Exhibit 10.1
CREDIT AGREEMENT
Dated as of January 28, 1999
among
BARNEY'S, INC.
BARNEYS AMERICA, INC.
PFP FASHIONS INC.
BARNEYS (CA) LEASE CORP.
BARNEYS (NY) LEASE CORP.
XXXXX ALL-AMERICAN SPORTSWEAR CORP.
BNY LICENSING CORP.
BARNEYS AMERICA (CHICAGO) LEASE CORP.,
as Borrowers
THE INSTITUTIONS FROM TIME TO TIME
PARTY HERETO AS LENDERS
THE INSTITUTIONS FROM TIME TO TIME
PARTY HERETO AS ISSUING BANKS
CITICORP USA, INC.,
as Administrative Agent
and
GENERAL ELECTRIC CAPITAL CORPORATION,
as Documentation Agent
CREDIT AGREEMENT
This Credit Agreement dated as of January 28, 1999 (as
amended, supplemented or otherwise modified from time to time, this "Agreement")
is entered into among BARNEY'S, INC., a New York corporation ("Barneys"),
BARNEYS AMERICA, INC., a Delaware corporation ("BAI"), PFP FASHIONS INC., a New
York corporation ("PFP"), BARNEYS (CA) LEASE CORP., a Delaware corporation ("CA
Lease"), BARNEYS (NY) LEASE CORP., a Delaware corporation ("NY Lease"), XXXXX
ALL-AMERICAN SPORTSWEAR CORP., a New York corporation ("Xxxxx"), BNY LICENSING
CORP., a Delaware corporation ("BNY"), and BARNEYS AMERICA (CHICAGO) LEASE
CORP., a Delaware corporation ("Chicago Lease;" and together with Barney's, BAI,
PFP, CA Lease, NY Lease, Xxxxx and BNY collectively the "Borrowers" and
individually a "Borrower"), the institutions from time to time party hereto as
lenders, whether by execution of this Agreement or an Assignment and Acceptance
(the "Lenders"), the institutions from time to time party hereto as issuing
banks, whether by execution of this Agreement or an Assignment and Acceptance
(the "Issuing Banks"), CITICORP USA, INC. ("CUSA"), in its capacity as agent for
the Lenders and the Issuing Banks (with its successors in such capacity, the
"Administrative Agent"), and GENERAL ELECTRIC CAPITAL CORPORATION, in its
capacity as documentation agent (in such capacity, the "Documentation Agent").
ARTICLE I
DEFINITIONS
1.01. Certain Defined Terms. In addition to the terms defined
above, the following terms used herein shall have the following meanings,
applicable both to the singular and the plural forms of the terms defined:
"Accommodation Obligation" means any Contractual Obligation,
contingent or otherwise, of one Person with respect to any Indebtedness,
obligation or liability of another, if the primary purpose or intent thereof by
the Person incurring the Accommodation Obligation is to provide assurance to the
obligee of such Indebtedness, obligation or liability of another that such
Indebtedness, obligation or liability shall be paid or discharged, or that any
agreements relating thereto shall be complied with, or that the holders thereof
shall be protected (in whole or in part) against loss in respect thereof
including, without limitation, direct and indirect guarantees, endorsements
(except for collection or deposit in the ordinary course of business), notes
co-made or discounted, recourse agreements, take-or-pay agreements, keep-well
agreements, agreements to purchase security therefor (other than such agreements
to purchase in the ordinary course of business) or to provide funds for the
payment or discharge thereof, agreements to maintain solvency, assets, level of
income, or other financial condition, and
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agreements to make payment other than for value received.
"Administrative Agent" has the meaning ascribed to such term
in the preamble hereto and shall include any successor Administrative Agent
appointed pursuant to Section 12.07.
"Administrative Agent's Account" means the account of the
Administrative Agent bearing account number 00000000 (re: Barney's, Inc.)
maintained at the office of Citibank at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, or such other deposit account as the Administrative Agent may from time
to time specify in writing to the Borrowers and the Lenders.
"Affiliate" of any specified Person means any other Person (i)
which directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, such specified Person, (ii)
which beneficially owns or holds 10% or more of any class of the Voting Stock or
other equity interest of such specified Person or (iii) of which 10% or more of
the Voting Stock or other equity interest is beneficially owned or held by such
specified Person or a Subsidiary of such specified Person; provided, however, if
Barneys Japan would otherwise become an Affiliate of Holdings or any member of
the Barneys Group as a result of the exercise of the Barneys Japan Option,
Barneys Japan will not be deemed to be such an Affiliate hereunder as a result
of such exercise. For the purposes of this definition, "control" when used with
respect to any specified Person means the power to direct the management and
policies of such Person directly or indirectly, whether through the ownership of
Voting Stock, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Agents" means the collective reference to the Administrative
Agent and the Documentation Agent.
"Applicable Commercial Letter of Credit Percentage" means a
rate equal to 1.25% per annum.
"Applicable Fixed Rate Margin" means initially a rate equal to
2.25% per annum until the last day of the fourth fiscal quarter of 1999.
Thereafter, such rate will reset quarterly on the first day of each fiscal
quarter, commencing with the first fiscal quarter of 2000, based upon the
Leverage Ratio for the immediately preceding fiscal quarter, calculated as of
the last day of such immediately preceding fiscal quarter for the twelve-month
period then ended, as set forth below:
If the Leverage Applicable Fixed
Ratio is: Rate Margin
--------------- ----------------
Greater than 5.00 2.500%
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Greater than 4.00 but less
than or equal to 5.00 2.350%
Greater than 3.00 but less
than or equal to 4.00 2.250%.
Greater than 2.00 but less
than or equal to 3.00 2.125%
Less than or equal to 2.00 2.000%
"Applicable Floating Rate Margin" means initially a rate equal
to 1.25% per annum until the last day of the fourth fiscal quarter of 1999.
Thereafter, such rate will reset quarterly on the first day of each fiscal
quarter, commencing with the first fiscal quarter of 2000, based upon the
Leverage Ratio for the immediately preceding fiscal quarter, calculated as of
the last day of such immediately preceding fiscal quarter for the twelve-month
period then ended, as set forth below:
If the Leverage Applicable Floating
Ratio is: Rate Margin
--------------- -------------------
Greater than 5.00 1.500%
Greater than 4.00 but less
than or equal to 5.00 1.350%
Greater than 3.00 but less
than or equal to 4.00 1.250%.
Greater than 2.00 but less
than or equal to 3.00 1.125%
Less than or equal to 2.00 1.000%
"Applicable Standby Letter of Credit Percentage" means
initially a rate equal to 2.00% per annum until the last day of the fourth
fiscal quarter of 1999. Thereafter, such rate will reset quarterly on the first
day of each fiscal quarter, commencing with the first fiscal quarter of 2000,
based upon the Leverage Ratio for the immediately preceding fiscal quarter,
calculated as of the last day of such immediately preceding fiscal quarter for
the twelve-month period then ended, as set forth below:
If the Leverage Applicable Standby
Ratio is: Letter of Credit Percentage
--------------- ---------------------------
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Greater than 5.00 2.25%
Greater than 4.00 but less
than or equal to 5.00 2.10%
Greater than 3.00 but less
than or equal to 4.00 2.00%
Greater than 2.00 but less
than or equal to 3.00 1.875%
Less than or equal to 2.00 1.75%
"Applicable Lending Office" means, with respect to a
particular Lender, its Fixed Rate Lending Office in respect of provisions
relating to Fixed Rate Loans and its Domestic Lending Office in respect of
provisions relating to Floating Rate Loans.
"Applicable Usance Letter of Credit Percentage" means a rate
equal to 1.75% per annum.
"Assignment and Acceptance" means an Assignment and Acceptance
in substantially the form of Exhibit A attached hereto and made a part hereof
(with blanks appropriately completed) delivered to the Administrative Agent in
connection with an assignment of a Lender's interest hereunder in accordance
with the provisions of Section 13.01.
"Availability" means, at any particular time, the amount by
which the Maximum Revolving Credit Amount exceeds the Revolving Credit
Obligations outstanding at such time.
"BAI" has the meaning ascribed to such term in the preamble to
this Agreement.
"Bankruptcy Code" means Title 11 of the United States Code (11
U.S.C.ss.ss.101 et seq.), as amended from time to time, and any successor
statute.
"Barneys" has the meaning ascribed to such term in the
preamble to this Agreement.
"Barneys Group" means Barneys and each of its Subsidiaries.
"Barneys Japan" means Barneys Japan Company Limited, a
Japanese corporation.
"Barneys Japan Option" means the option granted to Barneys by
Isetan to purchase up to 10% of each class of Capital Stock of Barneys Japan
pursuant to the Option to
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Purchase Capital Stock of Barneys Japan Company Limited, dated as of the date
hereof.
"Xxxxx" has the meaning ascribed to such term in the preamble
to this Agreement.
"Base Rate" means, for any period, a fluctuating interest rate
per annum as shall be in effect from time to time which rate per annum shall at
all times be equal to the highest of:
(a) the rate of interest announced publicly by
Citibank in New York, New York, from time to time (but at
least annually), as Citibank's base rate;
(b) the sum (adjusted to the nearest 1/4 of one
percent or, if there is no nearest 1/4 of one percent, to the
next higher 1/4 of one percent) of (i) 1/2 of one percent per
annum, plus (ii) the rate per annum obtained by dividing (A)
the latest three-week moving average of secondary market
morning offering rates in the United States for three-month
certificates of deposit of major United States money market
banks, such three-week moving average being determined weekly
on each Monday (or, if any such date is not a Business Day, on
the next succeeding Business Day) for the three-week period
ending on the previous Friday by Citibank on the basis of such
rates reported by certificate of deposit dealers to and
published by the Federal Reserve Bank of New York or, if such
publication shall be suspended or terminated, on the basis of
quotations for such rates received by Citibank from three New
York certificate of deposit dealers of recognized standing
selected by Citibank, by (B) a percentage equal to 100% minus
the average of the daily percentages specified during such
three-week period by the Federal Reserve Board (or any
successor) for determining the maximum reserve requirement
(including, but not limited to, any emergency, supplemental or
other marginal reserve requirement) for Citibank in respect of
liabilities consisting of or including (among other
liabilities) three-month U.S. dollar nonpersonal time deposits
in the United States, plus (iii) the average during such
three-week period of the annual assessment rates estimated by
Citibank for determining the then current annual assessment
payable by Citibank to the Federal Deposit Insurance
Corporation (or any successor) for insuring U.S. dollar
deposits of Citibank in the United States; and
(c) for any day, 1/2 of one percent per annum above
the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published for such day
(or, if such day is not a Business Day, for the next preceding
Business Day) by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day that is a Business
Day, the average of the quotations for such day on such
transactions received by Citibank from three Federal funds
brokers of recognized standing selected by it.
"Benefit Plan" means a defined benefit plan as defined in
Section 3(35) of ERISA (other than a Multiemployer Plan) in respect of which any
Borrower or any ERISA Affiliate is, or within the immediately preceding three
(3) years was, an "employer" as defined in Section
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3(5) of ERISA.
"Blocked Account Agreement" means a blocked account agreement
among each Blocked Account Bank, the Borrowers and the Administrative Agent, in
form and substance satisfactory to the Administrative Agent, as such agreement
may be amended, supplemented or otherwise modified from time to time.
"Blocked Account Bank" means each bank identified as such on
Schedule 3.05.
"Blocked Accounts" means, collectively, the blocked accounts
established at the Blocked Account Banks; and "Blocked Account" means any one of
the Blocked Accounts.
"BNY" has the meaning ascribed to such term in the preamble to
this Agreement.
"Board of Directors" means the Board of Directors of Holdings.
"Borrowers" and "Borrower" have the respective meanings set
forth in the preamble to this Agreement.
"Borrowers' Account" means the account of the Borrowers
bearing account number 00000000 (re: Barneys Group) maintained at the office of
Citibank at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
"Borrowing" means a borrowing consisting of Loans of the same
type made on the same day.
"Borrowing Base" means, as of any date of determination, an
amount equal to the sum of (i) up to ninety percent (90%) of the face amount of
Eligible Receivables less such reserves as the Administrative Agent, in its
reasonable credit judgment, deems appropriate, plus (ii) up to thirty-seven
percent (37%) of Eligible Retail Inventory less such reserves as the
Administrative Agent, in its reasonable credit judgment, deems appropriate, plus
(iii) up to thirty-seven percent (37%) of the Inventory being purchased by a
Borrower in the ordinary course of its business for which a Commercial Letter of
Credit is outstanding and has not been drawn upon less such reserves as the
Administrative Agent, in its reasonable credit judgment, deems appropriate, plus
(iv) up to thirty-seven percent (37%) of the Inventory being purchased by a
Borrower in the ordinary course of its business for which a Usance Letter of
Credit is outstanding and has not been drawn upon less such reserves as the
Administrative Agent, in its reasonable credit judgment, deems appropriate, plus
(v) up to twenty percent (20%) of Eligible Aged Inventory less such reserves as
the Administrative Agent, in its reasonable credit judgment, deems appropriate,
plus (vi) the Trademark Available Amount less a reserve in the amount of
$1,318,000 during the period from the date hereof until the date the Borrowers
deliver their financial statements pursuant to Section 7.01(a) showing
Consolidated EBITDA (without giving effect to the Pension Liability Payment) for
the twelve month period ending January 30, 1999,
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plus (vii) 100% of the funds constituting Net Cash Proceeds in the Cash
Collateral Account, plus (viii) 100% of the market value of the Treasury Notes
credited to the Control Account in an amount not to exceed $500,000 but only
after appropriate documentation and opinions, in form and substance reasonably
satisfactory to the Administrative Agent, have been delivered to the
Administrative Agent relating to the Administrative Agent's first priority Lien
in such Treasury Notes less such reserves as the Administrative Agent, in its
reasonable credit judgment, deems appropriate, minus (ix) the Rent Reserve, if
any, in effect at such time, minus (x) the amount of Pre-Settlement Exposure at
such time. The Administrative Agent, based on such reasonable credit and
collateral considerations as the Administrative Agent may deem appropriate, may
change from time to time the advance rates in clauses (i), (ii), (iii) and (iv)
above, provided that such advance rates do not at any time exceed the respective
percentages set forth above. The Administrative Agent agrees to give the
Borrowers prior written notice of any such change.
"Borrowing Base Certificate" means a certificate in
substantially the form of Exhibit B attached hereto and made a part hereof.
"Business Day" means a day, in the applicable local time,
which is not a Saturday or Sunday or a legal holiday and on which banks are not
required or permitted by law or other governmental action to close (i) in New
York, New York or (ii) in the case of Fixed Rate Loans, in London, England or
(iii) in the case of Letter of Credit transactions for a particular Issuing
Bank, in the place where its office for issuance or administration of the
pertinent Letter of Credit is located.
"CA Lease" has the meaning ascribed to such term in the
preamble to this Agreement.
"Capital Expenditures" means, for any period, the aggregate of
all expenditures (whether payable in cash or other Property or accrued as a
liability (but without duplication)) during such period that, in conformity with
GAAP, are required to be included in or reflected by the fixed asset accounts of
any member of the Barneys Group as reflected in any of their respective balance
sheets; provided, however, (i) Capital Expenditures shall include that portion
of Capital Leases which is incurred and capitalized during such period; (ii)
Capital Expenditures shall include the purchase price paid to exercise the
Barneys Japan Option if the Fixed Charge Coverage Ratio set forth in Section
9.04(v) is not met at the time of such exercise; and (iii) Capital Expenditures
shall exclude, whether or not such a designation would be in conformity with
GAAP, expenditures made in connection with the replacement or restoration of
Property, to the extent reimbursed or financed from insurance or condemnation
proceeds and permitted pursuant to Section 8.07.
"Capital Lease", as applied to any Person, means any lease of
any property (whether real, personal or mixed) by that Person as lessee which,
in conformity with GAAP, is accounted for as a capital lease on the balance
sheet of that Person.
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"Capital Stock", with respect to any Person, means any capital
stock of such Person, regardless of class or designation, and all warrants,
options, purchase rights, conversion or exchange rights, voting rights, calls or
claims of any character with respect thereto.
"Cash Collateral" means cash or Cash Equivalents held in the
Cash Collateral Account as security for the Obligations.
"Cash Collateral Account" means the account of the Borrowers
bearing account number 00000000 at Citibank, N.A., 000 Xxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx, under the sole dominion and control of the Administrative Agent.
"Cash Collateral Account Agreement" means the Cash Collateral
Pledge and Assignment Agreement dated the date hereof between the Borrowers and
the Administrative Agent regarding the Cash Collateral Account, as such Cash
Collateral Pledge and Assignment Agreement may be amended, supplemented or
otherwise modified from time to time.
"Cash Equivalents" means (i) marketable direct obligations
issued or unconditionally guaranteed by the United States government and backed
by the full faith and credit of the United States government; (ii) domestic and
Eurodollar certificates of deposit and time deposits, bankers' acceptances and
floating rate certificates of deposit issued by any commercial bank organized
under the laws of the United States, any state thereof, the District of
Columbia, any foreign bank, or its branches or agencies (reasonably protected
against currency fluctuations), which, at the time of acquisition, are rated A-1
(or better) by Standard & Poor's Corporation or P-1 (or better) by Xxxxx'x
Investors Service, Inc.; (iii) commercial paper of United States and foreign
banks and bank holding companies and their subsidiaries and United States and
foreign finance, commercial industrial or utility companies which, at the time
of acquisition, are rated A-1 (or better) by Standard & Poor's Corporation or
P-1 (or better) by Xxxxx'x Investors Service, Inc.; (iv) marketable direct
obligations of any State of the United States of America or any political
subdivision of any such State given on the date of such investment the highest
credit rating by Xxxxx'x Investors Service, Inc. and Standard & Poor's
Corporation; and (v) reverse purchase agreements covering obligations of the
type specified in clause (i); provided, that the maturities of any such Cash
Equivalents referred to in clauses (i) through (v) shall not exceed three
hundred sixty (360) days.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. xx.xx. 9601 et seq., any
amendments thereto, any successor statutes, and any regulations or legally
enforceable guidance promulgated thereunder.
"CERCLIS" has the meaning ascribed to such term in Section
6.01(o).
"Change of Control" means the occurrence of one or more of the
following events:
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(a) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that
any "person" (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act), other than one or more Permitted Holders, is
or becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5
under the Securities Exchange Act), directly or indirectly, of more
than 25% of the total voting power of the Voting Stock of Holdings; and
(b) the Permitted Holders "beneficially own" (as defined in
Rules 13d-3 and 13d- 5 under the Securities Exchange Act), directly or
indirectly, in the aggregate less than 40% of the total voting power of
the Voting Stock of Holdings for any period of thirty (30) days or
more.
"Citibank" means Citibank, N.A., a national banking
association, and its successors.
"Claim" means any written claim or demand, by any Person, of
whatsoever kind or nature for any alleged Liabilities and Costs, whether based
in contract, tort, implied or express warranty, strict liability, criminal or
civil statute, Permit, ordinance or regulation, common law or otherwise.
"Closing Date" means the date on which the conditions set
forth in Sections 5.01 and 5.02 have been satisfied or waived.
"Collateral" means all Property and interests in Property now
owned or hereafter acquired by any Borrower upon which a Lien is granted under
any of the Loan Documents.
"Commercial Letter of Credit" means any documentary letter of
credit issued by an Issuing Bank pursuant to Section 2.04 for the account of the
Borrowers, which is drawable upon presentation of documents evidencing the sale
or shipment of goods purchased by any Borrower in the ordinary course of its
business.
"Commitment" means, with respect to any Lender, the obligation
of such Lender to make Revolving Loans and to participate in Letters of Credit,
and which shall not exceed the principal amount set forth under such Lender's
name on the signature pages hereof or the signature page of the Assignment and
Acceptance by which it became a Lender, as modified from time to time pursuant
to the terms hereof or to give effect to any applicable Assignment and
Acceptance, and "Commitments" means the aggregate principal amount of the
Commitments of all the Lenders, the maximum amount of which shall not exceed a
principal amount of $120,000,000, as reduced from time to time pursuant to the
terms hereof.
"Commitment Termination Date" means the earlier to occur of
(i) the date of termination of the Commitments pursuant to the terms hereof and
(ii) January 28, 2003.
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"Compliance Certificate" has the meaning ascribed to such term
in Section 7.01(c).
"Concentration Account" means an account at Citibank, N.A. in
New York, New York, or such other account as is acceptable to the Administrative
Agent as a concentration account.
"Consolidated Interest Expense" means, for any period on a
consolidated basis for any Person and its Subsidiaries, as determined in
conformity with GAAP, total interest expense, whether paid or accrued (without
duplication), including the interest component of Capital Lease obligations.
"Consolidated EBITDA" means, for any twelve-month period on a
consolidated basis for any Person and its Subsidiaries, (i) the sum of (A)
Consolidated Net Income, (B) depreciation and amortization expense, (C)
Consolidated Interest Expense, (D) federal, state, local and foreign income
taxes and (E) other non-cash charges, minus (ii) extraordinary gains not already
excluded from the determination of Consolidated Net Income.
"Consolidated Net Income" means, for any period on a
consolidated basis for any Person and its Subsidiaries, the net earnings (or
loss) after taxes for such period taken as a single accounting period determined
in conformity with GAAP.
"Consolidated Net Worth" means, on a consolidated basis for
any Person and its Subsidiaries, (i) total consolidated assets of such Person
minus (ii) total consolidated liabilities of such Person. Assets and liabilities
shall be determined in accordance with GAAP, except that investments in and
moneys due from Affiliates of Barneys shall be excluded from total consolidated
assets.
"Constituent Document" means, with respect to any entity, (i)
the articles/certificate of incorporation (or the equivalent organizational
documents) of such entity, (ii) the by-laws (or the equivalent governing
documents) of such entity and (iii) any document setting forth the designation,
amount and/or relative rights, limitations and preferences of any class or
series of such entity's Capital Stock.
"Contaminant" means any pollutant, hazardous substance,
radioactive substance, toxic substance, hazardous waste, radioactive waste,
special waste, petroleum or petroleum-derived substance or waste, asbestos,
polychlorinated biphenyls (PCBs), or any hazardous or toxic constituent thereof
and includes, but is not limited to, these terms as defined in Environmental,
Health or Safety Requirements of Law.
"Contractual Obligation" means, as applied to any Person, any
provision of any Securities issued by that Person or any indenture, mortgage,
deed of trust, security agreement, pledge agreement, guaranty, contract,
undertaking, agreement or instrument to which that Person
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is a party or by which it or any of its properties is bound, or to which it or
any of its properties is subject.
"Control Account" means the control account that is subject to
a control account agreement which is in form and substance reasonably
satisfactory to the Administrative Agent.
"CUSA" has the meaning ascribed to such term in the preamble
hereto.
"Customary Permitted Liens" means Liens (other than
Environmental Liens and Liens in favor of the PBGC)
(i) with respect to the payment of taxes, assessments or
governmental charges in all cases which are not yet due or which are
being contested in good faith by appropriate proceedings and with
respect to which adequate reserves or other appropriate provisions are
being maintained in accordance with GAAP;
(ii) of landlords arising by statute and Liens of suppliers,
mechanics, carriers, materialmen, repairmen, warehousemen or workmen
and other Liens imposed by law created in the ordinary course of
business for amounts not yet due or which are being contested in good
faith by appropriate proceedings and with respect to which adequate
reserves, bonds or other appropriate provisions are being maintained in
accordance with GAAP;
(iii) incurred or deposits made in the ordinary course of
business in connection with worker's compensation, unemployment
insurance or other types of social security benefits or to secure the
performance of bids, tenders, sales, contracts (other than for the
repayment of borrowed money), surety, appeal, customs and performance
bonds; or
(iv) arising with respect to zoning restrictions, easements,
licenses, reservations, covenants, rights-of-way, utility easements,
building restrictions and other similar charges or encumbrances on the
use of Real Property which do not materially interfere with the
ordinary conduct of the business of any Borrower.
"Debt" means, as applied to any Person at any time, all
indebtedness, obligations or other liabilities of such Person (i) for borrowed
money or evidenced by debt securities, debentures, acceptances, notes or other
similar instruments, and any accrued interest, fees and charges relating
thereto, (ii) under profit payment agreements or in respect of obligations to
redeem, repurchase or exchange any Securities of such Person, (iii)
reimbursement obligations with respect to letters of credit issued for such
Person's account, (iv) to pay the deferred purchase price of property or
services, except accounts payable and accrued expenses arising in the ordinary
course of business, or (v) in respect of Capital Leases.
"Debtors" means the members of the Barneys Group as debtors in
the Chapter 11
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proceeding filed in the United States Bankruptcy Court for the Southern District
of New York, Case Numbers 96 B 40113 through 40133 (JLG).
"Default" means an event which, with the giving of notice or
the lapse of time, or both, would constitute an Event of Default.
"Disclosure Statement" means the Disclosure Statement for the
Debtors dated November 13, 1998 and filed with the United States Bankruptcy
Court for the Southern District of New York along with the Plan of
Reorganization.
"Documentation Agent" has the meaning ascribed to such term in
the preamble hereto.
"DOL" means the United States Department of Labor and any
successor department or agency.
"Dollars" and "$" means the lawful money of the United States.
"Domestic Lending Office" means, with respect to any Lender,
such Lender's office, located in the United States, specified as the "Domestic
Lending Office" under its name on the signature pages hereof or on the
Assignment and Acceptance by which it became a Lender or such other United
States office of such Lender as it may from time to time specify by written
notice to the Borrowers and the Administrative Agent.
"Eligible Aged Inventory" means, with respect to any date of
determination, Eligible Inventory that was acquired by a Borrower fifteen months
or more prior to such date.
"Eligible Assignee" means (i) a Lender or any Affiliate
thereof or (ii) a commercial bank, finance company, insurance company, other
financial institution or fund, reasonably acceptable to the Administrative Agent
and, so long as no Event of Default has occurred and is continuing at the time,
the Borrowers (which approval shall not be unreasonably withheld).
"Eligible Inventory" means Inventory (i) with respect to which
the Administrative Agent has a valid and perfected first priority Lien, (ii)
with respect to which no warranty contained in any of the Loan Documents has
been breached, (iii) which is not, in the reasonable opinion of the
Administrative Agent, obsolete or unmerchantable and (iv) which the
Administrative Agent, in its reasonable credit judgment, deems to be Eligible
Inventory, based on such credit and collateral considerations as the
Administrative Agent may deem appropriate. Eligible Inventory shall be valued at
retail, using the retail inventory method. No Inventory shall be Eligible
Inventory if a Commercial Letter of Credit or Usance Letter of Credit is
outstanding with respect to such Inventory and such Letter of Credit has not
been drawn upon. No Inventory of any Borrower shall be Eligible Inventory if
such Inventory is located, stored, used or held at
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the premises of a third party unless (A) the Administrative Agent shall have
received a landlord, bailee or similar letter from such third party, in form and
substance reasonably satisfactory to the Administrative Agent, and an
appropriate UCC-1 financing statement shall have been executed with respect to
such location or (B) Rent Reserve with respect to the premises of a third party
(other than the premises subject to an Isetan Lease) shall have been deducted
from the calculation of Borrowing Base. The Administrative Agent reserves the
right, in its reasonable discretion, to create, from time to time, additional
categories of ineligible Inventory. Eligible Inventory will be reduced by the
amount of "Additional Shrink Reserve", "Prepaid Gift Card", "Your Cut
Promotional Card", "Consignment" and "Ineligible Stock Ledger Locations", as
such items are reflected on the Borrowing Base Certificate. Notwithstanding the
foregoing, the Borrowers hereby acknowledge that the items referred to in the
immediately preceding sentence are not the only deductions being made from
Eligible Inventory in calculating the Borrowing Base pursuant to the Borrowing
Base Certificate.
"Eligible Retail Inventory" means, with respect to any date of
determination, Eligible Inventory that was acquired by a Borrower less than
fifteen months prior to such date.
"Eligible Receivables" means those Receivables (i) with
respect to which the Administrative Agent has a valid and perfected first
priority Lien, (ii) with respect to which no warranty contained in any of the
Loan Documents has been breached, and (iii) which the Administrative Agent, in
its reasonable credit judgment, deems to be Eligible Receivables, based on such
credit and collateral considerations as the Administrative Agent may deem
appropriate. No Receivable of a Borrower shall be an Eligible Receivable if:
(a) it is due or unpaid more than 60 days after the date of
the original invoice issued by a Borrower in connection with the sale
giving rise thereto; or
(b) the account debtor has filed a petition for bankruptcy or
any other petition for relief under the Bankruptcy Code or any similar
statute, made an assignment for the benefit of creditors, or if any
petition or other application for relief under the Bankruptcy Code or
any similar statute has been filed against the account debtor, or if
the account debtor has failed, suspended its business operations,
become insolvent, suffered a receiver or a trustee to be appointed for
any of its assets or affairs, or is generally failing to pay its debts
as they become due.
Eligible Receivables will be reduced by the amount of "Accounts 90 + days Past
Due", "Disputed Amounts/Claims", "Account Settlement", "Deceased", "Bankruptcy",
"Employee Accounts", "Payment Plan (Workout Accounts 24 to 36 months Payout)",
"Foreign Residence Cardholders", "NSF Checks", "Late Fees", "Return Reserve" and
"Finance Charge Reserve", as such items are reflected on the Borrowing Base
Certificate. Notwithstanding the foregoing, the Borrowers hereby acknowledge
that the items referred to in the immediately preceding sentence are not the
only deductions being made from Eligible Receivables in calculating the
Borrowing
14
Base pursuant to the Borrowing Base Certificate.
"Environmental Lien" means a Lien in favor of any Governmental
Authority for any (i) liabilities under any Environmental Requirements of Law,
or (ii) damages arising from, or costs incurred by such Governmental Authority
in response to, a Release or threatened Release of a Contaminant into the
environment.
"Environmental Requirements of Law" means all applicable
Requirements of Law derived from or relating to federal, state and local laws or
regulations relating to or addressing the indoor or outdoor environment,
including but not limited to any applicable law, regulation, or order relating
to the use, handling, or disposal of any Contaminant, any applicable law,
regulation, or order relating to Remedial Action and any law, regulation, or
order relating to workplace or worker safety and health (but only to the extent
relating to occupational exposure to Contaminants), and such Requirements as are
promulgated by the specifically authorized agent responsible for administering
such Requirements.
"Equipment" means all present and future (i) equipment,
including, without limitation, machinery, manufacturing, distribution, selling,
data processing and office equipment, assembly systems, tools, molds, dies,
fixtures, appliances, furniture, furnishings, vehicles, vessels, aircraft,
aircraft engines, and trade fixtures, (ii) other tangible personal Property
(other than Inventory), and (iii) any and all accessions, parts and
appurtenances attached to any of the foregoing or used in connection therewith,
and any substitutions therefor and replacements, products and proceeds thereof.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute.
"ERISA Affiliate" means any (i) corporation which is a member
of the same controlled group of corporations (within the meaning of Section
414(b) of the Internal Revenue Code) as any Borrower, (ii) partnership or other
trade or business (whether or not incorporated) under common control (within the
meaning of Section 414(c) of the Internal Revenue Code) with such Borrower, and
(iii) member of the same affiliated service group (within the meaning of section
414(m) of the Internal Revenue Code) as such Borrower, any corporation described
in clause (i) above or any partnership or trade or business described in clause
(ii) above.
"Eurodollar Rate" means, with respect to any Interest Period
applicable to a Borrowing of Fixed Rate Loans denominated in Dollars, the
interest rate per annum obtained by dividing (i) an interest rate per annum
determined by the Administrative Agent to be the average (rounded upward to the
nearest whole multiple of one-sixteenth of one percent (0.0625%) per annum if
such average is not such a multiple) of the rates per annum at which deposits in
Dollars are offered by the principal office of Citibank in London, England to
major banks in the London interbank market at approximately 11:00 a.m. (London
time) on the Fixed Rate Determination Date for such Interest Period for a period
equal to such Interest Period and in an amount
15
substantially equal to the amount of the Fixed Rate Loan to be made by CUSA for
such Interest Period, by (ii) a percentage equal to 100% minus the Eurodollar
Reserve Percentage in effect on the relevant Fixed Rate Determination Date. The
Eurodollar Rate shall be adjusted automatically on and as of the effective date
of any change in the Eurodollar Reserve Percentage.
"Eurodollar Reserve Percentage" means, for any day, that
percentage which is in effect on such day, as prescribed by the Federal Reserve
Board for determining the maximum reserve requirement (including, without
limitation, any emergency, supplemental or other marginal reserve requirement)
for a member bank of the Federal Reserve System in New York, New York with
deposits exceeding five billion Dollars in respect of "Eurocurrency Liabilities"
(or in respect of any other category of liabilities which includes deposits by
reference to which the interest rate on Fixed Rate Loans is determined or any
category of extensions of credit or other assets which includes loans by a
non-United States office of any bank to United States residents).
"Event of Default" means any of the occurrences set forth in
Section 11.01 after the expiration of any applicable grace period and the giving
of any applicable notice, in each case as expressly provided in Section 11.01.
"Excluded Proceeds" means (a) Net Cash Proceeds from sales or
other dispositions of assets in an aggregate amount not to exceed $2,000,000
during the period from the date hereof to the Commitment Termination Date and
(b) Net Cash Proceeds (in addition to the Net Cash Proceeds referred to in
clause (a)) from sales or other dispositions of assets in an aggregate amount
not to exceed the lesser of (i) $8,000,000 during the period from the date
hereof to the Commitment Termination Date and (ii) the amount of the Trademark
Available Amount at such time.
"Fair Market Value" means, with respect to any asset or group
of assets, the value of the consideration obtainable in a sale of such asset in
the open market, assuming a sale by a willing seller to a willing purchaser
dealing at arm's length and arranged in an orderly manner over a reasonable
period of time, each having reasonable knowledge of the nature and
characteristics of such asset, neither being under any compulsion to act,
determined (a) in good faith by the Board of Directors of Holdings or (b) in an
appraisal of such asset, provided that such appraisal was performed relatively
contemporaneously with such determination of the fair market value by an
independent third party appraiser and the basic assumptions underlying such
appraisal have not materially changed since the date thereof.
"Fall 1998 Stub Period" has the meaning ascribed to such term
in the Plan of Reorganization.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the weighted
average of the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds
16
brokers, as published for such day (or, if such day is not a Business Day in New
York, New York, for the next preceding Business Day) in New York, New York by
the Federal Reserve Bank of New York, or if such rate is not so published for
any day which is a Business Day in New York, New York, the average of the
quotations for such day on such transactions received by Citibank from three
federal funds brokers of recognized standing selected by the Administrative
Agent.
"Federal Reserve Board" means the Board of Governors of the
Federal Reserve System or any Governmental Authority succeeding to its
functions.
"Fiscal Year" means the fiscal year of the Borrowers, which
shall be the 52- or 53-week period ending on the Saturday in January of each
calendar year closest to January 31 in the succeeding calendar year as set forth
below:
Fiscal Period Name Dates
------------------ -----
Fall 1998 Stub Period 8/2/98 -- 1/30/99
Fiscal Year 1999 1/31/99 -- 1/29/00
Fiscal Year 2000 1/30/00 -- 1/27/01
Fiscal Year 2001 1/28/01 -- 2/2/02
Fiscal Year 2002 2/3/02 -- 2/1/03
"Fixed Charge Coverage Ratio" means, for any twelve-month
period on a consolidated basis for any Person and its Subsidiaries, the ratio of
(i) Consolidated EBITDA minus Capital Expenditures made during such period minus
cash payments of income and franchise taxes made during such period, to (ii)
Consolidated Interest Expense for such period plus any principal payment of
Funded Debt (other than the payments on the Revolving Loans) made during such
period plus the aggregate amount of security deposits or face amount of Letters
of Credit given in connection with the Isetan Leases.
"Fixed Rate" means, with respect to any Interest Period
applicable to a Borrowing of Fixed Rate Loans, an interest rate per annum equal
to the Eurodollar Rate in effect on the relevant Fixed Rate Determination Date.
"Fixed Rate Affiliate" means, with respect to each Lender, the
Affiliate of such Lender (if any) set forth below such Lender's name under the
heading "Fixed Rate Affiliate" on the signature pages hereof or on the
Assignment and Acceptance by which it became a Lender or such Affiliate of a
Lender as it may from time to time specify by written notice to the Borrowers
and the Administrative Agent.
"Fixed Rate Determination Date" means, with respect to a
Borrowing of Fixed Rate Loans, the second Business Day prior to the first day of
the Interest Period for such Borrowing.
17
"Fixed Rate Interest Payment Date" means (i) with respect to
any Fixed Rate Loan having an Interest Period of three (3) calendar months or
less, the last day of such Interest Period applicable to such Fixed Rate Loan
and (ii) with respect to any Fixed Rate Loan having an Interest Period in excess
of three (3) calendar months, the last day of each three (3) calendar month
interval during such Interest Period applicable to such Fixed Rate Loan and the
last day of such Interest Period.
"Fixed Rate Lending Office" means, with respect to any Lender,
the office or offices of such Lender (if any) set forth below such Lender's name
under the heading "Fixed Rate Lending Office" on the signature pages hereof or
on the Assignment and Acceptance by which it became a Lender or such office or
offices of such Lender as it may from time to time specify by written notice to
the Borrowers and the Administrative Agent.
"Fixed Rate Loans" means all Loans which bear interest at a
rate determined by reference to the Fixed Rate as provided in Section 4.01(a).
"Floating Rate" means, for any period applicable to any
Floating Rate Loan denominated in Dollars, an interest rate per annum equal to
the Base Rate in effect from time to time with respect to Floating Rate Loans.
"Floating Rate Loans" means all Loans which bear interest at a
rate determined by reference to the Floating Rate as provided in Section
4.01(a).
"Foreign Employee Benefit Plan" means any employee benefit
plan as defined in Section 3(3) of ERISA which is maintained or contributed to
for the benefit of the employees of any Borrower, any of its Subsidiaries or any
of its ERISA Affiliates, but which is not covered by ERISA pursuant to ERISA
Section 4(b)(4).
"Foreign Exchange Contract" means a foreign exchange contract
between any member of the Barneys Group and Citibank or an Affiliate of
Citibank.
"Foreign Pension Plan" means any employee pension benefit plan
as defined in Section 3(2) of ERISA which (i) is maintained or contributed to
for the benefit of employees of any Borrower, any of its Subsidiaries or any of
its ERISA Affiliates, (ii) is not covered by ERISA pursuant to Section 4(b)(4)
of ERISA, and (iii) under applicable local law, is required to be funded through
a trust or other funding vehicle.
"Funded Debt" means Debt which matures more than one year from
the date of its creation or matures within one year from such date but is
renewable or extendible, at the option of the debtor, to a date more than one
year from such date or arises under a revolving credit or similar agreement
which obligates the lender or lenders to extend credit during a period of more
than one year from such date including, without limitation, all amounts of
Funded Debt required to be paid or prepaid within one year from the date of
determination and excluding the Loans.
18
"Funding Date" means, with respect to any Loan, the date of
the funding of such Loan.
"GAAP" means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board, the
American Institute of Certified Public Accountants and the Financial Accounting
Standards Board or in such other statements by such other entity as may be in
general use by significant segments of the accounting profession as in effect on
the date hereof (unless otherwise specified pursuant to Section 13.04).
"Governmental Authority" means any nation or government, any
federal, state, local or other political subdivision thereof and any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Holder" means any Person entitled to enforce any of the
Obligations, whether or not such Person holds any evidence of Indebtedness,
including, without limitation, the Administrative Agent, each Lender and each
Issuing Bank.
"Holdings" means Barneys New York, Inc., a Delaware
corporation.
"Holdings Guaranty" means the Guaranty by Holdings dated as of
the date hereof in favor of the Administrative Agent for the benefit of the
Administrative Agent, the Lenders, the Issuing Banks and the other Holders, as
such agreement may be amended, supplemented or otherwise modified from time to
time.
"Indebtedness" means, as applied to any Person, at any time,
(a) all indebtedness, obligations or other liabilities of such Person (i) for
borrowed money or evidenced by debt securities, debentures, acceptances, notes
or other similar instruments, and any accrued interest, fees and charges
relating thereto, (ii) under profit payment agreements or in respect of
obligations to redeem, repurchase or exchange any Securities of such Person or
to pay dividends in respect of any stock, (iii) with respect to letters of
credit issued for such Person's account, (iv) to pay the deferred purchase price
of property or services, except accounts payable and accrued expenses arising in
the ordinary course of business, (v) in respect of Capital Leases, or (vi) which
are Accommodation Obligations (other than obligations pursuant to the Tax
Sharing Agreement to pay taxes, assessments, fees and other governmental charges
with respect to any member of the Barneys Group or Holdings); (b) all
indebtedness, obligations or other liabilities of others secured by a Lien on
any property of such Person, whether or not such indebtedness, obligations or
liabilities are assumed by such Person, all as of such time; (c) all
indebtedness, obligations or other liabilities of such Person in respect of
Interest Rate Contracts and foreign exchange agreements, net of liabilities owed
to such Person by the counterparties thereon; and (d) all contingent Contractual
Obligations with respect to any of the foregoing.
"Indemnified Matter" has the meaning ascribed to such term in
Section 13.03.
19
"Indemnitee" has the meaning ascribed to such term in Section
13.03.
"Intellectual Property" has the meaning ascribed to such term
in Section 6.01 (u).
"Interest Period" has the meaning ascribed to such term in
Section 4.02(b).
"Interest Rate Contracts" means interest rate exchange, swap,
collar or cap or similar agreements providing interest rate protection.
"Internal Revenue Code" means the Internal Revenue Code of
1986, as amended to the date hereof and from time to time hereafter, any
successor statute and any regulations or guidance promulgated thereunder.
"Inventory" means all present and future (i) inventory, (ii)
goods, merchandise and other personal Property furnished or to be furnished
under any contract of service or intended for sale or lease, and all goods
consigned by a Borrower and all other items which have previously constituted
Equipment but are then currently being held for sale or lease in the ordinary
course of such Borrower's business, (iii) raw materials, work-in-process and
finished goods, (iv) materials, components and supplies of any kind, nature or
description used or consumed in such Borrower's business or in connection with
the manufacture, production, packing, shipping, advertising, finishing or sale
of any of the Property described in clauses (i) through (iii) above, (v) goods
in which such Borrower has a joint or other interest to the extent of such
Borrower's interest therein or right of any kind (including, without limitation,
goods in which such Borrower has an interest or right as consignee), and (vi)
goods which are returned to or repossessed by such Borrower; in each case
whether in the possession of such Borrower, a bailee, a consignee, or any other
Person for sale, storage, transit, processing, use or otherwise, and any and all
documents for or relating to any of the foregoing.
"Investment" means, with respect to any Person, (i) any
purchase or other acquisition by that Person of Securities, or of a beneficial
interest in Securities issued by or other equity ownership interest in any other
Person, (ii) any purchase by that Person of all or a significant part of the
assets of a business conducted by another Person, and (iii) any loan, advance
(other than deposits with financial institutions available for withdrawal on
demand, prepaid expenses, accounts receivable, advances to employees and similar
items made or incurred in the ordinary course of business as presently
conducted), or capital contribution by that Person to any other Person,
including all Indebtedness to such Person arising from a sale of property by
such Person other than in the ordinary course of its business.
"IRS" means the Internal Revenue Service and any Person
succeeding to the functions thereof.
"Isetan" means Isetan of America Inc., a Delaware corporation.
20
"Isetan Leases" means (i) the Amended and Restated Lease
Agreement dated as of the Closing Date between Isetan, as lessor, and Barneys,
as lessee, in respect of the premises known as 0000 Xxxxxxxx Xxxxxxxxx, Xxxxxxx
Xxxxx, Xxxxxxxxxx, as assigned to CA Lease, as assignee, pursuant to an
Assignment and Assumption of Lease between Barneys, as assignor and CA Lease, as
assignee, (ii) the Amended and Restated Lease Agreement dated as of the Closing
Date between Isetan, as lessor, and BAI, as lessee, in respect of the premises
known as Rush and Oak Streets, Chicago, Illinois, as assigned to Chicago Lease,
as lessee, pursuant to an Assignment and Assumption of Lease between BAI, as
assignor and Chicago Lease, as assignee, and (iii) the Amended and Restated
Lease Agreement between Isetan, as successor in interest to Newireen Associates,
as lessor, and Barneys and Madneer Corp., as lessee, as assigned to NY Lease
pursuant to an Assignment and Assumption of Lease between Barneys and Madneer
Corp., as assignor and NY Lease, as assignee, in respect of premises known as
000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx.
"Issue" means, with respect to any Letter of Credit, either
issue, or extend the expiry of, or renew, or increase the amount of, such Letter
of Credit, and the term "Issued" or "Issuance" shall have a corresponding
meaning.
"Issuing Bank" means Citibank and any successor or assignee
thereof.
"Letter Agreement" means the fee letter dated December 11,
1998 from Citicorp Securities, Inc. and accepted and agreed to by Barneys.
"Letter of Credit" means any Commercial Letter of Credit,
Usance Letter of Credit or Standby Letter of Credit.
"Letter of Credit Fee" has the meaning ascribed to such term
in Section 4.03(a).
"Letter of Credit Obligations" means, at any particular time,
the sum of (i) all outstanding Reimbursement Obligations, plus (ii) the
aggregate amount of all outstanding time drafts issued under any Usance Letter
of Credit, plus (iii) the aggregate undrawn face amount of all outstanding
Letters of Credit, plus (iv) the aggregate face amount of all Letters of Credit
requested by any Borrower but not yet issued (unless the request for an unissued
Letter of Credit has been denied pursuant to Section 2.04(c)(i)).
"Letter of Credit Reimbursement Agreement" means, with respect
to a Letter of Credit, such form of application therefor and form of
reimbursement agreement therefor (whether in a single or several documents,
taken together) as the Issuing Bank from which the Letter of Credit is requested
may employ in the ordinary course of business for its own account, with such
modifications thereto as may be agreed upon by the Issuing Bank and any Borrower
and as are not materially adverse (in the reasonable judgment of the Issuing
Bank) to the interests of the Lenders; provided, however, in the event of any
conflict between the terms hereof and of any Letter of Credit Reimbursement
Agreement, the terms hereof shall control.
21
"Leverage Ratio" means, for any twelve-month period on a
consolidated basis for the Borrowers, the ratio of (a) the sum of (i) the
average of the outstanding Revolving Loans as of the last day of each week
during such period plus (ii) the outstanding Debt (other than the Revolving
Loans) as of the last day of such twelve-month period, to (b) Consolidated
EBITDA for such period.
"Liabilities and Costs" means all liabilities, obligations,
responsibilities, losses and damages with respect to or arising out of any of
the following: personal injury, death, punitive damages, economic damages,
consequential damages, treble damages, intentional, willful or wanton injury,
damage or threat to the environment or public health or welfare, costs and
expenses (including, without limitation, attorney, expert and consulting fees
and costs of investigation, feasibility or Remedial Action studies), fines,
penalties and monetary sanctions, voluntary disclosures made to, or settlements
with, the United States Government, interest, direct or indirect, known or
unknown, absolute or contingent, past, present or future.
"Lien" means any mortgage, deed of trust, pledge,
hypothecation, assignment, conditional sale agreement, deposit arrangement,
security interest, encumbrance, lien (statutory or other), preference, priority
or other security agreement or preferential arrangement of any kind or nature
whatsoever in respect of any property of a Person, whether granted voluntarily
or imposed by law, and includes the interest of a lessor under a Capital Lease
or under any financing lease having substantially the same economic effect as
any of the foregoing and the filing of any financing statement or similar notice
(other than a financing statement filed by a "true" lessor pursuant to ss. 9-408
of the Uniform Commercial Code), naming the owner of such property as debtor,
under the Uniform Commercial Code or other comparable law of any jurisdiction.
"List of Closing Documents" means a list of closing documents,
in substantially the form of Exhibit F attached hereto and made a part hereof.
"Loan Account" has the meaning ascribed to such term in
Section 2.05(b).
"Loan Documents" means this Agreement, the Notes, the Letter
Agreement, the Letter of Credit Reimbursement Agreements, the Blocked Account
Agreements, the Cash Collateral Account Agreement, the Security Agreements, the
Pledge Agreements, the Holdings Guaranty, the documents executed or delivered
pursuant to Sections 5.01(a) and (b) by Holdings or any member of the Barneys
Group, any Interest Rate Contracts to which any Lender or any Affiliate of a
Lender is a party, and all other instruments, agreements and written Contractual
Obligations between Holdings or any member of the Barneys Group, on the one
hand, and the Administrative Agent, any Lenders or the Issuing Bank, on the
other hand, in each case delivered to the Administrative Agent, such Lender or
the Issuing Bank pursuant to or in connection with the transactions contemplated
hereby.
"Loans" means collectively the Revolving Loans and the Swing
Loans.
22
"Lock Box" means the lock box located at X.X. Xxx 000000,
Xxxxxx XX 00000 and accessed by the Servicer.
"Margin Stock" means "margin stock" as such term is defined in
Regulation U.
"Material Adverse Effect" means a material adverse effect upon
(i) the business, condition (financial or otherwise), operations, performance,
assets or prospects of the Barneys Group, taken as a whole, (ii) the ability of
Holdings or the members of the Barneys Group, taken as a whole, to perform any
of their material obligations under the Loan Documents or (iii) the ability of
the Lenders, the Issuing Bank or the Administrative Agent to enforce the Loan
Documents.
"Maximum Revolving Credit Amount" means, at any particular
time, an amount equal to the lesser of (A) the Commitments at such time and (B)
the Borrowing Base at such time.
"Multiemployer Plan" means a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA which is, or within the immediately preceding
three (3) years was, contributed to by either any Borrower or any ERISA
Affiliate.
"Net Cash Proceeds" means (i) proceeds received by any
Borrower in cash or Cash Equivalents from the sale (including, without
limitation, any Sale and Leaseback Transaction), assignment or other disposition
of any Property or assets (other than the sales or dispositions permitted under
Section 9.02(i), (ii) or (iv)), net of (A) the reasonable cash costs of sale,
assignment or other disposition and (B) taxes paid or payable as a result
thereof; provided that evidence of each of (A) and (B) are provided to the
Administrative Agent; (ii) proceeds of insurance on account of the loss of or
damage to any Collateral; and (iii) proceeds received by any Borrower in cash or
Cash Equivalents from (A) the issuance of any Capital Stock by such Borrower
(other than Capital Stock that is issued by a Borrower to Holdings or another
Borrower provided that the Administrative Agent has a first priority Lien with
respect to such Capital Stock) or (B) issuance of any Indebtedness by such
Borrower (other than the Indebtedness permitted under Section 9.01), in each
case net of reasonable costs incurred in connection with such transaction;
provided that evidence of such costs is provided to the Administrative Agent.
"Notes" means collectively the Revolving Loan Notes and the
Swing Loan Notes.
"Notice of Borrowing" means a notice substantially in the form
of Exhibit D attached hereto and made a part hereof.
"Notice of Continuation/Conversion" means a notice
substantially in the form of Exhibit E attached hereto and made a part hereof.
23
"NY Lease" has the meaning ascribed to such term in the
preamble to this Agreement.
"Obligations" means all Loans, advances, debts, liabilities,
obligations, Reimbursement Obligations, covenants and duties owing by Holdings
or any member of the Barneys Group to the Administrative Agent, any Lender, the
Issuing Bank, any Affiliate of the Administrative Agent, any Lender or the
Issuing Bank, or any Person entitled to indemnification pursuant to Section
13.03, of any kind or nature, present or future, pursuant to or in connection
with the Loan Documents, whether or not evidenced by any note, guaranty or other
instrument, whether or not for the payment of money, whether arising by reason
of an extension of credit, opening or amendment of a Letter of Credit or payment
of any draft drawn thereunder, Interest Rate Contract, foreign exchange contract
with any Lender or with any Affiliate of a Lender, loan, guaranty,
indemnification or in any other manner, whether direct or indirect (including
those acquired by assignment), absolute or contingent, due or to become due, now
existing or hereafter arising and however acquired. The term includes, without
limitation, all interest, charges, expenses, fees, reasonable attorneys' fees
and disbursements and any other sum chargeable to any Borrower hereunder or
under any other Loan Document. The term also includes the obligations of
Holdings and each member of the Barneys Group to Citibank or its Affiliates in
respect of any liabilities Holdings or such member has in respect of cash
management functions (including Automated Clearing House (ACH) functions) and
other related services (including corporate credit cards) performed by Citibank
or its Affiliates on behalf of Holdings or any member of the Barneys Group.
"Officer's Certificate" means, as to a corporation, a
certificate executed on behalf of such corporation by an officer or director of
such corporation.
"Operating Lease" means, as applied to any Person, any lease
of any property (whether real, personal or mixed) by that Person as lessee which
is not a Capital Lease.
"PBGC" means the Pension Benefit Guaranty Corporation and any
Person succeeding to the functions thereof.
"Pension Liability Payment" means the payment made by the
Borrowers for existing withdrawal liability resulting from any Borrower's
withdrawal from the Amalgamated Insurance Fund in an amount not to exceed
$850,000.
"Permits" means any permit, approval, authorization license,
variance, or permission required from a Governmental Authority under an
applicable Requirement of Law.
"Permitted Existing Accommodation Obligations" means those
Accommodation Obligations of the members of the Barneys Group and Holdings
identified as such on Schedule 1.01.1.
24
"Permitted Existing Indebtedness" means the Indebtedness of
the members of the Barneys Group and Holdings identified as such on Schedule
1.01.2.
"Permitted Existing Investments" means those Investments of
the members of the Barneys Group and Holdings identified as such on Schedule
1.01.3.
"Permitted Existing Liens" means the Liens on assets of the
members of the Barneys Group and Holdings identified as such on Schedule 1.01.4.
"Permitted Holders" means Whippoorwill Associates, Inc. and
Bay Harbour Management L.C. and any other Person which directly or indirectly
through one or more intermediaries controls, or is controlled by, or is under
common control with, either Whippoorwill Associates, Inc. or Bay Harbour
Management L. C. or as to which any such Person has power to vote the Voting
Stock of Holdings. For the purposes of this definition, "control" when used with
respect to any specified Person means the power to direct the management and
policies of such Person directly or indirectly, whether through the ownership of
Voting Stock, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Permitted Subordinated Indebtedness" means indebtedness,
fully subordinated and junior in right of payment to the prior payment in full
of the Obligations, containing the subordination terms set forth on Schedule
1.01.5 and otherwise (including any modifications to the subordination terms) on
terms and conditions (including tenor beyond the Commitment Termination Date,
interest, covenants and events of default) reasonably satisfactory to the
Administrative Agent and the Requisite Lenders in an aggregate amount not to
exceed $30,000,000.
"Person" means any natural person, corporation, limited
partnership, limited liability company, general partnership, joint stock
company, joint venture, association, company, trust, bank, trust company, land
trust, business trust or other organization, whether or not a legal entity, and
any Governmental Authority.
"PFP" has the meaning ascribed to such term in the preamble to
this Agreement.
"Plan" means an employee benefit plan (other than a Foreign
Employee Benefit Plan) defined in Section 3(3) of ERISA in respect of which any
Borrower or any ERISA Affiliate is, or within the immediately preceding three
years was, an "employer" as defined in Section 3(5) of ERISA.
"Plan of Reorganization" means the Second Amended Joint Plan
of Reorganization for the Debtors Proposed by Whippoorwill Associates, Inc., Bay
Harbour Management L.C. and the Official Committee of Unsecured Creditors dated
November 13, 1998.
25
"Pledge Agreements" means, collectively, the Pledge Agreements
identified on the List of Closing Documents, as each such agreement may be
amended, supplemented or otherwise modified from time to time.
"Preferred Stock" means the shares of Series A Preferred
Stock, $.01 par value per share, of Holdings.
"Pre-Settlement Exposure" means on any day, and with respect
to all Foreign Exchange Contracts, the sum of (a) an amount of Dollars that
Citibank or an Affiliate of Citibank would be required to pay (with regard to
Foreign Exchange Contracts confirmed under an ISDA or IFEMA Master Agreement,
such amount to be calculated for each such Agreement on a net basis with any
such amounts that Citibank or such Affiliate would receive) to replace each of
the Foreign Exchange Contracts, determined on the basis of quotations from four
leading dealers in the relevant market selected by Citibank or an Affiliate of
Citibank in good faith (i) from among dealers of the highest credit standing
which satisfy all the criteria that Citibank or such Affiliate applies generally
at the time in deciding whether to offer or to make an extension of credit and
(ii) to the extent practicable, from among such dealers having an office in the
same city and (b) an amount of Dollars that is determined by Citibank or such
Affiliate to be equal to the aggregate of the amounts used by Citibank or such
Affiliate to monitor the financial risk associated with potential changes in
market value of each such Foreign Exchange Contract to and including the
settlement date of each such Foreign Exchange Contract.
"Property" means any Real Property or personal property,
plant, building, facility, structure, underground storage tank or unit,
Equipment, inventory, general intangible, Receivable, or other asset owned,
leased or operated by any Borrower or any other member of the Barneys Group, as
applicable (including any surface water thereon or adjacent thereto, and soil
and groundwater thereunder).
"Pro Rata Share" means, with respect to any Lender, the
percentage obtained by dividing such Lender's Commitment at such time by the
aggregate amount of all Commitments at such time; provided, however, if all of
the Commitments are terminated pursuant to the terms hereof, then "Pro Rata
Share" means the percentage obtained by dividing such Lender's Obligations by
the aggregate amount of all Obligations.
"Real Property" means all of each Borrower's present and
future right, title and interest (including, without limitation, any leasehold
estate) in (i) any plots, pieces or parcels of land, (ii) any improvements,
buildings, structures and fixtures now or hereafter located or erected thereon
or attached thereto of every nature whatsoever (the rights and interests
described in clauses (i) and (ii) above being the "Premises"), (iii) all
easements, rights of way, gores of land or any lands occupied by streets, ways,
alleys, passages, sewer rights, water courses, water rights and powers, and
public places adjoining such land, and any other interests in property
constituting appurtenances to the Premises, or which hereafter shall in any way
belong, relate or be appurtenant thereto, (iv) all hereditaments, gas, oil,
minerals (with the right to extract, sever
26
and remove such gas, oil and minerals), and easements, of every nature
whatsoever, located in or on the Premises and (v) all other rights and
privileges thereunto belonging or appertaining and all extensions, additions,
improvements, betterments, renewals, substitutions and replacements to or of any
of the rights and interests described in clauses (iii) and (iv) above.
"Receivables" means all present and future (i) accounts, (ii)
accounts receivable, (iii) rights to payment for goods sold or leased or for
services rendered (except those evidenced by instruments or chattel paper),
whether or not earned by performance, (iv) all rights in any merchandise or
goods which any of the same may represent, and (v) all rights, title, security
and guaranties with respect to each of the foregoing, including, without
limitation, any right of stoppage in transit.
"Register" has the meaning ascribed to such term in Section
13.01(c).
"Regulation U" means Regulation U of the Federal Reserve Board
as in effect from time to time.
"Regulation X" means Regulation X of the Federal Reserve Board
as in effect from time to time.
"Reimbursement Date" has the meaning ascribed to such term in
Section 2.04(d)(i)(A).
"Reimbursement Obligations" means the aggregate reimbursement
or repayment obligations of the Borrowers with respect to amounts drawn under
Letters of Credit.
"Release" means a release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration into
the indoor or outdoor environment or into or out of any Property, including the
movement of Contaminants through or in the air, soil, surface water, groundwater
or Property.
"Remedial Action" means actions required to (i) clean up,
remove, treat or in any other way address Contaminants in the indoor or outdoor
environment; (ii) prevent the Release or threat of Release or minimize the
further Release of Contaminants; or (iii) investigate and determine if a
remedial response is needed and to design such a response and post-remedial
investigation, monitoring, operation and maintenance and care.
"Rent Reserve" means an aggregate amount equal to the total
rental payments payable for a period equal to the greater of two months and the
period set forth on Schedule 1.01.6 for the applicable jurisdiction for each
real estate lease covering the premises of a third party where Inventory of a
Borrower is located, stored, used or held where the Administrative Agent has not
received (i) a landlord, bailee or similar letter from such third party, in form
and substance satisfactory to the Administrative Agent, and (ii) an appropriate
UCC-1 financing
27
statement executed by such third party with respect to such premises.
"Replaced Lender" has the meaning ascribed to such term in
Section 3.06.
"Replacement Lender" has the meaning ascribed to such term in
Section 3.06.
"Reportable Event" means an event described in Section 4043(c)
of ERISA with respect to a Benefit Plan other than those events as to which the
thirty day notice period is waived under the PBGC regulations issued under
Section 4043 of ERISA.
"Requirements of Law" means, as to any Person, the charter and
by-laws or other organizational or governing documents of such Person, and any
law, 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
including, without limitation, the Securities Act, the Securities Exchange Act,
Regulations U and X, ERISA, the Fair Labor Standards Act and any certificate of
occupancy, zoning ordinance, building, or land use requirement or Permit or
labor or employment rule or regulation, including Environmental Requirements of
Law.
"Requisite Lenders" means, at any time, Lenders holding, in
the aggregate, more than fifty percent (50%) of the Commitments in effect at
such time; provided, however, that, in the event that the Commitments have been
terminated pursuant to the terms hereof, "Requisite Lenders" means Lenders whose
aggregate ratable shares (stated as a percentage) of the aggregate outstanding
principal balance of all Loans are greater than fifty percent (50%).
"Restricted Junior Payment" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of
Capital Stock of any Borrower now or hereafter outstanding, except a dividend
payable solely in shares of that class of stock, (ii) any redemption,
retirement, sinking fund or similar payment, purchase or other acquisition for
value, direct or indirect, of any shares of any class of Capital Stock of any
member of the Barneys Group now or hereafter outstanding, (iii) any payment or
prepayment of principal of, premium, if any, or interest, fees or other charges
on or with respect to, and any redemption, purchase, retirement, defeasance,
sinking fund or similar payment and any claim for rescission with respect to,
any Permitted Subordinated Indebtedness and (iv) any payment made to redeem,
purchase, repurchase or retire, or to obtain the surrender of, any outstanding
warrants, options or other rights to acquire shares of any class of Capital
Stock of any member of the Barneys Group now or hereafter outstanding.
"Revolving Credit Obligations" means, at any particular time,
the sum of (i) the outstanding principal amount of the Swing Loans at such time,
plus (ii) the outstanding principal amount of the Revolving Loans at such time,
plus (iii) the Letter of Credit Obligations outstanding at such time.
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"Revolving Loan" has the meaning ascribed to such term in
Section 2.01(a).
"Revolving Note" has the meaning ascribed to such term in
Section 2.05(a).
"Sale and Leaseback Transaction" means, with respect to any
Person, any direct or indirect arrangement pursuant to which Property is sold or
transferred by such Person or a Subsidiary of such Person and is thereafter
leased back from the purchaser thereof by such Person or one of its
Subsidiaries.
"Section 338 Election" means the election under Section 338 of
the Internal Revenue Code, and any election under any comparable state or local
laws, contemplated to be made by Holdings with respect to the acquisition of
Barneys and its Subsidiaries pursuant to the Plan of Reorganization.
"Securities" means any stock, shares, voting trust
certificates, bonds, debentures, notes or other evidences of indebtedness,
secured or unsecured, convertible, subordinated or otherwise, or any
certificates of interest, shares, or participation in temporary or interim
certificates for the purchase or acquisition of, or any right to subscribe to,
purchase or acquire any of the foregoing, but shall not include any evidence of
the Obligations.
"Securities Act" means the Securities Act of 1933, as amended
from time to time, and any successor statute.
"Securities Exchange Act" means the Securities Exchange Act of
1934, as amended from time to time, and any successor statute.
"Security Agreements" means, collectively, the Security
Agreements identified on the List of Closing Documents, as each such agreement
may be amended, supplemented or otherwise modified from time to time.
"Servicer" means Cash Management Services, Inc., 00 Xxxxxxx
Xxxx, Xxxxxx, XX 00000 or any other servicer reasonably satisfactory to the
Administrative Agent.
"Solvent", when used with respect to any Person, means that at
the time of determination:
(i) the fair market value of its assets is in excess of the
total amount of its liabilities (including, without limitation,
contingent liabilities); and
(ii) the present fair saleable value of its assets is greater
than its probable liability on its existing debts as such debts become
absolute and matured; and
29
(iii) it is then able and expects to be able to pay its debts
(including, without limitation, contingent debts and other commitments)
as they mature; and
(iv) it has capital sufficient to carry on its business as
conducted and as proposed to be conducted.
For purposes of determining whether a Person is Solvent, the amount of any
contingent liability shall be computed as the amount that, in light of all the
facts and circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or matured liability.
"Standby Letter of Credit" means any letter of credit issued
by the Issuing Bank pursuant to Section 2.04 for the account of the Borrowers,
which is not a Commercial Letter of Credit or Usance Letter of Credit.
"Subordinated Notes" means the subordinated notes referred to
as items on Schedule 1.01.2 as of the Closing Date.
"Subsidiary" of a Person means any corporation or other entity
of which securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions are at the time directly or indirectly owned or controlled by such
Person, one or more of the other subsidiaries of such Person or any combination
thereof.
"Swing Loan" has the meaning ascribed to such term in Section
2.02(a).
"Swing Loan Lender" means CUSA, in its individual capacity or,
in the event CUSA is not the Administrative Agent, the Administrative Agent (or
any Affiliate of the Administrative Agent designated by the Administrative
Agent), in its individual capacity.
"Swing Loan Note" has the meaning ascribed to such term in
Section 2.05(a).
"Tax Sharing Agreement" means the written agreement among
Holdings and the members of the Barneys Group, in form and substance reasonably
satisfactory to the Administrative Agent, for the allocation and payment of tax
liabilities and the payment for tax benefits with respect to a consolidated,
combined or unitary tax return which tax return includes Holdings and any
Subsidiary.
"Taxes" has the meaning ascribed to such term in Section
3.03(a).
"Termination Event" means (i) a Reportable Event with respect
to any Benefit Plan; (ii) the withdrawal of any Borrower or any ERISA Affiliate
from a Benefit Plan during a plan year in which such Borrower or such ERISA
Affiliate was a "substantial employer" as defined in Section 4001(a)(2) of ERISA
or the cessation of operations which results in the
30
termination of employment of 20% of Benefit Plan participants who are employees
of such Borrower or any ERISA Affiliate; (iii) the imposition of an obligation
on any Borrower or any ERISA Affiliate under Section 4041 of ERISA to provide
affected parties written notice of intent to terminate a Benefit Plan in a
distress termination described in Section 4041(c) of ERISA; (iv) the institution
by the PBGC or any similar foreign governmental authority of proceedings to
terminate a Benefit Plan; (v) any event or condition which might constitute
grounds under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Benefit Plan; (vi) a foreign governmental
authority shall appoint or institute proceedings to appoint a trustee to
administer any Foreign Pension Plan; or (vii) the partial or complete withdrawal
of any Borrower or any ERISA Affiliate from a Multiemployer Plan other than with
respect to the Amalgamated Insurance Fund.
"Trademark Available Amount" means initially an amount equal
to $20,000,000, which amount shall be permanently reduced as follows: (i)
$1,250,000 on the first day of each fiscal quarter commencing with the first day
of the first fiscal quarter of Fiscal Year 2000; (ii) if the Borrowers'
Consolidated EBITDA (without giving effect to the Pension Liability Payment) for
the twelve month period ending January 31, 1999 is less than $16,000,000, an
amount equal to such deficiency on a dollar for dollar basis up to $1,318,000;
and (iii) an amount equal to the Net Cash Proceeds from sales or other
dispositions of assets in an aggregate amount not to exceed the lesser of
$10,000,000 and the amount of the Trademark Available Amount at such time prior
to giving effect to such reduction.
"Treasury Notes" means marketable direct debt obligations
issued by the United States government and backed by the full faith and credit
of the United States government which are intermediate securities with remaining
maturities of two years or less issued at a discount from face value.
"Uniform Commercial Code" means the Uniform Commercial Code as
enacted in the State of New York, as it may be amended from time to time.
"Unused Commitment Fee" has the meaning ascribed to such term
in Section 4.03(b).
"Usance Letter of Credit" means any letter of credit issued by
an Issuing Bank pursuant to Section 2.04 for the account of the Borrowers, which
is drawable upon presentation of documents evidencing the sale or shipment of
goods purchased by any Borrower in the ordinary course of its business and
honored by the Issuing Bank's delivery of time drafts payable no more than sixty
days from the date of delivery thereof.
"Voting Stock" means, with respect to any Person, securities
with respect to any class or classes of Capital Stock of such Person entitling
the holders thereof (whether at all times or only so long as no senior class of
stock has voting power by reason of any contingency) to vote in the election of
members of the board of directors of such Person.
31
1.02. Computation of Time Periods. In this Agreement, in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding". Periods of days referred to in this Agreement shall be
counted in calendar days unless Business Days are expressly prescribed. Any
period determined hereunder by reference to (a) a month or months, quarter or
quarters or year or years shall end on the day in the relevant calendar month,
calendar quarter or calendar year, if applicable, immediately preceding the date
numerically corresponding to the first day of such period and (b) a fiscal month
or months, a fiscal quarter or quarters or a fiscal year or years shall end on
the day in the relevant fiscal month, fiscal quarter or fiscal year, if
applicable, immediately preceding the date numerically corresponding to the
first day of such period. 1.03. Accounting Terms. Subject to Section 13.04, for
purposes of this Agreement, all accounting terms not otherwise defined herein
shall have the meanings assigned to them in conformity with GAAP.
1.04. Other Definitional Provisions. References to "Articles",
"Sections", "subsections", "Schedules" and "Exhibits" shall be to Articles,
Sections, subsections, Schedules and Exhibits, respectively, of this Agreement
unless otherwise specifically provided. The words "hereof", "herein", and
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement.
1.05. Other Terms. All other terms contained herein shall,
unless the context indicates otherwise, have the meanings assigned to such terms
by the Uniform Commercial Code to the extent the same are defined therein.
ARTICLE II
AMOUNTS AND TERMS OF LOANS
2.01 Revolving Credit Facility. (a) Revolving Loans. Subject
to the terms and conditions set forth herein, each Lender hereby severally and
not jointly agrees to make revolving loans, in Dollars (each individually, a
"Revolving Loan" and, collectively, the "Revolving Loans") to the Borrowers from
time to time on any Business Day during the period from the Closing Date to the
Business Day immediately preceding the Commitment Termination Date, in an amount
not to exceed at any time outstanding such Lender's Pro Rata Share of the
Availability at such time. All Revolving Loans comprising the same Borrowing
hereunder shall be made by such Lenders simultaneously and proportionately to
their then respective Commitments. Subject to the provisions hereof, the
Borrowers may repay the outstanding Revolving Loans on any day which is a
Business Day and any amounts so repaid may be reborrowed, up to the amount
available under this Section 2.01(a) at the time of such Borrowing in accordance
with the provisions hereof.
32
(b) Notice of Borrowing. When the Borrowers desire to borrow
under this Section 2.01, an irrevocable Notice of Borrowing shall be delivered
to the Administrative Agent no later than 11:00 a.m. (New York time) on the
proposed Funding Date, in the case of a Borrowing of Floating Rate Loans, and at
least three (3) Business Days in advance of the proposed Funding Date, in the
case of a Borrowing of Fixed Rate Loans. Such Notice of Borrowing shall specify
(i) the proposed Funding Date (which shall be a Business Day), (ii) the amount
of the proposed Borrowing, (iii) the Availability as of the date of such Notice
of Borrowing, (iv) whether the proposed Borrowing will be of Floating Rate Loans
or Fixed Rate Loans and (v) in the case of Fixed Rate Loans, the requested
Interest Period. Any Notice of Borrowing delivered pursuant to this Section
2.01(b) shall be deemed to constitute a Notice of Borrowing under Section 2.02.
In lieu of delivering such a Notice of Borrowing (except with respect to a
Borrowing on the Closing Date), the Borrowers may give the Administrative Agent
irrevocable telephonic notice of any proposed Borrowing by 11:00 a.m. (New York
time) on the day of the proposed Borrowing, in the case of a Borrowing of
Floating Rate Loans, and at least three (3) Business Days in advance of the day
of the proposed Borrowing, in the case of a Borrowing of Fixed Rate Loans, and
shall confirm such notice by delivery of the Notice of Borrowing by telecopy to
the Administrative Agent promptly, but in no event later than 3:00 p.m. (New
York time) on the same day.
(c) Making of Revolving Loans. (i) Promptly after receipt of a
Notice of Borrowing under Section 2.01(b) (or telephonic notice in lieu thereof)
and in the event that the Swing Loan Lender is not making the principal amount
requested under such Notice of Borrowing available to the Borrowers as a Swing
Loan, the Administrative Agent shall notify each Lender by telex or telecopy, or
other similar form of transmission, of the proposed Borrowing. Each Lender shall
deposit an amount equal to its Pro Rata Share of the amount requested by the
Borrowers with the Administrative Agent at its office in New York, New York, in
immediately available funds, (A) on the Closing Date specified in the initial
Notice of Borrowing and (B) not later than 2:00 p.m. (New York time) on any
other Funding Date applicable thereto. The Administrative Agent shall make the
proceeds of such amounts received by it available to the Borrowers at the
Administrative Agent's office in New York, New York on such Funding Date (or on
the date received if later than such Funding Date) and shall disburse such
proceeds to the Borrowers by transferring such proceeds to the Borrowers'
Account. The failure of any Lender to deposit the amount described above with
the Administrative Agent on the applicable Funding Date shall not relieve any
other Lender of its obligations hereunder to make its Revolving Loan on such
Funding Date. No Lender shall be responsible for any failure by any other Lender
to perform its obligation to make a Revolving Loan hereunder nor shall the
Commitment of any Lender be increased or decreased as a result of any such
failure.
(ii) Unless the Administrative Agent shall have been notified
by any Lender on the Business Day immediately preceding the applicable Funding
Date in respect of any Borrowing of Revolving Loans that such Lender does not
intend to fund its Revolving Loan requested to be made on such Funding Date, the
Administrative Agent may assume that such
33
Lender has funded its Revolving Loan and is depositing the proceeds thereof with
the Administrative Agent on the Funding Date, and the Administrative Agent in
its sole discretion may, but shall not be obligated to, disburse a corresponding
amount to the Borrowers on the Funding Date. If the Revolving Loan proceeds
corresponding to that amount are advanced to the Borrowers by the Administrative
Agent but are not in fact deposited with the Administrative Agent by such Lender
on or prior to the applicable Funding Date, such Lender agrees to pay, and in
addition the Borrowers agree to repay, to the Administrative Agent forthwith on
demand such corresponding amount, together with interest thereon, for each day
from the date such amount is disbursed to or for the benefit of the Borrowers
until the date such amount is paid or repaid to the Administrative Agent, (A) in
the case of the Borrowers, at the interest rate applicable to such Borrowing and
(B) in the case of such Lender, at the Federal Funds Rate for the first Business
Day, and thereafter at the interest rate applicable to such Borrowing. If such
Lender shall pay to the Administrative Agent the corresponding amount, the
amount so paid shall constitute such Lender's Revolving Loan, and if both such
Lender and the Borrowers shall pay and repay such corresponding amount, the
Administrative Agent shall promptly pay to the Borrowers such corresponding
amount. This Section 2.01(c)(ii) does not relieve any Lender of its obligation
to make its Revolving Loan on any Funding Date.
(d) Repayment of Revolving Loans. All outstanding Revolving
Loans shall be paid in full on the Commitment Termination Date. Each Lender's
obligation to make Revolving Loans shall terminate at the close of business on
the Business Day immediately preceding the Commitment Termination Date.
2.02. Swing Loans. (a) Swing Loans. Subject to the terms and
conditions set forth herein, the Swing Loan Lender may, in its sole discretion,
make loans (the "Swing Loans") in Dollars to the Borrowers, from time to time
after the Closing Date and prior to the Commitment Termination Date, up to an
aggregate principal amount at any one time outstanding which shall not exceed an
amount equal to $7,000,000. The Swing Loan Lender shall have no duty to make or
to continue to make Swing Loans. All Swing Loans shall be payable on demand with
accrued interest thereon and shall otherwise be subject to all the terms and
conditions applicable to Revolving Loans, except that all Swing Loans shall be
Floating Rate Loans and all interest on the Swing Loans shall be payable to the
Swing Loan Lender solely for its own account.
(b) Making of Swing Loans. The Swing Loan Lender shall deposit
the amount it intends to fund, if any, in respect of the Swing Loans requested
by the Borrowers with the Administrative Agent at its office in New York, New
York in immediately available funds on the date of the proposed Borrowing
applicable thereto. The Swing Loan Lender shall not make any Swing Loan in the
period commencing on the first Business Day after it receives written notice
from any Lender that one or more of the conditions precedent contained in
Section 5.02 shall not on such date be satisfied, and ending when such
conditions are satisfied, and the Swing Loan Lender shall not otherwise be
required to determine that, or take notice whether, the conditions precedent set
forth in Section 5.02 hereof have been satisfied in connection with the
34
making of any Swing Loan. Subject to the preceding sentence, the Administrative
Agent shall make such proceeds available to the Borrowers at the Administrative
Agent's office in New York, New York on the date of the proposed Borrowing and
shall disburse such proceeds to the Borrowers by transferring such proceeds to
the Borrowers' Account.
(c) Repayment of Swing Loans. The Borrowers shall repay the
outstanding Swing Loans owing to the Swing Loan Lender (i) in accordance with
Section 3.01(b)(ii), on a daily basis, to the extent funds are on deposit in the
Concentration Account, (ii) upon demand by the Swing Loan Lender and (iii) on
the Commitment Termination Date. In connection with the repayment of Swing Loans
set forth in the preceding clause (i), the Borrowers hereby irrevocably
authorize the Administrative Agent to apply the withdrawn funds in accordance
therewith. In the event that the Borrowers fail to repay any Swing Loans,
together with interest thereon, as set forth in clauses (i), (ii) and (iii) of
the first sentence of this paragraph, then, upon the request of the Swing Loan
Lender, each Lender shall make Revolving Loans to the Borrowers (irrespective of
the satisfaction of the conditions in Section 5.02 or the requirement to deliver
a Notice of Borrowing in Section 2.01(b), which conditions and requirement such
Lenders irrevocably waive) in an amount equal to such Lender's Pro Rata Share of
the aggregate amount of the Swing Loans then outstanding after giving effect to
any repayments made by the Borrowers, and the Borrowers hereby authorize the
Administrative Agent to apply the proceeds of such Revolving Loans to the
repayment of such Swing Loans. To the extent the Administrative Agent receives
any amounts in prepayment or repayment of outstanding Revolving Loans prior to
such request, the Administrative Agent shall apply such amounts when received to
the repayment of the Swing Loans then outstanding. The failure of any Lender to
make available to the Administrative Agent its Pro Rata Share of such Revolving
Loans shall not relieve such Lender or any other Lender of its obligation
hereunder to make available to the Administrative Agent such other Lender's Pro
Rata Share of such Revolving Loans on the date of such request. The
Administrative Agent shall settle with the Lenders in respect of Swing Loans at
least weekly.
2.03. Use of Proceeds. The proceeds of the Loans may be used
to refinance the debtor-in-possession financing, to pay certain claims pursuant
to the Plan of Reorganization, to pay professional fees and to fund working
capital in the ordinary course of the business of the Borrowers and for other
lawful general corporate purposes not prohibited hereunder.
2.04. Letters of Credit. Subject to the terms and conditions
set forth herein, the Issuing Bank hereby agrees to Issue for the account of the
Borrowers one or more Letters of Credit during the period from the Closing Date
to the date which is the thirtieth day prior to the Commitment Termination Date
(except as otherwise set forth in the proviso in Section 2.04(a)(iii)), subject
to the following provisions:
(a) Types and Amounts. The Issuing Bank shall not have any
obligation to Issue, and shall not Issue any Letter of Credit at any time:
(i) if the aggregate Letter of Credit Obligations with respect
to the
35
Issuing Bank, after giving effect to the Issuance of the Letter of
Credit requested hereunder, shall exceed $40,000,000 or any limit
imposed by law or regulation upon the Issuing Bank;
(ii) if the Issuing Bank receives written notice (A) from the
Administrative Agent or the Borrowers at or before 2:00 p.m. (New York
time) on the Business Day immediately preceding the date of the
proposed Issuance of such Letter of Credit that immediately after
giving effect to the Issuance of such Letter of Credit, (1) the Letter
of Credit Obligations at such time would exceed $40,000,000 or (2) the
Revolving Credit Obligations at such time would exceed the Maximum
Revolving Credit Amount at such time, or (B) from any of the Lenders at
or before 11:00 a.m. (New York time) on the date of the proposed
Issuance of such Letter of Credit that one or more of the conditions
precedent contained in Section 5.01 or 5.02, as applicable, would not
on such date be satisfied (or waived pursuant to Section 13.07), unless
such conditions are thereafter satisfied or waived and written notice
of such satisfaction or waiver is given to the Issuing Bank by the
Administrative Agent (and the Issuing Bank shall not otherwise be
required to determine that, or take notice whether, the conditions
precedent set forth in Section 5.01 or 5.02, as applicable, have been
satisfied or waived); or
(iii) which has an expiration date later than the earlier of
(A) the date which occurs 210 days following the date of Issuance with
respect to a Commercial Letter of Credit or a Usance Letter of Credit
or the date which occurs 364 days following the date of Issuance with
respect to a Standby Letter of Credit or (B) the date which is the
thirtieth day immediately preceding the Commitment Termination Date
with respect to a Commercial Letter of Credit, the date which is the
sixtieth day immediately preceding the Commitment Termination Date with
respect to a Usance Letter of Credit or the date which is the fifth
Business Day immediately preceding the Commitment Termination Date with
respect to a Standby Letter of Credit; provided, however, any Letter of
Credit may expire on a date which is no later than the thirtieth day
immediately following the Commitment Termination Date if the Borrowers
give the Administrative Agent at the time such Letter of Credit is
issued or its expiration date is extended Cash Collateral, on terms and
conditions satisfactory to the Administrative Agent, in an amount equal
to the sum of (1) the maximum amount available to be drawn under such
Letter of Credit and (2) the amount of Letter of Credit Fees applicable
thereto.
(b) Conditions. In addition to being subject to the
satisfaction of the conditions precedent contained in Sections 5.01 and 5.02, as
applicable, the obligation of the Issuing Bank to Issue any Letter of Credit is
subject to the satisfaction in full of the following conditions:
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(i) if the Issuing Bank so requests, the Borrowers shall have
executed and delivered to such Issuing Bank and the Administrative
Agent a Letter of Credit Reimbursement Agreement and such other
documents and materials as may be required pursuant to the terms
thereof;
(ii) the terms of the proposed Letter of Credit shall be
satisfactory to the Issuing Bank in its reasonable credit judgment; and
(iii) no order, judgment or decree of any court, arbitrator or
Governmental Authority shall purport by its terms to enjoin or restrain
the Issuing Bank from Issuing the Letter of Credit and no law, rule or
regulation applicable to the Issuing Bank and no request or directive
(whether or not having the force of law and whether or not the failure
to comply therewith would be unlawful) from a Governmental Authority
with jurisdiction over the Issuing Bank shall prohibit or request that
the Issuing Bank refrain from the Issuance of letters of credit
generally or the Issuance of such Letter of Credit.
(c) Issuance of Letters of Credit. (i) The Borrowers shall
give the Issuing Bank written notice that it is requesting that the Issuing Bank
Issue a Letter of Credit not later than 2:00 p.m. (New York time) on the
Business Day immediately preceding the requested date for Issuance thereof, or
such shorter notice as may be acceptable to the Issuing Bank. Such notice shall
be irrevocable unless and until such request is denied by the Issuing Bank and
shall specify (A) that the requested Letter of Credit is either a Commercial
Letter of Credit, Usance Letter of Credit or Standby Letter of Credit, (B) the
stated amount of the Letter of Credit requested, (C) the effective date (which
shall be a Business Day) of Issuance of such Letter of Credit, (D) the date on
which such Letter of Credit is to expire, (E) the Person for whose benefit such
Letter of Credit is to be Issued, (F) other relevant terms of such Letter of
Credit and (G) the amount of the then outstanding Letter of Credit Obligations.
The Issuing Bank shall notify the Administrative Agent immediately upon receipt
of a written notice from the Borrowers requesting that a Letter of Credit be
Issued and, upon the Administrative Agent's request therefor, send a copy of
such notice to the Administrative Agent.
(ii) The Issuing Bank shall give the Administrative Agent
written notice, or telephonic notice confirmed promptly thereafter in writing,
of the Issuance of a Letter of Credit (which notice the Administrative Agent
shall promptly transmit by telegram, telex, telecopy, telephone or similar
transmission to each Lender).
(d) Reimbursement Obligations; Duties of Issuing Bank. (i)
Notwithstanding any provisions to the contrary in any Letter of Credit
Reimbursement Agreement:
(A) the Borrowers shall reimburse the Issuing Bank for amounts
drawn under such Letter of Credit pursuant to subsection (d)(ii) below,
in Dollars, no later than the date (the "Reimbursement Date") which is
one (1) Business Day
37
after the Borrowers receive written notice from the Issuing Bank that a
draft has been presented under such Letter of Credit by the beneficiary
thereof; and
(B) all Reimbursement Obligations with respect to any Letter
of Credit shall bear interest at the rate applicable to Floating Rate
Loans in accordance with Section 4.01(a) from the date of the relevant
drawing under such Letter of Credit until the Reimbursement Date and
thereafter at the rate applicable in accordance with Section 4.01(c).
(ii) The Issuing Bank shall give the Administrative Agent
written notice, or telephonic notice confirmed promptly thereafter in writing,
of all drawings under a Letter of Credit and the payment (or the failure to pay
when due) by the Borrowers on account of a Reimbursement Obligation (which
notice the Administrative Agent shall promptly transmit by telegram, telex,
telecopy or similar transmission to each Lender).
(iii) No action taken or omitted, in good faith and without
gross negligence, by the Issuing Bank under or in connection with any Letter of
Credit shall put the Issuing Bank under any resulting liability to any Lender,
any Borrower or, so long as such Letter of Credit is not Issued in violation of
Section 2.04(a), relieve any Lender of its obligations hereunder to the Issuing
Bank. Solely as between the Issuing Bank and the Lenders, in determining whether
to pay under any Letter of Credit, the Issuing Bank shall have no obligation to
the Lenders other than to confirm that any documents required to be delivered
under a respective Letter of Credit appear to have been delivered and that they
appear on their face to comply with the requirements of such Letter of Credit.
(e) Participations. (i) Immediately upon Issuance by the
Issuing Bank of any Letter of Credit in accordance with the procedures set forth
in this Section 2.04, each Lender shall be deemed to have irrevocably and
unconditionally purchased and received from the Issuing Bank, without recourse
or warranty, an undivided interest and participation in such Letter of Credit to
the extent of such Lender's Pro Rata Share, including, without limitation, all
obligations of the Borrowers with respect thereto (other than amounts owing to
the Issuing Bank under Section 2.04(g)) and any security therefor and guaranty
pertaining thereto.
(ii) If the Issuing Bank makes any payment under any Letter of
Credit and the Borrowers do not repay such amount to the Issuing Bank on the
Reimbursement Date, the Issuing Bank shall promptly notify the Administrative
Agent, which shall promptly notify each Lender, and each Lender shall promptly
and unconditionally pay to the Administrative Agent for the account of the
Issuing Bank, in immediately available funds, the amount of such Lender's Pro
Rata Share of such payment, and the Administrative Agent shall promptly pay to
the Issuing Bank such amounts received by it, and any other amounts received by
the Administrative Agent for the Issuing Bank's account, pursuant to this
Section 2.04(e). All such payments shall constitute Revolving Loans made to the
Borrowers pursuant to Section 2.01 (irrespective of the satisfaction of the
conditions in Section 5.02 or the requirement in Section 2.01(b) to deliver a
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Notice of Borrowing which conditions and requirement, for the purpose of
refunding any Reimbursement Obligation owing to the Issuing Bank, the Lenders
irrevocably waive). If a Lender does not make its Pro Rata Share of the amount
of such payment available to the Administrative Agent, such Lender agrees to pay
to the Administrative Agent for the account of the Issuing Bank, forthwith on
demand, such amount together with interest thereon, for the first Business Day
after the date such payment was first due at the Federal Funds Rate, and
thereafter at the interest rate then applicable in accordance with Section
4.01(a). The failure of any such Lender to make available to the Administrative
Agent for the account of an Issuing Bank its Pro Rata Share of any such payment
shall neither relieve such Lender nor any other Lender of its obligation
hereunder to make available to the Administrative Agent for the account of the
Issuing Bank such Lender's Pro Rata Share of any payment on the date such
payment is to be made nor increase the obligation of any other Lender to make
such payment to the Administrative Agent. This Section does not relieve the
Borrowers of their obligation to pay or repay any Lender funding its Pro Rata
Share of such payment pursuant to this Section interest on the amount of such
payment from such date such payment is to be made until the date on which
payment is repaid in full.
(iii) Whenever the Issuing Bank receives a payment from the
Borrowers on account of a Reimbursement Obligation, including any interest
thereon, as to which any Lender has made a Revolving Loan pursuant to clause
(ii) of this Section, the Issuing Bank shall promptly pay to the Administrative
Agent such payment in accordance with Section 3.02. Each such payment shall be
made by the Issuing Bank or the Administrative Agent, as the case may be, on the
Business Day on which such Person receives the funds paid to such Person
pursuant to the preceding sentence, if received prior to 11:00 a.m. (New York
time) on such Business Day, and otherwise on the next succeeding Business Day.
(iv) Upon the request of any Lender, the Issuing Bank shall
furnish such Lender copies of any Letter of Credit or Letter of Credit
Reimbursement Agreement to which the Issuing Bank is party and such other
documentation as reasonably may be requested by such Lender.
(v) The obligations of a Lender to make payments to the
Administrative Agent for the account of the Issuing Bank with respect to a
Letter of Credit shall be irrevocable, shall not be subject to any qualification
or exception whatsoever except willful misconduct or gross negligence of the
Issuing Bank, and shall be honored in accordance with this Article II
(irrespective of the satisfaction of the conditions described in Sections 5.01
and 5.02, as applicable, which conditions, for the purposes of refunding any
Reimbursement Obligation owed to the Issuing Bank, such Lenders irrevocably
waive) under all circumstances, including, without limitation, any of the
following circumstances:
(A) any lack of validity or enforceability hereof or of any of
the other Loan Documents;
39
(B) the existence of any claim, setoff, defense or other right
which the Borrowers may have at any time against a beneficiary named in
a Letter of Credit or any transferee of a beneficiary named in a Letter
of Credit (or any Person for whom any such transferee may be acting),
the Administrative Agent, the Issuing Bank, any Lender, or any other
Person, whether in connection herewith, with any Letter of Credit, the
transactions contemplated herein or any unrelated transactions
(including any underlying transactions between the account party and
beneficiary named in any Letter of Credit);
(C) any draft, certificate or any other document presented
under the Letter of Credit having been determined to be forged,
fraudulent, invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect;
(D) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Loan
Documents;
(E) any failure by the Issuing Bank to make any reports
required pursuant to Section 2.04(h) or the inaccuracy of any such
report; or
(F) the occurrence of any Event of Default or Default.
(f) Payment of Reimbursement Obligations. (i) The Borrowers
unconditionally agree to pay to the Issuing Bank, in Dollars, the amount of all
Reimbursement Obligations, interest and other amounts payable to the Issuing
Bank under or in connection with the Letters of Credit when such amounts are due
and payable, irrespective of any claim, setoff, defense or other right which the
Borrowers may have at any time against the Issuing Bank or any other Person.
(ii) In the event any payment by the Borrowers received by the
Issuing Bank with respect to a Letter of Credit and distributed by the
Administrative Agent to the Lenders on account of their participation is
thereafter set aside, avoided or recovered from the Issuing Bank in connection
with any receivership, liquidation or bankruptcy proceeding, each such Lender
which received such distribution shall, upon demand by the Issuing Bank,
contribute such Lender's Pro Rata Share of the amount set aside, avoided or
recovered together with interest at the rate required to be paid by the Issuing
Bank upon the amount required to be repaid by it.
(g) Issuing Bank Charges. The Borrowers shall pay to the
Issuing Bank, solely for its own account, the standard charges assessed by the
Issuing Bank in connection with the issuance, administration, amendment and
payment or cancellation of Letters of Credit and set forth in a letter sent to
the Borrowers by the Issuing Bank, and such compensation in respect of such
Letters of Credit for the Borrowers' account as may be agreed upon by the
Borrowers and the Issuing Bank from time to time.
40
(h) Issuing Bank Reporting Requirements. The Issuing Bank
shall make available on a daily basis to the Administrative Agent and the
Borrowers separate schedules for Commercial Letters of Credit, Usance Letters of
Credit and Standby Letters of Credit issued by it, in form and substance
reasonably satisfactory to the Administrative Agent, setting forth the aggregate
Letter of Credit Obligations outstanding to it at the end of each month and any
information requested by the Administrative Agent or the Borrowers relating to
the date of issue, account party, amount, expiration date and reference number
of each Letter of Credit issued by it.
(i) Indemnification; Exoneration. (i) In addition to all other
amounts payable to an Issuing Bank, the Borrowers hereby agree to defend,
indemnify, and save the Administrative Agent, the Issuing Bank and each Lender
harmless from and against any and all claims, demands, liabilities, penalties,
damages, losses (other than loss of profits), costs, charges and expenses
(including reasonable attorneys' fees but excluding taxes) which the
Administrative Agent, the Issuing Bank or such Lender may incur or be subject to
as a consequence, direct or indirect, of (A) the Issuance of any Letter of
Credit other than as a result of the gross negligence or willful misconduct of
the Issuing Bank, as determined by a court of competent jurisdiction, or (B) the
failure of the Issuing Bank issuing a Letter of Credit to honor a drawing under
such Letter of Credit as a result of any act or omission, whether rightful or
wrongful, of any present or future de jure or de facto government or
Governmental Authority.
(ii) As between the Borrowers on the one hand and the
Administrative Agent, the Lenders and the Issuing Bank on the other hand, the
Borrowers assume all risks of the acts and omissions of, or misuse of Letters of
Credit by, the respective beneficiaries of the Letters of Credit. In furtherance
and not in limitation of the foregoing, subject to the provisions of the Letter
of Credit Reimbursement Agreements, the Administrative Agent, the Issuing Bank
and the Lenders shall not be responsible for, except to the extent of their
gross negligence or wilful misconduct: (A) the form, validity, legality,
sufficiency, accuracy, genuineness or legal effect of any document submitted by
any party in connection with the application for and Issuance of the Letters of
Credit, even if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (B) the validity, legality or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign a Letter of Credit or the rights or benefits thereunder or
proceeds thereof, in whole or in part, which may prove to be invalid or
ineffective for any reason; (C) failure of the beneficiary of a Letter of Credit
to comply duly with conditions required in order to draw upon such Letter of
Credit; (D) errors, omissions, interruptions or delays in transmission or
delivery of any messages, by mail, cable, telegraph, telex or otherwise, whether
or not they be in cipher; (E) errors in interpretation of technical terms; (F)
any loss or delay in the transmission or otherwise of any document required in
order to make a drawing under any Letter of Credit or of the proceeds thereof;
(G) the misapplication by the beneficiary of a Letter of Credit of the proceeds
of any drawing under such Letter of Credit; (H) any litigation, proceeding or
charges with respect to such Letter of Credit; and (I) any consequences arising
from causes beyond the control of the Administrative Agent, the Issuing Bank or
the Lenders.
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2.05. Promise to Repay; Evidence of Indebtedness.
(a) Promise to Repay. (i) The Borrowers jointly and severally
agree to pay on the Commitment Termination Date the principal amount of each
Revolving Loan, and further agree to pay all unpaid interest accrued thereon, in
accordance with the terms of this Agreement and the promissory notes evidencing
the Revolving Loans owing to the Lenders. The Borrowers shall execute and
deliver to each Lender such promissory notes as are necessary to evidence the
Revolving Loans owing to the Lenders after giving effect to any assignment
thereof pursuant to Section 13.01, each substantially in the form of Exhibit C-1
attached hereto and made a part hereof (all such promissory notes and all
amendments thereto, replacements thereof and substitutions therefor being
collectively referred to as the "Revolving Loan Notes"; and "Revolving Loan
Note" means any one of the Revolving Loan Notes).
(ii) The Borrowers jointly and severally agree to pay on
demand the principal amount of such Swing Loan, and further agree to pay all
unpaid interest accrued thereon, in accordance with Section 4.01 and the terms
of this Agreement and the promissory note evidencing the Swing Loans owing to
the Swing Loan Lender. The Borrowers shall execute and deliver to the Swing Loan
Lender such promissory note as is necessary to evidence the Swing Loans owing to
the Swing Loan Lender, substantially in the form of Exhibit C-2 (all such
promissory notes and all amendments thereto, replacements thereof and
substitutions therefor being collectively referred to as the "Swing Loan Notes";
and "Swing Loan Note" means any one of the Notes).
(b) Loan Accounts. Each Lender shall maintain in accordance
with its usual practice an account or accounts evidencing the Indebtedness of
the Borrowers to such Lender resulting from each Loan owing to such Lender from
time to time, including the amount of principal and interest payable and paid to
such Lender from time to time hereunder and under each of the Notes. The
Administrative Agent shall maintain in accordance with its usual practice a
composite account or accounts evidencing the outstanding Revolving Loans, Swing
Loans and Letter of Credit Obligations including the amount of principal and
interest payable and paid to the Lenders from time to time hereunder.
2.06. Authorized Officers and Agents. On the Closing Date and
from time to time thereafter, the Borrowers shall deliver to the Administrative
Agent an Officer's Certificate setting forth (i) the names of the officers,
employees and agents authorized on behalf of all Borrowers to request Swing
Loans, Revolving Loans and Letters of Credit and (ii) a specimen signature of
each such officer, employee or agent. The officers, employees and agents so
authorized shall also be authorized to act for the Borrowers in respect of all
other matters relating to the Loan Documents. The Administrative Agent shall be
entitled to rely conclusively on such officer's or employee's or agent's
authority to request such Loans or Letters of Credit until the Administrative
Agent receives written notice to the contrary. The Administrative Agent shall
have no duty to verify the authenticity of the signature appearing on any
written Notice of
42
Borrowing or any other document, and, with respect to an oral request for such
Loans or Letters of Credit, the Administrative Agent shall have no duty to
verify the identity of any person representing himself or herself as one of the
officers, employees or agents authorized to make such request or otherwise to
act on behalf of the Borrowers. None of the Administrative Agent, any Lender or
the Issuing Bank shall incur any liability to the Borrowers or any other Person
in acting upon any telephonic notice referred to above which the Administrative
Agent reasonably believes to have been given by a duly authorized officer or
other person authorized to borrow on behalf of the Borrowers.
ARTICLE III
PAYMENTS AND PREPAYMENTS
3.01. Prepayments; Reductions in Commitments.
(a) Voluntary Prepayments/Reductions. (i) Loans. The Borrowers
may prepay Floating Rate Loans on any Business Day, in whole or in part, upon
written notice no later than 1:00 p.m. on such day with respect to Revolving
Loans (and 4:00 p.m. on such day with respect to Swing Loans) to the
Administrative Agent (which the Administrative Agent shall promptly transmit to
each Lender as applicable), provided that the Borrowers shall not be required to
give notice to the Administrative Agent for any prepayments made pursuant to
Section 3.05. Fixed Rate Loans may be prepaid (A) in whole or in part on the
expiration date of the then applicable Interest Period upon written notice no
later than 1:00 p.m. on such day to the Administrative Agent (which the
Administrative Agent shall promptly transmit to each Lender as applicable) and
(B) on any other Business Day upon at least three (3) Business Days' prior
written notice to the Administrative Agent (which the Administrative Agent shall
promptly transmit to each Lender as applicable) and only upon payment of the
amounts described in Section 4.02(f).
(ii) Commitment. The Borrowers, upon at least five (5)
Business Days' prior written notice to the Administrative Agent (which the
Administrative Agent shall promptly transmit to each Lender), shall have the
right, from time to time, to terminate in whole or permanently reduce in part
the Commitments, provided that, after giving effect to such reduction of the
Commitments, the Borrowers are in compliance with the provisions of Section
3.01(b)(i). Any partial reduction of the Commitments shall be in an aggregate
minimum amount of $5,000,000 and integral multiples of $1,000,000 in excess of
that amount, and shall reduce the Commitment of each Lender proportionately in
accordance with such Lender's Pro Rata Share. Any notice of termination or
reduction given to the Administrative Agent under this Section 3.01(a)(ii) shall
specify the date (which shall be a Business Day) of such termination or
reduction and, with respect to a partial reduction, the aggregate principal
amount thereof. When notice of termination or reduction is delivered as provided
herein, such notice shall be irrevocable and such Commitments shall not be
reinstated.
43
(iii) The prepayments and payments in respect of reductions
and terminations described in clauses (i) and (ii) of this Section 3.01(a) may
be made without premium or penalty (except as provided in Section 4.02(f)).
(b) Mandatory Prepayments of Loans. (i) Immediately, if the
Revolving Credit Obligations are greater than the Maximum Revolving Credit
Amount, the Borrowers shall make a mandatory repayment of the Revolving Loans,
the Swing Loans and the Letter of Credit Obligations in an amount equal to such
excess. In addition, to the extent the Maximum Revolving Credit Amount is at any
time less than the amount of contingent Letter of Credit Obligations outstanding
at any time, the Borrowers shall deposit Cash Collateral in the Cash Collateral
Account in an amount equal to the amount by which such Letter of Credit
Obligations exceed such Maximum Revolving Credit Amount.
(ii) On a daily basis from funds on deposit in the
Concentration Account at the close of business on any Business Day, the
Administrative Agent shall apply such funds to the outstanding Swing Loans,
Revolving Loans and Reimbursement Obligations and thereby cause the Borrowers to
make a mandatory repayment of such Swing Loans, Revolving Loans and
Reimbursement Obligations on such Business Day.
(iii) Immediately after any Borrower's receipt of any Net Cash
Proceeds, the Borrowers shall make or cause to be made a mandatory prepayment of
the Revolving Credit Obligations in the amount of such Net Cash Proceeds;
provided, however, that in the event that all or a portion of such prepayment
would cause Fixed Rate Loans to be prepaid prior to the end of their respective
Interest Periods and no Event of Default has occurred and is continuing at such
time, the Borrowers may deposit that portion of the prepayment that would have
caused Fixed Rate Loans to be prepaid prior to the end of their respective
Interest Periods into the Cash Collateral Account. On the last day of each such
Interest Period, the Administrative Agent shall withdraw funds on deposit in the
Cash Collateral Account in an amount equal to the aggregate amount of Fixed Rate
Loans having Interest Periods ending on such day and apply such funds to the
repayment of the outstanding Revolving Credit Obligations. In addition, the
Commitments shall be permanently reduced on the date of such Borrower's receipt
of Net Cash Proceeds by the amount of such Net Cash Proceeds less the Excluded
Proceeds and the amount of Net Cash Proceeds that constitute proceeds of
insurance on account of the loss of or damage to any Collateral.
(iv) Nothing in this Section 3.01(b) shall be construed to
constitute the Lenders' consent to any transaction which is not expressly
permitted by Article IX.
3.02. Payments. (a) Manner and Time of Payment. All payments
of principal of and interest on the Loans and Reimbursement Obligations and
other Obligations (including, without limitation, fees and expenses) which are
payable to the Administrative Agent, the Lenders or the Issuing Bank shall be
made without condition or reservation of right, in immediately available funds,
delivered to the Administrative Agent (or, in the case of
44
Reimbursement Obligations, to the Issuing Bank) not later than 2:00 p.m. (New
York time) with respect to Revolving Loans and all other Obligations (other than
Swing Loans), and not later than 4:00 p.m. (New York time) with respect to Swing
Loans, on the date and at the place due, to the Administrative Agent's Account
(or such account of the Issuing Bank, as it may designate). Payments received by
the Administrative Agent in respect of Swing Loans shall be distributed to the
Swing Loan Lender, payments received by the Administrative Agent in respect of
Revolving Loans shall be distributed to each Lender in accordance with its Pro
Rata Share in accordance with the provisions of Section 3.02(b), if received
prior to 2:00 p.m., and on the next succeeding Business Day, if received
thereafter, by the Administrative Agent.
(b) Apportionment of Payments. (i) Subject to the provisions
of Section 3.02(b)(ii) and (v), except as otherwise provided herein (A) all
payments of principal and interest (I) in respect of outstanding Swing Loans
shall be allocated to the Swing Loan Lender and (II) in respect of outstanding
Revolving Loans shall be allocated among all the Lenders in proportion to their
respective Pro Rata Shares and (B) all payments of fees and all other payments
in respect of any other Obligations shall be allocated among such of the Holders
as are entitled thereto, on a pro rata basis. All principal payments in respect
of Loans shall be applied first, to repay outstanding Floating Rate Loans and
then, to repay outstanding Fixed Rate Loans with those Fixed Rate Loans which
have earlier expiring Interest Periods being repaid prior to those which have
later expiring Interest Periods.
(ii) After the occurrence and during the continuance of an
Event of Default, the Administrative Agent may, and shall upon the acceleration
of the Obligations pursuant to Section 11.02(a), apply all payments in respect
of any Obligations and all proceeds of Collateral in the following order:
(A) first, to pay interest on and then principal of any
portion of the Revolving Loans which the Administrative Agent may have
advanced on behalf of any Lender for which the Administrative Agent has
not then been reimbursed by such Lender or the Borrowers;
(B) second, to pay interest on and then principal of any Swing
Loan;
(C) third, to pay Obligations in respect of any expense
reimbursements or indemnities then due to the Administrative Agent;
(D) fourth, to pay Obligations in respect of any expense
reimbursements or indemnities then due to the Lenders and the Issuing
Bank;
(E) fifth, to pay Obligations in respect of any fees then due
to the Administrative Agent, the Lenders and the Issuing Bank;
(F) sixth, to pay interest due in respect of the Loans and
Reimbursement Obligations;
45
(G) seventh, to pay principal outstanding on the Loans and
outstanding Letter of Credit Obligations;
(H) eighth, to provide, to the extent any Obligations are
contingent, Cash Collateral pursuant to Section 11.02(b); and
(I) ninth, to the ratable payment of all other Obligations;
provided, however, if sufficient funds are not available to fund all payments to
be made in respect of any of the Obligations described in any of the foregoing
clauses (A) through (H), the available funds being applied with respect to any
such Obligation (unless otherwise specified in such clause) shall be allocated
to the payment of such Obligations ratably, based on the proportion of the
Administrative Agent's and each Lender's or Issuing Bank's interest in the
aggregate outstanding Obligations described in such clauses.
The order of priority set forth in this Section 3.02(b) and the related
provisions hereof are set forth solely to determine the rights and priorities of
the Administrative Agent, the Lenders, the Issuing Bank and other Holders as
among themselves. The order of priority set forth in clauses (A) through (H) of
this Section 3.02(b)(ii) may at any time and from time to time be changed by the
agreement of the Requisite Lenders without necessity of notice to or consent of
or approval by the Borrowers, any Holder which is not a Lender or Issuing Bank,
or any other Person; provided, however, the order of priority set forth in
clauses (A) through (E) of this Section 3.02(b)(ii) may not be changed without
the prior written consent of the Administrative Agent.
(iii) All payments of principal on the Swing Loans,
Reimbursement Obligations, interest, fees and other sums payable in respect of
the Loans may, at the option of the Administrative Agent, be paid from the
proceeds of the Revolving Loans. The Borrowers hereby authorize the Swing Loan
Lender to make pursuant to Section 2.02(a) and the Lenders to make pursuant to
Section 2.01(a), from time to time in such Swing Loan Lender's or Lenders'
discretion, Loans which are in the amounts of any and all principal on the Swing
Loans, Reimbursement Obligations, interest, fees and other sums payable in
respect of the Loans. The Borrowers agree that all such Loans so made shall be
deemed to have been requested by it and directs that all proceeds thereof shall
be used to pay such amounts.
(iv) The Administrative Agent shall promptly distribute to
each Lender and Issuing Bank at its primary address set forth on the appropriate
signature page hereof or the signature page to the Assignment and Acceptance by
which it became a Lender or Issuing Bank, or at such other address as a Lender,
an Issuing Bank or other Holder may request in writing, such funds as such
Person may be entitled to receive pursuant to the terms hereof; provided that,
as between the Holders and the Administrative Agent, the Administrative Agent
shall under no circumstances be bound to inquire into or determine the validity,
scope or priority of any interest or entitlement of any Holder and may suspend
all payments or seek appropriate relief (including, without limitation,
instructions from the Requisite Lenders or an action in the nature of
46
interpleader) in the event of any doubt or dispute as to any apportionment or
distribution contemplated hereby.
(v) If any Lender fails to fund its Pro Rata Share of any
Borrowing (the funded portion of such Borrowing being hereinafter referred to as
a "Non Pro Rata Loan") which such Lender is obligated to fund under the terms
hereof (excluding any such Lender who has delivered to the Administrative Agent
written notice that one or more of the conditions precedent contained in Section
5.02 shall not on the date of such request be satisfied and until such
conditions are satisfied), then until the earlier of such Lender's cure of such
failure and the termination of the Commitments, the proceeds of all amounts
thereafter repaid to the Administrative Agent by the Borrowers and otherwise
required to be applied to such Lender's share of all other Obligations pursuant
to the terms hereof shall be advanced to the Borrowers by the Administrative
Agent on behalf of such Lender to cure, in full or in part, such failure by such
Lender, but shall nevertheless be deemed to have been paid to such Lender in
satisfaction of such other Obligations. Notwithstanding anything contained
herein to the contrary:
(A) the foregoing provisions of this Section
3.02(b)(v) shall apply only with respect to the proceeds of
payments of Obligations;
(B) a Lender shall be deemed to have cured its
failure to fund its Pro Rata Share of any Revolving Loan at
such time as an amount equal to such Lender's original Pro
Rata Share of the requested principal portion of such
Revolving Loan is fully funded to the Borrowers, whether made
by such Lender itself or by operation of the terms of this
Section 3.02(b)(v), and whether or not the Non Pro Rata Loan
with respect thereto has been repaid;
(C) amounts advanced to the Borrowers to cure, in
full or in part, any such Lender's failure to fund its Pro
Rata Share of any Borrowing ("Cure Loans") shall bear interest
at the rate applicable to the other Revolving Loans comprising
such Borrowing and shall be treated as Revolving Loans
comprising such Borrowing for all purposes herein;
(D) regardless of whether or not an Event of Default
has occurred or is continuing, and notwithstanding the
instructions of the Borrowers as to its desired application,
all repayments of principal which, in accordance with the
other terms of this Section 3.02, would be applied to the
outstanding Revolving Loans shall be applied first, ratably to
all Revolving Loans constituting Non Pro Rata Loans, second,
ratably to Revolving Loans other than those constituting Non
Pro Rata Loans or Cure Loans and, third, ratably to Revolving
Loans constituting Cure Loans; and
(E) no Lender shall be relieved of any obligation
such Lender may have to the Borrowers under the terms of this
Agreement as a result of the provisions of this Section
3.02(b)(v).
47
(c) Payments on Non-Business Days. Whenever any payment to be
made by the Borrowers hereunder or under the Notes is stated to be due on a day
which is not a Business Day, the payment shall instead be due on the next
succeeding Business Day (or, as set forth in Section 4.02(b)(iii), the next
preceding Business Day), and any such extension of time shall be included in the
computation of the payment of interest and fees hereunder.
3.03. Taxes. (a) Payments Free and Clear of Taxes. Any and all
payments by the Borrowers hereunder or under any Note or other document
evidencing any Obligations shall be made free and clear of and without reduction
for any and all present or future taxes, levies, imposts, deductions, charges,
withholdings, and all stamp or documentary taxes, excise taxes, ad valorem taxes
and other taxes imposed on the value of the Property, charges or levies which
arise from the execution, delivery or registration, or from payment or
performance under, or otherwise with respect to, any of the Loan Documents or
the Commitments and all other liabilities with respect thereto excluding, in the
case of each Lender and the Administrative Agent, taxes imposed on or measured
by net income or overall gross receipts and capital and franchise taxes imposed
on it by (i) the United States, except withholding taxes contemplated pursuant
to Section 3.03(d)(ii)(C), (ii) the Governmental Authority of the jurisdiction
in which such Lender's Lending Office is located or any political subdivision
thereof or (iii) the Governmental Authority in which such Person is organized,
managed and controlled or any political subdivision thereof (all such
non-excluded taxes, levies, imposts, deductions, charges and withholdings being
hereinafter referred to as "Taxes"). Subject to the limitations in Section
3.03(e), if the Borrowers shall be required by law to withhold or deduct any
Taxes from or in respect of any sum payable hereunder or under any such Note or
document to any Lender or the Administrative Agent, (x) the sum payable to such
Lender or the Administrative Agent shall be increased as may be necessary so
that after making all required withholding or deductions (including withholding
or deductions applicable to additional sums payable under this Section 3.03)
such Lender or the Administrative Agent, as applicable, receives an amount equal
to the sum it would have received had no such withholding or deductions been
made, (y) the Borrowers shall make such withholding or deductions and (z) the
Borrowers shall pay the full amount withheld or deducted to the relevant
taxation authority or other authority in accordance with applicable law. If any
Taxes shall be applicable after the date hereof, to such payments by Borrowers
made to the Applicable Lending Office of any Lender, such Lender shall use its
best efforts to make, fund and maintain its Loans, and to make, fund and
maintain its obligations in connection with the Letters of Credit, through
another Applicable Lending Office of such Lender in another jurisdiction so as
to reduce the Borrowers' liability hereunder, if the making, funding or
maintenance of such Loans or obligations in connection with the Letters of
Credit through such other Applicable Lending Office of such Lender does not, in
the reasonable judgment of such Lender, otherwise materially adversely affect
such Loans, obligations under the Letters of Credit or such Lender.
(b) Indemnification. The Borrowers shall indemnify each Lender
and the Administrative Agent against, and reimburse each on demand for, the full
amount of all Taxes
48
payable by the Borrowers pursuant to Section 3.03(a) (including, without
limitation, any Taxes imposed by any Governmental Authority on amounts payable
under this Section 3.03 and any additional income or franchise taxes resulting
therefrom) incurred or paid by such Lender or the Administrative Agent or any of
their respective Affiliates and any liability (including penalties, interest,
and out-of-pocket expenses paid to third parties but excluding any penalties
paid to a taxing Governmental Authority for late payment of Taxes, which penalty
resulted solely from the action or inaction of such Person seeking
indemnification under this Section 3.03) arising therefrom or with respect
thereto, whether or not such Taxes were lawfully payable. A certificate as to
any additional amount payable to any Person under this Section 3.03 submitted by
it to the Borrowers shall, absent manifest error, be final, conclusive and
binding upon all parties hereto. In determining such additional amount, the
applicable Person shall take into account and reduce the amount otherwise
payable by the Borrowers pursuant to this subsection (b), by an amount equal to
the tax credits and other tax benefits actually utilized (as determined by such
Person in its reasonable discretion). Each of the Lenders and the Administrative
Agent agrees, within a reasonable time after receiving a written request from
the Borrowers, to provide the Borrowers and each Lender, and each Lender agrees
to so provide the Administrative Agent with such certificates as are reasonably
required, and take such other actions as are reasonably necessary to claim such
exemptions as such Lender or the Administrative Agent may be entitled to claim
in respect of all or a portion of any Taxes which are otherwise required to be
paid or deducted or withheld pursuant to this Section 3.03 in respect of any
payments hereunder or under the Notes.
(c) Receipts. If requested by the Administrative Agent, in its
sole discretion, within thirty (30) days after such request, the Borrowers shall
furnish to the Administrative Agent, at its address referred to in Section
13.08, the original or a certified copy of any receipt or other documentation
received by the Borrowers, evidencing payment of any Taxes by the Borrowers.
(d) Foreign Bank Certifications. (i) Each Lender and the
Administrative Agent that is not created or organized under the laws of the
United States or a political subdivision thereof or that is a foreign trust or
estate within the meaning of Section 7701(a)(31) of the Internal Revenue Code,
shall deliver to the Borrowers and the Administrative Agent on the Closing Date
or the date on which such Lender becomes a Lender pursuant to Section 13.01
hereof (or the date on which the Administrative Agent becomes an Administrative
Agent hereafter), (x) a true and accurate certificate executed in duplicate by a
duly authorized officer of such Person to the effect that such Person is
eligible to receive payments hereunder and under the Notes without deduction or
withholding of United States federal income tax (A) under the provisions of an
applicable tax treaty concluded by the United States (in which case the
certificate shall be accompanied by two duly completed copies of IRS Form 1001
(or any successor or substitute form or forms)), or (B) under Sections
1442(c)(1) and 1442(a) of the Internal Revenue Code (in which case the
certificate shall be accompanied by two duly completed copies of IRS Form 4224
(or any successor or substitute form or forms)).
49
(ii) Each Lender and the Administrative Agent further agrees
to deliver to the Borrowers and the Administrative Agent from time to time, a
true and accurate certificate executed in duplicate by a duly authorized officer
of such Person before or promptly upon the occurrence of any event requiring a
change in the most recent certificate previously delivered by it to the
Borrowers and the Administrative Agent pursuant to this Section 3.03(d). Each
certificate required to be delivered pursuant to this Section 3.03(d)(ii) shall
certify as to one of the following:
(A) that such Person can continue to receive payments
hereunder and under the Notes without deduction or withholding of
United States federal income tax;
(B) that such Person cannot continue to receive payments
hereunder and under the Notes without deduction or withholding of
United States federal income tax as specified therein but does not
require additional payments pursuant to Section 3.03(a) because it is
entitled to recover the full amount of any such deduction or
withholding from a source other than the Borrowers;
(C) that such Person is no longer capable of receiving
payments hereunder and under the Notes without deduction or withholding
of United States federal income tax as specified therein by reason of a
change in law (including the Internal Revenue Code or applicable tax
treaty) after the later of the Closing Date or the date on which such
Person became a Lender or Administrative Agent, as the case may be,
pursuant to Section 13.01 (or any other relevant provision hereof) and
that it is not capable of recovering the full amount of the same from a
source other than the Borrowers; or
(D) that such Person is no longer capable of receiving
payments hereunder without deduction or withholding of United States
federal income tax as specified therein other than by reason of a
change in law (including the Internal Revenue Code or applicable tax
treaty) after the later of the Closing Date or the date on which such
Person became a Lender or the Administrative Agent, as the case may be,
pursuant to Section 13.01 (or any other relevant provision hereof).
(e) Limitations. Notwithstanding anything to the contrary in
this Section 3.03, the Borrowers may withhold or deduct (as required by law),
and shall not be required to increase any amounts payable to any Lender or the
Administrative Agent for, any Taxes (i) that are directly attributable to such
Person's failure to comply with paragraphs (b) and (d) of this Section 3.03 with
respect to the certificates such Person is required to provide or with respect
to other actions such Person is required to take pursuant to such paragraphs or
(ii) that are contemplated by Section 3.03(d)(ii)(D).
(f) Refunds. Upon the written request of the Borrowers made to
a Lender, and at
50
the Borrowers' expense, such Lender shall apply for a refund with respect to any
Tax for which such Lender has been indemnified by the Borrowers pursuant to this
Section 3.03 and for which such Lender believes it is entitled to receive. If
the Lender receives such refund and determines that such refund is of Taxes for
which it has been indemnified by the Borrowers pursuant to Section 3.03, such
Lender shall promptly remit such refund to the Borrowers without interest (other
than interest, if any, included in such refund), net of all costs and expenses
of such Lender and any taxes payable with respect to the receipt of such refund
and interest. In the event that such Lender is required to repay such refund to
the relevant taxing authority requiring repayment of such refund, the Borrowers
agree upon demand to promptly return such refund (together with any interest
included in such refund).
(g) Survival. Without prejudice to the survival of any other
agreement of the Borrowers hereunder, the agreements and obligations of the
Borrowers contained in Section 3.03 shall survive the payment in full of the
Obligations and the termination of this Agreement.
3.04. Increased Capital. If after the date hereof any Lender
or the Issuing Bank determines that (i) the adoption or implementation of or any
change in or in the interpretation or administration of any law or regulation or
any guideline or request from any central bank or other Governmental Authority
or quasi-governmental authority exercising jurisdiction, power or control over
any Lender, the Issuing Bank or banks or financial institutions generally
(whether or not having the force of law), compliance with which affects or would
affect the amount of capital required or expected to be maintained by such
Lender or the Issuing Bank or any corporation controlling such Lender or the
Issuing Bank and (ii) the amount of such capital is increased by or based upon
(A) the making or maintenance by any Lender of its Loans, any Lender's
participation in or obligation to participate in the Loans, Letters of Credit or
other advances made hereunder or the existence of any Lender's obligation to
make Loans or (B) the issuance or maintenance by the Issuing Bank of, or the
existence of the Issuing Bank's obligation to issue, Letters of Credit, then, in
any such case, upon written demand by such Lender or the Issuing Bank (with a
copy of such demand to the Administrative Agent), the Borrowers shall
immediately pay to the Administrative Agent for the account of such Lender or
the Issuing Bank, from time to time as specified by such Lender or the Issuing
Bank, additional amounts sufficient to compensate such Lender or the Issuing
Bank or such corporation therefor. Such demand shall be accompanied by a
statement as to the amount of such compensation and include a summary of the
basis for such demand with detailed calculations. Such statement shall be
conclusive and binding for all purposes, absent manifest error.
3.05. Cash Management. The Borrowers have established the Lock
Boxes and Blocked Accounts listed on Schedule 3.05. The Borrowers have directed
(i) all account debtors of the Borrowers' private label credit cards to remit
all payments in respect of those Receivables directly to the Lock Boxes and have
directed the Servicer to remit all payments in respect of those Receivables to a
Blocked Account and (ii) all other account debtors of the Borrowers to remit all
payments in respect of those Receivables directly to the Blocked Accounts. Each
Borrower acknowledges that the Administrative Agent shall have at all times
dominion and
51
control of the Blocked Account or Blocked Accounts established with each Blocked
Account Bank. The Borrowers agree to cause all collections of Receivables, all
proceeds of Collateral and all Net Cash Proceeds now or hereafter received
directly or indirectly by any of the Borrowers or in the possession of any of
the Borrowers to be held in trust for the Administrative Agent for the benefit
of the Lenders and the Issuing Bank and, promptly upon receipt thereof, to be
deposited into a Blocked Account, except for the balances that are permitted to
be maintained pursuant to Section 9.16. The Administrative Agent alone shall
have power of withdrawal from each Blocked Account and each Borrower
acknowledges that such Borrower shall not have any right, title or interest in
the Blocked Accounts or the amounts at any time appearing to the credit of such
Blocked Accounts. All of the funds in the Blocked Accounts shall be transferred
into the Concentration Account pursuant to the terms of the respective Blocked
Account Agreements. The Administrative Agent alone shall have power of
withdrawal from the Concentration Account and each Borrower acknowledges that
the Administrative Agent shall have at all times dominion and control of the
Concentration Account and the amounts appearing to the credit of the
Concentration Account.
3.06. Replacement of Lenders. (a) Upon the occurrence of any
event giving rise to the operation of Section 3.03(d)(ii)(C) or (D), Section
3.04, or Section 4.01(f) with respect to any Lender which results in such Lender
charging to the Borrowers increased costs in excess of those being charged
generally by the Lenders, (b) if a Lender becomes in default of its obligations
under this Agreement and/or (c) if a Lender delivers a notice under Section
4.02(e), the Borrowers shall have the right, if no Event of Default then exists,
to replace such Lender (the "Replaced Lender") with one or more other Lenders,
Eligible Assignee or Eligible Assignees, none of whom shall be in default of its
obligations under this Agreement at the time of such replacement (collectively,
the "Replacement Lender"), reasonably acceptable to the Administrative Agent,
provided that at the time of any replacement pursuant to this Section 3.06, the
Replacement Lender shall enter into one or more Assignment and Acceptances
pursuant to Section 13.01 (and with all fees payable pursuant to said Section
13.01(d) to be paid by the Replacement Lender) pursuant to which the Replacement
Lender shall acquire all of the Commitments and outstanding Loans and
participations in outstanding Letters of Credit of the Replaced Lender and, in
connection therewith, shall pay to the Replaced Lender in respect thereof an
amount equal to the sum of (A) an amount equal to the principal of, and all
accrued interest on, all outstanding Loans of the Replaced Lender, (B) an amount
equal to all accrued, but theretofore unpaid, fees owing to the Replaced Lender
under this Agreement and (C) an amount equal to all other outstanding
Obligations (including, without limitation, amounts owing under Section
3.03(d)(ii)(C) or (D), Section 3.04 or Section 4.01(f)) owing to the Replaced
Lender. Upon the execution of the respective Assignment and Acceptance, the
payment of amounts referred to above and, if so requested by the Replacement
Lender, delivery to the Replacement Lender of the appropriate instruments
otherwise required by this Agreement executed by the Borrowers, the Replacement
Lender shall become a Lender hereunder and the Replaced Lender shall cease to be
a Lender hereunder, except with respect to indemnification provisions applicable
to the Replaced Lender under this Agreement, which shall survive as to such
Replaced Lender.
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ARTICLE IV
INTEREST AND FEES
4.01. Interest on the Loans and Other Obligations. (a) Rate of
Interest. All Loans and the outstanding amount of all other Obligations shall
bear interest on the unpaid principal amount thereof from the date such Loans
are made and such other Obligations are due and payable until paid in full,
except as otherwise provided in Section 4.01(d), as follows:
(i) If a Floating Rate Loan or such other Obligation, at a
rate per annum equal to the sum of (A) the Floating Rate in effect from
time to time, plus (B) the Applicable Floating Rate Margin in effect
from time to time; and
(ii) If a Fixed Rate Loan, at a rate per annum equal to the
sum of (A) the Fixed Rate determined for the applicable Interest
Period, plus (B) the Applicable Fixed Rate Margin in effect from time
to time.
The applicable basis for determining the rate of interest on the Loans shall be
selected by the Borrowers at the time a Notice of Borrowing or a Notice of
Conversion/Continuation is delivered by the Borrowers to the Administrative
Agent; provided, however, the Borrowers may not select the Fixed Rate as the
applicable basis for determining the rate of interest on such a Loan if (x) such
Loan is to be made on the Closing Date or (y) at the time of such selection an
Event of Default has occurred and is continuing. If on any day any Loan is
outstanding with respect to which notice has not been timely delivered to the
Administrative Agent in accordance with the terms hereof specifying the basis
for determining the rate of interest on that day, then for that day interest on
that Loan shall be determined by reference to the Floating Rate plus the
Applicable Floating Rate Margin with respect to Floating Rate Loans.
(b) Interest Payments. (i) Interest accrued on each Floating
Rate Loan shall be payable in arrears (A) on the first Business Day of each
calendar month, commencing on the first such day following the making of such
Floating Rate Loan and (B) on the Commitment Termination Date.
(ii) Interest accrued on each Fixed Rate Loan shall be payable
in arrears (A) on each Fixed Rate Interest Payment Date applicable to such Fixed
Rate Loan, (B) upon the payment or prepayment thereof in full or in part, and
(C) if not theretofore paid in full, on the Commitment Termination Date.
(iii) Interest accrued on the principal balance of all other
Obligations shall be payable in arrears (A) on the first Business Day of each
calendar month, commencing on the first such day following the incurrence of
such Obligation, (B) upon repayment thereof in full or in part, and (C) if not
theretofore paid in full, on the Commitment Termination Date.
53
(c) Conversion or Continuation. (i) The Borrowers shall have
the option (A) to convert at any time all or any part of outstanding Floating
Rate Loans (other than Swing Loans) to Fixed Rate Loans; (B) to convert all or
any part of outstanding Fixed Rate Loans having Interest Periods which expire on
the same date to Floating Rate Loans on such expiration date; or (C) to continue
all or any part of outstanding Fixed Rate Loans having Interest Periods which
expire on the same date as Fixed Rate Loans, and the succeeding Interest Period
of such continued Fixed Rate Loans shall commence on such expiration date;
provided, however, no outstanding Loan may be continued as, or be converted
into, a Fixed Rate Loan (i) if the continuation of, or the conversion into, such
a Fixed Rate Loan would violate any of the provisions of Section 4.02 or (ii) if
an Event of Default would occur or has occurred and is continuing. Any
conversion into or continuation of Fixed Rate Loans under this Section 4.01(c)
shall be in a minimum amount of $5,000,000 and in integral multiples of $250,000
in excess of that amount.
(ii) To convert or continue a Loan under Section 4.01(c)(i),
the Borrowers shall deliver a Notice of Conversion/Continuation to the
Administrative Agent no later than 11:00 a.m. (New York time) at least three (3)
Business Days in advance of the proposed conversion/continuation date. A Notice
of Conversion/Continuation shall specify (A) the proposed
conversion/continuation date (which shall be a Business Day), (B) the principal
amount of the Loan to be converted/continued, (C) whether such Loan shall be
converted and/or continued, and (D) in the case of a conversion to, or
continuation of, a Fixed Rate Loan, the requested Interest Period. In lieu of
delivering a Notice of Conversion/Continuation, the Borrowers may give the
Administrative Agent telephonic notice of any proposed conversion/continuation
by the time required under this Section 4.01(c)(ii), and such notice shall be
confirmed in writing delivered to the Administrative Agent promptly (but in no
event later than 5:00 p.m. (New York time) on the same day). Promptly after
receipt of a Notice of Conversion/Continuation under this Section 4.01(c)(ii)
(or telephonic notice in lieu thereof), the Administrative Agent shall notify
each Lender by telex or telecopy, or other similar form of transmission, of the
proposed conversion/continuation. Any Notice of Conversion/Continuation for
conversion to, or continuation of, a Loan (or telephonic notice in lieu thereof)
shall be irrevocable, and the Borrowers shall be bound to convert or continue in
accordance therewith.
(d) Default Interest. Notwithstanding the rates of interest
specified in Section 4.01(a) or elsewhere herein, effective immediately upon the
occurrence of any Event of Default, and for as long thereafter as such Event of
Default shall be continuing, the principal balance of all Loans and of all other
Obligations, shall bear interest at a rate which is two percent (2.0%) per annum
in excess of the rate of interest otherwise applicable to such Obligations from
time to time.
(e) Computation of Interest. Interest on all Obligations shall
be computed on the basis of the actual number of days elapsed in the period
during which interest accrues and a year of 360 days. In computing interest on
any Loan, the date of the making of the Loan shall be
54
included and the date of payment shall be excluded; provided, however, if a Loan
is repaid on the same day on which it is made, one (1) day's interest shall be
paid on such Loan.
(f) Changes; Legal Restrictions. If after the date hereof any
Lender or the Issuing Bank determines that the adoption or implementation of or
any change in or in the interpretation or administration of any law or
regulation or any guideline or request from any central bank or other
Governmental Authority or quasi-governmental authority exercising jurisdiction,
power or control over any Lender, the Issuing Bank or over banks or financial
institutions generally (whether or not having the force of law), compliance with
which, in each case after the date hereof:
(i) subjects a Lender or the Issuing Bank (or its Applicable
Lending Office) to charges (other than Taxes and taxes measured by or imposed
upon the net income of such Lender or Issuing Bank (or its Applicable Lending
Office) or franchise tax imposed in lieu of such net income tax) of any kind
which are applicable to the Commitments of the Lenders and/or the Issuing Bank
to make Fixed Rate Loans or to issue and/or participate in Letters of Credit or
changes the basis of taxation of payments to that Lender or the Issuing Bank of
principal, fees, interest or any other amount payable hereunder with respect to
Fixed Rate Loans or Letters of Credit; or
(ii) imposes, modifies, or holds applicable, any reserve
(other than reserves taken into account in calculating the Fixed Rate), special
deposit, compulsory loan, FDIC insurance or similar requirement against assets
held by, or deposits or other liabilities (including those pertaining to Letters
of Credit) in or for the account of, advances or loans by, commitments made, or
other credit extended by, or any other acquisition of funds by, a Lender or the
Issuing Bank or any Applicable Lending Office or Fixed Rate Affiliate of that
Lender or the Issuing Bank;
and the result of any of the foregoing is to increase the cost to that Lender or
the Issuing Bank of making, renewing or maintaining the Loans or its Commitments
or issuing or participating in the Letters of Credit or to reduce any amount
receivable thereunder; then, in any such case, upon written demand by such
Lender or the Issuing Bank (with a copy of such demand to the Administrative
Agent), the Borrowers shall immediately pay to the Administrative Agent for the
account of such Lender or the Issuing Bank, from time to time as specified by
such Lender or the Issuing Bank, such amount or amounts as may be necessary to
compensate such Lender or the Issuing Bank or its Fixed Rate Affiliate for any
such additional cost incurred or reduced amount received. Such demand shall be
accompanied by a statement as to the amount of such compensation and include a
summary of the basis for such demand. Such statement shall be conclusive and
binding for all purposes, absent manifest error.
4.02. Special Provisions Governing Fixed Rate Loans. With
respect to Fixed Rate Loans:
55
(a) Amount of Fixed Rate Loans. Each Fixed Rate Loan shall be
for a minimum amount of $5,000,000 and in integral multiples of $250,000 in
excess of that amount.
(b) Determination of Interest Period. By giving notice as set
forth in Section 2.01(b) (with respect to a Borrowing of Revolving Loans to be
made as Fixed Rate Loans) or Section 4.01(c) (with respect to a conversion into
or continuation of Fixed Rate Loans), the Borrowers shall have the option,
subject to the other provisions of this Section 4.02, to select an interest
period (each, a "Interest Period") to apply to the Loans described in such
notice, subject to the following provisions:
(i) The Borrowers may only select, as to a particular
Borrowing of Fixed Rate Loans, an Interest Period of either one, two,
three or six months in duration;
(ii) In the case of immediately successive Interest Periods
applicable to a Borrowing of Fixed Rate Loans, each successive Interest
Period shall commence on the day on which the next preceding Interest
Period expires;
(iii) If any Interest Period would otherwise expire on a day
which is not a Business Day, such Interest Period shall be extended to
expire on the next succeeding Business Day if such Business Day occurs
in the same calendar month, and if there shall be no succeeding
Business Day in such calendar month, the Interest Period shall expire
on the immediately preceding Business Day;
(iv) The Borrowers may not select an Interest Period as to any
Loan if such Interest Period terminates later than the Commitment
Termination Date; and
(v) There shall be no more than five (5) Interest Periods in
effect at any one time.
(c) Determination of Interest Rate. As soon as practicable on
the Fixed Rate Determination Date, the Administrative Agent shall determine the
interest rate which shall apply to the Fixed Rate Loans for which an interest
rate is then being determined for the applicable Interest Period and shall
promptly give notice thereof (in writing or by telephone confirmed in writing)
to the Borrowers and to each Lender. The Administrative Agent's determination
shall be presumed to be correct, absent manifest error, and shall be binding
upon the Borrowers.
(d) Interest Rate Unascertainable, Inadequate or Unfair. In
the event that at least one (1) Business Day before the Fixed Rate Determination
Date:
(i) the Administrative Agent determines that adequate and fair
means do not exist for ascertaining the Eurodollar Rate;
56
(ii) the Requisite Lenders advise the Administrative Agent
that Dollar deposits in the principal amounts of the Fixed Rate Loans
comprising such Borrowing are not generally available in the London
interbank market for a period equal to such Interest Period; or
(iii) the Requisite Lenders advise the Administrative Agent
that the applicable Fixed Rate, as determined by the Administrative
Agent, after taking into account the adjustments for reserves and
increased costs provided for in Section 4.01(a)(iii) and (f), will not
adequately and fairly reflect the cost to such Lenders of funding their
Fixed Rate Loans;
then the Administrative Agent shall forthwith give notice thereof to the
Borrowers, whereupon (until the Administrative Agent notifies the Borrowers that
the circumstances giving rise to such suspension no longer exist) the right of
the Borrowers to elect to have Loans bear interest based upon the Fixed Rate
shall be suspended and each outstanding Fixed Rate Loan shall be converted into
a Floating Rate Loan on the last day of the then current Interest Period
therefor, and any Notice of Borrowing for which Revolving Loans have not then
been made shall be deemed to be a request for Floating Rate Loans,
notwithstanding any prior election by the Borrowers to the contrary.
(e) Illegality. (i) If at any time any Lender determines
(which determination shall, absent manifest error, be final and conclusive and
binding upon all parties) that the making or continuation of any Fixed Rate Loan
has become unlawful or impermissible by compliance by that Lender with any law,
governmental rule, regulation or order of any Governmental Authority (whether or
not having the force of law and whether or not failure to comply therewith would
be unlawful or would result in costs or penalties), then, and in any such event,
such Lender may give notice of that determination, in writing, to the Borrowers
and the Administrative Agent, and the Administrative Agent shall promptly
transmit the notice to each other Lender.
(ii) When notice is given by a Lender under Section
4.02(e)(i), (A) the Borrowers' right to request from such Lender and such
Lender's obligation, if any, to make Fixed Rate Loans shall be immediately
suspended, and such Lender shall make a Floating Rate Loan as part of any
requested Borrowing of Fixed Rate Loans and (B) if the affected Fixed Rate Loan
or Loans are then outstanding, the Borrowers shall immediately, or if permitted
by applicable law, no later than the date permitted thereby, upon at least one
(1) Business Day's prior written notice to the Administrative Agent and the
affected Lender, convert each such Loan to a Floating Rate Loan.
(iii) If at any time after a Lender gives notice under Section
4.02(e)(i) such Lender determines that it may lawfully make Fixed Rate Loans,
such Lender shall promptly give notice of that determination, in writing, to the
Borrowers and the Administrative Agent, and the Administrative Agent shall
promptly transmit the notice to each other Lender. The Borrowers' right to
request, and such Lender's obligation, if any, to make Fixed Rate Loans shall
thereupon be restored.
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(f) Compensation. In addition to all amounts required to be
paid by the Borrowers pursuant to Section 4.01, the Borrowers shall compensate
each Lender, upon demand, for all losses, expenses and liabilities (including,
without limitation, any loss or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Lender to fund or
maintain such Lender's Fixed Rate Loans to the Borrowers) which that Lender may
sustain (i) if for any reason a Borrowing, conversion into or continuation of
Fixed Rate Loans does not occur on a date specified therefor in a Notice of
Borrowing or a Notice of Conversion/Continuation given by the Borrowers or in a
telephonic request by it for borrowing or conversion/continuation or a
successive Interest Period does not commence after notice therefor is given
pursuant to Section 4.01(c), including, without limitation, pursuant to Section
4.02(d), (ii) if for any reason any Fixed Rate Loan is prepaid (including,
without limitation, mandatorily pursuant to Section 3.01) on a date which is not
the last day of the applicable Interest Period, (iii) as a consequence of a
required conversion of a Fixed Rate Loan to a Floating Rate Loan as a result of
any of the events indicated in Section 4.02(d) or (e) or (iv) as a consequence
of any failure by the Borrowers to repay Fixed Rate Loans when required by the
terms hereof (without duplication). The Lender making demand for such
compensation shall deliver to the Borrowers concurrently with such demand a
written statement in reasonable detail as to such losses, expenses and
liabilities, and this statement shall be conclusive as to the amount of
compensation due to that Lender, absent manifest error.
(g) Booking of Fixed Rate Loans. Any Lender may make, carry or
transfer Fixed Rate Loans at, to, or for the account of, its Fixed Rate Lending
Office or Fixed Rate Affiliate or its other offices or Affiliates. No Lender
shall be entitled, however, to receive any greater amount under Sections 3.03,
3.04, 4.01(f) or 4.02(f) as a result of the transfer of any such Fixed Rate Loan
to any office (other than such Fixed Rate Lending Office) or any Affiliate
(other than such Fixed Rate Affiliate) than such Lender would have been entitled
to receive immediately prior thereto, unless (i) the transfer occurred at a time
when circumstances giving rise to the claim for such greater amount did not
exist and (ii) such claim would have arisen even if such transfer had not
occurred.
(h) Affiliates Not Obligated. No Fixed Rate Affiliate or other
Affiliate of any Lender shall be deemed a party hereto or shall have any
liability or obligation hereunder.
4.03. Fees. (a) Letter of Credit Fee. In addition to any
charges paid pursuant to Section 2.04(g), the Borrowers shall pay to the
Administrative Agent the following fees:
(i) with respect to each Commercial Letter of Credit,
(A) a fee, for the account of the Issuing Bank, at a per annum
rate equal to one-quarter of one percent (0.25%) on the
undrawn face amount of such Letter of Credit and (B) a fee,
for the account of the Lenders in accordance with their
respective Pro Rata Shares, at a per annum rate equal to the
Applicable Commercial Letter of Credit Percentage on the
undrawn face amount of such Letter of Credit, each fee payable
monthly, in arrears, on
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the first Business Day of each month during which such Letter
of Credit is outstanding;
(ii) with respect to each Usance Letter of Credit,
(A) a fee, for the account of the Issuing Bank, at a per annum
rate equal to one-quarter of one percent (0.25%) on the sum of
the undrawn face amount of such Letter of Credit plus the
amount of the time drafts issued under such Letter of Credit
and (B) a fee, for the account of the Lenders in accordance
with their respective Pro Rata Shares, at a per annum rate
equal to the Applicable Usance Letter of Credit Percentage on
the sum of the undrawn face amount of such Letter of Credit
plus the amount of the time drafts issued under such Letter of
Credit, each fee payable monthly, in arrears, on the first
Business Day of each month during which such Letter of Credit
is outstanding;
(iii) with respect to each Standby Letter of Credit,
(A) a fee, for the account of the Issuing Bank, at a per annum
rate equal to one-quarter of one percent (0.25%) on the
undrawn face amount of such Letter of Credit and (B) a fee,
for the account of the Lenders in accordance with their
respective Pro Rata Shares, at a per annum rate equal to the
Applicable Standby Letter of Credit Percentage on the undrawn
face amount of such Letter of Credit, each fee payable
monthly, in arrears, on the first Business Day of each month
during which such Letter of Credit is outstanding; and
(iv) with respect to each Letter of Credit, after the
occurrence and during the continuation of an Event of Default,
an additional fee in an amount equal to two percent (2.00%)
per annum on the undrawn face amount of such Letter of Credit,
payable monthly, in arrears, on the first Business Day of each
calendar month.
(b) Unused Commitment Fee. The Borrowers shall pay to the
Administrative Agent, for the account of the Lenders in accordance with their
respective Pro Rata Shares, a fee (the "Unused Commitment Fee"), accruing at the
rate of three-eighths of one percent (0.375%) on the average amount by which the
Commitments exceed the Revolving Credit Obligations at such time for the period
commencing on the Closing Date and ending on the Commitment Termination Date,
such fee being payable monthly, in arrears, on the first Business Day of each
month and on the Commitment Termination Date.
(c) Other Fees. The Borrowers shall pay to the Administrative
Agent such other fees as are set forth in the Letter Agreement.
(d) Calculation and Payment of Fees. All of the above fees
shall be calculated on the basis of the actual number of days elapsed in a
360-day year. All such fees shall be payable in addition to, and not in lieu of,
interest, expense reimbursements, indemnification and other Obligations. Fees
shall be payable to the Administrative Agent's Account in accordance with
Section 3.02. All fees shall be fully earned and nonrefundable when paid.
59
ARTICLE V
CONDITIONS TO LOANS AND LETTERS OF CREDIT
5.01. Conditions Precedent to the Initial Loans and Letters of
Credit. The obligation of each Lender on the Closing Date to make its Revolving
Loan requested by the Borrowers and the agreement of the Issuing Bank on the
Closing Date to Issue Letters of Credit, shall be subject to the satisfaction of
all of the following conditions precedent:
(a) Documents. The Administrative Agent shall have received on
or before the Closing Date all of the following:
(i) this Agreement, the Notes and all other agreements,
documents and instruments described in the List of Closing Documents
attached hereto and made a part hereof as Exhibit F, each duly executed
where appropriate and in form and substance satisfactory to the
Lenders;
(ii) (A) a five-year business plan of the Barneys Group, (B)
projections of the financial statements (including balance sheets,
income statements and cash flow statements) of the Barneys Group,
giving effect to the transactions contemplated by the Plan of
Reorganization and financing contemplated hereunder, on a monthly basis
for the twelve months following the Closing Date, and (C) such other
financial information as the Administrative Agent or the Lenders may
reasonably request; and
(iii) such additional documentation as the Administrative
Agent may reasonably request.
(b) Collateral Information; Perfection of Liens. The
Administrative Agent shall have received complete and accurate information from
the Borrowers with respect to the name and the location of the principal place
of business and chief executive office for each Borrower; all Uniform Commercial
Code and other filing and recording fees and taxes shall have been paid or duly
provided for; and the Administrative Agent shall have received evidence to the
satisfaction of the Lenders that all Liens granted to the Administrative Agent
with respect to all Collateral are perfected and of first priority, except as
otherwise permitted under this Agreement, and except for the filing of UCC-1
financing statements and filings with the United States Patent and Trademark
Office. All certificates representing Capital Stock included in the Collateral
shall have been delivered to the Administrative Agent (with duly executed stock
powers, as appropriate) and all instruments included in the Collateral shall
have been delivered to the Administrative Agent (duly endorsed to the
Administrative Agent, as appropriate).
(c) No Legal Impediments. No law, regulation, order, judgment
or decree of any Governmental Authority shall, and the Administrative Agent
shall not have received any notice that any action, suit, investigation,
litigation or proceeding is pending or threatened in any court or before any
arbitrator or Governmental Authority which (i) purports to enjoin, prohibit,
60
restrain or otherwise affect (A) the making of the Loans on the Closing Date or
(B) the consummation of the transactions contemplated pursuant to the Loan
Documents or the Plan of Reorganization, (ii) would likely impose or result in
the imposition of a Material Adverse Effect or (iii) would likely have a
material adverse effect on the ability of Holdings or any Borrower to consummate
the transactions contemplated by the Plan of Reorganization or the Loan
Documents or the ability of Holdings or any Borrower to perform its obligations
under the Plan of Reorganization or the Loan Documents.
(d) No Change in Condition. No change in the condition
(financial or otherwise), business, performance, assets, operations or prospects
of the Barneys Group, taken as a whole, shall have occurred since August 1, 1998
(other than as disclosed in the Disclosure Statement with respect to the Fall
1998 Stub Period), which change has had or is reasonably likely to have a
Material Adverse Effect.
(e) No Default. No Event of Default or Default shall have
occurred and be continuing or would result from the making of the Loans or the
Issuance of Letters of Credit.
(f) Representations and Warranties. All of the representations
and warranties contained in Section 6.01 and in the other Loan Documents shall
be true and complete in all material respects on and as of the Closing Date,
both before and after giving effect to the making of the Loans on the Closing
Date.
(g) Fees and Expenses Paid. There shall have been paid to the
Administrative Agent, for the account of the Lenders and the Administrative
Agent, all fees due and payable on or before the Closing Date (including,
without limitation, commitment fees that have accrued to the Closing Date and
all fees described in the Letter Agreement), and all expenses (including,
without limitation, legal expenses) due and payable on or before the Closing
Date.
(h) Closing Date. The Closing Date shall have occurred on or
before February 26, 1999.
(i) Consents, Etc. The Borrowers shall have obtained all
consents, approvals and authorizations required pursuant to any material
Contractual Obligation with any other Person required to be obtained and all
consents, approvals and authorizations of, and effected all notices to and
filings with, any Governmental Authority as may be necessary to allow each of
the Borrowers and Holdings lawfully (A) to execute, deliver and perform, in all
material respects, their respective obligations hereunder, under the other Loan
Documents to which each of them is, or shall be, a party and each other
agreement or instrument to be executed and delivered by each of them pursuant
thereto or in connection therewith, (B) to create and perfect the Liens on the
Collateral to be owned by each of them in the manner and for the purpose
contemplated by the Loan Documents and (C) to consummate the transactions
contemplated pursuant to the Plan of Reorganization. No such consent, approval
or authorization shall impose any conditions that are not acceptable to the
Administrative Agent and the Lenders.
61
(j) Plan of Reorganization. The Administrative Agent and the
Lenders shall have approved in writing any material modification, amendment,
termination, cancellation or waiver of any term of the Plan of Reorganization.
The Administrative Agent and the Lenders shall have received and approved all
documentation implementing the Plan of Reorganization. All conditions precedent
to the effectiveness of the Plan of Reorganization shall have been satisfied (or
with the prior written consent of the Administrative Agent and the Lenders
waived), the Plan of Reorganization shall have been confirmed in accordance with
the Bankruptcy Code and the order confirming the Plan of Reorganization shall
have become a Final Order (as defined in the Plan of Reorganization).
(k) Certificate of Chief Financial Officer. The Administrative
Agent shall have received a certificate of the chief financial officer of
Barneys certifying that as of the Closing Date (i) the Consolidated EBITDA
(without giving effect to the Pension Liability Payment) of Barneys Group for
the twelve month period ending December 31, 1998 is at least $15,882,000, (ii)
after giving effect to the proposed Revolving Loans to be made, and Letters of
Credit to be issued, on the Closing Date, there is at least $10,000,000 of
Availability, and (iii) the amount of the proposed Revolving Loans to be made on
the Closing Date does not exceed $85,000,000 in the aggregate.
5.02. Conditions Precedent to All Revolving Loans and Letters
of Credit. The obligation of each Lender to make any Revolving Loan requested by
the Borrowers on any date, and the agreement of the Issuing Bank to Issue any
Letter of Credit on any date is subject to the following conditions precedent as
of each such date:
(a) Representations and Warranties. As of such date, both
before and after giving effect to the Loans to be made or the Letter of Credit
to be Issued on such date, all of the representations and warranties contained
in Section 6.01 and in any other Loan Document (as such may be amended or
updated in accordance with Section 6.02, and other than representations and
warranties which expressly speak as of a different date) shall be true, correct
and complete in all material respects.
(b) No Default. No Event of Default or Default shall have
occurred and be continuing or would result from the making of the requested Loan
or the issuance of the requested Letter of Credit.
Each submission by the Borrowers to the Administrative Agent of a Notice of
Borrowing with respect to a Revolving Loan or a Swing Loan, each acceptance by
the Borrowers of the proceeds of each such Loan so made, each submission by the
Borrowers to the Issuing Bank of a request for issuance of a Letter of Credit
and the issuance of such Letter of Credit, shall constitute a representation and
warranty by each of the Borrowers as of such Funding Date and as of the date of
Issuance of such Letter of Credit, that all the conditions contained in this
Section 5.02 have been satisfied.
62
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.01. Representations and Warranties of the Borrowers. In
order to induce the Lenders and the Issuing Bank to enter into this Agreement
and to make the Loans and the other financial accommodations to the Borrowers
and to Issue the Letters of Credit described herein, each Borrower represents
and warrants to each Lender, the Issuing Bank and the Administrative Agent as of
the Closing Date and thereafter on each date as required by Section 5.02 that
the following statements are true, correct and complete:
(a) Organization; Corporate Powers. Each member of the Barneys
Group (i) is a corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, (ii) except as set forth
on Schedule 6.01-A, is duly qualified to do business as a foreign corporation
and is in good standing under the laws of each jurisdiction in which failure to
be so qualified and in good standing shall have or is reasonably likely to have
a Material Adverse Effect and (iii) has all requisite corporate power and
authority to own, operate and encumber its Property and to conduct its business
as presently conducted.
(b) Authority. (i) Each member of the Barneys Group has the
requisite corporate power and authority to execute, deliver and perform each of
the Loan Documents to which it is a party.
(ii) The execution, delivery and performance, as the case may
be, of each of the Loan Documents which have been executed and to which any
member of the Barneys Group is a party and the consummation of the transactions
contemplated thereby, have been duly approved pursuant to the Final Order (as
defined in the Plan of Reorganization) and, to the extent required by law, by
such member's board of directors and shareholders and such approvals have not
been rescinded, revoked or modified in any manner. No other corporate action or
proceedings on the part of any member of the Barneys Group is necessary to
consummate such transactions.
(iii) Each of the Loan Documents to which any member of the
Barneys Group is a party has been duly executed, or delivered on behalf of such
member and constitutes such member's legal, valid and binding obligation,
enforceable against such member in accordance with its terms, and is in full
force and effect.
(c) Subsidiaries; Ownership of Capital Stock. Schedule 6.01-C
(i) contains a diagram indicating the corporate structure of Holdings and each
member of the Barneys Group and any other Person in which any member of the
Barneys Group holds a majority equity interest as of the Closing Date; and (ii)
accurately sets forth as of the Closing Date, (A) the correct legal name, the
jurisdiction of incorporation, and Employer Identification Number of each member
of
63
the Barneys Group, and the jurisdictions in which such member is qualified to
transact business as a foreign corporation and intends to remain qualified after
the Closing Date, (B) the authorized, issued and outstanding shares of each
class of Capital Stock of the each member of the Barneys Group and the owners of
such shares and (C) a summary of the direct and indirect partnership, joint
venture, or other equity interests, if any, of the each member of the Barneys
Group in any Person that is not a corporation. None of the issued and
outstanding Capital Stock of the Barneys Group is subject to any vesting,
redemption, or repurchase agreement, and there are no warrants or options
outstanding with respect to such Capital Stock. The outstanding Capital Stock of
each member of the Barneys Group is duly authorized, validly issued, fully paid
and nonassessable and is not Margin Stock.
(d) No Conflict. The execution, delivery and performance of
each of the Loan Documents to which any member of the Barneys Group is a party
do not and will not (i) conflict with the Constituent Documents of such member,
(ii) constitute a tortious interference with any Contractual Obligation of any
Person, (iii) conflict with, result in a breach of or constitute (with or
without notice or lapse of time or both) a default under any Requirement of Law
or under any material Contractual Obligation of such member, or require the
termination of any material Contractual Obligation, (iv) result in or require
the creation or imposition of any Lien whatsoever upon any of the Property or
assets of such member, other than Liens contemplated by the Loan Documents, or
(v) require any approval of such member's shareholders that has not been
obtained.
(e) Governmental Consents, etc. Except as set forth on
Schedule 6.01-E, the execution, delivery and performance of each of the Loan
Documents to which any member of the Barneys Group is a party do not and will
not require any registration with, consent or approval of, or notice to, or
other action of, with or by any Governmental Authority, except (i) filings,
consents or notices which have been made, obtained or given, or, in a timely
manner, shall be made, obtained, or given and (ii) filings necessary to perfect
security interests in the Collateral. No member of the Barneys Group is subject
to regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Interstate Commerce Act, or the Investment Company Act of 1940,
or any other federal or state statute or regulation which limits its ability to
incur indebtedness or its ability to consummate the transactions contemplated in
the Loan Documents.
(f) Accommodation Obligations; Contingencies. Except as set
forth on Schedule 1.01.3, no member of the Barneys Group has any Accommodation
Obligation, contingent liability or liability for any Taxes, long-term lease or
commitment, not reflected in its financial statements delivered to the
Administrative Agent on or prior to the Closing Date or otherwise disclosed to
the Administrative Agent and the Lenders in the other Schedules hereto, which
shall have or is reasonably likely to have a Material Adverse Effect.
(g) Restricted Junior Payments. Since October 3, 1998, no
member of the Barneys Group has directly or indirectly declared, ordered, paid
or made or set apart any sum or
64
Property for any Restricted Junior Payment or agreed to do so, except as
permitted pursuant to Section 9.06 hereof or pursuant to the Plan of
Reorganization.
(h) Financial Position. The projections of the Barneys Group,
the financial statements referred to in Section 5.01(a)(ii) and each business
plan and all other financial projections and related materials and documents
delivered to the Lenders pursuant hereto were prepared in good faith and are
based upon facts and assumptions believed by the Borrowers to be reasonable when
made in light of the then current and foreseeable business conditions and
prospects of the Borrowers and represent management's opinion of the projected
financial performance of the Barneys Group based on the information available to
the Borrowers at the time so furnished.
(i) Litigation; Adverse Effects. Except as set forth in
Schedule 6.01-I, there is no action, suit, audit, proceeding, investigation or
arbitration (or series of related actions, suits, proceedings, investigations or
arbitrations) before or by any Governmental Authority or private arbitrator
pending or, to the knowledge of the Borrowers, threatened in writing against any
member of the Barneys Group or any Property of any of them (i) challenging the
validity or the enforceability of any of the Loan Documents or (ii) which has
had, shall have or is reasonably likely to have a Material Adverse Effect. No
member of the Barneys Group is (A) in violation of any applicable Requirements
of Law which violation shall have or is reasonably likely to result in a
Material Adverse Effect, or (B) subject to or in default with respect to any
final judgment, writ, injunction, restraining order or order of any nature,
decree, rule or regulation of any court or Governmental Authority, in each case
which shall have or is reasonably likely to have a Material Adverse Effect.
(j) No Material Adverse Change. Since August 1, 1998 (other
than as disclosed in the Disclosure Statement with respect to the Fall 1998 Stub
Period), there has occurred no event which has had, shall have or is reasonably
likely to have a Material Adverse Effect.
(k) Payment of Taxes. All tax returns and reports of each
member of the Barneys Group required to be filed have been timely filed or are
subject to extensions duly obtained, and all taxes, assessments, fees and other
governmental charges thereupon and upon their respective Property, assets,
income and franchises which are shown in such returns or reports to be due and
payable have been paid other than such taxes, assessments, fees and other
governmental charges (A) which (i) were discharged in any bankruptcy proceedings
of the member or (ii) are provided for in the Plan of Reorganization and listed
on Schedule 6.01-K or (B) (i) which are being contested in good faith by such
member by appropriate proceedings diligently instituted and conducted and
without danger of any material risk to the Collateral and (ii) with respect to
which a reserve or other appropriate provision, if any, as is required in
conformity with GAAP shall have been made. The Borrowers have no knowledge of
any proposed tax assessment against any member of the Barneys Group that shall
have or is reasonably likely to have a Material Adverse Effect.
65
(l) Performance. Other than as permitted pursuant to the
Debtors' bankruptcy proceedings, no member of the Barneys Group has received
notice or has actual knowledge that (i) it is in default in the performance,
observance or fulfillment of any of the obligations, covenants or conditions
contained in any Contractual Obligation applicable to it or (ii) any condition
exists which, with the giving of notice or the lapse of time or both, would
constitute a default with respect to any such Contractual Obligation, in each
case, except where such default or defaults, if any, shall not have or are not
reasonably likely to have a Material Adverse Effect.
(m) Disclosure. The representations and warranties of each
member of the Barneys Group contained in the Loan Documents, and all
certificates and documents delivered to the Administrative Agent and the Lenders
pursuant to the terms hereof and the other Loan Documents, and all statements
made in the Plan of Reorganization and Disclosure Statement, do not contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements contained herein or therein, in light of the
circumstances under which they were made, not misleading. The Borrowers have not
intentionally withheld any fact from the Administrative Agent, the Issuing Bank
or any Lender in regard to any matter which shall have or is reasonably likely
to have a Material Adverse Effect.
(n) Requirements of Law. Each member of the Barneys Group is
in compliance with all Requirements of Law applicable to it and its business, in
each case where the failure to so comply individually or in the aggregate shall
have or is reasonably likely to have a Material Adverse Effect.
(o) Environmental Matters. Except as disclosed on Schedule
6.01-O and except for matters, conditions, operations and noncompliance which
would not reasonably be expected to result in a liability to any member of the
Barneys Group in excess of $1,000,000 in any Fiscal Year or $4,000,000 in the
aggregate:
(A) the operations of the Barneys Group comply in all material
respects with all applicable Environmental Requirements of Law;
(B) each member of the Barneys Group has obtained or has taken
appropriate steps, as required by Environmental Requirements of Law, to
obtain all material environmental, health and safety Permits necessary
for their respective operations, and all such Permits are in good
standing and such member is currently in compliance in all material
respects with all terms and conditions of such Permits;
(C) no member of the Barneys Group or any of its operations or
present or to the actual knowledge of any Borrower, past Property are
currently subject to any pending or, to the actual knowledge of any
Borrower, actually threatened investigation by, or any judicial or
administrative proceeding, order, judgment, decree or settlement
alleging or addressing (i) a material violation of any Environmental
Requirement of Law; (ii) any
66
Remedial Action; or (iii) any material Claims or Liabilities and Costs
arising from the Release or threatened Release of a Contaminant into
the environment;
(D) to the actual knowledge of any Borrower, no member of the
Barneys Group is the owner or operator of any Property which has any of
the following:
(i) any past or present on-site generation,
treatment, recycling, storage or disposal of any hazardous
waste, as that term is defined under 40 C.F.R. Part 261 or any
state equivalent;
(ii) any past or present landfill, underground
storage tank or surface impoundment;
(iii) any asbestos-containing material; or
(iv) any polychlorinated biphenyls (PCB) used in
hydraulic oils, electrical transformers or other Equipment;
(E) no Environmental Lien has attached to any Property of any
member of the Barneys Group;
(F) to the actual knowledge of any Borrower, there have been
no Releases of any Contaminants into the environment in reportable
quantities by any member of the Barneys Group except for any such
Releases which occurred in compliance with an environmental, health or
safety Permit;
(G) to the actual knowledge of any Borrower, the Barneys Group
has no material contingent liability in connection with any Release or
threatened Release of any Contaminants into the environment;
(H) no member of the Barneys Group has received any notice
alleging that any member of the Barneys Group sent or directly arranged
for the transport of any waste to any site listed or proposed for
listing on the National Priorities List ("NPL") pursuant to CERCLA or
on the Comprehensive Environmental Response Compensation Liability
Information System List ("CERCLIS"), or any similar state list of
sites;
(I) to the actual knowledge of any Borrower, no present or
past Property of any member of the Barneys Group is listed or proposed
for listing on the NPL pursuant to CERCLA or on the CERCLIS or any
similar state list of sites requiring Remedial Action, and no Borrower
is aware of any conditions on such Property which would qualify such
Property for inclusion on any such list;
(J) This Section 6.01(o) constitutes the sole and exclusive
representations and
67
warranties regarding environmental matters, except that such matters
are also subject to Sections 6.01(e), 6.01(h), 6.01(j) and 6.01(m).
(p) ERISA Matters. Neither any Borrower nor any ERISA
Affiliate maintains or contributes to any Plan other than those listed on
Schedule 6.01-P hereto. Each Plan, other than a Multiemployer Plan, which is
intended to be qualified under Section 401(a) of the Internal Revenue Code as
currently in effect has been determined by the IRS to be so qualified, and each
trust related to any such Plan has been determined to be exempt from federal
income tax under Section 501(a) of the Internal Revenue Code as currently in
effect. Except as disclosed in Schedule 6.01-P, neither any Borrower nor any
ERISA Affiliate maintains or contributes to any employee welfare benefit plan
within the meaning of Section 3(l) of ERISA which provides health or life
insurance benefits coverage to employees after termination of employment other
than as required by Section 601 of ERISA, except as provided under any
Multiemployer Plan. The Borrowers and all of their respective ERISA Affiliates
are in compliance with the responsibilities, obligations or duties imposed on
them by ERISA, the Internal Revenue Code and regulations promulgated thereunder
with respect to all Plans except for such non-compliance which individually or
in the aggregate could reasonably result in a liability less than $1,000,000. No
Benefit Plan has any outstanding accumulated funding deficiency (as defined in
Sections 302(a)(2) of ERISA and 412(a) of the Internal Revenue Code) whether or
not waived. Neither any Borrower nor any ERISA Affiliate (i) has engaged in a
nonexempt prohibited transaction described in Sections 406 of ERISA or 4975 of
the Internal Revenue Code or (ii) has taken any action which would constitute or
result in a Termination Event. Neither any Borrower nor any ERISA Affiliate has
incurred, or can reasonably expect to incur, any material liability to or on
account of a Benefit Plan pursuant to Sections 4063, 4064, 4069, 4204 or 4212(c)
of ERISA. Neither any Borrower nor any ERISA Affiliate has incurred any
liability to the PBGC with respect to a Benefit Plan which remains outstanding
other than the payment of premiums, and there are no premium payments which have
become due which are unpaid. Neither any Borrower nor any ERISA Affiliate has
(i) failed to make a required contribution or payment to a Multiemployer Plan or
(ii) made a complete or partial withdrawal under Sections 4203 or 4205 of ERISA
from a Multiemployer Plan which individually or in the aggregate could
reasonably result in a liability in excess of $1,000,000. Neither any Borrower
nor any ERISA Affiliate has failed to make a required installment or any other
required payment under Section 412 of the Internal Revenue Code on or before the
due date for such installment or other payment with respect to a Benefit Plan
which could result in a Lien under Section 412(n) of the Internal Revenue Code.
Neither any Borrower nor any ERISA Affiliate is required to provide security to
a Benefit Plan under Section 401(a)(29) of the Internal Revenue Code due to a
Plan amendment that results in an increase in current liability for the plan
year. Except as disclosed on Schedule 6.01-P the Borrowers do not have, by
reason of the transactions contemplated hereby any obligation to make any
payment to any employee pursuant to any Plan or existing contract or
arrangement. Except as disclosed on Schedule 6.01-P, the Borrowers have given to
the Administrative Agent copies of all of the following documents: each Benefit
Plan and related trust agreement (including all amendments to such Plan and
trust) in existence or committed to as of the Closing Date and in respect of
which any Borrower or any ERISA Affiliate is currently an "
68
employer" as defined in section 3(5) of ERISA, and the most recent summary plan
description, actuarial report, determination letter issued by the IRS and Form
5500 filed in respect of each such Benefit Plan in existence; a listing of all
of the Multiemployer Plans currently contributed to by any Borrower or any ERISA
Affiliate with the aggregate amount of the most recent annual contributions
required to be made by any Borrower and all ERISA Affiliates to each such
Multiemployer Plan, any information which has been provided to any Borrower or
an ERISA Affiliate regarding withdrawal liability under any Multiemployer Plan
and the collective bargaining agreement pursuant to which such contribution is
required to be made; each employee welfare benefit plan within the meaning of
Section 3(l) of ERISA which provides health or life insurance benefits coverage
to employees of any Borrower after termination of employment other than as
required by Section 601 of ERISA, the most recent summary plan description for
such plan and the aggregate amount of the most recent annual payments made to
terminated employees under each such plan.
(q) Foreign Employee Benefit Matters. Except as disclosed on
Schedule 6.01-P, neither any Borrower nor any ERISA Affiliate maintains any
Foreign Employee Benefit Plan. Each Foreign Employee Benefit Plan is in
compliance with all laws, regulations and rules applicable thereto and the
respective requirements of the governing documents for such Plan, except for
such non-compliance which individually or in the aggregate could reasonably
result in a liability less than $1,000,000. With respect to any Foreign Employee
Benefit Plan maintained by any Borrower, any of their Subsidiaries or any ERISA
Affiliate, reasonable reserves have been established in accordance with prudent
business practice or where required by ordinary accounting practices in the
jurisdiction in which such Plan is maintained. There are no actions, suits or
claims (other than routine claims for benefits) pending or threatened in writing
against any Borrower, any of their Subsidiaries or any ERISA Affiliates with
respect to any Foreign Employee Benefit Plan which could reasonably result in a
material liability.
(r) Labor Matters. Except as set forth in Schedule 6.01-R, as
of the Closing Date there is no collective bargaining agreement covering any of
the employees of any member of the Barneys Group.
(s) Securities Activities. No member of the Barneys Group is
engaged in the business of extending credit for the purpose of purchasing or
carrying Margin Stock.
(t) Solvency. After giving effect to the transactions
contemplated in the Loan Documents and the Plan of Reorganization and the Loans
to be made on the Closing Date and each such other date as Loans requested
hereunder are made and the disbursement of the proceeds of such Loans, each
member of the Barneys Group is Solvent.
(u) Intellectual Property; Government Approvals. (i) Each
member of the Barneys Group owns or otherwise has the lawful right to use,
pursuant to license, sublicense, agreement or permission all trademarks, service
marks, designs, logos, trade dress, trade names, corporate names, together with
all translations, derivations and combinations thereof and
69
including all goodwill associated thereunder and all applications, registrations
and renewals in connection therewith, copyrights (whether registered or not),
technology, know-how and processes, computer software and all other proprietary
rights existing anywhere throughout the world necessary for the conduct of their
businesses as currently conducted ("Intellectual Property") except where the
failure to do so would not have a Material Adverse Effect. Each item of
Intellectual Property owned or used by the Barneys Group will be owned or
available for use by the Barneys Group on terms and conditions substantially
identical as those that presently exist immediately subsequent to the Closing
hereunder. The Barneys Group has taken all necessary action to maintain and
protect each material item of Intellectual Property that it owns or uses.
(ii) Schedule 6.01-U identifies each registration which has
been issued to, and each application which has been filed in the name of, each
member of the Barneys Group with respect to any of the Intellectual Property and
identifies each license, sublicense, agreement or other permission which any
member of the Barneys Group has granted to any third party with respect to any
of the Intellectual Property. The Barneys Group has delivered to the
Administrative Agent a correct and complete summary of all registrations and
applications evidencing ownership of each such item of Intellectual Property,
and correct and complete copies of all such licenses, agreements and
permissions. Schedule 6.01-U identifies each material trade name or corporate
name used by any member of the Barneys Group in connection with any of its
businesses, and identifies each license, sublicense, agreement and permission
that any member of the Barneys Group is a party to with respect to any
intellectual property rights of any third party. Except as set forth on Schedule
6.01-U:
(1) The Borrowers possess all right, title and interest in and
to each item of Intellectual Property, free and clear of any Lien, license or
other restriction;
(2) no action, claim or proceeding is pending or, to the
knowledge of the Borrowers, is threatened in writing which alleges that a member
of the Barneys Group has interfered with, infringed upon or come into conflict
with any intellectual property rights of any Person which could result in a
liability to any member of the Barneys Group in excess of $1,000,000;
(3) to the knowledge of the Borrowers, no Person has
interfered with, infringed upon or misappropriated any Intellectual Property
rights of any member of the Barneys Group; and
(4) no action, suit, proceeding or claim is pending or, to the
knowledge of the Borrowers, is threatened in writing which challenges the
legality, validity, enforceability, use or ownership of each item of
Intellectual Property which could result in a liability to any member of the
Barneys Group in excess of $1,000,000.
(iii) Except for Liens granted to the Administrative Agent for
the benefit of the Administrative Agent, the Issuing Bank, the Lenders and the
other Holders, the transactions
70
contemplated by the Loan Documents shall not impair the ownership of or rights
under (or the license or other right to use, as the case may be) any permits and
governmental approvals, or Intellectual Property rights of any member of the
Barneys Group in any manner.
(v) Assets and Properties. Each member of the Barneys Group
has good and marketable title to all of its assets and Property (tangible and
intangible) owned by it or a valid leasehold interest in all of its leased
assets (except insofar as marketability may be limited by any laws or
regulations of any Governmental Authority affecting such assets), and all such
assets and Property are free and clear of all Liens, except Liens securing the
Obligations and Liens permitted under Section 9.03. Schedule 6.01-V contains a
true and complete list of all of the Real Property owned in fee simple by each
member of the Barneys Group as of the Closing Date, and a true and complete list
of all real estate leases in effect on the Closing Date. Substantially all of
the assets and Property owned by or leased to each such member are in adequate
operating condition and repair, ordinary wear and tear excepted, and are free
and clear of any known defects except such defects that do not substantially
interfere with the continued use thereof in the conduct of normal operations.
Except for Liens granted to the Administrative Agent for the benefit of the
Administrative Agent, the Issuing Bank, the Lenders and the other Holders,
neither this Agreement nor any other Loan Document, nor any transaction
contemplated herein or therein, shall affect any right, title or interest of any
Borrower in and to any of such assets in a manner that shall have or is
reasonably likely to have a Material Adverse Effect.
(w) Insurance. Schedule 6.01-W accurately sets forth as of the
Closing Date all insurance policies and programs (including self-insurance
programs) currently in effect with respect to the respective assets and business
of the members of the Barneys Group, specifying for each such policy and
program, (i) the amount thereof, (ii) the risks insured against thereby, (iii)
the name of the insurer, if any, and each insured party thereunder, (iv) the
policy or other identification number thereof, (v) the expiration date thereof
and (vi) the annual premium, if any, with respect thereto.
(x) Bank Accounts. Schedule 6.01-X sets forth each account
(indicating the type of account) where funds are from time to time deposited,
the financial institutions where such account is located, the address of such
financial institution and the account name and number.
(y) Senior Debt. All Obligations constitute "Senior Debt"
under each of the Subordinated Notes.
6.02. Amendment to Schedules. Any Schedule referred to in
Section 6.01 or Section 9.16 shall be automatically amended upon written notice
delivered by the Borrowers to the Administrative Agent and the Lenders. Such
notice shall specify (i) the Schedule to be amended, (ii) the information to be
added to or deleted from such Schedule and (iii) to the extent relevant, the
Section of this Agreement pursuant to which the action giving rise to such
information is permitted and shall contain a representation and warranty by each
Borrower that
71
such action is permitted under such Section.
ARTICLE VII
REPORTING COVENANTS
Each Borrower covenants and agrees that so long as any
Commitment is outstanding and thereafter until payment in full of all of the
Obligations, unless the Requisite Lenders shall otherwise give prior written
consent thereto:
7.01. Financial Statements. The Borrowers shall maintain, and
shall cause each member of the Barneys Group to maintain, a system of accounting
established and administered in accordance with sound business practices to
permit preparation of consolidated and consolidating financial statements in
conformity with GAAP, and each of the financial statements described below shall
be prepared from such system and records. The Borrowers shall deliver or cause
to be delivered to the Administrative Agent and the Lenders:
(a) Monthly Reports. Within thirty (30) days after the end of
each fiscal month in each Fiscal Year, the consolidated balance sheet of
Holdings and its Subsidiaries as at the end of such period and the related
consolidated statements of income and cash flow of Holdings and its Subsidiaries
for such fiscal month and for the period from the beginning of the then current
Fiscal Year to the end of such fiscal month (the "Year To Date Monthly
Reports"), and a comparison of the Year To Date Monthly Reports to the business
plan most recently delivered in accordance with subsection (d) below, all
certified by the chief financial officer of Barneys as fairly presenting in all
material respects the consolidated financial position of Holdings and its
Subsidiaries as at the dates indicated and the results of its operations and
cash flow for the periods indicated in accordance with GAAP, subject to normal
year end adjustments and, with respect to the first two Year To Date Monthly
Reports delivered in each Fiscal Year, normal adjustments resulting from the
prior Fiscal Year end audits.
(b) Quarterly Reports. Within forty-five (45) days after the
end of each fiscal quarter in each Fiscal Year, the consolidated balance sheet
of Holdings and its Subsidiaries as at the end of such period and the related
consolidated statements of income and cash flow of Holdings and its Subsidiaries
for such fiscal quarter and for the period from the beginning of the then
current Fiscal Year to the end of such fiscal quarter (the "Year To Date
Quarterly Reports"), and (i) with respect to the Year To Date Quarterly Reports
for Fiscal Year 1999, a comparison of certain financial information to be
mutually agreed upon by the Borrowers and the Administrative Agent, (ii) with
respect to the Year To Date Quarterly Reports for each Fiscal Year thereafter, a
comparison of the Year To Date Quarterly Reports for such Fiscal Year to the
corresponding statements for the corresponding period from the previous Fiscal
Year and (iii) a comparison of the Year To Date Quarterly Reports to the
business plan most recently delivered in accordance with subsection (d) below,
all certified by the chief financial officer of Barneys as fairly presenting in
all material respects the consolidated and consolidating financial position of
72
Holdings and its Subsidiaries as at the dates indicated and the results of their
operations and cash flow for the periods indicated in accordance with GAAP,
subject to normal year end adjustments.
(c) Annual Reports. Within one-hundred and twenty (120) days
after the end of the Fall 1998 Stub Period and within ninety (90) days after the
end of each Fiscal Year thereafter, the annual audited consolidated financial
statements of Holdings and its Subsidiaries reported on by independent certified
public accountants of recognized national standing reasonably acceptable to the
Requisite Lenders, which report shall be unqualified and shall state that such
financial statements fairly present in all material respects the consolidated
financial position of Holdings and its Subsidiaries as at the dates indicated
and the results of their operations and cash flow for the periods indicated in
conformity with GAAP applied on a basis consistent with prior years (except for
changes with which such independent certified public accountants shall concur
and which shall have been disclosed in the notes to the financial statements)
and that the examination by such accountants in connection with such
consolidated financial statements has been made in accordance with generally
accepted auditing standards.
(d) Business Plans; Financial Projections. Not later than
fifteen (15) days before the beginning of each Fiscal Year commencing with
Fiscal Year 2000, and containing substantially the same types of financial
information contained in the projections delivered to the Administrative Agent
and the Lenders pursuant to Section 5.01(a)(ii) and otherwise in form and detail
satisfactory to the Lenders, (i) the annual business plan of Holdings and its
Subsidiaries for the next succeeding Fiscal Years up to and including the Fiscal
Year 2003 and (ii) forecasts prepared by management of Barneys for each fiscal
month in each such Fiscal Year, and on an annual basis for each succeeding
Fiscal Year, containing a consolidated balance sheet, an income statement and a
consolidated statement of cash flow.
(e) Officer's Certificate and Compliance Certificate. Together
with each delivery of any financial statement pursuant to paragraphs (a), (b)
and (c) of this Section 7.01, an Officer's Certificate of the Borrowers
substantially in the form of Exhibit G attached hereto and made a part hereof
(the "Officer's Certificate"), signed by the chief financial officer of Barneys.
Together with each delivery of any financial statement pursuant to paragraphs
(b) and (c) of this Section 7.01, a Compliance Certificate substantially in the
form of Exhibit H attached hereto and made a part hereof (the "Compliance
Certificate"), signed by the chief financial officer of Barneys and setting
forth calculations for the period then ended and which demonstrate compliance,
when applicable, with the provisions of Article X.
(f) Accountants. Together with each delivery of the financial
statements referred to in Section 7.01(c), a copy of the management letter or
any similar report delivered to any Borrower or to any officer or employee
thereof by such accountants in connection with such financial statements. The
Administrative Agent and each Lender may communicate directly with such
accountants. Any Lender or the Administrative Agent that communicates with such
accountants agrees to notify the Borrowers prior to any such communication;
provided, however, that the failure to give any such notice shall not affect the
Administrative Agent's or such
73
Lender's rights hereunder.
7.02. Borrowing Base Certificate. Promptly and in any event on
the first and third Friday of each fiscal month, or more frequently if the
Administrative Agent shall request, the Borrowers shall provide the
Administrative Agent and the Lenders with a Borrowing Base Certificate for the
two week period ending as of the immediately preceding Saturday, together with
such supporting documents as the Administrative Agent deems desirable, all
certified as being true, accurate and complete in all material respects by the
chief financial officer, treasurer or controller of Barneys.
7.03. Events of Default. Promptly upon any Borrower obtaining
knowledge (i) of any condition or event which constitutes an Event of Default or
Default, or becoming aware that any Lender, the Issuing Bank or the
Administrative Agent has given any written notice with respect to a claimed
Event of Default or Default, (ii) that any Person has given any written notice
to any Borrower or taken any other action with respect to a claimed default or
event or condition of the type referred to in Section 11.01(e) or (iii) of any
condition or event which has or is reasonably likely to have a Material Adverse
Effect or materially and adversely affect the value of, or the Administrative
Agent's interest in, the Collateral, such Borrower shall deliver to the
Administrative Agent and the Lenders an Officer's Certificate specifying (A) the
nature and period of existence of any such claimed default, Event of Default,
Default, condition or event, (B) the notice given or action taken by such Person
in connection therewith, and (C) the remedial action such Borrower has taken, is
taking and proposes to take with respect thereto.
7.04. Lawsuits. (i) Promptly upon any Borrower obtaining
knowledge of the institution of, any action, suit, proceeding, governmental
investigation or arbitration against or affecting any member of the Barneys
Group or any Property of such member not previously disclosed pursuant to
Section 6.01(j), which action, suit, proceeding, governmental investigation or
arbitration exposes, or in the case of multiple actions, suits, proceedings,
governmental investigations or arbitrations arising out of the same general
allegations or circumstances which expose, in such Borrower's reasonable
judgment, such member or other members of the Barneys Group to liability in an
amount in excess, individually or in the aggregate, of $1,000,000 (excluding
liability covered by insurance), the Borrowers shall give written notice thereof
to the Administrative Agent and the Lenders and provide such other information
as may be reasonably available to enable each Lender and the Administrative
Agent and its counsel to evaluate such matters; and (ii) in addition to the
requirements set forth in clause (i) of this Section 7.04, the Borrowers shall
give the Administrative Agent and the Lenders a written status report with
respect to any action, suit, proceeding, governmental investigation or
arbitration covered by a written notice delivered pursuant to clause (i) above
annually within 30 days following the end of each Fiscal Year and provide such
other information as may be reasonably available to it to enable each Lender and
the Administrative Agent and its counsel to evaluate such matters.
7.05. Insurance. As soon as practicable and in any event
within thirty (30) days of the end of each Fiscal Year ending after the Closing
Date, the Borrowers shall deliver to the
74
Administrative Agent and the Lenders (i) a report in form and substance
reasonably satisfactory to the Administrative Agent and the Requisite Lenders
outlining all material insurance coverage (including any self-insurance provided
by the Borrowers) maintained as of the date of such report by the Barneys Group
and the duration of such coverage and (ii) an insurance broker's statement that
all premiums then due and payable with respect to such coverage have been paid.
7.06. ERISA Notices. The Borrowers shall deliver or cause to
be delivered to the Administrative Agent, at the Borrowers' expense, the
following information and notices as soon as reasonably possible, and in any
event:
(i) within ten (10) Business Days after any Borrower or any
ERISA Affiliate knows or has reason to know that a Termination Event
has occurred, a written statement of the appropriate officer of any
Borrower describing such Termination Event and the action, if any,
which any Borrower or any ERISA Affiliate has taken, is taking or
proposes to take with respect thereto, and when known, any action taken
or threatened by the IRS, DOL or PBGC with respect thereto;
(ii) within ten (10) Business Days after any Borrower or any
ERISA Affiliate knows or has reason to know that a prohibited
transaction (defined in Sections 406 of ERISA and 4975 of the Internal
Revenue Code) involving any Borrower or any ERISA Affiliate has
occurred, other than with respect to a Multiemployer Plan, a statement
of the appropriate officer of any Borrower describing such transaction
and the action which any Borrower or any ERISA Affiliate has taken, is
taking or proposes to take with respect thereto;
(iii) within thirty (30) Business Days after the filing
thereof with the DOL, IRS or PBGC, copies of each annual report (form
5500 series), including Schedule B thereto, filed with respect to each
Benefit Plan;
(iv) within thirty (30) Business Days after receipt by any
Borrower or any ERISA Affiliate of each actuarial report for any
Benefit Plan or Multiemployer Plan and each annual report for any
Multiemployer Plan, copies of each such report;
(v) within five (5) Business Days after the filing thereof
with the IRS, a copy of each funding waiver request filed with respect
to any Benefit Plan and all communications received by any Borrower or
any ERISA Affiliate with respect to such request;
(vi) within five (5) Business Days after the occurrence
thereof, notification of any material increase in the benefits of any
existing Benefit Plan or the establishment of any new Benefit Plan or
the commencement of contributions to any Benefit Plan to which any
Borrower or any ERISA Affiliate was not previously contributing;
75
(vii) within five (5) Business Days after receipt by any
Borrower or any ERISA Affiliate of the PBGC's intention to terminate a
Benefit Plan or to have a trustee appointed to administer a Benefit
Plan, copies of each such notice;
(viii) within five (5) Business Days after receipt by any
Borrower or any ERISA Affiliate of any unfavorable determination letter
from the IRS regarding the qualification of a Plan other than a
Multiemployer Plan under Section 401(a) of the Internal Revenue Code,
copies of each such letter;
(ix) within five (5) Business Days after receipt by any
Borrower or any ERISA Affiliate of a notice from a Multiemployer Plan
regarding the imposition of withdrawal liability, copies of each such
notice other than with respect to the Pension Liability Payment;
(x) within five (5) Business Days after any Borrower or any
ERISA Affiliate fails to make a required installment or any other
required payment under Section 412 of the Internal Revenue Code on or
before the due date for such installment or payment, a notification of
such failure;
(xi) within five (5) Business Days after any Borrower or any
ERISA Affiliate knows or has reason to know (a) a Multiemployer Plan
has been terminated, (b) the administrator or plan sponsor of a
Multiemployer Plan intends to terminate a Multiemployer Plan, or (c)
the PBGC has instituted or will institute proceedings under Section
4042 of ERISA to terminate a Multiemployer Plan; and
(xii) within five (5) Business Days after receipt by any
Borrower of a written notice from the Administrative Agent, copies of
any Foreign Employee Benefit Plan and related documents, reports and
correspondence as requested by the Lenders in such notice.
For purposes of this Section 7.06, any Borrower and any ERISA Affiliate shall be
deemed to know all facts known by the administrator of any Plan of which any
Borrower or any ERISA Affiliate is the plan sponsor.
7.07. Environmental Notices. (a) The Borrowers shall notify
the Administrative Agent and the Lenders in writing, promptly and in any event
within 10 Business Days upon any Borrower's learning thereof, of any:
(i) notice or claim by a Governmental Authority or any third
party to the effect that any member of the Barneys Group is or may be
liable to any Person, or is subject to an investigation by a
Governmental Authority, relating to a material Release or threatened
Release of any Contaminant into the environment, which such notice or
claim exposes, or in the case of multiple notices or claims arising out
of the same general
76
allegations or circumstances which expose, in such Borrower's
reasonable judgment, such member to liability in an amount aggregating
$1,000,000 or more;
(ii) notice that any Property owned by any member of the
Barneys Group is subject to an Environmental Lien;
(iii) commencement or threat of any judicial or administrative
proceeding alleging a material violation by any member of the Barneys
Group of any Environmental, Health or Safety Requirement of Law which
such proceeding exposes, or in the case of multiple proceedings arising
out of the same general allegations or circumstances which expose, in
such Borrower's reasonable judgment, such member to liability in an
amount aggregating $1,000,000 or more;
(iv) new and material changes to any existing Environmental,
Health or Safety Requirement of Law that would or could reasonably be
expected to have a Material Adverse Effect; or
(v) any intent to execute an agreement, letter of intent or
commitment to acquire stock, assets or real estate, or to lease
property, or to take any other action by any member of the Barneys
Group that would subject such member to environmental, health or safety
Liabilities and Costs that would or could reasonably be expected to
have a Material Adverse Effect.
(b) In addition to the requirements set forth in clause (a) of
this Section 7.07, the Borrowers shall give the Administrative Agent and the
Lenders a written status report with respect to any matter covered by a written
notice delivered pursuant to clause (i) above annually within 30 days following
the end of each Fiscal Year.
7.08 Isetan Leases.
(a) Promptly upon receipt thereof, the
Borrowers shall deliver to the Administrative Agent a copy of all notices of
default or breach of covenant delivered by any Person to any member of the
Barneys Group pursuant to any Isetan Lease.
(b) Promptly upon receipt thereof, the Borrowers shall deliver
to the Administrative Agent a copy of all notices or requests (other than those
notices referred to in clause (a) of Section 7.08) delivered by any Person to
any member of the Barneys Group pursuant to any Isetan Lease.
7.09. Public Filings and Reports. Promptly upon the filing
thereof with any Governmental Authority (including, without limitation, the
Securities and Exchange Commission) or the mailing thereof to the public
shareholders or debtholders of the Company generally, copies of all filings or
reports made in connection with outstanding Indebtedness and Capital Stock of
Holdings.
77
7.10. Other Information. Promptly upon receipt of a request
therefor from the Administrative Agent, the Borrowers shall prepare and deliver
to the Administrative Agent and the Lenders such other information with respect
to Holdings, any member of the Barneys Group or the Collateral including,
without limitation, schedules identifying and describing the Collateral and any
dispositions thereof, as from time to time may be reasonably requested by the
Administrative Agent.
ARTICLE VIII
AFFIRMATIVE COVENANTS
Each Borrower covenants and agrees that so long as any
Commitment is outstanding and thereafter until payment in full of all of the
Obligations, unless the Requisite Lenders shall otherwise give prior written
consent:
8.01. Corporate Existence, Etc. Barneys shall, and shall cause
each other member of the Barneys Group to, at all times maintain their
respective corporate or limited liability company existence, as applicable
(except to the extent permitted by Section 9.09), and preserve and keep, or
cause to be preserved and kept, in full force and effect their respective rights
and franchises material to their respective businesses except where the board of
directors of such Person or such member (as applicable) determines that the
maintenance or preservation of such rights and franchises is not in the best
interest of such Person or such member (as applicable) and the failure to so
maintain or preserve would not have or be reasonably likely to have a Material
Adverse Effect.
8.02. Corporate Powers; Conduct of Business, Etc. Barneys
shall, and shall cause each other member of the Barneys Group to, qualify and
remain qualified to do business in each jurisdiction in which the nature of its
business requires it to be so qualified and where the failure to be so qualified
would have or would be likely to have a Material Adverse Effect.
8.03. Compliance with Laws, Etc. Barneys shall, and shall
cause each other member of the Barneys Group to, (a) comply with all
Requirements of Law and all restrictive covenants affecting such Person or the
business, Property, assets or operations of such Person, and (b) obtain as
needed all Permits necessary for such Person's operations and maintain such
Permits in good standing, except, in each case, where the failure to do so would
not have or be reasonably likely to have a Material Adverse Effect.
8.04. Payment of Taxes and Claims; Tax Consolidation. Barneys
shall, and shall cause each other member of the Barneys Group to, pay (a) all
taxes, assessments and other governmental charges imposed upon it or on any of
its Property or assets or in respect of any of its franchises, business, income
or Property before any penalty or interest for late payment (except as such
penalty or interest relates to underpayment of estimated tax payments) accrues
thereon, and (b) all claims (including, without limitation, claims for labor,
services, materials and
78
supplies) for sums which have become due and payable and which by law have or
may become a Lien (other than a Lien permitted by Section 9.03) upon any of
Barneys' or such member's Property or assets, prior to the time when any penalty
or fine shall be incurred with respect thereto; provided, however, that no such
taxes, assessments and governmental charges referred to in clause (a) above or
claims referred to in clause (b) above are required to be paid if being
contested in good faith by Holdings, Barneys or such member, as applicable, by
appropriate proceedings diligently instituted and conducted and without danger
of any material risk to the Collateral and if such reserve or other appropriate
provision, if any, as shall be required in conformity with GAAP shall have been
made therefor. Barneys shall not, and shall not permit any other member of the
Barneys Group to, file or consent to the filing of any consolidated income tax
return with any Person (other than Holdings and members of the Barneys Group).
8.05. Insurance. Barneys shall maintain for itself and the
other members of the Barneys Group, or shall cause each member of the Barneys
Group to maintain, in full force and effect the insurance policies and programs
listed on Schedule 6.01-W or similar policies and programs or other policies and
programs as are reasonably acceptable to the Administrative Agent (with such
ministerial changes as are from time to time effected by Barneys); provided,
however, Barneys shall not be required to maintain such policies identified on
Schedule 6.01-W that were required to be maintained by Barneys solely pursuant
to a Requirement of Law that has been legally waived or eliminated. Each
certificate and policy relating to Property damage with respect to the
Collateral and business interruption coverage shall contain an endorsement, in
form and substance acceptable to the Administrative Agent, showing loss payable
to the Administrative Agent, for the benefit of the Administrative Agent, the
Issuing Bank and the Lenders and naming the Administrative Agent as an
additional insured under such policy and providing that no act, whether willful
or negligent, or default of Barneys, any other member of the Barneys Group or
any other Person shall affect the right of the Administrative Agent to recover
under such policy or policies of insurance in case of loss or damage with
respect to the Collateral. Barneys may settle or compromise any insurance claim,
provided, that any such settlement or compromise of any claim individually or in
the aggregate exceeding $750,000 in any Fiscal Year shall require the
Administrative Agent's prior consent. Such endorsement furnished to the
Administrative Agent shall provide that the insurance companies shall give the
Administrative Agent at least thirty (30) days' written notice before any such
policy or policies of insurance shall be canceled or altered adversely to the
interests of the Administrative Agent, the Issuing Bank and the Lenders. In the
event that Barneys or any other member of the Barneys Group, at any time or
times hereafter, shall fail to obtain or maintain any of the policies or
insurance required herein or to pay any premium in whole or in part relating
thereto, then the Administrative Agent, without waiving or releasing any
obligations or resulting Event of Default hereunder, may at any time or times
thereafter (but shall be under no obligation to do so) obtain and maintain such
policies of insurance and pay such premiums and take any other action with
respect thereto which the Administrative Agent deems advisable. All sums so
disbursed by the Administrative Agent shall be part of the Obligations, payable
as provided herein.
8.06. Inspection of Property; Books and Records; Discussions.
(a) Barneys shall
79
permit, and shall cause each of the other members of the Barneys Group to
permit, any authorized representative(s) designated by the Administrative Agent
or any Lender to visit and inspect any of the Properties of such Person or such
member, to examine, audit, check and make copies of their respective financial
and accounting records, books, journals, orders, receipts and any correspondence
and other data relating to their respective businesses or the transactions
contemplated hereby and by the Loan Documents (including, in connection with
environmental compliance, hazard or liability), and to discuss their affairs,
finances and accounts with their officers and independent certified public
accountants, upon reasonable notice and at such times during normal business
hours, as often as may be reasonably requested. All costs and expenses incurred
by the Administrative Agent or, after the occurrence and during the continuance
of any Event of Default, any Lender, in each case as a result of such
inspection, audit or examination conducted pursuant to this Section 8.06 shall
be paid by the Borrowers.
(b) Barneys shall keep and maintain, and shall cause the other
members of the Barneys Group to keep and maintain, in all material respects
proper books of record and account in which entries in conformity with GAAP
shall be made of all dealings and transactions in relation to their respective
businesses and activities, including, without limitation, transactions and other
dealings with respect to the Collateral. If an Event of Default has occurred and
is continuing, the Borrowers, upon the Administrative Agent's request, shall
promptly turn over true, correct and complete copies of all such records to the
Administrative Agent or any of its representatives.
(c) Barneys shall cause the Inventory and the other Collateral
referred to in the definition of "Borrowing Base"of each member of the Barneys
Group to be appraised by an independent appraiser and to be audited by a field
auditor, in each case satisfactory to the Administrative Agent, once every two
months, provided that if an Event of Default has occurred and is continuing,
Barneys shall cause the Inventory to be appraised more frequently by such
appraiser if the Administrative Agent so requests.
8.07. Insurance and Condemnation Proceeds. Barneys hereby
directs (and, if applicable, shall cause the other members of the Barneys Group
to direct) all insurers under policies of Property damage and business
interruption insurance and payors of any condemnation claim or award relating to
the Collateral to pay all proceeds payable under such policies or with respect
to such claim or award for any loss directly to the Administrative Agent, for
the benefit of the Administrative Agent, the Issuing Bank, the Lenders and the
other Holders.
8.08. ERISA Compliance. Barneys shall, and shall cause each of
its Subsidiaries and ERISA Affiliates to, establish, maintain and operate all
Plans other than Multiemployer Plans to comply in all material respects with the
provisions of ERISA, the Internal Revenue Code, all other applicable laws, and
the regulations thereunder and the respective requirements of the governing
documents for such Plans.
8.09. Foreign Employee Benefit Plan Compliance. Barneys shall,
and shall
80
cause each of its Subsidiaries and ERISA Affiliates to establish, maintain and
operate all Foreign Employee Benefit Plans to comply in all material respects
with all laws, regulations and rules applicable thereto and the respective
requirements of the governing documents for such Plans.
8.10. Establishment of Blocked Accounts; Maintenance of
Property. Each Borrower shall establish Blocked Accounts with each of the
Blocked Account Banks listed on Schedule 3.05. Each Borrower shall cause all
Property used or useful in the conduct of its business or the business of any
other member of the Barneys Group to be maintained and kept in good condition,
repair and working order, ordinary wear and tear excepted, and supplied with all
necessary equipment and shall cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof; provided, however, that
nothing in this Section shall prevent such Borrower from discontinuing the
operation or maintenance of any of such Property if such discontinuance is, in
the judgment of such Borrower, necessary or appropriate in the conduct of its
business or the business of any other member of the Barneys Group and not
materially disadvantageous to the Administrative Agent, the Issuing Bank or the
Lenders.
8.11. Condemnation. Immediately upon learning of the
institution of any proceeding for the condemnation or other taking of any of the
owned or leased Real Property of Barneys or any other member of the Barneys
Group, the Borrowers shall notify the Administrative Agent (who shall in turn
forward such notice to the Lenders) of the pendency of such proceeding, and
permit the Administrative Agent to participate in any such proceeding, and from
time to time shall deliver to the Administrative Agent all instruments
reasonably requested by the Administrative Agent to permit such participation.
8.12. Landlord Waivers. The Borrowers have obtained and
delivered to the Administrative Agent landlord waivers, in form and substance
reasonably satisfactory to the Administrative Agent, relating to the Isetan
Leases and to the storage facility located in Lyndhurst, New Jersey. The
Borrowers will use their commercially reasonable efforts to obtain and deliver
to the Administrative Agent landlord waivers, in form and substance reasonably
satisfactory to the Administrative Agent, relating to the Borrowers' leases
(other than the Isetan Leases) for locations set forth on Schedule 6.01-V.
8.13. Year 2000. The Borrowers shall take all action they deem
necessary to assure that their computer systems are able to effectively process
data on and after January 1, 2000, including date data, so as not to cause any
material disruption to the Borrowers' business. At the request of the
Administrative Agent or any Lender, the Borrowers shall provide the
Administrative Agent and the Lenders with assurance reasonably acceptable to the
Administrative Agent or the Requisite Lenders, as the case may be, of the status
of Borrowers' Year 2000 efforts and their compliance with this Section. The
Borrowers' computer systems shall be tested and in compliance with this Section
by September 30, 1999.
8.14. Post Closing Matters. The Borrowers shall cause each of
the requirements set forth on Schedule 8.14 to be satisfied on or before the
date set forth opposite such
81
requirement.
ARTICLE IX
NEGATIVE COVENANTS
Each Borrower covenants and agrees that so long as any
Commitment is outstanding and thereafter until payment in full of all of the
Obligations, unless the Requisite Lenders shall otherwise give prior written
consent thereto:
9.01. Indebtedness. No member of the Barneys Group shall
directly or indirectly create, incur, assume or otherwise become or remain
directly or indirectly liable with respect to any Indebtedness, except:
(i) the Obligations;
(ii) Permitted Existing Indebtedness;
(iii) to the extent permitted by Article X and in any event in
an aggregate amount not to exceed $2,000,000 at any time, Capital
Leases and purchase money Indebtedness;
(iv) Indebtedness arising from intercompany loans made by one
Borrower to another Borrower or from intercompany loans made by
Holdings to a Borrower provided that such loans are subordinated in
right of payment to the Obligations;
(v) Permitted Subordinated Indebtedness provided that at the
time such Indebtedness is incurred, no Default or Event of Default has
occurred and is continuing;
(vi) Indebtedness owing to Holdings arising under the Tax
Sharing Agreement; and (vii) Indebtedness constituting Accommodation
Obligations to the extent permitted under Section 9.05.
9.02. Sales of Assets. No member of the Barneys Group shall
sell, assign, transfer, lease, convey or otherwise dispose of any Property,
whether now owned or hereafter acquired, or any income or profits therefrom, or
enter into any agreement to do so, except:
(i) the sale of Inventory in the ordinary course of business;
(ii) the sale of assets (other than Inventory) in the ordinary
course of business provided that the aggregate amount of such sales
does not exceed $2,000,000 during the
82
period from the date hereof to the Commitment Termination Date;
(iii) sales of assets outside of the ordinary course of
business not in excess of $1,000,000 in any Fiscal Year;
(iv) the sale or other disposition of equipment that is
obsolete or no longer used or useful in a Borrower's business;
(v) the sale, assignment, transfer, lease, conveyance or other
disposition of assets from one Borrower to another Borrower; and (vi)
the making of the Section 338 Election.
9.03. Liens. No member of the Barneys Group shall directly or
indirectly create, incur, assume or permit to exist any Lien on or with respect
to any of their respective Property or assets except:
(i) Liens created by the Loan Documents;
(ii) Permitted Existing Liens;
(iii) Customary Permitted Liens;
(iv) purchase money Liens (including the interest of a lessor
under a Capital Lease) and Liens to which any Property is subject at
the time of the acquisition thereof) securing Indebtedness permitted
under Section 9.01(iii) and limited in each case to the property
purchased or subject to such lease; and
(v) Liens on Real Property or leasehold interest having a
second priority securing the Permitted Subordinated Indebtedness, on
terms and conditions reasonably satisfactory to the Administrative
Agent, provided that Liens on such property and interests secure the
Obligations on a first priority basis and the holders of the Permitted
Subordinated Indebtedness enter into an intercreditor agreement with
terms and conditions reasonably satisfactory to the Administrative
Agent and the Requisite Lenders.
9.04. Investments. No member of the Barneys Group shall
directly or indirectly make or own any Investment except:
(i) Investments in Cash Collateral pledged to the
Administrative Agent or deposited in the Concentration Account in
accordance with the terms hereof;
(ii) Permitted Existing Investments in an amount not greater
than the amount thereof on the Closing Date;
83
(iii) Investments by one Borrower in another Borrower;
(iv) loans to Holdings (A) for its ordinary course expenses as
a public holding company (including, without limitation, administrative
overhead and any taxes, assessments, filing fees and other governmental
charges payable by Holdings in the ordinary course, but excluding all
costs, expenses and fees in connection with any registered public
offering of securities of Holdings) and (B) pursuant to the Tax Sharing
Agreement but only in an aggregate amount not to exceed the actual
taxes paid or payable by Holdings;
(v) Investments in Barneys Japan in accordance with the
Barneys Japan Option, provided that (A) the Trademark Available Amount
is zero, (B) either the Fixed Charge Coverage Ratio of the Barneys
Group on a consolidated basis, as determined as of the last day of the
immediately preceding fiscal quarter for the twelve month period ending
on such day on a pro forma basis after giving effect to such Investment
shall not be less than 1.25 to 1.0 or the purchase price paid for the
Barneys Japan Option is included in the Capital Expenditures calculated
as of the Fiscal Year in which such purchase price is paid, (C) no
Default or Event of Default has occurred and is continuing prior to and
after giving effect to such Investment and (D) the Administrative Agent
has received legal opinions and documents and other evidence
satisfactory to it that the Administration Agent has a first priority
Lien on the Stock of Barneys Japan;
(vi) loans to Holdings, provided that (A) the Trademark
Available Amount is zero, (B) the Fixed Charge Coverage Ratio of the
Barneys Group on a consolidated basis, as determined as of the last day
of the immediately preceding fiscal quarter for the twelve month period
ending on such day on a pro forma basis after giving effect to such
loan shall not be less than 1.50 to 1.0 and (C) no Default or Event of
Default has occurred and is continuing prior to and after giving effect
to such loans; and
(vii) Investments by any Borrower to create a new wholly-owned
Subsidiary; provided that such Subsidiary becomes a Borrower hereunder
and the Administrative Agent receives a first priority Lien on the
Capital Stock of such Subsidiary and on all assets and property of such
Subsidiary pursuant to documentation reasonably satisfactory to the
Administrative Agent.
9.05. Accommodation Obligations. No member of the Barneys
Group shall directly or indirectly create or become or be liable with respect to
any Accommodation Obligation, except:
(i) Permitted Existing Accommodation Obligations;
(ii) obligations, warranties and indemnities, not with respect
to
84
Indebtedness of any Person, which have been or are undertaken or made
in the ordinary course of business and not for the benefit of or in
favor of an Affiliate of any Borrower;
(iii) Accommodation Obligations under the Tax Sharing
Agreement; and
(iv) Accommodation Obligations with respect to Indebtedness
permitted by Section
9.01, Investments permitted under Section 9.04 and Operating
Leases permitted by Section 9.18.
9.06. Restricted Junior Payments. No member of the Barneys
Group shall declare or make any Restricted Junior Payment other than:
(i) Restricted Junior Payments made by one Borrower to another
Borrower;
(ii) dividends or distributions to Holdings for the payment of
dividends on the Preferred Stock up to an aggregate amount of $20,000
per Fiscal Year, so long as no Default or Event of Default has occurred
and is continuing prior to and after giving effect thereto;
(iii) payments or distributions to Holdings for the purpose of
paying (A) amounts payable to Holdings pursuant to the Tax Sharing
Agreement but only in an aggregate amount not to exceed the actual
taxes paid or payable by Holdings and (B) Holdings' ordinary course
expenses as a public holding company (including, without limitation,
administrative overhead and any taxes, assessments, filing fees and
other governmental charges payable by Holdings in the ordinary course,
but excluding all costs, expenses and fees in connection with any
registered public offering of securities of Holdings);
(iv) prepayments and payments of principal on the Permitted
Subordinated Indebtedness and purchases of the Capital Stock of
Holdings, provided that (A) the Trademark Available Amount is zero, (B)
the Fixed Charge Coverage Ratio of the Barneys Group on a consolidated
basis, as determined as of the last day of the immediately preceding
fiscal quarter for the twelve month period ending on such day on a pro
forma basis after giving effect to such prepayment, payment or purchase
shall not be less than 1.25 to 1.0 and (C) no Default or Event of
Default has occurred and is continuing prior to and after giving effect
to such prepayment, payment or purchase; and
(v) repurchases of Capital Stock of Holdings owned by
employees that are no longer employed by Holdings or any Borrower in an
aggregate amount not to exceed $1,000,000.
9.07. Conduct of Business; Subsidiaries; Acquisitions. No
member of the
85
Barneys Group shall engage in any business other than the businesses engaged in
by the Borrowers on the date hereof and any business or activities which are
substantially similar, related or incidental thereto. No member of the Barneys
Group shall sell or otherwise dispose of, or permit the sale or disposition of,
any shares of Capital Stock of any of its Subsidiaries except to other members
of the Barneys Group. No member of the Barneys Group shall enter into or permit
any transaction or series of transactions in which such member or any other
member of the Barneys Group acquires all or any significant portion of the
assets of another Person.
9.08. Transactions with Affiliates. No member of the Barneys
Group shall directly or indirectly (a) enter into or permit to exist any
transaction (including, without limitation, the purchase, sale, lease or
exchange of any Property or the rendering of any service) with any Affiliate of
such member on terms that are less favorable to such member than those that
could be obtained in an arm's length transaction at the time from Persons who
are not such an Affiliate or (b) pay management fees, consulting fees or
royalties to any Affiliate or (c) increase salaries of management of any member
of the Barneys Group except in the ordinary course of a retail business or as
otherwise necessary to retain key personnel.
9.09. Restriction on Fundamental Changes. No member of the
Barneys Group shall (a) enter into any merger or consolidation, or liquidate,
wind-up or dissolve (or suffer any liquidation or dissolution), or convey,
lease, sell, transfer or otherwise dispose of, in one transaction or series of
transactions, all or substantially all of such member's business or Property,
whether now or hereafter acquired (other than (i) pursuant to the making of the
Section 338 Election or (ii) the merger or consolidation of one Borrower with
another Borrower provided that such merger or consolidation is on terms and
conditions reasonably satisfactory to the Administrative Agent and has no
adverse effect on the Administrative Agent's Lien securing the Obligations) or
(b) enter into any partnership or joint venture.
9.10. Sales and Leasebacks. No member of the Barneys Group
shall become liable, directly, by assumption or by Accommodation Obligation,
with respect to any lease, whether an Operating Lease or a Capital Lease of any
Property (whether real or personal or mixed) (i) which it sold or transferred or
is to sell or transfer to any other Person, or (ii) which it intends to use for
substantially the same purposes as any other Property which has been or is to be
sold or transferred by it to any other Person in connection with such lease.
9.11. Margin Regulations; Securities Laws. No member of the
Barneys Group shall use all or any portion of the proceeds of any credit
extended hereunder to purchase or carry Margin Stock.
9.12. ERISA. No member of the Barneys Group shall:
(i) engage in any prohibited transaction described in
Sections 406 of ERISA or 4975 of the Internal Revenue Code
with respect to a Plan for which a statutory, regulatory or
class exemption is not available or a private exemption has
not been
86
previously obtained from the DOL;
(ii) permit to exist any accumulated funding deficiency (as
defined in sections 302 of ERISA and 412 of the Internal Revenue Code),
with respect to any Benefit Plan, whether or not waived;
(iii) fail, or permit any ERISA Affiliate to fail, to pay
timely required contributions or annual installments due with respect
to any waived funding deficiency to any Benefit Plan;
(iv) terminate, or permit any ERISA Affiliate to terminate,
any Benefit Plan which would result in any liability of any member of
the Barneys Group or any ERISA Affiliate under Title IV of ERISA;
(v) fail to make any contribution or payment to any
Multiemployer Plan which any member of the Barneys Group or any ERISA
Affiliate may be required to make under any agreement relating to such
Multiemployer Plan, or any law pertaining thereto;
(vi) fail, or permit any ERISA Affiliate to fail, to pay any
required installment or any other payment required under Section 412 of
the Internal Revenue Code on or before the due date for such
installment or other payment;
(vii) amend, or permit any ERISA Affiliate to amend, a Benefit
Plan resulting in an increase in current liability for the plan year
such that any member of the Barneys Group or any ERISA Affiliate is
required to provide security to such Plan under Section 401(a)(29) of
the Internal Revenue Code;
(viii) fail, or permit any member of the Barneys Group or any
ERISA Affiliate to fail, to pay any required contributions or payments
to a Foreign Employee Benefit Plan on or before the due date for such
required installment or payment;
in each case, under the foregoing clauses (i) through (viii), individually or in
the aggregate which could reasonably result in a liability in excess of
$1,000,000.
9.13. Issuance of Capital Stock. No member of the Barneys
Group shall issue any Capital Stock except the issuance of Capital Stock by one
member of the Barneys Group to another member of the Barneys Group or to
Holdings, provided that the Administrative Agent has a first priority Lien with
respect to such Capital Stock.
9.14. Constituent Documents. No member of the Barneys Group
shall amend, modify or otherwise change in any material respect any of the terms
or provisions in any of their respective Constituent Documents as in effect on
the Closing Date without the prior written
87
consent of the Requisite Lenders, which consent shall not be unreasonably
withheld.
9.15. Fiscal Year. No member of the Barneys Group shall change
its Fiscal Year for accounting or tax purposes from a period consisting of the
52- or 53-week period ending on the Saturday in January of each calendar year
closest to January 31.
9.16. Cash Management. Except for the deposit accounts listed
on Schedule 9.16 under the heading "Deposit Accounts" (over which accounts a
member of the Barneys Group has dominion and control and the Administrative
Agent does not have dominion and control), fiduciary accounts listed on Schedule
9.16 under the heading "Fiduciary Accounts" (over which accounts a member of the
Barneys Group has dominion and control and the Administrative Agent does not
have dominion and control), the trust account listed on Schedule 9.16 under the
heading "Administrative Claims Trust Account" (over which accounts a member of
the Barneys Group has dominion and control and the Administrative Agent does not
have dominion and control), the Blocked Accounts, the Concentration Account and
the Cash Collateral Account, no member of the Barneys Group shall open any
deposit or payable account with any Person. No member of the Barneys Group shall
authorize or direct any Person to take any action with respect to amounts
deposited in the Blocked Accounts or the Concentration Account in contravention
of the provisions hereof. The Borrowers shall not maintain balances in the
accounts set forth on Schedule 9.16 under the heading "Deposit Accounts" in an
aggregate amount for all such Deposit Accounts in excess of $3,125,000. The
Borrowers shall not maintain balances in the accounts set forth on Schedule 9.16
under the heading "Fiduciary Accounts" in an aggregate amount for all such
Fiduciary Accounts in excess of $4,000,000. The Borrowers shall not maintain
balances in the accounts set forth on Schedule 9.16 under the heading
"Administrative Claims Trust Account" in an aggregate amount for all such
Administrative Claims Trust Accounts in excess of $6,000,000 at any time from
the date hereof to January 27, 2000 and, thereafter, in an amount in excess of
$4,000,000; provided that all amounts exceeding $4,000,000 in such accounts on
January 27, 2000 shall be deposited by the Borrowers into the Concentration
Account on such date.
9.17. Environmental Matters. No member of the Barneys Group
shall:
(i) become subject to any Liabilities and Costs which would
have a Material Adverse Effect arising out of or related to (a) the
Release or threatened Release at any location of any Contaminant into
the environment, or any Remedial Action in response thereto, or (b) any
violation of any Environmental Requirements of Law; or
(ii) either directly or indirectly, create, incur, assume or
permit to exist any Environmental Lien on or with respect to any of its
Property.
9.18. Operating Leases. Except for the leases set forth on
Schedule 9.18 and renewals thereof, no member of the Barneys Group shall become
liable in any way, whether directly or by assignment or by Accommodation
Obligation, for the obligations of a lessee under
88
any Operating Leases if, immediately after giving effect to the incurrence of
rental payments with respect thereto, the annual amount of rental payments for
any Operating Lease would exceed $2,000,000 or the aggregate annual amount of
all rental payments with respect to all such Operating Leases would exceed
$4,500,000.
9.19. Subordinated Notes. No member of the Barneys Group shall
amend, modify or otherwise change any of the terms or provisions in the
Subordinated Notes which would be adverse to the interests of the Borrowers, the
Administrative Agent or the Lenders.
ARTICLE X
FINANCIAL COVENANTS
Each Borrower covenants and agrees that so long as any
Commitment is outstanding and thereafter until payment in full of all of the
Obligations, unless the Requisite Lenders (or such other Lenders, if so required
pursuant to Section 13.07) shall otherwise give prior written consent thereto:
10.01. Minimum Consolidated Net Worth. The Consolidated Net
Worth of the Barneys Group at the end of each fiscal quarter set forth below
shall not be less than the minimum amount set forth opposite such fiscal
quarter:
Fiscal Quarter Ending Minimum Amount
--------------------- --------------
First fiscal quarter of Fiscal Year 1999 $140,000,000
Second fiscal quarter of Fiscal Year 1999 140,000,000
Third fiscal quarter of Fiscal Year 1999 140,000,000
Fourth fiscal quarter of Fiscal Year 1999 140,000,000
First fiscal quarter of Fiscal Year 2000 140,000,000
Second fiscal quarter of Fiscal Year 2000 140,000,000
Third fiscal quarter of Fiscal Year 2000 140,000,000
Fourth fiscal quarter of Fiscal Year 2000 140,000,000
First fiscal quarter of Fiscal Year 2001 150,000,000
Second fiscal quarter of Fiscal Year 2001 150,000,000
Third fiscal quarter of Fiscal Year 2001 150,000,000
Fourth fiscal quarter of Fiscal Year 2001 150,000,000
First fiscal quarter of Fiscal Year 2002 150,000,000
Second fiscal quarter of Fiscal Year 2002 150,000,000
Third fiscal quarter of Fiscal Year 2002 150,000,000
Fourth fiscal quarter of Fiscal Year 2002 150,000,000
10.02. Maximum Leverage Ratio. The Leverage Ratio of the
Barneys Group on a consolidated basis, as determined as of the last day of each
fiscal quarter set forth below for the twelve month period ending on such day,
shall not be greater than the ratio set forth opposite
89
such fiscal quarter:
Fiscal Quarter Ending Ratio
--------------------- -----
First fiscal quarter of Fiscal Year 1999 7.0
Second fiscal quarter of Fiscal Year 1999 7.0
Third fiscal quarter of Fiscal Year 1999 7.0
Fourth fiscal quarter of Fiscal Year 1999 7.0
First fiscal quarter of Fiscal Year 2000 4.5
Second fiscal quarter of Fiscal Year 2000 4.5
Third fiscal quarter of Fiscal Year 2000 4.5
Fourth fiscal quarter of Fiscal Year 2000 4.5
First fiscal quarter of Fiscal Year 2001 3.5
Second fiscal quarter of Fiscal Year 2001 3.5
Third fiscal quarter of Fiscal Year 2001 3.5
Fourth fiscal quarter of Fiscal Year 2001 3.5
First fiscal quarter of Fiscal Year 2002 3.0
Second fiscal quarter of Fiscal Year 2002 3.0
Third fiscal quarter of Fiscal Year 2002 3.0
Fourth fiscal quarter of Fiscal Year 2002 3.0
10.03. Minimum Consolidated EBITDA. The Minimum Consolidated
EBITDA of the Barneys Group, as determined as of the last day of each fiscal
quarter set forth below for the twelve month period ending on such day, shall
not be less than the minimum amount set forth opposite such fiscal quarter:
Fiscal Quarter Ending Minimum Amount
--------------------- --------------
First fiscal quarter of Fiscal Year 1999 $16,000,000
Second fiscal quarter of Fiscal Year 1999 16,000,000
Third fiscal quarter of Fiscal Year 1999 17,000,000
Fourth fiscal quarter of Fiscal Year 1999 20,000,000
First fiscal quarter of Fiscal Year 2000 20,000,000
Second fiscal quarter of Fiscal Year 2000 20,000,000
Third fiscal quarter of Fiscal Year 2000 20,000,000
Fourth fiscal quarter of Fiscal Year 2000 25,000,000
First fiscal quarter of Fiscal Year 2001 25,000,000
Second fiscal quarter of Fiscal Year 2001 30,000,000
Third fiscal quarter of Fiscal Year 2001 30,000,000
Fourth fiscal quarter of Fiscal Year 2001 30,000,000
First fiscal quarter of Fiscal Year 2002 30,000,000
Second fiscal quarter of Fiscal Year 2002 35,000,000
90
Third fiscal quarter of Fiscal Year 2002 35,000,000
Fourth fiscal quarter of Fiscal Year 2002 35,000,000
10.04. Maximum Capital Expenditures. Capital Expenditures made
or incurred by the members of the Barneys Group on a consolidated basis during
any Fiscal Year shall not exceed (a) during Fiscal Year 1999, an aggregate
amount of $7,250,000, (b) during Fiscal Year 2000, an aggregate amount of
$7,500,000, (c) during Fiscal Year 2001, an aggregate amount of $7,750,000 and
(d) during Fiscal Year 2002, an aggregate amount of $7,750,000; provided,
however, the foregoing maximum amounts may be increased (i) by the amount (on a
dollar for dollar basis) of any cash equity contribution made by Holdings to
Barneys, (ii) with respect to Fiscal Year 1999, by the amount, if any, by which
the Consolidated EBITDA for the Barneys Group, calculated as of the last day of
the immediately preceding fiscal quarter for the twelve month period ending on
such day, exceeds $20,000,000, on a dollar for dollar basis, up to $4,000,000 in
the aggregate provided that the amount of such increase reduces the maximum
amount of Capital Expenditures (on a dollar for dollar basis) in a subsequent
Fiscal Year ending prior to February 7, 2003, and (iii) with respect to Fiscal
Year 2000 and each Fiscal Year thereafter, an amount of up to $4,000,000 for
such Fiscal Year if the Fixed Charge Coverage Ratio of the Barneys Group on a
consolidated basis, as determined as of the last day of the immediately
preceding fiscal quarter for the twelve month period ending on such day (after
giving effect to such increased amount of Capital Expenditures), is more than
1.25 to 1.0 provided that the amount of such increase reduces the maximum amount
of Capital Expenditures (on a dollar for dollar basis) in a subsequent Fiscal
Year selected by the Borrowers and ending prior to February 7, 2003; and
provided, further, in the event that the maximum amount which is permitted to be
expended in respect of Capital Expenditures during any Fiscal Year as set forth
above (without giving effect to this proviso) is not fully expended during such
Fiscal Year, the maximum amount expended during the immediately succeeding
Fiscal Year shall be increased by such unutilized amount.
ARTICLE XI
EVENTS OF DEFAULT; RIGHTS AND REMEDIES
11.01. Events of Default. Each of the following occurrences
shall constitute an Event of Default hereunder:
(a) Failure to Make Payments When Due. The Borrowers shall
fail to pay (i) when due any principal of, interest on or fees with respect to,
the Loans or the Reimbursement Obligations or (ii) any other Obligation, and if
such non-payment relates to Obligations other than those specified in clause
(i), such non-payment continues for a period of three (3) Business Days after
the due date thereof.
(b) Breach of Certain Covenants. (i) Any Borrower shall fail
to perform or observe duly and punctually any agreement, covenant or obligation
binding on such Person under
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(A) Sections 7.02, 7.03, 7.08(a), 8.01, 8.05, 8.06, 8.07, 8.14, or (B) Article
IX or Article X or (ii) Holdings shall fail to perform or observe duly and
punctually any agreement, covenant or obligation binding on it under Sections
6(a), 6(c) or Section 7 of the Holdings Guaranty.
(c) Breach of Representation or Warranty. Any representation
or warranty made or deemed made by Holdings or any Borrower to the
Administrative Agent, any Lender or the Issuing Bank herein or in any other Loan
Document or in any statement or certificate at any time given by any such Person
pursuant to any Loan Document shall be false or misleading in any material
respect on the date made (or deemed made).
(d) Other Defaults. Holdings or any Borrower shall default in
the performance of or compliance with any term contained herein (other than as
covered by paragraphs (a), (b) or (c) of this Section 11.01), or Holdings or any
Borrower shall default in the performance of or compliance with any term
contained in any other Loan Document, and such default shall continue for (i)
ten (10) Business Days after the occurrence thereof with respect to any term
contained in Sections 7.01, 7.04, 7.06, 7.07 and 7.08; and (ii) thirty (30) days
after the occurrence thereof with respect to any other term.
(e) Default as to Other Indebtedness; Isetan Leases.
(i) Holdings or any Borrower shall fail to make any payment
when due (whether by scheduled maturity, required prepayment, acceleration,
demand or otherwise) with respect to any Indebtedness (other than an Obligation)
in an amount of $1,000,000 or more; or any breach, default or event of default
shall occur, or any other condition shall exist under any instrument, agreement
or indenture pertaining to any such Indebtedness, if the effect thereof is (or,
with the giving of notice or lapse of time or both, would be) to cause an
acceleration, mandatory redemption or other required repurchase of such
Indebtedness; or any such Indebtedness shall be otherwise declared to be due and
payable (by acceleration or otherwise) or required to be prepaid, redeemed or
otherwise repurchased by Holdings or any Borrower (other than by a regularly
scheduled required prepayment) prior to the stated maturity thereof;
(ii) (A) Any Borrower shall fail to make any payment of fixed
or additional rent when due under any Isetan Lease, and the landlord thereunder
shall have given the first notice of such non-payment to such Borrower required
under the Isetan Lease and such non-payment shall continue for two (2) Business
Days after the delivery of such first notice or five (5) Business Days after
delivery of such first notice if on the date such first notice is given the
Borrowers have Availability (after giving effect to Loans made on such date and
the repayments made on such date) of at least $10,000,000; or (B) any Borrower
shall fail to comply with any covenant under an Isetan Lease (other than the
covenants to pay fixed and additional rent) and the landlord thereunder shall
have given the second notice of such non-compliance required under the
applicable Isetan Lease; provided, however, that no Event of Default shall be
deemed to have occurred with respect to any such alleged non-monetary default
under this clause (B), if and only for so long as either (1) such alleged
non-monetary default shall be curable by the applicable
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Borrower with reasonable diligence, and the applicable Borrower commenced to
cure such default during the period prior to the receipt of the second notice of
non-compliance and continues to prosecute the curing thereof with diligence to
completion, or (2) the applicable Borrower, in accordance with the express
provisions of such Isetan Lease, has initiated (in good faith and in a timely
fashion) the dispute resolution procedure set forth in Section 5.1(a) of the
applicable Isetan Lease for determining whether such Borrower has failed to
comply with the terms of such Isetan Lease; provided, further, that if the
dispute resolution procedure results in a determination by the arbitrator that a
non-monetary default has occurred under the applicable Isetan Lease, no Event of
Default shall be deemed to have occurred if and for so long as such alleged
non-monetary default shall be curable by the applicable Borrower with reasonable
diligence, and the applicable Borrower commences to cure such default during the
remaining cure period under the Isetan Lease and continues to prosecute the
curing thereof with diligence to completion.
(f) Involuntary Bankruptcy; Appointment of Receiver, Etc.
(i) An involuntary case shall be commenced against Holdings or
any Borrower and the petition shall not be dismissed, stayed, bonded or
discharged within sixty (60) days after commencement of the case; or a court
having jurisdiction in the premises shall enter a decree or order for relief in
respect of Holdings or any Borrower in an involuntary case, under any applicable
bankruptcy, insolvency or other similar law now or hereinafter in effect; or any
other similar relief shall be granted under any applicable federal, state, local
or foreign law.
(ii) A decree or order of a court having jurisdiction in the
premises for the appointment of a receiver, liquidator, sequestrator, trustee,
custodian or other officer having similar powers over Holdings or any Borrower
or over all or a substantial part of the Property of Holdings or any Borrower
shall be entered; or an interim receiver, trustee or other custodian of Holdings
or any Borrower or of all or a substantial part of the property of Holdings or
such Borrower shall be appointed or a warrant of attachment, execution or
similar process against any substantial part of the Property of Holdings or any
Borrower shall be issued and any such event shall not be stayed, dismissed,
bonded or discharged within sixty (60) days after entry, appointment or
issuance.
(g) Voluntary Bankruptcy; Appointment of Receiver, Etc.
Holdings or any Borrower shall (i) commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect; (ii) consent to the entry of an order for relief in an involuntary case,
or to the conversion of an involuntary case to a voluntary case, under any such
law, or consent to the appointment of or taking possession by a receiver,
trustee or other custodian for all or a substantial part of its property; (iii)
make any assignment for the benefit of creditors; (iv) fail generally to pay its
debts as such debts become due, or admit in writing its inability to pay its
debts; or (v) take any corporate action in furtherance of any such action.
(h) Judgments. Any judgment, writ, order or warrant of
attachment, or other
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similar process shall be rendered against Holdings or any Borrower or any of
their respective assets involving in any single case or in the aggregate an
amount in excess of $1,000,000 is (are) entered and remains undischarged,
unvacated and unstayed for a period of sixty (60) days.
(i) Dissolution. Any order, judgment or decree shall be
entered against Holdings or any Borrower, decreeing its involuntary dissolution
or split up and such order shall remain undischarged and unstayed for a period
in excess of sixty (60) days; or any member of the Barneys Group shall otherwise
dissolve or cease to exist except as specifically permitted hereby.
(j) Loan Documents; Failure of Security. At any time, for any
reason, (i) any Loan Document ceases to be in full force and effect or Holdings
or any Borrower seeks to repudiate its obligations thereunder or the Liens
intended to be created thereby are, or Holdings or any Borrower seeks to render
such Liens, invalid or unperfected, or (ii) Liens in favor of the Administrative
Agent, the Issuing Bank and/or the Lenders contemplated by the Loan Documents
shall, at any time, for any reason, be invalidated or otherwise cease to be in
full force and effect, or such Liens shall be subordinated or shall not have the
priority contemplated hereby or by the other Loan Documents.
(k) Termination Event. Any Termination Event occurs which the
Administrative Agent believes could reasonably be expected to subject either any
Borrower or any ERISA Affiliate to a material liability.
(l) Waiver of Minimum Funding Standard. If the plan
administrator of any Plan other than Multiemployer Plan applies under Section
412(d) of the Internal Revenue Code for a waiver of the minimum funding
standards of Section 412(a) of the Internal Revenue Code and the Administrative
Agent reasonably believes the substantial business hardship upon which the
waiver is based could subject either any Borrower or any ERISA Affiliate to a
material liability.
(m) Change of Control. A Change of Control shall occur with
respect to Holdings.
An Event of Default shall be deemed "continuing" until cured or waived in
accordance with Section 13.07.
11.02. Rights and Remedies.
(a) Acceleration and Termination. Upon the occurrence of any
Event of Default described in Sections 11.01(f) or 11.01(g), the Commitments
shall automatically and immediately terminate and the unpaid principal amount
of, and any and all accrued interest on, the Obligations and all accrued fees
shall automatically become immediately due and payable, without presentment,
demand, or protest or other requirements of any kind (including, without
limitation, valuation and appraisement, diligence, presentment, notice of intent
to demand or
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accelerate and of acceleration), all of which are hereby expressly waived by
each Borrower; and upon the occurrence and during the continuance of any other
Event of Default, the Administrative Agent shall at the request, or may with the
consent, of the Requisite Lenders, by written notice to the Borrowers, (i)
declare that all or any portion of the Commitments are terminated, whereupon the
Commitments and the obligation of each Lender to make any Loan hereunder and of
each Lender or the Issuing Bank to issue any Letter of Credit not then issued
shall immediately terminate, and/or (ii) declare the unpaid principal amount of
and any and all accrued and unpaid interest on the Obligations to be, and the
same shall thereupon be, immediately due and payable, without presentment,
demand, or protest or other requirements of any kind (including, without
limitation, valuation and appraisement, diligence, presentment, notice of intent
to demand or accelerate and of acceleration), all of which are hereby expressly
waived by each Borrower.
(b) Deposit for Letters of Credit. In addition, after the
occurrence and during the continuance of an Event of Default, the Borrowers
shall, promptly upon demand by the Administrative Agent, deliver to the
Administrative Agent, Cash Collateral in such form as requested by the
Administrative Agent, together with such endorsements, and execution and
delivery of such documents and instruments as the Administrative Agent may
request in order to perfect or protect the Administrative Agent's Lien with
respect thereto, in an aggregate principal amount equal to the then outstanding
Letter of Credit Obligations.
(c) Enforcement. Each Borrower acknowledges that in the event
Holdings or any Borrower fails to perform, observe or discharge any of its
respective obligations or liabilities hereunder or under any other Loan
Document, any remedy of law may prove to be inadequate relief to the
Administrative Agent, the Issuing Bank and the Lenders; therefore, the Borrowers
agree that the Administrative Agent, the Issuing Bank and the Lenders shall be
entitled after the occurrence and during the continuance of an Event of Default
to temporary and permanent injunctive relief in any such case without the
necessity of proving actual damages.
ARTICLE XII
THE AGENTS
12.01. Appointment. (a) Each Lender and the Issuing Bank
hereby designates and appoints CUSA as the Administrative Agent hereunder, and
each Lender and the Issuing Bank hereby irrevocably authorizes the
Administrative Agent to execute such documents (including, without limitation,
the Loan Documents to which the Administrative Agent is a party) and to take
such other action on such Person's behalf under the provisions hereof and of the
Loan Documents and to exercise such powers as are set forth herein or therein
together with such other powers as are reasonably incidental thereto. As to any
matters not expressly provided for hereby (including, without limitation,
enforcement or collection of the Notes or any amount payable under any provision
of Article III when due) or the other Loan Documents, the
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Administrative Agent shall not be required to exercise any discretion or take
any action. Notwithstanding the foregoing, the Administrative Agent shall be
required to act or refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of the Requisite Lenders
(unless the instructions or consent of all of the Lenders is required hereunder
or thereunder) and such instructions shall be binding upon all Lenders, the
Issuing Bank and Holders; provided, however, the Administrative Agent shall not
be required to take any action which (i) the Administrative Agent reasonably
believes shall expose it to personal liability unless the Administrative Agent
receives an indemnification satisfactory to it from the Lenders with respect to
such action or (ii) is contrary hereto, to the other Loan Documents or
applicable law. The Administrative Agent agrees to act as such on the express
conditions contained in this Article XII.
(b) The provisions of this Article XII are solely for the
benefit of the Agents, the Lenders and Issuing Bank, and no Borrower shall have
any rights to rely on or enforce any of the provisions hereof (other than as
expressly set forth in Sections 12.07 and 12.09). In performing its functions
and duties hereunder, the Administrative Agent shall act solely as agent of the
Lenders and the Issuing Bank and does not assume and shall not be deemed to have
assumed any obligation or relationship of agency, trustee or fiduciary with or
for any Borrower or any of its Subsidiaries. The Administrative Agent may
perform any of its duties hereunder, or under the Loan Documents, by or through
its agents or employees.
12.02. Nature of Duties. (a) The Administrative Agent shall
not have any duties or responsibilities except those expressly set forth herein
or in the Loan Documents. The duties of the Administrative Agent shall be
mechanical and administrative in nature. The Administrative Agent shall not have
by reason hereof a fiduciary relationship in respect of any Holder. Nothing
herein or in any of the Loan Documents, expressed or implied, is intended to or
shall be construed to impose upon the Administrative Agent any obligations in
respect hereof or any of the Loan Documents except as expressly set forth herein
or therein. Each Lender and the Issuing Bank shall make its own independent
investigation of the financial condition and affairs of Holdings and its
Subsidiaries in connection with the making and the continuance of the Loans
hereunder and with the issuance of the Letters of Credit and shall make its own
appraisal of the creditworthiness of Holdings and its Subsidiaries initially and
on a continuing basis, and the Administrative Agent shall not have any duty or
responsibility, either initially or on a continuing basis, to provide any Holder
with any credit or other information with respect thereto (except for reports
required to be delivered by the Administrative Agent under the terms hereof). If
the Administrative Agent seeks the consent or approval of any of the Lenders to
the taking or refraining from taking of any action hereunder, the Administrative
Agent shall send notice thereof to each Lender. The Administrative Agent shall
promptly notify each Lender at any time that the Lenders so required hereunder
have instructed the Administrative Agent to act or refrain from acting pursuant
hereto.
(b) The Documentation Agent shall have no duties or
responsibilities under this Agreement or any other Loan Document.
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12.03. Rights, Exculpation, Etc. (a) Liabilities;
Responsibilities. None of the Administrative Agent or any Affiliate of the
Administrative Agent, nor any of their respective officers, directors, employees
or agents shall be liable to any Holder for any action taken or omitted by them
hereunder or under any of the Loan Documents, or in connection therewith, except
that no Person shall be relieved of any liability imposed by law for gross
negligence or willful misconduct. The Administrative Agent shall not be liable
for any apportionment or distribution of payments made by it in good faith
pursuant to Section 3.02(b), and if any such apportionment or distribution is
subsequently determined to have been made in error the sole recourse of any
Holder to whom payment was due, but not made, shall be to recover from other
Holders any payment in excess of the amount to which they are determined to have
been entitled. The Administrative Agent shall not be responsible to any Holder
for any recitals, statements, representations or warranties herein or for the
execution, effectiveness, genuineness, validity, legality, enforceability,
collectibility, or sufficiency hereof or of any of the other Loan Documents or
the transactions contemplated thereby, or for the financial condition of
Holdings, any Borrower or any of its Subsidiaries. The Administrative Agent
shall not be required to make any inquiry concerning either the performance or
observance of any of the terms, provisions or conditions hereof or of any of the
Loan Documents or the financial condition of Holdings, any Borrower or any of
its Subsidiaries, or the existence or possible existence of any Default or Event
of Default.
(b) Right to Request Instructions. The Administrative Agent
may at any time request instructions from the Lenders with respect to any
actions or approvals which by the terms of any of the Loan Documents the
Administrative Agent is permitted or required to take or to grant, and the
Administrative Agent shall be absolutely entitled to refrain from taking any
action or to withhold any approval and shall not be under any liability
whatsoever to any Person for refraining from any action or withholding any
approval under any of the Loan Documents until it shall have received such
instructions from those Lenders from whom the Administrative Agent is required
to obtain such instructions for the pertinent matter in accordance with the Loan
Documents. Without limiting the generality of the foregoing, no Holder shall
have any right of action whatsoever against the Administrative Agent as a result
of the Administrative Agent acting or refraining from acting under the Loan
Documents in accordance with the instructions of the Requisite Lenders or, where
required by the express terms hereof, a greater proportion of the Lenders.
12.04. Reliance. The Administrative Agent shall be entitled to
rely upon any written notices, statements, certificates, orders or other
documents or any telephone message believed by it in good faith to be genuine
and correct and to have been signed, sent or made by the proper Person, and with
respect to all matters pertaining hereto or to any of the Loan Documents and its
duties hereunder or thereunder, upon advice of legal counsel (including counsel
for the Borrowers), independent public accountants and other experts selected by
it.
12.05. Indemnification. To the extent that the Administrative
Agent is not
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reimbursed and indemnified by the Borrowers, the Lenders shall reimburse and
indemnify the Administrative Agent for and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by, or asserted against any of them in any way relating to or
arising out of the Loan Documents or any action taken or omitted by the
Administrative Agent under the Loan Documents, in proportion to each Lender's
Pro Rata Share; provided, however, the Lenders shall have no obligation to the
Administrative Agent with respect to the matters indemnified pursuant to this
Section resulting from the willful misconduct or gross negligence of the
Administrative Agent, as determined in a final, non-appealable judgment by a
court of competent jurisdiction. The obligations of the Lenders under this
Section 12.05 shall survive the payment in full of the Loans, the Reimbursement
Obligations and all other Obligations and the termination hereof.
12.06. CUSA Individually. With respect to its Pro Rata Shares
of the Commitments hereunder, if any, and the Loans made by it, if any, CUSA
shall have and may exercise the same rights and powers hereunder and is subject
to the same obligations and liabilities as and to the extent set forth herein
for any other Lender. The terms "Lenders" or "Requisite Lenders" or any similar
terms shall, unless the context clearly otherwise indicates, include CUSA in its
individual capacity as a Lender or as one of the Requisite Lenders. CUSA and its
Affiliates may accept deposits from, lend money to, and generally engage in any
kind of banking, trust or other business with any Borrower or any of its
Subsidiaries as if CUSA were not acting as Administrative Agent pursuant hereto.
12.07. Successor Administrative Agent; Resignation of
Administrative Agent. (a) Resignation. The Administrative Agent may resign from
the performance of its functions and duties hereunder at any time by giving at
least thirty (30) Business Days' prior written notice to the Borrowers and the
Lenders. The resignation of the Administrative Agent shall take effect upon the
acceptance by a successor Administrative Agent of appointment pursuant to this
Section 12.07.
(b) Appointment by Requisite Lenders. Upon any such notice of
resignation by the Administrative Agent, the Requisite Lenders shall have the
right to appoint a successor Administrative Agent selected from among the
Lenders which appointment shall be subject to the prior written approval of the
Borrowers (which may not be unreasonably withheld and shall not be required upon
the occurrence and during the continuance of an Event of Default).
(c) Appointment by Retiring Administrative Agent. If a
successor Administrative Agent shall not have been appointed within the thirty
(30) Business Day period provided in paragraph (a) of this Section 12.07, the
retiring Administrative Agent, with the consent of the Borrowers (which may not
be unreasonably withheld, and shall not be required upon the occurrence and
during the continuance of an Event of Default), shall then appoint a successor
Administrative Agent who shall serve as Administrative Agent until such time, if
any, as the Requisite Lenders appoint a successor Administrative Agent as
provided above.
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(d) Rights of the Successor and Retiring Administrative Agent.
Upon the acceptance of any appointment as Administrative Agent hereunder by a
successor Administrative Agent, such successor Administrative Agent shall
thereupon 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 thereafter
to be performed. After any retiring Administrative Agent's resignation hereunder
as Administrative Agent, the provisions of this Article XII shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was the
Administrative Agent hereunder.
12.08. Relations Among Lenders. Each Lender agrees that it
shall not take any legal action, nor institute any actions or proceedings,
against the Borrowers or any other obligor hereunder or with respect to any
Collateral without the prior written consent of the Requisite Lenders. Without
limiting the generality of the foregoing, no Lender may accelerate or otherwise
enforce its portion of the Obligations, or terminate its Commitments except in
accordance with Section 11.02(a) or a setoff permitted under Section 13.05.
12.09. Concerning the Collateral and the Loan Documents. (a)
Disbursements and Advances. The Administrative Agent may from time to time,
after the occurrence and during the continuance of an Event of Default, make
such disbursements and advances pursuant to the Loan Documents which the
Administrative Agent, in its sole discretion, deems necessary or desirable to
preserve or protect the Collateral or any portion thereof. The Administrative
Agent shall notify the Borrowers and each Lender in writing of each such
disbursement and advance, which notice shall include a description of the
purpose thereof. The Borrowers agree to pay the Administrative Agent, upon
demand, the amount of all outstanding disbursements and advances.
(b) Authority. Each Lender and the Issuing Bank authorizes and
directs the Administrative Agent to enter into the Loan Documents relating to
the Collateral for the benefit of the Lenders and the Issuing Bank. Each Lender
and the Issuing Bank agrees that any action taken by the Administrative Agent or
the Requisite Lenders (or, where required by the express terms hereof, a
different proportion of the Lenders) in accordance with the provisions hereof or
of the other Loan Documents, and the exercise by the Administrative Agent or the
Requisite Lenders (or, where so required, such different proportion) of the
powers set forth herein or therein, together with such other powers as are
reasonably incidental thereto, shall be authorized and binding upon all of the
Lenders and the Issuing Bank. Without limiting the generality of the foregoing,
the Administrative Agent shall have the sole and exclusive right and authority
to (i) act as the disbursing and collecting agent for the Lenders and the
Issuing Bank with respect to all payments and collections arising in connection
herewith and with the Loan Documents relating to the Collateral; (ii) execute
and deliver each Loan Document relating to the Collateral and accept delivery of
each such agreement delivered by Holdings, any Borrowers or any of their
respective Subsidiaries; (iii) act as collateral agent for the Lenders and the
Issuing Bank for purposes of the perfection of all security interests and Liens
created by such agreements and all other purposes stated therein, provided,
however, the Administrative Agent hereby appoints,
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authorizes and directs each Lender and the Issuing Bank to act as collateral
sub-agent for the Administrative Agent, the Lenders and the Issuing Bank for
purposes of the perfection of all security interests and Liens with respect to
the Borrowers' and their respective Subsidiaries' respective deposit accounts
maintained with, and cash and Cash Equivalents held by, such Lender or the
Issuing Bank; (iv) manage, supervise and otherwise deal with the Collateral; (v)
take such action as is necessary or desirable to maintain the perfection and
priority of the security interests and liens created or purported to be created
by the Loan Documents; and (vi) except as may be otherwise specifically
restricted by the terms hereof or of any other Loan Document, exercise all
remedies given to the Administrative Agent, the Lenders or the Issuing Bank with
respect to the Collateral under the Loan Documents relating thereto, applicable
law or otherwise.
(c) Release of Collateral. (i) Each of the Administrative
Agent, the Lenders and the Issuing Bank hereby directs, in accordance with the
terms hereof, the Administrative Agent to release any Lien held by the
Administrative Agent for the benefit of the Administrative Agent, the Lenders,
the Issuing Bank and the other Holders:
(A) against all of the Collateral, upon final payment in full
of the Obligations and termination hereof; and
(B) against any part of the Collateral sold or disposed of by
any Borrower, if such sale or disposition is permitted by Section 9.02.
(ii) Each of the Lenders and the Issuing Bank hereby directs
the Administrative Agent to execute and deliver or file such termination and
partial release statements and do such other things as are necessary to release
Liens to be released pursuant to this Section 12.09(c) promptly upon the
effectiveness of any such release.
(d) Confirmation by Lenders. Without in any manner limiting
the Administrative Agent's authority to act without any specific or further
authorization or consent by the Lenders (as set forth in subsection (c) above),
each Lender agrees to confirm in writing, upon request by the Borrowers, the
authority to release Collateral conferred upon the Administrative Agent under
clauses (A) and (B) of subsection (c) above. So long as no Event of Default is
then continuing, upon receipt by the Administrative Agent of any such written
confirmation from the Lenders of the Administrative Agent's authority to release
any particular items or types of Collateral, and in any event upon any sale and
transfer of Collateral which is expressly permitted pursuant to the terms of
this Agreement, and upon at least five (5) Business Days' prior written request
by the Borrowers, the Administrative Agent shall (and is hereby irrevocably
authorized by the Lenders to) execute such documents as may be necessary to
evidence the release of the Liens upon such Collateral granted to the
Administrative Agent for the benefit of Administrative Agent, the Lenders, the
Issuing Bank and the other Holders; provided, however, that (i) the
Administrative Agent shall not be required to execute any such document on terms
which, in the Administrative Agent's opinion, would expose the
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Administrative Agent to liability or create any obligation or entail any
consequence other than the release of such Liens without recourse or warranty,
and (ii) such release shall not in any manner discharge, affect or impair the
Obligations or any Liens upon (or obligations of any Borrower or any of their
respective Subsidiaries in respect of) all interests retained by the Borrowers
and/or any of their respective Subsidiaries, including (without limitation) the
proceeds of any sale, all of which shall continue to constitute part of the
Collateral.
(e) No Obligation. The Administrative Agent shall not have any
obligation whatsoever to any Lender or to any other Person to assure that the
Collateral exists or is owned by the Borrowers or any of their respective
Subsidiaries or is cared for, protected or insured or has been encumbered or
that the Liens granted to the Administrative Agent herein or pursuant to the
Loan Documents have been properly or sufficiently or lawfully created,
perfected, protected or enforced or are entitled to any particular priority, or
to exercise at all or in any particular manner or under any duty of care,
disclosure or fidelity, or to continue exercising, any of the rights,
authorities and powers granted or available to the Administrative Agent in this
Section 12.09 or in any of the Loan Documents, it being understood and agreed
that in respect of the Collateral, or any act, omission or event related
thereto, the Administrative Agent may act in any manner it may deem appropriate,
in its sole discretion, given the Administrative Agent's own interests in the
Collateral as one of the Lenders and that the Administrative Agent shall not
have any duty or liability whatsoever to any Lender.
ARTICLE XIII
MISCELLANEOUS
13.01. Assignments. (a) Assignments. No assignments or
participations of any Lender's rights or obligations hereunder shall be made
except in accordance with this Section 13.01. Each Lender may assign to one or
more Eligible Assignees all or a portion of its rights and obligations hereunder
in accordance with the provisions of this Section 13.01.
(b) Limitations on Assignments. Each assignment shall be
subject to the following conditions: (i) each assignment shall be approved by
the Administrative Agent, which approval shall not be unreasonably withheld, and
so long as no Event of Default has occurred and is continuing, by the Borrowers,
which approval shall not be unreasonably withheld; (ii) each such assignment
shall be to an Eligible Assignee; (iii) each such assignment shall be in an
amount at least equal to $10,000,000, except if the Eligible Assignee is a
Lender or an Affiliate of a Lender or if such assignment shall constitute all
the assigning Lender's interest hereunder; (iv) any such assignment shall
consist of the simultaneous assignment of corresponding pro rata portions of the
assigning Lender's Commitment, Revolving Loans and Reimbursement Obligations,
and (v) the parties to each such assignment shall execute and deliver to the
Administrative Agent, for its acceptance and recording in the Register, an
Assignment and Acceptance. Upon such execution, delivery, acceptance and
recording in the Register, from and after the effective date specified in each
Assignment and Acceptance and agreed to by the
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Administrative Agent, (x) the assignee thereunder shall, in addition to any
rights and obligations hereunder held by it immediately prior to such effective
date, if any, have the rights and obligations hereunder that have been assigned
to it pursuant to such Assignment and Acceptance and shall, to the fullest
extent permitted by law, have the same rights and benefits hereunder as if it
were an original Lender hereunder and (y) the assigning Lender shall, to the
extent that rights and obligations hereunder have been assigned by it pursuant
to such Assignment and Acceptance, relinquish its rights and be released from
its obligations hereunder (and, in the case of an Assignment and Acceptance
covering all or the remaining portion of such assigning Lender's rights and
obligations hereunder, the assigning Lender shall cease to be a party hereto).
(c) The Register. The Administrative Agent shall maintain at
its address referred to in Section 13.08 a copy of each Assignment and
Acceptance delivered to and accepted by it and a register (the "Register") for
the recordation of the names and addresses of the Lenders and the Commitment
under each Loan of, and principal amount of the Loans under each facility owing
to, each Lender from time to time and whether such Lender is an original Lender
or the assignee of another Lender pursuant to an Assignment and Acceptance. The
Register shall include a control account, and a subsidiary account for each
Lender, in which accounts (taken together) shall be recorded (i) the date and
amount of each Borrowing made hereunder, (ii) the effective date and amount of
each Assignment and Acceptance delivered to and accepted by it and the parties
thereto, (iii) the amount of any principal or interest due and payable or to
become due and payable from the Borrowers to each Lender hereunder or under the
Notes, and (iv) the amount of any sum received by the Administrative Agent from
the Borrowers and each Lender's share thereof. The Administrative Agent shall
deliver a statement of such account to the Borrowers whenever an Assignment and
Acceptance is accepted by it and the parties hereto; provided, however, the
Administrative Agent shall not be obligated to deliver such statement more
frequently than once a month. Each such statement shall be deemed final, binding
and conclusive upon the Borrowers in all respects as to all matters reflected
therein (absent manifest error) unless the Borrowers, within thirty (30) days
after the date such statement is delivered to the Borrowers, deliver to the
Administrative Agent written notice of any objections which the Borrowers may
have to any such statement. In that event, only those items expressly objected
to in such notice shall be deemed to be disputed by the Borrowers. The entries
in the Register shall be conclusive and binding for all purposes, absent
manifest error, and the Borrowers, the Administrative Agent and the Lenders may
treat each Person whose name is recorded in the Register as a Lender hereunder
for all purposes hereof. The Register shall be available for inspection by the
Borrowers or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
(d) Fee. Upon its receipt of an Assignment and Acceptance
executed by the assigning Lender and an Eligible Assignee and a processing and
recordation fee of $3,000 (payable by the assigning Lender or the Replacement
Lender, in the case of assignments pursuant to Section 3.06 or Section
13.07(c)), the Administrative Agent shall, if such Assignment and Acceptance has
been completed and is in compliance herewith and in substantially the form of
Exhibit A hereto, (i) accept such Assignment and Acceptance, (ii) record the
information
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contained therein in the Register and (iii) give prompt notice thereof to the
Borrowers and the other Lenders.
(e) Information Regarding the Borrowers. Any Lender may, in
connection with any assignment or proposed assignment pursuant to this Section
13.01, disclose to the assignee or proposed assignee any information relating to
the Borrowers or their respective Subsidiaries furnished to such Lender by the
Administrative Agent or by or on behalf of the Borrowers; provided that, prior
to any such disclosure, such assignee or proposed assignee shall agree (for the
Borrowers' benefit) to preserve in accordance with Section 13.20 the
confidentiality of any confidential information described therein.
(f) Lenders' Creation of Security Interests. Notwithstanding
any other provision set forth herein, any Lender may at any time create a
security interest in all or any portion of its rights hereunder (including,
without limitation, Obligations owing to it and Notes held by it) in favor of
any Federal Reserve bank in accordance with Regulation A.
(g) Assignments by the Issuing Bank. If CUSA ceases to be a
Lender hereunder by virtue of any assignment made pursuant to this Section 13.01
and if the Issuing Bank is an Affiliate of CUSA, then, as of the effective date
of such cessation, the Issuing Bank's obligations to issue Letters of Credit
pursuant to Section 2.04 shall terminate and such Issuing Bank shall be an
Issuing Bank hereunder only with respect to outstanding Letters of Credit issued
prior to such date.
(h) Participations. Each Lender may sell participations to one
or more other financial institutions in or to all or a portion of its rights and
obligations under and in respect of any and all facilities hereunder (including,
without limitation, all or a portion of any or all of its Commitments hereunder
and the Loans owing to it and its undivided interest in the Letters of Credit);
provided, however, that (i) such Lender's obligations hereunder (including,
without limitation, its Commitments hereunder) shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) the Borrowers, the Administrative Agent
and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations hereunder and
(iv) such participant's rights to agree or to restrict such Lender's ability to
agree to the modification, waiver or release of any of the terms of the Loan
Documents or to the release of any Collateral covered by the Loan Documents, to
consent to any action or failure to act by any party to any of the Loan
Documents or any of their respective Affiliates, or to exercise or refrain from
exercising any powers or rights which any Lender may have under or in respect of
the Loan Documents or any Collateral, shall be limited to the right to consent
to (A) reduction of the principal of, or rate or amount of interest on the
Loans(s) subject to such participation (other than by the payment or prepayment
thereof), (B) postponement of any scheduled date for any payment of principal
of, or interest on, the Loan(s) subject to such participation (except with
respect to any modifications of the application provisions relating to the
prepayments of Loans and other Obligations) and (C) release of any guarantor of
the Obligations or all or a substantial portion of
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the Collateral except as provided in Section 12.09(c). No holder of a
participation in all or any part of the Loans shall be a "Lender" or a "Holder"
for any purposes hereunder by reason of such participation.
(i) Payment to Participants. Anything herein to the contrary
notwithstanding, in the case of any participation, all amounts payable by the
Borrowers under the Loan Documents shall be calculated and made in the manner
and to the parties required hereby as if no such participation had been sold.
13.02. Expenses.
(a) Generally. The Borrowers, jointly and severally, agree
upon demand to pay, or reimburse the Administrative Agent for, all of the
Administrative Agent's internal and external audit, legal, appraisal, valuation,
filing, document duplication and reproduction and investigation expenses and for
all other out-of-pocket costs and expenses of every type and nature (including,
without limitation, the reasonable fees, expenses and disbursements of the
Administrative Agent's counsel, Sidley & Austin, local legal counsel, auditors,
accountants, appraisers, printers, insurance and environmental advisers, and
other consultants and agents) incurred by the Administrative Agent in connection
with (A) the Administrative Agent's audit and investigation of each Borrower and
its Subsidiaries in connection with the preparation, negotiation, and execution
of the Loan Documents and the Administrative Agent's periodic audits of each
Borrower or any of its Subsidiaries; (B) the preparation, negotiation, execution
and interpretation hereof (including, without limitation, the satisfaction or
attempted satisfaction of any of the conditions set forth in Article V), the
other Loan Documents and any proposal letter or commitment letter issued in
connection therewith and the making of the Loans hereunder; (C) the creation,
perfection or protection of the Liens under the Loan Documents (including,
without limitation, any reasonable fees and expenses for local counsel in
various jurisdictions); (D) the ongoing administration hereof and the Loans,
including consultation with attorneys in connection therewith and with respect
to the Administrative Agent's rights and responsibilities hereunder and under
the other Loan Documents; (E) the protection, collection or enforcement of any
of the Obligations or the enforcement of any of the Loan Documents; (F) the
commencement, defense or intervention in any court proceeding relating in any
way to the Obligations, the Property, the Borrowers, this Agreement or any of
the other Loan Documents; (G) the response to, and preparation for, any subpoena
or request for document production with which the Administrative Agent is served
or deposition or other proceeding in which the Administrative Agent is called to
testify, in each case, relating in any way to the Obligations, the Property, the
Borrowers, this Agreement or any of the other Loan Documents; and (H) any
amendments, consents, waivers, assignments, restatements, or supplements to any
of the Loan Documents and the preparation, negotiation, and execution of the
same.
(b) After Default. The Borrowers further agree to pay or
reimburse the Administrative Agent, the Issuing Bank and the Lenders upon demand
for all out-of-pocket costs and expenses, including, without limitation,
reasonable attorneys' fees (including allocated costs
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of internal counsel and costs of settlement), incurred by the Administrative
Agent, any Issuing Bank or any Lender after the occurrence of an Event of
Default (i) in enforcing any Loan Document or Obligation or any security
therefor or exercising or enforcing any other right or remedy available by
reason of such Event of Default; (ii) in connection with any refinancing or
restructuring of the credit arrangements provided hereunder in the nature of a
"work-out" or in any insolvency or bankruptcy proceeding; (iii) in commencing,
defending or intervening in any litigation or in filing a petition, complaint,
answer, motion or other pleadings in any legal proceeding relating to the
Obligations, the Property, the Borrowers and related to or arising out of the
transactions contemplated hereby or by any of the other Loan Documents; and (iv)
in taking any other action in or with respect to any suit or proceeding
(bankruptcy or otherwise) described in clauses (i) through (iii) above.
13.03. Indemnity. The Borrowers further agree jointly and
severally to defend, protect, indemnify, and hold harmless each Agent and each
and all of the Lenders and the Issuing Bank and each of their respective
Affiliates, and each of such Agent's, Lender's, Issuing Bank's or Affiliate's
respective officers, directors, employees, attorneys and agents (including,
without limitation, those retained in connection with the satisfaction or
attempted satisfaction of any of the conditions set forth in Article V)
(collectively, the "Indemnitees") from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, claims,
costs, expenses and disbursements of any kind or nature whatsoever (including,
without limitation, the reasonable fees and disbursements of counsel for such
Indemnitees in connection with any investigative, administrative or judicial
proceeding, whether or not such Indemnitees shall be designated a party thereto,
but excluding taxes and other governmental charges excluded from the definition
of Taxes in Section 3.03(a)), imposed on, incurred by, or asserted against such
Indemnitees in any manner relating to or arising out of or in connection with
(a) this Agreement, the other Loan Documents or any act, event or transaction
related or attendant thereto, whether or not such Indemnitee is a party thereto
and whether or not such transactions are consummated, the making of the Loans,
the issuance of and participation in Letters of Credit hereunder, the management
of such Loans or Letters of Credit, the use or intended use of the proceeds of
the Loans or Letters of Credit hereunder, or any of the other transactions
contemplated by the Loan Documents, or (b) any Liabilities and Costs under
federal, state or local environmental, health or safety laws, regulations or
common law principles arising from or in connection with the past, present or
future operations of the Borrowers or any of their respective predecessors in
interest, or, the past, present or future environmental, health or safety
condition of any respective Property of any Borrower, the presence of
asbestos-containing materials at any respective Property of any Borrower or the
Release or threatened Release of any Contaminant into the environment
(collectively, the "Indemnified Matters"); provided, however, such Borrower
shall have no obligation to an Indemnitee hereunder with respect to Indemnified
Matters resulting from the willful misconduct or gross negligence of such
Indemnitee, as determined in a final, non-appealable judgment by a court of
competent jurisdiction. Notwithstanding anything herein to the contrary, each
Borrower understands and hereby agrees that its obligation to indemnify pursuant
to this Section 13.03 shall apply in the event of the sole, concurrent or
contributory negligence of any Indemnitee. To the extent that the undertaking to
indemnify, pay and hold
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harmless set forth in the preceding sentence may be unenforceable because it is
violative of any law or public policy, the Borrowers shall contribute the
maximum portion which it is permitted to pay and satisfy under applicable law,
to the payment and satisfaction of all Indemnified Matters incurred by the
Indemnitees.
13.04. Change in Accounting Principles. If (i) any change in
the accounting principles used in the preparation of the most recent financial
statements referred to in Section 7.01 is hereafter required or permitted by the
rules, regulations, pronouncements and opinions of the Financial Accounting
Standards Board or the American Institute of Certified Public Accountants (or
successors thereto or agencies with similar functions) and are adopted by the
Borrowers with the agreement of their independent certified public accountants
and such change results in a change in the method of calculation of any of the
covenants, standards or terms found in Article IX and Article X or (ii) as a
consequence of "fresh start" accounting in accordance with GAAP adjustments are
required to be made in the calculations of the covenants in Article IX and
Article X, the parties hereto agree to enter into negotiations in order to amend
such provisions so as to equitably reflect such change or adjustment with the
desired result that the criteria for evaluating compliance with such covenants,
standards and terms by the Borrowers shall be the same after such change or
adjustment as if such change or adjustment had not been made; provided, however,
no change in GAAP that would affect the method of calculation of any of the
covenants, standards or terms and no adjustment as a consequence of "fresh
start" accounting shall be given effect in such calculations until such
provisions are amended to reflect such change or adjustment, in a manner
satisfactory to the Requisite Lenders and the Borrowers; provided further that
no change or adjustment as a consequence of "fresh start" accounting shall be
given effect, if such change or adjustment shall affect the calculation of the
covenant set forth in Section 10.03 during the period from the date hereof to
the last day of January, 2000, until such covenant is amended to reflect such
change or adjustment in a manner satisfactory to the Borrowers and to Lenders
holding, in the aggregate, more than seventy-five percent (75%) of the
Commitments in effect at such time (or in the event that the Commitments have
been terminated pursuant to the terms hereof, Lenders whose aggregate ratable
shares (stated as a percentage) of the aggregate outstanding principal balance
of all Loans are greater than seventy-five percent (75%)).
13.05. Setoff. In addition to any Liens granted under the Loan
Documents and any rights now or hereafter granted under applicable law, upon the
occurrence and during the continuance of any Event of Default, each Lender and
any Affiliate of any Lender is hereby authorized by the Borrowers at any time or
from time to time, without notice to any Person (any such notice being hereby
expressly waived) to set off and to appropriate and to apply any and all
deposits (general or special, including, but not limited to, indebtedness
evidenced by certificates of deposit, whether matured or unmatured (but not
including trust accounts)) and any other Indebtedness at any time held or owing
by such Lender or any of its Affiliates to or for the credit or the account of
the Borrowers against and on account of the Obligations of the Borrowers to such
Lender or any of its Affiliates, including, but not limited to, all Loans and
Letters of Credit and all claims of any nature or description arising out of or
in connection herewith, irrespective
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of whether or not (i) such Lender shall have made any demand hereunder or (ii)
the Administrative Agent, at the request or with the consent of the Requisite
Lenders, shall have declared the principal of and interest on the Loans and
other amounts due hereunder to be due and payable as permitted by Article XI and
even though such Obligations may be contingent or unmatured.
13.06. Ratable Sharing. The Lenders agree among themselves
that, except as otherwise expressly provided in any Loan Document, (i) with
respect to all amounts received by them which are applicable to the payment of
the Obligations (excluding the fees described in Sections 2.04(g), 3.03, 3.04,
4.01(f) and 4.02) equitable adjustment shall be made so that, in effect, all
such amounts shall be shared among them ratably in accordance with their Pro
Rata Shares, whether received by voluntary payment, by the exercise of the right
of setoff or banker's lien, by counterclaim or cross-action or by the
enforcement of any or all of the Obligations (excluding the fees described in
Sections 2.04(g), 3.03, 3.04, 4.01(f) and 4.02) or the Collateral, (ii) if any
of them shall by voluntary payment or by the exercise of any right of
counterclaim, setoff, banker's lien or otherwise, receive payment of a
proportion of the aggregate amount of the Obligations held by it which is
greater than the amount which such Lender is entitled to receive hereunder, the
Lender receiving such excess payment shall purchase, without recourse or
warranty, an undivided interest and participation (which it shall be deemed to
have done simultaneously upon the receipt of such payment) in such Obligations
owed to the others so that all such recoveries with respect to such Obligations
shall be applied ratably in accordance with their Pro Rata Shares; provided,
however, that if all or part of such excess payment received by the purchasing
party is thereafter recovered from it, those purchases shall be rescinded and
the purchase prices paid for such participation shall be returned to such party
to the extent necessary to adjust for such recovery, but without interest except
to the extent the purchasing party is required to pay interest in connection
with such recovery. The Borrowers agree that any Lender so purchasing a
participation from another Lender pursuant to this Section 13.06 may, to the
fullest extent permitted by law, exercise all its rights of payment (including,
subject to Section 13.05, the right of setoff) with respect to such
participation as fully as if such Lender were the direct creditor of the
Borrowers in the amount of such participation.
13.07. Amendments and Waivers. (a) General Provisions. Unless
otherwise provided herein, no amendment or modification of any provision hereof
shall be effective without the written agreement of the Requisite Lenders and
the Borrowers, and no termination or waiver of any provision hereof, or consent
to any departure by the Borrowers therefrom, shall be effective without the
written concurrence of the Requisite Lenders, which the Requisite Lenders shall
have the right to grant or withhold in their sole discretion, provided that no
amendment, modification or waiver of compliance with Section 10.03 for each
fiscal quarter in Fiscal Year 1999 shall be effective without the written
agreement of the Borrowers and Lenders holding, in the aggregate, more than
seventy-five percent (75%) of the Commitments in effect at such time (or in the
event that the Commitments have been terminated pursuant to the terms hereof,
Lenders whose aggregate ratable shares (stated as a percentage) of the aggregate
outstanding principal balance of all Loans are greater than seventy-five percent
(75%)).
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(b) Amendments, Consents and Waivers by All Lenders.
Notwithstanding the foregoing, any amendment, modification, termination, waiver
or consent with respect to any of the following provisions hereof shall be
effective only by a written agreement, signed by each Lender:
(i) waiving any of the conditions specified in Section 5.01
(except with respect to a condition based upon another provision
hereof, the waiver of which requires only the concurrence of the
Requisite Lenders),
(ii) increasing the amount of any of the Commitments,
(iii) reducing the principal of, rate or amount of interest on
the Revolving Loans or Reimbursement Obligations or any fees or other
amounts payable to any Lender or the Issuing Bank,
(iv) postponing any date on which any payment of principal of,
or interest on, the Revolving Loans or Reimbursement Obligations or any
fees or other amounts payable to any Lender or the Issuing Bank would
otherwise be due,
(v) releasing all or a substantial portion of the Collateral
(except as provided in Section 12.09(c)),
(vi) changing the definition of "Pro Rata Share" (or the
application of proceeds set forth in Section 3.02(b)(i)(A)(II)) or
"Requisite Lenders",
(vii) terminating the Holdings Guaranty,
(viii) increasing the advance rates specified in the
definition of "Borrowing Base" (except as provided within such
definition) or amending any definition used in the definition of
"Borrowing Base" if the result of such amendment is to increase such
advance rates, or
(ix) amending Sections 12.09(c) or 13.06 or this Section
13.07.
Any waiver or consent shall be effective only in the specific instance and for
the specific purpose for which it was given. No notice to or demand on the
Borrowers in any case shall entitle the Borrowers to any other or further notice
or demand in similar or other circumstances. Notwithstanding anything to the
contrary contained in this Section 13.07, no amendment, modification, waiver or
consent shall affect the rights or duties of the Administrative Agent hereunder
or the other Loan Documents, unless made in writing and signed by the
Administrative Agent in addition to the Lenders required above to take such
action.
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(c) Replacement Lender. If any Lender (the "Non-Consenting
Lender") fails to agree in writing to any amendment, modification, consent or
waiver that requires the written agreement of each Lender or the agreement of
such percentage of the Lenders as is specified in the proviso to Section
13.07(a), the Non-Consenting Lender agrees to sell, assign and transfer to any
Replacement Lender designated by the Administrative Agent and, so long as no
Event of Default has occurred and is continuing, agreed to by the Borrowers all
of its Commitment and outstanding Loans and participations in outstanding
Letters of Credit and at the time of any replacement pursuant to this Section
13.07(c), the Replacement Lender shall enter into one or more Assignment and
Acceptances pursuant to Section 13.01 (and with all fees payable pursuant to
said Section 13.01(d) to be paid by the Replacement Lender) pursuant to which
the Replacement Lender shall acquire all of the Commitments and outstanding
Loans and participations in outstanding Letters of Credit of the Non-Consenting
Lender and, in connection therewith, shall pay to the Non-Consenting Lender in
respect thereof an amount equal to the sum of (A) an amount equal to the
principal of, and all accrued interest on, all outstanding Loans of the
Non-Consenting Lender, (B) an amount equal to all accrued, but theretofore
unpaid, fees owing to the Non-Consenting Lender under this Agreement and (C) an
amount equal to all other outstanding Obligations owing to the Non-Consenting
Lender. Upon the execution of the respective Assignment and Acceptance, the
payment of amounts referred to above and, if so requested by the Replacement
Lender, delivery to the Replacement Lender of the appropriate instruments
otherwise required by this Agreement executed by the Borrowers, the Replacement
Lender shall become a Lender hereunder and the Non-Consenting Lender shall cease
to be a Lender hereunder, except with respect to indemnification provisions
applicable to the Non-Consenting Lender under this Agreement, which shall
survive as to such Non-Consenting Lender.
13.08. Notices. Unless otherwise specifically provided herein,
any notice, consent or other communication herein required or permitted to be
given shall be in writing and may be personally served, telecopied, or sent by
courier service and shall be deemed to have been given when delivered in person
or by courier service, or upon receipt of a telecopy. Notices to the
Administrative Agent pursuant to Articles I or II shall not be effective until
received by the Administrative Agent. For the purposes hereof, the addresses of
the parties hereto (until notice of a change thereof is delivered as provided in
this Section 13.08) shall be as set forth on the signature pages hereof or the
signature page of any applicable Assignment and Acceptance, or, as to each
party, at such other address as may be designated by such party in a written
notice to all of the other parties hereto.
13.09. Survival of Warranties and Agreements. All
representations and warranties made herein and all obligations of the Borrowers
in respect of taxes, indemnification and expense reimbursement shall survive the
execution and delivery hereof and of the other Loan Documents, the making and
repayment of the Loans, the issuance and discharge of Letters of Credit
hereunder and the termination hereof and shall not be limited in any way by the
passage of time or occurrence of any event and shall expressly cover time
periods when the Administrative Agent, the Issuing Bank or any of the Lenders
may have come into possession or control of any
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Property of any Borrower.
13.10. Failure or Indulgence Not Waiver; Remedies Cumulative.
No failure or delay on the part of the Administrative Agent, any Lender or the
Issuing Bank in the exercise of any power, right or privilege under any of the
Loan Documents shall impair such power, right or privilege or be construed to be
a waiver of any default or acquiescence therein, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other right, power or privilege. All rights and
remedies existing under the Loan Documents are cumulative to and not exclusive
of any rights or remedies otherwise available.
13.11. Marshalling; Payments Set Aside. None of the
Administrative Agent, any Lender or the Issuing Bank shall be under any
obligation to xxxxxxxx any assets in favor of any Borrower or any other party or
against or in payment of any or all of the Obligations. To the extent that any
Borrower makes a payment or payments to the Administrative Agent, the Lenders or
the Issuing Bank or any of such Persons receives payment from the proceeds of
the Collateral or exercise their rights of setoff, and such payment or payments
or the proceeds of such enforcement or setoff or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to a trustee, receiver or any other party, then to the
extent of such recovery, the obligation or part thereof originally intended to
be satisfied, and all Liens, right and remedies therefor, shall be revived and
continued in full force and effect as if such payment had not been made or such
enforcement or setoff had not occurred.
13.12. Severability. In case any provision in or obligation
hereunder or under the other Loan Documents shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of
the remaining provisions or obligations, or of such provision or obligation in
any other jurisdiction, shall not in any way be affected or impaired thereby.
13.13. Headings. Section headings herein are included herein
for convenience of reference only and shall not constitute a part hereof or be
given any substantive effect.
13.14. Governing Law. THIS AGREEMENT SHALL BE INTERPRETED, AND
THE RIGHTS AND LIABILITIES OF THE PARTIES HERETO DETERMINED, IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
13.15. Limitation of Liability. No claim may be made by the
Borrowers, any Lender, the Issuing Bank, the Agents or any other Person against
the Agents, the Issuing Bank or any other Lender or the Affiliates, directors,
officers, employees, attorneys or agents of any of them for any special,
consequential or punitive damages in respect of any claim for breach of contract
or any other theory of liability arising out of or related to the transactions
contemplated hereby, or any act, omission or event occurring in connection
therewith; and each Borrower, each Lender, the Issuing Bank and each Agent
hereby waives, releases and agrees not to xxx upon any such claim for any such
damages, whether or not accrued and whether or not known or suspected to exist
in its favor.
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13.16. Successors and Assigns. This Agreement and the other
Loan Documents shall be binding upon the parties hereto and their respective
successors and assigns and shall inure to the benefit of the parties hereto and
the successors and permitted assigns of the Lenders and the Issuing Bank. The
rights hereunder and the interest herein of any Borrower may not be assigned
without the written consent of all Lenders. Any attempted assignment without
such written consent shall be void.
13.17. Certain Consents and Waivers.
(a) Personal Jurisdiction. (i) EACH OF THE AGENTS, THE
LENDERS, THE ISSUING BANK AND BORROWERS IRREVOCABLY AND UNCONDITIONALLY SUBMITS,
FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF ANY NEW YORK
STATE COURT OR FEDERAL COURT SITTING IN NEW YORK, NEW YORK, AND ANY COURT HAVING
JURISDICTION OVER APPEALS OF MATTERS HEARD IN SUCH COURTS, IN ANY ACTION OR
PROCEEDING ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS AGREEMENT, WHETHER
ARISING IN CONTRACT, TORT, EQUITY OR OTHERWISE, OR FOR RECOGNITION OR
ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND
UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH STATE COURT OR, TO THE EXTENT
PERMITTED BY LAW, IN SUCH FEDERAL COURT. EACH OF THE AGENTS, THE LENDERS, THE
ISSUING BANK AND THE BORROWERS AGREE 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. EACH BORROWER
WAIVES IN ALL DISPUTES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE
COURT CONSIDERING THE DISPUTE.
(ii) EACH BORROWER AGREES THAT THE ADMINISTRATIVE AGENT SHALL
HAVE THE RIGHT TO PROCEED AGAINST ANY BORROWER OR ITS PROPERTY IN A COURT IN ANY
LOCATION TO ENABLE THE ADMINISTRATIVE AGENT, THE ISSUING BANK AND THE LENDERS TO
REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO
ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF THE ADMINISTRATIVE
AGENT, THE ISSUING BANK OR ANY LENDER. EACH BORROWER WAIVES ANY OBJECTION THAT
IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH THE ADMINISTRATIVE AGENT, THE
ISSUING BANK OR ANY LENDER MAY COMMENCE A PROCEEDING DESCRIBED IN THIS SECTION.
111
(b) Service of Process. EACH BORROWER IRREVOCABLY CONSENTS TO
THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO SUCH BORROWER'S NOTICE ADDRESS SPECIFIED PURSUANT TO SECTION
13.08, SUCH SERVICE TO BECOME EFFECTIVE FIVE (5) DAYS AFTER SUCH MAILING. EACH
BORROWER IRREVOCABLY WAIVES ANY OBJECTION (INCLUDING, WITHOUT LIMITATION, ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS) WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
IN ANY JURISDICTION SET FORTH ABOVE. NOTHING HEREIN SHALL AFFECT THE RIGHT TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF
THE ADMINISTRATIVE AGENT TO BRING PROCEEDINGS AGAINST EACH BORROWER IN THE
COURTS OF ANY OTHER JURISDICTION.
(c) Waiver of Jury Trial. EACH OF THE AGENTS, THE ISSUING
BANK, THE LENDERS AND THE BORROWERS IRREVOCABLY WAIVES TRIAL BY JURY IN ANY
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT.
13.18. Counterparts; Effectiveness; Inconsistencies. This
Agreement and any amendments, waivers, consents, or supplements hereto may be
executed in counterparts, each of which when so executed and delivered shall be
deemed an original, but all such counterparts together shall constitute but one
and the same instrument. This Agreement shall become effective against the
Borrowers, each Lender, the Issuing Bank and the Agents on the date hereof. This
Agreement and each of the other Loan Documents shall be construed to the extent
reasonable to be consistent one with the other, but to the extent that the terms
and conditions hereof are actually inconsistent with the terms and conditions of
any other Loan Document, this Agreement shall govern.
13.19. Limitation on Agreements. All agreements between the
Borrowers, the Administrative Agent, each Lender and the Issuing Bank in the
Loan Documents are hereby expressly limited so that in no event shall any of the
Loans or other amounts payable by any Borrower under any of the Loan Documents
be directly or indirectly secured (within the meaning of Regulation U) by Margin
Stock.
13.20. Confidentiality. Subject to Section 13.01(e), the
Lenders and the Issuing Bank shall hold all nonpublic information obtained
pursuant to the requirements hereof and identified as such by the Borrowers in
accordance with such Lender's or the Issuing Bank's customary procedures for
handling confidential information of this nature and in accordance with
112
safe and sound banking practices and in any event may make disclosure reasonably
required by a bona fide offeree or transferee (or participant) in connection
with the contemplated transfer (or participation), or as required or requested
by any Governmental Authority or representative thereof, or pursuant to legal
process, or to its accountants, lawyers and other advisors, and shall require
any such offeree or transferee (or participant) to agree (and require any of its
offerees, transferees or participants to agree) to comply with this Section
13.20. In no event shall any Lender or the Issuing Bank be obligated or required
to return any materials furnished by the Borrowers; provided, however, each
offeree shall be required to agree that if it does not become a transferee (or
participant) it shall return all materials furnished to it by the Borrowers in
connection herewith.
13.21. Contribution as Between Borrowers. The Borrowers agree
as among themselves that, to the extent any Borrower shall make a payment of a
portion of the Obligations of another Borrower which shall exceed the greater of
(i) the amount of economic benefit actually received by such Borrower from the
Loans and (ii) the amount which such Borrower would otherwise have paid if such
Borrower had paid the aggregate amount of the Obligations (excluding the amount
thereof repaid by another Borrower) in the same proportion as such Borrower's
net worth at the date payment is sought bears to the aggregate net worth of all
the Borrowers at such date, then such Borrower shall be reimbursed by the other
Borrowers for the amount of such excess, pro rata based on the net worth of such
other Borrower at that date. The agreement in this Section 13.21 is only
intended to define the relative rights of the Borrowers, and is not intended to
nor shall it impair the obligations of the Borrowers, jointly and severally, to
pay to the Administrative Agent, the Issuing Banks and the Lenders the
Obligations as and when the same shall become due and payable.
13.22. Entire Agreement. This Agreement, taken together with
all of the other Loan Documents, embodies the entire agreement and understanding
among the parties hereto and supersedes all prior agreements and understandings,
written and oral, relating to the subject matter hereof.
113
IN WITNESS WHEREOF, this Agreement has been duly executed as
of the date first above written.
BARNEY'S, INC.
BARNEYS AMERICA, INC.
PFP FASHIONS INC.
BARNEYS (CA) LEASE CORP.
BARNEYS (NY) LEASE CORP.
XXXXX ALL-AMERICAN SPORTSWEAR CORP.
BNY LICENSING CORP.
BARNEYS AMERICA (CHICAGO) LEASE CORP.
By: /s/ Xxxxxx Xxxxxxx
--------------------------------
Name: Xxxxxx Xxxxxxx
Title: Executive VP and CFO
Notice address:
c/o Barney's, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
with copies to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxx X. Xxxxxxx, Esq.
Phone: (000) 000-0000
Fax: (000) 000-0000
114
CITICORP USA, INC.,
as Administrative Agent and as a
Lender
By: /s/ Xxxxxx Xxxxxx
--------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President
Commitment:
$50,000,000
Domestic Lending Office:
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fixed Rate Affiliate:
same as above
Fixed Rate Lending Office:
same as above
Notice address:
Citicorp USA, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxx
Telecopy: (000) 000-0000
with a copy to:
Sidley & Austin
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Telecopy: (000) 000-0000
115
GENERAL ELECTRIC CAPITAL CORPORATION,
as Documentation Agent and as a Lender
By: /s/ Xxxxxxx Xxxxxx
-----------------------------------
Name: Xxxxxxx Xxxxxx
Title: Duly Authorized Signatory
Commitment:
$30,000,000
Domestic Lending Office:
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
Fixed Rate Affiliate:
same as above
Fixed Rate Lending Office:
same as above
Notice address:
General Electric Capital Corporation
Account Manager
Attention: Xxxxxxx X. Xxxxxxxx
Phone: 000-000-0000
Fax: 000-000-0000
with a copy to: Borrowing Base only
Collateral Analyst
Xxxxxxx Xxxxxxxx
Attention:
Phone: 000-000-0000
Fax: 000-000-0000
116
CITIBANK, N.A., as Issuing Bank
By: /s/ Xxxxxx Xxxxxx
--------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President
Notice address:
Citibank, N.A.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Sidley & Austin
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Phone: (000) 000-0000
Fax: (000) 000-0000
117
BNY FINANCIAL CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Executive V. P.
Commitment:
$25,000,000
Domestic Lending Office:
BNY Financial Corporation
1290 Avenue of the Americas
Fixed Rate Affiliate:
Same
Fixed Rate Lending Office:
Same
Notice address:
BNY Financial Corporation
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attention:Xxx Xxxxxxx SVP
Phone: 000-000-0000
Fax: 000-000-0000
with a copy to:
BNY Financial Corporation
Attention: Xxxxx Xxxxxxxx SVP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
118
NATIONAL CITY COMMERCIAL FINANCE,
INC.
By: /s/ Xxxxxxxxx X. Xxxxx
--------------------------------
Name: Xxxxxxxxx X. Xxxxx
Title: Vice President
Commitment:
$15,000,000
Domestic Lending Office:
000 X. Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000-0000
Fixed Rate Affiliate:
same as above
Fixed Rate Lending Office:
same as above
Notice address:
National City Commercial Finance, Inc.
000 X. Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxx 00000-0000
Attention: Xxxx Xxxxxx, Vice President
Phone: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
National City Commercial Finance, Inc.
000 X. Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxx 00000-0000
Attention: Xxxxx Xxxxxx, AVP
Phone: (000) 000-0000
Fax: (000) 000-0000
119
TABLE OF CONTENTS
Page
----
ARTICLE I.....................................................................2
1.01. Certain Defined Terms...............................................2
1.02. Computation of Time Periods.........................................2
1.03. Accounting Terms....................................................2
1.04. Other Definitional Provisions.......................................2
1.05. Other Terms.........................................................2
ARTICLE II....................................................................2
2.01 Revolving Credit Facility............................................2
2.02. Swing Loans.........................................................2
2.03. Use of Proceeds.....................................................2
2.04. Letters of Credit...................................................2
2.05. Promise to Repay; Evidence of Indebtedness..........................2
2.06. Authorized Officers and Agents......................................2
ARTICLE III...................................................................2
3.01. Prepayments; Reductions in Commitments..............................2
3.02. Payments............................................................2
3.03. Taxes...............................................................2
3.04. Increased Capital...................................................2
3.05. Cash Management.....................................................2
3.06. Replacement of Lenders..............................................2
ARTICLE IV....................................................................2
4.01. Interest on the Loans and Other Obligations.........................2
4.02. Special Provisions Governing Fixed Rate Loans.......................2
4.03. Fees................................................................2
ARTICLE V.....................................................................2
5.01. Conditions Precedent to the Initial Loans and Letters of Credit.....2
5.02. Conditions Precedent to All Revolving Loans and Letters of
Credit.............................................................2
ARTICLE VI....................................................................2
6.01. Representations and Warranties of the Borrowers.....................2
ARTICLE VII...................................................................2
7.01. Financial Statements................................................2
7.02. Borrowing Base Certificate..........................................2
7.03. Events of Default...................................................2
7.04. Lawsuits............................................................2
7.05. Insurance...........................................................2
7.06. ERISA Notices.......................................................2
7.07. Environmental Notices...............................................2
7.08 Isetan Leases.......................................................2
7.09. Public Filings and Reports..........................................2
7.10. Other Information...................................................2
ARTICLE VIII..................................................................2
8.01. Corporate Existence, Etc............................................2
8.02. Corporate Powers; Conduct of Business, Etc..........................2
8.03. Compliance with Laws, Etc...........................................2
8.04. Payment of Taxes and Claims; Tax Consolidation......................2
8.05. Insurance...........................................................2
8.06. Inspection of Property; Books and Records;Discussions...............2
8.07. Insurance and Condemnation Proceeds.................................2
8.08. ERISA Compliance....................................................2
8.09. Foreign Employee Benefit Plan Compliance............................2
8.10. Establishment of Blocked Accounts; Maintenance of Property..........2
8.11. Condemnation........................................................2
8.12. Landlord Waivers....................................................2
8.13. Year 2000...........................................................2
8.14. Post Closing Matters................................................2
ARTICLE IX....................................................................2
9.01. Indebtedness........................................................2
9.02. Sales of Assets.....................................................2
9.03. Liens...............................................................2
9.04. Investments.........................................................2
9.05. Accommodation Obligations...........................................2
9.06. Restricted Junior Payments..........................................2
9.07. Conduct of Business; Subsidiaries; Acquisitions.....................2
9.08. Transactions with Affiliates........................................2
9.09. Restriction on Fundamental Changes..................................2
9.10. Sales and Leasebacks................................................2
9.11. Margin Regulations; Securities Laws.................................2
9.12. ERISA. No member of the Barneys Group shall.........................2
9.13. Issuance of Capital Stock...........................................2
9.14. Constituent Documents...............................................2
9.15. Fiscal Year.........................................................2
9.16. Cash Management.....................................................2
9.17. Environmental Matters...............................................2
9.18. Operating Leases....................................................2
9.19. Subordinated Notes..................................................2
ARTICLE X.....................................................................2
10.01. Minimum Consolidated Net Worth.....................................2
10.02. Maximum Leverage Ratio.............................................2
10.03. Minimum Consolidated EBITDA........................................2
10.04. Maximum Capital Expenditures.......................................2
ARTICLE XI....................................................................2
11.01. Events of Default..................................................2
11.02. Rights and Remedies................................................2
ARTICLE XII...................................................................2
12.01. Appointment........................................................2
12.02. Nature of Duties...................................................2
12.03. Rights, Exculpation, Etc...........................................2
12.04. Reliance...........................................................2
12.05. Indemnification....................................................2
12.06. CUSA Individually..................................................2
12.07. Successor Administrative Agent; Resignation of Administrative
Agent.............................................................2
12.08. Relations Among Lenders............................................2
12.09. Concerning the Collateral and the Loan Documents...................2
ARTICLE XIII..................................................................2
13.01. Assignments........................................................2
13.02. Expenses...........................................................2
13.03. Indemnity..........................................................2
13.04. Change in Accounting Principles....................................2
13.05. Setoff.............................................................2
13.06. Ratable Sharing....................................................2
13.07. Amendments and Waivers.............................................2
13.08. Notices............................................................2
13.09. Survival of Warranties and Agreements..............................2
13.10. Failure or Indulgence Not Waiver; Remedies Cumulative..............2
13.11. Marshalling; Payments Set Aside....................................2
13.12. Severability.......................................................2
13.13. Headings...........................................................2
13.14. Governing Law......................................................2
13.15. Limitation of Liability............................................2
13.16. Successors and Assigns.............................................2
13.17. Certain Consents and Waivers.......................................2
13.18. Counterparts; Effectiveness; Inconsistencies.......................2
13.19. Limitation on Agreements...........................................2
13.20. Confidentiality....................................................2
13.21. Contribution as Between Borrowers..................................2
13.22. Entire Agreement...................................................2
EXHIBITS
Exhibit A -- Form of Assignment and Acceptance
Exhibit B -- Form of Borrowing Base Certificate
Exhibit C-1 -- Form of Revolving Loan Note
Exhibit C-2 -- Form of Swing Loan Note
Exhibit D -- Form of Notice of Borrowing
Exhibit E -- Form of Notice of Continuation/Conversion
Exhibit F -- List of Closing Documents
Exhibit G -- Form of Officer's Certificate to Accompany Reports
Exhibit H -- Form of Compliance Certificate
SCHEDULES
Schedule 1.01.1 -- Permitted Existing Accommodation Obligations
Schedule 1.01.2 -- Permitted Existing Indebtedness
Schedule 1.01.3 -- Permitted Existing Investments
Schedule 1.01.4 -- Permitted Existing Liens
Schedule 1.01.5 -- Subordination Terms
Schedule 1.01.6 -- Rent Reserve Time Periods
Schedule 3.05 -- Lock Boxes; Blocked Accounts; Blocked Account Banks
Schedule 6.01-A -- Due Qualification
Schedule 6.01-C -- Subsidiaries; Ownership of Capital Stock
Schedule 6.01-E -- Governmental Consents, etc.
Schedule 6.01-K -- Taxes
Schedule 6.01-I -- Litigation; Adverse Effects
Schedule 6.01-O -- Environmental Matters
Schedule 6.01-P -- ERISA Matters
Schedule 6.01-R -- Labor Matters
Schedule 6.01-U -- Patents, Trademarks, Permits, Etc.; Governmental Approvals
Schedule 6.01-V -- Assets and Properties
Schedule 6.01-W -- Insurance Policies and Programs
Schedule 6.01-X -- Bank Accounts
Schedule 8.14 -- Post-Closing Items
Schedule 9.16 -- Cash Management
Schedule 9.18 -- Operating Leases