Exhibit 10.1
CREDIT AGREEMENT
Dated as of July 15, 2002
among
BARNEY'S, INC.
BARNEYS AMERICA, 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
and
GENERAL ELECTRIC CAPITAL CORPORATION,
as Administrative Agent
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ARTICLE I DEFINITIONS................................................................................1
1.01 Certain Defined Terms..........................................................................1
1.02 Computation of Time Periods...................................................................27
1.03 Accounting Terms..............................................................................27
1.04 Other Definitional Provisions.................................................................27
1.05 Other Terms...................................................................................27
ARTICLE II AMOUNTS AND TERMS OF LOANS................................................................27
2.01 Revolving Credit Facility.....................................................................27
2.02 Swing Loans...................................................................................30
2.03 Use of Proceeds...............................................................................31
2.04 Letters of Credit.............................................................................31
2.05 Promise to Repay; Evidence of Indebtedness....................................................31
2.06 Authorized Officers and Agents................................................................33
ARTICLE III PAYMENTS AND PREPAYMENTS..................................................................33
3.01 Prepayments Reductions in Commitments.........................................................33
3.02 Payments......................................................................................35
3.03 Taxes.........................................................................................39
3.04 Increased Capital.............................................................................42
3.05 Cash Management...............................................................................42
3.06 Replacement of Lenders........................................................................43
ARTICLE IV INTEREST AND FEES.........................................................................43
4.01 Interest on the Loans and Other Obligations...................................................43
4.02 Special Provisions Governing Fixed Rate Loans.................................................48
4.03 Fees..........................................................................................51
ARTICLE V CONDITIONS TO LOANS AND LETTERS OF CREDIT.................................................52
5.01 Conditions Precedent to the Initial Loans and Letters of Credit...............................52
5.02 Conditions Precedent to All Revolving Loans and Letters of Credit.............................55
ARTICLE VI REPRESENTATIONS AND WARRANTIES............................................................55
6.01 Representations and Warranties of the Borrowers...............................................55
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6.02 Amendment to Schedules........................................................................65
ARTICLE VII REPORTING COVENANTS.......................................................................65
7.01 Financial Statements..........................................................................65
7.02 Borrowing Base Certificate....................................................................67
7.03 Events of Default.............................................................................67
7.04 Lawsuits......................................................................................68
7.05 Insurance.....................................................................................68
7.06 ERISA Notices.................................................................................68
7.07 Environmental Notices.........................................................................70
7.08 Isetan Leases.................................................................................70
7.09 Public Filings and Reports....................................................................70
7.10 Permitted Subordinated Indebtedness...........................................................71
7.11 Other Information.............................................................................71
ARTICLE VIII AFFIRMATIVE COVENANTS.....................................................................71
8.01 Corporate Existence, Etc......................................................................71
8.02 Corporate Powers; Conduct of Business, Etc....................................................71
8.03 Compliance with Laws, Etc.....................................................................71
8.04 Payment of Taxes and Claims & Tax Consolidation...............................................72
8.05 Insurance.....................................................................................72
8.06 Inspection of Property; Books and Records; Discussions........................................73
8.07 Insurance and Condemnation Proceeds...........................................................74
8.08 ERISA Compliance..............................................................................74
8.09 Foreign Employee Benefit Plan Compliance......................................................74
8.10 Establishment of Blocked Accounts, Maintenance of Property....................................74
8.11 Condemnation..................................................................................74
8.12 Landlord Waivers..............................................................................74
8.13 Intellectual Property.........................................................................75
8.14 Further Assurances............................................................................75
8.15 Supplemental Disclosure.......................................................................75
8.16 Post Closing Matters..........................................................................76
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ARTICLE IX NEGATIVE COVENANTS........................................................................76
9.01 Indebtedness..................................................................................76
9.02 Sales of Assets...............................................................................77
9.03 Liens.........................................................................................77
9.04 Investments...................................................................................78
9.05 Accommodation Obligations.....................................................................79
9.06 Restricted Junior Payments....................................................................79
9.07 Conduct of Business; Subsidiaries; Acquisitions...............................................80
9.08 Transactions with Affiliates..................................................................80
9.09 Restriction on Fundamental Changes............................................................80
9.10 Sales and Leasebacks..........................................................................81
9.11 Margin Regulations; Securities Laws...........................................................81
9.12 ERISA.........................................................................................81
9.13 Issuance of Capital Stock.....................................................................82
9.14 Constituent Documents.........................................................................82
9.15 Fiscal Year...................................................................................82
9.16 Cash Management...............................................................................82
9.17 Environmental Matters.........................................................................82
9.18 Operating Leases..............................................................................82
9.19 Subordinated Notes............................................................................82
9.20 Employee Loans................................................................................82
9.21 Cancellation of Indebtedness..................................................................83
9.22 Change of Corporate Name or Location..........................................................83
9.23 No Impairment of Intercompany Transfers.......................................................83
9.24 No Speculative Transactions...................................................................83
ARTICLE X FINANCIAL COVENANTS.......................................................................83
10.01 Minimum Consolidated Net Worth................................................................83
10.02 Intentionally Deleted.........................................................................84
10.03 Minimum Consolidated EBITDA...................................................................84
10.04 Maximum Capital Expenditures..................................................................84
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ARTICLE XI EVENTS OF DEFAULT; RIGHTS AND REMEDIES....................................................85
11.01 Events of Default.............................................................................85
11.02 Rights and Remedies...........................................................................88
ARTICLE XII THE AGENTS................................................................................89
12.01 Appointment...................................................................................89
12.02 Lender Credit Decision........................................................................90
12.03 Rights, Exculpation, Etc......................................................................90
12.04 Reliance......................................................................................90
12.05 Indemnification...............................................................................91
12.06 GE Capital and Affiliates.....................................................................91
12.07 Successor Administrative Agent; Resignation of Administrative Agent...........................91
12.08 Relations Among Lenders.......................................................................92
12.09 Concerning the Collateral and the Loan Documents..............................................92
12.10 Revolving Loans; Payments; Non-Funding Lenders; Information...................................94
ARTICLE XIII MISCELLANEOUS.............................................................................97
13.01 Assignments...................................................................................97
13.02 Expenses.....................................................................................100
13.03 Indemnity....................................................................................101
13.04 Change in Accounting Principles..............................................................102
13.05 Setoff.......................................................................................102
13.06 Ratable Sharing..............................................................................103
13.07 Amendments and Waivers.......................................................................103
13.08 Notices......................................................................................105
13.09 Survival of Warranties and Agreements........................................................105
13.10 Failure of Indulgence Not Waiver, Remedies Cumulative........................................105
13.11 Marshalling; Payments Set Aside..............................................................106
13.12 Severability.................................................................................106
13.13 Headings.....................................................................................106
13.14 GOVERNING LAW................................................................................106
13.15 Limitation of Liability......................................................................107
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13.16 Successors and Assigns.......................................................................107
13.17 Waiver of Jury Trial.........................................................................107
13.18 Counterparts; Effectiveness; Inconsistencies.................................................108
13.19 Limitation on Agreements.....................................................................108
13.20 Confidentiality..............................................................................108
13.21 Contribution as Between Borrowers............................................................108
13.22 Remedies.....................................................................................108
13.23 Press Releases and Related Matters...........................................................109
13.24 Reinstatement................................................................................109
13.25 Advice of Counsel............................................................................109
13.26 No Strict Construction.......................................................................109
13.27 Entire Agreement.............................................................................109
ARTICLE XIV CROSS-GUARANTY...........................................................................109
14.01 Cross-Guaranty...............................................................................110
14.02 Waivers by Borrowers.........................................................................110
14.03 Benefit of Guaranty..........................................................................110
14.04 Subordination of Subrogation, Etc............................................................111
14.05 Election of Remedies.........................................................................111
14.06 Limitation...................................................................................111
14.07 Contribution with Respect to Guaranty Obligations............................................112
14.08 Liability Cumulative.........................................................................113
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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 C-3 -- Form of Term 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 1.01.7 -- Prior Lenders
Schedule 1.01.8 -- Prior Lender Obligations
Schedule 2.03 -- Statement of Sources and Uses
Schedule 3.05 -- Lock Box; 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 8.16 -- Post-Closing Items
Schedule 9.16 -- Cash Management
Schedule 9.18 -- Operating Leases
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CREDIT AGREEMENT
This Credit Agreement dated as of July 15, 2002 (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"), 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 Barneys, BAI, CA Lease, NY Lease, Xxxxx and BNY, collectively,
the "Borrowers" and each individually a "Borrower"), the institutions from time
to time party hereto as lenders, whether by execution of this Agreement or an
Assignment and Acceptance (collectively, the "Lenders"), and GENERAL ELECTRIC
CAPITAL CORPORATION, in its capacity as administrative agent for the Lenders
(with its successors in such capacity, the "Administrative 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 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 000-000-00 in the name of
Administrative Agent at Bankers Trust Company in New York, New York, ABA No. 021
001 033, 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.
"Agreement" has the meaning ascribed to such term in the
preamble to this Agreement.
"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 Letter of Credit Percentage" means a rate equal to
2.00% per annum.
"Applicable Revolver Floating Rate Margin" means the per annum
interest rate margin from time to time in effect and payable in addition to the
Floating Rate applicable to Revolving Loans, as determined by reference to
Section 4.01(a).
"Applicable Revolver Fixed Rate Margin" means the per annum
interest rate from time to time in effect and payable in addition to the Fixed
Rate applicable to Revolving Loans, as determined by reference to Section
4.01(a).
"Applicable Revolver Margins" means collectively the
Applicable Revolver Floating Rate Margin and the Applicable Revolver Fixed Rate
Margin.
"Applicable Term Loan Floating Rate Margin" means the per
annum interest rate from time to time in effect and payable in addition to the
Floating Rate applicable to the Term Loan, as determined by reference to Section
4.01(a).
"Applicable Term Loan Fixed Rate Margin" means the per annum
interest rate from time to time in effect and payable in addition to the Fixed
Rate applicable to the Term Loan, as determined by reference to Section 4.01(a).
"Applicable Term Loan Margins" means collectively the
Applicable Term Loan Floating Rate Margin and the Applicable Term Loan Fixed
Rate Margin.
"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
2
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
X.X.X.xx.xx. 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 Purchase Capital Stock of Barneys Japan Company
Limited, dated as of January 28, 1999.
"Xxxxx" has the meaning ascribed to such term in the preamble
to this Agreement.
"Base Rate" means, for any day, a floating rate equal to the
higher of (i) the rate publicly quoted from time to time by The Wall Street
Journal as the "base rate on corporate loans posted by at least 75% of the
nation's 30 largest banks" (or, if The Wall Street Journal ceases quoting a base
rate of the type described, the highest per annum rate of interest published by
the Federal Reserve Board in Federal Reserve statistical release H.15 (519)
entitled "Selected Interest Rates" as the Bank prime loan rate or its
equivalent), and (ii) the Federal Funds Rate plus 50 basis points per annum.
Each change in any interest rate provided for in this Agreement based upon the
Base Rate shall take effect at the time of such change in the Base Rate.
"Benefit Plan" means a defined benefit plan as defined in
Section 3(35) of ERISA (other than a Multiemployer Plan), which is subject to
Title IV of ERISA, and 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 3(5) of ERISA.
"Blocked Account Agreement" means a blocked account agreement
among (i) each Blocked Account Bank or, as the case may be, the Servicer, (ii)
the Borrowers and (iii) 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.
3
"BNY" has the meaning ascribed to such term in the preamble to
this Agreement.
"Board of Directors" means the Board of Directors of Holdings.
"Borrower Pledge Agreement" means the Pledge Agreement, dated
as of the date hereof, by and among the Borrowers and the Administrative Agent,
as such agreement may be amended, supplemented or otherwise modified from time
to time.
"Borrower Representative" means Barneys, acting as
representative and agent on the behalf the Borrowers for the purposes set forth
in Section 2.01(a)(iv) hereof.
"Borrower Security Agreement" means the Security Agreement,
dated as of the date hereof, by and among the Borrowers and the Administrative
Agent, as such agreement may be amended, supplemented or otherwise modified from
time to time.
"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, N.A., 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 Certificate" means a certificate 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.
"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.
4
"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.
"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 Account" has the meaning ascribed to such
term in Annex B to this Agreement.
"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 X.X.X.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:
(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;
(b) the Permitted Holders "beneficially own" (as defined in
Rules l3d-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
5
Voting Stock of Holdings for any period of thirty (30) days or more; and
(c) Holdings shall cease to own one hundred percent (100%) of
the issued and outstanding Capital Stock of Barneys.
"Charges" means all federal, state, county, city, municipal,
local, foreign or other governmental taxes (including taxes owed to the PBGC at
the time due and payable), levies, assessments, charges, liens, claims or
encumbrances upon or relating to (a) the Collateral, (b) the Obligations, (c)
the employees, payroll, income or gross receipts of any Borrower, (d) any
Borrower's ownership or use of any properties or other assets, or (e) any other
aspect of any Borrower's business.
"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.
"Collateral Reports" means the Borrowing Base Certificate and
the reports with respect to the Collateral referred to in Annex C.
"Commitment" means, as the context shall require, (a) as to
any Lender, the aggregate of such Lender's Revolving Loan Commitment (including
without duplication the Swing Loan Lender's Swing Loan Commitment as a subset of
its Revolving Loan Commitment) and Term Loan Commitment as set forth on Annex A
to the Agreement or in the most recent Assignment and Acceptance executed by
such Lender and (b) as to all Lenders, the aggregate of all Lenders' Revolving
Loan Commitments (including without duplication the Swing Loan Lender's Swing
Loan Commitment as a subset of its Revolving Loan Commitment) and Term Loan
Commitments, which aggregate commitment shall be ONE HUNDRED FIVE MILLION
DOLLARS ($105,000,000) on the Closing Date, as to each of clauses (a) and (b),
as such Commitments may be reduced, amortized or adjusted from time to time in
accordance with the Agreement.
"Commitment Termination Date" means the earlier to occur of
(i) the date of termination of the Commitments pursuant to the terms hereof,
(ii) July 15, 2005, or (iii) if the Subordinated Notes have not been refinanced
or restructured on terms reasonably satisfactory to the Administrative Agent and
the Requisite Lenders as permitted hereunder, the date that is forty-five (45)
days prior to the date of the first scheduled principal payment of the
Subordinated Notes.
"Compliance Certificate" has the meaning, ascribed to such
term in Section 7.01 (c).
6
"Concentration Account" means the concentration account of the
Borrowers bearing account number 00000000 maintained at Citibank, N.A., 000
Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000, 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 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, (E) other non-cash
charges, and (F) up to $3,000,000 in the aggregate of any cash equity
contributed or Permitted Subordinated Indebtedness loaned to the Borrowers to
the extent not used for Capital Expenditures pursuant to clause (i) of the first
proviso in Section 10.04, 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; provided, however, the
impact of the adoption of FASB Statements No. 141 "Business Combinations" and
No. 142 "Goodwill and Other Tangible Assets" shall be excluded from such
calculation. 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 is a party or by which
7
it or any of its properties is bound, or to which it or any of its properties is
subject.
"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.
"Default" means an event which, with the giving of notice or
the lapse of time, or both, would constitute an Event of Default.
"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
8
States office of such Lender as it may from time to time specify by written
notice to the Borrowers and the Administrative Agent.
"Eligible Assignee" means (a) any Lender, any Affiliate of any
Lender and, with respect to any Lender that is an investment fund that invests
in commercial loans, any other investment fund that invests in commercial loans
and that is managed or advised by the same investment advisor as such Lender or
by an Affiliate of such investment advisor, and (b) any commercial bank, savings
and loan association or savings bank or any other entity which is an "accredited
investor" (as defined in Regulation D under the Securities Act of 1933) which
extends credit or buys loans as one of its businesses, including insurance
companies, mutual funds, lease financing companies and commercial finance
companies, in each case, which has a rating of BBB or higher from S&P and a
rating of Baa2 or higher from Moody's at the date that it becomes a Lender and
which, through its applicable lending office, is capable of lending to Borrowers
without the imposition of any withholding or similar taxes; provided that no
Person determined by Administrative Agent to be acting in the capacity of a
vulture fund or distressed debt purchaser shall be an Eligible Assignee, and no
Person or Affiliate of such Person (other than a Person that is already a
Lender) holding Subordinated Notes or Permitted Subordinated Indebtedness or
Stock issued by any member of the Barneys Group shall be an Eligible Assignee.
"Eligible Inventory" means Inventory (i) which is owned by any
Borrower free and clear of all Liens and rights of any other Person (including
the rights of a purchaser that has made progress payments and the rights of a
surety that has issued a bond to assure such Borrower's performance with respect
to that Inventory), except the Liens in favor of Administrative Agent, on behalf
of itself and Lenders, and Customary Permitted Liens in favor of landlords and
bailees (subject to a Rent Reserve), (ii) with respect to which the
Administrative Agent has a valid and perfected first priority Lien, except for
Customary Permitted Liens in favor of landlords and bailees (subject to a Rent
Reserve), (iii) with respect to which no representation or warranty contained in
any of the Loan Documents has been breached, (iv) which is not placed on
consignment or is in transit, (v) is of a type held for sale in the ordinary
course of any Borrower's business, (vi) which is not covered by a negotiable
document of title, unless such document has been delivered to Administrative
Agent with all necessary endorsements, free and clear of all Liens except those
in favor of Administrative Agent and Lenders, (vii) which does not consist of
any costs associated with "freight-in" charges, (vii) which does not consist of
Contaminants or goods that can be transported or sold only with licenses that
are not readily available, (ix) is covered by casualty insurance reasonably
acceptable to Administrative Agent (less any reasonable deductible payable by
such Borrower), and (x) 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 based on its
customary criteria. Eligible Inventory shall be valued at the lower of cost
(determined on a first-in, first-out basis) or market (as determined by the
retail inventory method). No Inventory shall be Eligible Inventory if a 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 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, or (B) a Rent Reserve with
respect to the premises of a third party (other than the premises subject to an
9
Isetan Lease) shall have been deducted from the calculation of Revolving
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", "Customer Credit" 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 Revolving Borrowing Base pursuant to the
Borrowing Base Certificate.
"Eligible In-Transit Inventory" means all finished goods
Inventory owned by Borrowers and covered by documentary Letters of Credit, which
finished goods Inventory is in transit to one of the Borrowers' locations and
which finished goods Inventory (a) is owned by one of the Borrowers, (b) is
fully insured (less any reasonable deductible payable by such Borrower), (c) is
subject to a first priority security interest in and Lien upon such goods in
favor of Administrative Agent (except for any possessor Lien upon such goods in
the possession of a freight carrier or shipping company securing only the
freight charges for the transportation of such goods to such Borrower), (d) is
evidenced or deliverable pursuant to documents, notices, instruments, statements
and bills of lading that have been delivered to Administrative Agent or an agent
acting on its behalf, and (e) is otherwise deemed to be "Eligible Inventory"
hereunder.
"Eligible Receivables" means those Receivables of each of the
Borrowers (i) with respect to which the Administrative Agent has a valid and
perfected first priority Lien, (ii) with respect to which no representation or
warranty contained in any of the Loan Documents has been breached, (iii) which
arise from the sale of goods by such Borrower in the ordinary course of its
business, (iv) with respect to which such Borrower's right to receive payment is
absolute and is not contingent upon the fulfillment of any condition whatsoever,
(v) with respect to which such Borrower is able to bring suit or otherwise
enforce its remedies against the account debtor through judicial process, (vi)
which do not represent a progress xxxxxxxx consisting of invoices for goods sold
or used pursuant to a contract under which the account debtor's obligation to
pay that invoice is subject to such Borrower's completion of further performance
under such contract or is subject to the equitable lien of a surety bond issuer,
(vii) to the extent that any defense, counterclaim, setoff or dispute is not
asserted as to such Receivable, (viii) that are true and correct statements of
bona fide indebtedness incurred in the amount of such Receivables for
merchandise sold to and accepted by the applicable account debtor, (ix) with
respect to which an invoice, reasonably acceptable to Administrative Agent in
form and substance, has been sent to the applicable account debtor, (x) that (1)
are owned by such Borrower and (2) are not subject to any right, claim, security
interest or other interest of any other Person, other than Liens in favor of
Administrative Agent, on behalf of itself and Lenders, (xi) that do not arise
from a sale to any director, officer, other employee or Affiliate of such
Borrower, or to any entity that has any common officer or director with such
Borrower, provided that Receivables which arise from a sale to a director of
such Borrower shall be Eligible Receivables to the extent that the aggregate
amount of such Receivables owing to the Borrowers shall not exceed $100,000 at
any time, (xii) that are not the obligation of an account debtor that is the
United States government or a political subdivision thereof, or any state,
county or municipality or department, agency or instrumentality thereof unless
Administrative Agent, in its sole discretion, has agreed to the contrary in
writing and such Borrower, if necessary or desirable, has complied with respect
10
to such obligation with the Federal Assignment of Claims Act of 1940, or any
applicable state, county or municipal law restricting assignment thereof, (xiii)
that are not the obligation of an account debtor located in a foreign country
other than Canada (excluding the province of Newfoundland, the Northwest
Territories and the Territory of Nunavit) unless payment thereof is assured by a
letter of credit assigned and delivered to Administrative Agent, reasonably
satisfactory to Administrative Agent as to form, amount and issuer, (xiv) to the
extent such Borrower is not liable for goods by the applicable account debtor to
such Borrower but only to the extent of the potential offset, (xv) that do not
arise with respect to goods that are delivered on a xxxx-and-hold,
cash-on-delivery basis or placed on consignment, guaranteed sale or other terms
by reason of which the payment by the account debtor is or may be conditional,
(xvi) that are not the obligation of an account debtor if 50% or more of the
Dollar amount of all Receivables owing by that account debtor are ineligible,
(xvii) to the extent such Receivables are not evidenced by a judgment,
instrument or chattel paper, (xviii) to the extent that such Receivables,
together with all other Receivables owing by such account debtor and its
Affiliates as of any date of determination do not exceed 10% of all Eligible
Receivables, (xix) that are not payable in any currency other than Dollars, and
(xx) 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 based on its customary criteria.
No Receivable of a Borrower shall be an Eligible Receivable if such Receivable
is in default, provided, that, without limiting the generality of the foregoing,
a Receivable shall be deemed in default upon the occurrence of any of the
following:
(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 and permitted to be made from Eligible Receivables in
calculating the Revolving Borrowing 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.
11
"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 of Law
as are promulgated by the specifically authorized agent responsible for
administering such Requirements of Law.
"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, as to any Borrower, 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 such
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 the offered rate for deposits in
United States Dollars for the applicable Interest Period that appears on
Telerate Page 3750 as of 11:00 a.m. (London time), on the second full Business
Day next preceding the first day of such Interest Period (unless such date is
not a Business Day, in which event the next succeeding Business Day will be
used); divided by a number equal to 1.0 minus the aggregate (but without
duplication) of the rates (expressed as a decimal fraction) of reserve
requirements in effect on the day that is 2 Business Days prior to the beginning
of such Interest Period (including basic, supplemental, marginal and emergency
reserves under any regulations of the Federal Reserve Board or other
Governmental Authority having jurisdiction with respect thereto, as now and from
time to time in effect) for Fixed Rate Loan funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of the Federal Reserve Board that are
required to be maintained by a member bank of the Federal Reserve System. If
such interest rates shall cease to be available from Telerate News Service, the
Eurodollar Rate shall be determined from such financial reporting service or
other information as shall be mutually acceptable to Administrative Agent and
Borrower Representative.
12
"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.
"Federal Funds Rate" means, for any day, a floating rate equal
to the weighted average of the rates on overnight Federal funds transactions
among members of the Federal Reserve System, as determined by Administrative
Agent in its sole discretion, which determination shall be final, binding and
conclusive (absent manifest error).
"Federal Reserve Board" means the Board of Governors of the
Federal Reserve System or any Governmental Authority succeeding to its
functions.
"Financial Covenant Period" means (i) with respect to the
first fiscal quarter of Fiscal Year 2002, the three fiscal months ending on the
last day of such fiscal quarter; (ii) with respect to the second fiscal quarter
of the Fiscal Year 2002, the six fiscal months ending on the last day of such
fiscal quarter; (iii) with respect to the third fiscal quarter of the Fiscal
Year 2002, the nine fiscal months ending on the last day of such fiscal quarter;
and (iv) with respect to each fiscal quarter thereafter, the immediately
preceding twelve fiscal months.
"Fiscal Year" means the fiscal year of the Borrowers, which
shall be the 52- or 53-week period ending on the Saturday of each calendar year
closest to January 31 in the succeeding calendar year as set forth below:
Fiscal Period Name Dates
------------------ -----
Fiscal Year 2002 2/3/02 - - 2/1/03
Fiscal Year 2003 2/2/03 - - 1/31/04
Fiscal Year 2004 2/1/04 - - 1/29/05
Fiscal Year 2005 1/30/05 - - 1/28/06
"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.
13
"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.
"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 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.
14
"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.
"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 arid 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).
"GE Capital" means General Electric Capital Corporation, a
Delaware corporation.
"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 and each Lender.
"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 and the other Holders, as such agreement may
be amended, supplemented or otherwise modified from time to time.
"Holdings Pledge Agreement" means the Pledge Agreement, dated
as of the date hereof, by and between Holdings and the Administrative Agent, as
such agreement may be amended, supplemented or otherwise modified from time to
time.
"Holdings Security Agreement" means the Security Agreement,
dated as of the date hereof, by and between Holdings and the Administrative
Agent, 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
15
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.
"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).
"Intellectual Property Security Agreement" means the
Intellectual Property Security Agreement, dated as of the date hereof, by the
Borrowers in favor of the Administrative Agent, as such agreement may be
amended, supplemented or otherwise modified from time to time.
"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 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
16
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.
"Isetan Leases" means (i) the Amended and Restated Lease
Agreement, dated as of January 28, 1999, 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, as amended, (ii) the Amended and Restated Lease Agreement, dated as of
January 28, 1999, 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, as amended, 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,
as amended, 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.
"L/C Issuer" has the meaning ascribed to it in Annex B.
"L/C Sublimit" has the meaning ascribed to it in Annex B.
"Letter Agreement" means the fee letter, dated May 24, 2002,
from GE Capital and accepted and agreed to by Barneys, as amended and in effect
from time to time.
"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 undrawn amount of all outstanding Letters of Credit, plus (iii) 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 Annex B).
"Letters of Credit" means documentary or standby letters of
credit issued for the account of any Borrower by any L/C Issuer, and bankers'
acceptances issued by any Borrower, for which Administrative Agent and Lenders
17
have incurred Letter of Credit Obligations. For the avoidance of doubt, (i)
Letter of Credit Number SE442561P issued by GE Capital in favor of Citicorp USA,
Inc. as beneficiary thereunder, in the stated amount of $28,500,000, (ii) Letter
of Credit Number SE442558P issued by GE Capital in favor of Citicorp USA, Inc.
as beneficiary thereunder, in the stated amount of $1,800,000, and (iii) Letter
of Credit Number SE442559P issued by GE Capital in favor of Citicorp USA, Inc.
as beneficiary thereunder, in the stated amount of $600,000, shall each
constitute a Letter of Credit hereunder.
"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.9-505
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 Blocked Account Agreements, the Holdings Guaranty, the Borrower
Security Agreement, the Holdings Security Agreement, the Borrower Pledge
Agreement, the Holdings Pledge Agreement, the Intellectual Property Security
Agreement, the Master Standby Agreement, the Master Documentary Agreement, 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 or any Lenders,
on the other hand, in each case delivered to the Administrative Agent or such
Lender pursuant to or in connection with the transactions contemplated hereby.
"Loans" means collectively the Revolving Loans, the Term Loan
and the Swing Loans.
18
"Lock Box" means the lock box located at Citibank, N.A. at
X.X. Xxx 0000, Xxxxxxxxx, Xxx Xxxx, 00000-0000, and accessed by the Servicer.
"Margin Stock" means "margin stock" as such term is defined in
Regulation U.
"Master Documentary Agreement" means the Master Agreement for
Documentary Letters of Credit dated as of the Closing Date among Borrowers, as
Applicant(s), and GE Capital, as issuer.
"Master Standby Agreement" means the Master Agreement for
Standby Letters of Credit dated as of the Closing Date among Borrowers, as
Applicant(s), and GE Capital, as issuer.
"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 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 Revolving Loan Commitment at such
time and (B) the Revolving 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 Term Notes, the Revolving
Loan Notes and the Swing Loan Note.
"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.
19
"NY Lease" has the meaning ascribed to such term in the
preamble to this Agreement.
"Obligation" 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, any
Affiliate of the Administrative Agent, any Lender, 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.
"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 Borrower, any lease
of any Property (whether real, personal or mixed) by such Borrower as lessee
which is not a Capital Lease.
"PBGC" means the Pension Benefit Guaranty Corporation and any
Person succeeding to the functions thereof.
"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.
"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
20
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; provided that up to an aggregate of $15,000,000 of such
Indebtedness may be secured by a subordinated lien in favor of Permitted Holders
pursuant to (and subject to) terms and conditions reasonably satisfactory to the
Administrative Agent and the Requisite Lenders.
"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.
"Plan" means an employee benefit plan (other than a Foreign
Employee Benefit Plan) defined in Section 3(3) of ERISA, and any other
compensatory plan, program, arrangement, or agreement (including those relating
to profit-sharing, deferred compensation, pension, consulting, retainer,
severance and stock-based compensation for the benefit of employees or
independent contractors) 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 3(5) of ERISA. "Plan" also means a "voluntary employee
benefit association" within the meaning of Section 501(c)(9) of the Internal
Revenue Code, and a "multiple employer welfare association" within the meaning
of Section 3(40)(A) of ERISA) 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 3(5) of ERISA.
"Preferred Stock" means the shares of Series A Preferred
Stock, $.01 par value per share, of Holdings.
"Prior Lenders" means the financial institutions listed on
Schedule 1.01.7 hereto.
"Prior Lender Obligations" means all Indebtedness and other
liabilities and obligations owing by any Borrower to the Prior Lenders under the
financing documents described on Schedule 1.01.8 hereto.
"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).
21
"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 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.
"Refinancing" means the repayment in full by Borrowers of the
Prior Lender Obligations on the Closing Date.
"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 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
22
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 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, two (2) or more
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 two (2) or more 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
23
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 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 based on its
customary criteria, plus (ii) the lesser of (x) up to eighty percent (80%) of
Eligible Inventory (other than Eligible In-Transit Inventory) valued at the
lower of cost (determined on a first-in, first-out basis) or market (as
determined by the retail inventory method), less such reserves as the
Administrative Agent, in its reasonable credit judgment, deems appropriate based
on its customary criteria, and (y) up to eighty-five percent (85%) of the
Eligible Inventory (other than Eligible In-Transit Inventory) valued at the net
appraised liquidation value, less such reserves as the Administrative Agent, in
its reasonable credit judgment, deems appropriate based on its customary
criteria, plus (iii) up to fifty percent (50%) of the Eligible In-Transit
Inventory, minus (iv) the Term Loan Reserve, if any, in effect 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) and (iii) 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.
"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.
"Revolving Lenders" means, as of any date of determination,
Lenders having a Revolving Loan Commitment.
"Revolving Loan" has the meaning ascribed to such term in
Section 2.01(a).
"Revolving Loan Commitment" means (a) as to any Lender, the
aggregate commitment of such Lender to make Revolving Loans or incur Letter of
Credit Obligations as set forth on Annex A to the Agreement or in the most
recent Assignment and Acceptance executed by such Lender and (b) as to all
Lenders, the aggregate commitment of all Lenders to make Revolving Loans or
incur Letter of Credit Obligations, which aggregate commitment shall be
NINETY-SEVEN MILLION DOLLARS ($97,000,000) on the Closing Date, as such amount
may be adjusted, if at all, from time to time in accordance with the Agreement.
"Revolving Loan 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.
"Securities" means any stock, shares, voting trust
certificates, bonds, debentures, notes or other evidences of indebtedness,
24
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.
"Servicer" means Citibank, N.A., 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
(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.
"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 Commitment" has the meaning ascribed to such term
in Section 2.02(a).
25
"Swing Loan Lender" means GE Capital, in its individual
capacity or, in the event GE Capital 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).
"Term Lenders" means those Lenders having Term Loan
Commitments.
"Term Loan" has the meaning ascribed to such term in Section
2.01(b)(i).
"Term Loan Availability" means, at any particular time, the
sum of (i) an amount equal to the Trademark Available Amount at such time, and
(ii) the Term Loan Borrowing Base at such time.
"Term Loan Borrowing Base" means, as of any date of
determination, the lesser of (i) up to seven and one-half percent (7.5%) of
Eligible Inventory valued at the lower of cost (determined on a first-in,
first-out basis) or market (as determined by the retail inventory method) and
(ii) up to seven and one-half percent (7.5%) of the net appraised liquidation
value of the Eligible Inventory, in each case less such reserves as the
Administrative Agent, in its reasonable credit judgment, deems appropriate based
on its customary criteria.
"Term Loan Commitment" means (a) as to any Lender with a Term
Loan Commitment, the commitment of such Lender to make its Pro Rata Share of the
Term Loan as set forth on Annex A to this Agreement or in the most recent
Assignment and Acceptance executed by such Lender, and (b) as to all Lenders
with a Term Loan Commitment, the aggregate commitment of all Lenders to make the
Term Loan, which aggregate commitment shall be EIGHT MILLION DOLLARS
($8,000,000) on the Closing Date. After advancing the Term Loan, each reference
to a Lender's Term Loan Commitment shall refer to that Lender's Pro Rata Share
of the outstanding Term Loan.
"Term Loan Reserve" means the amount by which the outstanding
principal amount of the Term Loan exceeds the Term Loan Availability as of any
date of determination.
"Term Note" has the meaning ascribed to such term in Section
2.05(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 termination of employment of
20% of the participants, in a Benefit Plan intended to qualify under Section
26
401(a) of the Internal Revenue Code, 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.
"Trademark Available Amount" means initially an amount equal
to $5,000,000, which amount shall be permanently reduced as follows: (i)
$425,000 on November 3, 2002, and (ii) $425,000 on the first day of each fiscal
quarter thereafter; and (iii) an amount equal to the Net Cash Proceeds (to the
extent such Net Cash Proceeds are used to prepay the Term Loan pursuant to
Section 3.01(b)(iii)) from sales or other dispositions of assets in an aggregate
amount not to exceed the amount of the Trademark Available Amount at such time
prior to giving effect to such reduction.
"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).
"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.
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.
27
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 Revolving 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 Revolving Lender's Pro Rata Share of
Availability at such time. All Revolving Loans comprising the same Borrowing
hereunder shall be made by such Revolving 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.
(i) Notice of Borrowing. When the Borrowers desire to
borrow under this Section 2.01, an irrevocable Notice of Borrowing shall be
delivered by Borrower Representative 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. In lieu of
delivering such a Notice of Borrowing (except with respect to a Borrowing on the
Closing Date), the Borrower Representative 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.
28
(ii) Making of Revolving Loans.
(A) Promptly after receipt of a Notice of
Borrowing, under Section 2.01(a)(i) (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 Revolving Lender by telex or telecopy, or other similar form of
transmission, of the proposed Borrowing. Each Revolving Lender shall
deposit an amount equal to its Pro Rata Share of the amount requested
by the Borrowers with the Administrative Agent, in immediately
available funds, (1) on the Closing Date specified in the initial
Notice of Borrowing and (2) 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 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 Revolving Lender to deposit the amount described above with the
Administrative Agent on the applicable Funding Date shall not relieve
any other Revolving Lender of its obligations hereunder to make its
Revolving Loan on such Funding Date. No Revolving Lender shall be
responsible for any failure by any other Revolving Lender to perform
its obligation to make a Revolving Loan hereunder nor shall the
Commitment of any Revolving Lender be increased or decreased as a
result of any such failure.
(B) Unless the Administrative Agent shall
have been notified by any Revolving Lender on the Business Day
immediately preceding the applicable Funding Date in respect of any
Borrowing of Revolving Loans that such Revolving Lender does not intend
to fund its Revolving Loan requested to be made on such Funding Date,
the Administrative Agent may assume that such Revolving 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 Revolving Lender
on or prior to the applicable Funding Date, such Revolving 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 Revolving 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 Revolving 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(a)(ii) does not relieve any
Revolving Lender of its obligation to make its Revolving Loan on any
Funding Date.
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(iii) Repayment of Revolving Loans. All outstanding
Revolving Loans shall be paid in full on the Commitment Termination Date. Each
Revolving Lender's obligation to make Revolving Loans shall terminate at the
close of business on the Business Day immediately preceding the Commitment
Termination Date.
(iv) Appointment of Borrower Representative. Each
Borrower hereby designates Barneys as its representative and agent on its behalf
for the purposes of issuing Notices of Borrowing, giving instructions with
respect to the disbursement of the proceeds of the Loans, selecting interest
rate options, requesting Letters of Credit, giving and receiving all other
notices and consents hereunder or under any of the other Loan Documents and
taking all other actions (including in respect of compliance with covenants) on
behalf of any Borrower or Borrowers under the Loan Documents. Borrower
Representative hereby accepts such appointment. Administrative Agent and each
Lender may regard any notice or other communication pursuant to any Loan
Document from Borrower Representative as a notice or communication from all
Borrowers, and may give any notice or communication required or permitted to be
given to any Borrower or Borrowers hereunder to Borrower Representative on
behalf of such Borrower or Borrowers. Each Borrower agrees that each notice,
election, representation and warranty, covenant, agreement and undertaking made
on its behalf by Borrower Representative shall be deemed for all purposes to
have been made by such Borrower and shall be binding upon and enforceable
against such Borrower to the same extent as if the same had been made directly
by such Borrower.
(b) Term Loan. (i) Subject to the terms and conditions set
forth herein, each Term Lender hereby severally and not jointly agrees to make a
term loan on the Closing Date in Dollars (collectively, the "Term Loan") to the
Borrowers in the amount of such Lender's Term Loan Commitment.
(ii) The Borrowers shall repay the Term Loan in equal
quarterly installment payments of $425,000, beginning on November 3, 2002, and
the first day of each fiscal quarter thereafter, provided that no such payment
shall be payable for any fiscal quarter for which Availability on the first day
of such fiscal quarter, after giving effect to such payment, shall be less than
or equal to $15,000,000. The final installment due on July 15, 2005 shall be in
the amount of $325,000 or, if different, the remaining principal balance of the
Term Loan. No payment made by the Borrowers with respect to the Term Loan may be
reborrowed.
(iii) Notwithstanding Section 2.01(b)(ii), the aggregate
outstanding principal balance of the Term Loan shall be due and payable in full
in immediately available funds on the Commitment Termination Date, if not sooner
paid in full.
(iv) Each payment of principal with respect to the Term
Loan shall be paid to Administrative Agent for the ratable benefit of each Term
Lender making a Term Loan in proportion to each such Term Lender's respective
Term Loan Commitment.
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
(each a "Swing Loan") 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
30
equal to $7,000,000 (the "Swing Loan Commitment"). 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 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 Revolving 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 making of any Swing Loan. Subject to the
preceding sentence, the Administrative Agent shall make such proceeds available
to the Borrowers 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
Revolving 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 Revolving Lender to make available to the Administrative Agent its Pro Rata
Share of such Revolving Loans shall not relieve such Revolving Lender or any
other Revolving 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
Revolving Lenders in respect of Swing Loans at least weekly.
2.03 Use of Proceeds. Borrowers shall utilize the proceeds of the Loans
solely for the Refinancing (and to pay any related transaction expenses), and
for the financing of Borrowers' working capital, capital expenditures and
general corporate purposes. Schedule 2.03 contains a description of Borrowers'
31
sources and uses of funds as of the Closing Date, including Loans and Letter of
Credit Obligations to be made or incurred on that date, and a funds flow
memorandum detailing how funds from each source are to be transferred to
particular uses.
2.04 Letters of Credit. Subject to and in accordance with the terms and
conditions contained herein and in Annex B, Borrower Representative, on behalf
of the applicable Borrower, shall have the right to request, and Revolving
Lenders agree to incur, or purchase participations in, Letter of Credit
Obligations in respect of each Borrower.
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 Revolving Lenders. The Borrowers shall execute and deliver to each
Revolving Lender such promissory notes as are necessary to evidence the
Revolving Loans owning to the Revolving 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 Swing Loan Notes).
(iii) The Borrowers jointly and severally agree to pay
on the Commitment Termination Date the principal amount of the Term 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 Term Loan owing
to the Term Lenders. The Borrowers shall execute and deliver to each Term Lender
such promissory notes as are necessary to evidence the Term Loan owning to such
Term Lender after giving effect to any assignment thereof pursuant to Section
13.01, each substantially in the form of Exhibit C-3 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 "Term
Notes"; and "Term Note" means any one of the Term Notes).
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(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, Term
Loan, 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 (the "Loan Account"). All entries in the Loan Account shall be made in
accordance with Administrative Agent's customary accounting practices as in
effect from time to time. The balance in the Loan Account, as recorded on
Administrative Agent's most recent printout or other written statement, shall,
absent manifest error, be presumptive evidence of the amounts due and owing to
Administrative Agent and Lenders by each Borrower; provided that any failure to
so record or any error in so recording shall not limit or otherwise affect any
Borrower's duty to pay the Obligations. Administrative Agent shall render to
Borrower Representative a monthly accounting of transactions with respect to the
Loans setting forth the balance of the Loan Account as to each Borrower for the
immediately preceding month. Unless Borrower Representative notifies
Administrative Agent in writing of any objection to any such accounting
(specifically describing the basis for such objection) within 45 days after the
date thereof, each and every such accounting shall (absent manifest error) be
deemed final, binding and conclusive on Borrowers in all respects as to all
matters reflected therein. Only those items expressly objected to in such notice
shall be deemed to be disputed by Borrowers. Notwithstanding any provision
herein contained to the contrary, any Lender may elect (which election may be
revoked) to dispense with the issuance of Notes to that Lender and may rely on
the Loan Account as evidence of the amount of Obligations from time to time
owing to it.
2.06 Authorized Officers and Agents. On the Closing Date and from time
to time thereafter, the Borrower Representative 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 Borrower Representative
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 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 L/C Issuer 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.
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ARTICLE III
PAYMENTS AND PREPAYMENTS
------------------------
3.01 Prepayments Reductions in Commitments.
(a) Voluntary Prepayments/Reductions. (i) The Borrowers may
prepay Floating Rate Loans on any Business Day, in whole or in part, upon
written notice by Borrower Representative no later than 1:00 p.m. (New York
time) on such day with respect to Revolving Loans (and 4:00 p.m. (New York time)
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 by Borrower Representative
no later than 1:00 p.m. (New York time) 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 by Borrower Representative to the Administrative
Agent (which the Administrative Agent shall promptly transit to each Lender as
applicable) and only upon payment of the amounts described in Section 4.02(f).
Any voluntary prepayment of Loans must be accompanied by payment of the Fee
required by Section 4.03(d).
(ii) The Borrowers, upon at least five (5) Business
Days' prior written notice by Borrower Representative to the Administrative
Agent (which the Administrative Agent shall promptly transmit to each Revolving
Lender), shall have the right, from time to time, to terminate in whole or
permanently reduce in part the Revolving Loan Commitments, provided that, after
giving effect to such reduction of the Revolving Loan Commitments, the Borrowers
are in compliance with the provisions of Section 3.01(b)(i). Any partial
reduction of the Revolving Loan 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 Revolving Loan Commitment of each Revolving Lender
proportionately in accordance with such Revolving 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
Revolving Loan Commitments shall not be reinstated. Notwithstanding the
foregoing, the Borrowers may not reduce the Revolving Loan Commitments such that
after giving effect to any such reduction the Revolving Loan Commitment shall be
less than $87,000,000, unless after giving effect to any such reduction the
Revolving Loan Commitment shall equal $0. Borrowers may at any time on at least
5 Business Days' prior written notice by Borrower Representative to
Administrative Agent terminate the Revolving Loan Commitment; provided that upon
such termination, all Loans and other Obligations shall be immediately due and
payable in full and all Letter of Credit Obligations shall be cash
collateralized or otherwise satisfied in accordance with Annex B hereto. Any
voluntary prepayment and any reduction or termination of the Revolving Loan
Commitment must be accompanied by payment of the fees required by Section
4.02(f) and, if any, Section 4.03(d). Upon any such reduction or termination of
the Revolving Loan Commitment, each Borrower's right to request Revolving Loans,
34
or request that Letter of Credit Obligations be incurred on its behalf, or
request Swing Loans, shall simultaneously be permanently reduced or terminated,
as the case may be; provided that a permanent reduction of the Revolving Loan
Commitment shall require a corresponding pro rata reduction in the L/C Sublimit.
Each notice of partial prepayment shall designate the Loans or other Obligations
to which such prepayment is to be applied.
(iii) After the first anniversary of the Closing Date,
the Borrowers, upon at least five (5) Business Days' prior written notice by
Borrower Representative to the Administrative Agent (which the Administrative
Agent shall promptly transmit to each Term Lender), shall have the right, from
time to time, to voluntarily prepay all or part of the Term Loan, provided that,
after giving effect to such prepayment, Availability is in excess of
$15,000,000. The Term Loan may be prepaid in full at any time following the
termination in full of the Revolving Credit Commitments, subject to the notice
provision set forth above.
(iv) The prepayments and payments in respect of
reductions and terminations described in clauses (i) through (iii) 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 Loans 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 Loans. Any mandatory prepayments made in accordance
with this Section 3.01(b)(iii) shall be applied, first, to the Revolving Credit
Obligations until the same have been repaid in full, next, to prepay the Term
Loan. In addition, the Revolving Loan Commitment shall be permanently reduced on
35
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.
(v) For thirty consecutive days during the period
commencing December 1 of each year to February 28 of the following year, the
Revolving Credit Obligations shall not exceed $65,000,000 at any time during
such thirty consecutive day period.
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 or the Lenders or the L/C Issuer shall be made
without condition or reservation of right, in immediately available funds,
delivered to the Administrative Agent (or, in the case of Reimbursement
Obligations, to the L/C Issuer) not later than 2:00 p.m. (New York time) with
respect to Revolving Loans, the Term Loan 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 L/C Issuer, 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. (New York time), 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, (II) in respect of outstanding
Revolving Loans shall be allocated among all the Revolving Lenders in proportion
to their respective Pro Rata Shares and (III) in respect of the Term Loan shall
be allocated among all the Term 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
36
of any Revolving Lender for which the Administrative
Agent has not then been reimbursed by such Revolving
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 L/C Issuer;
(E) fifth, to pay Obligations in respect of
any fees then due to the Administrative Agent, the
Lenders and the L/C Issuer;
(F) sixth, to pay interest due in respect of
the Revolving Loans and Reimbursement Obligations;
(G) seventh, to pay interest due in respect
of the Term Loan;
(H) eighth, to pay principal outstanding on
the Revolving Loans and outstanding Letter of Credit
Obligations;
(I) ninth, to pay the principal of the Term
Loan;
(J) tenth, to provide, to the extent any
Obligations are contingent, cash collateral pursuant
to Annex B hereto; and
(K) eleventh, 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 (K), 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 L/C Issuer'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 L/C Issuer and other Holders as among
themselves. The order of priority set forth in clauses (A) through (K) of this
Section 3.02(b) 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 L/C Issuer, 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
37
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, Revolving 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 Revolving
Loans so made shall be deemed to have been requested by the Borrower
Representative and direct that all proceeds thereof shall be used to pay such
amounts.
(iv) The Administrative Agent shall promptly distribute
to each Lender 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 at such other address as a Lender 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 interpleader) in the event of
any doubt or dispute as to any apportionment or distribution contemplated
hereby.
(v) If any Revolving 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 Revolving Lender is obligated
to fund under the terms hereof (excluding any such Revolving 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 Revolving Lender's cure of such failure and the termination of
the Revolving Loan Commitment, the proceeds of all amounts thereafter repaid to
the Administrative Agent by the Borrowers and otherwise required to be applied
to such Revolving 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 Revolving 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 Revolving 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)(y), and whether or not the Non Pro
Rata Loan with respect thereto has been repaid;
38
(C) amounts advanced to the Borrowers to
cure, in full or in part, any such Revolving 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 Revolving Lender shall be relieved of
any obligation such Revolving Lender may have to the
Borrowers under the terms of this Agreement as a
result of the provisions of this Section 3.02(b)(y).
(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, deliver 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
39
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 to 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) Tax Indemnification. The Borrowers shall indemnify each
Lender and the Administrative Agent against, and reimburse each on demand for,
the full amount of all Taxes 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 Institution 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
40
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 W-8BEN
(or any successor or substitute form or forms)), or (B) under Sections
1441(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 W-8ECI
(or any successor or substitute form or forms)).
(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) and that therefore it is not
entitled to any additional amounts;
41
(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 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.
(h) Participants. Each Person who purchases a participation
hereunder pursuant to Section 13.01(h) will be subject to the requirements of
this Section 3.03 to the same extent as if it were a Lender.
3.04 Increased Capital. If after the date hereof any Lender 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, 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 or reserves required or expected to be maintained by such Lender or any
corporation controlling such Lender and (ii) the amount of such capital or
reserves 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, then, upon written demand by
such Lender (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, from time to time as specified by such Lender, additional amounts
sufficient to compensate such Lender 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.
42
3.05 Cash Management. The Borrowers have established the Lock Box 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 Box 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. On or
before the Closing Date, each of the Servicer and each Blocked Account Bank
shall have entered into a tri-party blocked account agreement with the
Administrative Agent, for the benefit of itself and Lenders, and the applicable
Borrower, in form and substance reasonably acceptable to Administrative Agent,
which shall become operative on or prior to the Closing Date. 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, promptly upon
receipt thereof, to be deposited into a Blocked Account. 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 sole dominion
and control of the Concentration Account and the amounts appearing to the credit
of the Concentration Account. Each Borrower shall, and shall cause its
Affiliates, officers, employees, agents, directors or other Persons acting for
or in concert with such Borrower (each a "Related Person") to, (i) hold in trust
for Administrative Agent, for the benefit of itself and Lenders, all checks,
cash and other items of payment constituting proceeds of Collateral received by
such Borrower or any such Related Person, and (ii) within two (2) Business Days
after receipt by such Borrower or any such Related Person of any checks, cash or
other items of payment constituting proceeds of Collateral, deposit the same
into a Blocked Account of such Borrower. Each Borrower and each Related Person
thereof acknowledges and agrees that all cash, checks or other items of payment
constituting proceeds of Collateral are part of the Collateral.
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 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
43
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.
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) With respect to Revolving Loans, 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 Revolver
Floating Rate Margin in effect from time to time;
(ii) With respect to Revolving Loans, 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 Revolver Fixed Rate
Margin in effect from time to time;
(iii) With respect to the Term Loan, 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 Term Loan
Floating Rate Margin in effect from time to time; and
(iv) With respect to the Term Loan, 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 Term Loan Fixed Rate
Margin in effect from time to time.
As of the Closing Date, the Applicable Revolver Margins are as
follows:
Applicable Revolver Floating Rate Margin 1.00%
Applicable Revolver Fixed Rate Margin 2.75%
44
The applicable basis for determining the rate of interest on
the Loans shall be selected by Borrower Representative at the time a Notice of
Borrowing, or a Notice of Conversion/Continuation is delivered by Borrower
Representative to the Administrative Agent; provided, however, the Borrower
Representative 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 Revolver
Floating Rate Margin.
The Applicable Revolver Margins shall be adjusted (up or down)
prospectively on a quarterly basis as determined by Holdings' and its
Subsidiaries' consolidated financial performance, commencing with the first day
of the first calendar month that occurs more than 5 days after delivery of
Holdings' and its Subsidiaries' quarterly financial statements to Lenders for
the fiscal quarter ending August 2, 2003. Adjustments in Applicable Revolver
Margins shall be determined by reference to the following grid:
------------ --------------------------------- ----------------------------- --------------------------------
Fixed Charge Coverage Applicable Revolver Applicable Revolver
Level Ratio Floating Rate Margin Fixed Rate Margin
----- ----- -------------------- -----------------
------------ --------------------------------- ----------------------------- --------------------------------
I <1.00 1.00% 2.75%
------------ --------------------------------- ----------------------------- --------------------------------
II Less than 1.50, but > 1.00 0.75% 2.50%
-
------------ --------------------------------- ----------------------------- --------------------------------
III >1.50 0.50% 2.25%
-
------------ --------------------------------- ----------------------------- --------------------------------
All adjustments in the Applicable Revolver Margins after
August 2, 2003 shall be implemented quarterly on a prospective basis, for each
calendar month commencing at least 5 days after the date of delivery to Lenders
of the quarterly unaudited or annual audited (as applicable) financial
statements evidencing the need for an adjustment. Concurrently with the delivery
of those financial statements, Borrower Representative shall deliver to
Administrative Agent and Lenders a certificate, signed by its chief financial
officer, setting forth in reasonable detail the basis for the continuance of, or
any change in, the Applicable Revolver Margins. Failure to timely deliver such
financial statements shall, in addition to any other remedy provided for in this
Agreement, result in an increase in the Applicable Revolver Margins to the
highest level set forth in the foregoing grid, until the first day of the first
calendar month following the delivery of those financial statements
demonstrating that such an increase is not required. If an Event of Default has
occurred and is continuing at the time any reduction in the Applicable Revolver
Margins is to be implemented, that reduction shall be deferred until the first
day of the first calendar month following the date on which such Event of
Default is waived or cured.
As of the Closing Date, the Applicable Term Loan Margins shall
be determined by reference to the following grids, and shall be adjusted (up or
down) prospectively on a weekly basis as determined by reference to the
Borrowers' most recently delivered Borrowing Base Certificate, commencing with
45
the first day of the following week. Adjustments in Applicable Term Loan Margins
shall be determined by reference to the following grid:
------------ --------------------------------- ------------------------------- ------------------------------
Applicable Applicable
Level Availability Term Loan Floating Rate Margin Term Loan Fixed Rate Margin
----- ------------ ------------------------------ ---------------------------
------------ --------------------------------- ------------------------------- ------------------------------
I > $15,000,000 1.75% 3.50%
-
------------ --------------------------------- ------------------------------- ------------------------------
II Less than $15,000,000, but
> $10,000,000 4.00% 3.50%
-
------------ --------------------------------- ------------------------------- ------------------------------
III < $10,000,000 6.00% 3.50%
------------ --------------------------------- ------------------------------- ------------------------------
With respect to any Fixed Rate Loan that is a Term Loan, on
any date of determination, if Availability is less than $15,000,000, such Fixed
Rate Loan shall bear interest for the period during which Availability is less
than $15,000,000 (each, a "Reference Period") calculated at the rate applicable
to such Fixed Rate Loan as determined by Administrative Agent by reference to
the above grid on the Fixed Rate Determination Date for such Fixed Rate Loan
plus an additional amount equal to the amount such rate is less than the rate
which would otherwise be applicable to such Fixed Rate Loan if such Fixed Rate
Loan were a Floating Rate Loan, as such rate shall be determined by the
Administrative Agent by reference to the above grid during such Reference
Period; provided that, if Availability equals or exceeds $15,000,000 on any date
of determination, such Fixed Rate Loan shall, until the occurrence of a new
Reference Period, bear interest at the rate determined by reference to the above
grid on the Fixed Rate Determination Date for such Fixed Rate Loan.
Concurrently with the delivery of the Borrowing Base
Certificate, Borrower Representative shall deliver to Administrative Agent and
Lenders a certificate, signed by its chief financial officer or its treasurer,
setting forth in reasonable detail the basis for the continuance of, or any
change in, the Applicable Term Loan Margins. Failure to timely deliver any
Borrowing Base Certificate shall, in addition to any other remedy provided for
in this Agreement, result in an increase in the Applicable Term Loan Margins to
the highest level set forth in the foregoing grid, until the first day of the
week following the delivery of such Borrowing Base Certificate demonstrating
that such an increase is not required. If an Event of Default has occurred and
is continuing at the time any reduction in the Applicable Term Loan Margins is
to be implemented, that reduction shall be deferred until the first day of the
week following the date on which such Event of Default is waived or cured.
(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.
46
(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.
(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 Borrower Representative 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 Borrower
Representative 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)(6) (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 included and the date of
47
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 Restriction. If after the date hereof any
Lender 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, 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 its Applicable Lending Office)
to charges (other than Taxes and taxes measured by or imposed upon the net
income of such Lender (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 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 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 (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 any
Applicable Lending Office or Fixed Rate Affiliate of that Lender;
and the result of any of the foregoing is to increase the cost to that Lender 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 (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, from
time to time as specified by such Lender, such amount or amounts as may be
necessary to compensate such Lender 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:
(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 Borrower Representative shall have the
option, subject to the other provisions of this Section 4.02, to select an
48
interest period (each, an "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;
(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
Borrower Representative, whereupon (until the Administrative Agent notifies the
Borrower Representative that the circumstances giving rise to such suspension no
longer exist) the right of the Borrowers to elect to have Loans bear interest
49
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 Borrower
Representative 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 from the Borrower Representative 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 Borrower Representative 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.
(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
50
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 Annex B, the Borrowers shall pay to the Administrative Agent the
following fees:
(i) with respect to each Letter of Credit, (A) a fee,
for the account of the L/C Issuer, 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 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;
(ii) 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 Revolving Lenders in accordance
with their respective Pro Rata Shares, a fee (the "Unused Commitment Fee"),
accruing at the rate of one-half of one percent (0.50%) on the average amount by
which the Revolving Loan Commitment exceeds 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) Prepayment Premium. If Borrowers pay after acceleration
following a voluntary Event of Default or voluntarily prepay all of the Term
Loan and the Revolving Loans and terminate the Revolving Loan Commitment,
whether before or after such acceleration of the Obligations, Borrowers shall
51
pay to Administrative Agent, for the benefit of Lenders, as liquidated damages
and compensation for the costs of being prepared to make funds available
hereunder an amount equal to the Applicable Percentage (as defined below)
multiplied by the sum of (i) the principal amount of the Term Loan paid after
acceleration or prepaid, and (ii) the amount of the reduction of the Revolving
Loan Commitment. As used herein, the term "Applicable Percentage" shall mean (x)
two percent (2.00%), in the case of a prepayment on or prior to the first
anniversary of the Closing Date, and (y) zero percent (0.00%), in the case of a
prepayment after the first anniversary of the Closing Date. The Barneys Group
agrees that the Applicable Percentage is a reasonable calculation of Lenders'
lost profits in view of the difficulties and impracticality of determining
actual damages resulting from an early termination of the Commitments.
Notwithstanding the foregoing, no prepayment fee shall be payable by Borrowers
in connection with the occurrence of a Change of Control, (ii) the sale of all
or substantially all of the assets of the Barneys Group, or (iii) any
restructuring or refinancing of the Subordinated Notes permitted hereunder.
(e) Calculation and Payment 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.
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 or to incur Letter of Credit Obligations, 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, the other Loan Documents
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 three-year business plan of the Barneys Group
reasonably acceptable to the Administrative Agent, (B) projections of the
financial statements (including balance sheets, income statements and cash flow
statements) of the Barneys Group, giving effect to the Refinancing, 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.
52
(b) Collateral Information; Perfection of Liens. The
Administrative Agent shall have received complete and accurate information from
the Borrowers with respect to the legal name, the jurisdiction of organization
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
valid, 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 promissory notes and instruments included in the Collateral shall have
been delivered to the Administrative Agent (duly endorsed to the Administrative
Agent, as appropriate).
(c) No Legal Impediment . No law, regulation, order, judgment
or decree of any Governmental Authority shall exist, 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,
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, (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 any Borrower to consummate the transactions contemplated by the Loan
Documents or the ability of any Borrower to perform its obligations under the
Loan Documents.
(d) No Change in Condition. Since February 2, 2002, (i) no
change has occurred which has had or is reasonably likely to have a material
adverse effect on (A) the business, assets, operations, prospects or financial
or other condition of Barneys, individually, or the Borrowers considered as a
whole, or (B) the Collateral or Administrative Agent's Liens, on behalf of
itself and Lenders, on the Collateral or the priority of such Liens, (ii) no
litigation has been commenced against any Borrower, which, if successful, has
had or is reasonably likely to have a material adverse effect on (A) the
business, assets, operations, prospects or financial or other condition of
Barneys, individually, or the Borrowers considered as a whole, (B) the
Collateral or Administrative Agent's Liens, on behalf of itself and Lenders, on
the Collateral or the priority of such Liens, (C) any Borrower's ability to pay
any of the Loans or any of the other Obligations in accordance with the terms of
the Agreement, or (D) would challenge the transactions contemplated by the Loan
Documents, and (iii) there has been no material increase in the liabilities,
liquidated or contingent, or a material decrease in the assets of Barneys,
individually, or the Borrowers considered as a whole, excluding any reduction in
the value of goodwill or any other effect on the financial statements required
by FASB Statements No. 141 "Business Combinations" and No. 142 "Goodwill and
Other Tangible Assets".
(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,
53
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, lega1 expenses) due and payable on or before the Closing
Date.
(h) Closing Date. The Closing Date shall have occurred on or
before August 30, 2002.
(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 and (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. No such consent, approval or authorization
shall impose any conditions that are not acceptable to the Administrative Agent
and the Lenders.
(j) Opening Availability. The Eligible Accounts and Eligible
Inventory and Eligible In-Transit Inventory supporting the initial Revolving
Loan and the initial Letter of Credit Obligations incurred and the amount of the
reserves to be established on the Closing Date shall be sufficient in value, as
determined by Administrative Agent, to provide Borrowers, collectively, with
Availability, after giving effect to the initial Revolving Loans made to each
Borrower and the incurrence of any initial Letter of Credit Obligations (on a
pro forma basis, with trade payables being paid currently, and expenses and
liabilities being paid in the ordinary course of business and without
acceleration of sales and without deterioration of working capital), of at least
$8,000,000.
(k) Legal Due Diligence; Collateral Audit. Administrative
Agent shall have completed its legal due diligence, including a collateral
audit, with results reasonably satisfactory to Administrative Agent.
(l) Repayment of Prior Lender Obligations; Satisfaction of
Outstanding L/Cs. (i) Administrative Agent shall have received a fully executed
original of a pay-off letter reasonably satisfactory to Administrative Agent
confirming that all of the Prior Lender Obligations will be repaid in full from
the proceeds of the Term Loan and the initial Revolving Loans and all Liens upon
any of the property of Borrowers and their Subsidiaries in favor of Prior
Lenders shall be terminated by Prior Lenders immediately upon such payment; and
(ii) all letters of credit issued or guaranteed by Prior Lender shall have been
cash collateralized, supported by a guaranty of Administrative Agent or
supported by a Letter of Credit issued pursuant to Annex B, as mutually agreed
54
upon by Administrative Agent, Borrowers and Prior Lenders.
5.02 Conditions Precedent to All Revolving Loans and Letters of Credit.
The obligation of each Revolving Lender to make any Revolving Loan requested by
the Borrowers on any date, or incur Letter of Credit Obligations 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 Borrower Representative 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 Borrower Representative to the Administrative Agent 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.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.01 Representations and Warranties of the Borrowers. In order to
induce the Lenders to enter into this Agreement and to make the Loans and the
other financial accommodations to the Borrowers and incur Letter of Credit
Obligations, each Borrower represents and warrants to each Lender 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.
55
(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 by such member's
board of directors 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, the current location of each Barneys Group
member's chief executive office and the warehouses and premises at which any
Collateral is located, and the Employer Identification Number of each member of
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 locations set forth
in Schedule 6.01-C has changed within the 12 months preceding the Closing Date.
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
56
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, each as amended, 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 Charges (including a
transferee or successor liability), 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 Property for any Restricted Junior Payment or
agreed to do so, except as permitted pursuant to Section 9.06 hereof.
(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 February 2, 2002, 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, all such returns are true, complete and
57
correct and Charges thereupon and upon their respective Property, assets, income
and franchises which are due and payable (whether or not shown on such returns
or reports) have been paid other than such Charges (A) which (i) were discharged
in any bankruptcy proceedings of the member or (ii) are 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. No adjustment relating to any tax return or report has
been proposed formally or informally by any Governmental Authority and, to the
knowledge of each Borrower, no basis exists for any such adjustment. Proper and
accurate amounts have been withheld by each Borrower from its respective
employees, independent contractors, creditors, members, partners and other third
parties for all periods in full and complete compliance with all applicable
federal, state, local and foreign laws and such withholdings have been timely
paid to the respective Governmental Authorities. No Borrower has executed or
filed with the IRS or any other Governmental Authority any agreement or other
document extending, or having the effect of extending, the period for assessment
or collection of any Charges. Except as indicated on Schedule 6.01-K, all
Charges that have been claimed, proposed, asserted or assessed against any
Borrower (or with respect to any of their assets) have been fully paid or
finally settled. 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.
(l) Performance. 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 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 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
58
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 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;
59
(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 warranties recording environmental matters, except
that such matters are also subject to Sections 6.01(e), 6.01(h),
6.01(i) and 6 01(m).
(p) ERISA Matters. Neither any Borrower nor any ERISA
Affiliate maintains or contributes to any Benefit 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 (or a
determination request has been submitted), 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 (or a determination request has
been submitted) and, to the knowledge of the Borrowers, each such determination
has not been revoked or, to the knowledge of the Borrowers, threatened to be
revoked, and neither any Borrower nor any ERISA Affiliate is aware of any event
that could reasonably be expected to adversely affect the tax-qualified status
of such Plans and trusts. 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 (with respect to any Benefit Plan) 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 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 material 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 of 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.
60
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, and no assets of any Benefit Plan are subject to
any Lien. 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
material payment to any employee or independent contractor pursuant to any Plan
or existing contract or arrangement. No actions, suits, claims, complaints,
charges, proceedings, hearings, examinations, investigations, audits or demands
with respect to any Plan (other than claims for benefits payable in the normal
operations of the Plans) are pending or, to the Borrowers' knowledge,
threatened, and, to the Borrowers' knowledge, there are no facts which could
give rise to or be expected to give rise to any actions, suits, claims,
complaints, charges, proceedings, hearings, examinations, investigations, audits
or demands.
(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 under which any Borrower could have liability.
Each Foreign Employee Benefit Plan under which any Borrower could have liability
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 under which any Borrower could have liability maintained by any
Borrower, any of their Subsidiaries or any ERISA Affiliate, reasonable reserves
have been established in accordance with prudent local 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, to the Borrowers' knowledge, threatened
in writing against any Borrower, any of their Subsidiaries or any ERISA
Affiliates with respect to any Foreign Employee Benefit Plan which could be
reasonably likely to 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, management
agreement, consulting agreement, employment agreement, bonus, restricted stock,
stock option, or stock appreciation plan or agreement or any similar plan,
agreement or arrangement covering any of the employees of any member of the
Barneys Group. As of the Closing Date (a) no strikes or other material labor
disputes against any member of the Barneys Group are pending or, to the
knowledge of any member of the Barneys Group, threatened; (b) to the knowledge
of the members of the Barneys Group, hours worked by and payment made to
employees of each member of the Barneys Group comply with the Fair Labor
Standards Act and each other federal, state, local or foreign law applicable to
such matters; (c) all payments due from any member of the Barneys Group for
employee health and welfare insurance have been paid or accrued as a liability
on the books of such member of the Barneys Group; (d) to the knowledge of the
members of the Barneys Group, there are no representation proceedings pending or
threatened with the National Labor Relations Board, and no labor organization or
group of employees of any member of the Barneys Group has made a pending demand
61
for recognition; and (e) to the knowledge of any member of the Barneys Group,
except as set forth in Schedule 6.01-R, there are no material complaints or
charges against any member of the Barneys Group pending or threatened to be
filed with any Governmental Authority or arbitrator based on, arising out of, in
connection with, or otherwise relating to the employment or termination of
employment by any member of the Barneys Group of any individual.
(s) Securities Activities. No member of the Barneys Group is
engaged in, nor will it engage in, the business of extending credit for the
purpose of purchasing or carrying Margin Stock. No member of the Barneys Group
owns any Margin Stock, and none of the proceeds of the Loans or other extensions
of credit under this Agreement will be used, directly or indirectly, for the
purpose of purchasing or carrying any Margin Stock, for the purpose of reducing
or retiring any Indebtedness that was originally incurred to purchase or carry
any Margin Stock or for any other purpose that might cause any of the Loans or
other extensions of credit under this Agreement to be considered a "purpose
credit" within the meaning of Regulations T, U or X of the Federal Reserve
Board. No member of the Barneys Group will take or, with actual knowledge,
permit to be taken any action that might cause any Loan Document to violate any
regulation of the Federal Reserve Board.
(t) Solvency. Both before and after giving effect to (a) the
Loans and Letter of Credit Obligations to be made or incurred on the Closing
Date or such other date as Loans and Letter of Credit Obligations requested
hereunder are made or incurred, (b) the disbursement of the proceeds of such
Loans pursuant to the instructions of Borrower Representative; (c) the
Refinancing, and (d) the payment and accrual of all transaction costs in
connection with the foregoing, each member of the Barneys Group is and will be
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 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,
62
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
6.0l-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 Lenders and the other
Holders, the transactions 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 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 Lenders and the other Holders, neither this Agreement
63
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. Except where the failure to have done so has had or could
reasonably be expected to have a Material Adverse Effect, each member of the
Barneys Group has received all deeds, assignments, waivers, consents,
nondisturbance and attornment or similar agreements, bills of sale and other
documents, and has duly effected all recordings, filings and other actions
necessary to establish, protect and perfect such Barneys Group member's right,
title and interest in and to all such Real Property and other properties and
assets. Schedule 6.01-V also describes any purchase options, rights of first
refusal or other similar contractual rights pertaining to any Real Property. As
of the Closing Date, except where the failure to have done so has had or could
reasonably be expected to have a Material Adverse Effect, all permits required
to have been issued or appropriate to enable the Real Property to be lawfully
occupied and used for all of the purposes for which it is currently occupied and
used have been lawfully issued and are in full force and 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.
(z) Brokers. No broker or finder brought about the obtaining,
making or closing of the Loans, and no member of the Barneys Group or Affiliate
thereof has any obligation to any Person in respect of any finder's or brokerage
fees in connection therewith.
(aa) Government Contracts. As of the Closing Date, no member
of the Barneys Group is a party to any material contract or agreement with any
Governmental Authority and no Barneys Group member's accounts are subject to the
Federal Assignment of Claims Act (31 U.S.C. Section 3727) or any similar state
or local law, each as amended.
(bb) Subordinated Indebtedness. As of the Closing Date,
Borrowers have delivered to Administrative Agent a complete and correct copy of
the Subordinated Notes (including all schedules, exhibits, amendments to which
any Borrower is a party, supplements, modifications, assignments and all other
documents delivered pursuant thereto or in connection therewith). Holdings and
the Borrowers have the corporate power and authority to incur the Indebtedness
evidenced by the Subordinated Notes. The subordination provisions of the
Subordinated Notes are enforceable against the holders of the Subordinated Notes
64
by Administrative Agent and Lenders. Borrowers acknowledge that Administrative
Agent and each Lender are entering into this Agreement and are extending the
Commitments in reliance upon the subordination provisions of the Subordinated
Notes and this Section 6.01(bb).
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
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 2002, a comparison of certain financial information to be
mutually agreed upon by the Borrowers and the Administrative Agent, (ii) with
65
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
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 ninety (90) days after the end of
each Fiscal Year, 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 2003, 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 2005, 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 up to and including the Fiscal Year 2005, 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;
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provided, however, that the failure to give any such notice shall not affect the
Administrative Agent's or such Lender's rights hereunder.
7.02 Collateral Reports. The Borrowers hereby agree that, from and
after the Closing Date and until the Commitment Termination Date, they shall
deliver to Administrative Agent or to Administrative Agent and Lenders, as
required, the various Collateral Reports at the times, to the Persons and in the
manner set forth in Annex C hereto.
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 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 Barney 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 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.
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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 reasonably should 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 reasonably should know that a non-exempt prohibited
transaction (defined in Sections 406 of ERISA and 4975 of the Internal Revenue
Code) involving any Borrower 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
Plan or the establishment of any new Plan or the commencement of contributions
to any Plan to which any Borrower or any ERISA Affiliate was not previously
contributing, unless such increased or new benefits could not, individually or
in the aggregate, result in a liability more than $1,000,000;
(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, or a letter threatening such a determination, 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;
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(x) within five (5) Business Days after any Borrower or
any ERISA Affiliate falls 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
in the Borrowers' possession as reasonably 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 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 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
69
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.
7.10 Permitted Subordinated Indebtedness. The Borrowers shall deliver
to the Administrative Agent, as soon as practicable, copies of all material
written notices given or received by any Borrower with respect to any Permitted
Subordinated Indebtedness of such Person, and, within two (2) Business Days
after any Borrower obtains knowledge of any matured or unmatured event of
default with respect to any Permitted Subordinated Indebtedness, notice of such
event of default.
7.11 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
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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 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 (a) the insurance policies and programs
listed on Schedule 6.01-W to the extent such policies are obtainable at
commercially reasonable rates, or (b) 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
71
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 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, shall not be renewed or shall
be altered adversely to the interests of the Administrative Agent 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, including reasonable attorneys' fees,
court costs and other charges related thereto, shall be part of the Obligations,
payable as provided herein and secured by the Collateral.
8.06 Inspection of Property; Books and Records; Discussions. (a)
Barneys shall 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.
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(c) Barneys shall cause the Inventory and the other Collateral
referred to in the definition of "Revolving 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 three 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 Lenders and the other Holders.
8.08 ERISA Compliance. Barneys shall, and shall cause each of its
Subsidiaries and ERISA Affiliates (with respect to Benefit Plans) 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
cause each of its Subsidiaries and ERISA Affiliates to establish, maintain and
operate all Foreign Employee Benefit Plans under which Barneys could have
liability 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 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 anticipate 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.
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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. Each Borrower will use
its 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 such Borrower's leases (other than the Isetan
Leases) for locations set forth on Schedule 6.01-V, and will use its
commercially reasonable efforts to obtain such landlord waivers relating to such
Borrower's leases for any location acquired or leased by such Borrower after the
Closing Date. Each Borrower shall use its commercially reasonable efforts to
obtain a bailee letter from the bailee with respect to any warehouse or other
location where Collateral is stored or located, which agreement or letter shall
contain a waiver or subordination of all Liens or claims that the bailee may
assert against the Collateral at that location, and shall otherwise be
reasonably satisfactory in form and substance to Administrative Agent. With
respect to such locations or warehouse space leased as of the Closing Date and
thereafter, if Administrative Agent has not received a landlord waiver or bailee
letter as of the Closing Date (or, if later, as of the date such location is
acquired or leased), any Borrower's Eligible Inventory at that location shall be
subject to Rent Reserves. After the Closing Date, no warehouse space shall be
leased by any Borrower without the prior written consent of Administrative Agent
(which consent, in Administrative Agent's discretion, may be conditioned upon
the exclusion from the Revolving Borrowing Base of Eligible Inventory at that
location or the establishment of reserves acceptable to Administrative Agent)
or, unless and until a reasonably satisfactory landlord waiver or bailee letter,
as appropriate, shall first have been obtained with respect to such location.
Each Borrower shall timely and fully pay and perform its obligations in all
material respects under all leases and other agreements with respect to each
leased location or public warehouse where any Collateral is or may be located.
8.13 Intellectual Property. Each member of the Barneys Group will
conduct its business and affairs without infringement of or interference with
any Intellectual Property of any other Person other than such infringements or
interferences that do not have or could not be reasonably likely to have a
Material Adverse Effect.
8.14 Further Assurances. Each member of the Barneys Group executing
this Agreement agrees that it shall and shall cause each other member of the
Barneys Group to, at such Barneys Group member's expense and upon request of
Administrative Agent, duly execute and deliver, or cause to be duly executed and
delivered, to Administrative Agent such further instruments and do and cause to
be done such further acts as may be necessary or proper in the reasonable
opinion of Administrative Agent to carry out more effectively the provisions and
purposes of this Agreement or any other Loan Document.
8.15 Supplemental Disclosure. From time to time as may be reasonably
requested by Administrative Agent (which request will not be made more
frequently than once each year absent the occurrence and continuance of a
Default or an Event of Default), the members of the Barneys Group shall
supplement each Schedule hereto, or any representation herein or in any other
Loan Document, with respect to any matter hereafter arising that, if existing or
occurring at the date of this Agreement, would have been required to be set
forth or described in such Schedule or as an exception to such representation or
that is necessary to correct any information in such Schedule or representation
which has been rendered inaccurate thereby (and, in the case of any supplements
74
to any Schedule, such Schedule shall be appropriately marked to show the changes
made therein); provided that (a) no such supplement to any such Schedule or
representation shall amend, supplement or otherwise modify any Schedule or
representation, or be or be deemed a waiver of any Default or Event of Default
resulting from the matters disclosed therein, except as consented to by
Administrative Agent and Requisite Lenders in writing, and (b) no supplement
shall be required or permitted as to representations and warranties that relate
solely to the Closing Date.
8.16 Post Closing Matters. The Borrowers shall cause each of the
requirements set forth on Schedule 8.16 to be satisfied on or before the date
set forth opposite such 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. (a) 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 (including the
Subordinated Notes and refinancings thereof or amendments or modifications
thereto that do not have the effect of increasing the principal amount thereof
or changing the amortization thereof (other than to extend the same) and that
are otherwise on terms and conditions no less favorable to any member of the
Barneys Group, Administrative Agent or any Lender, as reasonably determined by
Administrative Agent and the Requisite Lenders, than the terms of the
Indebtedness being refinanced, amended or modified), provided that at the time
such Indebtedness is incurred, no Default or Event of Default shall have
occurred and be continuing;
(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 or
advances made by one Borrower to another Borrower or from intercompany loans
made by Holdings to a Borrower; provided that: (A) each Borrower shall record
all intercompany transactions on its books and records in a manner reasonably
satisfactory to Administrative Agent; (B) the obligations of each Borrower under
any such intercompany loans shall be subordinated to the Obligations of such
Borrower hereunder in a manner reasonably satisfactory to Administrative Agent;
(C) at the time any such intercompany loan or advance is made by any Borrower to
any other Borrower and after giving effect thereto, each such Borrower shall be
Solvent; and (D) no Default or Event of Default would occur and be continuing
after giving effect to any such proposed intercompany loan;
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(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.
(b) No member of the Barneys Group shall, directly or
indirectly, voluntarily purchase, redeem, defease or prepay any principal of,
premium, if any, interest or other amount payable in respect of (i) any
Permitted Existing Indebtedness, other than upon any refinancing thereof in
accordance with Section 9.01(a)(ii) and (ii) as otherwise permitted in Section
9.06.
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 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; and
(v) the sale, assignment, transfer, lease, conveyance or
other disposition of assets from one Borrower to another Borrower.
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;
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(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; and
(vi) the subordinated Lien securing up to $15,000,000 of
the Permitted Subordinated Indebtedness pursuant to (and subject to) terms and
conditions reasonably satisfactory to the Administrative Agent and the Requisite
Lenders.
In addition, no member of the Barneys Group shall become a
party to any agreement, note, indenture or instrument, or take any other action,
that would prohibit the creation of a Lien on any of its properties or other
assets in favor of Administrative Agent, on behalf of itself and Lenders, as
additional collateral for the Obligations, except operating leases, Capital
Leases or licenses which prohibit Liens upon the assets that are subject
thereto.
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) Investments in Cash Equivalents;
(iii) Permitted Existing Investments in an amount not
greater than the amount thereof on the Closing Date;
(iv) Investments by one Borrower in another Borrower;
(v) 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;
(vi) Investments in Barneys Japan in accordance with the
Barneys Japan Option, provided that (A) the Term Loan has been paid in full in
cash, (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;
77
(vii) loans to Holdings, provided that (A) the Term Loan
has been paid in full in cash, (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
(viii) 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 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);
78
(iv) prepayments and payments of principal on the
Permitted Subordinated Indebtedness and purchases of the Capital Stock of
Holdings, provided that (A) the Term Loan has been paid in full in cash, (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.
(v) payments of principal and interest of intercompany
loans and advances issued in accordance with Section 9.01; and
(vi) 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
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 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
79
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 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; or
(ix) take, or permit any member of the Barneys Group to
take, any action that could reasonably result in a Termination Event;
80
except where, under the foregoing clauses (i) through (viii), such liability
could not reasonably be expected to exceed $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 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 a member of the
Barneys Group has dominion and control and the Administrative Agent does not
have dominion and control), the fiduciary accounts listed on Schedule 9.16 under
the heading "Fiduciary Accounts" (over which 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 $1,000,000.
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 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
81
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.
9.20 Employee Loans. No member of the Barneys Group shall enter into
any lending or borrowing transaction with any employees of any member of the
Barneys Group, except loans to its respective employees in the ordinary course
of business consistent with past practices for travel and entertainment
expenses, relocation costs and similar purposes and stock option financing up to
a maximum of $500,000 to any employee and up to a maximum of $1,000,000 in the
aggregate at any one time outstanding.
9.21 Cancellation of Indebtedness. No member of the Barneys Group shall
cancel any claim or debt owing to it, except for reasonable consideration
negotiated on an arm's length basis and in the ordinary course of its business
consistent with past practices.
9.22 Change of Corporate Name or Location. No member of the Barneys
Group shall (a) change its name as it appears in official filings in the state
of its incorporation or other organization, (b) change its chief executive
office, principal place of business, corporate offices or warehouses or
locations at which Collateral is held or stored, or the location of its records
concerning the Collateral, (c) change the type of entity that it is, (d) change
its organization identification number, if any, issued by its state of
incorporation or other organization, or (e) change its state of incorporation or
organization, in each case without at least 30 days prior written notice to
Administrative Agent (other than with respect to clause (b) above, for which 5
days prior written notice to the Administrative Agent shall be required) and
after Administrative Agent's written acknowledgment that any reasonable action
requested by Administrative Agent in connection therewith, including to continue
the perfection of any Liens in favor of Administrative Agent, on behalf of
Lenders, in any Collateral, has been completed or taken, and provided that any
such new location shall be in the United States.
9.23 No Impairment of Intercompany Transfers. No member of the Barneys
Group shall directly or indirectly enter into or become bound by any agreement,
instrument, indenture or other obligation (other than this Agreement and the
other Loan Documents) that could directly or indirectly restrict, prohibit or
require the consent of any Person with respect to the payment of dividends or
distributions or the making or repayment of intercompany loans by a Subsidiary
of any Borrower to any Borrower or between Borrowers.
9.24 No Speculative Transactions. No member of the Barneys Group shall
engage in any transaction involving commodity options, futures contracts or
similar transactions, except solely to hedge against fluctuations in the prices
of commodities owned or purchased by it and the values of foreign currencies
receivable or payable by it and Interest Rate Contracts.
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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
Holdings and 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 2002 $128,000,000
Second fiscal quarter of Fiscal Year 2002 $124,000,000
Third fiscal quarter of Fiscal Year 2002 $126,000,000
Fourth fiscal quarter of Fiscal Year 2002 $132,000,000
First fiscal quarter of Fiscal Year 2003 $130,000,000
Second fiscal quarter of Fiscal Year 2003 $128,000,000
Third fiscal quarter of Fiscal Year 2003 $130,000,000
Fourth fiscal quarter of Fiscal Year 2003 $136,000,000
First fiscal quarter of Fiscal Year 2004 $136,000,000
Second fiscal quarter of Fiscal Year 2004 $136,000,000
Third fiscal quarter of Fiscal Year 2004 $140,000,000
Fourth fiscal quarter of Fiscal Year 2004 $147,000,000
Each fiscal quarter thereafter $136,000,000
10.02 Intentionally Deleted.
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 Financial Covenant 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 2002 $0
Second fiscal quarter of Fiscal Year 2002 $0
Third fiscal quarter of Fiscal Year 2002 $5,000,000
Fourth fiscal quarter of Fiscal Year 2002 $16,000,000
First fiscal quarter of Fiscal Year 2003 $18,000,000
Second fiscal quarter of Fiscal Year 2003 $20,000,000
Third fiscal quarter of Fiscal Year 2003 $22,000,000
Fourth fiscal quarter of Fiscal Year 2003 $25,000,000
First fiscal quarter of Fiscal Year 2004 $25,000,000
Second fiscal quarter of Fiscal Year 2004 $26,000,000
83
Third fiscal quarter of Fiscal Year 2004 $27,000,000
Each fiscal quarter thereafter $28,000,000
10.04 Maximum Capital Expenditures. Capital Expenditures made or
incurred by the members of the Barneys Group on a consolidated basis (a) with
respect to Fiscal Year 2002 shall not exceed during such Fiscal Year, an
aggregate amount of $5,000,000, (b) with respect to any Fiscal Year thereafter,
shall not exceed during any such Fiscal Year, an aggregate amount of
$10,000,000; 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 or Permitted Subordinated Indebtedness loaned to Barneys, but
only to the extent not required in the calculation of Consolidated EBITDA in
order for the Borrowers to meet the financial covenant set forth in Section
10.3, (ii) with respect to Fiscal Year 2003, by the amount (on a dollar for
dollar basis) by which Consolidated EBITDA calculated as of the last day of the
fourth fiscal quarter of Fiscal Year 2002 exceeds $16,000,000, if any, for such
fiscal quarter, provided that such amount shall not exceed $1,000,000 in the
aggregate for such Fiscal Year, and (iii) with respect to Fiscal Year 2004, by
the amount (on a dollar for dollar basis) by which Consolidated EBITDA
calculated as of the last day of the fourth fiscal quarter of Fiscal Year 2003
exceeds $25,000,000, if any, for such fiscal quarter, provided that such amount
shall not exceed $2,000,000 in the aggregate for such Fiscal Year, 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. Any Borrower shall fail to
perform or observe duly and punctually any agreement, covenant or obligation
binding on such Person under (A) Sections 2.03, 3.05, 7.02, 7.03, 7.08(a), 8.01,
8.05, 8.06, 8.07, 8.16, or (B) Article IX or Article X.
(c) Breach of Representation or Warranty. Any representation
or warranty made or deemed made by Holdings or any Borrower to the
Administrative Agent or any Lender herein or in any other Loan Document or in
any statement or certificate at any time given by any such Person pursuant to
84
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(b), and (ii) thirty (30)
days after the occurrence thereof with respect to any other term,
(e) Default as to Other Indebtedness; Isetan Leases.
(i) 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 or permit
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 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
85
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 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 and/or the Lenders contemplated by the Loan Documents shall, at any time,
86
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 reasonably believes could reasonably be expected to subject
any Borrower, either directly or through an 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 any Borrower, either directly or through an ERISA
Affiliate, to a material liability.
(m) Change of Control. A Change of Control shall occur with
respect to Holdings.
(n) Borrowing Base Certificate; Representations. Any
information contained in any Borrowing Base Certificate is untrue or incorrect
in any respect (other than inadvertent, immaterial errors in any Borrowing Base
Certificate, provided that (i) any such error shall not result in the Borrowers
having Availability less than zero as of any date of determination and (ii) the
Borrowers shall have provided a corrected Borrowing Base Certificate to the
Administrative Agent within five (5) days from the date which any of the
Borrowers or any of their respective Affiliates, officers, employees, directors
or agents has actual knowledge of any such error) or any representation or
warranty herein or in any Loan Document or in any written statement, report,
financial statement or certificate (other than a Borrowing Base Certificate)
made or delivered to Administrative Agent or any Lender by any Borrower
Representative is untrue or incorrect in any material respect as of the date
when made or deemed made.
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 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
and require that the Letter of Credit Obligations be cash collateralized as
provided in Annex B, whereupon the Commitments and the obligation of each Lender
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to make any Loan hereunder and of each Lender or to incur Letter of Credit
Obligations not then incurred shall immediately terminate, (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, and/or (iii) or exercise
any rights and remedies provided to Administrative Agent under the Loan
Documents or at law or equity, including all remedies provided under the Uniform
Commercial Code.
(b) 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 and the Lenders therefore, the Borrowers agree that the
Administrative Agent 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.
(c) Waivers by Barneys Group. Except as otherwise provided for
in this Agreement or by applicable law, each member of the Barneys Group waives
(including for purposes of Article XIV): (a) presentment, demand and protest and
notice of presentment, dishonor, notice of intent to accelerate, notice of
acceleration, protest, default, nonpayment, maturity, release, compromise,
settlement, extension or renewal of any or all commercial paper, accounts,
contract rights, documents, instruments, chattel paper and guaranties at any
time held by Administrative Agent on which any member of the Barneys Group may
in any way be liable, and hereby ratifies and confirms whatever Administrative
Agent may do in this regard absent the Administrative Agent's gross negligence
or willful misconduct, (b) to the extent permitted by applicable law, all rights
to notice and a hearing prior to Administrative Agent's taking possession or
control of, or to Administrative Agent's replevy, attachment or levy upon, the
Collateral or any bond or security that might be required by any court prior to
allowing Administrative Agent to exercise any of its remedies, and (c) the
benefit of all valuation, appraisal, marshaling and exemption laws.
11.03 Remedies. Administrative Agent's and Lenders' rights and remedies
under this Agreement shall be cumulative and nonexclusive of any other rights
and remedies that Administrative Agent or any Lender may have under any other
agreement, including the other Loan Documents, by operation of law or otherwise.
Recourse to the Collateral shall not be required.
ARTICLE XII
THE ADMINISTRATIVE AGENT
12.01 Appointment. GE Capital is hereby appointed to act on behalf of
all Lenders as Administrative Agent under this Agreement and the other Loan
Documents. The provisions of this Section 12.01 are solely for the benefit of
Administrative Agent and Lenders and no member of the Barneys Group nor any
other Person shall have any rights as a third party beneficiary of any of the
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provisions hereof. In performing its functions and duties under this Agreement
and the other Loan Documents, except to the limited extent provided in Section
13.01(c), the Administrative Agent shall act solely as an agent of Lenders and
does not assume and shall not be deemed to have assumed any obligation toward or
relationship of agency or trust with or for any member of the Barneys Group or
any other Person. Administrative Agent shall have no duties or responsibilities
except for those expressly set forth in this Agreement and the other Loan
Documents. The duties of Administrative Agent shall be mechanical and
administrative in nature and Administrative Agent shall not have, or be deemed
to have, by reason of this Agreement, any other Loan Document or otherwise a
fiduciary relationship in respect of any Lender. Except as expressly set forth
in this Agreement and the other Loan Documents, Administrative Agent shall not
have any duty to disclose, and shall not be liable for failure to disclose, any
information relating to any member of the Barneys Group or any of their
respective Subsidiaries or any account debtor that is communicated to or
obtained by GE Capital or any of its Affiliates in any capacity. Neither
Administrative Agent nor any of its Affiliates nor any of their respective
officers, directors, employees, agents or representatives shall be liable to any
Lender for any action taken or omitted to be taken by it hereunder or under any
other Loan Document, or in connection herewith or therewith, except for damages
caused by its or their own gross negligence or willful misconduct.
If Administrative Agent shall request instructions from
Requisite Lenders or all affected Lenders with respect to any act or action
(including failure to act) in connection with this Agreement or any other Loan
Document, then Administrative Agent shall be entitled to refrain from such act
or taking such action unless and until Administrative Agent shall have received
instructions from Requisite Lenders or all affected Lenders, as the case may be,
and Administrative Agent shall not incur liability to any Person by reason of so
refraining. Administrative Agent shall be fully justified in failing or refusing
to take any action hereunder or under any other Loan Document (a) if such action
would, in the opinion of Administrative Agent, be contrary to law or the terms
of this Agreement or any other Loan Document, (b) if such action would, in the
opinion of Administrative Agent, expose Administrative Agent to Liabilities and
Costs or (c) if Administrative Agent shall not first be indemnified to its
satisfaction against any and all liability and expense which may be incurred by
it by reason of taking or continuing to take any such action. Without limiting
the foregoing, no Lender shall have any right of action whatsoever against
Administrative Agent as a result of Administrative Agent acting or refraining
from acting hereunder or under any other Loan Document in accordance with the
instructions of Requisite Lenders or all affected Lenders, as applicable.
12.02 Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon Administrative Agent or any other Lender
and based on the Financial Statements referred to in Section 6.01(h) and such
other documents and information as it has deemed appropriate, made its own
credit and financial analysis of the Barneys Group and its own decision to enter
into this Agreement. Each Lender also acknowledges that it will, independently
and without reliance upon Administrative Agent or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement. Each Lender acknowledges the potential conflict of interest of
each other Lender as a result of Lenders holding disproportionate interests in
the Loans, and expressly consents to, and waives any claim based upon, such
conflict of interest.
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12.03 Rights, Exculpation, Etc. Neither Administrative Agent nor any of
its Affiliates nor any of their respective directors, officers, agents or
employees shall be liable for any action taken or omitted to be taken by it or
them under or in connection with this Agreement or the other Loan Documents,
except for damages caused by its or their own gross negligence or willful
misconduct. Without limiting the generality of the foregoing, Administrative
Agent: (a) may treat the payee of any Note as the holder thereof until
Administrative Agent receives written notice of the assignment or transfer
thereof signed by such payee and in form reasonably satisfactory to
Administrative Agent; (b) may consult with legal counsel, independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken by it in good faith in accordance with the
advice of such counsel, accountants or experts; (c) makes no warranty or
representation to any Lender and shall not be responsible to any Lender for any
statements, warranties or representations made in or in connection with this
Agreement or the other Loan Documents; (d) shall not have any duty to ascertain
or to inquire as to the performance or observance of any of the terms, covenants
or conditions of this Agreement or the other Loan Documents on the part of any
member of the Barneys Group or to inspect the Collateral (including the books
and records) of any member of the Barneys Group; (e) shall not be responsible to
any Lender for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or the other Loan Documents
or any other instrument or document furnished pursuant hereto or thereto; and
(f) shall incur no liability under or in respect of this Agreement or the other
Loan Documents by acting upon any notice, consent, certificate or other
instrument or writing (which may be by telecopy, telegram, cable or telex)
believed by it to be genuine and signed or sent by the proper party or parties.
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 good 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. Lenders agree to indemnify Administrative Agent
(to the extent not reimbursed by the Barneys Group and without limiting the
obligations of Borrowers hereunder), ratably according to their respective Pro
Rata Shares, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever that may be imposed on, incurred by, or
asserted against Administrative Agent in any way relating to or arising out of
this Agreement or any other Loan Document or any action taken or omitted to be
taken by Administrative Agent in connection therewith; provided, that no Lender
shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from Administrative Agent's gross negligence or willful misconduct.
Without limiting the foregoing, each Lender agrees to reimburse Administrative
Agent promptly upon demand for its ratable share of any out-of-pocket expenses
(including reasonable counsel fees) incurred by Administrative Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement and each other Loan Document, to the
extent that Administrative Agent is not reimbursed for such expenses by the
Barneys Group.
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12.06 GE Capital and Affiliates. With respect to its Commitments
hereunder, GE Capital shall have the same rights and powers under this Agreement
and the other Loan Documents as any other Lender and may exercise the same as
though it were not Administrative Agent; and the term "Lender" or "Lenders"
shall, unless otherwise expressly indicated, include GE Capital in its
individual capacity. GE Capital and its Affiliates may lend money to, invest in,
and generally engage in any kind of business with, any member of the Barneys
Group, any of their Affiliates and any Person who may do business with or own
securities of any Credit Party or any such Affiliate, all as if GE Capital were
not Administrative Agent and without any duty to account therefor to Lenders. GE
Capital and its Affiliates may accept fees and other consideration from any
member of the Barneys Group for services in connection with this Agreement or
otherwise without having to account for the same to Lenders. Each Lender
acknowledges the potential conflict of interest between GE Capital as a Lender
holding disproportionate interests in the Loans and GE Capital as Administrative
Agent.
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 Borrower Representative 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 Borrower Representative
(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 which shall be a Lender, if a Lender is
willing to accept such appointment, or otherwise shall be a commercial bank or
financial institution or a subsidiary of a commercial bank or financial
institution if such commercial bank or financial institution is organized under
the laws of the United States of America or of any state thereof and has a
combined capital and surplus of at least $300,000,000. If no successor
Administrative Agent has been appointed pursuant to the foregoing, within 30
days after the date such notice of resignation was given by the resigning
Administrative Agent, such resignation shall become effective and the Requisite
Lenders shall thereafter perform all the duties of Administrative Agent
hereunder until such time, if any, as the Requisite Lenders appoint a successor
Administrative Agent as provided above.
(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. Upon the earlier of the
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acceptance of any appointment as Administrative Agent hereunder by a successor
Administrative Agent or the effective date of the resigning Administrative
Agent's resignation, the retiring Administrative Agent shall be discharged from
its duties and obligations hereunder and under the other Loan Documents
thereafter to be performed, except that any indemnity rights or other rights in
favor of such resigning Administrative Agent shall continue. After any retaining
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 Administrative Agent and the Requisite
Lenders, it being the intent of Lenders that any such action to protect or
enforce rights under this Agreement and the Notes shall be taken in concert and
at the direction or with the consent of Administrative Agent or 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 Borrower Representative 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 authorizes and directs the
Administrative Agent to enter into the Loan Documents relating to the Collateral
for the benefit of the Lenders. Each Lender 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. Without limiting the generality of the
foregoing, the Administrative Agent shall have the sole and exclusive right and
authority to (i) act as the disbursing and collecting agent for the Lenders with
respect to all payments and collections arising in connection herewith and with
the 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 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, authorizes and directs each Lender to act as collateral
sub-agent for the Administrative Agent, the Lenders for purposes of the
perfection of all security interests and Liens with respect to the Borrowers'
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and their respective Subsidiaries' respective deposit accounts maintained with,
and cash and Cash Equivalents held by, such Lender; (iv) manage, supervise and
otherwise deal with the Collateral; (v) take such action as is necessary or
desirable to maintain the perfection and priority of the security interests and
liens created or purported to be created by the 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 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 and the Lenders 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 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 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 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 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.
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(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.
12.10 Revolving Loans; Payments; Non-Funding Lenders; Information.
(a) Revolving Loans; Payments.
(i) Revolving Lenders shall refund or participate in the
Swing Loan in accordance with Section 2.02(c). If the Swing Loan Lender declines
to make a Swing Line Loan or if Swing Line availability is zero, Administrative
Agent shall notify Revolving Lenders, promptly after receipt of a Notice of
Borrowing and in any event prior to 1:00 p.m. (New York time) on the date such
Notice of Borrowing is received, by telecopy, telephone or other similar form of
transmission. Each Revolving Lender shall make the amount of such Lender's Pro
Rata Share of such Revolving Loan available to Administrative Agent in same day
funds by wire transfer to Administrative Agent's account as set forth in Annex A
not later than 3:00 p.m. (New York time) on the requested funding date, in the
case of an Floating Rate Loan, and not later than 11:00 a.m. (New York time) on
the requested funding date, in the case of a Fixed Rate Loan. After receipt of
such wire transfers (or, in the Administrative Agent's sole discretion, before
receipt of such wire transfers), subject to the terms hereof, Administrative
Agent shall make the requested Revolving Loan to the Borrower designated by
Borrower Representative in the Notice of Borrowing. All payments by each
Revolving Lender shall be made without setoff, counterclaim or deduction of any
kind.
(ii) On the 2nd Business Day of each calendar week or
more frequently at Administrative Agent's election (each, a "Settlement Date"),
Administrative Agent shall advise each Lender by telephone, or telecopy of the
amount of such Lender's Pro Rata Share of principal, interest and fees paid for
the benefit of Lenders with respect to each applicable Loan. Provided that each
Lender has funded all payments or Revolving Loans required to be made by it and
has purchased all participations required to be purchased by it under this
Agreement and the other Loan Documents as of such Settlement Date,
Administrative Agent shall pay to each Lender such Lender's Pro Rata Share of
principal, interest and fees paid by Borrowers since the previous Settlement
Date for the benefit of such Lender on the Loans held by it. To the extent that
any Lender (a "Non-Funding Lender") has failed to fund all such payments and
Advances or failed to fund the purchase of all such participations,
Administrative Agent shall be entitled to set off the funding short-fall against
that Non-Funding Lender's Pro Rata Share of all payments received from
Borrowers. Such payments shall be made by wire transfer to such Lender's account
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(as specified by such Lender in Annex A or the applicable Assignment Agreement)
not later than 2:00 p.m. (New York time) on the next Business Day following each
Settlement Date.
(b) Availability of Lender's Pro Rata Share. Administrative
Agent may assume that each Revolving Lender will make its Pro Rata Share of each
Revolving Loan available to Administrative Agent on each funding date. If such
Pro Rata Share is not, in fact, paid to Administrative Agent by such Revolving
Lender when due, Administrative Agent will be entitled to recover such amount on
demand from such Revolving Lender without setoff, counterclaim or deduction of
any kind. If any Revolving Lender fails to pay the amount of its Pro Rata Share
forthwith upon Administrative Agent's demand, Administrative Agent shall
promptly notify Borrower Representative and Borrowers shall immediately repay
such amount to Administrative Agent. Nothing in this Section 12.10(b) or
elsewhere in this Agreement or the other Loan Documents shall be deemed to
require Administrative Agent to advance funds on behalf of any Revolving Lender
or to relieve any Revolving Lender from its obligation to fulfill its
Commitments hereunder or to prejudice any rights that Borrowers may have against
any Revolving Lender as a result of any default by such Revolving Lender
hereunder. To the extent that Administrative Agent advances funds to any
Borrower on behalf of any Revolving Lender and is not reimbursed therefor on the
same Business Day as such Revolving Loan is made, Administrative Agent shall be
entitled to retain for its account all interest accrued on such Advance until
reimbursed by the applicable Revolving Lender.
(c) Return of Payments.
(i) If Administrative Agent pays an amount to a Lender
under this Agreement in the belief or expectation that a related payment has
been or will be received by Administrative Agent from Borrowers and such related
payment is not received by Administrative Agent, then Administrative Agent will
be entitled to recover such amount from such Lender on demand without setoff,
counterclaim or deduction of any kind.
(ii) If Administrative Agent determines at any time that
any amount received by Administrative Agent under this Agreement must be
returned to any Borrower or paid to any other Person pursuant to any insolvency
law or otherwise, then, notwithstanding any other term or condition of this
Agreement or any other Loan Document, Administrative Agent will not be required
to distribute any portion thereof to any Lender. In addition, each Lender will
repay to Administrative Agent on demand any portion of such amount that
Administrative Agent has distributed to such Lender, together with interest at
such rate, if any, as Administrative Agent is required to pay to any Borrower or
such other Person, without setoff, counterclaim or deduction of any kind.
(d) Non-Funding Lenders. The failure of any Non-Funding Lender
to make any Revolving Loan or any payment required by it hereunder or to
purchase any participation in any Swing Loan to be made or purchased by it on
the date specified therefor shall not relieve any other Lender (each such other
Revolving Lender, an "Other Lender") of its obligations to make such Revolving
Loan or purchase such participation on such date, but neither any Other Lender
nor Administrative Agent shall be responsible for the failure of any Non-Funding
Lender to make a Revolving Loan, purchase a participation or make any other
payment required hereunder. Notwithstanding anything set forth herein to the
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contrary, a Non-Funding Lender shall not have any voting or consent rights under
or with respect to any Loan Document or constitute a "Lender" or a "Revolving
Lender" (or be included in the calculation of "Requisite Lenders" hereunder) for
any voting or consent rights under or with respect to any Loan Document. At
Borrower Representative's request, Administrative Agent or a Person reasonably
acceptable to Administrative Agent shall have the right with Administrative
Agent's reasonable consent to purchase (except that the Administrative Agent
shall have no obligation to so purchase) from any Non-Funding Lender, and each
Non-Funding Lender agrees that it shall, at Administrative Agent's request, sell
and assign to Administrative Agent or such Person, all of the Commitments of
that Non-Funding Lender for an amount equal to the principal balance of all
Loans held by such Non-Funding Lender and all accrued interest and fees with
respect thereto through the date of sale, such purchase and sale to be
consummated pursuant to an executed Assignment and Acceptance.
(e) Dissemination of Information. Administrative Agent shall
use reasonable efforts to provide Lenders with any notice of Default or Event of
Default received by Administrative Agent from, or delivered by Administrative
Agent to, any Borrower, with notice of any Event of Default of which
Administrative Agent has actually become aware and with notice of any action
taken by Administrative Agent following any Event of Default; provided, that
Administrative Agent shall not be liable to any Lender for any failure to do so,
except to the extent that such failure is attributable to Administrative Agent's
gross negligence or willful misconduct. Lenders acknowledge that Borrowers are
required to provide financial statements and reports to Lenders in accordance
with Article VII hereto and agree that Administrative Agent shall have no duty
to provide the same to Lenders.
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) with respect to an assignment of a
Lender's portion of such Lender's (A) Revolving Loan Commitment, such assignment
shall be in an amount at least equal to $10,000,000, or (B) interest in the Term
Loan, such assignment shall be in an amount at least equal to $1,000,000, except
in each case 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 assignment of all or a
portion of the assigning Lender's Revolving Loan Commitment or interest in the
Term Loan, as the case may be (including the same portion of the Loans at the
time owing to it, the Notes held by it and its participating interest in the
risk relating to any Letters of Credit); and (v) the parties to each such
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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 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). Each Borrower hereby acknowledges and agrees that any assignment shall
give rise to a direct obligation of Borrowers to the assignee and that the
assignee shall be considered to be a "Lender". In all instances, each Lender's
liability to make Loans hereunder shall be several and not joint and shall be
limited to such Lender's Pro Rata Share of the applicable Commitment. In the
event Administrative Agent or any Lender assigns or otherwise transfers all or
any part of the Obligations, Administrative Agent or any such Lender shall so
notify Borrowers and Borrowers shall, upon the request of Administrative Agent
or such Lender, execute new Notes in exchange for the Notes, if any, being
assigned. Notwithstanding the foregoing provisions of this Section 13.01(b), (A)
any Lender may at any time pledge the Obligations held by it and such Lender's
rights under this Agreement and the other Loan Documents to a Federal Reserve
Bank provided that no such pledge to a Federal Reserve Bank shall release such
Lender from such Lender's obligations hereunder or under any other Loan
Document, and (B) any Lender that is an investment fund may assign the
Obligations held by it and such Lender's rights under this Agreement and the
other Loan Documents to another investment fund managed by the same investment
advisor provided that such Lender shall notify the Administrative Agent of any
such assignment for purposes of maintaining the Register in accordance with
Section 13.01(c) hereof, such assignment to become effective upon the
recordation of such assignment in the Register.
(c) The Register. The Administrative Agent, acting as agent
for the Lenders and, solely for the purposes of Treasury Regulation Section
5f.103-1(c) under this Section 13.01(c), the Borrowers, 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
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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 $3,500 (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 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) [Intentionally Omitted]
(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
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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 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. Notwithstanding the foregoing, solely for purposes of
Sections 3.03, 3.04, 4.02(f), 4.02(e), 13.03 and 13.05, each Borrower
acknowledges and agrees that a participation shall give rise to a direct
obligation of Borrowers to the participant and the participant shall be
considered to be a "Lender"; provided, however, that such Borrower's obligations
to such participant shall not exceed the obligations under the foregoing
Sections that would otherwise be payable to the Lender from whom such
participant purchased its 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.
(j) Relief from Obligations. Except as expressly provided in
this Section 13.01, no Lender shall, as between Borrowers and that Lender, or
Administrative Agent and that Lender, be relieved of any of its obligations
hereunder as a result of any sale, assignment, transfer or negotiation of, or
granting of participation in, all or any part of the Loans, the Notes or other
Obligations owed to such Lender.
(k) Assistance. Each member of the Barneys Group executing
this Agreement shall reasonably assist any Lender permitted to sell assignments
or participations under this Section 13.01 as reasonably required to enable the
assigning or selling Lender to effect any such assignment or participation,
including the execution and delivery of any and all agreements, notes and other
documents and instruments as shall be requested and, if requested by
Administrative Agent, the preparation of informational materials for, and the
participation of management in meetings with, potential assignees or
participants. Each member of the Barneys Group executing this Agreement shall
certify the correctness, completeness and accuracy in all material respects of
all descriptions of the Barneys Group and their respective affairs contained in
any selling materials provided by them, except that any projections delivered by
Borrowers shall only be certified by Borrowers as having been prepared by
Borrowers in compliance with the representations contained in Section 6.01(h).
13.02 Expenses.
(a) General. 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,
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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, Paul, Hastings, Xxxxxxxx & Xxxxxx LLP, 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 and the Lenders upon demand for all
out-of-pocket costs and expenses, including, without limitation, reasonable
attorneys' fees (including allocated costs of internal counsel and costs of
settlement), incurred by the Administrative Agent 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 the Administrative Agent and each
and all of the Lenders and each of their respective Affiliates, and each of the
Administrative Agent's, Lender's or Affiliate's respective officers, directors,
employees, attorneys and agents (including, without limitation, those retained
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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 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 any "Accounting Changes" (as
defined below) occur and such changes result in a change in the calculation of
the financial covenants, standards or terms used in the Agreement or any other
Loan Document, then Borrowers, Administrative Agent and Lenders agree to enter
into negotiations in order to amend such provisions of the Agreement so as to
equitably reflect such Accounting Changes with the desired result that the
criteria for evaluating Borrowers' and their Subsidiaries' financial condition
shall be the same after such Accounting Changes as if such Accounting Changes
had not been made; provided, however, that the agreement of Requisite Lenders to
any required amendments of such provisions shall be sufficient to bind all
Lenders. "Accounting Changes" means (i) changes in accounting principles
required by the promulgation of any rule, regulation, pronouncement or opinion
by the Financial Accounting Standards Board of the American Institute of
Certified Public Accountants (or successor thereto or any agency with similar
functions), (ii) changes in accounting principles concurred in by any Borrower's
certified public accountants; (iii) purchase accounting adjustments under A.P.B.
16 or 17 and EITF 88-16, and the application of the accounting principles set
forth in FASB 109, including the establishment of reserves pursuant thereto and
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any subsequent reversal (in whole or in part) of such reserves; and (iv) the
reversal of any reserves established as a result of purchase accounting
adjustments. If Administrative Agent, Borrowers and Requisite Lenders agree upon
the required amendments, then after appropriate amendments have been executed
and the underlying Accounting Change with respect thereto has been implemented,
any reference to GAAP contained in the Agreement or in any other Loan Document
shall, only to the extent of such Accounting Change, refer to GAAP, consistently
applied after giving effect to the implementation of such Accounting Change. If
Administrative Agent, Borrowers and Requisite Lenders cannot agree upon the
required amendments within 30 days following the date of implementation of any
Accounting Change, then all Financial Statements delivered and all calculations
of financial covenants and other standards and terms in accordance with the
Agreement and the other Loan Documents shall be prepared, delivered and made
without regard to the underlying Accounting Change. For purposes of Section
11.01, a breach of a financial covenant contained in Article IX shall be deemed
to have occurred as of any date of determination by Administrative Agent or as
of the last day of any specified measurement period regardless of when the
financial statements reflecting such breach are delivered to Administrative
Agent.
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 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
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receipt of such payment) in such Obligations owed to the others so that all such
recoveries with respect to such Obligations shall he 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.
(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) [intentionally deleted];
(ii) increasing the amount of any of the Commitments,
(iii) reducing the principal of, rate or amount of
interest on the Revolving Loans, Term Loan or Reimbursement Obligations or any
fees or other amounts payable to any Lender,
(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 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 "Revolving Borrowing Base" (except as provided within such
definition) or amending any definition used in the definition of "Revolving
Borrowing Base" if the result of such amendment is to increase such advance
rates, or
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(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.
(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.
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13.09 Survival of Warranties and Agreements. Except as otherwise
expressly provided for in the Loan Documents, no termination or cancellation
(regardless of cause or procedure) of any financing arrangement under this
Agreement shall in any way affect or impair the obligations, duties and
liabilities of the Barneys Group or the rights of Administrative Agent and
Lenders relating to any unpaid portion of the Loans or any other Obligations,
due or not due, liquidated, contingent or unliquidated, or any transaction or
event occurring prior to such termination, or any transaction or event, the
performance of which is required after the Commitment Termination Date. Except
as otherwise expressly provided herein or in any other Loan Document, all
undertakings, agreements, covenants, warranties and representations of or
binding upon the Barneys Group, and all rights of Administrative Agent and each
Lender, all as contained in the Loan Documents, shall not terminate or expire,
but rather shall survive any such termination or cancellation and shall continue
in full force and effect until the Obligations have been repaid in full in cash;
provided, that the provisions of Article XIII, the payment obligations under
Sections 3.04, 4.02(f) and 4.02(e), and the indemnities contained in the Loan
Documents shall survive the repayment of the Obligations.
13.10 Failure of Indulgence Not Waiver, Remedies Cumulative. No failure
or delay on the part of the Administrative Agent, any Lender 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 enlisting 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
or any Lender shall be under any obligation to marshal 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 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. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY OF
THE LOAN DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE, THE LOAN DOCUMENTS AND THE OBLIGATIONS SHALL BE
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GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF
THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE
AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. EACH OF THE
ADMINISTRATIVE AGENT AND THE LENDERS HEREBY CONSENTS TO THE NON-EXCLUSIVE
JURISDICTION OF THE STATE OR FEDERAL COURTS LOCATED IN XXX XXXX XXXXXX, XXXX XX
XXX XXXX, XXX XXXX. EACH MEMBER OF THE BARNEYS GROUP HEREBY CONSENTS AND AGREES
THAT THE STATE OR FEDERAL COURTS LOCATED IN XXX XXXX XXXXXX, XXXX XX XXX XXXX,
XXX XXXX SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR
DISPUTES BETWEEN THE BORROWERS, ADMINISTRATIVE AGENT AND LENDERS PERTAINING TO
THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY MATTER ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS; PROVIDED,
THAT ADMINISTRATIVE AGENT, LENDERS AND THE BARNEYS GROUP ACKNOWLEDGE THAT ANY
APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY X XXXXX XXXXXXX XXXXXXX XX XXX
XXXX XXXXXX; AND PROVIDED, FURTHER, THAT NOTHING IN THIS AGREEMENT SHALL BE
DEEMED OR OPERATE TO PRECLUDE ADMINISTRATIVE AGENT FROM BRINGING SUIT OR TAKING
OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO REALIZE ON THE COLLATERAL OR ANY
OTHER SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT
ORDER IN FAVOR OF ADMINISTRATIVE AGENT. EACH MEMBER OF THE BARNEYS GROUP
EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR
SUIT COMMENCED IN ANY SUCH COURT, AND EACH BORROWER HEREBY WAIVES ANY OBJECTION
THAT SUCH BORROWER MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER
VENUE OR FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL
OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT. EACH MEMBER OF THE
BARNEYS GROUP HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER
PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH
SUMMONS, COMPLAINTS AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED
MAIL ADDRESSED TO SUCH CREDIT PARTY AT THE ADDRESS SET FORTH ON THE SIGNATURE
PAGES OF THIS AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON
THE EARLIER OF SUCH BORROWER'S ACTUAL RECEIPT THEREOF OR 5 DAYS AFTER DEPOSIT IN
THE UNITED STATES MAILS, PROPER POSTAGE PREPAID.
13.15 Limitation of Liability. No claim may be made by the Borrowers, any
Lender, the Administrative Agent or any other Person against the Administrative
Agent 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 and the Administrative Agent hereby waives, releases and agrees not
106
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.
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. The rights hereunder and
the interest herein of any Borrower may not be assigned, transferred,
hypothecated or otherwise conveyed without the prior express written consent of
all Lenders. Any attempted assignment without such written consent shall be
void. The terms and provisions of this Agreement are for the purpose of defining
the relative rights and obligations of each member of the Barneys Group,
Administrative Agent and Lenders with respect to the transactions contemplated
hereby and no Person shall be a third party beneficiary of any of the terms and
provisions of this Agreement or any of the other Loan Documents.
13.17 Waiver of Jury Trial. THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL
BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE,
WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG ADMINISTRATIVE AGENT,
LENDERS AND ANY BORROWER ARISING OUT OF, CONNECTED WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH, THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS RELATED
THERETO.
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 and the Administrative Agent 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 and each Lender 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 shall
hold all nonpublic information obtained pursuant to the requirements hereof and
identified as such by the Borrowers in accordance with such Lender's customary
procedures for handling, confidential information of this nature and in
accordance with 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 accountant, lawyers and other
107
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 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 and the Lenders the Obligations as and when the
same shall become due and payable.
13.22 Press Releases and Related Matters. Each member of the Barneys
Group executing this Agreement agrees that neither it nor its Affiliates will in
the future issue any press releases or other public disclosure using the name of
GE Capital or its affiliates or referring to this Agreement, the other Loan
Documents without at least 2 Business Days' prior notice to GE Capital and
without the prior written consent of GE Capital unless (and only to the extent
that) such member of the Barneys Group or Affiliate is required to do so under
law and then, in any event, such member of the Barneys Group or Affiliate will
consult with GE Capital before issuing such press release or other public
disclosure. GE Capital and the Lenders, however, acknowledge that copies of this
Agreement and the other Loan Documents may be filed by Holdings with the
Securities and Exchange Commission and that Holdings and the Barneys Group may
describe this Agreement and the other Loan Documents in their filings with the
Securities and Exchange Commission. Each member of the Barneys Group consents to
the publication by Administrative Agent or any Lender of a tombstone or similar
advertising material relating to the financing transactions contemplated by this
Agreement. Administrative Agent reserves the right to provide to industry trade
organizations information necessary and customary for inclusion in league table
measurements.
13.23 Reinstatement. This Agreement shall remain in full force and
effect and continue to be effective should any petition be filed by or against
any Borrower for liquidation or reorganization, should any Borrower become
insolvent or make an assignment for the benefit of any creditor or creditors or
should a receiver or trustee be appointed for all or any significant part of any
Borrower's assets, and shall continue to be effective or to be reinstated, as
the case may be, if at any time payment and performance of the Obligations, or
any part thereof, is, pursuant to applicable law, rescinded or reduced in
amount, or must otherwise be restored or returned by any obligee of the
Obligations, whether as a "voidable preference," "fraudulent conveyance," or
otherwise, all as though such payment or performance had not been made. In the
event that any payment, or any part thereof, is rescinded, reduced, restored or
108
returned, the Obligations shall be reinstated and deemed reduced only by such
amount paid and not so rescinded, reduced, restored or returned.
13.24 Advice of Counsel. Each of the parties represents to each other
party hereto that it has discussed this Agreement and, specifically, the
provisions of Sections 13.14 and 13.17, with its counsel.
13.25 No Strict Construction. The parties hereto have participated
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties hereto and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provisions of this Agreement.
13.26 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.
ARTICLE XIV
CROSS-GUARANTY
14.01 Cross-Guaranty. Each Borrower hereby agrees that such Borrower is
jointly and severally liable for, and hereby absolutely and unconditionally
guarantees to Administrative Agent and Lenders and their respective successors
and assigns, the full and prompt payment (whether at stated maturity, by
acceleration or otherwise) and performance of, all Obligations owed or hereafter
owing to Administrative Agent and Lenders by each other Borrower. Each Borrower
agrees that its guaranty obligation hereunder is a continuing guaranty of
payment and performance and not of collection, that its obligations under this
Article XIV shall not be discharged until payment and performance, in full, of
the Obligations has occurred, and that its obligations under this Article XIV
shall be absolute and unconditional, irrespective of, and unaffected by,
(a) the genuineness, validity, regularity, enforceability or
any future amendment of, or change in, this Agreement, any other Loan Document
or any other agreement, document or instrument to which any Borrower is or may
become a party;
(b) the absence of any action to enforce this Agreement
(including this Article XIV) or any other Loan Document or the waiver or consent
by Administrative Agent and Lenders with respect to any of the provisions
thereof;
(c) the existence, value or condition of, or failure to
perfect its Lien against, any security for the Obligations or any action, or the
absence of any action, by Administrative Agent and Lenders in respect thereof
(including the release of any such security);
(d) the insolvency of any member of the Barneys Group; or
109
(e) any other action or circumstances that might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor.
Each Borrower shall be regarded, and shall be in the same
position, as principal debtor with respect to the Obligations guaranteed
hereunder.
14.02 Waivers by Borrowers. Each Borrower expressly waives all rights
it may have now or in the future under any statute, or at common law, or at law
or in equity, or otherwise, to compel Administrative Agent or Lenders to marshal
assets or to proceed in respect of the Obligations guaranteed hereunder against
any other member of the Barneys Group, any other party or against any security
for the payment and performance of the Obligations before proceeding against, or
as a condition to proceeding against, such Borrower. It is agreed among each
Borrower, Administrative Agent and Lenders that the foregoing waivers are of the
essence of the transaction contemplated by this Agreement and the other Loan
Documents and that, but for the provisions of this Article XIV and such waivers,
Administrative Agent and Lenders would decline to enter into this Agreement.
14.03 Benefit of Guaranty. Each Borrower agrees that the provisions of
this Article XIV are for the benefit of Administrative Agent and Lenders and
their respective successors, transferees, endorsees and assigns, and nothing
herein contained shall impair, as between any other Borrower and Administrative
Agent or Lenders, the obligations of such other Borrower under the Loan
Documents.
14.04 Subordination of Subrogation, Etc. Notwithstanding anything to
the contrary in this Agreement or in any other Loan Document, and except as set
forth in Section 14.07, each Borrower hereby expressly and irrevocably
subordinates to payment of the Obligations any and all rights at law or in
equity to subrogation, reimbursement, exoneration, contribution, indemnification
or set off and any and all defenses available to a surety, guarantor or
accommodation co-obligor until the Obligations are paid in full in cash. Each
Borrower acknowledges and agrees that this subordination is intended to benefit
Administrative Agent and Lenders and shall not limit or otherwise affect such
Borrower's liability hereunder or the enforceability of this Article XIV, and
that Administrative Agent, Lenders and their respective successors and assigns
are intended third party beneficiaries of the waivers and agreements set forth
in this Section 14.04.
14.05 Election of Remedies. If Administrative Agent or any Lender may,
under applicable law, proceed to realize its benefits under any of the Loan
Documents giving Administrative Agent or such Lender a Lien upon any Collateral,
whether owned by any Borrower or by any other Person, either by judicial
foreclosure or by non-judicial sale or enforcement, Administrative Agent or any
Lender may, at its sole option, determine which of its remedies or rights it may
pursue without affecting any of its rights and remedies under this Article XIV.
If, in the exercise of any of its rights and remedies, Administrative Agent or
any Lender shall forfeit any of its rights or remedies, including its right to
enter a deficiency judgment against any Borrower or any other Person, whether
because of any applicable laws pertaining to "election of remedies" or the like,
each Borrower hereby consents to such action by Administrative Agent or such
Lender and waives any claim based upon such action, even if such action by
Administrative Agent or such Lender shall result in a full or partial loss of
any rights of subrogation that each Borrower might otherwise have had but for
110
such action by Administrative Agent or such Lender. Any election of remedies
that results in the denial or impairment of the right of Administrative Agent or
any Lender to seek a deficiency judgment against any Borrower shall not impair
any other Borrower's obligation to pay the full amount of the Obligations. In
the event Administrative Agent or any Lender shall bid at any foreclosure or
trustee's sale or at any private sale permitted by law or the Loan Documents,
Administrative Agent or such Lender may bid all or less than the amount of the
Obligations and the amount of such bid need not be paid by Administrative Agent
or such Lender but shall be credited against the Obligations. To the extent
permitted by law, the amount of the successful bid at any such sale, whether
Administrative Agent, Lender or any other party is the successful bidder, shall
be conclusively deemed to be the fair market value of the Collateral and the
difference between such bid amount and the remaining balance of the Obligations
shall be conclusively deemed to be the amount of the Obligations guaranteed
under this Article XIV, notwithstanding that any present or future law or court
decision or ruling may have the effect of reducing the amount of any deficiency
claim to which Administrative Agent or any Lender might otherwise be entitled
but for such bidding at any such sale.
14.06 Limitation. Notwithstanding any provision herein contained to the
contrary, each Borrower's liability under this Article XIV (which liability is
in any event in addition to amounts for which such Borrower is primarily liable
under Article III) shall be limited to an amount not to exceed as of any date of
determination the greater of:
(a) the net amount of all Loans advanced to any other Borrower
under this Agreement and then re-loaned or otherwise transferred to, or for the
benefit of, such Borrower; and
(b) the amount that could be claimed by Administrative Agent
and Lenders from such Borrower under this Article XIV without rendering such
claim voidable or avoidable under Section 548 of Chapter 11 of the Bankruptcy
Code or under any applicable state Uniform Fraudulent Transfer Act, Uniform
Fraudulent Conveyance Act or similar statute or common law after taking into
account, among other things, such Borrower's right of contribution and
indemnification from each other Borrower under Section 14.07.
14.07 Contribution with Respect to Guaranty Obligations.
(a) To the extent that any Borrower shall make a payment under
this Article XIV of all or any of the Obligations (other than Loans made to that
Borrower for which it is primarily liable) (a "Guarantor Payment") that, taking
into account all other Guarantor Payments then previously or concurrently made
by any other Borrower, exceeds the amount that such Borrower would otherwise
have paid if each Borrower had paid the aggregate Obligations satisfied by such
Guarantor Payment in the same proportion that such Borrower's "Allocable Amount"
(as defined below) (as determined immediately prior to such Guarantor Payment)
bore to the aggregate Allocable Amounts of each of the Borrowers as determined
immediately prior to the making of such Guarantor Payment, then, following
payment in full in cash of the Obligations and termination of the Commitments,
such Borrower shall be entitled to receive contribution and indemnification
payments from, and be reimbursed by, each other Borrower for the amount of such
111
excess, pro rata based upon their respective Allocable Amounts in effect
immediately prior to such Guarantor Payment.
(b) As of any date of determination, the "Allocable Amount" of
any Borrower shall be equal to the maximum amount of the claim that could then
be recovered from such Borrower under this Article XIV without rendering such
claim voidable or avoidable under Section 548 of Chapter 11 of the Bankruptcy
Code or under any applicable state Uniform Fraudulent Transfer Act, Uniform
Fraudulent Conveyance Act or similar statute or common law.
(c) This Section 14.07 is intended only to define the relative
rights of Borrowers and nothing set forth in this Section 14.07 is intended to
or shall impair the obligations of Borrowers, jointly and severally, to pay any
amounts as and when the same shall become due and payable in accordance with the
terms of this Agreement, including Section 14.01. Nothing contained in this
Section 14.07 shall limit the liability of any Borrower to pay the Loans made
directly or indirectly to that Borrower and accrued interest, fees and expenses
with respect thereto for which such Borrower shall be primarily liable.
(d) The parties hereto acknowledge that the rights of
contribution and indemnification hereunder shall constitute assets of the
Borrower to which such contribution and indemnification is owing.
(e) The rights of the indemnifying Borrowers against other
members of the Barneys Group under this Section 14.07 shall be exercisable upon
the full and indefeasible payment of the Obligations and the termination of the
Commitments.
14.08 Liability Cumulative. The liability of Borrowers under this
Article XIV is in addition to and shall be cumulative with all liabilities of
each Borrower to Administrative Agent and Lenders under this Agreement and the
other Loan Documents to which such Borrower is a party or in respect of any
Obligations or obligation of the other Borrower, without any limitation as to
amount, unless the instrument or agreement evidencing or creating such other
liability specifically provides to the contrary.
112
IN WITNESS WHEREOF, this Agreement has been duly executed as
of the date first above written.
BARNEY'S, INC.
BARNEYS AMERICA, 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 X. Xxxxxxx
--------------------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Executive Vice President and
Chief Financial Officer
Notice address:
c/o Barney's, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxxxx, Esq.
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
GENERAL ELECTRIC CAPITAL CORPORATION
as Administrative Agent and as a Lender
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
[Signature Page to the Credit Agreement]
Domestic Lending Office:
000 Xxxxxxxxxxx Xxxxxx, Xxx Xxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Fixed Rate Affiliate:
same as above
Fixed Rate Lending Office:
same as above
Notice address:
General Electric Capital Corporation
000 Xxxxxxxxxxx Xxxxxx, Xxx Xxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
0000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxxx, Esq.
Phone: (000) 000-0000
Fax: (000) 000-0000
[Signature Page to the Credit Agreement]
GMAC COMMERCIAL CREDIT LLC
as a Lender
By: /s/ Xxxxx X. Xxxxx
-------------------------------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice-President
Domestic Lending Office:
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fixed Rate Affiliate:
same as above
Fixed Rate Lending Office:
same as above
Notice address:
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
0000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxxxx, Esq.
Phone: (000) 000-0000
Fax: (000) 000-0000
[Signature Page to the Credit Agreement]
ANNEX A
TO
CREDIT AGREEMENT
GENERAL ELECTRIC CAPITAL CORPORATION
REVOLVING LOAN COMMITMENT
$62,000,000
TERM LOAN COMMITMENT:
$8,000,000
GMAC COMMERICAL CREDIT LLC
REVOLVING LOAN COMMITMENT
$35,000,000
ANNEX B
TO
CREDIT AGREEMENT
----------------
LETTERS OF CREDIT
-----------------
(a) Issuance. Subject to the terms and conditions of the
Agreement, Administrative Agent and Revolving Lenders agree to incur, from time
to time prior to the Commitment Termination Date, upon the request of Borrower
Representative on behalf of the applicable Borrower and for such Borrower's
account, Letter of Credit Obligations by causing Letters of Credit to be issued
by GE Capital or a Subsidiary thereof or a bank or other legally authorized
Person selected by or acceptable to Administrative Agent and reasonably
acceptable to the Borrower Representative (each, an "L/C Issuer") for such
Borrower's account and guaranteed by Administrative Agent; provided, that if the
L/C Issuer is a Revolving Lender, then such Letters of Credit shall not be
guaranteed by Administrative Agent but rather each Revolving Lender shall,
subject to the terms and conditions hereinafter set forth, purchase (or be
deemed to have purchased) risk participations in all such Letters of Credit
issued with the written consent of Administrative Agent, as more fully described
in paragraph (b)(ii) below. The aggregate amount of all such Letter of Credit
Obligations shall not at any time exceed the least of (i) FORTY MILLION DOLLARS
($40,000,000) (the "L/C Sublimit"), (ii) the Maximum Revolving Credit Amount
less the Revolving Credit Obligations, and (iii) the Revolving Borrowing Base
less the Revolving Credit Obligations. No such Letter of Credit shall have an
expiry date that is more than one year following the date of issuance thereof,
unless otherwise determined by the Administrative Agent, in its sole discretion,
and neither Administrative Agent nor Revolving Lenders shall be under any
obligation to incur Letter of Credit Obligations in respect of, or purchase risk
participations in, any Letter of Credit having an expiry date that is later than
the Commitment Termination Date.
(b) (i) Advances Automatic; Participations. In the event that
Administrative Agent or any Revolving Lender shall make any payment on or
pursuant to any Letter of Credit Obligation, such payment shall then be deemed
automatically to constitute a Revolving Loan to the applicable Borrower under
Section 2.01(a) of the Agreement regardless of whether a Default or an Event of
Default has occurred and is continuing and notwithstanding any Borrower's
failure to satisfy the conditions precedent set forth in Section 5.02, and each
Revolving Lender shall be obligated to pay its Pro Rata Share thereof in
accordance with the Agreement. The failure of any Revolving Lender to make
available to Administrative Agent for Administrative Agent's own account its Pro
Rata Share of any such Revolving Loan or payment by Administrative Agent under
or in respect of a Letter of Credit shall not relieve any other Revolving Lender
of its obligation hereunder to make available to Administrative Agent its Pro
Rata Share thereof, but no Revolving Lender shall be responsible for the failure
of any other Revolving Lender to make available such other Revolving Lender's
Pro Rata Share of any such payment.
(ii) If it shall be illegal or unlawful for any Borrower
to incur Revolving Loans as contemplated by paragraph (b)(i) above because of an
Event of Default described in Sections 11.1(f) or (g) or otherwise or if it
shall be illegal or unlawful for any Revolving Lender to be deemed to have
assumed a ratable share of the reimbursement obligations owed to an L/C Issuer,
or if the L/C Issuer is a Revolving Lender, then (A) immediately and without
further action whatsoever, each Revolving Lender shall be deemed to have
irrevocably and unconditionally purchased from Administrative Agent (or such L/C
Issuer, as the case may be) an undivided interest and participation equal to
such Revolving Lender's Pro Rata Share (based on the Revolving Loan Commitments)
of the Letter of Credit Obligations in respect of all Letters of Credit then
outstanding and (B) thereafter, immediately upon issuance of any Letter of
Credit, each Revolving Lender shall be deemed to have irrevocably and
unconditionally purchased from Administrative Agent (or such L/C Issuer, as the
case may be) an undivided interest and participation in such Revolving Lender's
Pro Rata Share (based on the Revolving Loan Commitments) of the Letter of Credit
Obligations with respect to such Letter of Credit on the date of such issuance.
Each Revolving Lender shall fund its participation in all payments or
disbursements made under the Letters of Credit in the same manner as provided in
the Agreement with respect to Revolving Loans.
(c) Cash Collateral.
(i) If Borrowers are required to provide cash collateral
for any Letter of Credit Obligations pursuant to the Agreement prior to the
Commitment Termination Date, each Borrower will pay to Administrative Agent for
the ratable benefit of itself and Revolving Lenders cash or Cash Equivalents in
an amount equal to 105% of the maximum amount then available to be drawn under
each applicable Letter of Credit outstanding for the benefit of such Borrower.
Such funds or Cash Equivalents shall be held by Administrative Agent in a cash
collateral account (the "Cash Collateral Account") maintained at a bank or
financial institution acceptable to Administrative Agent. The Cash Collateral
Account shall be in the name of the applicable Borrower and shall be pledged to,
and subject to the control of, Administrative Agent, for the benefit of
Administrative Agent and Lenders, in a manner satisfactory to Administrative
Agent. Each Borrower hereby pledges and grants to Administrative Agent, on
behalf of itself and Lenders, a security interest in all such funds and Cash
Equivalents held in the Cash Collateral Account from time to time and all
proceeds thereof, as security for the payment of all amounts due in respect of
the Letter of Credit Obligations and other Obligations, whether or not then due.
The Agreement, including this Annex B, shall constitute a security agreement
under applicable law.
(ii) If any Letter of Credit Obligations, whether or not
then due and payable, shall for any reason be outstanding on the Commitment
Termination Date, Borrowers shall either (A) provide cash collateral therefor in
the manner described above, or (B) cause all such Letters of Credit and
guaranties thereof, if any, to be canceled and returned, or (C) deliver a
stand-by letter (or letters) of credit in guaranty of such Letter of Credit
Obligations, which stand-by letter (or letters) of credit shall be of like tenor
and duration (plus 20 additional days) as, and in an amount equal to 105% of,
the aggregate maximum amount then available to be drawn under, the Letters of
Credit to which such outstanding Letter of Credit Obligations relate and shall
be issued by a Person, and shall be subject to such terms and conditions, as are
satisfactory to Administrative Agent in its reasonable discretion.
(iii) From time to time after funds are deposited in the
Cash Collateral Account by any Borrower, whether before or after the Commitment
Termination Date, Administrative Agent may apply such funds or Cash Equivalents
then held in the Cash Collateral Account to the payment of any amounts, and in
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such order as Administrative Agent may elect, as shall be or shall become due
and payable by such Borrower to Administrative Agent and Lenders with respect to
such Letter of Credit Obligations of such Borrower and, upon the satisfaction in
full of all Letter of Credit Obligations of such Borrower, to any other
Obligations of any Borrower then due and payable.
(iv) No Borrower nor any Person claiming on behalf of or
through any Borrower shall have any right to withdraw any of the funds or Cash
Equivalents held in the Cash Collateral Account, except that upon the
termination of all Letter of Credit Obligations and the payment of all amounts
payable by Borrowers to Administrative Agent and Lenders in respect thereof, any
funds remaining in the Cash Collateral Account shall be applied to other
Obligations then due and owing and upon payment in full of such Obligations, any
remaining amount shall be paid to Borrowers or as otherwise required by law.
Interest, if any, earned on deposits in the Cash Collateral Account shall remain
in the Cash Collateral Account as security for the payment of all amounts due in
respect of the Letter of Credit Obligations and other Obligations, whether or
not then due, and, upon the termination of all Letter of Credit Obligations and
the payment of all amounts payable by Borrowers to Administrative Agent and
Lenders in respect thereof, shall be treated in accordance with the preceding
sentence of this clause (iv).
(d) Fees and Expenses. Borrowers agree to pay to
Administrative Agent for the benefit of Revolving Lenders, as compensation to
such Lenders for Letter of Credit Obligations incurred hereunder, (i) all
reasonable costs and expenses incurred by Administrative Agent or any Lender on
account of such Letter of Credit Obligations, and (ii) for each month during
which any Letter of Credit Obligation shall remain outstanding, a fee in an
amount equal to the Applicable Letter of Credit Percentage from time to time in
effect multiplied by the maximum amount available from time to time to be drawn
under the applicable Letter of Credit. Such fee shall be paid to Administrative
Agent for the benefit of the Revolving Lenders in arrears, on the first day of
each month and on the Commitment Termination Date. In addition, Borrowers shall
pay to any L/C Issuer, on demand, such customary fees (including all per annum
fees), charges and expenses of such L/C Issuer in respect of the issuance,
negotiation, acceptance, amendment, transfer and payment of such Letter of
Credit or otherwise payable pursuant to the application and related
documentation under which such Letter of Credit is issued.
(e) Request for Incurrence of Letter of Credit Obligations.
Borrower Representative shall give Administrative Agent at least 2 Business
Days' prior written notice requesting the incurrence of any Letter of Credit
Obligation. The notice shall be accompanied by the form of the Letter of Credit
(which shall be acceptable to the L/C Issuer) and a completed application for
such Letter of Credit. Notwithstanding anything contained herein to the
contrary, Letter of Credit applications by Borrower Representative and approvals
by Administrative Agent and the L/C Issuer may be made and transmitted pursuant
to electronic codes and security measures mutually agreed upon and established
by and among Borrower Representative, Administrative Agent and the L/C Issuer.
(f) Obligation Absolute. The Reimbursement Obligations shall
be absolute, unconditional and irrevocable except for gross negligence or
willful misconduct of the Administrative Agent or such Revolving Lender, without
necessity of presentment, demand, protest or other formalities, and the
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obligations of each Revolving Lender to make payments to Administrative Agent
with respect to Letters of Credit shall be unconditional and irrevocable. Such
obligations of Borrowers and Revolving Lenders shall be paid strictly in
accordance with the terms hereof under all circumstances including the
following:
(i) (i) any lack of validity or enforceability of any
Letter of Credit or the Agreement or the other Loan Documents or any other
agreement;
(ii) the existence of any claim, setoff, defense or
other right that any Borrower or any of their respective Affiliates or any
Lender may at any time have against a beneficiary or any transferee of any
Letter of Credit (or any Persons or entities for whom any such transferee may be
acting), Administrative Agent, any Lender, or any other Person, whether in
connection with the Agreement, the Letter of Credit, the transactions
contemplated herein or therein or any unrelated transaction (including any
underlying transaction between any Borrower or any of their respective
Affiliates and the beneficiary for which the Letter of Credit was procured);
(iii) any draft, demand, certificate or any other
document presented under any Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) payment by Administrative Agent (except as
otherwise expressly provided in paragraph (g)(ii)(C) below) or any L/C Issuer
under any Letter of Credit or guaranty thereof against presentation of a demand,
draft or certificate or other document that does not comply with the terms of
such Letter of Credit or such guaranty; or
(v) the fact that a Default or an Event of Default has
occurred and is continuing.
(g) Indemnification; Nature of Lenders' Duties.
(i) In addition to amounts payable as elsewhere provided
in the Agreement, Borrowers hereby agree to pay and to protect, indemnify, and
save harmless Administrative Agent and each Lender from and against any and all
claims, demands, liabilities, damages, losses, costs, charges and expenses
(including reasonable attorneys' fees) that Administrative Agent or any Lender
may incur or be subject to as a consequence, direct or indirect, of (A) the
issuance of any Letter of Credit or guaranty thereof, or (B) the failure of
Administrative Agent or any Lender seeking indemnification or of any L/C Issuer
to honor a demand for payment under any Letter of Credit or guaranty thereof 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, in each case
other than as a result of the gross negligence or willful misconduct of
Administrative Agent or such Lender (as finally determined by a court of
competent jurisdiction).
(ii) As between Administrative Agent and any Lender and
Borrowers, Borrowers assume all risks of the acts and omissions of, or misuse of
any Letter of Credit by beneficiaries, of any Letter of Credit. In furtherance
and not in limitation of the foregoing, to the fullest extent permitted by law,
neither Administrative Agent nor any Lender shall be responsible for: (A) the
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form, validity, sufficiency, accuracy, genuineness or legal effect of any
document issued by any party in connection with the application for and issuance
of any Letter 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 or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, that may prove to be
invalid or ineffective for any reason; (C) failure of the beneficiary of any
Letter of Credit to comply fully with conditions required in order to demand
payment under such Letter of Credit; provided, that in the case of any payment
by Administrative Agent under any Letter of Credit or guaranty thereof,
Administrative Agent shall be liable to the extent such payment was made as a
result of its gross negligence or willful misconduct (as finally determined by a
court of competent jurisdiction) in determining that the demand for payment
under such Letter of Credit or guaranty thereof complies on its face with any
applicable requirements for a demand for payment under such Letter of Credit or
guaranty thereof; (D) errors, omissions, interruptions or delays in transmission
or delivery of any messages, by mail, cable, telegraph, telex or otherwise,
whether or not they may 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 payment under any Letter of Credit or guaranty
thereof or of the proceeds thereof; (G) the credit of the proceeds of any
drawing under any Letter of Credit or guaranty thereof; and (H) any consequences
arising from causes beyond the control of Administrative Agent or any Lender.
None of the above shall affect, impair, or prevent the vesting of any of
Administrative Agent's or any Lender's rights or powers hereunder or under the
Agreement.
(iii) Nothing contained herein shall be deemed to limit
or to expand any waivers, covenants or indemnities made by Borrowers in favor of
any L/C Issuer in any letter of credit application, reimbursement agreement or
similar document, instrument or agreement between or among Borrowers and such
L/C Issuer, including a Master Documentary Agreement and a Master Standby
Agreement entered into with Administrative Agent.
5
ANNEX C
TO
CREDIT AGREEMENT
----------------
COLLATERAL REPORTS
------------------
Borrowers shall deliver or cause to be delivered the
following:
(a) Promptly, and in any event on each Friday of each fiscal
month, or more frequently if the Administrative Agent shall request, to the
Administrative Agent and the Lenders a Borrowing Base Certificate for the one
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.
(b) To Administrative Agent, upon its request, and in any
event no less frequently than 12:00 p.m. (New York time) on Friday of each week
(together with a copy of all or any part of the following reports requested by
any Lender in writing after the Closing Date), each of the following reports,
each of which shall be prepared by the applicable Borrower as of Saturday of the
immediately preceding week:
(i) with respect to each Borrower, a summary of total
company Inventory with a supporting perpetual Inventory report
(merchandise stock ledger by store), in each case accompanied
by such supporting detail and documentation as shall be
requested by Administrative Agent in its reasonable
discretion; and
(ii) with respect to each Borrower, a weekly accounts
receivable roll forward, accompanied by such supporting detail
and documentation as shall be requested by Administrative
Agent in its reasonable discretion; and
(c) Such other reports, statements and reconciliations with
respect to the Revolving Borrowing Base, Term Loan Borrowing Base, Collateral or
Obligations as Administrative Agent shall from time to time request in its
reasonable discretion.
