\n 1st Quarter\/1999 $10,000,000<\/p>\n 3rd Quarter\/1999 $10,000,000<\/p>\n
1st Quarter\/2000 $15,000,000<\/p>\n
3rd Quarter\/2000 $15,000,000<\/p>\n
1st Quarter\/2001 $20,000,000<\/p>\n
3rd Quarter\/2001 $20,000,000<\/p>\n
1st Quarter\/2002 $20,000,000<\/p>\n
3rd Quarter\/2002 $20,000,000<\/p>\n
1st Quarter\/2003 $20,000,000<\/p>\n
<\/c><\/s><\/caption>\n<\/table>\n
On the date that the last installment of principal on the Term Loans is due, the
\nprincipal amount of all Term Loans then outstanding shall be due and payable
\ntogether with all accrued but unpaid interest, fees and other amounts due and
\npayable hereunder. The Term Notes shall bear interest on the unpaid principal
\namount thereof and on any overdue interest at the applicable interest rate per
\nannum specified in subsection 6.1. Interest on the Term Notes shall be payable
\nas specified in subsection 6.1.<\/p>\n
SECTION 4. AMOUNT AND TERMS OF LETTERS OF CREDIT<\/p>\n
4.1 Letters of Credit. Subject to the terms and conditions hereof,
\nthe Issuing Lender and each Participating Lender agree to extend credit by the
\nIssuing Lender’s issuing Letters of Credit in the form of Commercial Letters of
\nCredit or Standby Letters of Credit for the account of the Company and its
\nSubsidiaries, and by each Participating Lender’s acquiring its Letter of Credit
\nParticipating Interest in each such Letter of Credit issued by the Issuing
\nLender, from time to time during the Commitment Period in an aggregate face
\namount at any
\n 31
\n 25<\/p>\n
one time outstanding not to exceed in the case of Standby Letters of Credit,
\n$30,000,000, provided, that no Letter of Credit shall be issued hereunder if,
\nafter giving effect thereto, the Available Revolving Credit Commitments would be
\nless than zero. During the Commitment Period, the Company may use the Revolving
\nCredit Commitments in this manner by having the Issuing Lender issue Letters of
\nCredit, having such Letters of Credit expire undrawn upon or, if drawn upon,
\nreimbursing the Issuing Lender for such drawing, and having the Issuing Lender
\nissue new Letters of Credit, all in accordance with the terms and conditions
\nhereof. From and after the Closing Date, all outstanding Letters of Credit
\nissued under, and as defined in, the Existing Credit Agreement shall be deemed
\nfor all, if any, purposes hereunder to be Letters of Credit issued under this
\nAgreement on the Closing Date.<\/p>\n
4.2 Issuance of Commercial Letters of Credit. (a) Subject to the
\nterms and conditions hereof (including, without limitation, subsection 4.1), the
\nCompany may request the Issuing Lender to issue a Commercial Letter of Credit in
\nfavor of sellers of goods to the Company and its Subsidiaries on any Business
\nDay during the Commitment Period by delivering to the Agent at its address
\nspecified in subsection 13.2 (or such other lending office of the Agent as the
\nAgent shall request) a commercial letter of credit application (executed by the
\nCompany and, in the case of any Letter of Credit to be issued for the account of
\nany Subsidiary of the Company, such Subsidiary) by a transmission in accordance
\nwith past practice (a “Commercial Letter of Credit Application”), completed to
\nthe satisfaction of the Issuing Lender, together with such other certificates,
\ndocuments and other papers and information as the Issuing Lender may reasonably
\nrequest. Subject to the provisions of the last sentence of subsection 4.8, the
\nCompany hereby agrees to observe and perform its covenants, duties and
\nobligations under each Commercial Letter of Credit Application.<\/p>\n
(b) Each Commercial Letter of Credit issued hereunder shall, among
\nother things, (i) be either a Sight Draft Letter of Credit or a Time Draft
\nLetter of Credit, (ii) have an expiry date occurring not later than one year
\nafter the date of issuance of such Commercial Letter of Credit and in no event
\nlater than 90 days after the Termination Date, and (iii) be denominated in
\nDollars (except for Commercial Letters of Credit denominated in foreign
\ncurrencies acceptable to the Issuing Lender in its sole discretion (each an
\n“Approved Foreign Currency”; provided that the aggregate undrawn face amount of
\nall such Commercial Letters of Credit issued in an Approved Foreign Currency
\nshall not exceed the Dollar Equivalent of $10,000,000 at any time outstanding).
\nEach Commercial Letter of Credit Application and each Commercial Letter of
\nCredit shall be subject to the Uniform Customs and, to the extent not
\ninconsistent therewith, the laws of the State of New York.<\/p>\n
(c) The Issuing Lender shall not at any time be obligated to issue
\nany Commercial Letter of Credit hereunder if such issuance would conflict with,
\nor cause the Issuing Lender or any Participating Lender to exceed any limits
\nimposed by, any applicable Requirements of Law.<\/p>\n
4.3 Issuance of Standby Letters of Credit. (a) Subject to the terms
\nand conditions hereof (including, without limitation, subsection 4.1), the
\nCompany may request the Issuing Lender to issue a Standby Letter of Credit for
\nthe account of the Company or any of its Subsidiaries, on any Business Day
\nduring the Commitment Period by delivering to the
\n 32
\n 26<\/p>\n
Agent at its address specified in subsection 13.2 (or such other lending office
\nof the Agent as the Agent shall request) a standby letter of credit application
\n(executed by the Company and, in the case of any Letter of Credit issued for the
\naccount of any Subsidiary of the Company, such Subsidiary) substantially in the
\nform of Exhibit D hereto (a “Standby Letter of Credit Application”), completed
\nto the satisfaction of the Issuing Lender, together with such other
\ncertificates, documents and other papers and information as the Issuing Lender
\nmay reasonably request. Subject to the provisions of the last sentence of
\nsubsection 4.8, the Company hereby agrees to observe and perform its covenants,
\nduties and obligations under each Standby Letter of Credit Application.<\/p>\n
(b) Each Standby Letter of Credit issued hereunder shall, among
\nother things, (i) be in such form and for such purposes requested by the Company
\nas shall be acceptable to the Issuing Lender in its sole discretion, (ii) have
\nan expiry date occurring not later than one year after the date of issuance of
\nsuch Standby Letter of Credit and in no event occurring later than 90 days after
\nthe Termination Date and (iii) be denominated in Dollars and have a minimum face
\namount of $25,000. Each Standby Letter of Credit Application and each Standby
\nLetter of Credit shall be subject to the Uniform Customs and, to the extent not
\ninconsistent therewith, the laws of the State of New York.<\/p>\n
(c) The Issuing Lender shall not at any time be obligated to issue
\nany Standby Letter of Credit hereunder if such issuance would conflict with, or
\ncause the Issuing Lender or any Participating Lender to exceed any limits
\nimposed by, any applicable Requirements of Law.<\/p>\n
4.4 Participating Interests. Effective in the case of each Letter of
\nCredit as of the date of the issuance thereof, the Issuing Lender agrees to
\nallot and does allot, to itself and each Participating Lender, and each
\nParticipating Lender irrevocably agrees to take and does take, a Letter of
\nCredit Participating Interest in each Letter of Credit, the related Letter of
\nCredit Application and all obligations of the Company with respect thereto
\n(other than fees payable to the Issuing Lender pursuant to subsections 6.3(b)
\nand 6.4(b)) in a percentage equal to such Lender’s Revolving Credit Commitment
\nPercentage. Each Participating Lender hereby agrees that its participation
\nobligations described in the immediately preceding sentence shall be irrevocable
\nand unconditional.<\/p>\n
4.5 Procedure for Opening Letters of Credit. Upon receipt of any
\nLetter of Credit Application from the Company, the Issuing Lender will process
\nsuch Letter of Credit Application and the other certificates, documents and
\nother papers delivered to the Issuing Lender in connection therewith, in
\naccordance with its customary procedures and shall promptly open such Letter of
\nCredit by issuing the original of such Letter of Credit to the beneficiary
\nthereof and by furnishing a copy thereof to the Company. The Issuing Lender will
\nsend monthly reports to each Participating Lender and the Company, on the third
\nBusiness Day of each calendar month, indicating the Letters of Credit opened
\nduring the previous month.<\/p>\n
4.6 Payments. (a) The Company agrees to reimburse the Issuing Lender
\nin Dollars and in immediately available funds, forthwith on the date the Issuing
\nLender is
\n 33
\n 27<\/p>\n
presented with a draft under any Letter of Credit (whether issued for the
\naccount of the Company or any Subsidiary of the Company) and otherwise in
\naccordance with the terms of the Letter of Credit Application relating thereto,
\nfor any payment made by the Issuing Lender under any Sight Draft Letter of
\nCredit and any Standby Letter of Credit issued for its account. In the case of
\nany Letter of Credit issued in an Approved Foreign Currency, such reimbursement
\nobligation with respect to any payment thereunder made in an Approved Foreign
\nCurrency shall be in an amount equal to the Dollar Equivalent of the amount of
\nsuch payment. The Issuing Lender is hereby authorized to charge the account(s)
\nmaintained by the Company at Chase for all amounts payable pursuant to this
\nsubsection 4.6(a).<\/p>\n
(b) The failure by the Company on any day to have sufficient
\naggregate Dollar funds on deposit in its account(s) maintained at Chase to pay
\nall Letter of Credit Reimbursement Obligations due on such day in accordance
\nwith subsection 4.6(a) (such deficiency being hereinafter referred to as a
\n“Letter of Credit Reimbursement Deficiency”) shall constitute the making by the
\nIssuing Lender of a loan to the Company (a “Letter of Credit Reimbursement
\nLoan”) in a principal amount equal to the amount of the Letter of Credit
\nReimbursement Deficiency as of such day. Each Letter of Credit Reimbursement
\nLoan shall (i) be payable on demand, (ii) be evidenced by a loan account
\nmaintained on the books and records of the Issuing Lender (the “Letter of Credit
\nReimbursement Loan Account”) and (iii) bear interest from the date of the
\ncreation of the applicable Letter of Credit Reimbursement Obligation until paid
\nin full at a rate per annum equal to (x) for the Business Day on which such
\nLetter of Credit Reimbursement Loan is created, the ABR and (y) thereafter, the
\nABR plus 2%. Interest on each Letter of Credit Reimbursement Loan shall be
\npayable on demand. The entries in the Letter of Credit Reimbursement Loan
\nAccount shall constitute prima facie evidence of the accuracy of the information
\nset forth therein.<\/p>\n
(c) In the event that the Issuing Lender makes a Letter of Credit
\nReimbursement Loan in accordance with subsection 4.6(b), the Issuing Lender will
\npromptly notify each Participating Lender. Forthwith upon its receipt of any
\nsuch notice, each Participating Lender will transfer to the Issuing Lender, in
\nDollars and in immediately available funds, an amount equal to such
\nParticipating Lender’s Revolving Credit Commitment Percentage of such Letter of
\nCredit Reimbursement Loan plus interest thereon calculated from the date of such
\nnotice at the Federal Funds Effective Rate.<\/p>\n
(d) Whenever, at any time after the Issuing Lender has made payment
\nunder any Sight Draft Letter of Credit or Standby Letter of Credit and has
\nreceived from each Participating Lender its Revolving Credit Commitment
\nPercentage of any Letter of Credit Reimbursement Loan in accordance with
\nsubsection 4.6(c), the Issuing Lender receives any payments related to such
\nLetter of Credit Reimbursement Loan (whether received directly from the Company
\nor otherwise, including proceeds of collateral applied thereto by the Issuing
\nLender), or any payment of interest on account thereof, the Issuing Lender will
\ndistribute to each Participating Lender its pro rata share thereof; provided,
\nhowever, that in the event that the receipt by the Issuing Lender of such
\npayments or such payment of interest (as the case may be) is required to be
\nreturned, each Participating Lender will return to the Issuing Lender any
\nportion thereof previously distributed by the Issuing Lender to it.
\n 34
\n 28<\/p>\n
(e) Within fifteen days after the end of each calendar quarter, the
\nIssuing Lender will notify each Participating Lender (with copies to the
\nCompany) of (i) each payment made by the Issuing Lender during such calendar
\nquarter under any Sight Draft Letter of Credit or Standby Letter of Credit and
\n(ii) each payment made by the Company during such calendar quarter to the
\nIssuing Lender in reimbursement of amounts paid by the Issuing Lender under any
\nsuch Letter of Credit.<\/p>\n
4.7 Further Assurances. The Company hereby agrees to do and perform,
\nfrom time to time, any and all acts and to execute any and all further
\ninstruments reasonably requested by the Issuing Lender more fully to effect the
\npurposes of this Agreement and the issuance of the Letters of Credit opened
\nhereunder for its account.<\/p>\n
4.8 Letter of Credit Applications. The provisions of this Section 4
\nin respect of any Letters of Credit are supplemental to, and not in derogation
\nof, any rights and remedies of the Issuing Lender and the Lenders under the
\nLetter of Credit Applications related to such Letters of Credit and under the
\nUniform Customs and other applicable laws. In the event of any conflict between
\nthe terms of this Agreement and the terms of the Letter of Credit Applications,
\nthe terms set forth in this Agreement shall control.<\/p>\n
4.9 Use of Letters of Credit. The Commercial Letters of Credit
\nopened for the account of the Company and its Subsidiaries shall be used solely
\nto finance purchases of inventory by such Persons in the ordinary course of
\ntheir business, and the Standby Letters of Credit shall be used solely for the
\npurposes described in the definition of such term in subsection 1.1.<\/p>\n
SECTION 5. ACCEPTANCES<\/p>\n
5.1 Acceptances. The Issuing Lender and each Participating Lender
\nconfirm that the Issuing Lender’s issuance of Time Draft Letters of Credit and
\neach Participating Lender’s acquisition of Letter of Credit Participating
\nInterests therein constitutes an agreement by the Issuing Lender and the
\nParticipating Lenders to extend credit by the Issuing Lender’s accepting drafts
\n(“Drafts”) for the account of the Company that are presented for honor under
\nTime Draft Letters of Credit in compliance with the terms thereof (each such
\naccepted Draft, an “Acceptance”) and each Participating Lender’s acquiring its
\nAcceptance Participating Interest in such Acceptance created by the Issuing
\nLender, from time to time during the period from the Closing Date to and
\nincluding the Termination Date, provided, that each Draft shall be denominated
\nin Dollars and shall be stated to mature on a Business Day which is 30, 60, 90
\nor 180 days after the date thereof, at the option of the Company. From and after
\nthe Closing Date, all then outstanding Acceptances, if any, created under, and
\nas defined in, the Existing Credit Agreement shall be deemed for all purposes
\nhereunder to be Acceptances created under this Agreement on the Closing Date.<\/p>\n
5.2 Participating Interests. Effective in the case of each
\nAcceptance as of the date of the creation thereof, the Issuing Lender agrees to
\nallot and does allot, to itself and each Participating Lender, and each
\nParticipating Lender irrevocably agrees to take and does
\n 35
\n 29<\/p>\n
take, an Acceptance Participating Interest in each Acceptance, the related Draft
\nand all obligations of the Company with respect thereto (other than fees payable
\nto the Issuing Lender pursuant to subsection 6.5(b)) in a percentage equal to
\nsuch Lender’s Revolving Credit Commitment Percentage. Each Participating Lender
\nhereby agrees that its participation obligations described in the immediately
\npreceding sentence shall be irrevocable and unconditional.<\/p>\n
5.3 Payments. (a) The Company shall be obligated, and hereby
\nunconditionally agrees, to pay to the Issuing Lender the face amount of each
\nAcceptance created by the Issuing Lender hereunder on the maturity thereof, or
\nsuch earlier date on which the obligations of the Company under this Agreement
\nbecome due and payable. The Issuing Lender is hereby authorized to charge the
\naccount(s) maintained by the Company at Chase for all amounts payable pursuant
\nto this subsection 5.3(a).<\/p>\n
(b) The failure by the Company on any day to have sufficient
\naggregate Dollar funds on deposit in its account(s) maintained at Chase to pay
\nall Acceptance Reimbursement Obligations due on such day in accordance with
\nsubsection 5.3(a) (such deficiency being hereinafter referred to as an
\n“Acceptance Reimbursement Deficiency”) shall constitute the making by the
\nIssuing Lender of a loan to the Company (an “Acceptance Reimbursement Loan”) in
\na principal amount equal to the amount of the Acceptance Reimbursement
\nDeficiency as of such day. Each Acceptance Reimbursement Loan shall (i) be
\npayable on demand, (ii) be evidenced by a loan account maintained on the books
\nand records of the Issuing Lender (the “Acceptance Reimbursement Loan Account”),
\nand (iii) bear interest from the date of the creation of the applicable
\nAcceptance Reimbursement Obligation until paid in full at a rate per annum equal
\nto (x) for the Business Day on which such Acceptance Reimbursement Loan is
\ncreated, the ABR and (y) thereafter, the ABR plus 2%. Interest on each
\nAcceptance Reimbursement Loan shall be payable on demand. The entries in the
\nAcceptance Reimbursement Loan Account shall constitute prima facie evidence of
\nthe accuracy of the information set forth therein.<\/p>\n
(c) If the Issuing Lender makes an Acceptance Reimbursement Loan in
\naccordance with subsection 5.3(b), the Issuing Lender will promptly notify each
\nParticipating Lender. Forthwith upon receipt of such notice, each Participating
\nLender will transfer to the Issuing Lender, in Dollars and in immediately
\navailable funds, an amount equal to such Participating Lender’s Revolving Credit
\nCommitment Percentage of such Acceptance Reimbursement Loan plus interest
\nthereon calculated from the date of such notice at the Federal Funds Effective
\nRate.<\/p>\n
(d) Upon each Participating Lender’s payment in full to the Issuing
\nLender of its Revolving Credit Commitment Percentage of any Acceptance
\nReimbursement Loan in accordance with subsection 5.3(b), such Participating
\nLender shall acquire the Issuing Lender’s claim against the Company in respect
\nof such Acceptance Reimbursement Loan to the extent of the amount paid by such
\nParticipating Lender. Each Participating Lender agrees that the Issuing Lender
\nshall have full authority and responsibility for enforcing all claims against
\nthe Company with respect to Acceptances and Acceptance Reimbursement Loans and
\nexercising all rights and remedies with respect thereto.
\n 36
\n 30<\/p>\n
(e) Whenever, at any time after the Issuing Lender has received from
\neach Participating Lender its pro rata share of any Acceptance Reimbursement
\nLoan in accordance with subsection 5.3(c), the Issuing Lender receives any
\npayments related to such Acceptance Reimbursement Loan (whether received
\ndirectly from the Company or otherwise, including proceeds of collateral applied
\nthereto by the Issuing Lender), or any payment of interest on account thereof,
\nthe Issuing Lender will distribute to each Participating Lender its pro rata
\nshare thereof; provided, however, that in the event that the receipt by the
\nIssuing Lender of such payments or such payment of interest (as the case may be)
\nis required to be returned, each Participating Lender will return to the Issuing
\nLender any portion thereof previously distributed by the Issuing Lender to it.<\/p>\n
(f) Within fifteen days after the end of each calendar quarter, the
\nIssuing Lender will notify each Participating Lender and the Company of (i) each
\ncreation of an Acceptance by the Issuing Lender during such calendar quarter and
\n(ii) each payment made by the Company to the Issuing Lender during such calendar
\nquarter on account of any Acceptance Reimbursement Obligation.<\/p>\n
5.4 Termination of Acceptance Commitments. In the event that (a)
\nthere is a determination made by any regulatory body or instrumentality thereof
\n(including, without limitation, any Federal Reserve Lender or any bank
\nexaminer), or there is a change in, or change in interpretation of, any
\napplicable law, rule or regulation (such determination or such change, a
\n“Reserve Determination”), in either case to the effect that bankers’ acceptances
\ncreated hereunder or in connection with a substantially similar facility
\n(whether or not the Company or any Lender is directly involved as parties) will
\nbe ineligible for reserve-free treatment (or if already discounted, should have
\nbeen ineligible for reserve-free treatment) with Federal Reserve Banks, and as a
\nresult any Lender is required to maintain, or determines as a matter of prudent
\nbanking that it is appropriate for it to maintain, additional reserves, or (b)
\nany restriction is imposed on any Lender (including, without limitation, any
\nchange in acceptance limits imposed on any Lender) which would prevent such
\nLender from creating or purchasing participating interests in bankers’
\nacceptances, as the case may be, or otherwise performing its obligations in
\nrespect of Acceptances, then, with the consent of the Participating Lenders, the
\nIssuing Lender may, or upon the direction of any Participating Lender, the
\nIssuing Lender shall, by notice to the Company in accordance with subsection
\n13.2 terminate the obligation of the Issuing Lender to issue Time Draft Letters
\nof Credit and to create Acceptances in whole, effective on the date on which the
\nIssuing Lender gives such notice, and the Issuing Lender shall have no further
\nobligation to issue Time Draft Letters of Credit.<\/p>\n
5.5 Mandatory Prepayment. The Company shall, within one Business Day
\nof its receipt of a notice of termination from the Issuing Lender pursuant to
\nsubsection 5.4, prepay the Acceptance Obligations with respect to each
\nAcceptance then outstanding by paying to the Issuing Lender the face amount of
\neach Acceptance less a prepayment discount calculated by the Issuing Lender
\nbased upon the then prevailing rate for U.S. Treasury Bills maturing on or about
\nthe maturity date of such Acceptance (and communicated to the Company in its
\nnotice of termination pursuant to subsection 5.4); provided that in the event
\nthe Company fails to make such prepayment as provided in this subsection 5.5,
\neach Lender’s
\n 37
\n 31<\/p>\n
pro rata share of the Acceptance Obligation with respect to each Acceptance then
\noutstanding shall be deemed to be a Revolving Credit Loan made on the Business
\nDay on which such prepayment was due in a principal amount equal to such
\nLender’s pro rata share of the face amount of such Acceptance and subject to the
\nterms and conditions of Section 2 and Section 6 hereof.<\/p>\n
SECTION 6. GENERAL PROVISIONS APPLICABLE TO LOANS<\/p>\n
6.1 Interest Rates and Payment Dates. (a) Each Eurodollar Loan shall
\nbear interest for each day during each Interest Period with respect thereto at a
\nrate per annum equal to the Eurodollar Rate determined for such day plus the
\nApplicable Margin.<\/p>\n
(b) Each ABR Loan shall bear interest at a rate per annum equal to
\nthe ABR.<\/p>\n
(c) If all or a portion of (i) the principal amount of any Loan,
\n(ii) any interest payable thereon or (iii) any commitment fee or other amount
\npayable hereunder shall not be paid when due (whether at the stated maturity, by
\nacceleration or otherwise), such overdue amount shall bear interest at a rate
\nper annum which is (x) in the case of overdue principal, the rate that would
\notherwise be applicable thereto pursuant to the foregoing provisions of this
\nsubsection plus 2% or (y) in the case of overdue interest, commitment fee or
\nother amount, the rate described in paragraph (b) of this subsection plus 2%, in
\neach case from the date of such non-payment until such amount is paid in full
\n(as well after as before judgment).<\/p>\n
(d) Interest shall be payable in arrears on each Interest Payment
\nDate, provided that interest accruing pursuant to paragraph (c) of this
\nsubsection shall be payable from time to time on demand.<\/p>\n
6.2 Commitment and Other Fees. (a) The Company agrees to pay to the
\nAgent, for the account of the Lenders, a commitment fee for the period from and
\nincluding the first day of the Commitment Period to the Termination Date,
\ncomputed at the rate per annum equal to the Applicable Commitment Rate
\nPercentage on the average daily amount of the Available Revolving Credit
\nCommitments during the period for which payment is made, payable quarterly in
\narrears on the last day of each March, June, September and December and on the
\nTermination Date, commencing on the first of such dates to occur after the date
\nhereof.<\/p>\n
(b) The Company agrees to pay to the Agent, for the account of the
\nAgent, an agent’s fee and the other fees described in the fee letter dated May
\n22, 1997 between the Company and the Agent.<\/p>\n
6.3 Commercial Letter of Credit Fees. (a) The Company agrees that on
\nthe date of each drawing under a Commercial Letter of Credit, it will pay to the
\nAgent, for the account of the Issuing Lender, a Commercial Letter of Credit fee.
\nIn the case of a Sight Draft Letter of Credit, such fee shall be equal to the
\nhigher of (i) $50 and (ii) the Applicable Sight Draft Fee Percentage then in
\neffect of the amount of such drawing (calculated on the
\n 38
\n 32<\/p>\n
basis of the Dollar Equivalent thereof in the case of any Letter of Credit
\nissued in an Approved Foreign Currency). In the case of a Time Draft Letter of
\nCredit, such fee shall equal the higher of (i) $120 and (ii) a percentage of the
\namount of such drawing equal to the Applicable Margin then in effect (calculated
\non the basis of the Dollar Equivalent thereof in the case of any Letter of
\nCredit issued in an Approved Foreign Currency). On the last day of each March,
\nJune, September and December, the Issuing Lender will allocate and pay to each
\nParticipating Lender a fee equal to such Participating Lender’s pro rata share
\nof the amount of such fees received from the Company during the immediately
\npreceding three-month period calculated on the basis of the Applicable Sight
\nDraft Fee Percentage or the Applicable Margin.<\/p>\n
(b) The Company agrees to pay to the Issuing Lender for its own
\naccount the customary fees (including, without limitation, issuing fees,
\namendment fees and processing fees) charged by the Issuing Lender in connection
\nwith its issuance and administration of commercial letters of credit.<\/p>\n
6.4 Standby Letter of Credit Fees. (a) The Company agrees to pay the
\nAgent, for the account of the Issuing Lender and the Participating Lenders, a
\nStandby Letter of Credit fee calculated at the rate per annum equal to the
\nApplicable Margin from time to time in effect of the amount available to be
\ndrawn under each Standby Letter of Credit issued for its account (and in no
\nevent less than $500 with respect to each such Standby Letter of Credit),
\npayable to the Issuing Lender semi-annually in advance on the date of issue of
\nany Standby Letter of Credit and, thereafter, on each six-month anniversary of
\nsuch date of issue. The Issuing Lender will promptly pay to the Participating
\nLenders their pro rata shares of any amounts received from the Company in
\nrespect of any such fees.<\/p>\n
(b) The Company agrees to pay to the Issuing Lender for its own
\naccount the customary fees (including, without limitation, issuing fees and
\nprocessing fees) charged by the Issuing Lender in connection with its issuance
\nand administration of standby letters of credit.<\/p>\n
6.5 Acceptance Fees. (a) The Company agrees to pay the Issuing
\nLender an acceptance commission (an “Acceptance Commission”) on the face amount
\nof each Acceptance created by the Issuing Lender hereunder for the period from
\nthe date of such Acceptance to the date of its maturity at a rate per annum
\nequal to the Acceptance Discount Rate in effect on the date of creation of such
\nAcceptance plus the Applicable Margin, payable in full on the date of creation
\nof such Acceptance; provided that such Acceptance Commission shall be an amount
\nequal to at least $120. On the last day of each March, June, September and
\nDecember, the Issuing Lender will allocate and pay to each Participating Lender
\nsuch Participating Lender’s pro rata share of the Applicable Margin portion of
\nthe Acceptance Commissions paid during the immediately preceding three-month
\nperiod.<\/p>\n
(b) The Company agrees to pay to the Issuing Lender for its own
\naccount the customary fees (including, without limitation, processing fees)
\ncharged by the Issuing Lender in connection with its creation and administration
\nof bankers’ acceptances.
\n 39
\n 33<\/p>\n
6.6 Computation of Interest and Fees. (a) Interest on ABR Loans,
\nLetter of Credit Reimbursement Loans, Acceptance Reimbursement Loans, Letter of
\nCredit Reimbursement Obligations and Acceptance Reimbursement Obligations, and
\nper annum fees shall be calculated on the basis of a 365- (or 366, as the case
\nmay be) day year for the actual days elapsed; otherwise interest shall be
\ncalculated on the basis of a 360-day year for the actual days elapsed. The Agent
\nshall as soon as practicable notify the Company and the Lenders of each
\ndetermination of a Eurodollar Rate. Any change in the interest rate on a Loan
\n(or on any other obligation accruing interest under the terms hereof) resulting
\nfrom a change in the ABR or the Eurocurrency Reserve Requirements shall become
\neffective as of the opening of business on the day on which such change becomes
\neffective. The Agent shall as soon as practicable notify the Company and the
\nLenders of the effective date and the amount of each such change in interest
\nrate.<\/p>\n
(b) Each determination of an interest rate by the Agent pursuant to
\nany provision of this Agreement shall be conclusive and binding on the Company
\nand the Lenders in the absence of manifest error.<\/p>\n
6.7 Optional Prepayments. The Company may at any time and from time
\nto time prepay the Loans, in whole or in part, without premium or penalty, upon
\nirrevocable notice to the Agent prior to 11:00 A.M. on such date of prepayment,
\nspecifying the date and amount of prepayment and whether the prepayment is of
\nEurodollar Loans, ABR Loans or a combination thereof, and, if of a combination
\nthereof, the amount allocable to each. Upon receipt of any such notice the Agent
\nshall promptly notify each Lender thereof. If any such notice is given, the
\namount specified in such notice shall be due and payable on the date specified
\ntherein, together with any amounts payable pursuant to subsection 6.14 and, in
\nthe case of prepayments of the Term Loans only, accrued interest to such date on
\nthe amount prepaid. Partial prepayments of the Term Loans shall be applied to
\nthe installments of principal thereof in the inverse order of their scheduled
\nmaturities. Amounts prepaid on account of the Term Loans may not be reborrowed.
\nPartial prepayments shall be in an aggregate principal amount of $500,000 or a
\nwhole multiple of $100,000 in excess thereof. In the event any prepayment
\npursuant to this subsection 6.7 of Eurodollar Loans is not made on the last day
\nof an Interest Period, the Company shall be obligated to reimburse the Lenders
\nin respect thereof pursuant to subsection 6.14.<\/p>\n
6.8 Termination or Reduction of Revolving Credit Commitments;
\nExtension of Revolving Credit Commitments. The Company shall have the right,
\nupon not less than five Business Days’ notice to the Agent, to terminate the
\nRevolving Credit Commitments or, from time to time, to reduce the amount of the
\nRevolving Credit Commitments, provided that no such termination or reduction
\nshall be permitted (i) to the extent that, after giving effect thereto and to
\nany prepayments of the Loans made on the effective date thereof, the Aggregate
\nRevolving Credit Extensions of Credit then outstanding would exceed the
\nRevolving Credit Commitments then in effect or (ii) prior to the Consummation
\nDate. Any such reduction shall be in an amount equal to $1,000,000 or a whole
\nmultiple of $100,000 in excess thereof and shall reduce permanently the
\nRevolving Credit Commitments then in effect.
\n 40
\n 34<\/p>\n
6.9 Pro Rata Treatment and Payments. (a) Each borrowing by the
\nCompany from the Lenders under the Revolving Credit Commitments, each payment by
\nthe Company on account of any commitment fee hereunder and any reduction of the
\nRevolving Credit Commitments of the Lenders shall be made pro rata according to
\nthe respective Revolving Credit Commitment Percentages of the Lenders. Each
\npayment (including each prepayment) by the Company on account of principal of
\nand interest on the Loans shall be made pro rata according to the respective
\noutstanding principal amounts of the Loans then held by the Lenders. All
\npayments (including prepayments) to be made by the Company hereunder and under
\nthe Notes, whether on account of principal, interest, fees or otherwise, shall
\nbe made without set off or counterclaim and shall be made prior to 12:00 Noon,
\nNew York City time, on the due date thereof to the Agent at the Agent’s office
\nspecified in subsection 13.2, in Dollars and in immediately available funds. The
\nAgent shall distribute such payments to the Lenders promptly upon receipt in
\nlike funds as received. If any payment hereunder becomes due and payable on a
\nday other than a Business Day, such payment shall be due on the next succeeding
\nBusiness Day, and, with respect to payments of principal, interest thereon shall
\nbe payable at the then applicable rate during such extension.<\/p>\n
(b) Unless the Agent shall have been notified in writing by any
\nLender prior to a Borrowing Date that such Lender will not make the amount that
\nwould constitute its Revolving Credit Commitment Percentage of the borrowing on
\nsuch date available to the Agent, the Agent may assume that such Lender has made
\nsuch amount available to the Agent on such Borrowing Date, and the Agent may, in
\nreliance upon such assumption, make available to the Company a corresponding
\namount. If such amount is made available to the Agent on a date after such
\nBorrowing Date, such Lender shall pay to the Agent on demand an amount equal to
\nthe product of (i) the daily average Federal Funds Effective Rate during such
\nperiod as quoted by the Agent, times (ii) the amount of such Lender’s Revolving
\nCredit Commitment Percentage of such borrowing, times (iii) a fraction the
\nnumerator of which is the number of days that have elapsed from and including
\nsuch Borrowing Date to the date on which such Lender’s Revolving Credit
\nCommitment Percentage of such borrowing shall have become immediately available
\nto the Agent and the denominator of which is 360. A certificate of the Agent
\nsubmitted to any Lender with respect to any amounts owing under this subsection
\nshall be conclusive in the absence of manifest error. If such Lender’s Revolving
\nCredit Commitment Percentage of such borrowing is not in fact made available to
\nthe Agent by such Lender within three Business Days of such Borrowing Date, the
\nAgent shall be entitled to recover (without duplication) such amount with
\ninterest thereon at the rate per annum applicable to ABR Loans hereunder, on
\ndemand, from the Company.<\/p>\n
6.10 Conversion and Continuation Options. (a) The Company may elect
\nfrom time to time to convert Eurodollar Loans to ABR Loans by giving the Agent
\nat least two Business Days’ prior irrevocable notice of such election, provided
\nthat in the event any such conversion of Eurodollar Loans is not made on the
\nlast day of an Interest Period, the Company shall be obligated to reimburse the
\nLenders in respect thereof pursuant to Section 6.14. The Company may elect from
\ntime to time to convert ABR Loans to Eurodollar Loans by giving the Agent at
\nleast three Business Days’ prior irrevocable notice of such election. Any such
\nnotice of conversion to Eurodollar Loans shall specify the length of the initial
\nInterest Period or Interest Periods therefor. Upon receipt of any such notice
\nthe Agent shall
\n 41
\n 35<\/p>\n
promptly notify each Lender thereof. All or any part of outstanding Eurodollar
\nLoans and ABR Loans may be converted as provided herein, provided that (i) no
\nLoan may be converted into a Eurodollar Loan when any Event of Default has
\noccurred and is continuing and the Agent has or the Required Lenders have
\ndetermined that such a conversion is not appropriate and (ii) no Loan may be
\nconverted into a Eurodollar Loan after the date that is one month prior to the
\nTermination Date or the date final payment is due on the Term Loans.<\/p>\n
(b) Any Eurodollar Loans may be continued as such upon the
\nexpiration of the then current Interest Period with respect thereto by the
\nCompany giving notice to the Agent, in accordance with the applicable provisions
\nof the term “Interest Period” set forth in subsection 1.1, of the length of the
\nnext Interest Period to be applicable to such Loans, provided that no Eurodollar
\nLoan may be continued as such (i) when any Event of Default has occurred and is
\ncontinuing and the Agent has or the Required Lenders have determined that such a
\ncontinuation is not appropriate or (ii) after the date that is one month prior
\nto the Termination Date and provided, further, that if the Company shall fail to
\ngive such notice or if such continuation is not permitted such Loans shall be
\nautomatically converted to ABR Loans on the last day of such then expiring
\nInterest Period.<\/p>\n
6.11 Minimum Amounts and Maximum Number of Tranches. All borrowings,
\nconversions and continuations of Loans hereunder and all selections of Interest
\nPeriods hereunder shall be in such amounts and be made pursuant to such
\nelections so that, after giving effect thereto, the aggregate principal amount
\nof the Loans comprising each Eurodollar Tranche shall be equal to $5,000,000 or
\na whole multiple of $500,000 in excess thereof. In no event shall there be more
\nthan 15 Eurodollar Tranches outstanding at any time.<\/p>\n
6.12 Inability to Determine Interest Rate. If prior to the first day
\nof any Interest Period:<\/p>\n
(a) the Agent shall have determined (which determination shall be
\n conclusive and binding upon the Company) that, by reason of circumstances
\n affecting the relevant market, adequate and reasonable means do not exist
\n for ascertaining the Eurodollar Rate for such Interest Period, or<\/p>\n
(b) the Agent shall have received notice from the Required Lenders
\n that the Eurodollar Rate determined or to be determined for such Interest
\n Period will not adequately and fairly reflect the cost to such Lenders (as
\n conclusively certified by such Lenders) of making or maintaining their
\n affected Loans during such Interest Period,<\/p>\n
the Agent shall give telecopy or telephonic notice thereof to the Company and
\nthe Lenders as soon as practicable thereafter. Unless the Company shall have
\nnotified the Agent promptly upon receipt of such notice that if it wishes to
\nrescind or modify its request (x) any Eurodollar Loans requested to be made on
\nthe first day of such Interest Period shall be made as ABR Loans and (y) any
\nLoans that were to have been converted on the first day of such Interest Period
\nto Eurodollar Loans shall be converted to or continued as ABR Loans. In
\naddition, in the case any such notice is given, any outstanding Eurodollar Loans
\nshall be converted, on the first day of such Interest Period, to ABR Loans.
\nUntil such notice has been
\n 42
\n 36<\/p>\n
withdrawn by the Agent, no further Eurodollar Loans shall be made or continued
\nas such, nor shall the Company have the right to convert Loans to Eurodollar
\nLoans.<\/p>\n
6.13 Illegality. Notwithstanding any other provision herein, if the
\nadoption of or any change in any Requirement of Law or in the interpretation or
\napplication thereof shall make it unlawful for any Lender to make or maintain
\nEurodollar Loans as contemplated by this Agreement, (a) the commitment of such
\nLender hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and
\nconvert ABR Loans to Eurodollar Loans shall forthwith be cancelled and (b) such
\nLender’s Loans then outstanding as Eurodollar Loans, if any, shall be converted
\nautomatically to ABR Loans on the respective last days of the then current
\nInterest Periods with respect to such Loans or within such earlier period as
\nrequired by law. If any such conversion of a Eurodollar Loan occurs on a day
\nwhich is not the last day of the then current Interest Period with respect
\nthereto, the Company shall pay to such Lender such amounts, if any, as may be
\nrequired pursuant to subsection 6.14.<\/p>\n
6.14 Indemnity. The Company agrees to indemnify each Lender and to
\nhold each Lender harmless from any loss or expense which such Lender may sustain
\nor incur as a consequence of (a) default by the Company in making a borrowing
\nof, conversion into or continuation of Eurodollar Loans after the Company has
\ngiven a notice requesting the same in accordance with the provisions of this
\nAgreement, (b) default by the Company in making any prepayment of Eurodollar
\nLoans after the Company has given notice thereof in accordance with the
\nprovisions of this Agreement or (c) the making of a prepayment of Eurodollar
\nLoans on a day which is not the last day of an Interest Period with respect
\nthereto. Such indemnification may include an amount equal to the excess, if any,
\nof (i) the amount of interest which would have accrued on the amount so prepaid,
\nor not so borrowed, converted or continued, for the period from the date of such
\nprepayment or of such failure to borrow, convert or continue to the last day of
\nsuch Interest Period (or, in the case of a failure to borrow, convert or
\ncontinue, the Interest Period that would have commenced on the date of such
\nfailure) in each case at the applicable rate of interest for such Loans provided
\nfor herein (excluding, however, the Applicable Margin included therein, if any)
\nover (ii) the amount of interest (as reasonably determined by such Lender) which
\nwould have accrued to such Lender on such amount by placing such amount on
\ndeposit for a comparable period with leading banks in the interbank eurodollar
\nmarket. A certificate setting forth the calculations as to any additional
\namounts payable pursuant to this subsection 6.14 shall be submitted by an
\nofficer of a Lender, through the Agent, to the Company and shall be conclusive
\nin the absence of manifest error. This covenant shall survive the termination of
\nthis Agreement and the payment of the Loans, the Notes, the Acceptance
\nObligations, the Letter of Credit Obligations and all other amounts payable
\nhereunder.<\/p>\n
6.15 Change of Lending Office. Each Lender agrees that if it makes
\nany demand for payment under subsection 6.16 or 6.17, or if any adoption or
\nchange of the type described in subsection 6.13 shall occur with respect to it,
\nit will use reasonable efforts (consistent with its internal policy and legal
\nand regulatory restrictions and so long as such efforts would not be
\ndisadvantageous to it, as determined in its sole discretion) to designate a
\ndifferent lending office if the making of such a designation would reduce or
\nobviate the need
\n 43
\n 37<\/p>\n
for the Company to make payments under subsection 6.16 or 6.17, or would
\neliminate or reduce the effect of any adoption or change described in subsection
\n6.13.<\/p>\n
6.16 Taxes. (a) All payments shall be made by the Company under this
\nAgreement and the Notes free and clear of, and without deduction or withholding
\nfor or on account of, any present or future income, stamp or other taxes,
\nlevies, imposts, duties, charges, fees, deductions or withholdings, now or
\nhereafter imposed, levied, collected, withheld or assessed by any Governmental
\nAuthority, excluding, in the case of the Agent and each Lender, net income and
\nfranchise taxes (imposed in lieu of net income taxes) imposed on the Agent or
\nsuch Lender, as the case may be, as a result of a present or former connection
\nbetween the Agent or such Lender and the jurisdiction of the Governmental
\nAuthority imposing such tax, or any political subdivision or taxing authority
\nthereof or therein (other than any such connection arising solely from the Agent
\nor such Lender having executed, delivered or performed its obligations or
\nreceived a payment under, or enforced, this Agreement or any Note). If any such
\nnon-excluded taxes, levies, imposts, duties, charges, fees, deductions and
\nwithholdings (“Non-Excluded Taxes”) are required to be withheld from any amounts
\npayable to the Agent or any Lender hereunder or under the Notes, the amounts so
\npayable to the Agent or such Lender shall be increased to the extent necessary
\nto yield to the Agent or such Lender (after payment of all Non-Excluded Taxes)
\ninterest or any such other amounts payable hereunder at the rates or in the
\namounts specified in this Agreement and the Notes, provided, however, that the
\nCompany shall not be required to increase any such amounts payable to any Lender
\nthat is not organized under the laws of the United States of America or a state
\nthereof (a “Non-U.S. Lender”) with respect to any taxes that are attributable to
\nsuch Non-U.S. Lender’s failure to comply with the requirements of paragraph (b)
\nof this subsection. Whenever any Non-Excluded Taxes specified in the preceding
\nsentence are payable by the Company, as promptly as possible thereafter the
\nCompany shall send to the Agent for its own account or for the account of such
\nLender, as the case may be, a certified copy of an original official receipt
\nreceived by the Company showing payment thereof. If the Company fails to pay any
\nNon-Excluded Taxes when due to the appropriate taxing authority or fails to
\nremit to the Agent the required receipts or other required documentary evidence,
\nthe Company shall indemnify the Agent and the Lenders for any incremental taxes,
\ninterest or penalties that may become payable by the Agent or any Lender as a
\nresult of any such failure. The agreements in this subsection shall survive the
\ntermination of this Agreement and the payment of the outstanding Notes,
\nAcceptance Obligations, Letter of Credit Obligations and all other amounts
\npayable hereunder.<\/p>\n
(b) Each Non-U.S. Lender agrees that prior to the first Interest
\nPayment Date it will deliver to the Company and the Agent (i) two duly completed
\ncopies of United States Internal Revenue Service Form 1001 or 4224 or successor
\napplicable form, as the case may be, and (ii) an Internal Revenue Service Form
\nW-8 or W-9 or successor applicable form. Each such Lender also agrees to deliver
\nto the Company and the Agent two new, duly completed copies of the said Form
\n1001 or 4224 and Form W-8 or W-9, or successor applicable forms or other manner
\nof certification, as the case may be, on or before the date that any such form
\nexpires or becomes obsolete or after the occurrence of any event requiring a
\nchange in the most recent form previously delivered by it to the Company, and
\nsuch extensions or renewals thereof as may reasonably be requested by the
\nCompany or the Agent.
\n 44
\n 38<\/p>\n
Such Lender shall certify (i) in the case of a Form 1001 or 4224, that it is
\nentitled to receive payments under the Agreement without deduction or
\nwithholding of any United States federal income taxes, unless in any such case
\nan event (including, without limitation, any change in treaty, law or
\nregulations) has occurred after the Closing Date and prior to the date on which
\nany such delivery would otherwise be required which renders all such forms
\ninapplicable or which would prevent such Lender from duly completing and
\ndelivering any such form with respect to it and such Lender advises the Company
\nthat it is not capable of so receiving payments without any deduction or
\nwithholding, and (ii) in the case of a Form W-8 or W-9, that it is entitled to a
\ncomplete exemption from United States backup withholding tax. Each Person that
\nshall become a Lender or a Participant pursuant to subsection 13.6 shall, upon
\nthe effectiveness of the related transfer, be required to provide all of the
\nforms and statements required pursuant to this subsection, provided that in the
\ncase of a Participant, such Participant shall furnish all such required forms
\nand statements to the Lender from which the related participation shall have
\nbeen purchased.<\/p>\n
(c) Each Lender agrees to use reasonable efforts (including
\nreasonable efforts to change the office in which it is booking its Loans)
\nconsistent with its internal policy and legal and regulatory restrictions and so
\nlong as such efforts would not be disadvantageous to it, as determined in its
\nsole discretion, to avoid or minimize any amounts which might otherwise be
\npayable pursuant to this subsection 6.16.<\/p>\n
(d) If the Agent or any Lender receives a refund which in the good
\nfaith judgment of such Lender is allocable to Non-Excluded Taxes paid by the
\nCompany, it shall promptly pay such refund, together with any other amounts paid
\nby the Company in connection with such refunded Non-Excluded Taxes, to the
\nCompany, net of all out-of-pocket expenses of such Lender incurred in obtaining
\nsuch refund, provided, however, that the Company agrees to promptly return such
\nrefund to the Agent or the applicable Lender, as the case may be, if it receives
\nnotice from the Agent or applicable Lender that such Agent or Lender is required
\nto repay such refund.<\/p>\n
6.17 Requirements of Law. (a) If the adoption of or any change in
\nany Requirement of Law or in the interpretation or application thereof or
\ncompliance by any Lender with any request or directive (whether or not having
\nthe force of law) from any central bank or other Governmental Authority made
\nsubsequent to the dates hereof:<\/p>\n
(i) does or shall subject any Lender to any tax of any kind
\n whatsoever with respect to this Agreement, any Note, any Eurodollar Loan,
\n any Letter of Credit Document or any Acceptance Document, or change the
\n basis of taxation of payments to such Lender in respect thereof (except
\n for Non-Excluded Taxes covered by subsection 6.16 and changes in the rate
\n of tax on the overall net income of such Lender);<\/p>\n
(ii) does or shall impose, modify or hold applicable any reserve,
\n special deposit, compulsory loan, assessment or similar requirement
\n against Letters of Credit issued by the Issuing Lender or participated in
\n by the Participating Lender or against assets held by, deposits or other
\n liabilities in or for the account of, advances, loans or
\n 45
\n 39<\/p>\n
other extensions of credit by, or any other acquisition of funds by, any
\n office of such Lender which is not otherwise included in the determination
\n of the Eurodollar Rate hereunder; or<\/p>\n
(iii) does or shall impose on such Lender any other condition;<\/p>\n
and the result of any of the foregoing is to increase the cost to such Lender of
\nmaking, converting into, continuing or maintaining Eurodollar Loans, issuing,
\nmaintaining or participating in any Letter of Credit or creating or
\nparticipating in any Acceptance, or to reduce any amount receivable hereunder in
\nrespect thereof, then, in any such case, the Company shall promptly pay such
\nLender, upon its demand, any additional amounts necessary to compensate such
\nLender for such additional increased cost or reduced amount receivable. If any
\nLender becomes entitled to claim any additional amounts pursuant to this
\nsubsection, it shall promptly notify the Company, through the Agent, of the
\nevent by reason of which it has become so entitled. A certificate as to any
\nadditional amounts payable pursuant to this paragraph, submitted by such Lender,
\nthrough the Agent, to the Company shall be conclusive in the absence of manifest
\nerror.<\/p>\n
(b) In the event that any Acceptance created hereunder is not, for
\nany reason, a bankers’ acceptance with respect to which no reserves are required
\nto be maintained by the Issuing Lender or any Participating Lender under
\nRegulation D of the Board in effect from time to time or under any other law or
\nregulation (an “Eligible Acceptance”), the Company shall, upon demand by the
\nAgent, pay to the Agent for the account of the Lenders, such additional amounts
\nas are sufficient to indemnify each Lender against any additional costs, as
\ndetermined by the Lenders and notified in writing to the Agent, incurred by the
\nLenders (including, without limitation, costs resulting from any Reserve
\nDetermination, or reserve requirements, or premium liability to the Federal
\nDeposit Insurance Corporation, or a higher discount rate) resulting from such
\nAcceptance not constituting an Eligible Acceptance hereunder.<\/p>\n
(c) In the event that after the date hereof, any Lender shall
\ndetermine that the adoption of any Requirement of Law, rule, regulation or
\nguideline regarding capital adequacy or any change in any Requirement of Law,
\nrule, regulation or guideline regarding capital adequacy or in the
\ninterpretation or application thereof or compliance by such Lender with any
\nrequest or directive regarding capital adequacy (whether or not having the force
\nof law) from any Governmental Authority, including, without limitation, the
\nissuance of any final rule, regulation or guideline, does or shall have the
\neffect of reducing the rate of return on such Lender’s capital as a consequence
\nof its obligations hereunder (including, without limitation, the issuance of any
\nLetters of Credit and the creation and discount of Acceptances) to a level below
\nthat which such Lender could have achieved but for such Requirement of Law,
\nrule, regulation or guideline, change or compliance (taking into consideration
\nsuch Lender’s policies with respect to capital adequacy) by an amount deemed by
\nsuch Lender to be material, then from time to time, after submission by such
\nLender to the Company (with a copy to the Agent) of a written request therefor,
\nthe Company shall pay to such Lender such additional amount or amounts as will
\ncompensate such Lender for such reduction.
\n 46
\n 40<\/p>\n
(d) The agreements in this subsection 6.17 shall survive the
\ntermination of this Agreement and payment of the outstanding Notes, Acceptance
\nObligations, Letter of Credit Obligations and all other amounts payable
\nhereunder.<\/p>\n
6.18 Obligations Absolute. (a) The Company’s payment obligations
\nunder this Agreement shall be unconditional and irrevocable and shall be paid
\nstrictly in accordance with the terms of this Agreement under all circumstances,
\nincluding, without limitation, the existence of any claim, set-off, defense or
\nother right which the Company may have at any time against the Issuing Lender,
\nany Participating Lender, any Lender or the Agent, or against any beneficiary of
\nany Letter of Credit or any holder of any Acceptance, or any transferee from any
\nsuch beneficiary or holder (or any Person for whom any such beneficiary, holder
\nor transferee may be acting), or against any other Person, whether in connection
\nwith this Agreement, the transactions contemplated hereby, or any unrelated
\ntransaction; provided, however, that this provision shall be deemed a waiver by
\nthe Company of the assertion of a compulsory counterclaim only to the extent
\npermitted by applicable law. The Company assumes all risks of the acts or
\nomissions of the users of the Letters of Credit and Acceptances and all risks of
\nthe misuse of the Letters of Credit and Acceptances. Neither the Issuing Lender,
\nnor any of its correspondents, nor any Participating Lender, nor the Agent shall
\nbe responsible: (i) for the form, validity, sufficiency, accuracy, genuineness
\nor legal effect of any document specified in any of the Letter of Credit
\nDocuments, even if it should in fact prove to be in any or all respects invalid,
\ninsufficient, inaccurate, fraudulent or forged; (ii) for the validity or
\nsufficiency of any instrument transferring or assigning or purporting to
\ntransfer or assign any of the Letters of Credit or any of the rights or benefits
\nthereunder or proceeds thereof in whole or in part, which may prove to be
\ninvalid or ineffective for any reason; (iii) for failure of any draft to bear
\nany reference or adequate reference to any of the Letters of Credit, or failure
\nof anyone to note the amount of any draft on the reverse of any of the Letters
\nof Credit or to surrender or to take up any of the Letters of Credit or to send
\nforward any such document apart from drafts as required by the terms of any of
\nthe Letters of Credit, each of which provisions, if contained in a Letter of
\nCredit itself, it is agreed, may be waived by the Issuing Lender; (iv) for
\nerrors, omissions, interruptions or delays in transmission or delivery of any
\nmessages, by mail, cable, telegraph, telex or otherwise, whether or not they be
\nin cipher; (v) for any error, neglect, default, suspension or insolvency of any
\ncorrespondents of the Issuing Lender; (vi) for errors in translation or for
\nerrors in interpretation of technical terms; (vii) for any loss or delay, in the
\ntransmission or otherwise, of any such document or draft or of proceeds thereof;
\nor (viii) for any other circumstances whatsoever in making or failing to make
\npayment under a Letter of Credit, except only that the Company shall have a
\nclaim against the Issuing Lender, and the Issuing Lender shall be liable to the
\nCompany, to the extent, but only to the extent, of any direct, as opposed to
\nconsequential, damages suffered by the Company which the Company proves were
\ncaused by the Issuing Lender’s willful misconduct or gross negligence in
\ndetermining whether documents presented under a Letter of Credit comply with the
\nterms of such Letter of Credit. None of the foregoing shall affect, impair or
\nprevent the vesting of any of the rights or powers of the Issuing Lender, the
\nAgent or any of the Participating Lenders. The Issuing Lender or the Agent shall
\nhave the right to transmit the terms of the Letter of Credit involved without
\ntranslating them.
\n 47
\n 41<\/p>\n
(b) In furtherance and extension and not in limitation of the
\nspecific provisions in subsection 6.18(a), (i) any action taken or omitted by
\nthe Issuing Lender, the Agent or by any of their respective correspondents under
\nor in connection with any of the Letters of Credit, if taken or omitted in good
\nfaith, shall be binding upon the Company and shall not put the Issuing Lender,
\nthe Agent or their respective correspondents under any resulting liability to
\nthe Company and (ii) the Issuing Lender may accept documents that appear on
\ntheir face to be in order, without responsibility for further investigation,
\nregardless of any notice or information to the contrary; provided that if the
\nIssuing Lender shall receive written notification from both the beneficiary of a
\nLetter of Credit and the Company that sufficiently identifies (in the opinion of
\nthe Issuing Lender) documents to be presented to the Issuing Lender which are
\nnot to be honored, the Issuing Lender agrees that it will not honor such
\ndocuments.<\/p>\n
6.19 Mandatory Prepayments and Commitment Reductions. (a) If, at any
\ntime during the Commitment Period, the Aggregate Revolving Credit Extensions of
\nCredit exceed the aggregate Revolving Credit Commitments then in effect, the
\nCompany shall, without notice or demand, immediately prepay the Revolving Credit
\nLoans in an aggregate principal amount equal to such excess, together with
\ninterest accrued to the date of such payment or prepayment and any amounts
\npayable under subsection 6.14. Prepayments shall be applied, first to ABR Loans
\nand second, to Eurodollar Loans. To the extent that after giving effect to any
\nprepayment of the Revolving Credit Loans required by the first sentence of this
\nparagraph (a), the Aggregate Revolving Credit Extensions of Credit exceed the
\naggregate Revolving Credit Commitments then in effect, the Company shall,
\nwithout notice or demand, immediately deposit in a cash collateral account with
\nthe Agent, having terms and conditions satisfactory to the Agent, as cash
\ncollateral security for the liability of the Issuing Lender (whether direct or
\ncontingent) under any Letters of Credit or Acceptances then outstanding, an
\naggregate amount equal to the amount by which the Aggregate Revolving Credit
\nExtensions of Credit exceed the aggregate Revolving Credit Commitments then in
\neffect.<\/p>\n
(b) On the Consummation Date, (i) the aggregate Revolving Credit
\nCommitments shall be automatically reduced to an amount equal to $225,000,000,
\n(ii) in connection with such reduction the amounts of the respective Revolving
\nCredit Commitments of each Lender shall be rearranged such that after giving
\neffect to clause (i) above each Lender’s (other than Chase’s) Revolving Credit
\nCommitment shall equal the lesser of (x) such Lender’s Pre-Consummation
\nRevolving Credit Commitment and (y) the product of (1) $175,000,000 multiplied
\nby (2) a fraction the numerator of which is such Lender’s Pre-Consummation
\nRevolving Credit Commitment and the denominator of which is the aggregate amount
\nof the Pre-Consummation Revolving Credit Commitments of all Lenders other than
\nChase and Chase’s Revolving Credit Commitment shall equal the greater of (x)
\n$50,000,000 and (y) the excess, if any, of $225,000,000 over the aggregate
\namount of Pre-Consummation Revolving Credit Commitments of all Lenders other
\nthan Chase and (iii) the Company shall prepay all then outstanding Revolving
\nCredit Loans and simultaneously reborrow from all Lenders, ratably according to
\ntheir respective Revolving Credit Commitments after giving effect to the
\nrearrangements thereof effected pursuant to clause (ii) above, an amount equal
\nto
\n 48
\n 42<\/p>\n
the lesser of (x) $225,000,000 and (y) the aggregate amount of the Revolving
\nCredit Loans so prepaid.<\/p>\n
(c) On the Non-Consummation Date (i) Chase’s Revolving Credit
\nCommitment shall automatically increase by $75,000,000, (ii) the Company shall
\nprepay all the outstanding Revolving Credit Loans and simultaneously reborrow
\nfrom all Lenders ratably according to their respective Revolving Credit
\nCommitments (after giving effect to Chase’s increase pursuant to clause (i)
\nabove) an amount equal to the lesser of (x) $225,000,000 and (y) the aggregate
\namount of the Revolving Credit Loans so prepaid, and (iii) that portion of the
\noutstanding principal amount of the Revolving Credit Loans (after giving effect
\nto clause (ii) above) that does not exceed $150,000,000 shall be converted to
\nTerm Loans in accordance with subsection 3.1.<\/p>\n
6.20 Cash Collateralization of Letter of Credit Obligations and
\nAcceptance Obligations. With respect to all Letters of Credit and Acceptances
\nthat shall not have matured or been paid or with respect to which presentment
\nfor honor shall not have occurred on or prior to the Termination Date, the
\nCompany shall, on the Termination Date, deposit in a cash collateral account
\nmaintained by the Agent (and under the exclusive dominion and control of the
\nAgent) an amount equal to the aggregate amount of the Letter of Credit
\nObligations plus the aggregate amount of Acceptance Obligations for application
\nto payments of drafts drawn under Letters of Credit and to payment of
\nAcceptances at maturity, and the unused portion thereof after such application,
\nif any, shall be applied to repay other obligations of the Company hereunder or
\nunder the Notes or any of the other Credit Documents, and after all Letters of
\nCredit have expired, all drafts and Acceptances have matured and been repaid and
\nall other obligations of the Company hereunder or any of the other Credit
\nDocuments are paid in full, the balance, if any, shall be returned to the
\nCompany.<\/p>\n
SECTION 7. CONDITIONS PRECEDENT<\/p>\n
7.1 Conditions to Effectiveness. The agreement of each Lender to
\nmake the initial Loan requested to be made by it is subject to the satisfaction,
\nimmediately prior to or concurrently with the making of such Loan, on the
\nClosing Date of the following conditions precedent:<\/p>\n
(a) Notes. The Agent shall have received a Revolving Credit Note for
\n each Lender, each conforming to the requirements hereof and executed by a
\n duly authorized officer of the Company.<\/p>\n
(b) Legal Opinions. The Agent shall have received, with a
\n counterpart for each Lender, an opinion of Paul, Weiss, Rifkind, Wharton & Garrison, counsel to the Company and the Guarantors, substantially in the
\n form of Exhibit F, and covering such other matters incident to the
\n transactions contemplated by this Agreement, the Notes and the other
\n Credit Documents as the Agent or any Lender may reasonably request.<\/p>\n
(c) Collateral Security, Guarantees and Subordination Agreements.
\n 49
\n 43<\/p>\n
(i) The Agent shall have received, with a counterpart for
\n each Lender, each of the following Credit Documents satisfactory to
\n the Agent, duly executed and delivered by the parties thereto and
\n each of which shall be in full force and effect:<\/p>\n
(A) the Guarantee and Collateral Agreement; and<\/p>\n
(B) the PRLE $24,000,000 Subordination Agreement.<\/p>\n
(d) Closing Certificates. The Agent shall have received, with a
\n counterpart for each Lender, (i) a closing certificate of the Company,
\n dated the Closing Date, substantially in the form of Exhibit G, executed
\n by a duly authorized officer of the Company and (ii) a closing certificate
\n of each Guarantor, dated the Closing Date, substantially in the form of
\n Exhibit H, executed by a duly authorized officer of such Guarantor, in
\n each case with appropriate attachments thereto.<\/p>\n
(e) Evidence of Insurance. The Agent shall have received evidence,
\n satisfactory to it, that the Company has obtained the policies of
\n insurance required pursuant to subsection 9.4 and by the Security
\n Documents.<\/p>\n
(f) Recordings and Filings. Any documents (including, without
\n limitation, financing statements and termination statements) required to
\n be filed, registered or recorded under any of the Security Documents in
\n order to create, in favor of the Agent for the benefit of the Lenders, a
\n perfected first-priority security interest in the collateral thereunder
\n with respect to which a security interest may be perfected by a filing
\n under the Uniform Commercial Code or other applicable law shall be duly
\n executed and in form to be properly filed, registered or recorded in each
\n office in each jurisdiction (other than Puerto Rico) required in order to
\n create in favor of the Agent for the benefit of the Lenders, a perfected
\n Lien on the respective collateral described in any Security Document in
\n the jurisdictions listed on Schedule 7.1.<\/p>\n
(g) Lien Searches. The Agent shall have received the results of a
\n recent search, by a Person satisfactory to the Agent, of the Uniform
\n Commercial Code filings which may have been filed with respect to personal
\n property of the Company and its Subsidiaries in the state and local filing
\n offices in each of the states indicated on Schedule 7.1.<\/p>\n
(h) Other Documents. The Agent shall have received, with a copy for
\n each Lender, such other certificates, opinions, documents and instruments
\n relating to the transactions contemplated hereby as may have been
\n reasonably requested by any Lender.<\/p>\n
(i) Corporate Proceedings of the Company. The Agent shall have
\n received a copy of the resolutions, in form and substance satisfactory to
\n the Agent, of the Board of Directors of the Company authorizing (i) the
\n execution, delivery and performance of the Credit Documents to which the
\n Company is a party and (ii) the granting by it of
\n 50
\n 44<\/p>\n
the Liens created pursuant to the Security Documents to which the Company
\n is a party, certified by the Secretary or an Assistant Secretary of the
\n Company as of the Closing Date, which certificate shall be in form and
\n substance satisfactory to the Agent and shall state that the resolutions
\n thereby certified have not been amended, modified, revoked or rescinded.<\/p>\n
(j) Corporate Documents. The Agent shall have received true and
\n complete copies of the certificate of incorporation and by-laws of the
\n Company, certified as of the Closing Date as complete and correct copies
\n thereof by the Secretary or an Assistant Secretary of the Company.<\/p>\n
(k) Additional Matters. All corporate and other proceedings and all
\n other documents (including, without limitation, all documents referred to
\n herein and not appearing as exhibits hereto) and legal matters in
\n connection with the transactions contemplated by this Agreement, the Notes
\n and the other Credit Documents shall be satisfactory in form and substance
\n to the Agent.<\/p>\n
(l) Fees. The Agent shall have received the fees required to be paid
\n on the Closing Date pursuant to the fee letter referred to in subsection
\n 6.2 hereof and the fees and disbursements of Simpson Thacher & Bartlett,
\n counsel to the Agent.<\/p>\n
(m) Consolidated Net Worth. The Agent shall have received a
\n certificate of a Responsible Officer of the Company (together with
\n supporting financial statements) certifying that the Consolidated Net
\n Worth of the Company as of the Closing Date is at least $150,000,000.<\/p>\n
(n) Reorganization. The Agent shall have received evidence in form
\n and substance reasonably satisfactory to it that the reorganization
\n described in Form S-1 shall have occurred.<\/p>\n
7.2 Conditions to All Extensions of Credit. The obligation of each
\nLender to make any Loan and the obligation of the Issuing Lender to issue any
\nLetter of Credit or create any Acceptance (including the Revolving Credit Loan
\nmade or initial Letter of Credit or Acceptance issued hereunder) is subject to
\nthe satisfaction of the following conditions precedent on the date such Loan is
\nmade or such Letter of Credit or Acceptance is issued or created:<\/p>\n
(a) Payments. All applicable fees and commissions and any other
\n amounts payable pursuant to this Agreement shall have been paid in full.<\/p>\n
(b) Representations and Warranties. The respective representations
\n and warranties made by each of the Company and the other Credit Parties in
\n the Credit Documents to which each is a party or which are contained in
\n any certificate, document or financial or other statement furnished at any
\n time under or in connection herewith shall be true and correct in all
\n material respects on and as of such date as if made on and as of such date
\n (other than (i) such
\n 51
\n 45<\/p>\n
representations as are made as of a specific earlier date, in which case
\n such representations and warranties shall be true and correct in all
\n material respects as of such earlier date and (ii) as previously notified
\n to the Agent and waived by the Required Lenders).<\/p>\n
(c) No Default or Event of Default. No Default or Event of Default
\n shall have occurred and be continuing on such date or after giving effect
\n to the Loans to be made, the Letters of Credit to be issued or the
\n Acceptances to be created and discounted, on such date.<\/p>\n
(d) Delivery of Documents. All documents required or otherwise
\n requested in connection with the issuance of any Letters of Credit or the
\n creation of any Acceptances hereunder shall have been delivered to the
\n Issuing Lender, the Participating Lenders, the Lenders or the Agent, as
\n the case may be, completed in a manner in form and substance satisfactory
\n to the party to whom such documents are delivered.<\/p>\n
Each borrowing by the Company hereunder and each issuance of a Letter of Credit
\nor creation of an Acceptance shall constitute a representation and warranty by
\nthe Company as of the date of such borrowing or issuance that the conditions in
\nclauses (b) and (c) of this subsection 7.2 have been satisfied.<\/p>\n
SECTION 8. REPRESENTATIONS AND WARRANTIES<\/p>\n
To induce the Agent, the Issuing Lender and the Lenders to enter
\ninto this Agreement and to make the Loans, issue and participate in the Letters
\nof Credit and create and participate in the Acceptances as herein provided, the
\nCompany hereby represents and warrants to the Agent, the Issuing Lender and to
\neach Lender that:<\/p>\n
8.1 Financial Condition. (a) The combined balance sheets of Polo
\nRalph Lauren L.P. and its Subsidiaries, Polo Ralph Lauren Enterprises, L.P., The
\nRalph Lauren Womenswear Company, L.P. and its Subsidiary and Polo Retail
\nCorporation and its Subsidiaries (all of the foregoing, collectively, the “Polo
\nCompany”) as at March 29, 1997 and the related combined statements of income and
\nretained earnings and of changes in financial position for the fiscal year ended
\non such date, reported on by Deloitte & Touche LLP, copies of which have
\nheretofore been furnished to each Lender, are complete and correct and present
\nfairly the financial condition of the Polo Company as at such date, and the
\nresults of Polo Company’s operations and changes in financial position for the
\nfiscal year then ended. All such financial statements, including the related
\nschedules and notes to all such financial statements, have been prepared in
\naccordance with GAAP applied consistently throughout the periods involved
\n(except as concurred in by such accountants or Responsible Officers, as the case
\nmay be, and as disclosed therein). No Polo Company had, at the date of the most
\nrecent balance sheet referred to above, any material Guarantee Obligation,
\ncontingent liabilities or liability for taxes, long-term lease or unusual
\nforward or long-term commitment, which is not reflected in the foregoing
\nstatements or in the notes thereto (and, in the case of such lease or
\n 52
\n 46<\/p>\n
commitment, which is required in accordance with GAAP to be reflected in such
\nstatements or notes) or which has not otherwise been disclosed to the Lenders in
\nwriting.<\/p>\n
(b) The consolidated pro forma balance sheet of the Polo Company and
\nits Subsidiaries as at March 29, 1997, a copy of which is set forth in the Form
\nS-1, adjusted to give effect to the Initial Public Offering, is complete and
\ncorrect and presents fairly on a pro forma basis the financial condition of the
\nCompany and its Subsidiaries as at such date.<\/p>\n
8.2 No Change. Since March 29, 1997 (a) there has been no
\ndevelopment or event which has had or could reasonably be expected to have a
\nMaterial Adverse Effect and (until the Closing Date) there has been no material
\nadverse change in the business, operations, property or financial or other
\ncondition of the Polo Company, taken as a whole; and (b) prior to the Closing
\nDate, except as described in the Form S-1 no dividends or other distributions
\nhave been declared, paid or made upon any shares of Capital Stock of the Company
\nor any of its Subsidiaries or any of the Polo Companies and neither the Company
\nnor any of its Subsidiaries nor any of the Polo Companies has redeemed, retired,
\npurchased or otherwise acquired for value any of its own Capital Stock.<\/p>\n
8.3 Existence; Compliance with Law. Each Credit Party (a) is duly
\norganized, validly existing and in good standing under the laws of the
\njurisdiction of its organization, (b) has the corporate or partnership, as the
\ncase may be, power and authority and the legal right to own and operate its
\nproperty, to lease the property it operates as lessee and to conduct the
\nbusiness in which it is currently engaged and in which it proposes to be engaged
\nafter the Closing Date, (c) is duly qualified as a foreign corporation or
\npartnership, as the case may be, and in good standing under the laws of each
\njurisdiction where its ownership, lease or operation of property or the conduct
\nof its business requires such qualification, except where the failure to so
\nqualify could not have a Material Adverse Effect and (d) is in compliance with
\nall Requirements of Law, except to the extent that the failure to comply
\ntherewith could not, in the aggregate, have a Material Adverse Effect.<\/p>\n
8.4 Power; Authorization; Enforceable Obligations. (a) The Company
\nhas the corporate power and authority and the legal right to execute, deliver
\nand perform the Credit Documents to which it is a party and to borrow hereunder
\nand has taken all necessary action to authorize the borrowings on the terms and
\nconditions of this Agreement and the Notes and to authorize the execution,
\ndelivery and performance of the Credit Documents to which it is a party. Each
\nother Credit Party has the power and authority and the legal right to execute,
\ndeliver and perform the Credit Documents to which it is a party and has taken
\nall necessary action to authorize the execution, delivery and performance of the
\nCredit Documents to which it is a party.<\/p>\n
(b) No consent or authorization of, filing with or other act by or
\nin respect of any Governmental Authority or any other Person is required in
\nconnection with the borrowings hereunder or with the execution, delivery,
\nperformance, validity or enforceability of the Credit Documents, except for
\nthose which have been duly obtained or made and are in full force and effect.
\n 53
\n 47<\/p>\n
(c) This Agreement has been and each other Credit Document has been
\nor will be (as the case may be) duly executed and delivered on behalf of each
\nCredit Party thereto, and each constitutes or will constitute (as the case may
\nbe) a legal, valid and binding obligation of such Credit Party enforceable
\nagainst such Credit Party in accordance with its terms, except as enforceability
\nmay be limited by applicable bankruptcy, insolvency, reorganization, moratorium
\nor similar laws affecting the enforcement of creditors’ rights generally.<\/p>\n
8.5 No Legal Bar. The execution, delivery and performance of the
\nCredit Documents, the borrowings hereunder and the use of the proceeds thereof
\nwill not violate any applicable usury laws or any other Requirement of Law
\napplicable to, or any Contractual Obligation of, any Credit Party, and will not
\nresult in, or require, the creation or imposition of any Lien on any of its or
\ntheir respective properties or revenues pursuant to any such Requirement of Law
\nor Contractual Obligation, other than the Liens created by the Security
\nDocuments.<\/p>\n
8.6 No Material Litigation. No litigation, investigation or
\nproceeding of or before any arbitrator or Governmental Authority is pending or,
\nto the best knowledge of the Company, threatened by or against any Credit Party
\nor any of its Subsidiaries or against any of its or their respective properties
\nor revenues (i) with respect to any of the Credit Documents to which any of them
\nis a party or any of the transactions contemplated hereby or thereby, or (ii)
\nwhich could reasonably be expected to have a Material Adverse Effect. Schedule
\n8.6 lists all litigation pending on the date hereof against the Company or any
\nof its Subsidiaries in which the amount in controversy or potential liability of
\nthe Company or any of its Subsidiaries exceeds $5,000,000 and is not covered by
\ninsurance.<\/p>\n
8.7 No Default. Neither the Company nor any other Credit Party is in
\ndefault under or with respect to any Contractual Obligation or any order, award
\nor decree of any Governmental Authority or arbitrator binding upon it or its
\nproperties in any respect which could reasonably be expected to have a Material
\nAdverse Effect. No Default or Event of Default has occurred and is continuing.<\/p>\n
8.8 Ownership of Property; Liens. Except as set forth in Schedule
\n8.8, each Credit Party has good record and marketable title in fee simple to or
\nvalid leasehold interests in all its real property that is material to the
\noperation of its business, and good title to all its other property, and none of
\nsuch property is subject to any Lien, except as permitted by subsection 10.5.<\/p>\n
8.9 No Burdensome Restrictions. No Contractual Obligation of the
\nCompany or any other Credit Party and no Requirement of Law could reasonably be
\nexpected to have a Material Adverse Effect.<\/p>\n
8.10 Taxes. Each Credit Party has filed or caused to be filed all
\nmaterial tax returns which to the knowledge the Company are required to be filed
\nand has paid all taxes shown to be due and payable on said returns or on any
\nassessments made against it or any of its property and all other material taxes,
\nfees or other charges imposed on it or any of its
\n 54
\n 48<\/p>\n
property by any Governmental Authority (other than those the amount or validity
\nof which is currently being contested in good faith by appropriate proceedings
\nand with respect to which reserves in conformity with GAAP have been provided on
\nthe books of such Credit Party), and no material tax Liens have been filed and,
\nto the knowledge of the Company, no material claims are being asserted with
\nrespect to any such taxes, fees or other charges.<\/p>\n
8.11 Federal Regulations. No part of the proceeds of any Loans
\nhereunder will be used, directly or indirectly, for “purchasing” or “carrying”
\nany “margin stock” within the respective meanings of each of the quoted terms
\nunder Regulation G or Regulation U of the Board as now and from time to time
\nhereafter in effect or for any purpose which violates, or which would be
\ninconsistent with, the provisions of the Regulations of such Board. If requested
\nby the Agent or any Lender, the Company will furnish to the Agent and each
\nLender a statement to the foregoing effect in conformity with the requirements
\nof FR Form G-1 or FR Form U-1 referred to in said Regulation G or Regulation U,
\nas the case may be.<\/p>\n
8.12 ERISA. Neither a Reportable Event nor an “accumulated funding
\ndeficiency” (within the meaning of Section 412 of the Code or Section 302 or
\nERISA) has occurred during the five-year period prior to the date on which this
\nrepresentation is made or deemed made with respect to any Single Employer Plan,
\nand each Plan and, to the Company’s knowledge, Multiemployer Plan, has complied,
\nand has been administered in compliance, in all material respects with the
\napplicable provisions of ERISA and the Code. No termination of a Single Employer
\nPlan has occurred, and no Lien in favor of the PBGC or a Plan has arisen, during
\nsuch five-year period. The present value of all accrued benefits under each
\nSingle Employer Plan maintained by the Company or any Commonly Controlled Entity
\n(based on those assumptions used to fund such Plan) did not, as of the last
\nannual valuation date applicable thereto, exceed the value of the assets of such
\nPlan allocable to such accrued benefits. Except as disclosed on Schedule 8.12,
\nneither the Company nor any Commonly Controlled Entity has had a complete or
\npartial withdrawal from any Multiemployer Plan, and the liability to which the
\nCompany or any Commonly Controlled Entity would become subject under ERISA if
\nthe Company or any such Commonly Controlled Entity were to withdraw completely
\nfrom all Multiemployer Plans as of the valuation date most closely preceding the
\ndate on which this representation is made or deemed made is not in excess of
\n$5,000,000. To the knowledge of the Company, no such Multiemployer Plan is in
\nReorganization or Insolvent. The present value (determined using actuarial and
\nother assumptions which are reasonable in respect of the benefits provided and
\nthe employees participating) of the liability of the Company and each Commonly
\nControlled Entity for post retirement benefits to be provided to their current
\nand former employees under Plans which are welfare benefit plans (as defined in
\nSection 3(1) of ERISA) does not in the aggregate, exceed the assets under all
\nsuch Plans allocable to such benefits by an amount in excess of $5,000,000.<\/p>\n
8.13 Investment Company Act; Other Regulations. No Credit Party is
\nan “investment company”, or a company “controlled” by an “investment company”,
\nwithin the meaning of the Investment Company Act of 1940, as amended. The
\nCompany is not subject to regulation under any Federal or state statute or
\nregulation (other than Regulation X of the Board) which limits its ability to
\nincur Indebtedness.
\n 55
\n 49<\/p>\n
8.14 Subsidiaries. Schedule 8.14 sets forth as of the date hereof
\nthe name, and, where applicable, the jurisdiction of organization, number of
\nauthorized and issued shares and ownership of each Subsidiary of the Company and
\neach general partner of each Credit Party which is a partnership.<\/p>\n
8.15 Chief Executive Office. The Company’s chief executive office on
\nthe date hereof is located at 650 Madison Avenue, New York, New York 10022.<\/p>\n
8.16 General Partners’ Existence; Compliance with Law. The corporate
\ngeneral partner of each Credit Party that is a partnership (a) is duly
\norganized, validly existing and in good standing under the laws of the
\njurisdiction of its incorporation, (b) has the power and authority and the legal
\nright to own and operate its property, to lease the property it operates and to
\nconduct the business in which it is currently engaged and in which it proposes
\nto be engaged after the Closing Date, (c) is duly qualified as a foreign
\ncorporation or partnership, as the case may be, and in good standing under the
\nlaws of each jurisdiction where its ownership, lease or operation of property or
\nthe conduct of its business requires such qualification, except where the
\nfailure to so qualify could not have a Material Adverse Effect, and (d) is in
\ncompliance with all Requirements of Law except to the extent that the failure to
\ncomply therewith could not, in the aggregate, reasonably be expected to have a
\nMaterial Adverse Effect.<\/p>\n
8.17 General Partners’ Power; Authorization; Enforceable
\nObligations. The general partner of any Credit Party that is a partnership has
\nthe power and authority and the legal right to make, deliver and perform on
\nbehalf of the Credit Party of which it is a general partner, and thereby legally
\nbind such Credit Party to perform, (a) in the case of the Company, this
\nAgreement, and has taken all necessary action to authorize the borrowings by the
\nCompany on the terms and conditions of this Agreement and any Notes and (b) in
\nthe case of each such Credit Party (including the Company), the Credit Documents
\nto which it is a party and has taken all necessary action to authorize the
\nexecution and delivery on behalf of such Credit Party of, and thereby legally
\nbind such Credit Party to perform, this Agreement, the Notes and the other
\nCredit Documents to which such Credit Party is a party. This Agreement has been,
\nand each of the other Credit Documents has been or will be (as the case may be),
\nduly executed and delivered by each such general partner on behalf of each
\nCredit Party which is a party thereto.<\/p>\n
8.18 Accuracy of Information. All factual information heretofore or
\ncontemporaneously furnished by or on behalf of any Credit Party or any of its
\nAffiliates to the Agent or any Lender for purposes of or in connection with this
\nAgreement or any transaction contemplated hereby is, and all other such factual
\ninformation hereafter furnished by or on behalf of any Credit Party or any of
\nits Affiliates to the Agent or any Lender will be, true and accurate in all
\nmaterial respects, taken as a whole, on the date as of which such information is
\ndated or certified and not incomplete by omitting to state any material fact
\nnecessary to make such information not misleading at such time.<\/p>\n
8.19 Environmental Matters.
\n 56
\n 50<\/p>\n
(a) To the best knowledge of the Company, the facilities and
\n properties owned, leased or operated by the Company or any of its
\n Subsidiaries (the “Properties”) do not contain any Materials of
\n Environmental Concern in amounts or concentrations which (i) constitute a
\n violation of, or (ii) could reasonably be expected to give rise to
\n liability to the Company or any of its Subsidiaries under, any
\n Environmental Law which would have a Material Adverse Effect.<\/p>\n
(b) To the best knowledge of the Company, the Properties and all
\n operations at the Properties are in compliance, and have in the last five
\n years been in compliance, in all material respects with all applicable
\n Environmental Laws, and there is no contamination at, under or about the
\n Properties or violation of any Environmental Law with respect to the
\n Properties or the business operated by the Company or any of its
\n Subsidiaries (the “Business”) which could materially interfere with the
\n continued operation of the Properties.<\/p>\n
(c) To the best knowledge of the Company, neither the Company nor
\n any of its Subsidiaries has received any notice of violation, alleged
\n violation, non-compliance, liability or potential liability regarding
\n environmental matters or compliance with Environmental Laws with regard to
\n any of the Properties or the Business, nor does the Company have knowledge
\n or reason to believe that any such notice will be received or is being
\n threatened except insofar as such notice or threatened notice, or any
\n aggregation thereof, does not involve a matter or matters that could
\n reasonably be expected to have a Material Adverse Effect.<\/p>\n
(d) To the best knowledge of the Company, Materials of Environmental
\n Concern have not been transported or disposed of from the Properties in
\n violation of, or in a manner or to a location which could reasonably be
\n expected to give rise to liability under, any Environmental Law, nor have
\n any Materials of Environmental Concern been generated, treated, stored or
\n disposed of at, on or under any of the Properties in violation of, or in a
\n manner that could reasonably be expected to give rise to liability under,
\n any applicable Environmental Law except insofar as any such violation or
\n liability referred to in this paragraph, or any aggregation thereof, could
\n not reasonably be expected to have a Material Adverse Effect.<\/p>\n
(e) To the best knowledge of the Company, no judicial proceeding or
\n governmental or administrative action is pending or, to the knowledge of
\n the Company, threatened, under any Environmental Law to which the Company
\n or any Subsidiary is or will be named as a party with respect to the
\n Properties or the Business, nor are there any consent decrees or other
\n decrees, consent orders, administrative orders or other orders, or other
\n administrative or judicial requirements outstanding under any
\n Environmental Law with respect to the Properties or the Business except
\n insofar as such proceeding, action, decree, order or other requirement, or
\n any aggregation thereof, could not reasonably be expected to have a
\n Material Adverse Effect.
\n 57
\n 51<\/p>\n
(f) To the best knowledge of the Company, there has been no release
\n or threat of release of Materials of Environmental Concern at or from the
\n Properties, or arising from or related to the operations of the Company or
\n any Subsidiary in connection with the Properties or otherwise in
\n connection with the Business, in violation of or in amounts or in a manner
\n that could reasonably give rise to liability under Environmental Laws
\n except insofar as any such violation or liability referred to in this
\n paragraph, or any aggregation thereof, could not reasonably be expected to
\n have a Material Adverse Effect.<\/p>\n
8.20 Material Contracts. The Exhibit Index to the Form S-1 (as
\namended through the date hereof) sets forth, as of the date hereof, all material
\ncontracts of the Company and its Subsidiaries required to be filed pursuant to
\nitem 601 of Regulation S-K.<\/p>\n
SECTION 9. AFFIRMATIVE COVENANTS<\/p>\n
The Company hereby agrees that, so long as the Revolving Credit
\nCommitments remain in effect, any Note, any Letter of Credit Obligation or any
\nAcceptance Obligation remains outstanding and unpaid or any other amount is
\nowing to any Lender or the Agent hereunder, the Company shall and shall cause
\neach of its Subsidiaries to:<\/p>\n
9.1 Financial Statements and Information. Deliver to each Lender:<\/p>\n
(a) as soon as available and, in any event, within 90 days following
\n the end of each Fiscal Year, (i) for any Fiscal Year ending prior to the
\n Consummation Date, consolidated and consolidating balance sheets of the
\n Company and its Subsidiaries, as of the end of such Fiscal Year, and the
\n related consolidated (and, as to statements of income, consolidating)
\n statements of income and retained earnings and statements of cash flows
\n for such Fiscal Year, in each case setting forth in comparative form the
\n figures for the previous comparable period, all in reasonable detail and
\n as reported to the holders of Capital Stock of the Company, and reported
\n upon by Deloitte & Touche LLP or other independent certified public
\n accountants of national standing approved by the Required Lenders (which
\n approval shall not be unreasonably withheld) (the “Accountants”), which
\n report shall state that such financial statements have been prepared in
\n accordance with GAAP applied consistently with prior periods; and (ii) for
\n any Fiscal Year ending after the Consummation Date, the Annual Report of
\n the Company on Form 10-K for such Fiscal Year signed by a Responsible
\n Officer of the Company;<\/p>\n
(b) as soon as available and, in any event, within 75 days after the
\n end of each Fiscal Quarter of the Company, (i) for any Fiscal Quarter of
\n the Company ending prior to the Consummation Date, (x) consolidated and
\n consolidating balance sheets of the Company and its Subsidiaries as of the
\n end of such Fiscal Quarter and the related consolidated (and, as to
\n statements of income, consolidating) statements of income, retained
\n earnings and cash flows for the portion of the Company’s Fiscal Year ended
\n at the end of such Fiscal Quarter, and (y) the information described in
\n Section II of Schedule 9.1, all in reasonable detail and certified by a
\n Responsible Officer of the
\n 58
\n 52<\/p>\n
Company as presenting fairly, in accordance with GAAP applied (except as
\n specifically set forth therein and approved by such Responsible Officer)
\n consistently with such prior periods, the information contained therein,
\n subject to changes resulting from normal year-end audit adjustments and
\n setting forth comparable figures for the same accounting period in the
\n preceding Fiscal Year; and (ii) for any Fiscal Quarter of the Company
\n ending after the Consummation Date, the Quarterly Report of the Company on
\n Form 10-Q for the relevant Fiscal Quarter signed by a Responsible Officer
\n of the Company;<\/p>\n
(c) prior to the Consummation Date, promptly upon receipt thereof,
\n copies of all reports submitted to the Company, any Guarantor or any other
\n Credit Party by the Accountants in connection with each annual, interim or
\n special audit of the books of the Company, any Guarantor or any such
\n Credit Party made by the Accountants, including, without limitation, the
\n comment letter submitted by the Accountants to management in connection
\n with their annual audit;<\/p>\n
(d) concurrently with the delivery of each set of the financial
\n statements referred to in paragraph (a) above, a certificate of the
\n Accountants certifying such financial statements, stating that in making
\n the examination necessary therefor no knowledge was obtained of any
\n Default or Event of Default (except as specified in such certificate);<\/p>\n
(e) concurrently with the delivery of each set of the financial
\n statements referred to in paragraphs (a) and (b) above, a certificate of a
\n Responsible Officer of the Company (i) stating that such Officer has
\n obtained no knowledge of any Default or Event of Default (except as
\n specified in such certificate) and (ii) showing in reasonable detail the
\n calculations supporting such statement in respect of subsections 10.1,
\n 10.2, 10.3, 10.4, 10.5, 10.8, 10.10 and 10.11 and (iii) for each fiscal
\n period ending prior to the Consummation Date, describing any litigation or
\n proceeding affecting the Company, the Guarantors or any other Credit Party
\n in which the amount involved is $2,000,000 or more and not covered by
\n insurance or in which injunctive or similar relief is sought involving
\n potential damages of $2,000,000 or more;<\/p>\n
(f) forthwith upon the occurrence of any Default or Event of
\n Default, a certificate of a Responsible Officer of the Company setting
\n forth the details thereof and the action which the Company is taking or
\n proposes to take with respect thereto;<\/p>\n
(g) immediately upon any authorized officer of the Company or any
\n Guarantor or of any Commonly Controlled Entity obtaining knowledge of the
\n occurrence of any (i) “reportable event”, as such term is defined in
\n Section 4043 of ERISA, or (ii) “prohibited transaction”, as such term is
\n defined in Section 4975 of the Code, in connection with any Plan or any
\n trust created thereunder, a written notice specifying the nature thereof,
\n what action the Company or such Guarantor has taken, is taking or proposes
\n to take with respect thereto, and, when known, any action taken or
\n threatened by the Internal Revenue Service or the PBGC with respect
\n thereto, provided that, with respect to the occurrence of any “reportable
\n event” as to which the PBGC has waived
\n 59
\n 53<\/p>\n
the 30-day reporting requirement, such written notice need be given only
\n at the time notice is given to the PBGC;<\/p>\n
(h) from time to time, such additional information regarding the
\n business, affairs or financial or other position of the Company, any
\n Guarantor and any other Credit Party as any Lender may reasonably request,
\n such information to be provided as soon as practicable after such request;<\/p>\n
(i) for each Fiscal Year ending prior to the Consummation Date,
\n promptly upon completion but, in any event within 45 days after the end of
\n such Fiscal Year, a copy of the operating budget and projections by the
\n Company of cash flow of the Company and its Subsidiaries taken as a whole
\n and of the Company and each Subsidiary individually for the next
\n succeeding Fiscal Year of the Company, such operating budget and
\n projections of cash flow to be accompanied by a certificate of a
\n Responsible Officer to the effect that such operating budget and
\n projections of cash flow have been prepared on the basis of sound
\n financial planning practice and that such Responsible Officer has no
\n reason to believe they are incorrect or misleading in any material
\n respect;<\/p>\n
(j) within five days after the same are sent, copies of all
\n financial statements and reports which the Company and\/or its Subsidiaries
\n sends to its public holders of Capital Stock or debtholders, and within
\n five days after the same are filed, copies of all financial statements and
\n reports which the Company may make to, or file with, the SEC or any
\n successor or analogous Governmental Authority; and<\/p>\n
(k) for any fiscal month of the Company ending prior to the
\n Consummation Date, as soon as available, but in any event within 30 days
\n following the end of such fiscal month of the Company, a certificate of a
\n Responsible Officer setting forth the information described in Section I
\n of Schedule 9.1 and certifying that such information is, to the best
\n knowledge of such Responsible Officer, true and correct in all respects.<\/p>\n
9.2 Corporate Existence; Nature of Business. Except as otherwise
\npermitted under this Agreement, preserve and maintain its partnership or
\ncorporate or other (as the case may be) existence and all of its material
\nrights, privileges and franchises; comply with all Requirements of Law, except
\nto the extent that failure to comply therewith could not, in the aggregate,
\nreasonably be expected to have a Material Adverse Effect; and pay and discharge
\nall taxes, assessments and governmental charges or levies imposed on it or on
\nits income or profits or on any of its property prior to the date on which
\npenalties attach thereto, unless the failure to pay and discharge any such
\ntaxes, assessments or governmental charges or levies could not, individually or
\nin the aggregate, reasonably be expected to have a Material Adverse Effect,
\nexcept for any such tax, assessment, charge or levy the payment of which is
\nbeing contested in good faith and by proper proceedings and against which
\nadequate reserves are being maintained; not discontinue, and will actively
\nengage in and continue to pursue, the current business of the Company and its
\nSubsidiaries, taken as a whole, and no other business which is not a Related
\nLine of Business, provided that nothing in this subsection shall be deemed to
\nprevent the Company or any Subsidiary from making an Investment permitted by
\n 60
\n 54<\/p>\n
subsection 10.8(g) in the Capital Stock of, or any assets constituting a
\nbusiness unit of, any other Person (including the Company or any of its
\nSubsidiaries) which is engaged in a business that is not a Related Line of
\nBusiness.<\/p>\n
9.3 Payment of Obligations. Pay, discharge or otherwise satisfy when
\nthe same shall become due, all its obligations of whatever nature, except when
\nthe amount or validity thereof is currently being contested in good faith by
\nappropriate proceedings and adequate reserves with respect thereto are
\nmaintained on the books of the Company or the appropriate Subsidiary, as the
\ncase may be, in accordance with GAAP and, except to the extent that failure to
\ncomply with this subsection 9.3 results from a good faith error (which shall be
\ncorrected promptly following the Company becoming aware of such error) and such
\nfailure could not, in the aggregate, reasonably be expected to have a Material
\nAdverse Effect.<\/p>\n
9.4 Maintenance of Properties; Insurance. Maintain or cause to be
\nmaintained in good working order and condition, ordinary wear and tear excepted,
\nall material properties used in the businesses of the Company and its
\nSubsidiaries, provided that the Company and its Subsidiaries, may in accordance
\nwith good business practices, make determinations with respect to the timeliness
\nof necessary repairs. The Company and its Subsidiaries will maintain or cause to
\nbe maintained such insurance with respect to their respective properties and
\nbusinesses as a prudent Person engaged in the same or similar business of a
\nsimilar size and otherwise similarly situated would maintain.<\/p>\n
9.5 Maintain Trademarks. Take all action reasonably necessary or
\ndesirable in accordance with good business practices to (a) maintain in full
\nforce and effect such domestic and foreign patents, trademarks, service marks,
\ntrade names, copyrights and licenses and such material rights with respect to
\nthe foregoing, in each case necessary for the conduct of its business as now
\nconducted (collectively, the “Trademarks”) and (b) protect all domestic and
\nforeign Trademarks against infringement by third parties.<\/p>\n
9.6 Inspection; Books and Records. Keep proper books of records and
\naccounts in which full, true and correct entries in conformity with GAAP and all
\nRequirements of Law shall be made of all dealings and transactions in relation
\nto its business and activities. The Company and each other Credit Party will
\npermit on an annual basis at the request of the Agent (or at any time and from
\ntime to time after the occurrence and during the continuance of a Default or
\nEvent of Default) any authorized representatives designated by the Lenders to
\nvisit and inspect any of the properties of the Company and such Credit Party,
\nall during reasonable business hours, including their respective books of
\naccounts, and to make copies and take extracts therefrom, and to analyze such
\ndata of the Company and such Credit Party, and to discuss their respective
\naffairs, finances and accounts with their respective officers and the
\nAccountants (and by this provision the Company and each Credit Party authorize
\nthe Accountants to discuss with such representatives the affairs, finances and
\naccounts of the Company and any such Credit Party, whether or not a
\nrepresentative of the Company or such Credit Party is present). The Company
\nshall reimburse the Lenders for all reasonable costs and expenses incurred by
\nsuch Lenders in connection with the audit and verification activities
\ncontemplated by the immediately preceding sentence. So long as no Default or
\nEvent of Default shall have occurred and be continuing, the Agent shall, prior
\nto
\n 61
\n 55<\/p>\n
commencing any such verification activities, provide an estimate to the Company
\nof the costs thereof, but any failure to give such an estimate shall not impair
\nany of the rights of the Agent and the Lenders under this subsection.<\/p>\n
9.7 Notices. Promptly give notice to the Agent and each Lender:<\/p>\n
(a) of the occurrence of any Default or Event of Default (including,
\n without limitation, any event referred to in Section 11(j));<\/p>\n
(b) of any (i) default or event of default under any Contractual
\n Obligation of the Company or any other Credit Party or (ii) litigation,
\n investigation (known to the Company) or proceeding which may exist at any
\n time between the Company or any other Credit Party and any Governmental
\n Authority or Person, which in either case, if not cured or if adversely
\n determined, as the case may be, would have a Material Adverse Effect;<\/p>\n
(c) as soon as possible and in any event within five days after the
\n Company knows or has reason to know of the following events: (i) the
\n occurrence of any Reportable Event with respect to any Plan, or any
\n withdrawal from, or the termination, Reorganization or Insolvency of, any
\n Multiemployer Plan or (ii) the institution of proceedings or the taking of
\n any other action by PBGC, the Company or any Commonly Controlled Entity,
\n or any Multiemployer Plan with respect to the withdrawal from,
\n Reorganization or Insolvency of, any Multiemployer Plan, or the
\n terminating of any Plan; and<\/p>\n
(d) of a material adverse change in the business, operations,
\n property or financial or other condition of the Company and its
\n Subsidiaries taken as a whole.<\/p>\n
Each notice pursuant to this subsection 9.7 shall be accompanied by a statement
\nof a Responsible Officer setting forth details of the occurrence referred to
\ntherein and stating what action the Company proposes to take with respect
\nthereto.<\/p>\n
9.8 Maintenance of Liens of the Security Documents. Promptly, upon
\nthe reasonable request of any Lender, at the Company’s expense, execute,
\nacknowledge and deliver, or cause the execution, acknowledgement and delivery
\nof, and thereafter register, file or record, or cause to be registered, filed or
\nrecorded, in an appropriate governmental office, any document or instrument
\nsupplemental to or confirmatory of the Security Documents or otherwise necessary
\nor desirable for the continued validity, perfection and priority of the Liens on
\nthe collateral covered thereby.<\/p>\n
9.9 Guarantee and Collateral Agreement Supplement. Each Domestic
\nSubsidiary that is or becomes a “significant subsidiary” (as that term is
\ndefined in Regulation S-X (part 210 of the Code of Federal Regulations)) shall
\npromptly execute and deliver to the Agent (with a counterpart for each Lender) a
\nsupplement to the Guarantee and Collateral Agreement pursuant to which such
\nSubsidiary shall become a party thereto as a Guarantor, together with such other
\ndocuments and opinions as the Lenders shall reasonably request.
\n 62
\n 56<\/p>\n
9.10 Use of Proceeds. The proceeds of the Loans shall be used by the
\nCompany solely for the purposes set forth in subsection 2.4. No portion of the
\nproceeds of any Loan shall be used by the Company in any manner which might
\ncause the borrowing or the application of such proceeds to violate Regulation G,
\nT, U or X of the Board or any other regulation of such Board.<\/p>\n
9.11 Observance of Agreements. Observe and perform all the terms and
\nconditions of all material agreements to which any of them or any other Credit
\nParty is party and shall diligently protect and enforce their respective rights
\nunder all such agreements in a manner consistent with prudent business judgment.<\/p>\n
SECTION 10. NEGATIVE COVENANTS<\/p>\n
The Company hereby agrees that, so long as the Revolving Credit
\nCommitments remain in effect, any Note, any Letter of Credit Obligation or any
\nAcceptance Obligation remains outstanding and unpaid or any other amount is
\nowing hereunder to any Lender or the Agent:<\/p>\n
10.1 Consolidated Net Worth. (a) The Company will not permit
\nConsolidated Net Worth as at the end of any Fiscal Quarter ending after the
\nClosing Date and after the consummation of the Initial Public Offering to be
\nless than $300,000,000.<\/p>\n
(b) Prior to the consummation of the Initial Public Offering or in
\nthe event that the Initial Public Offering is not consummated on or before the
\nthirtieth day following the Closing Date, the Company will not (i) permit
\nConsolidated Net Worth as of the last day of the second Fiscal Quarter of Fiscal
\nYear 1998 to be less than $165,000,000, (ii) commencing with the last day of the
\nthird Fiscal Quarter of Fiscal Year 1998, and any Fiscal Quarter thereafter,
\npermit Consolidated Net Worth to be less than the sum of (a) $165,000,000 and
\n(b) the aggregate of the Annual Increases for each Fiscal Year that shall have
\nended during the period from the Closing Date through the date as at which
\ncompliance with this covenant is being determined.<\/p>\n
10.2 Fixed Charge Coverage Ratio. If the Initial Public Offering is
\nnot consummated on or before the thirtieth day following the Closing Date, the
\nCompany will not permit, for the period of three consecutive fiscal quarters
\nending September 30, 1997 and for any period of four consecutive Fiscal Quarters
\nending thereafter, the Consolidated Fixed Charges Coverage Ratio to be less than
\n1.25 : 1.00.<\/p>\n
10.3 Consolidated Indebtedness Ratio. The Company will not permit
\n(a) for the period of three consecutive Fiscal Quarters ending September 30,
\n1997, the Consolidated Indebtedness Ratio to be greater than 2.75 : 1.00, and
\n(b) for any period of four consecutive Fiscal Quarters ending during any Test
\nPeriod set forth below after September 30, 1997, the Consolidated Indebtedness
\nRatio to be greater than the ratio set forth opposite such Test Period:
\n 63
\n 57<\/p>\n
\n\n Test Period Ratio
\n ———– —–
\n
\n October 1, 1997 through December 31, 1997 2.75 : 1
\n January 1, 1998 through March 30, 1999 2.50 : 1
\n March 31, 1999 to Termination Date 2.25 : 1
\n<\/c><\/s><\/caption>\n<\/table>\n 10.4 Limitation on Indebtedness. The Company will not, nor will it
\npermit any of its Subsidiaries to, create, incur, assume or suffer to exist any
\nIndebtedness except:<\/p>\n
(a) Indebtedness not secured by any Lien in an aggregate principal
\n amount not to exceed $200,000,000, provided that (i) no part of the
\n principal of such Indebtedness (except in the case of any such
\n Indebtedness in an aggregate principal amount, when added to the aggregate
\n principal amount of Indebtedness then outstanding as permitted by
\n subsection 10.4(g), not greater than $50,000,000) is stated to be payable
\n or is required to be paid (whether by way of mandatory sinking fund,
\n mandatory redemption, mandatory prepayment or otherwise) prior to the
\n Termination Date, (ii) the material terms, conditions and restrictive
\n covenants contained in the instrument governing such Indebtedness, taken
\n as a whole, are no less favorable to the Company or any of its
\n Subsidiaries, as the case may be, than the terms, conditions and
\n restrictive covenants contained in this Agreement and (iii) no Default or
\n Event of Default shall have occurred after giving effect to the incurrence
\n of such Indebtedness;<\/p>\n
(b) Indebtedness secured by Liens permitted by subsection 10.5(g) in
\n an aggregate amount at any one time outstanding not in excess of the
\n amount set forth in said subsection;<\/p>\n
(c) Indebtedness existing on the Closing Date, not otherwise
\n permitted under this Agreement, described in Schedule 10.4 hereto, and any
\n refinancings, refundings, renewals or extensions thereof on terms no less
\n favorable (taken as a whole) to the Company or such Subsidiary, as the
\n case may be, provided that the principal amount of such Indebtedness is
\n not increased;<\/p>\n
(d) Subordinated Indebtedness;<\/p>\n
(e) Indebtedness incurred under this Agreement;<\/p>\n
(f) Indebtedness of the Company to its Subsidiaries or Indebtedness
\n of any Subsidiary of the Company to the Company or any of its
\n Subsidiaries; and<\/p>\n
(g) Indebtedness of any Person which becomes a Subsidiary of the
\n Company after the date hereof (provided that (i) such Indebtedness was in
\n existence on the date such Person became a Subsidiary, (ii) such
\n Indebtedness was not created, incurred or assumed in anticipation thereof,
\n and (iii) the aggregate principal amount of such Indebtedness at any one
\n time outstanding, when added to the aggregate principal amount of
\n Indebtedness then outstanding as permitted by the parenthetical phrase
\n included in clause (i) of the proviso to subsection 10.4(a), shall not be
\n in excess of
\n 64
\n 58<\/p>\n
$50,000,000) and any Indebtedness resulting from the refinancing of any
\n such Indebtedness.<\/p>\n
For purposes of this subsection 10.4, any Person becoming a
\nSubsidiary of the Company after the date of this Agreement shall be deemed to
\nhave incurred all of its then outstanding Indebtedness at the time it becomes a
\nSubsidiary.<\/p>\n
10.5 Limitation on Liens. The Company will not, nor will it permit
\nany of its Subsidiaries to, create, incur, assume or suffer to exist any Lien
\nupon any of its property or assets, whether now owned or hereafter acquired, or
\nupon any income or profits therefrom, or acquire any property pursuant to any
\nconditional sale, lease purchase or other title retention agreement, except:<\/p>\n
(a) Liens created pursuant to the Security Documents or securing the
\n Notes, the Letter of Credit Obligations, the Acceptance Obligations and
\n all amendments, extensions, renewals and substitutions thereof;<\/p>\n
(b) Liens existing on the Closing Date, not otherwise permitted
\n under this Agreement, described in Schedule 10.5 hereto, securing the
\n Indebtedness described in such Schedule, and extensions, renewals and
\n substitutions thereof, provided that the principal amount so secured is
\n not increased and the Lien is not extended to any other property;<\/p>\n
(c) Liens for taxes and duties, assessments, governmental charges or
\n levies not yet due or which are being contested in good faith and by
\n appropriate proceedings promptly initiated and diligently conducted, if
\n adequate reserves with respect thereto are maintained on the books of the
\n Company and its Subsidiaries in accordance with GAAP;<\/p>\n
(d) Liens incurred in the ordinary course of and incidental to the
\n conduct of the business of the Company and its Subsidiaries or the
\n ownership of its property, including, without limitation, Liens incurred
\n in connection with the sale, lease, transfer or other disposition of any
\n credit card receivable of the Company or any of its Subsidiaries and Liens
\n for workmen’s compensation, bids, tenders, lessors, vendors, bank
\n deposits, trade letters of credit and trust receipts, which were not
\n incurred in connection with the borrowing of money and which do not in the
\n aggregate materially detract from the value of the property of the Company
\n and its Subsidiaries, taken as a whole, or materially impair the use
\n thereof in the operation of the business of the Company and its
\n Subsidiaries;<\/p>\n
(e) Liens imposed by law in favor of mechanics, repairmen, carriers
\n or warehousemen for sums not yet due or which are being contested in good
\n faith and by appropriate proceedings promptly initiated and diligently
\n conducted, if adequate reserves with respect thereto are maintained on the
\n books of the Company and its Subsidiaries in accordance with GAAP;
\n 65
\n 59<\/p>\n
(f) Liens existing on property or assets of a Person immediately
\n prior to its becoming a Subsidiary of the Company and which Lien was not
\n created, incurred or assumed in anticipation thereof, provided that such
\n Lien shall at all times be confined solely to the property subject thereto
\n at the time such Person becomes a Subsidiary of the Company;<\/p>\n
(g) Liens securing Indebtedness of the Company and its Subsidiaries
\n (and any refinancings, refundings, renewals or extensions thereof on terms
\n no less favorable (taken as a whole) to the Company or such Subsidiary, as
\n the case may be, provided that the principal amount of such Indebtedness
\n is not increased) incurred after the Closing Date solely for the purpose
\n of financing the acquisition by the Company or any of its Subsidiaries of
\n real or personal property or solely for the purpose of financing the cost
\n of construction or improvements to or on real or personal property, or
\n Liens existing on such property so acquired at the time of acquisition
\n thereof, provided that:<\/p>\n
(i) each such Lien shall at all times be confined solely to
\n the property so acquired;<\/p>\n
(ii) the principal amount of Indebtedness secured by each such
\n Lien shall at no time exceed the lesser of (A) the cost to such
\n Person of the property subject thereto or (B) the fair value of such
\n property (as determined in good faith by the Board of Directors of
\n such Person) at the time of the acquisition thereof or completion of
\n construction thereon.<\/p>\n
(h) Liens solely constituting the right of any other Person to a
\n share of any licensing royalties (pursuant to a licensing agreement or
\n other related agreement entered into by the Company or any of its
\n Subsidiaries with such Person in the ordinary course of the Company’s or
\n such Subsidiary’s business) otherwise payable to the Company or any of its
\n Subsidiaries, provided that such right shall have been conveyed to such
\n Person for consideration received by the Company or such Subsidiary on an
\n arm’s-length basis; and<\/p>\n
(i) in the case of real property owned by the Company or any of its
\n Subsidiaries, easements, rights of way, restrictive covenants,
\n encroachments and other non-monetary Liens which Liens would not have,
\n individually or in the aggregate, a Material Adverse Effect.<\/p>\n
For purposes of this subsection 10.5, any Person becoming a Subsidiary of the
\nCompany after the date hereof shall be deemed to have incurred all of its then
\noutstanding Liens at the time it becomes a Subsidiary of the Company, and any
\nPerson extending, renewing or refunding any Indebtedness secured by any Lien
\nshall be deemed to have incurred such Lien at the time of such extension,
\nrenewal or refunding.<\/p>\n
10.6 Sale of Assets. Except in the ordinary course of business
\n(including the sale, lease, transfer or other disposition of any credit card
\nreceivable of the Company or any
\n 66
\n 60<\/p>\n
of its Subsidiaries), the Company will not, nor will it permit any of its
\nSubsidiaries to, sell, lease, transfer or otherwise dispose of any of its assets
\nor sell, transfer or otherwise dispose of any of the Capital Stock of any of its
\nSubsidiaries, provided that, so long as no Default or Event of Default shall
\nhave occurred and be continuing or would result therefrom, no such disposition
\nof assets or Capital Stock out of the ordinary course of business shall
\nconstitute a violation of this subsection 10.6 so long as (i) the aggregate fair
\nmarket value of the assets or Capital Stock so disposed of during any Fiscal
\nYear of the Company shall not exceed 10% of Consolidated Net Worth as at the end
\nof the preceding Fiscal Year, or (ii) the net cash proceeds are used within 180
\ndays after the receipt thereof to purchase assets to be utilized by the Company
\nin any Related Line of Business and if not so used within such time period, such
\nproceeds shall be applied to the prepayment of principal of any outstanding Term
\nLoans in inverse order of maturity and thereafter, 50% of such proceeds shall,
\nif Margin Level I Status then exists, be applied to the mandatory reduction of
\nthe Revolving Credit Commitments. Notwithstanding anything contained in this
\nsubsection 10.6 to the contrary, neither the Company nor any of its Subsidiaries
\nshall dispose of any of its right, title or interest in any Collateral or any
\nmaterial Trademark, except for (i) licensing of Trademarks and sales of
\ninventory in the ordinary course of business and (ii) sales, leases, transfers
\nor other dispositions of Trademarks by the Company to any of its Subsidiaries
\nwhich is a Guarantor or by any Subsidiary to any other Subsidiary which is a
\nGuarantor or to the Company.<\/p>\n
10.7 Limitation on Fundamental Changes. The Company will not, nor
\nwill it permit any of its Subsidiaries to, enter into any merger, consolidation
\nor amalgamation, or liquidate, wind up or dissolve itself (or suffer any
\nliquidation or dissolution), or convey, sell, lease, assign, transfer or
\notherwise dispose of, all or substantially all of its property, business or
\nassets, except:<\/p>\n
(a) any Subsidiary of the Company may be merged or consolidated with
\n or into the Company (provided that the Company shall be the continuing or
\n surviving entity) or with or into any one or more wholly owned
\n Subsidiaries of the Company (provided that the wholly owned Subsidiary or
\n Subsidiaries shall be the continuing or surviving entity);<\/p>\n
(b) any wholly owned Subsidiary may sell, lease, transfer or
\n otherwise dispose of any or all of its assets (upon voluntary liquidation
\n or otherwise) to the Company or any other wholly owned Subsidiary of the
\n Company;<\/p>\n
(c) the Company or any Subsidiary may effect any Investment
\n permitted by subsections 10.8(h), (i) or (j) by means of a merger of the
\n Person that is the subject of such acquisition with the Company or any of
\n its Subsidiaries (provided that, in the case of a merger with the Company,
\n the Company is the survivor); and<\/p>\n
(d) the Company may, and may permit any of its Subsidiaries to,
\n enter into any transaction otherwise permitted pursuant to subsection
\n 10.6.
\n 67
\n 61<\/p>\n
10.8 Limitation on Loans, Advances and Other Investments. The
\nCompany will not, nor will it permit any of its Subsidiaries to, make any
\nInvestment other than:<\/p>\n
(a) advances or loans made in the ordinary course of business to
\n employees of the Company or any of its Subsidiaries;<\/p>\n
(b) Investments in Cash Equivalents;<\/p>\n
(c) Investments by the Company in and to its Domestic Subsidiaries
\n and any Foreign Subsidiary that becomes a party to the Guarantee and
\n Collateral Agreement as a Guarantor or of which 66% of such Foreign
\n Subsidiary’s Capital Stock is pledged to the Lenders pursuant to a pledge
\n agreement in form and substance reasonably satisfactory to the Agent;<\/p>\n
(d) Investments by any Subsidiaries of the Company in and to the
\n Company and any of its Domestic Subsidiaries that becomes a party to the
\n Guarantee and Collateral Agreement as a Guarantor;<\/p>\n
(e) Investments in Foreign Subsidiaries in an aggregate amount not
\n in excess of $75,000,000;<\/p>\n
(f) existing Investments not otherwise permitted under this
\n Agreement and described in Schedule 10.8 hereto;<\/p>\n
(g) Investments received in connection with the bona fide settlement
\n of any defaulted Indebtedness or other liability owed to the Company or
\n any Subsidiary;<\/p>\n
(h) Investments in Permitted Acquisitions provided that if, as a
\n result of Permitted Acquisition, a new Domestic Subsidiary shall be
\n created, such Domestic Subsidiary shall become a party to the Guarantee
\n and Collateral Agreement as a Guarantor;<\/p>\n
(i) Investments in Permitted Acquisitions in Persons organized under
\n the laws of a jurisdiction outside of the United States in an aggregate
\n amount not in excess of the sum of (x) $200,000,000 plus (y) the Annual
\n Increase for each full Fiscal Year which shall have been completed and for
\n which financial statements and the related compliance certificate shall
\n have been delivered pursuant to subsections 9.1(a) and (e) hereof, during
\n the period from the Closing Date through the date at which compliance with
\n this paragraph is being determined (as reflected in such financial
\n statements and compliance certificate) less an amount equal to the
\n aggregate amount of Investments, if any, made pursuant to clause (j) of
\n this subsection 10.8 in excess of $100,000,000; and<\/p>\n
(j) additional Investments in an amount not in excess of an amount
\n equal to the sum of (x) $100,000,000, and (y) the Annual Increase for each
\n full Fiscal Year which shall have been completed, and for which financial
\n statements and the related compliance certificate shall have been
\n delivered pursuant to subsections 9.1(a) and (e)
\n 68
\n 62<\/p>\n
hereof, during the period from the Closing Date through the date as at
\n which compliance with this paragraph is being determined (as reflected in
\n such financial statements and compliance certificate) less an amount equal
\n to the aggregate amount of Investments, if any, made pursuant to clause
\n (i) of this subsection 10.8 in excess of $200,000,000; provided that the
\n Investments under this subsection 10.8(j) shall in no event exceed
\n $175,000,000.<\/p>\n
10.9 Compliance with ERISA. The Company and its Subsidiaries will
\nnot:<\/p>\n
(a) knowingly engage in any transaction in connection with which the
\n Company or any Subsidiary might reasonably be likely to be subject to
\n either a civil penalty assessed pursuant to Section 502(i) of ERISA or a
\n tax imposed by Section 4975 of the Code, terminate any Plan in a manner,
\n or take any other action with respect to any such Plan, which is likely to
\n result in any liability of the Company or any Subsidiary to the PBGC, fail
\n to make full payment when due of all amounts which, under the provisions
\n of any Plan, the Company or any Subsidiary is required to pay as
\n contributions thereto, or permit to exist any accumulated funding
\n deficiency, whether or not waived, with respect to any Plan (other than a
\n Multiemployer Plan), if, in any such case, such penalty or tax or such
\n liability, or the failure to make such payment, or the existence of such
\n deficiency, as the case may be, would have a Material Adverse Effect; or<\/p>\n
(b) permit at any time the aggregate complete or partial withdrawal
\n liability of the Company and its Subsidiaries under Title IV of ERISA with
\n respect to Multiemployer Plans to exceed 5% of Consolidated Net Worth as
\n at the end of the then most recently ended Fiscal Quarter.<\/p>\n
For purposes of subdivision (b) of this subsection 10.9, the amount of the
\nwithdrawal liability of the Company or its Subsidiaries at any date shall be the
\naggregate present value of the amount claimed to have been incurred less any
\nportion thereof as to which the Company or its Subsidiaries reasonably believes,
\nafter appropriate consideration of possible adjustments arising under Sections
\n4219 and 4221 of ERISA, it and its Subsidiaries will have no liability, provided
\nthat the Company and its Subsidiaries shall obtain prompt written advice from
\nindependent actuarial consultants supporting such determination. The Company and
\nits Subsidiaries shall, promptly upon request by any Lender, transmit a copy of
\nany current statement of withdrawal liability from each Multiemployer Plan, if
\nand when available, after the Company or any Subsidiary receives the same. As
\nused in this subsection 10.9, the term “accumulated funding deficiency” has the
\nmeaning specified in Section 301 of ERISA and Section 412 of the Code, and the
\nterms “accrued benefit” and “current value” have the meanings specified in
\nSection 3 of ERISA.<\/p>\n
10.10 Transactions with Affiliates. The Company will not, and will
\nnot permit any of its Subsidiaries to, directly or indirectly, enter into any
\ntransactions, including, without limitation, the purchase, sale or exchange of
\nproperty, the making of any Investment or the rendering of any service, with any
\nAffiliate of the Company or a spouse or any relative (by blood, adoption or
\nmarriage) within the third degree of any such Affiliate or any other Person
\n 69
\n 63<\/p>\n
which is an Affiliate of any such spouse or relative, except (a) in the ordinary
\ncourse of business and pursuant to the reasonable requirements of the Company’s
\nor such Subsidiary’s business and upon reasonable terms no less favorable to the
\nCompany or such Subsidiary than would obtain in a comparable arm’s-length
\ntransaction with a Person which is not an Affiliate of the Company, (b) any
\ntransaction listed in Schedule 10.10 hereto and (c) any transaction between the
\nCompany and any Subsidiary of the Company or between any Subsidiary and any
\nother Subsidiary.<\/p>\n
10.11 Additional Liens. If at any time subsequent to the Closing
\nDate any Domestic Subsidiary shall distribute menswear products being
\ndistributed by the Company on the date hereof under the Polo by Ralph Lauren,
\nPolo Sport, Ralph Lauren\/Purple Label Collection and Polo Golf brands, the
\nCompany will cause such Subsidiary to become a party to the Guarantee and
\nCollateral Agreement as a Grantor of Liens on the Collateral described therein
\nand will deliver to the Lenders such legal opinions with respect thereto as the
\nAgent may reasonably request.<\/p>\n
SECTION 11. EVENTS OF DEFAULT<\/p>\n
Upon the occurrence of any of the following events:<\/p>\n
(a) (i) The Company shall fail to pay any principal of any Note, any
\n Letter of Credit Obligation or any Acceptance Obligation, in each case
\n within two days after such principal or Obligation becomes due or (ii) the
\n Company shall fail to pay any interest on any Note, any Letter of Credit
\n Obligation or any Acceptance Obligation, or any fee, commission or other
\n amount owing hereunder, in each case within five days after such interest,
\n fee or other amount is due; or<\/p>\n
(b) Any representation or warranty made or deemed made by the
\n Company herein or by the Company or any other Credit Party in any other
\n Credit Document or which is contained in any certificate, document or
\n financial or other statement furnished at any time under or in connection
\n with this Agreement shall prove to have been incorrect in any material
\n respect on or as of the date made or deemed made; or<\/p>\n
(c) The Company shall default in the observance or performance of
\n any covenant or agreement contained in Section 10 or subsection 6.19; or<\/p>\n
(d) The Company shall default in the observance or performance of
\n any covenant or agreement contained in this Agreement (other than in
\n Section 10 or subsection 6.19 hereof) or in any Security Document to which
\n it is a party; or any other Credit Party shall default in the observance
\n or performance of any covenant or agreement contained in any Credit
\n Document to which it is a party, and, in each case, such default is not
\n remediable or, if remediable, continues unremedied for a period of 30 days
\n after the earlier to occur of (i) the date on which such default is known
\n or reasonably should have become known to any officer of the Company or
\n such other Credit Party and (ii) the date on which the Agent or any Lender
\n shall have notified the Company or such other Credit Party of such
\n default; or
\n 70
\n 64<\/p>\n
(e) Any Security Document shall for any reason cease to be in full
\n force and effect; the Liens on the collateral described therein purported
\n to be created thereby shall cease to be or are not valid and perfected
\n first Liens to the extent contemplated thereby; any Guarantor shall assert
\n that it has no liability under the Guarantee to which it is a party; or
\n any Guarantee shall cease, for any reason, to be in full force and effect;
\n or<\/p>\n
(f) The Company, any other Credit Party or any Foreign Subsidiary
\n shall (A) default in any payment of principal of or interest on any
\n Indebtedness (other than the Notes, the Acceptance Obligations or the
\n Letter of Credit Obligations) or in the payment of any Guarantee
\n Obligation in respect of Indebtedness (other than the Guarantee and
\n Collateral Agreement), the aggregate principal amount of which exceeds
\n $5,000,000 in the case of the Company or any Subsidiary, beyond the period
\n (without giving effect to any extensions, waivers, amendments or other
\n modifications of or to such period) of grace, if any, provided in the
\n instrument or agreement under which such Indebtedness or Guarantee
\n Obligation was created; or (B) default in the observance or performance of
\n any other agreement or condition relating to any such Indebtedness or
\n Guarantee Obligation or contained in any instrument or agreement
\n evidencing, securing or relating thereto, or any other event shall occur
\n or condition exist, the effect of which default or other event or
\n condition is to cause, or to permit the holder or holders of such
\n Indebtedness or beneficiary or beneficiaries of such Guarantee Obligation
\n (or a trustee or agent on behalf of such holder or holders or beneficiary
\n or beneficiaries) to cause, with the giving of notice or the lapse of
\n time, or both, if required, such Indebtedness to become due prior to its
\n stated maturity or such Guarantee Obligation to become payable; or<\/p>\n
(g) (i) The Company, any other Credit Party or any Foreign
\n Subsidiary shall commence any case, proceeding or other action (A) under
\n any existing or future law of any jurisdiction, domestic or foreign,
\n relating to bankruptcy, insolvency, reorganization or relief of debtors,
\n seeking to have an order for relief entered with respect to it, or seeking
\n to adjudicate it a bankrupt or insolvent, or seeking reorganization,
\n arrangement, adjustment, winding-up, liquidation, dissolution, composition
\n or other relief with respect to it or its debts, or (B) seeking
\n appointment of a receiver, trustee, custodian or other similar official
\n for it or for all or any substantial part of its assets, or the Company,
\n any other Credit Party or any Foreign Subsidiary shall make a general
\n assignment for the benefit of its creditors; or (ii) there shall be
\n commenced against the Company, any other Credit Party or any Foreign
\n Subsidiary any case, proceeding or other action of a nature referred to in
\n clause (i) above which (A) results in the entry of an order for relief or
\n any such adjudication or appointment or (B) remains undismissed,
\n undischarged or unbonded for a period of 45 days; or (iii) there shall be
\n commenced against the Company, any other Credit Party or any Foreign
\n Subsidiary any case, proceeding or other action seeking issuance of a
\n warrant of attachment, execution, distraint or similar process against all
\n or any substantial part of its assets which results in the entry of an
\n order for any such relief which shall not have been vacated, discharged,
\n or stayed or bonded pending appeal within 45 days from the entry thereof;
\n or (iv) the Company, any other Credit Party or any Foreign
\n 71
\n 65<\/p>\n
Subsidiary shall take any action in furtherance of, or indicating its
\n consent to, approval of, or acquiescence in, any of the acts set forth in
\n clause (i), (ii) or (iii) above; or (v) the Company, any other Credit
\n Party or any Foreign Subsidiary shall generally not, or shall be unable
\n to, or shall admit in writing its inability to, pay its debts as they
\n become due; provided, however, that the occurrence of any of the events
\n specified in this paragraph (g) with respect to any Person other than the
\n Company shall not be deemed to be an Event of Default unless (x) the net
\n assets of such Person, determined in accordance with GAAP, shall have
\n exceeded $3,000,000 as of the date of the most recent audited financial
\n statements delivered to the Lenders pursuant to subsection 9.1 or on the
\n date of occurrence of any such event and\/or (y) the aggregate net assets
\n of all Credit Parties and Foreign Subsidiaries in respect of which any of
\n the events specified in this paragraph (g) shall have occurred shall have
\n exceeded $5,000,000 as of the date of the most recent audited financial
\n statements delivered to the Lenders pursuant to subsection 9.1 or on the
\n date of occurrence of any such event; or<\/p>\n
(h) (i) Any Person shall engage in any “prohibited transaction” (as
\n defined in Section 406 of ERISA or Section 4975 of the Code) involving any
\n Plan, (ii) any “accumulated funding deficiency” (as defined in Section 302
\n of ERISA), whether or not waived, shall exist with respect to any Plan or
\n any Lien in favor of the PBGC or a Plan shall arise on the assets of the
\n Company or any Commonly Controlled Entity, (iii) a Reportable Event shall
\n occur with respect to, or proceedings shall commence to have a trustee
\n appointed, or a trustee shall be appointed, to administer or to terminate,
\n any Single Employer Plan, which Reportable Event or commencement of
\n proceedings or appointment of a trustee is, in the reasonable opinion of
\n the Required Lenders, likely to result in the termination of such Plan for
\n purposes of Title IV of ERISA, (iv) any Single Employer Plan shall
\n terminate for purposes of Title IV of ERISA, (v) the Company or any
\n Commonly Controlled Entity shall, or in the reasonable opinion of the
\n Required Lenders is likely to, incur any liability (except as set forth in
\n Schedule 8.12) in connection with a withdrawal from, or the Insolvency or
\n Reorganization of, a Multiemployer Plan or (vi) any other event or
\n condition shall occur or exist with respect to a Plan; and in each case in
\n clauses (i) through (vi) above, such event or condition, together with all
\n other such events or conditions, if any, could subject the Company or any
\n other Credit Party to any tax, penalty or other liabilities in the
\n aggregate material in relation to the business, operations, property or
\n financial or other condition of the Company and its Subsidiaries taken as
\n a whole; or<\/p>\n
(i) One or more judgments or decrees shall be entered against the
\n Company, any other Credit Party or any Foreign Subsidiary involving in the
\n aggregate a liability (not paid or fully covered by insurance) of
\n $5,000,000 or more and all such judgments or decrees shall not have been
\n vacated, discharged, stayed or bonded pending appeal within 60 days from
\n the entry thereof; or<\/p>\n
(j) Lauren, his estate or Persons related to him by blood, adoption
\n or marriage and\/or trusts or other entities principally for the benefit of
\n any of the foregoing (the “Lauren Interests”) shall cease to own in the
\n aggregate, directly or indirectly (i) at any time before the consummation
\n of the Initial Public Offering, Voting Stock of the
\n 72
\n 66<\/p>\n
Company having more than 50% of the voting power for the election of the
\n board of directors of the Company or (ii) at any time after the
\n consummation of the Initial Public Offering, either (x) Voting Stock of
\n the Company having the voting power to elect a majority of the Board of
\n Directors of the Company or (y) Voting Stock representing more than 25% of
\n the voting power of the Company’s Capital Stock; or<\/p>\n
(k) Prior to the consummation of the Initial Public Offering, Lauren
\n shall cease to be the principal manager of the Company by reason of death,
\n disability, retirement or otherwise, and the Company shall fail within 360
\n days after such event to (i) find a replacement chief executive officer
\n for Lauren acceptable to the Required Lenders and (ii) have presented a
\n business plan acceptable to the Required Lenders; or<\/p>\n
(l) The PRLE $24,000,000 Subordination Agreement shall be amended
\n without the prior written consent of the Required Lenders;<\/p>\n
then, and in any such event, (A) if such event is an Event of Default in respect
\nof the Company specified in clause (i) or (ii) of paragraph (g) above,
\nautomatically the Revolving Credit Commitments shall immediately terminate and
\nthe Loans hereunder (with accrued interest thereon) and all other amounts owing
\nunder this Agreement (including, without limitation, all amounts of Letter of
\nCredit Obligations whether or not the beneficiaries thereof shall have presented
\nthe documents required thereunder and all amounts of Acceptance Obligations
\nwhether or not matured) and the Notes shall immediately become due and payable,
\nand (B) if such event is any other Event of Default, any or all of the following
\nactions may be taken: the Agent may, or upon the direction of the Required
\nLenders, the Agent shall, (i) declare the Revolving Credit Commitments to be
\nterminated forthwith, whereupon the Revolving Credit Commitments shall
\nimmediately terminate; (ii) declare the Loans hereunder (with accrued interest
\nthereon) and all other amounts owing under this Agreement (including, without
\nlimitation, all amounts of Letter of Credit Obligations whether or not the
\nbeneficiaries thereof shall have presented the documents required thereunder and
\nall amounts of Acceptance Obligations whether or not matured) and the Notes to
\nbe due and payable forthwith, whereupon the same shall immediately become due
\nand payable; and (iii) exercise any and all remedies and other rights provided
\npursuant to this Agreement and\/or the other Credit Documents.<\/p>\n
With respect to all Letters of Credit and Acceptances that shall not
\nhave matured or been paid or with respect to which presentment for honor shall
\nnot have occurred, upon the occurrence of an Event of Default, the Company shall
\ndeposit in an interest bearing cash collateral account opened by the Agent (and
\nunder the exclusive dominion and control of the Agent) an amount equal to the
\naggregate amount of the Letter of Credit Obligations plus the aggregate
\noutstanding amount of Acceptance Obligations for application to payments of
\ndrafts drawn under Letters of Credit and to payment of Acceptances at maturity,
\nand the unused portion thereof after such application, if any, shall be applied
\nto repay other obligations of the Company hereunder or under the Notes or any of
\nthe other Credit Documents, and after all Letters of Credit have expired, all
\ndrafts and Acceptances have matured and been repaid and all other obligations of
\nthe Company hereunder or any of the other Credit Documents are paid in full, the
\nbalance, if any, shall be returned to the Company.
\n 73
\n 67<\/p>\n
Except as expressly provided above in this Section 11, presentment,
\ndemand, protest and all other notices of any kind are hereby expressly waived.<\/p>\n
SECTION 12. THE AGENT AND ISSUING LENDER<\/p>\n
12.1 Appointment; Authorization. Each Lender hereby irrevocably
\ndesignates and appoints Chase as the Agent of such Lender under this Agreement
\nand each of the other Credit Documents, and each such Lender irrevocably
\nauthorizes (a) Chase, as the Agent for such Lender, to take such action on its
\nbehalf under the provisions of this Agreement and each of the other Credit
\nDocuments and to exercise such powers and perform such duties as are expressly
\ndelegated to the Agent by the terms of this Agreement and the other Credit
\nDocuments, together with such other powers as are reasonably incidental thereto
\nand (b) Chase, in its capacity as Issuing Lender, to issue the Letters of
\nCredit, subject to the terms and conditions hereof, to pay the amount of any
\ndraft presented under any Letter of Credit upon presentation of documents which,
\nupon their face, conform to the terms of such Letter of Credit, to create
\nAcceptances, to receive from the Company reimbursement for the amount of each
\ndraft paid under each Letter of Credit and each Acceptance and payment of all
\ncommissions, charges and interest in respect of the Letters of Credit and the
\nAcceptances, and to take such action on behalf of such Lender under this
\nAgreement, the Letter of Credit Documents and the Acceptance Documents and to
\nexercise such powers and to perform such duties hereunder and thereunder as are
\nspecifically delegated to or required of the Issuing Lender by the terms hereof
\nand thereof, together with such powers as are reasonably incidental thereto.
\nNotwithstanding any provision to the contrary elsewhere in this Agreement,
\nneither the Agent nor the Issuing Lender shall have any duties or
\nresponsibilities, except those expressly set forth herein, or any fiduciary
\nrelationship with any Lender, and no implied covenants, functions,
\nresponsibilities, duties, obligations or liabilities shall be read into this
\nAgreement or the other Credit Documents or otherwise exist against the Agent or
\nthe Issuing Lender.<\/p>\n
12.2 Delegation of Duties. Each of the Agent and the Issuing Lender
\nmay execute any of its duties under this Agreement or the other Credit Documents
\nby or through agents or attorneys-in-fact and shall be entitled to advice of
\ncounsel concerning all matters pertaining to such duties. Neither the Agent nor
\nthe Issuing Lender shall be responsible for the negligence or misconduct of any
\nagents or attorneys-in-fact selected by it with reasonable care.<\/p>\n
12.3 Exculpatory Provisions. Neither the Agent nor the Issuing
\nLender nor any of their respective officers, directors, employees, agents,
\nattorneys-in-fact or Affiliates shall be (i) liable for any action lawfully
\ntaken or omitted to be taken by it or such Person under or in connection with
\nthis Agreement or any Credit Document (except for its or such Person’s own gross
\nnegligence or willful misconduct), or (ii) responsible in any manner to any of
\nthe Lenders for any recitals, statements, representations or warranties made by
\nthe Company, any other Credit Party or any officer thereof contained in this
\nAgreement or any other Credit Document or in any certificate, report, statement
\nor other document referred to or provided for in, or received by the Agent or
\nthe Issuing Lender under or in connection with,
\n 74
\n 68<\/p>\n
this Agreement or any other Credit Document or for the value, validity,
\neffectiveness, genuineness, enforceability or sufficiency of this Agreement, any
\nother Credit Document or the Notes or for any failure of the Company or any
\nother Credit Party to perform its or his obligations hereunder or thereunder.
\nNeither the Agent nor the Issuing Lender shall be under any obligation to any
\nLender to ascertain or to inquire as to the observance or performance of any of
\nthe agreements contained in, or conditions of, this Agreement or any other
\nCredit Document, or to inspect the properties, books or records of the Company
\nor any other Credit Party.<\/p>\n
12.4 Reliance by Agent and Issuing Lender. Each of the Agent and the
\nIssuing Lender shall be entitled to rely, and shall be fully protected in
\nrelying, upon any Note, writing, resolution, notice, consent, certificate,
\naffidavit, letter, cablegram, telegram, telecopy, telex or teletype message,
\nstatement, order or other document or conversation believed by it to be genuine
\nand correct and to have been signed, sent or made by the proper Person or
\nPersons and upon advice and statements of legal counsel (including, without
\nlimitation, counsel to the Company), independent accountants and other experts
\nselected by the Agent or the Issuing Lender, as the case may be. The Agent may
\ndeem and treat the payee of any Note as the owner thereof for all purposes
\nunless a written notice of assignment, negotiation or transfer thereof shall
\nhave been filed with the Agent. Each of the Agent and the Issuing Lender shall
\nbe fully justified in failing or refusing to take any action under this
\nAgreement or any other Credit Document unless it shall first receive such advice
\nor concurrence of the Required Lenders as it deems appropriate or it shall first
\nbe indemnified to its satisfaction by the Lenders against any and all liability
\nand expense which may be incurred by it by reason of taking or continuing to
\ntake any such action. Each of the Agent and the Issuing Lender shall in all
\ncases be fully protected in acting, or in refraining from acting, under this
\nAgreement, the Credit Documents and the Notes in accordance with a request of
\nthe Required Lenders, and such request and any action taken or failure to act
\npursuant thereto shall be binding upon all the Lenders and all future holders of
\nthe Notes.<\/p>\n
12.5 Notice of Default. Neither the Agent nor the Issuing Lender
\nshall be deemed to have knowledge or notice of the occurrence of any Default or
\nEvent of Default hereunder unless the Agent has received written notice from a
\nLender or the Company referring to this Agreement, describing such Default or
\nEvent of Default and stating that such notice is a “notice of default”. In the
\nevent that the Agent receives such a notice, the Agent shall give notice thereof
\nto the Lenders. The Agent shall take such action with respect to any Default or
\nEvent of Default as shall be reasonably directed by the Required Lenders,
\nprovided that unless and until the Agent shall have received such directions,
\nthe Agent may (but shall not be obligated to) take such action, or refrain from
\ntaking such action, with respect to such Default or Event of Default as it shall
\ndeem advisable in the best interests of the Lenders.<\/p>\n
12.6 Non-Reliance on Agent, Issuing Lender or Other Lenders. Each
\nLender expressly acknowledges that neither the Agent nor the Issuing Lender nor
\nany of their respective officers, directors, employees, agents,
\nattorneys-in-fact or Affiliates has made any representations or warranties to it
\nand that no act by the Agent or the Issuing Lender hereinafter taken, including
\nany review of the affairs of the Company or any other Credit Party, shall be
\ndeemed to constitute any representation or warranty by the Agent or the
\n 75
\n 69<\/p>\n
Issuing Lender to any Lender. Each Lender represents to the Agent and the
\nIssuing Lender that it has, independently and without reliance upon the Agent,
\nthe Issuing Lender or any other Lender, and based on such documents and
\ninformation as it has deemed appropriate, made its own appraisal of and
\ninvestigation into the business, operations, property, financial and other
\ncondition and creditworthiness of the Company and the other Credit Parties and
\nmade its own decision to make its Loans, to purchase Acceptance Participating
\nInterests, to purchase Letter of Credit Participating Interests and to enter
\ninto this Agreement. Each Lender also represents that it will, independently and
\nwithout reliance upon the Agent, the Issuing Lender or any other Lender, and
\nbased on such documents and information as it shall deem appropriate at the
\ntime, continue to make its own credit analysis, appraisals and decisions in
\ntaking or not taking action under this Agreement, and to make such investigation
\nas it deems necessary to inform itself as to the business, operations, property,
\nfinancial and other condition and creditworthiness of the Company and the other
\nCredit Parties. Except for notices, reports and other documents expressly
\nrequired to be furnished to the Lenders by the Agent or the Issuing Lender
\nhereunder, neither the Agent nor the Issuing Lender shall have any duty or
\nresponsibility to provide any Lender with any credit or other information
\nconcerning the business, operations, property, financial and other condition or
\ncreditworthiness of the Company or any other Credit Party, which may come into
\nthe possession of the Agent or any of its officers, directors, employees,
\nagents, attorneys-in-fact or Affiliates.<\/p>\n
12.7 Indemnification. The Lenders agree to indemnify the Agent and
\nthe Issuing Lender in their capacities as such (to the extent not reimbursed by
\nthe Company and without limiting the obligation of the Company to do so),
\nratably according to their respective Combined Loan Percentages in effect on the
\ndate on which indemnification is sought under this subsection (or, if
\nindemnification is sought after the date upon which the Revolving Credit
\nCommitments shall have terminated and the Loans shall have been paid in full,
\nratably in accordance with their Combined Loan Percentages immediately prior to
\nsuch date), from and against any and all liabilities, obligations, losses,
\ndamages, penalties, actions, judgments, suits, costs, expenses or disbursements
\nof any kind whatsoever which may at any time (including, without limitation, at
\nany time following the payment of the Notes and all other amounts payable
\nhereunder) be imposed on, incurred by or asserted against the Agent or the
\nIssuing Lender, as the case may be, in any way relating to or arising out of
\nthis Agreement, the Notes, the other Credit Documents or any documents
\ncontemplated by or referred to herein or therein or the transactions
\ncontemplated hereby or thereby or any action taken or omitted by the Agent or
\nthe Issuing Lender, as the case may be, under or in connection with any of the
\nforegoing; provided that no Lender shall be liable for the payment of any
\nportion of such liabilities, obligations, losses, damages, penalties, actions,
\njudgments, suits, costs, expenses or disbursements resulting solely from the
\nAgent’s or Issuing Lender’s gross negligence or willful misconduct. The
\nagreements in this subsection shall survive the payment of the Notes and all
\nother amounts payable hereunder.<\/p>\n
12.8 Agent in Its Individual Capacity. The Agent and its Affiliates
\nmay make loans to, accept deposits from and generally engage in any kind of
\nbusiness with the Company and the other Credit Parties as though the Agent were
\nnot the Agent hereunder. With respect to Loans made or renewed by it,
\nAcceptances created by it, Letters of Credit issued by it, and any Note issued
\nto it, Chase shall have the same rights and powers under this Agreement as
\n 76
\n 70<\/p>\n
any Lender (as well as those of the Issuing Lender) and may exercise the same as
\nthough it were not the Agent, and the terms “Lender” and “Lenders” shall include
\nChase in its individual capacity.<\/p>\n
12.9 Successor Agent. The Agent may resign as Agent upon 10 days’
\nnotice to the Lenders. If the Agent shall resign as Agent under this Agreement
\nand the other Credit Documents, then the Required Lenders shall appoint a
\nsuccessor agent for the Lenders (and if no successor agent shall have been so
\nappointed within 10 days of the retiring Agent’s having given notice of its
\nresignation, then the retiring Agent shall, on behalf of the Lenders, appoint a
\nsuccessor agent), which successor agent shall be approved by the Company (which
\napproval shall not be unreasonably withheld), whereupon such successor agent
\nshall succeed to the rights, powers and duties of the Agent, and the term
\n“Agent” shall mean such successor agent effective upon its appointment, and the
\nformer Agent’s rights, powers and duties as Agent shall be terminated, without
\nany other or further act or deed on the part of such former Agent or any of the
\nparties to this Agreement or any holders of the Notes. After any retiring
\nAgent’s resignation hereunder as Agent, the provisions of this Section 12 shall
\ninure to its benefit as to any actions taken or omitted to be taken by it while
\nit was Agent under this Agreement.<\/p>\n
SECTION 13. MISCELLANEOUS<\/p>\n
13.1 Amendments and Waivers. Neither this Agreement, any Note, any
\nother Credit Document nor any terms hereof or thereof may be amended,
\nsupplemented or modified except in accordance with the provisions of this
\nsubsection 13.1. Upon the written consent of the Required Lenders, the Agent
\n(or, in the case of the Letter of Credit Documents and the Acceptance Documents,
\nthe Issuing Lender) and the Company may, from time to time, enter into written
\namendments, supplements or modifications for the purpose of adding, deleting or
\nchanging any provisions to this Agreement, the Notes or the other Credit
\nDocuments or changing in any manner the rights of the Lenders or of the Company
\nhereunder or thereunder or waiving, on such terms and conditions as the Agent
\n(or the Issuing Lender, as the case may be) may specify in such instrument, any
\nof the requirements of this Agreement or the Notes or the other Credit Documents
\nor any Default or Event of Default and its consequences; provided, however, that
\nno such waiver and no such amendment, supplement or modification shall (a)
\nextend the Termination Date or the maturity of any Note or any installment
\nthereof, or reduce the rate or extend the time of payment of interest thereon,
\nor reduce any fee payable to the Lenders hereunder, or reduce the principal
\namount of any Note, or change the amount of any Lender’s Revolving Credit
\nCommitment, or amend, modify or waive any provision of this subsection 13.1, or
\namend or modify the definition of Required Lenders, or consent to the release of
\nall or substantially all of the Collateral, or consent to the assignment or
\ntransfer by the Company of any of its rights and obligations under this
\nAgreement, in each case without the written consent of all the Lenders, or (b)
\namend, modify or waive any provision of Section 12 without the written consent
\nof the then Agent and Issuing Lender. Any such waiver and any such amendment,
\nsupplement or modification shall apply to each of the Lenders equally and shall
\nbe binding upon the Company, the Lenders, the Issuing Lender, the Agent and all
\nfuture holders of the Notes. In the case of any waiver, the Company, the
\n 77
\n 71<\/p>\n
Lenders and the Agent shall be restored to their former position and rights
\nhereunder and under the outstanding Notes, and any Default or Event of Default
\nwaived shall be deemed to be cured and not continuing; but no such waiver shall
\nextend to any subsequent or other Default or Event of Default, or impair any
\nright consequent thereon.<\/p>\n
13.2 Notices. All notices, requests and demands to or upon the
\nrespective parties hereto to be effective shall be in writing (including by
\ntelegraph or facsimile), and, unless otherwise expressly provided herein, shall
\nbe deemed to have been duly given or made when delivered by hand, or five days
\nafter being deposited in the United States mail, postage prepaid and return
\nreceipt requested, or, in the case of telegraphic notice, when delivered to the
\ntelegraph company, or, in the case of facsimile, when sent, telephonic
\nconfirmation received, addressed as follows, or to such other address as may be
\nhereafter notified by the respective parties hereto and any future holders of
\nthe Notes:<\/p>\n
The Company: Polo Ralph Lauren Corporation
\n 650 Madison Avenue
\n New York, New York 10022
\n Attention: Michael Newman,
\n Vice Chairman and C.O.O.
\n and Victor Cohen, Esq.,
\n Senior Vice President,
\n General Counsel and Secretary<\/p>\n
Telecopier: (212) 318-7183
\n Telephonic Confirmation: (212) 318-7351<\/p>\n
with a copy to:<\/p>\n
Polo Ralph Lauren Corporation
\n 9 Polito Avenue
\n Lyndhurst, New Jersey 07071
\n Attention: Nancy Platoni Poli
\n Vice President-Chief Financial Officer<\/p>\n
Facsimile No: (201) 531-6766
\n Telephonic Confirmation: (201) 531-6250
\n 78
\n 72<\/p>\n
The Agent and
\n the Issuing
\n Lender: The Chase Manhattan Bank
\n 1411 Broadway
\n New York, New York 10018
\n Attention: John Murphy
\n Vice President<\/p>\n
Facsimile: (212) 391-7118
\n Telephonic Confirmation: (212) 391-6073<\/p>\n
The Lenders: To the addresses set forth on Schedule 1.1 hereto<\/p>\n
provided that any notice, request or demand to or upon the Agent, the Issuing
\nLender or the Lenders pursuant to subsections 2.3, 3.1, 4.2, 4.3, 6.7 and 6.8
\nshall not be effective until received.<\/p>\n
13.3 No Waiver; Cumulative Remedies. No failure to exercise and no
\ndelay in exercising, on the part of the Agent or any Lender, any right, remedy,
\npower or privilege hereunder or under the other Credit Documents, shall operate
\nas a waiver thereof; nor shall any single or partial exercise of any right,
\nremedy, power or privilege hereunder or thereunder preclude any other or further
\nexercise thereof or the exercise of any other right, remedy, power or privilege.
\nThe rights, remedies, powers and privileges herein provided or provided in the
\nother Credit Documents are cumulative and not exclusive of any rights, remedies,
\npowers and privileges provided by law.<\/p>\n
13.4 Survival of Representations and Warranties. All representations
\nand warranties made hereunder, in the other Credit Documents and in any
\ndocument, certificate or statement delivered pursuant hereto or in connection
\nherewith shall survive the execution and delivery of this Agreement and the
\nNotes.<\/p>\n
13.5 Payment of Expenses and Taxes. The Company agrees (a) to pay or
\nreimburse the Agent for all its out-of-pocket costs and expenses incurred in
\nconnection with the negotiation, preparation and execution of, and any
\namendment, supplement or modification to, this Agreement, the Notes, the other
\nCredit Documents and any other documents prepared in connection herewith or
\ntherewith, and the consummation of the transactions contemplated hereby and
\nthereby, including, without limitation, the disbursements and reasonable fees of
\ncounsel to the Agent, (b) to pay or reimburse each Lender and the Agent for all
\ntheir costs and expenses incurred in connection with the enforcement or
\npreservation of any rights under this Agreement, the Notes, the other Credit
\nDocuments and any such other documents, including, without limitation,
\ndisbursements and reasonable fees of counsel to the Agent and to the several
\nLenders, (c) to pay, indemnify, and hold each Lender and the Agent harmless
\nfrom, any and all recording and filing fees, and any and all liabilities with
\nrespect to, or resulting from any delay in paying, stamp, excise and other
\ntaxes, if any, which may be payable or determined to be payable in connection
\nwith the execution and delivery of, or consummation of any of the transactions
\ncontemplated by, or any amendment,
\n 79
\n 73<\/p>\n
supplement or modification of, or any waiver or consent under or in respect of,
\nthis Agreement, the Notes, the other Credit Documents and any such other
\ndocuments, (d) to pay or reimburse the Agent on demand for any amounts paid by
\nit under the CIT Indemnity and (e) to pay, indemnify, and hold each Lender and
\nthe Agent harmless from and against any and all other liabilities, obligations,
\nlosses, damages, penalties, actions, judgments, suits, costs, expenses or
\ndisbursements of any kind or nature whatsoever with respect to the execution,
\ndelivery, enforcement, performance and administration of this Agreement, the
\nNotes, the other Credit Documents and any such other documents (all the
\nforegoing, collectively, the “indemnified liabilities”), provided that the
\nCompany shall have no obligation hereunder to the Agent or any Lender with
\nrespect to indemnified liabilities arising from (i) the gross negligence or
\nwillful misconduct of the Agent or any such Lender, or (ii) legal proceedings
\ncommenced against the Agent or any such Lender by any other Lender or by any
\nParticipant. The agreements in this subsection 13.5 shall survive repayment of
\nthe Notes and all other amounts payable hereunder.<\/p>\n
13.6 Successors and Assigns; Participations. (a) This Agreement
\nshall be binding upon and inure to the benefit of the Company, the Lenders, the
\nAgent, all future holders of the Notes and their respective successors and
\nassigns, except that the Company may not assign or transfer any of its rights or
\nobligations under this Agreement without the prior written consent of each
\nLender. Assignments by any Lender of its rights and obligations hereunder may be
\neither in whole or in part.<\/p>\n
(b) Any Lender may, in the ordinary course of its commercial banking
\nbusiness and in accordance with applicable law, at any time sell to one or more
\nbanks or other entities (“Participants”) participating interests in any Loan
\nowing to such Lender, any Note held by such Lender, the Revolving Credit
\nCommitment of such Lender, any Acceptance Participating Interest, any Letter of
\nCredit Participating Interest or any other interest of such Lender hereunder. In
\nthe event of any such sale by a Lender of participating interests to a
\nParticipant, such Lender’s obligations under this Agreement shall remain
\nunchanged, such Lender shall remain solely responsible for the performance
\nthereof, such Lender shall remain the holder of any such Note for all purposes
\nunder this Agreement, and the Company, the Agent and the Issuing Lender shall
\ncontinue to deal solely and directly with such Lender in connection with such
\nLender’s rights and obligations under this Agreement. Each participation
\nagreement entered into between any Lender and any Participant shall provide that
\nsuch Lender shall not be required to seek the consent of such Participant before
\nagreeing to amend, waive or otherwise modify any Credit Document or taking any
\nother action with respect thereto, except that such participation agreement may
\nprovide that the selling Lender thereunder must obtain the prior written consent
\nof the Participant thereunder to extend the Termination Date or the maturity of
\nany Note or any installment thereof or reduce the rate or extend the time of
\npayment of interest thereon, or reduce the principal amount of any Note. The
\nCompany agrees that if amounts outstanding under this Agreement and the Notes
\nare due or unpaid, or shall have been declared or shall have become due and
\npayable upon the occurrence of an Event of Default, each Participant shall be
\ndeemed to have the right of setoff in respect of its participating interest in
\namounts owing under this Agreement and any Note to the same extent as if the
\namount of its participating interest were owing directly to it as a Lender under
\nthis Agreement or any Note, provided that such right of setoff shall be subject
\n 80
\n 74<\/p>\n
to the obligation of such Participant to share with the Lenders, and the Lenders
\nagree to share with such Participant, as provided in subsection 13.7. The
\nCompany also agrees that each Participant shall be entitled to the benefits of
\nsubsections 6.14, 6.16 and 6.17 with respect to its participation in the
\nCommitments, the Acceptances, the Letters of Credit and the Loans outstanding
\nfrom time to time; provided that no Participant shall be entitled to receive any
\ngreater amount pursuant to such subsections than the transferor Lender would
\nhave been entitled to receive in respect of the amount of the participation
\ntransferred by such transferor Lender to such Participant had no such transfer
\noccurred.<\/p>\n
(c) Any Lender may, in the ordinary course of its commercial lending
\nbusiness and in accordance with applicable law, at any time and from time to
\ntime assign to any Lender or any affiliate thereof or, with the consent of the
\nCompany and the Agent (which in each case shall not be unreasonably withheld),
\nto any additional bank, financial institution or other lending entity (each an
\n“Assignee”), all or any part of its rights and obligations under this Agreement
\nand the Notes pursuant to an Assignment and Acceptance Agreement, in form and
\nsubstance satisfactory to the Agent (each an “Assignment and Acceptance”),
\nexecuted by such Assignee, such assigning Lender (and, in the case of an
\nAssignee that is not then a Lender or an affiliate thereof, by the Agent and the
\nCompany) and delivered to the Agent for its acceptance and recording in the
\nRegister (as defined in paragraph (d) below); [provided that any such assignment
\nshall, in the case of Revolving Credit Commitments and Term Loans, be in an
\namount at least equal to $________________ in the case of any such assignment by
\nChase occurring within 90 days from the Closing Date (except in the case where
\nthe original syndication hereof is oversubscribed), or $______________] [will be
\nset based on size of Syndication] in the case of any other assignment; and
\nprovided, further, that any assignment by any Lender of all or any part of its
\nRevolving Credit Commitment and Term Loans must be made ratably in accordance
\nwith the respective amounts of such Revolving Credit Commitment and Term Loans
\nthen held by such Lender immediately prior to such assignment. Upon such
\nexecution, delivery, acceptance and recording, from and after the effective date
\ndetermined pursuant to such Assignment and Acceptance, (x) the Assignee
\nthereunder shall be a party hereto and, to the extent provided in such
\nAssignment and Acceptance, have the rights and obligations of a Lender hereunder
\nwith a Revolving Credit Commitment and Term Loans as set forth therein, and (y)
\nthe assigning Lender thereunder shall, to the extent provided in such Assignment
\nand Acceptance, be released from its obligations under this Agreement (and, in
\nthe case of an Assignment and Acceptance covering all or the remaining portion
\nof an assigning Lender’s rights and obligations under this Agreement, such
\nassigning Lender shall cease to be a party hereto).<\/p>\n
(d) The Agent shall maintain at its address referred to in
\nsubsection 13.2 a copy of each Assignment and Acceptance delivered to it and a
\nregister (the “Register”) for the recordation of the names and addresses of the
\nLenders and the Revolving Credit Commitment and Term Loans of, and principal
\namount of the Loans owing to, each Lender from time to time. The entries in the
\nRegister shall be conclusive, in the absence of manifest error, and the Company,
\nthe Agent and the Lenders may treat each Person whose name is recorded in the
\nRegister as the owner of the Loan recorded therein for all purposes of this
\nAgreement. The Register shall be available for inspection by the Company or any
\nLender at any reasonable time and from time to time upon reasonable prior
\nnotice.
\n 81
\n 75<\/p>\n
(e) Upon its receipt of an Assignment and Acceptance executed by an
\nassigning Lender and an Assignee (and, in the case of an Assignee that is not
\nthen a Lender or an affiliate thereof, by the Agent and the Company) together
\nwith payment to the Agent of a registration and processing fee of $4,000 (or
\n$1,500 in the case of an Assignment to a Lender or affiliate thereof), the Agent
\nshall (i) promptly accept such Assignment and Acceptance and (ii) on the
\neffective date determined pursuant thereto record the information contained
\ntherein in the Register and give notice of such acceptance and recordation to
\nthe Lenders and the Company. On or prior to such effective date, the Company, at
\nits own expense, shall execute and deliver to the Agent (in exchange for the
\nNotes of the assigning Lender) new Notes to the order of such Assignee in an
\namount equal to the Revolving Credit Commitment and Term Loan assumed by it
\npursuant to such Assignment and Acceptance and, if the assigning Lender has
\nretained a Revolving Credit Commitment and a Term Loan hereunder, new Notes to
\nthe order of the assigning Lender in an amount equal to the Revolving Credit
\nCommitment and Term Loan retained by it hereunder. Such new Notes shall be dated
\nthe Closing Date and shall otherwise be in the form of the Notes replaced
\nthereby.<\/p>\n
(f) The Company authorizes each Lender to disclose to any
\nParticipant, Assignee and any prospective Participant or Assignee any and all
\nfinancial information in such Lender’s possession concerning the Company and its
\naffiliates which has been delivered to such Lender by or on behalf of the
\nCompany pursuant to this Agreement or which has been delivered to such Lender by
\nor on behalf of the Company in connection with such Lender’s credit evaluation
\nof the Company and its affiliates prior to becoming a party to this Agreement;
\nprovided that any prospective Participant or Assignee shall have acknowledged in
\nwriting that it is receiving such information subject to the provisions of
\nsubsection 13.8.<\/p>\n
(g) For avoidance of doubt, the parties to this Agreement
\nacknowledge that the provisions of this subsection concerning assignments of
\nLoans and Notes relate only to absolute assignments and that such provisions do
\nnot prohibit assignments creating security interests, including, without
\nlimitation, any pledge or assignment by a Lender of any Loan or Note to any
\nFederal Reserve Bank in accordance with applicable law.<\/p>\n
13.7 Adjustments; Set-Off. (a) If any Lender (a “Benefitted Lender”)
\nshall at any time receive any payment of all or part of its Loans, or interest
\nthereon, or any other amount payable to it hereunder, or receive any collateral
\nin respect thereof or any amount under any guarantee in respect thereof (whether
\nvoluntarily or involuntarily, by set-off, pursuant to events or proceedings of
\nthe nature referred to in paragraph (g) of Section 11, or otherwise) in a
\ngreater proportion than any such payment to and collateral received by any other
\nLender, if any, in respect of such other Lender’s Loans, or interest thereon, or
\nany other amount payable to it hereunder, such Benefitted Lender shall purchase
\nfor cash from the other Lender such portion of such other Lender’s Loans, or
\nshall provide such other Lender with the benefits of any such collateral, or the
\nproceeds thereof, as shall be necessary to cause such Benefitted Lender to share
\nthe excess payment or benefits of such collateral or proceeds ratably with each
\nof the Lenders; provided, however, that if all or any portion of such excess
\npayment or benefits is thereafter recovered from such Benefitted Lender, such
\npurchase shall be rescinded, and the purchase price and benefits returned, to
\nthe extent of such recovery, but
\n 82
\n 76<\/p>\n
without interest. The Company agrees that each Lender so purchasing a portion of
\nanother Lender’s Loans may exercise all rights of payment (including, without
\nlimitation, rights of set-off) with respect to such portion as fully as if such
\nLender were the direct holder of such portion.<\/p>\n
(b) In addition to any rights and remedies of the Lenders provided
\nby law, upon the occurrence of an Event of Default and acceleration of the
\nobligations owing in connection with this Agreement, each Lender shall have the
\nright, without prior notice to the Company, any such notice being expressly
\nwaived by the Company to the extent permitted by applicable law, to set-off and
\napply against any indebtedness, whether matured or unmatured, of the Company to
\nsuch Lender, any amount owing from such Lender to the Company, at or at any time
\nafter, the happening of any of the above-mentioned events, and the aforesaid
\nright of set-off may be exercised by such Lender against the Company or against
\nany trustee in bankruptcy, debtor in possession, assignee for the benefit of
\ncreditors, receiver or executor, judgment or attachment creditor of the Company,
\nor against anyone else claiming through or against the Company or such trustee
\nin bankruptcy, debtor in possession, assignee for the benefit of creditors,
\nreceiver or executor, judgment or attachment creditor, notwithstanding the fact
\nthat such right of set-off shall not have been exercised by such Lender prior to
\nthe making, filing or issuance, or service upon such Lender of, or of notice of,
\nany such petition, assignment for the benefit of creditors, appointment or
\napplication for the appointment of a receiver, or issuance of execution,
\nsubpoena, order or warrant. Each Lender agrees promptly to notify the Company
\nand the Agent after any such set-off and application made by such Lender,
\nprovided that the failure to give such notice shall not affect the validity of
\nsuch set-off and application.<\/p>\n
13.8 Confidentiality. Each Lender agrees that it will not disclose
\nConfidential Information (as hereinafter defined) to any Person other than (a)
\nas may be consented to by the Company, (b) as may be required by law or pursuant
\nto legal process and (c) to prospective Participants and Assignees and those of
\nsuch Lender’s directors, officers, employees, examiners and professional
\nadvisors who have a need to know the Confidential Information in accordance with
\ncustomary banking practices and who receive the Confidential Information having
\nbeen made aware of the restrictions of this subsection 13.8. As used herein, the
\nterm “Confidential Information” means all information contained in materials
\nrelating to the Company and its Subsidiaries provided to the Lenders by the
\nCompany or its representatives or agents other than (i) information which is at
\nthe time so provided or thereafter becomes generally available to the public
\nother than as a result of a disclosure by one or more Lenders, (ii) information
\nwhich was available to any Lender prior to its disclosure to the Lenders by the
\nCompany, its representatives or agents and (iii) information which becomes
\navailable to one or more Lenders from a source other than the Company, its
\nrepresentatives or agents.<\/p>\n
13.9 Severability. Any provision of this Agreement which is
\nprohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
\nbe ineffective to the extent of such prohibition or unenforceability without
\ninvalidating the remaining provisions hereof, and any such prohibition or
\nunenforceability in any jurisdiction shall not invalidate or render
\nunenforceable such provisions in any other jurisdiction.
\n 83
\n 77<\/p>\n
13.10 Counterparts. This Agreement may be executed by one or more of
\nthe parties to this Agreement on any number of separate counterparts and all of
\nsaid counterparts taken together shall be deemed to constitute one and the same
\ninstrument. A set of the copies of this Agreement signed by all the parties
\nshall be lodged with the Company and the Agent.<\/p>\n
13.11 No Third Party Beneficiaries. This Agreement is solely for the
\nbenefit of the Agent, the Lenders (and Participants and Assignees to the extent
\nprovided in subsection 13.6) and the Company, and nothing expressed in, or to be
\nimplied from, this Agreement shall or shall be deemed to confer upon anyone
\nother than the Company, the Agent and the Lenders (and such Participants and
\nAssignees) any benefit, or legal or equitable right, remedy or claim under or by
\nvirtue of this Agreement or any provision hereof, including, without limitation,
\nthe right to insist upon or to enforce the performance or observance of any of
\nthe obligations contained herein. All conditions to the obligations of the
\nLenders to make the Loans, the Issuing Lender and the Participating Lenders to
\nissue and participate in the Letters of Credit and the Lenders to create and
\nparticipate in the Acceptances are imposed solely and exclusively for the
\nbenefit of the Lenders, and no other Person shall have standing to require
\nsatisfaction of such conditions in accordance with their terms or be entitled to
\nassume that the Lenders will not refuse to make such extensions of credit in the
\nabsence of strict compliance with any or all thereof and no other Person shall
\nunder any circumstances be deemed to be a beneficiary of such conditions, any or
\nall of which may be freely waived in whole or in part by the Lenders at any time
\nif, in their sole discretion, the Lenders deem it advisable or desirable to do
\nso.<\/p>\n
13.12 SUBMISSION TO JURISDICTION; WAIVERS. (a) EACH OF THE COMPANY,
\nTHE AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY:<\/p>\n
(i) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
\n PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT TO
\n WHICH IT IS A PARTY, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN
\n RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS
\n OF THE STATE OF NEW YORK, THE COURTS OF THE UNITED STATES FOR THE SOUTHERN
\n DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF;<\/p>\n
(ii) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN
\n SUCH COURTS, WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
\n VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH
\n ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT
\n TO PLEAD OR CLAIM THE SAME;<\/p>\n
(iii) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR
\n PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR
\n CERTIFIED MAIL (OR ANY
\n 84
\n 78<\/p>\n
SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO IT AT ITS ADDRESS
\n SET FORTH IN SUBSECTION 13.2 OR AT SUCH OTHER ADDRESS OF WHICH THE AGENT
\n SHALL HAVE BEEN NOTIFIED PURSUANT THERETO; AND<\/p>\n
(iv) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT
\n SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE
\n RIGHT TO SUE IN ANY OTHER JURISDICTION.<\/p>\n
(b) EACH OF THE COMPANY, THE AGENT AND THE LENDERS HEREBY
\nIRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR
\nPROCEEDING REFERRED TO IN PARAGRAPH (a) ABOVE.<\/p>\n
13.13 GOVERNING LAW. THIS AGREEMENT, THE NOTES AND THE OTHER CREDIT
\nDOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT,
\nTHE NOTES AND THE OTHER CREDIT DOCUMENTS SHALL BE GOVERNED BY, AND CONSTRUED AND
\nINTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.<\/p>\n
13.14 Integration. This Agreement and the other Credit Documents
\nrepresent the agreement of the Company, the Agent and the Lenders with respect
\nto the subject matter hereof, and there are no promises, undertakings,
\nrepresentations or warranties by the Agent or any Lender relative to the subject
\nmatter hereof not expressly set forth herein or in the other Credit Documents.<\/p>\n
13.15 Acknowledgements. The Company hereby acknowledges that:<\/p>\n
(a) it has been advised by counsel in the negotiation, execution and
\n delivery of this Agreement, the Notes and the other Credit Documents;<\/p>\n
(b) neither the Agent nor any Lender has any fiduciary relationship
\n with or duty to the Company arising out of or in connection with this
\n Agreement or any of the other Credit Documents, and the relationship
\n between the Agent and the Lenders, on one hand, and the Company, on the
\n other hand, in connection herewith or therewith is solely that of debtor
\n and creditor; and<\/p>\n
(c) no joint venture is created hereby or by the other Credit
\n Documents or otherwise exists by virtue of the transactions contemplated
\n hereby among the Lenders or among the Company and the Lenders.<\/p>\n
13.16 Satisfaction in Dollars. The obligation of the Company
\nhereunder, under the Notes and in respect of Letter of Credit Obligations and
\nAcceptance Obligations to make payments in Dollars shall not be discharged or
\nsatisfied by any tender or recovery
\n 85
\n 79<\/p>\n
pursuant to any judgment expressed in or converted into any currency other than
\nDollars or any other realization in such currency, whether as proceeds of
\nset-off, security, guarantee, distributions, or otherwise, except to the extent
\nto which such tender, recovery or realization shall result in the effective
\nreceipt by the Agent and the Lenders of the full amount of Dollars expressed to
\nbe payable hereunder, under the Notes and in respect of Letter of Credit
\nObligations and Acceptance Obligations and the Company shall indemnify the Agent
\nand each Lender (as an alternative or additional cause of action) for the amount
\n(if any) by which such effective receipt shall fall short of the full amount of
\nDollars expressed to be payable hereunder, under the Notes and in respect of
\nLetter of Credit Obligations and Acceptance Obligations and such obligation to
\nindemnify shall not be affected by judgment being obtained for any other sums
\ndue under this Agreement, the Notes and in respect of Letter of Credit
\nObligations and Acceptance Obligations.<\/p>\n
POLO RALPH LAUREN CORPORATION<\/p>\n
By: _____________________________
\n Name:
\n Title:<\/p>\n
THE CHASE MANHATTAN BANK, as Agent,
\n Issuing Lender and a Lender<\/p>\n
By: _________________________
\n Name: John Murphy
\n Title: Vice President
\n 86
\n ANNEX A<\/p>\n
PRICING GRID<\/p>\n
\n\n============================================================================================
\n STATUS APPLICABLE
\n MARGIN FOR APPLICABLE
\n EURODOLLAR COMMITMENT APPLICABLE SIGHT
\n LOANS RATE PERCENTAGE DRAFT FEE PERCENTAGE
\n============================================================================================
\n
\n MARGIN LEVEL STATUS I 0.75% 0.2500% 0.1250%
\n============================================================================================
\n MARGIN LEVEL STATUS II 0.50% 0.1875% 0.1250%
\n============================================================================================
\n MARGIN LEVEL STATUS III 0.40% 0.1750% 0.0625%
\n============================================================================================
\n MARGIN LEVEL STATUS IV 0.35% 0.1500% 0.0625%
\n============================================================================================
\n MARGIN LEVEL STATUS V 0.30% 0.1250% 0.0625%
\n============================================================================================
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