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EXHIBIT 10.35
EXECUTION COPY
$45,000,000
LETTER OF
CREDIT AGREEMENT
dated as of March 19, 1999
among
Venator Group, Inc.,
The Co-Applicants Party Hereto,
The Banks Party Hereto
and
The Bank of New York,
as Agent
Arranged by
BNY Capital Markets, Inc.,
as Lead Arranger
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TABLE OF CONTENTS
Page
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ARTICLE I
Definitions
Section 1.01 Definitions....................................................4
Section 1.02 Accounting Terms and Determinations............................8
ARTICLE II
The LETTERS OF Credit
Section 2.01. Issuance of Letters of Credit..................................8
Section 2.02. Expiry Dates...................................................9
Section 2.03. Notice of Proposed Issuance....................................9
Section 2.04. Conditions to Issuance.........................................9
Section 2.05. Extension of Expiry Dates.....................................10
Section 2.06. Notices of Actual Issuances, Extensions and Amounts Available
for Drawing...................................................10
Section 2.07. (a) Letter of Credit Fees.................................10
(b) Facility Fees.........................................10
Section 2.08. Drawings......................................................10
Section 2.09. Reimbursement and Other Payments by the Applicant.............11
Section 2.10. Payments by Banks with Respect to Letters of Credit...........11
Section 2.11. Optional Termination or Reduction of Commitments..............12
Section 2.12. Computation of Interest and Fees..............................12
Section 2.13. Exculpatory Provisions........................................12
Section 2.14. Reliance, Etc.................................................13
Section 2.15. Indemnification by Applicant..................................13
Section 2.16. Indemnification by Banks......................................14
Section 2.17. Certain Administrative Provisions with respect to Letters of
Credit........................................................14
ARTICLE III
Conditions
Section 3.01. Conditions to Issuance of Initial Letter of Credit............15
Section 3.02. Conditions to Issuance of each Letter of Credit...............16
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ARTICLE IV
Representations and Warranties
Section 4.01. Corporate Existence and Power.................................17
Section 4.02. Corporate and Governmental Authorization; No Contravention....17
Section 4.03. Binding Effect................................................17
Section 4.04. Litigation....................................................17
Section 4.05. Subsidiary Guarantors.........................................17
ARTICLE V
Covenants
Section 5.01. Information...................................................17
Section 5.02. Conduct of Business and Maintenance of Existence..............18
Section 5.03. Compliance with Laws..........................................18
Section 5.04. Inspection of Property, Books and Records.....................18
Section 5.05. Additional Guarantors.........................................18
ARTICLE VI
Defaults
Section 6.01. Events of Defaults............................................19
Section 6.02. Notice of Default.............................................19
Section 6.03. Cash Cover....................................................19
ARTICLE VII
The Agent
Section 7.01. Appointment and Authorization.................................21
Section 7.02. Dual Capacity.................................................21
Section 7.03. Obligations of Agent..........................................21
Section 7.04. Consultation with Experts.....................................21
Section 7.05. Liability of Agent............................................21
Section 7.06. Credit Decision...............................................21
Section 7.07. Successor Agent...............................................22
Section 7.08. Agent's Fees..................................................22
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ARTICLE VIII
Change in Circumstances
Section 8.01. Increased Cost and Reduced Return.............................22
Section 8.02. Taxes.........................................................24
Section 8.03. Substitution of Bank..........................................25
ARTICLE IX
Miscellaneous
Section 9.01. Notices.......................................................26
Section 9.02. No Waivers....................................................26
Section 9.03. Expenses; Indemnification.....................................26
Section 9.04. Sharing of Set-offs...........................................27
Section 9.05. Amendments and Waivers........................................27
Section 9.06. Successors and Assigns........................................28
Section 9.07. Governing Law; Submission to Jurisdiction.....................29
Section 9.08. Counterparts..................................................30
Section 9.09. WAIVER OF JURY TRIAL..........................................30
Co-Applicant Schedule
Commitment Schedule
Exhibit A - Form of Guarantee Agreement
Exhibit B-1 - Form of Opinion of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Exhibit B-2 - Form of Opinion of the General Counsel of the Applicant
Exhibit C - Form of Assignment and Assumption Agreement
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LETTER OF CREDIT AGREEMENT dated as of March 19, 1999 among VENATOR GROUP,
INC., the CO-APPLICANTS party hereto, the BANKS party hereto and THE BANK OF NEW
YORK, as Agent.
ARTICLE I
Definitions
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Section 1.01. Definitions. The following terms, as used herein, have the
following meanings:
"Administrative Questionnaire" means, with respect to each Bank, an
administrative questionnaire in the form prepared by the Agent and submitted to
the Agent (with a copy to the Applicant) duly completed by such Bank.
"Affiliate" means, (i) any Person that directly, or indirectly through one
or more intermediaries, controls the Applicant (a "Controlling Person") or
(ii) any Person (other than the Applicant, a Co-Applicant or a Subsidiary
Guarantor) which is controlled by or is under common control with a Controlling
Person. As used herein, the term control means possession, directly or
indirectly, of the power to vote 10% or more of any class of voting securities
of a Person or to direct or cause the direction of the management or policies of
a Person, whether through ownership of voting securities, by contract or
otherwise.
"Agent" means The Bank of New York, in its capacities as agent for the
Banks under the Loan Documents and as the issuer of the Letters of Credit issued
or to be issued hereunder, and its successors in such capacities.
"Aggregate LC Exposure" means, at any time, the sum, without duplication,
of (i) the aggregate amount that is (or may thereafter become) available for
drawing under all Letters of Credit outstanding at such time plus (ii) the
aggregate unpaid amount of all Reimbursement Obligations outstanding at such
time.
"Agreement, " when used in reference to this Agreement, means this
Agreement, as it may be amended or amended and restated
from time to time.
"Applicable Co-Applicant" means, with respect to any Letter of Credit, the
Co-Applicant, if any, for whose account such Letter of Credit is issued.
"Applicant" means Venator Group, Inc., a New York corporation, and its
successors.
"Assignee" has the meaning set forth in Section 9.06.
"Bank" means each bank listed on the signature pages hereof, each Assignee
which becomes a Bank pursuant to Section 9.06(c), and their respective
successors.
"Bank Parties" means the Banks and the Agent.
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"Co-Applicant" means (a) the Subsidiaries listed on the Co-Applicant
Schedule and (b) other Subsidiaries that shall have executed a counterpart of
this Agreement after the date hereof.
"Commitment" means, with respect to each Bank, the amount set forth
opposite the name of such Bank on the Commitment Schedule (or, in the case of an
Assignee, the portion of the transferor Bank's Commitment assigned to such
Assignee pursuant to Section 9.06(c)), in each case as such amount may be
reduced from time to time pursuant to Section 2.11 or changed as a result of an
assignment pursuant to Section 8.03 or 9.06(c).
"Commitment Schedule" means the Commitment Schedule attached hereto.
"Consolidated Subsidiary" means at any date any Subsidiary or other entity
the accounts of which would be consolidated with those of the Applicant in its
consolidated financial statements if such statements were prepared as of such
date in accordance with generally accepted accounting principles.
"Default" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"Domestic Business Day" means any day except a Saturday, Sunday or other
day on which commercial banks in New York City or, if different, the
jurisdiction where the LC Office of the Agent is located, are authorized or
required by law to close.
"Effective Date" means the date hereof.
"Environmental Laws" means any and all federal, state, local and foreign
statutes, laws, judicial decisions, regulations, ordinances, rules, judgments,
orders, injunctions, permits, licenses and agreements relating to the protection
of the environment, to the effect of the environment on human health or to
emissions, discharges or releases of pollutants, contaminants, hazardous or
toxic substances or wastes into the environment including, without limitation,
ambient air, surface water, ground water, or land, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, hazardous or toxic substances
or wastes or the clean-up or other remediation thereof.
"Event of Default" has the meaning set forth in Section 6.01.
"Facility Fee Rate" means, at any time, the rate per annum that is equal to
the Facility Fee Rate (as defined in the RC Agreement) in effect at such time.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upward, if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Domestic Business Day
next succeeding such day, provided that (i) if such day is not a Domestic
Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Domestic Business Day as so published on the
next succeeding Domestic Business Day, and (ii) if no such rate is so published
on such next succeeding Domestic Business Day, the Federal Funds Rate for such
day shall be the average rate quoted to The Bank of New York on such day on such
transactions as determined by the Agent.
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"Foreign Subsidiary" means any Subsidiary organized under the laws of a
jurisdiction, and conducting substantially all its operations, outside the
United States.
"Guarantee Agreement" means the Guarantee Agreement dated as of the
Effective Date among the Subsidiary Guarantors and the Agent, substantially in
the form of Exhibit A hereof, as amended from time to time.
"Immaterial Subsidiary" means at any time any Subsidiary that (i) does not
hold any material patents, trademarks or other intellectual property, (ii) on a
consolidated basis, together with its Subsidiaries, holds assets with an
aggregate fair market value of less than $2,000,000, (iii) on a consolidated
basis, together with its Subsidiaries, does not account for more than 1% of the
consolidated revenues of the Applicant and its Consolidated Subsidiaries and
(iv) on a consolidated basis, together with its Subsidiaries, does not have
consolidated net income in excess of $500,000. The determinations in clauses
(ii), (iii) and (iv) shall be made on the basis of the financial statements most
recently delivered by the Applicant to the Banks pursuant to Sections 5.01(a) or
5.01(b), as the case may be, of the RC Agreement.
"Indemnitee" has the meaning set forth in Section 9.03(b).
"Internal Revenue Code" means the Internal Revenue Code of 1986, as amended
from time to time, or any successor statute.
"LC Collateral Account" shall mean a collateral account established
pursuant to an arrangement satisfactory to the Agent.
"LC Exposure" means, with respect to any Bank at any time, an amount equal
to its Pro Rata Share of the Aggregate LC Exposure at such time.
"LC Fee Rate" means, at any time, the rate per annum that is 50% of the LC
Fee Rate (as defined in the RC Agreement) in effect at such time.
"LC Indemnitees" has the meaning set forth in Section 2.15.
"LC Office" means, with respect to the Agent, for any Letter of Credit, the
office at which the Agent books such Letter of Credit and, with respect to any
Bank, for any Letter of Credit, the office at which such Bank books its
participating interest in such Letter of Credit.
"Letter of Credit" means a letter of credit issued or to be issued
hereunder by the Agent.
"Loan Documents" means this Agreement and the Guarantee Agreement.
"Material Adverse Effect" means a material adverse effect on (i) the
business, operations or condition (financial or otherwise) of the Applicant and
its Subsidiaries taken as a whole, (ii) the ability of any Obligor to perform
any payment obligation of such Obligor under the Loan Documents or (iii) the
ability of any Bank Party to enforce any rights or remedies under the Loan
Documents with respect to any payment obligation of any Obligor under the Loan
Documents.
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"Obligor" means the Applicant, each Co-Applicant or any Subsidiary
Guarantor, and "Obligors" means all of them.
"Parent" means, with respect to any Bank Party, any Person controlling such
Bank Party.
"Participant" has the meaning set forth in Section 9.06(b).
"Person" means an individual, a corporation, a partnership, a limited
liability company, an association, a trust or any other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.
"Pro Rata Share" means, with respect to any Bank at any time, a fraction
the numerator of which is the amount of such Bank's Commitment at such time (or,
if the Commitments have terminated in their entirety, such Bank's Commitment as
in effect immediately prior to such termination) and the denominator of which is
the Total Commitments at such time (or, if the Commitments have terminated in
their entirety, the Total Commitments as in effect immediately prior to such
termination).
"RC Agreement" means the Second Amended and Restated Credit Agreement dated
as of April 9, 1997 and amended and restated as of March 19, 1999 among Venator
Group, Inc. (formerly known as Woolworth Corporation), subsidiaries of the
Applicant party thereto, the Banks party thereto, the Co-Agents party thereto,
Bank of America NT & SA, as Documentation Agent, The Bank of New York, as
Administrative Agent, LC Agent and Swingline Bank, and X.X. Xxxxxx Securities,
Inc., BNY Capital Markets, Inc., and NationsBank Xxxxxxxxxx Securities LLC, as
Lead Arrangers, as amended or amended and restated or otherwise modified or
supplemented from time to time.
"RC Commitment" means, at any time, the "Total Commitments" under, and as
defined in, the RC Agreement at such time.
"Reimbursement Obligation" means any obligation of the Applicant and the
Applicable Co-Applicants to reimburse the Agent pursuant to Article II for
amounts paid by the Agent in respect of drawings under Letters of Credit,
including any portion of any such obligation to which a Bank has become
subrogated pursuant to Section 2.10(a).
"Required Banks" means at any time Banks having at least a majority of the
aggregate amount of the Commitments at such time.
"Responsible Officer" means, with respect to any Obligor, its chief
operating officer, its chief financial officer, its general counsel, its
treasurer, any assistant treasurer or any other officer whose duties include the
administration of this Agreement.
"Steamship/Airway Indemnity" means, with respect to any Letter of Credit, a
steamship guarantee, airway release or similar undertaking providing for the
release of the goods related to such Letter of Credit to the Applicant or
Applicable Co-Applicant or the designee of the Applicant or such Applicable
Co-Applicant notwithstanding the unavailability of the applicable xxxx of lading
or other shipping documents.
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"Subsidiary" means, as to any Person, any corporation or other entity of
which securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions are at the time directly or indirectly owned by such Person; unless
otherwise specified, "Subsidiary" means a Subsidiary of the Applicant.
"Subsidiary Guarantor" means each Subsidiary that from time to time is a
party to the Guarantee Agreement.
"Termination Date" means the 364th day following the Effective Date;
provided that, in the event that the RC Commitment shall have been reduced to
zero or otherwise terminated prior to such 364th day, the Termination Date shall
thereupon be deemed to be the date of such reduction or termination.
"Total Commitments" means, at any time, the aggregate amount of the
Commitments (whether used or unused) at such time.
"UCP" means the Uniform Customs and Practice for Documentary Credits (1993
Revision), International Chamber of Commerce Publication No. 500, as the same
may be revised or amended from time to time.
"United States" means the United States of America, including the States
thereof and the District of Columbia, but excluding its territories and
possessions.
Section 1.02. Accounting Terms and Determinations. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared, in accordance with
generally accepted accounting principles as in effect from time to time, applied
on a basis consistent (except for changes concurred in by the Applicant's
independent public accountants) with the most recent audited consolidated
financial statements of the Applicant and its Consolidated Subsidiaries
delivered to the Banks.
ARTICLE II
The LETTERS OF Credit
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Section 2.01. Issuance of Letters of Credit. (a) The Agent agrees, on the
terms and conditions set forth in this Agreement, to issue Letters of Credit
from time to time during the period from and including the Effective Date to but
excluding the date that is 30 days before the Termination Date; provided that,
immediately after each such Letter of Credit is issued:
(i) the Aggregate LC Exposure shall not exceed the Total Commitments;
and
(ii) in the case of each Bank, its LC Exposure shall not exceed its
Commitment.
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Each Letter of Credit shall be issued for the account of the Applicant and, if
applicable, the Applicable Co-Applicant.
(b) Upon the issuance by the Agent of each Letter of Credit pursuant to
this Section 2.01, the Agent shall be deemed, without further action by any
party hereto, to have sold to each Bank and each Bank shall be deemed, without
further action by any party hereto, to have purchased from the Agent, a
participation in such Letter of Credit, on the terms set forth in this Article
II, equal to such Bank's Pro Rata Share thereof.
(c) In connection with any Letter of Credit, the Applicant or the
Applicable Co-Applicant may request that the Agent issue a Steamship/Airway
Indemnity, whereupon, and as a condition to the issuance thereof, the Applicant
or the Applicable Co-Applicant shall execute and deliver to the Agent
counterparts of the Agent's then standard forms of applicable application,
guarantee and trust receipt or other documentation reasonably required by the
Agent. For all purposes hereof, including but not limited to Sections 2.13, 2.15
and 2.16, the Applicant, the Co-Applicants and the Banks acknowledge and agree
that the Agent shall be entitled to honor drawings under Letters of Credit with
respect to which Steamship/Airway Indemnities have been issued without regard to
whether the documents submitted in connection with any such drawing are
sufficient or conform to the requirements of the applicable Letter of Credit,
and the Agent's honoring of such drawings shall not constitute gross negligence
or willful misconduct or otherwise impair the Agent's entitlement to the
benefits of the indemnification and other exculpatory provisions hereunder.
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Section 2.02. Expiry Dates. Each Letter of Credit shall, when issued, have
an expiry date on or before the earlier of (i) 180 days from the date such
Letter of Credit was issued and (ii) the fifth Domestic Business Day prior to
the Termination Date.
Section 2.03. Notice of Proposed Issuance. The Applicant or the Applicable
Co-Applicant shall give the Agent at least one Domestic Business Day's prior
notice specifying the date each Letter of Credit is to be issued and describing
the proposed terms of such Letter of Credit and the nature of the transactions
proposed to be supported thereby.
Section 2.04. Conditions to Issuance. Without limiting the provisions of
Sections 3.01 and 3.02 hereof, the Agent shall not issue any Letter of Credit
unless:
(a) such Letter of Credit shall be satisfactory in form and reasonably
satisfactory in substance in all respects affecting the Agent;
(b) the Agent shall be satisfied that the goods related to it shall be
effectively consigned to the Agent and that the applicable bills of lading and
other shipping documents shall be negotiable and drawn to the order of the
Agent;
(c) the Applicant and any Applicable Co-Applicant shall have executed and
delivered such other instruments and agreements relating to such Letter of
Credit as the Agent shall have reasonably requested;
(d) the Agent shall not have been notified in writing by the Applicant or
the Required Banks that any condition specified in clause (c), (d), (e), (f) or
(g) of Section 3.02 is not satisfied on the date such Letter of Credit is to be
issued; and
(e) if such Letter of Credit is being issued for the account of a
Subsidiary, such Subsidiary shall be a Co-Applicant.
Section 2.05. Extension of Expiry Dates. The Agent shall not extend (or
allow the extension of) the expiry date of such Letter of Credit if it shall
have been notified by the Applicant or the Required Banks that any condition
specified in clause (c), (d), (e), (f) or (g) of Section 3.02 is not satisfied
on the date of such extension.
Section 2.06. Notices of Actual Issuances, Extensions and Amounts Available
for Drawing. Within fifteen Domestic Business Days after the end of each
calendar month, the Agent shall notify each Bank of (i) the daily average
aggregate amount available for drawings (whether or not conditions for drawing
thereunder have been satisfied) under all Letters of Credit outstanding during
such month, (ii) the aggregate amount of letter of credit fees accrued during
such month pursuant to Section 2.07, (iii) each Bank's Pro Rata Share of such
accrued letter of credit fees and (iv) the aggregate undrawn amount of all
Letters of Credit outstanding at the end of such month.
Section 2.07. (a) Letter of Credit Fees. The Applicant (and, with respect
to each particular Letter of Credit, the Applicable Co-Applicant), on a joint
and several basis with the Applicant shall pay to the Agent, for the account of
the Banks ratably in accordance with their respective Pro Rata Shares, a letter
of credit fee for each day at the LC Fee Rate on the aggregate amount available
for drawings (whether or not conditions for drawing thereunder have been
satisfied) under all Letters of Credit outstanding on such day. Such letter of
credit fee shall be payable quarterly in arrears on within three Domestic
Business Day after the end of each calendar quarter and on the second Domestic
Business Day before the Termination Date (or any earlier date on which the
Commitments shall have terminated in their entirety and no Letters of Credit are
outstanding). Promptly upon receiving any payment of such fee, the Agent will
distribute to each Bank its Pro Rata Share thereof. In addition, the Applicant
shall pay to the Agent for its own account fronting fees and reasonable expenses
in the amounts and at the times agreed between the Applicant and the Agent.
(b) Facility Fees. The Applicant shall pay to the Agent for the account of
each Bank a facility fee, calculated for each day at the Facility Fee Rate for
such day, on the amount of such Bank's Commitment on such day. Such facility
fees shall accrue for each day from and including the Effective Date to but
excluding the day on which the Total Commitments are reduced to zero and shall
be payable quarterly in arrears on the last Domestic Business Day of each
calendar quarter and on the day on which the Total Commitments are reduced to
zero.
Section 2.08. Drawings. Upon receipt from the beneficiary of any Letter of
Credit of a demand for payment under such Letter of Credit, the Agent shall
determine in accordance with the terms of such Letter of Credit whether such
demand for payment should be honored. If the Agent determines that any such
demand for payment should be honored in accordance with its customary practice,
the Agent shall make available to such beneficiary in accordance with the terms
of such Letter of Credit the amount of the drawing under such Letter of Credit.
The Agent shall thereupon notify the Applicant and the Applicable Co-Applicant
of the amount of such drawing paid by the Agent.
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Section 2.09. Reimbursement and Other Payments by the Applicant and
Applicable Co-Applicants. (a) If any amount is drawn under any Letter of Credit,
the Applicant and the Applicable Co-Applicant irrevocably and unconditionally
agree on a joint and several basis to reimburse the Agent on the day of such
drawing for all amounts paid by the Agent upon such drawing, together with any
and all reasonable charges and expenses which the Agent may pay or incur
relative to such drawing. For all purposes of this Agreement, the issuance by
the Agent of a Steamship/Airway Indemnity with respect to a Letter of Credit
shall be deemed a drawing under such Letter of Credit, and a payment by the
Agent in respect thereof, in the amount of the portion of such Letter of Credit
represented by the goods to which such Steamship/Airway Indemnity relates, and
the Agent shall be entitled to immediate reimbursement thereof as hereinabove
provided.
(b) In addition, the Applicant and the Applicable Co-Applicant agrees on a
joint and several basis to pay to the Agent interest on any and all amounts not
paid by the Applicant when due hereunder with respect to a Letter of Credit, for
each day from and including the date when such amount becomes due to but
excluding the date such amount is paid in full, whether before or after
judgment, payable on demand, at a rate per annum equal to the sum of 2% plus the
rate that would be applicable to "Base Rate Loans" under, and as defined in, the
RC Agreement for such day (determined without regard to whether the RC Agreement
is then in effect).
(c) Each payment to be made by the Applicant or any Applicable Co-Applicant
pursuant to this Section 2.09 shall be made to the Agent in Federal or other
funds immediately available to it at its address referred to in Section 9.01.
Section 2.10. Payments by Banks with Respect to Letters of Credit. (a) If
the Applicant or any Applicable Co-Applicant fails to reimburse the Agent as and
when required by Section 2.09 above for all or any portion of any amount drawn
under a Letter of Credit, or fails to deposit funds as required pursuant to
Section 6.03, the Agent may notify each Bank of such unreimbursed amount or
failure to deposit and request that each Bank reimburse or fund the Agent for
such Bank's Pro Rata Share thereof. Upon receiving such notice from the Agent,
each Bank shall make available to the Agent, at its address referred to in
Section 9.01, an amount equal to such Bank's share of such unreimbursed amount
or required deposit amount as set forth in such notice, in Federal or other
funds immediately available to the Agent, by 3:00 P.M. (New York City time) on
the Domestic Business Day following such Bank's receipt of such notice from the
Agent, together with, in the case of any such unreimbursed amount, interest on
such amount for each day from and including the date of such drawing to but
excluding the day such payment is due from such Bank at the Federal Funds Rate
for such day. Upon payment in full thereof, such Bank shall be subrogated to the
rights of the Agent against the Applicant or such Applicable Co-Applicant to the
extent of such Bank's Pro Rata Share of the related Reimbursement Obligation
(including interest accrued thereon). Nothing in this Section 2.10 shall affect
any rights any Bank may have against the Agent for any action or omission for
which the Agent is not indemnified under Section 7.06.
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(b) If any Bank fails to pay any amount required to be paid by it pursuant
to clause (a) of this Section 2.10 on the date on which such payment is due,
interest shall accrue on such Bank's obligation to make such payment, for each
day from and including the date such payment became due to but excluding the
date such Bank makes such payment, whether before or after judgment, at a rate
per annum equal to the Federal Funds Rate for such day. Any payment made by any
Bank after 3:00 P.M. (New York City time) on any Domestic Business Day shall be
deemed for purposes of the preceding sentence to have been made on the next
succeeding Domestic Business Day.
(c) If the Applicant or any Applicable Co-Applicant shall reimburse the
Agent for any drawing with respect to which any Bank shall have made funds
available to the Agent in accordance with clause (a) of this Section 2.10, the
Agent shall promptly upon receipt of such reimbursement distribute to such Bank
its Pro Rata Share thereof, including interest, to the extent received by the
Agent.
Section 2.11. Optional Termination or Reduction of Commitments. The
Applicant may, without premium or penalty, upon at least three Domestic Business
Days' notice to the Agent, (i) terminate the Commitments at any time, if no Bank
has an LC Exposure at such time or (ii) ratably reduce the Commitments from time
to time, in each case by an aggregate amount of at least $5,000,000; provided
that immediately after such reduction the Aggregate LC Exposure shall not exceed
the Total Commitments. Upon any such termination or reduction of the
Commitments, the Agent shall promptly notify each Bank of such termination or
reduction.
Section 2.12. Computation of Interest and Fees. All interest and fees
payable hereunder shall be computed on the basis of a year of 360 days and paid
for the actual number of days elapsed (including the first day but excluding the
last day).
Section 2.13. Exculpatory Provisions. The obligations of the Applicant and
each Applicable Co-Applicant under this Article shall be absolute and
unconditional under any and all circumstances and irrespective of any setoff,
counterclaim or defense to payment which the Applicant or such Applicable
Co-Applicant may have or have had against the Agent, any Bank, the beneficiary
of any Letter of Credit or any other Person (other than the defense of payment).
The Applicant and, with respect to Letters of Credit issued for its own account,
each Applicable Co-Applicant assumes all risks of the acts or omissions of any
beneficiary of any Letter of Credit with respect to its use of such Letter of
Credit. None of the Agent, the Banks and their respective officers, directors,
employees and agents shall be responsible for, and the obligations of each Bank
to make payments to the Agent and of the Applicant or the Applicable
Co-Applicant to reimburse the Agent for drawings pursuant to this Section (other
than obligations resulting solely from the gross negligence or willful
misconduct of the Agent or the Applicable Co-Applicant) shall not be excused or
affected by, among other things, (a) the use which may be made of any Letter of
Credit or any acts or omissions of any beneficiary or transferee in connection
therewith; (b) the validity, sufficiency or genuineness of documents presented
under any Letter of Credit or of any endorsements thereon, even if such
documents should in fact prove to be in any or all respects invalid,
insufficient, fraudulent or forged (and notwithstanding any assertion to such
effect by the Applicant); (c) payment by the Agent against presentation of
documents to it which do not comply with the terms of the relevant Letter of
Credit; (d) any dispute between or among the Applicant, any of its Subsidiaries,
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the beneficiary of any Letter of Credit or any other Person or any claims or
defenses whatsoever of the Applicant, any of its Subsidiaries or any other
Person against the beneficiary of any Letter of Credit; (e) any adverse change
in the business, operations, properties, assets, condition (financial or
otherwise) or prospects of the Applicant and its Subsidiaries taken as a whole;
(f) any breach of this Agreement by any party hereto (except, in the case of the
Agent, a breach resulting solely from its gross negligence or willful
misconduct); (g) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing; (h) the fact that a Default shall have occurred
and be continuing; or (i) the fact that the Termination Date shall have passed
or the Commitments shall have terminated. The Agent shall not be liable for any
error, omission, interruption or delay in transmission, dispatch or delivery of
any message or advice, however transmitted, in connection with any Letter of
Credit. Any action taken or omitted by the Agent or any Bank under or in
connection with any Letter of Credit and the related drafts and documents, if
done without willful misconduct or gross negligence, shall be binding upon the
Applicant and the Applicable Co-Applicant and shall not place the Agent or any
Bank under any liability to the Applicant or such Applicable Co-Applicant.
Section 2.14. Reliance, Etc. The Agent shall be entitled (but not
obligated) to rely, and shall be fully protected in relying, on the
representation and warranty by the Applicant and the Applicable Co-Applicants
set forth in the last sentence of Section 3.02 to establish whether the
conditions specified in clauses (c), (d), (e), (f) and (g) of Section 3.02 are
met in connection with any issuance or extension of a Letter of Credit, unless
the Agent shall have been notified to the contrary by the Required Banks (in
which event the Agent shall be fully protected in relying on such notice). The
rights and obligations of the Agent under each Letter of Credit issued by it
shall be governed by the provisions thereof and the provisions of the UCP and/or
the Uniform Commercial Code referred to therein or otherwise applicable thereto.
Section 2.15. Indemnification by Applicant. The Applicant and, with respect
to the Letters of Credit issued for its own account each Applicable Co-Applicant
agrees, on a joint and several basis, to indemnify and hold harmless each Bank
and the Agent (collectively, the "LC Indemnitees") from and against any and all
claims and damages, losses, liabilities, costs or expenses (including, without
limitation, the reasonable fees and disbursements of counsel) which any such LC
Indemnitee may reasonably incur (or which may be claimed against any such LC
Indemnitee by any Person whatsoever) by reason of or in connection with the
execution and delivery or transfer of or payment or failure to pay under any
Letter of Credit or any actual or proposed use of any Letter of Credit,
including any claims, damages, losses, liabilities, costs or expenses which the
Agent may incur by reason of or in connection with the failure of any Bank to
fulfill or comply with its obligations to the Agent hereunder; provided that
neither the Applicant nor the Applicable Co-Applicant shall be required to
indemnify the Agent for any claims, damages, losses, liabilities, costs or
expenses to the extent, but only to the extent, caused by (i) the willful
misconduct or gross negligence of the Agent in determining whether a request
presented under any Letter of Credit issued by it complied with the terms of
such Letter of Credit or (ii) the Agent's failure to pay under any Letter of
Credit issued by it after the presentation to it of a request strictly complying
with the terms and conditions of such Letter of Credit (unless such payment is
enjoined or otherwise prevented by order of a court or other governmental
authority). Nothing in this Section 2.15 is intended to change the obligations
of the Applicant or any Applicable Co-Applicant under any other provision of
this Agreement.
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Section 2.16. Indemnification by Banks. The Banks shall, ratably in
accordance with their respective Pro Rata Shares, indemnify the Agent, its
affiliates and their respective directors, officers, agents and employees (to
the extent not reimbursed by the Obligors) against any cost, expense (including
fees and disbursements of counsel), claim, demand, action, loss or liability
(except such as result from the Agent's gross negligence or willful misconduct)
that any such indemnitee may suffer or incur in connection with the Loan
Documents or any action taken or omitted by such indemnitee under the Loan
Documents.
Section 2.17. Certain Administrative Provisions with respect to Letters of
Credit. The following shall apply with respect to each Letter of Credit:
(a) The Applicant or the Applicable Co-Applicant will promptly examine the
copy of such Letter of Credit (and any amendments thereof) sent to the Applicant
or such Applicable Co-Applicant by the Agent, as well as all other instruments
and documents delivered to the Applicant or such Applicable Co-Applicant from
time to time, and, in the event the Applicant or such Applicable Co-Applicant
has any claim of noncompliance with its instructions with respect to such Letter
of Credit or of any discrepancy or other irregularity, the Applicant or such
Applicable Co-Applicant will immediately notify the Agent thereof in writing,
and the Applicant and the Applicable Co-Applicant will conclusively be deemed to
have waived any such claim against the Agent and its correspondents unless such
immediate notice is given as aforesaid.
(b) The Agent may (but need not) pay any drafts otherwise in order which
are signed or issued by, or accompanied by required statements or documents
otherwise in order which are signed or issued by, the custodian, executor,
administrator, trustee in bankruptcy, debtor in possession, assignees for the
benefit of creditors, liquidator, receiver or other agent or legal
representative of the beneficiary of such Letter of Credit or other party who is
authorized under such Letter of Credit to draw or issue any drafts, required
statements or other documents.
(c) Either the Applicant or the Applicable Co-Applicant will cause the
goods and other property covered by such Letter of Credit to be adequately
insured in amounts, against risks and by companies reasonably satisfactory to
the Agent, and, if requested by the Agent, assign the policies or certificates
thereof to the Agent or make loss payable to the Agent, at its option, and
furnish the Agent upon request evidence of compliance with the foregoing. If the
Agent at any time deems such insurance inadequate for any reason, the Agent may
procure such insurance as it deems necessary, at the Applicant's or the
Applicable Co-Applicant's expense.
(d) The Applicant or the Applicable Co-Applicant will procure promptly
necessary import, export or shipping licenses for the goods and other property
covered by such Letter of Credit, comply with all governmental regulations,
foreign or domestic (including exchange regulations) with regard thereto or the
financing thereof, and furnish to the Agent, upon request, certificates
evidencing the foregoing, and on demand, pay to the Agent any amount(s) the
Agent may be required to expend in respect thereto.
(e) For a Letter of Credit expiring at the Agent's counters, the Agent is
the nominated bank for payment or acceptance. For Letters of Credit not expiring
at the Agent's counters, if the Applicant or the Applicable Co-Applicant does
not nominate a bank to be available for payment, acceptance or negotiation of
the Letter of Credit, then the Agent may, with the consent of the Applicant or
the Applicable Co-Applicant (such consent not to be unreasonably withheld),
issue the Letter of Credit as negotiable by any bank or the Agent may, with the
consent of the Applicant or the Applicable Co-Applicant (such consent not to be
unreasonably withheld), nominate any of its branches or affiliates or any
correspondents of its choice. It is further understood that the Agent may, with
the consent of the Applicant or the Applicable Co-Applicant (such consent not to
be unreasonably withheld), waive its stipulation of the nominated bank and
accept presentations of documents from a bank not so nominated by the Applicant
or such Applicable Co-Applicant.
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Section 2.18. Additional Co-Applicants. Any Subsidiary may become a
Co-Applicant party hereto and bound hereby by executing a counterpart hereof and
delivering the same to the Agent.
ARTICLE III
Conditions
----------
Section 3.01. Conditions to Issuance of Initial Letter of Credit.
The obligation of the Agent to issue the initial Letter of Credit is subject to
the satisfaction of the following conditions:
(a) receipt by the Agent of a counterpart hereof signed by the Applicant,
each of the Co-Applicants party hereto at such time and the Banks (or facsimile
or other written confirmation satisfactory to the Agent that each party has
signed a counterpart hereof);
(b) receipt by the Agent of a counterpart of the Guarantee signed by each
party listed on the signature pages thereof (or facsimile or other written
confirmation satisfactory to the Agent that each party has signed a counterpart
hereof);
(c) receipt by the Agent of an opinion of Skadden, Arps, Slate, Xxxxxxx &
Xxxx LLP, special counsel for the Applicant, substantially in the form of
Exhibit B-1 hereto;
(d) receipt by the Agent of an opinion of the General Counsel of the
Applicant, substantially in the form of Exhibit B-2 hereto;
(e) the fact that the Applicant shall have paid all expenses (including
without limitation all expenses payable by it pursuant to Section 9.03(b)
hereof) with respect to which the Applicant shall have received an invoice at
least one Domestic Business Day prior to the date of such issuance;
(f) (i) the fact that the representations and warranties set forth herein
and in the Guarantee Agreement shall be true and correct on and as of the date
hereof and (ii) receipt by the Agent of a certificate of a Responsible Officer
of the Applicant and each Subsidiary so certifying;
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(g) (i) the fact that no Default shall occur and be continuing and
(ii) receipt by the Agent of a certificate of a Responsible Officer of the
Applicant and each Subsidiary so certifying;
(h) receipt by the Agent of all documents that the Agent may request
relating to the existence of the Applicant, each Co-Applicant and each
Subsidiary Guarantor, the corporate authority for and the validity of the Loan
Documents, and any other matters relevant hereto, all in form and substance
satisfactory to the Agent; and
(i) the fact that the RC Agreement shall have become effective and receipt
by the Agent of a certified copy thereof.
Section 3.02. Conditions to Issuance of each Letter of Credit. The
obligation of the Agent to issue (which shall include any amendment to an
outstanding Letter of Credit that increases the amount available thereunder) or
extend (or allow the extension of) the expiry date of any Letter of Credit is
subject to the satisfaction of the following conditions:
(a) receipt by the Agent of a notice of proposed issuance or extension as
required by Section 2.04;
(b) the Agent shall have determined that the conditions set forth in 2.03
with regard to such issuance or extension have been satisfied;
(c) the fact that, immediately after such issuance or extension, the
applicable limitations in Section 2.01 shall not be exceeded;
(d) the fact that, immediately before and after such issuance or extension,
no Default shall have occurred and be continuing;
(e) the fact that each of the representations and warranties of the
Obligors contained in the Loan Documents shall be true on and as of the date of
such issuance or extension;
(f) the fact that each of the conditions to the making of Loans (as defined
in the RC Agreement) under the RC Agreement could be satisfied at such time (or,
if any such conditions could not be satisfied, the Agent shall have received
evidence satisfactory to it of the waiver thereof); and
(g) the fact that the aggregate amount of the RC Commitments shall be not
less than $150,000,000 at such time and that the availability thereof to the
Applicant shall not have been limited or restricted in any way not expressly set
forth in the RC Agreement as in effect on the date hereof.
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Each issuance or extension of a Letter of Credit hereunder shall be deemed to be
a representation and warranty by the Applicant on the date of such issuance or
extension as to the facts specified in clauses (c), (d), (e), (f) and (g) of
this Section.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
------------------------------
The Applicant represents and warrants that:
Section 4.01. Corporate Existence and Power. Each Obligor is a corporation
duly incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation, and has all corporate powers and all material
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted, except where failures to possess such
licenses, authorizations, consents and approvals could not, in the aggregate,
reasonably be expected to result in a Material Adverse Effect.
Section 4.02. Corporate and Governmental Authorization; No Contravention.
The execution, delivery and performance by each Obligor of each Loan Document to
which it is party is within such Obligor's corporate powers, have been duly
authorized by all necessary corporate action, require no action by or in respect
of, or filing with, any governmental body, agency or official and do not
contravene, or constitute a default under, any provision of applicable law or
regulation or of the certificate of incorporation or by-laws of any Obligor or
of any agreement, judgment, injunction, order, decree or other instrument
binding upon the Applicant or any of its Subsidiaries or result in the creation
or imposition of any lien or other encumbrance on any asset of the Applicant or
any of its Subsidiaries.
Section 4.03. Binding Effect. Each of the Loan Documents constitutes a
valid and binding agreement of each Obligor party thereto, enforceable in
accordance with its terms.
Section 4.04. Litigation. There is no action, suit or proceeding pending
against, or to the knowledge of the Applicant threatened against or affecting,
the Applicant or any of its Subsidiaries before any court or arbitrator or any
governmental body, agency or official which could reasonably be expected to
result in a Material Adverse Effect.
Section 4.05. Subsidiary Guarantors. The Subsidiary Guarantors are all of
the Subsidiaries of the Applicant, other than Subsidiaries not required to be a
party to the Guarantee Agreement.
ARTICLE V
COVENANTS
---------
The Applicant agrees that:
Section 5.01. Information. The Applicant will deliver to each of the Banks:
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(a) the financial statements, accountantS' reports, forecasts,
projections, notices and other materials required to be delivered pursuant
to Section 5.01 of the RC Agreement, on the earlier of (i) the day on which
such materials are delivered thereunder and (ii) the last day by which such
materials are required to be delivered thereunder; and
(b) from time to time such additional information regarding the
financial position or business of the Applicant and its Subsidiaries as the
Agent may reasonably request.
Section 5.02. Conduct of Business and Maintenance of Existence. The
Applicant will continue, and will cause each Subsidiary to continue, to engage
in business of the same general type as now conducted by the Applicant and its
Subsidiaries, and will preserve, renew and keep in full force and effect, and
will cause each Subsidiary to preserve, renew and keep in full force and effect
their respective existence and their respective rights, privileges and
franchises necessary or desirable in the normal conduct of business, except
where failures to possess such rights, privileges and franchises could not, in
the aggregate, reasonably be expected to result in a Material Adverse Effect,
and except as otherwise permitted by the RC Agreement;
Section 5.03. Compliance with Laws. The Applicant will comply, and cause
each Subsidiary to comply, in all material respects with all applicable laws,
ordinances, rules, regulations, and binding requirements of governmental
authorities (including, without limitation, Environmental Laws and the rules and
regulations thereunder), except where (i) the necessity of compliance therewith
is being contested in good faith by appropriate proceedings or (ii) failures to
comply therewith could not, in the aggregate, reasonably be expected to result
in a Material Adverse Effect.
Section 5.04. Inspection of Property, Books and Records. The Applicant will
keep, and will cause each Subsidiary (except for Subsidiaries that constitute
Immaterial Subsidiaries) to keep, proper books of record and account in which
full, true and correct entries shall be made of all dealings and transactions in
relation to its business and activities; and will permit, and will cause each
Subsidiary (except for Subsidiaries that constitute Immaterial Subsidiaries) to
permit, representatives of any Bank at such Bank's expense, upon reasonable
prior notice, to visit and inspect any of their respective properties, to
examine and make abstracts from any of their respective books and records and to
discuss their respective affairs, finances and accounts with their respective
officers, employees and independent public accountants, all at such reasonable
times and as often as may reasonably be desired.
Section 5.05. Additional Guarantors. The Applicant shall cause any Person
which becomes a Subsidiary (other than any Foreign Subsidiary or any Immaterial
Subsidiary) after the date hereof, and any Immaterial Subsidiary (other than any
Foreign Subsidiary) that ceases to be an Immaterial Subsidiary after the date
hereof to (i) enter into the Guarantee Agreement and (ii) deliver such
certificates, evidences of corporate or other organizational actions, notations
and registrations, opinions of counsel, powers of attorney and other documents
relating thereto as the Agent may reasonably request, all in form and substance
reasonably satisfactory to the Agent, in each case within ten days after the
date on which such Person becomes a Subsidiary or ceases to be an Immaterial
Subsidiary.
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ARTICLE VI
DEFAULTS
--------
Section 6.01. Events of Defaults. If one or more of the following events
("Events of Default") shall have occurred and be continuing:
(a) any Obligor shall fail to pay any principal of any Reimbursement
Obligation, any interest on any Reimbursement Obligation, any fees or any other
amount payable hereunder within two Domestic Business Days after the due date
thereof;
(b) any Obligor shall fail to observe or perform any covenant or agreement
contained in this Agreement (other than those covered by clause (a) above) or
any other Loan Document for 30 days after written notice thereof has been given
to the Applicant by the Agent at the request of the Required Banks;
(c) any representation, warranty, certification or statement made (or
deemed made) by any Obligor in any Loan Document or any certificate, financial
statement or other document delivered pursuant to any Loan Document shall prove
to have been incorrect in any material respect when made (or deemed made);
(d) the obligations of any Subsidiary Guarantor pursuant to the Guarantee
Agreement shall cease for any reason to be in full force and effect (other than
a result of the release of such obligations with respect to any Subsidiary
Guarantor pursuant to the release provisions contained therein), or any Obligor
shall so assert in writing; or
(e) an Event of Default shall have occurred and be continuing under, and as
defined in, the RC Agreement, it being understood that any such Event of Default
that shall have been waived in accordance with the RC Agreement or cured
pursuant to an amendment to the RC Agreement shall be no longer "continuing" for
purposes hereof;
then, and in every such event, the Agent may, and shall, if requested by Banks
having more than 50% in aggregate amount of the Commitments, by notice to the
Applicant terminate the Commitments; provided however, that if any Event of
Default specified in clause (e) above occurs with respect to any Obligor as the
result of the occurrence of an "Event of Default" specified in clauses (g) or
(h) of Section 6.01 of the RC Agreement, then without any notice to the
Applicant or any other act by the Agent or the Banks, the Commitments shall
thereupon terminate.
Section 6.02. Notice of Default. The Agent shall give notice to the
Applicant under Section 6.01(b) promptly upon being requested to do so by the
Required Banks and shall thereupon notify all the Banks thereof.
Section 6.03. Cash Cover. The Applicant and each Applicable Co-Applicant
agrees, on a joint and several basis, in addition to the provisions of Section
6.01, that upon the occurrence and during the continuance of any Event of
Default, it shall, if requested by the Agent upon the instruction of the
Required Banks, deposit in the LC Collateral Account an amount in immediately
available funds equal to the aggregate amount available for drawing under, in
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the case of the Applicant, all Letters of Credit then outstanding at such time
and, in the case of such Applicable Co-Applicant, all Letters of Credit then
outstanding at such time issued for its account, provided that, upon the
occurrence of (i) the Termination Date or (ii) any Event of Default specified in
clause (e) of Section 6.01 as the result of the occurrence of an "Event of
Default" specified in clauses (g) or (h) of Section 6.01 of the RC Agreement
with respect to the Applicant or such Applicable Co-Applicant, the Applicant or
such Applicable Co-Applicant, as the case may be, shall deposit such amount
forthwith without any notice or demand or any other act by the Agent or the
Banks.
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ARTICLE VII
THE AGENT
---------
Section 7.01. Appointment and Authorization. Each Bank irrevocably appoints
and authorizes the Agent to take such action as agent on its behalf and to
exercise such powers under the Loan Documents as are delegated to the Agent by
the terms thereof, together with all such powers as are reasonably incidental
thereto.
Section 7.02. Dual Capacity. In its capacity as a Bank, the Agent shall
have the same rights and obligations under the Loan Documents as any other Bank.
Section 7.03. Obligations of Agent. The obligations of the Agent under this
Agreement are only those expressly set forth herein. Without limiting the
generality of the foregoing, the Agent shall not be required to take any action
with respect to any Default, except as expressly provided in Article VI.
Section 7.04. Consultation with Experts. The Agent may consult with legal
counsel (who may be counsel for any Obligor), independent public accountants and
other experts selected by it and shall not be liable for any action taken or
omitted to be taken by it in good faith in accordance with the advice of such
counsel, accountants or experts.
Section 7.05. Liability of Agent. None of the Agent, its respective
affiliates or its respective directors, officers, agents or employees shall be
liable for any action taken or not taken in connection herewith (i) with the
consent or at the request of the Required Banks or (ii) in the absence of its
own gross negligence or willful misconduct. None of the Agent, its respective
affiliates or its respective directors, officers, agents or employees shall be
responsible for or have any duty to ascertain, inquire into or verify (i) any
statement, warranty or representation made in connection with any Loan Document
or any issuance or extension of a Letter of Credit; (ii) the performance or
observance of any of the covenants or agreements of any Obligor; (iii) the
satisfaction of any condition specified in Article III except, in the case of
the Agent, receipt of items required to be delivered to it; or (iv) the
validity, effectiveness or genuineness of any Loan Document or any other
instrument or writing furnished in connection herewith.
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Section 7.06. Credit Decision. Each Bank acknowledges that it has,
independently and without reliance upon any Bank Party, and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Bank also acknowledges
that it will, independently and without reliance upon any Bank Party, 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 any action
under this Agreement.
Section 7.07. Successor Agent. The Agent may resign at any time by giving
notice thereof to the Banks and the Applicant, such resignation to be effective
when a successor Agent is appointed pursuant to this Section and accepts such
appointment. Upon receiving any such notice of resignation, the Required Banks
shall have the right to appoint a successor Agent, subject to the approval of
the Applicant (unless an Event of Default shall have occurred and be continuing
at the time of such appointment, in which case the Applicant's approval will not
be required). If no successor Agent shall have been so appointed by the Required
Banks, and shall have accepted such appointment, within 30 days after the
retiring Agent gives notice of resignation, then the retiring Agent may, on
behalf of the other Banks, appoint a successor Agent, which shall be a
commercial bank organized or licensed under the laws of the United States of
America or of any State thereof and having a combined capital and surplus of at
least $500,000,000. Upon the acceptance of its appointment as the Agent
hereunder by a successor Agent, such successor Agent shall thereupon succeed to
and become vested with all the rights and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations hereunder.
After any retiring Agent's resignation hereunder, the provisions of this Article
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was the Agent.
Section 7.08. Agent's Fees. The Applicant shall pay to the Agent for its
account, fees in the amounts and at the times previously agreed upon between the
Applicant and the Agent.
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
-----------------------
Section 8.01. Increased Cost and Reduced Return. (a) If on or after the
date hereof, in the case of any Letter of Credit or any obligation to
participate in Letters of Credit, the adoption of any applicable law, rule or
regulation, or any change in any applicable law, rule or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank with any request or directive
(whether or not having the force of law) of any such authority, central bank or
comparable agency, shall impose, modify or deem applicable any reserve
(including, without limitation, any such requirement imposed by the Board of
Governors of the Federal Reserve System) special deposit, insurance assessment,
or similar requirement against assets of, deposits with or for the account of,
or credit extended by, any Bank or shall impose on any Bank any other condition
affecting its obligation to participate in any Letter of Credit and the result
of any of the foregoing is to increase the cost to such Bank of participating in
any Letter of Credit, then, within 15 days after receiving a request by such
Bank for compensation under this subsection, accompanied by a certificate
complying with subsection (e) of this Section (with a copy to the Agent), the
Applicant shall, subject to subsection (f) of this Section, pay to such Bank
such additional amount or amounts as will compensate such Bank for such
increased cost or reduction.
(b) If, on or after the date hereof, the adoption of any applicable law,
rule or regulation, or any change in any applicable law, rule or regulation, or
any change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
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administration thereof, or compliance by the Agent with any request or directive
(whether or not having the force of law) made on or after the date of this
Agreement by any such authority, central bank or comparable agency, shall
impose, modify or deem applicable any reserve (including, without limitation,
any such requirement imposed by the Board of Governors of the Federal Reserve
System), special deposit, insurance assessment or similar requirement against
any Letter of Credit issued by the Agent or shall impose on the Agent any other
condition affecting its Letters of Credit or its obligation to issue Letters of
Credit and the result of any of the foregoing is to increase the cost to the
Agent of issuing any Letter of Credit or to reduce the amount of any sum
received or receivable by the Agent under this Agreement with respect thereto,
by an amount deemed by the Agent to be material, then, within 15 days after
demand by the Agent, the Applicant shall pay to the Agent such additional amount
or amounts as will compensate the Agent for such increased cost or reduction.
(c) If any Bank or the Agent shall have determined that, after the date
hereof, the adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change in any such law, rule or regulation, or any change in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or 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 capital of such Bank or the Agent, as the case may be (or its Parent), as a
consequence of its obligations hereunder to a level below that which such Bank
or the Agent, as the case may be (or its Parent), could have achieved but for
such adoption, change, request or directive (taking into consideration its
policies with respect to capital adequacy) by an amount deemed by it to be
material, then from time to time, within 15 days after receiving a request by
such Bank or the Agent, as the case may be, for compensation under this
subsection, accompanied by a certificate complying with subsection (e) of this
Section, the Applicant shall, subject to subsection (f) of this Section, pay to
such Bank or the Agent, as the case may be, such additional amount or amounts as
will compensate it (or its Parent) for such reduction.
(d) Each Bank and the Agent will promptly notify the Applicant of any event
of which it has knowledge, occurring after the date hereof, which will entitle
it to compensation pursuant to this Section and will designate a different LC
Office if such designation will avoid the need for, or reduce the amount of,
such compensation and will not, in its judgment, be otherwise disadvantageous to
it. If a Bank or the Agent fails to notify the Applicant of any such event
within 180 days after such event occurs, it shall not be entitled to
compensation under this Section for any effect of such event arising more than
180 days before it does notify the Applicant thereof.
(e) Each request by a Bank or the Agent for compensation under this Section
shall be accompanied by a certificate, signed by one of its authorized
employees, setting forth in reasonable detail (i) the basis for claiming such
compensation, (ii) the additional amount or amounts to be paid to it hereunder
and (iii) the method of calculating such amount or amounts, which certificate
shall be conclusive in the absence of manifest error. In determining such
amount, such Bank or the Agent may use any reasonable averaging and attribution
methods.
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(f) Notwithstanding any other provision of this Section, none of the Banks
or the Agent shall be entitled to compensation under subsection (a), (b) or (c)
of this Section if it is not then its general practice to demand compensation in
similar circumstances under comparable provisions of other credit agreements.
Section 8.02. Taxes. (a) For purposes of this Section 8.02, the following
terms have the following meanings:
"Taxes" means any and all present or future taxes, duties, levies, imposts,
deductions, charges or withholdings with respect to any payment by the Applicant
pursuant to the Loan Documents, and all liabilities with respect thereto,
excluding (i) in the case of each Bank Party, taxes imposed on or measured by
its income, and franchise or similar taxes imposed on it, by a jurisdiction
under the laws of which it is organized or qualified to do business (but only if
the taxes are imposed solely because such Bank Party is qualified to do business
in such jurisdiction without regard to any issuance or extension of Letter of
Credit) or in which its principal executive office is located or in which its LC
Office is located, and (ii) in the case of each Bank, any United States
withholding tax imposed on such payments other than such withholding tax imposed
as a result of a change in treaty, law or regulation occurring after a Bank
first becomes subject to this Agreement.
"Other Taxes" means any present or future stamp, documentary or mortgage
recording taxes and any other excise or property taxes, or similar charges or
levies, which arise from any payment made pursuant to the Loan Documents or from
the execution, delivery or enforcement of, or otherwise with respect to, the
Loan Documents.
(b) Any and all payments by the Applicant or any Applicable Co-Applicant to
or for the account of any Bank Party under any Loan Document shall be made
without deduction for any Taxes or Other Taxes; provided that, if the Applicant
or such Applicable Co-Applicant shall be required by law to deduct any Taxes or
Other Taxes from any such payments, (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 8.02) such Bank Party
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Applicant or such Applicable Co-Applicant shall
make such deductions, (iii) the Applicant or such Applicable Co-Applicant shall
pay the full amount deducted to the relevant taxation authority or other
authority in accordance with applicable law and (iv) the Applicant or such
Applicable Co-Applicant shall furnish to the Agent, at its address referred to
in Section 9.01, the original or a certified copy of a receipt evidencing
payment thereof.
(c) The Applicant and each Applicable Co-Applicant agree, on a joint and
several basis, to indemnify each Bank Party for the full amount of Taxes or
Other Taxes (including, without limitation, any Taxes or Other Taxes imposed or
asserted by any jurisdiction on amounts payable under this Section 8.02) paid by
such Bank Party and any liability (including penalties, interest and expenses)
arising therefrom or with respect thereto, provided that neither the Applicant
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nor such Applicable Co-Applicant shall indemnify any Bank Party for any
penalties or interest on any Taxes or Other Taxes accrued during the period
between the 15th day after such Bank Party has received a notice from the
jurisdiction asserting such Taxes or Other Taxes and such later day on which
such Bank Party has informed the Applicant or such Applicable Co-Applicant of
the receipt of such notice. This indemnification shall be paid within 15 days
after such Bank Party makes demand therefor.
(d) Each Bank Party organized under the laws of a jurisdiction outside the
United States, on or prior to the date of its execution and delivery of this
Agreement in the case of each Bank Party listed on the signature pages hereof
and on or prior to the date on which it becomes a Bank Party in the case of each
other Bank Party, and from time to time thereafter if requested in writing by
the Applicant (but only so long as such Bank Party remains lawfully able to do
so), shall provide the Applicant with Internal Revenue Service Form 1001 or
4224, as appropriate, or any successor form prescribed by the Internal Revenue
Service, certifying that such Bank Party is entitled to benefits under an income
tax treaty to which the United States is a party which exempts such Bank Party
from United States withholding tax or reduces the rate of withholding tax on
payments of interest for the account of such Bank Party or certifying that the
income receivable pursuant to this Agreement is effectively connected with the
conduct of a trade or business in the United States.
(e) For any period with respect to which a Bank Party has failed to provide
the Applicant with the appropriate form as required by Section 8.02(d) (unless
such failure is due to a change in treaty, law or regulation occurring
subsequent to the date on which such form originally was required to be
provided), such Bank Party shall not be entitled to indemnification under
Section 8.02(b) or (c) with respect to Taxes (including penalties, interest and
expenses) imposed by the United States; provided that if a Bank Party, which is
otherwise exempt from or subject to a reduced rate of withholding tax, becomes
subject to Taxes because of its failure to deliver a form required hereunder,
the Applicant shall take such steps as such Bank Party shall reasonably request
to assist such Bank Party to recover such Taxes.
(f) If the Applicant or any Applicable Co-Applicant is required to pay
additional amounts to or for the account of any Bank Party pursuant to this
Section 8.02, then such Bank Party will change the jurisdiction of its LC Office
if, in the judgment of such Bank Party, such change (i) will eliminate or reduce
any such additional payment which may thereafter accrue and (ii) is not
otherwise disadvantageous to such Bank Party.
(g) If a Bank Party receives a notice from a taxing authority asserting any
Taxes or Other Taxes for which the Applicant or any Applicable Co-Applicant is
required to indemnify such Bank Party under Section 8.02(c), it shall furnish to
the Applicant or such Applicable Co-Applicant a copy of such notice no later
than 90 days after the receipt thereof. If such Bank Party has failed to furnish
a copy of such notice to the Applicant or such Applicable Co-Applicant within
such 90-day period as required by this Section 8.02(g), the Applicant or such
Applicable Co-Applicant shall not be required to indemnify such Bank Party for
any such Taxes or Other Taxes (including penalties, interest and expenses
thereon) arising between the 90th day after such Bank Party has received such
notice and the day on which such Bank Party has furnished to the Applicant or
such Applicable Co-Applicant a copy of such notice.
Section 8.03. Substitution of Bank. If any Bank has demanded compensation
under Section 8.01 or 8.02, the Applicant shall have the right, with the
assistance of the Agent, to seek a mutually satisfactory substitute bank or
banks (which may be one or more of the Banks) to replace such Bank. Any
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substitution under this Section 8.03 may be accomplished, at the Applicant's
option, either (i) by the replaced Bank assigning its rights and obligations
hereunder to the replacement bank or banks pursuant to Section 9.06(c) at a
mutually agreeable price or (ii) by the Applicant terminating its Commitment on
a date specified in a notice delivered to the Agent and the replaced Bank at
least three Domestic Business Days before the date so specified and concurrently
the replacement bank or banks assuming a Commitment in an amount equal to the
Commitment being terminated, all pursuant to documents reasonably satisfactory
to the Agent (and in the case of any document to be signed by the replaced Bank,
reasonably satisfactory to such Bank). No such substitution shall relieve the
Applicant or any Applicable Co-Applicant of its obligation to compensate and/or
indemnify the replaced Bank as required by Sections 8.01 and 8.02 with respect
to the period before it is replaced and to pay all accrued interest, accrued
fees and other amounts owing to the replaced Bank hereunder.
ARTICLE IX
MISCELLANEOUS
-------------
Section 9.01. Notices. All notices, requests and other communications to
any party hereunder shall be in writing (including bank wire, telex, facsimile
transmission or similar writing) and shall be given to such party: (x) in the
case of the Applicant, any Co-Applicant or the Agent, at its address, facsimile
number or telex number set forth on the signature pages hereof, (y) in the case
of any Bank, at its address, facsimile number or telex number set forth in its
Administrative Questionnaire or (z) in the case of any party, such other
address, facsimile number or telex number as such party may hereafter specify
for such purpose by notice to the Agent and the Applicant. Each such notice,
request or other communication shall be effective (i) if given by telex, when
such telex is transmitted to the telex number specified in this Section and the
appropriate answerback is received, (ii) if given by facsimile transmission,
when transmitted to the facsimile number specified in this Section and
confirmation of receipt is received, (iii) if given by mail, three Domestic
Business Days after such communication is deposited in the mails with first
class postage prepaid, addressed as aforesaid, or (iv) if given by any other
means, when delivered at the address specified in this Section; provided that
notices to the Agent under Article 2 or Article 8 shall not be effective until
received.
Section 9.02. No Waivers. No failure or delay by any Bank Party in
exercising any right, power or privilege under any Loan Document shall operate
as a waiver thereof nor shall any single or partial exercise thereof preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege. The rights and remedies provided in this Agreement shall be
cumulative and not exclusive of any rights or remedies provided by law.
Section 9.03. Expenses; Indemnification. (a) The Applicant shall pay
(i) all reasonable out-of-pocket expenses of the Agent, including reasonable
fees and disbursements of special counsel, in connection with the negotiation
and preparation of the Loan Documents, (ii) all reasonable out-of-pocket
expenses of the Agent, including reasonable fees and disbursements of special
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counsel and reasonable fees and disbursements of accountants and any other
advisors to the Agent, in connection with the administration of the Loan
Documents, any waiver or consent thereunder or any amendment thereof or any
Default or alleged Default thereunder and (iii) if an Event of Default occurs,
all out-of-pocket expenses incurred by the Agent and each Bank Party including
(without duplication) the fees and disbursements of special counsel and the
allocated cost of internal counsel and the fees and disbursements of accountants
and any other advisors to the Agent or any Bank Party, in connection with any
collection, bankruptcy, insolvency and other enforcement proceedings resulting
therefrom.
(b) The Applicant agrees to indemnify each Bank Party, their respective
affiliates and the respective directors, officers, agents and employees of the
foregoing (each an "Indemnitee") and hold each Indemnitee harmless from and
against any and all liabilities, losses, damages, costs and expenses of any
kind, including, without limitation, the reasonable fees and disbursements of
counsel, which may be incurred by such Indemnitee in connection with any
investigative, administrative or judicial proceeding (whether or not such
Indemnitee shall be designated a party thereto) brought or threatened relating
to or arising out of the Loan Documents or any actual or proposed use of
proceeds of Letters of Credit hereunder; provided that no Indemnitee shall have
the right to be indemnified hereunder for such Indemnitee's own gross negligence
or willful misconduct as determined by a court of competent jurisdiction.
Section 9.04. Sharing of Set-offs. (a) Each Bank agrees that if it shall,
by exercising any right of set-off or counterclaim or otherwise, receive payment
of a proportion of the aggregate amount of the principal of and interest on the
Reimbursement Obligations held by it or for its account which is greater than
the proportion received in respect of the aggregate amount of the principal of
and interest on the Reimbursement Obligations held by or for the account of any
other Bank, the Bank receiving such proportionately greater payment shall
purchase such participations in the aggregate amount of the principal of and
interest on the Reimbursement Obligations held by or for the account of the
other Banks, and such other adjustments shall be made, as may be required so
that all such payments of the aggregate amount of the principal of and interest
on the Reimbursement Obligations held by or for the account of the Banks shall
be shared by them pro rata.
(b) The Applicant and each Applicable Co-Applicant agrees, to the fullest
extent it may effectively do so under applicable law, that any holder of a
participation in a Reimbursement Obligation, whether or not acquired pursuant to
the foregoing arrangements, may exercise rights of set-off or counterclaim and
other rights with respect to such participation as fully as if such holder of a
participation were a direct creditor of the Applicant or such Applicable
Co-Applicant in the amount of such participation.
(c) Nothing in this Section shall impair the right of any Bank to exercise
any right of set-off or counterclaim it may have and to apply the amount subject
to such exercise to the payment of indebtedness of the Applicant or any
Applicable Co-Applicant other than its indebtedness hereunder.
Section 9.05. Amendments and Waivers. (a) Any provision of this Agreement
may be amended or waived if, but only if, such amendment or waiver is in writing
and is signed by the Applicant and the Required Banks (and, if the rights or
duties of the Agent or any Co-Applicant are affected thereby, by the Agent or
such Co-Applicant); provided that no such amendment or waiver shall, unless
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signed by all the Banks, (i) increase or decrease the Commitment of any Bank
(except for a ratable decrease in the Commitments of all Banks) or subject any
Bank to any additional obligation, (ii) reduce the principal of or rate of
interest on any Reimbursement Obligation, (iii) postpone the date fixed for
payment by the Applicant or any Applicable Co-Applicant of any Reimbursement
Obligation or extend the expiry date of any Letter of Credit to a date later
than the fifth Domestic Business Day prior to the Termination Date, or
(iv) change the percentage of the Commitments or the number of Banks, which
shall be required for the Banks or any of them to take any action under this
Section or any other provision of this Agreement (including without limitation
subsection (b) of this Section 9.05).
(b) Any provision of the Guarantee Agreement may be amended or waived if,
but only if, such amendment or waiver is in writing and is signed by each
Obligor party thereto and the Agent with the consent of the Required Banks;
provided that no such amendment or waiver shall, unless signed by each Obligor
party thereto and the Agent with the consent of all the Banks, release all or
substantially all of the Obligors from their obligations under the Guarantee
Agreement or permit termination of the Guarantee Agreement, except in each case
as expressly permitted by the terms thereof.
Section 9.06. Successors and Assigns. (a) The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that neither the Applicant nor any
Co-Applicant may assign or otherwise transfer any of its rights under this
Agreement without the prior written consent of each Bank and the Agent.
(b) Any Bank may at any time grant to one or more banks or other
institutions (each a "Participant") participating interests in its Commitment or
all or any part of its LC Exposure. If any Bank grants a participating interest
to a Participant, whether or not upon notice to the Applicant and the Agent,
such Bank shall remain responsible for the performance of its obligations
hereunder, such Bank shall remain the holder of its LC Exposure, and the
Applicant or the Applicable Co-Applicant and the Agent shall continue to deal
solely and directly with such Bank in connection with such Bank's rights and
obligations under this Agreement. Any agreement pursuant to which any Bank may
grant such a participating interest shall provide that such Bank shall retain
the sole right and responsibility to enforce the obligations of the Applicant or
the Applicable Co-Applicant hereunder including, without limitation, the right
to approve any amendment, modification or waiver of any provision of this
Agreement; provided that such participation agreement may provide that such Bank
will not agree to any modification, amendment or waiver of this Agreement
described in clause (i), (ii) or (iii) of Section 9.05(a) or in the proviso to
Section 9.05(b) without the consent of the Participant. The Applicant and each
Co-Applicant agree that each Participant shall, to the extent provided in its
participation agreement, be entitled to the benefits of this Article with
respect to its participating interest. An assignment or other transfer which is
not permitted by subsection (c) or (d) below shall be given effect for purposes
of this Agreement only to the extent of a participating interest granted in
accordance with this subsection (b).
(c) Any Bank may, in the ordinary course of its business and in accordance
with applicable law, at any time assign to one or more banks or other
institutions (each an "Assignee") all, or a proportionate part (equivalent to an
initial Commitment of not less than $5,000,000) of all, of its rights and
obligations under this Agreement, and such Assignee shall assume such rights and
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obligations, pursuant to an Assignment and Assumption Agreement in substantially
the form of Exhibit C hereto executed by such Assignee and such transferor Bank,
with (and subject to) the subscribed consents of the Applicant and the Agent
(which consents shall not be unreasonably withheld); provided that (i) such
consents shall not be required if the Assignee is an affiliate of such
transferor Bank or was a Bank immediately prior to such assignment or if, at the
time of the proposed assignment, an Event of Default has occurred and is
continuing; and (ii) the $5,000,000 minimum amount specified above for a partial
assignment of the transferor Bank's rights and obligations shall not apply if
the Assignee was a Bank immediately prior to such assignment. Upon execution and
delivery of such instrument and payment by such Assignee to such transferor Bank
of an amount equal to the purchase price agreed between such transferor Bank and
such Assignee, such Assignee shall be a Bank party to this Agreement and shall
have all the rights and obligations of a Bank with a Commitment as set forth in
such instrument of assumption, and the transferor Bank shall be released from
its obligations hereunder (and its Commitment shall be reduced) to a
corresponding extent, and no further consent or action by any party shall be
required. In connection with any such assignment, the transferor Bank shall pay
to the Agent an administrative fee for processing such assignment in the amount
of $3,500; provided that the Applicant shall pay such administrative fee if such
assignment is required by the Applicant pursuant to Section 8.03. If the
Assignee is not incorporated under the laws of the United States of America or a
state thereof, it shall deliver to the Applicant and the Agent certification as
to exemption from deduction or withholding of any United States federal income
taxes in accordance with Section 8.02.
(d) Any Bank may at any time assign all or any portion of its rights under
this Agreement to a Federal Reserve Bank. No such assignment shall release the
transferor Bank from its obligations hereunder.
(e) No Assignee, Participant or other transferee of any Bank's rights shall
be entitled to receive any greater payment under Section 8.01 or 8.02 than such
Bank would have been entitled to receive with respect to the rights transferred,
unless such transfer is made with the Applicant's prior written consent or by
reason of the provisions of Section 8.01 or 8.02 requiring such Bank to
designate a different LC Office under certain circumstances or at a time when
the circumstances giving rise to such greater payment did not exist.
Section 9.07. Governing Law; Submission to Jurisdiction. (a) Each Letter of
Credit and Article II shall be subject to the UCP, and, to the extent not
inconsistent therewith, the laws of the State of New York.
(b) SUBJECT TO CLAUSE (a) OF THIS SECTION, EACH LOAN DOCUMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
(c) The Applicant and each Co-Applicant hereby submits to the nonexclusive
jurisdiction of the United States District Court for the Southern District of
New York and of any New York State court sitting in New York City for purposes
of all legal proceedings arising out of or relating to any Loan Document or the
transactions contemplated thereby. The Applicant and each Co-Applicant
irrevocably waives, to the fullest extent permitted by law, any objection which
it may now or hereafter have to the laying of the venue of any such proceeding
brought in such a court and any claim that any such proceeding brought in such a
court has been brought in an inconvenient forum.
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Section 9.08. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
Section 9.09. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATING TO ANY LOAN DOCUMENT OR TRANSACTIONS CONTEMPLATED THEREBY.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
VENATOR GROUP, INC.
By: /s/ Xxxx X. Xxxxxx
--------------------------
Name: XXXX X. XXXXXX
Title: Vice President and Treasurer
000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Facsimile number: 000-000-0000
VENATOR GROUP RETAIL, INC.
By: /s/ Xxxx X. Xxxxxx
---------------------------
Name: XXXX X. XXXXXX
Title: Vice President and Treasurer
VENATOR GROUP SPECIALTY, INC.
By: /s/ Xxxx X. Xxxxxx
----------------------------
Name: XXXX X. XXXXXX
Title: Vice President and Treasurer
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THE BANK OF NEW YORK, as Agent and Bank
By: /s/ Xxxxxx X. Xxxxxx, Xx.
-----------------------------
Name: XXXXXX X. XXXXXX, XX.
Title: Vice President
Xxx Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile number: 000-000-0000
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Co-Applicant Schedule
---------------------
Venator Group Retail, Inc.
Venator Group Specialty, Inc.
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Commitment Schedule
-------------------
Bank Commitment
---- ----------
The Bank of New York $45,000,000
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EXHIBIT A
FORM OF GUARANTEE AGREEMENT
GUARANTEE AGREEMENT dated as of March 19, 1999 among each of the
Subsidiaries of the Company (as defined below) listed on the signature pages
hereof and each other Subsidiary of the Company that may from time to time
become a party hereto in accordance with Section 19 (each such Subsidiary, with
its successors, a "Subsidiary Guarantor") and The Bank of New York, as Agent
(with its successors, the "Agent"), for the benefit of the Bank Parties (as
defined in the Credit Agreement referred to below).
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, it is a condition to effectiveness of the Letter of Credit
Agreement dated as of the date hereof among Venator Group, Inc., the Banks party
thereto, the Co-Applicants party thereto and The Bank of New York, as Agent (as
amended or amended and restated or otherwise modified or supplemented from time
to time, the "Credit Agreement") that each Subsidiary Guarantor enter into a
Guarantee Agreement substantially in the form hereof; and
WHEREAS, in consideration of the financial and other support that the
Company has provided, and such financial and other support as the Company may in
the future provide, to the Subsidiary Guarantors, the Subsidiary Guarantors are
willing to enter into this Guarantee Agreement;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
Section 1. Definitions. Terms defined in the Credit Agreement and not
otherwise defined herein have, as used herein, the respective meanings provided
for therein. The following additional terms, as used herein, have the following
meanings:
"Guaranteed Obligations" means, with respect to each Subsidiary Guarantor,
(i) all Reimbursement Obligations of the Company or any other Obligor (other
than such Subsidiary Guarantor) with respect to any Letter of Credit issued
pursuant to the Credit Agreement and all interest payable by the Company or such
other Obligor thereon (including, without limitation, any interest which accrues
after or would accrue but for the commencement of any case, proceeding or other
action relating to the bankruptcy, insolvency or reorganization of the Company
or such other Obligor, whether or not allowed or allowable as a claim in any
such proceeding), (ii) all other amounts payable by the Company or any other
Obligor (other than such Subsidiary Guarantor) under the Loan Documents and
(iii) any renewals, extensions or modifications of any of the foregoing.
Section 2. The Guarantees. Each of the Subsidiary Guarantors, jointly and
severally, hereby unconditionally guarantees the full and punctual payment when
due (whether at stated maturity, upon acceleration or otherwise) of the
Guaranteed Obligations. Upon failure by any Obligor to pay punctually any
Guaranteed Obligation when due, each Subsidiary Guarantor agrees jointly and
severally that it shall forthwith on demand pay such Guaranteed Obligation at
the place and in the manner specified in the Credit Agreement.
37
Section 3. Guarantees Unconditional. The obligations of each Subsidiary
Guarantor hereunder shall be unconditional and absolute and, without limiting
the generality of the foregoing, shall not be released, discharged or otherwise
affected by:
(i) any extension, renewal, settlement, compromise, waiver or release
in respect of any obligation of any Obligor or any other Person under any
Loan Document, by operation of law or otherwise;
(ii) any modification or amendment of or supplement to any Loan
Document or any Letter of Credit;
(iii) any release, impairment, non-perfection or invalidity of any
direct or indirect security for any obligation of any Obligor or any other
Person under any Loan Document or with respect to any Letter of Credit;
(iv) any change in the corporate existence, structure or ownership of
any Obligor or any other Person or any of their respective subsidiaries, or
any insolvency, bankruptcy, reorganization or other similar proceeding
affecting any Obligor or any other Person or any of their respective
subsidiaries or any of their respective assets or any resulting release or
discharge of any obligation of any Obligor or any other Person contained in
any Loan Document;
(v) the existence of any claim, set-off or other rights which such
Subsidiary Guarantor may have at any time against any other Obligor or any
Bank Party, whether in connection herewith or with any unrelated
transactions; provided that nothing herein shall prevent the assertion of
any such claim by separate suit or compulsory counterclaim;
(vi) any invalidity or unenforceability relating to or against any
Obligor or any other Person for any reason of any Loan Document or any
Letter of Credit, or any provision of applicable law or regulation
purporting to prohibit the payment by any Obligor or any other Person of
the principal of or interest on any Reimbursement Obligation or any other
amount payable by any Obligor under any Loan Document; or
(vii) any other act or omission to act or delay of any kind by any
Obligor, any Bank Party or any other party to any Loan Document, or any
other circumstance whatsoever which might, but for the provisions of this
Section, constitute a legal or equitable discharge of or defense to
obligations of such Subsidiary Guarantor hereunder.
Section 4. Discharge Only upon Payment in Full; Reinstatement In Certain
Circumstances; Release of Subsidiary Guarantors. (a) Each Subsidiary Guarantor's
obligations hereunder shall remain in full force and effect until the repayment
in full of all Guaranteed Obligations, the termination of all Commitments under
the Credit Agreement and the expiration or cancellation of all Letters of Credit
(unless such Letters of Credit have been fully cash collateralized pursuant to
arrangements satisfactory to the Agent, or back-stopped by a separate letter of
credit, in form and substance and issued by an issuer satisfactory to the
Agent). If at any time any payment of any Guaranteed Obligation is rescinded or
must be otherwise restored or returned upon the insolvency or receivership of
the Company or any other Obligor or otherwise, each Subsidiary Guarantor's
obligations hereunder with respect thereto shall be reinstated as though such
payment had been due but not made at such time.
38
(b) Upon (x) the consummation of any Asset Sale, as such such term is
defined in the RC Agreement (or any sale or other disposition described in
clause (iv) of such definition of Asset Sale) permitted by the terms of the RC
Agreement and consisting of the disposition of all of the capital stock of a
Subsidiary Guarantor (any such transaction, a "Guarantor Asset Sale"), (y) the
satisfaction of the conditions to the release of such Subsidiary Guarantor from
its obligations under the Guarantee Agreement entered into in connection with
the RC Agreement and (z) repayment in full of all Reimbursement Obligations owed
by such Subsidiary Guarantor in respect of, and cancellation or termination of,
all Letters of Credit issued for its account, such Subsidiary Guarantor shall be
released from all of its obligations hereunder (and such release shall not
require the consent of any Bank Party). The Agent shall be fully protected in
relying on a certificate of the Company as to whether any particular transaction
constitutes a Guarantor Asset Sale and whether such conditions have been
satisfied.
(c) In addition to the release of any Subsidiary Guarantor from its
obligations hereunder permitted pursuant to subsection (b), at any time and from
time to time prior to the termination of each Subsidiary Guarantor's obligations
hereunder, the Agent may release any Subsidiary Guarantor from its obligations
hereunder with the prior written consent of the Required Banks; provided that
any release of all or substantially all of the Subsidiary Guarantors shall
require the consent of all of the Banks.
Section 5. Waiver by the Subsidiary Guarantors. Each Subsidiary Guarantor
irrevocably waives acceptance hereof, presentment, demand, protest and any
notice, as well as any requirement that at any time any action be taken by any
Person against such Subsidiary Guarantor, any other Subsidiary Guarantor, the
Company or any other Person.
Section 6. Subrogation and Contribution. Upon making any payment hereunder
with respect to the obligations of any Obligor, each Subsidiary Guarantor shall
be subrogated to the rights of the payee against such Obligor with respect to
the portion of such obligation paid by such Subsidiary Guarantor; provided that
such Subsidiary Guarantor shall not enforce any payment by way of subrogation,
or by reason of contribution, against any other guarantor of the Guaranteed
Obligations (including without limitation any other Subsidiary Guarantor), until
the repayment in full of all Guaranteed Obligations of all Subsidiary
Guarantors, the termination of the Commitments under the Credit Agreement and
the expiration or cancellation of all Letters of Credit (unless such Letters of
Credit have been fully cash collateralized pursuant to arrangements satisfactory
to the Agent, or back-stopped by a separate letter of credit, in form and
substance and issued by an issuer satisfactory to the Agent).
Section 7. Stay of Acceleration. If acceleration of the time for payment of
any Guaranteed Obligations payable by any Subsidiary Guarantor is stayed upon
the insolvency, bankruptcy or reorganization of such Subsidiary Guarantor or
otherwise, all such Guaranteed Obligations otherwise subject to acceleration
under the terms of any Loan Document shall nonetheless be payable by each other
Subsidiary Guarantor hereunder forthwith on demand by the Agent made at the
request of the Required Banks.
39
Section 8. Representations and Warranties. Each Subsidiary Guarantor
represents and warrants that:
(a) Such Subsidiary Guarantor is a corporation duly incorporated, validly
existing and in good standing under the laws of its jurisdiction of
incorporation, and has all corporate powers and all material governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted, except where failures to possess such licenses,
authorizations, consents and approvals could not, in the aggregate, reasonably
be expected to result in a Material Adverse Effect.
(b) The execution, delivery and performance by such Subsidiary Guarantor of
this Guarantee Agreement are within such Subsidiary Guarantor's corporate
powers, have been duly authorized by all necessary corporate action, require no
action by or in respect of, or filing with, any governmental body, agency or
official and do not contravene, or constitute a default under, any provision of
applicable law or regulation or of the certificate of incorporation or by-laws
of such Subsidiary Guarantor or of any agreement, judgment, injunction, order,
decree or other instrument binding upon the Company or any of its Subsidiaries
or result in the creation or imposition of any lien or other encumbrance on any
asset of the Company or any of its Subsidiaries.
(c) This Guarantee Agreement constitutes a valid and binding agreement of
such Subsidiary Guarantor.
(d) The obligations of such Subsidiary Guarantor hereunder rank (i) pari
passu with other unsecured indebtedness of such Subsidiary Guarantor (other than
any such indebtedness described in clause (ii)) with respect to any assets of
such Subsidiary Guarantor and (ii) senior to any other indebtedness of such
Subsidiary Guarantor which by its terms is subordinated thereto.
Section 9. Amendments. Any provision of this Guarantee Agreement may be
amended or waived if, but only if, such amendment or waiver is in writing and is
signed by each Subsidiary Guarantor and the Agent, subject to the provisions of
Section 9.05(b) of the Credit Agreement.
Section 10. Notices. All notices, requests and other communications to any
party hereunder shall be in writing (including facsimile or similar writing) and
shall be given to such party at its address or facsimile number set forth on the
signature pages hereof or at such other address or facsimile number as such
party may hereafter specify for the purpose by notice to the Agent and the
Company. Each such notice, request or other communication shall be effective if
given by facsimile, when transmitted to the facsimile number referred to in this
Section and confirmation of receipt is received, or (ii) if given by any other
means, when delivered at the address referred to in this Section 10.
40
Section 11. Taxes. Each Subsidiary Guarantor agrees to be bound by the
provisions of Section 8.02 of the Credit Agreement with respect to any payments
made by such Subsidiary Guarantor under this Guarantee Agreement.
Section 12. Continuing Guarantees. This Guarantee Agreement is a continuing
Guarantee of each Subsidiary Guarantor and shall be binding upon each Subsidiary
Guarantor and its successors and assigns. This Guarantee Agreement is for the
benefit of each Bank Party and its successors and permitted assigns, and in the
event of an assignment of all or any of any Bank's interest in and to its rights
and obligations under the Credit Agreement in accordance with the Credit
Agreement, the assignor's rights hereunder, to the extent applicable to the
indebtedness or obligation so assigned, shall automatically be transferred with
such indebtedness or obligation.
Section 13. Severability. If any provision hereof is invalid or
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(i) the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in favor of the Bank Parties in
order to carry out the intentions of the parties hereto as nearly as may be
possible, and (ii) the invalidity or unenforceability of any provision hereof in
any jurisdiction shall not affect the validity or enforceability of such
provision in any other jurisdiction.
Section 14. Limitation on the Obligations of Subsidiary Guarantors. The
obligations of each Subsidiary Guarantor hereunder shall be limited to an
aggregate amount that is equal to the largest amount that would not render the
obligations of such Subsidiary Guarantor hereunder subject to avoidance under
Section 548 of the United States Bankruptcy Code or any comparable provisions of
applicable law.
Section 15. Governing Law; Jurisdiction. This Guarantee Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York. Each Subsidiary Guarantor hereby submits to the nonexclusive jurisdiction
of the United States District Court for the Southern District of New York and of
any New York State court sitting in New York City for purposes of all legal
proceedings arising out of or relating to this Guarantee Agreement or the
transactions contemplated hereby. Each Subsidiary Guarantor irrevocably waives,
to the fullest extent permitted by law, any objection which it may now or
hereafter have to the laying of the venue of any such proceeding brought in such
a court and any claim that any such proceeding brought in such a court has been
brought in an inconvenient forum.
Section 16. Appointment of Agent for Service Of Process. (a) Each
Subsidiary Guarantor hereby irrevocably designates, appoints, authorizes and
empowers as its agent for service of process, the secretary of Venator Group,
Inc. to accept and acknowledge for and on behalf of such Subsidiary Guarantor
service of any and all process, notices or other documents that may be served in
any suit, action or proceeding relating hereto in any New York State or Federal
court sitting in The State of New York.
(b) In lieu of service upon its agent, each Subsidiary Guarantor consents
to process being served in any suit, action or proceeding relating hereto by
mailing a copy thereof by registered or certified air mail, postage prepaid,
return receipt requested, to its address set forth on the signature pages
hereof, provided that a copy thereof is mailed concurrently to the Secretary of
Venator Group, Inc. Each Subsidiary Guarantor agrees that such service (1) shall
be deemed in every respect effective service of process upon it in any such
suit, action or proceeding and (2) shall, to the fullest extent permitted by
law, be taken and held to be valid personal service upon and personal delivery
to it.
41
(c) Nothing in this Section shall affect the right of any party hereto to
serve process in any manner permitted by law, or limit any right that any party
hereto may have to bring proceedings against any other party hereto in the
courts of any jurisdiction or to enforce in any lawful manner a judgment
obtained in one jurisdiction in any other jurisdiction.
Section 17. Section 17. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS GUARANTEE AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
Section 18. Section 18. Counterparts. This Guarantee Agreement may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument.
Section 19. Section 19. Additional Guarantors. Any Subsidiary may become a
Subsidiary Guarantor party hereto and bound hereby by executing a counterpart
hereof and delivering the same to the Agent.
42
IN WITNESS WHEREOF, the parties hereto have caused this Guarantee Agreement
to be duly executed by their respective authorized officers as of the day and
year first above written.
[ SUBSIDIARY GUARANTOR]
By _____________________________
Name:
Title:
THE BANK OF NEW YORK
as agent
By _____________________________
Name:
Title:
43
EXHIBIT X-0
Xxxxx 00, 0000
Xxx Xxxx xx Xxx Xxxx,
as Agent
Xxx Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
and
The lenders party to the
Credit Agreement referred to
below, as listed on Schedule I
hereto (the "Banks")
Ladies and Gentlemen:
We have acted as special counsel to Venator Group, Inc., a New York
corporation (the "Company"), in connection with the preparation, execution and
delivery of the Letter of Credit Agreement, dated as of the date hereof (the
"Credit Agreement"), among the Company, the Co-Applicants party thereto, the
banks party thereto and The Bank of New York, as agent (the "Agent"). This
opinion is being delivered pursuant to Section 3.01(c) of the Credit Agreement.
Capitalized terms used and not otherwise defined herein shall have the meanings
herein as ascribed thereto in the Credit Agreement. The subsidiaries of the
Company listed on Sched ule II hereto shall hereinafter be referred to
collectively as the "Subsidiary Guaran tors". The subsidiaries of the Company
listed on Schedule III hereto shall hereinafter be referred to collectively as
the "Co-Applicants". The Subsidiary Guarantors and the Co-Applicants shall
hereinafter be referred to collectively as the "Subsidiary
44
The Bank of New York
March 19, 1999
Page 2
Parties". The Company and the Subsidiary Parties shall hereinafter be referred
to collectively as the "Credit Parties".
In our examination we have assumed the genuineness of all signa tures, the
legal capacity of natural persons, the authenticity of all documents submit xxx
to us as originals, the conformity to original documents of all documents submit
xxx to us as certified or photostatic copies, and the authenticity of the
originals of such copies. As to any facts material to this opinion which we did
not independently establish or verify, we have relied upon statements and
representations of the Company and its officers and other representatives and of
public officials, including the facts set forth in the Opinion Certificate
described below.
In rendering the opinions set forth herein, we have examined and relied on
originals or copies of the following:
(a) the Credit Agreement;
(b) the Guarantee Agreement, dated as of the date hereof, between the
Subsidiary Guarantors and the Administrative Agent;
(c) the certificate of the Credit Parties dated the date hereof, a
copy of which is attached as Exhibit A hereto (the "Opinion
Certificate");
(d) certified copies of the Certificate of Incorporation and By-laws
of the Company;
(e) a certified copy of certain resolutions of the Board of Directors
of the Company adopted on March 15, 1999; and
(f) such other documents as we have deemed necessary or appropriate
as a basis for the opinions set forth below.
45
The Bank of New York
March 19, 1999
Page 3
The documents referred to in clauses (a) and (b) above shall hereinaf ter
be referred to collectively as the "Transaction Documents."
We express no opinion as to the laws of any jurisdiction other than (i) the
laws of the State of New York, and (ii) the federal laws of the United States of
America to the extent specifically referred to herein.
Based upon the foregoing and subject to the limitations, qualifica tions,
exceptions and assumptions set forth herein, we are of the opinion that:
1. The Company has been duly incorporated and is validly existing and in
good standing under the laws of the State of New York.
2. The Company has the corporate power and authority to (i) carry on its
business as described in the Company's 1997 Form 10-K and (ii)
execute, deliver and perform all of its obligations under each of the
Transaction Documents and to borrow under the Credit Agreement and to
incur reimbursement obligations with respect to letters of credit
issued thereunder. The execution and delivery of each of the
Transaction Documents and the consummation by the Company of the
transac tions contemplated thereby have been duly authorized by all
requisite corporate action on the part of the Company. Each of the
Transaction Documents has been duly executed and delivered by the
Company.
3. Each of the Transaction Documents constitutes the valid and binding
obligation of each Credit Party which is a party thereto enforceable
against each such Credit Party in accordance with its terms, subject
to the following qualifi cations:
(a) enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors'
rights generally and by general principles of equity (regardless of whether
enforcement is sought in equity or at law);
46
The Bank of New York
March 19, 1999
Page 4
(b) we express no opinion as to the enforceability of any rights to
contribution or indemnification provided for in the Transaction Documents
which are violative of the public policy underlying any law, rule or
regulation (including any federal or state securities law, rule or
regulation);
(c) we call to your attention that (i) effective enforcement of a
claim denominated in a foreign currency may be limited by requirements that
the claim (or a judgement in respect of such claim) be converted into
United States dollars at a rate of exchange prevailing on a specified date
and (ii) we express no opinion as to whether a federal or state court would
award a judgment in a currency other than United States dollars; and
(d) we express no opinion as to Section 9.04 of the Credit Agreement
to the extent it authorizes or permits any party to any Transaction
Document or any purchaser of a participation interest for any such party to
set off or apply any deposit, property or indebtedness with respect to any
partic ipation interest.
4. The execution and delivery by the Company of each of the
Transaction Documents and the performance by the Company of its obligations
under each of the Transaction Documents, each in accordance with its terms,
do not conflict with the Certificate of Incorporation or By-laws of the
Company.
5. Neither the execution, delivery or performance by the Credit
Parties of the Transaction Documents nor the compliance by the Credit
Parties with the terms and provisions thereof will contravene any provision
of any Applicable Law (as hereinafter defined). "Applicable Laws" shall
mean those laws, rules and regulations of the State of New York and of the
United States of America (including, without limitation, Regulations U and
X of the Federal Reserve Board) which, in our experience, are normally
applicable to transactions of the type contemplated by the Transaction
Documents.
47
The Bank of New York
March 19, 1999
Page 5
6. No Governmental Approval (as hereinafter defined), which has not
been obtained or taken and is not in full force and effect, is required to
authorize or is required in connection with the execution, delivery or
performance of any of the Transaction Documents by the Credit Parties.
"Governmental Approval" means any consent, approval, license, authorization
or validation of, or filing, recording or registration with, any
Governmental Authority (as hereinafter defined) pursuant to Applicable
Laws. "Governmental Authority" means any New York or federal legislative,
judicial, administrative or regulatory body.
7. Neither the execution, delivery or performance by the Credit
Parties of its obligations under the Transaction Documents nor compliance
by the Credit Parties with the terms thereof will contravene any Applicable
Order (as hereinafter defined) against the Credit Parties. "Applicable
Orders" means those orders, judgements or decrees of Governmental
Authorities identified in paragraph 2 of the Opinion Certificate.
8. No Credit Party is an "investment company" within the meaning of
the Investment Company Act of 1940, as amended.
In rendering the foregoing opinions, we have assumed, with your
consent, that:
(a) each Subsidiary Party has been duly incorporated and is validly
existing and in good standing under the laws of the jurisdiction of its
incorpo ration;
(b) each Subsidiary Party has the corporate power and authority to (i)
carry on its business as described in the Company's 1997 Form 10-K and (ii)
execute, deliver and perform all of its obligations under each of the
Transaction Documents to which it is a party, and in the case of the
Subsidiary Borrowers, to borrow under the Credit Agreement and to incur
reimbursement obligations with respect to letters of credit issued
thereunder;
48
The Bank of New York
March 19, 1999
Page 6
(c) the execution and delivery of each of the Transaction Docu ments
by each Subsidiary Party which is a party thereto and the consummation by
each Subsidiary Party of the transactions contemplated thereby have been
duly authorized by all requisite corporate action on the part of each
Subsidiary Party;
(d) each of the Transaction Documents has been duly executed and
delivered by each of the Subsidiary Parties which is a party thereto;
(e) the execution and delivery of, and the performance of each Credit
Party's obligations under, the Transaction Documents does not and will not
conflict with, contravene, violate or constitute a default under (i) any
lease, indenture, instrument or other agreement to which any Credit Party
or its property is subject, (ii) any rule, law or regulation to which any
Credit Party is subject (other than Appli cable Laws as to which we express
our opinion in paragraph 5 herein) or (iii) any judicial or administrative
order or decree of any governmental authority (other than Applicable Orders
as to which we express our opinion in paragraph 7 herein); and
(f) no authorization, consent or other approval of, notice to or
filing with any court, governmental authority or regulatory body (other
than Governmental Approvals as to which we express our opinion in paragraph
6 herein) is required to authorize or is required in connection with the
execution, delivery or performance by any Credit Party of the Transaction
Documents to which it is a party or the transac tions contemplated thereby.
We understand that you are separately receiving an opinion, dated as
of the date hereof, with respect to the foregoing from Xxxx X. Xxxxxx (the
"General Counsel Opinion") and we are advised that such opinion contains
qualifications. Our opinions herein stated are based on the assumptions
specified above and we express no opinion as to the effect on the opinions
herein stated of the qualifications contained in the General Counsel
Opinion.
49
The Bank of New York
March 19, 1999
Page 7
Our opinions are also subject to the following assumptions and
qualifications:
(a) we have assumed each of the Transaction Documents constitutes the
legal, valid and binding obligation of each party to such Transaction
Document (other than the Credit Parties) enforceable against such party
(other than the Credit Parties) in accordance with its terms; and
(b) we express no opinion as to the effect on the opinion expressed
herein of (i) the compliance or non-compliance of any party (other than the
Credit Parties) to the Transaction Documents with any state, federal or
other laws or regu lations applicable to it or (ii) the legal or regulatory
status or the nature of the business of any party (other than the Credit
Parties) to the Transaction Documents.
This opinion is being furnished only to you and is solely for your
benefit and is not to be relied upon by any other Person or for any other
purpose without our prior written consent, provided, however, that any
Assignee that be comes a Bank pursuant to Section 9.06(c) of the Credit
Agreement may rely on this opinion as if it were addressed to such Assignee
and delivered on the date hereof.
Very truly yours,
50
Schedule I
to SASM&F Opinion
-----------------
Banks
-----
The Bank of New York
51
Schedule II to
SASM&F Opinion
--------------
Subsidiary Guarantors
---------------------
Eastbay, Inc.
eVenator, Inc.
Foot Locker Japan, Inc.
Northern Reflections, Inc.
Retail Company of Germany, Inc.
The Xxxxxxx Brothers Company
Robby's Sporting Goods, Inc.
Team Edition Apparel, Inc.
The San Francisco Music Box Company
Venator Group Corporate Services, Inc.
Venator Group Holdings, Inc.
Venator Group Retail, Inc.
Venator Group Sourcing, Inc.
Venator Group Speciality, Inc.
52
Schedule III to
SASM&F Opinion
--------------
Co-Applicants
-------------
Venator Group Retail, Inc.
Venator Group Specialty, Inc.
53
Exhibit A
to SASM&F Opinion
-----------------
Officer's Certificate
---------------------
The undersigned are duly elected, authorized and acting officers of the
corpora tions listed on the signature page hereof (the "Credit Parties"). Each
of the undersigned understands that in connection with the Credit Agreement
(these and other capitalized terms used herein and not otherwise defined have
the meanings set forth in the Opinion, as defined below) and the consummation of
the transactions contemplated thereby, Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
is rendering an opinion dated the date hereof with respect thereto (the
"Opinion"), and is relying on this certificate in rendering such Opinion.
With regard to the foregoing, on behalf of the Credit Parties, each of the
under signed do hereby certify that:
1. Set forth below are all consents, approvals, licenses, authorizations or
validations of, or filings, recordings or registrations with any legislative,
judicial, administrative or regulatory governmental authorities which are
required in connection with the execution and delivery of the Transaction
Documents:
None.
2. Set forth below are all of the orders, judgements and decrees of any
govern mental authority which are required in connection with the execution and
delivery of the Transaction Documents:
None.
3. Less than 25 percent of the assets of the Credit Parties on a
consolidated basis and on an unconsolidated basis consist of margin stock (as
such term is defined in Regulation U of the Board of Governors of the Federal
Reserve System).
4. None of the Credit Parties (i) is or holds itself out as being, engaged
primarily nor does it propose to engage primarily, in the business of investing,
reinvesting or trading in Securities (as hereinafter defined), (ii) is engaged
in, nor proposes to engage in, the business of issuing Face-Amount Certificates
of the Installment Type (as hereinafter defined) and has no such certificate
outstanding and (iii) is engaged nor proposes to engage in the business of
investing, reinvesting, owning, holding or trading in Securities, whether or not
-1-
54
as its primary activity, nor owns or proposes to acquire Investment Securities
(as hereinafter defined) having a Value exceeding 40% of the Value of the total
assets of the Company (exclusive of Government Securities (as hereinafter
defined)) on an unconsolidated basis.
As used in this Certificate, the following terms shall have the following
meanings:
"Control" means the power to exercise a controlling influence over the
manage ment or policies of a company, unless such power is solely the result of
an official position with such company;
"Face-Amount Certificate of the Installment Type" means any certificate,
investment contract, or other Security that represents an obligation on the part
of its issuer to pay a stated or determinable sum or sums at a fixed or
determinable date or dates more than 24 months after the date of issuance, in
consideration of the payment of periodic installments of a stated or
determinable amount;
"Government Securities" means all Securities issued or guaranteed as to
principal or interest by the United States, or by a person controlled or
supervised by and acting as an instrumentality of the government of the United
States pursuant to authority granted by the Con xxxxx of the United States; or
any certificate of deposit for any of the foregoing;
"Investment Securities" includes all Securities except (A) Government
Securities, (B) Securities issued by employees' securities companies, and (C)
Securities issued by Majority- Owned Subsidiaries of the Borrower which are not
engaged and do not propose to be engaged in activities within the scope of
clauses (i), (ii) or (iii) of paragraph 4 of this Certificate;
"Majority-Owned Subsidiary" of a person means a company 50% or more of the
outstanding Voting Securities of which are owned by such person, or by a company
which, within the meaning of this paragraph, is a Majority-Owned Subsidiary of
such person. Notwith standing the foregoing, a company shall not be considered a
Majority-Owned Subsidiary of a person if Control of such company rests with
someone other than such person;
"Security" means any note, stock, treasury stock, bond, debenture, evidence
of indebtedness, certificate of interest or participation in any profit-sharing
agreement, collateral- trust certificate, preorganization certificate or
subscription, transferable share, investment contract, voting-trust certificate,
certificate of deposit for a security, fractional undivided interest in oil,
gas, or other mineral rights, any put, call, straddle, option, or privilege on
any security (including a certificate of deposit) or on any group or index of
securities (including any interest therein or based on the value thereof), or
any put, call, straddle, option, or privilege entered into
-2-
55
on a national securities exchange relating to foreign currency, or, in general,
any interest or instrument commonly known as a "security," or any certificate of
interest or participation in, temporary or interim certificate for, receipt for,
guarantee of, or warrant or right to subscribe to or purchase, any of the
foregoing;
"Value" means (i) with respect to Securities owned at the end of the last
preceding fiscal quarter for which market quotations are readily available, the
market value at the end of such quarter; (ii) with respect to other Securities
and assets owned at the end of the last preceding fiscal quarter, fair value at
the end of such quarter, as determined in good faith by or under the direction
of the board of directors; and (iii) with respect to securities and other assets
acquired after the end of the last preceding fiscal quarter, the cost thereof;
"Voting Security" means any security presently entitling the owner or
holder thereof to vote for the election of directors of a company.
5. Other than as described on Schedule 1, neither the Company nor any
Subsid iary owns or operates facilities used for the generation, transmission or
distribution of electric energy for sale ("electric utility facilities").
6. Neither the Company nor any Subsidiary owns or operates facilities used
for the distribution at retail of natural or manufactured gas for heat, light or
power ("gas utility facilities").
7. Neither the Company nor any Subsidiary, directly or indirectly, or
through one or more intermediary companies, owns, controls or holds with power
to vote (a) 10% or more of the outstanding securities, such as notes, drafts,
stock, treasury stock, bonds, debentures, certif icates of interest or
participation in any profit sharing agreements or in oil, gas, other mineral
royalties or leases, collateral-trust certificates, preorganization certificates
or subscriptions, transferable shares, investment contracts, voting-trust
certificates, certificates of deposit for a security, receiver's or trustee's
certificates or instruments commonly known as a "security" (including
certificates of interest or participation in, temporary or interim certificates
for, receipt for, guaranty of, assumption of liability on or warrants or right
to subscribe to or purchase any of the foregoing) presently entitling the owner
or holder thereof to vote in the direction or manage ment of, or any such
instrument issued under or pursuant to any trust, agreement or arrangement
whereby a trustee or trustees or agent or agents for the owner or holder of such
instrument is presently entitled to vote in the direction or management of, any
corporation, partnership, association, joint-stock company, joint venture or
trust that owns or operates any electric utility facilities or gas utility
facilities or (b) any other interest, directly or indirectly, or through one or
more intermediary entities, in (i) any corporation, partnership, association,
joint-stock company,
-3-
56
joint venture or trust that owns or operates any electric utility facilities or
gas utility facilities or (ii) any of the foregoing types of entities which have
received notice of the sort described in Paragraph 8 below.
8. Neither the Company nor any Subsidiary has received notice that the
Securities and Exchange Commission has determined, or may determine, that the
Company or any Subsidiary exercises a controlling influence over the management
or direction of the policies of a gas utility company or any electric utility
company as to make it subject to the obligations, duties and liabilities imposed
upon holding companies by the Public Utility Holding Company Act of 1935, as
amended.
-4-
57
IN WITNESS WHEREOF, the undersigned have executed this certificate on
behalf of the Credit Parties this day of March, 1999.
Eastbay, Inc.
eVenator, Inc.
Foot Locker Japan, Inc.
Northern Reflections, Inc.
The Xxxxxxx Brothers Company
Robby's Sporting Goods, Inc.
Team Edition Apparel, Inc.
The San Francisco Music Box Company
Venator Group Corporate Services, Inc.
Venator Group Holdings, Inc.
Venator Group, Inc.
Venator Group Retail, Inc.
Venator Group Sourcing, Inc.
Venator Group Speciality, Inc.
By: __________________________
Name:
Title:
Retail Company of Germany, Inc.
By: __________________________
Name:
Title:
-5-
58
Schedule 1
----------
The Company owns an approximately 1 percent limited partnership interest in two
California limited partnerships that operate "wind farms", which generate
electricity.
-6-
59
Exhibit X-0
Xxxxx 00, 0000
Xxx Xxxx xx Xxx Xxxx,
as Agent
Xxx Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
and
The lenders party to the
Credit Agreement referred to
below, as listed on Schedule I
hereto (the "Banks")
Ladies and Gentlemen:
I am a Senior Vice President and the General Counsel of Venator Group,
Inc., a New York corporation (the "Company"), and as such have acted as counsel
for the company and each of the subsidiaries of the Company listed on Schedule
II hereto (the "Subsidiary Guarantors") and each of the subsidiaries of the
Company listed on Schedule III hereto (the "Co-Applicants", and together with
the Subsidiary Guarantors, the "Subsidiary Parties"), in connection with the
preparation, execution and delivery of the Letter of Credit Agreement, dated as
of the date hereof (the "Credit Agreement"), among the Company, the
Co-Applicants party thereto, the banks party thereto and The Bank of New York,
as agent (the "Agent"). This opinion is being delivered pursuant to Section
3.01(d) of the Credit Agreement. Capitalized terms used and not otherwise
defined herein shall have the meanings herein as ascribed thereto in the Credit
Agreement. The Subsidiary Parties and the Company are sometimes collectively
referred to herein as the "Credit Parties."
In my examination I have assumed the genuineness of all signatures, the
legal capacity of natural persons, the authenticity of all documents submitted
to me as originals, the conformity to original documents of all documents
submitted to me as certified or photostatic copies, and the authenticity of the
originals of such copies. As to any facts material to this opinion which I did
60
The Bank of New York
March 19, 1999
Page 2
not independently establish or verify, I have relied upon statements and
representations of the Credit Parties and their respective officers and other
representatives and of public officials.
In rendering the opinions set forth herein, I, or a lawyer acting under my
general supervision, have examined and relied on originals or copies of the
following:
(a) the Credit Agreement;
(b) the Guarantee Agreement, dated as of the date hereof, between the
Subsidiary Guarantors and the Agent;
(c) certified copies of the Certificate of Incorporation and By-laws
of the Credit Parties;
(d) a certified copy of certain resolutions of the Boards of Directors
of the Credit Parties;
(e) a certified copy of certain resolutions of the Acquisitions and
Finance Committee of the Boards of Directors of the Company; and
(f) such other documents as I have deemed necessary or appropriate as
a basis for the opinions set forth below.
The documents referred to in clauses (a) and (b) above shall
hereinafter be referred to collectively as the "Transaction Documents."
I am a member of the bar of the State of New York and I do not express any
opinion herein concerning any law other than (i) the laws of the State of New
York, (ii) the General Corporation Law of the State of Delaware, and (iii) based
solely on the certificates and telegrams from public officials in Wisconsin,
Florida, California and Ohio (the "Foreign Jurisdictions") with respect to the
opinions herein regarding valid incorporation and good standing of Eastbay, Inc.
(a Wisconsin corporation), Robby's Sporting Goods, Inc. and Team Edition
Apparel, Inc. (both Florida corporations), The Xxxxxxx Brothers Company (an Ohio
corporation) and The San Francisco Music Box Company (a California corporation).
61
The Bank of New York
March 19, 1999
Page 3
Please note that I am not admitted to practice in the Foreign Jurisdictions, and
am not an expert in the laws of any such jurisdictions.
Based upon the foregoing and subject to the limitations, qualifications,
exceptions and assumptions set forth herein, I am of the opinion that:
1. Each Subsidiary Party has been duly incorporated and is validly existing
and in good standing under the laws of the jurisdiction of its incorporation.
2. Each Subsidiary Party has the corporate power and authority to (i) carry
on its business as described in the Company's 1997 Form 10-K and (ii) execute,
deliver and perform all of its obligations under each of the Transaction
Documents to which it is a party, and in the case of the Co-Applicants, to incur
reimbursement obligations with respect to letters of credit issued thereunder.
The execution and delivery of each of the Transaction Documents by each
Subsidiary Party which is a party thereto and the consummation by each
Subsidiary Party of the transactions contemplated thereby have been duly
authorized by all requisite corporate action on the part of each Subsidiary
Party.
3. Each of the Transaction Documents has been duly executed and delivered
by each of the Subsidiary Parties which is a party thereto.
4. The execution and delivery by each Credit Party of each of the
Transaction Documents to which it is a party and the performance by each Credit
Party of its obligations under each of the Transaction Documents, each in
accordance with its terms, do not (i) constitute a violation of or a default
under any Applicable Contracts (as hereinafter defined) or (ii) cause the
creation of any security interest or lien upon any of the property of the Credit
Parties pursuant to any Applicable Contracts. I do not express any opinion,
however, as to whether the execution, delivery or performance by any Credit
Party of the Transaction Documents will constitute a violation of or a default
under any covenant, restriction or provision with respect to financial ratios or
tests or any aspect of the financial condition or results of operations of any
Credit Party as set forth in the Transaction Documents, the Applicable
Contracts, or otherwise. "Applicable Contracts" mean those agreements or
instruments which are material to the business or financial condition of the
Credit Parties, taken as a whole.
62
The Bank of New York
March 19, 1999
Page 4
5. There is no action, suit or proceeding pending against, or to the best
of my knowledge threatened against or affecting, any Credit Party before any
court or arbitrator or any governmental body, agency or official which could
reasonably be expected to result in a Material Adverse Effect.
This opinion is being furnished only to you and is solely for your benefit
and is not to be relied upon by any other Person or for any other purpose
without my prior written consent, provided, however, that any Assignee that
becomes a Bank pursuant to Section 9.06(c) of the Credit Agreement may rely on
this opinion as if it were addressed to such Assignee and delivered on the date
hereof.
Very truly yours,
63
Schedule I to
General Counsel Opinion
-----------------------
Banks
-----
The Bank of New York
64
Schedule II to
General Counsel Opinion
-----------------------
Subsidiary Guarantors
---------------------
Eastbay, Inc.
eVenator, Inc.
Foot Locker Japan, Inc.
Northern Reflections Inc.
Retail Company of Germany, Inc.
The Xxxxxxx Brothers Company
Robby's Sporting Goods, Inc.
Team Edition Apparel, Inc.
The San Francisco Music Box Company
Venator Group Corporate Services, Inc.
Venator Group Holdings, Inc.
Venator Group Retail, Inc.
Venator Group Sourcing, Inc.
Venator Group Speciality, Inc.
65
Schedule III to
General Counsel Opinion
-----------------------
Co-Applicants
-------------
Venator Group Retail, Inc.
Venator Group Specialty, Inc.
66
Exhibit C
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of ___________, ________ among [ASSIGNOR] )the
"Assignor") and [ASSIGNEE] (the "Assignee").
WITNESSETH
WHEREAS, this Assignment and Assumption Agreement (the "Agreement") relates
to the Letter of Credit Agreement dated as of March 19, 1999 among Venator
Group, Inc., the Co-Applicants party thereto, the Banks party thereto and The
Bank of New York as Agent (as further amended from time to time, the "Credit
Agreement");
WHEREAS, as provided under the Credit Agreement, the Assignor has a
Commitment to participate in Letters of Credit issued for the account of the
Applicant or any Co-Applicant in an aggregate amount at any time outstanding not
to exceed $ _________; and
WHEREAS, the Assignor proposes to assign to the Assignee all of the rights
of the Assignor under the Credit Agreement in respect of a portion of its
Commitment thereunder in an amount equal to $ __________1/ (the "Assigned
Amount"), together with a corresponding portion of its LC Exposure, and the
Assignee proposes to accept assignment of such rights and assume the
corresponding obligations from the Assignor on such terms;
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
contained herein, the parties hereto agree as follows:
SECTION 1. Definitions. All capitalized terms not otherwise defined herein
have the respective meanings set forth in the Credit Agreement.
SECTION 2. Assignment. The Assignor hereby assigns and sells to the
Assignee all of the rights of the Assignor under the Credit Agreement to the
extent of the Assigned Amount, and the Assignee hereby accepts such assignment
and purchases such rights from the Assignor and assumes all of the obligations
of the Assignor under the Credit Agreement to the extent of the Assigned Amount,
including the purchase from the Assignor of the corresponding portion of the
principal amount of the LC Exposure of the Assignor outstanding at the date
hereof. Upon the execution and delivery hereof by the Assignor, the Assignee,
the Applicant and the Agent and the payment of the amounts specified in Section
3 hereof required to be paid on the date hereof (i) the Assignee shall, as of
the date hereof, succeed to the rights and be obligated to perform the
obligations of a Bank under the Credit Agreement with a Commitment in an amount
equal to the Assigned Amount, and (ii) the Commitment of the Assignor shall, as
of the date hereof, be reduced by a like amount and the Assignor released from
its obligations under the Credit Agreement to the extent such obligations have
been assumed by the Assignee. The assignment provided for herein shall be
without recourse to the Assignor.
-----------------------------
1/ Must be in an amount of not less than $5,000,000 if the Assignee was not a
Bank immediately prior to such assignment.
67
SECTION 3. Payments. (a) As consideration for the assignment and sale
contemplated in Section 2 hereof, the Assignee shall pay to the Assignor on the
date hereof in Federal funds the amount heretofore agreed between them.2/ It is
understood that facility fees accrued to the date hereof in respect of the
Assigned Amount are for the account of the Assignor and such fees accruing from
and including the date hereof are for the account of the Assignee. Each of the
Assignor and the Assignee hereby agrees that if it receives any amount under the
Credit Agreement or any other Loan Document which is for the account of the
other party hereto, it shall receive the same for the account of such other
party to the extent of such other party's interest therein and shall promptly
pay the same to such other party.
(b) The Assignor shall pay the $3,500 administrative fee to be paid by it
to the Agent pursuant to Section 9.06(c) of the Credit Agreement.3/
[SECTION 4. Consent of the Applicant and the Agent. This Agreement is
conditioned upon the consent of the Applicant and the Agent pursuant to Section
9.06(c) of the Credit Agreement. The execution of this Agreement by the
Applicant and the Agent is evidence of this consent.]
SECTION 5. Non-Reliance on Assignor. The Assignor makes no representation
or warranty in connection with, and shall have no responsibility with respect
to, the solvency, financial condition, or statements of the Applicant or any
other Obligor, or the validity and enforceability of the obligations of the
Applicant or any other Obligor in respect of any Loan Document. The Assignee
acknowledges that it has, independently and without reliance on the Assignor,
and based on such documents and information as it has deemed appropriate, made
its own credit analysis and decision to enter into this Agreement and will
continue to be responsible for making its own independent appraisal of the
business, affairs and financial condition of any Obligor.
SECTION 6. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 7. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
---------------------------------
2/ Amount should combine principal togerher with accrued interest and breakage
compensation, if any, to be paid by the Assignee.
3/ Section 3(b) should be deleted if the assignment is required by the
Applicant pursuant to Section 8.03 of the Credit Agreement.
68
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered by their duly authorized officers as of the date first above
written.
[ASSIGNOR]
By
---------------------------
Title
[ASSIGNEE]
By
---------------------------
Title:
[Consented and agreed to:
VENATOR GROUP, INC.
By
----------------------
Title:
THE BANK OF NEW YORK,
as Agent
By
---------------------
Title:
