TERM LOAN AGREEMENT Dated as of August 17, 2007 among COLLECTIVE BRANDS FINANCE, INC. as Borrower and THE LENDERS PARTY HERETO and CITICORP NORTH AMERICA, INC. as Administrative Agent and Collateral Agent CITIGROUP GLOBAL MARKETS INC. and J.P. MORGAN...
EXECUTION
COPY
$725,000,000
Dated
as of August
17, 2007
among
COLLECTIVE
BRANDS FINANCE, INC.
as
Borrower
and
THE
LENDERS PARTY HERETO
and
CITICORP
NORTH AMERICA, INC.
as
Administrative Agent and Collateral Agent
CITIGROUP
GLOBAL MARKETS INC. and
X.X.
XXXXXX SECURITIES INC.
as
Joint Bookrunners and Joint Lead Arrangers
WEIL,
GOTSHAL & XXXXXX LLP
000
XXXXX
XXXXXX
XXX
XXXX,
XXX XXXX 00000-0000
TERM
LOAN AGREEMENT,
dated
as of August 17, 2007, among COLLECTIVE
BRANDS FINANCE, INC.,
a
Nevada corporation (formerly known as “Payless
ShoeSource Finance, Inc.”),
COLLECTIVE
BRANDS, INC.,
a
Delaware corporation (the name “Collective
Brands, Inc.” to
be
changed on or prior to the Closing Date from “Payless
ShoeSource, Inc.”,
the
“Parent”), the
Lenders (as defined below) and CITICORP
NORTH AMERICA, INC., as
administrative agent and collateral agent for the Lenders (in such
capacity, the
“Administrative
Agent”).
WITNESSETH
WHEREAS,
the
Borrower has requested that the Lenders make term loans available for the
purposes specified in this Agreement; and
WHEREAS,
the
Lenders are willing to make available to the Borrower such term loans upon
the
terms and subject to the conditions set forth herein;
NOW,
THEREFORE,
in
consideration of the premises and the covenants and agreements contained herein,
the parties hereto hereby agree as follows:
ARTICLE
I
DEFINITIONS,
INTERPRETATION AND ACCOUNTING TERMS
Section
1.1 Defined
Terms
As
used
in this Agreement, the following terms have the following meanings (such
meanings to be equally applicable to both the singular and plural forms of
the
terms defined):
“Acquisition
Subsidiary”
means
San Xxxx Acquisition Corp., a Massachusetts corporation and a Wholly-Owned
Subsidiary of the Parent.
“Administrative
Agent” has
the
meaning specified in the preamble to this Agreement.
“Affected
Lender”
has
the
meaning specified in Section
2.15 (Substitution of Lenders).
“Affiliate” means,
with respect to any Person, any other Person directly or indirectly controlling
or that is controlled by or is under common control with such Person, each
officer, director, general partner or joint-venturer of such Person, and each
Person that is the beneficial owner of 15% or more of any class of Voting Stock
of such Person; provided,
however,
“Affiliate”
shall
not include any holder of a minority interest in any Subsidiary of the Parent.
For the purposes of this definition, “control” means
the
possession of the power to direct or cause the direction of the management
and
policies of such Person, whether through the ownership of voting securities,
by
contract or otherwise.
“Agent
Affiliate”
has
the
meaning specified in Section
10.3 (Posting of Approved Electronic Communications).
“Agreement” means
this Term Loan Agreement.
“Alternative
Currency”
means
any lawful currency other than Dollars that is freely transferable into
Dollars.
“Applicable
Amount”
shall mean, at any time (the “Reference
Time”),
an
amount
equal to (a) the sum, without duplication, of:
(i) an
amount
equal to the greater of (x) zero and (y) 50% of cumulative Consolidated Net
Income for the period from the Closing Date until the last day of the then most
recent fiscal quarter for which Financial Statements have been delivered
pursuant to Section
6.1 (Financial Statements);
provided
that,
the amount in this clause
(i) shall
only be available if the Parent would be in compliance with the financial
covenant contained in Section
5.1 (Financial Covenant)
for the most recently ended Test Period, determined on a Pro Forma Basis after
giving effect to any Investment, Restricted Payment or Optional Debt Prepayment
actually made pursuant to Sections
8.3(j)(ii) (Investments), 8.5(d)(ii) (Restricted Payments) and
Section
8.6(g)(ii) (Prepayment of Indebtedness);
and
(ii) the
amount of any capital contributions (other than any such contribution consisting
of Disqualified Stock) made in cash to, or any proceeds of an Equity Issuance
received by, the Parent (and contributed as common equity to the Borrower)
from
and including the Closing Date through and including the Reference
Time,
minus
(b) the
sum, without duplication, of:
(i) the
aggregate amount of Investments made pursuant to Section 8.3(j)(ii)
(Investments)
following the Closing Date and prior to the Reference Time;
(ii) the
aggregate amount of Restricted Payments pursuant to Section 8.5(d)(ii)
(Restricted Payments) following
the Closing Date and prior to the Reference Time; and
(iii) the
aggregate amount of Optional Debt Prepayments made pursuant to Section
8.6(g)(ii) (Prepayment of Indebtedness) following
the Closing Date and prior to the Reference Time.
“Applicable
Lending Office”
means,
with respect to each Lender, its Domestic Lending Office in the case of a Base
Rate Loan, and its Eurodollar Lending Office in the case of a Eurodollar Rate
Loan.
“Applicable
Margin” means
(a)
with respect to (i) Closing Date Term Loans maintained as Base Rate Loans,
a
rate equal to 1.75% per annum and (ii) Closing Date Term Loans maintained as
Eurodollar Rate Loans, a rate equal to 2.75% per annum and (b) with respect
to
Incremental Term Loans, at the rates per annum for Base Rate Loans and
Eurodollar Rate Loans to be agreed by the Administrative Agent, the Incremental
Term Loan Lenders providing such Incremental Term Loans and the Borrower prior
to the applicable Facility Increase Date.
“Approved
Electronic Communications”
means
each notice, demand, communication, information, document and other material
that any Loan Party is obligated to, or otherwise chooses to, provide to the
Administrative Agent pursuant to any Loan Document or the transactions
contemplated therein, including (a) any supplement to the Guaranty, any joinder
to the Pledge and Security Agreement and any other written Contractual
Obligation delivered or required to be delivered in respect of any Loan Document
or the transactions contemplated therein and (b) any Financial Statement,
financial and other report, notice, request, certificate and other information
material; provided,
however, that,
“Approved
Electronic Communication” shall
exclude (i) any Notice of Borrowing, Notice of Conversion or Continuation,
Facility Increase Notice and any other notice, demand, communication,
information, document and other material relating to a request for a new, or
a
conversion of an existing, Borrowing, (ii) any notice pursuant to Section
2.6 (Optional Prepayments) and
Section
2.7 (Mandatory Prepayments) and
any
other notice relating to the payment of any principal or other amount due under
any Loan Document prior to the scheduled date therefor, (iii) all notices of
any
Default or Event of Default and (iv) any notice, demand, communication,
information, document and other material required to be delivered to satisfy
any
of the conditions set forth in Article
III (Conditions To Term Loans) or
any
other condition to any Borrowing or other extension of credit hereunder or
any
condition precedent to the effectiveness of this Agreement.
“Approved
Electronic Platform”
has
the
meaning specified in Section
10.3 (Posting of Approved Electronic Communications).
“Approved
Fund”
means
any Fund that is advised or managed by (a) a Lender, (b) an Affiliate of a
Lender or (c) an entity or Affiliate of an entity that administers or manages
a
Lender.
“Approved
Securities Intermediary”
means
a
“securities
intermediary”
or
“commodity
intermediary”
(as
such terms are defined in the UCC) selected or reasonably approved by the
Administrative Agent.
“Arrangers”
means,
collectively, Citigroup Global Markets Inc. and X.X. Xxxxxx Securities Inc.,
each in its capacity as joint lead arranger and joint bookrunner.
“Asset
Sale”
has
the
meaning specified in Section
8.4 (Sale of Assets).
“Assignment
and Acceptance”
means
an assignment and acceptance entered into by a Lender and an Eligible Assignee,
and accepted by the Administrative Agent, in substantially the form of
Exhibit A (Form
of Assignment and Acceptance).
“Attributable
Debt”
in
respect of a Permitted Sale Leaseback transaction, as at the time of
determination, the present value (discounted at the interest rate then borne
by
the Term Loans, compounded annually) of the total obligations of the lessee
for
rental payments during the remaining term of the lease included in such Sale
Leaseback transaction (including any period for which such lease has been
extended); provided,
however,
that if
such Permitted Sale Leaseback transaction results in a Capital Lease Obligation,
the amount of Indebtedness represented thereby will be determined in accordance
with the definition of “Capital
Lease Obligations”.
“Base
Rate”
means,
for any period, a fluctuating interest rate per annum as shall be in effect
from
time to time, which rate per annum shall be equal at all times to the higher
of
the following:
(a) the
rate
of interest announced publicly by Citibank in New York, New York, from time
to
time, as Citibank’s base rate; and
(b) 0.5%
per
annum plus
the
Federal Funds Rate.
“Base
Rate Loan”
means
any Term Loan during any period in which it bears interest based on the Base
Rate.
“Benefit
Plan”
means
a
“defined benefit plan” (as defined in Section 3(35)
of
ERISA) subject to Title IV of ERISA for which any Group Member or ERISA
Affiliate of any Group Member has been an “employer” (as defined in
Section 3(5) of ERISA) within the past six years.
“Borrower”
has
the
meaning specified in the preamble to this Agreement.
“Borrower’s
Accountants”
means
Deloitte Touche LLP or other independent nationally-recognized public
accountants reasonably acceptable to the Administrative Agent.
“Borrowing”
means
any Closing Date Term Loan Borrowing or any borrowing under the Facility
Increase, as the context may require.
“Business
Day”
means
a
day of the year on which banks are not required or authorized to close in New
York City and, if the applicable Business Day relates to notices,
determinations, fundings and payments in connection with the Eurodollar Rate
or
any Eurodollar Rate Loans, a day on which dealings in Dollar deposits are also
carried on in the London interbank market.
“Capital
Expenditures”
means,
for any Person for any period, the aggregate of amounts that would be reflected
as capital expenditures on a statement of cash flows of such Person prepared
in
conformity with GAAP.
“Capital
Lease”
means,
with respect to any Person, any lease of, or other arrangement conveying the
right to use, property by such Person as lessee that would be accounted for
as a
capital lease on a balance sheet of such Person prepared in conformity with
GAAP.
“Capital
Lease Obligations”
means,
with respect to any Person, the capitalized amount of all Consolidated
obligations of such Person or any of its Subsidiaries under Capital
Leases.
“Cash
Equivalents”
means,
as of any date of determination, (i) marketable securities (a) issued or
directly and unconditionally guaranteed as to interest and principal by the
federal government of the United States or (b) issued by any agency of the
United States in each case maturing within thirteen months after such date;
(ii)
marketable direct obligations issued by any state of the United States or any
political subdivision of any such state or any public instrumentality thereof,
in each case maturing within thirteen months after such date and having, at
the
time of the acquisition thereof, a rating of at least A-1 from S&P or at
least P-1 from Xxxxx’x; (iii) (a) commercial paper maturing no more than
thirteen months from the date of creation thereof and having, at the time of
the
acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from
Xxxxx’x and (b) other corporate obligations maturing no more than thirteen
months from the acquisition thereof and having, at the time of the acquisition
thereof, a rating of at least AA from S&P or at least Aa2 from Xxxxx’x; (iv)
variable rate demand notes and auction rate securities maturing no more than
thirteen months from the date of creation thereof; (v) certificates of deposit
or bankers’ acceptances maturing within thirteen months after such date and
issued or accepted by any Lender or by any commercial bank organized under
the
laws of the United States or any state thereof or the District of Columbia
that
(a) is at least “adequately capitalized” (as defined in the regulations of its
primary Federal banking regulator) and (b) has Tier 1 capital (as defined in
such regulations) of not less than $100,000,000; and (vi) shares of any money
market mutual fund that (a) has substantially all of its assets invested
continuously in the types of investments referred to in clauses (i) and (ii)
above, (b) has net assets of not less than $500,000,000 and (c) has the highest
rating obtainable from either S&P or Xxxxx’x.
“Change
of Control”
means any
event or circumstance after which (a) any person or group of persons (within
the
meaning of the Securities Exchange Act of 1934, as amended) shall have acquired
beneficial ownership (within the meaning of Rule 13d-3 of the Securities and
Exchange Commission under the Securities Act of 1934, as amended) of more than
50% of the Voting Stock of the Parent, (b) a majority of the board of directors
of the Parent shall not be Continuing Directors or
(c)
the Borrower shall cease to be a direct Wholly Owned Subsidiary of the
Parent.
“Citi”
means
Citicorp North America, Inc., a Delaware corporation.
“Citibank”
means
Citibank, N.A., a national banking association.
“Closing
Date”
means
August 17, 2007.
“Closing
Date Term Loan”
has
the
meaning specified in Section
2.1(a) (The Term Loans).
“Closing
Date Term Loan Borrowing”
means
a
borrowing consisting of Closing Date Term Loans made on the Closing Date by
the
Lenders ratably according to their respective Term Loan Commitments.
“Closing
Date Term Loan Maturity Date”
means
the 7th anniversary of the Closing Date.
“Code”
means
the U.S. Internal Revenue Code of 1986, as currently amended.
“Collateral”
means
all property and interests in property and proceeds thereof now owned or
hereafter acquired by any Loan Party in or upon which a Lien is granted under
any Collateral Document.
“Collateral
Documents”
means
the Pledge and Security Agreement, other pledge or security agreements
(including those in respect of Intellectual Property), the Mortgages, the
Deposit Account Control Agreements, the Securities Account Control Agreements
and any other document executed and delivered by a Loan Party granting a Lien
on
any of its property to secure payment of the Secured Obligations.
“Commitment
Letter”
shall
mean the letter dated May 22, 2007 addressed to the Borrower from the Arrangers
and accepted by the Borrower on May 22, 2007, with respect to certain terms
and
conditions of the Term Loan Facility.
“Compliance
Certificate”
has
the
meaning specified in Section
6.1(c) (Financial Statements).
“Consolidated”
means,
with respect to any Person, the consolidation of accounts of such Person and
its
Subsidiaries.
“Consolidated
Current Assets”
means,
with respect to any Person at any date, the total Consolidated current assets
(other than cash and Cash Equivalents) of such Person and its Subsidiaries
at
such date.
“Consolidated
Current Liabilities”
means,
with respect to any Person at any date, all liabilities of such Person and
its
Subsidiaries at such date that should be classified as current liabilities
on a
Consolidated balance sheet of such Person and its Subsidiaries, but excluding,
in the case of the Parent the sum of (a) the principal amount of any current
portion of long-term Consolidated Funded Indebtedness and (b) (without
duplication of clause
(a) above)
the then outstanding principal amount of the Term Loans.
“Consolidated
EBITDA”
means
Consolidated EBITDAR minus
the
amount, if any, of rental expense added to Consolidated Net Income in
calculating Consolidated EBITDAR.
“Consolidated
EBITDAR”
means,
with respect to any Person for any period, Consolidated Net Income for such
Person and its Subsidiaries for such period, plus
(a)
the
sum of the following, without duplication and, in each case, to the extent
deducted in determining such Consolidated Net Income: (i) any provision for
income taxes, (ii) all interest expense (net of interest income), (iii)
depreciation, amortization and rental expense, (iv) extraordinary, unusual
or
non-recurring charges, expenses or losses (including, whether or not otherwise
includable as a separate item in the statement of such Consolidated Net Income
for such period, losses on the sales of assets outside of the ordinary course
of
business), (v) losses or charges resulting from hedging activities, including
but not limited to any decrease in the fair value of interest rate swap
agreements and any losses on foreign currency contracts not entered into for
speculative purposes, (vi) the amount of all non-cash charges for such period
(including any impairment or writeoff of goodwill or other intangible assets
but
excluding any such non-cash charge, expense or loss to the extent that it
represents an accrual of or reserve for cash expenses in any future period
or an
amortization of a prepaid cash expense that was paid in a prior period), (vii)
the amortization of any financing costs or fees or original issue discount
incurred in connection with any Indebtedness, (viii) any non-cash expenses
due
to purchase accounting associated with the Transactions and any future Permitted
Acquisitions, (ix) any non-cash compensation charge or expense arising from
any
grant of stock, stock options or other equity based awards and (x) to the extent
non-recurring and not capitalized, costs, fees, charges and expenses (including
legal and consulting fees) incurred in connection with or written off as a
result of (A) the Term Loan Facility, the Merger or the other Transactions,
(B)
Permitted Acquisitions and other investments permitted under this Agreement,
(C)
issuances of Stock or Stock Equivalents, and (D) disposition, incurrence or
refinancing of any Indebtedness, including in each case, all deferred financing
costs written off and premiums paid or other expenses incurred directly in
connection with any early extinguishment of Indebtedness and any net loss from
any write-off or forgiveness of Indebtedness; minus
(b)
the
sum of the following to the extent included in determining Consolidated Net
Income (i) income tax benefits for such period, (ii) any extraordinary, unusual
or non-recurring income or gains for such period (including, whether or not
otherwise includable as a separate item in the statement of such Consolidated
Net Income for such period, gains on the sales of assets outside of the ordinary
course of business and any net gain from any write-off or forgiveness of
Indebtedness), (iii) other non-cash income or gains (other than the accrual
of
revenue in the ordinary course), and (iv) gains resulting from hedging
activities, including but not limited to any increase in the fair value of
interest rate swap agreements and any gains on foreign currency contracts not
entered into for speculative purpose.
“Consolidated
Funded Indebtedness”
means,
as of any date of determination, the sum (without duplication) of (a) the
aggregate principal amount of Indebtedness of the Parent and the Restricted
Subsidiaries outstanding as of such date, in the amount that would be reflected
on a balance sheet prepared as of such date on a Consolidated basis in
accordance with GAAP, and (b) the aggregate principal amount of Indebtedness
outstanding as of such date of Persons other than the Parent or a Restricted
Subsidiary, in the amount that would be reflected on a balance sheet of any
such
Person prepared as of such date on a Consolidated basis in accordance with
GAAP,
to the extent such Indebtedness is guaranteed by the Parent or a Restricted
Subsidiary. For
purposes of determining the Senior Secured Leverage Ratio and the Total Leverage
Ratio for any Test Period, Consolidated Funded Indebtedness in respect of
Indebtedness outstanding under the Revolving Credit Agreement shall be the
average outstanding amount of such Indebtedness during such Test
Period.
“Consolidated
Net Income”
means,
with respect to any Person and its Subsidiaries, for any period, the net income
(or loss) of such Person and its Subsidiaries for such period, determined on
a
Consolidated basis in accordance with GAAP; provided
that
there shall be excluded from the calculation of Consolidated Net Income (a)
except as otherwise provided in the credit documentation with respect to
calculations to be made on a Pro Forma Basis, the net income (or loss) of any
other Person accrued prior to the date it became a Subsidiary of, or was merged
or consolidated into, such Person or any of such Person’s Subsidiaries, (b) the
net income (or loss) of any Person that is an Unrestricted Subsidiary or in
which such Person has a minority ownership interest, except to the extent any
such income has actually been received by such Person in the form of cash
dividends or distributions, and (c) the cumulative effect of a change in
accounting principles.
“Constituent
Documents”
means,
with respect to any Person, (a) the articles of incorporation, certificate
of
incorporation, constitution or certificate of formation (or the equivalent
organizational documents) of such Person, (b) the by-laws or operating agreement
(or the equivalent governing documents) of such Person and (c) any document
setting forth the manner of election or duties of the directors or managing
members of such Person (if any) and the designation, amount or relative rights,
limitations and preferences of any class or series of such Person’s
Stock.
“Continuing
Directors”
shall
mean the directors of the Parent on the Closing Date and each other director
of
the Parent, if, in each case, such other director’s nomination for election to
the board of directors of the Parent is recommended by at least 51% of the
then
Continuing Directors.
“Contractual
Obligation”
of
any
Person means any obligation, agreement, undertaking or similar provision of
any
Security issued by such Person or of any agreement, undertaking, contract,
lease, indenture, mortgage, deed of trust or other instrument (excluding a
Loan
Document) to which such Person is a party or by which it or any of its property
is bound or to which any of its property is subject.
“Corporate
Chart”
means
a
corporate organizational chart, list or other similar document in each case
in
form
reasonably acceptable to
the
Administrative Agent and setting forth, for each Person that is a Loan Party,
that is subject to Section
7.11 (Additional Collateral and Guaranties) or
that
is a Subsidiary of any of them, (a) the full legal name of such Person (and
any
trade name, fictitious name or other name such Person may have had or operated
under), (b) the jurisdiction of organization, the organizational number (if
any) and the tax identification number (if any) of such Person, (c) the location
of such Person’s chief executive office (or sole place of business) and (d) the
number of shares of each class of such Person’s Stock authorized (if
applicable), the number outstanding as of the date of delivery and the number
and percentage of such outstanding shares for each such class owned (directly
or
indirectly) by any Loan Party or any Subsidiary of any of them.
“Customary
Permitted Liens”
means,
with respect to any Person, any of the following Liens:
(a) Liens
with respect to the payment of taxes, assessments or governmental charges in
each case that are not yet due or that are being contested in good faith by
appropriate proceedings and with respect to which adequate reserves or other
appropriate provisions are being maintained to the extent required by
GAAP;
(b) Liens
of
landlords arising by statute and liens of suppliers, mechanics, carriers,
materialmen, warehousemen or workmen and other similar Liens, in each case
(i)
imposed by law or arising in the ordinary course of business, (ii) for amounts
not yet due or that are being contested in good faith by appropriate proceedings
and (iii) with respect to which adequate reserves or other appropriate
provisions are being maintained to the extent required by GAAP;
(c) deposits
made in the ordinary course of business in connection with workers’
compensation, unemployment insurance or other types of social security benefits
or to secure the performance of bids, tenders, sales, contracts (other than
for
the repayment of borrowed money) and surety, appeal, customs or performance
bonds;
(d) encumbrances
arising by reason of zoning restrictions, easements, licenses, reservations,
covenants, rights-of-way, utility easements, building restrictions and other
similar encumbrances on the use of real property not materially detracting
from
the value of such real property or not materially interfering with the ordinary
conduct of the business conducted and proposed to be conducted at such real
property;
(e) encumbrances
arising under leases or subleases of real property that do not, in the
aggregate, materially detract from the value of such real property or interfere
with the ordinary conduct of the business conducted and proposed to be conducted
at such real property; and
8
TERM
LOAN AGREEMENT
COLLECTIVE
BRANDS FINANCE, INC.
(f) financing
statements with respect to a lessor’s rights in and to personal property leased
to such Person in the ordinary course of such Person’s business other than
through a Capital Lease.
“Debt
Issuance”
means
the incurrence of Indebtedness of the type specified in clause
(a) or
(b)
of
the
definition of “Indebtedness” by
the
Parent or any Restricted Subsidiary.
“Default”
means
any event that, with the passing of time or the giving of notice or both, would
become an Event of Default.
“Deposit
Account”
has
the
meaning given to such term in the UCC.
“Deposit
Account Bank”
means
a
financial institution selected or approved by the Administrative
Agent.
“Deposit
Account Control Agreement”
has
the
meaning specified in the Pledge and Security Agreement.
“Disqualified
Stock”
shall
mean any Stock or Stock Equivalent which, by its terms (or by the terms of
any
Security into which it is convertible or for which it is exchangeable), or
upon
the happening of any event, (a) matures (excluding any maturity as the result
of
an optional redemption by the issuer thereof) or is mandatorily redeemable,
pursuant to a sinking fund obligation or otherwise, or is redeemable at the
option of the holder thereof, in whole or in part, on or prior to the first
anniversary of the Term Loan Maturity Date, (b) is convertible into or
exchangeable (unless at the sole option of the issuer thereof) for (i) debt
securities or (ii) any Stock or Stock Equivalent referred to in clause
(a)
above,
in each case at any time on or prior to the first anniversary of the Term Loan
Maturity Date, or (c) contains any repurchase obligation which may come into
effect prior to payment in full of all Obligations; provided,
however,
that
any Stock or Stock Equivalents that would not constitute Disqualified Stock
but
for provisions thereof giving holders thereof (or the holders of any security
into or for which such Stock or Stock Equivalents is convertible, exchangeable
or exercisable) the right to require the issuer thereof to redeem such Stock
or
Stock Equivalents upon the occurrence of a change in control or an asset sale
occurring prior to the first anniversary of the Term Loan Maturity Date shall
not constitute Disqualified Stock if such Stock or Stock Equivalents provide
that the issuer thereof will not redeem any such Stock or Stock Equivalents
pursuant to such provisions prior to the repayment in full of the Obligations;
provided
further,
however,
that
any Stock or Stock Equivalents owned by a Group Member in a Joint Venture shall
not constitute Disqualified Stock solely due to repurchase obligations triggered
upon such Group Member’s failure to make a required capital contribution.
“Dollar
Equivalent”
of
any
amount means, at the time of determination thereof, (a) if such amount is
expressed in Dollars, such amount, (b) if such amount is expressed in an
Alternative Currency, the equivalent of such amount in Dollars determined by
using the rate of exchange quoted by Citibank in New York, New York at 11:00
a.m. (New York time) on the date of determination (or, if such date is not
a
Business Day, the last Business Day prior thereto) to prime banks in New York
for the spot purchase in the New York foreign exchange market of such amount
of
Dollars with such Alternative Currency and (c) if such amount is denominated
in
any other currency, the equivalent of such amount in Dollars as reasonably
determined by the Administrative Agent using any method of determination it
deems appropriate.
9
TERM
LOAN AGREEMENT
COLLECTIVE
BRANDS FINANCE, INC.
“Dollars”
and
the
sign “$”
each
mean the lawful money of the United States of America.
“Domestic
Lending Office”
means,
with respect to any Lender, the office of such Lender specified as its
“Domestic
Lending Office”
opposite its name on Schedule II (Applicable
Lending Offices and Addresses for Notices) or
on the
Assignment and Acceptance by which it became a Lender or such other office
of
such Lender as such Lender may from time to time specify to the Borrower and
the
Administrative Agent.
“Domestic
Person”
means
any “United
States person”
under
and as defined in Section
770l(a)(30)
of the
Code.
“Domestic
Subsidiary”
means
any Restricted Subsidiary of the Parent that was formed under the laws of the
United States or any state of the United States or the District of
Columbia.
“XXXXX”
means
the Electronic Data-Gathering, Analysis, and Retrieval System maintained by
the
Securities and Exchange Commission.
“Eligible
Assignee”
means
(a) a Lender or an Affiliate or Approved Fund of any Lender, (b) a commercial
bank having total assets whose Dollar Equivalent exceeds $5,000,000,000, (c)
a
finance company, insurance company or any other financial institution or Fund,
in each case reasonably acceptable to the Administrative Agent and regularly
engaged in making, purchasing or investing in loans and having a net worth,
determined in accordance with GAAP, whose Dollar Equivalent exceeds $250,000,000
(or, to the extent net worth is less than such amount, a finance company,
insurance company, other financial institution or Fund, reasonably acceptable
to
the Administrative Agent and the Borrower) or (d) a savings and loan association
or savings bank organized under the laws of the United States or any State
thereof having a net worth, determined in accordance with GAAP, whose Dollar
Equivalent exceeds $250,000,000.
“Environmental
Actions”
means
any complaint, summons, citation, notice, directive, order, claim, litigation,
investigation, judicial or administrative proceeding, judgment, letter, or
other
communication, each, by or from any Governmental Authority, or any third party
involving (x) violations of Environmental Laws or (y) releases of Hazardous
Materials (a) from any assets, properties, or businesses of any Group Member,
or
any of their predecessors in interest, or (b) from or onto any facilities which
received Hazardous Materials generated by any Group Member, or any of their
predecessors in interest.
“Environmental
Laws”
means
all applicable Requirements of Law now or hereafter in effect and as amended
or
supplemented from time to time, relating to pollution or the regulation and
protection of human or animal health, safety, the environment or natural
resources, including the Comprehensive Environmental Response, Compensation,
and
Liability Act of 1980, as amended (42 U.S.C. § 9601 et
seq.); the
Hazardous Material Transportation Act, as amended (49 U.S.C. § 5101 et
seq.); the
Federal Insecticide, Fungicide, and Rodenticide Act, as amended (7 U.S.C. § 136
et
seq.);
the
Resource Conservation and Recovery Act, as amended (42 U.S.C. § 6901
et
seq.); the
Toxic
Substance Control Act, as amended (15 U.S.C. § 2601 et
seq.); the
Clean
Air Act, as amended (42 U.S.C. § 7401 et
seq.); the
Federal Water Pollution Control Act, as amended (33 U.S.C. § 1251 et
seq.); the
Occupational Safety and Health Act, as amended (29 U.S.C. § 651 et
seq.); the
Safe
Drinking Water Act, as amended (42 U.S.C. § 300f et
seq.); and
each
of their state and local counterparts or equivalents and any transfer of
ownership notification or approval statute, including the Industrial Site
Recovery Act (N.J. Stat. Xxx. § 13:1K-6 et
seq.).
10
TERM
LOAN AGREEMENT
COLLECTIVE
BRANDS FINANCE, INC.
“Environmental
Liabilities and Costs”
means,
with respect to any Person, all liabilities, obligations, responsibilities,
Remedial Actions, losses, damages, punitive damages, consequential damages,
treble damages, costs and expenses (including all fees, disbursements and
expenses of counsel, experts and consultants and costs of investigation and
feasibility studies), fines, penalties, sanctions and interest incurred as
a
result of any claim or demand by any other Person, whether based in contract,
tort, implied or express warranty, strict liability, criminal or civil statute
and whether arising under any Environmental Law, Permit, order or agreement
with
any Governmental Authority or other Person, in each case relating to any
environmental, health or safety condition or to any Release or threatened
Release and resulting from the past, present or future operations of, or
ownership of property by, such Person or any of its Subsidiaries.
“Environmental
Lien”
means
any Lien in favor of any Governmental Authority for Environmental Liabilities
and Costs.
“Equity
Issuance”
means
the issue or sale of any Stock of the Borrower, the Parent, or any Restricted
Subsidiary of the Parent to any Person other than the Borrower, the Parent
or
any Restricted Subsidiary of the Parent.
“ERISA”
means
the United States Employee Retirement Income Security Act of 1974.
“ERISA
Affiliate”
means
any trade or business (whether or not incorporated) under common control or
treated as a single employer with any Group Member within the meaning of
Section
414(b),
(c),
(m)
or
(o)
of the
Code.
“ERISA
Event”
means
(a) a reportable event described in Section
4043(b)
or
4043(c)(1),
(2),
(3),
(5),
(6),
(8)
or
(9)
of ERISA
with respect to a Title IV Plan or a Multiemployer Plan, (b) the withdrawal
of
the Borrower, the Parent, any of the Restricted Subsidiaries or any ERISA
Affiliate from a Title IV Plan subject to Section
4063
of ERISA
during a plan year in which it was a substantial employer, as defined in
Section
4001(a)(2)
of
ERISA, (c) the complete or partial withdrawal of the Borrower, the Parent,
any
of the Restricted Subsidiaries or any ERISA Affiliate from any Multiemployer
Plan, (d) notice of reorganization or insolvency of a Multiemployer Plan, (e)
the filing of a notice of intent to terminate a Title IV Plan or the treatment
of a plan amendment as a termination under Section
4041
of
ERISA, (f) the institution of proceedings to terminate a Title IV Plan or
Multiemployer Plan by the PBGC, (g) the failure to timely make any required
contribution to a Title IV Plan or Multiemployer Plan, (h) the imposition of
a
lien under Section
412
of the
Code or Section
302
of ERISA
on the Borrower, the Parent, any of the Restricted Subsidiaries or any ERISA
Affiliate, (i) any other event or condition that might reasonably be expected
to
constitute grounds under Section
4042
of ERISA
for the termination of, or the appointment of a trustee to administer, any
Title
IV Plan or Multiemployer Plan or the imposition of any liability under Title
IV
of ERISA, other than for PBGC premiums due but not delinquent under Section
4007
of ERISA
or (j) the acceleration of an obligation to pay a pension shortfall with respect
to a Foreign Plan.
“Eurocurrency
Liabilities”
has
the
meaning assigned to that term in Regulation D of the Federal Reserve
Board.
11
TERM
LOAN AGREEMENT
COLLECTIVE
BRANDS FINANCE, INC.
“Eurodollar
Base Rate”
means,
with respect to any Interest Period for any Eurodollar Rate Loan, the offered
rate for deposits in Dollars for the applicable Interest Period appearing on
the
Reuters Screen LIBOR01 Page as of 11:00 a.m. (London time) on the second full
Business Day next preceding the first day of each Interest Period. In the event
that such rate does not appear on the Reuters Screen LIBOR01 Page (or otherwise
on the Reuters screen), the Eurodollar Base Rate for the purposes of this
definition shall be determined by reference to such other comparable publicly
available service for displaying eurodollar rates as may be reasonably selected
by the Administrative Agent, or, in the absence of such availability, the
Eurodollar Base Rate shall be the rate of interest as reasonably determined
by
the Administrative Agent to be the rate per annum at which deposits in Dollars
are offered by the principal office of Citibank in London to major banks in
the
London interbank market at 11:00 a.m. (London time) two Business Days before
the
first day of such Interest Period in an amount substantially equal to the
Eurodollar Rate Loan of Citibank for a period equal to such Interest
Period.
“Eurodollar
Lending Office”
means,
with respect to any Lender, the office of such Lender specified as its
“Eurodollar
Lending Office” opposite
its name on Schedule II (Applicable
Lending Offices and Addresses for Notices) or
on the
Assignment and Acceptance by which it became a Lender (or, if no such office
is
specified, its Domestic Lending Office) or such other office of such Lender
as
such Lender may from time to time specify to the Borrower and the Administrative
Agent.
“Eurodollar
Rate”
means,
with respect to any Interest Period for any Eurodollar Rate Loan, an interest
rate per annum equal to the rate per annum obtained by dividing (a) the
Eurodollar Base Rate by (b)(i) a percentage equal to 100% minus
(ii)
the
reserve percentage applicable two Business Days before the first day of such
Interest Period under regulations issued from time to time by the Federal
Reserve Board for determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve requirement) for a member
bank
of the Federal Reserve System in New York City with respect to liabilities
or
assets consisting of or including Eurocurrency Liabilities (or with respect
to
any other category of liabilities that includes deposits by reference to which
the Eurodollar Rate is determined) having a term equal to such Interest
Period.
“Eurodollar
Rate Loan”
means
any Term Loan that, for an Interest Period, bears interest based on the
Eurodollar Rate.
“Event
of Default” has
the
meaning specified in Section
9.1 (Events of Default).
“Excess
Cash Flow”
means,
for the Borrower, the Parent and the Restricted Subsidiaries for any period,
(a)
Consolidated EBITDAR of the Parent and the Restricted Subsidiaries for such
period plus
(b)
the
excess, if any, of Working Capital at the beginning of such period over Working
capital at the end of such period for the Borrower, the Parent and the
Restricted Subsidiaries minus
(c)
the
sum of (without duplication) the following: (i) scheduled cash principal
payments on the Term Loans during such period and optional cash principal
payments on the Term Loans during such period, (ii) cash principal payments
made
by the Borrower, the Parent or any Restricted Subsidiary during such period
on
other Indebtedness to the extent such other Indebtedness and payments are
permitted hereunder (to the extent (x) not financed by the incurrence of
Indebtedness or an Equity Issuance and (y) in the case of optional cash payments
of loans made under the Revolving Credit Agreement, accompanied by permanent
reductions of commitments under the Revolving Credit Agreement in amounts
corresponding to such payments), (iii) payments made by the Borrower, the Parent
or any Restricted Subsidiary during such period on Capital Lease Obligations
to
the extent such Capital Lease Obligations and payments are permitted hereunder
(to the extent not financed by the incurrence of Indebtedness or an Equity
Issuance), (iv) Capital Expenditures (to the extent not financed by the
incurrence of Indebtedness or an Equity Issuance) made by the Borrower, the
Parent or any Restricted Subsidiary during such period to the extent permitted
hereunder, (v) cash payments made by the Borrower, the Parent or any Restricted
Subsidiary to satisfy tax obligations, (vi) cash interest expense of the
Borrower, the Parent or any Restricted Subsidiary during such period, (vii)
rental expense of the Borrower, the Parent or any Restricted Subsidiary during
such period, and (vii) the excess, if any, of Working Capital at the end of
such
period over Working Capital at the beginning of such period.
12
TERM
LOAN AGREEMENT
COLLECTIVE
BRANDS FINANCE, INC.
“Excluded
Assets”
means
(a) any lease, license, contract, property right or agreement to which any
Loan
Party is a party or any of its rights or interests thereunder if and to the
extent that a security interest is prohibited by or in violation of (i) any
law,
rule or regulation applicable to such Loan Party, or (ii) a term, provision
or
condition of or under, any such lease, license, contract, property right or
agreement (unless in either clause
(i) or
(ii)
above
such law, rule or regulation or such term, provision or condition would be
rendered unenforceable against the Term Loans pursuant to Sections
9-406,
9-407,
or
9-408
of the
applicable Uniform Commercial Code); (b) any Stock or Stock Equivalents
representing more than 66% of the outstanding Voting Stock issued by any Person
that is not a “United States person” under and as defined in Section 7701(a)(30)
of the IRC; (c) any assets of an Unrestricted Subsidiary or any assets of or
Stock or Stock Equivalents in any of an Unrestricted Subsidiary’s direct or
indirect subsidiaries; or (d) any assets of any Immaterial Subsidiary that
is
not a Loan Party.
“Existing
Agent”
means
Bank of America, N.A., in its capacity as administrative agent under the Target
Credit Agreement.
“Existing
Revolving Credit Agreement”
means
that certain Loan, Guaranty and Security Agreement, dated as of January 15,
2004
(as amended and otherwise modified up to but not including the Closing Date),
among the Borrower, the institutions party thereto as lenders and Xxxxx Fargo
Retail Finance, LLC, as administrative agent thereunder.
“Facility
Increase”
has
the
meaning specified in Section
2.1(b) (The Term Loans).
“Facility
Increase Date”
has
the
meaning specified in
Section 2.1(b) (The Term Loans).
“Facility
Increase Notice”
means
a
notice from the Borrower to the Administrative Agent requesting a Facility
Increase, which may include any proposed term and condition for such proposed
Facility Increase but shall include in any event the amount of such proposed
Facility Increase.
“Fair
Market Value”
means
(a) with respect to any asset or group of assets (other than a marketable
Security) at any date, the value of the consideration obtainable in a sale
of
such asset at such date assuming a sale by a willing seller to a willing
purchaser dealing at arm’s length and arranged in an orderly manner over a
reasonable period of time having regard to the nature and characteristics of
such asset, determined by the Board of Directors or a Responsible Officer of
the
Borrower or Parent or, if such asset shall have been the subject of a relatively
contemporaneous appraisal by an independent third party appraiser, the basic
assumptions underlying which have not materially changed since its date, the
value set forth in such appraisal and (b) with respect to any marketable
Security at any date, the closing sale price of such Security on the Business
Day next preceding such date, as appearing in any published list of any national
securities exchange or the NASDAQ Stock Market or, if there is no such closing
sale price of such Security, the final price for the purchase of such Security
at face value quoted on such Business Day by a financial institution of
recognized standing regularly dealing in Securities of such type and selected
by
the Administrative Agent.
13
TERM
LOAN AGREEMENT
COLLECTIVE
BRANDS FINANCE, INC.
“Federal
Funds Rate”
means,
for any period, a fluctuating interest rate per annum equal for each day during
such period to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers, as published for such day (or, if such day is not a Business
Day,
for the next preceding Business Day) by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day that is a Business Day, the
average of the quotations for such day on such transactions received by the
Administrative Agent from three Federal funds brokers of recognized standing
selected by it.
“Federal
Reserve Board”
means
the Board of Governors of the United States Federal Reserve System, or any
successor thereto.
“Fee
Letter”
shall
mean (a) the letter dated May 22, 2007 addressed to the Borrower from the
Arrangers and accepted by the Borrower on May 22, 2007, with respect to certain
fees to be paid from time to time to the Arrangers and (b) if applicable, any
additional fee letter entered into as part of any Facility Increase and executed
by, among others, the Borrower and the Administrative Agent.
“Financial
Asset”
has
the
meaning given to such term in the UCC.
“Financial
Statements”
means
the financial statements of the Parent and its Subsidiaries delivered in
accordance with Section
4.4 (Financial Statements) and
Section
6.1 (Financial Statements).
“Foreign
Plan”
means
any defined benefit pension plan maintained by the Borrower, the Parent or
any
of the Restricted Subsidiaries that is mandated or governed by any law, rule
or
regulation of any Government Authority other than the United States, any state
thereof or any other political subdivision thereof.
“Foreign
Subsidiary”
means
any Subsidiary of the Parent that is not organized under the laws of any state
of the United States of America or the District of Columbia.
“Fund”
means
any Person (other than a natural Person) that is or will be engaged in making,
purchasing, holding or otherwise investing in commercial loans and similar
extensions of credit in the ordinary course of its business.
“GAAP”
means
generally accepted accounting principles in the United States of America as
in
effect from time to time set forth in the opinions and pronouncements of the
Accounting Principles Board and the American Institute of Certified Public
Accountants and the statements and pronouncements of the Financial Accounting
Standards Board, or in such other statements by such other entity as may be
in
general use by significant segments of the accounting profession, that are
applicable to the circumstances as of the date of determination.
14
TERM
LOAN AGREEMENT
COLLECTIVE
BRANDS FINANCE, INC.
“Governmental
Authority”
means
any nation, sovereign or government, any state or other political subdivision
thereof and any entity or authority exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government, including
any central bank or stock exchange.
“Group
Members”
means,
collectively, the Borrower, the Parent and each Restricted
Subsidiary.
“Guarantor”
means
Parent and each Wholly Owned Domestic Subsidiary of the Parent that is a
Restricted Subsidiary or any Restricted Subsidiary of the Parent that guarantees
or otherwise provides direct credit support for any Indebtedness of the Parent
of the type listed in clause
(a)
or
(b)
of
the
definition of Indebtedness, each party to the Guaranty.
“Guaranty”
means
the guaranty, in substantially the form of Exhibit F (Form
of Guaranty), executed
by the Guarantors.
“Guaranty
Obligation”
means,
as applied to any Person, any direct or indirect liability, contingent or
otherwise, of such Person with respect to any Indebtedness of another Person,
if
the purpose or intent of such Person in incurring the Guaranty Obligation is
to
provide assurance to the obligee of such Indebtedness that such Indebtedness
will be paid or discharged, that any agreement relating thereto will be complied
with, or that any holder of such Indebtedness will be protected (in whole or
in
part) against loss in respect thereof, including (a) the direct or indirect
guaranty, endorsement (other than for collection or deposit in the ordinary
course of business), co-making, discounting with recourse or sale with recourse
by such Person of Indebtedness of another Person and (b) any liability of such
Person for Indebtedness of another Person through any agreement (contingent
or
otherwise) (i) to purchase, repurchase or otherwise acquire such Indebtedness
or
any security therefor or to provide funds for the payment or discharge of such
Indebtedness (whether in the form of a loan, advance, stock purchase, capital
contribution or otherwise), (ii) to maintain the solvency or any balance sheet
item, level of income or financial condition of another Person, (iii) to make
take-or-pay or similar payments, if required, regardless of non-performance
by
any other party or parties to an agreement, (iv) to purchase, sell or lease
(as
lessor or lessee) property, or to purchase or sell services, primarily for
the
purpose of enabling the debtor to make payment of such Indebtedness or to assure
the holder of such Indebtedness against loss or (v) to supply funds to, or
in
any other manner invest in, such other Person (including to pay for property
or
services irrespective of whether such property is received or such services
are
rendered), if in the case of any agreement described under clause
(b)(i),
(ii),
(iii),
(iv)
or
(v)
above
the
primary purpose or intent thereof is to provide assurance that Indebtedness
of
another Person will be paid or discharged, that any agreement relating thereto
will be complied with or that any holder of such Indebtedness will be protected
(in whole or in part) against loss in respect thereof. The amount of any
Guaranty Obligation shall be equal to the amount of the Indebtedness so
guaranteed or otherwise supported.
“Hazardous
Materials”
means
any material, substance or waste that is classified, regulated or otherwise
characterized under any Environmental Law as hazardous, toxic, a contaminant
or
a pollutant or by other words of similar meaning or regulatory effect, including
any petroleum or petroleum-derived substance or waste, asbestos and
polychlorinated biphenyls.
“Hedging
Contracts”
means
all Interest Rate Contracts, foreign exchange contracts, currency swap or option
agreements, forward contracts, commodity swap, purchase or option agreements,
other commodity price hedging arrangements and all other similar agreements
or
arrangements designed to alter the risks of any Person arising from fluctuations
in interest rates, currency values or commodity prices.
15
TERM
LOAN AGREEMENT
COLLECTIVE
BRANDS FINANCE, INC.
“Immaterial
Subsidiary”
means
any Domestic Subsidiary of the Parent designated in writing by the Borrower
to
the Administrative Agent whose total assets or revenues (in each case on a
Consolidated basis with its Subsidiaries) are less than 3% of the total assets
or revenues of the Parent and the Restricted Subsidiaries, taken as a whole;
provided,
however,
that
the aggregate total assets or revenues of all such subsidiaries designated
as
“Immaterial
Subsidiaries”
(on
a
Consolidated basis with their Subsidiaries), shall not exceed 5% of the total
assets or revenue of the Parent and the Restricted Subsidiaries, taken as a
whole.
“Incremental
Term Loan”
has
the
meaning set forth in Section
2.1(b) (The Term Loans).
“Incremental
Term Loan Lender”
has
the
meaning set forth in Section
2.1(b) (The Term Loans).
“Incremental
Term Loan Maturity Date”
the
date that is agreed to for such Incremental Term Loan by the Administrative
Agent and the Borrower at the time the applicable Facility Increase becomes
effective; provided,
that
no
such date shall be earlier than the Closing Date Term Loan Maturity
Date.
“Included
Asset Sale”
means
any Asset Sale by the Parent or any of the Restricted Subsidiaries other than
Asset Sales permitted pursuant to clauses
(a)
through
(i),
(l)
and
(n)
of
Section
8.4 (Sale of Assets).
“Indebtedness”
means,
without duplication, (a) all obligations for borrowed money, (b) all obligations
evidenced by bonds, debentures, notes, or other similar instruments and all
reimbursement or other obligations in respect of letters of credit, bankers
acceptances, interest rate swaps, or other financial products, (c) all
obligations as a lessee under Capital Leases, (d) all obligations or liabilities
of others secured by a Lien on any asset of a Person or its Subsidiaries,
irrespective of whether such obligation or liability is assumed, (e) all
obligations to pay the deferred purchase price of assets (other than trade
payables incurred in the ordinary course of business), (f) all Attributable
Debt
in respect of Sale Leaseback transactions, (g) all obligations owing under
Hedging Contracts, and (h) any obligation guaranteeing or intended to guarantee
(whether directly or indirectly guaranteed, endorsed, co-made, discounted,
or
sold with recourse) any obligation of any other Person that constitutes
Indebtedness under any of clauses
(a) through
(g)
above.
“Indemnified
Matter” has
the
meaning specified in Section
11.4 (Indemnities).
“Indemnitee”
has
the
meaning specified in Section
11.4 (Indemnities).
“Intellectual
Property”
has
the
meaning given such term in the Pledge and Security Agreement.
“Intercreditor
Agreement”
means
an agreement, in substantially the form of Exhibit
H (Form of Intercreditor Agreement),
among
the Administrative Agent, the Revolving Credit Agent and each Loan
Party.
16
TERM
LOAN AGREEMENT
COLLECTIVE
BRANDS FINANCE, INC.
“Interest
Period”
means,
in the case of any Eurodollar Rate Loan, (a) initially, the period commencing
on
the date such Eurodollar Rate Loan is made or on the date of conversion of
a
Base Rate Loan to such Eurodollar Rate Loan and ending one, two, three or six
months thereafter, as selected by the Borrower in its Notice of Borrowing or
Notice of Conversion or Continuation given to the Administrative Agent pursuant
to Section
2.2 (Borrowing Procedures) or
Section
2.9 (Conversion/Continuation Option) and
(b)
thereafter, if such Term Loan is continued, in whole or in part, as a Eurodollar
Rate Loan pursuant to Section
2.9 (Conversion/Continuation Option),
a
period commencing on the last day of the immediately preceding Interest Period
therefor and ending one, two, three or six months thereafter, as selected by
the
Borrower in its Notice of Conversion or Continuation given to the Administrative
Agent pursuant to Section
2.9 (Conversion/Continuation Option);
provided,
however, that
all
of the foregoing provisions relating to Interest Periods in respect of
Eurodollar Rate Loans are subject to the following:
(a) if
any
Interest Period would otherwise end on a day that is not a Business Day, such
Interest Period shall be extended to the next succeeding Business Day, unless
the result of such extension would be to extend such Interest Period into
another calendar month, in which event such Interest Period shall end on the
immediately preceding Business Day;
(b) any
Interest Period that begins on the last Business Day of a calendar month (or
on
a day for which there is no numerically corresponding day in the calendar month
at the end of such Interest Period) shall end on the last Business Day of a
calendar month; and
(c) the
Borrower may not select any Interest Period that ends after the date of a
scheduled principal payment on the Term Loans as set forth in Article
II (The Term Loan Facility) unless,
after giving effect to such selection, the aggregate unpaid principal amount
of
the Term Loans for which Interest Periods end after such scheduled principal
payment shall be equal to or less than the principal amount to which the Term
Loans are required to be reduced after such scheduled principal payment is
made.
“Interest
Rate Contracts”
means
all interest rate swap agreements, interest rate cap agreements, interest rate
collar agreements and interest rate insurance.
“Inventory”
has
the
meaning given to such term in the UCC.
“Investment”
means,
with respect to any Person, (a) any purchase or other acquisition by such Person
of (i) any Security issued by, (ii) a beneficial interest in any Security issued
by, or (iii) any other equity ownership interest in, any other Person, (b)
any
purchase by such Person of all or a significant part of the assets of a business
conducted by any other Person, or all or substantially all of the assets
constituting the business of a division, branch or other unit operation of
any
other Person, (c) any loan, advance (other than deposits with financial
institutions available for withdrawal on demand,
prepaid expenses, accounts receivable and similar items made or incurred in
the
ordinary course of business as presently conducted) or capital contribution
by
such Person to any other Person, including all Indebtedness of any other Person
to such Person arising from a sale of property by such Person other than in
the
ordinary course of its business, and (d) any Guaranty Obligation incurred by
such Person in respect of Indebtedness of any other Person. For purposes of
determining the value of any Investment outstanding for purposes of any
subclause of Section
8.3 (Investments),
such
amount, when aggregated with the amount of all other Investments made pursuant
to such subclause, shall deemed to be the amount of all such Investments when
made, purchased or acquired less any returns on such Investments (not to exceed
the aggregate of the original amounts invested pursuant to such
subclause).
17
TERM
LOAN AGREEMENT
COLLECTIVE
BRANDS FINANCE, INC.
“IRS”
means
the Internal Revenue Service of the United States or any successor
thereto.
“Joint
Venture”
means a
corporation, limited liability company, joint venture or similar limited
liability legal entity formed in order to conduct a common venture or enterprise
between two or more Persons.
“Land”
of
any
Person means all of those plots, pieces or parcels of land now owned, leased
or
hereafter acquired or leased or purported to be owned, leased or hereafter
acquired or leased (including, in respect of the Loan Parties, as reflected
in
the most recent Financial Statements) by such Person.
“Lender”
means
each financial institution or other entity that (a) is listed on the signature
pages hereof as a “Lender”,
(b)
from time to time becomes a party hereto by execution of an Assignment and
Acceptance or (c) from time to time becomes a party hereto in connection with
a
Facility Increase by execution of an assumption agreement, in form and substance
reasonably satisfactory to the Administrative Agent and the
Borrower.
“Lien”
means
any mortgage, deed of trust, pledge, hypothecation, assignment, charge, deposit
arrangement, encumbrance, lien (statutory or other), security interest or
preference, priority or other security agreement or preferential arrangement
of
any kind or nature whatsoever intended to assure payment of any Indebtedness
or
the performance of any other obligation, including any conditional sale or
other
title retention agreement, the interest of a lessor under a Capital Lease and
any financing lease having substantially the same economic effect as any of
the
foregoing, and the filing of any financing statement under the UCC or comparable
law of any jurisdiction naming the owner of the asset to which such Lien relates
as debtor.
“Loan
Documents”
means,
collectively, this Agreement, the Notes (if any), the Intercreditor Agreement,
the Guaranty, the Fee Letter, each Hedging Contract between any Loan Party
and
any Person that was a Lender or an Affiliate of a Lender at the time it entered
into such Hedging Contract, the Collateral Documents and each certificate,
agreement or document executed by a Loan Party and delivered to the
Administrative Agent or any Lender in connection with or pursuant to any of
the
foregoing.
“Loan
Party”
means
each of the Borrower, each Guarantor and each other Subsidiary of the Parent
that executes and delivers a Loan Document.
“Material
Adverse Change”
means
(a) a material adverse change in the business, operations, results of
operations, assets, liabilities or condition (financial or otherwise) of the
Borrower, the Parent and the Restricted Subsidiaries taken as a whole, (b)
a
material impairment of the Loan Parties’ ability to perform their obligations
under the Loans Documents to which they are parties or of the Administrative
Agent or the Lenders to enforce the Obligations or realize upon the Collateral
or (c) a material impairment of the enforceability or priority of the
Administrative Agent’s Liens with respect to the Collateral as a result of an
action or failure to act on the part of any Loan Party.
18
TERM
LOAN AGREEMENT
COLLECTIVE
BRANDS FINANCE, INC.
“Material
Adverse Effect”
means
an effect that results in or causes, or would reasonably be expected to result
in or cause, a Material Adverse Change.
“Merger”
means
the merger of the Acquisition Subsidiary with and into the Target, with the
Target being the surviving corporation, whereupon the outstanding shares of
the
Target will be converted into the right to receive the purchase price, in cash,
and on terms and conditions otherwise set forth in the Merger
Agreement.
“Merger
Agreement” means
that certain Agreement and Plan of Merger dated as of May 22, 2007 among the
Borrower, the Acquisition Subsidiary and the Target.
“Moody’s”
means
Xxxxx’x Investors Service, Inc.
“Mortgage
Supporting Documents”
means,
with respect to any Mortgage for a parcel of owned Real Property, each document
(including title policies or marked-up unconditional insurance binders (in
each
case, together with copies of all documents referred to therein), maps, ALTA
or
TLTA, if applicable, as-built surveys, in form and as to date that is
sufficiently acceptable to the title insurer issuing title insurance to the
Administrative Agent for such title insurer to deliver endorsements to such
title insurance as reasonably requested by the Administrative Agent,
environmental assessments and reports and evidence regarding recording and
payment of fees, insurance premium and taxes) that the Administrative Agent
may
reasonably request, to create, register, perfect, maintain, evidence the
existence, substance, form or validity of or enforce a valid and enforceable
first priority Lien on such parcel of owned Real Property in favor of the
Administrative Agent for the benefit of the Secured Parties, subject only to
such Liens as the Administrative Agent may approve.
“Mortgages”
means
the mortgages, deeds of trust or other real estate security documents made
or
required herein to be made by the Borrower or any other Loan Party, each in
form
and substance reasonably satisfactory to the Administrative Agent.
“Multiemployer
Plan”
means
a
multiemployer plan, as defined in Section 400l(a)(3)
of
ERISA, to which any Group Member or any ERISA Affiliate has any obligation
or
liability, contingent or otherwise.
“Net
Cash Proceeds”
means
(a) with respect to any Included Asset Sale or Recovery Event, in each case,
of
Term Priority Collateral, the proceeds thereof received by any Group Member
in
the form of cash and Cash Equivalents (including any such proceeds subsequently
received (as and when received) in respect of noncash consideration initially
received) not reinvested in assets used or useful in the business of any Group
Member within 365 days of receipt, net of (i) selling, recovery or other
transactional expenses payable by any Group Member in connection with obtaining
such proceeds (including reasonable and customary broker’s or investment
banker’s fees or commissions, legal fees, transfer and similar taxes incurred in
connection therewith and the Borrower’s good faith estimate of income taxes paid
or payable in connection with such sale or other transaction), (ii) amounts
provided as a reserve, in accordance with GAAP, against any liabilities under
any indemnification obligations or purchase price adjustment associated with
such Included Asset Sale or Recovery Event (provided that, to the extent and
at
the time any such amounts are released from such reserve, such amounts shall
constitute Net Cash Proceeds) and (iii) the principal amount, premium or
penalty, if any, interest and other amounts on any Indebtedness for borrowed
money which is secured by the asset sold in such Included Asset Sale or involved
in such Recovery Event and which is repaid with such proceeds (other than,
in
connection with an Included Asset Sale, any such Indebtedness assumed by the
purchaser of such asset) or (b) with respect to any Debt Issuance, the proceeds
received by any Group Member in cash or Cash Equivalents, net of reasonable
and
customary broker’s or advisor’s fees and other costs and expenses (including
attorneys’ fees) incurred in connection therewith (including, if applicable, the
cost of any Note Hedge Transaction entered into in connection with such Debt
Issuance).
19
TERM
LOAN AGREEMENT
COLLECTIVE
BRANDS FINANCE, INC.
“Non-Consenting
Lender”
has
the
meaning specified in Section
11.1(c) (Amendments, Waivers, Etc.).
“Non-U.S.
Lender”
means
each Lender (or the Administrative Agent) that is a Non-U.S.
Person.
“Non-U.S.
Person”
means
any Person that is not a Domestic Person.
“Note”
means
a
promissory note of the Borrower payable to the order of any Lender in a
principal amount equal to the amount of the Term Loan owing to such
Lender.
“Note
Hedge Transaction”
means
any note hedge transaction entered into in connection with the issuance of
Qualified Refinancing Indebtedness and which shall be paid for with the proceeds
of such Qualified Refinancing Indebtedness.
“Notice
of Borrowing”
has
the
meaning specified in Section
2.2(a) (Borrowing Procedures).
“Notice
of Conversion or Continuation”
has
the
meaning specified in Section
2.9 (Conversion/Continuation Option).
“Obligations”
means
the Term Loans and all other amounts, obligations, covenants and duties owing
by
any Loan Party to the Administrative Agent, any Lender any Affiliate of any
of
them or any Indemnitee, of every type and description (whether by reason of
an
extension of credit or payment of any draft drawn or other payment thereunder,
loan, guaranty, indemnification, foreign exchange or currency swap transaction,
interest rate hedging transaction or otherwise), present or future, arising
under this Agreement, any other Loan Document, whether direct or indirect
(including those acquired by assignment), absolute or contingent, due or to
become due, now existing or hereafter arising and however acquired and whether
or not evidenced by any note, guaranty or other instrument or for the payment
of
money, including all fees, interest, charges, expenses, attorneys’ fees and
disbursements and other sums chargeable to the Loan Parties under this Agreement
and any other Loan Document (including Hedging Contracts that are Loan
Documents).
“Optional
Debt Prepayment”
has the meaning specified in Section
8.6 (Prepayment of Indebtedness).
“Parent”
has
the
meaning specified in the preamble to this Agreement.
“Patriot
Act”
means
the USA Patriot Act of 2001 (31 U.S.C. 5318 et
seq.).
“PBGC”
means
the Pension Benefit Guaranty Corporation or any successor thereto.
20
TERM
LOAN AGREEMENT
COLLECTIVE
BRANDS FINANCE, INC.
“Permit”
means
any permit, approval, authorization, license, variance or permission required
from a Governmental Authority under an applicable Requirement of
Law.
“Permitted
Acquisition”
means
any Proposed Acquisition subject to the satisfaction of each of the following
conditions at or prior to the consummation of the Proposed
Acquisition:
(a) the
Administrative Agent shall receive prior written notice of such Proposed
Acquisition, which notice shall include, without limitation, a
reasonably
detailed
description of such
Proposed Acquisition;
(b) the
Investment in such Permitted Acquisition is permitted under clause
(i) or
(j)
of
Section
8.3 (Investments);
(c) the
Borrower (or the Parent or the Subsidiary making such Proposed Acquisition)
and
the Proposed Acquisition Target shall have executed such documents and taken
such actions as may be required under Section
7.11 (Additional Collateral and Guaranties);
(d) the
Administrative Agent shall have received copies of the agreements, related
contracts, instruments and all opinions, certificates, lien search results
and
other documents, in each case to the extent actually received by any Loan Party
(and subject to agreement to such additional confidentiality requirements as
may
be required to permit such Loan Party to deliver such copies), in each case
reasonably requested by the Administrative Agent; and
(e) at
the
time of such Proposed Acquisition and after giving effect thereto, (i) no
Default or Event of Default shall have occurred and be continuing and (ii)
all
representations and warranties contained in Article
IV (Representations and Warranties)
and in
the other Loan Documents shall be true and correct in all material respects
and
(iii) the
Parent would be in compliance with the financial covenant contained in
Section
5.1 (Financial
Covenant)
for the most recently ended Test Period, determined on a Pro Forma Basis after
giving effect to such Proposed Acquisition (and the transactions contemplated
thereby, including the incurrence or assumption of any Indebtedness in
connection therewith).
“Permitted
Payment Restriction”
means
any consensual encumbrance or restriction (each, a “restriction”)
on the
ability of any Restricted Subsidiary to (a) pay dividends or make any other
distributions on its Stock or Stock Equivalent to the Borrower, the Parent
or a
Restricted Subsidiary or pay any Indebtedness owed to the Parent or a Restricted
Subsidiary or (b) make any loans or advances to the Parent or a Restricted
Subsidiary, which restriction (i) satisfies all of the following conditions:
(x)
such restriction becomes effective only upon the occurrence of (1) specified
events under its charter or (2) a default by such Restricted Subsidiary in
the
payment of principal of or interest, a bankruptcy default, a default on any
financial covenant or any other material default, in each case on Indebtedness
that was incurred by such Restricted Subsidiary in compliance with Section
8.1 (Indebtedness)
and (y)
such restriction would not materially impair the Borrower’s ability to make
scheduled payments of cash interest and to make required principal payments
on
the Term Loans, as determined in good faith by a Responsible Officer of the
Parent or the Borrower or (ii) represents customary provisions of a Joint
Venture and relates solely to the assets, revenues and business of such Joint
Venture.
21
TERM
LOAN AGREEMENT
COLLECTIVE
BRANDS FINANCE, INC.
“Permitted
Refinancing”
means
Indebtedness constituting a refinancing or extension of Indebtedness permitted
under this Agreement that (a) has an aggregate outstanding principal amount
not
greater than the aggregate principal amount of such Indebtedness outstanding
at
the time of such refinancing or extension, (b) has a weighted average maturity
(measured as of the date of such refinancing or extension) no shorter than
that
of such Indebtedness, (c) has a maturity date no earlier than the stated
maturity of such Indebtedness; provided,
however,
that
the maturity date of any Permitted Refinancing of the Subordinated Notes shall
have a maturity date no earlier than the Term Loan Maturity Date at the time
of
such refinancing or extension, (d) has Lien and payment subordinated terms,
if
applicable, that are no less favorable to the Lenders, in each case, than the
corresponding terms of such Indebtedness and (e) is otherwise on terms, taken
as
a whole, no less favorable to the Group Members than those of such Indebtedness,
other than market interest rates and fees.
“Permitted
Sale Leaseback”
shall
mean any Sale Leaseback consummated by the Borrower or any of the Restricted
Subsidiaries with any Person that is not an Affiliate of the Borrower after
the
Closing Date; provided
that (i)
after giving effect to such Sale Leaseback, no Default or Event of Default
shall
have occurred and be continuing and (ii) any such Sale Leaseback shall be
consummated for fair value as determined at the time of consummation in good
faith by a Responsible Officer of the Borrower or the Parent.
“Person”
means
an individual, partnership, corporation (including a business trust), joint
stock company, estate, trust, limited liability company, unincorporated
association, joint venture or other entity or a Governmental
Authority.
“Pledge
and Security Agreement”
means
an agreement, in substantially the form of Exhibit G (Form
of Pledge and Security Agreement), executed
by the Borrower and each Guarantor.
“Pledged
Debt Instruments”
has
the
meaning specified in the Pledge and Security Agreement.
“Pledged
Stock”
has
the
meaning specified in the Pledge and Security Agreement.
“Proceeds”
has
the
meaning given to such term in the UCC.
“Pro
Forma Basis”
means, as to any Person, for any events as described in clauses
(i) and
(ii)
below
that occur subsequent to the commencement of a period for which the financial
effect of such events is being calculated, and giving effect to the events
for
which such calculation is being made, such calculation as will give pro
forma
effect to such events as if such events occurred on the first day of the
applicable Test Period:
(i)
in making any determination of Consolidated EBITDA or Consolidated EBITDAR,
pro
forma
effect shall be given to any Asset Sale and to any Permitted Acquisition (or
to
any similar transaction or transactions that require a waiver or consent of
the
Required Lenders pursuant to Section
8.3 (Investments) or
8.4 (Asset
Sales)),
in each case that occurred during the Test Period (or, in the case of
determinations made pursuant to the definition of “Permitted Acquisition”
occurring during the Test Period or thereafter and through and including the
date upon which the respective Permitted Acquisition is consummated); and
22
TERM
LOAN AGREEMENT
COLLECTIVE
BRANDS FINANCE, INC.
(ii)
in making any determination on a Pro Forma Basis, (x) all Indebtedness
(including Indebtedness incurred or assumed and for which the financial effect
is being calculated, whether incurred under this Agreement or otherwise incurred
or permanently repaid during the Test Period (or, in the case of determinations
made pursuant to the definition of “Permitted
Acquisition”,
occurring during the Test Period and through and including the date upon which
the respective Permitted Acquisition is consummated) shall be deemed to have
been incurred or repaid at the beginning of such period (if such Indebtedness
was incurred under the Revolving Credit Agreement, such Indebtedness shall
be
deemed to be outstanding for the entire Test Period for purposes of determining
the Senior Secured Leverage Ratio and the Total Leverage Ratio) and (y) interest
expense of such Person attributable to interest on any Indebtedness, for which
pro
forma
effect is being given as provided in preceding clause
(x),
bearing floating interest rates shall be computed on a pro
forma
basis as if the rates that would have been in effect during the period for
which
pro
forma
effect is being given had been actually in effect during such
periods.
Pro
forma
calculations made pursuant to the definition of “Pro
Forma Basis”
shall be determined in good faith by a Responsible Officer of the Borrower
and,
for any fiscal period ending on or prior to the first anniversary of a Permitted
Acquisition or Asset Sale (or any similar transaction or transactions that
require a waiver or consent of the Required Lenders pursuant to Section
8.3 (Investments) or
8.4 (Asset
Sales)),
may include adjustments to reflect operating expense reductions and other
operating improvements or synergies implemented or planned to be implemented
and
reasonably expected to result from such Permitted Acquisition, Asset Sale or
other similar transaction, to the extent that the Borrower delivers to the
Administrative Agent (i) a certificate of the Borrower signed by a Responsible
Officer setting forth such operating expense reductions and other operating
improvements or synergies and (ii) information and calculations supporting
in
reasonable detail such estimated operating expense reductions and other
operating improvements or synergies.
“Projections”
means
the then most recent financial projections of the Parent, the Target and their
respective Subsidiaries (on a combined basis) through the fiscal year ending
2014, prepared for each fiscal quarter through the end of fiscal year ending
2007 (and annually thereafter), to be delivered to the Lenders by the
Borrower.
“Proposed
Acquisition”
means
the proposed acquisition by the Borrower, the Parent or any of the Restricted
Subsidiaries of all or substantially all of the assets or Stock of any Proposed
Acquisition Target, or the merger of any Proposed Acquisition Target with or
into the Borrower, the Parent or any Subsidiary of the Parent (and, in the
case
of a merger with the Borrower, with the Borrower being the surviving
corporation).
“Proposed
Acquisition Target”
means
any Person or group of Persons engaged in a particular line of business or
any
operating division thereof subject to a Proposed Acquisition.
“Purchasing
Lender”
has
the
meaning specified in Section
11.7 (Sharing of Payments, Etc.).
“Qualified
Capital Stock”
of any
Person shall mean any Stock or Stock Equivalents of such Person that is not
Disqualified Stock.
23
TERM
LOAN AGREEMENT
COLLECTIVE
BRANDS FINANCE, INC.
“Qualified
Refinancing Indebtedness”
means
Indebtedness incurred pursuant to Section
8.1(m) (Indebtedness)
to
refinance, in part, the Obligations, in an aggregate principal amount not to
exceed $450,000,000.
“Qualified
Restricted Subsidiary”
means
any Restricted Subsidiary that is not a Loan Party and that satisfies each
of
the following requirements: (i) except for Permitted Payment Restrictions,
there
are no restrictions, directly or indirectly, on the ability of such Restricted
Subsidiary to pay dividends or make distributions to the holders of its Stock
and Stock Equivalents; and (ii) the Stock and Stock Equivalents of such
Restricted Subsidiary consist of Stock and Stock Equivalents majority owned
by
the Parent and its Qualified Restricted Subsidiaries.
“Ratable
Portion”
or
(other than in the expression “equally
and ratably”) “ratably” means,
with respect to any Lender, the percentage obtained by dividing (a) the Term
Loan Commitment of such Lender by (b) the aggregate Term Loan Commitments of
all
Lenders (or, at any time after the funding of the Closing Date Term Loans,
the
percentage obtained by dividing the principal amount of such Lender’s Term Loans
by the aggregate Term Loans of all Lenders).
“Real
Property”
of
any
Person means the Land of such Person, together with the right, title and
interest of such Person, if any, in and to the streets, the Land lying in the
bed of any streets, roads or avenues, opened or proposed, in front of, the
air
space and development rights pertaining to the Land and the right to use such
air space and development rights, all rights of way, privileges, liberties,
tenements, hereditaments and appurtenances belonging or in any way appertaining
thereto, all fixtures, all easements now or hereafter benefiting the Land and
all royalties and rights appertaining to the use and enjoyment of the Land,
including all alley, vault, drainage, mineral, water, oil and gas rights,
together with all of the buildings and other improvements now or hereafter
erected on the Land and any fixtures appurtenant thereto.
“Recovery
Event”
means
any settlement of or payment in respect of any property or casualty insurance
claim or any taking under power of eminent domain or by condemnation or similar
proceeding of or relating to any property or asset of the Parent or any of
the
Restricted Subsidiaries other than any settlement, payment, taking or proceeding
that results in cash consideration of less than $1,000,000,
individually.
“Register”
has
the
meaning specified in Section
2.5(b) (Evidence of Debt).
“Regulation
S-X”
means
Regulation S-X under the Securities Act of 1933, as amended from time to time,
and any successor statute.
“Related
Documents”
means
the Merger Agreement, the Subordinated Notes Indenture, the Revolving Credit
Agreement and each other document and instrument executed with respect to any
of
the foregoing.
“Release”
means,
with respect to any Person, any release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration,
in
each case, of any Hazardous Material into the indoor or outdoor environment
or
into or out of any property owned, leased or operated by such Person, including
the movement of Hazardous Materials through or in the air, soil, surface water,
ground water or property.
24
TERM
LOAN AGREEMENT
COLLECTIVE
BRANDS FINANCE, INC.
“Remedial
Action”
means
all actions required to (a) clean up, remove, treat or in any other way address
any Hazardous Material in the indoor or outdoor environment, (b) prevent the
Release or threat of Release or minimize the further Release so that a Hazardous
Material does not migrate or endanger or threaten to endanger public health
or
welfare or the indoor or outdoor environment or (c) perform pre-remedial studies
and investigations and post-remedial monitoring and care.
“Requirement
of Law”
means,
with respect to any Person, the common law and all federal, state, local and
foreign laws, treaties, rules and regulations, orders, judgments, decrees and
other determinations of, concessions, grants, franchises, licenses and other
Contractual Obligations with, any Governmental Authority or arbitrator,
applicable to or binding upon such Person or any of its property or to which
such Person or any of its property is subject.
“Requisite
Lenders”
means,
collectively, Lenders having more than 50% of the aggregate outstanding amount
of the Term Loan Commitments or, after the funding of the Closing Date Term
Loans, more than fifty percent (50%) of the principal amount of all Term Loans
then outstanding.
“Responsible
Officer”
means,
with respect to any Person, any of the principal executive officers, managing
members or general partners of such Person but, in any event, with respect
to
financial matters, the chief financial officer, treasurer or controller of
such
Person.
“Restricted
Payment”
means
(a) any dividend, distribution or any other payment whether direct or indirect,
on account of any Stock or Stock Equivalent of the Borrower, the Parent or
any
Restricted Subsidiary now or hereafter outstanding and (b) any redemption,
retirement, sinking fund or similar payment, purchase or other acquisition
for
value, direct or indirect, of any Stock or Stock Equivalent of the Borrower,
the
Parent or any Restricted Subsidiary now or hereafter outstanding.
“Restricted
Subsidiary”
means
each direct and indirect Subsidiary of the Parent other than one that has been
designated as an Unrestricted Subsidiary by the Parent in accordance with the
terms of this Agreement.
“Revolving
Credit Agent”
means
Xxxxx Fargo Retail Finance, LLC, in its capacity as administrative agent under
the Revolving Credit Agreement.
“Revolving
Credit Agreement”
means
that certain Amended and Restated Loan and Guaranty Agreement, dated as of
the
date hereof, among the Borrower, the institutions party thereto as lenders,
the
Revolving Credit Agent, and Citigroup Global Markets Inc., as co-lead arranger
thereunder.
“Revolving
Credit Loan Documents”
means,
collectively, the Revolving Credit Agreement, all guaranties, pledges, security
agreements and similar agreements entered into in connection therewith to
guaranty or secure any Revolving Credit Obligations and each other certificate,
agreement and other document entered into in connection therewith (other than
the Intercreditor Agreement).
“Revolving
Credit Obligations”
means
the “Obligations”
under
and as defined in the Revolving Credit Agreement.
25
TERM
LOAN AGREEMENT
COLLECTIVE
BRANDS FINANCE, INC.
“S&P”
means
Standard & Poor’s Rating Services.
“Sale
Leaseback”
shall
mean any transaction or series of related transactions pursuant to which the
Borrower or any of the Restricted Subsidiaries (i) sells, transfers or otherwise
disposes of any property, real or personal, whether now owned or hereafter
acquired, and (ii) as part of such transaction, thereafter rents or leases
such
property or other property that it intends to use for substantially the same
purpose or purposes as the property being sold, transferred or
disposed.
“Xxxxxxxx-Xxxxx
Act”
means
the United States Xxxxxxxx-Xxxxx Act of 2002.
“Secured
Obligations”
means,
in the case of the Borrower, the Obligations and, in the case of any other
Loan
Party, the obligations of such Loan Party under the Guaranty and the other
Loan
Documents to which it is a party.
“Secured
Parties”
means
the Lenders, the Administrative Agent and any other holder of any Secured
Obligation.
“Securities
Account”
has
the
meaning given to such term in the UCC.
“Securities
Account Control Agreement”
has
the
meaning specified in the Pledge and Security Agreement.
“Security”
means
any Stock, Stock Equivalent, voting trust certificate, bond, debenture, note
or
other evidence of Indebtedness, whether secured, unsecured, convertible or
subordinated, or any certificate of interest, share or participation in, any
temporary or interim certificate for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing, but shall
not
include any evidence of the Obligations.
“Selling
Lender”
has
the
meaning specified in Section
11.7 (Sharing of Payments, Etc.).
“Senior
Secured Leverage Ratio”
means,
as of any date of determination, the ratio of (a) Consolidated Funded
Indebtedness of the Parent and the Restricted Subsidiaries that is secured
by
Liens outstanding as of such date (minus the cash and Cash Equivalents of the
Loan Parties that are not subject to any Lien securing Indebtedness other than
the Obligations or Revolving Credit Obligations) to (b) the aggregate amount
of
Consolidated EBITDA of the Parent and the Restricted Subsidiaries for the most
recently ended Test Period.
“Solvent”
means,
with respect to any Person as of any date of determination, that, as of such
date, (a) the value of the assets of such Person (both at fair value and present
fair saleable value) is greater than the total amount of liabilities (including
contingent and unliquidated liabilities) of such Person, (b) such Person is
able
to pay all liabilities of such Person as such liabilities mature and (c) such
Person does not have unreasonably small capital. In computing the amount of
contingent or unliquidated liabilities at any time, such liabilities shall
be
computed at the amount that, in light of all the facts and circumstances
existing at such time, represents the amount that can reasonably be expected
to
become an actual or matured liability.
“Special
Purpose Vehicle”
means
any special purpose funding vehicle identified as such in writing by any Lender
to the Administrative Agent.
26
TERM
LOAN AGREEMENT
COLLECTIVE
BRANDS FINANCE, INC.
“Stock”
means
shares of capital stock (whether denominated as common stock or preferred
stock), beneficial, partnership or membership interests, participations or
other
equivalents (regardless of how designated) of or in a corporation, partnership,
limited liability company or equivalent entity, whether voting or
non-voting.
“Stock
Equivalents”
means
all securities convertible into or exchangeable for Stock and all warrants,
options or other rights to purchase or subscribe for any Stock, whether or
not
presently convertible, exchangeable or exercisable.
“Subordinated
Notes”
means
the 8.25% Senior Subordinated Notes due 2013 issued pursuant to the Subordinated
Notes Indenture.
“Subordinated
Notes Indenture”
means
the Indenture, dated as of July 28, 2003, between the Borrower and Xxxxx Fargo
Bank Minnesota, National Association, as trustee.
“Subsidiary”
means,
with respect to any Person, any corporation, partnership, limited liability
company or other business entity of which an aggregate of 50% or more of the
outstanding Voting Stock is, at the time, directly or indirectly, owned or
controlled by such Person or one or more Subsidiaries of such
Person.
“Substitute
Institution”
has
the
meaning specified in Section
2.15 (Substitution of Lenders).
“Substitution
Notice”
has
the
meaning specified in Section
2.15 (Substitution of Lenders).
“Target”
means
The Stride Rite Corporation, a Massachusetts corporation.
“Target
Credit Agreement”
means
that certain Credit Agreement, dated as of September 16, 2005, among the Target,
the institutions party thereto as lenders and Bank of America, N.A. as
administrative agent thereunder, among others.
“Tax
Affiliate”
means,
with respect to any Person, (a) any Subsidiary of such Person and (b) any
Affiliate of such Person with which such Person files or is eligible to file
consolidated, combined or unitary tax returns; provided,
that
when used with respect the Borrower or Parent, the term “Tax
Affiliate”
shall
not include any Unrestricted Subsidiary.
“Tax
Return”
has
the
meaning specified in Section
4.8(a) (Taxes).
“Taxes”
has
the
meaning specified in Section
2.14(a) (Taxes).
“Term
Loans”
means,
collectively, the Closing Date Term Loans and the Incremental Term
Loans.
“Term
Loan Commitment”
means,
with respect to each Lender, (a) the commitment of such Lender to make its
Term
Loans to the Borrower in the aggregate principal amount not to exceed the amount
set forth opposite such Lender’s name on Schedule
I (Term Loan Commitments)
under
the caption “Term
Loan Commitment”
as
amended to reflect each Assignment and Acceptance executed by such Lender and
as
such amount may be reduced pursuant to this Agreement, and (b) any commitment
by
such Lender that is included as part of a Facility Increase to make its
Incremental Term Loans to the Borrower on any Facility Increase Date, as such
amount may be reduced pursuant to this Agreement. “Term
Loan Commitments”
means
the aggregate Term Loan Commitments of all Lenders.
27
TERM
LOAN AGREEMENT
COLLECTIVE
BRANDS FINANCE, INC.
“Term
Loan Facility”
means
the Term Loan Commitments, the facility described in Section
2.1(a) (The Term Loans)
providing for Closing Date Term Loans to the Borrower by the Lenders on the
Closing Date in an aggregate principal amount of $725,000,000 and the facility
described in Section
2.1(b) (The Term Loans)
providing for one or more Incremental Term Loans to the Borrower by the
Incremental Term Loan Lenders in an aggregate principal amount not to exceed
$200,000,000.
“Term
Loan Maturity Date”
means
(i) with respect to the Closing Date Term Loan, the Closing Date Term Loan
Maturity Date and (ii) with respect to each Incremental Term Loan, the
Incremental Term Loan Maturity Date.
“Test
Period”
shall
mean, for any determination under this Agreement, the period of the most
recently ended four consecutive fiscal quarters of the Parent for which
Financial Statements have been delivered to the Administrative Agent pursuant
to
Section
6.1 (Financial Statements).
“Title
IV Plan”
means
a
pension plan, other than a Multiemployer Plan, covered by Title IV of ERISA
and
to which any Group Member or any ERISA Affiliate has any obligation or
liability, contingent or otherwise.
“Total
Assets”
means
the total amount of all assets of the Borrower, the Parent and the Restricted
Subsidiaries, determined on a Consolidated basis as shown on the most recent
balance sheet of the Parent.
“Total
Leverage Ratio”
means,
as of any date of determination, the ratio of (a) Consolidated Funded
Indebtedness of the Parent and the Restricted Subsidiaries outstanding as of
such date (minus the cash and Cash Equivalents of the Loan Parties that are
not
subject to any Lien securing Indebtedness other than the Obligations or
Revolving Credit Obligations) to (b) the aggregate amount of Consolidated EBITDA
of the Parent and the Restricted Subsidiaries for the most recently ended Test
Period.
“Total
Liabilities”
of
any
Person means, at any date, all obligations that would be included in determining
total liabilities as shown on the liabilities side of a Consolidated balance
sheet of such Person and its Subsidiaries at such date; provided,
however, that,
regardless of whether the same would be so shown, “Total
Liabilities”
of
any
Person shall include all Indebtedness of such Person or any of its Subsidiaries
at such date (other than intercompany Indebtedness) and shall exclude the
greater of the liquidation preference and the redemption price of any
outstanding Disqualified Stock of such Person at such date.
“Transactions”
means,
collectively, the transactions contemplated in the Merger Agreement, the
amendment and restatement of the Existing Revolving Credit Agreement pursuant
to
Revolving Credit Agreement, the refinancing in full of the Target Credit
Agreement, the Borrowing of the Closing Date Term Loans under this Agreement
and
the payment of related fees and expenses.
“UCC”
has
the
meaning specified in the Pledge and Security Agreement.
28
TERM
LOAN AGREEMENT
COLLECTIVE
BRANDS FINANCE, INC.
“United
States”
means
the United States of America.
“Unrestricted
Subsidiary”
means
each direct and indirect Subsidiary of the Parent that is designated by the
board of directors of the Parent as an Unrestricted Subsidiary pursuant to
a
Section
7.12 (Designation of Subsidiaries)
on or
after the Closing Date and any Subsidiary of such Unrestricted
Subsidiary.
“U.S.
Lender”
means
each Lender (or the Administrative Agent) that is a Domestic
Person.
“Voting
Stock”
means
Stock of any Person having ordinary power to vote in the election of members
of
the board of directors, managers, trustees or other controlling Persons, of
such
Person (irrespective of whether, at the time, Stock of any other class or
classes of such entity shall have or might have voting power by reason of the
happening of any contingency).
“Wholly-Owned”
means,
with respect to a Subsidiary of any Person, any Subsidiary of such Person,
all
of the Stock of which (other than director’s qualifying shares, as may be
required by law) is owned by such Person, either directly or indirectly through
one or more Wholly-Owned Subsidiaries of such Person.
“Withdrawal
Liability”
means,
with respect to the Parent or any of the Restricted Subsidiaries at any time,
the aggregate liability incurred (whether or not assessed) with respect to
all
Multiemployer Plans pursuant to Section
4201
of ERISA
or for increases in contributions required to be made pursuant to Section
4243
of
ERISA.
“Working
Capital”
means,
for any Person at any date, the amount, if any, by which the Consolidated
Current Assets of such Person at such date exceeds the Consolidated Current
Liabilities of such Person at such date.
Section
1.2 Computation
of Time Periods
In
this
Agreement, in the computation of periods of time from a specified date to
a
later specified date, the word “from” means “from
and including” and
the
words “to” and
“until” each
mean
“to
but excluding” and
the
word “through” means
“to
and including.”
Section
1.3 Accounting
Terms and Principles
(a) Except
as
set forth below, all accounting terms not specifically defined herein shall
be
construed in conformity with GAAP and all accounting determinations required
to
be made pursuant hereto shall, unless expressly otherwise provided herein,
be
made in conformity with GAAP.
(b) If
any
change in the accounting principles used in the preparation of the most recent
Financial Statements referred to in Section
6.1 (Financial
Statements)
is
hereafter required or permitted by the rules, regulations, pronouncements
and
opinions of the Financial Accounting Standards Board or the American Institute
of Certified Public Accountants (or any successors thereto) and such change
is
adopted by the Borrower with the agreement of the Borrower’s Accountants and
results in a change in any of the calculations required by Article
VIII (Negative Covenants)
that
would not have resulted had such accounting change not occurred, the parties
hereto agree to enter into negotiations in order to amend such provisions
so as
to equitably reflect such change such that the criteria for evaluating
compliance with such covenants by the Borrower shall be the same after such
change as if such change had not been made; provided, however, that no change
in
GAAP that would affect a calculation that measures compliance with any covenant
contained in Article
VIII (Negative Covenants)
shall be
given effect until such provisions are amended to reflect such changes in
GAAP.
29
TERM
LOAN AGREEMENT
COLLECTIVE
BRANDS FINANCE, INC.
Section
1.4 Conversion
of Foreign Currencies
(a) Consolidated
Funded Indebtedness.
Consolidated Funded Indebtedness denominated in any currency other than Dollars
shall be calculated using the Dollar Equivalent thereof as of the date of
the
Financial Statements on which such Consolidated Funded Indebtedness is
reflected.
(b) Dollar
Equivalents.
The
Administrative Agent shall reasonably determine the Dollar Equivalent of
any
amount as required hereby, and a determination thereof by the Administrative
Agent shall be conclusive absent manifest error. The Administrative Agent
may,
but shall not be obligated to, rely on any determination made by any Loan
Party
in any document delivered to the Administrative Agent. The Administrative
Agent
may determine or redetermine the Dollar Equivalent of any amount on any date
either in its own discretion or upon the request of any Lender.
(c) Rounding-Off.
The
Administrative Agent may set up appropriate rounding off mechanisms or otherwise
round-off amounts hereunder to the nearest higher or lower amount in whole
Dollar or cent to ensure amounts owing by any party hereunder or that otherwise
need to be calculated or converted hereunder are expressed in whole Dollars
or
in whole cents, as may be reasonably necessary or appropriate.
Section
1.5 Certain
Terms
(a) The
terms
“herein,”
“hereof,”
“hereto”
and
“hereunder”
and
similar terms refer to this Agreement as a whole and not to any particular
Article, Section, subsection or clause in, this Agreement.
(b) Unless
otherwise expressly indicated herein, (i) references in this Agreement to
an
Exhibit, Schedule, Article, Section, clause or sub-clause refer to the
appropriate Exhibit or Schedule to, or Article, Section, clause or sub-clause
in
this Agreement and (ii) the words “above”
and
“below”,
when
following a reference to a clause or a sub-clause of any Loan Document, refer
to
a clause or sub-clause within, respectively, the same Section or
clause.
(c) Each
agreement defined in this ARTICLE
I
shall
include all appendices, exhibits and schedules thereto. Unless the prior
written
consent of the Requisite Lenders or the Administrative Agent is required
hereunder or under the Intercreditor Agreement for an amendment, restatement,
supplement or other modification to any such agreement and such consent is
not
obtained, references in this Agreement to such agreement shall be to such
agreement as so amended, restated, supplemented or modified.
(d) References
in this Agreement to any statute shall be to such statute as amended or modified
from time to time and to any successor legislation thereto, in each case
as in
effect at the time any such reference is operative.
30
TERM
LOAN AGREEMENT
COLLECTIVE
BRANDS FINANCE, INC.
(e) The
term
“including”
when
used in any Loan Document means “including
without limitation”
except
when used in the computation of time periods.
(f) The
terms
“Lender”
and
“Administrative
Agent”
include, without limitation, their respective successors.
(g) Upon
the
appointment of any successor Administrative Agent pursuant to Section
10.7 (Successor Administrative Agent),
references to Citi in Section
10.4 (The Administrative Agent Individually)
and to
Citibank in the definitions of Base Rate, Dollar Equivalent, and Eurodollar
Rate
shall be deemed to refer to the financial institution then acting as the
Administrative Agent or one of its Affiliates if it so designates.
ARTICLE
II
THE
TERM LOAN FACILITY
Section
2.1 The
Term Loans
(a) Closing
Date Term Loans.
On the
terms and subject to the conditions contained in this Agreement, each Lender
severally agrees to make a loan (each a “Closing
Date Term Loan”)
in
Dollars to the Borrower on the Closing Date, in an amount not to exceed such
Lender’s Term Loan Commitment. No amount of the Closing Date Term Loan repaid or
prepaid by the Borrower may be reborrowed hereunder, and no Borrowing under
the
Term Loan Facility shall be allowed other than the advance set forth in the
first sentence of this Section
2.1(a) and
any
Incremental Term Loan advanced as part of any Facility Increase.
(b) Incremental
Term Loans.
(i) The
Borrower shall have the right to send to the Administrative Agent, after
the
Closing Date but on or prior to the Closing Date Term Loan Maturity Date,
a
Facility Increase Notice to request an increase in the aggregate principal
amount of the Term Loan Facility (each a “Facility
Increase”)
to be
effectuated by the disbursement of one or more additional Term Loans (each
an
“Incremental
Term Loan”)
in
excess of the Closing Date Term Loans, in a principal amount not to exceed
$200,000,000 in the aggregate for all such requests. The Administrative Agent
shall promptly notify each Lender of the proposed Facility Increase and of
the
proposed terms and conditions therefor agreed between the Borrower and the
Administrative Agent. Each such Lender (and each of their Affiliates and
Approved Funds) may, in its sole discretion, commit to participate in such
Facility Increase by forwarding its commitment therefor to the Administrative
Agent in form and substance reasonably satisfactory to the Administrative
Agent.
The Administrative Agent shall allocate, in its discretion (after consultation
with the Borrower) but in amounts not to exceed for each such Lender the
commitment received from such Lender, Affiliate or Approved Fund, the Term
Loan
Commitments to be made as part of the Facility Increase to the Lenders from
which it has received such written commitments; provided,
however,
the
Administrative Agent shall be entitled, after consultation with the Borrower,
to
allocate to any Eligible Assignee any amount of such Facility Increase whether
or not it has obtained commitments from existing Lenders. Each Facility Increase
shall become effective on a date agreed by the Borrower and the Administrative
Agent (each a “Facility
Increase Date”),
which
shall be in any case on or after the date of satisfaction of the conditions
precedent set forth in Section
3.2 (Conditions Precedent to Incremental Term Loans).
The
Administrative Agent shall notify the Lenders and the Borrower, on or before
1:00 p.m. (New York time) on the day following the Facility Increase Date
of the
effectiveness of the Facility Increase on the Facility Increase Date and
shall
record in the Register all applicable additional information in respect of
such
Facility Increase.
31
TERM
LOAN AGREEMENT
COLLECTIVE
BRANDS FINANCE, INC.
(ii) (A)
The
Incremental Term Loans and Term Loan Commitments extended pursuant to any
Facility Increase shall rank pari
passu
in right
of payment with all other Term Loans and Term Loan Commitments, (B) the weighted
average life to maturity of the Incremental Term Loans shall not be shorter
than
the remaining average life to maturity of the Term Loans prior to giving
effect
to such Facility Increase, (C) the Incremental Term Loan Maturity Date for
such
Incremental Term Loans shall not be earlier than the Closing Date Term Loan
Maturity Date, (D) the interest rate margins or yield to maturity applicable
to
such Incremental Term Loans shall not be more than 0.50% per annum higher
than
the interest rate margins or yield to maturity applicable to the Term Loans
prior to giving effect to such Facility Increase, unless the interest rate
margins or yield to maturity with respect to the Term Loans are increased
by an
amount equal to the difference between the interest rate margins or yield
to
maturity with respect to the Incremental Term Loans and the corresponding
interest rate margins or yield to maturity for the Term Loans minus
0.50%,
(E) all other terms of such Incremental Term Loans, if not consistent with
the
terms of the existing Term Loan Facility, shall be as agreed between the
Borrower and the Lenders providing such Incremental Term Loans, and (F) after
giving effect to such Facility Increase, the Senior Secured Leverage Ratio,
determined on a Pro Forma Basis, shall be less than 3.0 to 1.
(iii) Any
Facility Increase will be effected in accordance with procedures reasonably
satisfactory to the Administrative Agent. Nothing in this Agreement shall
be
construed to obligate any Lender to negotiate for (whether or not in good
faith), solicit, provide or consent to any increase in the Term Loan
Commitments, and any such increase may be subject to changes in any term
of this
Agreement reasonably acceptable to the Administrative Agent and the
Borrower.
Section
2.2 Borrowing
Procedures
(a) Each
Borrowing shall be made on notice given by the Borrower to the Administrative
Agent not later than 11:00 a.m. (New York time) (i) one Business Day, in
the
case of a Borrowing of Base Rate Loans and (ii) three Business Days, in the
case
of a Borrowing of Eurodollar Rate Loans, prior to the date of the proposed
Borrowing. Each such notice shall be in substantially the form of Exhibit C (Form
of Notice of Borrowing)
(a
“Notice
of Borrowing”),
specifying, (A) the date of such proposed Borrowing (which, in the case of
the
Closing Date Term Loan Borrowing, shall be the Closing Date), (B) the aggregate
amount of such proposed Borrowing, (C) whether any portion of the proposed
Borrowing will be of Base Rate Loans or Eurodollar Rate Loans and (D) for
each
Eurodollar Rate Loan, the initial Interest Period or Periods thereof. Term
Loans
shall be made as Base Rate Loans unless, subject to Section
2.12 (Special
Provisions Governing Eurodollar Rate Loans),
the
Notice of Borrowing specifies that all or a portion thereof shall be Eurodollar
Rate Loans.
32
TERM
LOAN AGREEMENT
COLLECTIVE
BRANDS FINANCE, INC.
(b) The
Administrative Agent shall give to each Lender prompt notice of the
Administrative Agent’s receipt of a Notice of Borrowing and, if Eurodollar Rate
Loans are properly requested in such Notice of Borrowing, the applicable
interest rate determined pursuant to Section
2.12(a) (Determination
of Interest Rate).
Each
Lender shall, before 11:00 am. (New York time) on the date of the proposed
Borrowing, make available to the Administrative Agent at its address referred
to
in Section
11.8 (Notices,
Etc.),
in
immediately available funds, such Lender’s Ratable Portion of such proposed
Borrowing. Upon fulfillment (or due waiver in accordance with Section
11.1 (Amendments,
Waivers, Etc.))
(i) on
the Closing Date, of the applicable conditions set forth in Section
3.1 (Conditions
Precedent to Closing Date Term
Loans)
and
(ii) at any time (including the Closing Date), of the applicable conditions
set
forth in Section
3.2
(Conditions
Precedent to Incremental Term Loans),
and
after the Administrative Agent’s receipt of such funds, the Administrative Agent
shall make such funds available to the Borrower.
(c) Unless
the Administrative Agent shall have received notice from a Lender prior to
the
date of any proposed Borrowing that such Lender will not make available to
the
Administrative Agent such Lender’s Ratable Portion of such Borrowing (or any
portion thereof), the Administrative Agent may assume that such Lender has
made
such Ratable Portion available to the Administrative Agent on the date of
such
Borrowing in accordance with this Section
2.2
and the
Administrative Agent may, in reliance upon such assumption, make available
to
the Borrower on such date a corresponding amount. If and to the extent that
such
Lender shall not have so made such Ratable Portion available to the
Administrative Agent, such Lender and the Borrower severally agree to repay
to
the Administrative Agent forthwith on demand such corresponding amount together
with interest thereon, for each day from the date such amount is made available
to the Borrower until the date such amount is repaid to the Administrative
Agent, at (i) in the case of the Borrower, the interest rate applicable at
the
time to the Term Loans comprising such Borrowing and (ii) in the case of
such
Lender, the Federal Funds Rate for the first Business Day and thereafter
at the
interest rate applicable at the time to the Term Loans comprising such
Borrowing. If such Lender shall repay to the Administrative Agent such
corresponding amount, such corresponding amount so repaid shall constitute
such
Lender’s Term Loan as part of such Borrowing for purposes of this Agreement. If
the Borrower shall repay to the Administrative Agent such corresponding amount,
such payment shall not relieve such Lender of any obligation it may have
hereunder to the Borrower.
(d) The
failure of any Lender to make on the date specified any Term Loan or any
payment
required by it shall not relieve any other Lender of its obligations to make
such Term Loan or payment on such date but no such other Lender shall be
responsible for the failure of any Lender to make a Term Loan or payment
required under this Agreement.
Section
2.3 Reduction
and Termination of the Term Loan Commitments
(a) Any
unused Term Loan Commitment (other than with respect to a Facility Increase)
shall terminate on the Closing Date.
Section
2.4 Repayment
of Term Loans
(a) The
Borrower promises to repay the Closing Date Term Loans at the dates and in
the
amounts set forth below:
33
TERM
LOAN AGREEMENT
COLLECTIVE
BRANDS FINANCE, INC.
|
DATE
|
AMOUNT
|
|
December
31, 2007
|
$1,812,500
|
|
March
31, 2008
|
$1,812,500
|
|
June
30, 2008
|
$1,812,500
|
|
September
30, 2008
|
$1,812,500
|
|
December
31, 2008
|
$1,812,500
|
|
March
31, 2009
|
$1,812,500
|
|
June
30, 2009
|
$1,812,500
|
|
September
30, 2009
|
$1,812,500
|
|
December
31, 2009
|
$1,812,500
|
|
March
31, 2010
|
$1,812,500
|
|
June
30, 2010
|
$1,812,500
|
|
September
30, 2010
|
$1,812,500
|
|
December
31, 2010
|
$1,812,500
|
|
March
31, 2011
|
$1,812,500
|
|
June
30, 2011
|
$1,812,500
|
|
September
30, 2011
|
$1,812,500
|
|
December
31, 2011
|
$1,812,500
|
|
March
31, 2012
|
$1,812,500
|
|
June
30, 2012
|
$1,812,500
|
|
September
30, 2012
|
$1,812,500
|
|
December
31, 2012
|
$1,812,500
|
|
March
31, 2013
|
$1,812,500
|
|
June
30, 2013
|
$1,812,500
|
|
September
30, 2013
|
$1,812,500
|
|
December
31, 2013
|
$1,812,500
|
|
March
31, 2014
|
$1,812,500
|
|
June
30, 2014
|
$1,812,500
|
|
Term
Loan Maturity Date
|
$676,062,500;
|
provided,
however,
that
the Borrower shall repay the entire unpaid principal amount of the Term Loans
on
the Closing Date Term Loan Maturity Date.
(b) The
Borrower promises to repay the Incremental Term Loans on the dates and in
the
amounts to be agreed by the Administrative Agent and the Borrower prior to
the
applicable Facility Increase Date; provided,
however,
that
the Borrower shall repay the entire unpaid principal amount of each such
Incremental Term Loan on the Incremental Term Loan Maturity Date.
(c) Payless
ShoeSource, Inc., a Missouri corporation, and Payless ShoeSource Distribution,
Inc., a Kansas corporation, hereby agree that, in addition to and without
limitation to the obligations of such parties as Guarantors pursuant to the
Guaranty, such parties hereby agree, in respect to the Obligations, to be
jointly and severally liable with the Borrower as if such parties were borrowers
hereunder.
34
TERM
LOAN AGREEMENT
COLLECTIVE
BRANDS FINANCE, INC.
Section
2.5 Evidence
of Debt
(a) Each
Lender shall maintain in accordance with its usual practice an account or
accounts evidencing Indebtedness of the Borrower to such Lender resulting
from
each Term Loan of such Lender from time to time, including the amounts of
principal and interest payable and paid to such Lender from time to time
under
this Agreement.
(b) (i) The
Administrative Agent, acting as agent of the Borrower solely for this purpose
and for tax purposes, shall establish and maintain at its address referred
to in
Section
11.8 (Notices, Etc.)
a record
of ownership (the “Register”)
in
which the Administrative Agent agrees to register by book entry the
Administrative Agent’s, each Lender’s interest in each Term Loan and in the
right to receive any payments hereunder and any assignment of any such interest
or rights. In addition, the Administrative Agent, acting as agent of the
Borrower solely for this purpose and for tax purposes, shall establish and
maintain accounts in the Register in accordance with its usual practice in
which
it shall record (i) the names and addresses of the Lenders, (ii) the Term
Loan
Commitments of each Lender from time to time, (iii) the amount of each Term
Loan
made and, if a Eurodollar Rate Loan, the Interest Period applicable thereto,
(iv) the amount of any principal or interest due and payable, and paid, by
the
Borrower to, or for the account of, each Lender hereunder and (v) the amount
of
any sum received by the Administrative Agent hereunder from the Borrower,
whether such sum constitutes principal or interest (and the type of Term
Loan to
which it applies), fees, expenses or other amounts due under the Loan Documents
and each Lender’s share thereof, if applicable.
(i) Notwithstanding
anything to the contrary contained in this Agreement, the Term Loans (including
the Notes evidencing such Term Loans) are registered obligations and the
right,
title, and interest of the Lenders and their assignees in and to such Term
Loans, as the case may be, shall be transferable only upon notation of such
transfer in the Register. A Note shall only evidence the Lender’s or a
registered assignee’s right, title and interest in and to the related Term Loan.
This Section
2.5(b) and
Section
11.2 (Assignments
and Participations)
shall be
construed so that the Term Loans are at all times maintained in “registered
form”
within
the meaning of Sections
163(f), 871(h)(2)
and
881(c)(2)
of the
Code and any related regulations (or any successor provisions of the Code
or
such regulations).
(c) The
entries made in the Register and in the accounts therein maintained pursuant
to
clauses
(a)
and
(b)
above
shall, to the extent permitted by applicable law, be prima
facie
evidence
of the existence and amounts of the obligations recorded therein; provided,
however,
that
the failure of any Lender or the Administrative Agent to maintain such accounts
or any error therein shall not in any manner affect the obligations of the
Borrower to repay the Term Loans in accordance with their terms. In addition,
the Loan Parties, the Administrative Agent and the Lenders shall treat each
Person whose name is recorded in the Register as a Lender for all purposes
of
this Agreement. Information contained in the Register with respect to any
Lender
shall be available for inspection by the Borrower, the Administrative Agent
or
such Lender at any reasonable time and from time to time upon reasonable
prior
notice.
(d) Notwithstanding
any other provision of the Agreement, in the event that any Lender requests
that
the Borrower execute and deliver a promissory note or notes payable to such
Lender in order to evidence the Indebtedness owing to such Lender by the
Borrower hereunder, the Borrower shall promptly execute and deliver a Note
or
Notes to such Lender evidencing any Term Loans of such Lender, substantially
in
the forms of Exhibit
B
(Form
of Term Note).
35
TERM
LOAN AGREEMENT
COLLECTIVE
BRANDS FINANCE, INC.
Section
2.6 Optional
Prepayments
(a) The
Borrower may, upon at least three Business Days’ prior notice to the
Administrative Agent stating the proposed date and aggregate principal amount
of
the prepayment, prepay the outstanding principal amount of the Term Loans,
in
whole or in part, together with accrued interest to the date of such prepayment
on the principal amount prepaid; provided,
however,
that if
any prepayment of any Eurodollar Rate Loan is made by the Borrower other
than on
the last day of an Interest Period for such Term Loan, the Borrower shall
also
pay any amounts owing pursuant to Section
2.12(e) (Breakage Costs);
and,
provided,
further,
that
each partial prepayment shall be in an aggregate amount not less than $1,000,000
or integral multiples of $500,000 in excess thereof and that any such partial
prepayment shall be applied to reduce ratably the remaining installments
of such
outstanding principal amount of the Term Loans in the stated order of their
maturities. Upon the giving of such notice of prepayment, the principal amount
of the Term Loans specified to be prepaid shall become due and payable on
the
date specified for such prepayment.
(b) The
Borrower shall have no right to prepay the principal amount of any Term Loan
other than as provided in this
Section 2.6.
Section
2.7 Mandatory
Prepayments
(a) Upon
receipt by the Borrower, the Parent or any of the Restricted Subsidiaries
of Net
Cash Proceeds arising from an Included Asset Sale, Recovery Event or Debt
Issuance (other than (i) a Debt Issuance permitted pursuant to clauses
(a) through
(l)
of
Section
8.1 (Indebtedness)
and (ii)
any Debt Issuance permitted pursuant to clause
(m)
of
Section
8.1 (Indebtedness)
in
excess of the first $450,000,000 in principal amount thereof) the Borrower
shall
prepay the Term Loans. Any such mandatory prepayment shall be applied in
accordance with clause
(c)
below.
(b) The
Borrower shall prepay the Term Loans within 120 days after the last day of
each
fiscal year (beginning with the fiscal year ended January 31, 2009), in an
amount equal to 25% of Excess Cash Flow for such fiscal year; provided,
that the
amount of such prepayment shall be reduced to 0% of such Excess Cash Flow
if the
Total Leverage Ratio of the Borrower at the end of such fiscal year is less
than
2.0 to 1. Any such mandatory prepayment shall be applied in accordance with
clause (c)
below.
(c) Subject
to the provisions of Section
2.11(g) (Payments
and Computations),
any
prepayments made by the Borrower required to be applied in accordance with
this
clause (c)
shall be
applied to reduce ratably the remaining installments of such outstanding
principal amount of the Term Loans on a pro rata
basis.
Section
2.8 Interest
(a) Rate
of Interest.
All
Term Loans and the outstanding amount of all other Obligations (other than
pursuant to Hedging Contracts that are Loan Documents, to the extent such
Hedging Contracts provide for the accrual of interest on unpaid obligations)
shall bear interest, in the case of Term Loans, on the unpaid principal amount
thereof from the date such Term Loans are made and, in the case of such other
Obligations, from the date such other Obligations are due and payable until,
in
all cases, paid in full, except as otherwise provided in clause
(c)
below,
as follows:
36
TERM
LOAN AGREEMENT
COLLECTIVE
BRANDS FINANCE, INC.
(i) if
a Base
Rate Loan or such other Obligation, at a rate per annum equal to the sum
of (A)
the Base Rate as in effect from time to time and (B) the Applicable Margin
in
effect from time to time; and
(ii) if
a
Eurodollar Rate Loan, at a rate per annum equal to the sum of (A) the Eurodollar
Rate determined for the applicable Interest Period and (B) the Applicable
Margin
in effect from time to time during such Eurodollar Interest Period.
(b) Interest
Payments.
(i)
Interest accrued on each Base Rate Loan shall be payable in arrears (A) on
the
first Business Day of each calendar month, commencing on the first such day
following the making of such Base Rate Loan, (B) upon the payment or prepayment
thereof in full or in part and (C) if not previously paid in full, at maturity
(whether by acceleration or otherwise) of such Base Rate Loan, (ii) interest
accrued on each Eurodollar Rate Loan shall be payable in arrears (A) on the
last
day of each Interest Period applicable to such Eurodollar Rate Loan and,
if such
Interest Period has a duration of more than three months, on each date during
such Interest Period occurring every three months from the first day of such
Interest Period, (B) upon the payment or prepayment thereof in full or in
part
and (C) if not previously paid in full, at maturity (whether by acceleration
or
otherwise) of such Eurodollar Rate Loan and (iii) interest accrued on the
amount
of all other Obligations shall be payable on demand from and after the time
such
Obligation becomes due and payable (whether by acceleration or
otherwise).
(c) Default
Interest.
Notwithstanding the rates of interest specified in clause (a)
above or
elsewhere herein, if the Borrower shall default in the payment of the principal
of or interest on any Term Loan or any other amount becoming due hereunder,
by
acceleration or otherwise, the Borrower shall on demand from time to time
pay
interest on such defaulted amount up to (but not including) the date of actual
payment (after as well as before judgment) at a rate that is two percent
per
annum in excess of the rate of interest applicable to such Term Loan or other
Obligation from time to time. Such interest shall be payable on the date
that
would otherwise be applicable to such interest pursuant to clause
(b)
above or
otherwise on demand.
Section
2.9 Conversion/Continuation
Option
(a) The
Borrower may elect (i) at any time on any Business Day to convert Base Rate
Loans or any portion thereof to Eurodollar Rate Loans and (ii) at the end
of any
applicable Interest Period, to convert Eurodollar Rate Loans or any portion
thereof into Base Rate Loans or to continue such Eurodollar Rate Loans or
any
portion thereof for an additional Interest Period; provided,
however,
that
the aggregate amount of the Eurodollar Rate Loans for each Interest Period
must
be in the amount of at least $5,000,000 or an integral multiple of $1,000,000
in
excess thereof. Each conversion or continuation shall be allocated among
the
Term Loans of each Lender in accordance with such Lender’s Ratable Portion. Each
such election shall be in substantially the form of Exhibit D
(Form
of Notice of Conversion or Continuation)
(a
“Notice
of Conversion or Continuation”)
and
shall be made by giving the Administrative Agent at least three Business
Days’
prior written notice specifying (A) the amount and type of Term Loan being
converted or continued, (B) in the case of a conversion to or a continuation
of
Eurodollar Rate Loans, the applicable Interest Period and (C) in the case
of a
conversion, the date of such conversion.
37
TERM
LOAN AGREEMENT
COLLECTIVE
BRANDS FINANCE, INC.
(b) The
Administrative Agent shall promptly notify each Lender of its receipt of
a
Notice of Conversion or Continuation and of the options selected therein.
Notwithstanding the foregoing, no conversion in whole or in part of Base
Rate
Loans to Eurodollar Rate Loans and no continuation in whole or in part of
Eurodollar Rate Loans upon the expiration of any applicable Interest Period
shall be permitted at any time at which (A) a Default or an Event of Default
shall have occurred and be continuing or (B) the continuation of, or conversion
into, a Eurodollar Rate Loan would violate any provision of Section
2.12 (Special Provisions Governing Eurodollar Rate Loans).
If,
within the time period required under the terms of this Section
2.9,
the
Administrative Agent does not receive a Notice of Conversion or Continuation
from the Borrower containing a permitted election to continue any Eurodollar
Rate Loans for an additional Interest Period or to convert any such Term
Loans,
then, upon the expiration of the applicable Interest Period, such Term Loans
shall be automatically converted to Base Rate Loans. Each Notice of Conversion
or Continuation shall be irrevocable.
Section
2.10 Fees
The
Parent has agreed to pay to the Administrative Agent and the Arrangers
additional fees, the amount and dates of payment of which are embodied in
the
Fee Letter.
Section
2.11 Payments
and Computations
(a) The
Borrower shall make each payment hereunder (including fees and expenses)
not
later than 11:00 a.m. (New York time) on the day when due, in the currency
specified herein (or, if no such currency is specified, in Dollars) to the
Administrative Agent at its address referred to in Section
11.8 (Notices, Etc.)
in
immediately available funds without set-off or counterclaim. The Administrative
Agent shall promptly thereafter cause to be distributed immediately available
funds relating to the payment of principal, interest or fees to the Lenders,
in
accordance with the application of payments set forth in clause
(f)
or
(g)
below,
as applicable, for the account of their respective Applicable Lending Offices;
provided,
however,
that
amounts payable pursuant to Section
2.13 (Capital Adequacy),
Section
2.14 (Taxes) or
Section
2.12(c)
or
(d) (Special
Provisions Governing Eurodollar Rate Loans) shall
be
paid only to the affected Lender or Lenders. Payments received by the
Administrative Agent after 11:00 a.m. (New York time) shall be deemed to
be
received on the next Business Day.
(b) All
computations of interest and of fees shall be made by the Administrative
Agent
on the basis of a year of 360 days (or, in the case of Term Loans bearing
interest based on Citibank’s base rate, 365 days), in each case for the actual
number of days (including the first day but excluding the last day) occurring
in
the period for which such interest and fees are payable. Each determination
by
the Administrative Agent of a rate of interest hereunder shall be conclusive
and
binding for all purposes, absent manifest error.
(c) Each
payment by the Borrower of any Term Loan (including interest or fees in respect
thereof) and each reimbursement of various costs, expenses or other Obligation
shall be made in the currency in which such Term Loan was made or such cost,
expense or other Obligation was incurred; provided,
however,
that
other than for payments in respect of a Term Loan, Loan Documents duly executed
by the Administrative Agent or any Hedging Contract may specify other currencies
of payment for Obligations created by or directly related to such Loan Document
or Hedging Contract.
38
TERM
LOAN AGREEMENT
COLLECTIVE
BRANDS FINANCE, INC.
(d) Whenever
any payment hereunder shall be stated to be due on a day other than a Business
Day, the due date for such payment shall be extended to the next succeeding
Business Day, and such extension of time shall in such case be included in
the
computation of payment of interest or fees, as the case may be; provided,
however,
that if
such extension would cause payment of interest on or principal of any Eurodollar
Rate Loan to be made in the next calendar month, such payment shall be made
on
the immediately preceding Business Day. All repayments of any Term Loans
shall
be applied as follows: first,
to
repay such Term Loans outstanding as Base Rate Loans and then,
to
repay such Term Loans outstanding as Eurodollar Rate Loans, with those
Eurodollar Rate Loans having earlier expiring Eurodollar Interest Periods
being
repaid prior to those having later expiring Eurodollar Interest
Periods.
(e) Unless
the Administrative Agent shall have received notice from the Borrower prior
to
the date on which any payment is due hereunder that the Borrower will not
make
such payment in full, the Administrative Agent may assume that the Borrower
has
made such payment in full to the Administrative Agent on such date and the
Administrative Agent may, in reliance upon such assumption, cause to be
distributed to each Lender on such due date an amount equal to the amount
then
due such Lender. If and to the extent that the Borrower shall not have made
such
payment in full to the Administrative Agent, each Lender shall repay to the
Administrative Agent forthwith on demand such amount distributed to such
Lender
together with interest thereon (at the Federal Funds Rate for the first Business
Day and thereafter, at the rate applicable to Base Rate Loans) for each day
from
the date such amount is distributed to such Lender until the date such Lender
repays such amount to the Administrative Agent.
(f) Except
for payments and other amounts received by the Administrative Agent and applied
in accordance with the provisions of clause
(g)
below
(or required to be applied in accordance with Section
2.7(c) (Mandatory Prepayments)),
all
payments and any other amounts received by the Administrative Agent from
or for
the benefit of the Borrower shall be applied as follows: first,
to pay
principal of, and interest on, any portion of the Term Loans the Administrative
Agent may have advanced pursuant to the express provisions of this Agreement
on
behalf of any Lender, for which the Administrative Agent has not then been
reimbursed by such Lender or the Borrower, second,
to pay
all other Obligations then due and payable and third,
as the
Borrower so designates. Payments in respect of the Term Loans received by
the
Administrative Agent shall be distributed to each Lender in accordance with
such
Lender’s Ratable Portion of the Term Loans and all payments of fees and all
other payments in respect of any other Obligation shall be allocated among
such
of the Lenders as are entitled thereto and, for such payments allocated to
the
Lenders, in proportion to their respective Ratable Portions.
(g) The
Borrower hereby irrevocably waives the right to direct the application of
any
and all payments in respect of the Obligations and any proceeds of Collateral
after the occurrence and during the continuance of an Event of Default and
agrees that, notwithstanding the provisions of Section
2.7(c) (Mandatory Prepayments)
and
clause
(f)
above,
the Administrative Agent may, and, upon either (A) the written direction
of the
Requisite Lenders or (B) the acceleration of the Obligations pursuant to
Section
9.2 (Remedies)
shall,
subject to the provisions of the Intercreditor Agreement, apply all payments
in
respect of any Obligations and all other proceeds of Collateral in the following
order:
39
TERM
LOAN AGREEMENT
COLLECTIVE
BRANDS FINANCE, INC.
(i) first,
to pay
Secured Obligations in respect of any expense reimbursements or indemnities
then
due to the Administrative Agent;
(ii) second,
to pay
Secured Obligations in respect of any expense reimbursements or indemnities
then
due to the Lenders;
(iii) third,
to pay
Secured Obligations in respect of any fees then due to the Administrative
Agent
and the Lenders;
(iv) fourth,
to pay
interest then due and payable in respect of the Term Loans;
(v) fifth,
to pay
or prepay principal amounts on the Term Loans, ratably to the aggregate
principal amount of such Term Loans;
(vi) sixth,
to pay
amounts owing with respect to Hedging Contracts, ratable to the aggregate
principal amount of such Obligations owing with respect to Hedging Contracts;
and
(vii) seventh,
to
the
ratable payment of all other Secured Obligations;
provided,
however,
that if
sufficient funds are not available to fund all payments to be made in respect
of
any Secured Obligation described in any of clauses
(i),
(ii),
(iii),
(iv),
(v),
(vi)
and
(vi)
above,
the available funds being applied with respect to any such Secured Obligation
(unless otherwise specified in such clause) shall be allocated to the payment
of
such Secured Obligation ratably, based on the proportion of the Administrative
Agent’s and each Lender’s interest in the aggregate outstanding Secured
Obligations described in such clauses. The order of priority set forth in
clauses (i),
(ii),
(iii),
(iv),
(v),
(vi)
and
(vi)
above
may
at any time and from time to time be changed by the agreement of the Requisite
Lenders without necessity of notice to or consent of or approval by the
Borrower, any Secured Party that is not a Lender or by any other Person that
is
not a Lender. The order of priority set forth in clauses
(i),
(ii)
and
(iii)
above
may
be changed only with the prior written consent of the Administrative Agent
in
addition to that of the Requisite Lenders.
Section
2.12 Special
Provisions Governing Eurodollar Rate Loans
(a) Determination
of Interest Rate
The
Eurodollar Rate for each Interest Period for Eurodollar Rate Loans shall
be
determined by the Administrative Agent pursuant to the procedures set forth
in
the definition of “Eurodollar
Rate.”
The
Administrative Agent’s determination shall be presumed to be correct absent
manifest error and shall be binding on the Borrower.
(b) Interest
Rate Unascertainable, Inadequate or Unfair
In
the
event that (i) the Administrative Agent determines that adequate and fair
means
do not exist for ascertaining the applicable interest rates by reference
to
which the Eurodollar Rate then being determined is to be fixed or (ii) the
Requisite Lenders notify the Administrative Agent that the Eurodollar Rate
for
any Interest Period will not adequately reflect the cost to the Lenders of
making or maintaining such Term Loans for such Interest Period, the
Administrative Agent shall forthwith so notify the Borrower and the Lenders,
whereupon each Eurodollar Rate Loan shall automatically, on the last day
of the
current Interest Period for such Term Loan, convert into a Base Rate Loan
and
the obligations of the Lenders to make Eurodollar Rate Loans or to convert
Base
Rate Loans into Eurodollar Rate Loans shall be suspended until the
Administrative Agent shall notify the Borrower that the Requisite Lenders
have
determined that the circumstances causing such suspension no longer
exist.
40
TERM
LOAN AGREEMENT
COLLECTIVE
BRANDS FINANCE, INC.
(c) Increased
Costs
If
at any
time any Lender determines that the introduction of, or any change in or
in the
interpretation of, any law, treaty or governmental rule, regulation or order
(other than any change by way of imposition or increase of reserve requirements
included in determining the Eurodollar Rate) or the compliance by such Lender
with any guideline, request or directive from any central bank or other
Governmental Authority (whether or not having the force of law), shall have
the
effect of increasing the cost to such Lender of agreeing to make or making,
funding or maintaining any Eurodollar Rate Loans, then the Borrower shall
from
time to time, upon demand by such Lender (with a copy of such demand to the
Administrative Agent), pay to the Administrative Agent for the account of
such
Lender additional amounts sufficient to compensate such Lender for such
increased cost. A certificate as to the amount of such increased cost, submitted
to the Borrower and the Administrative Agent by such Lender, shall be conclusive
and binding for all purposes, absent manifest error. For the avoidance of
any
doubt, this clause
(c)
shall
not apply to any increased costs attributable to Taxes, which shall be governed
by this Section
2.14 (Taxes).
(d) Illegality
Notwithstanding
any other provision of this Agreement, if any Lender determines that the
introduction of, or any change in or in the interpretation of, any law, treaty
or governmental rule, regulation or order after the date of this Agreement
shall
make it unlawful, or any central bank or other Governmental Authority shall
assert that it is unlawful, for any Lender or its Eurodollar Lending Office
to
make Eurodollar Rate Loans or to continue to fund or maintain Eurodollar
Rate
Loans, then, on notice thereof and demand therefor by such Lender to the
Borrower through the Administrative Agent, (i) the obligation of such Lender
to
make or to continue Eurodollar Rate Loans and to convert Base Rate Loans
into
Eurodollar Rate Loans shall be suspended, and each such Lender shall make
a Base
Rate Loan as part of any requested Borrowing of Eurodollar Rate Loans and
(ii)
if the affected Eurodollar Rate Loans are then outstanding, the Borrower
shall
immediately convert each such Term Loan into a Base Rate Loan. If, at any
time
after a Lender gives notice under this clause
(d),
such
Lender determines that it may lawfully make Eurodollar Rate Loans, such Lender
shall promptly give notice of that determination to the Borrower and the
Administrative Agent, and the Administrative Agent shall promptly transmit
the
notice to each other Lender. The Borrower’s right to request, and such Lender’s
obligation, if any, to make Eurodollar Rate Loans shall thereupon be
restored.
(e) Breakage
Costs
In
addition to all amounts required to be paid by the Borrower pursuant to
Section
2.8 (Interest),
the
Borrower shall compensate each Lender, upon demand, for all losses, expenses
and
liabilities (including any loss or expense incurred by reason of the liquidation
or reemployment of deposits or other funds acquired by such Lender to fund
or
maintain such Lender’s Eurodollar Rate Loans to the Borrower but excluding any
loss of the Applicable Margin on the relevant Term Loans) that such Lender
may
sustain (i) if for any reason a proposed Borrowing, conversion into or
continuation of Eurodollar Rate Loans does not occur on a date specified
therefor in a Notice of Borrowing or a Notice of Conversion or Continuation
given by the Borrower or in a telephonic request by it for borrowing or
conversion or continuation or a successive Interest Period does not commence
after notice therefor is given pursuant to Section
2.9 (Conversion/Continuation Option),
(ii) if
for any reason any Eurodollar Rate Loan is prepaid (including mandatorily
pursuant to Section
2.7 (Mandatory Prepayments))
on a
date that is not the last day of the applicable Interest Period, (iii) as
a
consequence of a required conversion of a Eurodollar Rate Loan to a Base
Rate
Loan as a result of any of the events indicated in clause
(d)
above or
(iv) as a consequence of any failure by the Borrower to repay Eurodollar
Rate
Loans when required by the terms hereof. The Lender making demand for such
compensation shall deliver to the Borrower concurrently with such demand
a
written statement as to such losses, expenses and liabilities, and this
statement shall be conclusive as to the amount of compensation due to such
Lender, absent manifest error.
41
TERM
LOAN AGREEMENT
COLLECTIVE
BRANDS FINANCE, INC.
Section
2.13 Capital
Adequacy
If
at any
time any Lender determines that (a) the adoption of, or any change in or
in the
interpretation of, any law, treaty or governmental rule, regulation or order
after the date of this Agreement regarding capital adequacy, (b) compliance
with
any such law, treaty, rule, regulation or order or (c) compliance with any
guideline or request or directive from any central bank or other Governmental
Authority (whether or not having the force of law) shall have the effect
of
reducing the rate of return on such Lender’s (or any corporation controlling
such Lender’s) capital as a consequence of its obligations hereunder to a level
below that which such Lender or such corporation could have achieved but
for
such adoption, change, compliance or interpretation, then, upon demand from
time
to time by such Lender (with a copy of such demand to the Administrative
Agent),
the Borrower shall pay to the Administrative Agent for the account of such
Lender, from time to time as specified by such Lender, additional amounts
sufficient to compensate such Lender for such reduction. A certificate as
to
such amounts submitted to the Borrower and the Administrative Agent by such
Lender shall be conclusive and binding for all purposes absent manifest
error.
Section
2.14 Taxes
(a) Except
as
otherwise provided in this Section
2.14,
any and
all payments by any Loan Party under each Loan Document shall be made free
and
clear of and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with respect
thereto, excluding (i) in the case of each Lender and the Administrative
Agent
(A) taxes measured by its net income, and franchise taxes imposed on it,
and
similar taxes imposed by a jurisdiction (or any political subdivision thereof)
under the laws of which such Lender or the Administrative Agent (as the case
may
be) is organized, does business, or has an office, and (B) any U.S. withholding
taxes payable with respect to payments under the Loan Documents under laws
(including any statute, treaty or regulation) in effect on the Closing Date
(or,
in the case of (x) an Eligible Assignee, the date of the Assignment and
Acceptance, (y) a successor Administrative Agent, the date of the appointment
of
such Administrative Agent or (z) a Lender that changes its Applicable Lending
Office, the date of such change) applicable to such Lender or the Administrative
Agent, as the case may be, but not excluding any U.S. withholding taxes payable
as a result of any change in such laws occurring after the Closing Date (or
the
date of such Assignment and Acceptance or the date of such appointment of
such
Administrative Agent or the date of such change of the Applicable Lending
Office
of a Lender) and (ii) in the case of each Lender or the Administrative Agent,
taxes measured by its net income, and franchise taxes imposed on it as a
result
of a present or former connection between such Lender or the Administrative
Agent and the jurisdiction of the Governmental Authority imposing such tax
or
any taxing authority thereof or therein (other than any such connection arising
solely from such Lender or the Administrative Agent having executed, delivered
or performed its obligations or received a payment under, or having been
a party
or havng enforced this Agreement or other Loan Document) (all such non-excluded
taxes, levies, imposts, deductions, charges, withholdings and liabilities
being
hereinafter referred to as “Taxes”).
If
any Taxes shall be required by law to be deducted from or in respect of any
sum
payable under any Loan Document to any Lender or the Administrative Agent
(w)
the sum payable shall be increased as may be necessary so that, after making
all
required deductions (including deductions applicable to additional sums payable
under this Section
2.14,
such
Lender or the Administrative Agent (as the case may be) receives an amount
equal
to the sum it would have received had no such deductions been made, (x) the
relevant Loan Party shall make such deductions, (y) the relevant Loan Party
shall pay the full amount deducted to the relevant taxing authority or other
authority in accordance with applicable law and (z) the relevant Loan Party
shall deliver to the Administrative Agent evidence of such payment.
42
TERM
LOAN AGREEMENT
COLLECTIVE
BRANDS FINANCE, INC.
(b) In
addition, each Loan Party agrees to pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies of the United States or any political subdivision thereof or any
applicable foreign jurisdiction, and all liabilities with respect thereto,
in
each case arising from any payment made under any Loan Document or from the
execution, delivery or registration of, or otherwise with respect to, any
Loan
Document (collectively, “Other
Taxes”).
(c) Each
Loan
Party shall, jointly and severally, indemnify each Lender and the Administrative
Agent for the full amount of Taxes and Other Taxes (including any Taxes and
Other Taxes imposed by any jurisdiction on amounts payable under this
Section
2.14)
paid by
such Lender or the Administrative Agent (as the case may be) and any liability
(including for penalties, interest and expenses) arising therefrom or with
respect thereto, whether or not such Taxes or Other Taxes were correctly
or
legally asserted. This indemnification shall be made within 30 days from
the
date such Lender or the Administrative Agent (as the case may be) makes written
demand therefor. Notwithstanding the foregoing, no Loan Party shall be required
to indemnify any Lender or the Administrative Agent for amounts paid by such
Lender or the Administrative Agent for Taxes to the extent such amounts are
attributable to such Lender’s or the Administrative Agent’s failure to comply
with the requirements of Section
2.14(f).
(d) Within
30
days after the date of any payment of Taxes or Other Taxes by any Loan Party,
the Borrower shall furnish to the Administrative Agent, at its address referred
to in Section
11.8 (Notices, Etc.),
the
original or a certified copy of a receipt evidencing payment
thereof.
(e) Without
prejudice to the survival of any other agreement of any Loan Party hereunder
or
under the Guaranty, the agreements and obligations of such Loan Party contained
in this Section
2.14
shall
survive the payment in full of the Obligations.
43
TERM
LOAN AGREEMENT
COLLECTIVE
BRANDS FINANCE, INC.
(f) (i) Each
Non-U.S. Lender that is entitled to an exemption from U.S. withholding tax,
or that is subject to such tax at a reduced rate under an applicable tax
treaty,
shall (v) on or prior to the Closing Date in the case of each Non-U.S. lender
that is a signatory hereto, (w) on or prior to the date of the Assignment
and
Acceptance pursuant to which such Non-U.S. Lender becomes a Lender or the
date a
successor Administrative Agent becomes the Administrative Agent hereunder,
(x) on or prior to the date on which any such form or certification expires
or becomes obsolete, (y) after the occurrence of any event requiring a change
in
the most recent form or certification previously delivered by it to the Borrower
and the Administrative Agent, and (z) from time to time if requested by the
Borrower or the Administrative Agent, provide the Administrative Agent and
the
Borrower with two completed originals of each of the following, as
applicable:
(A) Form
W-8ECI (claiming exemption from U.S. withholding tax because the income is
effectively connected with a U.S. trade or business) or any successor
form;
(B) Form
W-8BEN (claiming exemption from, or a reduction of, U.S. withholding tax
under
an income tax treaty) or any successor form;
(C) in
the
case of a Non-U.S. Lender claiming exemption under Sections
871(h)
or
881(c)
of the
Code, a Form W-8BEN (claiming exemption from U.S. withholding tax under the
portfolio interest exemption) or any successor form; or
(D) any
other
applicable form, certificate or document prescribed by the IRS certifying
as to
such Non-U.S. Lender’s entitlement to such exemption from U.S. withholding tax
or reduced rate with respect to all payments to be made to such Non-U.S.
Lender
under the Loan Documents.
Unless
the Borrower and the Administrative Agent have received forms or other documents
satisfactory to them indicating that payments under any Loan Document to
or for
a Non-U.S. Lender are not subject to U.S. withholding tax or are subject
to such
tax at a rate reduced by an applicable tax treaty, the Loan Parties and the
Administrative Agent shall withhold amounts required to be withheld by
applicable Requirements of Law from such payments at the applicable statutory
rate.
(ii) Each
U.S.
Lender shall (v) on or prior to the Closing Date in the case of each U.S.
Lender
that is a signatory hereto, (w) on or prior to the date of the Assignment
and Acceptance pursuant to which such U.S. Lender becomes a Lender or on
or
prior to the date a successor Administrative Agent becomes the Administrative
Agent hereunder, (x) on or prior to the date on which any such form or
certification expires or becomes obsolete, (y) after the occurrence of any
event
requiring a change in the most recent form or certification previously delivered
by it to the Borrower and the Administrative Agent, and (z) from time to
time if requested by the Borrower or the Administrative Agent, provide the
Administrative Agent and the Borrower with two completed originals of Form
W-9
(certifying that such U.S. Lender is entitled to an exemption from U.S. backup
withholding tax) or any successor form. Solely for purposes of this Section
2.14(f),
a U.S.
Lender shall not include a Lender or an Administrative Agent that may be
treated
as an exempt recipient based on the indicators described in Treasury Regulation
section 1.6049-4(c)(1)(ii).
44
TERM
LOAN AGREEMENT
COLLECTIVE
BRANDS FINANCE, INC.
(g) Any
Lender claiming any additional amounts payable pursuant to this Section
2.14
shall
use its reasonable efforts (consistent with its internal policies and
Requirements of Law) to change the jurisdiction of its Applicable Lending
Office
if the making of such a change would avoid the need for, or reduce the amount
of, any such additional amounts that would be payable or may thereafter accrue
and would not, in the sole determination of such Lender, be otherwise
disadvantageous to such Lender.
Section
2.15 Substitution
of Lenders
(a) In
the
event that (i)(A) any Lender makes a claim under Section
2.12(c) (Increased Costs)
or
Section
2.13 (Capital Adequacy),
(B) it
becomes illegal for any Lender to continue to fund or make any Eurodollar
Rate
Loan and such Lender notifies the Borrower pursuant to Section
2.12(d) (Illegality)
or (C)
any Loan Party is required to make any payment pursuant to Section
2.14 (Taxes)
that is
attributable to a particular Lender, (ii) in the case of clause
(i)(A)
above,
as a consequence of increased costs in respect of which such claim is made,
the
effective rate of interest payable to such Lender under this Agreement with
respect to its Term Loans materially exceeds the effective average annual
rate
of interest payable to the Requisite Lenders under this Agreement and (iii)
in
the case of clauses
(i)(A),
(B)
and
(C)
above,
Lenders holding at least 75% of the Term Loans are not subject to such increased
costs or illegality, payment or proceedings (any such Lender, an “Affected
Lender”),
the
Borrower may substitute any Lender and, if reasonably acceptable to the
Administrative Agent, any other Eligible Assignee (a “Substitute
Institution”)
for
such Affected Lender hereunder, after delivery of a written notice (a
“Substitution
Notice”)
by the
Borrower to the Administrative Agent and the Affected Lender within a reasonable
time (in any case not to exceed 90 days) following the occurrence of any
of the
events described in clause
(i)
above
that the Borrower intends to make such substitution; provided, however, that,
if
more than one Lender claims increased costs, illegality or right to payment
arising from the same act or condition and such claims are received by the
Borrower within 30 days of each other, then the Borrower may substitute all,
but
not (except to the extent the Borrower has already substituted one of such
Affected Lenders before the Borrower’s receipt of the other Affected Lenders’
claim) less than all, Lenders making such claims.
(b) If
the
Substitution Notice was properly issued under this Section
2.15,
the
Affected Lender shall sell, and the Substitute Institution shall purchase,
all
rights and claims of such Affected Lender under the Loan Documents and the
Substitute Institution shall assume, and the Affected Lender shall be relieved
of all prior unperformed obligations of the Affected Lender under the Loan
Documents (other than in respect of any damages (which pursuant to Section
11.5 (Limitation
on Liability)
do not
include exemplary or punitive damages, to the extent permitted by applicable
law) in respect of any such unperformed obligations). Such purchase and sale
(and the corresponding assignment of all rights and claims hereunder) shall
be
recorded in the Register maintained by the Administrative Agent and shall
be
effective on (and not earlier than) the later of (i) the receipt by the Affected
Lender of its Ratable Portion of the Term Loans, together with any other
Obligations owing to it, (ii) the receipt by the Administrative Agent of
an
agreement in form and substance reasonably satisfactory to it and the Borrower
whereby the Substitute Institution shall agree to be bound by the terms hereof
and (iii) the payment in full to the Affected Lender in cash of all fees,
unreimbursed costs and expenses and indemnities accrued and unpaid through
such
effective date. Upon the effectiveness of such sale, purchase and assumption,
the Substitute Institution shall become a “Lender”
hereunder for all purposes of this Agreement having a Term Loan Commitment
in
the amount of such Affected Lender’s Term Loan Commitment assumed by it and such
Term Loan Commitment of the Affected Lender shall be terminated; provided,
however,
that
all indemnities under the Loan Documents shall continue in favor of such
Affected Lender.
45
TERM
LOAN AGREEMENT
COLLECTIVE
BRANDS FINANCE, INC.
(c) Each
Lender agrees that, if it becomes an Affected Lender and its rights and claims
are assigned hereunder to a Substitute Institution pursuant to this Section
2.15,
it
shall execute and deliver to the Administrative Agent an Assignment and
Acceptance to evidence such assignment, together with any Note (if such Term
Loans are evidenced by a Note) evidencing the Term Loans subject to such
Assignment and Acceptance; provided,
however,
that
the failure of any Affected Lender to execute an Assignment and Acceptance
shall
not render such assignment invalid.
ARTICLE
III
CONDITIONS
TO TERM LOANS
Section
3.1 Conditions
Precedent to Closing Date Term Loans
The
obligation of each Lender to make the Closing Date Term Loans requested to
be
made by it on the Closing Date is subject to the satisfaction or due waiver
in
accordance with Section
11.1 (Amendments, Waivers, Etc.) of
each
of the following conditions precedent on or prior to the Closing
Date:
(a) Certain
Documents.
The
Administrative Agent shall have received (and, to the extent any Borrowing
of
any Eurodollar Rate Loans is requested to be made on the Closing Date, in
respect of the Notice of Borrowing for such Eurodollar Rate Loans, at least
three Business Days prior to the Closing Date) each of the following, each
dated
the Closing Date unless otherwise indicated or agreed to by the Administrative
Agent in its reasonable discretion, in form and substance reasonably
satisfactory to the Administrative Agent and in sufficient copies for each
Lender:
(i) this
Agreement, duly executed and delivered by the Borrower and, for the account
of
each Lender requesting the same, a Note of the Borrower conforming to the
requirements set forth herein;
(ii) the
Intercreditor Agreement, duly executed and delivered by the Revolving Credit
Agent and each Loan Party party thereto;
(iii) the
Guaranty, duly executed and delivered by each Guarantor;
(iv) except
as
set forth on Schedule
7.13 (Post-Closing Covenants)
and
subject to the proviso in Section
7.11 (Additional Collateral and Guarantees),
the
Pledge and Security Agreement, duly executed and delivered by the Borrower
and
each Guarantor, together with each of the following:
(A) evidence
reasonably satisfactory to the Administrative Agent that, upon the filing and
recording of instruments delivered on or before the Closing Date, the
Administrative Agent (for the benefit of the Secured Parties) shall have
a valid
and perfected security interest (having the priority set forth in the
Intercreditor Agreement) in the Collateral, including (x) the filing of
financing statements under the UCC, (y) copies of UCC search reports as of
a
recent date listing all effective financing statements that name any Loan
Party
as debtor, together with copies of such financing statements, none of which
shall cover the Collateral except for those that shall be terminated on the
Closing Date or are otherwise permitted hereunder and (z) such other such
documents duly executed by each Loan Party as the Administrative Agent may
reasonably request with respect to the perfection of its security interests
in
the Collateral (including patent, trademark and copyright security agreements
suitable for filing with the Patent and Trademark Office or the Copyright
Office, as the case may be, and other applicable documents under the laws
of any
jurisdiction with respect to the perfection of Liens created by the Pledge
and
Security Agreement);
46
TERM
LOAN AGREEMENT
COLLECTIVE
BRANDS FINANCE, INC.
(B) all
certificates, instruments and other documents representing all Pledged Stock
being pledged pursuant to such Pledge and Security Agreement and stock powers
for such certificates, instruments and other documents executed in
blank;
(C) to
the
extent delivered in connection with the Revolving Credit Agreement on the
Closing Date or within such other time period as provided therein, all Deposit
Account Control Agreements, duly executed by the corresponding Deposit Account
Bank and the applicable Loan Party; and
(D) to
the
extent delivered in connection with the Revolving Credit Agreement on the
Closing Date or within such other time period as provided therein, Securities
Account Control Agreements, duly executed by the applicable Loan Party and
(1)
all “securities
intermediaries”
(as
defined in the UCC) with respect to all Securities Accounts and securities
entitlements of the Borrower and each Guarantor and (2) all “commodities
intermediaries”
(as
defined in the UCC) with respect to all commodities contracts and commodities
accounts held by the Borrower and each Guarantor;
(v) except
as
set forth on Schedule
7.13 (Post-Closing Covenants)
and
subject to the proviso in Section
7.11 (Additional Collateral and Guarantees),
Mortgages for all of the Real Property of the Loan Parties identified on
Schedule
4.19 (Real
Property) (except
as may be agreed to by the Administrative Agent), together with all Mortgage
Supporting Documents relating thereto;
(vi) a
favorable opinion of (A) Xxxxxxxx & Xxxxxxxx LLP, counsel to the Loan
Parties, in substantially the form of
Exhibit E (Form of Opinion of counsel for the Loan
Parties),
(B)
counsel to the Borrower in Nevada, (C) counsel to Payless ShoeSource, Inc.,
a
Missouri corporation, in Missouri and (D) counsel to Payless ShoeSource
Worldwide, Inc. and Payless ShoeSource Distribution, Inc. each in Kansas,
in
each case addressed to the Administrative Agent and the Lenders and addressing
such other matters as any Lender through the Administrative Agent may reasonably
request;
(vii) a
copy of
each Related Document certified as being complete and correct by a Responsible
Officer of the Borrower or other Loan Party as the case may be;
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TERM
LOAN AGREEMENT
COLLECTIVE
BRANDS FINANCE, INC.
(viii) a
copy of
the articles or certificate of incorporation (or equivalent Constituent
Document) of each Loan Party, certified as of a recent date by the Secretary
of
State of the state of organization of such Loan Party, together with
certificates of such official attesting to the good standing of each such
Loan
Party;
(ix) a
certificate of the Secretary or an Assistant Secretary of each Loan Party
certifying (A) the names and true signatures of each officer of such Loan
Party
that has been authorized to execute and deliver any Loan Document or other
document required hereunder to be executed and delivered by or on behalf
of such
Loan Party, (B) the by-laws (or equivalent Constituent Document) of such
Loan
Party as in effect on the date of such certification, (C) the resolutions
of
such Loan Party’s Board of Directors (or equivalent governing body) approving
and authorizing the execution, delivery and performance of this Agreement
and
the other Loan Documents to which it is a party and (D) that there have been
no
changes in the certificate of incorporation (or equivalent Constituent Document)
of such Loan Party from the certificate of incorporation (or equivalent
Constituent Document) delivered pursuant to clause
(viii) above;
(x) a
certificate of a Responsible Officer of the Borrower, stating that the Borrower
is Solvent immediately before and after giving effect to the Closing Date
Term
Loans, the application of the proceeds thereof in accordance with Section
7.9 (Application of Proceeds), the
payment of all estimated legal, accounting and other fees related hereto
and
thereto and the other Transactions; and
(xi) evidence
reasonably satisfactory to the Administrative Agent that the insurance policies
required by Section
7.5 (Maintenance of Insurance)
and any
Collateral Document are in full force and effect, together with, unless
otherwise agreed by the Administrative Agent, endorsements naming the
Administrative Agent, on behalf of the Secured Parties, as an additional
insured
or loss payee under all insurance policies to be maintained with respect
to the
properties of the Borrower and each other Loan Party.
(b) Fee
and Expenses Paid.
There
shall have been paid to the Administrative Agent, for the account of the
Administrative Agent and the Lenders, as applicable, all fees and expenses
(including reasonable fees and expenses of counsel) invoiced at least two
Business Days prior to the Closing Date and due and payable on or before
the
Closing Date (including all such fees described in the Fee Letter).
(c) Refinancing
of Target Credit Agreement.
(i) The
Administrative Agent shall have received a payoff letter duly executed and
delivered by the Target and the Existing Agent or other evidence of such
termination in each case in form and substance reasonably satisfactory to
the
Administrative Agent; (ii) all obligations
under the Target Credit Agreement shall have been repaid in full and (iii)
the
Target Credit Agreement, all Loan Documents (as defined therein) and all
Liens
granted in connection therewith shall have been terminated and released on
terms
reasonably acceptable to the Administrative Agent.
(d) Amendment
and Restatement of Existing Revolving Credit Agreement.
All
obligations and Liens under the Existing Revolving Credit Agreement and any
other Loan Documents (as defined therein) shall, through an amendment and
restatement of such documents, become obligations and Liens under the Revolving
Credit Loan Documents substantially on the terms set forth in that certain
commitment letter dated May 22, 2007 addressed to the Borrower from Xxxxx
Fargo
Retail Finance, LLC.
48
TERM
LOAN AGREEMENT
COLLECTIVE
BRANDS FINANCE, INC.
(e) Related
Documents.
The
Administrative Agent shall be satisfied (i) that the terms and conditions
of the Merger Agreement shall not have been amended, waived or modified without
the approval of the Administrative Agent (other than (A) with the prior written
consent, not to be unreasonably withheld, of the Arrangers and the
Administrative Agent or (B) amendments, waivers and modifications to such
terms
that do not, individually or in the aggregate, materially and adversely affect
the interests of the Lenders), (ii) that the Merger Agreement and the other
Related Documents shall have been approved by all corporate action of the
Borrower and each of the other parties thereto, shall have been executed
and
delivered by each such party and shall be in full force and effect, (iii)
that
subject only to the funding of the Closing Date Term Loans hereunder, all
conditions precedent to the consummation of the Merger shall have been satisfied
or waived as set forth in clause
(i)
above,
and (iv) that subject only to the funding of the Closing Date Term Loans
hereunder, the Merger shall have been consummated in accordance with the
Merger
Agreement and all applicable Requirements of Law and all representations
and
warranties made by the Target in the Merger Agreement as are material to
the
interests of the Lenders (but only to the extent that the Borrower and/or
the
Acquisition Subsidiary has the right to terminate its obligations under the
Merger Agreement as a result of a breach of such representations and warranties
in the Merger Agreement), shall be true and correct in all material respects
on
the Closing Date.
(f) No
Material Adverse Effect.
Since
May 22, 2007, there shall not have occurred any change, event, circumstances
or
development that has had, or would reasonably be expected to have, a Material
Adverse Effect (as defined in the Merger Agreement as in effect on May 22,
2007).
(g) Consents,
Etc.
All
requisite material Governmental Authorities shall have approved or consented
to
the Transactions to the extent required on or prior to the Closing Date,
all
applicable governmental filings have been made and all applicable waiting
periods shall have expired without, in either case, any action being taken
by
any competent authority, all applicable appeal periods shall have expired
and
there shall be no action by any Governmental Authority that would reasonably
be
expected to restrain, prevent or impose burdensome conditions on such
Transactions.
(h) Financial
Statements of the Parent.
The
Lenders shall have received from the Parent a Consolidated balance sheet
as of
May 5, 2007 and related statements of income and cash flows of the Parent
and
its Subsidiaries on the Closing Date as of February 3, 2007 and May 5, 2007
and
the trailing four quarters ended on May 5, 2007, each on a Pro Forma Basis
after
giving effect to each of the Transactions, together with a certificate of
the
chief financial officer of the Parent and its Subsidiaries on the Closing
Date
in accordance with GAAP and Regulation S-X.
(i) Projections.
The
Borrower shall have delivered to the Lenders the Projections.
(j) Request
for Borrowing.
With
respect to the Closing Date Term Loans, the Administrative Agent shall have
received a duly executed Notice of Borrowing.
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TERM
LOAN AGREEMENT
COLLECTIVE
BRANDS FINANCE, INC.
(k) Representations
and Warranties; No Defaults.
Both
before and after giving effect thereto and to the application of the proceeds
thereof, (i) the representations and warranties set forth in Sections
4.1, 4.2, 4.6, 4.10, 4.12, 4.20(a)(iv)
and
(c)
and
Section
3.2
of the
Pledge and Security Agreement shall be true and correct on and as of the
Closing
Date and (ii) no Default or Event of Default shall have occurred and be
continuing.
(l) No
Legal Impediments.
The
making of the Closing Date Term Loans does not violate any Requirement of
Law on
the date of or immediately following such Closing Date Term Loan and is not
enjoined, temporarily, preliminarily or permanently.
Section
3.2 Conditions
Precedent to Incremental Term Loans
(a) Certain
Documents.
The
Administrative Agent shall have received on or prior to the Facility Increase
Date for such Facility Increase each of the following, each dated such Facility
Increase Date unless otherwise indicated or agreed to by the Administrative
Agent and each in form and substance reasonably satisfactory to the
Administrative Agent:
(i) written
commitments duly executed by the applicable Incremental Term Loan Lenders
in an
aggregate amount equal to the amount of the proposed Facility Increase (as
agreed between the Borrower and the Administrative Agent but in any case
not to
exceed, in the aggregate for all such Facility Increases, the maximum amount
set
forth in Section
2.1(b) (The Term Loans))
and, in
the case of each Incremental Term Loan Lender that is not an existing Lender
at
the time of the applicable Facility Increase, an assumption agreement in
form
and substance reasonably satisfactory to the Administrative Agent and the
Borrower and duly executed by the Borrower, the Administrative Agent and
such
Incremental Term Loan Lender;
(ii) an
amendment to this Agreement, effective as of the Facility Increase Date and
executed by the Borrower, the Administrative Agent and the applicable
Incremental Term Loan Lenders, to the extent necessary to implement the terms
and conditions of the Facility Increase (including interest rates, fees and
scheduled repayment dates and maturity), as agreed by the Borrower and the
Administrative Agent but, which, in any case, except for interest, fees,
scheduled repayment dates and maturity, shall not be applied materially
differently to the Facility Increase and the existing Term Loan
Facility;
(iii) certified
copies of resolutions of the Board of Directors (or equivalent governing
body)
of each Loan Party approving the consummation of such Facility Increase and
the
execution, delivery and performance of the corresponding amendments to this
Agreement and the other Loan Documents to be executed in connection
therewith;
(iv) a
favorable opinion of (A) counsel to the Loan Parties that is reasonably
acceptable to Administrative Agent, in substantially the form of Exhibit E
(Form of Opinion of counsel for the Loan Parties),
(B)
counsel to the Borrower in Nevada, (C) counsel to Payless ShoeSource, Inc.
in
Missouri and (D) counsel to Payless ShoeSource Worldwide, Inc. and Payless
ShoeSource Distribution, Inc. each in Kansas, in each case addressed to the
Administrative Agent and the Lenders and addressing such other matters as
any
Lender through the Administrative Agent may reasonably request; and
50
TERM
LOAN AGREEMENT
COLLECTIVE
BRANDS FINANCE, INC.
(v) such
other documents as the Administrative Agent may reasonably request or as
any
Incremental Term Loan Lender participating in such Facility Increase may
reasonably require as a condition to its commitment in such Facility
Increase.
(b) Fees
and Expenses Paid.
There
shall have been paid to the Administrative Agent, for the account of the
Administrative Agent and the Lenders (including any Person becoming a Lender
as
part of such Facility Increase on such Facility Increase Date), as applicable,
all fees and expenses (including attorney costs of the Administrative Agent)
due
and payable on or before the Facility Increase Date (including all such fees
described in the Fee Letters).
(c) Other
Conditions. As
of the
Facility Increase Date for such Facility Increase, such Facility Increase
shall
be made on the terms and conditions set forth in Section
2.1(b) (The Term Loans).
(d) Representations
and Warranties; Events of Default.
Both
before and after giving effect to any Incremental Term Loan and to the
application of the proceeds thereof, (i) the representations and warranties
set
forth in Article
IV (Representations and Warranties)
and in
the other Loan Documents shall be true and correct in all material respects
on
and as of the date on which such Incremental Term Loan is made with the same
effect as though made on and as of such date, except to the extent such
representations and warranties expressly relate to an earlier date, in which
case such representations and warranties shall have been true and correct
in all
material respects as of such earlier date and (ii) no Default or Event of
Default shall have occurred and be continuing.
(e) Request
for Borrowing.
With
respect to any Incremental Term Loan, the Administrative Agent shall have
received a duly executed Notice of Borrowing.
(f) No
Legal Impediments.
The
making of the Incremental Term Loans on such date does not violate any
Requirement of Law on the date of or immediately following such Incremental
Term
Loan and is not enjoined, temporarily, preliminarily or
permanently.
Each
submission by the Borrower to the Administrative Agent of a Notice of Borrowing
and the acceptance by the Borrower of the proceeds of each Incremental Term
Loan
requested therein shall be deemed to constitute a representation and warranty
by
the Borrower as to the matters specified in clause
(e) above on
the
date of the making of such Incremental Term Loan.
Section
3.3 Determinations
of Borrowing Conditions
For
purposes of determining compliance with the conditions specified in Section
3.1 (Conditions Precedent to Closing Date Term Loans)
and
Section
3.2 (Conditions Precedent to Incremental Term Loans), each
Lender shall be deemed to have consented to, approved, accepted or be satisfied
with, each document or other matter required thereunder to be consented to
or
approved by or reasonably acceptable or reasonably satisfactory to the Lenders
unless an officer of the Administrative Agent responsible for the transactions
contemplated by the Loan Documents shall have received notice from such Lender
prior to the applicable Term Loan Borrowing hereunder specifying its objection
thereto and such Lender shall not have made available to the Administrative
Agent such Lender’s Ratable Portion of such Term Loan Borrowing.
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TERM
LOAN AGREEMENT
COLLECTIVE
BRANDS FINANCE, INC.
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES
To
induce
the Lenders and the Administrative Agent to enter into this Agreement, the
Borrower represents and warrants each of the following to the Lenders and
the
Administrative Agent, on and as of the Closing Date and after giving effect
to
the Merger and the making of the Term Loans on the Closing Date and on and
as of
each date as required by Section
3.2 (Conditions Precedent to Incremental Term Loans):
Section
4.1 Corporate
Existence; Compliance with Law
Each
Group Member (a) is duly organized, validly existing and in good standing
under
the laws of the jurisdiction of its organization, (b) is duly qualified to
do
business as a foreign entity and in good standing under the laws of each
jurisdiction where such qualification is necessary, except where the failure
to
be so qualified or in good standing would not, in the aggregate, have a Material
Adverse Effect, (c) has all requisite power and authority and the legal
right to own, pledge, mortgage and operate its properties, to lease the property
it operates under lease and to conduct its business as now or currently proposed
to be conducted, except where the failure to have such power, authority and
legal right would not, in the aggregate, have a Material Adverse Effect,
(d) is
in compliance with its Constituent Documents, (e) is in compliance with all
applicable Requirements of Law except where the failure to be in compliance
would not, in the aggregate, have a Material Adverse Effect and (f) has all
necessary Permits from or by, has made all necessary filings with, and has
given
all necessary notices to, each Governmental Authority having jurisdiction,
to
the extent required for such ownership, operation and conduct, except for
Permits or filings that can be obtained or made by the taking of ministerial
action to secure the grant or transfer thereof or the failure to obtain or
make
would not, in the aggregate, have a Material Adverse Effect.
Section
4.2 Corporate
Power; Authorization; Enforceable Obligations
(a) The
execution, delivery and performance by each Loan Party of the Loan Documents
to
which it is a party and the consummation of the transactions contemplated
thereby:
(i) are
within such Loan Party’s corporate, limited liability company, partnership or
other powers;
(ii) have
been
or, at the time of delivery thereof pursuant to Article
III (Conditions To Term Loans)
will
have been duly authorized by all necessary action, including the consent
of
shareholders, partners and members where required;
(iii) do
not
and will not (A) contravene or violate such Loan Party’s respective Constituent
Documents, (B) violate any other Requirement of Law applicable to such Loan
Party (including Regulations T, U and X of the Federal Reserve Board), or
any
order or decree of any Governmental Authority or arbitrator applicable to
such
Loan Party, (C) conflict with or result in the breach of, or constitute a
default under, or result in or permit the termination or acceleration of,
any
Related Document or any other material Contractual Obligation of such Loan
Party
or (D) result in the creation or imposition of any Lien upon any property
of
such Loan Party, other than those in favor of the Secured Parties pursuant
to
the Collateral Documents; and
52
TERM
LOAN AGREEMENT
COLLECTIVE
BRANDS FINANCE, INC.
(iv) do
not
require the consent of, authorization by, approval of, notice to, or filing
or
registration with, any Governmental Authority or any other Person, other
than
those listed on Schedule 4.2 (Consents)
and that
have been or will be, prior to the Closing Date, obtained or made, copies
of
which have been or will be delivered to the Administrative Agent pursuant
to
Section
3.1 (Conditions Precedent to Closing Date Term Loans),
and
each of which on the Closing Date will be in full force and effect and, with
respect to the Collateral, filings required to perfect the Liens created
by the
Collateral Documents.
(b) This
Agreement has been, and each of the other Loan Documents will have been upon
delivery thereof pursuant to the terms of this Agreement, duly executed and
delivered by each Loan Party party thereto. This Agreement is, and the other
Loan Documents will be, when delivered hereunder, the legal, valid and binding
obligation of each Loan Party party thereto, enforceable against such Loan
Party
in accordance with its terms.
Section
4.3 Ownership
of Subsidiaries
Set
forth
on Schedule
4.3 (Ownership of Subsidiaries) is
a
complete and accurate list showing, as of the Closing Date, all Subsidiaries
owned (directly or indirectly) by the Parent and, as to each such Subsidiary,
the jurisdiction of its organization, the number of shares of each class
of
Stock authorized (if applicable), the number outstanding on the Closing Date
and
the number and percentage of the outstanding shares of each such class owned
(directly or indirectly) by the Parent. No Stock of any Subsidiary owned
(directly or indirectly) by the Parent is subject to any outstanding option,
warrant, right of conversion or purchase of any similar right. All of the
outstanding Stock of each owned (directly or indirectly) by the Parent has
been
validly issued, is fully paid and non-assessable (to the extent applicable)
and
is owned by the Parent or a Subsidiary of the Parent, free and clear of all
Liens (other than the Lien in favor of the Secured Parties created pursuant
to
the Pledge and Security Agreement and the Revolving Credit Loan Documents),
options, warrants, rights of conversion or purchase or any similar
rights.
Section
4.4 Financial
Statements
(a) All
Financial Statements relating to the Group Members that have been provided
by
Borrower to the Administrative Agent or the Lenders pursuant to Section
3.1(h) (Conditions
Precedent to Closing Date Term Loans) and
Section
6.1 (Financial Statements) have
been
prepared in accordance with GAAP (except, in the case of unaudited financial
statements, for the lack of footnotes and being subject to year-end audit
adjustments) and present fairly in all material respects, the financial
condition of the Borrower, the Parent and its Subsidiaries as of the date
thereof and results of operations for the period then ended.
(b) The
Projections have been prepared by the Parent in light of the past operations
of
its business, and reflect projections for the seven year period beginning
on
February 4, 2007, on a quarterly basis through the end of the fiscal year
ending 2007 and on a year by year basis thereafter. The Projections are based
upon estimates and assumptions stated therein, all of which the Parent believes
to be reasonable and fair in light of current conditions and current facts
known
to the Parent and, as of the Closing Date, reflect the Parent’s good faith and
reasonable estimates of the future financial performance of the Parent and
its
Subsidiaries and of the other information projected therein for the periods
set
forth therein.
53
TERM
LOAN AGREEMENT
COLLECTIVE
BRANDS FINANCE, INC.
(c) The
consolidated balance sheet as of May 5, 2007 and the related statements of
income and cash flows of the Borrower and its Subsidiaries on the Closing
Date
as of February 3, 2007 and May 5, 2007 and the trailing four quarters ended
on
May 5, 2007, in each case delivered to the Administrative Agent pursuant
to
Section 3.1(h)
(Conditions Precedent to Closing Date Term Loans),
reflects as of such date, on a Pro Forma Basis, the Consolidated financial
condition of the Borrower and its Subsidiaries, and the assumptions expressed
therein were reasonable based on the information available to the Borrower
at
the time so furnished and on the Closing Date.
Section
4.5 Material
Adverse Change
Since
May
5, 2007, there has been no Material Adverse Change and there have been no
events
or developments that, in the aggregate, have had a Material Adverse
Effect.
Section
4.6 Solvency
Both
before and after giving effect to (a) the Term Loans to be made on the Closing
Date or such other date as Term Loans requested hereunder are made, (b) the
disbursement of the proceeds of such Term Loans pursuant to the instructions
of
the Borrower, (c) the Merger and the consummation of the other financing
transactions contemplated hereby and (d) the payment and accrual of all
transaction costs in connection with the foregoing, each Group Member is
Solvent.
Section
4.7 Litigation
Except
as
set forth on Schedule
4.7 (Litigation),
there
are no pending or, to the knowledge of the Borrower, threatened actions,
investigations or proceedings affecting any of the Group Members before any
court, Governmental Authority or arbitrator other than those that, individually
or when considered in the aggregate with other related actions, investigations
or proceedings, would not have a Material Adverse Effect. The performance
of any
action by any Group Member required or contemplated by any Loan Document
or any
Related Document is not restrained or enjoined (either temporarily,
preliminarily or permanently).
Section
4.8 Taxes
(a) All
material federal, state, local and foreign income and franchise and other
material tax returns, reports and statements (collectively, the “Tax
Returns”)
required to be filed by the Borrower or any of its Tax Affiliates have been
filed with the appropriate Governmental Authorities in all jurisdictions
in
which such Tax Returns are required to be filed, all such Tax Returns are
true
and correct in all material respects, and all material taxes, charges and
other
impositions reflected therein or otherwise due and payable have been paid
prior
to the date on which any material fine, penalty, interest, late charge or
loss
may be added thereto for non-payment thereof except where contested in good
faith and by appropriate proceedings if adequate reserves therefor have been
established on the books of the Borrower or such Tax
54
TERM
LOAN AGREEMENT
COLLECTIVE
BRANDS FINANCE, INC.
Affiliate
in conformity with GAAP. [Except as disclosed on Schedule
4.8,]1
no Tax
Return is under audit or examination by any Governmental Authority and no
written, and to the knowledge of the Borrower oral, notice of such an audit
or
examination or any assertion of any claim for Taxes has been received by
the
Borrower or any of its Tax Affiliates. Proper amounts have been withheld
by the
Borrower and each of its Tax Affiliates from their respective employees for
all
periods in full and complete compliance with the tax, social security and
unemployment withholding provisions of applicable Requirements of Law and
such
withholdings have been timely paid to the respective Governmental Authorities,
except those that, in the aggregate, would not result in a Material Adverse
Effect.
(b) None
of
the Borrower or any of its Tax Affiliates has (i) executed or filed with
the IRS
or any other Governmental Authority any agreement or other document extending,
or having the effect of extending, the period for the filing of any Tax Return
or the assessment or collection of any charges, (ii) incurred any obligation
under any tax sharing agreement or arrangement other than those of which
the
Administrative Agent has received a copy prior to the date hereof, (iii)
been a
member of an affiliated, combined or unitary group other than the group of
which
the Borrower (or its Tax Affiliate) is the common parent or (iv) participated
in
a “listed
transaction”
within
the meaning of Treasury Regulation section 1.6011-4((6)).
Section
4.9 Full
Disclosure
The
information prepared or furnished by or on behalf of the Borrower in connection
with this Agreement or the Related Documents or the consummation of the
transactions contemplated hereunder and thereunder taken as a whole, does
not
contain any untrue statement of a material fact or omit to state a material
fact
necessary to make the statements contained therein or herein not misleading
in
any material respect at such time in light of the circumstances under which
such
information was provided.
Section
4.10 Margin
Regulations
The
Borrower is not engaged in the business of extending credit for the purpose
of
purchasing or carrying margin stock (within the meaning of Regulation U of
the
Federal Reserve Board), and no proceeds of any Term Loan will be used to
purchase or carry any such margin stock or to extend credit to others for
the
purpose of purchasing or carrying any such margin stock in contravention
of
Regulation T, U or X of the Federal Reserve Board.
Section
4.11 No
Burdensome Restrictions; No Defaults
(a) No
Group
Member (i) is a party to any Contractual Obligation the compliance with one
or
more of which would have, in the aggregate, a Material Adverse Effect or
the
performance of which by any thereof, either unconditionally or upon the
happening of an event, would result in the creation of a Lien (other than
a Lien
permitted under Section
8.2 (Liens, Etc.))
on the
assets of any thereof or (ii) is subject to one or more charter or corporate
restrictions that would, in the aggregate, have a Material Adverse
Effect.
(b) No
Group
Member is in default under or with respect to any Contractual Obligation
owed by
it and, to the knowledge of the Borrower, no other party is in default under
or
with respect to any Contractual Obligation owed to any of the Group Members,
other than, in either case, those defaults that, in the aggregate, would
not
have a Material Adverse Effect.
______________________
1Under
discussion with S&C.
55
TERM
LOAN AGREEMENT
COLLECTIVE
BRANDS FINANCE, INC.
(c) No
Default or Event of Default has occurred and is continuing.
(d) To
the
best knowledge of the Borrower, there are no Requirements of Law applicable
to
any of the Group Members the compliance with which by such Group Member,
as the
case may be, would, in the aggregate, have a Material Adverse
Effect.
Section
4.12 Investment
Company Act
No
Group
Member is an “investment
company”
or
an
“affiliated
person”
of,
or
“promoter”
or
“principal
underwriter”
for,
an
“investment
company,”
as
such
terms are defined in the Investment Company Act of 1940, as
amended.
Section
4.13 Use
of Proceeds
(a) The
proceeds of the Closing Date Term Loans are being used by the Borrower (and,
to
the extent distributed to them by the Borrower, each other Group Member)
solely
(a) to refinance all Indebtedness and other obligations outstanding under
the
Target Credit Agreement, (b) to finance the Merger and for the payment of
related transaction costs, fees and expenses and (c) for the payment of
transaction costs, fees and expenses incurred in connection with this Agreement,
the Revolving Credit Agreement and the transactions contemplated
hereby.
(b) The
proceeds of any Incremental Term Loans shall be used (a) to finance working
capital needs and (b) for general corporate purposes.
Section
4.14 Insurance
Each
of
the Group Members maintains in full force and effect such policies of insurance,
including policies of life, fire, theft, product liability, public liability,
property damage, other casualty, employee fidelity, workers’ compensation and
employee health and welfare insurance, of a nature and provide such coverage
as
is customarily carried by businesses of the size and character of such Person,
except to the extent that any failure to do so would not, individually or
in the
aggregate, have a Material Adverse Effect.
Section
4.15 Labor
Matters
(a) There
are
no strikes, work stoppages, slowdowns or lockouts pending or threatened against
or involving the Group Members, other than those that, in the aggregate,
would
not have a Material Adverse Effect.
(b) There
are
no unfair labor practices, grievances, complaints or arbitrations pending,
or,
to the Borrower’s knowledge, threatened, against or involving any Group Members,
nor are there any arbitrations or grievances threatened involving any of
the
Group Members, other than those that, in the aggregate, would not have a
Material Adverse Effect.
56
TERM
LOAN AGREEMENT
COLLECTIVE
BRANDS FINANCE, INC.
(c) Except
as
set forth on Schedule
4.15 (Labor Matters),
as of
the Closing Date, there is no collective bargaining agreement covering any
material number of employees of any Group Member.
Section
4.16 ERISA
(a) Schedule
4.16 (List of Plans)
separately identifies all Title IV Plans, all Multiemployer Plans and all
of the
employee benefit plans within the meaning of Section
3(3)
of ERISA
to which any Group Member has any obligation or liability, contingent or
otherwise.
(b) Each
employee benefit plan of the Group Members intended to qualify under
Section
401
of the
Code does so qualify, and any trust created thereunder is exempt from tax
under
the provisions of Section
501
of the
Code, except where such failures, in the aggregate, would not have a Material
Adverse Effect.
(c) Each
Title IV Plan is in compliance in all material respects with applicable
provisions of ERISA, the Code and other Requirements of Law except for
noncompliances that, in the aggregate, would not have a Material Adverse
Effect.
(d) There
has
been no, nor is there reasonably expected to occur, any ERISA Event other
than
those that, in the aggregate, would not have a Material Adverse
Effect.
(e) Except
to
the extent set forth on Schedule
4.16 (List of Plans),
none of
the Group Members or any ERISA Affiliate would have any Withdrawal Liability
as
a result of a complete withdrawal as of the date hereof from any Multiemployer
Plan.
Section
4.17 Environmental
Matters
(a) The
operations of the Group Members have been and are in compliance with all
Environmental Laws, including obtaining and complying with all required
environmental, health and safety Permits, other than non-compliances that,
in
the aggregate, would not have a reasonable likelihood of the Group Members
incurring Environmental Liabilities and Costs after the date hereof that
would
have a Material Adverse Effect.
(b) None
of
the Group Members or any Real Property currently or, to the knowledge of
the
Borrower, previously owned, operated or leased by or for any of the Group
Members is subject to any pending or, to the knowledge of the Borrower,
threatened, claim, order, agreement, notice of violation, notice of potential
liability or is the subject of any pending or threatened proceeding or
governmental investigation under or pursuant to Environmental Laws other
than
those that, in the aggregate, are not reasonably likely to result in the
Group
Members incurring Environmental Liabilities and Costs that would have a Material
Adverse Effect.
(c) There
are
no facts, circumstances or conditions arising out of or relating to the
operations or ownership of the Borrower or of Real Property owned, operated
or
leased by any of the Group Members that are not specifically included in
the
financial information furnished to the Lenders other than those that, in
the
aggregate, would not have a reasonable likelihood of the Group Members incurring
Environmental Liabilities and Costs that would have a Material Adverse
Effect.
57
TERM
LOAN AGREEMENT
COLLECTIVE
BRANDS FINANCE, INC.
(d) The
Group
Members have provided the Lenders with copies of all material environmental,
health or safety audits, studies, assessments, inspections, investigations
or
other environmental health and safety reports relating to the operations
of the
Group Members or any Real Property of any of them that are in the possession,
custody or control of the Group Members.
(e) Except
for other matters that would not reasonably be expected to result in a Material
Adverse Effect, (i) no owned Real Property of any Group Member has ever been
used by any Group Member or, to each Group Member’s knowledge, by previous
owners or operators in the disposal of, or to produce, store, handle, treat,
release, or transport, any Hazardous Materials, where such production, storage,
handling, treatment, release or transport was in violation of or in a manner
likely to give rise to liability under any Environmental Law, (ii) no Group
Member’s owned Real Property and, to each Group Member’s knowledge, any leased
Real Property has ever been designated or identified in any manner pursuant
to
any environmental protection statute as a Hazardous Materials disposal site,
(iii) no Group Member has received notice that a Lien arising under any
Environmental Law has attached to any revenues or to any Real Property owned
or
operated by any Group Member, and (iv) no Group Member has received a summons,
citation, notice, or directive from the U.S. Environmental Protection Agency
or
any other federal or state governmental agency concerning any action or omission
by any Group Member resulting in the releasing or disposing of Hazardous
Materials into the environment in violation of or in a manner likely to give
rise to liability under any Environmental Law.
Section
4.18 Intellectual
Property
Except
as
disclosed on Schedule
4.18 (Intellectual Property),
the
Group Members own or license or otherwise have the continuing right to use
all
licenses, permits, patents, patent applications, trademarks, trademark
applications, servicemarks, trade names, copyrights, copyright applications,
Internet domain names, franchises, authorizations and other intellectual
property rights (including all Intellectual Property) that are reasonably
necessary for the operations of their respective businesses, without
infringement upon, misappropriation of, or conflict with the rights of any
other
Person with respect thereto, including all trade names associated with any
private label brands of the Group Members, except where such failure to own
or
license, individually or in the aggregate, would not have a Material Adverse
Effect. To the Borrower’s knowledge no license, permit, patent, patent
application, trademark, trademark application, servicemark, tradename,
copyright, copyright application, Internet domain name, franchise authorization,
other intellectual property right (including all Intellectual Property),
slogan
or other advertising device, product, process, method, substance, part or
component, or other material now employed, by any of the Group Members infringes
upon, misappropriates, or conflicts with any rights owned by any other Person,
in any manner that would have a Material Adverse Effect and no claim or
litigation regarding any of the foregoing is pending or threatened, except
(i)
that which would not otherwise have a Material Adverse Effect and (ii) as
disclosed on Schedule
4.7 (Litigation).
Section
4.19 Title;
Real Property
(a) Each
Group Member has good and marketable title to, or valid leasehold interests
in,
all Real Property and good title to, or valid leasehold interests in, all
personal property, in each case that is purported to be owned or leased by
it,
including those reflected on the most recent Financial Statements delivered
by
the Borrower, and none of such properties and assets is subject to any Lien;
except (i) for Liens permitted under Section
8.2 (Liens, Etc.),
and
(ii) where the loss thereof would not, individually or in the aggregate,
result
in a Material Adverse Effect.. The Group Members have received all deeds,
assignments, waivers, consents, non-disturbance and recognition or similar
agreements, bills of sale and other documents in respect of, and have duly
effected all recordings, filings and other actions necessary to establish,
protect and perfect, such Group Member’s right, title and interest in and to all
such property, except where the lack thereof would not, individually or in
the
aggregate, result in a Material Adverse Effect.
58
TERM
LOAN AGREEMENT
COLLECTIVE
BRANDS FINANCE, INC.
(b) Set
forth
on Schedule
4.19 (Real Property)
is a
complete and accurate list of all Real Property of each Loan Party, except
for
owned and leased Real Property the primary use of which is as a retail store,
and showing, as of the Closing Date, the current street address (including,
where applicable, county, state and other relevant jurisdictions), record
owner
and, where applicable, lessee thereof.
(c) All
Permits required to have been issued or appropriate to enable all Real Property
of the Group Members to be lawfully occupied and used for all of the purposes
for which they are currently occupied and used have been lawfully issued
and are
in full force and effect, other than those that, in the aggregate, would
not
have a Material Adverse Effect.
(d) No
Group
Member has received any notice, or has any knowledge, of any pending, threatened
or contemplated condemnation proceeding affecting any Real Property of any
Group
Member or any part thereof, except those that, in the aggregate, would not
have
a Material Adverse Effect.
Section
4.20 Related
Documents
(a) The
execution, delivery and performance by each Group Member of the Related
Documents to which it is a party and the consummation of the transactions
contemplated thereby by such Group Member:
(i) are
within such Group Member’s respective corporate, limited liability company,
partnership or other powers;
(ii) on
or
prior to the Closing Date will have been duly authorized by all necessary
corporate or other action, including the consent of stockholders where
required;
(iii) do
not
and will not (A) contravene or violate such Group Member’s Constituent
Documents, (B) violate any other Requirement of Law applicable to such Group
Member, or any order or decree of any Governmental Authority or arbitrator,
except to the extent that, in the aggregate, such violation would not have
a
Material Adverse Effect, (C) conflict with or result in the breach of,
constitute a default under, or result in or permit the termination or
acceleration of, any Contractual Obligation of such Group Member, except
for
those that, in the aggregate, would not have a Material Adverse Effect or
(D)
result in the creation or imposition of any Lien upon any property of such
Group
Member (or any other Group Member) other than a Lien permitted under
Section
8.2 (Liens, Etc.);
and
59
TERM
LOAN AGREEMENT
COLLECTIVE
BRANDS FINANCE, INC.
(iv) do
not
require the consent of, authorization by, approval of, notice to, or filing
or
registration with, any Governmental Authority or any other Person, other
than
those that (A) will have been obtained at the Closing Date, each of which
will
be in full force and effect on the Closing Date, none of which will on the
Closing Date impose materially adverse conditions upon the exercise of control
by the Borrower over any Group Members and (B) in the aggregate, if not
obtained, would not have a Material Adverse Effect.
(b) None
of
the Related Documents has been amended or modified in any respect and no
provision therein has been waived, except in each case to the extent permitted
by Section
8.12 (Modification of Related Documents).
(c) The
Obligations constitute “Senior
Debt”
as
defined in the Subordinated Notes Indenture.
ARTICLE
V
The
Borrower agrees with the Lenders and the Administrative Agent to each of
the
following as long as any Obligation remains outstanding and, in each case,
unless the Requisite Lenders otherwise consent in writing:
Section
5.1 Maximum
Total Leverage Ratio
The
Borrower shall maintain, on the last day of each fiscal quarter set forth
below,
a Total Leverage Ratio of not more than the maximum ratio set forth below
opposite such fiscal quarter:
|
FISCAL
QUARTER ENDING ON OR ABOUT
|
MAXIMUM
LEVERAGE RATIO
|
|
October
31, 2007, January 31, 2008, April 30, 2008, July 31, 2008, October
31,
2008 and January 31, 2009
|
4.7
to 1
|
|
April
30, 2009, July 31, 2009, October 31, 2009 and January 31,
2010
|
4.2
to 1
|
|
April
30, 2010 and each fiscal quarter thereafter
|
4.0
to 1
|
ARTICLE
VI
REPORTING
COVENANTS
The
Borrower agrees with the Lenders and the Administrative Agent to each of
the
following, as long as any Obligation remains outstanding and, in each case,
unless the Requisite Lenders otherwise consent in writing:
Section
6.1 Financial
Statements
The
Borrower shall furnish to the Administrative Agent each of the
following:
(a) Quarterly
Reports.
Within
45 days after the end of each of the first three fiscal quarters of each
fiscal
year, financial information regarding the Parent and its Subsidiaries consisting
of Consolidated unaudited balance sheets as of the close of such quarter
and the
related statements of income and cash flow for such quarter and that portion
of
the fiscal year ending as of the close of such quarter, setting forth in
comparative form the figures for the corresponding period in the prior year,
in
each case certified by the chief financial officer of the Borrower as fairly
presenting the Consolidated financial condition of the Parent and its
Subsidiaries as at the dates indicated and the results of their operations
and
cash flow for the periods indicated in accordance with GAAP (subject to the
absence of footnote disclosure and normal year-end audit adjustments).
60
TERM
LOAN AGREEMENT
COLLECTIVE
BRANDS FINANCE, INC.
(b) Annual
Reports.
Within
90 days after the end of each fiscal year, financial information regarding
the
Parent and its Subsidiaries consisting of Consolidated balance sheets of
the
Parent and its Subsidiaries as of the end of such year and related statements
of
income and cash flows of the Parent and its Subsidiaries for such fiscal
year,
all prepared in conformity with GAAP and certified without qualification
as to
the scope of the audit or as to the Borrower being a going concern by the
Borrower’s Accountants, together with the report of such accounting firm stating
that (i) such Financial Statements fairly present the Consolidated financial
condition of the Parent and its Subsidiaries as at the dates indicated and
the
results of their operations and cash flow for the periods indicated in
conformity with GAAP applied on a basis consistent with prior years (except
for
changes with which the Borrower’s Accountants shall concur and that shall have
been disclosed in the notes to the Financial Statements) and (ii) the
examination by the Borrower’s Accountants in connection with such Consolidated
Financial Statements has been made in accordance with generally accepted
auditing standards, and accompanied by a certificate stating that in the
course
of the regular audit of the business of the Parent and its Subsidiaries such
accounting firm has obtained no knowledge that a Default or Event of Default
has
occurred and is continuing, or, if in the opinion of such accounting firm,
a
Default or Event of Default has occurred and is continuing, a statement as
to
the nature thereof.
(c) Compliance
Certificate.
Together with each delivery of any Financial Statement pursuant to clause (a)
or
(b)
above, a
certificate of a Responsible Officer of the Borrower (each, a “Compliance
Certificate”)
(i)
showing in reasonable detail the calculations used in determining (A) the
Total
Leverage Ratio, (B) the Senior Secured Leverage Ratio, (C) the Applicable
Amount, (D) Excess Cash Flow (but only in connection with Financial Statements
delivered pursuant to clause
(b)
above
for the preceding four fiscal quarters) and (E) compliance with the financial
covenant contained in Article
V (Financial Covenant)
and in
Section
8.3 (Investments) (as
applicable) and (ii) stating that no Default or Event of Default has occurred
and is continuing or, if a Default or an Event of Default has occurred and
is
continuing, stating the nature thereof and the action that the Borrower proposes
to take with respect thereto.
(d) Other
Collateral Updates.
Together with each delivery of any Financial Statement pursuant to clause
(a) or
(b)
above,
a
certificate of a Responsible Officer of the Borrower in form and substance
reasonably satisfactory to the Administrative Agent that, to the knowledge
of
the Borrower, all certificates, statements, updates and other documents
(including updated schedules) required to be delivered pursuant to the Pledge
and Security Agreement by any Loan Party in the preceding fiscal quarter
have
been delivered thereunder (or such delivery requirement was otherwise duly
waived or extended). The reporting requirements set forth in this clause
(d)
are in
addition to, and are not intended to and shall not replace or otherwise modify,
any obligation of any Loan Party under any Loan Document (including other
notice
or reporting requirements). Compliance with the reporting obligations in
this
clause
(d)
shall
only provide notice to the Administrative Agent and shall not, by itself,
modify
any obligation of any Loan Party under any Loan Document, update any Schedule
to
this Agreement or any schedule to any other Loan Document or cure, or otherwise
modify in any way, any failure to comply with any covenant, or any breach
of any
representation or warranty, contained in any Loan Document or any other Default
or Event of Default.
61
TERM
LOAN AGREEMENT
COLLECTIVE
BRANDS FINANCE, INC.
(e) Business
Plan.
As soon
as approved by the board of directors of Parent and not later than 60 days
after
the end of each fiscal year, and containing substantially the types of financial
information contained in the Projections, (i) the annual business plan of
the
Borrower, the Parent and its Subsidiaries for the next succeeding fiscal
year
approved by the Board of Directors of the Parent and (ii) forecasts prepared
by
management of the Parent for each of the succeeding fiscal years through
the
fiscal year in which the Term Loan Maturity Date is scheduled to occur,
including, in each instance described in clauses
(i)
and
(ii)
above,
(x) a projected year-end Consolidated balance sheet and income statement
and
statement of cash flows and (y) a statement of all of the material assumptions
on which such forecasts are based.
Section
6.2 Default
Notices
As
soon
as practicable, and in any event within five Business Days after a Responsible
Officer of the Parent or the Borrower has actual knowledge of the existence
of
any Default, Event of Default or other event having had a Material Adverse
Effect, the Borrower shall give the Administrative Agent notice specifying
the
nature of such Default or Event of Default or other event, including the
anticipated effect thereof, which notice, if given by telephone, shall be
promptly confirmed in writing on the next Business Day.
Section
6.3 Litigation
Within
30
days after the later of (i) the service of process with respect thereto on
any
Loan Party or (ii) such time as exposure of the Loan Party could be reasonably
determined, the Borrower shall give the Administrative Agent written notice
of
the commencement of all actions, suits and proceedings before any domestic
or
foreign Governmental Authority or arbitrator affecting any of the Group Members
that (i) seeks injunctive or similar relief that could reasonably be expected
to
have a Material Adverse Effect or (ii) in the reasonable judgment of such
Group
Member, expose any of the Group Members to liability in an amount that, if
adversely determined, would have a Material Adverse Effect.
Section
6.4 SEC
Filings; Press Releases
Promptly
after the sending or filing thereof, the Borrower shall send notices to the
Administrative Agent of (a) all reports and registration statements that
the
Borrower, the Parent or any of its Subsidiaries files with the Securities
and
Exchange Commission or any national or foreign securities exchange or the
National Association of Securities Dealers, Inc. on Form 10-K, 10-Q or 8-K,
and
(b) all other statements concerning material changes or developments in the
business of the Group Members made available by any Group Member to the public
or its other creditors generally, provided,
however,
that
the Borrower shall provide copies to the Administrative Agent of all (i)
all
documents listed in clauses
(a)
and
(b)
above
that are not publicly available or (ii) each document listed in clauses
(a)
and
(b)
above
upon the request of the Administrative Agent.
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Section
6.5 Insurance
As
soon
as is practicable and in any event within 90 days after the end of each fiscal
year, the Borrower shall furnish the Administrative Agent (in sufficient
copies
for each of the Lenders) with (a) a report in form and substance reasonably
satisfactory to the Administrative Agent and the Lenders outlining all material
insurance coverage maintained as of the date of such report by any Loan Party
and the duration of such coverage and (b) an insurance broker’s statement that
all premiums then due and payable with respect to such coverage have been
paid
and confirming, with respect to any insurance maintained by any Loan Party,
that
the Administrative Agent has been named as loss payee or additional insured,
as
applicable.
Section
6.6 ERISA
Matters
The
Borrower shall furnish the Administrative Agent (with sufficient copies for
each
of the Lenders) each of the following:
(a) promptly
and in any event within 30 days after any Group Member or any ERISA Affiliate
knows or has reason to know that any ERISA Event has occurred, written notice
describing such event;
(b) promptly
and in any event within 30 days after any Group Member or any ERISA Affiliate
knows or has reason to know that a request for a minimum funding waiver under
Section
412
of the
Code has been filed with respect to any Title IV Plan or Multiemployer Plan,
a
written statement of a Responsible Officer of the Borrower describing such
ERISA
Event or waiver request and the action, if any, the Group Members and ERISA
Affiliates propose to take with respect thereto and a copy of any notice
filed
with the PBGC or the IRS pertaining thereto; and
(c) promptly
and in any event within 5 days after the date that any Group Member or any
ERISA
Affiliate files a notice of intent to terminate any Title IV Plan, if such
termination would require material additional contributions in order to be
considered a standard termination within the meaning of Section
4041(b)
of
ERISA, a copy of each notice.
Section
6.7 Environmental
Matters
The
Borrower shall provide the Administrative Agent promptly and in any event
within
10 days after any Group Member learning of any of the following, written
notice
of each of the following:
(a) that
an
Environmental Lien has been filed against any of the real or personal property
of any Group Member;
(b) commencement
of any Environmental Action or notice that an Environmental Action will be
filed
against any Group Member;
(c) the
discovery by any Group Member of any condition that would reasonably be expected
to result in collective Environmental Liabilities and costs whose Dollar
Equivalent would have a Material Adverse Effect;
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(d) any
proposed acquisition of stock, assets or real estate, any proposed leasing
of
property or any other action by any Group Member other than those the
consequences of which, in the aggregate, have reasonable likelihood of
subjecting the Group Members collectively to Environmental Liabilities and
Costs
that would have a Material Adverse Effect;
(e) any
proposed action by any Group Member or any proposed change in Environmental
Laws
that, in the aggregate, have a reasonable likelihood of requiring the Group
Members to obtain additional environmental, health or safety Permits or make
additional capital improvements to obtain compliance with Environmental Laws
that, in the aggregate, would have a Material Adverse Effect or that shall
subject the Group Members to additional Environmental Liabilities and Costs
that
would have a Material Adverse Effect;
(f) notice
of
any violation citation or other administrative order received by any Loan
Party
that, in the aggregate, would have a Material Adverse Effect; and
(g) upon
written request by any Lender through the Administrative Agent, a report
providing an update of the status of any environmental, health or safety
compliance, hazard or liability issue identified in any notice or report
delivered pursuant to this Agreement.
Section
6.8 Other
Information
The
Borrower shall provide the Administrative Agent, or any Lender making a request
through the Administrative Agent, with such other information respecting
the
business, properties, condition, financial or otherwise, or operations of
the
Borrower, the Parent or any Restricted Subsidiary as the Administrative Agent
or
such Lender through the Administrative Agent may from time to time reasonably
request, including a Corporate Chart. Documents or notices required to be
delivered pursuant to this clauses
(a) and
(b)
of
Section
6.1 (Financial Statements)
and
Section
6.3 (Litigation), which
are
made available via XXXXX, or any successor system of the Securities and Exchange
Commission, in an annual or quarterly report of the Parent on Form 10-K or
10-Q
or in a current report of the Parent on Form 8-K, shall be deemed delivered
to
the Lenders on the date such documents are made so available; provided
that,
(i)
the Parent shall have provided notice to the Administrative Agent that such
document or notice is publicly available and (ii) upon the request of the
Administrative Agent, the Borrower shall deliver paper copies (or in any
other
manner approved pursuant to Section
11.8 (Notices, Etc.)
of such
documents or notices to the Administrative Agent.
ARTICLE
VII
AFFIRMATIVE
COVENANTS
Each
of
the Parent and the Borrower agrees with the Lenders and the Administrative
Agent
to each of the following, as long as any Obligation remains outstanding and,
in
each case, unless the Requisite Lenders otherwise consent in
writing:
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Section
7.1 Preservation
of Corporate Existence, Etc.
The
Borrower and Parent each shall, and Parent shall cause each Restricted
Subsidiary to, preserve and maintain its legal existence, rights (charter
and
statutory) and franchises, except as permitted by Sections
8.4 (Sale of Assets),
8.7
(Restriction on Fundamental Changes)
and
Section 8.11 (Modification of Constituent Documents)
and, in
the case of statutory rights and franchises, for those that would not, in
the
aggregate, have a Material Adverse Effect..
Section
7.2 Compliance
with Laws, Etc.
The
Borrower and Parent each shall, and Parent shall cause each Restricted
Subsidiary to, comply with all applicable Requirements of Law, Contractual
Obligations and Permits, except where the failure so to comply would not,
in the
aggregate, have a Material Adverse Effect.
Section
7.3 Conduct
of Business
The
Borrower and Parent each shall, and Parent shall cause each Restricted
Subsidiary to, (a) conduct its business in the ordinary course and (b) use
its
reasonable efforts, in the ordinary course and consistent with past practice,
to
preserve its business and the goodwill and business of the customers,
advertisers, suppliers and others having business relations with the Borrower,
the Parent or any Restricted Subsidiary, except in each case where the failure
to comply with the covenants in each of clauses
(a)
and
(b)
above
would not, in the aggregate, have a Material Adverse Effect.
Section
7.4 Payment
of Taxes, Etc.
The
Borrower and Parent each shall, and Parent shall cause each Restricted
Subsidiary to, pay and discharge before the same shall become delinquent,
all
lawful governmental claims, taxes, assessments, charges and levies, except
(i)
where contested in good faith, by proper proceedings and adequate reserves
therefor have been established on the books of the Borrower, the Parent or
the
appropriate Restricted Subsidiary in conformity with GAAP or (ii) where the
failure to do so, individually or in the aggregate, would not result in a
Material Adverse Effect.
Section
7.5 Maintenance
of Insurance
The
Borrower and Parent each shall, and Parent shall cause each Restricted
Subsidiary to, (a) maintain insurance with responsible and reputable insurance
companies or associations in such amounts and covering such risks as is usually
carried by companies engaged in similar businesses and owning similar properties
in the same general areas in which the Borrower, the Parent or such Restricted
Subsidiary operates, and such other insurance as may be required by any
Collateral Document and (b) cause all such insurance relating to the Borrower,
the Parent or any Loan Party to name the Administrative Agent on behalf of
the
Secured Parties as additional insured or loss payee, as appropriate, and
to
provide that no cancellation, material addition in amount or material change
in
coverage shall be effective until after 30 days’ written notice thereof to the
Administrative Agent.
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Section
7.6 Access
The
Borrower and Parent each shall, and Parent shall cause each Restricted
Subsidiary to, from time to time permit the Administrative Agent and the
Lenders, or any agents or representatives thereof, within five Business Days
after written notification of the same (except that during the continuance
of an
Event of Default, no such notice shall be required) to (a) examine and make
copies of and abstracts from the records and books of account of the Borrower,
the Parent and each Restricted Subsidiary, (b) visit the properties of the
Borrower, the Parent and each Restricted Subsidiary, (c) discuss the affairs,
finances and accounts of the Borrower, the Parent and each Restricted Subsidiary
with any of their respective officers or directors and (d) communicate directly
with any of its certified public accountants (including the Borrower’s
Accountants), if any. The Borrower, the Parent and each Restricted Subsidiary
shall authorize its certified public accountants (including the Borrower’s
Accountants), if any, to disclose to the Administrative Agent or any Lender
any
and all financial statements and other information of any kind, as the
Administrative Agent or any Lender reasonably requests and that such accountants
may have with respect to the business, financial condition, results of
operations or other affairs of the Borrower, the Parent and each Restricted
Subsidiary.
Section
7.7 Keeping
of Books
The
Borrower and Parent each shall, and Parent shall cause each Restricted
Subsidiary to, keep proper books of record and account, in which full and
correct entries shall be made in conformity with GAAP of all financial
transactions and the assets and business of the Borrower, the Parent and
each
Restricted Subsidiary.
Section
7.8 Maintenance
of Properties, Etc.
The
Borrower and Parent each shall, and Parent shall cause each Restricted
Subsidiary to, maintain and preserve (a) in good working order and condition
all
of its properties necessary in the conduct of its business, (b) all rights,
permits, licenses, approvals and privileges (including all Permits) used
or
useful or necessary in the conduct of its business and (c) all registered
patents, trademarks, trade names, copyrights and service marks with respect
to
its business, except where failure to so maintain and preserve the items
set
forth in clauses
(a),
(b)
and
(c)
above
would not, in the aggregate, have a Material Adverse Effect.
Section
7.9 Application
of Proceeds
The
Borrower (and, to the extent distributed to them by the Borrower, the Parent
and
each Restricted Subsidiary) shall use the entire amount of the proceeds of
the
Term Loans as provided in Section
4.13 (Use of Proceeds).
Section
7.10 Environmental
The
Borrower and Parent each shall, and Parent shall cause each Restricted
Subsidiary to, comply in all material respects with Environmental Laws and,
without limiting the foregoing, the Borrower shall, at its sole cost and
expense, upon receipt of any notification or otherwise obtaining knowledge
of
any Release or other event that has any reasonable likelihood of any of the
Borrower, the Parent or any Restricted Subsidiary incurring Environmental
Liabilities and Costs that would have a Material Adverse Effect,
(a) conduct, or pay for consultants to conduct, tests or assessments of
environmental conditions at such operations or properties, including the
investigation and testing of subsurface conditions and (b) take such Remedial
Action and undertake such investigation or other action as required by
Environmental Laws or as any Governmental Authority requires or as is
appropriate and consistent with good business practice to address the Release
or
event and otherwise ensure compliance with Environmental Laws.
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Section
7.11 Additional
Collateral and Guaranties
Unless
otherwise agreed by the Administrative Agent in its reasonable discretion,
subject to Section
7.13 (Post-Closing Covenants),
to the
extent not delivered to the Administrative Agent on or before the Closing
Date
(including in respect of after-acquired property and any Person (other than
an
Immaterial Subsidiary) that becomes a Wholly-Owned Domestic Subsidiary of
any
Loan Party after the Closing Date), the Borrower and Parent each agree promptly
to do, or cause each other Group Member to do, each of the following (including
in respect of any after-acquired property) in form and substance reasonably
satisfactory to the Administrative Agent:
(a) except
for any Immaterial Subsidiary (other than with respect to its Stock or Stock
Equivalents under clause
(B)(1)
below),
cause such Group Member to (A) become a party to a Guaranty and applicable
Collateral Documents or enter into new Collateral Documents and (B) take
such
other actions necessary or, in the reasonable judgment of the Administrative
Agent, advisable to grant to the Administrative Agent for the benefit of
the
Secured Parties, subject only to the Liens permitted under Section
8.2 (Liens, Etc.),
a valid
and enforceable perfected first-priority security interest in (1) all of
the
Stock and Stock Equivalents of such Borrower, the Parent or Restricted
Subsidiary and (2) all property and assets of such Borrower, the Parent or
Restricted Subsidiary, including, if applicable, the filing of UCC financing
statements (or the applicable equivalent) and perfection (including, if
applicable, the delivery of all certificates, together with undated powers
or
endorsements in blank) of security interest on Stock, Stock Equivalents,
intercompany notes or debt Securities in such jurisdictions as may be required
by the Collateral Documents, by any Requirement of Law or as may be reasonably
requested by the Administrative Agent;
(b) upon
written request of the Administrative Agent, execute and deliver to the
Administrative Agent, for the benefit of the Secured Parties, promptly and
in
any event not later than 60 days after receipt of such notice, a Mortgage
(or
similar security document) on any owned Real Property of any Loan Party with
a
fair market value of $10,000,000 or more, together with, if requested by
the
Administrative Agent, all Collateral Documents (including any Mortgage
Supporting Documents) necessary or, in the reasonable judgment of the
Administrative Agent, appropriate in the applicable jurisdiction to obtain
the
equivalent in such jurisdiction of a valid and enforceable perfected
first-priority Lien on such Real Property, subject only to the Liens permitted
under Section
8.2 (Liens, Etc.);
(c) to
take
such other actions necessary or, in the reasonable judgment of the
Administrative Agent, advisable to ensure the validity or continuing validity
of
the guaranties or to create, maintain or perfect the security interest required
to be granted pursuant to clauses
(a) and
(b)
above,
including such actions as may be required by the Collateral Documents or
by any
Requirement of Law or reasonably requested by the Administrative Agent;
and
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(d) if
requested by the Administrative Agent, deliver to the Administrative Agent
legal
opinions relating to the matters described above, which opinions shall be
in
form and substance, and from counsel, reasonably satisfactory to the
Administrative Agent;
provided,
however,
that
notwithstanding anything to the contrary contained in this Section
7.11
or in
Section
3.1 (Conditions Precedent to Closing Date Term Loans),
(i) any
security interest required to be granted under the Loan Documents on any
assets
of a Group Member shall be subject to the Intercreditor Agreement and any
Liens
permitted under Section 8.2
(Liens, Etc.),
(ii)
the Loan Documents shall not require any Group Member to enter into any control
agreement for the perfection of security interests in Cash, Cash Equivalents
or
Securities in a deposit or securities account (other than any Cash Collateral
Account) except to the extent the same is required under the terms of the
Revolving Credit Agreement and (iii) the Loan Documents shall not require
the
creation or perfection of, pledges of or security interests in, or the obtaining
of title insurance or legal opinions with respect to, any Excluded Assets or any
leaseholds, commercial tort claims, motor vehicles or any other asset subject
to
certificates of title or letter of credit rights (other than any such rights
constituting “supporting
obligations”
as
defined in the UCC). Nothing herein shall restrict any Group Member that
is not
a Loan Party on the Closing Date from becoming a Loan Party; provided,
however,
that
such Group Member shall have complied with the provisions of this Section
7.11 as
if it
were a new Restricted Subsidiary.
Section
7.12 Designation
of Subsidiaries
The
board
of directors of the Parent may at any time designate any Restricted Subsidiary
(other than the Borrower) as an Unrestricted Subsidiary or any Unrestricted
Subsidiary as a Restricted Subsidiary; provided
that (a)
immediately before and after such designation, no Default or Event of Default
shall have occurred and be continuing, (b) no Restricted Subsidiary may be
designated an Unrestricted Subsidiary if it previously had been designated
as an
Unrestricted Subsidiary, (c) any such designation shall be deemed to be an
Investment requiring compliance with Section
8.3 (Investments)
(or
reduction in an outstanding Investment, in the case of a designation of an
Unrestricted Subsidiary as a Restricted Subsidiary), on the date of such
designation in an amount equal to the sum of (i) the Parent’s direct or
indirect equity ownership percentage of the net worth of such designated
Restricted Subsidiary immediately prior to such designation (such net worth
to
be calculated without regard to any guarantee provided by such designated
Restricted Subsidiary of the Parent’s, Borrower’s or another Restricted
Subsidiary’s Indebtedness) and (ii) without duplication, the aggregate
principal amount of any Indebtedness owed by such designated Restricted
Subsidiary to the Parent, Borrower or any other Restricted Subsidiary
immediately prior to such designation, all calculated, except as set forth
in
the parenthetical to clause
(i)
above,
on a Consolidated basis in accordance with GAAP, and (c) no Subsidiary may
be designated as an Unrestricted Subsidiary if it is a “Restricted
Subsidiary”
for
the
purpose of any other Indebtedness of the Parent. The designation of any
Unrestricted Subsidiary as a Restricted Subsidiary shall constitute the
incurrence at the time of designation of any Indebtedness or Liens of such
Subsidiary existing at such time.
Section
7.13 Post-Closing
Covenants
Each
of
the Parent and the Borrower shall, and Parent shall cause each other Group
Member to, comply with the terms and conditions set forth on Schedule
7.13 (Post-Closing Covenants).
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ARTICLE
VIII
NEGATIVE
COVENANTS
Each
of
the Parent and the Borrower agrees with the Lenders and the Administrative
Agent
to each of the following, as long as any Obligation or any Term Loan Commitment
remains outstanding and, in each case, unless the Requisite Lenders otherwise
consent in writing:
Section
8.1 Indebtedness
The
Parent shall not, nor shall it permit the Borrower or any Restricted Subsidiary
to, directly or indirectly create, incur, assume or otherwise become or remain
directly or indirectly liable with respect to any Indebtedness or Disqualified
Stock, except for the following:
(a) the
Secured Obligations (other than in respect of Hedging Contracts not permitted
to
be incurred pursuant to clause
(i)
below)
and Guaranty Obligations in respect thereto and Permitted Refinancings
thereof;
(b) the
Revolving Credit Obligations and Permitted Refinancings thereof;
(c) Indebtedness
existing on the date of this Agreement and disclosed on Schedule 8.1
(Existing Indebtedness)
and
Permitted Refinancings thereof;
(d) Guaranty
Obligations incurred by the Borrower or any Guarantor in respect of Indebtedness
of the Borrower or any Guarantor that is otherwise permitted by this
Section
8.1
(other
than clause
(a)
above);
(e) Capital
Lease Obligations, purchase money Indebtedness or other Indebtedness in respect
of industrial revenue or similar bonds, in each case incurred by the Parent
or a
Restricted Subsidiary to finance the acquisition, construction or improvement
of
fixed assets and Permitted Refinancings thereof; provided,
however,
that
the aggregate outstanding principal amount of all such Capital Lease
Obligations, purchase money or other Indebtedness and Permitted Refinancings
thereof at the date such Capital Lease Obligation, purchase money or other
Indebtedness is incurred, and after giving effect thereto, shall not exceed
the
greater of (i) $50,000,000 and (ii) 2.0% of the Total Assets of the Borrower,
the Parent and the Restricted Subsidiaries taken as a whole;
(f) Attributable
Debt incurred by the Parent or any Restricted Subsidiary pursuant to Permitted
Sale Leaseback transactions; provided,
however,
that
the aggregate principal amount all such of Attributable Debt outstanding
at the
date such Permitted Sale Leaseback transaction is consummated, and after
giving
effect thereto, shall not exceed the greater of (i) $50,000,000 and
(ii) 2.0% of Total Assets of the Borrower and the Restricted Subsidiaries
taken as a whole at any time;
(g) Indebtedness
arising from intercompany loans (i) among Loan Parties, (ii) among Qualified
Restricted Subsidiaries, (iii) among Restricted Subsidiaries that are not
Qualified Restricted Subsidiaries or Guarantors, (iv) from any Restricted
Subsidiary to any Loan Party; provided,
however,
any
such loans shall be subordinated to the Obligations on terms that expressly
prohibit payment of any amount thereof (including interest thereon) at any
time
an Event of Default has occurred and is continuing, (v) from any Loan Party
to
any Qualified Restricted Subsidiary, (vi) from any Loan Party or Qualified
Restricted Subsidiary to any Restricted Subsidiary that is not a Loan Party
or
Qualified Restricted Subsidiary or to any Unrestricted Subsidiary and (vii)
from
any Restricted Subsidiary that is not a Qualified Restricted Subsidiary or
a
Guarantor to any Unrestricted Subsidiary; provided,
however,
that,
in the case of clauses
(v),
(vi)
and
(vii)
above,
the Investment in such intercompany loan to such Subsidiary is permitted
under
Section 8.3 (Investments);
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(h) Indebtedness
of the Borrower and the Restricted Subsidiaries arising under any performance
or
surety bond entered into in the ordinary course of business;
(i) Obligations
under Hedging Contracts permitted under
Section 8.15 (No Speculative Transactions);
(j) other
Indebtedness of the Parent and the Restricted Subsidiaries in an aggregate
principal amount not to exceed $100,000,000 at any time outstanding;
provided,
however,
that
Indebtedness of Persons which are not Loan Parties pursuant to this clause
(j)
shall
not exceed an aggregate principal amount of $50,000,000 at any time
outstanding;
(k) Indebtedness
of any Person that becomes a Restricted Subsidiary after the Closing Date
in
connection with a Permitted Acquisition and any Permitted Refinancing thereof;
provided,
that
(i) such Indebtedness exists at the time such Person becomes a Restricted
Subsidiary and is not created in contemplation of or in connection with such
Person becoming a Restricted Subsidiary, (ii) after giving effect to the
assumption of such Indebtedness (A) the
Parent would be in compliance with the financial covenant contained in
Section
5.1 (Financial Covenant)
for the most recently ended Test Period, determined on a Pro Forma
Basis,
and (B)
if such Indebtedness is secured by a Lien on any assets of such Person, the
Senior Secured Leverage Ratio would be less than 3.0 to 1 on a Pro Forma
Basis,
(iii) such Indebtedness is not guaranteed in any respect by the Borrower,
any
Guarantor or any Restricted Subsidiary (other than by any such Person that
so
becomes a Restricted Subsidiary or is the survivor of a merger with such
Person
or any of its Subsidiaries) and (iv) except for Indebtedness consisting of
Capital Lease Obligations, revenue bonds, purchase money Indebtedness or
mortgages or other Liens on specific assets no portion of such Indebtedness
matures prior to the Term Loan Maturity Date;
(l) Indebtedness
of the Borrower or the Restricted Subsidiaries arising from the issuance,
for
use in the ordinary course of business, of letters of credit in an aggregate
amount not to exceed at any one time outstanding $75,000,000; and
(m) Indebtedness
of the Loan Parties not otherwise permitted under this Section
8.1
and
Permitted Refinancings thereof; provided,
however,
that
after giving effect to the occurrence of such Indebtedness (A) no Default
or
Event of Default shall have occurred and be continuing and (B) the
Parent would be in compliance with the financial covenant contained in
Section
5.1 (Financial Covenant)
for the most recently ended Test Period, determined on a Pro Forma Basis
after
giving effect to the incurrence of such Indebtedness.
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Section
8.2 Liens,
Etc.
The
Parent shall not, nor shall it permit any Restricted Subsidiary to, create
or
suffer to exist, any Lien upon or with respect to any of their respective
properties or assets, whether now owned or hereafter acquired, or assign,
or
permit any Restricted Subsidiary to assign, any right to receive income,
except
for the following:
(a) Liens
created pursuant to the Loan Documents;
(b) Liens
created pursuant to the Revolving Credit Loan Documents securing the Revolving
Credit Obligations, subject to the terms of the Intercreditor
Agreement;
(c) Liens
existing on the date of this Agreement and disclosed on Schedule
8.2 (Existing Liens);
(d) Customary
Permitted Liens on the assets of the Borrower and the Restricted
Subsidiaries;
(e) purchase
money Liens or Liens in favor of any Governmental Authority or a Subsidiary
thereof granted by the Borrower or any of the Restricted Subsidiaries (including
the interest of a lessor under a Capital Lease and purchase money Liens or
Liens
in favor of such Governmental Authority or Subsidiary thereof to which any
property is subject at the time, on or after the date hereof, of the Borrower’s
or such Restricted Subsidiary’s acquisition thereof) securing Indebtedness
permitted under Section
8.1(e) (Indebtedness)
and
limited in each case to the property purchased, constructed or improved with
the
proceeds of such purchase money or other Indebtedness or subject to such
Capital
Lease;
(f) any
Lien
securing the renewal, extension, refinancing or refunding of any Indebtedness
secured by any Lien permitted by clause
(c)
or
(e) above
or this
clause
(f)
without
any change in the assets subject to such Lien and to the extent such renewal,
extension, refinancing or refunding is permitted by clause
(c)
or
(e)
of
Section
8.1(Indebtedness);
(g) Liens
in
favor of lessors securing operating leases or, to the extent such transactions
create a Lien hereunder, a Permitted Sale Leaseback, in each case to the
extent
such operating leases or Permitted Sale Leasebacks are permitted hereunder;
(h) Liens
existing on the assets of any Person that becomes a Restricted Subsidiary
(or is
a Restricted Subsidiary that survives a merger with such Person), or existing
on
assets acquired, pursuant to a Permitted Acquisition to the extent the Liens
on
such assets secure Indebtedness permitted by Section
8.1(k) (Indebtedness);
provided
that
such
Liens attach at all times only to the same assets to which such Liens attached
(and after-acquired property that is affixed or incorporated into the property
covered by such Lien), and secure only the same Indebtedness or obligations
that
such Liens secured, immediately prior to such Permitted Acquisition and any
Permitted Refinancing thereof; and
(i) Liens
not
otherwise permitted by the foregoing clauses of this Section
8.2
securing
obligations or other liabilities of any Restricted Subsidiary; provided,
however,
that
the Dollar Equivalent of the aggregate outstanding amount of all such
obligations and liabilities shall not exceed $50,000,000 at any
time.
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Section
8.3 Investments
The
Parent shall not, nor shall it permit Borrower or any Restricted Subsidiary
to
make or maintain, directly or indirectly, any Investment except for the
following:
(a) Investments
existing on the date of this Agreement and disclosed on Error!
Reference source not found.3
(Existing Investments);
(b) Investments
in cash and Cash Equivalents;
(c) Investments
in payment intangibles, chattel paper (each as defined in the UCC) and Accounts,
notes receivable and similar items arising or acquired in the ordinary course
of
business consistent with the past practice of the Group Members;
(d) Investments
received in settlement of amounts due to any Group Member effected in the
ordinary course of business;
(e) Investments
(i) among Loan Parties, (ii) among Qualified Restricted Subsidiaries, (iii)
among Restricted Subsidiaries that are not Qualified Restricted Subsidiaries
or
Guarantors, (iv) from any Restricted Subsidiary to any Loan Party, (v) from
any
Loan Party to any Qualified Restricted Subsidiary; provided,
however,
that at
the date of, and after giving effect to any such Investment made pursuant
to
this clause
(v)
or
clause
(i)(B)
below,
the Parent
would be in compliance with the financial covenant contained in Section
5.1 (Financial
Covenant)
for the most recently ended Test Period, determined on a Pro Forma Basis,
and
provided
further,
that, the
aggregate outstanding amount of all such Investments permitted pursuant to
this
clause
(v),
together with all such Investments in Permitted Acquisitions permitted pursuant
to clause
(i)(B) below,
shall not exceed $250,000,000;
(f) Investments
in respect of (i) Hedging Contracts permitted under Section
8.15 (No Speculative Transactions) and
(ii)
any Note Hedge Transaction;
(g) loans
or
advances to employees of the Borrower or any Restricted Subsidiary in the
ordinary course of business as presently conducted other than any loans or
advances that would be in violation of Section
402
of the
Xxxxxxxx-Xxxxx Act; provided,
however,
that
the Dollar Equivalent of the aggregate principal amount of all loans and
advances permitted pursuant to this clause
(g) shall
not
exceed $10,000,000 at any time;
(h) Guaranty
Obligations permitted by Section
8.1 (Indebtedness);
(i) Investments
in any Person that becomes a Loan Party or a Qualified Restricted Subsidiary
or
in any assets that are acquired by a Loan Party or a Qualified Restricted
Subsidiary, in each case, in connection with any Permitted Acquisition
consummated after the Closing Date; provided,
however,
that at
the date of, and after giving effect to any such Investment made pursuant
to
this clause
(i),
the
Parent
would be in compliance with the financial covenant contained in Section
5.1 (Financial Covenant)
for the most recently ended Test Period, determined on a Pro Forma Basis,
and
provided
further,
that, (A) the fair market value (determined in good faith by the Borrower)
of
such Investments (or portion thereof) in Persons that become Loan Parties
or in
assets that are acquired by Loan Parties shall not exceed $500,000,000 in
the
aggregate, except for any such Investment to the extent the consideration
for
which consists of Qualified Capital Stock of the Parent and (B) the fair
market
value (determined in good faith by the Borrower) of such Investments (or
portion
thereof) in Persons that become Qualified Restricted Subsidiaries or in assets
that are acquired by Qualified Restricted Subsidiaries shall not, together
with all such Investments permitted pursuant to clause
(e)(v) above,
exceed
$250,000,000 in the aggregate (it
being
understood that additional Investments in connection with Permitted
Acquisitions, including Investments in Restricted Subsidiaries that are not
Loan
Parties or Qualified Restricted Subsidiaries, may be made in reliance on
clause
(j)
below);
and
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(j) Investments
in an amount not to exceed at the date of, and after giving effect to such
Investment, the sum of (i) the greater of (a) $75,000,000 and (b) 2.5% of
the
Total Assets of the Borrower and the Restricted Subsidiaries taken as a whole
at
such time and (ii) the Applicable Amount in the aggregate at any time
outstanding.
Section
8.4 Sale
of Assets
The
Parent shall not, nor shall it permit Borrower or any Restricted Subsidiary
to,
sell, convey, transfer, lease or otherwise dispose of, any of their respective
assets or any interest therein (including the sale or factoring at maturity
or
collection of any accounts) to any Person, or permit or suffer any other
Person
to acquire any interest in any of their respective assets or, except in the
case
of the Borrower, issue or sell any shares of their Stock or any Stock
Equivalents (any such disposition being an “Asset
Sale”),
except for the following:
(a) the
sale
or disposition of Cash Equivalents, Inventory or other assets, in each case
in
the ordinary course of business;
(b) the
sale
or disposition of equipment that has become obsolete, damaged, surplus or
otherwise no longer used or useful in the ordinary course of business or
is
replaced in the ordinary course of business;
(c) any
Recovery Event (without giving effect to the limitations in the definition
thereof);
(d) sales
or
other dispositions without recourse and in the ordinary course of business
of
overdue accounts receivable in connection with the compromise or collection
thereof;
(e) the
licensing, sublicensing or other similar ordinary course transfers (but not
sales) of intellectual property rights (on an exclusive or non-exclusive
basis)
to the extent that the foregoing occurs on an arms-length basis;
(f) the
settlement, release or surrender of tort or other litigation claims;
(g) asset
contributions for no cash consideration (or its equivalent) to the extent
constituting an Investment permitted by Section
8.3(e) (Investments);
(h) Assets
Sales (i) among the Loan Parties, (ii) among Qualified Restricted Subsidiaries,
and (iii) among Restricted Subsidiaries that are not Qualified Restricted
Subsidiaries or Loan Parties;
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(i) a
true
lease or sublease of Real Property not constituting Indebtedness and not
constituting a Sale Leaseback;
(j) dispositions
of property pursuant to a Permitted Sale Leaseback; provided,
however,
that
with respect to any such Asset Sale pursuant to this clause
(j),
an
amount equal to all Net Cash Proceeds of such Asset Sale are applied to the
payment of the Obligations as set forth in, and to the extent required by,
Section
2.7 (Mandatory Prepayments);
(k) as
long
as no Default or Event of Default is continuing or would result therefrom,
any
other Asset Sale for Fair Market Value, 75% of which shall be payable in
cash
upon such sale; provided,
however,
that
with respect to any such Asset Sale pursuant to this clause
(k),
(i) the
Dollar Equivalent of the aggregate consideration received during any fiscal
year
for all such Asset Sales shall not exceed 2.0% of the Total Assets of the
Borrower and the Restricted Subsidiaries taken as a whole at any time
outstanding and (ii) an amount equal to all Net Cash Proceeds of such Asset
Sale
are applied to the payment of the Obligations as set forth in, and to the
extent
required by, Section
2.7 (Mandatory Prepayments);
(l) any
other
sale or transfer or series of related sales or transfers that result in cash
consideration of less than $1,000,000;
(m) termination,
sale or closure of up to 500 stores, subleases and franchises per annum,
net of
those acquired or opened; provided,
however,
that at
no time shall the aggregate number of stores owned or franchised by the Group
Members be less than 3,500;
(n) transfers
to insurers as part of insurance settlements for losses to governmental
authority for condemned property; and
(o) dispositions
listed on Schedule
8.4 (Asset Sales).
Section
8.5 Restricted
Payments
The
Parent shall not, and shall not permit Borrower or any Restricted Subsidiary
to,
directly or indirectly, declare, order, pay, make or set apart any sum for
any
Restricted Payment except for the following:
(a) Restricted
Payments by any Subsidiary of the Parent to any Loan Party;
(b) dividends
and distributions declared and paid on the common Stock of the Parent and
payable only in common Stock of the Parent;
(c) (i)
payments of cash upon conversion, redemption, repayment, prepayment or
repurchase of any Indebtedness to the extent such payments would be permitted
under Section
8.6(e) (Prepayment of Indebtedness),
(ii)
deliveries of the Borrower’s common stock upon conversion of any Qualified
Refinancing Indebtedness to equity, (iii) payments of cash in respect of
any
interest payments due on any Qualified Refinancing Indebtedness, (iv) Restricted
Payments in respect of any Note Hedge Transaction (including, but not limited
to, the purchase and exercise of such Note Hedge Transaction), and (v)
Restricted Payments in respect of any warrant transaction entered into
concurrently with any Note Hedge Transaction;
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(d) as
long
as no Default or Event of Default has occurred and is continuing or would
result
therefrom, Restricted Payments in an amount not to exceed, together with
any
payment made pursuant to clause
(g) of
Section
8.6 (Prepayment of Indebtedness),
the sum
of (i) $50,000,000 and (ii) the Applicable Amount in the aggregate at any
time
outstanding;
(e) repurchases
of Parent stock in connection with the exercise of employee stock options
in the
ordinary course of business on a basis that is “net of taxes” or any equivalent
gross exercise and repurchase to fund tax liabilities to the extent required
under applicable employee contractual arrangements; and
(f) dividends
or distributions by Restricted Subsidiaries to another Restricted Subsidiary and
to minority investors in such Restricted Subsidiary, in each case to the
extent
of their interest therein, provided,
however,
that
any such Restricted Payment shall be made pro
rata
among
all such investors.
Section
8.6 Prepayment
of Indebtedness
The
Parent shall not, nor shall it permit Borrower or any Restricted Subsidiary
to,
prepay, redeem, purchase, defease or otherwise satisfy prior to the scheduled
maturity thereof in any manner, or make any payment in violation of any
subordination terms of, any Indebtedness (each an “Optional
Debt Prepayment”);
provided,
however,
that
the Borrower, the Parent, and each Restricted Subsidiary may (a) prepay the
Obligations in accordance with the terms of this Agreement, (b) prepay
Indebtedness under the Target Credit Agreement with the proceeds of the Closing
Date Term Loans hereunder, (c) prepay any intercompany Indebtedness permitted
under Section
8.1(g)
and
(j)
(Indebtedness),
(d)
enter into any Permitted Refinancing permitted under Section
8.1 (Indebtedness),
(e) as
long as no Default or Event of Default has occurred and is continuing or
would
result therefrom, repay, redeem, purchase, defease or otherwise satisfy prior
to
the scheduled maturity thereof in any matter any senior unsecured, senior
subordinated or other subordinated Indebtedness in an aggregate principal
amount
not to exceed $450,000,000; provided
that,
after giving effect to such payment, (i) the Senior Secured Leverage Ratio
would
not be greater than 2.0 to 1 on a Pro Forma Basis, and (ii) the
Parent would be in compliance with the financial covenant contained in
Section
5.1 (Financial Covenant)
for the most recently ended Test Period, determined on a Pro Forma
Basis,
(f) to
the extent not otherwise permitted hereby and as long as no Default or Event
of
Default has occurred and is continuing or would result therefrom, prepay
Indebtedness of any Foreign Subsidiary in an amount not to exceed in the
aggregate $10,000,000, and (g) to the extent not otherwise permitted hereby
and
as long as no Default or Event of Default has occurred and is continuing
or
would result therefrom, prepay Indebtedness in an amount not to exceed, together
with any Restricted Payment made pursuant to Section
8.5(d) (Restricted Payments),
the sum
of (i) $50,000,000 and (ii) the Applicable Amount in the aggregate at any
time
outstanding.
Section
8.7 Restriction
on Fundamental Changes
Except
in
connection with Investments in Permitted Acquisitions made pursuant to
Section
8.3 (Investments)
and
Asset Sales expressly permitted under Section
8.4 (Sale of Assets),
the
Parent shall not, nor shall it permit Borrower or any Restricted Subsidiary
to,
enter into any transaction of merger or consolidation, or liquidate, wind-up
or
dissolve itself (or suffer any liquidation or dissolution), or convey, sell,
lease or sub-lease (as lessor or sublessor), exchange, transfer or otherwise
dispose of, in one transaction or a series of transactions, all or any part
of
its business, assets or property of any kind whatsoever, whether real, personal
or mixed and whether tangible or intangible, whether now owned or hereafter
acquired, or acquire by purchase or otherwise (other than purchases or other
acquisitions of inventory, materials and equipment and Capital Expenditures
in
the ordinary course of business) the business, property or fixed assets of,
or
stock or other evidence of beneficial ownership of, any Person or any division
or line of business or other business unit of any Person, except:
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LOAN AGREEMENT
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BRANDS FINANCE, INC.
(a) any
Loan
Party may be merged with or into any other Loan Party, or be liquidated,
wound
up or dissolved, or all or any part of its business, property or assets may
be
conveyed, sold, leased, transferred or otherwise disposed of, in one transaction
or a series of transactions, to any other Loan Party; provided,
in the
case of such a merger, the continuing or surviving Person shall remain a
Loan
Party, provided,
however,
that if
the Borrower is merged into another Loan Party, the Borrower must be the
surviving entity;
(b) any
Restricted Subsidiary that is not a Loan Party may be merged with or into
any
other Restricted Subsidiary that is not a Loan Party or into any Loan Party,
or
be liquidated, wound up or dissolved, or all or any part of its business,
property or assets may be conveyed, sold, leased, transferred or otherwise
disposed of, in one transaction or a series of transactions, to any other
Restricted Subsidiary that is not a Loan Party or to a Loan Party;
and
(c) in
the
case of either clause
(a) or
(b)
above,
prior to and after giving effect to any proposed transaction, no Default
or
Event of Default shall occur or be continuing.
Section
8.8 Change
in Nature of Business
(a) The
Parent shall not, and shall not permit Borrower or any of the Restricted
Subsidiaries to, make any material change in the nature or conduct of its
business as carried on at the date hereof, whether in connection with a
Permitted Acquisition or otherwise.
(b) The
Parent shall not engage in any business (but may incur liabilities) or hold
any
assets; provided,
however,
the
Parent may (i) hold shares of Stock of the Borrower or Unrestricted Subsidiaries
and (ii) have employees and hold assets used to provide administrative and
operational support.
Section
8.9 Transactions
with Affiliates
Other
than as set forth on Schedule
8.9,
the
Parent shall not, nor shall it permit Borrower or any Restricted Subsidiary
to
effect any transaction with any of its respective Affiliates that is not
a
Restricted Subsidiary on a basis less favorable to the Borrower or such
Restricted Subsidiary than would at the time be obtainable for a comparable
transaction in arms-length dealing with an unrelated third party.
Section
8.10 Limitations
on Restrictions on Subsidiary Distributions; No New Negative
Pledge
Except
pursuant to the Loan Documents and any agreements governing purchase money
Indebtedness or Capital Lease Obligations permitted by Section
8.1(c) or
(e)
(Indebtedness) (in
the
case of agreements permitted by such clauses, any prohibition or limitation
shall only be effective against the assets financed thereby), the Parent
shall
not, and shall not permit the Borrower or any of the Restricted Subsidiaries
to,
(a) agree to enter into or suffer to exist or become effective any consensual
encumbrance or restriction of any kind on the ability of such Restricted
Subsidiary, other than customary provisions in Joint Venture agreements and
other similar agreements relating solely to the securities, assets and revenues
of such Joint Venture, to pay dividends or make any other distribution or
transfer of funds or assets or make loans or advances to or other Investments
in, or pay any Indebtedness owed to, the Borrower or any other Restricted
Subsidiary or (b) enter into or suffer to exist or become effective any
agreement prohibiting or limiting the ability of any Restricted Subsidiary,
other than customary provisions in Joint Venture agreements and other similar
agreements relating solely to the securities, assets and revenues of such
Joint
Venture, to create, incur, assume or suffer to exist any Lien upon any of
its
property, assets or revenues, whether now owned or hereafter acquired, to
secure
the Obligations, including any agreement requiring any other Indebtedness
or
Contractual Obligation to be equally and ratably secured with the
Obligations.
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Section
8.11 Modification
of Constituent Documents
The
Parent shall not, nor shall it permit any Restricted Subsidiary to, change
its
capital structure (including in the terms of its outstanding Stock) or otherwise
amend its Constituent Documents, except for changes and amendments that do
not
materially affect the rights and privileges of any Restricted Subsidiary
and do
not materially affect the interests of the Secured Parties under the Loan
Documents or in the Collateral.
Section
8.12 Modification
of Related Documents
The
Parent shall not, nor shall it permit any Restricted Subsidiary to, alter,
rescind, terminate, amend, supplement, waive or otherwise modify any provision
of any Related Document (except for modifications that do not materially
affect
the rights and privileges of any Restricted Subsidiary under such Related
Document and that do not materially affect the interests of the Secured Parties
under the Loan Documents or in the Collateral).
Section
8.13 Accounting
Changes; Fiscal Year
The
Parent shall not, nor shall it permit the Borrower to, change its (a) accounting
treatment and reporting practices or tax reporting treatment, except as required
by GAAP or any Requirement of Law and disclosed to the Lenders and the
Administrative Agent or (b) fiscal year, in each case other than as set forth
on
Schedule
8.13 (Accounting Changes; Fiscal Year).
Section
8.14 Margin
Regulations
The
Parent shall not, nor shall it permit any Restricted Subsidiary to, use all
or
any portion of the proceeds of any credit extended hereunder to purchase
or
carry margin stock (within the meaning of Regulation U of the Federal Reserve
Board) in contravention of Regulation U of the Federal Reserve
Board.
Section
8.15 No
Speculative Transactions
The
Parent shall not, nor shall it permit any Restricted Subsidiary to, engage
in
any speculative transaction or in any transaction involving Hedging Contracts
except for the sole purpose of hedging in the normal course of business and
consistent with industry practices; provided,
for the
avoidance of doubt, the provisions of this Section
8.15
shall
not apply to (a) any Note Hedge Transaction or (b) any warrant transaction
entered into concurrently with any Note Hedge Transaction.
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Section
8.16 Compliance
with ERISA
The
Parent shall not, nor shall it permit any Restricted Subsidiary or any ERISA
Affiliate to, cause or permit to occur an ERISA Event (a) that could result
in
the imposition of a Lien that is not permitted by Section
8.2(i) (Liens)
or (b)
that would have a Material Adverse Effect in the aggregate.
ARTICLE
IX
EVENTS
OF DEFAULT
Section
9.1 Events
of Default
Each
of
the following events shall be an Event of Default:
(a) the
Borrower shall fail to pay any principal of any Term Loan when the same becomes
due and payable; or
(b) the
Borrower shall fail to pay any interest on any Term Loan, any fee under any
of
the Loan Documents or any other Obligation (other than one referred to in
clause
(a)
above)
and such non-payment continues for a period of three Business Days after
the due
date therefor; or
(c) any
representation or warranty made or deemed made by any Loan Party in any Loan
Document or by any Loan Party (or any of its officers) in connection with
any
Loan Document shall prove to have been incorrect in any material respect
when
made or deemed made; or
(d) any
Loan
Party shall fail to perform or observe (i) any term, covenant or agreement
contained in Sections 6.2 (Default
Notices),
7.1
(Preservation of Corporate Existence, Etc.),
7.6
(Access),
7.9 (Application
of Proceeds),
7.11
(Additional Collateral and Guaranties),
7.12
(Designation of Subsidiaries)
or
Article
VIII (Negative Covenants), (ii)
any
term, covenant or agreement contained in Section
6.1 (Financial Statements)
if such
failure under this clause
(ii)
shall
remain unremedied for 15 days after the earlier of (A) the date on which
a
Responsible Officer of the Borrower becomes aware of such failure and (B)
the
date on which written notice thereof shall have been given to the Borrower
by
the Administrative Agent or any Lender or (iii) any other term, covenant
or
agreement contained in this Agreement or in any other Loan Document if such
failure under this clause
(iii)
shall
remain unremedied for 30 days after the earlier of (A) the date on which
a
Responsible Officer of the Borrower becomes aware of such failure and (B)
the
date on which written notice thereof shall have been given to the Borrower
by
the Administrative Agent or any Lender; or
(e) (i)
the
Borrower, the Parent or any Restricted Subsidiary shall fail to make any
payment
on any Indebtedness of the Borrower, the Parent or any such Restricted
Subsidiary (other than the Obligations) or any Guaranty Obligation in respect
of
Indebtedness of any other Person, and, in each case, such failure relates
to
Indebtedness having a principal amount of $25,000,000 or more, when the same
becomes due and payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise), (ii) any other event shall occur or
condition shall exist under any agreement or instrument relating to any such
Indebtedness, if the effect of such event or condition is to accelerate,
or to
permit the acceleration of, the maturity of such Indebtedness or (iii) any
such
Indebtedness shall become or be declared to be due and payable, or be required
to be prepaid or repurchased (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof; provided,
that
other than with respect to payments defaults, any default under the Revolving
Credit Agreement shall remain unremedied for 30 days; or
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BRANDS FINANCE, INC.
(f) (i)
the
Borrower, the Parent or any Restricted Subsidiary shall generally not pay
its
debts as such debts become due, shall admit in writing its inability to pay
its
debts generally or shall make a general assignment for the benefit of creditors,
(ii) any proceeding shall be instituted by or against the Borrower, the Parent
or any Restricted Subsidiary seeking to adjudicate it as bankrupt or insolvent,
or seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief or composition of it or its debts, under any Requirement
of
Law relating to bankruptcy, insolvency or reorganization or relief of debtors,
or seeking the entry of an order for relief or the appointment of a custodian,
receiver, trustee or other similar official for it or for any substantial
part
of its property; provided, however, that, in the case of any such proceedings
instituted against the Borrower, the Parent or any Restricted Subsidiary
(but
not instituted by the Borrower, the Parent or any Restricted Subsidiary)
either
such proceedings shall remain undismissed or unstayed for a period of 60
days or
more or any action sought in such proceedings shall occur or (iii) the Borrower,
the Parent or any Restricted Subsidiary shall take any corporate action to
authorize any action set forth in clauses
(i)
and
(ii)
above;
or
(g) any
money
judgment, writ or warrant of attachment or similar process involving
individually or in the aggregate, an amount in excess of $25,000,000 to the
extent not adequately covered by insurance shall be entered or filed against
the
Borrower, the Parent or any of the Restricted Subsidiaries or any of their
respective assets and shall remain unpaid, undischarged, unvacated, unbonded
or
unstayed for a period of sixty days; or
(h) an
ERISA
Event shall occur and the Dollar Equivalent of the amount of all liabilities
and
deficiencies resulting therefrom, whether or not assessed, exceeds $25,000,000
in the aggregate; or
(i) any
provision of any Loan Document after delivery thereof shall for any reason
fail
or cease to be valid and binding on, or enforceable against, any Loan Party
party thereto, or any Loan Party shall so state in writing; or
(j) any
Collateral Document shall for any reason fail or cease to create a valid
and
enforceable Lien on any Collateral purported to be covered thereby or, except
as
permitted by the Loan Documents, such Lien shall fail or cease to be a perfected
Lien having the priority set forth in the Intercreditor Agreement, or any
Loan
Party shall so state in writing; or
(k) there
shall occur any Change of Control.
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Section
9.2 Remedies
During
the continuance of any Event of Default, the Administrative Agent (a) may,
and, at the request of the Requisite Lenders, shall, by notice to the Borrower
declare that all or any portion of the Term Loan Commitments be terminated,
whereupon the obligation of each Lender to make any Term Loan shall immediately
terminate and (b) may and, at the request of the Requisite Lenders, shall,
by notice to the Borrower, declare the Term Loans, all interest thereon and
all
other amounts and Obligations payable under this Agreement to be forthwith
due
and payable, whereupon the Term Loans, all such interest and all such amounts
and Obligations shall become and be forthwith due and payable, without
presentment, demand, protest or further notice of any kind, all of which
are
hereby expressly waived by the Borrower; provided,
however,
that
upon the occurrence of the Events of Default specified in Section
9.1(f) (Events of Default),
(x) the
Term Loan Commitments of each Lender to make Term Loans shall each automatically
be terminated and (y) the Term Loans, all such interest and all such amounts
and
Obligations shall automatically become and be due and payable, without
presentment, demand, protest or any notice of any kind, all of which are
hereby
expressly waived by the Borrower. In addition to the remedies set forth above,
the Administrative Agent may exercise any remedies provided for by the
Collateral Documents in accordance with the terms thereof or any other remedies
provided by applicable law.
Section
9.3 Rescission
If
at any
time after termination of the Term Loan Commitments or acceleration of the
maturity of the Term Loans, the Borrower shall pay all arrears of interest
and
all payments on account of principal of the Term Loans that shall have become
due otherwise than by acceleration (with interest on principal and, to the
extent permitted by law, on overdue interest, at the rates specified herein)
and
all Events of Default and Defaults (other than non-payment of principal of
and
accrued interest on the Term Loans due and payable solely by virtue of
acceleration) shall be remedied or waived pursuant to Section
11.1 (Amendments, Waivers, Etc.),
then
upon the written consent of the Requisite Lenders and written notice to the
Borrower, the termination of the Term Loan Commitments or the acceleration
and
their consequences may be rescinded and annulled; provided,
however,
that
such action shall not affect any subsequent Event of Default or Default or
impair any right or remedy consequent thereon. The provisions of the preceding
sentence are intended merely to bind the Lenders to a decision that may be
made
at the election of the Requisite Lenders, and such provisions are not intended
to benefit the Borrower and do not give the Borrower the right to require
the
Lenders to rescind or annul any acceleration hereunder, even if the conditions
set forth herein are met.
ARTICLE
X
THE
ADMINISTRATIVE AGENT
Section
10.1 Authorization
and Action
(a) Each
Lender hereby appoints Citi as the Administrative Agent hereunder and each
Lender authorizes the Administrative Agent to take such action as agent on
its
behalf and to exercise such powers under this Agreement and the other Loan
Documents as are delegated to the Administrative Agent under such agreements
and
to exercise such powers as are reasonably incidental thereto. Without limiting
the foregoing, each Lender hereby authorizes the Administrative Agent to
execute
and deliver, and to perform its obligations under, each of the Loan Documents
to
which the Administrative Agent is a party, to exercise all rights, powers
and
remedies that the Administrative Agent may have under such Loan Documents
and,
in the case of the Collateral Documents, to act as agent for the Lenders
and the
other Secured Parties under such Collateral Documents.
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(b) As
to any
matters not expressly provided for by this Agreement and the other Loan
Documents (including enforcement or collection), the Administrative Agent
shall
not be required to exercise any discretion or take any action, but shall
be
required to act or to refrain from acting (and shall be fully protected in
so
acting or refraining from acting) upon the instructions of the Requisite
Lenders, and such instructions shall be binding upon all Lenders; provided,
however,
that
the Administrative Agent shall not be required to take any action that (i)
the
Administrative Agent in good faith believes exposes it to personal liability
unless the Administrative Agent receives an indemnification reasonably
satisfactory to it from the Lenders with respect to such action or (ii) is
contrary to this Agreement or applicable law. The Administrative Agent agrees
to
give to each Lender prompt notice of each notice given to it by any Loan
Party
pursuant to the terms of this Agreement or the other Loan
Documents.
(c) In
performing its functions and duties hereunder and under the other Loan
Documents, the Administrative Agent is acting solely on behalf of the Lenders
except to the limited extent provided in Section
2.5(b),
and its
duties are entirely administrative in nature. The Administrative Agent does
not
assume and shall not be deemed to have assumed any obligation other than
as
expressly set forth herein and in the other Loan Documents or any other
relationship as the agent, fiduciary or trustee of or for any Lender or other
holder of any Obligation. The Administrative Agent may perform any of its
duties
under any Loan Document by or through its agents or employees.
(d) The
Arranger shall have no obligations or duties whatsoever in such capacity
under
this Agreement or any other Loan Document and shall incur no liability hereunder
or thereunder in such capacity.
Section
10.2 Administrative
Agent’s Reliance, Etc.
None
of
the Administrative Agent, any of its Affiliates or any of their respective
directors, officers, agents or employees shall be liable for any action taken
or
omitted to be taken by it, him, her or them under or in connection with this
Agreement or the other Loan Documents, except for its, his, her or their
own
gross negligence or willful misconduct. Without limiting the foregoing, the
Administrative Agent (a) may rely on the Register to the extent set forth
in
Section
2.5 (Evidence of Debt),
(b) may
consult with legal counsel (including counsel to the Borrower or any other
Loan
Party), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith
by
it in accordance with the advice of such counsel, accountants or experts,
(c)
makes no warranty or representation to any Lender and shall not be responsible
to any Lender for any statements, warranties or representations made by or
on
behalf of the Borrower, the Parent or any of its Subsidiaries in or in
connection with this Agreement or any other Loan Document, (d) shall not
have
any duty to ascertain or to inquire either as to the performance or observance
of any term, covenant or condition of this Agreement or any other Loan Document,
as to the financial condition of any Loan Party or as to the existence or
possible existence of any Default or Event of Default, (e) shall not be
responsible to any Lender for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the attachment,
perfection or priority of any Lien created or purported to be created under
or
in connection with, this Agreement, any other Loan Document or any other
instrument or document furnished pursuant hereto or thereto and (f) shall
incur
no liability under or in respect of this Agreement or any other Loan Document
by
acting upon any notice, consent, certificate or other instrument or writing
(which writing may be a telecopy or electronic mail) or any telephone message
believed by it to be genuine and signed or sent by the proper party or
parties.
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Section
10.3 Posting
of Approved Electronic Communications
(a) Each
of
the Lenders, the Parent and the Borrower agree, and the Parent shall cause
each
Guarantor to agree, that the Administrative Agent may, but shall not be
obligated to, make the Approved Electronic Communications available to the
Lenders by posting such Approved Electronic Communications on IntraLinks™ or a
substantially similar electronic platform chosen by the Administrative Agent
to
be its electronic transmission system (the “Approved
Electronic Platform”).
(b) Although
the Approved Electronic Platform and its primary web portal are secured with
generally-applicable security procedures and policies implemented or modified
by
the Administrative Agent from time to time (including, as of the Closing
Date, a
dual firewall and a User ID/Password Authorization System) and the Approved
Electronic Platform is secured through a single-user-per-deal authorization
method whereby each user may access the Approved Electronic Platform only
on a
deal-by-deal basis, each of the Lenders, the Parent and the Borrower
acknowledges and agrees, and the Parent shall cause each Guarantor to
acknowledge and agree, that the distribution of material through an electronic
medium is not necessarily secure and that there are confidentiality and other
risks associated with such distribution. In consideration for the convenience
and other benefits afforded by such distribution and for the other consideration
provided hereunder, the receipt and sufficiency of which is hereby acknowledged,
each of the Lenders, the Parent and the Borrower hereby approves, and the
Parent
shall cause each Guarantor to approve, distribution of the Approved Electronic
Communications through the Approved Electronic Platform and understands and
assumes, and the Parent shall cause each Guarantor to understand and assume,
the
risks of such distribution.
(c) The
Approved Electronic Platform and the Approved Electronic Communications are
provided “as
is”
and
“as
available”.
None
of the Administrative Agent or any of its Affiliates or any of their respective
officers, directors, employees, agents, advisors or representatives (the
“Agent
Affiliates”)
warrant the accuracy, adequacy or completeness of the Approved Electronic
Communications or the Approved Electronic Platform and each expressly disclaims
liability for errors or omissions in the Approved Electronic Platform and
the
Approved Electronic Communications. No warranty of any kind, express, implied
or
statutory, including, without limitation, any warranty of merchantability,
fitness for a particular purpose, non-infringement of third party rights
or
freedom from viruses or other code defects, is made by the Agent Affiliates
in
connection with the Approved Electronic Platform or the Approved Electronic
Communications.
(d) Each
of
the Lenders, the Parent and the Borrower agree, and the Parent shall cause
each
Guarantor to agree, that the Administrative Agent may, but (except as may
be
required by applicable law) shall not be obligated to, store the Approved
Electronic Communications on the Approved Electronic Platform in accordance
with
the Administrative Agent’s generally-applicable document retention procedures
and policies.
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Section
10.4 The
Administrative Agent Individually
With
respect to its Ratable Portion, Citi shall have and may exercise the same
rights
and powers hereunder and is subject to the same obligations and liabilities
as
and to the extent set forth herein for any other Lender. The terms “Lenders”,
“Requisite
Lenders”
and
any
similar terms shall, unless the context clearly otherwise indicates, include,
without limitation, the Administrative Agent in its individual capacity as
a
Lender or as one of the Requisite Lenders. Citi and its Affiliates may accept
deposits from, lend money to, and generally engage in any kind of banking,
trust
or other business with, any Loan Party as if Citi were not acting as the
Administrative Agent.
Section
10.5 Lender
Credit Decision
Each
Lender acknowledges that it shall, independently and without reliance upon
the
Administrative Agent or any other Lender, conduct its own independent
investigation of the financial condition and affairs of the Borrower and
each
other Loan Party in connection with the making and continuance of the Term
Loans. Each Lender also acknowledges that it shall, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue
to
make its own credit decisions in taking or not taking action under this
Agreement and other Loan Documents. Except for the documents expressly required
by any Loan Document to be transmitted by the Administrative Agent to the
Lenders, the Administrative Agent shall not have any duty or responsibility
to
provide any Lender with any credit or other information concerning the business,
prospects, operations, property, financial or other condition or
creditworthiness of any Loan Party or any Affiliate of any Loan Party that
may
come into the possession of the Administrative Agent or any Affiliate thereof
or
any employee or agent of any of the foregoing.
Section
10.6 Indemnification
Each
Lender agrees to indemnify the Administrative Agent and each of its Affiliates,
and each of their respective directors, officers, employees, agents and advisors
(to the extent not reimbursed by the Borrower), from and against such Lender’s
aggregate Ratable Portion of any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses and disbursements
(including fees, expenses and disbursements of financial and legal advisors)
of
any kind or nature whatsoever that may be imposed on, incurred by, or asserted
against, the Administrative Agent or any of its Affiliates, directors, officers,
employees, agents and advisors in any way relating to or arising out of this
Agreement or the other Loan Documents or any action taken or omitted by the
Administrative Agent under this Agreement or the other Loan Documents;
provided,
however,
that no
Lender shall be liable for any portion of such liabilities, obligations,
losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the Administrative Agent’s or such Affiliate’s gross negligence
or willful misconduct. Without limiting the foregoing, each Lender agrees
to
reimburse the Administrative Agent promptly upon demand for its ratable share
of
any out-of-pocket expenses (including fees, expenses and disbursements of
financial and legal advisors) incurred by the Administrative Agent in connection
with the preparation, execution, delivery, administration, modification,
amendment or enforcement (whether through negotiations, legal proceedings
or
otherwise) of, or legal advice in respect of its rights or responsibilities
under, this Agreement or the other Loan Documents, to the extent that the
Administrative Agent is not reimbursed for such expenses by the Borrower
or
another Loan Party.
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Section
10.7 Successor
Administrative Agent
The
Administrative Agent may resign at any time by giving written notice thereof
to
the Lenders and the Borrower. Upon any such resignation, the Requisite Lenders
shall have the right to appoint a successor Administrative Agent. If no
successor Administrative Agent shall have been so appointed by the Requisite
Lenders, and shall have accepted such appointment, within 30 days after the
retiring Administrative Agent’s giving of notice of resignation, then the
retiring Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent, selected from among the Lenders. In either case, such
appointment shall be subject to the prior written approval of the Borrower
(which approval may not be unreasonably withheld and shall not be required
upon
the occurrence and during the continuance of an Event of Default). Upon the
acceptance of any appointment as Administrative Agent by a successor
Administrative Agent, such successor Administrative Agent shall succeed to,
and
become vested with, all the rights, powers, privileges and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall
be
discharged from its duties and obligations under this Agreement and the other
Loan Documents. Prior to any retiring Administrative Agent’s resignation
hereunder as Administrative Agent, the retiring Administrative Agent shall
take
such action as may be reasonably necessary to assign to the successor
Administrative Agent its rights as Administrative Agent under the Loan
Documents. After such resignation, the retiring Administrative Agent shall
continue to have the benefit of this Article
X
as to
any actions taken or omitted to be taken by it while it was Administrative
Agent
under this Agreement and the other Loan Documents.
Section
10.8 Concerning
the Collateral and the Collateral Documents; Releases
(a) Each
Lender agrees that any action taken by the Administrative Agent or the Requisite
Lenders (or, where required by the express terms of this Agreement, a greater
proportion of the Lenders) in accordance with the provisions of this Agreement
or of the other Loan Documents, and the exercise by the Administrative Agent
or
the Requisite Lenders (or, where so required, such greater proportion) of
the
powers set forth herein or therein, together with such other powers as are
reasonably incidental thereto, shall be authorized and binding upon all of
the
Lenders and other Secured Parties. Without limiting the generality of the
foregoing, the Administrative Agent shall have the sole and exclusive right
and
authority to (i) act as the disbursing and collecting agent for the Lenders
with
respect to all payments and collections arising in connection herewith and
with
the Collateral Documents, (ii) execute and deliver each Collateral Document
and
accept delivery of each such agreement delivered by any of the Group Members,
(iii) act as collateral agent for the Lenders and the other Secured Parties
for
purposes of the perfection of all security interests and Liens created by
such
agreements and all other purposes stated therein, provided,
however,
that
the Administrative Agent hereby appoints, authorizes and directs each Lender
to
act as collateral sub-agent for the Administrative Agent and the Lenders
for
purposes of the perfection of all security interests and Liens with respect
to
the Collateral, including any Deposit Accounts maintained by a Loan Party
with,
and cash and Cash Equivalents held by, such Lender, (iv) manage, supervise
and
otherwise deal with the Collateral, (v) take such action as is necessary
or
desirable to maintain the perfection and priority of the security interests
and
Liens created or purported to be created by the Collateral Documents and
(vi)
except as may be otherwise specifically restricted by the terms hereof or
of any
other Loan Document, exercise all remedies given to the Administrative Agent,
the Lenders, and the other Secured Parties with respect to the Collateral
under
the Loan Documents relating thereto, applicable law or otherwise.
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(b) Each
of
the Lenders hereby consents to the release and hereby directs, in accordance
with the terms hereof, the Administrative Agent to release (or, in the case
of
clause
(ii)
below,
release or subordinate) any Lien held by the Administrative Agent for the
benefit of the Lenders against any of the following:
(i) all
of
the Collateral and all Loan Parties, upon termination of the Term Loan
Commitments and payment and satisfaction in full of all Term Loans and all
other
Obligations that the Administrative Agent has been notified in writing are
then
due and payable;
(ii) any
assets that are subject to a Lien permitted by Section
8.2(e)
or
(f)
(Liens, Etc.);
(iii) any
part
of the Collateral sold or disposed of by a Loan Party if such sale or
disposition is permitted by this Agreement (or permitted pursuant to a waiver
of
or consent to a transaction otherwise prohibited by this
Agreement);
(iv) any
Guarantor from its obligations under the Guaranty if in connection with the
sale
or other disposition of such Guarantor (or all or substantially all of its
assets) permitted by this Agreement (or permitted pursuant to a waiver or
consent of a transaction otherwise prohibited by this Agreement);
and
(v) any
Guarantor from its obligations under the Guaranty if such Person ceases to
be a
Restricted Subsidiary as a result of a transaction or designation permitted
hereunder.
(c) Each
of
the Lenders hereby directs the Administrative Agent to execute and deliver
the
Intercreditor Agreement and to execute and deliver or file such termination
and
partial release statements and do such other things as are necessary to release
Liens and/or guarantees to be released pursuant to this Section
10.8
or
subordinated in accordance with, and subject to the terms and conditions
of, the
Intercreditor Agreement promptly upon the effectiveness of any such
release.
Section
10.9 Collateral
Matters Relating to Related Obligations
The
benefit of the Loan Documents and of the provisions of this Agreement relating
to the Collateral shall extend to and be available in respect of any Secured
Obligation arising under any Hedging Contract or that is otherwise owed to
Persons other than the Administrative Agent, the Lenders (collectively,
“Related
Obligations”)
solely
on the condition and understanding, as among the Administrative Agent and
all
Secured Parties, that (a) the Related Obligations shall be entitled to the
benefit of the Loan Documents and the Collateral to the extent expressly
set
forth in this Agreement and the other Loan Documents and to such extent the
Administrative Agent shall hold, and have the right and power to act with
respect to, the Guaranty and the Collateral on behalf of and as agent for
the
holders of the Related Obligations, but the Administrative Agent is otherwise
acting solely as agent for the Lenders and shall have no fiduciary duty,
duty of
loyalty, duty of care, duty of disclosure or other obligation whatsoever
to any
holder of Related Obligations, (b) all matters, acts and omissions relating
in any manner to the Guaranty, the Collateral, or the omission, creation,
perfection, priority, abandonment or release of any Lien, shall be governed
solely by the provisions of this Agreement and the other Loan Documents and
no
separate Lien, right, power or remedy shall arise or exist in favor of any
Secured Party under any separate instrument or agreement or in respect of
any
Related Obligation, (c) each Secured Party shall be bound by all actions
taken
or omitted, in accordance with the provisions of this Agreement and the other
Loan Documents, by the Administrative Agent and the Requisite Lenders, each
of
whom shall be entitled to act at its sole discretion and exclusively in its
own
interest given its own Term Loan Commitments and its own interest in the
Term
Loans and other Obligations to it arising under this Agreement or the other
Loan
Documents, without any duty or liability to any other Secured Party or as
to any
Related Obligation and without regard to whether any Related Obligation remains
outstanding or is deprived of the benefit of the Collateral or becomes unsecured
or is otherwise affected or put in jeopardy thereby, (d) no holder of Related
Obligations and no other Secured Party (except the Administrative Agent and
the
Lenders, to the extent set forth in this Agreement) shall have any right
to be
notified of, or to direct, require or be heard with respect to, any action
taken
or omitted in respect of the Collateral or under this Agreement or the Loan
Documents and (e) no holder of any Related Obligation shall exercise any
right
of setoff, banker’s lien or similar right except to the extent provided in
Section
11.6 (Right of Set-off)
and then
only to the extent such right is exercised in compliance with Section
11.7 (Sharing of Payments, Etc.).
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ARTICLE
XI
MISCELLANEOUS
Section
11.1 Amendments,
Waivers, Etc.
(a) No
amendment or waiver of any provision of this Agreement or any other Loan
Document nor consent to any departure by any Loan Party therefrom shall in
any
event be effective unless the same shall be in writing and (x) in the case
of
any such waiver or consent, signed by the Requisite Lenders (or by the
Administrative Agent with the consent of the Requisite Lenders), (y) in the
case of any amendment necessary to implement the terms of a Facility Increase
in
accordance with the terms hereof, by the Borrower, the Parent, the
Administrative Agent and the Incremental Term Loan Lenders providing such
Facility Increase, and (z) in the case of any other amendment, by the Requisite
Lenders (or by the Administrative Agent with the consent of the Requisite
Lenders), the Borrower and the Parent and then any such waiver or consent
shall
be effective only in the specific instance and for the specific purpose for
which given; provided,
however,
that no
amendment, waiver or consent shall, unless in writing and signed by each
Lender
directly affected thereby, in addition to the Requisite Lenders (or the
Administrative Agent with the consent thereof), do any of the
following:
(i) waive
any
condition specified in Section
3.1 (Conditions Precedent to Closing Date Term Loans)
or
3.2
(Conditions Precedent to Incremental Term Loans),
except
with respect to a condition based upon another provision hereof, the waiver
of
which requires only the concurrence of the Requisite Lenders and, in the
case of
the conditions specified in Section
3.1 (Conditions Precedent to Closing Date Term Loans)
and
3.2
(Conditions Precedent to Incremental Loans),
subject
to the provisions of Section
3.3 (Determinations of Borrowing Conditions);
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(ii) except
pursuant to a Facility Increase, increase the Term Loan Commitment of such
Lender or subject such Lender to any additional obligation;
(iii) extend
the scheduled final maturity of any Term Loan owing to such Lender, or waive,
reduce or postpone any scheduled date fixed for the payment or reduction
of
principal or interest of any such Term Loan or fees owing to such Lender
(it
being understood that Section
2.7 (Mandatory Prepayments) does
not
provide for scheduled dates fixed for payment) or for the reduction of such
Lender’s Term Loan Commitment;
(iv) reduce,
or release the Borrower from its obligations to repay, the principal amount
of
any Term Loan owing to such Lender (other than by the payment or prepayment
thereof);
(v) reduce
the rate of interest on any Term Loan outstanding and owing to such Lender
or
any fee payable hereunder to such Lender;
(vi) postpone
any scheduled date fixed for payment of interest or fees owing to such Lender
or
waive any such payment;
(vii) change
the aggregate Ratable Portions of Lenders required for any or all Lenders
to
take any action hereunder;
(viii) release
all or substantially all of the Collateral except as provided in Section 8
(Release of Collateral)
of the
Intercreditor Agreement and except as provided in Section
10.8(b) (Concerning the Collateral and the Collateral
Documents; Releases)
or
release the Borrower from its payment obligation to such Lender under this
Agreement or the Notes owing to such Lender (if any) or release any Guarantor
from its obligations under the Guaranty except as provided in Section
10.8(b) (Concerning the Collateral and the Collateral
Documents; Releases);
or
(ix) amend,
Section
10.8(b) (Concerning the Collateral and the Collateral Documents;
Releases),
Section
11.7 (Sharing of Payments, Etc.),
this
Section
11.1
or
either definition of the terms “Requisite
Lenders”
or
“Ratable
Portion”;
(x) amend,
Section 8
(Release of Collateral)
of the
Intercreditor Agreement;
and
provided,
further,
that no
amendment, waiver or consent shall, unless in writing and signed by the
Administrative Agent in addition to the Lenders required above to take such
action, affect the rights or duties of the Administrative Agent under this
Agreement or the other Loan Documents; and provided,
further,
that
the Administrative Agent may, with the consent of the Borrower, amend, modify
or
supplement this Agreement to cure any ambiguity, omission, defect or
inconsistency, so long as such amendment, modification or supplement does
not
adversely affect the rights of any Lender.
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(b) The
Administrative Agent may, but shall have no obligation to, with the written
concurrence of any Lender, execute amendments, modifications, waivers or
consents on behalf of such Lender. Any waiver or consent shall be effective
only
in the specific instance and for the specific purpose for which it was given.
No
notice to or demand on the Borrower in any case shall entitle the Borrower
to
any other or further notice or demand in similar or other
circumstances.
(c) If,
in
connection with any proposed amendment, modification, waiver or termination
requiring the consent of all Lenders, the consent of Requisite Lenders is
obtained but the consent of any Lender whose consent is required is not obtained
(any such Lender whose consent is not obtained as described in this Section
11.1
being
referred to as a “Non-Consenting
Lender”),
then,
as long as the Lender acting as the Administrative Agent is not a Non-Consenting
Lender, at the Borrower’s request, an Eligible Assignee reasonably acceptable to
the Administrative Agent shall have the right with the Administrative Agent’s
consent and in the Administrative Agent’s sole discretion (but shall have no
obligation) to purchase from such Non-Consenting Lender, and such Non-Consenting
Lender agrees that it shall, upon the Administrative Agent’s request, sell and
assign to the Lender acting as the Administrative Agent or such Eligible
Assignee, all of the Term Loans of such Non-Consenting Lender for an amount
equal to the principal balance of all such Term Loans held by the Non-Consenting
Lender and all accrued and unpaid interest and fees with respect thereto
through
the date of sale; provided,
however,
that
such purchase and sale shall be recorded in the Register maintained by the
Administrative Agent and not be effective until (x) the Administrative Agent
shall have received from such Eligible Assignee an agreement in form and
substance reasonably satisfactory to the Administrative Agent and the Borrower
whereby such Eligible Assignee shall agree to be bound by the terms hereof
and
(y) such Non-Consenting Lender shall have received payments of all Term Loans
held by it and all accrued and unpaid interest and fees with respect thereto
through the date of the sale. Each Lender agrees that, if it becomes a
Non-Consenting Lender, it shall execute and deliver to the Administrative
Agent
an Assignment an Acceptance to evidence such sale and purchase and shall
deliver
to the Administrative Agent any Note (if the assigning Lender’s Term Loans are
evidenced by Notes) subject to such Assignment and Acceptance; provided,
however,
that
the failure of any Non-Consenting Lender to execute an Assignment and Acceptance
shall not render such sale and purchase (and the corresponding assignment)
invalid and such assignment shall be recorded in the Register.
Section
11.2 Assignments
and Participations
(a) Each
Lender may sell, transfer, negotiate or assign to one or more Eligible Assignees
all or a portion of its rights and obligations hereunder (including all of
its
rights and obligations with respect to the Term Loans); provided,
however,
that
(i) if any such assignment shall be of the assigning Lender’s Term Loans and
Term Loan Commitment, such assignment shall cover the same percentage of
such
Lender’s Term Loans and Term Loan Commitment, (ii) the aggregate amount being
assigned pursuant to each such assignment (determined as of the date of the
Assignment and Acceptance with respect to such assignment) shall in no event
(if
less than the Assignor’s entire interest) be less than $1,000,000 or an integral
multiple of $1,000,000 in excess thereof, except, in either case, (A) with
the
consent of the Borrower and the Administrative Agent or (B) if such assignment
is being made to a Lender or an Affiliate or Approved Fund of such Lender,
and
(iii) if such Eligible Assignee is not, prior to the date of such
assignment, a Lender or an Affiliate or Approved Fund of a Lender, such
assignment shall be subject to the prior consent of the Administrative Agent
and
the Borrower (which consents shall not be unreasonably withheld or delayed);
and
provided,
further,
that,
notwithstanding any other provision of this Section
11.2,
the
consent of the Borrower shall not be required for any assignment occurring
when
any Event of Default shall have occurred and be continuing.
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(b) The
parties to each such assignment shall execute and deliver to the Administrative
Agent, for its acceptance and recording in the Register, an Assignment and
Acceptance, together with any Note (if the assigning Lender’s Term Loans are
evidenced by a Note) subject to such assignment. Upon the execution, delivery,
acceptance and recording in the Register of any Assignment and Acceptance
and,
other than in respect of assignments made pursuant to Section
2.15 (Substitution of Lenders)
and
Section
11.1(c) (Amendments, Waivers, Etc.),
the
receipt by the Administrative Agent from the assignee of an assignment fee
in
the amount of $3,500 from and after the effective date specified in such
Assignment and Acceptance, (i) the assignee thereunder shall become a party
hereto and, to the extent that rights and obligations under the Loan Documents
have been assigned to such assignee pursuant to such Assignment and Acceptance,
have the rights and obligations of a Lender, (ii) the Notes (if any)
corresponding to the Term Loans assigned thereby shall be transferred to
such
assignee by notation in the Register and (iii) the assignor thereunder
shall, to the extent that rights and obligations under this Agreement have
been
assigned by it pursuant to such Assignment and Acceptance, relinquish its
rights
(except for those surviving the payment in full of the Obligations) and be
released from its obligations under the Loan Documents, other than those
relating to events or circumstances occurring prior to such assignment (and,
in
the case of an Assignment and Acceptance covering all or the remaining portion
of an assigning Lender’s rights and obligations under the Loan Documents, such
Lender shall cease to be a party hereto).
(c) The
Administrative Agent shall maintain at its address referred to in Section
11.8 (Notices, Etc.)
a copy
of each Assignment and Acceptance delivered to and accepted by it and shall
record in the Register the names and addresses of the Lenders and the principal
amount of the Term Loans owing to each Lender from time to time and the Term
Loan Commitments of each Lender. Any assignment pursuant to this Section
11.2
shall
not be effective until such assignment is recorded in the Register.
(d) Upon
its
receipt of an Assignment and Acceptance executed by an assigning Lender and
an
assignee, the Administrative Agent shall, if such Assignment and Acceptance
has
been completed, (i) accept such Assignment and Acceptance, (ii) record or
cause
to be recorded the information contained therein in the Register and (iii)
give
prompt notice thereof to the Borrower. Within five Business Days after its
receipt of such notice, the Borrower, at its own expense, shall, if requested
by
such assignee, execute and deliver to the Administrative Agent new Notes
to the
order of such assignee in an amount equal to the Term Loan Commitments and
Term
Loans assumed by it pursuant to such Assignment and Acceptance and, if the
assigning Lender has surrendered any Note for exchange in connection with
the
assignment and has retained Term Loan Commitments or Term Loans hereunder,
new
Notes to the order of the assigning Lender in an amount equal to the Term
Loan
Commitments and Term Loans retained by it hereunder. Such new Notes shall
be
dated the same date as the surrendered Notes and be in substantially the
form of
Exhibit
B (Form
of Term Note).
(e) In
addition to the other assignment rights provided in this Section
11.2,
each
Lender may do each of the following:
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BRANDS FINANCE, INC.
(i) grant
to
a Special Purpose Vehicle the option to make all or any part of any Term
Loan
that such Lender would otherwise be required to make hereunder and the exercise
of such option by any such Special Purpose Vehicle and the making of Term
Loans
pursuant thereto shall satisfy (once and to the extent that such Term Loans
are
made) the obligation of such Lender to make such Term Loans thereunder;
provided,
however,
that
(x) nothing herein shall constitute a commitment or an offer to commit by
such a Special Purpose Vehicle to make Term Loans hereunder and no such Special
Purpose Vehicle shall be liable for any indemnity or other Obligation (other
than the making of Term Loans for which such Special Purpose Vehicle shall
have
exercised an option, and then only in accordance with the relevant option
agreement) and (y) such Lender’s obligations under the Loan Documents shall
remain unchanged, such Lender shall remain responsible to the other parties
for
the performance of its obligations under the terms of this Agreement and
shall
remain the holder of the Obligations for all purposes hereunder;
and
(ii) may
at
any time pledge or assign a security interest in all or any portion of its
rights under this Agreement to secure obligations of such Lender, including
without limitation any pledge or assignment to secure obligations to (A)
a
Federal Reserve Bank, (B) any holder of, or trustee for the benefit of, the
holders of such Lender’s Securities and (C) any Special Purpose Vehicle to which
such Lender has granted an option pursuant to clause
(i)
above;
provided,
however,
that no
such assignment or grant shall release such Lender from any of its obligations
hereunder except as expressly provided in clause
(i) above
and
except, in the case of a subsequent foreclosure pursuant to an assignment
as
collateral, if such foreclosure is made in compliance with the other provisions
of this Section
11.2 other
than this clause
(e)
or
clause
(f) below.
Each party hereto acknowledges and agrees that, prior to the date that is
one
year and one day after the payment in full of all outstanding commercial
paper
or other senior debt of any such Special Purpose Vehicle, such party shall
not
institute against, or join any other Person in instituting against, any Special
Purpose Vehicle that has been granted an option pursuant to this clause
(e)
any
bankruptcy, reorganization, insolvency or liquidation proceeding (such agreement
shall survive the payment in full of the Obligations). The terms of the
designation of, or assignment to, such Special Purpose Vehicle shall not
restrict such Lender’s ability to, or grant such Special Purpose Vehicle the
right to, consent to any amendment or waiver to this Agreement or any other
Loan
Document or to the departure by the Borrower from any provision of this
Agreement or any other Loan Document without the consent of such Special
Purpose
Vehicle except, as long as the Administrative Agent and the Lenders, Issuers
and
other Secured Parties shall continue to, and shall be entitled to continue
to,
deal solely and directly with such Lender in connection with such Lender’s
obligations under this Agreement, to the extent any such consent would reduce
the principal amount of, or the rate of interest on, any Obligations, amend
this
clause
(e)
or
postpone any scheduled date of payment of such principal or interest. Each
Special Purpose Vehicle shall be entitled to the benefits of Sections
2.13 (Capital Adequacy)
and
2.14
(Taxes)
and of
2.12(d)
(Illegality)
as if it
were such Lender; provided,
however,
that
anything herein to the contrary notwithstanding, no Borrower shall, at any
time,
be obligated to make under Section
2.13 (Capital Adequacy),
2.14
(Taxes)
or
2.12(d)
(Illegality)
to any
such Special Purpose Vehicle and any such Lender any payment in excess of
the
amount the Borrower would have been obligated to pay to such Lender in respect
of such interest if such Special Purpose Vehicle had not been assigned the
rights of such Lender hereunder; and provided,
further,
that
such Special Purpose Vehicle shall have no direct right to enforce any of
the
terms of this Agreement against the Borrower, the Administrative Agent or
the
other Lenders.
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COLLECTIVE
BRANDS FINANCE, INC.
(f) Each
Lender may sell participations to one or more Persons in or to all or a portion
of its rights and obligations under the Loan Documents (including all its
rights
and obligations with respect to the Term Loans). The terms of such participation
shall not, in any event, require the participant’s consent to any amendments,
waivers or other modifications of any provision of any Loan Documents, the
consent to any departure by any Loan Party therefrom, or to the exercising
or
refraining from exercising any powers or rights such Lender may have under
or in
respect of the Loan Documents (including the right to enforce the obligations
of
the Loan Parties), except if any such amendment, waiver or other modification
or
consent would (i) reduce the amount, or postpone any date fixed for, any
amount
(whether of principal, interest or fees) payable to such participant under
the
Loan Documents, to which such participant would otherwise be entitled under
such
participation or (ii) result in the release of all or substantially all of
the Collateral other than in accordance with Section
10.8(b) (Concerning the Collateral and the Collateral
Documents; Releases).
In the
event of the sale of any participation by any Lender, (w) such Lender’s
obligations under the Loan Documents shall remain unchanged, (x) such Lender
shall remain solely responsible to the other parties for the performance
of such
obligations, (y) such Lender shall remain the holder of such Obligations
for all
purposes of this Agreement and (z) the Borrower, the Administrative Agent
and
the other Lenders shall continue to deal solely and directly with such Lender
in
connection with such Lender’s rights and obligations under this Agreement. Each
participant shall be entitled to the benefits of Sections
2.13 (Capital Adequacy)
and
2.14
(Taxes)
and of
2.12(d)
(Illegality)
as if it
were a Lender; provided,
however,
that
anything herein to the contrary notwithstanding, the Borrower shall not,
at any
time, be obligated to make under Section
2.13 (Capital Adequacy),
2.14
(Taxes)
or
2.12(d)
(Illegality) to
the
participants in the rights and obligations of any Lender (together with such
Lender) any payment in excess of the amount the Borrower would have been
obligated to pay to such Lender in respect of such interest had such
participation not been sold and provided,
further,
that
such participant in the rights and obligations of such Lender shall have
no
direct right to enforce any of the terms of this Agreement against the Borrower,
the Administrative Agent or the other Lenders.
Section
11.3 Costs
and Expenses
(a) The
Borrower agrees, so long as no Default or Event of Default has occurred and
is
continuing, within fifteen (15) days of receiving an invoice therefor and
otherwise upon demand, to pay, or reimburse the Administrative Agent for,
all of
the Administrative Agent’s reasonable internal and external audit, legal,
appraisal, valuation, filing, document duplication and reproduction and
investigation expenses and for all other reasonable out-of-pocket costs and
expenses of every type and nature (including the reasonable fees, expenses
and
disbursements of the Administrative Agent’s counsel, Weil, Gotshal & Xxxxxx
LLP, local legal counsel, auditors, accountants, appraisers, printers, insurance
and environmental advisors, and other consultants and agents) incurred by
the
Administrative Agent in connection with any of the following: (i) the
Administrative Agent’s audit and investigation of the Borrower, the Parent and
any of its Subsidiaries in connection with the preparation, negotiation or
execution of any Loan Document or the Administrative Agent’s periodic audits of
the Borrower, the Parent or any of its Subsidiaries, as the case may be,
(ii)
the preparation, negotiation, execution or interpretation of this Agreement
(including, without limitation, the satisfaction or attempted satisfaction
of
any condition set forth in Article
III (Conditions To Term Loans),
any
Loan Document or any proposal letter or commitment letter issued in connection
therewith, or the making of the Term Loans hereunder, (iii) the creation,
perfection or protection of the Liens under any Loan Document (including
any
reasonable fees, disbursements and expenses for local counsel in various
jurisdictions), (iv) the ongoing administration of this Agreement and the
Term
Loans, including consultation with attorneys in connection therewith and
with
respect to the Administrative Agent’s rights and responsibilities hereunder and
under the other Loan Documents, (v) the protection, collection or enforcement
of
any Obligation or the enforcement of any Loan Document, (vi) the commencement,
defense or intervention in any court proceeding relating in any way to the
Obligations, any Loan Party, any of the Parent’s Subsidiaries, the Merger, the
Related Documents, this Agreement or any other Loan Document, (vii) the response
to, and preparation for, any subpoena or request for document production
with
which the Administrative Agent is served or deposition or other proceeding
in
which the Administrative Agent is called to testify, in each case, relating
in
any way to the Obligations, any Loan Party, any of the Parent’s Subsidiaries,
the Merger, the Related Documents, this Agreement or any other Loan Document
or
(viii) any amendment, consent, waiver, assignment, restatement, or supplement
to
any Loan Document or the preparation, negotiation and execution of the
same.
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(b) The
Borrower further agrees to pay or reimburse the Administrative Agent and
each of
the Lenders, so long as no Default or Event of Default has occurred and is
continuing, within fifteen (15) days of receiving an invoice therefor and
otherwise upon demand, for all out-of-pocket costs and expenses, including
reasonable attorneys’ fees (including allocated costs of internal counsel and
costs of settlement), incurred by the Administrative Agent or such Lenders
in
connection with any of the following: (i) in enforcing any Loan Document
or
Obligation or any security therefor or exercising or enforcing any other
right
or remedy available by reason of an Event of Default, (ii) in connection
with
any refinancing or restructuring of the credit arrangements provided hereunder
in the nature of a “work-out”
or
in
any insolvency or bankruptcy proceeding, (iii) in commencing, defending or
intervening in any litigation or in filing a petition, complaint, answer,
motion
or other pleadings in any legal proceeding relating to the Obligations, any
Loan
Party, any of the Parent’s Subsidiaries and related to or arising out of the
transactions contemplated hereby or by any other Loan Document or Related
Document or (iv) in taking any other action in or with respect to any suit
or
proceeding (bankruptcy or otherwise) described in clause (i),
(ii)
or
(iii)
above.
Section
11.4 Indemnities
(a) The
Borrower agrees to indemnify and hold harmless the Administrative Agent and
each
Lender (including each Person obligated on a Hedging Contract that is a Loan
Document if such Person was a Lender at the time of it entered into such
Hedging
Contract) and each of their respective Affiliates, and each of the directors,
officers, employees, agents, trustees, representatives, attorneys, consultants
and advisors of or to any of the foregoing (including those retained in
connection with the satisfaction or attempted satisfaction of any condition
set
forth in Article
III (Conditions To Term Loans)
(each
such Person being an “Indemnitee”)
from
and against any and all claims, damages, liabilities, obligations, losses,
penalties, actions, judgments, suits, costs, disbursements and expenses,
joint
or several, of any kind or nature (including fees, disbursements and expenses
of
financial and legal advisors to any such Indemnitee) that may be imposed
on,
incurred by or asserted against any such Indemnitee in connection with or
arising out of any investigation, litigation or proceeding, whether or not
such
investigation, litigation or proceeding is brought by any such indemnitee
or any
of its directors, security holders or creditors or any such Indemnitee,
director, security holder or creditor is a party thereto, whether direct,
indirect, or consequential and whether based on any federal, state or local
law
or other statutory regulation, securities or commercial law or regulation,
or
under common law or in equity, or on contract, tort or otherwise, in any
manner
relating to or arising out of this Agreement, any other Loan Document, any
Obligation, any Related Document, or any act, event or transaction related
or
attendant to any thereof, or the use or intended use of the proceeds of the
Term
Loans or in connection with any investigation of any potential matter covered
hereby (collectively, the “Indemnified
Matters”);
provided,
however,
that
the Borrower shall not have any liability under this Section
11.4
to an
Indemnitee with respect to any Indemnified Matter that has resulted primarily
from the gross negligence or willful misconduct of that Indemnitee, as
determined by a court of competent jurisdiction in a final non-appealable
judgment or order. Without limiting the foregoing, “Indemnified
Matters”
include
(i) all Environmental Liabilities and Costs arising from or connected with
the
past, present or future operations of the Borrower, the Parent or any of
its
Subsidiaries involving any property subject to a Collateral Document, or
damage
to real or personal property or natural resources or harm or injury alleged
to
have resulted from any Release of Hazardous Materials on, upon or into such
property or any contiguous real estate, (ii) any costs or liabilities incurred
in connection with any Remedial Action concerning the Borrower, the Parent
or
any of its Subsidiaries, (iii) any costs or liabilities incurred in connection
with any Environmental Lien and (iv) any costs or liabilities incurred in
connection with any other matter under any Environmental Law and applicable
state property transfer laws, whether, with respect to any such matter, such
Indemnitee is a mortgagee pursuant to any leasehold mortgage, a mortgagee
in
possession, the successor in interest to the Borrower, the Parent or any
of its
Subsidiaries, or the owner, lessee or operator of any property of the Borrower,
the Parent or any of its Subsidiaries by virtue of foreclosure, except, with
respect to those matters referred to in clauses
(i),
(ii),
(iii)
and
(iv)
above,
to the extent (x) incurred following foreclosure by the Administrative Agent
or
any Lender, or the Administrative Agent or any Lender having become the
successor in interest to the Borrower, the Parent or any of its Subsidiaries
and
(y) attributable solely to acts of the Administrative Agent, such Lender
or any
agent on behalf of the Administrative Agent or such Lender.
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(b) The
Borrower shall indemnify the Administrative Agent and the Lenders for, and
hold
the Administrative Agent and the Lenders harmless from and against, any and
all
claims for brokerage commissions, fees and other compensation made against
the
Administrative Agent and the Lenders for any broker, finder or consultant
with
respect to any agreement, arrangement or understanding made by or on behalf
of
any Loan Party or any of its Subsidiaries in connection with the transactions
contemplated by this Agreement.
(c) The
Borrower, at the request of any Indemnitee, shall have the obligation to
defend
against any investigation, litigation or proceeding or requested Remedial
Action, in each case contemplated in clause
(a)
above,
and the Borrower, in any event, may participate in the defense thereof with
legal counsel of the Borrower’s choice. In the event that such indemnitee
requests the Borrower to defend against such investigation, litigation or
proceeding or requested Remedial Action, the Borrower shall promptly do so
and
such Indemnitee shall have the right to have legal counsel of its choice
participate in such defense. No action taken by legal counsel chosen by such
Indemnitee in defending against any such investigation, litigation or proceeding
or requested Remedial Action, shall vitiate or in any way impair the Borrower’s
obligation and duty hereunder to indemnify and hold harmless such
Indemnitee.
(d) The
Borrower agrees that any indemnification or other protection provided to
any
Indemnitee pursuant to this Agreement (including pursuant to this Section
11.4)
or any
other Loan Document shall (i) survive payment in full of the Obligations
and
(ii) inure to the benefit of any Person that was at any time an Indemnitee
under
this Agreement or any other Loan Document.
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LOAN AGREEMENT
COLLECTIVE
BRANDS FINANCE, INC.
Section
11.5 Limitation
of Liability
(a) The
Borrower agrees that no Indemnitee shall have any liability (whether in
contract, tort or otherwise) to any Loan Party or any of their respective
Subsidiaries or any of their respective equity holders or creditors for or
in
connection with the transactions contemplated hereby and in the other Loan
Documents and Related Documents, except to the extent such liability is
determined in a final non-appealable judgment by a court of competent
jurisdiction to have resulted primarily from such Indemnitee’s gross negligence
or willful misconduct. In no event, however, shall any Indemnitee be liable
on
any theory of liability for any special, indirect, consequential or punitive
damages (including, without limitation, any loss of profits, business or
anticipated savings). The Borrower hereby waives, releases and agrees (each
for
itself and on behalf of its Subsidiaries) not to xxx upon any such claim
for any
special, indirect, consequential or punitive damages, whether or not accrued
and
whether or not known or suspected to exist in its favor.
(b) IN
NO
EVENT SHALL ANY AGENT AFFILIATE HAVE ANY LIABILITY TO ANY LOAN PARTY, LENDER
OR
ANY OTHER PERSON FOR DAMAGES OF ANY KIND, INCLUDING DIRECT OR INDIRECT, SPECIAL,
INCIDENTAL OR CONSEQUENTIAL DAMAGES, LOSSES OR EXPENSES (WHETHER IN TORT
OR
CONTRACT OR OTHERWISE) ARISING OUT OF ANY LOAN PARTY OR ANY AGENT AFFILIATE’S
TRANSMISSION OF APPROVED ELECTRONIC COMMUNICATIONS THROUGH THE INTERNET OR
ANY
USE OF THE APPROVED ELECTRONIC PLATFORM, EXCEPT TO THE EXTENT SUCH LIABILITY
OF
ANY AGENT AFFILIATE IS FOUND IN A FINAL NON-APPEALABLE JUDGMENT BY A COURT
OF
COMPETENT JURISDICTION TO HAVE RESULTED PRIMARILY FORM SUCH AGENT AFFILIATE’S
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
Section
11.6 Right
of Set-off
Upon
the
occurrence and during the continuance of any Event of Default each Lender
and
each Affiliate of a Lender is hereby authorized at any time and from time
to
time, to the fullest extent permitted by law, to set off and apply any and
all
deposits (general or special, time or demand, provisional or final) at any
time
held and other Indebtedness at any time owing by such Lender or its Affiliates
to or for the credit or the account of the Borrower against any and all of
the
Obligations now or hereafter existing whether or not such Lender shall have
made
any demand under this Agreement or any other Loan Document and even though
such
Obligations may be unmatured. Each Lender agrees promptly to notify the Borrower
after any such set-off and application made by such Lender or its Affiliates;
provided,
however,
that
the failure to give such notice shall not affect the validity of such set-off
and application. Each Lender agrees that it shall not, without the express
consent of the Requisite Lenders (and that, it shall, to the extent lawfully
entitled to do so, upon the request of the Requisite Lenders) exercise its
set-off rights under this Section
11.6
against
any deposit accounts of the Loan Parties and their Subsidiaries maintained
with
such Lender or any Affiliate thereof. The rights of each Lender under this
Section
11.6
are in
addition to the other rights and remedies (including other rights of set-off)
that such Lender may have.
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LOAN AGREEMENT
COLLECTIVE
BRANDS FINANCE, INC.
Section
11.7 Sharing
of Payments, Etc.
(a) If
any
Lender (directly or through an Affiliate thereof) obtains any payment (whether
voluntary, involuntary, through the exercise of any right of set-off (including
pursuant to Section
11.6 (Right
of Set-off))
or
otherwise) of the Term Loans owing to it, any interest thereon, fees in respect
thereof or amounts due pursuant to Section
11.3 (Costs and Expenses) or
11.4
(Indemnities)
(other
than payments pursuant to Section
2.12 (Special Provisions Governing Eurodollar Rate Loans),
2.13
(Capital Adequacy)
or
2.14
(Taxes)
or
otherwise receives any Collateral or any “Proceeds”
(as
defined in the Pledge and Security Agreement) of Collateral (other than payments
pursuant to Section
2.12 (Special Provisions Governing Eurodollar Rate Loans),
2.13
(Capital Adequacy)
or
2.14
(Taxes))
(in
each case, whether voluntary, involuntary, through the exercise of any right
of
set-off (including pursuant to Section
11.6 (Right
of Set-off))
or
otherwise) in excess of its Ratable Portion of all payments of such Obligations
obtained by all the Lenders, such Lender (a “Purchasing
Lender”)
shall
forthwith purchase from the other Lenders (each, a “Selling
Lender”)
such
participations in their Term Loans or other Obligations as shall be necessary
to
cause such Purchasing Lender to share the excess payment ratably with each
of
them.
(b) If
all or
any portion of any payment received by a Purchasing Lender is thereafter
recovered from such Purchasing Lender, such purchase from each Selling Lender
shall be rescinded and such Selling Lender shall repay to the Purchasing
Lender
the purchase price to the extent of such recovery together with an amount
equal
to such Selling Lender’s ratable share (according to the proportion of (i) the
amount of such Selling Lender’s required repayment in relation to (ii) the total
amount so recovered from the Purchasing Lender) of any interest or other
amount
paid or payable by the Purchasing Lender in respect of the total amount so
recovered.
(c) The
Borrower agrees that any Purchasing Lender so purchasing a participation
from a
Selling Lender pursuant to this Section
11.7
may, to
the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off) with respect to such participation as fully
as
if such Lender were the direct creditor of the Borrower in the amount of
such
participation.
Section
11.8 Notices,
Etc.
(a) Addresses
for Notices.
All
notices, demands, requests, consents and other communications provided for
in
this Agreement shall be given in writing, or by any telecommunication device
capable of creating a written record (including electronic mail), and addressed
to the party to be notified as follows:
|
(i)
|
if
to the Borrower:
|
Payless
ShoeSource, Inc.
0000
Xxxxxxxxx Xxxxx Xxxxxx
Xxxxxx,
Xxxxxx 00000-0000
95
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LOAN AGREEMENT
COLLECTIVE
BRANDS FINANCE, INC.
Attention:
Xxxx Xxxxxx, Chief Financial Officer
Copy:
Xxxxxxx Xxxxxx, General Counsel
Telecopy
no: (000) 000-0000
E-Mail
Addresses:
xxxx_xxxxxx@xxxxxxx.xxx;xxxxxxx_xxxxxx@xxxxxxx.xxx
(ii) if
to any
Lender, at its Domestic Lending Office specified opposite its name on
Schedule II (Applicable
Lending Offices and Addresses for Notices)
or on
the signature page of any applicable Assignment and Acceptance;
|
(iii)
|
if
to the Administrative Agent:
|
CITICORP
NORTH AMERICA, INC.
000
Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention:
Xxxxxxx Xxxx
Telecopy
no: (000) 000-0000
E-Mail
Address: xxxxxxx.xxxx@xxxxxxxxx.xxx
with
a
copy to:
CITCORP
NORTH AMERICA, INC. - LOAN ADMINISTRATION
0
Xxxxx
Xxx - Xxxxx 000
Xxx
Xxxxxx, Xxxxxxxx 00000
Attention:
Xxxx Xxxxxxxxx
Telecopy
no: (000) 000-0000
E-Mail
Address: xxxxxxxxxxxxxxx@xxxx.xxx
WEIL,
GOTSHAL&
XXXXXX
LLP
000
Xxxxx
Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000-0000
Attention:
Xxxxxx X. Xxxxx
Telecopy
no: (000) 000-0000
E-Mail
Address: xxxxxx.xxxxx@xxxx.xxx
or
at
such other address as shall be notified in writing (x) in the case of the
Borrower and the Administrative Agent, to the other parties and (y) in the
case
of all other parties, to the Borrower and the Administrative Agent.
(b) Effectiveness
of Notices.
All
notices, demands, requests, consents and other communications described in
clause
(a)
above
shall be effective (i) if delivered by hand, including any overnight courier
service, upon personal delivery, (ii) if delivered by mail, when deposited
in
the mails, (iii) if delivered by posting to an Approved Electronic Platform
(to
the extent permitted by Section
10.3
to be
delivered thereunder), an Internet website or a similar telecommunication
device
requiring a user prior access to such Approved Electronic Platform, website
or
other device (to the extent permitted by Section
10.3
to be
delivered thereunder), when such notice, demand, request, consent and other
communication shall have been made generally available on such Approved
Electronic Platform, Internet website or similar device to the class of Person
being notified (regardless of whether any such Person must accomplish, and
whether or not any such Person shall have accomplished, any action prior
to
obtaining access to such items, including registration, disclosure of contact
information, compliance with a standard user agreement or undertaking a duty
of
confidentiality) and such Person has been notified that such communication
has
been posted to the Approved Electronic Platform and (iv) if delivered by
electronic mail or any other telecommunications device, when transmitted
to an
electronic mail address (or by another means of electronic delivery) as provided
in clause
(a)
above;
provided,
however,
that
notices and communications to the Administrative Agent pursuant to Article
II (The Term Loan Facility)
or
Article
X (The Administrative Agent)
shall
not be effective until received by the Administrative Agent.
96
TERM
LOAN AGREEMENT
COLLECTIVE
BRANDS FINANCE, INC.
(c) Use
of
Electronic Platform. Notwithstanding clause
(a)
and
(b)
above
(unless the Administrative Agent requests that the provisions of clause
(a)
and
(b)
above be
followed) and any other provision in this Agreement or any other Loan Document
providing for the delivery of any Approved Electronic Communication by any
other
means the Loan Parties shall deliver all Approved Electronic Communications
to
the Administrative Agent by properly transmitting such Approved Electronic
Communications in an electronic/soft medium in a format reasonably acceptable
to
the Administrative Agent to xxxxxxxxxxxxxxx@Xxxx.xxx or such other electronic
mail address (or similar means of electronic delivery) as the Administrative
Agent may notify the Borrower. Nothing in this clause
(c)
shall
prejudice the right of the Administrative Agent or any Lender to deliver
any
Approved Electronic Communication to any Loan Party in any manner authorized
in
this Agreement or to request that the Borrower effect delivery in such
manner.
Section
11.9 No
Waiver; Remedies
No
failure on the part of any Lender or the Administrative Agent to exercise,
and
no delay in exercising, any right hereunder shall operate as a waiver thereof;
nor shall any single or partial exercise of any such right preclude any other
or
further exercise thereof or the exercise of any other right. The remedies
herein
provided are cumulative and not exclusive of any remedies provided by
law.
Section
11.10 Binding
Effect
This
Agreement shall become effective when it shall have been executed by the
Borrower and the Administrative Agent and when the Administrative Agent shall
have been notified by each Lender that such Lender has executed it and
thereafter shall be binding upon and inure solely to the benefit of the
Borrower, the Administrative Agent and each Lender and, in each case, their
respective successors and assigns; provided,
however,
that
the Borrower shall not have the right to assign its rights hereunder or any
interest herein without the prior written consent of the Lenders.
Section
11.11 Governing
Law
This
Agreement and the rights and obligations of the parties hereto shall be governed
by, and construed and interpreted in accordance with, the law of the State
of
New York.
97
TERM
LOAN AGREEMENT
COLLECTIVE
BRANDS FINANCE, INC.
Section
11.12 Submission
to Jurisdiction; Service of Process
(a) Any
legal
action or proceeding with respect to this Agreement or any other Loan Document
may be brought in the courts of the State of New York located in the City
of New
York or of the United States of America for the Southern District of New
York,
and, by execution and delivery of this Agreement, the Borrower hereby accepts
for itself and in respect of its property, generally and unconditionally,
the
jurisdiction of the aforesaid courts. The parties hereto hereby irrevocably
waive any objection, including any objection to the laying of venue or based
on
the grounds of forum
non conveniens,
that
any of them may now or hereafter have to the bringing of any such action
or
proceeding in such respective jurisdictions.
(b) The
Borrower hereby irrevocably consents to the service of any and all legal
process, summons, notices and documents in any suit, action or proceeding
brought in the United States of America arising out of or in connection with
this Agreement or any other Loan Document by the mailing (by registered or
certified mail, postage prepaid) or delivering of a copy of such process
to the
Borrower at its address specified in Section
11.8 (Notices, Etc.).
The
Borrower agrees that a final judgment in any such action or proceeding shall
be
conclusive and may be enforced in other jurisdictions by suit on the judgment
or
in any other manner provided by law.
(c) Nothing
contained in this Section
11.12
shall
affect the right of the Administrative Agent or any Lender to serve process
in
any other manner permitted by law or commence legal proceedings or otherwise
proceed against the Borrower or any other Loan Party in any other
jurisdiction.
(d) If
for
the purposes of obtaining judgment in any court it is necessary to convert
a sum
due hereunder in Dollars into another currency, the parties hereto agree,
to the
fullest extent that they may effectively do so, that the rate of exchange
used
shall be that at which in accordance with normal banking procedures the
Administrative Agent could purchase Dollars with such other currency at the
spot
rate of exchange quoted by the Administrative Agent at 11:00 a.m. (New York
time) on the Business Day preceding that on which final judgment is given,
for
the purchase of Dollars, for delivery two Business Days thereafter.
Section
11.13 Waiver
of Jury Trial
EACH
OF
THE ADMINISTRATIVE AGENT, THE LENDERS, THE PARENT AND THE BORROWER IRREVOCABLY
WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT.
Section
11.14 Marshaling;
Payments Set Aside
None
of
the Administrative Agent or any Lender shall be under any obligation to marshal
any assets in favor of the Borrower or any other party or against or in payment
of any or all of the Obligations. To the extent that the Borrower makes a
payment or payments to the Administrative Agent or the Lenders or any such
Person receives payment from the proceeds of the Collateral or exercise their
rights of setoff, and such payment or payments or the proceeds of such
enforcement or setoff or any part thereof are subsequently invalidated, declared
to be fraudulent or preferential, set aside or required to be repaid to a
trustee, receiver or any other party, then to the extent of such recovery,
the
obligation or part thereof originally intended to be satisfied, and all Liens,
right and remedies therefor, shall be revived and continued in full force
and
effect as if such payment had not been made or such enforcement or setoff
had
not occurred.
98
TERM
LOAN AGREEMENT
COLLECTIVE
BRANDS FINANCE, INC.
Section
11.15 Section
Titles
The
section titles contained in this Agreement are and shall be without substantive
meaning or content of any kind whatsoever and are not a part of the agreement
between the parties hereto, except when used to reference a Section. Any
reference to the number of a clause, sub-clause or subsection hereof immediately
followed by a reference in parenthesis to the title of the Section containing
such clause, sub-clause or subsection is a reference to such clause, sub-clause
or subsection and not to the entire Section; provided,
however,
that,
in case of direct conflict between the reference to the title and the reference
to the number of such Section, the reference to the title shall govern absent
manifest error. If any reference to the number of a Section (but not to any
clause, sub-clause or subsection thereof) is followed immediately by a reference
in parenthesis to the title of a Section, the title reference shall govern
in
case of direct conflict absent manifest error.
Section
11.16 Execution
in Counterparts
This
Agreement may be executed in any number of counterparts and by different
parties
in separate counterparts, each of which when so executed shall be deemed
to be
an original and all of which taken together shall constitute one and the
same
agreement. Signature pages may be detached from multiple separate counterparts
and attached to a single counterpart so that all signature pages are attached
to
the same document. Delivery of an executed signature page of this Agreement
by
facsimile transmission, electronic mail or by posting on the Approved Electronic
Platform shall be as effective as delivery of a manually executed counterpart
hereof. A set of the copies of this Agreement signed by all parties shall
be
lodged with the Borrower and the Administrative Agent.
Section
11.17 Entire
Agreement
This
Agreement, together with all of the other Loan Documents and all certificates
and documents delivered hereunder or thereunder, embodies the entire agreement
of the parties and supersedes all prior agreements and understandings relating
to the subject matter hereof. In the event of any conflict between the terms
of
this Agreement and any other Loan Document, the terms of this Agreement shall
govern.
Section
11.18 Confidentiality
Each
of the Administrative Agent and the Lenders agrees to maintain the
confidentiality of the Information (as defined below) and not to use or disclose
such Information, except that Information may be used or disclosed (a) to
its Affiliates and to its and its Affiliates’ respective managers,
administrators, trustees, partners, directors, officers, employees, agents,
advisors and other representatives (it being understood that the Persons
to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to
the extent requested by any regulatory authority purporting to have jurisdiction
over it (including any self-regulatory authority, such as the National
Association of Insurance Commissioners), (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process,
(d) to any other party hereto, (e) in connection with the exercise of
any remedies hereunder or under any other Loan Document or any action or
proceeding relating to this Agreement or any other Loan Document or the
enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to
(i) any Eligible Assignee of or Participant in, or any prospective Eligible
Assignee of or Participant in, any of its rights or obligations under this
Agreement or (ii) any actual or party (or its managers, administrators,
trustees, partners, directors, officers, employees, agents, advisors and
other
representatives) to any swap or derivative or similar transaction under which
payments are to be made by reference to the Borrower and its Obligations,
this
Agreement or payments hereunder, (iii) any rating agency (it being understood
that, prior to any such disclosure, such rating agency shall undertake to
preserve the confidentiality of any Information relating to the Loan Parties
received by it from such Lender), or (iv) the CUSIP Service Bureau or any
similar organization, (g) with the written consent of the Borrower or
(h) to the extent such Information (x) becomes publicly available
other than as a result of a breach of this Section or (y) becomes available
to the Administrative Agent, any Lender, or any of their respective Affiliates
on a nonconfidential basis from a source other than the Borrower.
99
TERM
LOAN AGREEMENT
COLLECTIVE
BRANDS FINANCE, INC.
For
purposes of this Section, “Information”
means
all information received from the Parent or any of its Subsidiaries relating
to
the Parent or any of its Subsidiaries or any of their respective businesses,
other than any such information that is available to the Administrative Agent
or
any Lender on a nonconfidential basis prior to disclosure by the Parent or
any
of its Subsidiaries, provided that, in the case of information received from
the
Parent or any of its Subsidiaries after the date hereof, such information
is
clearly identified at the time of delivery as confidential. Any Person required
to maintain the confidentiality of Information as provided in this Section
shall
be considered to have complied with its obligation to do so if such Person
has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential
information.
Section
11.19 Patriot
Act Notice.
Each
Lender subject to the Patriot Act hereby notifies the Borrower that, pursuant
to
Section
326
of the
Patriot Act, it is required to obtain, verify and record information that
identifies the Borrower, including the name and address of the Borrower and
other information that will allow such Lender to identify the Borrower in
accordance with the Patriot Act.
[Signature
Pages Follow]
100
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by
their respective officers thereunto duly authorized, as of the date first
above
written.
COLLECTIVE
BRANDS FINANCE, INC.
(formerly known as Payless ShoeSource Finance, Inc.),
as Borrower
(formerly known as Payless ShoeSource Finance, Inc.),
as Borrower
By:
/s/
Xxxxxxx X. Xxxxxx
Name:
Xxxxxxx X. Xxxxxx
Title:
President
COLLECTIVE
BRANDS, INC.
(formerly
known as Payless ShoeSource, Inc.)
as a Loan Party
as a Loan Party
By:
/s/
Xxxxxxx X. Xxxxxx
Name:
Xxxxxxx X. Xxxxxx
Title:
Senior Vice President
PAYLESS
SHOESOURCE, INC.,
a
Missouri corporation
as
a
Loan Party
By:
/s/
Xxxxxxx X. Xxxxxx
Name:
Xxxxxxx X. Xxxxxx
Title:
Senior Vice President
PAYLESS
SHOESOURCE DISTRIBUTION, INC.
as
a
Loan Party
By:
/s/
Xxxxxxx X. Xxxxxx
Name:
Xxxxxxx X. Xxxxxx
Title:
Vice President
[SIGNATURE
PAGE TO TERM LOAN AGREEMENT]
CITICORP
NORTH AMERICA, INC.,
as
Administrative Agent and Lender
By:
/s/
Xxxxxxx X. Xxxxxx
Name:
Xxxxxxx X. Xxxxxx
Title:
Director
[SIGNATURE
PAGE TO TERM LOAN AGREEMENT]
X.X.
XXXXXX CHASE BANK, N.A.,
as
Lender
By:
/s/
Xxxxxxx X. Xxxxxx
Name:
Xxxxxxx X. Xxxxxx
Title:
Vice President
[SIGNATURE
PAGE TO TERM LOAN AGREEMENT]
TABLE
OF CONTENTS
|
Section
1.1
|
Defined
Terms
|
1
|
|
Section
1.2
|
Computation
of Time Periods
|
29
|
|
Section
1.3
|
Accounting
Terms and Principles
|
29
|
|
Section
1.4
|
Conversion
of Foreign Currencies
|
30
|
|
Section
1.5
|
Certain
Terms
|
30
|
|
ARTICLE
II
|
THE
TERM LOAN FACILITY
|
31
|
|
Section
2.1
|
The
Term Loans
|
31
|
|
Section
2.2
|
Borrowing
Procedures
|
33
|
|
Section
2.3
|
Reduction
and Termination of the Term Loan Commitments
|
34
|
|
Section
2.4
|
Repayment
of Term Loans
|
34
|
|
Section
2.5
|
Evidence
of Debt
|
35
|
|
Section
2.6
|
Optional
Prepayments
|
36
|
|
Section
2.7
|
Mandatory
Prepayments
|
37
|
|
Section
2.8
|
Interest
|
38
|
|
Section
2.9
|
Conversion/Continuation
Option
|
39
|
|
Section
2.10
|
Fees
|
39
|
|
Section
2.11
|
Payments
and Computations
|
39
|
|
Section
2.12
|
Special
Provisions Governing Eurodollar Rate Loans
|
42
|
|
Section
2.13
|
Capital
Adequacy
|
43
|
|
Section
2.14
|
Taxes
|
44
|
|
Section
2.15
|
Substitution
of Lenders
|
46
|
|
ARTICLE
III
|
CONDITIONS
TO TERM LOANS
|
47
|
|
Section
3.1
|
Conditions
Precedent to Closing Date Term Loans
|
47
|
|
Section
3.2
|
Conditions
Precedent to Incremental Term Loans
|
51
|
|
Section
3.3
|
Determinations
of Borrowing Conditions
|
53
|
|
ARTICLE
IV
|
REPRESENTATIONS
AND WARRANTIES
|
53
|
|
Section
4.1
|
Corporate
Existence; Compliance with Law
|
54
|
|
Section
4.2
|
Corporate
Power; Authorization; Enforceable Obligations
|
54
|
|
Section
4.3
|
Ownership
of Subsidiaries
|
55
|
|
Section
4.4
|
Financial
Statements
|
55
|
|
Section
4.5
|
Material
Adverse Change
|
56
|
i
TABLE
OF CONTENTS
(continued)
Page
|
Section
4.6
|
Solvency
|
56
|
|
Section
4.7
|
Litigation
|
56
|
|
Section
4.8
|
Taxes
|
57
|
|
Section
4.9
|
Full
Disclosure
|
57
|
|
Section
4.10
|
Margin
Regulations
|
57
|
|
Section
4.11
|
No
Burdensome Restrictions; No Defaults
|
58
|
|
Section
4.12
|
Investment
Company Act
|
58
|
|
Section
4.13
|
Use
of Proceeds
|
58
|
|
Section
4.14
|
Insurance
|
59
|
|
Section
4.15
|
Labor
Matters
|
59
|
|
Section
4.16
|
ERISA
|
59
|
|
Section
4.17
|
Environmental
Matters
|
60
|
|
Section
4.18
|
Intellectual
Property
|
60
|
|
Section
4.19
|
Title;
Real Property
|
61
|
|
Section
4.20
|
Related
Documents
|
62
|
|
ARTICLE
V
|
FINANCIAL
COVENANT
|
63
|
|
Section
5.1
|
Maximum
Leverage Ratio
|
63
|
|
ARTICLE
VI
|
REPORTING
COVENANTS
|
63
|
|
Section
6.1
|
Financial
Statements
|
63
|
|
Section
6.2
|
Default
Notices
|
64
|
|
Section
6.3
|
Litigation
|
65
|
|
Section
6.4
|
SEC
Filings; Press Releases
|
65
|
|
Section
6.5
|
Insurance
|
65
|
|
Section
6.6
|
ERISA
Matters
|
65
|
|
Section
6.7
|
Environmental
Matters
|
66
|
|
Section
6.8
|
Other
Information
|
67
|
|
ARTICLE
VII
|
AFFIRMATIVE
COVENANTS
|
67
|
|
Section
7.1
|
Preservation
of Corporate Existence, Etc
|
67
|
|
Section
7.2
|
Compliance
with Laws, Etc
|
68
|
|
Section
7.3
|
Conduct
of Business
|
68
|
|
Section
7.4
|
Payment
of Taxes, Etc
|
68
|
|
Section
7.5
|
Maintenance
of Insurance
|
68
|
ii
TABLE
OF CONTENTS
(continued)
Page
|
Section
7.6
|
Access
|
68
|
|
Section
7.7
|
Keeping
of Books
|
69
|
|
Section
7.8
|
Maintenance
of Properties, Etc
|
69
|
|
Section
7.9
|
Application
of Proceeds
|
69
|
|
Section
7.10
|
Environmental
|
69
|
|
Section
7.11
|
Additional
Collateral and Guaranties
|
69
|
|
Section
7.12
|
Designation
of Subsidiaries
|
71
|
|
ARTICLE
VIII
|
NEGATIVE
COVENANTS
|
72
|
|
Section
8.1
|
Indebtedness
|
72
|
|
Section
8.2
|
Liens,
Etc
|
73
|
|
Section
8.3
|
Investments
|
74
|
|
Section
8.4
|
Sale
of Assets
|
75
|
|
Section
8.5
|
Restricted
Payments
|
75
|
|
Section
8.6
|
Prepayment
of Indebtedness
|
76
|
|
Section
8.7
|
Restriction
on Fundamental Changes
|
76
|
|
Section
8.8
|
Change
in Nature of Business
|
76
|
|
Section
8.9
|
Transactions
with Affiliates
|
77
|
|
Section
8.10
|
Limitations
on Restrictions on Subsidiary Distributions; No New Negative
Pledge
|
77
|
|
Section
8.11
|
Modification
of Constituent Documents
|
77
|
|
Section
8.12
|
Modification
of Related Documents
|
77
|
|
Section
8.13
|
Accounting
Changes; Fiscal Year
|
78
|
|
Section
8.14
|
Margin
Regulations
|
78
|
|
Section
8.15
|
No
Speculative Transactions
|
79
|
|
Section
8.16
|
Compliance
with ERISA
|
79
|
|
ARTICLE
IX
|
EVENTS
OF DEFAULT
|
79
|
|
Section
9.1
|
Events
of Default
|
79
|
|
Section
9.2
|
Remedies
|
81
|
|
Section
9.3
|
Rescission
|
82
|
|
ARTICLE
X
|
THE
ADMINISTRATIVE AGENT
|
82
|
|
Section
10.1
|
Authorization
and Action
|
82
|
|
Section
10.2
|
Administrative
Agent’s Reliance, Etc
|
83
|
iii
TABLE
OF CONTENTS
(continued)
Page
|
Section
10.3
|
Posting
of Approved Electronic Communications
|
84
|
|
Section
10.4
|
The
Administrative Agent Individually
|
85
|
|
Section
10.5
|
Lender
Credit Decision
|
85
|
|
Section
10.6
|
Indemnification
|
85
|
|
Section
10.7
|
Successor
Administrative Agent
|
86
|
|
Section
10.8
|
Concerning
the Collateral and the Collateral Documents; Releases
|
86
|
|
Section
10.9
|
Collateral
Matters Relating to Related Obligations
|
87
|
|
ARTICLE
XI
|
MISCELLANEOUS
|
88
|
|
Section
11.1
|
Amendments,
Waivers, Etc
|
88
|
|
Section
11.2
|
Assignments
and Participations
|
90
|
|
Section
11.3
|
Costs
and Expenses
|
92
|
|
Section
11.4
|
Indemnities
|
93
|
|
Section
11.5
|
Limitation
of Liability
|
94
|
|
Section
11.6
|
Right
of Set-off
|
95
|
|
Section
11.7
|
Sharing
of Payments, Etc
|
95
|
|
Section
11.8
|
Notices,
Etc
|
96
|
|
Section
11.9
|
No
Waiver; Remedies
|
97
|
|
Section
11.10
|
Binding
Effect
|
98
|
|
Section
11.11
|
Governing
Law
|
98
|
|
Section
11.12
|
Submission
to Jurisdiction; Service of Process
|
98
|
|
Section
11.13
|
Waiver
of Jury Trial
|
99
|
|
Section
11.14
|
Marshaling;
Payments Set Aside
|
99
|
|
Section
11.15
|
Section
Titles
|
99
|
|
Section
11.16
|
Execution
in Counterparts
|
99
|
|
Section
11.17
|
Entire
Agreement
|
100
|
|
Section
11.18
|
Confidentiality
|
100
|
|
Section
11.19
|
Patriot
Act Notice.
|
100
|
iv
TABLE
OF CONTENTS
(continued)
Schedules
|
Schedule I
|
–
|
Term
Loan Commitments
|
|
Schedule II
|
–
|
Applicable
Lending Offices and Addresses for Notices
|
|
Schedule 4.2
|
–
|
Consents
|
|
Schedule 4.3
|
–
|
Ownership
of Subsidiaries
|
|
Schedule 4.7
|
–
|
Litigation
|
|
Schedule
4.15
|
–
|
Labor
Matters
|
|
Schedule
4.16
|
–
|
List
of Plans
|
|
Schedule
4.17
|
–
|
Environmental
Matters
|
|
Schedule
4.18
|
–
|
Intellectual
Property
|
|
Schedule
4.19
|
–
|
Real
Property
|
|
Schedule
7.13
|
–
|
Post-Closing
Covenants
|
|
Schedule 8.1
|
–
|
Existing
Indebtedness
|
|
Schedule
8.2
|
–
|
Existing
Liens
|
|
Schedule 8.3
|
–
|
Existing
Investments
|
|
Schedule
8.4
|
–
|
Asset
Sales
|
|
Schedule 8.13
|
–
|
Accounting
Change; Fiscal Year
|
Exhibits
|
Exhibit A
|
–
|
Form
of Assignment and Acceptance
|
|
Exhibit
B
|
–
|
Form
of Term Note
|
|
Exhibit C
|
–
|
Form
of Notice of Borrowing
|
|
Exhibit D
|
–
|
Form
of Notice of Conversion or Continuation
|
|
Exhibit E
|
–
|
Form
of Opinion of counsel for the Loan Parties
|
|
Exhibit F
|
–
|
Form
of Guaranty
|
|
Exhibit G
|
–
|
Form
of Pledge and Security Agreement
|
|
Exhibit H
|
–
|
Form
of Intercreditor Agreement
|
v
