EXHITIB 10.3
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AMENDED AND RESTATED
THREE-YEAR CREDIT AGREEMENT
dated as of October 15, 1998,
by and among
▇▇▇▇▇ APPAREL GROUP, INC.
(and other parties which may from time to time become an
Additional Obligor or the Borrower, as applicable, under the terms hereof),
the Lenders referred to herein,
and
FIRST UNION NATIONAL BANK,
as Administrative Agent
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS................................................ 6
SECTION 1.1 Definitions............................................ 6
SECTION 1.2 General................................................ 20
SECTION 1.3 Other Definitions and Provisions....................... 20
ARTICLE II REVOLVING CREDIT FACILITY................................. 20
SECTION 2.1 Revolving Credit Loans................................. 20
SECTION 2.2 Procedure for Advances of Revolving Credit Loans....... 20
SECTION 2.3 Repayment of Loans..................................... 21
SECTION 2.4 Revolving Credit Notes................................. 22
SECTION 2.5 Permanent Reduction of the Revolving Credit
Commitment............................................ 22
SECTION 2.6 Termination of Revolving Credit Facility............... 23
ARTICLE III LETTER OF CREDIT FACILITY................................ 23
SECTION 3.1 L/C Commitment......................................... 23
SECTION 3.2 Procedure for Issuance of Letters of Credit............ 23
SECTION 3.3 Fees and Other Charges................................. 24
SECTION 3.4 L/C Participations..................................... 24
SECTION 3.5 Reimbursement Obligation of the Borrower............... 25
SECTION 3.6 Obligations Absolute................................... 26
SECTION 3.7 Effect of Application.................................. 26
ARTICLE IV TERM LOAN FACILITY........................................ 26
SECTION 4.1 Term Loan.............................................. 26
SECTION 4.2 Procedure for Advance of Term Loan..................... 26
SECTION 4.3 Repayment of Term Loans................................ 27
SECTION 4.4 Prepayments of Term Loan............................... 27
SECTION 4.5 Term Notes............................................. 27
ARTICLE V GENERAL LOAN PROVISIONS.................................... 27
SECTION 5.1 Interest............................................... 27
SECTION 5.2 Notice and Manner of Conversion or Continuation of
Loans................................................. 29
SECTION 5.3 Fees................................................... 30
SECTION 5.4 Manner of Payment...................................... 30
SECTION 5.5 Crediting of Payments and Proceeds..................... 31
SECTION 5.6 Adjustments............................................ 31
SECTION 5.7 Nature of Obligations of Lenders Regarding Extensions
of Credit; Assumption by the Administrative Agent..... 31
SECTION 5.8 Changed Circumstances.................................. 32
SECTION 5.9 Indemnity.............................................. 35
SECTION 5.10 Capital Requirements................................... 35
SECTION 5.11 Taxes.................................................. 35
ARTICLE VI CLOSING; CONDITIONS OF CLOSING AND BORROWING.............. 38
SECTION 6.1 Closing................................................ 38
SECTION 6.2 Conditions to Closing and Initial Loans and Letters
of Credit............................................. 38
SECTION 6.3 Conditions to All Extensions of Credit................. 41
ARTICLE VII REPRESENTATIONS AND WARRANTIES OF THE CREDIT PARTIES..... 41
SECTION 7.1 Representations and Warranties......................... 41
SECTION 7.2 Survival of Representations and Warranties, Etc........ 47
ARTICLE VIII FINANCIAL INFORMATION AND NOTICES........................ 47
SECTION 8.1 Financial Statements and Projections................... 47
SECTION 8.2 Officer's Compliance Certificate....................... 48
SECTION 8.3 Accountants' Certificate............................... 48
SECTION 8.4 Other Reports.......................................... 48
SECTION 8.5 Notice of Litigation and Other Matters................. 49
SECTION 8.6 Accuracy of Information................................ 49
ARTICLE IX AFFIRMATIVE COVENANTS.................................... 49
SECTION 9.1 Preservation of Corporate Existence and Related
Matters............................................... 49
SECTION 9.2 Maintenance of Property................................ 50
SECTION 9.3 Insurance.............................................. 50
SECTION 9.4 Accounting Methods and Financial Records............... 50
SECTION 9.5 Payment and Performance of Obligations................. 50
SECTION 9.6 Compliance With Laws and Approvals..................... 50
SECTION 9.7 Environmental Laws..................................... 50
SECTION 9.8 Compliance with ERISA.................................. 51
SECTION 9.9 Conduct of Business.................................... 51
SECTION 9.10 Visits and Inspections................................. 51
SECTION 9.11 Use of Proceeds........................................ 51
SECTION 9.12 Year 2000 Compatibility................................ 52
ARTICLE X FINANCIAL COVENANT....................................... 52
SECTION 10.1 Interest Coverage Ratio................................ 52
SECTION 10.2 Minimum Net Worth...................................... 52
ARTICLE XI NEGATIVE COVENANTS....................................... 52
SECTION 11.1 Limitations on Debt and Guaranty Obligations........... 52
SECTION 11.2 [Reserved]............................................. 54
SECTION 11.3 Limitations on Liens................................... 54
SECTION 11.4 Limitations on Loans, Advances, Investments and
Acquisitions.......................................... 56
SECTION 11.5 Limitations on Mergers and Liquidation................. 57
SECTION 11.6 Limitations on Sale or Transfer of Assets.............. 57
SECTION 11.7 Limitations on Dividends and Distributions............. 58
SECTION 11.8 Transactions with Affiliates........................... 59
SECTION 11.9 Changes in Fiscal Year End............................. 59
SECTION 11.10 Amendments; Payments and Prepayments of Material
Debt and Subordinated Debt............................ 59
ARTICLE XII DEFAULT AND REMEDIES..................................... 59
SECTION 12.1 Events of Default...................................... 59
SECTION 12.2 Remedies............................................... 61
SECTION 12.3 Rights and Remedies Cumulative; Non-Waiver; etc........ 62
ARTICLE XIII THE ADMINISTRATIVE AGENT................................. 62
SECTION 13.1 Appointment............................................ 62
SECTION 13.2 Delegation of Duties................................... 63
SECTION 13.3 Exculpatory Provisions................................. 63
SECTION 13.4 Reliance by the Administrative Agent................... 63
SECTION 13.5 Notice of Default...................................... 64
SECTION 13.6 Non-Reliance on the Administrative Agent and Other
Lenders............................................... 64
SECTION 13.7 Indemnification........................................ 65
SECTION 13.8 The Administrative Agent in Its Individual Capacity.... 65
SECTION 13.9 Resignation of the Administrative Agent; Successor
Administrative Agent.................................. 65
ARTICLE XIV MISCELLANEOUS............................................ 66
SECTION 14.1 Notices................................................ 66
SECTION 14.2 Expenses; Indemnity.................................... 67
SECTION 14.3 Set-off................................................ 67
SECTION 14.4 Governing Law.......................................... 68
SECTION 14.5 Consent to Jurisdiction................................ 68
SECTION 14.6 Binding Arbitration; Waiver of Jury Trial.............. 68
SECTION 14.7 Reversal of Payments................................... 69
SECTION 14.8 Injunctive Relief; Punitive Damages.................... 69
SECTION 14.9 Accounting Matters..................................... 70
SECTION 14.10 Successors and Assigns; Participations................. 70
SECTION 14.11 Amendments, Waivers and Consents....................... 73
SECTION 14.12 Performance of Duties.................................. 74
SECTION 14.13 All Powers Coupled with Interest....................... 74
SECTION 14.14 Survival of Indemnities................................ 74
SECTION 14.15 Titles and Captions.................................... 74
SECTION 14.16 Severability of Provisions............................. 74
SECTION 14.17 Counterparts........................................... 74
SECTION 14.18 Term of Agreement...................................... 75
SECTION 14.19 Inconsistencies with Other Documents; Independent
Effect of Covenants................................... 75
AMENDED AND RESTATED THREE-YEAR CREDIT AGREEMENT, dated as
of the 15th day of October, 1998, by and among ▇▇▇▇▇ APPAREL GROUP, INC., a
Pennsylvania corporation, other parties which may from time to time become
an Additional Obligor (as defined below) or the Borrower, as applicable,
under the terms hereof, the Lenders who are or may become a party to this
Agreement, and FIRST UNION NATIONAL BANK, as Administrative Agent for the
Lenders.
STATEMENT OF PURPOSE
The Borrower (as defined below) has requested, and the
Lenders have agreed, to amend and restate the Prior Credit Agreement (as
defined below) as set forth herein to provide for, among other things, (i)
the Asset Drop-Down (as defined below), and (ii) the addition of the
Additional Obligors (as defined below), as of the Asset Drop-Down Effective
Date, all on the terms and subject to the conditions hereinafter set forth.
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by the parties
hereto, such parties hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions. The following terms when used in
this Agreement shall have the meanings assigned to them below:
"364-Day Credit Agreement" means the Amended and Restated 364-Day
Credit Agreement of even date herewith by and among the ▇▇▇▇▇ Apparel
Group, Inc. (and the other parties which may from time to time become
an Additional Obligor or the Borrower, as applicable, under the terms
thereof), the Administrative Agent and the Lenders, as amended,
restated, supplemented or otherwise modified from time to time.
"364-Day Credit Agreement Guaranty Agreements" means the
collective reference to the unconditional guaranty agreements, each in
form and substance reasonably satisfactory to the Administrative
Agent, executed by the Additional Obligors in favor of the
Administrative Agent, for the ratable benefit of itself and the
Lenders, to guarantee the Obligations of the Borrower and the 364-Day
Credit Agreement.
"364-Day Credit Agreement Obligations" means the "Obligations"
(as defined therein) of the Borrower under the 364-Day Credit
Agreement.
"Additional Debt Securities" shall have the meaning set forth in
Section 11.1(e).
"Additional Obligors" means, from and after the Asset Drop-Down
Effective Date, the collective reference to ▇▇▇▇▇ Apparel Group and
▇▇▇▇▇ Apparel Group Holdings, in their capacities as guarantors under
the Guaranty Agreements or co-obligors under this Agreement.
"Administrative Agent" means First Union in its capacity as
Administrative Agent hereunder, and any successor thereto appointed
pursuant to Section 13.9.
"Administrative Agent's Office" means the office of the
Administrative Agent specified in or determined in accordance with the
provisions of Section 14.1(c).
"Affiliate" means, with respect to any Person, any other Person
(other than a Subsidiary) which directly or indirectly through one or
more intermediaries, controls, or is controlled by, or is under common
control with, such first Person or any of its Subsidiaries. The term
"control" means the possession, directly or indirectly, of any other
power to direct or cause the direction of the management and policies
of a Person, whether through ownership of voting securities, by
contract or otherwise.
"Aggregate Commitment" means the aggregate amount of the Lenders'
Commitments hereunder, as such amount may be reduced or modified at
any time or from time to time pursuant to the terms hereof. On the
Closing Date, the Aggregate Commitment shall be Two Hundred Fifty
Million Dollars ($250,000,000).
"Agreement" means this Amended and Restated Three-Year Credit
Agreement, as amended, restated, supplemented or otherwise modified.
"Applicable Law" means all applicable provisions of
constitutions, laws, statutes, ordinances, rules, treaties,
regulations, permits, licenses, approvals, interpretations and orders
of courts or Governmental Authorities and all orders and decrees of
all courts and arbitrators.
"Applicable Margin" means, for purposes of calculating (a) the
Base Rate and LIBOR Rate for purposes of Section 5.1(a), (b) the L/C
Fee for purposes of Section 3.3(a) or (c) the Facility Fee for
purposes of Section 5.3(a), the corresponding rate set forth below for
the applicable rating of the senior, unsecured, long-term debt of the
Credit Parties, on a collective basis, (the "Debt Rating") publicly
announced by Standard & Poor's Ratings Group ("S&P") and ▇▇▇▇▇'▇
Investors Service, Inc. ("▇▇▇▇▇' ) as follows:
S&P Moody's Applicable Margin Per Annum
Level Rating Rating LIBOR Rate Base Rate L/C Fee Facility Fee
1 > A- > A3 0.325% 0.000% 0.325% 0.125%
- -
2 > BBB+ > Baa1 0.450% 0.000% 0.450% 0.150%
- -
3 > BBB > Baa2 0.550% 0.000% 0.550% 0.200%
- -
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