Exhibit 10(q)
▇▇ ▇▇▇▇▇▇
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364-DAY CREDIT AGREEMENT
dated as of
October 17, 2003
among
LIZ CLAIBORNE, INC.
The Lenders Party Hereto
Fleet National Bank and Citibank, N.A.,
as Syndication Agents
Bank One, NA,
as Documentation Agent
and
JPMORGAN CHASE BANK,
as Administrative Agent
$375,000,000 364-DAY REVOLVING CREDIT FACILITY
▇.▇. ▇▇▇▇▇▇ SECURITIES, INC.,
as Sole Advisor, Lead Arranger
and Sole Bookrunner
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TABLE OF CONTENTS
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ARTICLE I
Definitions
SECTION 1.01. Defined Terms....................................................1
SECTION 1.02. Terms Generally.................................................15
SECTION 1.03. Accounting Terms; GAAP..........................................16
ARTICLE II
The Credits
SECTION 2.01. Commitments.....................................................16
SECTION 2.02. Loans and Borrowings............................................16
SECTION 2.03. Requests for Borrowings.........................................17
SECTION 2.04. Funding of Borrowings...........................................18
SECTION 2.05. Interest Elections..............................................18
SECTION 2.06. Termination and Reduction of Commitments........................19
SECTION 2.07. Repayment of Loans; Evidence of Debt............................20
SECTION 2.08. Optional Prepayment of Loans....................................20
SECTION 2.09. Fees ...........................................................21
SECTION 2.10. Interest........................................................21
SECTION 2.11. Alternate Rate of Interest......................................22
SECTION 2.12. Increased Costs.................................................23
SECTION 2.13. Break Funding Payments..........................................24
SECTION 2.14. Taxes...........................................................24
SECTION 2.15. Payments Generally; Pro Rata Treatment; Sharing of Set-offs.....25
SECTION 2.16. Mitigation Obligations; Replacement of Lenders..................26
SECTION 2.17. Source of Funds.................................................27
ARTICLE III
Representations and Warranties
SECTION 3.01. Organization; Powers............................................27
SECTION 3.02. Authorization; Enforceability...................................28
SECTION 3.03. Governmental Approvals; No Conflicts............................28
SECTION 3.04. Financial Condition; No Material Adverse Change.................28
SECTION 3.05. Properties; Liens...............................................28
SECTION 3.06. Litigation and Environmental Matters............................29
SECTION 3.07. Compliance with Laws and Agreements.............................29
SECTION 3.08. No Default......................................................29
SECTION 3.09. Investment and Holding Company Status...........................29
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SECTION 3.10. No Burdensome Restrictions......................................29
SECTION 3.11. Taxes...........................................................29
SECTION 3.12. Federal Regulations.............................................30
SECTION 3.13. Subsidiaries....................................................30
SECTION 3.14. ERISA...........................................................30
SECTION 3.15. Disclosure......................................................30
ARTICLE IV
Conditions
SECTION 4.01. Effective Date..................................................31
SECTION 4.02. Each Credit Event...............................................32
ARTICLE V
Affirmative Covenants
SECTION 5.01. Financial Statements............................................32
SECTION 5.02. Certificates; Other Information.................................33
SECTION 5.03. Notices of Material Events......................................33
SECTION 5.04. Existence; Conduct of Business..................................34
SECTION 5.05. Payment of Obligations..........................................34
SECTION 5.06. Maintenance of Properties and Trademarks; Insurance.............34
SECTION 5.07. Books and Records; Inspection Rights............................34
SECTION 5.08. Environmental Laws..............................................35
SECTION 5.09. Compliance......................................................35
SECTION 5.10. Additional Subsidiaries.........................................35
SECTION 5.11. Use of Proceeds.................................................35
ARTICLE VI
Negative Covenants
SECTION 6.01. Financial Covenants.............................................36
SECTION 6.02. Indebtedness....................................................36
SECTION 6.03. Liens...........................................................37
SECTION 6.04. Fundamental Changes.............................................38
SECTION 6.05. Investments, Loans, Advances, Guarantees and Acquisitions;
Hedging Agreements..............................................39
SECTION 6.06. Limitation on Sale of Assets....................................40
SECTION 6.07. Restricted Payments.............................................40
SECTION 6.08. Transactions with Affiliates....................................40
SECTION 6.09. Changes in Fiscal Periods.......................................41
SECTION 6.10. Lines of Business...............................................41
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ARTICLE VII
Events of Default
ARTICLE VIII
The Administrative Agent
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices.........................................................45
SECTION 9.02. Waivers; Amendments.............................................46
SECTION 9.03. Expenses; Indemnity; Damage Waiver..............................46
SECTION 9.04. Successors and Assigns..........................................47
SECTION 9.05. Survival........................................................51
SECTION 9.06. Counterparts; Integration; Effectiveness........................51
SECTION 9.07. Severability....................................................51
SECTION 9.08. Right of Setoff.................................................51
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process......52
SECTION 9.10. WAIVER OF JURY TRIAL............................................52
SECTION 9.11. Headings........................................................52
SECTION 9.12. Confidentiality.................................................53
SCHEDULES:
Schedule 2.01 -- Commitments
Schedule 3.06 -- Disclosed Matters
Schedule 3.13 -- Subsidiaries
Schedule 6.02 -- Existing Indebtedness
Schedule 6.03 -- Existing Liens
Schedule 6.05(i) -- Existing Investments
Schedule 6.05(ii) -- Borrower's Investment Policy
EXHIBITS:
Exhibit A -- Form of Assignment and Acceptance
Exhibit B-1 -- Form of Opinion of ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
Exhibit B-2 -- Form of Opinion of Deputy General Counsel of the Borrower
Exhibit C -- Form of Subsidiary Guarantee
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364-DAY CREDIT AGREEMENT dated as of October 17, 2003, among LIZ CLAIBORNE,
INC., the LENDERS party hereto, FLEET NATIONAL BANK and CITIBANK, N.A., as
Syndication Agents, BANK ONE, NA, as Documentation Agent and JPMORGAN CHASE
BANK, as Administrative Agent.
The parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Defined Terms. As used in this Agreement, the following terms
have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are bearing interest at a
rate determined by reference to the Alternate Base Rate.
"Administrative Agent" means JPMorgan Chase Bank, in its capacity as
administrative agent for the Lenders hereunder.
"Administrative Questionnaire" means an Administrative Questionnaire in a
form supplied by the Administrative Agent.
"Affiliate" means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
"Agreement" means this 364-Day Credit Agreement, as amended, supplemented
or otherwise modified from time to time in accordance with its terms.
"Alternate Base Rate" means, for any day, a rate per annum equal to the
greatest of (a) the Prime Rate in effect on such day, (b) the Base CD Rate in
effect on such day plus 1% and (c) the Federal Funds Effective Rate in effect on
such day plus 1/2 of 1%. Any change in the Alternate Base Rate due to a change
in the Prime Rate, the Base CD Rate or the Federal Funds Effective Rate shall be
effective from and including the effective date of such change in the Prime
Rate, the Base CD Rate or the Federal Funds Effective Rate, as applicable.
"Applicable Percentage" means, with respect to any Lender, the percentage
of the total Commitments represented by such Lender's Commitment. If the
Commitments have terminated or expired, the Applicable Percentages shall be
determined based upon the Commitments most recently in effect, giving effect to
any assignments.
"Applicable Rate" means, for any day, with respect to any Eurocurrency
Revolving Loan or ABR Revolving Loan, as the case may be, or with respect to the
facility fees payable hereunder, the applicable rate per annum set forth below
under the caption
"Eurocurrency Spread," "ABR Spread" or "Facility Fee Rate," based upon the
ratings by ▇▇▇▇▇'▇ and S&P, respectively, applicable on such date to the Index
Debt:
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Eurocurrency Facility Fee Utilization
Level Index Debt Rating Spread ABR Spread Rate Fee Rate
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I >= A-/A3 0.35% 0.00% 0.10% 0.125%
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II BBB+/Baa1 0.50% 0.00% 0.125% 0.125%
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III BBB/Baa2 0.60% 0.00% 0.15% 0.125%
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IV BBB-/Baa3 0.80% 0.00% 0.20% 0.25%
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V <= BB+/Ba1 1.075% 0.025% 0.25% 0.25%
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For purposes of the foregoing, (i) if the ratings established or deemed to
have been established by ▇▇▇▇▇'▇ and S&P for the Index Debt shall fall within
different Levels, the Applicable Rate shall be based on the higher of the two
ratings (i.e., the lower Level number) unless one of the two ratings is two or
more Levels lower than the other, in which case the Applicable Rate shall be
determined by reference to the Level next below that of the higher of the two
Levels; and (ii) if the ratings established or deemed to have been established
by ▇▇▇▇▇'▇ and S&P for the Index Debt shall be changed (other than as a result
of a change in the rating system of ▇▇▇▇▇'▇ or S&P), such change shall be
effective as of the date on which it is first announced by the applicable rating
agency. Each change in the Applicable Rate shall apply during the period
commencing on the effective date of such change and ending on the date
immediately preceding the effective date of the next such change. If the rating
system of ▇▇▇▇▇'▇ or S&P shall change, or if either such rating agency shall
cease to be in the business of rating corporate debt obligations, the Borrower
and the Lenders shall negotiate in good faith to amend this definition to
reflect such changed rating system or the unavailability of ratings from such
rating agency and, pending the effectiveness of any such amendment, the
Applicable Rate shall be determined by reference to the rating most recently in
effect prior to such change or cessation. If, on any date, the Loans or the
"Dollar Equivalent" of the outstanding principal amount of the "Loans" and "L/C
Obligations" under the Three-Year Credit Agreement exceed 50% of the aggregate
amount of the Commitments or the "Commitments" under the Three-Year Credit
Agreement, as the case may be (or, during the period after the Commitments or
such "Commitments", as the case may be, have terminated, 50% of the aggregate
amount of the Commitments or such "Commitments", as the case may be, immediately
prior to such termination), the Eurocurrency Spread or ABR Spread, as the case
may be, for such date shall increase by the amount set forth in the above grid
under the caption "Utilization Fee Rate," based upon the ratings by ▇▇▇▇▇'▇ and
S&P, respectively, applicable on such date to the Index Debt.
"Approved Fund" means (a) a CLO and (b) with respect to any Lender that is
a fund which invests in bank loans and similar extensions of credit, any other
fund that invests in bank loans and similar extensions of credit and is managed
by the same investment advisor as such Lender or by an Affiliate of such
investment advisor.
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"Assessment Rate" means, for any day, the annual assessment rate in effect
on such day that is payable by a member of the Bank Insurance Fund classified as
"well-capitalized" and within supervisory subgroup "B" (or a comparable
successor risk classification) within the meaning of 12 C.F.R. Part 327 (or any
successor provision) to the Federal Deposit Insurance Corporation for insurance
by such Corporation of time deposits made in dollars at the offices of such
member in the United States; provided that if, as a result of any change in any
law, rule or regulation, it is no longer possible to determine the Assessment
Rate as aforesaid, then the Assessment Rate shall be such annual rate as shall
be reasonably determined by the Administrative Agent to be representative of the
cost of such insurance to the Lenders.
"Assignment and Acceptance" means an assignment and acceptance entered into
by a Lender and an assignee (with the consent of any party whose consent is
required by Section 9.04), and accepted by the Administrative Agent, in the form
of Exhibit A or any other form approved by the Administrative Agent.
"Availability Period" means the period from and including the Effective
Date to but excluding the earlier of the Maturity Date and the date of
termination of the Commitments.
"Base CD Rate" means the sum of (a) the Three-Month Secondary CD Rate
multiplied by the Statutory Reserve Rate plus (b) the Assessment Rate.
"Board" means the Board of Governors of the Federal Reserve System of the
United States of America.
"Borrower" means Liz Claiborne, Inc., a Delaware corporation.
"Borrowing" means Revolving Loans of the same Type, made, converted or
continued on the same date and, in the case of Eurocurrency Loans, as to which a
single Interest Period is in effect.
"Borrowing Request" means a request by the Borrower for a Borrowing in
accordance with Section 2.03.
"Business Day" means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
remain closed; provided that, when used in connection with a Eurocurrency Loan,
the term "Business Day" shall also exclude any day on which banks are not open
for dealings in dollar deposits in the London interbank market.
"Capital Lease Obligations" means the obligations of the Borrower and its
Subsidiaries to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a consolidated balance sheet of the Borrower
under GAAP, and the amount of such obligations shall be the capitalized amount
thereof determined in accordance with GAAP.
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"Change in Control" means (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group (within the
meaning of Section 13(d) of the Securities Exchange Act of 1934 and the rules of
the Securities and Exchange Commission thereunder as in effect on the date
hereof) of shares representing more than 33 1/3% of the aggregate ordinary
voting power represented by the issued and outstanding capital stock of the
Borrower; or (b) occupation of a majority of the seats (other than vacant seats)
on the board of directors of the Borrower by Persons who were neither (i)
nominated by the board of directors of the Borrower nor (ii) appointed by
directors so nominated.
"Change in Law" means (a) the adoption of any law, rule or regulation after
the date of this Agreement, (b) any change in any law, rule or regulation or in
the interpretation or application thereof by any Governmental Authority after
the date of this Agreement or (c) compliance by any Lender (or, for purposes of
Section 2.12(b), by any lending office of such Lender or by such Lender's
holding company, if any) with any request, guideline or directive (whether or
not having the force of law) of any Governmental Authority made or issued after
the date of this Agreement.
"CLO" means any entity (whether a corporation, partnership, trust or
otherwise) that is engaged in making, purchasing, holding or otherwise investing
in bank loans and similar extensions of credit in the ordinary course of its
business and is administered or managed by a Lender or an Affiliate of such
Lender.
"Closing Date" means the date on which the conditions precedent set forth
in Section 4.01 shall have been satisfied, which date is October 17, 2003.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Commitment" means, with respect to each Lender, the commitment of such
Lender to make Revolving Loans, expressed as an amount representing the maximum
aggregate amount of such Lender's Revolving Credit Exposure hereunder, as such
commitment may be (a) reduced from time to time pursuant to Section 2.06 and (b)
reduced or increased from time to time pursuant to assignments by or to such
Lender pursuant to Section 9.04. The initial amount of each Lender's Commitment
is set forth on Schedule 2.01, or in the Assignment and Acceptance pursuant to
which such Lender shall have assumed its Commitment, as applicable. The
aggregate amount of the Commitments on the Closing Date is $375,000,000.
"Conduit Lender" means any special purpose corporation organized and
administered by any Lender for the purpose of making Loans hereunder otherwise
required to be made by such Lender and designated by such Lender in a written
instrument, subject to the consent of the Borrower (which, in each case, shall
not be unreasonably withheld or delayed); provided, that the designation by any
Lender of a Conduit Lender shall not relieve the designating Lender of any of
its obligations to fund a Loan under this Agreement if, for any reason, its
Conduit Lender fails to fund any such Loan, and the designating Lender (and not
the Conduit Lender) shall have the sole right and responsibility to deliver all
consents and waivers required or requested under this Agreement with respect to
its Conduit Lender; and provided further, that no Conduit Lender shall (a) be
entitled to receive any greater amount pursuant to Section 2.12, 2.13, 2.14 or
9.03 than the designating Lender would have been entitled to receive
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in respect of the extensions of credit made by such Conduit Lender or (b) be
deemed to have any Commitment hereunder.
"Consolidated EBITDA" means, for any period, Consolidated Net Income for
such period plus, without duplication and to the extent reflected as a charge in
the statement of such Consolidated Net Income for such period, the sum of (a)
income or franchise tax expense, (b) interest expense, both expensed and
capitalized, amortization or writeoff of debt discount and debt issuance costs
and commissions, discounts and other fees and charges associated with
Indebtedness (including the Loans), (c) depreciation and amortization expense,
(d) amortization of intangibles (including, but not limited to, goodwill) and
organization costs, (e) any extraordinary, unusual or non-recurring non-cash
expenses or losses (including, whether or not otherwise includable as a separate
item in the statement of such Consolidated Net Income for such period, non-cash
losses on sales of assets outside of the ordinary course of business), and (f)
any other non-cash charges, and minus, to the extent included in the statement
of such Consolidated Net Income for such period, the sum of (a) interest income,
(b) any extraordinary, unusual or non-recurring income or gains (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 (c) any other non-cash income, all as
determined on a consolidated basis.
"Consolidated EBITDAR" means, with respect to any period, Consolidated
EBITDA for such period plus the Consolidated Rental Expense of the Borrower for
such period.
"Consolidated Interest Expense" means, for any period, (a) the total amount
of interest expense, both expensed and capitalized, of the Borrower and its
Subsidiaries determined on a consolidated basis, without duplication, in
accordance with GAAP for such period minus (b) the amount of interest income of
the Borrower and its Subsidiaries determined on a consolidated basis in
accordance with GAAP for such period
"Consolidated Net Income" means, for any period, the consolidated net
income (or loss) of a Borrower and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP; provided that there shall be
excluded (a) the income (or deficit) of any Person accrued prior to the date it
becomes a Subsidiary of such Borrower or is merged into or consolidated with
such Borrower or any of its Subsidiaries, (b) the income (or deficit) of any
Person (other than a Subsidiary of such Borrower) in which such Borrower or any
of its Subsidiaries has an ownership interest, except to the extent that any
such income is actually received by such Borrower or such Subsidiary in the form
of dividends or similar distributions and (c) the undistributed earnings of any
Subsidiary of such Borrower to the extent that the declaration or payment of
dividends or similar distributions by such Subsidiary is not at the time
permitted by the terms of any Contractual Obligation (other than under the
Agreement) or Requirement of Law applicable to such Subsidiary.
"Consolidated Rental Expense" means, for any period, the aggregate amount
of fixed and contingent rentals payable by the Borrower and its Subsidiaries for
such period determined on a consolidated basis in accordance with GAAP with
respect to leases of real property minus the aggregate amount of rental income
(including licensee related income from licensees operating on the store
premises of the Borrower and its Subsidiaries) payable to the
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Borrower and its Subsidiaries for such period in accordance with GAAP with
respect to leases of real and personal property.
"Consolidated Total Debt" means, at any date, the aggregate principal
amount of the Indebtedness of the Borrower and its Subsidiaries at such date set
forth on the Borrower's consolidated balance sheet opposite the captions
"Current Portion of Long Term Borrowings," "Long Term Borrowings" and "Short
Term Borrowings," determined on a consolidated basis in accordance with GAAP.
"Contractual Obligation" means, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.
"Default" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Disclosed Matters" means the actions, suits and proceedings and the
environmental matters disclosed in Schedule 3.06.
"dollars" or "$" refers to lawful money of the United States of America
unless otherwise specified.
"Documentation Agent" means Bank One, NA.
"Effective Date" means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 9.02).
"Environmental Laws" means all applicable laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
which relate in any way to the environment, preservation or reclamation of
natural resources, the management, release or threatened release of any
Hazardous Material or to human health and safety matters.
"Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower or any Subsidiary, directly or
indirectly, resulting from or based upon (a) violation of any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract or agreement pursuant to which liability is
incurred by the Borrower or any Subsidiary with respect to any of the foregoing.
6
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not incorporated)
that, together with the Borrower, is treated as a single employer under Section
414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and
Section 412 of the Code, is treated as a single employer under Section 414 of
the Code.
"ERISA Event" means (a) any "reportable event", as defined in Section 4043
of ERISA or the regulations issued thereunder with respect to a Plan (other than
an event for which the 30-day notice period is waived); (b) the existence with
respect to any Plan of an "accumulated funding deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the
Borrower or any of its ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the
receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by
any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.
"Eurocurrency", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the LIBO Rate.
"Event of Default" has the meaning assigned to such term in Article VII.
"Excluded Taxes" means, with respect to the Administrative Agent, any
Lender or any other recipient of any payment to be made by or on account of any
obligation of the Borrower hereunder, (a) income or franchise taxes imposed on
(or measured by) its net income by the United States of America, or by the
jurisdiction under the laws of which such recipient is organized or in which its
principal office is located or, in the case of any Lender, in which its
applicable lending office is located, (b) any branch profits taxes imposed by
the United States of America or any similar tax imposed by any other
jurisdiction in which the Borrower is located and (c) in the case of a Foreign
Lender (other than an assignee pursuant to a request by the Borrower under
Section 2.16(b)), any United States withholding tax that is imposed on amounts
payable to such Foreign Lender at the time such Foreign Lender becomes a party
to this Agreement or at the time such Lender changes its applicable lending
office or is attributable to such Foreign Lender's failure or inability to
comply with Section 2.14(e), except to the extent that such Foreign Lender's
assignor (if any) or such Foreign Lender, in the case of a Lender that changes
its applicable lending office, was entitled, at the time of assignment or at the
time of the change in applicable lending office, to receive additional amounts
from the Borrower with respect to such withholding tax pursuant to Section
2.14(a).
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"Extended Maturity Date" has the meaning set forth in Section 2.07.
"Federal Funds Effective Rate" means, for any day, the weighted average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Financial Officer" means the Senior Vice President - Chief Financial
Officer, chief financial officer, principal accounting officer, treasurer or
controller of the Borrower.
"Fixed Charge Coverage Ratio" means, as at the last day of any period,
Consolidated EBITDAR divided by the sum of Consolidated Interest Expense plus
Consolidated Rental Expense.
"Foreign Lender" means any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is located. For purposes of
this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
"GAAP" means generally accepted accounting principles in the United States
of America.
"Governmental Authority" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"Guarantee" of or by any Person (the "guarantor") means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the "primary obligor") in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation; provided, that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business.
8
"Hazardous Materials" means all radioactive substances or wastes and all
hazardous or toxic substances, wastes or other pollutants, including petroleum,
asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas,
and all other substances or wastes regulated under any Environmental Law.
"Hedging Agreement" means any interest rate protection agreement, foreign
currency exchange agreement, commodity price protection agreement or other
interest or currency exchange rate or commodity price hedging arrangement.
"Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such Person under conditional sale or other title retention
agreements relating to property acquired by such Person, (d) all obligations of
such Person in respect of the deferred purchase price of property or services
(excluding accounts payable incurred in the ordinary course of business), (e)
all Indebtedness of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien on property owned or acquired by such Person, whether or not the
Indebtedness secured thereby has been assumed, (f) all Guarantees by such Person
of Indebtedness of others, (g) all Capital Lease Obligations of such Person, (h)
all obligations, contingent or otherwise, of such Person as an account party in
respect of letters of credit and letters of guaranty and (i) all obligations,
contingent or otherwise, of such Person in respect of bankers' acceptances. The
Indebtedness of any Person shall include, without duplication, the Indebtedness
of any other entity (including any partnership in which such Person is a general
partner) to the extent such Person is liable therefor as a result of such
Person's ownership interest in or other relationship with such entity, except to
the extent the terms of such Indebtedness provide that such Person is not liable
therefor.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Index Debt" means senior, unsecured, long-term indebtedness for borrowed
money of the Borrower that is not guaranteed by any other Person or subject to
any other credit enhancement.
"Interest Election Request" means a request by the Borrower to convert or
continue a Borrowing in accordance with Section 2.05.
"Interest Payment Date" means (a) with respect to any ABR Loan, the last
day of each March, June, September and December, and (b) with respect to any
Eurocurrency Loan, the last day of the Interest Period applicable to the
Borrowing of which such Loan is a part and, in the case of a Eurocurrency
Borrowing with an Interest Period of more than three months' duration, each day
prior to the last day of such Interest Period that occurs at intervals of three
months' duration after the first day of such Interest Period.
"Interest Period" means with respect to any Eurocurrency Loan, the period
commencing on the date of such Loan and ending on the numerically corresponding
day in the calendar month that is one, two, three or six months (or to the
extent available to all Lenders, nine or twelve months) thereafter, as the
Borrower may elect; provided, that (i) if any Interest
9
Period would end on a day other than a Business Day, such Interest Period shall
be extended to the next succeeding Business Day unless such next succeeding
Business Day would fall in the next calendar month, in which case such Interest
Period shall end on the next preceding Business Day and (ii) any Interest Period
pertaining to a Eurocurrency Loan that commences on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the last calendar month of such Interest Period) shall end on the last
Business Day of the last calendar month of such Interest Period. For purposes
hereof, the date of a Borrowing initially shall be the date on which such
Borrowing is made or if initially an ABR Loan, on the date initially converted
and, in the case of a Eurocurrency Loan, thereafter shall be the effective date
of the most recent conversion or continuation of such Borrowing.
"Lender Affiliate" means, (a) with respect to any Lender, (i) an Affiliate
of such Lender or (ii) an Approved Fund.
"Lenders" means the Persons listed on Schedule 2.01 and any other Person
that shall have become a party hereto pursuant to an Assignment and Acceptance,
other than any such Person that ceases to be a party hereto pursuant to an
Assignment and Acceptance.
"Leverage Ratio" means, as at the last day of any period, the ratio of (a)
Consolidated Total Debt on such day to (b) Consolidated EBITDA for such period.
"LIBO Rate" means, with respect to any Eurocurrency Borrowing for any
Interest Period, the rate appearing on Page 3750 of the Telerate screen (or on
any successor or substitute page of such Page, or any successor to or substitute
for such Page, providing rate quotations comparable to those currently provided
on such page of such Page, as determined by the Administrative Agent from time
to time for purposes of providing quotations of interest rates applicable to
deposits in the relevant currency in the London interbank market) at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for dollar deposits with a
maturity comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then the "LIBO Rate" with respect to such
Eurocurrency Borrowing for such Interest Period shall be the rate at which
deposits in the relevant currency of $5,000,000 and for a maturity comparable to
such Interest Period are offered to the principal London office of the
Administrative Agent in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.
"Lien" means, with respect to any asset, (a) any mortgage, deed of trust,
lien, pledge, hypothecation, encumbrance, charge or security interest in, on or
of such asset, (b) the interest of a vendor or a lessor under any conditional
sale agreement, capital lease or title retention agreement (or any financing
lease having substantially the same economic effect as any of the foregoing)
relating to such asset and (c) in the case of securities, any purchase option,
call or similar right of a third party with respect to such securities.
"Loan Documents" means this Agreement, the Subsidiary Guarantee and any
Notes.
10
"Loan Parties" means the Borrower and each Subsidiary that is a party to a
Loan Document.
"Loans" means the loans made by the Lenders to the Borrower pursuant to
this Agreement.
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, operations or condition, financial or otherwise, of the
Borrower and the Subsidiaries taken as a whole, (b) the ability of the Borrower
to perform any of its obligations under this Agreement or (c) the rights of or
benefits available to the Lenders under this Agreement and the Subsidiary
Guarantee.
"Material Indebtedness" means Indebtedness (other than the Loans), or
obligations in respect of one or more Hedging Agreements, of any one or more of
the Borrower and its Subsidiaries in an aggregate principal amount exceeding
$50,000,000. For purposes of determining Material Indebtedness, the "principal
amount" of the obligations of the Borrower or any Subsidiary in respect of any
Hedging Agreement at any time shall be the maximum aggregate amount (giving
effect to any netting agreements) that the Borrower or such Subsidiary would be
required to pay if such Hedging Agreement were terminated at such time.
"Maturity Date" means October 15, 2004.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Multiemployer Plan" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
"Note" has the meaning set forth in Section 2.07(e).
"Other Taxes" means any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made hereunder or from the execution, delivery or enforcement
of, or otherwise with respect to, this Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA and any successor entity performing similar functions.
"Permitted Acquisition" means any acquisition by the Borrower or any
Subsidiary of any of the assets of, or capital stock in, a Person or of a
division or line of business of a Person if, immediately after giving effect
thereto, (a) no Default has occurred and is continuing or would result
therefrom, (b) the principal business of any such acquired Person, division or
line of business shall be a Permitted Line of Business, (c) all actions required
to be taken under Section 5.10 with respect to any Subsidiary acquired or newly
formed in connection with such acquisition have been taken, (d) the Borrower and
its Subsidiaries are in compliance, on a pro forma basis after giving effect to
such acquisition, with the covenants contained in Section 6.01 recomputed as at
the last day of the most recently ended fiscal quarter of the Borrower for which
financial statements are available, as if such acquisition had occurred on the
first day of each relevant period for testing such compliance and (e) the
Borrower has delivered to the
11
Administrative Agent an officers' certificate to the effect set forth in clauses
(a), (b), (c) and (d) above, together with all relevant financial information
for the Person or assets to be acquired and reasonably detailed calculations
demonstrating satisfaction of the requirement set forth in clause (d) above.
"Permitted Encumbrances" means:
(a) Liens imposed by law for taxes that are not yet due or are being
contested in compliance with Section 5.05;
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's
and other like Liens imposed by law, arising in the ordinary course of
business and securing obligations that are not overdue by more than 30 days
or are being contested in compliance with Section 5.05;
(c) pledges and deposits made in the ordinary course of business in
compliance with workers' compensation, unemployment insurance and other
social security laws or regulations;
(d) Liens granted and deposits made to secure the performance of bids,
trade contracts, leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature, in each case in
the ordinary course of business; and
(e) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary
course of business that do not secure any monetary obligations and do not
materially detract from the value of the affected property or interfere
with the ordinary conduct of business of the Borrower or any Subsidiary;
provided that the term "Permitted Encumbrances" shall not include any Lien
securing Indebtedness.
"Permitted Lines of Business" means (a) the business of the Borrower as
conducted on the Effective Date, (b) any wholesale, retail or other distribution
of products (including catalogue and internet) or services under any Trademark
or any derivative thereof, (c) any similar business and any business which
provides a service and/or supplies products in connection with any business
described in clause (a) or (b) above or (d) any reasonable modification or
extension thereof.
"Person" means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
"Plan" means any employee pension benefit plan (other than a Multiemployer
Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code
or Section 302 of ERISA, and in respect of which the Borrower or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.
12
"Prime Rate" means the rate of interest per annum publicly announced from
time to time by the Administrative Agent as its prime rate in effect at its
principal office in New York
City; each change in the Prime Rate shall be effective from and including the
date such change is publicly announced as being effective.
"Register" has the meaning set forth in Section 9.04(c).
"Regulation U" means Regulation U of the Board as in effect from time to
time.
"Related Parties" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"Required Lenders" means, at any time, Lenders having Revolving Credit
Exposures and unused Commitments representing more than 50% of the sum of the
total Revolving Credit Exposures and unused Commitments at such time.
"Requirement of Law" means, as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"Responsible Officer" means the chief executive officer, president, any
vice president or Financial Officer of the Borrower, but in any event, with
respect to financial matters, a Financial Officer of the Borrower.
"Restricted Payment" means any dividend or other distribution (whether in
cash, securities or other property) with respect to any shares of any class of
capital stock of the Borrower or any Subsidiary, or any payment (whether in
cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any such shares of capital stock of the Borrower
or any option, warrant or other right to acquire any such shares of capital
stock of the Borrower.
"Revolving Credit Exposure" means, with respect to any Lender at any time,
the sum of the outstanding principal amount of such Lender's Revolving Loans at
such time.
"Revolving Loan" means a Loan made pursuant to Section 2.01.
"S&P" means Standard & Poor's Ratings Services, a division of the McGraw
Hill Companies, Inc.
"Statutory Reserve Rate" means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject (a) with
respect to the Base CD Rate, for new negotiable
13
nonpersonal time deposits in dollars of over $100,000 with maturities
approximately equal to three months and (b) with respect to the LIBO Rate, for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board). The Statutory Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.
"Subordinated Indebtedness" means any Indebtedness of the Borrower,
provided that with respect to any such Indebtedness (i) no part of the principal
of such Indebtedness is stated to be payable or is required to be paid (whether
by way of mandatory sinking fund, mandatory redemption, mandatory prepayment or
otherwise) prior to the Maturity Date or, if such Maturity Date is extended
pursuant to Section 2.07, the Extended Maturity Date and the payment of
principal of which and (subject to clause (ii) below) any other obligations of
the Borrower in respect thereof are subordinated to the prior payment in full of
principal of and interest (including post-petition interest) on the Loans and
all other obligations and liabilities of the Borrower to the Administrative
Agent and the Lenders hereunder on terms and conditions first approved in
writing by the Required Lenders, (ii) no part of the interest accruing on such
Indebtedness (other than interest payable solely in kind which shall be
similarly subordinated) is payable, without the prior written consent of the
Required Lenders, after a Default or Event of Default has occurred and is
continuing, and (iii) such Indebtedness otherwise contains terms, covenants and
conditions in form and substance reasonably satisfactory to the Required
Lenders, as evidenced by their prior written approval thereof.
"subsidiary" means, with respect to any Person (the "parent") at any date,
any corporation, limited liability company, partnership, association or other
entity the accounts of which would be consolidated with those of the parent in
the parent's consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50%
of the equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, controlled or held, or (b) that is, as of such date, otherwise
Controlled, by the parent or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent.
"Subsidiary" means any wholly-owned subsidiary of the Borrower and any
other subsidiary of the Borrower that the Borrower and the Administrative Agent
agree in writing to designate as a "Subsidiary", it being understood that the
Borrower and the Administrative Agent have agreed to designate each of the
entities set forth on Schedule 3.13 as a Subsidiary.
"Subsidiary Guarantee" means the Subsidiary Guarantee, substantially in the
form of Exhibit C, among the Subsidiary Guarantors signatories thereto and the
Administrative Agent, for the benefit of the Lenders.
"Subsidiary Guarantor" means each Subsidiary indicated on Schedule 3.13 as
being a "Subsidiary Guarantor", together with each other Subsidiary that becomes
a party to the Subsidiary Guarantee in compliance with Section 5.10.
"Syndication Agents" means Fleet National Bank and Citibank, N.A.
14
"Taxes" means any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.
"Term-Out Applicable Rate" means the Applicable Rate plus 0.25%.
"Term-Out Period" means the period from but excluding the Maturity Date to
and including the Extended Maturity Date.
"Three-Month Secondary CD Rate" means, for any day, the secondary market
rate for three-month certificates of deposit reported as being in effect on such
day (or, if such day is not a Business Day, the next preceding Business Day) by
the Board through the public information telephone line of the Federal Reserve
Bank of New York (which rate will, under the current practices of the Board, be
published in Federal Reserve Statistical Release H.15(519) during the week
following such day) or, if such rate is not so reported on such day or such next
preceding Business Day, the average of the secondary market quotations for
three-month certificates of deposit of major money center banks in New York City
received at approximately 10:00 a.m., New York City time, on such day (or, if
such day is not a Business Day, on the next preceding Business Day) by the
Administrative Agent from three negotiable certificate of deposit dealers of
recognized standing selected by it.
"Three-Year Credit Agreement" means the Three-Year Credit Agreement dated
as of October 21, 2002, (as amended, supplemented or otherwise modified from
time to time in accordance with its terms) among the Borrower, the financial
institutions party thereto, Fleet National Bank and Citibank, N.A., as
syndication agents, Bank One, NA, as documentation agent and the Administrative
Agent, providing for a three-year credit facility in an initial aggregate amount
of $375,000,000.
"Trademarks" has the meaning set forth in Section 5.06.
"Transactions" means the execution, delivery and performance by the
Borrower of this Agreement and by the Subsidiary Guarantors of the Subsidiary
Guarantee, the borrowing of Loans and the use of the proceeds thereof.
"Type", when used in reference to any Loan or Borrowing, refers to whether
the rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the LIBO Rate or the Alternate Base Rate.
"Withdrawal Liability" means liability to a Multiemployer Plan as a result
of a complete or partial withdrawal from such Multiemployer Plan, as such terms
are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include," "includes" and "including" shall
be deemed to be followed by the phrase "without limitation." The word "will"
shall be construed to have the same meaning and effect as the word "shall."
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such
15
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein," "hereof" and "hereunder," and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.
SECTION 1.03. Accounting Terms; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; provided
that, if the Borrower notifies the Administrative Agent that the Borrower
requests an amendment to any provision hereof to eliminate the effect of any
change occurring after the date hereof in GAAP or in the application thereof on
the operation of such provision (or if the Administrative Agent notifies the
Borrower that the Required Lenders request an amendment to any provision hereof
for such purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.
ARTICLE II
The Credits
SECTION 2.01. Commitments. Subject to the terms and conditions set forth
herein, each Lender agrees to make revolving credit loans in dollars ("Revolving
Loans") to the Borrower from time to time during the Availability Period in an
aggregate principal amount that will not result in (i) such Lender's Revolving
Credit Exposure exceeding such Lender's Commitment or (ii) the sum of the
Revolving Credit Exposures exceeding the total Commitments. Within the foregoing
limits and subject to the terms and conditions set forth herein, the Borrower
may borrow, prepay and reborrow Revolving Loans.
SECTION 2.02. Loans and Borrowings. (a) Each Revolving Loan shall be made
as part of a Borrowing consisting of Revolving Loans made by the Lenders ratably
in accordance with their respective Commitments. The failure of any Lender to
make any Loan required to be made by it shall not relieve any other Lender of
its obligations hereunder; provided that the Commitments of the Lenders are
several and no Lender shall be responsible for any other Lender's failure to
make Loans as required.
(b) Subject to Section 2.11, each Borrowing shall be comprised entirely of
ABR Loans or Eurocurrency Loans as the Borrower may request in accordance
herewith. Each Lender at its option may make any Eurocurrency Loan by causing
any domestic or foreign branch or Lender Affiliate of such Lender to make such
Loan; provided that any exercise of such
16
option shall not affect the obligation of the Borrower to repay such Loan in
accordance with the terms of this Agreement.
(c) At the commencement of each Interest Period for any Eurocurrency
Borrowing, such Borrowing shall be in an aggregate amount that is an integral
multiple of $1,000,000 and not less than $5,000,000. At the time that each ABR
Borrowing is made, such Borrowing shall be in an aggregate amount that is an
integral multiple of $500,000 and not less than $1,000,000; provided that an ABR
Borrowing may be in an aggregate amount that is equal to the entire unused
balance of the Commitments. Borrowings of more than one Type may be outstanding
at the same time; provided that there shall not at any time be more than a total
of 20 Eurocurrency Borrowings outstanding.
(d) Notwithstanding any other provision of this Agreement, the Borrower
shall not be entitled to request, or to elect to convert or continue, any
Borrowing if the Interest Period requested with respect thereto would end after
the Maturity Date unless such Maturity Date is extended pursuant to Section
2.07, in which case such Interest Period shall not be permitted to end after the
Extended Maturity Date.
SECTION 2.03. Requests for Borrowings. To request a Borrowing, the Borrower
shall notify the Administrative Agent of such request by telephone (a) in the
case of a Eurocurrency Borrowing, not later than 11:00 a.m., New York City time,
three Business Days before the date of the proposed Borrowing and (b) in the
case of an ABR Borrowing, not later than 11:00 a.m., New York City time, on the
date of the proposed Borrowing. Each such telephonic Borrowing Request shall be
irrevocable and shall be confirmed promptly by hand delivery or telecopy to the
Administrative Agent of a written Borrowing Request in a form approved by the
Administrative Agent and signed by the Borrower. Each such telephonic and
written Borrowing Request shall specify the following information in compliance
with Section 2.02:
(i) the aggregate amount of the requested Borrowing;
(ii) the date of such Borrowing, which shall be a Business Day;
(iii) whether such Borrowing is to be an ABR Borrowing or a Eurocurrency
Borrowing;
(iv) in the case of a Eurocurrency Borrowing, the initial Interest Period
to be applicable thereto, which shall be a period contemplated by the definition
of the term "Interest Period"; and
(v) the location and number of the Borrower's account to which funds are to
be disbursed, which shall comply with the requirements of Section 2.04.
If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to any requested Eurocurrency Borrowing, then the Borrower shall be
deemed to have selected an Interest Period of one month's duration. Promptly
following receipt of a Borrowing Request in accordance with this
17
Section, the Administrative Agent shall advise each Lender of the details
thereof and of the amount of such Lender's Loan to be made as part of the
requested Borrowing.
SECTION 2.04. Funding of Borrowings. (a) Each Lender shall make each Loan
to be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by 12:00 noon, New York City time, to the account of
the Administrative Agent most recently designated by it for such purpose by
notice to the Lenders. The Administrative Agent will make such Loans available
to the Borrower by promptly crediting the amounts so received, in like funds, to
an account of the Borrower maintained with the Administrative Agent in New York
City and designated by the Borrower in the applicable Borrowing Request.
(b) Unless the Administrative Agent shall have received notice from a
Lender prior to the proposed date of any Borrowing that such Lender will not
make available to the Administrative Agent such Lender's share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with paragraph (a) of this Section
and may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. In such event, if a Lender has not in fact made its share
of the applicable Borrowing available to the Administrative Agent, then the
applicable Lender and the Borrower severally agree to pay to the Administrative
Agent forthwith on demand, without duplication such corresponding amount with
interest thereon, for each day from and including the date such amount is made
available to the Borrower to but excluding the date of payment to the
Administrative Agent, at (i) in the case of such Lender, the Federal Funds
Effective Rate or (ii) in the case of the Borrower, the interest rate otherwise
applicable to such Borrowing. If such Lender pays such amount to the
Administrative Agent, then such amount shall constitute such Lender's Loan
included in such Borrowing.
SECTION 2.05. Interest Elections. (a) Each Borrowing initially shall be of
the Type specified in the applicable Borrowing Request and, in the case of a
Eurocurrency Borrowing, shall have an initial Interest Period as specified in
such Borrowing Request. Thereafter, the Borrower may elect to convert such
Borrowing to a different Type or to continue such Borrowing and, in the case of
a Eurocurrency Borrowing, may elect Interest Periods therefor, all as provided
in this Section. The Borrower may elect different options with respect to
different portions of the affected Borrowing, in which case each such portion
shall be allocated ratably among the Lenders holding the Loans comprising such
Borrowing, and the Loans comprising each such portion shall be considered a
separate Borrowing.
(b) To make an election pursuant to this Section, the Borrower shall notify
the Administrative Agent of such election by telephone by the time that a
Borrowing Request would be required under Section 2.03 if the Borrower were
requesting a Borrowing of the Type resulting from such election to be made on
the effective date of such election. Each such telephonic Interest Election
Request shall be irrevocable and shall be confirmed promptly by hand delivery or
telecopy to the Administrative Agent of a written Interest Election Request in a
form approved by the Administrative Agent and signed by the Borrower.
(c) Each telephonic and written Interest Election Request shall specify the
following information in compliance with Section 2.02:
18
(i) the Borrowing to which such Interest Election Request applies and, if
different options are being elected with respect to different portions thereof,
the portions thereof to be allocated to each resulting Borrowing (in which case
the information to be specified pursuant to clauses (iii) and (iv) below shall
be specified for each resulting Borrowing);
(ii) the effective date of the election made pursuant to such Interest
Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR Borrowing or a
Eurocurrency Borrowing; and
(iv) if the resulting Borrowing is a Eurocurrency Borrowing, the Interest
Period to be applicable thereto after giving effect to such election, which
shall be a period contemplated by the definition of the term "Interest Period".
If any such Interest Election Request requests a Eurocurrency Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender's portion of each resulting Borrowing.
(e) If the Borrower fails to deliver a timely Interest Election Request
with respect to a Eurocurrency Borrowing prior to the end of the Interest Period
applicable thereto, then, unless such Borrowing is repaid as provided herein, at
the end of such Interest Period such Borrowing shall be converted to an ABR
Borrowing. Notwithstanding any contrary provision hereof, if an Event of Default
has occurred and is continuing and the Administrative Agent, at the request of
the Required Lenders, so notifies the Borrower, then, so long as an Event of
Default is continuing (i) no outstanding Borrowing may be converted to or
continued as a Eurocurrency Borrowing and (ii) unless repaid, each Eurocurrency
Borrowing shall be converted to an ABR Borrowing at the end of the Interest
Period applicable thereto.
SECTION 2.06. Termination and Reduction of Commitments. Unless previously
terminated, the Commitments shall terminate on the Maturity Date.
(a) The Borrower may at any time terminate, or from time to time reduce,
the Commitments without penalty; provided that (i) each reduction of the
Commitments shall be in an amount that is an integral multiple of $1,000,000 and
not less than $10,000,000 and (ii) the Borrower shall not terminate or reduce
the Commitments if, after giving effect to any concurrent prepayment of the
Loans in accordance with Section 2.08, the sum of the Revolving Credit Exposures
would exceed the total Commitments.
(b) The Borrower shall notify the Administrative Agent of any election to
terminate or reduce the Commitments under paragraph (a) of this Section at least
three Business Days prior to the effective date of such termination or
reduction, specifying such election and the effective date thereof. Promptly
following receipt of any notice, the Administrative Agent shall advise the
Lenders of the contents thereof. Each notice delivered by the Borrower pursuant
to
19
this Section shall be irrevocable; provided that a notice of termination of the
Commitments delivered by the Borrower may state that such notice is conditioned
upon the effectiveness of other credit facilities, in which case such notice may
be revoked by the Borrower (by notice to the Administrative Agent on or prior to
the specified effective date) if such condition is not satisfied. Any
termination or reduction of the Commitments shall be permanent. Each reduction
of the Commitments shall be made ratably among the Lenders in accordance with
their respective Commitments.
SECTION 2.07. Repayment of Loans; Evidence of Debt. (a) The Borrower hereby
unconditionally promises to pay to the Administrative Agent for the account of
each Lender the then unpaid principal amount of each Revolving Loan on the
Maturity Date. Notwithstanding the foregoing, the Borrower may request, in a
notice provided to the Administrative Agent not less than 30 nor more than 60
days prior to the Maturity Date, that the Revolving Loans comprising any
Borrowing outstanding on the Maturity Date mature on the date one year after the
Maturity Date (such later date, the "Extended Maturity Date"), and the unpaid
principal amount of such Revolving Loans shall then be due and payable on such
date. The Administrative Agent shall promptly notify each relevant Lender of
such request.
(b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrower to such Lender
resulting from each Loan made by such Lender, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder.
(c) The Administrative Agent shall maintain accounts in which it shall
record (i) the amount of each Loan made hereunder, the currency of such Loan,
the Type thereof and the Interest Period applicable thereto, (ii) the amount of
any principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder and (iii) the amount of any sum received by
the Administrative Agent hereunder for the account of the Lenders and each
Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to paragraph (b)
or (c) of this Section shall be prima facie evidence of the existence and
amounts of the obligations recorded therein; provided 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 obligation of the Borrower to repay
the Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that Loans made by it be evidenced by a
promissory note (a "Note"). In such event, the Borrower shall prepare, execute
and deliver to such Lender a promissory note payable to the order of such Lender
(or, if requested by such Lender, to such Lender and its registered assigns) and
in a form approved by the Administrative Agent. Thereafter, the Loans evidenced
by such promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 9.04) be represented by one or more promissory
notes in such form payable to the order of the payee named therein (or, if such
promissory note is a registered note, to such payee and its registered assigns).
SECTION 2.08. Optional Prepayment of Loans. (a) The Borrower shall have the
right at any time and from time to time to prepay any Borrowing in whole or in
part without
20
penalty, except as provided in Section 2.13, subject to prior notice in
accordance with paragraph (b) of this Section.
(b) The Borrower shall notify the Administrative Agent by telephone
(confirmed by telecopy) of any prepayment hereunder (i) in the case of
prepayment of a Eurocurrency Borrowing, not later than 11:00 a.m., New York City
time, three Business Days before the date of prepayment or (ii) in the case of
prepayment of an ABR Borrowing not later than 11:00 a.m., New York City time, on
the date of prepayment. Each such notice shall be irrevocable and shall specify
the prepayment date and the principal amount of each Borrowing or portion
thereof to be prepaid; provided that, if a notice of prepayment is given in
connection with a conditional notice of termination of the Commitments as
contemplated by Section 2.06, then such notice of prepayment may be revoked if
such notice of termination is revoked in accordance with Section 2.06. Promptly
following receipt of any such notice relating to a Borrowing, the Administrative
Agent shall advise the Lenders of the contents thereof. Each partial prepayment
of any Borrowing, and the remainder of such Borrowing after giving effect to
such prepayment, shall be in an amount that would be permitted in the case of an
advance of a Borrowing of the same Type as provided in Section 2.02. Each
prepayment of a Borrowing shall be applied ratably to the Revolving Loans
included in the prepaid Borrowing. Prepayments shall be accompanied by accrued
interest to the extent required by Section 2.10.
SECTION 2.09. Fees. (a) The Borrower agrees to pay to the Administrative
Agent for the account of each Lender a facility fee, which shall accrue at the
Applicable Rate on the daily amount of the Commitment of such Lender (whether
used or unused) during the period from and including the Effective Date to but
excluding the date on which such Commitment terminates; provided that, if such
Lender continues to have any Revolving Credit Exposure after its Commitment
terminates, then such facility fee shall continue to accrue on the daily amount
of such Lender's Revolving Credit Exposure from and including the date on which
its Commitment terminates to but excluding the date on which such Lender ceases
to have any Revolving Credit Exposure. Accrued facility fees shall be payable in
arrears on the last day of March, June, September and December of each year and
on the date on which the Commitments terminate, commencing on the first such
date to occur after the date hereof; provided that any facility fees accruing
after the date on which the Commitments terminate shall be payable on demand.
All facility fees shall be computed on the basis of a year of 360 days and shall
be payable for the actual number of days elapsed (including the first day but
excluding the last day).
(b) The Borrower agrees to pay to the Administrative Agent, for its own
account, fees payable in the amounts and at the times separately agreed upon
between the Borrower and the Administrative Agent.
(c) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Administrative Agent for distribution, in
the case of facility fees and utilization fees, to the Lenders. Fees paid shall
not be refundable under any circumstances.
SECTION 2.10. Interest. (a) The Loans comprising each ABR Borrowing shall
bear interest at a rate per annum equal to the Alternate Base Rate plus (i) the
Applicable Rate, during the period from but excluding the Effective Date to and
including the Maturity Date or (ii) the Term-Out Applicable Rate, during the
Term-Out Period, if it occurs.
21
(b) The Loans comprising each Eurocurrency Borrowing shall bear interest at
a rate per annum equal to the LIBO Rate for the Interest Period in effect for
such Borrowing plus (i) the Applicable Rate, during the period from but
excluding the Effective Date to and including the Maturity Date or (ii) the
Term-Out Applicable Rate, during the Term-Out Period, if it occurs.
(c) Notwithstanding the foregoing, if any principal of or interest on any
Loan or any fee or other amount payable by the Borrower hereunder is not paid
when due, whether at stated maturity, upon acceleration or otherwise, such
overdue amount shall bear interest, after as well as before judgment, at a rate
per annum equal to (i) in the case of overdue principal of any Loan, 2% plus the
rate otherwise applicable to such Loan as provided above or (ii) in the case of
any other amount, 2% plus the rate applicable to ABR Loans as provided above.
(d) Accrued interest on each Loan shall be payable in arrears on each
Interest Payment Date for such Loan; provided that (i) interest accrued pursuant
to paragraph (c) of this Section shall be payable on demand, (ii) in the event
of any repayment or prepayment of any Loan (other than a prepayment of an ABR
Revolving Loan prior to the end of the Availability Period), accrued interest on
the principal amount repaid or prepaid shall be payable on the date of such
repayment or prepayment, (iii) in the event of any conversion of any
Eurocurrency Revolving Loan prior to the end of the current Interest Period
therefor, accrued interest on such Loan shall be payable on the effective date
of such conversion and (iv) all accrued interest shall be payable upon
termination of the Commitments unless the Maturity Date has been extended
pursuant to Section 2.07, in which case interest shall continue to be payable in
arrears on each applicable Interest Payment Date.
(e) All interest hereunder shall be computed on the basis of a year of 360
days, except that interest computed by reference to the Alternate Base Rate at
times when the Alternate Base Rate is based on the Prime Rate shall be computed
on the basis of a year of 365 days (or 366 days in a leap year), and in each
case shall be payable for the actual number of days elapsed (including the first
day but excluding the last day). The applicable Alternate Base Rate or LIBO Rate
shall be determined by the Administrative Agent, and such determination shall be
conclusive absent manifest error.
SECTION 2.11. Alternate Rate of Interest. If prior to the commencement of
any Interest Period for a Eurocurrency Borrowing:
(a) the Administrative Agent determines (which determination shall be
conclusive absent manifest error) that adequate and reasonable means do not
exist for ascertaining the LIBO Rate for such Interest Period; or
(b) the Administrative Agent is advised by the Required Lenders that
the LIBO Rate for such Interest Period will not adequately and fairly
reflect the cost to such Lenders (or Lender) of making or maintaining their
Loans (or its Loan) included in such Borrowing for such Interest Period;
then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer
22
exist, (i) any Interest Election Request that requests the conversion of any
Borrowing to, or continuation of any Borrowing as, a Eurocurrency Borrowing
shall be ineffective, and (ii) if any Borrowing Request requests a Eurocurrency
Borrowing, such Borrowing shall be made as an ABR Borrowing; provided that if
the circumstances giving rise to such notice affect only one Type of Borrowing,
then the other Types of Borrowing shall be permitted.
SECTION 2.12. Increased Costs. (a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit or
similar requirement against assets of, deposits with or for the account of, or
credit extended by, any Lender (including the type referred to in clause (b) of
the definition of "Statutory Reserve Rate" in Section 1.01); or
(ii) impose on any Lender or the London interbank market any other
condition affecting this Agreement or Eurocurrency Loans made by such Lender
therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurocurrency Loan (or of maintaining its
obligation to make any such Loan) or to reduce the amount of any sum received or
receivable by such Lender hereunder (whether of principal, interest or
otherwise), then the Borrower will pay to such Lender such additional amount or
amounts as will compensate such Lender for such additional costs incurred or
reduction suffered.
(b) If any Lender determines that any Change in Law regarding capital
requirements has or would have the effect of reducing the rate of return on such
Lender's capital or on the capital of such Lender's holding company, if any, as
a consequence of this Agreement or the Loans made by such Lender to a level
below that which such Lender or such Lender's holding company could have
achieved but for such Change in Law (taking into consideration such Lender's
policies and the policies of such Lender's holding company with respect to
capital adequacy), then from time to time the Borrower will pay to such Lender
such additional amount or amounts as will compensate such Lender or such
Lender's holding company for any such reduction suffered.
(c) A certificate of a Lender setting forth the amount or amounts necessary
to compensate such Lender or its holding company, as the case may be, as
specified in paragraph (a) or (b) of this Section shall be delivered to the
Borrower and shall be conclusive absent manifest error. The Borrower shall pay
such Lender the amount shown as due on any such certificate within 10 days after
receipt thereof.
(d) Failure or delay on the part of any Lender to demand compensation
pursuant to this Section shall not constitute a waiver of such Lender's right to
demand such compensation; provided that the Borrower shall not be required to
compensate a Lender pursuant to this Section for any increased costs or
reductions incurred more than three months prior to the date that such Lender
notifies the Borrower of the Change in Law giving rise to such increased costs
or reductions and of such Lender's intention to claim compensation therefor;
provided further that, if the Change in Law giving rise to such increased costs
or reductions is retroactive, then the
23
three-month period referred to above shall be extended to include the period of
retroactive effect thereof.
SECTION 2.13. Break Funding Payments. The Borrower agrees to indemnify each
Lender and to hold each Lender harmless from any loss or expense that such
Lender may sustain or incur as a consequence of (a) default by the Borrower in
making a borrowing of, conversion into or continuation of Eurocurrency Loans
after the Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement, (b) default by the Borrower in making any
prepayment of or conversion from Eurocurrency Loans after the Borrower has given
a notice thereof in accordance with the provisions of this Agreement, (c) the
making of a prepayment of Eurocurrency Loans on a day that is not the last day
of an Interest Period with respect thereto, (d) the assignment of any
Eurocurrency Loan other than on the last day of the Interest Period applicable
thereto as a result of a request by the Borrower pursuant to Section 2.16. Such
indemnification may include an amount equal to the excess, if any, of (i) the
amount of interest that would have accrued on the amount so prepaid, or not so
borrowed, converted or continued or assigned for the period from the date of
such prepayment or of such failure to borrow, convert or continue or assign to
the last day of such Interest Period (or, in the case of a failure to borrow,
convert or continue, or assign the Interest Period that would have commenced on
the date of such failure) in each case at the applicable rate of interest for
such Loans provided for herein (excluding, however, the Applicable Rate included
therein, if any) over (ii) the amount of interest (as reasonably determined by
such Lender) that would have accrued to such Lender on such amount by placing
such amount on deposit for a comparable period with leading banks in the
interbank eurocurrency market. A certificate as to any amounts payable pursuant
to this Section submitted to the Borrower by any Lender shall be conclusive in
the absence of manifest error. This covenant shall survive the termination of
this Agreement and the payment of the Loans and all other amounts payable
hereunder.
SECTION 2.14. Taxes. (a) Any and all payments by or an account of any
obligation of the Borrower hereunder shall be made free and clear of and without
deduction for any Indemnified Taxes or Other Taxes; provided that if the
Borrower shall be required to deduct any Indemnified Taxes or Other Taxes from
such payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Administrative Agent or Lender
(as the case may be) receives an amount equal to the sum it would have received
had no such deductions been made, (ii) the Borrower shall make such deductions
and (iii) the Borrower shall pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law.
(b) In addition, the Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.
(c) The Borrower shall indemnify the Administrative Agent and each Lender
within 30 days after written demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes
imposed or asserted on or attributable to amounts payable under this Section)
paid by the Administrative Agent or such Lender, as the case may be, and any
penalties, interest and reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or
legally
24
imposed or asserted by the relevant Governmental Authority. A certificate as to
the amount of such payment or liability delivered to the Borrower by a Lender or
by the Administrative Agent on its own behalf or on behalf of a Lender, shall be
conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes or Other
Taxes by the Borrower to a Governmental Authority, the Borrower shall deliver to
the Administrative Agent the original or a certified copy of a receipt issued by
such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably satisfactory
to the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from or reduction
of withholding tax under the law of the jurisdiction in which the Borrower is
located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law or
reasonably requested by the Borrower, such properly completed and executed
documentation prescribed by applicable law as will permit such payments to be
made without withholding or at a reduced rate.
(f) If any Lender or the Administrative Agent receives a refund
attributable to any Indemnified Taxes or Other Taxes paid by the Borrower or for
which the Lender or the Administrative Agent has received payment from the
Borrower hereunder, such Lender or the Administrative Agent, within 30 days of
such receipt, shall deliver to the Borrower the amount of such refund (but only
to the extent of Indemnified Taxes or Other Taxes giving rise to such refund
paid by the Borrower or for which the Lender or the Administrative Agent has
received payment from the Borrower hereunder), net of all out-of-pocket expenses
of the Administrative Agent or such Lender and without interest (other than any
interest paid by the relevant Governmental Authority with respect to such
refund); provided however, that the Borrower agrees to repay the amount paid
over to the Borrower (plus any penalties, interest or other charges imposed by
the relevant Governmental Authority) to such Lender or the Administrative Agent
in the event that such Lender or the Administrative Agent is required to repay
such refund to such Governmental Authority.
SECTION 2.15. Payments Generally; Pro Rata Treatment; Sharing of Set-offs.
(a) Except as otherwise expressly provided herein, the Borrower shall make each
payment required to be made by it hereunder (whether of principal, interest or
fees, or under Section 2.12, 2.13 or 2.14, or otherwise) prior to 3:00 p.m. New
York City time, on the date when due in dollars, in immediately available funds,
without set-off or counterclaim. Any amounts received after such time on any
date may, in the discretion of the Administrative Agent, be deemed to have been
received on the next succeeding Business Day for purposes of calculating
interest thereon. All such payments shall be made to the Administrative Agent at
its offices at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, except that payments
pursuant to Sections 2.12, 2.13, 2.14 and 9.03 shall be made directly to the
Persons entitled thereto. The Administrative Agent shall distribute any such
payments received by it for the account of any other Person to the appropriate
recipient promptly following receipt thereof. If any payment hereunder shall be
due on a day that is not a Business Day, the date for payment shall be extended
to the next succeeding Business Day, and, in the case of any payment accruing
interest, interest thereon shall be payable for the period of such extension.
25
(b) If at any time insufficient funds are received by and available to the
Administrative Agent to pay fully all amounts of principal, interest and fees
then due hereunder, such funds shall be applied (i) first, to pay interest and
fees then due hereunder, ratably among the parties entitled thereto in
accordance with the amounts of interest and fees then due to such parties, and
(ii) second, to pay principal then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of principal then due to such
parties.
(c) If any Lender shall, by exercising any right of set-off or counterclaim
or otherwise, obtain payment in respect of any principal of or interest on any
of its Revolving Loans resulting in such Lender receiving payment of a greater
proportion of the aggregate amount of its Revolving Loans and accrued interest
thereon than the proportion received by any other Lender, then the Lender
receiving such greater proportion shall purchase (for cash at face value)
participations in the Revolving Loans of other Lenders to the extent necessary
so that the benefit of all such payments shall be shared by the Lenders ratably
in accordance with the aggregate amount of principal of and accrued interest on
their respective Revolving Loans; provided that (i) if any such participations
are purchased and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the purchase price
restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by the Borrower pursuant to and in accordance with the express terms of this
Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans to any assignee or
participant, other than to the Borrower or any Subsidiary or Affiliate thereof
(as to which the provisions of this paragraph shall apply). The Borrower
consents to the foregoing and agrees, to the extent it may effectively do so
under applicable law, that any Lender acquiring a participation pursuant to the
foregoing arrangements may exercise against the Borrower rights of set-off and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of the Borrower in the amount of such participation.
(d) Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders hereunder that the Borrower will not make
such payment, the Administrative Agent may assume that the Borrower has made
such payment on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the Lenders the amount due. In such event, if the
Borrower has not in fact made such payment, then each of the Lenders severally
agrees to repay to the Administrative Agent forthwith on demand the amount so
distributed to such Lender with interest thereon, for each day from and
including the date such amount is distributed to it to but excluding the date of
payment to the Administrative Agent, at the Federal Funds Effective Rate.
(e) If any Lender shall fail to make any payment required to be made by it
pursuant to 2.04(b) or 2.15(d), then the Administrative Agent may, in its
discretion (notwithstanding any contrary provision hereof), apply any amounts
thereafter received by the Administrative Agent for the account of such Lender
to satisfy such Lender's obligations under such Sections until all such
unsatisfied obligations are fully paid.
SECTION 2.16. Mitigation Obligations; Replacement of Lenders. (a) If any
Lender requests compensation under Section 2.12, or if the Borrower is required
to pay any additional amount to any Lender or any Governmental Authority for the
account of any Lender
26
pursuant to Section 2.14, then such Lender shall use reasonable efforts to
designate a different lending office for funding or booking its Loans hereunder
or to assign its rights and obligations hereunder to another of its offices,
branches or affiliates, if, in the judgment of such Lender, such designation or
assignment (i) would eliminate or reduce amounts payable pursuant to Section
2.12 or 2.14, as the case may be, in the future and (ii) would not subject such
Lender to any unreimbursed cost or expense and would not otherwise be
disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable
costs and expenses incurred by any Lender in connection with any such
designation or assignment.
(b) If any Lender requests compensation under Section 2.12, or if the
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.14,
or if any Lender defaults in its obligation to fund Loans hereunder, then the
Borrower may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.04), all its interests, rights and obligations under this Agreement to
an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided that (i) if such assignee
is not a Lender, the Borrower shall have received the prior written consent of
the Administrative Agent which consent shall not be unreasonably withheld or
delayed, (ii) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans, accrued interest thereon, accrued fees and
all other amounts payable to it hereunder, from the assignee (to the extent of
such outstanding principal and accrued interest and fees) or the Borrower (in
the case of all other amounts) and (iii) in the case of any such assignment
resulting from a claim for compensation under Section 2.12 or payments required
to be made pursuant to Section 2.14, such assignment will result in a reduction
in such compensation or payments. A Lender shall not be required to make any
such assignment and delegation if, prior thereto, as a result of a waiver by
such Lender or otherwise, the circumstances entitling the Borrower to require
such assignment and delegation cease to apply.
SECTION 2.17. Source of Funds. None of the funds to be lent pursuant to
this Agreement are assets of an employee benefit plan or constitute "plan
assets" within the meaning of Department of Labor Regulation Section 2510.3-101.
ARTICLE III
Representations and Warranties
The Borrower represents and warrants to the Lenders that:
SECTION 3.01. Organization; Powers. Each of the Borrower and its
Subsidiaries is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, has all requisite power and
authority to carry on its business as now conducted and, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in,
and is in good standing in, every jurisdiction where such qualification is
required.
27
SECTION 3.02. Authorization; Enforceability. The Transactions are within
the Borrower's corporate powers and have been duly authorized by all necessary
corporate and, if required, stockholder action. This Agreement has been duly
executed and delivered by the Borrower and constitutes a legal, valid and
binding obligation of the Borrower, enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditors' rights generally and subject to general
principles of equity, regardless of whether considered in a proceeding in equity
or at law.
SECTION 3.03. Governmental Approvals; No Conflicts. The Transactions (a) do
not require any consent or approval of, registration or filing with, or any
other action by, any Governmental Authority, except such as have been obtained
or made and are in full force and effect, (b) will not violate any applicable
law or regulation or the charter, by-laws or other organizational documents of
the Borrower or any of its Subsidiaries or any order of any Governmental
Authority, (c) will not violate or result in a default under any indenture,
agreement or other instrument binding upon the Borrower or any of its
Subsidiaries or its assets, or give rise to a right thereunder to require any
payment to be made by the Borrower or any of its Subsidiaries in a manner which
could reasonably be expected to have a Material Adverse Effect, and (d) will not
result in the creation or imposition of any material Lien on any asset of the
Borrower or any of its Subsidiaries.
SECTION 3.04. Financial Condition; No Material Adverse Change. (a) The
Borrower has heretofore furnished to the Lenders its consolidated balance sheet
and statements of income, stockholders equity and cash flows (i) as of and for
the fiscal year ended December 28, 2002, reported on by Deloitte & Touche,
independent public accountants, and (ii) as of and for the fiscal quarter and
the portion of the fiscal year ended July 5, 2003, certified by its chief
financial officer. Such financial statements present fairly, in all material
respects, the financial position and results of operations and cash flows of the
Borrower and its consolidated Subsidiaries as of such dates and for such periods
in accordance with GAAP, subject to year-end audit adjustments and the absence
of footnotes in the case of the statements referred to in clause (ii) above. The
Borrower and its Subsidiaries do not have any material Guarantees, contingent
liabilities and liabilities for taxes, or any long-term leases or unusual
forward or long-term commitments, including any interest rate or foreign
currency swap or exchange transaction or other obligation in respect of
derivatives, that are not reflected in the financial statements referred to in
this paragraph or in the notes thereto (and, in the case of such lease or
commitment, which is required in accordance with GAAP to be reflected in such
statements or notes) or which has not otherwise been disclosed to the Lenders in
writing.
(b) Since July 5, 2003, there has been no development, event or
circumstance that has had or could reasonably be expected to have a Material
Adverse Effect.
SECTION 3.05. Properties; Liens. (a) Each of the Borrower and its
Subsidiaries has good title to, or valid leasehold interests in, all its real
and personal property material to its business, except for minor defects in
title that do not interfere with its ability to conduct its business as
currently conducted or to utilize such properties for their intended purposes,
and none of such property is subject to any Lien, except as permitted by Section
6.03.
28
(b) Each of the Borrower and its Subsidiaries owns, or is licensed to use,
all trademarks, tradenames, copyrights, patents and other intellectual property
material to its business, and the use thereof by the Borrower and its
Subsidiaries does not infringe upon the rights of any other Person, except for
any such infringements that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
SECTION 3.06. Litigation and Environmental Matters. (a) There are no
actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of the Borrower, threatened
against or affecting the Borrower or any of its Subsidiaries (i) as to which
there is a reasonable possibility of an adverse determination and that, if
adversely determined, could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect (other than the Disclosed
Matters) or (ii) that involve this Agreement, any other Loan Document or the
Transactions.
(b) Except for the Disclosed Matters and except with respect to any other
matters that, individually or in the aggregate, could not reasonably be expected
to result in a Material Adverse Effect, neither the Borrower nor any of its
Subsidiaries (i) has failed to comply with any Environmental Law, (ii) is
subject to any Environmental Liability, (iii) has received any written notice of
any claim with respect to any Environmental Liability or (iv) has knowledge of
any reason to reasonably conclude that Environmental Liability will be incurred.
(c) Since the date of this Agreement, there has been no change in the
status of the Disclosed Matters that, individually or in the aggregate, has
resulted in, or materially increased the likelihood of, a Material Adverse
Effect.
SECTION 3.07. Compliance with Laws and Agreements. Each of the Borrower and
its Subsidiaries is in compliance with all laws, regulations and orders of any
Governmental Authority applicable to it or its property and all indentures,
agreements and other instruments binding upon it or its property, except where
the failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 3.08. No Default. Neither the Borrower nor any of its Subsidiaries
is in default under or with respect to any Contractual Obligation or any order,
award or decree of any Governmental Authority or arbitrator binding upon it or
its properties in any respect which could reasonably be expected to have a
Material Adverse Effect. No Default or Event of Default has occurred and is
continuing.
SECTION 3.09. Investment and Holding Company Status. Neither the Borrower
nor any of its Subsidiaries is (a) an "investment company" as defined in, or
subject to regulation under, the Investment Company Act of 1940 or (b) a
"holding company" as defined in, or subject to regulation under, the Public
Utility Holding Company Act of 1935.
SECTION 3.10. No Burdensome Restrictions. Neither the Borrower nor any
Subsidiary is a party to any indenture, agreement, lease or other instrument
which is so unusual or burdensome such that it could be reasonably expected to
have a Material Adverse Effect.
SECTION 3.11. Taxes. Each of the Borrower and its Subsidiaries has timely
filed or caused to be filed all Tax returns and reports required to have been
filed and have paid or
29
caused to be paid all Taxes required to have been paid by it, except (a) Taxes
that are being contested in good faith by appropriate proceedings and for which
the Borrower or such Subsidiary, as applicable, has set aside on its books
adequate reserves or (b) to the extent that the failure to do so could not
reasonably be expected to result in a Material Adverse Effect.
SECTION 3.12. Federal Regulations. No part of the proceeds of any Loans
hereunder will be used, directly or indirectly, for "buying" or "carrying" any
"margin stock" within the respective meanings of each of the quoted terms under
Regulation U of the Board as now and from time to time hereafter in effect or
for any purpose which violates, or which would be inconsistent with, the
provisions of the Regulations of such Board. If requested by the Agent or any
Lender, the Borrower will furnish to the Agent and each Lender a statement to
the foregoing effect in conformity with the requirements of FR Form G-3 or FR
Form U-1, as applicable, referred to in said Regulation U.
SECTION 3.13. Subsidiaries. Schedule 3.13 sets forth as of the date hereof
the name, and, where applicable, the jurisdiction of organization, number of
authorized and issued shares and ownership of each Subsidiary of the Borrower.
SECTION 3.14. ERISA. No ERISA Event has occurred or is reasonably expected
to occur that, when taken together with all other such ERISA Events for which
liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts, exceed the fair
market value of the assets of such Plan, except to the extent any such excess
(individually or in the aggregate) could not reasonably be expected to have a
Material Adverse Effect, and the present value of all accumulated benefit
obligations of all underfunded Plans (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts, exceed the fair
market value of the assets of all such underfunded Plans except to the extent
any such excess (individually or in the aggregate) could not reasonably be
expected to have a Material Adverse Effect.
SECTION 3.15. Disclosure. None of the reports, financial statements,
certificates or other information furnished by or on behalf of the Borrower to
the Administrative Agent or any Lender in connection with the negotiation of
this Agreement or delivered hereunder (as modified or supplemented by other
information so furnished) contain any material misstatement of fact or omit to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; provided that,
with respect to projected financial information, the Borrower represents only
that such information was prepared in good faith based upon assumptions believed
to be reasonable at the time.
30
ARTICLE IV
Conditions
SECTION 4.01. Effective Date. The obligations of the Lenders to make Loans
hereunder shall not become effective until the date on which each of the
following conditions is satisfied (or waived in accordance with Section 9.02):
(a) The Administrative Agent (or its counsel) shall have received (i)
either (A) a counterpart of this Agreement, executed and delivered by a
duly authorized officer of the Borrower or (B) written evidence
satisfactory to the Administrative Agent (which may include telecopy
transmission of a signed signature page of this Agreement) that such party
has signed a counterpart of this Agreement and (ii) a counterpart of the
Subsidiary Guarantee, executed and delivered by a duly authorized officer
of each Subsidiary Guarantor.
(b) The Administrative Agent shall have received favorable written
opinions (addressed to the Administrative Agent and the Lenders and dated
the Effective Date) of (i) ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, counsel for
the Borrower, substantially in the form of Exhibit B-1, and (ii) ▇▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇, Deputy General Counsel of the Borrower, substantially in the
form of Exhibit B-2, and each opinion covering such other matters relating
to the Borrower, this Agreement or the Transactions as the Required Lenders
shall reasonably request. The Borrower hereby requests such counsel to
deliver such opinion.
(c) The Administrative Agent shall have received all government
approvals necessary or, in the discretion of the Administrative Agent,
advisable in connection with the financing contemplated hereby and the
continuing operations of the Borrower and its Subsidiaries shall have been
obtained and be in full force and effect.
(d) The Administrative Agent shall have received such documents and
certificates as the Administrative Agent or its counsel may reasonably
request relating to the organization, existence and good standing of the
Borrower and its Subsidiaries, the authorization of the Transactions and
any other legal matters relating to the Borrower, this Agreement or the
Transactions, all in form and substance reasonably satisfactory to the
Administrative Agent and its counsel.
(e) The Administrative Agent shall have received (i) audited
consolidated financial statements of the Borrower for the two most recent
fiscal years ended prior to the Effective Date as to which such financial
statements are available and (ii) unaudited interim consolidated financial
statements of the Borrower for each quarterly period ended subsequent to
the date of the latest financial statements delivered pursuant to clause
(i) of this paragraph as to which such financial statements are available.
(f) The Administrative Agent shall have received a certificate, dated
the Effective Date and signed by the president, a vice president or a
Financial Officer of the Borrower, confirming compliance with the
conditions set forth in paragraphs (a) and (b) of
31
Section 4.02 (with such paragraph (a) being deemed for this purpose not to
include the parenthetical clause included therein).
(g) The Administrative Agent shall have received all fees and other
amounts due and payable on or prior to the Effective Date, including, to
the extent invoiced, reimbursement or payment of all out-of-pocket expenses
required to be reimbursed or paid by the Borrower hereunder.
The Administrative Agent shall notify the Borrower and the Lenders of the
Effective Date, and such notice shall be conclusive and binding. Notwithstanding
the foregoing, the obligations of the Lenders to make Loans hereunder shall not
become effective unless each of the foregoing conditions is satisfied (or waived
pursuant to Section 9.02) at or prior to 3:00 p.m., New York City time, on
October 17, 2003 (and, in the event such conditions are not so satisfied or
waived, the Commitments shall terminate at such time).
SECTION 4.02. Each Credit Event. The obligation of each Lender to make a
Loan on the occasion of any Borrowing is subject to the satisfaction of the
following conditions:
(a) The representations and warranties of the Borrower set forth in
this Agreement (except the representations set forth in Section 3.04(b),
Section 3.06 and the first sentence of Section 3.08) shall be true and
correct in all material respects on and as of the date of such Borrowing,
except for representations and warranties which are made as of a specific
date which shall be true and correct as of such date.
(b) At the time of and immediately after giving effect to such
Borrowing, no Default shall have occurred and be continuing.
Each Borrowing shall be deemed to constitute a representation and warranty by
the Borrower on the date thereof as to the matters specified in paragraphs (a)
and (b) of this Section.
ARTICLE V
Affirmative Covenants
Until the Commitments have expired or been terminated and the principal of
and interest on each Loan and all fees payable hereunder shall have been paid in
full, the Borrower covenants and agrees with the Lenders that:
SECTION 5.01. Financial Statements. The Borrower will furnish to the
Administrative Agent and each Lender:
(a) as soon as available, but in any event within 2 Business Days after the
end of 90 days following the end of each fiscal year of the Borrower, a copy of
the audited consolidated balance sheet of the Borrower and its consolidated
subsidiaries as at the end of such year and the related audited consolidated
statements of income and of cash flows for such year, setting forth in each case
in comparative form the figures for the previous year, reported on without a
"going
32
concern" or like qualification or exception, or qualification arising out of the
scope of the audit, by Deloitte & Touche LLP or other independent certified
public accountants of nationally recognized standing; and
(b) as soon as available, but in any event within 2 Business Days after the
end of 45 days following the end of each of the first three quarterly periods of
each fiscal year of the Borrower, the unaudited consolidated balance sheet of
the Borrower and its consolidated subsidiaries as at the end of such quarter and
the related unaudited consolidated statements of income and of cash flows for
such quarter and the portion of the fiscal year through the end of such quarter,
setting forth in each case in comparative form the figures for the previous
year, signed by a Responsible Officer (subject to normal year-end audit
adjustments).
All such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).
SECTION 5.02. Certificates; Other Information. The Borrower will furnish to
the Administrative Agent and each Lender (or, in the case of clause (d), to the
relevant Lender):
(a) concurrently with the delivery of the financial statements referred to
in Section 5.01(a), a certificate of the independent certified public
accountants reporting on such financial statements stating that in making the
examination necessary therefor no knowledge was obtained that caused it to
believe that the Borrower failed to comply with the terms of Sections 6.01(a)
and (b) and clauses (a) and (b) of Article VII, except as specified in such
certificate; the Lenders who are also parties to the Three-Year Credit Agreement
agree that compliance with the terms of this Section 5.02(a) shall also
constitute compliance with Section 6.02(a) of the Three-Year Credit Agreement;
(b) concurrently with the delivery of any financial statements pursuant to
Section 5.01, (i) a certificate of a Responsible Officer stating that, to the
best of each such Responsible Officer's knowledge, each Loan Party during such
period has observed or performed all of its covenants and other agreements, and
satisfied every condition, contained in this Agreement and the other Loan
Documents to which it is a party to be observed, performed or satisfied by it,
that such Responsible Officer has obtained no knowledge of any Default or Event
of Default except as specified in such certificate and (ii) in the case of
quarterly or annual financial statements, a Certificate containing all
information and calculations necessary for determining compliance by the
Borrower and its Subsidiaries with the provisions of this Agreement referred to
therein as of the last day of the fiscal quarter or fiscal year of the Borrower,
as the case may be;
(c) within five days after the same are sent, copies of all financial
statements and reports that the Borrower sends to the holders of any class of
its debt securities or public equity securities and, within five days after the
same are filed, copies of all financial statements and reports that the Borrower
may make to, or file with, the Securities and Exchange Commission, or any
Governmental Authority; and
33
(d) promptly, such additional financial and other information as any Lender
may from time to time reasonably request.
SECTION 5.03. Notices of Material Events. The Borrower will promptly (and
in any event within five days after the Borrower knows of the following events)
furnish to the Administrative Agent and each Lender written notice of the
following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or proceeding by or
before any arbitrator or Governmental Authority against or affecting the
Borrower or any Affiliate thereof as to which there is a reasonable possibility
of an adverse determination and that, if adversely determined, could reasonably
be expected to result in a Material Adverse Effect;
(c) the occurrence of any ERISA Event that, alone or together with any
other ERISA Events that have occurred, could reasonably be expected to have a
Material Adverse Effect; and
(d) any other development that results in, or could reasonably be expected
to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of
a Responsible Officer setting forth the details of the event or development
requiring such notice and any action taken or proposed to be taken with respect
thereto.
SECTION 5.04. Existence; Conduct of Business. The Borrower will, and will
cause each of its Subsidiaries to, do or cause to be done all things necessary
to preserve, renew and keep in full force and effect its legal existence and the
rights, licenses, permits, privileges and franchises material to the conduct of
Permitted Lines of Business; provided that the foregoing shall not prohibit any
merger, consolidation, liquidation or dissolution permitted under Section 6.04.
SECTION 5.05. Payment of Obligations. The Borrower will, and will cause
each of its Subsidiaries to, pay its obligations, including Tax liabilities,
that, if not paid, could result in a Material Adverse Effect before the same
shall become delinquent or in default, except where (a) the validity or amount
thereof is being contested in good faith by appropriate proceedings, (b) the
Borrower or such Subsidiary has set aside on its books adequate reserves with
respect thereto in accordance with GAAP and (c) the failure to make payment
pending such contest could not reasonably be expected to result in a Material
Adverse Effect.
SECTION 5.06. Maintenance of Properties and Trademarks; Insurance. The
Borrower will, and will cause each of its Subsidiaries to, (a) keep and maintain
all property material to the conduct of its business in good working order and
condition, ordinary wear and tear excepted, provided that the Borrower shall, in
good faith, determine when to repair any property, (b) take all action
reasonably necessary or desirable in accordance with good business practices to
(i) maintain in full force and effect such domestic and foreign patents,
trademarks, service marks, trade names, copyrights and licenses and such
material rights with respect to the foregoing, now or hereafter acquired, in
each case necessary for the conduct of its business
34
(collectively, the "Trademarks") and (ii) protect all domestic and foreign
Trademarks against infringement by third parties and (c) maintain, with
financially sound and reputable insurance companies, insurance in such amounts
and against such risks as a prudent Person engaged in the same or similar
business of a similar size and otherwise similarly situated would maintain.
SECTION 5.07. Books and Records; Inspection Rights. The Borrower will, and
will cause each of its Subsidiaries to, keep proper books of record and account
in which full, true and correct entries in conformity with GAAP are made of all
dealings and transactions in relation to its business and activities. The
Borrower will, and will cause each of its Subsidiaries to, permit on an annual
basis (or at any time and from time to time after the occurrence and during the
continuance of a Default or Event of Default) any representatives designated by
the Administrative Agent or any Lender, upon reasonable prior notice, to visit
and inspect its properties, to examine and make extracts from its books and
records, and to discuss its affairs, finances and condition with its officers
and independent accountants, all at such reasonable times and as often as
reasonably requested.
SECTION 5.08. Environmental Laws. The Borrower will, and will use
reasonable best efforts to cause each of its Subsidiaries to:
(a) Comply in all material respects with, and use reasonable best efforts
to ensure compliance in all material respects by their tenants and subtenants,
if any, with, all applicable Environmental Laws, except for such matters of
noncompliance which could not reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect.
(b) Except to the extent being contested in good faith, conduct and
complete all investigations, studies, sampling and testing, and all remedial,
removal and other actions required under Environmental Laws or by Governmental
Authorities.
SECTION 5.09. Compliance. The Borrower will, and will cause each of its
Subsidiaries to, comply with all Contractual Obligations and Requirements of Law
except to the extent that failure to comply therewith could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
SECTION 5.10. Additional Subsidiaries. The Borrower will, with respect to
any Person that, subsequent to the Effective Date, becomes a Subsidiary
organized in a jurisdiction within the United States, promptly cause such new
Subsidiary to become a party to the Subsidiary Guarantee pursuant to
documentation which is in form and substance satisfactory to the Administrative
Agent; provided that the Administrative Agent and the Borrower may agree in
writing that any non-material or less than wholly-owned Subsidiary need not
become a Subsidiary Guarantor.
SECTION 5.11. Use of Proceeds. The proceeds of the Loans will be used only
to refinance existing debt, provide working capital and for other general
corporate purposes of the Borrower, including, without limitation, capital
expenditures, stock repurchases, Permitted Acquisitions and support of its
commercial paper facility. No part of the proceeds of any Loan will be used,
whether directly or indirectly, for any purpose that entails a violation of any
of the Regulations of the Board, including Regulations U and X.
35
ARTICLE VI
Negative Covenants
Until the Commitments have expired or terminated and the principal of and
interest on each Loan and all fees payable hereunder have been paid in full, the
Borrower covenants and agrees with the Lenders that:
SECTION 6.01. Financial Covenants.
(a) Leverage Ratio. The Borrower will not permit the Leverage Ratio as
at the last day of any period of four consecutive fiscal quarters of the
Borrower to exceed 2.75 to 1.00.
(b) Fixed Charge Coverage Ratio. The Borrower will not permit the
Fixed Charge Coverage Ratio for any period of four consecutive fiscal
quarters of the Borrower to be less than 2.50 to 1.00.
SECTION 6.02. Indebtedness. The Borrower will not, and will not permit any
Subsidiary to, create, incur, assume or permit to exist any Indebtedness,
except:
(a) Indebtedness created hereunder;
(b) Indebtedness existing on the date hereof and set forth in Schedule
6.02;
(c) Indebtedness of the Borrower to any Subsidiary and of any
Subsidiary to the Borrower or any other Subsidiary;
(d) Guarantees by the Borrower of Indebtedness of any Subsidiary and
by any Subsidiary of Indebtedness of the Borrower or any other Subsidiary;
(e) Indebtedness of the Borrower or any Subsidiary incurred to finance
the acquisition, construction or improvement of any fixed or capital
assets, including Capital Lease Obligations and any Indebtedness assumed in
connection with the acquisition of any such assets or secured by a Lien on
any such assets prior to the acquisition thereof, provided that (i) such
Indebtedness is incurred prior to or within 90 days after such acquisition
or the completion of such construction or improvement and (ii) the
aggregate principal amount of Indebtedness permitted by this clause (e)
shall not exceed $150,000,000 at any time outstanding;
(f) Indebtedness of any Person that becomes a Subsidiary after the
date hereof; provided that (i) such Indebtedness exists or is committed at
the time such Person becomes a Subsidiary and is not created in
contemplation of or in connection with such Person becoming a Subsidiary
and (ii) the Borrower and its Subsidiaries are in compliance, on a pro
forma basis after giving effect to such acquisition, with the covenants
contained in Section 6.01 recomputed as at the last day of the most
recently ended fiscal quarter of the Borrower for which financial
statements are available, as if
36
such acquisition had occurred on the first day of each relevant period for
testing such compliance;
(g) Indebtedness of the Borrower or any Subsidiary incurred (a) as an
account party in respect of trade letters of credit issued in the ordinary
course of business and (b) in connection with standby letters of credit in
an aggregate principal amount not exceeding $40,000,000 at any time
outstanding;
(h) Indebtedness of the Borrower or any Subsidiary in respect of
commercial paper; provided that the aggregate amount of such Indebtedness,
when added to the aggregate amount of outstanding Loans and "Loans" and
"L/C Obligations" under the Three-Year Credit Agreement, shall not exceed
the aggregate amount of the Commitments and the "Commitments" under the
Three-Year Credit Agreement;
(i) Subordinated Indebtedness;
(j) any refinancings, refundings, renewals or extensions of
Indebtedness permitted hereunder that do not increase the outstanding
principal amount of such Indebtedness;
(k) additional Indebtedness not otherwise permitted hereunder secured
by Liens and not exceeding $100,000,000 in aggregate principal amount at
any time outstanding;
(l) Indebtedness not otherwise permitted hereunder, not secured by any
Lien and incurred after the date hereof; provided that the Borrower and its
Subsidiaries are in compliance, on a pro forma basis after giving effect to
such Indebtedness, with the covenants contained in Section 6.01 recomputed
as at the last day of the most recently ended fiscal quarter of the
Borrower for which financial statements are available, as if such
Indebtedness had been incurred on the first day of each relevant period for
testing such compliance; and
(m) Indebtedness created under the Three-Year Credit Agreement.
SECTION 6.03. Liens. The Borrower will not, and will not permit any
Subsidiary to, create, incur, assume or permit to exist any Lien on any property
or asset now owned or hereafter acquired by it, or assign or sell any income or
revenues (including accounts receivable) or rights in respect of any thereof,
except:
(a) Permitted Encumbrances;
(b) any Lien on any property or asset of the Borrower or any
Subsidiary existing on the date hereof and set forth in Schedule 6.03;
provided that (i) such Lien shall not apply to any other property or asset
of the Borrower or any Subsidiary and (ii) such Lien shall secure only
those obligations which it secures on the date hereof and extensions,
renewals and replacements thereof that do not increase the outstanding
principal amount thereof;
37
(c) Liens arising by the terms of letters of credit entered into in
the ordinary course of business to secure reimbursement obligations and
other obligations in connection therewith;
(d) Liens solely constituting the right of any other Person to a share
of any licensing royalties (pursuant to a licensing agreement or other
related agreement entered into by the Borrower or any of its Subsidiaries
with such Person in the ordinary course of the Borrower's or such
Subsidiary's business) otherwise payable to the Borrower or any of its
Subsidiaries, provided that such right shall have been conveyed to such
Person for consideration received by the Borrower or such Subsidiary on an
arm's-length basis;
(e) Liens arising by reason of any judgment, decree or order of any
court or other Governmental Authority for the payment of money in aggregate
amount not to exceed $25,000,000 at any time outstanding;
(f) Liens arising in connection with factoring accounts receivable
related to any acquired Subsidiary; provided that such factoring shall not
continue for a period longer than one year from the date such Subsidiary is
acquired;
(g) any Lien existing on any property or asset prior to the
acquisition thereof by the Borrower or any Subsidiary or existing on any
property or asset of any Person that becomes a Subsidiary after the date
hereof prior to the time such Person becomes a Subsidiary; provided that
(i) such Lien is not created in contemplation of or in connection with such
acquisition or such Person becoming a Subsidiary, as the case may be, (ii)
such Lien shall not apply to any other property or assets of the Borrower
or any Subsidiary and (iii) such Lien shall secure only those obligations
which it secures on the date of such acquisition or the date such Person
becomes a Subsidiary, as the case may be and extensions, renewals and
replacements thereof that do not increase the outstanding principal amount
thereof;
(h) Liens on fixed or capital assets acquired, constructed or improved
by the Borrower or any Subsidiary; provided that (i) such security
interests secure Indebtedness permitted by clause (e) of Section 6.02, (ii)
such security interests and the Indebtedness secured thereby are incurred
prior to or within 90 days after such acquisition or the completion of such
construction or improvement, (iii) the Indebtedness secured thereby does
not exceed 100% of the cost of acquiring, constructing or improving such
fixed or capital assets and (iv) such security interests shall not apply to
any other property or assets of the Borrower or any Subsidiary; and
(i) Liens securing Indebtedness permitted under Sections 6.02(j) and
6.02(k); provided that with respect to Indebtedness incurred pursuant to
Section 6.02(j) no such Lien is spread to cover additional property.
SECTION 6.04. Fundamental Changes. Except in connection with transactions
otherwise permitted pursuant to Section 6.05 or 6.06, the Borrower will not, and
will not permit any Subsidiary to, merge into or consolidate with any other
Person, or permit any other Person to merge into or consolidate with it, or
sell, transfer, lease or otherwise dispose of (in one
38
transaction or in a series of transactions) all or substantially all of its
assets, or all or substantially all of the stock of any of its Subsidiaries (in
each case, whether now owned or hereafter acquired), or liquidate or dissolve,
except that, if at the time thereof and immediately after giving effect thereto,
no Default shall have occurred and be continuing (i) any Person may merge into
the Borrower in a transaction in which the Borrower is the surviving
corporation, (ii) any Person may merge into any Subsidiary in a transaction in
which the surviving entity is a Subsidiary and, if required to be so under
Section 5.10, a Subsidiary Guarantor, (iii) any Subsidiary may sell, transfer,
lease or otherwise dispose of its assets to the Borrower or to another
Subsidiary which is a Subsidiary Guarantor and (iv) any Subsidiary may liquidate
or dissolve if the Borrower determines in good faith that such liquidation or
dissolution is in the best interests of the Borrower and is not materially
disadvantageous to the Lenders; provided that any such merger involving a Person
that is not a wholly owned Subsidiary immediately prior to such merger shall not
be permitted unless also permitted by Section 6.05.
SECTION 6.05. Investments, Loans, Advances, Guarantees and Acquisitions;
Hedging Agreements. (a) The Borrower will not, and will not permit any of its
Subsidiaries to, purchase, hold or acquire (including pursuant to any merger
with any Person that was not a wholly owned Subsidiary prior to such merger) any
capital stock, evidences of indebtedness or other securities (including any
option, warrant or other right to acquire any of the foregoing) of, make or
permit to exist any loans or advances to, guarantee any obligations of, or make
or permit to exist any investment or any other interest in, any other Person, or
purchase or otherwise acquire (in one transaction or a series of transactions)
any assets of any other Person constituting a business unit, except:
(i) existing investments not otherwise permitted under this Agreement and
described in Schedule 6.05(i) hereto;
(ii) investments made in accordance with the investment policy of the
Borrower as set forth on Schedule 6.05(ii) hereto; as provided that any material
amendment or other material modification to such policy is subject to the
approval of the Administrative Agent in its reasonable discretion;
(iii) investments by the Borrower in the capital stock of its Subsidiaries;
(iv) Permitted Acquisitions;
(v) investments received in connection with the bona fide settlement of any
defaulted Indebtedness or other liability owed to the Borrower or any
Subsidiary;
(vi) advances or loans made in the ordinary course of business to employees
of the Borrower or any of its Subsidiaries in an aggregate amount not to exceed
$10,000,000 at any time outstanding;
(vii) loans or advances to third party contractors, suppliers or customers
in the ordinary course of business and consistent with past practice;
(viii) loans or advances made by the Borrower to any Subsidiary and made by
any Subsidiary to the Borrower or any other Subsidiary;
39
(ix) guarantees by the Borrower or any Subsidiary of obligations of the
Borrower or any other Subsidiary which do not constitute Indebtedness;
(x) Guarantees constituting Indebtedness permitted by Section 6.02; and
(xi) any other investments in, advances or loans to or Guarantees of, any
Person in an aggregate amount not to exceed $225,000,000 at any time
outstanding;
(b) The Borrower will not, and will not permit any of its Subsidiaries to,
enter into any Hedging Agreement, other than Hedging Agreements entered into in
the ordinary course of business (including, without limitation, Hedging
Agreements in connection with the Borrower's stock repurchase program) to hedge
or mitigate risks to which the Borrower or any Subsidiary is exposed in the
conduct of its business or the management of its liabilities.
SECTION 6.06. Limitation on Sale of Assets. Except in the ordinary course
of business, the Borrower will not, and will not permit any of its Subsidiaries
to, sell, convey, lease, transfer or otherwise dispose of (other than as
otherwise permitted by Section 6.04 or 6.05) all or any substantial part of its
assets; provided that the foregoing shall not prohibit any such sale,
conveyance, lease, transfer or disposition (i) which (x) is for a price not
materially less than the fair market value of such assets of the Borrower or
such Subsidiary, (y) would not materially impair the ability of the Borrower to
perform its obligations under this Agreement and (z) together with all other
such sales, conveyances, leases, transfers and dispositions, would have no
Material Adverse Effect, (ii) of assets that individually or in the aggregate
constitute less than 15% of the total assets of the Borrower and its
Subsidiaries taken as a whole or (iii) of assets in connection with factoring
arrangements with respect to any acquired Subsidiary, provided that such
factoring arrangements do not continue longer than a year after such Subsidiary
is acquired by the Borrower.
SECTION 6.07. Restricted Payments. The Borrower will not, and will not
permit any of its Subsidiaries to, declare or make, or agree to pay or make,
directly or indirectly, any Restricted Payment, except (a) the Borrower may
declare and pay dividends with respect to its capital stock payable solely in
additional shares of its common stock, (b) so long as no Default or Event of
Default has occurred and is continuing, the Borrower may declare and pay
dividends with respect to its capital stock, (c) any Subsidiary may declare and
pay dividends to the Borrower or, in the case of any Subsidiary that is wholly
owned by another Subsidiary, to such other Subsidiary, (d) the Borrower may make
Restricted Payments pursuant to and in accordance with stock option plans or
other benefit plans for management or employees of the Borrower and its
Subsidiaries, (e) so long as no Default or Event of Default has occurred and is
continuing, the Borrower may repurchase its capital stock pursuant to its stock
repurchase program and (f) so long as no Default or Event of Default has
occurred and is continuing, the Borrower may make Restricted Payments in
connection with the repurchase of the Capital Stock of Lucky Brands, Inc. and
Segrets, Inc.
SECTION 6.08. Transactions with Affiliates. The Borrower will not, and will
not permit any of its Subsidiaries to, sell, lease or otherwise transfer any
property or assets to, or purchase, lease or otherwise acquire any property or
assets from, or otherwise engage in any other transactions with, any of its
Affiliates, except (a) in the ordinary course of business at
40
prices and on terms and conditions not less favorable to the Borrower or such
Subsidiary than could be obtained on an arm's-length basis from unrelated third
parties, (b) transactions between or among the Borrower and its Subsidiaries not
involving any other Affiliate and (c) any Restricted Payment permitted by
Section 6.07.
SECTION 6.09. Changes in Fiscal Periods. The Borrower will not, and will
not permit any of its Subsidiaries to, permit the fiscal year of such Borrower
to end on a day other than the last Saturday closest to December 31 or change
such Borrower's method of determining fiscal quarters.
SECTION 6.10. Lines of Business. The Borrower will not, and will not permit
any of its Subsidiaries to, enter into any business, either directly or through
any Subsidiary, except for Permitted Lines of Business.
ARTICLE VII
Events of Default
If any of the following events ("Events of Default") shall occur:
(a) the Borrower shall fail to pay any principal of any Loan when and
as the same shall become due and payable, whether at the due date thereof
or at a date fixed for prepayment thereof or otherwise;
(b) the Borrower shall fail to pay any interest on any Loan or any fee
or any other amount (other than an amount referred to in clause (a) of this
Article) payable under this Agreement, when and as the same shall become
due and payable, and such failure shall continue unremedied for a period of
five days;
(c) any representation or warranty made or deemed made by or on behalf
of the Borrower or any Subsidiary in or in connection with this Agreement
or any amendment or modification hereof, or in any report, certificate,
financial statement or other document furnished pursuant to or in
connection with this Agreement or any amendment or modification hereof,
shall prove to have been materially incorrect when made or deemed made;
(d) the Borrower shall fail to observe or perform any covenant,
condition or agreement contained in Section 5.04 (with respect to the
Borrower's existence) or 5.11 or in Article VI;
(e) the Borrower shall fail to observe or perform any covenant,
condition or agreement contained in this Agreement (other than those
specified in clause (a), (b) or (d) of this Article), and such failure
shall continue unremedied for a period of 30 days after notice thereof from
the Administrative Agent (given at the request of any Lender) to the
Borrower;
41
(f) the Borrower or any Subsidiary shall fail to make any payment
(whether of principal or interest and regardless of amount) in respect of
any Material Indebtedness, when and as the same shall become due and
payable (after giving effect to any applicable period of grace);
(g) any default or any event of default with respect to any Material
Indebtedness which results in such Material Indebtedness becoming due prior
to its scheduled maturity or that enables or permits (with or without the
giving of notice, the lapse of time or both) the holder or holders of any
Material Indebtedness or any trustee or agent on its or their behalf to
cause any Material Indebtedness to become due, or to require the
prepayment, repurchase, redemption or defeasance thereof, prior to its
scheduled maturity;
(h) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other
relief in respect of the Borrower or any Subsidiary or its debts, or of a
substantial part of its assets, under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in
effect or (ii) the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Borrower or any
Subsidiary or for a substantial part of its assets, and, in any such case,
such proceeding or petition shall continue undismissed for 60 days or an
order or decree approving or ordering any of the foregoing shall be
entered;
(i) the Borrower or any Subsidiary shall (i) voluntarily commence any
proceeding or file any petition seeking liquidation, reorganization or
other relief under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect, (ii) consent to the
institution of, or fail to contest in a timely and appropriate manner, any
proceeding or petition described in clause (h) of this Article, (iii) apply
for or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Borrower or any
Subsidiary or for a substantial part of its assets, (iv) file an answer
admitting the material allegations of a petition filed against it in any
such proceeding, (v) make a general assignment for the benefit of creditors
or (vi) take any action for the purpose of effecting any of the foregoing;
(j) the Borrower or any Subsidiary shall become unable, admit in
writing or fail generally to pay its debts as they become due;
(k) one or more judgments for the payment of money in an aggregate
amount in excess of $25,000,000 shall be rendered against the Borrower, any
Subsidiary or any combination thereof and the same shall remain
undischarged for a period of 30 consecutive days during which execution
shall not be effectively stayed, or any action shall be legally taken by a
judgment creditor to attach or levy upon any assets of the Borrower or any
Subsidiary to enforce any such judgment;
(l) an ERISA Event shall have occurred that, in the opinion of the
Required Lenders, when taken together with all other ERISA Events that have
occurred, could reasonably be expected to result in a Material Adverse
Effect; or
(m) a Change in Control shall occur;
42
then, and in every such event (other than an event with respect to the Borrower
described in clause (h) or (i) of this Article), and at any time thereafter
during the continuance of such event, the Administrative Agent with the consent
of the Required Lenders may, and at the request of the Required Lenders shall,
by notice to the Borrower, take either or both of the following actions, at the
same or different times: (i) terminate the Commitments, and thereupon the
Commitments shall terminate immediately, and (ii) declare the Loans then
outstanding to be due and payable in whole (or in part, in which case any
principal not so declared to be due and payable may thereafter be declared to be
due and payable), and thereupon the principal of the Loans so declared to be due
and payable, together with accrued interest thereon and all fees and other
obligations of the Borrower accrued hereunder, shall become due and payable
immediately, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrower; and in case of any event with
respect to the Borrower described in clause (h) or (i) of this Article, the
Commitments shall automatically terminate and the principal of the Loans then
outstanding, together with accrued interest thereon and all fees and other
obligations of the Borrower accrued hereunder, shall automatically become due
and payable, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrower.
ARTICLE VIII
The Administrative Agent
Each of the Lenders hereby irrevocably appoints the Administrative Agent as
its agent and authorizes the Administrative Agent to take such actions on its
behalf and to exercise such powers as are delegated to the Administrative Agent
by the terms hereof, together with such actions and powers as are reasonably
incidental thereto.
The bank serving as the Administrative Agent hereunder shall have the same
rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and such bank
and its Affiliates may accept deposits from, lend money to and generally engage
in any kind of business with the Borrower or any Subsidiary or other Affiliate
thereof as if it were not the Administrative Agent hereunder.
The Administrative Agent shall not have any duties or obligations except
those expressly set forth herein. Without limiting the generality of the
foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or
other implied duties, regardless of whether a Default has occurred and is
continuing, (b) the Administrative Agent shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated hereby that the Administrative Agent is
required to exercise in writing by the Required Lenders, and (c) except as
expressly set forth herein, the Administrative Agent shall not have any duty to
disclose, and shall not be liable for the failure to disclose, any information
relating to the Borrower or any of its Subsidiaries that is communicated to or
obtained by the bank serving as Administrative Agent or any of its Affiliates in
any capacity. The Administrative Agent shall not be liable for any action taken
or not taken by it with the consent or at the request of the Required Lenders or
in the absence of its own gross negligence or willful misconduct. The
Administrative Agent shall be deemed not to have knowledge of any Default unless
and until written notice thereof is given to the Administrative
43
Agent by the Borrower or a Lender, and the Administrative Agent shall not be
responsible for or have any duty to ascertain or inquire into (i) any statement,
warranty or representation made in or in connection with this Agreement, (ii)
the contents of any certificate, report or other document delivered hereunder or
in connection herewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth herein, (iv) the
validity, enforceability, effectiveness or genuineness of this Agreement or any
other agreement, instrument or document, or (v) the satisfaction of any
condition set forth in Article IV or elsewhere herein, other than to confirm
receipt of items expressly required to be delivered to the Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to be made by the proper Person, and shall not incur any liability for
relying thereon. The Administrative Agent may consult with legal counsel (who
may be counsel for the Borrower), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts.
The Administrative Agent may perform any and all its duties and exercise
its rights and powers by or through any one or more sub-agents appointed by the
Administrative Agent. The Administrative Agent and any such sub-agent may
perform any and all its duties and exercise its rights and powers through their
respective Related Parties. The exculpatory provisions of the preceding
paragraphs shall apply to any such sub-agent and to the Related Parties of the
Administrative Agent and any such sub-agent, and shall apply to their respective
activities in connection with the syndication of the credit facility provided
for herein as well as activities as Administrative Agent.
Subject to the appointment and acceptance of a successor Administrative
Agent as provided in this paragraph, the Administrative Agent may resign at any
time by notifying the Lenders and the Borrower. Upon any such resignation, the
Required Lenders shall have the right, in consultation with the Borrower, to
appoint a successor. If no successor shall have been so appointed by the
Required Lenders and shall have accepted such appointment within 30 days after
the retiring Administrative Agent gives notice of its resignation, then the
retiring Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent which shall be a bank with an office in New York, New York,
or an Affiliate of any such bank. Upon the acceptance of its appointment as
Administrative Agent hereunder by a successor, such successor shall succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder. The fees payable by the
Borrower to a successor Administrative Agent shall be the same as those payable
to its predecessor unless otherwise agreed between the Borrower and such
successor. After the Administrative Agent's resignation hereunder, the
provisions of this Article and Section 9.03 shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as Administrative Agent.
44
Each Lender acknowledges that it has, independently and without reliance
upon the Administrative Agent or any other Lender and based on such documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Administrative Agent or any
other Lender and based on such documents and information as it shall from time
to time deem appropriate, continue to make its own decisions in taking or not
taking action under or based upon this Agreement, any related agreement or any
document furnished hereunder or thereunder.
The Syndication Agents and the Documentation Agent shall not have any
duties or responsibilities hereunder in their capacity as such.
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by facsimile, as follows:
(a) if to the Borrower, to it at Liz Claiborne, Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇▇▇ ▇▇▇▇ (Facsimile
No. 201-295-7825);
(b) if to the Administrative Agent:
JPMorgan Chase Bank, Loan and Agency Services Group
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention of ▇▇▇▇▇▇ ▇▇▇▇▇ (Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇),
with a copy to:
JPMorgan Chase Bank, ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention of Liz Claiborne Relationship Manager
(Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇)
(c) if to any other Lender, to it at its address (or number) set forth
in its Administrative Questionnaire.
Any party hereto may change its address or facsimile number for notices and
other communications hereunder by notice to the other parties hereto. All
notices and other communications given to any party hereto in accordance with
the provisions of this Agreement shall be deemed to have been given on the date
of receipt.
Notices and other communications to the Lenders hereunder may be delivered
or furnished by electronic communications pursuant to procedures approved by the
Administrative
45
Agent; provided that the foregoing shall not apply to notices pursuant to
Section 2 unless otherwise agreed by the Administrative Agent and the applicable
Lender. The Administrative Agent or the Borrower may, in its discretion, agree
to accept notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by it; provided that approval of
such procedures may be limited to particular notices or communications.
SECTION 9.02. Waivers; Amendments. (a) No failure or delay by the
Administrative Agent or any Lender in exercising any right or power hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof or
the exercise of any other right or power. The rights and remedies of the
Administrative Agent and the Lenders hereunder are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver of
any provision of this Agreement or consent to any departure by the Borrower
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) of this Section, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, the making of a Loan shall not
be construed as a waiver of any Default, regardless of whether the
Administrative Agent or any Lender may have had notice or knowledge of such
Default at the time.
(b) Neither this Agreement nor any provision hereof may be waived, amended
or modified except pursuant to an agreement or agreements in writing entered
into by the Borrower and the Required Lenders or by the Borrower and the
Administrative Agent with the consent of the Required Lenders; provided that no
such agreement shall (i) increase the Commitment of any Lender without the
written consent of such Lender, (ii) reduce the principal amount of any Loan or
reduce the rate of interest thereon, or reduce any fees payable hereunder,
without the written consent of each Lender affected thereby, (iii) postpone the
scheduled date of payment of the principal amount of any Loan or any interest
thereon, or any fees payable hereunder, or reduce the amount of, waive or excuse
any such payment, or postpone the scheduled date of expiration of any
Commitment, without the written consent of each Lender affected thereby, (iv)
change Section 2.15(b) or (c) in a manner that would alter the pro rata sharing
of payments required thereby, without the written consent of each Lender
adversely affected thereby, (v) except in connection with transactions otherwise
permitted pursuant to Section 6.04, 6.05 or 6.06, release all or substantially
all of the Subsidiary Guarantors from their obligations under the Subsidiary
Guarantee, without the written consent of each Lender, or (vi) change any of the
provisions of this Section or the definition of "Required Lenders" or any other
provision hereof specifying the number or percentage of Lenders required to
waive, amend or modify any rights hereunder or make any determination or grant
any consent hereunder, without the written consent of each Lender; provided
further that no such agreement shall amend, modify or otherwise affect the
rights or duties of the Administrative Agent hereunder without the prior written
consent of the Administrative Agent.
SECTION 9.03. Expenses; Indemnity; Damage Waiver. (a) The Borrower shall
pay (i) all reasonable out-of-pocket expenses incurred by the Administrative
Agent and Chase Securities Inc., including the reasonable fees, charges and
disbursements of counsel for the Administrative Agent, in connection with the
syndication of the credit facility provided for herein, the preparation and
administration of this Agreement or any amendments, modifications
46
or waivers of the provisions hereof (whether or not the transactions
contemplated hereby or thereby shall be consummated) and (ii) all out-of-pocket
expenses incurred by any Administrative Agent or any Lender, including the
reasonable fees, charges and disbursements of any counsel for the Administrative
Agent or any Lender, in connection with the enforcement or protection of its
rights in connection with this Agreement, including its rights under this
Section, or in connection with the Loans made hereunder, including in connection
with any workout, restructuring or negotiations in respect thereof.
(b) The Borrower shall indemnify the Administrative Agent and each Lender,
and each Related Party of any of the foregoing Persons (each such Person being
called an "Indemnitee") against, and hold each Indemnitee harmless from, any and
all losses, claims, damages, liabilities and related expenses, including the
fees, charges and disbursements of any counsel for any Indemnitee, incurred by
or asserted against any Indemnitee arising out of, in connection with, or as a
result of (i) the execution or delivery of this Agreement or any agreement or
instrument contemplated hereby, the performance by the parties hereto of their
respective obligations hereunder or the consummation of the Transactions or any
other transactions contemplated hereby, (ii) any Loan or the use of the proceeds
therefrom, (iii) any actual or alleged presence or release of Hazardous
Materials on or from any property owned or operated by the Borrower or any of
its Subsidiaries, or any Environmental Liability, or (iv) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such Indemnitee.
(c) To the extent that the Borrower fails to pay any amount required to be
paid by it to the Administrative Agent under paragraph (a) or (b) of this
Section, each Lender severally agrees to pay to the Administrative Agent such
Lender's Applicable Percentage (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount;
provided that the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted
against the Administrative Agent in its capacity as such.
(d) To the extent permitted by applicable law, the Borrower shall not
assert, and hereby waives, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement or any agreement or instrument contemplated hereby, the
Transactions or any Loan or the use of the proceeds thereof.
(e) All amounts due under this Section shall be payable promptly no later
than seven (7) days after written demand therefor.
SECTION 9.04. Successors and Assigns. (a) The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that the Borrower may
not assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of each Lender (and any
47
attempted assignment or transfer by the Borrower without such consent shall be
null and void). Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent and
the Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.
(b) (i) Subject to the conditions set forth in paragraph (b)(ii) below, any
Lender may assign to one or more assignees all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitments
and the Loans at the time owing to it) with the prior written consent (such
consent not to be unreasonably withheld) of:
(A) the Borrower, provided that no consent of the Borrower shall be
required for an assignment to a Lender, an Affiliate of a Lender other than
a Conduit Lender, an Approved Fund or, if an Event of Default under clause
(a), (b), (h) or (i) of Article VII has occurred and is continuing, any
other Person; and
(B) the Administrative Agent, provided that no consent of the
Administrative Agent shall be required for an assignment to an assignee
that is a Lender immediately prior to giving effect to such assignment,
except in the case of an assignment of a Commitment to an assignee that
does not already have a Commitment, or for an assignment to an Affiliate of
a Lender.
(ii) Assignments shall be subject to the following additional conditions:
(A) except in the case of an assignment to a Lender, an Affiliate of a
Lender or an Approved Fund or an assignment of the entire remaining amount
of the assigning Lender's Commitment or Loans, the amount of the
Commitments or Loans of the assigning Lender subject to each such
assignment (determined as of the date the Assignment and Acceptance with
respect to such assignment is delivered to the Administrative Agent) shall
not be less than $10,000,000 unless each of the Borrower and the
Administrative Agent otherwise consent, provided that (1) no such consent
of the Borrower shall be required if an Event of Default under clause (a),
(b), (h) or (i) of Article VII has occurred and is continuing and (2) such
amounts shall be aggregated in respect of each Lender and its affiliates or
Approved Funds, if any;
(B) each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender's rights and obligations
under this Agreement;
(C) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Acceptance, together with a
processing and recordation fee of $3,500;
(D) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire; and
48
(E) in the case of an assignment to a CLO, the assigning Lender shall
retain the sole right to approve any amendment, modification or waiver of
any provision of this Agreement and the other Loan Documents, provided that
the Assignment and Acceptance between such Lender and such CLO may provide
that such Lender will not, without the consent of such CLO, agree to any
amendment, modification or waiver that (1) requires the consent of each
Lender directly affected thereby pursuant to the first proviso to Section
9.02(b) and (2) directly affects such CLO.
(iii) Upon acceptance and recording pursuant to paragraph (d) of this
Section, from and after the effective date specified in each Assignment and
Acceptance, the assignee thereunder shall be a party hereto and, to the extent
of the interest assigned by such Assignment and Acceptance, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Acceptance, be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all of the assigning Lender's
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled, (with respect to the period
prior to such assignment ) to the benefits of Sections 2.12, 2.13, 2.14 and
9.03). Any assignment or transfer by a Lender of rights or obligations under
this Agreement that does not comply with this paragraph shall be treated for
purposes of this Agreement as a sale by such Lender of a participation in such
rights and obligations in accordance with paragraph (e) of this Section.
Notwithstanding the foregoing, any Conduit Lender may assign at any time to its
designating Lender hereunder with the consent of the Borrower, any or all Loans
it may have funded hereunder and pursuant to its designation agreement.
(iv) The Administrative Agent, acting for this purpose as an agent of the
Borrower, shall maintain at one of its offices in The City of New York a copy of
each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount of the Loans owing to each Lender pursuant to the terms
hereof from time to time (the "Register"). The entries in the Register shall be
conclusive, and the Borrower, the Administrative Agent and the Lenders may treat
each Person whose name is recorded in the Register pursuant to the terms hereof
as a Lender hereunder for all purposes of this Agreement, notwithstanding notice
to the contrary. The Register shall be available for inspection by the Borrower
and any Lender, at any reasonable time and from time to time upon reasonable
prior notice.
(v) Upon its receipt of a duly completed Assignment and Acceptance executed
by an assigning Lender and an assignee, the assignee's completed Administrative
Questionnaire (unless the assignee shall already be a Lender hereunder), the
processing and recordation fee referred to in paragraph (b) of this Section and
any written consent to such assignment required by paragraph (b) of this
Section, the Administrative Agent shall accept such Assignment and Acceptance
and record the information contained therein in the Register. No assignment
shall be effective for purposes of this Agreement unless it has been recorded in
the Register as provided in this paragraph.
(c) (i) Any Lender may, without the consent of the Borrower or the
Administrative Agent, sell participations to one or more banks or other entities
(a "Participant")
49
in all or a portion of such Lender's rights and/or obligations under this
Agreement (including all or a portion of its Commitment and the Loans owing to
it); provided that (i) such Lender's obligations under this Agreement shall
remain unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) the Borrower, the
Administrative Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and (iv) all Participants shall represent, for
the benefit of Borrower, that none of the participation interests are being
acquired with assets of an employee benefit plan or with assets that constitute
"plan assets" under Department of Labor Regulation Section 2510.3-101 . Any
agreement or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce this
Agreement and to approve any amendment, modification or waiver of any provision
of this Agreement; provided that such agreement or instrument may provide that
such Lender will not, without the consent of the Participant, agree to any
amendment, modification or waiver described in the first proviso to Section
9.02(b) that affects such Participant. Subject to paragraph (c)(ii) of this
Section, the Borrower agrees that each Participant shall be entitled to the
benefits of Sections 2.12, 2.13 and 2.14 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to paragraph (b) of
this Section.
(ii) A Participant shall not be entitled to receive any greater payment
under Sections 2.12, 2.13 or 2.14 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Borrower's prior written consent. A Participant that would be a Foreign Lender
if it were a Lender shall not be entitled to the benefits of Section 2.14 unless
the Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrower, to comply with Section
2.14(e) as though it were a Lender.
(d) Any Lender 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 any such pledge or assignment to a Federal Reserve Bank, and
this Section shall not apply to any such pledge or assignment of a security
interest; provided that no such pledge or assignment of a security interest
shall release a Lender from any of its obligations hereunder or substitute any
such assignee for such Lender as a party hereto.
(e) Each of the Borrower, the Subsidiary Guarantors and each Lender hereby
confirms that it will not institute against a Conduit Lender or join any other
Person in instituting against a Conduit Lender any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceeding under any state bankruptcy or
similar law, for one year and one day after the payment in full of the latest
maturing commercial paper note issued by such Conduit Lender; provided, however,
that each Lender designating any Conduit Lender hereby agrees to indemnify, save
and hold harmless each other party hereto for any loss, cost, damage or expense
arising out of its inability to institute such a proceeding against such Conduit
Lender during such period of forbearance.
SECTION 9.05. Survival. All covenants, agreements, representations and
warranties made by the Borrower herein and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement shall be
considered to have been relied upon by
50
the other parties hereto and shall survive the execution and delivery of this
Agreement and the making of any Loans, regardless of any investigation made by
any such other party or on its behalf and notwithstanding that the
Administrative Agent or any Lender may have had notice or knowledge of any
Default or incorrect representation or warranty at the time any credit is
extended hereunder, and shall continue in full force and effect as long as the
principal of or any accrued interest on any Loan or any fee or any other amount
payable under this Agreement is outstanding and unpaid and so long as the
Commitments have not expired or terminated. The provisions of Sections 2.12,
2.13, 2.14 and 9.03 and Article VIII shall survive and remain in full force and
effect regardless of the consummation of the transactions contemplated hereby,
the repayment of the Loans, the expiration or termination of the Commitments or
the termination of this Agreement or any provision hereof.
SECTION 9.06. Counterparts; Integration; Effectiveness. This Agreement may
be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement and any
separate letter agreements with respect to fees payable to the Administrative
Agent constitute the entire contract among the parties relating to the subject
matter hereof and supersede any and all previous agreements and understandings,
oral or written, relating to the subject matter hereof. Except as provided in
Section 4.01, this Agreement shall become effective when it shall have been
executed by the Administrative Agent and when the Administrative Agent shall
have received counterparts hereof which, when taken together, bear the
signatures of each of the other parties hereto, and thereafter shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Delivery of an executed counterpart of a signature page
of this Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Agreement.
SECTION 9.07. Severability. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 9.08. Right of Setoff. If an Event of Default shall have occurred
and be continuing, each Lender is hereby authorized at any time and from time to
time, to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Lender to or for the
credit or the account of the Borrower against any of and all the obligations of
the Borrower now or hereafter existing under this Agreement held by such Lender,
irrespective of whether or not such Lender shall have made any demand under this
Agreement and although such obligations may be unmatured provided that such
Lender shall promptly notify the Borrower of such setoff. The rights of each
Lender under this Section are in addition to other rights and remedies
(including other rights of setoff) which such Lender may have.
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process.
(a) This Agreement shall be construed in accordance with and governed by the law
of the State of New York.
51
(b) The Borrower hereby irrevocably and unconditionally submits, for itself
and its property, to the nonexclusive jurisdiction of the Supreme Court of the
State of New York sitting in New York County and of the United States District
Court of the Southern District of New York, and any appellate court from any
thereof, in any action or proceeding arising out of or relating to this
Agreement, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such New
York State or, to the extent permitted by law, in such Federal court. Each of
the parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall
affect any right that the Administrative Agent or any Lender may otherwise have
to bring any action or proceeding relating to this Agreement against the
Borrower or its properties in the courts of any jurisdiction.
(c) The Borrower hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement in any court referred to in
paragraph (b) of this Section. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to service of process
in the manner provided for notices in Section 9.01. Nothing in this Agreement
will affect the right of any party to this Agreement to serve process in any
other manner permitted by law.
SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 9.11. Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
SECTION 9.12. Confidentiality. Each of the Administrative Agent and the
Lenders expressly agrees to maintain the confidentiality of the Information (as
defined below), except that Information may be disclosed (a) to its and its
Affiliates' directors, officers, employees and agents, including accountants,
legal counsel and other advisors (it being
52
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 required by any regulatory
authority, (c) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process, (d) to any other party to this Agreement,
(e) in connection with the exercise of any remedies hereunder or any suit,
action or proceeding relating to this Agreement or the enforcement of rights
hereunder, (f) subject to an agreement containing provisions substantially the
same as those of this Section, to any assignee of or Participant in, or any
prospective assignee of or Participant in, any of its rights or obligations
under this Agreement, (g) with the consent of the Borrower or (h) to the extent
such Information (i) becomes publicly available other than as a result of a
breach of this Section or (ii) becomes available to the Administrative Agent or
any Lender on a nonconfidential basis from a source other than the Borrower. For
the purposes of this Section, "Information" means all information received from
the Borrower relating to the Borrower or its business, other than any such
information that is available to the Administrative Agent or any Lender on a
nonconfidential basis prior to disclosure by the Borrower; provided that, in the
case of information received from the Borrower 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, provided, however, in no event less than reasonable
care. Notwithstanding anything herein to the contrary, any party to this
Agreement (and any employee, representative, or other agent of any party to this
Agreement) may disclose to any and all persons, without limitation of any kind,
the tax treatment and tax structure of the transactions contemplated by this
Agreement and all materials of any kind (including opinions or other tax
analyses) that are provided to it relating to such tax treatment and tax
structure. However, any such information relating to the tax treatment or tax
structure is required to be kept confidential to the extent necessary to comply
with any applicable federal or state securities laws.
53
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
LIZ CLAIBORNE, INC.
by /s/ ▇▇▇▇▇▇ ▇. Vill
------------------------------------
Name: ▇▇▇▇▇▇ ▇. Vill
Title: Vice President of Treasury
Investor Relations and Treasurer
JPMORGAN CHASE BANK, as Administrative
Agent and a Lender
by /s/ ▇▇▇▇▇▇▇▇ ▇. Vanden Handel
------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. Vanden Handel
Title: Vice President
FLEET NATIONAL BANK, as Syndication Agent
and a Lender
by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
by
------------------------------------
Name:
Title:
by
------------------------------------
Name:
Title:
by
------------------------------------
Name:
Title:
CITIBANK, N.A., as Syndication Agent and a
Lender
by /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
by
------------------------------------
Name:
Title:
by
------------------------------------
Name:
Title:
BANK ONE, NA, as Documentation Agent and a
Lender
by /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Director
BANK OF AMERICA, N.A., as a Lender
by /s/ Chitt Swamidasan
------------------------------------
Name: Chitt Swamidasan
Title: Principal
HSBC BANK USA, as a Lender
by /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Senior Vice President
55
THE HUNTINGTON NATIONAL BANK, as a
Lender
by /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
ING BANK, N.V., as a Lender
by /s/ ▇▇▇▇▇▇▇▇ ▇. Elfrinde-Ryntjes
------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. Elfrinde-Ryntjes
Title: Senior Relationship Manager
by /s/ Frans Th. ▇. ▇▇▇▇
------------------------------------
Name: Frans Th. ▇. ▇▇▇▇
Title: Director
by
------------------------------------
Name:
Title:
by
------------------------------------
Name:
Title:
SUNTRUST BANK, as a Lender
by /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
56
WACHOVIA BANK, N.A., as a Lender
by /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
THE BANK OF NEW YORK, as a Lender
by /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
U.S. BANK NATIONAL ASSOCIATION, as a
Lender
by /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
COMERICA BANK, as a Lender
by /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Assistant Vice President
UNION BANK OF CALIFORNIA, N.A., as a Lender
by /s/ ▇▇▇▇▇ ▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇
Title: Vice President
57
BANK LEUMI USA, as a Lender
by /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Title: First Vice President
by /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
ISRAEL DISCOUNT BANK OF NEW YORK, as a Lender
by /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: First Vice President
by /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Assistant Vice President
58
▇▇▇▇▇ FARGO BANK NATIONAL ASSOCIATION, as a
Lender
by /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
59
FORTIS CAPITAL CORPORATION
by /s/ ▇▇▇▇▇▇▇▇ Delathawco
------------------------------------
Name: ▇▇▇▇▇▇▇▇ Delathawco
Title: Vice President
by /s/ ▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
60
SCHEDULE 2.01
COMMITMENTS
------------------------------------------ -----------------------------------
BANK COMMITMENT
------------------------------------------ -----------------------------------
JPMorgan Chase Bank $42,500,000
------------------------------------------ -----------------------------------
Bank One, NA 35,000,000
------------------------------------------ -----------------------------------
Citibank, N.A.. 35,000,000
------------------------------------------ -----------------------------------
Fleet National Bank 35,000,000
------------------------------------------ -----------------------------------
Bank of America, N.A. 27,500,000
------------------------------------------ -----------------------------------
HSBC Bank USA 22,500,000
------------------------------------------ -----------------------------------
The Huntington National Bank 22,500,000
------------------------------------------ -----------------------------------
ING Bank N.V. 22,500,000
------------------------------------------ -----------------------------------
SunTrust Bank 22,500,000
------------------------------------------ -----------------------------------
Wachovia Bank, N.A. 22,500,000
------------------------------------------ -----------------------------------
The Bank of New York 17,500,000
------------------------------------------ -----------------------------------
U.S. Bank National Association 15,000,000
------------------------------------------ -----------------------------------
Comerica Bank 12,500,000
------------------------------------------ -----------------------------------
Union Bank of California, N.A. 12,500,000
------------------------------------------ -----------------------------------
Bank Leumi USA 7,500,000
------------------------------------------ -----------------------------------
Fortis Capital Corporation 7,500,000
------------------------------------------ -----------------------------------
Israel Discount Bank of New York 7,500,000
------------------------------------------ -----------------------------------
▇▇▇▇▇ Fargo Bank N.A. 7,500,000
------------------------------------------ -----------------------------------
Total: $375,000,000
------------------------------------------ -----------------------------------
SCHEDULE 3.06
DISCLOSED MATTERS
See Part II, Item 1 - "Legal Proceedings" contained in Borrower's Quarterly
Report on Form 10-Q for the period ended July 5, 2003.
SCHEDULE 3.13
SUBSIDIARIES
Name Jurisdiction of Incorporation
---- -----------------------------
▇▇▇▇ Acquisition Corp* Delaware
DB Newco, Corp.* Delaware
Juicy Couture, Inc.* California
L.C. Augusta, Inc.* Delaware
L.C. Caribbean Holdings, Inc.* Delaware
L.C. Dyeing, Inc.* Delaware
LC Libra, LLC* Delaware
L.C. Licensing, Inc.* Delaware
L.C. Service Company, Inc.* Delaware
L.C. Special Markets, Inc.* Delaware
L.C.K.C., LLC* Delaware
LC/QL Investments, Inc.* Delaware
LCI Acquisition U.S., Inc.* Delaware
LCI Holdings, Inc.* Delaware
LCI Investments, Inc.* Delaware
LCI Laundry, Inc.* Delaware
Liz Claiborne Accessories, Inc.* Delaware
Liz Claiborne Accessories-Sales, Inc.* Delaware
Liz Claiborne Cosmetics, Inc.* Delaware
Liz Claiborne Export, Inc.* Delaware
Liz Claiborne Foreign Holdings, Inc.* Delaware
Liz Claiborne Japan, Inc.* Delaware
Liz Claiborne Puerto Rico, Inc.* Delaware
Liz Claiborne Sales, Inc.* Delaware
Liz Claiborne Shoes, Inc.* Delaware
Liz Claiborne-Texas, Inc.* Delaware
Lucky Brand Dungarees, Inc. Delaware
Lucky Brand Dungarees Stores, Inc. Delaware
Monet International, Inc.* Delaware
Monet Puerto Rico, Inc.* Delaware
Segrets, Inc. Delaware
Segrets Stores, Inc. Delaware
* Indicates a Subsidiary Guarantor
SCHEDULE 6.02
EXISTING INDEBTEDNESS
Long Term Loans
---------------
5 Year 6.625% Notes 350 Million Euros @1.16 $406,000,000
One Year Revolving Credit Agreement 375/750 $0
Three Year Revolving Credit Agreement 375/750
75 Million Multi-Currency Tranche - 24,000,000 Euro @1.16 $27,840,000
Commercial Paper Outstanding $0
Pennsylvania Industrial Development Authority Loan $ 901,262
Pennsylvania Industrial Development Authority Loan $ 179,265
-------------
$434,920,527
Outstanding
Mexx Credit Lines Credit Lines as of 10/3/03
----------------- ------------ -------------
ING Bank euro 14,900,000 400,000 $464,000
HSBC UK euro 15,000,000 10,100,000 $11,716,000
Fortis Bank euro 13,900,000 0 $0
Citibank euro 7,500,000 2,000,000 $2,320,000
Artesia Bank euro 15,000,000 3,400,000 $3,944,000
ABN Amro euro 200,000 0 0
66,500,000 15,900,000 $18,444,000
Liz Claiborne Canada
--------------------
HSBC - Canada 5,000,000 CAD 0 0
L/C Credit Lines $ Credit Lines
---------------- --------------
Wachovia Bank $100,000,000 $82,275,621
Fleet National Bank $125,000,000 $85,213,161
Huntington National Bank $100,000,000 $49,606,339
Bank One $60,000,000 $31,462,164
HSBC - Mexx Group HK$ 77,500,000 $10,000,000 $7,475,000
Bank of America - Mexx Group HK$ 58,000,000 $7,500,000 $5,290,000
Bank Artesia - Mexx Group euro 6,000,000 $6,900,000 $6,210,000
$409,400,000 $267,532,285
L/C Standby Credit Lines
------------------------
HSBC $7,680,960
HSBC - U.K. $1,335,000
Other Mexx Group euro 5,000,000 $5,800,000
-------------
$14,815,960
Synthetic Lease
---------------
Sun Trust Bank - Ohio/RI Distribution Centers $63,724,222
Conditional Purchase Price Payments
-----------------------------------
Mexx Group - (Current Estimate) $150,000,000
Mexx Canada - (Current Estimate) $29,000,000
Lucky Brands - (Minority Interest-Current Estimate) $8,285,000
Segrets - (Minority Interest-Current Estimate) $654,000
-------------
$187,939,000
SCHEDULE 6.03
EXISTING LIENS
None.
SCHEDULE 6.05(i)
EXISTING INVESTMENTS
10/6/2003
Closing Price
-------------
Liz Claiborne, Inc.
-------------------
Vanguard 500 Index Fund Admiral Shares
64,768.36 shares $95.56 $ 6,189,264.48
▇▇▇▇▇▇▇ ▇▇▇▇ Productions Class A Stock
1,500,000 shares $28.34 $42,510,000.00
--------------
$48,699,264.48
Tax Exempt Municipal Funds
Federated Fund # 852 $28,900,000.00
Evergreen Fund # 496 $17,500,000.00
--------------
$46,400,000.00
Liz Claiborne International Ltd.
--------------------------------
Tax Exempt Municipal Fund
Federated Fund # 852 $20,150,000.00
$20,150,000.00
--------------
$95,099,264.48
SCHEDULE 6.05(ii)
LIZ CLAIBORNE, INC. INVESTMENT POLICY
Revised: September 2003
================================================================================
OBJECTIVE
1) To establish the policies and guidelines governing the investment of idle
or surplus cash generated by the company
2) To define the minimum acceptable credit and maximum market exposure of an
investment
3) To identify those individuals authorized to transact business on behalf of,
and for the benefit of the company
SCOPE
Unless specifically limited in the text, these policies and guidelines are
applicable to Liz Claiborne, Inc. and all of its subsidiaries. All currency
representations within this policy are in U.S. Dollars. Appendix B outlines the
investment policy for the Mexx subsidiary.
POLICY
To maximize the utilization of idle or surplus cash by investing in accordance
with principles of sound investment management and the guidelines set forth in
this Investment Policy. The criteria for the selection of cash investments will
be as follows:
First: Preservation of Capital
Second: Liquidity/Marketability
Third: Maximization of after-tax yield
INDIVIDUALS AUTHORIZED TO TRADE
1) CFO
2) VP Investor Relations and Treasury, Treasurer
3) VP Cash and Risk Management
4) Portfolio/Risk Manager
5) Cash Manager*
* In the absence of the Cash Manager, the Senior Treasury Analyst may invest
daily surplus cash in any of the approved Institutional Money Market Funds.
APPROVED INVESTMENT VEHICLES AND REQUIREMENTS
See Appendix A, "Investment Guidelines"
TIME LIMITATIONS
One year, except for:
a) Up to three years for Government Securities
b) Up to 15 months for Federal Agency Securities
c) Up to four years for Municipal Bonds providing the total average
maturity of all tax exempt bonds does not exceed 2 1/2 years.
AUTHORIZED SECURITIES FIRMS
Bank of New York
Comerica Securities
▇▇▇▇▇▇▇ ▇▇▇▇▇
HSBC
JPMorgan ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇*
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇*
Wachovia
* Custody accounts
POLICY DEVIATION
Any deviation from these guidelines must be approved, in writing, by two
members of the Investment Committee. If a rating is lowered, approval to
hold the security must also be obtained, in writing, from two members of
the Investment Committee.
APPENDIX A
LIZ CLAIBORNE, INC.
INVESTMENT GUIDELINES
Revised: September 2003
--------------------------- ----------- ------------ ------------------------------------------ ------------------------------------
LIMIT PER MAXIMUM %
SECURITY ISSUE OF REQUIRED MINIMUM RATINGS
(000's) PORTFOLIO S&P ▇▇▇▇▇'▇ ADDITIONAL REQUIREMENTS
--------------------------- ----------- ------------ --------- -------------------------------- ------------------------------------
TAXABLE Credit ratings may rely on credit support
--------------------------- ----------- ------------ ------------- ------ --------------------- ------------------------------------
Bankers Acceptances 10,000 25% A-1 AND P-1 - None
--------------------------- ----------- ------------ ------------- ------ --------------------- ------------------------------------
Commercial Paper 25,000 75% A-1 AND P-1 - Must be Direct Corporate
Obligation or Corporate Parent
Guaranty
--------------------------- ----------- ------------ ------------- ------ --------------------- ------------------------------------
Corporate Bonds and Notes 25,000 75% AA- OR Aa3 - None
--------------------------- ----------- ------------ ------------- ------ --------------------- ------------------------------------
Domestic Bank CD's 10,000 25% A-1 AND P-1 - None
--------------------------- ----------- ------------ ------------- ------ --------------------- ------------------------------------
Eurocurrency Deposits 10,000 100% A-1 AND P-1 - None
--------------------------- ----------- ------------ ------------- ------ --------------------- ------------------------------------
Federal Agency Securities None 100% N/A N/A - None
--------------------------- ----------- ------------ ------------- ------ --------------------- ------------------------------------
Foreign Bank CD's/Time 10,000 100% A-1 AND P-1 - None
Deposits
--------------------------- ----------- ------------ ------------- ------ --------------------- ------------------------------------
Institutional Money Market 50,000 100% N/A N/A - Fund Investment
Funds objectives/parameters must be
consistent with this policy
- Fund may not deviate from a $1
per share price
--------------------------- ----------- ------------ ------------- ------ --------------------- ------------------------------------
Repurchase Agreements 25,000 100% N/A N/A -Must be collateralized by any of
the following:
1)Commercial mortgages
2)Direct US government securities
3)Agencies of the US Government
4) AAA rated whole loan
collateralized mortgage
obligations
-Collateralization at no less
than 102%
-7 day maximum term
--------------------------- ----------- ------------ ------------- ------ --------------------- ------------------------------------
US Treasury Obligations None 100% N/A N/A - None
--------------------------- ----------- ------------ ------------- ------ --------------------- ------------------------------------
Taxable Debt 25,000 50% AAA OR Aaa - No more than 20% of any one issue
(7/28 day Auction Rate
Securities)
--------------------------- ----------- ------------ ------------- ------ --------------------- ------------------------------------
TAX EXEMPT/ADVANTAGED
--------------------------- ----------- ------------ ------------- ------ --------------------- ------------------------------------
Institutional Money Market 50,000 100% N/A N/A - Fund Investment
Funds objective/parameters must be
consistent with this policy
- Fund may not deviate from a $1
per share price
--------------------------- ----------- ------------ ------------- ------ --------------------- ------------------------------------
Municipal Bonds/Notes - Issue must be at least $25
- Short term 10,000 100% SP-1 or ▇-▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇ or P-1 million
- Long term 20,000 100% AAA OR Aaa
--------------------------- ----------- ------------ ------------- ------ --------------------- ------------------------------------
Daily/Weekly Municipal Put 15,000 50% SP-1 or ▇-▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇ or P-1 - Issue must be at least $25
Bonds million
--------------------------- ----------- ------------ ------------- ------ --------------------- ------------------------------------
Municipal Preferreds (7/28 25,000 100% AAA AND Aaa - No more than 20% of any one issue
day Auction Rate
Securities)
--------------------------- ----------- ------------ ------------- ------ --------------------- ------------------------------------
Money Market Preferreds 25,000 50% AA- OR Aa3 - No more than 20% of any one issue
(49 day Auction Rate
Securities)
--------------------------- ----------- ------------ ------------- ------ --------------------- ------------------------------------
Tax Exempt Commercial Paper 15,000 50% AA- OR Aa3 - None
--------------------------- ----------- ------------ ------------- ------ --------------------- ------------------------------------
Tax Exempt Debt 15,000 50% AAA OR Aaa - No more than 20% of any one issue
(35 day Auction Rate
Securities)
--------------------------- ----------- ------------ ------------- ------ --------------------- ------------------------------------
Approved:
______________________________ ______________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
______________________________ ______________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
APPENDIX B
MEXX INVESTMENT POLICY
Introduction
To manage surplus cash in a sound and efficient way to the benefit of the firm
and its shareholder, particular policies and guidelines have been developed.
Responsibility
The CFO of Liz Claiborne, Inc. is charged with the oversight of the Mexx
Investment Policy. He decides on the company's strategy and reviews and controls
the treasury performance, risk and compliance with the policy. Further the CFO
of Liz Claiborne, Inc. has the authority to delegate activities concerning
investment transactions to the CFO, Group Treasurer and Assistant Group
Treasurer of Mexx.
The GT develops procedures for control of investment activities and is
responsible for the implementation of and compliance with the agreed policy and
executes investment transactions within his authority.
Treasury Steering Committee
On a regular basis the Treasury Steering Committee ("TSC") meets to discuss
investment opportunities and the way to have the company's idle cash managed.
Next to the CFO and GT the actual members of this advisory body are the CEO of
Mexx Group and the Treasurer of Liz Claiborne Inc.
Policy
This is the ranking of criteria for the selection of cash investments:
1. Preservation of Capital
2. Liquidity and Marketability
3. Maximization of after-tax-yield
Authority
The CFO, GT and Assistant Group Treasurer are authorized to invest surplus cash
in accordance with this policy with any of the authorized institutions shown in
this document. The CFO and GT may at any time remove an institution from the
list of approved counterparts.
Approved Investment Vehicles
--------------- --------- --------- -------------------------- -----------------
Type of Limit per Max % of Required Minimum Rating Additional
Investment Issue Portfolio Requirements
(euro
000's) S&P ▇▇▇▇▇'▇
--------------- --------- --------- -------------------------- -----------------
Certificates of 10.000 75% A-1 or P-1
Deposit
--------------- --------- --------- ------- ------- ---------- -----------------
Commercial 10.000 75% A-1 or P-1 Must be direct
Paper corporate
obligation or
corporate
parent
guarantee must
be authorized
counterpart
--------------- --------- --------- ------- ------- ---------- -----------------
Bank Deposits 10.000 100% A-1 or P-1
--------------- --------- --------- ------- ------- ---------- -----------------
Time Limitations
Six months for all approved investment vehicles.
Approved currencies
All euro currencies, US dollar, HK dollar, Pound Sterling, Swedish Kroner,
Norwegian Kroner, Danish Kroner
Reporting
The GT periodically - but at least monthly - reports to the CFO of Mexx with a
copy to the TSC and to Liz Claiborne Corporate Treasury:
o 12 months rolling cash forecast
o FYE finance costs
o transaction summary report
Authorisation
The following individuals at Mexx, are authorized to give investing instructions
to approved institutions:
euro
Title Limit
Assistant Group Treasurer 10,000,000
Group Treasurer 15,000,000
Chief Financial Officer 25,000,000
Authorised Counterparts
The following institutions are authorized to deal with:
Bank Tel. Name e-mail
Fortis Bank 020-▇▇▇▇▇▇▇ Jako Groeneveld ▇▇▇▇.▇▇▇▇▇▇▇▇▇▇@▇▇.▇▇▇▇▇▇▇▇▇▇.▇▇▇
020-5357184 ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.▇▇▇▇▇▇▇▇▇@▇▇.▇▇▇▇▇▇▇▇▇▇.▇▇▇
Citibank 020-▇▇▇▇▇▇▇ Jan-▇▇▇▇ ▇▇▇▇
HSBC ▇▇▇ (▇▇) ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇.▇.▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇
ING Bank 020-▇▇▇▇▇▇▇ ▇▇▇ Albregt ▇▇▇.▇▇▇▇▇▇▇@▇▇▇▇.▇▇▇.▇▇
Commerzbank 020-▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇.▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇.▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
Policy Deviation
Any deviation from these guidelines must be approved by the CFO of Liz
Claiborne, Inc.
Latest revision: September 2003
Approved by:
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