or any Subsidiary) then the Borrowers and the Lenders shall
negotiate in good faith to amend the references to specific ratings in this
definition to reflect such changed rating system or the non-availability of
ratings from such rating agency, and pending any such amendment the Commitment
Fee Percentage shall be determined by reference to the ratings in effect
immediately prior to such change or cessation.
"CONSOLIDATED COVERAGE RATIO" shall mean with respect to
Holdings and its consolidated subsidiaries for any period, the ratio of (a)
Consolidated EBITDA for such period to (b) Consolidated Interest Expense for
such period.
"CONSOLIDATED EBITDA" with respect to Holdings and its
consolidated subsidiaries for any period shall mean the sum of (a) Consolidated
Net Income for such period, (b) Consolidated Interest Expense for such period,
(c) all Federal, state, local and foreign income taxes deducted in determining
such Consolidated Net Income and (d) depreciation, amortization and other
non-cash charges deducted in determining such Consolidated Net Income.
"CONSOLIDATED INTEREST EXPENSE" shall mean with respect to
Holdings and its consolidated subsidiaries for any period, the consolidated
gross interest expense of Holdings and its consolidated subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP consistently
applied.
"CONSOLIDATED LEVERAGE RATIO" shall mean, as to Holdings and
its consolidated subsidiaries, the ratio of (a) the consolidated Indebtedness of
Holdings and its consolidated subsidiaries to (b) the sum of the consolidated
Indebtedness of Holdings and its consolidated subsidiaries and Consolidated Net
Worth.
"CONSOLIDATED NET INCOME" shall mean, for Holdings and its
consolidated subsidiaries for any period, the aggregate net income (or net
deficit) of such persons determined on a consolidated basis for such period, in
accordance with GAAP on a basis consistent with that used in preparing the
Financial Statements referred to in Section 3.03; PROVIDED, HOWEVER, that in
computing "Consolidated Net Income", any extraordinary gains and losses and any
non-recurring losses relating to the Litigation Liabilities shall be excluded.
"CONSOLIDATED NET TANGIBLE ASSETS" shall mean the aggregate
amount of assets (less applicable reserves and other properly deductible
9
items) after deducting therefrom (a) all current liabilities, and (b) all
goodwill, trade names, trademarks, patents, unamortized debt discount and
expense and other like intangibles, all as set forth on the books and records of
Holdings and its consolidated subsidiaries and computed in accordance with GAAP.
"CONSOLIDATED NET WORTH" shall mean at any date shareholders'
equity, as shown on a consolidated balance sheet of Holdings and its
Subsidiaries prepared in accordance with GAAP at such date.
"CONSTRUCTION AND IMPROVEMENT AMOUNT" shall mean, at any time,
the aggregate amount then or theretofore expended by Sotheby's, Inc. on the
purchase price, cost of construction and cost of substantial improvements to the
York Avenue Property.
"CONTINUING DIRECTOR" shall mean any Director of Holdings that
shall have been a Director on the Closing Date or shall have been nominated or
appointed by a majority of the then Continuing Directors.
"CONTROL" shall mean the possession, directly or indirectly,
of the power to direct or cause the direction of the management or policies of a
person, whether through the ownership of voting securities, by contract or
otherwise, and the terms "CONTROLLING" and "CONTROLLED" shall have meanings
correlative thereto.
"DEFAULT" shall mean any event or condition which upon notice,
lapse of time or both would constitute an Event of Default.
"DENOMINATION DATE" shall mean (a) in relation to any
Alternative Currency Borrowing, the date that is three Business Days before the
date such Borrowing is made, (b) in relation to any Letter of Credit denominated
in the Alternate Currency, the most recent date that is (i) the date three
Business Days before the date of issuance or renewal of such Letter of Credit
(the "INITIAL VALUATION DATE") or (ii) a date corresponding to the Initial
Valuation Date in the third, sixth or ninth month following the month in which
the Initial Valuation Date shall have occurred and (c) in relation to any LC
Disbursement, the Denomination Date applicable to the Letter of Credit under
which such LC Disbursement shall have been made.
"DESIGNATED DATE" shall mean, at any time, the date of the
most recent borrowing hereunder (other than a Tranche B Borrowing) (a) prior to
which the aggregate principal amount of the Loans outstanding hereunder (other
than Tranche B Loans) and LC Exposures shall not have exceeded 15% of
Consolidated Net Tangible Assets as of such date and (b) after which the
aggregate principal amount of the Loans outstanding hereunder (other than
Tranche B Loans) and LC Exposures shall have exceeded 15% of Consolidated Net
Tangible Assets as of such date.
"DOLLAR EQUIVALENT" shall mean, with respect to an amount of
the Alternative Currency on any date, (A) for any Loan, the amount of Dollars
that may be purchased with such amount of such Alternative Currency at the Spot
Exchange Rate with respect to the Alternative Currency on such date and (B) for
any Letter of Credit, the Dollar equivalent of the face amount of such Letter of
Credit determined at the most recent of (i) the exchange rate at the date such
Letter of Credit was issued and (ii) the exchange rate at the three month
anniversary of such date.
"DOLLARS" or "$" shall mean lawful money of the United
States of America.
10
"DOMESTIC SUBSIDIARIES" shall mean all Subsidiaries
incorporated or organized under the laws of the United States of America, any
State thereof or the District of Columbia.
"EQUITY INTERESTS" shall mean any shares of capital stock,
partnership interests, membership interests in a limited liability company,
beneficial interests in a trust or other equity ownership interests in a person,
and any warrants, options or other rights to acquire any such equity ownership
interests.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as the same may be amended from time to time.
"ERISA AFFILIATE" shall mean any trade or business (whether or
not incorporated) that together with the Borrowers is treated as a single
employer under Section 414 of the Code.
"EUROCURRENCY BORROWING" shall mean a Borrowing comprised of
Eurocurrency Loans.
"EUROCURRENCY LOAN" shall mean any Eurocurrency Standby
Loan.
"EUROCURRENCY STANDBY BORROWING" shall mean a Standby
Borrowing comprised of Eurocurrency Standby Loans.
"EUROCURRENCY STANDBY LOAN" shall mean any Standby Loan
bearing interest at a rate determined by reference to the LIBO Rate in
accordance with the provisions of Article II.
"EVENT OF DEFAULT" shall have the meaning assigned to such
term in Article VII.
"FEES" shall mean the Administrative Fees and the Commitment
Fee.
"FINANCIAL OFFICER" of any corporation shall mean the Chief
Financial Officer, principal accounting officer, Treasurer or Controller of such
corporation.
"FOREIGN SUBSIDIARIES" shall mean all Subsidiaries other
than Domestic Subsidiaries.
"GAAP" shall mean United States generally accepted accounting
principles, applied on a basis consistent with the financial statements referred
to in Section 3.03.
"GOVERNMENTAL AUTHORITY" shall mean any Federal, state, local
or foreign court or governmental agency, authority, instrumentality or
regulatory body.
"GUARANTEE" of or by any person shall mean any obligation,
contingent or otherwise, of such person guaranteeing or having the economic
effect of guaranteeing any Indebtedness of any other person (the "primary
obligor") in any manner, whether directly or indirectly, and including any
obligation of such person, direct or indirect, (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or to
purchase (or to advance or supply funds for the purchase of) any security for
the payment of such Indebtedness, (b) to purchase property, securities or
services for the purpose of assuring the owner of such Indebtedness of the
payment of such Indebtedness or (c) to maintain working capital, equity capital
or other financial statement condition or liquidity of the primary obligor so as
11
to enable the primary obligor to pay such Indebtedness; PROVIDED, HOWEVER, that
the term Guarantee shall not include endorsements for collection or deposit, or
guarantees in the ordinary course of business including, without limitation,
guarantees by the Borrowers to consignors of minimum prices in connection with
sales of property.
"GUARANTOR" shall mean the Borrowers in their capacity as
guarantors under Section 9.01 except that Oatshare Limited and Sotheby's will
not be Guarantors in respect of any obligations of Holdings and Sotheby's, Inc.
"INDEBTEDNESS" of any person shall mean, without duplication,
(a) all obligations of such person for borrowed money or with respect to
deposits or advances of any kind, (b) all obligations of such person evidenced
by bonds, debentures, notes or similar instruments, (c) all obligations of such
person upon which interest charges are customarily paid, (d) all obligations of
such person under conditional sale or other title retention agreements relating
to property or assets purchased by such person, (e) all obligations of such
person issued or assumed as the deferred purchase price of property or services,
(f) all Indebtedness of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien on property owned or acquired by such person, whether or not the
obligations secured thereby have been assumed, (g) all Guarantees by such person
of Indebtedness of others, (h) all Capital Lease Obligations of such person, (i)
all obligations of such person in respect of interest rate protection
agreements, foreign currency exchange agreements or other interest or exchange
rate hedging arrangements and (j) all obligations of such person as an account
party in respect of letters of credit and bankers' acceptances; PROVIDED,
HOWEVER, that Indebtedness shall not include trade accounts payable in the
ordinary course of business (whether or not any such trade accounts have terms
providing a discount if paid within a certain time or an interest factor if not
paid within a certain time), and for purposes of determining compliance with the
financial covenants contained in Sections 6.02, 6.07 and 6.09, Indebtedness will
not include the items referred to in (i) and (j) above. The Indebtedness of any
person shall include the Indebtedness of any partnership in which such person is
a general partner to the extent that the Indebtedness of such partnership is
attributed to such person in accordance with GAAP.
"INDEMNITY, SUBROGATION AND CONTRIBUTION AGREEMENT" shall mean
an Indemnity, Subrogation and Contribution Agreement in form and substance
satisfactory to Holdings and the Collateral Agent.
"INDEX DEBT" shall have the meaning given such term in the
definition of "Applicable Margin".
"INITIAL BORROWING DATE" shall mean the date of the first
borrowing hereunder after the date of this Agreement.
"INTEREST PAYMENT DATE" shall mean, with respect to any Loan,
the last day of each Interest Period applicable thereto and, in the case of a
Eurocurrency Loan with an Interest Period of more than three months' duration,
each day that would have been an Interest Payment Date for such Loan had
successive Interest Periods of three months' duration or 90 days duration, as
the case may be, been applicable to such Loan and, in addition, the date of any
refinancing of such Loan with a Loan of a different Type.
12
"INTEREST PERIOD" shall mean (a) as to any Eurocurrency
Borrowing, the period commencing on the date of such Borrowing and ending on the
numerically corresponding day (or, if there is no numerically corresponding day,
on the last day) in the calendar month that is 1, 2, 3 or 6 months thereafter,
as the applicable Borrower may elect and (b) as to any ABR Borrowing, a period
commencing on the date of such Loan and ending on the earlier of the next
succeeding March 31, June 30, September 30 and December 31 or the date on which
such Loan is repaid or prepaid; PROVIDED, HOWEVER, that if any Interest Period
would end on a day other than a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless, in the case of Eurocurrency
Loans only, such next succeeding Business Day would fall in the next calendar
month, in which case such Interest Period shall end on the next preceding
Business Day. Interest shall accrue from and including the first day of an
Interest Period to but excluding the last day of such Interest Period.
"ISSUING BANK" means The Chase Manhattan Bank, in its capacity
as the issuer of Letters of Credit hereunder, and its successors in such
capacity as provided in Section 2.03(i). The Issuing Bank may, in its
discretion, arrange for one or more Letters of Credit to be issued by affiliates
of the Issuing Bank, in which case the term "Issuing Bank" shall include any
such affiliate with respect to Letters of Credit issued by such affiliate.
"LC DISBURSEMENT" means a payment made by the Issuing Bank
pursuant to a Letter of Credit.
"LC EXPOSURE" means, at any time, the sum of (a) the aggregate
undrawn amount of all outstanding Letters of Credit denominated in Dollars at
such time plus (b) the aggregate amount of all LC Disbursements denominated in
Dollars that have not yet been reimbursed by or on behalf of the applicable
Borrowers at such time plus (c) the sum of the Assigned Dollar Values of the
undrawn amounts of all outstanding Letters of Credit denominated in the
Alternative Currency at such time plus (d) the sum of the Assigned Dollar Values
of all LC Disbursements denominated in the Alternative Currency that have not
yet been reimbursed by or on behalf of the applicable Borrowers at such time.
The LC Exposure of any Revolving Lender at any time shall be its Applicable
Percentage of the total LC Exposure at such time.
"LENDING SUBSIDIARIES" shall mean Sotheby's Financial
Services, Inc., Sotheby's Financial Services California, Inc., Oberon Inc.,
Theta Inc., Sotheby's Ventures LLC, Sotheby's Financial Services Limited and
Sotheby's Aktiengesellschaft.
"LETTER OF CREDIT" means any letter of credit issued
pursuant to this Agreement.
"LIBO RATE" shall mean, with respect to any Eurocurrency
Borrowing for any Interest Period, an interest rate per annum (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to the rate at which deposits in the
currency in which such Borrowing is denominated approximately equal in principal
amount to the Loan of the Administrative Agent, in its capacity as a Lender (or,
if the Administrative Agent is not a Lender in respect of such Borrowing, then
the Loan of the Lender in respect of such Borrowing with the greatest Loan
amount), included in such Eurocurrency Borrowing, and for a maturity comparable
to such Interest Period are offered to the principal London office of the
Administrative Agent in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time, on the date that is two
Business Days prior to the commencement of such Interest Period.
13
"LIEN" shall mean with respect to any asset, (a) any mortgage,
deed of trust, lien, pledge, encumbrance, charge or security interest in or on
such asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement relating to such asset and
(c) in the case of securities, any purchase option, call or similar right of a
third party with respect to such securities.
"LITIGATION LIABILITIES" shall mean liabilities (whether
actual or asserted), claims, judgments, settlements and expenses resulting from
(a) the antitrust investigation by the United States Department of Justice
disclosed prior to the date hereof or related antitrust investigations by other
Governmental Authorities, (b) antitrust litigation, whether commenced by
Governmental Authorities or other persons, arising out of the matters that are
the subject of any such investigation, (c) related shareholder derivative
lawsuits and claims and (d) related securities lawsuits and claims.
"LOAN" shall mean any Standby Loan.
"LOAN DOCUMENTS" shall mean this Agreement, including all
Exhibits and Schedules, and the Security Documents.
"MARGIN STOCK" shall have the meaning given such term under
Regulation U.
"MATERIAL ADVERSE CHANGE" or "MATERIAL ADVERSE EFFECT" shall
mean a materially adverse change in, or a materially adverse effect on, the
business, assets, operations or financial condition of Holdings and its
Subsidiaries taken as a whole (other than any such change or effect resulting
from the Litigation Liabilities to the extent no Default shall have resulted
therefrom under Section 6.08 or any other provision of this Agreement).
"MATERIAL SUBSIDIARY" shall mean at any time (a) each
Subsidiary that is a Borrower and (b) any other Subsidiary that either (i) has a
Subsidiary Net Worth at such time in excess of 2.5% of Consolidated Net Worth at
such time or (ii) has consolidated assets in excess of 5% of the consolidated
assets of Holdings and its consolidated subsidiaries at such time.
"MATURITY DATE" shall mean July 11, 2001.
"MOODY'S" shall mean Xxxxx'x Investors Service, Inc.
"MORTGAGE" shall mean one or more mortgages or deeds of trust
in form and substance satisfactory to Holdings and the Collateral Agent.
"MORTGAGED PROPERTY" shall mean each parcel of real
property owned by Holdings or any Domestic Subsidiary on the date hereof or
at any time hereafter and the improvements thereto.
"MULTIEMPLOYER PLAN" shall mean a multiemployer plan as
defined in Section 4001(a)(3) of ERISA to which the Borrowers or any ERISA
Affiliate (other than one considered an ERISA Affiliate only pursuant to
subsection (m) or (o) of Code Section 414) is making or accruing an obligation
to make contributions, or has within any of the preceding five plan years made
or accrued an obligation to make contributions.
"OBLIGATIONS" shall mean (a) the due and punctual payment by
14
the Borrowers of the principal of and interest (including interest accruing
during the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding) on
the Loans, when and as due, whether at maturity, by acceleration, upon one or
more dates set for prepayment or otherwise, and (ii) all other monetary
obligations, including fees, costs, expenses and indemnities, whether primary,
secondary, direct, contingent, fixed or otherwise (including monetary
obligations incurred during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding), of Holdings and the Subsidiaries to the Lenders
under this Agreement and the other Loan Documents, (b) the due and punctual
payment and performance of all covenants, agreements, obligations and
liabilities of the Borrowers, monetary or otherwise, under or pursuant to this
Agreement and the other Loan Documents and (c) the due and punctual payment of
all monetary obligations of Holdings and the Subsidiaries referred to in
Schedule 1.01A hereto.
"OBLIGATION CURRENCY" shall have the meaning assigned to
such term in Section 10.13.
"OTHER TAXES" shall have the meaning assigned to such term in
Section 2.19(b).
"PBGC" shall mean the Pension Benefit Guaranty Corporation
referred to and defined in ERISA.
"PERFECTION CERTIFICATE" shall mean a perfection certificate
in form and substance satisfactory to Holdings and the Collateral Agent,
substantially in the form of Exhibit E hereto.
"PERSON" shall mean any natural person, corporation, business
trust, joint venture, association, company, partnership, government (or any
agency or political subdivision thereof) or other entity.
"PLAN" shall mean any employee pension benefit plan (other
than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or
Section 412 of the Code which is maintained for current or former employees, or
any beneficiary thereof, of the Borrowers or any ERISA Affiliate.
"PLEDGE AGREEMENTS" shall mean one or more pledge agreements
in form and substance satisfactory to Holdings and the Collateral Agent.
"REGISTER" shall have the meaning given such term in
Section 10.04(d).
"REGULATION D" shall mean Regulation D of the Board as from
time to time in effect and all official rulings and interpretations thereunder
or thereof.
"REGULATION U" shall mean Regulation U of the Board as from
time to time in effect and all official rulings and interpretations thereunder
or thereof.
"REGULATION X" shall mean Regulation X of the Board as from
time to time in effect and all official rulings and interpretations thereunder
or thereof.
"REPORTABLE EVENT" shall mean any reportable event as defined
in Section 4043(b) of ERISA or the regulations issued thereunder with respect to
a Plan (other than a Plan maintained by an
15
ERISA Affiliate that is considered an ERISA Affiliate only pursuant to
subsection (m) or (o) of Code Section 414).
"REQUIRED LENDERS" shall mean, at any time, Lenders having
Commitments representing at least 51% of the Total Commitment or, after the
Commitments shall have been terminated or for purposes of acceleration pursuant
to paragraph (a) of Article VII, Lenders holding Loans and participations in LC
Disbursements representing at least 51% of the aggregate principal amount of the
Loans and LC Disbursements outstanding. For purposes of determining the Required
Lenders, any Loans or LC Disbursements denominated in the Alternative Currency
shall be translated into Dollars at the Spot Exchange Rate in effect on the
applicable Denomination Date.
"RESPONSIBLE OFFICER" of any corporation shall mean any
executive officer or Financial Officer of such corporation and any other officer
or similar official thereof responsible for the administration of the
obligations of such corporation in respect of this Agreement.
"RESTRICTED PAYMENT" shall mean any dividend or other
distribution (whether in cash, securities or other property) with respect to any
Equity Interests in Holdings or any Subsidiary, or any payment (whether in cash,
securities or other property), including any sinking fund or similar deposit, on
account of the purchase, redemption, retirement, acquisition, cancelation or
termination of any Equity Interests in Holdings or any Subsidiary.
"S&P" shall mean Standard and Poor's Ratings Group, a division
of XxXxxx-Xxxx, Inc.
"SCHEDULED INDEBTEDNESS" shall mean all Indebtedness incurred
under the Existing Facility or listed on Schedule B.
"SECURITY AGREEMENT" shall mean a Security Agreement in form
and substance satisfactory to Holdings and the Collateral Agent.
"SECURITY DOCUMENTS" shall mean the Security Agreement, the
Pledge Agreements, the Trademark Security Agreement, the Mortgages and each
other security agreement or other instrument or document executed and
delivered pursuant to Section 5.09.
"SENIOR NOTES" shall mean Holdings' 6-7/8% Notes due 2009 in
an aggregate principal amount outstanding on the date hereof of $100,000,000.
"SENIOR NOTE INDENTURE" shall mean the Indenture dated as of
February 5, 1999, governing the Senior Notes, as amended, supplemented or
otherwise modified from time to time.
"SPECIFIED ASSETS" shall mean those assets listed on
Schedule 1.01B.
"SPOT EXCHANGE RATE" shall mean, on any day, (a) with respect
to the Alternative Currency in relation to Dollars, the spot rate at which
Dollars are offered on such day by The Chase Manhattan Bank in London for the
Alternative Currency at approximately 11:00 a.m. (London time), and (b) with
respect to Dollars in relation to the Alternative Currency, the spot rate at
which the Alternative Currency is offered on such day by The Chase Manhattan
Bank in London for Dollars at approximately 11:00 a.m. (London time). For
purposes of determining the Spot Exchange Rate in connection with an Alternative
Currency Borrowing, such Spot Exchange Rate shall be determined as of the
Denomination Date for such Borrowing with respect to transactions in the
Alternative
16
Currency that will settle on the date of such Borrowing. Each determination of a
Spot Exchange Rate will be made by the Administrative Agent and will be
conclusive absent manifest error.
"STANDBY BORROWING" shall mean a borrowing consisting of
simultaneous Standby Loans from each of the Lenders.
"STANDBY BORROWING REQUEST" shall mean a request made pursuant
to Section 2.04 in the form of Exhibit A-5.
"STANDBY LOAN" shall mean a revolving loan made by a Lender
pursuant to Section 2.04. Each Standby Loan shall be a Eurocurrency Standby
Loan or an ABR Loan.
"STANDBY LOAN EXPOSURE" shall mean, with respect to any Lender
at any time, the sum of (a) the aggregate principal amount at such time of all
outstanding Standby Loans of such Lender denominated in Dollars, plus (b) the
Assigned Dollar Value at such time of the aggregate principal amount at such
time of all outstanding Standby Loans of such Lender that are Alternative
Currency Loans.
"STATUTORY RESERVE RATE" shall mean, with respect to any
currency, a fraction (expressed as a decimal), the numerator of which is the
number one and the denominator of which is the number one minus the aggregate of
the maximum reserve, liquid asset or similar percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by any Governmental Authority of the United States or of the
jurisdiction of such currency to which banks in such jurisdiction are subject
for any category of deposits or liabilities customarily used to fund loans in
such currency or by reference to which interest rates applicable to Loans in
such currency are determined. Eurocurrency Loans shall be deemed to be subject
to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under Regulation D or any other applicable law, rule or regulation. The
Statutory Reserve Rate shall be adjusted automatically on and as of the
effective date of any change in any reserve percentage.
"STERLING" shall mean lawful money of the United Kingdom.
"Subsidiary" shall mean, with respect to any person (herein
referred to as the "parent"), any corporation, partnership, association or other
business entity (a) of which securities or other ownership interests
representing more than 50% of the equity or more than 50% of the ordinary voting
power or more than 50% of the general partnership interests are, at the time any
determination is being made, owned, Controlled or held, or (b) which is, at the
time any determination is made, 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.
"SUBSIDIARY" shall mean any subsidiary of Holdings.
"SUBSIDIARY GUARANTEE AGREEMENT" shall mean a guarantee
agreement substantially in the form of Exhibit F hereto.
"SUBSIDIARY NET WORTH" shall mean, as to any Subsidiary at any
date, shareholder's equity of such Subsidiary and its consolidated subsidiaries
at such date determined in accordance with GAAP.
"TAXES" shall have the meaning assigned to such term in
Section 2.19(a).
"TOTAL COMMITMENT" shall mean, at any time, the aggregate
17
amount of the Commitments, as in effect at such time.
"TRADEMARK SECURITY AGREEMENT" shall mean a Trademark Security
Agreement in form and substance satisfactory to Holdings and the Collateral
Agent.
"TRANCHE A COMMITMENT" shall mean, with respect to each Lender
at any time, a portion of such Lender's Commitment equal to such Lender's
Applicable Percentage of an amount equal to 15% of Consolidated Net Tangible
Assets as of the Designated Date.
"TRANCHE A BORROWING" shall mean a Borrowing consisting of
Tranche A Loans.
"TRANCHE A LOAN" shall mean a Loan made pursuant to the
Tranche A Commitment of any Lender.
"TRANCHE B BORROWING" shall mean a Borrowing consisting of
Tranche B Loans.
"TRANCHE B LOAN" shall mean a Loan made pursuant to the
requirements of Section 5.11.
"TRANCHE B/C COMMITMENT" shall mean, with respect to each
Lender at any time, a portion of such Lender's Commitment equal to the aggregate
amount of such Lender's Commitment minus such Lender's Tranche A Commitment at
such time.
"TRANCHE C BORROWING" shall mean a Borrowing consisting of
Tranche C Loans.
"TRANCHE C LOAN" shall mean a Loan, other than a Tranche B
Loan, made pursuant to the Tranche B/C Commitment of any Lender.
"TRANSFEREE" shall have the meaning assigned to such term in
Section 2.19(a).
"TYPE", when used in respect of any Loan or Borrowing, shall
refer to the rate by reference to which interest on such Loan or on the Loans
comprising such Borrowing is determined and the currency in which such Loan or
the Loans comprising such Borrowings are denominated. For purposes hereof, the
term "rate" shall include the LIBO Rate and the Alternate Base Rate, and the
term "currency" shall include Dollars and the Alternative Currency.
"WITHDRAWAL LIABILITY" shall mean liability to a Multiemployer
Plan as a result of a complete or partial withdrawal from such Multiemployer
Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.
"YORK AVENUE PROPERTY" shall mean the land, building and
improvements located at 0000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx.
"YORK AVENUE PURCHASE AGREEMENT" shall mean the Agreement of
Sale and Purchase dated September 9, 1999, between The Xxxxxxxx Capital Company,
Xxxxxxxx X. Xxxxxxxx and Xxxxxxx X. Xxxxxxxx and York Avenue Development, Inc.,
and assigned by York Avenue Development, Inc., to Sotheby's, Inc.
18
SECTION 1.02. TERMS GENERALLY. The definitions in Section 1.01
shall apply equally to both the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
All references herein to Articles, Sections, Exhibits and Schedules shall be
deemed references to Articles and Sections of, and Exhibits and Schedules to,
this Agreement unless the context shall otherwise require. 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,
HOWEVER, that if the Borrowers notify the Administrative Agent that the
Borrowers wish to amend any covenant in Article VI or any related definition to
eliminate the effect of any change in GAAP occurring after the date of this
Agreement on the operation of such covenant (or if the Administrative Agent
notifies the Borrowers that the Required Lenders wish to amend Article VI or any
related definition for such purpose), then the Borrowers' compliance with such
covenant shall be determined on the basis of GAAP in effect immediately before
the relevant change in GAAP became effective, until either such notice is
withdrawn or such covenant is amended in a manner satisfactory to the Borrowers
and the Required Lenders. The phrase "the date of this Agreement" or "the date
hereof", or words of similar effect, when used herein, shall mean the date of
this Amended and Restated Credit Agreement.
ARTICLE II. THE CREDITS
SECTION 2.01. COMMITMENTS. (a) Subject to the terms and
conditions and relying upon the representations and warranties herein set forth,
each Lender agrees, severally and not jointly, to make Standby Loans to the
Borrowers, at any time and from time to time on and after the date hereof and
until the earlier of the Maturity Date and the termination of the Commitment of
such Lender in accordance with the terms hereof, in Dollars or the Alternative
Currency (as specified in the Standby Borrowing Requests with respect thereto),
in an aggregate principal amount at any time outstanding that will not result in
such Lender's Standby Loan Exposure exceeding such Lender's Commitment, subject,
however, to the conditions that (i) at no time shall the aggregate Standby Loan
Exposures and LC Exposures of all the Lenders exceed the Total Commitment; (ii)
at no time shall the aggregate Standby Loan Exposures and LC Exposures of all
the Lenders exceed the Borrowing Base then in effect; and (iii) at all times the
outstanding aggregate principal amount of all Standby Loans made by each Lender
shall equal such Lender's Applicable Percentage of the outstanding aggregate
principal amount of all Standby Loans. Each Standby Borrowing (other than a
Tranche B Borrowing) shall be made pursuant to the Lenders' Tranche A
Commitments to the extent of the amount of such Tranche A Commitments that shall
remain unused and available at the time of such Borrowing, and each Tranche B
Borrowing and any amount of any other Standby Borrowing in excess of the Tranche
A Commitments available at the time of such Borrowing shall be made pursuant to
the Lenders' Tranche B/C Commitments. Each Lender's Commitment is set forth
opposite its name in Schedule 2.01. The Commitments may be terminated or reduced
from time to time pursuant to Section 2.11. Within the foregoing limits, the
Borrowers may borrow, pay or prepay and reborrow hereunder, on and after the
date hereof and prior to the Maturity Date, subject to the terms, conditions and
limitations set forth herein.
(b) For purposes of paragraph (a) above, if the Dollar
Equivalent of an outstanding Borrowing denominated in the Alternative Currency,
determined by the Administrative Agent based upon the
19
applicable Spot Exchange Rate as of the date that is three Business Days before
the end of the Interest Period with respect to such Borrowing, does not exceed
by more than 5% the Assigned Dollar Value of such Borrowing, and if the entire
amount of such Borrowing is to be refinanced with a new Borrowing of equivalent
amount in the same currency and by the same Borrower, then such Borrowing shall
continue to have the same Assigned Dollar Value as in effect prior to such
refinancing. The Administrative Agent shall determine the applicable Spot
Exchange Rate as of the date three Business Days before the end of an Interest
Period with respect to a Borrowing denominated in the Alternative Currency and
shall promptly notify the Borrower and the Lenders whether the Dollar Equivalent
of such Borrowing exceeds by more than 5% the Assigned Dollar Value thereof.
SECTION 2.02. LOANS. (a) Each Standby Loan shall be made as
part of a Borrowing consisting of Loans made by the Lenders ratably in
accordance with their respective Commitments (and their respective Tranche A
Commitments or Tranche B/C Commitments, as the case may be); PROVIDED, HOWEVER,
that the failure of any Lender to make any Standby Loan shall not in itself
relieve any other Lender of its obligation to lend hereunder (it being
understood, however, that no Lender shall be responsible for the failure of any
other Lender to make any Loan required to be made by such other Lender). The
Standby Loans comprising any Borrowing shall be in (i) an aggregate principal
amount or Assigned Dollar Value which is not less than $10,000,000 (or the
Alternative Currency Equivalent of such amount in the case of an Alternative
Currency Borrowing) and, except in the case of Alternative Currency Borrowing,
an integral multiple of $1,000,000 or (ii) an aggregate principal amount equal
to the remaining balance of the available Commitments (or the Alternative
Currency Equivalent thereof in the case of an Alternative Currency Borrowing).
(b) Each Standby Borrowing shall be comprised entirely of
Eurocurrency Standby Loans or ABR Loans, as the Borrowers may request pursuant
to Section 2.03 or 2.04, as applicable. Each Lender may at its option make any
Eurocurrency Loan by causing any domestic or foreign branch or affiliate of such
Lender to make such Loan; PROVIDED that any exercise of such option shall not
affect the obligation of the applicable Borrower to repay such Loan in
accordance with the terms of this Agreement. Borrowings of more than one Type
may be outstanding at the same time; PROVIDED, HOWEVER, that none of the
Borrowers shall be entitled to request any Borrowing which, if made, would
result in an aggregate of more than twenty separate Standby Borrowings being
outstanding hereunder at any one time. For purposes of the foregoing, Borrowings
having different Interest Periods or denominated in different currencies,
regardless of whether they commence on the same date, shall be considered
separate Borrowings.
(c) Subject to Section 2.05, each Lender shall make each Loan
to be made by it hereunder on the proposed date thereof by wire transfer to such
account as the Administrative Agent may designate in federal funds (in the case
of any Loan denominated in Dollars) or such other immediately available funds as
may then be customary for the settlement of international transactions in
Sterling not later than 12:00 (noon), New York City time, in the case of
fundings to an account in New York City, or 11:00 a.m., local time, in the case
of fundings to an account in another jurisdiction, and the Administrative Agent
shall by 1:00 p.m., New York City time, in the case of fundings to an account in
New York City, or 12:00 (noon), local time, in the case of fundings to an
account in another jurisdiction, credit the amounts so received to an account
designated by the applicable Borrower in the applicable Borrowing Request, which
account must be in the country of the currency of the Loan (it being understood
that the funding may be for the credit
20
of an account outside such country) or, if a Borrowing shall not occur on such
date because any condition precedent herein specified shall not have been met,
return the amounts so received to the respective Lenders. Standby Loans shall be
made by the Lenders pro rata in accordance with Section 2.16. Unless the
Administrative Agent shall have received notice from a Lender prior to the date
of any Borrowing that such Lender will not make available to the Administrative
Agent such Lender's portion of such Borrowing, the Administrative Agent may
assume that such Lender has made such portion available to the Administrative
Agent on the date of such Borrowing in accordance with this paragraph (c) and
the Administrative Agent may, in reliance upon such assumption, make available
to the applicable Borrower on such date a corresponding amount in the required
currency. If the Administrative Agent shall have so made funds available then to
the extent that such Lender shall not have made such portion available to the
Administrative Agent, such Lender and the applicable Borrower severally agree to
repay to the Administrative Agent forthwith on demand such corresponding amount
together with interest thereon in such currency, for each day from the date such
amount is made available to the applicable Borrower until the date such amount
is repaid to the Administrative Agent at (i) in the case of the Borrower, the
interest rate applicable at the time to the Loans comprising such Borrowing and
(ii) in the case of such Lender, a rate determined by the Administrative Agent
to represent its cost of overnight or short-term funds in the relevant currency
(which determination shall be conclusive absent manifest error). If such Lender
shall repay to the Administrative Agent such corresponding amount, such amount
shall constitute such Lender's Loan as part of such Borrowing for purposes of
this Agreement.
(d) Notwithstanding any other provision of this Agreement, no
Borrower shall be entitled to request any Borrowing if the Interest Period
requested with respect thereto would end after the Maturity Date.
SECTION 2.03. LETTERS OF CREDIT. (a) GENERAL. Subject to the
terms and conditions set forth herein, any Borrower may request the issuance of
Letters of Credit denominated in dollars or in the Alternative Currency for its
own account, in a form reasonably acceptable to the Administrative Agent and the
Issuing Bank, at any time and from time to time after the date hereof and until
the earlier of the Maturity Date and the termination of the Commitments in
accordance with the terms hereof. In the event of any inconsistency between the
terms and conditions of this Agreement and the terms and conditions of any form
of letter of credit application or other agreement submitted by the applicable
Borrower to, or entered into by the applicable Borrower with, the Issuing Bank
relating to any Letter of Credit, the terms and conditions of this Agreement
shall control. Letters of Credit will be issued solely to support obligations
owed to persons that are Lenders as of the respective date of issuance of such
Letters of Credit.
(b) NOTICE OF ISSUANCE, AMENDMENT, RENEWAL, EXTENSION; CERTAIN
CONDITIONS. To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an outstanding Letter of Credit), the applicable
Borrower shall hand deliver or telecopy (or transmit by electronic
communication, if arrangements for doing so have been approved by the Issuing
Bank) to the Issuing Bank and the Administrative Agent (reasonably in advance of
the requested date of issuance, amendment, renewal or extension) a notice
requesting the issuance of a Letter of Credit, or identifying the Letter of
Credit to be amended, renewed or extended, and specifying the date of issuance,
amendment,
21
renewal or extension (which shall be a Business Day), the date on which such
Letter of Credit is to expire (which shall comply with paragraph (c) of this
Section), the amount of such Letter of Credit, the name and address of the
beneficiary thereof and such other information as shall be necessary to prepare,
amend, renew or extend such Letter of Credit. If requested by the Issuing Bank,
the applicable Borrower also shall submit a letter of credit application on the
Issuing Bank's standard form in connection with any request for a Letter of
Credit. A Letter of Credit shall be issued, amended, renewed or extended only if
(and upon issuance, amendment, renewal or extension of each Letter of Credit the
Borrower shall be deemed to represent and warrant that), after giving effect to
such issuance, amendment, renewal or extension (i) the LC Exposure shall not
exceed $50,000,000; (ii) the sum of the LC Exposure and the Standby Loan
Exposure shall not exceed the Total Commitment; and (iii) the sum of the LC
Exposure and the Standby Loan Exposure shall not exceed the Borrowing Base then
in effect.
(c) EXPIRATION DATE. Each Letter of Credit shall expire at or
prior to the close of business on the earlier of (i) the date one year after the
date of the issuance of such Letter of Credit (or, in the case of any renewal or
extension thereof, one year after such renewal or extension) and (ii) the date
that is five Business Days prior to the Maturity Date.
(d) PARTICIPATIONS. By the issuance of a Letter of Credit (or
an amendment to a Letter of Credit increasing the amount thereof) and without
any further action on the part of the Issuing Bank or the Lenders, the Issuing
Bank hereby grants to each Lender, and each Lender hereby acquires from the
Issuing Bank, a participation in such Letter of Credit equal to such Lender's
Applicable Percentage of the aggregate amount available to be drawn under such
Letter of Credit. In consideration and in furtherance of the foregoing, each
Lender hereby absolutely and unconditionally agrees to pay to the Administrative
Agent, for the account of the Issuing Bank, such Lender's Applicable Percentage
of each LC Disbursement made by the Issuing Bank and not reimbursed by the
applicable Borrower on the date due as provided in paragraph (e) of this
Section, or of any reimbursement payment required to be refunded to the
applicable Borrower for any reason. Each Lender acknowledges and agrees that its
obligation to acquire participations pursuant to this paragraph in respect of
Letters of Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including any amendment, renewal or extension of any
Letter of Credit or the occurrence and continuance of a Default or reduction or
termination of the Commitments, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever.
(e) REIMBURSEMENT. If the Issuing Bank shall make any LC
Disbursement in respect of a Letter of Credit, the applicable Borrower shall
reimburse such LC Disbursement by paying to the Administrative Agent an amount
equal to such LC Disbursement not later than 12:00 noon, New York City time, on
the date that such LC Disbursement is made, if the Borrower shall have received
notice of such LC Disbursement prior to 10:00 a.m., New York City time, on such
date, or, if such notice has not been received by the Borrower prior to such
time on such date, then not later than 12:00 noon, New York City time, on (i)
the Business Day that the applicable Borrower receives such notice, if such
notice is received prior to 10:00 a.m., New York City time, on the day of
receipt, or (ii) the Business Day immediately following the day that the
applicable Borrower receives such notice, if such notice is not received prior
to such time on the day of receipt. If the applicable Borrower fails to make
such payment when due, the Administrative Agent shall notify each Lender of the
applicable LC Disbursement, the payment then due from the applicable Borrower in
respect thereof and such Lender's Applicable
22
Percentage thereof. Promptly following receipt of such notice, each Lender shall
pay to the Administrative Agent its Applicable Percentage of the payment then
due from the applicable Borrower, in the same manner as provided in Section
2.02(c) with respect to Loans made by such Lender (and Section 2.02(c) shall
apply, MUTATIS MUTANDIS, to the payment obligations of the Lenders), and the
Administrative Agent shall promptly pay to the Issuing Bank the amounts so
received by it from the Lenders. Promptly following receipt by the
Administrative Agent of any payment from the applicable Borrower pursuant to
this paragraph, the Administrative Agent shall distribute such payment to the
Issuing Bank or, to the extent that Lenders have made payments pursuant to this
paragraph to reimburse the Issuing Bank, then to such Lenders and the Issuing
Bank as their interests may appear. Any payment made by a Lender pursuant to
this paragraph to reimburse the Issuing Bank for any LC Disbursement shall not
constitute a Loan and shall not relieve the applicable Borrower of its
obligation to reimburse such LC Disbursement.
(f) OBLIGATIONS ABSOLUTE. The applicable Borrower's obligation
to reimburse LC Disbursements as provided in paragraph (e) of this Section shall
be absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement under any and all circumstances
whatsoever and irrespective of (i) any lack of validity or enforceability of any
Letter of Credit or this Agreement, or any term or provision therein, (ii) any
draft or other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by the Issuing Bank under a Letter of
Credit against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit, or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against, the Borrower's obligations hereunder. Neither
the Administrative Agent, the Lenders nor the Issuing Bank, nor any of their
affiliates, shall have any liability or responsibility by reason of or in
connection with the issuance or transfer of any Letter of Credit or any payment
or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error, omission,
interruption, loss or delay in transmission or delivery of any draft, notice or
other communication under or relating to any Letter of Credit (including any
document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of the
Issuing Bank; PROVIDED that the foregoing shall not be construed to excuse the
Issuing Bank from liability to the applicable Borrower to the extent of any
direct damages (as opposed to consequential damages, claims in respect of which
are hereby waived by such Borrower to the extent permitted by applicable law)
suffered by such Borrower that are caused by the Issuing Bank's failure to
exercise care when determining whether drafts and other documents presented
under a Letter of Credit comply with the terms thereof. The parties hereto
expressly agree that, in the absence of gross negligence or wilful misconduct on
the part of the Issuing Bank (as finally determined by a court of competent
jurisdiction), the Issuing Bank shall be deemed to have exercised care in each
such determination. In furtherance of the foregoing and without limiting the
generality thereof, the parties agree that, with respect to documents presented
which appear on their face to be in substantial compliance with the terms of a
Letter of Credit, the Issuing Bank may, in its sole discretion, either accept
and make payment upon such documents without responsibility for further
investigation, regardless of any notice or information to the contrary, or
refuse to accept and make payment upon such documents if such documents are not
in strict compliance with the terms of such Letter of Credit.
23
(g) DISBURSEMENT PROCEDURES. The Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit. The Issuing Bank shall promptly
notify the Administrative Agent and the applicable Borrower by telephone
(confirmed by telecopy) of such demand for payment and whether the Issuing Bank
has made or will make an LC Disbursement thereunder; PROVIDED that any failure
to give or delay in giving such notice shall not relieve the applicable Borrower
of its obligation to reimburse the Issuing Bank and the Lenders with respect to
any such LC Disbursement.
(h) INTERIM INTEREST. If the Issuing Bank shall make any LC
Disbursement, then, unless the applicable Borrower shall reimburse such LC
Disbursement in full on the date such LC Disbursement is made, the unpaid amount
thereof shall bear interest, for each day from and including the date such LC
Disbursement is made to but excluding the date that the applicable Borrower
reimburses such LC Disbursement, at the rate per annum then applicable to ABR
Loans; PROVIDED that, if the applicable Borrower fails to reimburse such LC
Disbursement when due pursuant to paragraph (e) of this Section, then Section
2.09 shall apply. Interest accrued pursuant to this paragraph shall be for the
account of the Issuing Bank, except that interest accrued on and after the date
of payment by any Lender pursuant to paragraph (e) of this Section to reimburse
the Issuing Bank shall be for the account of such Lender to the extent of such
payment.
(i) REPLACEMENT OF THE ISSUING BANK. The Issuing Bank may be
replaced at any time by written agreement among Holdings, the Administrative
Agent, the replaced Issuing Bank and the successor Issuing Bank. The
Administrative Agent shall notify the Lenders of any such replacement of the
Issuing Bank. At the time any such replacement shall become effective, the
applicable Borrower shall pay all unpaid fees accrued for the account of the
replaced Issuing Bank pursuant to Section 2.06. From and after the effective
date of any such replacement, (i) the successor Issuing Bank shall have all the
rights and obligations of the Issuing Bank under this Agreement with respect to
Letters of Credit to be issued thereafter and (ii) references herein to the term
"Issuing Bank" shall be deemed to refer to such successor or to any previous
Issuing Bank, or to such successor and all previous Issuing Banks, as the
context shall require. After the replacement of an Issuing Bank hereunder, the
replaced Issuing Bank shall remain a party hereto and shall continue to have all
the rights and obligations of an Issuing Bank under this Agreement with respect
to Letters of Credit issued by it prior to such replacement, but shall not be
required to issue additional Letters of Credit.
(j) CASH COLLATERALIZATION. If any Event of Default shall
occur and be continuing, on the Business Day that the applicable Borrower
receives notice from the Administrative Agent or the Required Lenders demanding
the deposit of cash collateral pursuant to this paragraph, the applicable
Borrower shall deposit in an account with the Administrative Agent, in the name
of the Administrative Agent and for the benefit of the Lenders, an amount in
cash equal to the LC Exposure as of such date plus any accrued and unpaid
interest thereon; PROVIDED that the obligation to deposit such cash collateral
shall become effective immediately, and such deposit shall become immediately
due and payable, without demand or other notice of any kind, upon the occurrence
of any Event of Default with respect to the Borrower described in clause (l) or
(m) of Article VII. Each such deposit shall be held by the Administrative Agent
as collateral for the payment and performance of the obligations of the
Borrowers under this Agreement. The Administrative Agent shall have exclusive
dominion and control,
24
including the exclusive right of withdrawal, over such account. Other than any
interest earned on the investment of such deposits, which investments shall be
made at the option and sole discretion of the Administrative Agent and at the
applicable Borrower's risk and expense, such deposits shall not bear interest.
Interest or profits, if any, on such investments shall accumulate in such
account. Moneys in such account shall be applied by the Administrative Agent to
reimburse the Issuing Bank for LC Disbursements for which it has not been
reimbursed and, to the extent not so applied, shall be held for the satisfaction
of the reimbursement obligations of the applicable Borrower for the LC Exposure
at such time or, if the maturity of the Loans has been accelerated (but subject
to the consent of Revolving Lenders with LC Exposure representing a majority in
amount of the total LC Exposure), be applied to satisfy other obligations of the
Borrower under this Agreement. If any Borrower is required to provide an amount
of cash collateral hereunder as a result of the occurrence of an Event of
Default, such amount (to the extent not applied as aforesaid) shall be returned
to such Borrower within three Business Days after all Events of Default have
been cured or waived.
SECTION 2.04. STANDBY BORROWING PROCEDURE. In order to request
a Standby Borrowing, the applicable Borrower shall give telephonic notice to the
Administrative Agent (confirmed by hand delivery or telecopy of a duly completed
Standby Borrowing Request in the form of Exhibit A-5), (a) in the case of a
Eurocurrency Standby Borrowing, not later than 11:00 noon, London time, three
Business Days before a proposed borrowing and (b) in the case of an ABR
Borrowing, not later than 11:00 a.m., New York City time, on the Business Day of
a proposed borrowing. Such notice shall be irrevocable and shall in each case
specify (i) whether the Borrowing then being requested is to be a Eurocurrency
Borrowing or an ABR Borrowing; (ii) the date of such Borrowing (which shall be a
Business Day), (iii) the aggregate principal amount of such Borrowing, (iv) the
currency of such Borrowing (which, in the case of an ABR Borrowing, shall be
Dollars) and (v) if such Borrowing is to be a Eurocurrency Borrowing, the
Interest Period with respect thereto. If no election as to the currency of
Borrowing is specified in any Standby Borrowing Request, then the applicable
Borrower shall be deemed to have requested a Borrowing in Dollars. If no
election as to the Type of Borrowing is specified, then the requested Borrowing
shall be an ABR Borrowing if denominated in Dollars or a Eurocurrency Borrowing
if denominated in the Alternative Currency. If no Interest Period with respect
to any Eurocurrency Borrowing is specified, then the applicable Borrower shall
be deemed to have selected an Interest Period of one month's duration. If the
applicable Borrower shall not have given notice in accordance with this Section
2.04 of its election to refinance a Standby Borrowing prior to the end of the
Interest Period in effect for such Borrowing (or, if such Borrowing is a
Eurocurrency Borrowing, the third Business Day prior to the end of such Interest
Period), then such Borrower shall (unless such Borrowing is repaid at the end of
such Interest Period) be deemed to have given notice of an election to refinance
such Borrowing with an ABR Borrowing if denominated in Dollars or a Eurocurrency
Borrowing in the same currency and with an Interest Period of one month if
denominated in the Alternative Currency. The Administrative Agent shall promptly
advise the Lenders of any notice given pursuant to this Section 2.04 (and the
contents thereof), of each Lender's portion of the requested Borrowing and, in
the case of an Alternative Currency Borrowing, of the Dollar Equivalent of the
Alternative Currency amount specified in the applicable Borrowing Request and
the Spot Exchange Rate utilized to determine such Dollar Equivalent. Subject to
Section 2.01(b), if the Dollar Equivalent of a Lender's portion of any such
Borrowing would exceed such Lender's remaining available Commitment, such
availability to be determined by the Administrative Agent, then such Lender's
portion
25
of such Borrowing shall be reduced to the Alternative Currency Equivalent of
such Lender's remaining available Commitment.
SECTION 2.05. REFINANCINGS. Each Borrower may refinance all or
any part of any Standby Borrowing with a Standby Borrowing of the same or a
different Type made pursuant to Section 2.04, subject to the conditions and
limitations set forth herein and elsewhere in this Agreement. Any Borrowing or
part thereof in a particular currency so refinanced shall be deemed to be repaid
in accordance with Section 2.07 with the proceeds of a new Borrowing hereunder
and the proceeds of the new Borrowing under the same currency, to the extent
they do not exceed the principal amount of the Borrowing being refinanced, shall
not be paid by the Lenders to the Administrative Agent or by the Administrative
Agent to the applicable Borrower pursuant to Section 2.02(c); PROVIDED, HOWEVER,
that in the case of any refinancing of a Borrowing with another Borrowing in the
same currency, (i) if the principal amount extended by a Lender in a refinancing
is greater than the principal amount extended by such Lender in the Borrowing
being refinanced, then such Lender shall pay such difference to the
Administrative Agent for distribution to the Lenders described in (ii) below,
(ii) if the principal amount extended by a Lender in the Borrowing being
refinanced is greater than the principal amount being extended by such Lender in
the refinancing, the Administrative Agent shall return the difference to such
Lender out of amounts received pursuant to (i) above, and (iii) to the extent
any Lender fails to pay the Administrative Agent amounts due from it pursuant to
(i) above, any Loan or portion thereof being refinanced with such amounts shall
not be deemed repaid in accordance with Section 2.07 and shall be payable by the
applicable Borrower.
SECTION 2.06. FEES. (a) Holdings agrees to pay to each Lender,
through the Administrative Agent, on each March 31, June 30, September 30 and
December 31 and on the Maturity Date, a commitment fee (a "Commitment Fee")
equal to the Commitment Fee Percentage of the daily average unused amount of the
Commitment of such Lender (whether or not the conditions set forth in Section
4.01 shall have been satisfied), during the preceding quarter (or shorter period
commencing with the date hereof or ending with the Maturity Date or any date on
which the Commitment of such Lender shall be terminated). All Commitment Fees
shall be computed on the basis of the actual number of days elapsed in a year of
360 days. The Commitment Fee due to each Lender shall commence to accrue on the
date of this Agreement and shall cease to accrue on the earlier of the Maturity
Date and the date on which the Commitment of such Lender shall have been
terminated and the Loans of such Lender shall have been repaid.
(b) Holdings agrees to pay the Administrative Agent, for its
own account, such fees, and at such times, as have been separately agreed upon.
(c) All Fees shall be paid on the dates due, in immediately
available funds, to the Administrative Agent for distribution, if and as
applicable, among the Lenders (and, if applicable, to the Issuing Bank with
respect to Fees owed to it). Once paid, none of the Fees shall be refundable
except in the case of errors.
(d) Holdings agrees to pay (i) to the Administrative Agent for
the account of each Lender a participation fee with respect to its
participations in Letters of Credit, which shall accrue at the Applicable Margin
used to determine interest on Eurocurrency Loans, on the average daily amount of
such Lender's LC Exposure (excluding any portion thereof attributable to
unreimbursed LC Disbursements) during the period from and including the date
hereof to but excluding the later of the date on which such Lender's Commitment
terminates and the date on
26
which such Lender ceases to have any LC Exposure, and (ii) to the Issuing Bank a
fronting fee, which shall accrue at the rate or rates per annum separately
agreed upon between Holdings and the Issuing Bank on the average daily amount of
the LC Exposure (excluding any portion thereof attributable to unreimbursed LC
Disbursements) during the period from and including the date hereof to but
excluding the later of the date of termination of the Revolving Commitments and
the date on which there ceases to be any LC Exposure, as well as the Issuing
Bank's standard fees with respect to the issuance, amendment, renewal or
extension of any Letter of Credit or processing of drawings thereunder.
Participation fees and fronting fees accrued through and including the last day
of March, June, September and December of each year shall be payable on the
third Business Day following such last day, commencing on the first such date to
occur after the Effective Date; PROVIDED that all such fees shall be payable on
the date on which the Commitments terminate and any such fees accruing after the
date on which the Commitments terminate shall be payable on demand. Any other
fees payable to the Issuing Bank pursuant to this paragraph shall be payable
within 10 days after demand. All participation fees and fronting fees shall be
computed on the basis of a year of 360 days and shall be payable for the actual
number of days elapsed (including the first day but excluding the last day).
SECTION 2.07. REPAYMENT OF LOANS. (a) The outstanding
principal balance of each Loan made by each Lender to each Borrower shall be
payable on the last day of the Interest Period applicable to such Loan and on
the Maturity Date. Each Loan shall bear interest from the date of the Borrowing
of which such Loan is a part on the outstanding principal balance thereof as set
forth in Section 2.08.
(b) Each Lender shall, and is hereby authorized by the
Borrowers to, maintain, in accordance with its usual practice, records
evidencing the indebtedness of each Borrower to such Lender hereunder from time
to time, including the date, amount, currency and Type of and the Interest
Period applicable to each Loan made by such Lender from time to time and the
amounts of principal and interest paid to such Lender from time to time in
respect of each such Loan.
(c) The entries made in the records maintained pursuant to
paragraph (b) of this Section 2.07 and in the Register maintained by the
Administrative Agent pursuant to Section 10.04(d) shall be prima facie evidence
of the existence and amounts of the obligations of each Borrower to which such
entries relate; PROVIDED, HOWEVER, that the failure of any Lender or the
Administrative Agent to maintain or to make any entry in such records or the
Register, as applicable, or any error therein shall not in any manner affect the
obligation of any Borrower to repay any Loans in accordance with the terms of
this Agreement.
SECTION 2.08. INTEREST ON LOANS. (a) Subject to the provisions
of Section 2.09, the Eurocurrency Standby Loans comprising each Eurocurrency
Borrowing shall bear interest (computed on the basis of the actual number of
days elapsed over a year of 360 days), at a rate per annum equal to (i) the LIBO
Rate for the Interest Period in effect for the Borrowing of which such Loan is
part plus the Applicable Margin from time to time in effect multiplied by (ii)
the Statutory Reserve Rate.
(b) Subject to the provisions of Section 2.09, the Loans
comprising each ABR Borrowing shall bear interest (computed on the basis of the
actual number of days elapsed over a year of 365 or 366 days, as applicable,
when determined by reference to the Prime Rate and over a year of 360 days at
all other times) at a rate per annum equal to the Alternate Base Rate plus the
Applicable Margin from time to time in
27
effect.
(c) Interest on each Loan shall be payable in arrears on each
Interest Payment Date applicable to such Loan except as otherwise provided in
this Agreement. The applicable LIBO Rate or Alternate Base Rate for each
Interest Period or day within an Interest Period, as the case may be, shall be
determined by the Administrative Agent, and such determination shall be
conclusive absent manifest error.
SECTION 2.09. DEFAULT INTEREST. If any Borrower shall default
in the payment of the principal of or interest on any Loan or any other amount
becoming due hereunder, whether by scheduled maturity, notice of prepayment,
acceleration or otherwise, such Borrower shall on demand from time to time from
the Administrative Agent pay interest, to the extent permitted by law, on such
defaulted amount up to (but not including) the date of actual payment (after as
well as before judgment) at a rate per annum (computed on the basis of the
actual number of days elapsed over a year of 360 days) equal to the Alternate
Base Rate plus 2% per annum (or, in the case of the principal of any Loan, if
higher, the rate of interest otherwise applicable, or most recently applicable,
to such Loan hereunder plus 2% per annum).
SECTION 2.10. ALTERNATE RATE OF INTEREST. In the event, and on
each occasion, that on the day two Business Days prior to the commencement of
any Interest Period for a Eurocurrency Borrowing of any Type the Administrative
Agent shall have determined that Dollar deposits or deposits in the Alternative
Currency in which such Borrowing is to be denominated in the principal amounts
of the Loans comprising such Borrowing are not generally available in the London
interbank market, or that the rates at which such deposits are being offered
will not adequately and fairly reflect the cost to any Lender of making or
maintaining its Eurocurrency Loan during such Interest Period, or that
reasonable means do not exist for ascertaining the LIBO Rate, the Administrative
Agent shall, as soon as practicable thereafter, give written or telecopy notice
of such determination to the applicable Borrower and the Lenders. In the event
of any such determination, until the Administrative Agent shall have advised the
applicable Borrower and the Lenders that the circumstances giving rise to such
notice no longer exist, any request by a Borrower for a Eurocurrency Standby
Borrowing of the affected Type or in the affected currency shall be deemed to be
a request for an ABR Borrowing denominated in Dollars. Each determination by the
Administrative Agent hereunder shall be conclusive absent manifest error.
SECTION 2.11. TERMINATION AND REDUCTION OF COMMITMENTS.
(a) The Commitments shall be automatically terminated at the
Administrative Agent's close of business in New York City on the
Maturity Date.
(b) Upon at least three Business Days' prior irrevocable
written or telecopy notice to the Administrative Agent, Holdings (on behalf of
all the Borrowers) may at any time in whole permanently terminate, or from time
to time in part permanently reduce, the Total Commitment; PROVIDED, HOWEVER,
that (i) each partial reduction of the Total Commitment shall be in an integral
multiple of $1,000,000 and in a minimum principal amount of $5,000,000 or if
less, the remaining total Commitment and (ii) no such termination or reduction
shall be made which would reduce the Total Commitment to an amount less than the
aggregate outstanding principal amount of the Standby Loans.
(c) Each reduction in the Total Commitment hereunder shall be
made ratably among the Lenders in accordance with their respective Commitments.
Holdings shall pay to the Administrative Agent for the
28
account of the Lenders, on the date of each termination or reduction, the
Commitment Fees on the amount of the Commitments so terminated or reduced
accrued to but not including the date of such termination or reduction.
(d) Each reduction in the Total Commitment hereunder shall
reduce the Lenders' Tranche B/C Commitments to the extent of the amount of such
Tranche B/C Commitments that shall remain in effect at the time of such
reduction, and thereafter shall reduce the Lenders' Tranche A Commitments.
SECTION 2.12. PREPAYMENT. (a) Each Borrower shall have the
right at any time and from time to time to prepay any Borrowing, in whole or in
part, upon giving written or telecopy notice (or telephone notice promptly
confirmed by written or telecopy notice) to the Administrative Agent: (i) in the
case of Eurocurrency Loans no later than 12:00 noon, New York City time, three
Business Days prior to prepayment and (ii) in the case of ABR Loans, no later
than 11:00 a.m., New York City time, on the Business Day of the prepayment;
PROVIDED, HOWEVER, that each partial prepayment shall be in an amount which is
an integral multiple of $1,000,000 and not less than $5,000,000.
(b) On the date of any termination or reduction of the
Commitments pursuant to Section 2.11, the Borrowers shall pay or prepay so much
of the Standby Borrowings as shall be necessary in order that the aggregate
outstanding principal amount of all Loans will not exceed the Total Commitment
after giving effect to such termination or reduction.
(c) In the event and on each occasion that the sum of the
aggregate outstanding principal amount of all Loans exceeds the Borrowing Base,
the Borrowers shall prepay Borrowings in an aggregate amount equal to such
excess.
(d) Each notice of prepayment under this Section 2.12 shall
specify the prepayment date and the principal amount of each Borrowing (or
portion thereof) to be prepaid, shall be irrevocable and shall commit the
applicable Borrower to prepay such Borrowing (or portion thereof) by the amount
stated therein on the date stated therein. All prepayments under this Section
2.12 shall be subject to Section 2.15 but otherwise without premium or penalty.
(e) Each prepayment under this Section shall be applied first
against the Lenders' Tranche C Loans to the extent of the amount of such Tranche
C Loans that shall be outstanding at the time of such prepayment, second against
the Lenders' Tranche A Loans to the extent of the amount of such Tranche A Loans
that shall be outstanding at the time of such prepayment and thereafter against
the Lenders' Tranche B Loans.
SECTION 2.13. RESERVE REQUIREMENTS; CHANGE IN CIRCUMSTANCES.
(a) Notwithstanding any other provision herein, if after the date of this
Agreement any change in applicable law or regulation or in the interpretation or
administration thereof by any Governmental Authority charged with the
interpretation or administration thereof (whether or not having the force of
law) shall change the basis of taxation of payments to any Lender (or any
lending office of any Lender) or the Issuing Bank of the principal of or
interest on any Eurocurrency Loan made by such Lender or any Letter of Credit or
participation therein, or any Fees or other amounts payable hereunder (other
than changes in respect of taxes imposed on the overall net income or capital
stock of such Lender by the jurisdiction in which such Lender has its principal
office or by any political subdivision or taxing authority therein), or shall
impose, modify or deem applicable
29
any reserve, special deposit or similar requirement against assets of, deposits
with or for the account of or credit extended by such Lender (or any lending
office of such Lender) or the Issuing Bank, or shall impose on such Lender or
the Issuing Bank or the London interbank market any other condition affecting
this Agreement or any Eurocurrency Loan made by such Lender or any Letter of
Credit or participation therein, and the result of any of the foregoing shall be
to increase the cost to such Lender of making or maintaining any Eurocurrency
Loan or to increase the cost to such Lender or the Issuing Bank of participating
in, issuing or maintaining any Letter of Credit or to reduce the amount of any
sum received or receivable by such Lender hereunder (whether of principal,
interest or otherwise) by an amount deemed by such Lender to be material, then
Holdings shall (or shall cause the Borrowers to) pay to such Lender or the
Issuing Bank upon demand such additional amount or amounts as will compensate
such Lender or the Issuing Bank for such additional costs incurred or reduction
suffered.
(b) If any Lender or the Issuing Bank shall have determined
that any change after the date hereof in the applicability of any law, rule,
regulation or guideline adopted pursuant to or arising out of the July 1988
report of the Basel Committee on Banking Regulations and Supervisory Practices
entitled "International Convergence of Capital Measurement and Capital
Standards", or the adoption after the date hereof of any other law, rule,
regulation or guideline regarding capital adequacy, or any change in any of the
foregoing or in the interpretation or administration of any of the foregoing by
any governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender (or any
lending office of such Lender) or any Lender's or the Issuing Bank's holding
company with any request or directive regarding capital adequacy (whether or not
having the force of law) of any such authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on such
Lender's or the Issuing Bank's capital or on the capital of such Lender's or the
Issuing Bank's holding company, if any, as a consequence of this Agreement or
the Loans or Letters of Credit or participations therein made by such Lender or
the Issuing Bank pursuant hereto to a level below that which such Lender, the
Issuing Bank or such Lender's or the Issuing Bank's holding company could have
achieved but for such applicability, adoption, change or compliance (taking into
consideration such Lender's and the Issuing Bank's policies and the policies of
such Lender's and the Issuing Bank's holding company with respect to capital
adequacy) by an amount deemed by such Lender or the Issuing Bank to be material,
then from time to time Holdings shall (or shall cause the responsible Borrower
to) pay to such Lender or the Issuing Bank such additional amount or amounts as
will compensate such Lender, the Issuing Bank or such Lender's or the Issuing
Bank's holding company for any such reduction suffered.
(c) A certificate of a Lender or the Issuing Bank setting
forth such amount or amounts as shall be necessary to compensate such Lender or
the Issuing Bank as specified in paragraph (a) or (b) above, as the case may be,
shall be delivered to Holdings and shall be conclusive absent manifest error.
Holdings shall (or shall cause the responsible Borrower to) pay each Lender or
the Issuing Bank the amount shown as due on any such certificate delivered by it
within 10 days after the receipt of the same.
(d) Except as provided below in this paragraph (d), failure on
the part of any Lender or the Issuing Bank to demand compensation for
30
any increased costs or reduction in amounts received or receivable or reduction
in return on capital with respect to any period shall not constitute a waiver of
such Lender's or the Issuing Bank's right to demand compensation with respect to
such period or any other period. The protection of this Section shall be
available to each Lender and the Issuing Bank regardless of any possible
contention of the invalidity or inapplicability of the law, rule, regulation,
guideline or other change or condition which shall have occurred or been
imposed. Neither the Issuing Bank nor any Lender shall be entitled to
compensation under this Section 2.13 for any costs incurred or reductions
suffered with respect to any date unless it shall have notified Holdings that it
will demand compensation for such costs or reductions not more than 90 days
after the later of (i) such date and (ii) the date on which it shall have become
aware of such costs or reductions.
SECTION 2.14. CHANGE IN LEGALITY. (a) Notwithstanding any
other provision herein, if, after the date hereof, (i) any change in any law or
regulation or in the interpretation thereof by any Governmental Authority
charged with the administration or interpretation thereof shall make it unlawful
for any Lender to make or maintain any Eurocurrency Loan or Alternative Currency
Loan or to give effect to its obligations as contemplated hereby with respect to
any Eurocurrency Loan or Alternative Currency Loan, or (ii) there shall have
occurred any change in national or international financial, political or
economic conditions (including the imposition of or any change in exchange
controls) or currency exchange rates which would make it impracticable for any
Lender to make Loans denominated in the Alternative Currency or to any Borrower,
then, by written notice to the Borrowers and to the Administrative Agent, such
Lender may:
(i) declare that Eurocurrency Loans or Alternative Currency
Loans (in the affected currency or to the affected Borrower), as the
case may be, will not thereafter (for the duration of such unlawfulness
or impracticability) be made by such Lender hereunder, whereupon any
request by a Borrower for a Eurocurrency Standby Borrowing or
Alternative Currency Borrowing (in the affected currency or to the
affected Borrower), as the case may be, shall, as to such Lender only,
be deemed a request for an ABR Loan or a Loan denominated in Dollars,
as the case may be, unless such declaration shall be subsequently
withdrawn (or, if a Loan to the requesting Borrower cannot be made for
the reasons specified above, such request shall be deemed to have been
withdrawn); and
(ii) require that all outstanding Eurocurrency Loans or
Alternative Currency Loans (in the affected currency or to the affected
Borrower), as the case may be, made by it be converted to ABR Loans or
Loans denominated in Dollars, as the case may be, in which event all
such Eurocurrency Loans or Alternative Currency Loans (in the affected
currency or to the affected Borrower) shall be automatically converted
to ABR Loans or Loans denominated in Dollars, as the case may be, as of
the effective date of such notice as provided in paragraph (b) below.
In the event any Lender shall exercise its rights under (i) or (ii) above, all
payments and prepayments of principal which would otherwise have been applied to
repay the Eurocurrency Loans or Alternative Currency Loans, as the case may be,
that would have been made by such Lender or the converted Eurocurrency Loans or
Alternative Currency Loans, as the case may be, of such Lender shall instead be
applied to repay the ABR Loans or Loans denominated in Dollars, as the case may
be, made by such Lender in lieu of, or resulting from the conversion of, such
Eurocurrency Loans or Loans denominated in Dollars, as the case may be.
31
(b) For purposes of this Section 2.14, a notice to the
Borrowers by any Lender shall be effective as to each Loan, if lawful, on the
last day of the Interest Period currently applicable to such Loan; in all other
cases such notice shall be effective on the date of receipt by the Borrowers.
SECTION 2.15. INDEMNITY. The Borrowers agree to indemnify each
Lender against any actual loss or expense which such Lender may sustain or incur
as a consequence of (a) any failure by such Borrower to fulfill on the date of
any borrowing hereunder the applicable conditions set forth in Article IV, (b)
any failure by such Borrower to borrow or to refinance or continue any Loan
hereunder after irrevocable notice of such borrowing, refinancing or
continuation has been given or deemed given pursuant to Section 2.04, (c) any
payment, prepayment, conversion or transfer of a Eurocurrency Loan required by
any other provision of this Agreement or otherwise made or deemed made on a date
other than the last day of the Interest Period applicable thereto, (d) any
default in payment or prepayment of the principal amount of any Loan or any part
thereof or interest accrued thereon, as and when due and payable (at the due
date thereof, whether by scheduled maturity, acceleration, irrevocable notice of
prepayment or otherwise) or (e) the occurrence of any other Event of Default,
including, in each such case, any actual loss or reasonable expense sustained or
incurred or to be sustained or incurred in liquidating or employing deposits
from third parties acquired to effect or maintain such Loan or any part thereof
as a Eurocurrency Loan. Such loss or reasonable expense shall include an amount
equal to the excess, if any, as reasonably determined by such Lender, of (i) its
cost of obtaining the funds for the Loan being paid, prepaid, converted,
transferred or not borrowed (assumed to be the LIBO Rate) for the period from
the date of such payment, prepayment, conversion, transfer or failure to borrow
to the last day of the Interest Period for such Loan (or, in the case of a
failure to borrow, the Interest Period for such Loan which would have commenced
on the date of such failure) over (ii) the amount of interest (as reasonably
determined by such Lender) that would be realized by such Lender in reemploying
the funds so paid, prepaid, converted, transferred or not borrowed for such
period or Interest Period, as the case may be. A certificate of any Lender
setting forth any amount or amounts which such Lender is entitled to receive
pursuant to this Section shall be delivered to the Borrowers and shall be
conclusive absent manifest error.
SECTION 2.16. PRO RATA TREATMENT. Except as required under
Section 2.14, each Standby Borrowing, each payment or prepayment of principal of
any Standby Borrowing, each payment of interest on the Standby Loans, each
payment of the Commitment Fees, each payment constituting reimbursement of an LC
Disbursement, each reduction of the Commitments and each refinancing of any
Borrowing with a Standby Borrowing of any Type, shall be allocated pro rata
among the Lenders in accordance with their respective Commitments (and their
respective Tranche A Commitments or Tranche B Commitments, as the case may by)
or, if such Commitments shall have expired or been terminated, in accordance
with the respective principal amounts of their outstanding Standby Loans. Each
Lender agrees that in computing such Lender's portion of any Borrowing to be
made hereunder, the Administrative Agent may, in its discretion, round each
Lender's percentage of such Borrowing to the next higher or lower whole Dollar
(or comparable unit of the Alternative Currency) amount.
SECTION 2.17. SHARING OF SETOFFS. Each Lender agrees that if
it shall, through the exercise of a right of banker's lien, setoff or
counterclaim against any Borrower, or pursuant to a secured claim under
32
Section 506 of Title 11 of the United States Code or other security or interest
arising from, or in lieu of, such secured claim, received by such Lender under
any applicable bankruptcy, insolvency or other similar law or otherwise, or by
any other means, obtain payment (voluntary or involuntary) in respect of any
Standby Loan or Standby Loans or reimbursement obligations in respect of any LC
Disbursement as a result of which the unpaid principal portion of its Standby
Loans or LC Disbursements shall be proportionately less than the unpaid
principal portion of the Standby Loans or LC Disbursements of any other Lender,
it shall be deemed simultaneously to have purchased from such other Lender at
face value, and shall promptly pay to such other Lender the purchase price for,
a participation in the Standby Loans and LC Disbursements of such other Lender,
so that the aggregate unpaid principal amount of the Standby Loans and LC
Disbursements and participations in the Standby Loans and LC Disbursements held
by each Lender shall be in the same proportion to the aggregate unpaid principal
amount of all Standby Loans and LC Disbursements then outstanding as the
principal amount of its Standby Loans and LC Disbursements prior to such
exercise of banker's lien, setoff or counterclaim or other event was to the
principal amount of all Standby Loans and LC Disbursements outstanding prior to
such exercise of banker's lien, setoff or counterclaim or other event; PROVIDED,
HOWEVER, that, if any such purchase or purchases or adjustments shall be made
pursuant to this Section 2.17 and the payment giving rise thereto shall
thereafter be recovered, such purchase or purchases or adjustments shall be
rescinded to the extent of such recovery and the purchase price or prices or
adjustment restored without interest. The Borrowers expressly consent to the
foregoing arrangements and agree that any Lender holding a participation in a
Standby Loan or LC Disbursement deemed to have been so purchased may exercise
any and all rights of banker's lien, setoff or counterclaim with respect to any
and all moneys owing by such Borrower to such Lender by reason thereof as fully
as if such Lender had made a Standby Loan or LC Disbursement directly to such
Borrower in the amount of such participation.
SECTION 2.18. PAYMENTS. (a) Each Borrower shall make each
payment (including principal of or interest on any Borrowing, reimbursements of
LC Disbursements or any Fees or other amounts) hereunder and under each other
Loan Document not later than 12:00 noon, local time at the place of payment, on
the date when due in immediately available funds. Each such payment shall be
made to the Administrative Agent at its offices at 000 Xxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx. Each such payment (other than principal of and interest on Alternative
Currency Loans, which shall be made in the Alternative Currency) shall be made
in Dollars and each Alternative Currency payment should be made at the offices
of the Administrative Agent at 000 Xxxxxx Xxxx, Xxxxxx, Xxxxxxx XX0X0XX, or any
other account that the Administrative Agent may designate.
(b) Whenever any payment (including principal of or interest
on any Borrowing, reimbursements of LC Disbursements or any Fees or other
amounts) hereunder or under any other Loan Document shall become due, or
otherwise would occur, on a day that is not a Business Day, such payment may be
made on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of interest or Fees, if applicable.
SECTION 2.19. TAXES. (a) Each Borrower covenants and agrees
that, whether or not any Loans are made by the Lenders or Letters of Credit are
issued by the Issuing Bank hereunder:
(i) all payments on account of the principal of and interest
on the Loans, and all other amounts payable by each Borrower hereunder,
to or for the account of the Lenders including, without
33
limitation, amounts payable under clause (ii) of this Section 2.19(a),
shall be made without any setoff or counterclaim and free and clear of,
and without reduction by reason of, all present and future income,
stamp, documentary, registration, excise, property and other taxes and
levies, deductions, charges, compulsory loans and withholdings
whatsoever (other than income or franchise taxes imposed on the overall
net income or capital stock of the Agent, the Issuing Bank or any
Lender, including any transferee or assignee thereof ("Transferee"), by
the taxing authority of the jurisdiction in which the Agent or such
Lender, as applicable, has its principal lending office or under the
laws of which the Agent, the Issuing Bank or such Lender, as
applicable, is organized) and all interest, penalties or similar
amounts with respect thereto, now or hereafter imposed, assessed,
levied or collected by any country or any political subdivision or
taxing authority thereof or therein or by any federation or association
of or with which any country may be a member or associated or by any
jurisdiction from which any payment hereunder is made or any taxing
authority thereof or therein, on or in respect of this Agreement, the
recording, registration, notarization or other formalization of any
thereof, the enforcement thereof or the introduction thereof in any
judicial proceedings, or on or in respect of any payments of principal,
interest, premiums, charges, fees or other amounts made on, under or in
respect of any thereof (hereinafter called "Taxes"), all of which will
be paid by the appropriate Borrower, for its own account, prior to the
date on which penalties attach thereto;
(ii) the Borrowers shall indemnify the Agent, the Issuing Bank and
Lenders against, and reimburse the Agent, the Issuing Bank and Lenders
(or Transferees) on demand for, any Taxes and any loss, liability,
claim or expense arising therefrom or with respect thereto including
interest, penalties and reasonable legal fees and disbursements, which
the Agent or the Issuing Bank may incur, whether or not such Taxes were
correctly or legally asserted by the relevant taxing authority. A
certificate as to the amount of such Tax, loss, liability, claim or
expense prepared by the Agent or the Issuing Bank, absent manifest
error, shall be final, conclusive and binding for all purposes. Such
indemnification shall be made within 30 days after the date the Agent
or the Issuing Bank makes a written demand therefor;
(iii) in the event that a Borrower is required by applicable law,
decree or regulation to deduct or withhold Taxes from any amounts
payable on, under or in respect to this Agreement, such Borrower shall
pay to the Agent, the Issuing Bank or the applicable Lenders, as the
case may be, such additional amount(s) as may be required, after the
deduction or withholding of Taxes (including any deduction or
withholding of Taxes with respect to such additional amounts), to
enable the Agent, the Issuing Bank or such Lender to receive from such
Borrower an amount equal to the amount stated to be payable by such
Borrower to the Agent, the Issuing Bank or such Lender under this
Agreement;
(iv) each Borrower shall furnish to the Agent the official tax
receipts in respect of each payment of Taxes required under this
Section 2.19(a) within 30 days after the date such payment is due
pursuant to applicable law, and each Borrower shall promptly furnish
to the Bank, at the Agent's request, any other information, documents
and receipts that the Agent may, from time to time, reasonably require
to establish to its reasonable satisfaction that full and timely
payment has been made of all Taxes required to be paid under this
Section 2.19(a);
34
(v) in the event that the payments by a Borrower become exempt
from or not subject to Taxes, such Borrower will, upon the reasonable
request of the Agent, furnish to the Agent either a certificate from
each appropriate taxing authority or an opinion of counsel reasonably
acceptable to the Agent, in either case stating that payments hereunder
are exempt from or not subject to taxes; and
(vi) if a Lender (or Transferee), the Issuing Bank or the
Agent shall become aware that it is entitled to receive a refund in
respect of Taxes as to which it has been indemnified by the Borrower,
or with respect to which the Borrower has paid additional amounts,
pursuant to this Section 2.19, it shall promptly notify the Borrower of
the availability of such refund and shall, within 30 days after receipt
of a request by the Borrower make a claim to the relevant taxing
authority or other Governmental Authority for such refund at the
Borrower's expense. If any Lender (or Transferee), the Issuing Bank or
the Agent receives a refund (including pursuant to a claim for refund
made pursuant to the preceding sentence) in respect of any Taxes as to
which it has been indemnified by the Borrower or with respect to which
the Borrower has paid additional amounts pursuant to this Section 2.19,
it shall promptly repay such refund (but only to the extent of
indemnity payments made, or additional amounts paid, by the Borrower
under this Section 2.19 with respect to the Taxes giving rise to such
refund), net of all out-of-pocket expenses of such Lender (or
Transferee), the Issuing Bank or the Agent to the Borrower, PROVIDED
that the Borrower, upon the request of such Lender (or Transferee) or
the Agent, agrees to return such refund (plus penalties, interest or
other charges) to such Lender (or Transferee), the Issuing Bank or the
Agent in the event such Lender (or Transferee), the Issuing Bank or the
Agent is required to repay such refund to the relevant taxing authority
or other Governmental Authority.
(vii) Any Lender that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which
a Borrower is located, or any treaty to which such jurisdiction is a
party, with respect to payments under this Agreement shall deliver to
Holdings (with a copy to the Administrative Agent), at the time or
times prescribed by applicable law, such properly completed and
executed documentation prescribed by applicable law or reasonably
requested by Holdings as will permit such payments to be made without
withholding or at a reduced rate, provided that such Lender has
received written notice from the Borrower advising it of the
availability of such exemption or reduction and supplying all
applicable documentation.
(b) Without prejudice to the survival of any other agreement
contained herein, the agreements and obligations of each Borrower pursuant to
this Section 2.19 shall survive the payment in full of the principal of and
interest on the Loans.
SECTION 2.20. ASSIGNMENT OF COMMITMENTS UNDER CERTAIN
CIRCUMSTANCES. (a) Any Lender (or Transferee) claiming any additional amounts
payable pursuant to Section 2.13 or Section 2.19 shall use reasonable efforts
(consistent with legal and regulatory restrictions) to file any certificate or
document requested by a Borrower or to change the jurisdiction of its applicable
lending office if the making of such a filing or change would avoid the need for
or reduce the amount of any such additional amounts which may thereafter accrue
and would not, in the judgment of such Lender (or Transferee), be otherwise
35
disadvantageous to such Lender (or Transferee).
(b) In the event that any Lender shall have delivered a notice
or certificate pursuant to Section 2.13 or 2.14, or a Borrower shall be required
to make additional payments to any Lender under Section 2.19, Holdings shall
have the right, at its own expense, upon notice to such Lender and the
Administrative Agent, to require such Lender to transfer and assign without
recourse (in accordance with and subject to the restrictions contained in
Section 10.04) all its interests, rights and obligations under this Agreement to
another financial institution approved by the Administrative Agent (which
approval shall not be unreasonably withheld) which shall assume such
obligations; PROVIDED that (i) no such assignment shall conflict with any law,
rule or regulation or order of any Governmental Authority and (ii) the assignee
shall pay to the affected Lender in immediately available funds on the date of
such assignment the principal of and interest accrued to the date of payment on
the Loans made by it hereunder and a Borrower shall pay to the affected Lender
in immediately available funds on such date all other amounts accrued for its
account or owed to it hereunder.
ARTICLE III. REPRESENTATIONS AND WARRANTIES
Holdings and each Borrower represents and warrants that:
SECTION 3.01. CORPORATE EXISTENCE AND GOOD STANDING. Holdings
and each of its Material Subsidiaries: (a) is a corporation, partnership or
other entity duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization; (b) has all requisite corporate or
other power, and has all material governmental licenses, authorizations,
consents and approvals, necessary to own its assets and carry on its business as
now being or as proposed to be conducted; and (c) is qualified to do business
and is in good standing in all jurisdictions in which the nature of the business
conducted by it makes such qualification necessary and where failure so to
qualify or to be in good standing could reasonably be expected to (either
individually or in the aggregate) result in a Material Adverse Effect.
SECTION 3.02. CORPORATE POWER, AUTHORIZATION AND COMPLIANCE
WITH THE LAW. (a) The execution, delivery and performance by the Borrowers of
this Agreement and by Holdings and the Subsidiaries of the other Loan Documents
to which they are to be party are within their respective corporate powers, have
been duly authorized by all necessary corporate action and will not violate any
provision of law of or their articles of incorporation, by-laws or memoranda or
articles of association, or result in the breach of or constitute a default
under or require any consent under any indenture or other material agreement or
instrument to which Holdings or any Subsidiary is a party or by which Holdings
or any Subsidiary or its respective properties may be bound or affected, or
cause any of its properties to become subject to any Lien; this Agreement
constitutes the legal, valid and binding obligation of each Borrower, and each
other Loan Document constitutes the legal, valid and binding obligation of
Holdings and each Subsidiary (to the extent Holdings or such Subsidiary is party
thereto) enforceable against such person in accordance with its terms.
(b) The conduct by Holdings and its Subsidiaries of their
respective businesses as they are presently operated does not violate any
material provision of law or material rule or regulation of any Governmental
Authority in a manner which, when taken together with all other such violations,
could reasonably be expected to result in a
36
Materially Adverse Effect; and Holdings and its Subsidiaries have obtained all
material consents and approvals of Governmental Authorities required to conduct
their respective businesses as they are presently operated, except to the extent
that failure to obtain any such consents or approvals could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 3.03. FINANCIAL INFORMATION; ABSENCE OF MATERIAL
ADVERSE CHANGE. (a) The audited consolidated financial statements of Holdings
and its Subsidiaries for the fiscal year ended December 31, 1998, certified by
independent public accountants selected by Holdings, fairly present the
financial condition of Holdings and its Subsidiaries at the date of such
statements and the results of their respective operations for the fiscal year
ended on said date, all in conformity with generally accepted accounting
principles consistently applied.
(b) The consolidating balance sheets by geographic region of
Holdings and its Subsidiaries as of December 31, 1998, were prepared by
management of Holdings in good faith.
(c) Since December 31, 1998, there has occurred no Material
Adverse Change (other than any change resulting from the Litigation Liabilities
to the extent no Default shall have resulted therefrom under Section 6.08 or any
other provision of this Agreement).
SECTION 3.04. EMPLOYEE BENEFIT PLANS. Each of the Borrowers
and its ERISA Affiliates are in compliance in all material respects with the
applicable provisions of ERISA and the Code and the regulations and published
interpretations thereunder. No Reportable Event has occurred in respect of any
Plan of any Borrower or any ERISA Affiliate. The present value of all benefit
liabilities of all underfunded Plans (based on those assumptions used to fund
each such Plan) did not, as of the last annual valuation dates applicable
thereto, exceed by more than $5,000,000 the value of the assets of all such
underfunded Plans. Neither the Borrowers nor any ERISA Affiliate have incurred
any Withdrawal Liability that materially adversely affects the financial
condition of any Borrower and its ERISA Affiliates taken as a whole. Neither the
Borrowers nor any ERISA Affiliate have received any notification that any
Multiemployer Plan is in reorganization or has been terminated, within the
meaning of Title IV of ERISA, and no Multiemployer Plan is reasonably expected
to be in reorganization or to be terminated, where such reorganization or
termination has resulted or can reasonably be expected to result in an increase
in the contributions required to be made to such Plan that would materially and
adversely affect the financial condition of any Borrower and its ERISA
Affiliates taken as a whole.
SECTION 3.05. ENVIRONMENTAL MATTERS. The Borrowers are aware
of no events, conditions or circumstances involving environmental pollution or
contamination or employee health or safety that could reasonably be expected to
result in a Material Adverse Change.
SECTION 3.06. LITIGATION. There are no suits, investigations
or proceedings pending or, to the best of its knowledge, threatened, against or
affecting Holdings or the Subsidiaries which call into question the validity of
this Agreement or could reasonably be expected to result in a Material Adverse
Effect (other than suits, investigations or proceedings referred to in the
definition of "Litigation Liabilities" to the extent no Default shall have
resulted therefrom under Section 6.08 or any other provision of this Agreement).
SECTION 3.07. TAXES. Holdings and its Subsidiaries have filed
all Federal and other material tax returns required to be filed
37
and paid all Federal and other material taxes due or assessed indicated thereon,
including interest and penalties, except for taxes which are being contested in
good faith and by applicable proceedings, and for which Holdings and its
Subsidiaries have made adequate reserves on the books of Holdings and its
Subsidiaries.
SECTION 3.08. SUBSIDIARIES. Schedule 3.08, as the same shall
be updated by Holdings from time to time by means of one or more notices
delivered to the Administrative Agent, correctly sets forth the name of each
Subsidiary of Holdings, its jurisdiction of incorporation and the percentage of
each class of issued and outstanding capital stock owned by Holdings and any
Subsidiary, respectively, if any; the corporations listed on Schedule 3.08 are
the only Subsidiaries of Holdings as of the date of this Agreement.
SECTION 3.09. INVESTMENT COMPANY ACT. Neither Holdings nor
any of its Subsidiaries is an "investment company", or a company
"controlled" by an "investment company", within the meaning of the
Investment Company Act of 1940, as amended.
SECTION 3.10. NO MATERIAL MISSTATEMENTS. No information,
report, financial statement, exhibit or schedule furnished by or on behalf of
any Borrower to the Administrative Agent or any Lender in connection with this
Agreement or included herein or delivered pursuant hereto contained or contains
any material misstatement of fact or omitted or omits any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, or are made, not misleading.
SECTION 3.11. FEDERAL RESERVE REGULATIONS. (a) Neither
Holdings, nor any of its Subsidiaries is engaged principally, or as one
if its important activities, in the business of extending credit for the
purpose of purchasing or carrying Margin Stock.
(b) No part of the proceeds of any Loan will be used, whether
directly or indirectly, and whether immediately, incidentally or ultimately, (i)
to purchase or carry Margin Stock or to extend credit to others for the purpose
of purchasing or carrying Margin Stock or to refund indebtedness originally
incurred for such purpose, or (ii) for any purpose which entails a violation of,
or which is inconsistent with, the provisions of the Regulations of the Board,
including Regulation U or X.
SECTION 3.12. TITLE TO PROPERTIES. Holdings and its
Subsidiaries have good title in fee simple to, or valid and subsisting leasehold
interests in, all their respective material real properties, and good title to
all their respective material other properties, reflected on the financial
statements of Holdings and its Subsidiaries referred to in Section 3.03 above,
except for property disposed of in the ordinary course of business, and none of
such properties or documents of title relating to such properties are subject to
any Lien, except Liens for taxes not yet due and Liens which will not materially
interfere with the occupation, use and enjoyment of Holdings and its
Subsidiaries of such properties and assets in the normal course of business of
Holdings and its Subsidiaries taken as a whole.
SECTION 3.13. USE OF PROCEEDS. The Borrowers will use the
proceeds of the Loans only for the purposes specified in the preamble to
this Agreement.
SECTION 3.14. SECURITY DOCUMENTS. (a) The Pledge Agreement
will, when executed and delivered, be effective to create in favor of the
Collateral Agent a legal, valid and enforceable security interest in
38
the Collateral (as defined therein), and when the Collateral is delivered to the
Collateral Agent or the appropriate filings are made under the Uniform
Commercial Code the Pledge Agreement will constitute a perfected first priority
Lien on and security interest in all right, title and interest of each pledgor
thereunder in and to such Collateral.
(b) The Security Agreement will, when executed and delivered,
be effective to create in favor of the Collateral Agent a legal, valid and
enforceable security interest in the Collateral (as defined therein), and when
financing statements in appropriate form are filed in the offices specified in
the Perfection Certificate or other comparable actions are taken in foreign
jurisdictions, the Security Agreement will constitute a perfected first priority
Lien on and security interest in all right, title and interest of each grantor
thereunder in and to such Collateral to the extent it can be perfected by such
filing or such other actions, subject only to Liens existing on the date hereof
and expressly permitted by Section 6.01.
(c) When the Trademark Security Agreement is filed in the
United States Patent and Trademark Office and the United States Copyright
Office, the Trademark Security Agreement will constitute a perfected Lien on and
security interest in all right, title and interest of the grantors thereunder in
the Intellectual Property (as defined in the Security Agreement) that is
registered in the United States.
(d) The Mortgages will, when executed and delivered, be
effective to create in favor of the Collateral Agent, legal, valid and
enforceable Liens on all right, title and interest of the grantors thereunder in
and to the Mortgaged Properties and the proceeds thereof, and when the Mortgages
are filed in the offices specified in the Perfection Certificate, the Mortgages
will constitute perfected first priority Liens on and security interests in all
right, title and interest of such grantors in and to the Mortgaged Properties
and the proceeds thereof, subject only to Liens existing on the date hereof and
expressly permitted by Section 6.01.
ARTICLE IV. CONDITIONS OF LENDING
The obligations of the Lenders to make Loans hereunder and of
the Issuing Bank to issue Letters of Credit are subject to the satisfaction of
the following conditions:
SECTION 4.01. EACH BORROWING DATE. On the date of each
Borrowing, including each Borrowing in which Loans are refinanced with new Loans
as contemplated by Section 2.05, or on the date of issuance of any Letter of
Credit:
(a) The Administrative Agent shall have received a notice of
such Borrowing as required by Section 2.04.
(b) The representations and warranties set forth in Article
III hereof shall be true and correct in all material respects on and as
of the date of such Borrowing with the same effect as though made on
and as of such date, except to the extent such representations and
warranties expressly relate to an earlier date.
(c) Each Borrower shall be in compliance with all the terms
and provisions set forth herein and at the time of and immediately
after such Borrowing no Event of Default or Default shall have occurred
and be continuing.
39
(d) After giving effect to such Borrowing, the aggregate
outstanding principal amount of all Loans shall not exceed the
Borrowing Base.
(e) The Collateral and Guarantee Requirement shall have been
satisfied at all times on and after the Initial Borrowing Date.
Each Borrowing shall be deemed to constitute a representation and warranty by
each Borrower on the date of such Borrowing as to the matters specified in
paragraphs (b), (c) and (d) of this Section 4.01.
SECTION 4.02. INITIAL BORROWING DATE. On the Initial
Borrowing Date:
(a) The Administrative Agent shall have received the favorable
written opinions of Weil, Gotshal & Xxxxxx LLP and Freshfields, counsel
for the Borrowers, and Xx. Xxxxxxxxx X. Xxxxxxxxx, General Counsel of
Sotheby's Holdings, Inc. dated the Initial Borrowing Date and addressed
to the Lenders, the Administrative Agent and the Issuing Bank to the
effect set forth in Exhibits D-1 and D-2, respectively; the Borrowers
hereby instruct such counsel to deliver such opinions to the
Administrative Agent.
(b) All legal matters incident to this Agreement and the
borrowings hereunder shall be satisfactory to the Lenders and to
Cravath, Swaine & Xxxxx, counsel for the Administrative Agent.
(c) The Administrative Agent shall have received such evidence
as it shall reasonably have requested as to the power and authority of
Holdings and each Subsidiary to enter into and perform its obligations
under each Loan Document to which it is party and as to the due
execution and delivery of each such Loan Document.
(d) The Administrative Agent shall have received a certificate
of Holdings, dated the Initial Borrowing Date and signed by a Financial
Officer of Holdings, confirming compliance with the conditions
precedent set forth in paragraphs (b), (c) and (d) of Section 4.01.
(e) The Administrative Agent shall have received all Fees and
other amounts due and payable on or prior to the Initial Borrowing
Date.
(f) The Administrative Agent shall have received a completed
Borrowing Base Certificate dated as of a recent date and signed by a
Financial Officer on behalf of Holdings.
(g) The Collateral and Guarantee Requirement shall have been
satisfied at or prior to the earlier of (i) the Initial Borrowing Date
and (ii) March 10, 2000.
(h) The Collateral Agent shall have received the results of
such lien searches as it shall reasonably have requested, together with
copies of the financing statements (or similar documents) disclosed by
such searches, and accompanied by evidence
40
satisfactory to the Collateral Agent that the Liens indicated in any
such financing statement (or similar document) are permitted under
Section 6.01 or have been released.
(i) The Collateral Agent shall have received a Perfection
Certificate dated the Initial Borrowing Date and duly executed by a
Financial Officer of Holdings.
ARTICLE V. AFFIRMATIVE COVENANTS
The Borrowers covenant and agree with each Lender that, so
long as this Agreement shall remain in effect or the principal of or interest on
any Loan, any Fees or any other expenses or amounts payable under any Loan
Document shall be unpaid, or any Letter of Credit shall remain in effect, unless
the Required Lenders shall otherwise consent in writing, Holdings will, and will
cause each of its Subsidiaries to:
SECTION 5.01. FINANCIAL STATEMENTS. In the case of
Holdings, furnish to the Agent and each Lender:
(a) within 90 days after the end of each fiscal year, (i) a
consolidated balance sheet at the end of such fiscal year and the
related statements of income and operations and changes in financial
position and of shareholder's equity for such year, all prepared in
accordance with GAAP and audited by and accompanied by the opinion of
Deloitte & Touche or other independent public accountants reasonably
satisfactory to the Required Lenders and (ii) a consolidating balance
sheet by geographic region;
(b) within 60 days after the end of the first, second and
third quarter of each fiscal year, a consolidated balance sheet (and a
consolidating balance sheet by geographic region) at the end of such
quarter and the related statement of income for such period, all
prepared in accordance with GAAP and certified by the Financial Officer
of Holdings;
(c) (i) at the time of each delivery of financial statements
pursuant to (a) or (b) above, a certificate signed by a Responsible
Officer of Holdings stating whether or not Holdings and its
Subsidiaries are in compliance with Article VI and setting forth in
detail satisfactory to the Administrative Agent calculations of the
amounts, ratios and baskets referred to in Sections 6.07, 6.08, 6.09
and 6.10, and (ii) within 45 days after the end of each calendar
quarter, a completed Borrowing Base Certificate setting forth the
calculation of and certifying the Borrowing Base as of the last day of
such calendar quarter, certified as complete and correct and signed on
behalf of Holdings by a Financial Officer, together with such other
supporting documentation and additional reports with respect to the
Borrowing Base as the Administrative Agent shall reasonably request;
(d) promptly after the filing thereof, copies of all forms and
reports filed by it with the Securities and Exchange Commission and,
promptly after knowledge thereof shall have come to the attention of
any Responsible Officer, written notice of (i) any threatened or
pending litigation or arbitral or governmental or administrative
proceeding against Holdings or any of its Subsidiaries which could
reasonably be expected to result in a Material Adverse Effect and (ii)
any Event of Default (or event which with notice or the passage of time
or both would constitute an Event of Default) together with a statement
by a Responsible Officer describing the action, if any, which Holdings
proposes to
41
take with respect thereto; and
(e) promptly, such further information regarding the business
affairs, legal affairs relating to the Litigation Liabilities,
financial condition and contingent liabilities (including Litigation
Liabilities) of Holdings and its Subsidiaries as the Administrative
Agent may reasonably request.
SECTION 5.02. PAYMENT OF OBLIGATIONS. (a) Pay and discharge or
cause to be paid and discharged promptly when due all material and lawful taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits or in respect of its property, before the same shall become in
default, as well as all material and lawful claims which, if unpaid, might
become a lien or charge upon such properties or any part thereof; PROVIDED,
HOWEVER, that neither Holdings nor any of the Subsidiaries shall be required to
pay and discharge or to cause to be paid and discharged any such tax,
assessment, charge, levy or claim so long as the validity, applicability or
amount thereof shall be contested in good faith by applicable proceedings and
Holdings or such Subsidiary, as the case may be, shall have set aside on its
books reserves reasonably deemed adequate by it with respect thereto.
SECTION 5.03. MAINTAIN PROPERTY AND INSURANCE. (a) Maintain
and preserve all properties which are used in the conduct of the business of
Holdings and the Material Subsidiaries in good working order and condition,
ordinary wear and tear excepted, and (b) maintain in respect of the assets of
Holdings and the Material Subsidiaries, insurance in such amounts and against
such risks as is generally maintained by companies operating similar businesses
in the same general area. All insurance policies hereunder shall be maintained
with sound and reputable insurance carriers of recognized standing.
SECTION 5.04. MAINTAIN EXISTENCE. Preserve (a) the corporate
existence and good standing of Holdings and the Material Subsidiaries and (b)
all the material rights, privileges and franchises necessary and desirable in
the normal conduct of the business of Holdings and the Material Subsidiaries.
SECTION 5.05. COMPLIANCE WITH LAWS. Comply with the
requirements of all applicable laws (including ERISA), regulations and orders of
any Governmental Authority, a violation of which would materially affect the
business or financial condition of Holdings and its Subsidiaries taken as a
whole, except any such law, regulation or order which is being contested by
Holdings or any Subsidiary in good faith by applicable proceedings.
SECTION 5.06. INSPECTION. Give, upon the request of any Lender
upon reasonable advance notice, any representative of such Lender access during
normal business hours to inspect, and permit such representative to inspect, all
properties belonging to it and permit such representative to examine, copy and
make extracts from, financial records relating to its affairs, as such
representative may reasonably require.
SECTION 5.07. ERISA. (a) Comply in all material respects with
the applicable provisions of ERISA and the Code and (b) furnish to the
Administrative Agent and each Lender (i) as soon as possible, and in any event
within 30 days after any Responsible Officer of Holdings or any ERISA Affiliate
either knows or has reason to know that any Reportable Event has occurred that
alone or together with any other Reportable Event could reasonably be expected
to result in liability of Holdings to the PBGC in an aggregate amount exceeding
$5,000,000, a
42
statement of a Financial Officer setting forth details as to such
Reportable Event and the action proposed to be taken with respect thereto,
together with a copy of the notice, if any, of such Reportable Event given to
the PBGC, (ii) promptly after receipt thereof, a copy of any notice Holdings or
any ERISA Affiliate may receive from the PBGC relating to the intention of the
PBGC to terminate any Plan or Plans (other than a Plan maintained by an ERISA
Affiliate which is considered an ERISA Affiliate only pursuant to subsection (m)
or (o) of Section 414 of the Code) or to appoint a trustee to administer any
Plan or Plans, (iii) within 10 days after the due date for filing with the PBGC
pursuant to Section 412(n) of the Code of a notice of failure to make a required
installment or other payment with respect to a Plan, a statement of a Financial
Officer setting forth details as to such failure and the action proposed to be
taken with respect thereto, together with a copy of such notice given to the
PBGC and (iv) promptly and in any event within 30 days after receipt thereof by
any Borrower or any ERISA Affiliate from the sponsor of a Multiemployer Plan, a
copy of each notice received by such Borrower or any ERISA Affiliate concerning
(A) the imposition of Withdrawal Liability or (B) a determination that a
Multiemployer Plan is, or is expected to be, terminated or in reorganization,
both within the meaning of Title IV of ERISA.
SECTION 5.08. COLLATERAL AND BORROWING BASE EVALUATIONS.
Permit any representatives designated by the Administrative Agent (including
consultants or other advisors retained by the Administrative Agent) to conduct
evaluations of its computation of the Borrowing Base and the assets included in
the Borrowing Base, all at such reasonable times and as often as reasonably
requested; PROVIDED that, if no Default shall have occurred and be continuing,
no more than one such evaluation will be requested by the Administrative Agent
during any fiscal year; and PROVIDED FURTHER that any consultants or other
advisors retained by the Administrative Agent (i) shall not be employed by a
competing auction house and (ii) shall be subject to the confidentiality
provisions of Section 10.17. Holdings shall pay the reasonable fees and expenses
of any such evaluation.
SECTION 5.09. FURTHER ASSURANCES. Execute any and all further
documents, financing statements, agreements and instruments, and take all such
further actions (including the filing and recording of financing statements,
fixture filings, mortgages, deeds of trust and other documents), which may be
required under any applicable law, or which the Collateral Agent or the Required
Lenders may reasonably request, to cause the Collateral and Guarantee
Requirement to be and remain satisfied at all times, all at the expense of
Holdings. Holdings also agrees to provide to the Administrative Agent from time
to time upon request evidence reasonably satisfactory to the Collateral Agent as
to the perfection and priority of the Liens created or intended to be created by
the Security Documents.
SECTION 5.10. ART LOANS. Cause each Lending Subsidiary, in
connection with each Art Loan made or to be made by it, to apply credit
standards and loan to collateral value requirements, and to follow practices
with respect to documentation and the perfection of security interests, not less
strict than those generally applied and followed in the Lending Subsidiaries'
art lending business prior to the Closing Date.
SECTION 5.11. YORK AVENUE PROPERTY. (a) Sotheby's, Inc.
agrees that it shall, within 30 days of the date hereof (i) transfer all
43
its rights under the Agreement of Sale and Purchase dated September 9,
1999 between The Beneson Capital Company, Xxxxxxxx X. Xxxxxxx, Xxxxxxx
X. Xxxxxxx and York Avenue Development, Inc. (which entity assigned its
rights to Sotheby's, Inc. by an Assignment and Assumption Agreement
dated September 9, 1999) to a wholly owned subsidiary of Sotheby's,
Inc., which has no significant assets, operations or liabilities (the
"YORK AVENUE HOLDING SUBSIDIARY"), and (ii) pledge all the capital stock
of the York Avenue Holding Subsidiary to the Collateral Agent, for the
ratable benefit of the holders of the Obligations.
(b) Sotheby's, Inc. agrees to maintain records that will
enable it to determine the Construction and Improvement Amount at any time and
to furnish copies of such records to the Administrative Agent from time to time
upon request. Sotheby's, Inc. further agrees (i) to cause the York Avenue
Holding Subsidiary or another Subsidiary of Holdings to acquire title to the
York Avenue Property at the time provided in the York Avenue Purchase Agreement,
(ii) at such time as the York Avenue Holding Subsidiary or such other Subsidiary
shall have acquired such title, (A) to prepay or cause other Borrowers to prepay
Loans outstanding hereunder in the amount, if any, required in order for the
aggregate amount available for borrowing hereunder (taking into account the
Borrowing Base at such time) to be at least equal to the Construction and
Improvement Amount at such time, (B) promptly thereafter, execute and deliver a
mortgage on the York Avenue Property as contemplated in the definition of
Collateral and Guarantee Requirement and (C) promptly thereafter, to borrow
hereunder in a principal amount equal to the Construction and Improvement Amount
at such time to finance or refinance, as the case may be, the costs of
construction and substantial improvements related to the York Avenue Property
and (iii) from time to time after such Borrowing, to pay all costs of
construction and substantial improvements related to the York Avenue Property
with the proceeds of separate Borrowings, it being understood that the proceeds
of the Borrowings relating to the costs of construction and substantial
improvements will not be used for any other purpose. Sotheby's, Inc. agrees that
any Borrowing made pursuant to this Section will be identified as such in the
Borrowing Request submitted with respect thereto.
ARTICLE VI. NEGATIVE COVENANTS
The Borrowers covenant and agree with each Lender that, so
long as this Agreement shall remain in effect or the principal of or interest on
any Loan, any Fees or any other expenses or amounts payable under any Loan
Document shall be unpaid, or any Letters of Credits remain in outstanding,
unless the Required Lenders shall otherwise consent in writing, Holdings will
not, either directly or indirectly, and will not cause or permit any of its
Subsidiaries to:
SECTION 6.01. LIENS. Incur, create, assume or permit to exist
any mortgage, pledge, security interest, lien, charge or other encumbrance of
any nature whatsoever (including conditional sales or other title retention
agreement) on any of its property or assets, whether owned at the date hereof or
hereafter acquired, other than:
(a) liens incurred or pledges and deposits made in connection
with workmen's compensation, unemployment insurance, old-age pensions,
social security and public liability and similar legislation;
(b) liens securing the performance of bids, tenders, leases,
contracts (other than for the repayment of borrowed money),
44
statutory obligations, surety and appeal bonds and other obligations of
like nature, incurred incident to and in the ordinary course of
business;
(c) statutory liens of landlords and other liens imposed by
law, such as carriers', warehousemen's, mechanics', materialmen's and
vendors' liens, incurred in good faith in the ordinary course of
business, including but not limited to those relating to the
construction of the York Avenue Property;
(d) liens securing the payment of taxes, assessments and
governmental charges or levies, either (i) not delinquent or (ii) being
contested in good faith by appropriate proceedings with adequate
reserves;
(e) zoning restrictions, easements, licenses, reservations,
restrictions on the use of real property or minor irregularities
incident thereto which do not in the aggregate materially detract from
the value of the property or assets of Holdings and the Subsidiaries
taken as a whole or materially impair the operation of the business of
Holdings and the Subsidiaries taken as a whole;
(f) liens incurred in the ordinary course of business (other
than consensual liens on assets constituting Collateral) provided that
these liens are not given as security for Indebtedness;
(g) liens on property or assets of any Subsidiary securing
Indebtedness of such Subsidiary to Holdings or to a wholly owned
Subsidiary of Holdings;
(h) liens for judgments or awards, so long as the finality of
such judgment or award is being contested in good faith and execution
thereof is stayed; PROVIDED that the aggregate amount of liens
permitted by this clause may not exceed $10,000,000;
(i) any lien existing on any property or assets of any
corporation at the time it becomes a Subsidiary of Holdings, or
existing prior to the time of acquisition upon any property or assets
acquired by Holdings or any of its Subsidiaries through purchase,
merger or consolidation or otherwise, whether or not assumed by
Holdings or such Subsidiary;
(j) any lien placed upon property or assets within 90 days of
the time of acquisition of such property or assets by Holdings or any
of its Subsidiaries to secure all or a portion of (or to secure
Indebtedness incurred to pay all or a portion of) the purchase price
thereof, provided that any such lien shall not encumber any other
property or assets of Holdings or any Subsidiary;
(k) liens, other than the liens permitted by clauses (a)
through (j) above (including any such liens in existence as of the date
hereof), existing as of the date hereof and set forth on Schedule 6.01;
PROVIDED, HOWEVER, that no such lien shall be permitted under this
clause (k) if it extends to property other than the property subject to
such lien on the date hereof;
(l) any lien renewing, extending or refunding any lien
permitted by clause (i), (j) or (k) above, provided that the principal
amount secured is not increased, and the lien is not extended to other
property;
(m) liens, in addition to the liens permitted by clauses (a)
45
through (l) above, on assets not constituting Collateral securing
obligations in an aggregate amount not greater than 10% of Consolidated
Net Worth; and
(n) liens created under the Security Documents.
SECTION 6.02. SUBSIDIARY INDEBTEDNESS. Permit any
Subsidiary to create, incur, assume or permit to exist any Indebtedness except:
(a) in the case of any Subsidiary that is a Borrower,
Indebtedness not prohibited under any other Section of this
Agreement;
(b) Indebtedness of any Subsidiary the proceeds of which are
used by such Subsidiary to make secured loans to consignors, dealers or
clients in the ordinary course of business of the Borrowers and their
subsidiaries and in a manner that is consistent with established
practices pursuant to the auction finance business of the Borrowers and
their subsidiaries;
(c) Indebtedness of any Subsidiary to another Subsidiary or
any Borrower;
(d) Indebtedness of any Subsidiary outstanding on the date
hereof or available to any Subsidiary under credit facilities existing
on the date hereof, not in excess of $20,000,000 in the aggregate with
respect to all Subsidiaries; and
(e) other Indebtedness, provided that the aggregate principal
amount of all such other Indebtedness of all Subsidiaries outstanding
at any time (excluding amounts permitted under clauses (a) through (d)
above) does not exceed 10% of Consolidated Net Worth at such time.
SECTION 6.03. CONSOLIDATIONS, MERGERS, AND SALES OF ASSETS.
(a) Merge or consolidate with any other corporation, except that (i) any
Borrower may merge or consolidate with a Subsidiary so long as the Borrower is
the surviving entity in such merger or consolidation, (ii) any Subsidiary may
merge or consolidate with a Subsidiary so long as the surviving entity in such
merger or consolidation is a Subsidiary (and, if either constituent corporation
is a Domestic Subsidiary, a Domestic Subsidiary) or (iii) any Borrower may merge
or consolidate with any other Person so long as the Borrower is the surviving
entity in such merger or consolidation and, after giving effect to such merger
or consolidation, no Event of Default exists.
(b) Sell, lease, transfer or otherwise dispose of all or a
substantial part of its assets, other than assets no longer used or useful in
the conduct of its business or leases for space used in the ordinary course of
business which are near the end of their term, except dispositions in the
ordinary course of business for a full and adequate consideration.
(c) Sell, lease, transfer or otherwise dispose of any Art
Loan.
SECTION 6.04. LINES OF BUSINESS. Engage to any substantial
extent in any line or lines of business activity fundamentally different
46
from the business presently engaged in.
SECTION 6.05. TRANSACTIONS WITH AFFILIATES. Sell or transfer
any property or assets to, or purchase or acquire any property or assets from,
or otherwise engage in any other transactions with, any of its Affiliates,
except that as long as no Default or Event of Default shall have occurred and be
continuing, Holdings or any of its Subsidiaries may engage in any of the
foregoing transactions in the ordinary course of business at prices and on terms
and conditions not less favorable to Holdings or any Subsidiary than could be
obtained on an arm's-length basis from unrelated third parties.
SECTION 6.06. RESTRICTIONS ON DIVIDENDS. Enter into any
agreement, contract or arrangement which expressly limits the right of
any Subsidiary to pay dividends to its parent corporation.
SECTION 6.07. CONSOLIDATED LEVERAGE RATIO. Permit the
Consolidated Leverage Ratio at any time to exceed .50 to 1.0.
SECTION 6.08. ADJUSTED CONSOLIDATED NET WORTH. Permit
Adjusted Consolidated Net Worth at any time to be less than
$315,000,000.
SECTION 6.09. CONSOLIDATED COVERAGE RATIO. Permit the
Consolidated Coverage Ratio for any period of four consecutive financial
quarters ending after the date hereof to be less than 4.5 to 1.0.
SECTION 6.10. RESTRICTED PAYMENTS; CERTAIN PAYMENTS IN RESPECT
OF INDEBTEDNESS. (a) Declare or make, or agree to make, directly or indirectly,
any Restricted Payment, or incur any obligation (contingent or otherwise) to do
so, except that (i) Subsidiaries may declare and pay dividends ratably with
respect to their capital stock and (ii) if no Default or Event of Default has
occurred and is continuing or would occur as a result thereof, Holdings may make
any Restricted Payment that, taken together with all other Restricted Payments
made after the date hereof, would not exceed 40% of Consolidated Net Income of
Holdings, adjusted to exclude nonrecurring or extraordinary reserves and charges
relating to the Litigation Liabilities, for the period (treated as one
accounting period) commencing January 1, 2000, and ending at the most recent
fiscal quarter end for which financial statements shall have been delivered
under Section 5.01(a) or (b).
(b) Make any payment on account of the purchase, redemption,
prepayment, retirement or defeasance of the Senior Notes.
SECTION 6.11. ART LOANS. Permit any of the Pledged Art Loans
(as such term is defined in the Pledge Agreement) to be represented or evidenced
by an instrument or a certificate, or permit any agreement relating to any
Pledged Art Loan to provide that any of the documentation evidencing such
Pledged Art Loan is a security governed by Article 8 of the Uniform Commercial
Code as in effect in any applicable jurisdiction.
ARTICLE VII. EVENTS OF DEFAULT
In case of the happening of any of the following events
("Events of Default"):
(a) default shall be made in the payment of any principal of
any Loan or any amount due in respect of the reimbursement of any LC
Disbursement when and as the same shall become due and payable,
47
whether at the due date thereof or at a date fixed for prepayment
thereof or by acceleration thereof or otherwise;
(b) default shall be made in the payment of any interest on
any Loan or LC Disbursement or any Fee or any other amount due under
any Loan Document, when and as the same shall become due and payable,
and such default shall continue unremedied for a period of five days;
(c) default shall be made in the due observance or performance
by a Borrower or any Subsidiary of any other covenant, condition or
agreement contained in Section 5.04(a) or 5.10 or in Article VI;
(d) default shall be made in the due observance or performance
by a Borrower or any Subsidiary of any other covenant, condition or
agreement contained in any Loan Document and such default shall
continue unremedied for a period of 30 days after notice thereof from
the Administrative Agent or any Lender to Holdings, or default shall be
made in the due observance or performance by a Borrower or any
Subsidiary of any other covenant, condition or agreement contained in
any Security Document and such default shall continue unremedied for a
period of 5 Business Days after notice thereof from the Administrative
Agent or any Lender to Holdings;
(e) Holdings or any Subsidiary shall fail to pay any
Indebtedness greater than $1,000,000, or fail during any 30-day period
to pay Indebtedness aggregating more than $1,000,000, owing by Holdings
or such Subsidiary, or any interest or premium thereon aggregating
$1,000,000 or more, when due (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise) and such failure shall
continue after the applicable grace period, if any, specified in the
agreement or instrument relating to such Indebtedness;
(f) Any event or condition shall occur or exist under any
agreement or instrument of Holdings or any Subsidiary evidencing or
securing or relating to any Indebtedness exceeding $10,000,000, if the
effect of such event or condition is to accelerate, or to permit the
holder or holders of such Indebtedness or the trustee or trustees under
any such agreement or instrument to accelerate, the maturity of such
Indebtedness;
(g) any representation or warranty made or deemed made in or
in connection with any Loan Document or the borrowings hereunder, or
any representation, warranty, statement or information contained in any
report, certificate, financial statement or other instrument furnished
in connection with or pursuant to any Loan Document, shall prove to
have been false or misleading in any material respect when so made,
deemed made or furnished;
(h)(i) a Reportable Event or Reportable Events, or a failure
to make a required installment or other payment (within the meaning of
Section 412(n)(1) of the Code), shall have occurred with respect to any
Plan or Plans that reasonably could be expected to result in liability
of Holdings to the PBGC or to a Plan in an aggregate amount exceeding
$5,000,000 and, within 30 days after the reporting of any such
Reportable Event to the Agent or after the receipt by the Agent of a
statement required pursuant to Section 5.07(b(iii) hereof, the Agent
shall have notified the Borrower in writing that (A) the Required
Lenders have made a determination that, on the basis of such Reportable
Event or
48
Reportable Events or the failure to make a required payment, there are
reasonable grounds for the termination of such Plan or Plans by the
PBGC, the appointment by the appropriate United States district court
of a trustee to administer such Plan or Plans or the imposition of a
lien in favor of a Plan and (B) as a result thereof an Event of Default
exists hereunder; or (ii) a trustee shall be appointed by a United
States district court to administer any such Plan or Plans; or (iii)
the PBGC shall institute proceedings (including giving notice of intent
thereof) to terminate any such Plan or Plans;
(i)(i) the Borrowers or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that it has incurred
Withdrawal Liability to such Multiemployer Plan, (ii) such Borrower or
such ERISA Affiliate does not have reasonable grounds for contesting
such Withdrawal Liability or is not contesting such Withdrawal
Liability in a timely and appropriate manner and (iii) the amount of
such Withdrawal Liability specified in such notice, when aggregated
with all other amounts required to be paid to Multiemployer Plans in
connection with Withdrawal Liabilities (determined as of the date or
dates of such notification), either (A) exceeds $5,000,000 or requires
payments exceeding $1,000,000 in any year or (B) is less than
$5,000,000 but any Withdrawal Liability payment remains unpaid 30 days
after such payment is due;
(j) the Borrower or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that such Multiemployer
Plan is in reorganization or is being terminated, within the meaning of
Title IV of ERISA, if solely as a result of such reorganization or
termination the aggregate annual contributions of the Borrower and its
ERISA Affiliates to all Multiemployer Plans that are then in
reorganization or have been or are being terminated have been or will
be increased over the amounts required to be contributed to such
Multiemployer Plans for their most recently completed plan years by an
amount exceeding $1,000,000;
(k) a judgment or judgments for the payment of money in excess
of $5,000,000 in the aggregate shall have been rendered against
Holdings or any Subsidiary and the same shall have remained unsatisfied
and in effect, without stay of execution, for any period of 60 days;
(l) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed in a court of competent
jurisdiction seeking (i) relief in respect of Holdings or any Material
Subsidiary, or of a substantial part of the property or assets of
Holdings or any Material Subsidiary, under Title 11 of the United
States Code, as now constituted or hereafter amended, or any other
Federal or state bankruptcy, insolvency, receivership or similar law
(or similar statute or law in any other jurisdiction), (ii) the
appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for Holdings or any Material Subsidiary
or for a substantial part of the property or assets of Holdings or a
Material Subsidiary or (iii) the winding-up or liquidation of Holdings
or any Material Subsidiary; and such proceeding or petition shall
continue undismissed for 30 days or an order or decree approving or
49
ordering any of the foregoing shall be entered;
(m) Holdings or any Material Subsidiary shall (i) volun tarily
commence any proceeding or file any petition seeking relief under Title
11 of the United States Code, as now constituted or hereafter amended,
or any other Federal or state bankruptcy, insolvency, receivership or
similar law (or similar statute or law in any other jurisdiction), (ii)
consent to the institution of, or fail to contest in a timely and
applicable manner, any proceeding or the filing of any petition
described in (g) above, (iii) apply for or consent to the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar
official for Holdings or any Material Subsidiary or for a substantial
part of the property or assets of Holdings or any Material Subsidiary,
(iv) file an answer admitting the Material allegations of a petition
filed against it in any such proceeding, (v) make a general assignment
for the benefit of creditors, (vi) become unable, admit in writing its
inability or fail generally to pay its debts as they become due or
(vii) take any action for the purpose of effecting any of the
foregoing;
(n) A Change in Control shall occur; or
(o) any Lien purported to be created under any Security
Document shall cease to be, or shall be asserted in writing by any
Borrower or any Subsidiary party to a Security Document not to be, a
valid and perfected Lien on any Collateral, with the priority required
by the applicable Security Document, except (i) as a result of the sale
or other disposition of the applicable Collateral in a transaction
permitted under the Loan Documents or (ii) as a result of the
Administrative Agent's failure to maintain possession of any stock
certificates, promissory notes or other instruments delivered to it
under the Pledge Agreement or to make or continue UCC filings; provided
that no such cessation shall give rise to an Event of Default unless
such cessation (x) affects Collateral that is or should be subject to a
Lien in favor of the Collateral Agent having an aggregate value in
excess of $1,000,000 or (y) is not corrected upon request by the
Collateral Agent upon reasonable notice.
then, and in every such event (other than an event with respect to any Borrower
described in paragraph (l) or (m) above), and at any time thereafter during the
continuance of such event, the Administrative Agent shall at the request of the
Required Lenders, by notice to the Borrowers, take either or both of the
following actions, at the same or different times: (i) terminate forthwith the
Commitments and (ii) declare the Loans then outstanding to be forthwith due and
payable in whole or in part, whereupon the principal of the Loans so declared to
be due and payable, together with accrued interest thereon and any unpaid
accrued Fees and all other liabilities of the Borrowers accrued hereunder, shall
become forthwith due and payable, without presentment, demand, protest or any
other notice of any kind, all of which are hereby expressly waived by the
Borrowers, anything contained herein to the contrary notwithstanding; and, in
any event with respect to a Borrower described in paragraph (l) or (m) above,
the Commitments shall automatically terminate and the principal of the Loans
then outstanding, together with accrued interest thereon and any unpaid accrued
Fees and all other liabilities of the Borrowers accrued hereunder, shall
automatically become due and payable, without presentment, demand, protest or
any other notice of any kind, all of which are hereby expressly waived by the
Borrowers, anything contained herein to the contrary notwithstanding. Any
Letters of Credit issued to Lenders to support the obligations listed on
Schedule 1.01A hereto may be drawable
50
on or after an Event of Default.
ARTICLE VIII. THE AGENTS
In order to expedite the transactions contemplated by this
Agreement, The Chase Manhattan Bank is hereby appointed to act as Administrative
Agent and Collateral Agent on behalf of the Lenders. Each of the Lenders hereby
irrevocably authorizes the Agents to take such actions on behalf of such Lender
and to exercise such powers as are specifically delegated to the Agents by the
terms and provisions hereof and of the other Loan Documents, together with such
actions and powers as are reasonably incidental thereto. The Administrative
Agent is hereby expressly authorized by the Lenders, without hereby limiting any
implied authority, (a) to receive on behalf of the Lenders all payments of
principal of and interest on the Loans and all other amounts due to the Lenders
hereunder, and promptly to distribute to each Lender its proper share of each
payment so received; (b) as provided in Article VII, to give notice on behalf of
each of the Lenders to the Borrowers of any Event of Default specified in this
Agreement of which the Administrative Agent has actual knowledge acquired in
connection with its agency hereunder; and (c) to distribute to each Lender
copies of all notices, financial statements and other materials delivered by any
Borrower pursuant to this Agreement as received by the Administrative Agent.
Neither the Agents nor any of their directors, officers,
employees or agents shall be liable as such for any action taken or omitted by
any of them except for its or his own gross negligence or wilful misconduct, or
be responsible for any statement, warranty or representation herein or the
contents of any document delivered in connection herewith, or be required to
ascertain or to make any inquiry concerning the performance or observance by the
Borrowers of any of the terms, conditions, covenants or agreements contained in
any Loan Document. The Agents shall not be responsible to the Lenders for the
due execution, genuineness, validity, enforceability or effectiveness of this
Agreement, or any other Loan Documents or other instruments or agreements. The
Agents shall in all cases be fully protected in acting, or refraining from
acting, in accordance with written instructions signed by the Required Lenders
and, except as otherwise specifically provided herein, such instructions and any
action or inaction pursuant thereto shall be binding on all the Lenders. The
Agents shall, in the absence of knowledge to the contrary, be entitled to rely
on any instrument or document believed by them in good faith to be genuine and
correct and to have been signed or sent by the proper person or persons. Neither
the Agents nor any of their directors, officers, employees or agents shall have
any responsibility to the Borrowers on account of the failure of or delay in
performance or breach by any Lender of any of its obligations hereunder or to
any Lender on account of the failure of or delay in performance or breach by any
other Lender or a Borrower of any of their respective obligations hereunder or
under any other Loan Document or in connection herewith or therewith. The Agents
may execute any and all duties hereunder and under the other Loan Documents by
or through agents or employees and shall be entitled to rely upon the advice of
legal counsel selected by them with respect to all matters arising hereunder and
shall not be liable for any action taken or suffered in good faith by them in
accordance with the advice of such counsel.
The Lenders hereby acknowledge that the Agents shall be under
no duty to take any discretionary action permitted to be taken by them pursuant
to the provisions of this Agreement or any other Loan Document unless they shall
be requested in writing to do so by the Required Lenders.
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Subject to the appointment and acceptance of a successor
Administrative Agent as provided below, the Administrative Agent may resign at
any time by notifying the Lenders, the Issuing Bank and the Borrowers. Upon any
such resignation, the Required Lenders shall have the right to appoint a
successor. If no successor shall have been so appointed by the Required Lenders
and shall have accepted such appointment within 30 days after the retiring
Administrative Agent gives notice of its resignation, then the retiring
Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent which shall be a bank with an office in New York, New York,
having a combined capital and surplus of at least $500,000,000 or an affiliate
of any such bank. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor bank, such successor shall succeed to and become vested
with all the rights, powers, privileges and duties of the retiring
Administrative Agent and the retiring Administrative Agent shall be discharged
from its duties and obligations hereunder. After the Administrative Agent's
resignation hereunder, the provisions of this Article and Section 10.05 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.
With respect to the Loans made by it hereunder, the Agents in
their individual capacity and not as Agents shall have the same rights and
powers as any other Lender and may exercise the same as though they were not the
Agents, and the Agents and their affiliates may accept deposits from, lend money
to and generally engage in any kind of business with Holdings or any Subsidiary
or other Affiliate thereof as if they were not the Agents.
Each Lender agrees (a) to reimburse the Agents, on demand, in
the amount of its pro rata share (based on its Commitment hereunder or, if the
Commitments shall have been terminated, its outstanding Loans) of any expenses
incurred for the benefit of the Lenders by the Agents, including counsel fees
and compensation of agents and employees paid for services rendered on behalf of
the Lenders, which shall not have been reimbursed by one of the Borrowers and
(b) to indemnify and hold harmless the Agents and any of their directors,
officers, employees or agents, on demand, in the amount of such pro rata share,
from and against any and all liabilities, taxes, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever which may be imposed on, incurred by or asserted
against them in their capacity as Agents or any of them in any way relating to
or arising out of this Agreement or any other Loan Document or any action taken
or omitted by any of them under this Agreement or any other Loan Document, to
the extent the same shall not have been reimbursed by the Borrowers; PROVIDED
that no Lender shall be liable to the Agents for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the gross negligence or wilful
misconduct of the Agents or any of their directors, officers, employees or
agents.
Each Lender acknowledges that it has, independently and
without reliance upon the Agents or any other Lender and based on such documents
and information as it has deemed applicable, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Agents or any other Lender and
based on such documents and informa tion as it shall from time to time deem
applicable, continue to make its own decisions in taking or not taking action
under or based upon this Agreement or any other Loan Document, any related
agreement or
52
any document furnished hereunder or thereunder.
ARTICLE IX. GUARANTEE
SECTION 9.01. GUARANTEE. (a) Subject to the last sentence of
this Section 9.01(a), each Guarantor hereby guarantees to each Lender and the
Administrative Agent and their respective successors and assigns the prompt
payment in full when due (whether at stated maturity, by acceleration, by
optional prepayment or otherwise) of the principal of and interest (accruing at
the rate specified herein after the filing or commencement of any bankruptcy or
similar proceeding) on the Loans made by the Lenders to any Borrower and all
other amounts from time to time owing to the Lenders or the Administrative Agent
by any Borrower under this Agreement, strictly in accordance with the terms
thereof (such obligations being herein collectively called the "Guaranteed
Obligations"). Each Guarantor hereby further agrees that if any Borrower shall
fail to pay in full when due (whether at stated maturity, by acceleration, by
optional prepayment or otherwise) any of the Guaranteed Obligations, the
Guarantor will promptly pay the same, without any demand or notice whatsoever,
and that in the case of any extension of time of payment or renewal of any of
the Guaranteed Obligations, the same will be promptly paid in full when due
(whether at extended maturity, by acceleration or otherwise) in accordance with
the terms of such extension or renewal. Notwithstanding anything in this Article
IX to the contrary, Oatshare Limited and Sotheby's will not be liable as
Guarantors for the obligations of Sotheby's Holdings, Inc. and Sotheby's, Inc.
(b) Anything herein to the contrary notwithstanding, the
maximum liability of each Guarantor hereunder shall in no event exceed the
amount which can be guaranteed by such Guarantor under applicable federal and
state laws relating to the insolvency of debtors.
SECTION 9.02. OBLIGATIONS UNCONDITIONAL. The obligations of
each Guarantor under Section 9.01 hereof are absolute and unconditional
irrespective of the value, genuineness, validity, regularity or enforceability
of the obligations of any Borrower under this Agreement or any other agreement
or instrument referred to herein or therein, or any substitution, release or
exchange of any other guarantee of or security for any of the Guaranteed
Obligations, and, to the fullest extent permitted by applicable law,
irrespective of any other circumstance whatsoever which might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor,
it being the intent of this Section 9.02 that the obligations of each Guarantor
hereunder shall be absolute and unconditional under any and all circumstances.
Without limiting the generality of the foregoing, it is agreed that the
occurrence of any one or more of the following shall not affect the liability of
any Guarantor hereunder:
(a) at any time or from time to time, without notice to the
Guarantors, the time for any performance of or compliance with any of
the Guaranteed Obligations shall be extended, or such performance or
compliance shall be waived;
(b) any of the acts mentioned in any of the provisions of this
Agreement or any other agreement or instrument referred to herein or
therein shall be done or omitted; or
53
(c) the maturity of any of the Guaranteed Obligations shall
be accelerated, or any of the Guaranteed Obligations shall be modified,
supplemented or amended in any respect, or any right under this
Agreement or any other agreement or instrument referred to herein or
therein shall be waived or any other guarantee of any of the Guaranteed
Obligations or any security therefor shall be released or exchanged in
whole or in part or otherwise dealt with.
Each Guarantor hereby expressly waives diligence, presentment, demand of
payment, protest and all notices whatsoever, and any requirement that the
Administrative Agent or any Lender exhaust any right, power or remedy or proceed
against any Borrower under this Agreement or any other agreement or instrument
referred to herein or therein, or against any other person under any other
guarantee of, or security for, any of the Guaranteed Obligations.
SECTION 9.03. REINSTATEMENT. The obligations of each Guarantor
under this Article IX shall be automatically reinstated if and to the extent
that for any reason any payment by or on behalf of any Borrower in respect of
the Guaranteed Obligations is rescinded or must be otherwise restored by any
holder of any of the Guaranteed Obligations, whether as a result of any
proceedings in bankruptcy or reorganization or otherwise, and each Guarantor
agrees that it will indemnify the Administrative Agent and each Lender on demand
for all reasonable costs and expenses (including, without limitation, fees of
counsel) incurred by the Administrative Agent or such Lender in connection with
such rescission or restoration.
SECTION 9.04. SUBROGATION. Each Guarantor hereby irrevocably
waives all rights of subrogation or contribution, whether arising by operation
of law (including, without limitation, any such right arising under Title 11 of
the United States Code) or otherwise, by reason of any payment by it pursuant to
the provisions of this Article IX and further agrees for the benefit of each of
its creditors (including, without limitation, each Lender and the Administrative
Agent) that any such payment by it of the Guaranteed Obligations of any Borrower
shall constitute a contribution of capital or a dividend, as the case may be, by
such Guarantor to such Borrower.
SECTION 9.05. REMEDIES. Each Guarantor agrees that, as between the
Guarantors and the Lenders, the obligations of any Borrower under this Agreement
may be declared to be forthwith due and payable as provided in Article VII
hereof (and shall be deemed to have become automatically due and payable in the
circumstances provided in said Article VII) for purposes of Section 9.01 hereof
notwithstanding any stay, injunction or other prohibition preventing such
declaration (or preventing such obligations from becoming automatically due and
payable) as against any Borrower and that, in the event of such declaration (or
such obligations being deemed to have become automatically due and payable),
such obligations (whether or not due and payable by such Approved Borrower)
shall forthwith become due and payable by each Guarantor for purposes of such
Section 9.01.
SECTION 9.06. CONTINUING GUARANTEE. The guarantee in this
Article IX is a continuing guarantee, and shall apply to all Guaranteed
Obligations whenever arising.
ARTICLE X. MISCELLANEOUS
SECTION 10.01. NOTICES. Notices and other communications
provided for herein shall be in writing and shall be delivered by hand or
overnight courier service, mailed by certified or registered mail or
54
sent by telecopy, as follows:
(a) if to any Borrower, to it in care of Holdings at 0000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention of the Chief Financial
Officer (Telecopy No. (000) 000-0000);
(b) if to the Administrative Agent, to The Chase Manhattan
Bank, Xxx Xxxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx, 00000 Attention
of Xxxxxx Xxxxxx (Telecopy No. 212-552-7500), with copies to The Chase
Manhattan Bank, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention of
Xxxxxxxx Xxxx (Telecopy No. 000- 000-0000);
(c) if to the Issuing Bank, to The Chase Manhattan Bank, 000
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention of Xxxxxxxx Xxxx
(Telecopy No. 212-270-5646);
(d) if to the Collateral Agent, to The Chase Manhattan Bank,
000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention of Xxxxxxxx Xxxx
(Telecopy No. 212-270-5646); and
(e) if to a Lender, to it at its address (or telecopy number)
set forth in Schedule 2.01 or in the Assignment and Acceptance pursuant
to which such Lender shall have become a party hereto.
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
date of receipt if delivered by hand or overnight courier service or sent by
telecopy, or on the date five Business Days after dispatch by certified or
registered mail, in each case delivered, sent or mailed (properly addressed) to
such party as provided in this Section 10.01 or in accordance with the latest
unrevoked direction from such party given in accordance with this Section 10.01.
SECTION 10.02. SURVIVAL OF AGREEMENT. All covenants,
agreements, representations and warranties made by the Borrowers herein and in
the certificates or other instruments prepared or delivered in connection with
or pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Lenders and shall survive the making by the Lenders
of the Loans and the issuance of the Letters of Credit by the Issuing Bank,
regardless of any investigation made by the Lenders or on their behalf, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any Fee or any other amount payable under this
Agreement or any other Loan Document is outstanding and unpaid and so long as
the Commitments have not been terminated.
SECTION 10.03. BINDING EFFECT. This Agreement shall become
effective when it shall have been executed by the Borrowers and the
Administrative Agent and when the Administrative Agent shall have received
copies hereof which, when taken together, bear the signatures of the Required
Lenders, and thereafter shall be binding upon and inure to the benefit of the
Borrowers, the Administrative Agent and each Lender and their respective
successors and assigns, except that the Borrowers shall not have the right to
assign rights hereunder or any interest herein without the prior consent of all
the Lenders.
SECTION 10.04. SUCCESSORS AND ASSIGNS. (a) Whenever in this
Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the successors and assigns of such party (including any
affiliate of the Issuing Bank that issues any Letter of Credit); and all
covenants, promises and agreements by or on behalf of
55
the Borrowers, the Administrative Agent, the Issuing Bank or the Lenders that
are contained in this Agreement shall bind and inure to the benefit of their
respective successors and assigns (including any affiliate of the Issuing Bank
that issues any Letter of Credit).
(b) Each Lender may assign to one or more assignees all or a
portion of its interests, rights and obligations under this Agreement (including
all or a portion of its Commitment or outstanding Loans or Letters of Credit at
the time owing to it); PROVIDED, HOWEVER, that (i) except in the case of (A) an
assignment to a Lender or an affiliate of such Lender or (B) an assignment after
the occurrence and during the continuance of an Event of Default referred to in
paragraph (l) or (m) of Article VII, Holdings and the Administrative Agent (and,
in the case of an assignment of all or a portion of any Lender's LC Exposure,
the Issuing Bank) must give their prior written consent to such assignment
(which consent shall not be unreasonably withheld), (ii) each such assignment
shall be of a constant, and not a varying, percentage of all the assigning
Lender's rights and obligations under this Agreement, (iii) the amount of the
Commitment of the assigning Lender subject to each such assignment (determined
as of the date the Assignment and Acceptance Agreement with respect to such
assignment is delivered to the Administrative Agent) shall not be less than
$5,000,000 (or, if smaller, such Lender's remaining Commitment) and the amount
of the Commitment of such Lender remaining after such assignment shall not be
less than $5,000,000 or shall be zero, (iv) the parties to each such assignment
shall execute and deliver to the Administrative Agent an Assignment and
Acceptance Agreement and a processing and recordation fee of $4,000 and (v) the
assignee, if it shall not be a Lender, shall deliver to the Administrative Agent
an Administrative Questionnaire. Upon acceptance and recording pursuant to
paragraph (e) of this Section 10.04, from and after the effective date specified
in each Assignment and Acceptance Agreement, which effective date shall be at
least five Business Days after the execution thereof, (A) the assignee
thereunder shall be a party hereto and, to the extent of the interest assigned
by such Assignment and Acceptance Agreement, have the rights and obligations of
a Lender under this Agreement and (B) the assigning Lender thereunder shall, to
the extent of the interest assigned by such Assignment and Acceptance Agreement,
be released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance Agreement covering all or the remaining portion of an
assigning Lender's rights and obligations under this Agreement, such Lender
shall cease to be a party hereto (but shall continue to be entitled to the
benefits of Sec tions 2.13, 2.15, 2.19 and 10.05, as well as to any Fees accrued
for its account hereunder and not yet paid)).
(c) By executing and delivering an Assignment and Acceptance
Agreement, the assigning Lender thereunder and the assignee thereunder shall be
deemed to confirm to and agree with each other and the other parties hereto as
follows: (i) such assigning Lender warrants that it is the legal and beneficial
owner of the interest being assigned thereby free and clear of any adverse claim
and that its Commitment, if any, and the outstanding balances of its Standby
Loans, if any, in each case without giving effect to assignments thereof which
have not become effective, are as set forth in such Assignment and Acceptance
Agreement, (ii) except as set forth in (i) above, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement, or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement, any other Loan Document or any other
instrument or document furnished pursuant hereto or the financial condition of
the Borrowers or any Subsidiary or the performance or observance by any Borrower
of any of its obligations under this Agreement, any other Loan Document or any
56
other instrument or document furnished pursuant hereto; (iii) such assignee
represents and warrants that it is legally authorized to enter into such
Assignment and Acceptance Agreement; (iv) such assignee confirms that it has
received a copy of this Agreement, together with copies of the most recent
financial statements delivered pursuant to Section 5.01 and such other documents
and information as it has deemed applicable to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (v) such assignee will
independently and without reliance upon the Administrative Agent, such assigning
Lender or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement; (vi) such assignee appoints
and authorizes the Administrative Agent to take such action as agent on its
behalf and to exercise such powers under this Agreement as are delegated to the
Administrative Agent by the terms hereof, together with such powers as are
reasonably incidental thereto; and (vii) such assignee agrees that it will
perform in accordance with their terms all the obligations which by the terms of
this Agreement are required to be performed by it as a Lender.
(d) The Administrative Agent shall maintain at one of its
offices in The City of New York a copy of each Assignment and Acceptance
Agreement delivered to it and a register for the recordation of the names and
addresses of the Lenders, and the Commitment of, and principal amount of the
Loans and LC Disbursements owing to, each Lender pursuant to the terms hereof
from time to time (the "Register"). 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 pursuant to the terms hereof as a Lender hereunder for all purposes of
this Agreement. The Register shall be available for inspection by the Borrowers
and any Lender, at any reasonable time and from time to time upon reasonable
prior notice.
(e) Upon its receipt of a duly completed Assignment and
Acceptance Agreement executed by an assigning Lender and an assignee, an
Administrative Questionnaire completed in respect of the assignee (unless the
assignee shall already be a Lender hereunder), the processing and recordation
fee referred to in paragraph (b) above and, as required, the written consent of
Holdings and the Administrative Agent to such assignment, the Administrative
Agent shall (i) accept such Assignment and Acceptance Agreement, (ii) record the
information contained therein in the Register and (iii) give prompt notice
thereof to the Lenders.
(f) Each Lender may without the consent of Holdings, the
Issuing Bank or the Administrative Agent sell participations to one or more
banks or other entities in all or a portion of its rights and obligations under
this Agreement (including all or a portion of its Commitment and the Loans or LC
Disbursements owing to it); PROVIDED, HOWEVER, that (i) such Lender's
obligations under this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations, (iii) the participating banks or other entities shall be
entitled to the benefit of the cost protection provisions contained in Sections
2.13, 2.15 and 2.19 to the same extent as if they were Lenders and (iv) the
Borrowers, the Administrative Agent and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement, and such Lender shall retain the sole right to
enforce the obligations of the Borrowers relating to the Loans and to approve
any amendment, modification or waiver of any provision of this Agreement (other
than amendments, modifications or waivers decreasing any fees payable hereunder
or the
57
amount of principal of or the rate at which interest is payable on the Loans,
extending any scheduled principal payment date or date fixed for the payment of
interest on the Loans or changing or extending the Commitments).
(g) Any Lender or participant may, in connection with any
assignment or participation or proposed assignment or participation pursuant to
this Section 10.04, disclose to the assignee or participant or proposed assignee
or participant any information relating to the Borrowers furnished to such
Lender by or on behalf of the Borrowers; PROVIDED that, prior to any such
disclosure of information, each such assignee or participant or proposed
assignee or participant shall execute an agreement whereby such assignee or
participant shall agree on terms substantially similar to those set forth in
Section 10.17 to preserve the confidentiality of such confidential information.
(h) Any Lender may at any time assign all or any portion of
its rights under this Agreement to a Federal Reserve Bank; PROVIDED that no such
assignment shall release a Lender from any of its obligations hereunder. In
order to facilitate such an assignment to a Federal Reserve Bank, the applicable
Borrower shall, at the request of the assigning Lender, duly execute and deliver
to the assigning Lender a promissory note or notes evidencing the Loans made to
such Borrower by the assigning Lender hereunder.
(i) The Borrowers shall not assign or delegate any of their
rights or duties hereunder, except pursuant to a merger permitted by Section
6.03.
SECTION 10.05. EXPENSES; INDEMNITY. (a) Each Borrower agrees
to pay all reasonable out-of-pocket expenses incurred by the Administrative
Agent in connection with the preparation of this Agree ment and the other Loan
Documents or in connection with any amendments, modifications or waivers of the
provisions hereof or thereof (whether or not the transactions hereby
contemplated shall be consummated) or incurred by the Administrative Agent or
any Lender in connection with the enforcement or protection of their rights in
connection with this Agreement and the other Loan Documents or in connection
with the Loans made hereunder, including the reasonable fees, charges and
disbursements of Cravath, Swaine & Xxxxx, counsel for the Administrative Agent,
and, in connection with any such enforcement or protection, the reasonable fees,
charges and disbursements of any other counsel for the Administrative Agent or
any Lender and all reasonable out-of-pocket expenses incurred by the Issuing
Bank in connection with the issuance, amendment, renewal or extension of any
Letter of Credit or any demand for payment thereunder. Each Borrower further
agrees that it shall indemnify the Lenders from and hold them harmless against
any docu mentary taxes, assessments or charges made by any Governmental
Authority by reason of the execution and delivery of this Agreement or any of
the other Loan Documents.
(b) Each Borrower agrees to indemnify the Administrative
Agent, the Issuing Bank, each Lender and each of their respective directors,
officers, employees and agents (each such person being called an "Indemnitee")
against, and to hold each Indemnitee harmless from, any and all actual losses,
claims, damages, liabilities and related expenses, including reasonable counsel
fees, charges and disbursements, incurred by or asserted against any Indemnitee
arising out of, in any way connected with, or as a result of (i) the execution
or delivery of this Agreement or any other Loan Document or any agreement or
instrument
58
contemplated thereby, the performance by the parties thereto of their respective
obligations thereunder or the consummation of the transactions contemplated
thereby, (ii) the actual or proposed use of the proceeds of the Loans or (iii)
any claim, litigation, investigation or proceeding relating to any of the
foregoing, whether or not any Indemnitee is a party thereto; PROVIDED that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or wilful misconduct of such Indemnitee.
(c) The provisions of this Section 10.05 shall remain
operative and in full force and effect regardless of the expiration of the term
of this Agreement, the consummation of the transactions contemplated hereby, the
repayment of any of the Loans, the expiration of the Letters of Credit, the
invalidity or unenforceability of any term or provision of this Agreement or any
other Loan Document, or any investigation made by or on behalf of the
Administrative Agent, the Issuing Bank or any Lender. All amounts due under this
Section 10.05 shall be payable on written demand therefor.
SECTION 10.06. RIGHT OF SETOFF. If an Event of Default shall
have occurred and be continuing, each Lender is hereby authorized at any time
and from time to time, to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by such Lender
to or for the credit or the account of any Borrower against any of and all the
obligations of such Borrower now or hereafter existing under this Agreement,
irrespective of whether or not such Lender shall have made any demand under this
Agreement or such other Loan Document and although such obligations may be
unmatured. The rights of each Lender under this Section are in addition to other
rights and remedies (including other rights of setoff) which such Lender may
have.
SECTION 10.07. APPLICABLE LAW. THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 10.08. WAIVERS; AMENDMENT. (a) No failure or delay of
the Administrative Agent or any Lender in exercising any power or right
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The rights and remedies of
the Administrative Agent, the Issuing Bank and the Lenders hereunder are
cumulative and are not exclusive of any rights or remedies which they would
otherwise have. No waiver of any provision of this Agreement or consent to any
departure by any Borrower therefrom shall in any event be effective unless the
same shall be permitted by paragraph (b) below, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. No notice or demand on any Borrower in any case shall entitle such
Borrower to any other or further notice or demand in similar or other
circumstances.
(b) Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to an agreement or agreements in
writing entered into by the Borrowers and the Required Lenders; PROVIDED,
HOWEVER, that no such agreement shall (i) decrease the principal amount of, or
extend the maturity of or any scheduled principal payment date or date for the
payment of any interest on any
59
Loan, or waive or excuse any such payment or any part thereof, or decrease the
rate of interest on any Loan, without the prior written consent of each Lender
affected thereby, (ii) change or extend the Commitment or decrease the
Commitment Fees of any Lender or extend any payment date therefor without the
prior written consent of such Lender, or (iii) amend or modify the provisions of
Section 2.16, the provisions of Article IX, the provisions of this Section or
the definition of the term "Required Lenders", without the prior written consent
of each Lender; PROVIDED FURTHER that no such agreement shall amend, modify or
otherwise affect the rights or duties of the Administrative Agent hereunder
without the prior written consent of the Administrative Agent.
SECTION 10.09. INTEREST RATE LIMITATION. Notwithstanding
anything herein to the contrary, if at any time the applicable interest rate,
together with all fees and charges which are treated as interest under
applicable law (collectively the "Charges"), as provided for herein or in any
other document executed in connection herewith, or otherwise contracted for,
charged, received, taken or reserved by any Lender, shall exceed the maximum
lawful rate (the "Maximum Rate") which may be contracted for, charged, taken,
received or reserved by such Lender in accordance with applicable law, the rate
of interest payable on the Loans of such Lender, together with all Charges
payable to such Lender, shall be limited to the Maximum Rate.
SECTION 10.10. ENTIRE AGREEMENT. This Agreement and the other
Loan Documents constitute the entire contract between the parties relative to
the subject matter hereof. Any previous agreement among the parties with respect
to the subject matter hereof is superseded by this Agreement and the other Loan
Documents. Nothing in this Agreement or in the other Loan Documents, expressed
or implied, is intended to confer upon any party other than the parties hereto
and thereto any rights, remedies, obligations or liabilities under or by reason
of this Agreement or the other Loan Documents.
SECTION 10.11. WAIVER OF JURY TRIAL. Each party hereto hereby
waives, to the fullest extent permitted by applicable law, any right it may have
to a trial by jury in respect of any litigation directly or indirectly arising
out of, under or in connection with this Agreement or any of the other Loan
Documents. Each party hereto (a) certifies that no representative, agent or
attorney of any other party has represented, expressly or otherwise, that such
other party would not, in the event of litigation, seek to enforce the foregoing
waiver and (b) acknowledges that it and the other parties hereto have been
induced to enter into this Agreement and the other Loan Documents, as
applicable, by, among other things, the mutual waivers and certifications in
this Section 10.11.
SECTION 10.12. SEVERABILITY. In the event any one or more of
the provisions contained in this Agreement or in any other Loan Document should
be held invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein and therein
shall not in any way be affected or impaired thereby. The parties shall endeavor
in good-faith negotia tions to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.
SECTION 10.13. JUDGMENT CURRENCY. (a) The Borrowers'
obligations hereunder and under the other Loan Documents to make payments in
Dollars or in the Alternative Currency (the "Obligation Currency") shall not be
discharged or satisfied by any tender or recovery pursuant to any judgment
expressed in or converted into any currency other than the Obligation Currency,
except to the extent that
60
such tender or recovery results in the effective receipt by the Administrative
Agent or a Lender of the full amount of the Obligation Currency expressed to be
payable to the Administrative Agent or such Lender under this Agreement or the
other Loan Documents. If, for the purpose of obtaining or enforcing judgment
against any Borrower or in any court or in any jurisdiction, it becomes
necessary to convert into or from any currency other than the Obligation
Currency (such other currency being hereinafter referred to as the "Judgment
Currency") an amount due in the Obligation Currency, the conversion shall be
made at the Alternative Currency Equivalent or Dollar Equivalent, in the case of
any Alternative Currency or Dollars, and, in the case of other currencies, the
rate of exchange (as quoted by the Administrative Agent or if the Administrative
Agent does not quote a rate of exchange on such currency, by a known dealer in
such currency designated by the Administrative Agent) determined, in each case,
as of the date immediately preceding the day on which the judgment is given
(such Business Day being hereinafter referred to as the "Judgment Currency
Conversion Date").
(b) If there is a change in the rate of exchange prevailing
between the Judgment Currency Conversion Date and the date of actual payment of
the amount due, the Borrower covenants and agrees to pay, or cause to be paid,
as a separate obligation and notwithstanding any judgment, such additional
amounts, if any (but in any event not a lesser amount), as may be necessary to
ensure that the amount paid in the Judgment Currency, when converted at the rate
of exchange prevailing on the date of payment, will produce the amount of the
Obligation Currency which could have been purchased with the amount of Judgment
Currency stipulated in the judgment or judicial award at the rate of exchange
prevailing on the Judgment Currency Conversion Date.
(c) For purposes of determining the Alternative Currency
Equivalent or Dollar Equivalent or rate of exchange for this Section, such
amounts shall include any premium and costs payable in connection with the
purchase of the Obligation Currency.
SECTION 10.14. COUNTERPARTS. This Agreement may be executed in
two or more counterparts, each of which shall constitute an original but all of
which when taken together shall constitute but one contract, and shall become
effective as provided in Section 10.03.
SECTION 10.15. HEADINGS. Article and Section headings and the
Table of Contents used herein are for convenience of reference only, are not
part of this Agreement and are not to affect the construction of, or to be taken
into consideration in interpreting, this Agreement.
SECTION 10.16. JURISDICTION; CONSENT TO SERVICE OF PROCESS.
(a) Each Borrower hereby irrevocably and unconditionally submits, for itself and
its property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or the other Loan Documents, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right that any
Lender may otherwise have to bring any action or proceeding relating to this
Agreement or the other Loan Documents against any Borrower or its properties in
the courts of
61
any jurisdiction.
(b) Each Borrower hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this agreement or the other
Loan Documents in any New York State or Federal court. Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.
(c) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 10.01. Nothing
in this Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.
SECTION 10.17. CONFIDENTIALITY. Except as otherwise provided
in Section 10.04(g), the Administrative Agent, the Issuing Bank, the Collateral
Agent and each of the Lenders agrees to keep confidential (and (i) to cause its
respective officers, directors and employees to keep confidential and (ii) to
use its best efforts to cause its respective agents and representatives to keep
confidential) the Information (as defined below) and all copies thereof,
extracts therefrom and analyses or other materials based thereon, except that
the Agent or any Lender shall be permitted to disclose Information (a) to such
of its respective affiliates, officers, directors employees, agents and
representatives as need to know such Information, (b) to the extent requested by
any bank regulatory authority, (c)(i) to the extent otherwise required by
applicable laws and regulations or by any subpoena or similar legal process or
(ii) in connection with the enforcement of this Agreement, (d) to the extent
such Information (i) becomes publicly available other than as a result of a
breach of this Agreement or (ii) becomes available to the Administrative Agent
or any Lender on a nonconfidential basis from a source other than the Borrowers
or (e) to the extent Holdings shall have consented to such disclosure in
writing. For the purposes of this Section, "Information" shall mean all
information that is received from and relates to Holdings or any of its
Subsidiaries other than any such information available to the Administrative
Agent or any Lender on a nonconfidential basis prior to its disclosure thereto
by Holdings or any such Subsidiary. The provisions of this Section 10.17 shall
remain operative and in full force and effect regardless of the expiration of
this Agreement.
SECTION 10.18. RELEASE OF LIENS AND GUARANTEES. (a) Except as
provided in paragraph (b) below, no amendment to the Loan Documents that has the
effect of releasing all or substantially all the Collateral or any of the
guarantees under the Subsidiary Guarantee Agreements or hereunder shall be
effective except pursuant to an agreement or agreements in writing entered into
by the Borrowers and all the Lenders. It is expressly understood that an
amendment providing that additional obligations will be secured under the
Security Documents will not constitute a release of Collateral for purposes of
this paragraph.
(b) In the event that Holdings or any Subsidiary sells,
transfers or otherwise disposes of all or any portion of any of the Equity
Interests, assets or property owned by Holdings or such Subsidiary in a
transaction not prohibited by this Agreement, the Administrative Agent and the
Collateral Agent shall promptly (and the Lenders hereby authorize and instruct
the Administrative Agent and the Collateral Agent to) take such action and
execute any such documents as may be reasonably requested by the Borrower to
release any Liens created by any Loan Document in respect of such Equity
Interests, assets or property, including the release and satisfaction of record
62
of any mortgage or deed of trust granted in connection herewith, and, in the
case of a disposition of all or substantially all the Equity Interests or
assets of any Subsidiary, to terminate such Subsidiary's obligations under
the Subsidiary Guarantee Agreement and each other Loan Document. In addition,
the parties hereto acknowledge and agree that the Liens and security
interests created by the Security Documents will automatically terminate when
all the Obligations have been paid in full and the Commitments have been
terminated, and the Administrative Agent and the Collateral Agent will take
such actions as are reasonably requested by the Borrower to evidence such
termination. Holdings agrees to pay all out-of-pocket expenses of the
Administrative Agent and the Collateral Agent in connection with releases of
Liens and obligations under the Subsidiary Guarantee Agreement provided for
in this Section.
63
IN WITNESS WHEREOF, the Borrowers (in their capacity as
Borrowers and Guarantors), the Administrative Agent and the Lenders have caused
this Agreement to be duly executed by their respective authorized officers as of
the day and year first above written.
SOTHEBY'S HOLDINGS, INC.,
by /s/ Xxxxxxx X. Xxxxxxxx
----------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Senior Vice President and
Chief Financial Officer
SOTHEBY'S, INC.,
by /s/ Xxxxxxx X. Xxxxxxxx
----------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Senior Vice President and
Chief Financial Officer
OATSHARE LIMITED,
by /s/ Xxxxxxx X. Xxxxxxxx
----------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Director
SOTHEBY'S,
by /s/ Xxxxxxx X. Xxxxxxxx
----------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Director
THE CHASE MANHATTAN BANK, N.A.,
individually and as Administrative Agent,
Collateral Agent, and Issuing Bank,
by /s/ Xxxxxx X. Xxxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
64
BARCLAYS BANK PLC,
by /s/ Xxxxxx X. Xxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxx
Title: Director
65
THE BANK OF NEW YORK,
by /s/ Xxxxx X. Xxxxx
----------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
66
COMERICA BANK,
by /s/ Xxxxxx X. Xxxxxxxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxxxxxxx
Title: Vice President
67
UBS AG, STAMFORD BRANCH,
by /s/ Xxxx X. Xxxxxxxx
----------------------------
Name: Xxxx X. Xxxxxxxx
Title: Executive Director
by /s/ Xxxxxxx XxXxxxxx
----------------------------
Name: Xxxxxxx XxXxxxxx
Title: Associate Director
Loan Portfolio Support
00
XXX XXXX XX XXXX XXXXXX,
by /s/ J. Xxxx Xxxxxxx
----------------------------
Name: J. Xxxx Xxxxxxx
Title: Managing Director
00
XXXXX XXXXXXXXXXX XXXXXXXX, XXX XXXX
BRANCH
by /s/ X. Xxxxxxx
----------------------------
Name: X. Xxxxxxx
Title: FVP/Deputy Manager
by /s/ Xxxxxx Xxxxxxx
----------------------------
Name: Xxxxxx Xxxxxxx
Title: Vice President
70
BANCA MONTE dei PASCHI di SIENA S.P.A.
by /s/ G. Natalizoni
----------------------------
Name: G. Natalizoni
Title: Senior Vice President
and General Manager
by /s/ Xxxxx X. Xxxxx
----------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
71
BANK ONE, NA (Main Office Chicago)
by /s/ Xxxxxxx XxXxxxxx
----------------------------
Name: Xxxxxxx XxXxxxxx
Title: Senior Vice President
72
BBL INTERNATIONAL (U.K.) LIMITED,
by
----------------------------
Name:
Title:
73
BANK HAPPALIM,
by
----------------------------
Name:
Title:
74
FUJI BANK,
by /s/ Xxxxxxx Xxxxxxx
----------------------------
Name: Xxxxxxx Xxxxxxx
Title: Vice President and
Manager
75
VIA BANQUE (PARIS),
by /s/ Xxxxxxxx Prot
----------------------------
Name: Xxxxxxxx Prot
Title: Vice President
by /s/ Xxxx Xxxxxxxx Xxxxx
----------------------------
Name: Xxxx Xxxxxxxx Vitte
Title: DGA
76
BAYERSCHE HYPO-UND VEREINSBANK AG (NEW
YORK BRANCH),
by /s/ Xxxxxxxx Xxxxxxxxxx
----------------------------
Name: Xxxxxxxx Xxxxxxxxxx
Title: Director
by /s/ Xxxx Xxxxxxxxx
----------------------------
Name: Xxxx Xxxxxxxxx
Title: Associate Director
77
SCHEDULE 1.01A
OTHER OBLIGATIONS OF THE LENDERS
1. All obligations of Holdings and any Subsidiary owed to Xxxxxxx'x Bank
PLC ("Barclay's") or any affiliate of Barclay's in connection with rent
guarantees and overdraft guarantees in France in the amount of FFR 26.7
million and rent guarantees in Monaco in the amount of FFR 40,000.
2. All obligations of Holdings and any Subsidiary owed to Barclay's or any
affiliate of Barclay's in connection with a guarantee line in the
amount of L20.5 million.
3. All obligations of Holdings and any Subsidiary owed to any Lender in
connection with cash management services provided by such Lender or
commitments to provide such services.
4. All guarantee obligations of Holdings and any Subsidiary owed to Chase
or any affiliate of Chase in connection with loans and other extensions
of credit make by Chase for officers and employees of Holdings and its
Subsidiaries.
5. All obligations of Holdings and any Subsidiary in connection with
interest rate and foreign exchange rate hedging agreements with persons
that are Lenders on the date hereof or were Lenders at the time such
agreements were entered into.
6. All obligations of Holdings and any Subsidiary in connection with
Letters of Credit provided by persons that are Lenders on the date
hereof or were Lenders at the time such letters of credit were entered
into.
78
SCHEDULE 1.01B
100 shares of Common Stock, no par value, of Sotheby's-Xxxxxx Holdings, Inc.
owned by Sotheby's, Inc.
50% membership interest in Xxxxxx Projects LLC, held by Sotheby's-Xxxxxx
Holdings, Inc.
49% membership interest in a limited liability company (in formation),
to be held by Sotheby's, Inc., and operating as a fine jewelry designer and
dealer.
50% partnership interest in Acquavella Modern Art held by Sotheby's Nevada, Inc.
49.99% membership interest in a joint venture to be formed by Sotheby's
International Realty, Inc. with a major investment bank for a residential
mortgage program.
Sotheby's, Inc.'s rights under that certain Agreement of Sale and Purchase dated
September 9, 1999, between The Xxxxxxxx Capital Company, Xxxxxxxx X. Xxxxxxxx,
Xxxxxxx X. Xxxxxxxx and York Avenue Development, Inc. (which entity assigned its
rights to Sotheby's, Inc. by an Assignment and Assumption Agreement dated
September 9, 1999), until such time that Sotheby's, Inc. or an affiliate of
Sotheby's, Inc. is the owner of the York Avenue Property.
The rights under any other real property lease or software license agreement to
which any of the Borrowers or any Subsidiary is a party that would require the
consent of the counter-party thereto in connection with the grant of security
interests contemplated hereunder.
Issued and outstanding shares (and assets, if any) of York Storage, Inc.
(Inactive and in process of liquidation) , for so long as York Storage, Inc.
remains an inactive subsidiary or holds no significant assets and conducts no
significant operations
Issued and outstanding shares (and assets, if any) of Sotheby's Art Sales
Corporation (Inactive and in process of liquidation) , for so long as Sotheby's
Art Sales Corporation remains an inactive subsidiary or holds no significant
assets and conducts no significant operations
Issued and outstanding shares (and assets, if any) of Sotheby's International
Realty of Colorado, Inc. (inactive and in process of liquidation) , for so long
as Sotheby's International Realty of Colorado, Inc. remains an inactive
subsidiary or holds no significant assets and conducts no significant operations
Issued and outstanding shares (and assets, if any) of Sotheby's Holdings
International, Inc. (Inactive and in process of liquidation) , for so long as
Sotheby's Holdings International, Inc. remains an inactive subsidiary or holds
no significant assets and conducts no significant operations
