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Exhibit 10.1
EXECUTION COPY
CREDIT AGREEMENT
DATED AS OF JULY 29, 1999
AMONG
CYRK, INC.,
AS BORROWER,
THE LENDERS LISTED HEREIN,
AS LENDERS,
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
AS ISSUING LENDER,
AND
XXXXX FARGO HSBC TRADE BANK, N.A.,
AS ADMINISTRATIVE AGENT
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CYRK, INC.
CREDIT AGREEMENT
TABLE OF CONTENTS
PAGE
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Section 1. DEFINITIONS...........................................................................2
1.1 Certain Defined Terms.................................................................2
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations Under Agreement...16
1.3 Other Definitional Provisions and Rules of Construction..............................16
Section 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS...........................................17
2.1 Commitments; Making of Loans; Notes..................................................17
2.2 Interest on the Loans................................................................19
2.3 Nonutilization Fees..................................................................22
2.4 General Provisions Regarding Payments; Application of Proceeds of Collateral.........22
2.5 Use of Proceeds......................................................................25
2.6 Special Provisions Governing LIBOR Loans.............................................25
2.7 Increased Costs; Taxes; Capital Adequacy.............................................27
2.8 Obligation of Lenders and Issuing Lender to Mitigate.................................31
Section 3. DOCUMENTARY CREDITS AND LOANS AGAINST IMPORTS........................................32
3.1 Issuance of Documentary Credits and Lenders' Purchase of Participations Therein......32
3.2 Documentary Credit Fees..............................................................34
3.3 Drawings and Reimbursement of Amounts Paid Under Documentary Credits.................35
3.4 Obligations Absolute.................................................................38
3.5 Indemnification; Nature of Issuing Lenders' Duties...................................39
Section 4. CONDITIONS TO LOANS AGAINST IMPORTS AND DOCUMENTARY CREDITS..........................40
4.1 Conditions to Effectiveness of Agreement.............................................40
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4.2 Conditions to All Loans Against Imports..............................................42
4.3 Conditions to Documentary Credits....................................................43
Section 5. COMPANY'S REPRESENTATIONS AND WARRANTIES.............................................44
5.1 Organization, Powers, Qualification, Good Standing, Business and Subsidiaries........44
5.2 Authorization of Borrowing, etc......................................................45
5.3 Financial Condition..................................................................45
5.4 No Material Adverse Change; No Restricted Junior Payments............................46
5.5 Title to Properties; Liens...........................................................46
5.6 Litigation; Adverse Facts............................................................46
5.7 Payment of Taxes.....................................................................47
5.8 Performance of Agreements; Material Contracts........................................47
5.9 Governmental Regulation..............................................................47
5.10 Securities Activities................................................................47
5.11 Employee Benefit Plans...............................................................48
5.12 Employee Matters.....................................................................48
5.13 Solvency.............................................................................48
5.14 Matters Relating to Collateral.......................................................48
5.15 Disclosure...........................................................................49
Section 6. COMPANY'S AFFIRMATIVE COVENANTS......................................................49
6.1 Financial Statements and Other Reports...............................................50
6.2 Corporate Existence, etc.............................................................53
6.3 Payment of Taxes and Claims; Tax Consolidation.......................................53
6.4 Maintenance of Properties; Insurance.................................................53
6.5 Inspection Rights; Lender Meeting; Audits of Collateral..............................54
6.6 Compliance with Laws, etc............................................................55
6.7 Year 2000 Compliance.................................................................55
Section 7. COMPANY'S NEGATIVE COVENANTS.........................................................55
7.1 Indebtedness.........................................................................55
7.2 Liens and Related Matters............................................................56
7.3 Restriction on Extraordinary Events..................................................57
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7.4 Contingent Obligations...............................................................57
7.5 Financial Covenants..................................................................58
7.6 Restriction on Fundamental Changes; Asset Sales......................................58
7.7 Sale or Discount of Receivables......................................................59
7.8 Transactions with Shareholders and Affiliates........................................59
7.9 Disposal of Subsidiary Stock.........................................................59
7.10 Conduct of Business..................................................................60
7.11 Fiscal Year..........................................................................60
Section 8. EVENTS OF DEFAULT....................................................................60
8.1 Failure to Make Payments When Due....................................................60
8.2 Default in Other Agreements..........................................................60
8.3 Breach of Certain Covenants..........................................................61
8.4 Breach of Warranty...................................................................61
8.5 Other Defaults Under Loan Documents..................................................61
8.6 Involuntary Bankruptcy; Appointment of Receiver, etc.................................61
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc...................................61
8.8 Judgments and Attachments............................................................62
8.9 Dissolution..........................................................................62
8.11 Material Adverse Effect..............................................................62
8.12 Failure of Security; Repudiation of Obligations......................................62
8.13 Change in Control....................................................................63
Section 9. ADMINISTRATIVE AGENT.................................................................64
9.1 Appointment..........................................................................64
9.2 Powers and Duties; General Immunity..................................................65
9.3 Representations and Warranties; No Responsibility For Appraisal of Creditworthiness..66
9.4 Right to Indemnity...................................................................67
9.5 Successor Administrative Agent.......................................................67
9.6 Collateral Documents.................................................................67
Section 10. MISCELLANEOUS........................................................................68
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10.1 Assignments and Participations in Loans Against Imports and Documentary Credits......68
10.2 Expenses.............................................................................71
10.3 Indemnity............................................................................71
10.4 Set-Off..............................................................................72
10.5 Ratable Sharing......................................................................72
10.6 Amendments and Waivers...............................................................73
10.7 Independence of Covenants............................................................74
10.8 Notices..............................................................................74
10.9 Survival of Representations, Warranties and Agreements...............................74
10.10 Failure or Indulgence Not Waiver; Remedies Cumulative................................75
10.11 Marshalling; Payments Set Aside......................................................75
10.12 Severability.........................................................................75
10.13 Obligations Several; Independent Nature of Lenders' Rights...........................75
10.14 Headings.............................................................................75
10.15 Applicable Law.......................................................................76
10.16 Successors and Assigns...............................................................76
10.17 Consent to Jurisdiction and Service of Process.......................................76
10.18 Waiver of Jury Trial.................................................................76
10.19 Confidentiality......................................................................77
10.20 Counterparts; Effectiveness..........................................................77
10.21 Arbitration..........................................................................78
Signature pages ...........................................................................S-1
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EXHIBITS
I FORM OF NOTICE OF BORROWING
II FORM OF NOTICE OF CONVERSION/CONTINUATION
III FORM OF NOTICE OF ISSUANCE OF DOCUMENTARY CREDIT
IV FORM OF LETTER OF CREDIT APPLICATION
V FORM OF NOTE
VI FORM OF COMPLIANCE CERTIFICATE
VII FORM OF CERTIFICATE RE NON-BANK STATUS
VIII FORM OF OPINION OF XXXXXX, XXXX & XXXXXXX
IX FORM OF OPINION OF O'MELVENY & XXXXX LLP
X FORM OF ASSIGNMENT AGREEMENT
XI FORM OF COMPANY SECURITY AGREEMENT
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SCHEDULES
2.1 LENDERS' COMMITMENTS AND PRO RATA SHARES
5.1 SUBSIDIARIES OF COMPANY
5.5 PROPERTIES
5.6 LITIGATION
5.8 MATERIAL CONTRACTS
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CYRK, INC.
CREDIT AGREEMENT
This CREDIT AGREEMENT (this "AGREEMENT") is dated as of July 29, 1999,
and entered into by and among CYRK, INC., a Delaware corporation ("COMPANY"),
THE FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF (each
individually referred to herein as a "LENDER" and collectively as "LENDERS"),
XXXXX FARGO BANK, NATIONAL ASSOCIATION, as Issuing Lender, and XXXXX FARGO HSBC
TRADE BANK, N.A. (the "TRADE BANK"), as and as agent for Lenders (in such
capacity, "ADMINISTRATIVE AGENT").
R E C I T A L S
WHEREAS, the Trade Bank, as successor-in-interest to the Hong Kong and
Shanghai Banking Corporation Limited ("HSBC"), and Company are parties to that
certain Revolving Credit Agreement, dated as of December 1, 1993, as amended by
Amendment No. 1 to Revolving Credit Agreement dated as of January 12, 1994,
Amendment Number Two to Revolving Credit Agreement dated as of May 16, 1994,
Amendment Number Three to Revolving Credit Agreement dated as of January 25,
1996, Amendment Number Four to Revolving Credit Agreement dated as of January
11, 1999, Amendment Number Five to Revolving Credit Agreement dated as of
February 4, 1999, Amendment Number Six to Revolving Credit Agreement dated as of
March 31, 1999, Amendment Number Seven to Revolving Credit Agreement dated as of
May 14, 1999 and Amendment Number Eight to Revolving Credit Agreement dated as
of June 30, 1999 (the "EXISTING CREDIT AGREEMENT"); and
WHEREAS, all obligations under the Existing Credit Agreement are
secured by a first priority Lien on all personal property of Company under that
certain Security Agreement dated as of December 1, 1993 between Company and the
Trade Bank; and
WHEREAS, the Trade Bank and the other Lenders have agreed to extend
certain credit facilities and to issue certain standby documentary credits to
Company for working capital and other general corporate purposes; and
WHEREAS, HSBC has agreed, pursuant to that certain Participation
Agreement to be dated on or about July 29, 1999 (the "PARTICIPATION AGREEMENT"),
by and between HSBC and the Trade Bank, to issue certain commercial documentary
credits to Company under its Asian Documentary Credits Issuance Program
("ADCIP"); and
WHEREAS, Company desires to secure all of the Obligations hereunder and
under the other Loan Documents by granting to Lenders a first priority Lien on
its personal property;
WHEREAS, coincident with the execution of this Agreement, the Existing
Credit Agreement and all other Documents (as defined in the Existing Credit
Agreement) will be terminated except for any existing liens granted to the Trade
Bank certain of which will be terminated by separate filings and all loans
thereunder (except outstanding documentary credits
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and loans against imports having a maturity date after the date of this
Agreement) will be repaid by Company.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Company, Lenders and Administrative
Agent agree as follows:
SECTION 1. DEFINITIONS
1.1 CERTAIN DEFINED TERMS
The following terms used in this Agreement shall have the following
meanings:
"AAA" has the meaning assigned to that term in subsection 10.21B.
"ACCOUNT" means any present or future right to payment for goods sold
or leased or for services rendered, whether due or to become due, whether now
existing or hereafter arising.
"ADCIP" has the meaning assigned to that term in the Recitals.
"ADCIP COMMERCIAL DOCUMENTARY CREDIT" means a commercial letter of
credit issued by HSBC under ADCIP.
"ADJUSTED LIBO RATE" means, for any Interest Rate Determination Date
with respect to an Interest Period for a LIBOR Loan, the rate per annum obtained
by dividing (i) the arithmetic average (rounded upward to the nearest 1/16 of
one percent) of the quotations, if any, offered by first class banks in the
London interbank market to Xxxxx Fargo for U.S. dollar deposits of amounts in
same day funds comparable to the principal amount of the requested LIBOR Loan of
the Trade Bank for which the Adjusted LIBO Rate is then being determined (which
principal amount shall be deemed to be equal to the principal amount of such
LIBOR Loan in the event the Trade Bank is not making, converting to or
continuing such a LIBOR Loan) with maturities comparable to such Interest Period
as of approximately 11:00 A.M. (London time) on such Interest Rate Determination
Date by (ii) a percentage equal to 100% MINUS the stated maximum rate of all
reserve requirements (including any marginal, emergency, supplemental, special
or other reserves) applicable on such Interest Rate Determination Date to any
member bank of the Federal Reserve System in respect of "Eurocurrency
liabilities" as defined in Regulation D (or any successor category of
liabilities under Regulation D).
"ADMINISTRATIVE AGENT" has the meaning assigned to that term in the
introduction to this Agreement and also means and includes any successor
Administrative Agent appointed pursuant to subsection 9.5.
"AFFECTED LENDER" has the meaning assigned to that term in
subsection 2.6C.
"AFFECTED LOANS" has the meaning assigned to that term in
subsection 2.6C.
"AFFILIATE", as applied to any Person, means any other Person directly
or indirectly controlling, controlled by, or under common control with, that
Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled
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by" and "under common control with"), as applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of that Person, whether through the
ownership of voting securities or by contract or otherwise.
"AGGREGATE AMOUNTS DUE" has the meaning assigned to that term in
subsection 10.5.
"ASSIGNMENT AGREEMENT" means an Assignment Agreement in substantially
the form of EXHIBIT X annexed hereto.
"BANKRUPTCY CODE" means Title 11 of the United States Code entitled
"Bankruptcy", as now and hereafter in effect, or any successor statute.
"BASE RATE" means, at any time, the rate that Xxxxx Fargo most recently
announced at its principal office in San Francisco as its prime lending rate, as
in effect from time to time, it being understood that the prime lending rate of
Xxxxx Fargo is one of its base rates and serves as the basis upon which
effective rates of interest are calculated for those loans making reference
thereto, and is evidenced by the recording thereof after its announcement in
such internal publication or publications as Xxxxx Fargo may designate. Each
change in the Base Rate will be effective on the day Xxxxx Fargo announces the
change in its prime lending rate. The Base Rate is a reference rate and does not
necessarily represent the lowest or best rate actually charged to any customer.
Xxxxx Fargo or any other Lender may make commercial loans or other loans at
rates of interest at, above or below the Base Rate.
"BASE RATE LOANS" means Loans Against Imports bearing interest at rates
determined by reference to the Base Rate as provided in subsection 2.2A.
"BUSINESS DAY" means (i) for all purposes other than as covered by
clause (ii) below, any day excluding Saturday, Sunday and any day which is a
legal holiday under the laws of the States of California and Massachusetts or is
a day on which banking institutions located in either such state are authorized
or required by law or other governmental action to close, and (ii) with respect
to all notices, determinations, fundings and payments in connection with the
Adjusted LIBO Rate or any LIBOR Loans, any day that is a Business Day described
in clause (i) above and that is also a day for trading by and between banks in
Dollar deposits in the London interbank market.
"CAPITAL LEASE", as applied to any Person, means any lease of any
property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person.
"CAPITAL STOCK" means (i) in the case of a corporation, corporate
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership, partnership
interests (whether general or limited), (iv) in the case of a limited liability
company, membership interests and (v) any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distribution of assets of, the issuing Person.
"CASH" means money, currency or a credit balance in a Deposit Account.
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"CASH EQUIVALENTS" means, as at any date of determination, (i)
marketable securities (a) issued or directly and unconditionally guaranteed as
to interest and principal by the United States Government or (b) issued by any
agency of the United States of America the obligations of which are backed by
the full faith and credit of the United States of America, in each case maturing
within one year after such date; (ii) marketable direct obligations issued by
any state of the United States of America or any political subdivision of any
such state or any public instrumentality thereof, in each case maturing within
one year after such date and having, at the time of the acquisition thereof, the
rating of "Aa" or "AA", respectively, from either Standard & Poor's Ratings
Group ("S&P") or Xxxxx'x Investors Service, Inc. ("MOODY'S"); (iii) commercial
paper maturing no more than one year from the date of creation thereof and
having, at the time of the acquisition thereof, a rating of at least A-1 from
S&P or at least P-1 from Moody's; (iv) certificates of deposit or bankers'
acceptances maturing within one year after such date and issued or accepted by
any Lender or by any commercial bank organized under the laws of the United
States of America or any state thereof or the District of Columbia having
capital and surplus and undivided profits aggregating not less than
$100,000,000; and (v) shares of any money market mutual fund that has the rating
of "Aa" or "AA", respectively, from either S&P or Moody's.
"CERTIFICATE RE NON-BANK STATUS" means a certificate substantially in
the form of EXHIBIT VII annexed hereto delivered by a Lender to Administrative
Agent pursuant to subsection 2.7B(iii).
"CLOSING DATE" means July 23, 1999.
"COLLATERAL" means, collectively, all of the personal and mixed
property in which Liens are purported to be granted pursuant to the Collateral
Documents as security for the Obligations.
"COLLATERAL DOCUMENTS" means the Company Security Agreement and all
other instruments or documents delivered by Company pursuant to this Agreement
or any of the other Loan Documents in order to grant to Administrative Agent a
Lien on any real, personal or mixed property of Company as security for the
Obligations.
"COMMERCIAL DOCUMENTARY CREDIT" means any letter of credit or similar
instrument issued hereunder pursuant to subsection 3.1A for the purpose of
providing the primary payment mechanism in connection with the purchase of any
materials, goods, or services by Company or its Subsidiaries in the ordinary
course of business.
"COMMERCIAL DOCUMENTARY CREDIT USAGE" means, as at any date of
determination, the sum of (i) the maximum aggregate amount which is or at any
time thereafter may become available for drawing under all Commercial
Documentary Credits then outstanding PLUS (ii) the aggregate amount of all
drawings under Commercial Documentary Credits honored by the Issuing Lender and
not theretofore reimbursed by Company (including any such reimbursement out of
the proceeds of Loans Against Imports pursuant to subsection 3.3B).
"COMMERCIAL REIMBURSEMENT DATE" has the meaning assigned to that term
in subsection 3.3B.
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"COMMITMENT" means the commitment of each Lender to make Loans Against
Imports as set forth in subsection 2.1A, and "COMMITMENTS" means such
commitments of all Lenders in the aggregate.
"COMMITMENT TERMINATION DATE" means July 31 2000.
"COMPANY" has the meaning assigned to that term in the introduction to
this Agreement.
"COMPANY SECURITY AGREEMENT" means the Company Security Agreement
executed and delivered by Company and Administrative Agent on the Closing Date,
in the form of EXHIBIT XI annexed hereto.
"COMPLIANCE CERTIFICATE" means a certificate substantially in the form
of EXHIBIT VI annexed hereto delivered to Administrative Agent and Lenders by
Company pursuant to subsection 6.1(iii).
"CONSOLIDATED NET INCOME" means, for any period, the net income (or
loss) of Company and its Subsidiaries (other than Unrestricted Subsidiaries) on
a consolidated basis for such period taken as a single accounting period
determined in conformity with GAAP; PROVIDED that there shall be excluded (i)
the income (or loss) of any Person in which any other Person has a joint
interest, except to the extent of the amount of dividends or other distributions
actually paid to Company or any of its Subsidiaries (other than Unrestricted
Subsidiaries) by such Person during such period, (ii) the income (or loss) of
any Person accrued prior to the date it becomes a Subsidiary of Company or is
merged into or consolidated with Company or any of its Subsidiaries or that
Person's assets are acquired by Company or any of its Subsidiaries, (iii) the
income of any Subsidiary of Company to the extent that the declaration or
payment of dividends or similar distributions by that Subsidiary of that income
is not at the time permitted by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Subsidiary, (iv) any after-tax gains or losses
attributable to asset sales or returned surplus assets of any Pension Plan, and
(v) (to the extent not included in clauses (i) through (iv) above) any net
extraordinary gains or net non-cash extraordinary losses.
"CONSOLIDATED TANGIBLE NET WORTH" means, as at any date of
determination, the sum of the Capital Stock and additional paid-in capital PLUS
retained earnings (or minus accumulated deficits) of Company and its
Subsidiaries (other than Unrestricted Subsidiaries) MINUS (i) Investments in
Subsidiaries by Company and (ii) intangible assets, all of the foregoing
determined on a consolidated basis (other than Unrestricted Subsidiaries)
determined in conformity with GAAP.
"CONSOLIDATED TOTAL DEBT" means, at any date of determination, the
aggregate stated balance sheet amount of all Indebtedness of Company and its
Subsidiaries (other than Unrestricted Subsidiaries), determined on a
consolidated basis in accordance with GAAP.
"CONTINGENT OBLIGATION", as applied to any Person, means any direct or
indirect liability, contingent or otherwise, of that Person (i) with respect to
any Indebtedness, lease, dividend or other obligation of another if the primary
purpose or intent thereof by the Person incurring the Contingent Obligation is
to provide assurance to the obligee of such obligation of
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another that such obligation of another will be paid or discharged, or that any
agreements relating thereto will be complied with, or that the holders of such
obligation will be protected (in whole or in part) against loss in respect
thereof, (ii) with respect to any letter of credit issued for the account of
that Person or as to which that Person is otherwise liable for reimbursement of
drawings, or (iii) under Hedge Agreements. Contingent Obligations shall include
(a) the direct or indirect guaranty, endorsement (otherwise than for collection
or deposit in the ordinary course of business), co-making, discounting with
recourse or sale with recourse by such Person of the obligation of another, (b)
the obligation to make take-or-pay or similar payments if required regardless of
non-performance by any other party or parties to an agreement, and (c) any
liability of such Person for the obligation of another through any agreement
(contingent or otherwise) (x) to purchase, repurchase or otherwise acquire such
obligation or any security therefor, or to provide funds for the payment or
discharge of such obligation (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise) or (y) to maintain the solvency
or any balance sheet item, level of income or financial condition of another if,
in the case of any agreement described under subclauses (x) or (y) of this
sentence, the primary purpose or intent thereof is as described in the preceding
sentence. The amount of any Contingent Obligation shall be equal to the amount
of the obligation so guaranteed or otherwise supported or, if less, the amount
to which such Contingent Obligation is specifically limited.
"CONTRACTUAL OBLIGATION", as applied to any Person, means any provision
of any Security issued by that Person or of any material indenture, mortgage,
deed of trust, contract, undertaking, agreement or other instrument to which
that Person is a party or by which it or any of its properties is bound or to
which it or any of its properties is subject.
"CURRENT ASSETS" means, as at any date of determination, the total
assets of Company on an unconsolidated basis which may properly be classified as
current assets in conformity with GAAP other than the aggregate amount of all
obligations owing to Company from any director, officer, partner, stockholder,
employee or Affiliate of Company or any of its Subsidiaries.
"CURRENT LIABILITIES" means, as at any date of determination, the total
liabilities of Company on an unconsolidated basis which may properly be
classified as current liabilities in conformity with GAAP.
"DEPOSIT ACCOUNT" means a demand, time, savings, passbook or like
account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable certificate of
deposit.
"DISPUTE" has the meaning assigned to that term in subsection 10.21A.
"DOCUMENTARY CREDITS" means Commercial Documentary Credits and Standby
Documentary Credits issued or to be issued by Issuing Lender for the account of
Company pursuant to subsection 3.1A.
"DOLLARS" and the sign "$" mean the lawful money of the United States
of America.
"ELIGIBLE ASSIGNEE" means (i) (a) a commercial bank organized under the
laws of the United States of America or any state thereof; (b) a savings and
loan association or savings bank organized under the laws of the United States
of America or any state thereof; (c) a commercial
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bank organized under the laws of any other country or a political subdivision
thereof; PROVIDED that such bank has Tier 1 capital of not less than
$100,000,000 and either (x) such bank is acting through a branch or agency
located in the United States of America or (y) such bank is organized under the
laws of a country that is a member of the Organization for Economic Cooperation
and Development or a political subdivision of such country; and (d) any other
entity which is an institutional "accredited investor" (as defined in Regulation
D under the Securities Act) which makes loans in the ordinary course of its
business and total assets of at least $250,000,000 and a positive tangible net
worth or (ii) any Lender and any Affiliate of any Lender; PROVIDED that no
Affiliate of Company and no Person principally engaged in the business engaged
in by Company and its Subsidiaries on the Closing Date shall be an Eligible
Assignee.
"EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as defined in
Section 3(3) of ERISA which is or was maintained or contributed to by Company,
any of its Subsidiaries or any of their respective ERISA Affiliates.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor thereto.
"ERISA AFFILIATE" means, as applied to any Person, (i) any corporation
which is a member of a controlled group of corporations within the meaning of
Section 414(b) of the Internal Revenue Code of which that Person is a member;
(ii) any trade or business (whether or not incorporated) which is a member of a
group of trades or businesses under common control within the meaning of Section
414(c) of the Internal Revenue Code of which that Person is a member; and (iii)
any member of an affiliated service group within the meaning of Section 414(m)
or (o) of the Internal Revenue Code of which that Person, any corporation
described in clause (i) above or any trade or business described in clause (ii)
above is a member. Any former ERISA Affiliate of Company or any of its
Subsidiaries shall continue to be considered an ERISA Affiliate of Company or
such Subsidiary within the meaning of this definition with respect to the period
such entity was an ERISA Affiliate of Company or such Subsidiary and with
respect to liabilities arising after such period for which Company or such
Subsidiary could be liable under the Internal Revenue Code or ERISA.
"ERISA EVENT" means (i) a "reportable event" within the meaning of
Section 4043 of ERISA and the regulations issued thereunder with respect to any
Pension Plan (excluding those for which the provision for 30-day notice to the
PBGC has been waived by regulation); (ii) the failure to meet the minimum
funding standard of Section 412 of the Internal Revenue Code with respect to any
Pension Plan (whether or not waived in accordance with Section 412(d) of the
Internal Revenue Code) or the failure to make by its due date a required
installment under Section 412(m) of the Internal Revenue Code with respect to
any Pension Plan or the failure to make any required contribution to a
Multiemployer Plan; (iii) the provision by the administrator of any Pension Plan
pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate such
plan in a distress termination described in Section 4041(c) of ERISA; (iv) the
withdrawal by Company or any of its ERISA Affiliates from any Pension Plan with
two or more contributing sponsors or the termination of any such Pension Plan
resulting in liability pursuant to Section 4063 or 4064 of ERISA; (v) the
institution by the PBGC of proceedings to terminate any Pension Plan; (vi) the
imposition of liability on Company or any of its ERISA Affiliates pursuant to
Section 4062(e) or 4069 of ERISA or by reason of the application of Section 4212
(c) of ERISA;
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(vii) the withdrawal of Company or any of its ERISA Affiliates in a complete or
partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from
any Multiemployer Plan if there is any potential liability therefor, or the
receipt by Company or any of its ERISA Affiliates of notice from any
Multiemployer Plan that it is in reorganization or insolvency pursuant to
Section 4241 or 4245 of ERISA, or that it intends to terminate or has terminated
under Section 4041 A or 4042 of ERISA; (viii) the occurrence of an act or
omission which could give rise to the imposition on Company or any of its ERISA
Affiliates of fines, penalties, taxes or related charges under Chapter 43 of the
Internal Revenue Code or under Section 409, Section 502(c), (i) or (l), or
Section 4071 of ERISA in respect of any Employee Benefit Plan; (ix) the
assertion of a material claim (other than routine claims for benefits) against
any Employee Benefit Plan other than a Multiemployer Plan or the assets thereof,
or against Company or any of its ERISA Affiliates in connection with any
Employee Benefit Plan; (x) receipt from the Internal Revenue Service of notice
of the failure of any Pension Plan(or any other Employee Benefit Plan intended
to be qualified under Section 401(a) of the Internal Revenue Code) to qualify
under Section 401(a) of the Internal Revenue Code, or the failure of any trust
forming part of any Pension Plan to qualify for exemption from taxation under
Section 501(a) of the Internal Revenue Code; or (xi) the imposition of a Lien
pursuant to Section 401(a)(29) or 412(n) of the Internal Revenue Code or
pursuant to ERISA with respect to any Pension Plan.
"EVENT OF DEFAULT" means each of the events set forth in Section 8.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute.
"EXISTING DOCUMENTARY CREDITS" means all documentary credits made under
the Existing Credit Agreement which are outstanding as of the Closing Date.
"EXISTING LOANS AGAINST IMPORTS" means all loans against imports made
under the Existing Credit Agreement which have a maturity date after the Closing
Date.
"EXTRAORDINARY EVENT" means any of the following events:
(i) the acquisition by purchase or otherwise of all or
substantially all of the business, property or fixed assets of, or
stock of other evidence of beneficial ownership of, any Person or any
division or line of business of any Person;
(ii) the making, directly or indirectly, of any Investment in any
Person, including any Joint Venture;
(iii) the declaration, order, payment, making or setting apart,
directly or indirectly, of any sum for any Restricted Junior Payment;
(iv) the discharge, payment or settlement of any pending claim,
money judgment, writ or warrant of attachment; and
(v) the payment of any severance, bonus or other non-salary
compensation to any director, officer, employee or consultant of
Company or any of its Subsidiaries.
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"FIRST PRIORITY" means, with respect to any Lien purported to be
created in any Collateral pursuant to any Collateral Document, that (i) such
Lien has priority over any other Lien on such Collateral (except Permitted
Encumbrances) and (ii) such Lien is the only Lien (other than Permitted
Encumbrances and Liens permitted pursuant to subsection 7.2) to which such
Collateral is subject.
"FISCAL QUARTER" means a fiscal quarter of any Fiscal Year.
"FISCAL YEAR" means the fiscal year of Company and its Subsidiaries
ending on December 31 of each calendar year. For purposes of this Agreement, any
particular Fiscal Year shall be designated by reference to the calendar year in
which such Fiscal Year ends.
"FUNDING AND PAYMENT OFFICE" means (i) the office of Administrative
Agent located at 000 Xxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
or (ii) such other office of Administrative Agent as may from time to time
hereafter be designated as such in a written notice delivered by Administrative
Agent to Company and each Lender.
"FUNDING DATE" means the date of the funding of a Loan.
"GAAP" means, subject to the limitations on the application thereof set
forth in subsection 1.2, generally accepted accounting principles set forth in
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession, in each case as the same are applicable to the circumstances as of
the date of determination.
"GOVERNMENTAL ACTS" has the meaning assigned to that term in
subsection 3.5A.
"GOVERNMENTAL AUTHORIZATION" means any permit, license, authorization,
plan, directive, consent order or consent decree of or from any federal, state
or local governmental authority, agency or court.
"HSBC" has the meaning assigned to that term in the Recitals to this
Agreement.
"INDEBTEDNESS", as applied to any Person, means (i) all indebtedness
for borrowed money, (ii) that portion of obligations with respect to Capital
Leases that is properly classified as a liability on a balance sheet in
conformity with GAAP, (iii) notes payable and drafts accepted representing
extensions of credit whether or not representing obligations for borrowed money,
(iv) any obligation owed for all or any part of the deferred purchase price of
property or services (excluding any such obligations incurred under ERISA),
which purchase price is (a) due more than six months from the date of incurrence
of the obligation in respect thereof or (b) evidenced by a note or similar
written instrument, and (v) all indebtedness secured by any Lien on any property
or asset owned or held by that Person regardless of whether the indebtedness
secured thereby shall have been assumed by that Person or is nonrecourse to the
credit of that Person. Obligations under Swap Agreements constitute (x) in the
case of Swap Agreements designed to hedge against fluctuations in interest rates
or currency values, Contingent Obligations, and (y) in all other cases,
Investments, and in neither case constitute Indebtedness. Obligations under any
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lease of any property (whether real, personal or mixed) that is not a Capital
Lease do not constitute Indebtedness of any Person unless such obligations are
secured by a Lien on property or assets owned or held by that Person.
"INDEMNIFIED LIABILITIES" has the meaning assigned to that term in
subsection 10.3.
"INDEMNITEE" has the meaning assigned to that term in subsection 10.3.
"INTEREST PAYMENT DATE" means with respect to any Loan Against Imports
the first Business Day of each month, commencing on the first such date to occur
after the Closing Date.
"INTEREST PERIOD" has the meaning assigned to that term in
subsection 2.2B.
"INTEREST RATE AGREEMENT" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other similar
agreement or arrangement to which Company is a party.
"INTEREST RATE DETERMINATION DATE" means, with respect to any Interest
Period, the second Business Day prior to the first day of such Interest Period.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter, and any successor
statute.
"INVENTORY" means, with respect to any Person as of any date of
determination, all goods, merchandise and other personal property which are then
held by such Person for sale or lease, including raw materials and work in
process.
"INVESTMENT" means (i) any direct or indirect purchase or other
acquisition by Company or any of its Subsidiaries of, or of a beneficial
interest in, any Securities of any other Person (including any Subsidiary of
Company), (ii) any direct or indirect redemption, retirement, purchase or other
acquisition for value, by any Subsidiary of Company from any Person other than
Company or any of its Subsidiaries, of any equity Securities of such Subsidiary,
(iii) any direct or indirect loan, advance (other than advances to employees for
moving, entertainment and travel expenses, drawing accounts and similar
expenditures in the ordinary course of business) or capital contribution by
Company or any of its Subsidiaries to any other Person, including all
indebtedness and accounts receivable from that other Person that are not current
assets or did not arise from sales to that other Person in the ordinary course
of business, or (iv) Swap Agreements not designed to hedge against fluctuations
in interest rates or currency values. The amount of any Investment shall be the
original cost of such Investment PLUS the cost of all additions thereto, without
any adjustments for increases or decreases in value, or write-ups, write-downs
or write-offs with respect to such Investment.
"ISSUING LENDER" means, with respect to the Existing Letters of Credit,
the Trade Bank and, with respect to all other Documentary Credits, Xxxxx Fargo
Bank.
"JOINT VENTURE" means a joint venture, partnership or other similar
arrangement, whether in corporate, partnership or other legal form; PROVIDED
that in no event shall any
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corporate Subsidiary of any Person be considered to be a Joint Venture to which
such Person is a party.
"LAI MATURITY DATE" has the meaning assigned to that term in
subsection 2.1B.
"LAI REIMBURSEMENT DATE" has the meaning assigned to that term in
subsection 2.1B.
"LENDER" and "LENDERS" means the persons identified as "Lenders" and
listed on the signature pages of this Agreement, together with their successors
and permitted assigns pursuant to subsection 10.1.
"LIBOR LOANS" means Loans Against Imports bearing interest at rates
determined by reference to the Adjusted LIBO Rate as provided in subsection
2.2A.
"LIEN" means any lien, mortgage, pledge, assignment, security interest,
charge or encumbrance of any kind (including any conditional sale or other title
retention agreement, any lease in the nature thereof, and any agreement to give
any security interest) and any option, trust or other preferential arrangement
having the practical effect of any of the foregoing.
"LOAN DOCUMENTS" means this Agreement, the Notes, the Standby
Documentary Credits (and any applications for, or reimbursement agreements or
other documents or certificates executed by Company in favor of the Issuing
Lender relating to, the Standby Documentary Credits) and the Collateral
Documents.
"LOAN EXPOSURE" means, with respect to any Lender as of any date of
determination, (i) prior to the termination of the Commitments, the aggregate
principal amount of the Loans Against Imports of that Lender and (ii) after the
termination of the Commitments, the sum of (a) the aggregate principal amount of
the Loans Against Imports of that Lender PLUS (b) in the event that Lender is
the Issuing Lender, the aggregate Standby Documentary Credit Usage in respect of
all Standby Documentary Credits issued by that Lender (in each case net of any
participations purchased by other Lenders in such Standby Documentary Credits or
any unreimbursed drawings thereunder) PLUS (c) the aggregate amount of all
participations purchased by that Lender in any outstanding Standby Documentary
Credits or any unreimbursed drawings under any Standby Documentary Credit.
"LOANS AGAINST IMPORTS" means the loans made by Lenders to Company
pursuant to subsection 2.1B.
"MAJOR SUBSIDIARY" means each of Xxxxxx, Xxxxx Marketing, Cyrk Europe
Limited, a corporation established under the laws of England and Wales, Cyrk
(H.K.) Limited, a Hong Kong corporation, and Cyrk Acquisition Corp., a Delaware
corporation.
"MARGIN STOCK" has the meaning assigned to that term in Regulation U of
the Board of Governors of the Federal Reserve System as in effect from time to
time.
"MATERIAL ADVERSE EFFECT" means (i) a material adverse effect upon the
business, operations, properties, assets, condition (financial or otherwise) or
prospects of Company and its
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Major Subsidiaries, taken as a whole, or (ii) the material impairment of the
ability of Company to perform, or of Administrative Agent or Lenders to enforce,
the Obligations.
"MATERIAL CONTRACT" means any contract or other arrangement to which
Company or any of its Subsidiaries is a party (other than the Loan Documents)
for which breach, nonperformance, cancellation or failure to renew could have a
Material Adverse Effect.
"MIDLAND STANDBY DOCUMENTARY CREDIT" means any Standby Documentary
Credit issued pursuant to subsection 3.1A where Midland Bank PLC is the named
beneficiary in the Notice of Issuance of Standby Documentary Credit for such
Standby Documentary Credit.
"MULTIEMPLOYER PLAN" means any Employee Benefit Plan which is a
"multiemployer plan" as defined in Section 3(37) of ERISA.
"NOTES" means (i) the promissory notes of Company issued pursuant to
subsection 2.1D on the Closing Date and (ii) any promissory notes issued by
Company pursuant to the last sentence of subsection 10.1B(i) in connection with
assignments of the Commitments and Loans Against Imports of any Lenders, in each
case substantially in the form of EXHIBIT V annexed hereto.
"NOTICE OF BORROWING" means a notice substantially in the form of
EXHIBIT I annexed hereto.
"NOTICE OF CONVERSION/CONTINUATION" means a notice substantially in the
form of EXHIBIT II annexed hereto.
"NOTICE OF ISSUANCE OF DOCUMENTARY CREDIT" means a notice substantially
in the form of EXHIBIT III annexed hereto.
"OBLIGATIONS" means all obligations of every nature of Company from
time to time owed to Administrative Agent, Lenders or any of them under the Loan
Documents, whether for principal, interest, reimbursement of amounts drawn under
Documentary Credits, fees, expenses, indemnification or otherwise.
"OFFICERS' CERTIFICATE" means, as applied to any corporation, a
certificate executed on behalf of such corporation by its chairman of the board
(if an officer) or its president or one of its vice presidents and by its chief
financial officer or its treasurer.
"PARTICIPATION AGREEMENT" has the meaning assigned to that term in the
Recitals.
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor thereto).
"PENSION PLAN" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Internal Revenue Code
or Section 302 of ERISA.
"PERMITTED ENCUMBRANCES" means the following types of Liens (excluding
any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of the Internal
Revenue Code or by
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ERISA, and any such Lien expressly prohibited by any applicable terms of any
Collateral Document):
(i) Liens for taxes, assessments or governmental charges or
claims the payment of which is not, at the time, required by
subsection 6.3;
(ii) statutory Liens of landlords, statutory Liens of banks and
rights of set-off, statutory Liens of carriers, warehousemen,
mechanics, repairmen, workmen and materialmen, and other Liens imposed
by law, in each case incurred in the ordinary course of business (a)
for amounts not yet overdue or (b) for amounts that are overdue and
that (in the case of any such amounts overdue for a period in excess
of five days) are being contested in good faith by appropriate
proceedings, so long as (1) such reserves or other appropriate
provisions, if any, as shall be required by GAAP shall have been made
for any such contested amounts and (2) in the case of a Lien with
respect to any portion of the Collateral, such contest proceedings
operate to stay the sale of any portion of the Collateral on account
of such Lien;
(iii) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment
insurance and other types of social security, or to secure the
performance of tenders, statutory obligations, surety and appeal
bonds, bids, leases, government contracts, trade contracts,
performance and return-of-money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money), so long
as no foreclosure, sale or similar proceedings have been commenced
with respect to any portion of the Collateral on account thereof;
(iv) any attachment or judgment Lien not constituting an Event of
Default under subsection 8.8; and
(v) Liens in favor of customs and revenue authorities arising as
a matter of law to secure payment of customs duties in connection with
the importation of goods.
"PERSON" means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, Joint Ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and governments (whether federal,
state or local, domestic or foreign, and including political subdivisions
thereof) and agencies or other administrative or regulatory bodies thereof.
"POTENTIAL EVENT OF DEFAULT" means a condition or event that, after
notice or lapse of time or both, would constitute an Event of Default.
"PRO RATA SHARE" means, with respect to each Lender, the percentage
obtained by DIVIDING (i) the Loan Exposure of that Lender BY (ii) the aggregate
Loan Exposure of all Lenders, as such percentage may be adjusted by assignments
permitted pursuant to subsection 10.1. The initial Pro Rata Share of each Lender
is set forth opposite the name of that Lender in SCHEDULE 2.1 annexed hereto.
"PROCEEDINGS" has the meaning assigned to that term in
subsection 6.1(vii).
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"REGULATION D" means Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"REQUISITE LENDERS" means Lenders having or holding more than 50% of
the aggregate Loan Exposure of all Lenders.
"RESPONSIBLE OFFICER" means the President, the Chief Executive Officer,
the Chief Financial Officer or the Director of Treasury.
"RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of stock
of Company now or hereafter outstanding, except a dividend payable solely in
shares of that class of stock to the holders of that class, (ii) any redemption,
retirement, sinking fund or similar payment, purchase or other acquisition for
value, direct or indirect, of any shares of any class of stock of Company now or
hereafter outstanding, (iii) any payment made to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire
shares of any class of stock of Company now or hereafter outstanding, and (iv)
any payment or prepayment of principal of, premium, if any, or interest on, or
redemption, purchase, retirement, defeasance (including in-substance or legal
defeasance), sinking fund or similar payment with respect to, any Indebtedness
of Company or its Subsidiaries subordinated in right of payment to the
Obligations.
"SECURITIES" means any stock, shares, partnership interests, voting
trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds, debentures,
notes, or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general any instruments commonly known as
"securities" or any certificates of interest, shares or participations in
temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing.
"SECURITIES ACT" means the Securities Act of 1933, as amended from time
to time, and any successor statute.
"SIMON MARKETING" means Simon Marketing, Inc., a Delaware corporation,
and each of its wholly-owned Subsidiaries, collectively.
"SOLVENT" means, with respect to any Person, that as of the date of
determination both (i)(a) the then fair saleable value of the property of such
Person is (y) greater than the total amount of liabilities (including contingent
liabilities) of such Person and (z) not less than the amount that will be
required to pay the probable liabilities on such Person's then existing debts as
they become absolute and matured considering all financing alternatives and
potential asset sales reasonably available to such Person; (b) such Person's
capital is not unreasonably small in relation to its business or any
contemplated or undertaken transaction; and (c) such Person does not intend to
incur, or believe (nor should it reasonably believe) that it will incur, debts
beyond its ability to pay such debts as they become due; and (ii) such Person is
"solvent" within the meaning given that term and similar terms under applicable
laws relating to fraudulent transfers and conveyances. For purposes of this
definition, the amount of any contingent liability at any time shall be computed
as the amount that, in light of all of the facts and circumstances existing
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at such time, represents the amount that can reasonably be expected to become an
actual or matured liability.
"STANDBY DOCUMENTARY CREDIT" means any standby letter of credit or
similar instrument issued pursuant to subsection 3.1A for the purpose of
supporting performance, payment, deposit or surety obligations of Company or any
of its Subsidiaries in the ordinary course of Company's or such Subsidiary's
business, including any Midland Standby Documentary Credit; PROVIDED that
Standby Documentary Credits issued for a purpose other than supporting workers'
compensation obligations or the performance of Company or a Subsidiary under a
lease may not be issued for the purpose of supporting (i) trade payables or (ii)
any Indebtedness constituting "antecedent debt" (as that term is used in Section
547 of the Bankruptcy Code).
"STANDBY DOCUMENTARY CREDIT USAGE" means, as at any date of
determination, the sum of (i) the maximum aggregate amount which is or at any
time thereafter may become available for drawing under all Standby Documentary
Credits then outstanding PLUS (ii) the aggregate amount of all drawings under
Standby Documentary Credits honored by the Issuing Lender and not theretofore
reimbursed by Company.
"STANDBY REIMBURSEMENT DATE" has the meaning assigned to that term in
subsection 3.3C.
"SUBSIDIARY" means, with respect to any Person, any corporation,
partnership, limited liability company, association, joint venture or other
business entity of which more than 50% of the total voting power of shares of
stock or other ownership interests entitled (without regard to the occurrence of
any contingency) to vote in the election of the Person or Persons (whether
directors, managers, trustees or other Persons performing similar functions)
having the power to direct or cause the direction of the management and policies
thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person or a combination
thereof.
"SUPPLEMENTAL COLLATERAL AGENT" has the meaning assigned to that term
in subsection 9.1B.
"SWAP AGREEMENT" means an interest rate swap agreement, interest rate
cap agreement, interest rate collar agreement or other similar agreement or
arrangement or a foreign exchange contract, currency swap agreement, futures
contract, option contract, synthetic cap or other similar agreement or
arrangement.
"TAX" or "TAXES" means any present or future tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature and whatever called, by
whomsoever, on whomsoever and wherever imposed, levied, collected, withheld or
assessed; PROVIDED that "TAX ON THE OVERALL NET INCOME" of a Person shall be
construed as a reference to a tax imposed by the jurisdiction in which that
Person is organized or in which that Person's principal office (and/or, in the
case of a Lender, its lending office) is located or in which that Person
(and/or, in the case of a Lender, its lending office) is deemed to be doing
business on all or part of the net income, profits or gains (whether worldwide,
or only insofar as such income, profits or gains are
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considered to arise in or to relate to a particular jurisdiction, or otherwise)
of that Person (and/or, in the case of a Lender, its lending office).
"TONKIN" means Tonkin, Inc., a Delaware corporation.
"TONKIN GUARANTEE" has all the meaning assigned to that term in
subsection 5.13.
"TOTAL UTILIZATION" means, as at any date of determination, the sum of
(i) the maximum aggregate amount which is or at any time thereafter may become
available for drawing under all ADCIP Commercial Documentary Credits then
outstanding PLUS (ii) the aggregate amount of all drawings under ADCIP honored
by HSBC and not therefore reimbursed by Company (including any such
reimbursement out of the proceeds of Loans Against Imports pursuant to
subsection 2.1B) PLUS (iii) the aggregate principal amount of all outstanding
Loans Against Imports PLUS (iv) the Commercial Documentary Credit Usage PLUS (v)
the Standby Documentary Credit Usage.
"TRADE BANK" has the meaning assigned to that term in the introduction
to this Agreement.
"UCC" means the Uniform Commercial Code (or any similar or equivalent
legislation) as in effect in any applicable jurisdiction.
"UNRESTRICTED SUBSIDIARIES" means Tonkin and Simon Marketing.
"XXXXX FARGO" means Xxxxx Fargo Bank, National Association.
"WORKING CAPITAL" means, as at any date of determination, the excess
(or deficit) of Current Assets over Current Liabilities.
1.2 ACCOUNTING TERMS; UTILIZATION OF GAAP FOR PURPOSES OF CALCULATIONS
UNDER AGREEMENT.
Except as otherwise expressly provided in this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP. Financial statements and other information
required to be delivered by Company to Lenders pursuant to clauses (i), (ii) and
(viii) of subsection 6.1 shall be prepared in accordance with GAAP as in effect
at the time of such preparation. Calculations in connection with the
definitions, covenants and other provisions of this Agreement shall utilize
accounting principles and policies in conformity with those used to prepare the
financial statements referred to in subsection 5.3.
1.3 OTHER DEFINITIONAL PROVISIONS AND RULES OF CONSTRUCTION.
A. Any of the terms defined herein may, unless the context otherwise
requires, be used in the singular or the plural, depending on the reference.
B. References to "Sections" and "subsections" shall be to Sections and
subsections, respectively, of this Agreement unless otherwise specifically
provided.
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C. The use in any of the Loan Documents of the word "include" or
"including", when following any general statement, term or matter, shall be
construed to mean "including, without limitation."
D. References to agreements (including this Agreement) and other
contractual instruments shall be deemed to include all subsequent amendments,
supplements and other modifications thereto, but only to the extent such
amendments, supplements and other modifications are not prohibited by the terms
of any Loan Document.
E. References to any Person include that Person's successors and
permitted assigns.
SECTION 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
2.1 COMMITMENTS; MAKING OF LOANS; NOTES.
A. COMMITMENTS.
(i) Subject to the terms and conditions of this Agreement and in
reliance upon the representations and warranties of Company herein set
forth, each Lender hereby severally agrees, subject to the limitations set
forth below with respect to the maximum amount of Loans Against Imports
permitted to be outstanding from time to time, to lend to Company from time
to time during the period from the Closing Date to but excluding the
Commitment Termination Date an aggregate amount not exceeding its Pro Rata
Share of the aggregate amount of the Commitments under the conditions set
forth in subsection 2.1B. The original amount of each Lender's Commitment
is set forth opposite its name on SCHEDULE 2.1 annexed hereto and the
aggregate original amount of the Commitments is $50,000,000; provided that
the Commitments of Lenders shall be adjusted to give effect to any
assignments of the Commitments pursuant to subsection 10.1B. Each Lender's
Commitment shall expire on the Commitment Termination Date and all Loans
Against Imports and all other amounts owed hereunder with respect to the
Loans Against Imports and the Commitments shall be paid in full no later
than that date. Amounts borrowed under this subsection 2.1A(i) may be
repaid and reborrowed to but excluding the Commitment Termination Date.
(ii) Anything contained in this Agreement to the contrary
notwithstanding, the Loans Against Imports and the Commitments shall be
subject to the limitation that the Total Utilization shall not exceed
$50,000,000.
B. BORROWING MECHANICS FOR LOANS AGAINST IMPORTS.
In the event that HSBC or the Issuing Lender notifies Company and
Administrative Agent that it has determined to honor a drawing under an ADCIP
Commercial Documentary Credit or a Commercial Documentary Credit, (i) Company
shall have the right, on the date of such notice from HSBC or the Issuing
Lender, as the case may be, to give notice to Administrative Agent requesting
Lenders to make Loans Against Imports that are Base Rate Loans or LIBOR Loans on
the date such drawing is honored (the "LAI REIMBURSEMENT DATE") or the
succeeding Business Day for a period, specified by Company in the Notice of
Borrowing, not to exceed 90 days from the Funding Date (the last day of such
period being the "LAI
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MATURITY DATE") in an amount in Dollars equal to the amount of such honored
drawing and (ii) subject to satisfaction or waiver of the conditions specified
in subsection 4.2B, Lenders shall, on the LAI Reimbursement Date or the
succeeding Business Day, make Loans Against Imports that are Base Rate Loans or
LIBOR Loans in the amount of such honored drawing, the proceeds of which shall
be applied directly by Administrative Agent to reimburse HSBC or the Issuing
Lender, as the case may be, for the amount of such honored drawing. Whenever
Company exercises its right under this subsection 2.1B to request that Lenders
make Loans Against Imports it shall (i) either (a) deliver to Administrative
Agent a Notice of Borrowing or (b) give Administrative Agent telephonic notice
of any proposed borrowing, in either case no later than 10:00 A.M. (San
Francisco time) on the proposed Funding Date and (ii) if Company elects to give
telephonic notice of any proposed borrowing, deliver to Administrative Agent a
Notice of Borrowing no later than 10:00 A.M. (San Francisco time) one Business
Day after the Funding Date.
Neither Administrative Agent nor any Lender shall incur any liability
to Company in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to borrow on behalf of Company or
for otherwise acting in good faith under this subsection 2.1B, and upon funding
of Loans Against Imports by Lenders in accordance with this Agreement pursuant
to any such telephonic notice Company shall have effected Loans hereunder.
Company shall notify Administrative Agent prior to the funding of any
Loans Against Imports in the event that any of the matters to which Company is
required to certify in the applicable Notice of Borrowing is no longer true and
correct as of the applicable Funding Date, and the acceptance by Company of the
proceeds of any Loans Against Imports shall, unless such notice is given by
Company, constitute a re-certification by Company, as of the applicable Funding
Date, as to the matters to which Company is required to certify in the
applicable Notice of Borrowing.
On the Closing Date, all Existing Loans Against Imports shall be deemed
to have been made under this Agreement. The LAI Maturity Date for such Existing
Loans Against Imports shall, subject to subsection 2.2B, be the existing
maturity date for such Existing Loans Against Imports and each of the Existing
Loans Against Imports shall continue to bear interest at the same interest rate
now borne by such Existing Loans Against Imports.
C. DISBURSEMENT OF FUNDS. All Loans Against Imports under this
Agreement shall be made by Lenders simultaneously and proportionately to their
respective Pro Rata Shares, it being understood that no Lender shall be
responsible for any default by any other Lender in that other Lender's
obligation to make a Loan Against Imports requested hereunder nor shall the
Commitment of any Lender be increased or decreased as a result of a default by
any other Lender in that other Lender's obligation to make a Loan Against
Imports requested hereunder. Promptly after receipt by Administrative Agent of a
Notice of Borrowing pursuant to subsection 2.1B (or telephonic notice in lieu
thereof), Administrative Agent shall notify each Lender of the proposed
borrowing. Each Lender shall make the amount of its Loan Against Imports
available to Administrative Agent, in same day funds in Dollars, at the Funding
and Payment Office, not later than 12:00 Noon (San Francisco time) on the first
Business Day after the applicable Funding Date. Upon satisfaction or waiver of
the conditions precedent specified in subsections
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4.1 (in the case of Loans Against Imports made on the Closing Date) and 4.2 (in
the case of all Loans Against Imports), Administrative Agent shall make the
proceeds of such Loans Against Imports available to Company on the applicable
Funding Date by causing an amount of same day funds in Dollars equal to the
proceeds of all such Loans Against Imports received by Administrative Agent from
Lenders to be applied to reimburse HSBC or the Issuing Lender, as applicable.
Unless Administrative Agent shall have been notified by any Lender
prior to the Funding Date for any Loans Against Imports that such Lender does
not intend to make available to Administrative Agent the amount of such Lender's
Loan Against Imports requested on such Funding Date, Administrative Agent may
assume that such Lender has made such amount available to Administrative Agent
on such Funding Date and Administrative Agent may, in its sole discretion, but
shall not be obligated to, make available to Company a corresponding amount on
such Funding Date. If such corresponding amount is not in fact made available to
Administrative Agent by such Lender, Administrative Agent shall be entitled to
recover such corresponding amount on demand from such Lender together with
interest thereon, for each day from such Funding Date until the date such amount
is paid to Administrative Agent, at the customary rate set by Administrative
Agent for the correction of errors among banks for three Business Days and
thereafter at the Base Rate. If such Lender does not pay such corresponding
amount forthwith upon Administrative Agent's demand therefor, Administrative
Agent shall promptly notify Company and Company shall immediately pay such
corresponding amount to Administrative Agent together with interest thereon, for
each day from such Funding Date until the date such amount is paid to
Administrative Agent, at the rate payable under this Agreement for the
applicable Loan Against Imports. Nothing in this subsection 2.1C shall be deemed
to relieve any Lender from its obligation to fulfill its Commitment hereunder or
to prejudice any rights that Company may have against any Lender as a result of
any default by such Lender hereunder.
D. NOTES. Company shall execute and deliver to each Lender (or to
Administrative Agent for that Lender) on the Closing Date a Note substantially
in the form of EXHIBIT V annexed hereto to evidence that Lender's Loans Against
Imports, in the principal amount of that Lender's Commitment and with other
appropriate insertions.
Administrative Agent may deem and treat the payee of any Note as the
owner thereof for all purposes hereof unless and until an Assignment Agreement
effecting the assignment or transfer thereof shall have been accepted by
Administrative Agent as provided in subsection 10.1B(ii). Any request, authority
or consent of any person or entity who, at the time of making such request or
giving such authority or consent, is the holder of any Note shall be conclusive
and binding on any subsequent holder, assignee or transferee of that Note or of
any Note or Notes issued in exchange therefor.
E. AUTHORIZED OFFICERS. The President, Chief Financial Officer,
Controller and Director of Treasury of Company shall be the only officers
authorized to deliver written or telephonic notice pursuant to this Section 2.
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2.2 INTEREST ON THE LOANS.
A. RATE OF INTEREST. Subject to the provisions of subsections 2.6 and
2.7, each Loan Against Imports shall bear interest on the unpaid principal
amount thereof from the date made through maturity (whether by acceleration or
otherwise) at a rate determined by reference to the Base Rate or the Adjusted
LIBO Rate. The applicable basis for determining the initial rate of interest
with respect to any Loan Against Imports shall be selected by Company initially
at the time Company gives notice with respect to such Loan Against Imports
pursuant to subsection 2.1B. The basis for determining the interest rate with
respect to any Loan Against Imports may be changed from time to time pursuant to
subsection 2.2D. If on any day a Loan Against Imports is outstanding with
respect to which notice has not been delivered to Administrative Agent in
accordance with the terms of this Agreement specifying the applicable basis for
determining the rate of interest, then for that day that Loan Against Imports
shall bear interest determined by reference to the Base Rate.
Subject to the provisions of subsections 2.2E and 2.7, the Loans
Against Imports shall bear interest so long as the same shall remain outstanding
as follows:
(i) if a Base Rate Loan, then at the Base Rate; or
(ii) if a LIBOR Loan, then at the sum of the Adjusted LIBO Rate
plus 1.75% per annum.
B. INTEREST PERIODS. In connection with each LIBOR Loan, Company may,
pursuant to its notice pursuant to SECTION 2.1B or pursuant to a Notice of
Conversion/Continuation, select an interest period (each an "INTEREST PERIOD")
to be applicable to such LIBOR Loan, which Interest Period shall be, at
Company's option, either a thirty, forty-five, sixty or ninety day period;
provided that:
(i) the initial Interest Period for any LIBOR Loan shall commence
on the date specified in the applicable Notice of
Conversion/Continuation;
(ii) in the case of immediately successive Interest Periods
applicable to a LIBOR Loan continued as such pursuant to a Notice of
Conversion/Continuation, each successive Interest Period shall
commence on the day on which the next preceding Interest Period
expires;
(iii) if an Interest Period would otherwise expire on a day that
is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; provided that, if any Interest Period would
otherwise expire on a day that is not a Business Day but is a day of
the month after which no further Business Day occurs in such month,
such Interest Period shall expire on the next preceding Business Day;
(iv) any Interest Period that begins on the last Business Day of
a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall, subject to clause (iv) of this subsection 2.2B, end on
the last Business Day of a calendar month;
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(v) no Interest Period shall extend beyond the LAI Maturity Date
of the applicable Loan;
(vi) no Interest Period with respect to any portion of the Loans
Against Imports shall extend beyond the Commitment Termination Date;
and
(vii) in the event Company fails to specify an Interest Period
for any LIBOR Loan in the Notice of Conversion/Continuation, Company
shall be deemed to have selected an Interest Period of thirty days.
C. INTEREST PAYMENTS. Subject to the provisions of subsection 2.2E,
interest on each Loan Against Imports shall be payable in arrears on and to each
Interest Payment Date applicable to that Loan Against Imports, upon any
prepayment of that Loan Against Imports (to the extent accrued on the amount
being prepaid) and at maturity (including final maturity).
D. CONVERSION OR CONTINUATION. Subject to the provisions of subsection
2.6, Company shall have the option (i) to convert at any time all or any part of
its outstanding Loans Against Imports equal to $1,000,000 and integral multiples
of $500,000 in excess of that amount (or such amount of Loans Against Imports of
the type converted as is then outstanding) from Loans Against Imports bearing
interest at a rate determined by reference to one basis to Loans Against Imports
bearing interest at a rate determined by reference to an alternative basis or
(ii) upon the expiration of any Interest Period applicable to a LIBOR Loan, to
continue all or any portion of such Loan equal to $1,000,000 and integral
multiples of $500,000 in excess of that amount as a LIBOR Loan; provided,
however, that a LIBOR Loan may only be converted into a Base Rate Loan on the
expiration date of an Interest Period applicable thereto.
Company shall deliver a Notice of Conversion/Continuation to
Administrative Agent no later than 10:00 A.M. (San Francisco time) at least one
Business Day in advance of the proposed conversion date (in the case of a
conversion to a Base Rate Loan) and at least three Business Days in advance of
the proposed conversion/continuation date (in the case of a conversion to, or a
continuation of, a LIBOR Loan). In lieu of delivering a Notice of
Conversion/Continuation, Company may give Administrative Agent telephonic notice
by the required time of any proposed conversion/continuation under this
subsection 2.2D; PROVIDED that such notice shall be promptly confirmed in
writing by delivery of a Notice of Conversion/Continuation to Administrative
Agent on or before the proposed conversion/continuation date. Upon receipt of
written or telephonic notice of any proposed conversion/continuation under this
subsection 2.2D, Administrative Agent shall promptly transmit such notice by
telefacsimile or telephone to each Lender.
Neither Administrative Agent nor any Lender shall incur any liability
to Company in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to act on behalf of Company or for
otherwise acting in good faith under this subsection 2.2D, and upon conversion
or continuation of the applicable basis for determining the interest rate with
respect to any Loans Against Imports in accordance with this Agreement pursuant
to any such telephonic notice Company shall have effected a conversion or
continuation, as the case may be, hereunder.
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Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a
Notice of Conversion/Continuation for conversion to, or continuation of, a LIBOR
Loan (or telephonic notice in lieu thereof) shall be irrevocable on and after
the related Interest Rate Determination Date, and Company shall be bound to
effect a conversion or continuation in accordance therewith.
E. DEFAULT RATE. Upon the occurrence and during the continuation of
any Event of Default, the outstanding principal amount of all Loans Against
Imports, to the extent permitted by applicable law, any interest payments
thereon not paid when due and any fees and other amounts then due and payable
hereunder, shall thereafter bear interest (including post-petition interest in
any proceeding under the Bankruptcy Code or other applicable bankruptcy laws)
payable upon demand at a rate that is 3% per annum in excess of the interest
rate otherwise payable under this Agreement with respect to the applicable Loans
Against Imports (or, in the case of any such fees and other amounts, at a rate
which is 3% per annum in excess of the interest rate otherwise payable under
this Agreement for Base Rate Loans); provided that, in the case of LIBOR Loans,
upon the expiration of the Interest Period in effect at the time any such
increase in interest rate is effective such LIBOR Loans shall thereupon become
Base Rate Loans and shall thereafter bear interest payable upon demand at a rate
which is 3% per annum in excess of the interest rate otherwise payable under
this Agreement for Base Rate Loans. Payment or acceptance of the increased rates
of interest provided for in this subsection 2.2E is not a permitted alternative
to timely payment and shall not constitute a waiver of any Event of Default or
otherwise prejudice or limit any rights or remedies of Administrative Agent or
any Lender.
F. COMPUTATION OF INTEREST. Interest on the Loans Against Imports
shall be computed on the basis of a 360-day year, in each case for the actual
number of days elapsed in the period during which it accrues. In computing
interest on any Loan Against Imports, the date of the making of such Loan
Against Imports or the first day of an Interest Period applicable to such Loan
or, with respect to a Base Rate Loan being converted from a LIBOR Loan, the date
of conversion of such LIBOR Loan to such Base Rate Loan, as the case may be,
shall be included, and the date of payment of such Loan or the expiration date
of an Interest Period applicable to such Loan Against Imports or, with respect
to a Base Rate Loan being converted to a LIBOR Loan, the date of conversion of
such Base Rate Loan to such LIBOR Loan, as the case may be, shall be excluded;
provided that if a Loan Against Imports is repaid on the same day on which it is
made, one day's interest shall be paid on that Loan Against Imports.
2.3 FEES.
Company agrees to pay to Administrative Agent on the Closing Date a
nonrefundable facility fee in the amount of $125,000.
2.4 GENERAL PROVISIONS REGARDING PAYMENTS; APPLICATION OF PROCEEDS OF
COLLATERAL.
A. SCHEDULED PAYMENTS OF LOANS AGAINST IMPORTS.
Company shall repay each Loan Against Imports on the LAI Maturity Date
of such Loan Against Imports.
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B. PREPAYMENTS OF COMMITMENT.
(i) VOLUNTARY PREPAYMENTS. Company may, upon not less than one
Business Day's prior written or telephonic notice, in the case of Base
Rate Loans, and three Business Days' prior written or telephonic
notice, in the case of LIBOR Loans, in each case given to
Administrative Agent by 12:00 Noon (San Francisco time) on the date
required and, if given by telephone, promptly confirmed in writing to
Administrative Agent (which original written or telephonic notice
Administrative Agent will promptly transmit by telefacsimile or
telephone to each Lender), at any time and from time to time prepay
any Loans Against Imports on any Business Day in whole or in part.
Notice of prepayment having been given as aforesaid, the principal
amount of the Loans Against Imports specified in such notice shall
become due and payable on the prepayment date specified therein. Any
such voluntary prepayment shall be applied as specified in subsection
2.4B(iv).
(ii) VOLUNTARY REDUCTIONS OF COMMITMENTS. Company may, upon not
less than three Business Days' prior written or telephonic notice
confirmed in writing to Administrative Agent, at any time and from
time to time terminate in whole or permanently reduce in part, without
premium or penalty, the Commitments in an amount up to the amount by
which the Commitments exceed the Total Utilization at the time of such
proposed termination or reduction; PROVIDED that any such partial
reduction of the Commitments shall be in an aggregate minimum amount
of $5,000,000 and integral multiples of $1,000,000 in excess of that
amount. Company's notice to Administrative Agent shall designate the
date (which shall be a Business Day) of such termination or reduction
and the amount of any partial reduction, and such termination or
reduction of the Commitments shall be effective on the date specified
in Company's notice.
(iii) MANDATORY PREPAYMENTS. Company shall from time to time
prepay the Loans Against Imports to the extent necessary so that the
Total Utilization shall not at any time exceed $50,000,000.
(iv) APPLICATION OF PREPAYMENTS.
(a) APPLICATION OF VOLUNTARY AND MANDATORY PREPAYMENTS BY
TYPE OF LOANS. Any voluntary prepayment pursuant to subsection
2.4B(i) and any mandatory prepayment pursuant to subsection
2.4B(iii) shall be applied as specified by Company in the
applicable notice of prepayment; provided that in the event
Company fails to specify how any such prepayment shall be
applied, such prepayment shall be applied first to repay
outstanding Loans Against Imports to the full extent thereof,
second, if an Event of Default has occurred and is continuing, to
cash collateralize the Standby Documentary Credits to the full
extent thereof pursuant to the terms of the Company Security
Agreement and third to Company.
(b) APPLICATION OF PREPAYMENTS TO BASE RATE LOANS AND LIBOR
LOANS. Considering Loans Against Imports being prepaid
separately, any prepayment thereof shall be applied as specified
by Company in the applicable
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notice of prepayment; provided that in the event Company fails to
specify how any such prepayment shall be applied, such prepayment
shall be applied first to Base Rate Loans to the full extent
thereof before application to LIBOR Loans, in each case in a
manner which minimizes the amount of any payments required to be
made by Company pursuant to subsection 2.6D.
C. GENERAL PROVISIONS REGARDING PAYMENTS.
(i) MANNER AND TIME OF PAYMENT. All payments by Company of
principal, interest, fees and other Obligations hereunder and under
the Notes shall be made in Dollars in same day funds, without defense,
setoff or counterclaims, free of any restriction or condition, and
delivered to Administrative Agent not later than 12:00 Noon (San
Francisco time) on the date due at the Funding and Payment Office for
the account of Lenders; funds received by Administrative Agent after
that time on such due date shall be deemed to have been paid by
Company on the next succeeding Business Day.
(ii) APPLICATION OF PAYMENTS TO PRINCIPAL AND INTEREST. All
payments in respect of the principal amount of any Loan Against
Imports shall include payment of accrued interest on the principal
amount being repaid or prepaid, and all such payments (and, in any
event, any payments in respect of any Loan Against Imports on a date
when interest is due and payable with respect to such Loan) shall be
applied to the payment of interest before application to principal.
(iii) APPORTIONMENT OF PAYMENTS. Aggregate principal and interest
payments shall be apportioned among all outstanding Loans Against
Imports to which such payments relate, in each case proportionately to
Lenders' respective Pro Rata Shares. Administrative Agent shall
promptly distribute to each Lender, at its primary address set forth
below its name on the appropriate signature page hereof or at such
other address as such Lender may request, its Pro Rata Share of all
such payments received by Administrative Agent and the commitment fees
of such Lender when received by Administrative Agent pursuant to
subsection 2.3. Notwithstanding the foregoing provisions of this
subsection 2.4C(iii), if, pursuant to the provisions of subsection
2.6C, any Notice of Conversion/Continuation is withdrawn as to any
Affected Lender or if any Affected Lender makes Base Rate Loans in
lieu of its Pro Rata Share of any LIBOR Loans, Administrative Agent
shall give effect thereto in apportioning payments received
thereafter.
(iv) PAYMENTS ON BUSINESS DAYS. Whenever any payment to be made
hereunder shall be stated to be due on a day that is not a Business
Day, such payment shall be made on the next succeeding Business Day
and such extension of time shall be included in the computation of the
payment of interest hereunder or of the commitment fees hereunder, as
the case may be.
(v) NOTATION OF PAYMENT. Each Lender agrees that before disposing
of the Note held by it, or any part thereof (other than by granting
participations therein), that Lender will make a notation thereon of
all Loans Against Imports evidenced by that Note and all principal
payments previously made thereon and of the date to which interest
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thereon has been paid; provided that the failure to make (or any error
in the making of) a notation of any Loan Against Imports made under
such Note shall not increase, limit or otherwise affect the
obligations of Company hereunder or under such Note with respect to
any Loan Against Imports or any payments of principal or interest on
such Note.
D. APPLICATION OF PROCEEDS OF COLLATERAL.
All proceeds received by Administrative Agent in respect of any sale
of, collection from, or other realization upon all or any part of the Collateral
under any Collateral Document may, in the discretion of Administrative Agent, be
held by Administrative Agent as Collateral for, and/or (then or at any time
thereafter) applied in full or in part by Administrative Agent against, the
applicable Secured Obligations (as defined in such Collateral Document) in the
following order of priority:
(i) to the payment of all costs and expenses of such sale,
collection or other realization, including reasonable compensation to
Administrative Agent and its agents and counsel, and all other
expenses, liabilities and advances made or incurred by Administrative
Agent in connection therewith, and all amounts for which
Administrative Agent is entitled to indemnification under such
Collateral Document and all advances made by Administrative Agent in
connection with the exercise of any right or remedy under such
Collateral Documents, all in accordance with the terms of this
Agreement and such Collateral Document;
(ii) thereafter, to the extent of any excess such proceeds, to
the payment of all other such Secured Obligations for the ratable
benefit of the holders thereof; and
(iii) thereafter, to the extent of any excess such proceeds, to
the payment to or upon the order of Company or to whosoever may be
lawfully entitled to receive the same or as a court of competent
jurisdiction may direct.
2.5 USE OF PROCEEDS.
A. LOANS AGAINST IMPORTS. The Loans Against Imports shall be used by
Company to finance its obligation to reimburse the Issuing Lender for drawings
under ADCIP Commercial Documentary Credits and Commercial Documentary Credits.
B. MARGIN REGULATIONS. No portion of the proceeds of any borrowing
under this Agreement shall be used by Company or any of its Subsidiaries in any
manner that might cause the borrowing or the application of such proceeds to
violate Regulation U, Regulation T or Regulation X of the Board of Governors of
the Federal Reserve System or any other regulation of such Board or to violate
the Exchange Act, in each case as in effect on the date or dates of such
borrowing and such use of proceeds.
2.6 SPECIAL PROVISIONS GOVERNING LIBOR LOANS.
Notwithstanding any other provision of this Agreement to the contrary,
the following provisions shall govern with respect to LIBOR Loans as to the
matters covered:
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A. DETERMINATION OF APPLICABLE INTEREST RATE. As soon as practicable
after 10:00 A.M. (San Francisco time) on each Interest Rate Determination Date,
Administrative Agent shall determine (which determination shall, absent manifest
error, be final, conclusive and binding upon all parties) the interest rate that
shall apply to the LIBOR Loans for which an interest rate is then being
determined for the applicable Interest Period and shall promptly give notice
thereof (in writing or by telephone confirmed in writing) to Company and each
Lender.
B. INABILITY TO DETERMINE APPLICABLE INTEREST RATE. In the event that
Administrative Agent shall have determined (which determination shall be final
and conclusive and binding upon all parties hereto), on any Interest Rate
Determination Date with respect to any LIBOR Loans, that by reason of
circumstances affecting the London interbank market adequate and fair means do
not exist for ascertaining the interest rate applicable to such Loans Against
Imports on the basis provided for in the definition of Adjusted LIBO Rate,
Administrative Agent shall on such date give notice (by telefacsimile or by
telephone confirmed in writing) to Company and each Lender of such
determination, whereupon (i) no Loans Against Imports may be made as, or
converted to, LIBOR Loans until such time as Administrative Agent notifies
Company and Lenders that the circumstances giving rise to such notice no longer
exist and (ii) any Notice of Borrowing or Notice of Conversion/Continuation
given by Company with respect to the Loans Against Imports in respect of which
such determination was made shall be deemed to be rescinded by Company.
C. ILLEGALITY OR IMPRACTICABILITY OF LIBOR LOANS. In the event that on
any date any Lender shall have determined (which determination shall be final
and conclusive and binding upon all parties hereto but shall be made only after
consultation with Company and Administrative Agent) that the making, maintaining
or continuation of its LIBOR Loans (i) has become unlawful as a result of
compliance by such Lender in good faith with any law, treaty, governmental rule,
regulation, guideline or order (or would conflict with any such treaty,
governmental rule, regulation, guideline or order not having the force of law
even though the failure to comply therewith would not be unlawful) or (ii) has
become impracticable, or would cause such Lender material hardship, in each case
as a result of events occurring after the date of this Agreement which
materially and adversely affect the London interbank market or the position of
such Lender in that market, then, and in any such event, such Lender shall be an
"AFFECTED LENDER" and it shall on that day give notice (by telefacsimile or by
telephone confirmed in writing) to Company and Administrative Agent of such
determination (which notice Administrative Agent shall promptly transmit to each
other Lender). Thereafter (a) the obligation of the Affected Lender to make
Loans Against Imports as, or to convert Loans Against Imports to, LIBOR Loans
shall be suspended until such notice shall be withdrawn by the Affected Lender,
(b) to the extent such determination by the Affected Lender relates to a LIBOR
Loan then being requested by Company pursuant to a Notice of
Conversion/Continuation, the Affected Lender shall convert such Loan Against
Imports to a Base Rate Loan, (c) the Affected Lender's obligation to maintain
its outstanding LIBOR Loans (the "AFFECTED LOANS") shall be terminated at the
earlier to occur of the expiration of the Interest Period then in effect with
respect to the Affected Loans or when required by law, and (d) the Affected
Loans shall automatically convert into Base Rate Loans on the date of such
termination. Notwithstanding the foregoing, to the extent a determination by an
Affected Lender as described above relates to a LIBOR Loan then being requested
by Company pursuant to a Notice of Conversion/Continuation, Company shall have
the option, subject to the provisions of subsection 2.6D, to rescind
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such Notice of Conversion/Continuation as to all Lenders by giving notice (by
telefacsimile or by telephone confirmed in writing) to Administrative Agent of
such rescission on the date on which the Affected Lender gives notice of its
determination as described above (which notice of rescission Administrative
Agent shall promptly transmit to each other Lender). Except as provided in the
immediately preceding sentence, nothing in this subsection 2.6C shall affect the
obligation of any Lender other than an Affected Lender to maintain Loans Against
Imports as, or to convert Loans Against Imports to, LIBOR Loans in accordance
with the terms of this Agreement.
D. COMPENSATION FOR BREAKAGE OR NON-COMMENCEMENT OF INTEREST PERIODS.
Company shall compensate each Lender, upon written request by that Lender (which
request shall set forth the basis for requesting such amounts), for all
reasonable losses, expenses and liabilities (including any interest paid by that
Lender to lenders of funds borrowed by it to make or carry its LIBOR Loans and
any loss, expense or liability sustained by that Lender in connection with the
liquidation or re-employment of such funds) which that Lender may sustain: (i)
if for any reason (other than a default by that Lender) a conversion to or
continuation of any LIBOR Loan does not occur on a date specified therefor in a
Notice of Conversion/Continuation or a telephonic request for conversion or
continuation, (ii) if any prepayment (including any prepayment pursuant to
subsection 2.4B(i)) or other principal payment or any conversion of any of its
LIBOR Loans occurs on a date prior to the last day of an Interest Period
applicable to that Loan, (iii) if any prepayment of any of its LIBOR Loans is
not made on any date specified in a notice of prepayment given by Company, or
(iv) as a consequence of any other default by Company in the repayment of its
LIBOR Loans when required by the terms of this Agreement.
E. BOOKING OF LIBOR LOANS. Any Lender may make, carry or transfer
LIBOR Loans at, to, or for the account of any of its branch offices or the
office of an Affiliate of that Lender.
F. ASSUMPTIONS CONCERNING FUNDING OF LIBOR LOANS. Calculation of all
amounts payable to a Lender under this subsection 2.6 and under subsection 2.7A
shall be made as though that Lender had actually funded each of its relevant
LIBOR Loans through the purchase of a Eurodollar deposit bearing interest at the
rate obtained pursuant to clause (i) of the definition of Adjusted LIBO Rate in
an amount equal to the amount of such LIBOR Loan and having a maturity
comparable to the relevant Interest Period and through the transfer of such
Eurodollar deposit from an offshore office of that Lender to a domestic office
of that Lender in the United States of America; provided, however, that each
Lender may fund each of its LIBOR Loans in any manner it sees fit and the
foregoing assumptions shall be utilized only for the purposes of calculating
amounts payable under this subsection 2.6 and under subsection 2.7A.
G. LIBOR LOANS AFTER DEFAULT. After the occurrence of and during the
continuation of a Potential Event of Default or an Event of Default, (i) Company
may not elect to have a Loan Against Imports maintained as, or converted to, a
LIBOR Loan after the expiration of any Interest Period then in effect for that
Loan Against Imports and (ii) subject to the provisions of subsection 2.6D, any
Notice of Conversion/Continuation given by Company with respect to a requested
conversion/continuation that has not yet occurred shall be deemed to be
rescinded by Company.
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2.7 INCREASED COSTS; TAXES; CAPITAL ADEQUACY.
A. COMPENSATION FOR INCREASED COSTS AND TAXES. Subject to the
provisions of, and without duplication of amounts payable under, subsections
2.7B and C (which shall be controlling with respect to the matters covered
thereby), and the definition of "Adjusted LIBO Rate" in the event that the
Issuing Lender or any Lender shall reasonably determine that any law, treaty or
governmental rule, regulation or order, or any change therein or in the
interpretation, administration or application thereof (including the
introduction of any new law, treaty or governmental rule, regulation or order),
or any determination of a court or governmental authority, in each case that
becomes effective after the date hereof, or compliance by the Issuing Lender or
any Lender with any guideline, request or directive issued or made after the
date hereof by any central bank or other governmental or quasi-governmental
authority (whether or not having the force of law):
(i) subjects the Issuing Lender or any Lender (or its applicable
lending or letter of credit office) to any additional Tax (other than
any Tax on the overall net income of the Issuing Lender or any Lender)
with respect to this Agreement or any of its obligations hereunder or
any payments to such Lender (or its applicable lending or letter of
credit office) of principal, interest, fees or any other amount
payable hereunder or with respect to the issuing or maintaining of any
Standby Documentary Credit or the purchasing or maintaining of any
participation therein;
(ii) imposes, modifies or holds applicable any reserve (including
any marginal, emergency, supplemental, special or other reserve),
special deposit, compulsory loan, FDIC insurance or similar
requirement against assets held by, or deposits or other liabilities
in or for the account of, or advances or loans by, or other credit
extended by, or any other acquisition of funds by, any office of any
Lender (other than any such reserve or other requirements with respect
to LIBOR Loans that are reflected in the definition of Adjusted LIBO
Rate) or in respect of any Standby Documentary Credit issued by the
Issuing Lender or participations therein purchased by any Lender; or
(iii) imposes any other condition (other than with respect to a
Tax matter) on or affecting the Issuing Lender or any Lender (or its
applicable lending or letter of credit office), its obligations
hereunder, the London interbank market, agreeing to issue, issuing or
maintaining any Standby Documentary Credit or agreeing to purchase,
purchasing or maintaining any participation therein;
and the result of any of the foregoing is to increase the cost to the Issuing
Lender or any Lender of its (x) agreeing to make, making or maintaining Loans
Against Imports hereunder, (y) agreeing to issue, issuing or maintaining any
Standby Documentary Credit or (z) agreeing to purchase, purchasing or
maintaining any participation therein or to reduce any amount received or
receivable by such Lender (or its applicable lending or letter of credit office)
with respect thereto; then, in any such case, Company shall promptly pay to the
Issuing Lender or any Lender, upon receipt of the statement referred to in the
next sentence, such additional amount or amounts (including in the form of an
increased rate of, or a different method of calculating, interest or otherwise
as the Issuing Lender or such Lender in its sole discretion shall determine)
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as may be necessary to compensate the Issuing Lender or such Lender for any such
increased cost or reduction in amounts received or receivable hereunder. The
Issuing Lender or such Lender shall deliver to Company (with a copy to
Administrative Agent) a written statement, setting forth in reasonable detail
the basis for calculating the additional amounts owed to the Issuing Lender or
such Lender under this subsection 2.7A, which statement shall be conclusive and
binding upon all parties hereto absent manifest error.
B. WITHHOLDING OF TAXES.
(i) PAYMENTS TO BE FREE AND CLEAR. All sums payable by Company
under this Agreement and the other Loan Documents shall (except to the
extent required by law) be paid free and clear of, and without any
deduction or withholding on account of, any Tax (other than a Tax on
the overall net income of any Lender) imposed, levied, collected,
withheld or assessed by or within the United States of America or any
political subdivision in or of the United States of America or any
other jurisdiction from or to which a payment is made by or on behalf
of Company or by any federation or organization of which the United
States of America or any such jurisdiction is a member at the time of
payment.
(ii) GROSSING-UP OF PAYMENTS. If Company or any other Person is
required by law to make any deduction or withholding on account of any
such Tax from any sum paid or payable by Company to Administrative
Agent or any Lender under any of the Loan Documents:
(a) Company shall notify Administrative Agent of any such
requirement or any change in any such requirement as soon as
Company becomes aware of it;
(b) Company shall pay any such Tax before the date on which
penalties attach thereto, such payment to be made (if the
liability to pay is imposed on Company) for its own account or
(if that liability is imposed on Administrative Agent or such
Lender, as the case may be) on behalf of and in the name of
Administrative Agent or such Lender;
(c) the sum payable by Company in respect of which the
relevant deduction, withholding or payment is required shall be
increased to the extent necessary to ensure that, after the
making of that deduction, withholding or payment, Administrative
Agent or such Lender, as the case may be, receives on the due
date a net sum equal to what it would have received had no such
deduction, withholding or payment been required or made; and
(d) within 30 days after paying any sum from which it is
required by law to make any deduction or withholding, and within
30 days after the due date of payment of any Tax which it is
required by clause (b) above to pay, Company shall deliver to
Administrative Agent evidence satisfactory to the other affected
parties of such deduction, withholding or payment and of the
remittance thereof to the relevant taxing or other authority;
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PROVIDED that no such additional amount shall be required to be paid to any
Lender under clause (c) above except to the extent that any change after
the date hereof (in the case of each Lender listed on the signature pages
hereof) or after the date of the Assignment Agreement pursuant to which
such Lender became a Lender (in the case of each other Lender) in any such
requirement for a deduction, withholding or payment as is mentioned therein
shall result in an increase in the rate of such deduction, withholding or
payment from that in effect at the date of this Agreement or at the date of
such Assignment Agreement, as the case may be, in respect of payments to
such Lender.
(iii) EVIDENCE OF EXEMPTION FROM U.S. WITHHOLDING TAX.
(a) Each Lender that is organized under the laws of any
jurisdiction other than the United States of America or any state or
other political subdivision thereof (for purposes of this subsection
2.7B(iii), a "NON-US LENDER") shall deliver to Administrative Agent
for transmission to Company, on or prior to the Closing Date (in the
case of each Lender listed on the signature pages hereof) or on or
prior to the date of the Assignment Agreement pursuant to which it
becomes a Lender (in the case of each other Lender), and at such other
times as may be necessary in the determination of Company or
Administrative Agent (each in the reasonable exercise of its
discretion), (1) two original copies of Internal Revenue Service Form
1001 or 4224 (or any successor forms), properly completed and duly
executed by such Lender, together with any other certificate or
statement of exemption required under the Internal Revenue Code or the
regulations issued thereunder to establish that such Lender is not
subject to deduction or withholding of United States federal income
tax with respect to any payments to such Lender of principal,
interest, fees or other amounts payable under any of the Loan
Documents or (2) if such Lender is not a "bank" or other Person
described in Section 881(c)(3) of the Internal Revenue Code and cannot
deliver either Internal Revenue Service Form 1001 or 4224 pursuant to
clause (1) above, a Certificate re Non-Bank Status together with two
original copies of Internal Revenue Service Form W-8 (or any successor
form), properly completed and duly executed by such Lender, together
with any other certificate or statement of exemption required under
the Internal Revenue Code or the regulations issued thereunder to
establish that such Lender is not subject to deduction or withholding
of United States federal income tax with respect to any payments to
such Lender of interest payable under any of the Loan Documents.
(b) Each Lender required to deliver any forms, certificates or
other evidence with respect to United States federal income tax
withholding matters pursuant to subsection 2.7B(iii)(a) hereby agrees,
from time to time after the initial delivery by such Lender of such
forms, certificates or other evidence, whenever a lapse in time or
change in circumstances renders such forms, certificates or other
evidence obsolete or inaccurate in any material respect, that such
Lender shall promptly (1) deliver to Administrative Agent for
transmission to Company two new original copies of Internal Revenue
Service Form 1001 or 4224, or a Certificate re Non-Bank Status and two
original copies of Internal Revenue Service Form W-8, as the case may
be, properly completed and duly
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executed by such Lender, together with any other certificate or
statement of exemption required in order to confirm or establish that
such Lender is not subject to deduction or withholding of United
States federal income tax with respect to payments to such Lender
under the Loan Documents or (2) notify Administrative Agent and
Company of its inability to deliver any such forms, certificates or
other evidence.
(c) Company shall not be required to pay any additional amount to
any Non-US Lender under clause (c) of subsection 2.7B(ii) if such
Lender shall have failed to satisfy the requirements of clause (a) or
(b)(1) of this subsection 2.7B(iii); PROVIDED that if such Lender
shall have satisfied the requirements of subsection 2.7B(iii)(a) on
the Closing Date (in the case of each Lender) listed on the signature
pages hereof) or on the date of the Assignment Agreement pursuant to
which it became a Lender (in the case of each other Lender), nothing
in this subsection 2.7B(iii)(c) shall relieve Company of its
obligation to pay any additional amounts pursuant to clause (c) of
subsection 2.7B(ii) in the event that, as a result of any change in
any applicable law, treaty or governmental rule, regulation or order,
or any change in the interpretation, administration or application
thereof, such Lender is no longer properly entitled to deliver forms,
certificates or other evidence at a subsequent date establishing the
fact that such Lender is not subject to withholding as described in
subsection 2.7B(iii)(a).
C. CAPITAL ADEQUACY ADJUSTMENT. Without duplication of any amounts
payable under Section 2.7A and the definition of "Adjusted LIBO Rate", if any
Lender shall have reasonably determined that the adoption, effectiveness,
phase-in or applicability after the date hereof of any law, rule or regulation
(or any provision thereof) regarding capital adequacy, or any change therein or
in the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or its applicable lending
office) with any guideline, request or directive regarding capital adequacy
(whether or not having the force of law) of any such governmental authority,
central bank or comparable agency, has or would have the effect of reducing the
rate of return on the capital of such Lender or any corporation controlling such
Lender as a consequence of, or with reference to, such Lender's Loans Against
Imports or Commitments or Documentary Credits or participations therein or other
obligations hereunder with respect to the Loans or the Documentary Credits to a
level below that which such Lender or such controlling corporation could have
achieved but for such adoption, effectiveness, phase-in, applicability, change
or compliance (taking into consideration the policies of such Lender or such
controlling corporation with regard to capital adequacy), then from time to
time, within five Business Days after receipt by Company from such Lender of the
statement referred to in the next sentence, Company shall pay to such Lender
such additional amount or amounts as will compensate such Lender or such
controlling corporation on an after-tax basis for such reduction. Such Lender
shall deliver to Company (with a copy to Administrative Agent) a written
statement, setting forth in reasonable detail the basis of the calculation of
such additional amounts, which calculation shall be conclusive and binding upon
all parties hereto absent manifest error.
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2.8 OBLIGATION OF LENDERS AND ISSUING LENDER TO MITIGATE.
Each Lender and the Issuing Lender agrees that, as promptly as
practicable after the officer of such Lender or the Issuing Lender responsible
for administering the Loans Against Imports or Documentary Credits of such
Lender or the Issuing Lender, as the case may be, becomes aware of the
occurrence of an event or the existence of a condition that would cause such
Lender or the Issuing Lender to become an Affected Lender or that would entitle
such Lender or the Issuing Lender to receive payments under subsection 2.7 or
subsection 3.6, it will, to the extent not inconsistent with the internal
policies of such Lender or the Issuing Lender and any applicable legal or
regulatory restrictions, use reasonable efforts to (i) make, issue, fund or
maintain the Commitments of such Lender or the Issuing Lender or the affected
Loans Against Imports or Documentary Credits of such Lender or the Issuing
Lender through another lending or letter of credit office of such Lender or the
Issuing Lender, or (ii) take such other reasonable measures as may result in the
circumstances which would cause such Lender to be an Affected Lender ceasing to
exist or a material reduction in the additional amounts which would otherwise be
required to be paid to such Lender or the Issuing Lender pursuant to subsection
2.7 or subsection 3.6 and if, as determined by such Lender or the Issuing Lender
in its sole discretion, the making, issuing, funding or maintaining of such
Commitments or Loans Against Imports or Documentary Credits through such other
lending or letter of credit office or in accordance with such other measures, as
the case may be, would not otherwise materially adversely affect such
Commitments or Loans Against Imports or Standby Documentary Credits or the
interests of such Lender or the Issuing Lender; PROVIDED that such Lender or the
Issuing Lender will not be obligated to utilize such other lending or letter of
credit office pursuant to this subsection 2.8 unless Company agrees to pay all
incremental expenses incurred by such Lender or the Issuing Lender as a result
of utilizing such other lending or letter of credit office as described in
clause (i) above. A certificate as to the amount of any such expenses payable by
Company pursuant to this subsection 2.8 (setting forth in reasonable detail the
basis for requesting such amount) submitted by such Lender or the Issuing Lender
to Company (with a copy to Administrative Agent) shall be conclusive absent
manifest error.
SECTION 3. DOCUMENTARY CREDITS AND LOANS AGAINST IMPORTS
3.1 ISSUANCE OF DOCUMENTARY CREDITS AND LENDERS' PURCHASE OF PARTICIPATIONS
THEREIN.
A. DOCUMENTARY CREDITS. In addition to Company requesting that Lenders
make Loans Against Imports pursuant to subsection 2.1B, Company may request, in
accordance with the provisions of this subsection 3.1, from time to time during
the period from the Closing Date to but excluding the Commitment Termination
Date, that the Issuing Lender issue Documentary Credits in Dollars for the
account of Company for the purposes specified in the definition of Commercial
Documentary Credits and Standby Documentary Credits. Subject to the terms and
conditions of this Agreement and in reliance upon the representations and
warranties of Company herein set forth, upon such request the Issuing Lender
shall issue such Documentary Credits in accordance with the provisions of this
subsection 3.1; provided that the Issuing Lender shall not be required to
issue):
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(i) any Standby Documentary Credit if, after giving effect to
such issuance, the Standby Documentary Credit Usage in respect of
Standby Documentary Credits (other than Midland Standby Documentary
Credits) would exceed $1,000,000;
(ii) any Midland Standby Documentary Credit if, after giving
effect to such issuance, the Standby Documentary Credit Usage in
respect of Midland Standby Documentary Credits would exceed
$2,650,000;
(iii) any Documentary Credit if, after giving effect to such
issuance, the Total Utilization would exceed $50,000,000;
(iv) any Commercial Documentary Credit having an expiration date
later than the date which is 120 days from the date of issuance from
such Commercial Documentary Credit;
(v) any Standby Documentary Credit having an expiration date
later than the date which is 364 days from the date of issuance of
such Standby Documentary Credit; provided that the immediately
preceding clause shall not prevent the Issuing Lender from agreeing
that a Standby Documentary Credit will automatically be extended for
one or more successive periods not to exceed 364 days each unless
Company notified the Issuing Lender of cancellation of such Standby
Documentary Credit at least 30 days before the original expiration
date; provided, further that the Issuing Lender shall elect not to
extend such Standby Documentary Credit if it has knowledge that an
Event of Default has occurred and is continuing (and has not been
waived in accordance with subsection 10.6) at the time the Issuing
Lender must elect whether or not to allow such extension; or
(vi) any Midland Standby Documentary Credit after ADCIP is
implemented.
B. MECHANICS OF ISSUANCE.
(i) NOTICE OF ISSUANCE. Whenever Company desires the issuance of
a Documentary Credit, it shall deliver to Administrative Agent a
Notice of Issuance of Documentary Credit substantially in the form of
EXHIBIT III annexed hereto no later than 12:00 Noon (San Francisco
time) at least three Business Days, or in each case such shorter
period as may be agreed to by the Issuing Lender in any particular
instance, in advance of the proposed date of issuance. The Notice of
Issuance of Documentary Credit shall specify (a) the proposed date of
issuance (which shall be a Business Day), (b) whether the Documentary
Credit is to be a Commercial Documentary Credit, a Standby Documentary
Credit or a Midland Standby Documentary Credit, (c) the face amount of
the Documentary Credit, (d) the expiration date of the Documentary
Credit, (e) the name and address of the beneficiary, and (f) either
the verbatim text of the proposed Documentary Credit or the proposed
terms and conditions thereof, including a precise description of any
documents to be presented by the beneficiary which, if presented by
the beneficiary prior to the expiration date of the Documentary
Credit, would require the Issuing Lender to make payment under the
Documentary Credit; provided that the Issuing Lender, in its
reasonable discretion, may require changes in the text of the proposed
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Documentary Credit or any such documents; and provided, further that
no Documentary Credit shall require payment against a conforming draft
to be made thereunder on the same business day (under the laws of the
jurisdiction in which the office of the Issuing Lender to which such
draft is required to be presented is located) that such draft is
presented if such presentation is made after 10:00 A.M. (in the time
zone of such office of the Issuing Lender) on such business day.
Company shall notify Administrative Agent prior to the issuance
of any Documentary Credit in the event that any of the matters to
which Company is required to certify in the applicable Notice of
Issuance of Documentary Credit is no longer true and correct as of the
proposed date of issuance of such Documentary Credit, and upon the
issuance of any Documentary Credit Company shall (unless Company has
so notified Administrative Agent) be deemed to have re-certified, as
of the date of such issuance, as to the matters to which Company is
required to certify in the applicable Notice of Issuance of
Documentary Credit.
On the Closing Date, all Existing Documentary Credits shall be
deemed to have been made under this Agreement. The expiration date for
such Existing Documentary Credits shall be the existing expiration
date for such Existing Documentary Credits.
(ii) ISSUANCE OF DOCUMENTARY CREDIT. Upon satisfaction or waiver
(in accordance with subsection 10.6) of the conditions set forth in
subsection 4.3, the Issuing Lender shall issue the requested
Documentary Credit on the date of issuance set forth in the applicable
Notice of Issuance in accordance with the Issuing Lender's standard
operating procedures.
(iii) NOTIFICATION TO LENDERS. Upon the issuance of any
Documentary Credit, the Issuing Lender shall notify each other Lender
of such issuance, which notice shall be accompanied by a copy of such
Documentary Credit, and of the amount of such Lender's respective
participation in such Documentary Credit, determined in accordance
with subsection 3.1C.
C. LENDERS' PURCHASE OF PARTICIPATIONS IN DOCUMENTARY CREDITS.
Immediately upon the issuance of each Documentary Credit, each Lender shall be
deemed to, and hereby agrees to, have irrevocably purchased from the Issuing
Lender a participation in such Documentary Credit and any drawings honored
thereunder in an amount equal to such Lender's Pro Rata Share of the maximum
amount which is or at any time may become available to be drawn thereunder.
D. AUTHORIZED OFFICERS. The President, the Chief Financial Officer,
the Controller and the Director of Treasury of Company shall be the only
officers authorized to deliver written or telephonic notice pursuant to this
Section 3.
3.2 DOCUMENTARY CREDIT FEES.
Company agrees to pay the following amounts with respect to
Documentary Credits issued hereunder:
(i) with respect to each Commercial Documentary Credit,
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(a) a letter of credit fee, payable to Administrative Agent
for the account of the Issuing Lender, equal to the greater of
(1) 1/32% per 120 days of the face amount of such Commercial
Documentary Credit calculated for the period commencing on the
date of such Commercial Documentary Credit and ending on its
expiration date and (2) $50, in either case payable in advance on
the date of issuance and (b) a document handling fee, payable to
Administrative Agent for the account of the Issuing Lender, equal
to the greater of (1) 1/24% of the face amount of such Commercial
Documentary Credit and (2) $30, in either case payable on the
date of any drawing;
(ii) with respect to each Standby Documentary Credit, other than
Midland Standby Documentary Credits, a letter of credit fee, payable
to Administrative Agent for the account of the Issuing Lender, equal
to 3/4% per annum of the face amount of such Standby Documentary
Credit, payable in advance on the date of issuance;
(iii) with respect to each Midland Standby Documentary Credit, a
letter of credit fee, payable to Administrative Agent for the account
of the Issuing Lender, equal to 1 1/4% per annum of the face amount of
such Midland Standby Documentary Credit, payable on the expiration or
termination date of such Midland Standby Documentary Credit; and
(iv) with respect to the amendment or transfer of each
Documentary Credit and each payment of a drawing made thereunder
(without duplication of the fees payable under clauses (i) and (ii)
above), customary "fronting fees" and documentary and processing
charges payable directly to the Issuing Lender for its own account in
accordance with the Issuing Lender's standard schedule for such
charges in effect at the time of such amendment, transfer or payment,
as the case may be.
Promptly upon receipt by Administrative Agent of any amount described in clause
(i) or (ii) of this subsection 3.2, Administrative Agent shall distribute to
each Lender its Pro Rata Share of such amount.
3.3 DRAWINGS AND REIMBURSEMENT OF AMOUNTS PAID UNDER DOCUMENTARY CREDITS.
A. RESPONSIBILITY OF ISSUING LENDER WITH RESPECT TO DRAWINGS. In
determining whether to honor any drawing under any Documentary Credit by the
beneficiary thereof, the Issuing Lender shall be responsible only to examine the
documents delivered under such Documentary Credit with reasonable care so as to
ascertain whether they appear on their face to be in accordance with the terms
and conditions of such Documentary Credit.
B. REIMBURSEMENT BY COMPANY OF AMOUNTS PAID UNDER COMMERCIAL
DOCUMENTARY CREDITS. In the event the Issuing Lender has determined to honor a
drawing under a Commercial Documentary Credit, the Issuing Lender shall
immediately notify Company and Company shall reimburse the Issuing Lender on or
before the Business Day immediately following the date on which such drawing is
honored (the "COMMERCIAL REIMBURSEMENT DATE") in an amount in Dollars and in
same day funds equal to the amount of such honored drawing; PROVIDED that,
anything contained in this Agreement to the contrary notwithstanding,
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(i) unless Company shall have notified the Issuing Lender prior to 10:00 A.M.
(San Francisco time) on the date following the date such drawing is honored that
Company intends to reimburse Issuing Lender for the amount of such honored
drawing with funds constituting the proceeds of Loans Against Imports that are
LIBOR Loans or with funds other than the proceeds of Loans Against Imports,
Company shall be deemed to have given a timely Notice of Borrowing to
Administrative Agent requesting Loans Against Imports that are Base Rate Loans
on the Commercial Reimbursement Date in an amount in Dollars equal to the amount
of such honored drawing and (ii) subject to satisfaction or waiver of the
conditions specified in subsection 4.2B, Administrative Agent shall, on the
Commercial Reimbursement Date, make Loans Against Imports that are Base Rate
Loans in the amount of such honored drawing, the proceeds of which shall be
applied directly by Administrative Agent to reimburse the Issuing Lender for the
amount of such honored drawing; and PROVIDED, FURTHER that if for any reason
proceeds of Loans Against Imports are not received by Issuing Lender on the
Commercial Reimbursement Date in an amount equal to the amount of such honored
drawing, Company shall reimburse the Issuing Lender, on demand, in an amount in
same day funds equal to the excess of the amount of such honored drawing over
the aggregate amount of such Loans Against Imports, if any, which are so
received.
C. REIMBURSEMENT BY COMPANY OF AMOUNTS PAID UNDER DOCUMENTARY CREDITS
OR MIDLAND STANDBY DOCUMENTARY CREDITS. In the event the Issuing Lender has
determined to honor a drawing under a Documentary Credit, the Issuing Lender
shall immediately notify Company, and Company shall reimburse the Issuing Lender
on or before the Business Day immediately following the date on which such
drawing is honored (the "STANDBY REIMBURSEMENT DATE") in an amount in Dollars
and in same day funds equal to the amount of such honored drawing.
D. PAYMENT BY LENDERS OF UNREIMBURSED AMOUNTS PAID UNDER DOCUMENTARY
CREDITS.
(i) PAYMENT BY LENDERS. In the event that Company shall fail for
any reason to reimburse the Issuing Lender as provided in subsections
3.3B or 3.3C, as applicable, in an amount equal to the amount of any
drawing honored by the Issuing Lender under a Documentary Credit, the
Issuing Lender shall promptly notify each other Lender of the
unreimbursed amount of such honored drawing and of such other Lender's
respective participation therein based on such Lender's Pro Rata
Share. Each Lender shall make available to the Issuing Lender an
amount equal to its respective participation, in Dollars and in same
day funds, at the office of the Issuing Lender specified in such
notice, not later than 12:00 Noon (San Francisco time) on the first
business day (under the laws of the jurisdiction or jurisdictions in
which such office of the Issuing Lender and the reimbursing Lender is
located) after the date notified by the Issuing Lender. In the event
that any Lender fails to make available to the Issuing Lender on such
business day the amount of such Lender's participation in such
Documentary Credit as provided in this subsection 3.3D, the Issuing
Lender shall be entitled to recover such amount on demand from such
Lender together with interest thereon at the rate customarily used by
the Issuing Lender for the correction of errors among banks for three
Business Days and thereafter at the Base Rate. Nothing in this
subsection 3.3D shall be deemed to prejudice the right of any Lender
to recover from the Issuing Lender any amounts made available
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by such Lender to the Issuing Lender pursuant to this subsection 3.3D
in the event that it is determined by the final judgment of a court of
competent jurisdiction that the payment with respect to a Documentary
Credit by the Issuing Lender in respect of which payment was made by
such Lender constituted gross negligence or willful misconduct on the
part of the Issuing Lender.
Anything contained in this Agreement to the contrary
notwithstanding, with respect to Documentary Credit issued by Xxxxx
Fargo unless Xxxxx Fargo shall have notified Administrative Agent
prior to 10:00 A.M. (San Francisco time) on the date any drawing is
honored that Company has reimbursed Xxxxx Fargo for such honored
drawing, Administrative Agent shall immediately pay to Xxxxx Fargo the
amount of such unpaid drawing, and Company and the other Lenders shall
be obligated, to the extent that Company and the other Lenders have
not reimbursed Xxxxx Fargo therefor prior to notice to Company or such
other Lender, as the case may be, by Administrative Agent and Xxxxx
Fargo that Administrative Agent has made such payment to Xxxxx Fargo,
to reimburse Administrative Agent instead of Xxxxx Fargo in respect of
such Documentary Credit in accordance with the procedures set forth in
this subsection 3.3D for reimbursement of the Issuing Lender.
(ii) DISTRIBUTION TO LENDERS OF REIMBURSEMENTS RECEIVED FROM
COMPANY. In the event the Issuing Lender shall have been reimbursed by
other Lenders pursuant to subsection 3.3D(i) for all or any portion of
any drawing honored by the Issuing Lender under a Documentary Credit,
the Issuing Lender shall distribute to each other Lender which has
paid all amounts payable by it under subsection 3.3D(i) with respect
to such honored drawing such other Lender's Pro Rata Share of all
payments subsequently received by the Issuing Lender from Company in
reimbursement of such honored drawing when such payments are received.
Any such distribution shall be made to a Lender at its primary address
set forth below its name on the appropriate signature page hereof or
at such other address as such Lender may request.
E. INTEREST ON AMOUNTS PAID UNDER DOCUMENTARY CREDITS.
(i) PAYMENT OF INTEREST BY COMPANY. Company agrees to pay to the
Issuing Lender, with respect to drawings honored under any Documentary
Credits issued by it, interest on the amount paid by the Issuing
Lender in respect of each such honored drawing from the date such
drawing is honored to but excluding the date such amount is reimbursed
by Company (including any such reimbursement out of proceeds of Loans
Against Imports pursuant to subsection 3.3B) at a rate equal to (a)
for the period from the date such drawing is honored to but excluding
the Commercial Reimbursement Date or Standby Reimbursement Date, as
the case may be, the rate then in effect under this Agreement with
respect to Loans Against Imports that are Base Rate Loans and (b)
thereafter, a rate which is 3% per annum in excess of the rate of
interest otherwise payable under this Agreement with respect to Loans
Against Imports that are Base Rate Loans. Interest payable pursuant to
this subsection 3.3E(i) shall be computed on the basis of a 360-day
year for the actual number of days elapsed in the period during which
it accrues and shall be payable on demand or, if no demand is made, on
the date on which the related drawing under a Documentary Credit is
reimbursed in full.
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Anything contained in this Agreement to the contrary
notwithstanding, with respect to any Documentary Credit issued by Xxxxx
Fargo in the event that Administrative Agent shall have reimbursed
Xxxxx Fargo for any unpaid drawing in accordance with subsection 3.3D,
Company shall to Administrative Agent instead of Xxxxx Fargo any
interest due and payable pursuant to this subsection 3.3E in respect of
such Documentary Credit.
(ii) DISTRIBUTION OF INTEREST PAYMENTS BY ISSUING LENDER.
Promptly upon receipt by the Issuing Lender of any payment of interest
pursuant to subsection 3.3E(i) with respect to a drawing honored under
a Documentary Credit, (a) the Issuing Lender shall distribute to each
other Lender, out of the interest received by the Issuing Lender in
respect of the period from the date such drawing is honored to but
excluding the date on which the Issuing Lender is reimbursed for the
amount of such drawing, the amount that such other Lender would have
been entitled to receive in respect of the letter of credit fee that
would have been payable in respect of such Documentary Credit for such
period pursuant to subsection 3.2 if no drawing had been honored under
such Documentary Credit, and (b) in the event the Issuing Lender shall
have been reimbursed by other Lenders pursuant to subsection 3.3D(i)
for all or any portion of such honored drawing, the Issuing Lender
shall distribute to each other Lender which has paid all amounts
payable by it under subsection 3.3D(i) with respect to such honored
drawing such other Lender's Pro Rata Share of any interest received by
the Issuing Lender in respect of that portion of such honored drawing
so reimbursed by other Lenders for the period from the date on which
the Issuing Lender was so reimbursed by other Lenders to but excluding
the date on which such portion of such honored drawing is reimbursed
by Company. Any such distribution shall be made to a Lender at its
primary address set forth below its name on the appropriate signature
page hereof or at such other address as such Lender may request.
3.4 OBLIGATIONS ABSOLUTE.
The obligation of Company to reimburse the Issuing Lender for drawings
honored under the Documentary Credits issued by it and the obligations of
Lenders under subsection 3.3D(i) shall be unconditional and irrevocable and
shall be paid strictly in accordance with the terms of this Agreement under all
circumstances including any of the following circumstances:
(i) any lack of validity or enforceability of any Documentary
Credit;
(ii) the existence of any claim, set-off, defense or other right
which Company, any of its Subsidiaries or any Lender may have at any
time against a beneficiary or any transferee of any Documentary Credit
(or any Persons for whom any such transferee may be acting), the
Issuing Lender or any other Lender or any other Person or, in the case
of a Lender, against Company, whether in connection with this
Agreement, the transactions contemplated herein or any unrelated
transaction (including any underlying transaction between Company or
one of its Subsidiaries and the beneficiary for which any Documentary
Credit was procured);
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(iii) any draft or other document presented under any Documentary
Credit proving to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any
respect;
(iv) payment by the Issuing Lender under any Documentary Credit
against presentation of a draft or other document which does not
substantially comply with the terms of such Documentary Credit;
(v) any adverse change in the business, operations, properties,
assets, condition (financial or otherwise) or prospects of Company or
any of its Subsidiaries;
(vi) any breach of this Agreement or any other Loan Document by
any party thereto;
(vii) any other circumstance or happening whatsoever, whether or
not similar to any of the foregoing; or
(viii) the fact that an Event of Default or a Potential Event of
Default shall have occurred and be continuing;
PROVIDED, in each case, that payment by the Issuing Lender under the applicable
Documentary Credit shall not have constituted gross negligence or willful
misconduct of the Issuing Lender under the circumstances in question (as
determined by a final judgment of a court of competent jurisdiction or by
arbitration in accordance with subsection 10.21).
3.5 INDEMNIFICATION; NATURE OF ISSUING LENDERS' DUTIES.
A. INDEMNIFICATION. Company hereby agrees to protect, indemnify, pay
and save harmless the Issuing Lender from and against any and all claims,
demands, liabilities, damages, losses, costs, charges and expenses (including
reasonable fees, expenses and disbursements of counsel and allocated costs of
internal counsel) which the Issuing Lender may incur or be subject to as a
consequence, direct or indirect, of (i) the issuance of any Documentary Credit
by the Issuing Lender, other than as a result of (a) the gross negligence or
willful misconduct of the Issuing Lender as determined by a final judgment of a
court of competent jurisdiction or by arbitration in accordance with subsection
10.21 or (b) subject to the following clause (ii), the wrongful dishonor by the
Issuing Lender of a proper demand for payment made under any Documentary Credit
issued by it or (ii) the failure of the Issuing Lender to honor a drawing under
any such Documentary Credit as a result of any act or omission, whether rightful
or wrongful, of any present or future de jure or de facto government or
governmental authority (all such acts or omissions herein called "GOVERNMENTAL
ACTS").
B. NATURE OF ISSUING LENDER'S DUTIES. As between Company and the
Issuing Lender, Company assumes all risks of the acts and omissions of, or
misuse of the Documentary Credits issued by the Issuing Lender by, the
respective beneficiaries of such Documentary Credits. In furtherance and not in
limitation of the foregoing, the Issuing Lender shall not be responsible for:
(i) the form, validity, sufficiency, accuracy, genuineness or legal effect of
any document submitted by any party in connection with the application for and
issuance of any such Documentary Credit, even if it should in fact prove to be
in any or all respects invalid,
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insufficient, inaccurate, fraudulent or forged; (ii) the validity or sufficiency
of any instrument transferring or assigning or purporting to transfer or assign
any such Documentary Credit or the rights or benefits thereunder or proceeds
thereof, in whole or in part, which may prove to be invalid or ineffective for
any reason; (iii) failure of the beneficiary of any such Documentary Credit to
comply fully with any conditions required in order to draw upon such Documentary
Credit; (iv) errors, omissions, interruptions or delays in transmission or
delivery of any messages, by mail, cable, telegraph, telex or otherwise, whether
or not they be in cipher; (v) errors in interpretation of technical terms; (vi)
any loss or delay in the transmission or otherwise of any document required in
order to make a drawing under any such Documentary Credit or of the proceeds
thereof; (vii) the misapplication by the beneficiary of any such Documentary
Credit of the proceeds of any drawing under such Documentary Credit; or (viii)
any consequences arising from causes beyond the control of the Issuing Lender,
including any Governmental Acts, and none of the above shall affect or impair,
or prevent the vesting of, any of the Issuing Lender's rights or powers
hereunder.
In furtherance and extension and not in limitation of the specific
provisions set forth in the first paragraph of this subsection 3.5B, any action
taken or omitted by the Issuing Lender under or in connection with the
Documentary Credits issued by it or any documents and certificates delivered
thereunder, if taken or omitted in good faith, shall not put the Issuing Lender
under any resulting liability to Company.
Notwithstanding anything to the contrary contained in this subsection
3.5, Company shall retain any and all rights it may have against the Issuing
Lender for any liability arising solely out of the gross negligence or willful
misconduct of the Issuing Lender, as determined by a final judgment of a court
of competent jurisdiction or by arbitration in accordance with subsection 10.21.
SECTION 4. CONDITIONS TO LOANS AGAINST IMPORTS AND DOCUMENTARY CREDITS
The obligations of Lenders to make Loans Against Imports and the
issuance of Documentary Credits hereunder are subject to the satisfaction of the
following conditions.
4.1 CONDITIONS TO EFFECTIVENESS OF AGREEMENT.
The effectiveness of this Agreement is subject to satisfaction of the
following conditions:
A. COMPANY DOCUMENTS. On or before the Closing Date, Company shall
deliver or cause to be delivered to Lenders (or to Administrative Agent for
Lenders with sufficient originally executed copies, where appropriate, for each
Lender and its counsel) the following, each, unless otherwise noted, dated the
Closing Date:
(i) Certified copies of its Certificate of Incorporation,
together with a good standing certificate from the Secretary of State
of the State of Delaware, each dated a recent date prior to the
Closing Date;
(ii) Copies of its Bylaws, certified as of the Closing Date by
its corporate secretary or an assistant secretary;
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(iii) Resolutions of its Board of Directors approving and
authorizing the execution, delivery and performance of this Agreement
and the other Loan Documents, certified as of the Closing Date by its
corporate secretary or an assistant secretary as being in full force
and effect without modification or amendment;
(iv) Signature and incumbency certificates of the authorized
representatives of Company executing the Loan Documents;
(v) Executed originals of the Loan Documents; and
(vi) Such other documents as Administrative Agent may reasonably
request.
B. NO MATERIAL ADVERSE EFFECT. Since December 31, 1998, no Material
Adverse Effect (in the reasonable opinion of Administrative Agent) shall have
occurred.
C. SECURITY INTERESTS IN COLLATERAL. Administrative Agent shall have
received evidence satisfactory to it that Company shall have taken or caused to
be taken all such actions, executed and delivered or caused to be executed and
delivered all such agreements, documents and instruments, and made or caused to
be made all such filings and recordings (other than the filing or recording of
items described in clauses (i) and (ii) below) that may be necessary or, in the
opinion of Administrative Agent, desirable in order to create in favor of
Administrative Agent, for the benefit of Lenders, a valid and (upon such filing
and recording) perfected First Priority security interest in the Collateral.
Such actions shall include the following:
(i) LIEN SEARCHES AND UCC TERMINATION STATEMENTS. Delivery to
Administrative Agent of (a) the results of a recent search, by a
Person satisfactory to Administrative Agent, of all effective UCC
financing statements and fixture filings and all judgment and tax lien
filings which may have been made with respect to any personal or mixed
property of Company, together with copies of all such filings
disclosed by such search, and (b) UCC termination statements duly
executed by all applicable Persons for filing in all applicable
jurisdictions as may be necessary to terminate any effective UCC
financing statements or fixture filings disclosed in such search
(other than any such financing statements or fixture filings in
respect of Liens permitted to remain outstanding pursuant to the terms
of this Agreement).
(ii) UCC FINANCING STATEMENTS AND FIXTURE FILINGS. Delivery to
Administrative Agent of UCC financing statements and, where
appropriate, fixture filings, duly executed by Company with respect to
all Collateral of Company, for filing in all jurisdictions as may be
necessary or, in the opinion of Administrative Agent, desirable to
perfect the security interests created in such Collateral pursuant to
the Collateral Documents.
D. EVIDENCE OF INSURANCE. Administrative Agent shall have received a
certificate from Company's insurance broker or other evidence satisfactory to it
that all insurance required to be maintained pursuant to subsection 6.4 is in
full force and effect and that Administrative Agent on behalf of Lenders has
been named as an additional insured and/or loss payee thereunder to the extent
required under subsection 6.4.
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E. OPINIONS OF COMPANY'S COUNSEL. Lenders and their respective counsel
shall have received originally executed copies of one or more favorable written
opinions of Xxxxxx, Xxxx & Xxxxxxx, counsel for Company, in form and substance
reasonably satisfactory to Administrative Agent and its counsel, dated as of the
Closing Date and setting forth substantially the matters in the opinions
designated in EXHIBIT VIII annexed hereto and as to such other matters as
Administrative Agent acting on behalf of Lenders may reasonably request.
F. OPINIONS OF ADMINISTRATIVE AGENT'S COUNSEL. Lenders shall have
received originally executed copies of one or more favorable written opinions of
O'Melveny & Xxxxx LLP, counsel to Administrative Agent, dated as of the Closing
Date, substantially in the form of EXHIBIT IX annexed hereto and as to such
other matters as Administrative Agent acting on behalf of Lenders may reasonably
request.
G. FEES. Company shall have paid to Administrative Agent, for
distribution (as appropriate) to Administrative Agent and Lenders, the fees
payable on the Closing Date referred to in subsection 2.3.
H. COMPLETION OF PROCEEDINGS. All corporate and other proceedings
taken or to be taken in connection with the transactions contemplated hereby and
all documents incidental thereto not previously found acceptable by
Administrative Agent, acting on behalf of Lenders, and its counsel shall be
satisfactory in form and substance to Administrative Agent and such counsel, and
Administrative Agent and such counsel shall have received all such counterpart
originals or certified copies of such documents as Administrative Agent may
reasonably request.
4.2 CONDITIONS TO ALL LOANS AGAINST IMPORTS.
The obligations of Lenders to make any Loans Against Imports hereunder
are subject to the following conditions precedent:
A. Administrative Agent shall have received an originally executed
Notice of Borrowing in accordance with subsection 2.1B signed by the chief
executive officer, the chief financial officer, the Director of Treasury, the
Controller or the treasurer of Company or by any executive officer of Company
designated by any of the above-described officers on behalf of Company in a
writing delivered to Administrative Agent or telephonic notice in lieu thereof,.
B. As of that Funding Date:
(i) The representations and warranties contained herein and in
the other Loan Documents shall be true, correct and complete in all
material respects on and as of that Funding Date to the same extent as
though made on and as of that date, except to the extent such
representations and warranties specifically relate to an earlier date,
in which case such representations and warranties shall have been
true, correct and complete in all material respects on and as of such
earlier date;
(ii) No event shall have occurred and be continuing or would
result from the consummation of the borrowing contemplated by such
Notice of Borrowing that would constitute an Event of Default or a
Potential Event of Default;
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(iii) Company shall have performed in all material respects all
agreements and satisfied all conditions which this Agreement provides
shall be performed or satisfied by it on or before that Funding Date;
(iv) No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain any Lender
from making the Loans to be made by it on that Funding Date;
(v) The making of the Loans Against Imports requested on such
Funding Date shall not violate any law including Regulation T,
Regulation U or Regulation X of the Board of Governors of the Federal
Reserve System; and
(vi) There shall not be pending or, to the knowledge of Company,
threatened, any action, suit, proceeding, governmental investigation
or arbitration against or affecting Company or any of its Subsidiaries
or any property of Company or any of its Subsidiaries that has not
been disclosed by Company in writing pursuant to subsection 5.6 or
6.1(vii) prior to the making of the last preceding Loans Against
Imports (or, in the case of the initial Loans Against Imports, prior
to the execution of this Agreement), and there shall have occurred no
development not so disclosed in any such action, suit, proceeding,
governmental investigation or arbitration so disclosed, that, in
either event, in the reasonable opinion of Administrative Agent or of
Requisite Lenders, would be expected to have a Material Adverse
Effect.
4.3 CONDITIONS TO DOCUMENTARY CREDITS.
The issuance of any Documentary Credit hereunder is subject to the
following conditions precedent:
A. On or before the date of issuance of such Documentary Credit,
Administrative Agent shall have received, in accordance with the provisions of
subsection 3.1B(i), an originally executed Notice of Issuance of Documentary
Credit, in each case signed by the chief executive officer, the chief financial
officer or the treasurer of Company or by any executive officer of Company
designated by any of the above-described officers on behalf of Company in a
writing delivered to Administrative Agent, together with all other information
specified in subsection 3.1B(i) and such other documents or information as the
Issuing Lender may reasonably require in connection with the issuance of such
Documentary Credit.
B. On or before the date of issuance of such Documentary Credit,
Administrative Agent shall have received an originally executed Letter of Credit
Application Agreement, substantially in the form of EXHIBIT IV annexed hereto.
C. On or before the date of issuance of any Commercial Documentary
Credit, Administrative Agent shall have received copies of executed purchase
orders, in form and substance satisfactory to Administrative Agent, for the
presold goods being purchased; PROVIDED, HOWEVER, that Commercial Documentary
Credits may be issued without purchase orders and for unsold goods so long as
the aggregate Commercial Documentary Credit Usage in respect of such Commercial
Documentary Credits does not exceed $3,000,000 at any time.
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D. On the date of issuance of such Documentary Credit, all conditions
precedent described in subsection 4.2B shall be satisfied to the same extent as
if the issuance of such Documentary Credit were the making of a Loan Against
Imports and the date of issuance of such Documentary Credit were a Funding Date.
SECTION 5. COMPANY'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement and to make
the Loans Against Imports, to induce the Issuing Lender to issue Documentary
Credits and to induce other Lenders to purchase participations therein, Company
represents and warrants to each Lender, on the date of this Agreement, on each
Funding Date and on the date of issuance of each Documentary Credit, that the
following statements are true, correct and complete:
5.1 ORGANIZATION, POWERS, QUALIFICATION, GOOD STANDING, BUSINESS AND
SUBSIDIARIES.
A. ORGANIZATION AND POWERS. Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
Company has all requisite corporate power and authority to own and operate its
properties, to carry on its business as now conducted and as proposed to be
conducted, to enter into the Loan Documents and to carry out the transactions
contemplated thereby.
B. QUALIFICATION AND GOOD STANDING. Company is qualified to do
business and in good standing in every jurisdiction where its assets are located
and wherever necessary to carry out its business and operations, except in
jurisdictions where the failure to be so qualified or in good standing has not
had and will not have a Material Adverse Effect.
C. CONDUCT OF BUSINESS. Company and its Subsidiaries are engaged only
in the businesses permitted to be engaged in pursuant to subsection 7.10.
D. SUBSIDIARIES All of the Subsidiaries of Company as of the Closing
Date are identified in SCHEDULE 5.1 annexed hereto. The Capital Stock of each of
the Subsidiaries of Company identified in SCHEDULE 5.1 annexed hereto is duly
authorized, validly issued, fully paid and nonassessable and none of such
Capital Stock constitutes Margin Stock. Each of the Subsidiaries of Company
identified in SCHEDULE 5.1 annexed hereto is duly organized, validly existing
and in good standing under the laws of its respective jurisdiction of
organization set forth therein, has all requisite power and authority to own and
operate its properties and to carry on its business as now conducted and as
proposed to be conducted, and is qualified to do business and in good standing
in every jurisdiction where its assets are located and wherever necessary to
carry out its business and operations, in each case except where failure to be
so qualified or in good standing or a lack of such power and authority has not
had and will not have a Material Adverse Effect. SCHEDULE 5.1 annexed hereto
correctly sets forth, as of the Closing Date, the ownership interest of Company
and each of its Subsidiaries in each of the Subsidiaries of Company identified
therein.
5.2 AUTHORIZATION OF BORROWING, ETC.
A. AUTHORIZATION OF BORROWING. The execution, delivery and performance
of the Loan Documents have been duly authorized by all necessary corporate
action on the part of Company.
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B. NO CONFLICT. The execution, delivery and performance by Company of
the Loan Documents and the consummation of the transactions contemplated by the
Loan Documents do not and will not (i) violate any provision of any law or any
governmental rule or regulation applicable to Company or any of its Major
Subsidiaries, the Certificate or Articles of Incorporation or Bylaws of Company
or any of its Major Subsidiaries or any order, judgment or decree of any court
or other agency of government binding on Company or any of its Major
Subsidiaries, (ii) conflict with, result in a breach of or constitute (with due
notice or lapse of time or both) a default under any Contractual Obligation of
Company or any of its Major Subsidiaries, (iii) result in or require the
creation or imposition of any Lien upon any of the properties or assets of
Company or any of its Major Subsidiaries (other than any Liens created under any
of the Loan Documents in favor of Administrative Agent on behalf of Lenders), or
(iv) require any approval of stockholders or any approval or consent of any
Person under any Contractual Obligation of Company or any of its Major
Subsidiaries, except for such approvals or consents which will be obtained on or
before the Closing Date and disclosed in writing to Lenders.
C. GOVERNMENTAL CONSENTS. The execution, delivery and performance by
Company of the Loan Documents and the consummation of the transactions
contemplated by the Loan Documents do not and will not require any registration
with, consent or approval of, or notice to, or other action to, with or by, any
federal, state or other governmental authority or regulatory body, other than
those that have been duly obtained.
D. BINDING OBLIGATION. Each of the Loan Documents has been duly
executed and delivered by Company and is the legally valid and binding
obligation of Company, enforceable against Company in accordance with its
respective terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting creditors'
rights generally or by equitable principles relating to enforceability.
5.3 FINANCIAL CONDITION.
Company has heretofore delivered to Lenders, at Lenders' request, the
audited consolidated and consolidating balance sheets of Company and its
Subsidiaries as at December 31, 1998 and the related consolidated and
consolidating statements of income, stockholders' equity and cash flows of
Company and its Subsidiaries for the Fiscal Year then ended. All such statements
were prepared in conformity with GAAP and fairly present, in all material
respects, the financial position (on a consolidated and, where applicable,
consolidating basis) of the entities described in such financial statements as
at the respective dates thereof and the results of operations and cash flows (on
a consolidated and, where applicable, consolidating basis) of the entities
described therein for each of the periods then ended, subject, in the case of
any such unaudited financial statements, to changes resulting from audit and
normal year-end adjustments. Company does not (and will not following the
funding of the initial Loans Against Imports) have any Contingent Obligation,
contingent liability or liability for taxes, long-term lease or unusual forward
or long-term commitment that is not reflected in the foregoing financial
statements or the notes thereto and which in any such case is material in
relation to the business, operations, properties, assets, condition (financial
or otherwise) or prospects of Company and its Major Subsidiaries, taken as a
whole.
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5.4 NO MATERIAL ADVERSE CHANGE; NO RESTRICTED JUNIOR PAYMENTS.
Since December 31, 1998, no event or change has occurred that has
caused or evidences, either in any case or in the aggregate, a Material Adverse
Effect. Since December 31, 1998, neither Company nor any of its Subsidiaries has
directly or indirectly declared, ordered, paid or made, or set apart any sum or
property for, any Restricted Junior Payment or agreed to do so except as
permitted by subsection 7.3.
5.5 TITLE TO PROPERTIES; LIENS.
A. TITLE TO PROPERTIES; LIENS. Company and its Subsidiaries have (i)
good, sufficient and legal title to (in the case of fee interests in real
property), (ii) valid leasehold interests in (in the case of leasehold interests
in real or personal property), or (iii) good title to (in the case of all other
personal property), all of their respective properties and assets reflected in
the financial statements referred to in subsection 5.3 or in the most recent
financial statements delivered pursuant to subsection 6.1, in each case except
for assets disposed of since the date of such financial statements in the
ordinary course of business or as otherwise permitted under subsection 7.6. All
such properties and assets are free and clear of Liens prohibited by this
Agreement.
B. REAL PROPERTY. As of the Closing Date, SCHEDULE 5.5 annexed hereto
contains a true, accurate and complete list of (i) all fee interests in material
real property and (ii) all leases, subleases or assignments of leases (together
with all amendments, modifications, supplements, renewals or extensions of any
thereof) affecting any material real property of Company, regardless of whether
Company is the landlord or tenant (whether directly or as an assignee or
successor in interest) under such lease, sublease or assignment. Except as
specified in SCHEDULE 5.5 annexed hereto, each agreement listed in clause (ii)
of the immediately preceding sentence is in full force and effect and Company
does not have knowledge of any default that has occurred and is continuing
thereunder.
5.6 LITIGATION; ADVERSE FACTS.
Except as set forth in SCHEDULE 5.6 annexed hereto, there are no
actions, suits, proceedings, arbitrations or governmental investigations
(whether or not purportedly on behalf of Company or any of its Subsidiaries) at
law or in equity, or before or by any federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign that are pending or, to the actual knowledge of a
Responsible Officer of Company, threatened against or affecting Company or any
of its Subsidiaries or any property of Company or any of its Subsidiaries and
that, individually or in the aggregate, could reasonably be expected to result
in a Material Adverse Effect. Neither Company nor any of its Subsidiaries (i) is
in violation of any applicable laws that, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect, or (ii) is
subject to or in default with respect to any final judgments, writs,
injunctions, decrees, rules or regulations of any court or any federal, state,
municipal or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, that, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect.
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5.7 PAYMENT OF TAXES.
Except to the extent permitted by subsection 6.3, all tax returns and
reports of Company and its Subsidiaries required to be filed by any of them have
been timely filed, and all taxes shown on such tax returns to be due and payable
and all assessments, fees and other governmental charges upon Company and its
Subsidiaries and upon their respective properties, assets, income, businesses
and franchises which are due and payable have been paid when due and payable.
Company has no actual knowledge of any proposed tax assessment against Company
or any of its Subsidiaries which is not being actively contested by Company or
such Subsidiary in good faith and by appropriate proceedings; PROVIDED that such
reserves or other appropriate provisions, if any, as shall be required in
conformity with GAAP shall have been made or provided therefor.
5.8 PERFORMANCE OF AGREEMENTS; MATERIAL CONTRACTS.
A. Neither Company nor any of its Subsidiaries is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any of its Contractual Obligations, and no condition
exists that, with the giving of notice or the lapse of time or both, would
constitute such a default, except, in each case, where the consequences, direct
or indirect, of such default or defaults, if any, would not have a Material
Adverse Effect.
B. SCHEDULE 5.8 contains a true, correct and complete list of all the
Material Contracts in effect on the Closing Date. Except as described on
SCHEDULE 5.8, all such Material Contracts are in full force and effect and no
material defaults currently exist thereunder.
5.9 GOVERNMENTAL REGULATION.
Neither Company nor any of its Subsidiaries is subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act or the Investment Company Act of 1940 or under any other
federal or state statute or regulation which limits its ability to incur
Indebtedness or which otherwise renders all or any portion of the Obligations
unenforceable.
5.10 SECURITIES ACTIVITIES.
A. Neither Company nor any of its Subsidiaries is engaged principally,
or as one of its important activities, in the business of extending credit for
the purpose of purchasing or carrying any Margin Stock.
B. Following application of the proceeds of each Loan, not more than
25% of the value of the assets (either of Company only or of Company and its
Subsidiaries on a consolidated basis) subject to the provisions of subsection
7.2 or 7.6 or subject to any restriction contained in any agreement or
instrument, between Company and any Lender or any Affiliate of any Lender,
relating to Indebtedness and within the scope of subsection 8.2, will be Margin
Stock.
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5.11 EMPLOYEE BENEFIT PLANS.
A. Each of Company and its Subsidiaries is in material compliance with
all applicable provisions and requirements of ERISA and the regulations and
published interpretations thereunder with respect to each Employee Benefit Plan
of Company and its Subsidiaries, and have performed all their material
obligations under each such Employee Benefit Plan. Each Employee Benefit Plan of
Company and its Subsidiaries which is intended to qualify under Section 401(a)
of the Internal Revenue Code is so qualified.
B. No ERISA Event with respect to Company or its Subsidiaries has
occurred or is reasonably expected to occur and no ERISA Event with respect to
any ERISA Affiliate of Company and its Subsidiaries has occurred or is
reasonably expected to occur which would be reasonably expected to result in a
Material Adverse Effect.
C. As of the most recent valuation date for any Pension Plan
maintained or contributed to by Company and its Subsidiaries, the amount of
unfunded benefit liabilities (as defined in Section 4001(a)(18) of ERISA),
individually or in the aggregate for all such Pension Plans (excluding for
purposes of such computation any Pension Plans with respect to which assets
exceed benefit liabilities), does not exceed $3,000,000. As of the most recent
valuation date for any Pension Plan maintained or contributed to by Company and
its Subsidiaries or any ERISA Affiliate, the amount of unfunded benefit
liabilities (as defined in Section 4001(a)(18) of ERISA), individually or in the
aggregate for all such Pension Plans (excluding for purposes of such computation
any Pension Plans with respect to which assets exceed benefit liabilities), if
required to be fully paid, would not reasonably be expected to have Material
Adverse Effect.
D. The Company is not party to any Multiemployer Plan.
5.12 EMPLOYEE MATTERS.
There is no strike or work stoppage in existence or threatened
involving Company or any of its Subsidiaries that could reasonably be expected
to have a Material Adverse Effect.
5.13 SOLVENCY.
Company is and, upon the incurrence of any Obligations by Company on
any date on which this representation is made will be, Solvent.
5.14 MATTERS RELATING TO COLLATERAL.
A. CREATION, PERFECTION AND PRIORITY OF LIENS. The execution and
delivery of the Collateral Documents by Company, together with the actions taken
on or prior to the date hereof pursuant to subsection 4.1E are effective to
create in favor of Administrative Agent for the benefit of Lenders, as security
for the respective Secured Obligations (as defined in the applicable Collateral
Document in respect of any Collateral), a valid and perfected First Priority
Lien on all of the Collateral, and all filings and other actions necessary or
desirable to perfect and maintain the perfection and First Priority status of
such Liens have been duly made or taken and remain in full force and effect,
other than the filing of any UCC financing statements delivered to
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Administrative Agent for filing (but not yet filed) and the periodic filing of
any UCC financing statements filed by or on behalf of Administrative Agent.
B. GOVERNMENTAL AUTHORIZATIONS. No authorization, approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for either (i) the pledge or grant by Company of the
Liens purported to be created in favor of Administrative Agent pursuant to any
of the Collateral Documents or (ii) the exercise by Administrative Agent of any
rights or remedies in respect of any Collateral (whether specifically granted or
created pursuant to any of the Collateral Documents or created or provided for
by applicable law), except for filings or recordings contemplated by subsection
5.14A.
C. ABSENCE OF THIRD-PARTY FILINGS. Except such as may have been filed
in favor of Administrative Agent as contemplated by subsection 5.14A and such as
shall be assigned to Administrative Agent as of the Closing Date, no effective
UCC financing statement, fixture filing or other instrument similar in effect
covering all or any part of the Collateral is on file in any filing or recording
office.
5.15 DISCLOSURE.
No representation or warranty of Company contained in any Loan
Document or in any other document, certificate or written statement furnished to
Lenders by or on behalf of Company for use in connection with the transactions
contemplated by this Agreement contains any untrue statement of a material fact
or omits to state a material fact (known to Company, in the case of any document
not furnished by it) necessary in order to make the statements contained herein
or therein not misleading in light of the circumstances in which the same were
made. Any projections and pro forma financial information contained in such
materials are based upon good faith estimates and assumptions believed by
Company to be reasonable at the time made, it being recognized by Lenders that
such projections as to future events are not to be viewed as facts and that
actual results during the period or periods covered by any such projections may
differ from the projected results. There are no facts known to Company (other
than matters of a general economic nature) that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect
and that have not been disclosed herein or in such other documents, certificates
and statements furnished to Lenders for use in connection with the transactions
contemplated hereby.
SECTION 6. COMPANY'S AFFIRMATIVE COVENANTS
Company covenants and agrees that, so long as any of the Commitments
hereunder shall remain in effect and until payment in full of all of the Loans
Against Imports and other Obligations and the cancellation or expiration of all
Standby Documentary Credits, unless Requisite Lenders shall otherwise give prior
written consent, Company shall perform, and shall cause each of its Subsidiaries
to perform, all covenants in this Section 6, in each case to the extent
applicable thereto.
6.1 FINANCIAL STATEMENTS AND OTHER REPORTS.
Company will maintain, and cause each of its Major Subsidiaries to
maintain, a system of accounting established and administered in accordance with
sound business practices to permit
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preparation of financial statements in conformity with GAAP. Company will
deliver to Administrative Agent and Lenders:
(i) QUARTERLY FINANCIALS: as soon as available and in any event within
45 days after the end of each Fiscal Quarter, the consolidated and
consolidating balance sheets of Company and its Subsidiaries as at the end
of such Fiscal Quarter and the related consolidated and consolidating
statements of income, stockholders' equity and cash flows of Company and
its Subsidiaries for such Fiscal Quarter and for the period from the
beginning of the then current Fiscal Year to the end of such Fiscal
Quarter, setting forth in each case in comparative form the corresponding
figures for the corresponding periods of the previous Fiscal Year and the
corresponding figures from the Financial Plan for the current Fiscal Year,
all in reasonable detail and certified by the chief financial officer of
Company that they fairly present, in all material respects, the financial
condition of Company and its Subsidiaries as at the dates indicated and the
results of their operations and their cash flows for the periods indicated,
subject to changes resulting from audit and normal year-end adjustments;
(ii) YEAR-END FINANCIALS: as soon as available and in any event within
120 days after the end of each Fiscal Year, (a) the consolidated and
consolidating balance sheets of Company and its Subsidiaries as at the end
of such Fiscal Year and the related consolidated and consolidating
statements of income, stockholders' equity and cash flows of Company and
its Subsidiaries for such Fiscal Year, setting forth in each case in
comparative form the corresponding figures for the previous Fiscal Year and
the corresponding figures from the Financial Plan for the Fiscal Year
covered by such financial statements, all in reasonable detail and
certified by the chief financial officer of Company that they fairly
present, in all material respects, the financial condition of Company and
its Subsidiaries as at the dates indicated and the results of their
operations and their cash flows for the periods indicated and (b) in the
case of such consolidated financial statements, a report thereon of
PriceWaterhouseCoopers or other independent certified public accountants of
recognized national standing selected by Company and satisfactory to
Administrative Agent, which report shall be unqualified, shall express no
doubts about the ability of Company and its Subsidiaries to continue as a
going concern, and shall state that such consolidated financial statements
fairly present, in all material respects, the consolidated financial
position of Company and its Subsidiaries as at the dates indicated and the
results of their operations and their cash flows for the periods indicated
in conformity with GAAP applied on a basis consistent with prior years
(except as otherwise disclosed in such financial statements) and that the
examination by such accountants in connection with such consolidated
financial statements has been made in accordance with generally accepted
auditing standards;
(iii) OFFICERS' AND COMPLIANCE CERTIFICATES: (a) together with each
delivery of financial statements of Company and its Subsidiaries pursuant
to subdivision (ii) above, an Officers' Certificate of Company stating that
the signers have reviewed the terms of this Agreement and are generally
familiar with the transactions and condition of Company and its
Subsidiaries during the accounting period covered by such financial
statements and that such review has not disclosed the existence during or
at the end of such accounting period, and that the signers do not have
actual knowledge of the
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existence as at the date of such Officers' Certificate, of any condition or
event that constitutes an Event of Default or Potential Event of Default,
or, if any such condition or event existed or exists, specifying the nature
and period of existence thereof and what action Company has taken, is
taking and proposes to take with respect thereto; and (b) together with
each delivery of financial statements of Company and its Subsidiaries
pursuant to subdivisions (i) and (ii) above, a Compliance Certificate, in
each case to the extent compliance with such restrictions is required to be
tested at the end of the applicable accounting period;
(iv) ACCOUNTANTS' REPORTS: promptly upon receipt thereof (unless
restricted by applicable professional standards), copies of all reports
submitted to Company by independent certified public accountants in
connection with each annual, interim or special audit of the financial
statements of Company and its Subsidiaries made by such accountants;
(v) SEC FILINGS: promptly upon their becoming available, copies of all
regular and periodic reports and all registration statements (other than on
Form S-8 or a similar form) and prospectuses, if any, filed by Company or
any of its Subsidiaries with any securities exchange or with the Securities
and Exchange Commission or any governmental or private regulatory
authority;
(vi) EVENTS OF DEFAULT, ETC.: promptly upon any Responsible Officer of
Company obtaining actual knowledge (a) of any condition or event that
constitutes an Event of Default or Potential Event of Default, or becoming
aware that any Lender has given any notice (other than to Administrative
Agent) or taken any other action with respect to a claimed Event of Default
or Potential Event of Default, (b) of any condition or event that would be
required to be disclosed in a current report filed by Company with the
Securities and Exchange Commission on Form 8-K (Items 1, 2, and 4 of such
Form as in effect on the date hereof) if Company were required to file such
reports under the Exchange Act, or (c) of the occurrence of any event or
change that has caused or evidences, either in any case or in the
aggregate, a Material Adverse Effect, an Officers' Certificate specifying
the nature and period of existence of such condition, event or change, or
specifying the notice given or action taken by any such Person and the
nature of such claimed Event of Default, Potential Event of Default,
default, event or condition, and what action Company has taken, is taking
and proposes to take with respect thereto;
(vii) LITIGATION OR OTHER PROCEEDINGS: (a) promptly upon any
Responsible Officer of Company obtaining actual knowledge of (x) the
institution of, or non-frivolous threat of, any action, suit, proceeding
(whether administrative, judicial or otherwise), governmental investigation
or arbitration against or affecting Company or any of its Subsidiaries or
any property of Company or any of its Subsidiaries involving an alleged
liability of, or claims against or affecting, Company or any of its
Subsidiaries equal to or greater than $1,000,000 (collectively,
"PROCEEDINGS") not previously disclosed in writing by Company to Lenders or
(y) any material development in any Proceeding that, in any case:
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(1) has a reasonable possibility of giving rise to a Material
Adverse Effect; or
(2) seeks to enjoin or otherwise prevent the consummation of, or
to recover any damages or obtain relief as a result of, the
transactions contemplated hereby;
written notice thereof together with such other information as may be
reasonably available to Company to enable Lenders and their counsel to
evaluate such matters; and (b) within 20 days after the end of each Fiscal
Quarter, a schedule of all Proceedings, and promptly after request by
Administrative Agent such other information as may be reasonably requested
by Administrative Agent to enable Administrative Agent and its counsel to
evaluate any of such Proceedings;
(viii) FINANCIAL PLANS: promptly upon the same becoming available, a
consolidated and consolidating plan and financial forecast for such Fiscal
Year or such other financial plan prepared by Company for its internal use;
(ix) INSURANCE: promptly upon the same becoming available, a copy of
the report prepared by Company for its internal use outlining all material
insurance coverage maintained as of the date of such report by Company and
its Subsidiaries and all material insurance coverage planned to be
maintained by Company and its Subsidiaries in the immediately succeeding
Fiscal Year, together with certificates of insurance from all insurance
carriers indicating that Administrative Agent has been named as an
additional insured and/or loss payee thereunder;
(x) UNINSURED LOSS: with reasonable promptness, written notice of any
uninsured property or casualty loss in excess of $500,000;
(xi) BOARD OF DIRECTORS; EXECUTIVE OFFICERS: with reasonable
promptness, written notice of any change in the Board of Directors or
executive officers of Company;
(xii) MATERIAL CONTRACTS: with reasonable promptness, such information
and data with respect to the Material Contracts of Company and its
Subsidiaries (other than Unrestricted Subsidiaries) as reasonably requested
by Administrative Agent no more frequently than twice a year;
(xiii) AGING ACCOUNTS REPORT: as soon as available and in any event
within 45 days after the end of each Fiscal Quarter, a detailed aged
balance of Accounts of Company and a detailed balance of accounts payable
as of the end of such month, each certified by the President, Chief
Financial Officer or Controller of Company as being complete and correct;
(xiv) INVENTORY REPORT: as soon as available and in any event within
45 days after the end of each Fiscal Quarter, a complete listing (including
location) and valuation of all Inventory of Company as of the end of such
month certified by the President, Chief Financial Officer or Controller of
Company as being complete and correct;
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(xv) PURCHASE ORDER SUMMARY: within 30 days after the end of each
month, a detailed summary of purchase orders of Company as of the end
of such month certified by the President, Chief Financial Officer or
Controller of Company as being complete and correct; and
(xvi) OTHER INFORMATION: with reasonable promptness, such other
information and data with respect to Company or any of its
Subsidiaries as from time to time may be reasonably requested by any
Lender.
6.2 CORPORATE EXISTENCE, ETC.
Except as permitted under subsection 7.6, Company will, and will cause
each of its Subsidiaries to, at all times preserve and keep in full force and
effect its corporate existence and all rights and franchises material to
Company's business.
6.3 PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION.
A. Company will, and will cause each of its Subsidiaries to, pay all
taxes, assessments and other governmental charges imposed upon it or any of its
properties or assets or in respect of any of its income, businesses or
franchises before any penalty accrues thereon, and all claims (including claims
for labor, services, materials and supplies) for sums that have become due and
payable and that by law have or may become a Lien upon any of Company's
properties or assets, prior to the time when any penalty or fine shall be
incurred with respect thereto; provided that no such charges or claims need be
paid if it is being contested in good faith by appropriate proceedings promptly
instituted and diligently conducted, so long as (i) such reserve or other
appropriate provision, if any, as shall be required in conformity with GAAP
shall have been made therefor and (ii) in the case of a charge or claim which
has or may become a Lien against any of the Collateral, such contest proceedings
conclusively operate to stay the sale of any portion of the Collateral to
satisfy such charge or claim.
B. Company will not, nor will it permit any of its Subsidiaries to,
file or consent to the filing of any consolidated income tax return with any
Person (other than Company or any of its Subsidiaries).
6.4 MAINTENANCE OF PROPERTIES; INSURANCE.
A. MAINTENANCE OF PROPERTIES. Company will, and will cause each of its
Major Subsidiaries (other than the Unrestricted Subsidiaries) to, maintain or
cause to be maintained in good repair, working order and condition, ordinary
wear and tear excepted, all material properties used or useful in the business
of Company and its Major Subsidiaries (other than the Unrestricted Subsidiaries)
and from time to time will make or cause to be made all appropriate repairs,
renewals and replacements thereof.
B. INSURANCE. Company will maintain or cause to be maintained, with
financially sound and reputable insurers, such public liability insurance, third
party property damage insurance, business interruption insurance, casualty
insurance and marine insurance with respect to liabilities, losses or damage in
respect of the assets, properties and businesses of Company and its Major
Subsidiaries (other than the Unrestricted Subsidiaries) as may customarily be
carried or
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maintained under similar circumstances by corporations of established reputation
engaged in similar businesses, in each case in such amounts (giving effect to
self-insurance), with such deductibles, covering such risks and otherwise on
such terms and conditions as shall be customary for corporations similarly
situated in the industry and shall be acceptable to Administrative Agent. All
casualty and marine insurance shall be provided by an insurance company having a
Best's rating of at least "A-". All other insurance shall be provided by
insurance companies acceptable to Administrative Agent in its reasonable
discretion. Each such policy of insurance shall (a) name Administrative Agent
for the benefit of Lenders as an additional insured thereunder as its interests
may appear, (b) in the case of each business interruption and casualty insurance
policy, contain a loss payable clause or endorsement, satisfactory in form and
substance to Administrative Agent, that names Administrative Agent for the
benefit of Lenders as the loss payee thereunder for any covered loss in excess
of $500,000 and (c) provide for at least 30 days prior written notice to
Administrative Agent of any modification or cancellation of such policy.
6.5 INSPECTION RIGHTS; LENDER MEETING; AUDITS OF COLLATERAL.
A. INSPECTION RIGHTS. Company shall, and shall cause each of its
Subsidiaries (other than the Unrestricted Subsidiaries) to, permit any
authorized representatives designated by any Lender to visit and inspect any of
the properties of Company or of any of its Subsidiaries, to inspect, copy and
take extracts from its and their financial and accounting records, and to
discuss its and their affairs, finances and accounts with its and their officers
and independent public accountants (provided that Company may, if it so chooses,
be present at or participate in any such discussion), all upon reasonable notice
and at such reasonable times during normal business hours and as often as may
reasonably be requested.
B. LENDER MEETING. Company will, upon the request of Administrative
Agent or Requisite Lenders, participate in a meeting of Administrative Agent and
Lenders once during each Fiscal Year to be held at Company's corporate offices
(or at such other location as may be agreed to by Company and Administrative
Agent) at such time as may be agreed to by Company and Administrative Agent.
C. AUDITS OF COLLATERAL. Company shall permit any authorized
representatives designated by Administrative Agent to conduct one audit of all
Collateral, including all Inventory and Accounts of Company, within 90 days
after the Closing Date, upon reasonable notice and at such reasonable times
during normal business hours as may reasonably be requested; provided that no
such audit shall take more than five Business Days.
6.6 COMPLIANCE WITH LAWS, ETC.
Company shall comply, and shall cause each of its Subsidiaries to
comply, with the requirements of all applicable laws, rules, regulations and
orders of any governmental authority, noncompliance with which could reasonably
be expected to cause, individually or in the aggregate, a Material Adverse
Effect.
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6.7 YEAR 2000 COMPLIANCE.
Company shall perform all acts reasonably necessary to ensure that
Company and its Subsidiaries become Year 2000 Compliant in a timely manner.
Company shall use commercially reasonable efforts to determine whether all
customers, suppliers and vendors that are material to Company's business will
become Year 2000 Compliant in a timely manner. As used in this paragraph, "YEAR
2000 COMPLIANT" shall mean, in regard to any entity, that all software,
hardware, firmware, equipment, goods or systems utilized by or material to the
business operations or financial condition of such entity, will not suffer a
loss of the capability to perform date sensitive functions as a result of the
so-called "Year 2000 Problem" that causes a Material Adverse Effect. Company
shall, immediately upon request, provide to Administrative Agent such
certifications or other evidence of Company's compliance with the terms of this
subsection 6.7 as Administrative Agent may from time to time reasonably require.
SECTION 7. COMPANY'S NEGATIVE COVENANTS
Company covenants and agrees that, so long as any of the Commitments
hereunder shall remain in effect and until payment in full of all of the Loans
and other Obligations and the cancellation or expiration of all Documentary
Credits, unless Requisite Lenders shall otherwise give prior written consent,
Company shall perform, and shall cause each of its Subsidiaries to perform, all
covenants in this Section 7, in each case to the extent applicable thereto.
7.1 INDEBTEDNESS.
Company shall not, and shall not permit any of its Major Subsidiaries
(other than the Unrestricted Subsidiaries) to, directly or indirectly, create,
incur or assume, or otherwise become or remain directly or indirectly liable
with respect to, any Indebtedness (other than as obligor under any Contingent
Obligations), except:
(i) Company may become and remain liable with respect to the
Obligations;
(ii) Company may become and remain liable with respect to
Indebtedness to HSBC in respect of ADCIP Commercial Documentary
Credits issued under ADCIP;
(iii) Company and its Subsidiaries may become and remain liable
with respect to Indebtedness in respect of Capital Leases;
(iv) Company may become and remain liable with respect to
Indebtedness to any of its wholly-owned Subsidiaries and any
wholly-owned Subsidiary of Company may become and remain liable with
respect to Indebtedness to Company or any other wholly-owned
Subsidiary of Company; provided that (a) all such intercompany
Indebtedness shall be evidenced by promissory notes, (b) all such
intercompany Indebtedness owed by Company to any of its wholly-owned
Subsidiaries shall be subordinated in right of payment to the payment
in full of the Obligations pursuant to the terms of the applicable
promissory notes or an intercompany subordination agreement, and (c)
all such intercompany Indebtedness owed to Company by its wholly-owned
Subsidiaries and by Company to its wholly-owned Subsidiaries shall not
exceed $30,000,000 in the aggregate at any time; and
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(v) Company and its Subsidiaries, as applicable, may become and
remain liable with respect to Indebtedness described in Schedule 7.1
annexed hereto.
7.2 LIENS AND RELATED MATTERS.
A. PROHIBITION ON LIENS. Company shall not, and shall not permit any
of its Major Subsidiaries (other than the Unrestricted Subsidiaries) to,
directly or indirectly, create, incur, assume or permit to exist any Lien on or
with respect to any property or asset of any kind (including any document or
instrument in respect of goods or accounts receivable) of Company or any of its
Major Subsidiaries (other than Unrestricted Subsidiaries), whether now owned or
hereafter acquired, or any income or profits therefrom, or file or permit the
filing of, or permit to remain in effect, any financing statement or other
similar notice of any Lien with respect to any such property, asset, income or
profits under the UCC of any State or under any similar recording or notice
statute, except:
(i) Permitted Encumbrances;
(ii) Liens granted pursuant to the Collateral Documents;
(iii) existing Liens described in Schedule 7.2, if any; and
(iv) Liens that replace, extend or renew any Lien permitted by
clause (iii).
B. EQUITABLE LIEN IN FAVOR OF LENDERS. If Company or any of its Major
Subsidiaries (other than the Unrestricted Subsidiaries) shall create or assume
any Lien upon any of its properties or assets, whether now owned or hereafter
acquired, other than Liens excepted by the provisions of subsection 7.2A, it
shall make or cause to be made effective provision whereby the Obligations will
be secured by such Lien equally and ratably with any and all other Indebtedness
secured thereby as long as any such Indebtedness shall be so secured; provided
that, notwithstanding the foregoing, this covenant shall not be construed as a
consent by Requisite Lenders to the creation or assumption of any such Lien not
permitted by the provisions of subsection 7.2A.
C. NO FURTHER NEGATIVE PLEDGES. Except with respect to specific
property encumbered to secure payment of particular Indebtedness, neither
Company nor any of its Major Subsidiaries (other than the Unrestricted
Subsidiaries) shall enter into any agreement prohibiting the creation or
assumption of any Lien upon any of its properties or assets, whether now owned
or hereafter acquired.
D. NO RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS TO COMPANY OR OTHER
SUBSIDIARIES. Except as provided herein, Company will not, and will not permit
any of its Major Subsidiaries (other than the Unrestricted Subsidiaries) to,
create or otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction of any kind on the ability of any such Major
Subsidiary to (i) pay dividends or make any other distributions on any of such
Major Subsidiary's Capital Stock owned by Company or any other Major Subsidiary
of Company, (ii) repay or prepay any Indebtedness owed by such Major Subsidiary
to Company or any other Major
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Subsidiary of Company, (iii) make loans or advances to Company or any other
Major Subsidiary of Company, or (iv) transfer any of its property or assets to
Company or any other Major Subsidiary of Company.
7.3 RESTRICTION ON EXTRAORDINARY EVENTS.
Company shall not and shall not permit any of its Subsidiaries to,
directly or indirectly, perform any Extraordinary Event, except:
(i) Company may make and own Investments in Cash Equivalents;
(ii) Company may make intercompany loans to the extent permitted
under subsection 7.1(iv);
(iii) Company may perform any Extraordinary Event in which the
consideration paid by Company is in a form other than Cash or Cash
Equivalents;
(iv) Company may perform any Extraordinary Event for which the
aggregate amount of Cash or Cash Equivalents used by Company in
connection with such Extraordinary Event is less than $10,000,000;
(v) Company may perform any Extraordinary Event for which the
aggregate amount of Cash or Cash Equivalents used by Company in
connection with such Extraordinary Event is greater than $10,000,000
if, after giving effect to such Extraordinary Event, the sum of the
aggregate amount of Cash and Cash Equivalents of Company, on an
unconsolidated basis, is greater than $30,000,000;
(vi) Company may perform any Extraordinary Event with the prior
written approval of Administrative Agent, such approval not to be
unreasonably withheld or delayed; or
(vii) any Unrestricted Subsidiary may perform any Extraordinary
Event.
7.4 CONTINGENT OBLIGATIONS.
Company shall not, and shall not permit any of its Subsidiaries (other
than the Unrestricted Subsidiaries) to, directly or indirectly, create or become
or remain liable with respect to any Contingent Obligation, except:
(i) Company may become and remain liable with respect to
Contingent Obligations in respect of Documentary Credits;
(ii) Company may become and remain liable with respect to
Contingent Obligations in respect of ADCIP Commercial Documentary
Credits;
(iii) Company may remain liable with respect to the Tonkin
Guarantee;
(iv) Company and its Subsidiaries may become and remain liable
with respect to Contingent Obligations under guarantees in the
ordinary course of business of the obligations of suppliers,
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customers, franchisees and licensees of Company and its Subsidiaries
in an aggregate amount not to exceed at any time $5,000,000; and
(v) Company and its Subsidiaries may become and remain liable
with respect to other Contingent Obligations; provided that the
maximum aggregate liability, contingent or otherwise, of Company and
its Subsidiaries in respect of all such Contingent Obligations shall
at no time exceed $5,000,000.
7.5 FINANCIAL COVENANTS.
A. MAXIMUM LEVERAGE RATIO.
Company shall not permit the ratio of (i) the sum of (a) Consolidated
Total Debt PLUS (b) the total amount of indebtedness of Tonkin guaranteed by
Company pursuant to the Tonkin Guarantee to (ii) Consolidated Tangible Net
Worth, as of the last day of any Fiscal Quarter to exceed 1.50:1.00.
B. MINIMUM NET INCOME.
Company shall not permit Consolidated Net Income as of the last day of
any Fiscal Year for the Fiscal Year then ended to be less than $1.00.
C. MINIMUM WORKING CAPITAL.
Company shall not permit Working Capital to be less than $55,000,000
at any time.
7.6 RESTRICTION ON FUNDAMENTAL CHANGES; ASSET SALES.
Without the consent of Requisite Lenders, Company shall not, and shall
not permit any of its Major Subsidiaries to, alter the corporate, capital or
legal structure of Company or any of its Major Subsidiaries, or enter into any
transaction of merger or consolidation, or liquidate, wind-up or dissolve itself
(or suffer any liquidation or dissolution), or convey, sell, lease or sub-lease
(as lessor or sub-lessor), transfer or otherwise dispose of, in one transaction
or a series of transactions, all or any part of its business, property or
assets, whether now owned or hereafter acquired, except:
(i) any Subsidiary of Company may be merged with or into Company
or any wholly-owned Subsidiary of Company, or be liquidated, wound up
or dissolved, or all or any part of its business, property or assets
may be conveyed, sold, leased, transferred or otherwise disposed of,
in one transaction or a series of transactions, to Company or any
wholly-owned Subsidiary of Company; provided that, in the case of such
a merger, Company or such wholly-owned Subsidiary shall be the
continuing or surviving corporation;
(ii) Company and its Subsidiaries may dispose of obsolete, worn
out or surplus property in the ordinary course of business;
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(iii) Company and its Subsidiaries may sell or otherwise dispose
of Inventory in the ordinary course of business; and
(iv) Company and its Subsidiaries may sell any part of its
business, property or assets in an aggregate amount not to exceed at
any time $10,000,000.
Nothing in this subsection 7.6 shall preclude the issuance or sale by
Company or its Subsidiaries of any Securities.
7.7 SALE OR DISCOUNT OF RECEIVABLES.
Company shall not, directly or indirectly, (i) sell with recourse, or
discount or otherwise sell for less than the face value thereof, any of its
notes or Accounts constituting part of the Collateral or (ii) waive, amend or
vary the terms of any such Account, including postponing payment thereof.
7.8 TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, enter into or permit to exist any transaction (including
the purchase, sale, lease or exchange of any property or the rendering of any
service) with any holder of 5% or more of any class of equity Securities of
Company or with any Affiliate of Company or of any such holder, on terms that
are less favorable to Company or that Subsidiary, as the case may be, than those
that might be obtained at the time from Persons who are not such a holder or
Affiliate, except for the transactions reflected in Schedule 7.8 annexed hereto;
PROVIDED that the foregoing restriction shall not apply to (i) any transaction
between Company and any of its wholly-owned Subsidiaries or between any of its
wholly-owned Subsidiaries or (ii) reasonable and customary fees paid to members
of the Boards of Directors of Company and its Subsidiaries.
7.9 DISPOSAL OF SUBSIDIARY STOCK.
Company shall not:
(i) directly or indirectly sell, assign, pledge or otherwise
encumber or dispose of any shares of Capital Stock or other equity
Securities of any of its Subsidiaries, except to qualify directors if
required by applicable law; or
(ii) permit any of its Subsidiaries directly or indirectly to
sell, assign, pledge or otherwise encumber or dispose of any shares of
Capital Stock or other equity Securities of any of its Subsidiaries
(including such Subsidiary), except to Company, another Subsidiary of
Company, or to qualify directors if required by applicable law;
PROVIDED that this subsection 7.9 shall not prevent the granting or honoring of
any options to purchase Capital Stock of any Subsidiary of Company or any action
described in clause (i) or (ii) above taken by Company with the consent of
Administrative Agent (such consent not to be unreasonably withheld or delayed).
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7.10 CONDUCT OF BUSINESS.
From and after the Closing Date, Company shall not, and shall not
permit any of its Subsidiaries to, engage in any business other than (i) the
businesses engaged in by Company and its Subsidiaries on the Closing Date and
similar or related businesses, including, without limitation, an advertising
business, and (ii) such other lines of business as may be consented to by
Requisite Lenders, except that Company and its Subsidiaries may engage in any
other business as long as the net income for the twelve-month period then ended
derived from such other business does not constitute more than 20% of the
Consolidated Net Income for the most recently ended Fiscal Year of the Company
and its Subsidiaries.
7.11 FISCAL YEAR.
Company shall not change its Fiscal Year-end from December 31 without
the consent of the Requisite Lenders (which consent shall not be unreasonably
withheld or delayed).
SECTION 8. EVENTS OF DEFAULT
If any of the following conditions or events ("EVENTS OF DEFAULT")
shall occur:
8.1 FAILURE TO MAKE PAYMENTS WHEN DUE.
Failure by Company to pay any installment of principal of or interest
on any Loan when due, whether at stated maturity, by acceleration, by notice of
voluntary prepayment, by mandatory prepayment or otherwise; failure by Company
to pay when due any fee due under this Agreement or any amount payable to the
Issuing Lender in reimbursement of any drawing under a Documentary Credit within
3 days after the date due; or failure by Company to pay any other amount due
under this Agreement within ten days after the demand for such amount is made by
Administrative Agent on Company; or
8.2 DEFAULT IN OTHER AGREEMENTS.
(i) Failure of Company or any of its Subsidiaries to pay when due any
principal of or interest on or any other amount payable in respect of one or
more items of Indebtedness (other than Indebtedness referred to in subsection
8.1) or Contingent Obligations in an individual principal amount of $1,000,000
or more or with an aggregate principal amount of $1,000,000 or more, in each
case beyond the end of any grace period provided therefor; or (ii) breach or
default by Company or any of its Subsidiaries with respect to any other material
term of (a) one or more items of Indebtedness or Contingent Obligations or (b)
any loan agreement, mortgage, indenture or other agreement relating to such
item(s) of Indebtedness or Contingent Obligation(s), in each case with respect
to Indebtedness or Contingent Obligations in excess of $1,000,000, if the effect
of such breach or default is to cause, or to permit the holder or holders of
that Indebtedness or Contingent Obligation(s) (or a trustee on behalf of such
holder or holders) to cause, that Indebtedness or Contingent Obligation(s) to
become or be declared due and payable prior to its stated maturity or the stated
maturity of any underlying obligation, as the case may be; or
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8.3 BREACH OF CERTAIN COVENANTS.
Failure of Company to perform or comply with any term or condition
contained in subsection 6.2 or Section 7; or
8.4 BREACH OF WARRANTY.
Any representation, warranty, certification or other statement made by
Company or any of its Subsidiaries in any Loan Document or in any statement or
certificate at any time given by Company or any of its Subsidiaries in writing
pursuant hereto or thereto or in connection herewith or therewith shall be false
in any material respect on the date as of which made; or
8.5 OTHER DEFAULTS UNDER LOAN DOCUMENTS.
Company shall default in the performance of or compliance with any term
contained in this Agreement or any of the other Loan Documents, other than any
such term referred to in any other subsection of this Section 8, and such
default shall not have been remedied or waived within twenty days after the
earlier of (i) a Responsible Officer of Company obtaining actual knowledge of
such default or (ii) receipt by Company of notice from Administrative Agent or
any Lender of such default; or
8.6 INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(i) A court having jurisdiction in the premises shall enter a decree or
order for relief in respect of Company or any of its Subsidiaries in an
involuntary case under the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect, which decree
or order is not stayed; or any other similar relief shall be granted under any
applicable federal or state law; or (ii) an involuntary case shall be commenced
against Company or any of its Subsidiaries under the Bankruptcy Code or under
any other applicable bankruptcy, insolvency or similar law now or hereafter in
effect; or a decree or order of a court having jurisdiction in the premises for
the appointment of a receiver, liquidator, sequestrator, trustee, custodian or
other officer having similar powers over Company or any of its Subsidiaries, or
over all or a substantial part of its property, shall have been entered; or
there shall have occurred the involuntary appointment of an interim receiver,
trustee or other custodian of Company or any of its Subsidiaries for all or a
substantial part of its property; or a warrant of attachment, execution or
similar process shall have been issued against any substantial part of the
property of Company or any of its Subsidiaries, and any such event described in
this clause (ii) shall continue for 60 days unless dismissed, bonded or
discharged; or
8.7 VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC..
(i) Company or any of its Subsidiaries shall have an order for relief
entered with respect to it or commence a voluntary case under the Bankruptcy
Code or under any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect, or shall consent to the entry of an order for relief in an
involuntary case, or to the conversion of an involuntary case to a voluntary
case, under any such law, or shall consent to the appointment of or taking
possession by a receiver, trustee or other custodian for all or a substantial
part of its property; or Company or any of its Subsidiaries shall make any
assignment for the benefit of creditors; or
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(ii) Company or any of its Subsidiaries shall be unable, or shall fail
generally, or shall admit in writing its inability, to pay its debts as such
debts become due; or the Board of Directors of Company or any of its
Subsidiaries (or any committee thereof) shall adopt any resolution or otherwise
authorize any action to approve any of the actions referred to in clause (i)
above or this clause (ii); or
8.8 JUDGMENTS AND ATTACHMENTS.
Any money judgment, writ or warrant of attachment or similar process
involving (i) in any individual case an amount in excess of $1,000,000 or (ii)
in the aggregate at any time an amount in excess of $3,000,000 shall be entered
or filed against Company or any of its Subsidiaries or any of their respective
assets and shall remain undischarged, unvacated, unbonded or unstayed for, and
Company and its insurance carrier are unable to agree that such judgment, writ
or attachment is covered by insurance within, a period of 60 days (or in any
event later than five days prior to the date of any proposed sale thereunder);
PROVIDED that the foregoing shall not constitute an Event of Default if and to
the extent that the same shall have been caused by the failure of Administrative
Agent to give any consent pursuant to Section 7.3(vi); or
8.9 DISSOLUTION.
Any order, judgment or decree shall be entered against Company or any
of its Subsidiaries decreeing the dissolution or split up of Company or that
Subsidiary and such order shall remain undischarged or unstayed for a period in
excess of 30 days unless the same shall not constitute a Material Adverse
Effect; or
8.10 EMPLOYEE BENEFIT PLANS
There shall occur one or more ERISA Events which individually or in the
aggregate results in or might reasonably be expected to result in a Material
Adverse Effect; or there shall exist an amount of unfunded benefit liabilities
(as defined in Section 4001(a)(18) of ERISA), individually or in the aggregate
for all Pension Plans (excluding for purposed of such computation any Pension
Plans with respect to which assets exceed benefit liabilities), which exceeds
$3,000,000; or
8.11 MATERIAL ADVERSE EFFECT.
Any event or change shall occur that has caused or evidences, either in
any case or in the aggregate, a Material Adverse Effect; or
8.12 FAILURE OF SECURITY; REPUDIATION OF OBLIGATIONS.
At any time after the execution and delivery thereof, (i) any
Collateral Document shall cease to be in full force and effect (other than by
reason of a release of Collateral thereunder in accordance with the terms hereof
or thereof, the satisfaction in full of the Obligations or any other termination
of such Collateral Document in accordance with the terms hereof or thereof) or
shall be declared null and void, or Administrative Agent shall not have or shall
cease to have a valid and perfected First Priority Lien in any Collateral
purported to be covered thereby, in each
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case for any reason other than the failure of Administrative Agent or any Lender
to take any action within its control, or (ii) Company shall contest the
validity or enforceability of any Loan Document in writing or deny in writing
that it has any further liability, including with respect to future advances by
Lenders, under any Loan Document to which it is a party; or
8.13 CHANGE IN CONTROL.
Any Person or any two or more Persons acting in concert shall have
acquired beneficial ownership (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission under the Exchange Act), directly or
indirectly, of Securities of Company (or other Securities convertible into such
Securities) representing 35% or more of the combined voting power of all
Securities of Company entitled to vote in the election of directors, other than
(i) Securities held by any Person subject to any restriction preventing the
voting of such Securities for more than a minority (or which by their terms have
the power to elect less than a majority) of directors on Company's Board of
Directors and (ii) Securities having such power only by reason of the happening
of a contingency PROVIDED, that the same shall not constitute an Event of
Default if Requisite Lenders shall have consented thereto:
THEN (i) upon the occurrence of any Event of Default described in subsection 8.6
or 8.7, each of (a) the unpaid principal amount of and accrued interest on the
Loans Against Imports, (b) an amount equal to the maximum amount that may at any
time be drawn under all Documentary Credits then outstanding (whether or not any
beneficiary under any such Documentary Credit shall have presented, or shall be
entitled at such time to present, the drafts or other documents or certificates
required to draw under such Documentary Credit), and (c) all other Obligations
shall automatically become immediately due and payable, without presentment,
demand, protest or other requirements of any kind, all of which are hereby
expressly waived by Company, and the obligation of each Lender to make any Loan
Against Imports, the obligation of the Issuing Lender to issue any Documentary
Credit and the right of any Lender to issue any Standby Documentary Credit
hereunder shall thereupon terminate, and (ii) upon the occurrence and during the
continuation of any other Event of Default, the Issuing Lender shall, upon the
written request or with the written consent of Requisite Lenders, by written
notice to Company, declare all or any portion of the amounts described in
clauses (a) through (c) above to be, and the same shall forthwith become,
immediately due and payable, and the obligation of each Lender to make any Loan
Against Imports, the obligation of the Issuing Lender to issue any Documentary
Credit and the right of any Lender to issue any Documentary Credit hereunder
shall thereupon terminate; PROVIDED that the foregoing shall not affect in any
way the obligations of Lenders under subsection 3.3C(i).
Any amounts described in clause (b) above, when received by
Administrative Agent, shall be held by Administrative Agent pursuant to the
terms of the Company Security Agreement and shall be applied as therein
provided.
Notwithstanding anything contained in the second preceding paragraph,
if at any time within 60 days after an acceleration of the Loans Against Imports
pursuant to clause (ii) of such paragraph Company shall pay all arrears of
interest and all payments on account of principal which shall have become due
otherwise than as a result of such acceleration (with interest on principal and,
to the extent permitted by law, on overdue interest, at the rates specified in
this
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Agreement) and all Events of Default and Potential Events of Default (other than
non-payment of the principal of and accrued interest on the Loans Against
Imports, in each case which is due and payable solely by virtue of acceleration)
shall be remedied or waived pursuant to subsection 10.6, then Requisite Lenders,
by written notice to Company, may at their option rescind and annul such
acceleration and its consequences; but such action shall not affect any
subsequent Event of Default or Potential Event of Default or impair any right
consequent thereon. The provisions of this paragraph are intended merely to bind
Lenders to a decision which may be made at the election of Requisite Lenders and
are not intended, directly or indirectly, to benefit Company, and such
provisions shall not at any time be construed so as to grant Company the right
to require Lenders to rescind or annul any acceleration hereunder or to preclude
Administrative Agent or Lenders from exercising any of the rights or remedies
available to them under any of the Loan Documents, even if the conditions set
forth in this paragraph are met.
SECTION 9. ADMINISTRATIVE AGENT
9.1 APPOINTMENT.
A. APPOINTMENT OF ADMINISTRATIVE AGENT. The Trade Bank is hereby
appointed Administrative Agent hereunder and under the other Loan Documents and
each Lender hereby authorizes Administrative Agent to act as its agent in
accordance with the terms of this Agreement and the other Loan Documents.
Administrative Agent agrees to act upon the express conditions contained in this
Agreement and the other Loan Documents, as applicable. The provisions of this
Section 9 are solely for the benefit of Administrative Agent and Lenders and
Company shall have no rights as a third party beneficiary of any of the
provisions hereof. In performing its functions and duties under this Agreement,
Administrative Agent shall act solely as an agent of Lenders and does not assume
and shall not be deemed to have assumed any obligation towards or relationship
of agency or trust with or for Company or any of its Subsidiaries.
B. APPOINTMENT OF SUPPLEMENTAL COLLATERAL AGENTS. It is the purpose of
this Agreement and the other Loan Documents that there shall be no violation of
any law of any jurisdiction denying or restricting the right of banking
corporations or associations to transact business as agent or trustee in such
jurisdiction. It is recognized that in case of litigation under this Agreement
or any of the other Loan Documents, and in particular in case of the enforcement
of any of the Loan Documents, or in case Administrative Agent deems that by
reason of any present or future law of any jurisdiction it may not exercise any
of the rights, powers or remedies granted herein or in any of the other Loan
Documents or take any other action which may be desirable or necessary in
connection therewith, it may be necessary that Administrative Agent appoint an
additional individual or institution as a separate trustee, co-trustee,
collateral agent or collateral co-agent (any such additional individual or
institution being referred to herein individually as a "SUPPLEMENTAL COLLATERAL
AGENT" and collectively as "SUPPLEMENTAL COLLATERAL AGENTS").
In the event that Administrative Agent appoints a Supplemental
Collateral Agent with respect to any Collateral, (i) each and every right,
power, privilege or duty expressed or intended by this Agreement or any of the
other Loan Documents to be exercised by or vested in or conveyed to
Administrative Agent with respect to such Collateral shall be exercisable by and
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vest in such Supplemental Collateral Agent to the extent, and only to the
extent, necessary to enable such Supplemental Collateral Agent to exercise such
rights, powers and privileges with respect to such Collateral and to perform
such duties with respect to such Collateral, and every covenant and obligation
contained in the Loan Documents and necessary to the exercise or performance
thereof by such Supplemental Collateral Agent shall run to and be enforceable by
either Administrative Agent or such Supplemental Collateral Agent, and (ii) the
provisions of this Section 9 and of subsections 10.2 and 10.3 that refer to
Administrative Agent shall inure to the benefit of such Supplemental Collateral
Agent and all references therein to Administrative Agent shall be deemed to be
references to Administrative Agent and/or such Supplemental Collateral Agent, as
the context may require.
Should any instrument in writing from Company be required by any
Supplemental Collateral Agent so appointed by Administrative Agent for more
fully and certainly vesting in and confirming to him or it such rights, powers,
privileges and duties, Company shall execute, acknowledge and deliver any and
all such instruments promptly upon request by Administrative Agent. In case any
Supplemental Collateral Agent, or a successor thereto, shall die, become
incapable of acting, resign or be removed, all the rights, powers, privileges
and duties of such Supplemental Collateral Agent, to the extent permitted by
law, shall vest in and be exercised by Administrative Agent until the
appointment of a new Supplemental Collateral Agent.
9.2 POWERS AND DUTIES; GENERAL IMMUNITY.
X. XXXXXX; DUTIES SPECIFIED. Each Lender irrevocably authorizes
Administrative Agent to take such action on such Lender's behalf and to exercise
such powers, rights and remedies hereunder and under the other Loan Documents as
are specifically delegated or granted to Administrative Agent by the terms
hereof and thereof, together with such powers, rights and remedies as are
reasonably incidental thereto. Administrative Agent shall have only those duties
and responsibilities that are expressly specified in this Agreement and the
other Loan Documents. Administrative Agent may exercise such powers, rights and
remedies and perform such duties by or through its agents or employees.
Administrative Agent shall not have, by reason of this Agreement or any of the
other Loan Documents, a fiduciary relationship in respect of any Lender; and
nothing in this Agreement or any of the other Loan Documents, expressed or
implied, is intended to or shall be so construed as to impose upon
Administrative Agent any obligations in respect of this Agreement or any of the
other Loan Documents except as expressly set forth herein or therein.
B. NO RESPONSIBILITY FOR CERTAIN MATTERS. Administrative Agent shall
not be responsible to any Lender for the execution, effectiveness, genuineness,
validity, enforceability, collectibility or sufficiency of this Agreement or any
other Loan Document or for any representations, warranties, recitals or
statements made herein or therein or made in any written or oral statements or
in any financial or other statements, instruments, reports or certificates or
any other documents furnished or made by Administrative Agent to Lenders or by
or on behalf of Company to Administrative Agent or any Lender in connection with
the Loan Documents and the transactions contemplated thereby or for the
financial condition or business affairs of Company or any other Person liable
for the payment of any Obligations, nor shall Administrative Agent be required
to ascertain or inquire as to the performance or observance of any of the terms,
conditions, provisions, covenants or agreements contained in any of the Loan
Documents or as to
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the use of the proceeds of the Loans or the use of the Standby Documentary
Credits or as to the existence or possible existence of any Event of Default or
Potential Event of Default. Anything contained in this Agreement to the contrary
notwithstanding, Administrative Agent shall not have any liability arising from
confirmations of the amount of outstanding Loans, the Standby Documentary Credit
Usage or the component amounts thereof.
C. EXCULPATORY PROVISIONS. Neither Administrative Agent nor any of its
officers, directors, employees or agents shall be liable to Lenders for any
action taken or omitted by Administrative Agent under or in connection with any
of the Loan Documents except to the extent caused by Administrative Agent's
gross negligence or willful misconduct. Administrative Agent shall be entitled
to refrain from any act or the taking of any action (including the failure to
take an action) in connection with this Agreement or any of the other Loan
Documents or from the exercise of any power, discretion or authority vested in
it hereunder or thereunder unless and until Administrative Agent shall have
received instructions in respect thereof from Requisite Lenders (or such other
Lenders as may be required to give such instructions under subsection 10.6) and,
upon receipt of such instructions from Requisite Lenders (or such other Lenders,
as the case may be), Administrative Agent shall be entitled to act or (where so
instructed) refrain from acting, or to exercise such power, discretion or
authority, in accordance with such instructions. Without prejudice to the
generality of the foregoing, (i) Administrative Agent shall be entitled to rely,
and shall be fully protected in relying, upon any communication, instrument or
document believed by it to be genuine and correct and to have been signed or
sent by the proper person or persons, and shall be entitled to rely and shall be
protected in relying on opinions and judgments of attorneys (who may be
attorneys for Company and its Subsidiaries), accountants, experts and other
professional advisors selected by it; and (ii) no Lender shall have any right of
action whatsoever against Administrative Agent as a result of Administrative
Agent acting or (where so instructed) refraining from acting under this
Agreement or any of the other Loan Documents in accordance with the instructions
of Requisite Lenders (or such other Lenders as may be required to give such
instructions under subsection 10.6).
D. ADMINISTRATIVE AGENT ENTITLED TO ACT AS LENDER. The agency hereby
created shall in no way impair or affect any of the rights and powers of, or
impose any duties or obligations upon, Administrative Agent in its individual
capacity as a Lender hereunder. With respect to its participation in the Loans
Against Imports and the Documentary Credits, Administrative Agent shall have the
same rights and powers hereunder as any other Lender and may exercise the same
as though it were not performing the duties and functions delegated to it
hereunder, and the term "Lender" or "Lenders" or any similar term shall, unless
the context clearly otherwise indicates, include Administrative Agent in its
individual capacity. Administrative Agent and its Affiliates may accept deposits
from, lend money to and generally engage in any kind of banking, trust,
financial advisory or other business with Company or any of its Affiliates as if
it were not performing the duties specified herein, and may accept fees and
other consideration from Company for services in connection with this Agreement
and otherwise without having to account for the same to Lenders.
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9.3 REPRESENTATIONS AND WARRANTIES; NO RESPONSIBILITY FOR APPRAISAL OF
CREDITWORTHINESS.
Each Lender represents and warrants that it has made its own
independent investigation of the financial condition and affairs of Company and
its Subsidiaries in connection with the making of the Loans Against Imports and
the issuance of Documentary Credits hereunder and that it has made and shall
continue to make its own appraisal of the creditworthiness of Company and its
Subsidiaries. Administrative Agent shall not have any duty or responsibility,
either initially or on a continuing basis, to make any such investigation or any
such appraisal on behalf of Lenders or to provide any Lender with any credit or
other information with respect thereto, whether coming into its possession
before the making of the Loans Against Imports or at any time or times
thereafter, and Administrative Agent shall not have any responsibility with
respect to the accuracy of or the completeness of any information provided to
Lenders.
9.4 RIGHT TO INDEMNITY.
Each Lender, in proportion to its Pro Rata Share, severally agrees to
indemnify Administrative Agent, to the extent that Administrative Agent shall
not have been reimbursed by Company, for and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including counsel fees and disbursements) or disbursements of any kind
or nature whatsoever which may be imposed on, incurred by or asserted against
Administrative Agent in exercising its powers, rights and remedies or performing
its duties hereunder or under the other Loan Documents or otherwise in its
capacity as Administrative Agent in any way relating to or arising out of this
Agreement or the other Loan Documents; PROVIDED that no Lender shall be liable
for any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from
Administrative Agent's gross negligence or willful misconduct. If any indemnity
furnished to Administrative Agent for any purpose shall, in the opinion of
Administrative Agent, be insufficient or become impaired, Administrative Agent
may call for additional indemnity and cease, or not commence, to do the acts
indemnified against until such additional indemnity is furnished.
9.5 SUCCESSOR ADMINISTRATIVE AGENT.
Administrative Agent may resign at any time by giving 30 days' prior
written notice thereof to Lenders and Company, and Administrative Agent may be
removed at any time with or without cause by an instrument or concurrent
instruments in writing delivered to Company and Administrative Agent and signed
by Requisite Lenders. Upon any such notice of resignation or any such removal,
Requisite Lenders shall have the right, upon five Business Days' notice to
Company, to appoint a successor Administrative Agent. Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor Administrative
Agent, that successor Administrative Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring or
removed Administrative Agent and the retiring or removed Administrative Agent
shall be discharged from its duties and obligations under this Agreement. After
any retiring or removed Administrative Agent's resignation or removal hereunder
as Administrative Agent, the provisions of this Section 9 shall inure to its
benefit as to
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any actions taken or omitted to be taken by it while it was Administrative Agent
under this Agreement.
9.6 COLLATERAL DOCUMENTS.
Each Lender hereby further authorizes Administrative Agent, on behalf
of and for the benefit of Lenders, to enter into the Collateral Document as
secured party, and each Lender agrees to be bound by the terms of each
Collateral Document; PROVIDED that Administrative Agent shall not (i) enter into
or consent to any material amendment, modification, termination or waiver of any
provision contained in any Collateral Document or (ii) release any Collateral
(except as otherwise expressly permitted or required pursuant to the terms of
this Agreement or the applicable Collateral Document), in each case without the
prior consent of Requisite Lenders (or, if required pursuant to subsection 10.6,
all Lenders); PROVIDED FURTHER, HOWEVER, that, without further written consent
or authorization from Lenders, Administrative Agent may execute any documents or
instruments necessary to release any Lien encumbering any item of Collateral
that is the subject of a sale or other disposition of assets permitted by this
Agreement or to which Requisite Lenders have otherwise consented. Anything
contained in any of the Loan Documents to the contrary notwithstanding, Company,
Administrative Agent and each Lender hereby agree that (x) no Lender shall have
any right individually to realize upon any of the Collateral under any
Collateral Document, it being understood and agreed that all powers, rights and
remedies under the Collateral Documents may be exercised solely by
Administrative Agent for the benefit of Lenders in accordance with the terms
thereof, and (y) in the event of a foreclosure by Administrative Agent on any of
the Collateral pursuant to a public or private sale, Administrative Agent or any
Lender may be the purchaser of any or all of such Collateral at any such sale
and Administrative Agent, as agent for and representative of Lenders (but not
any Lender or Lenders in its or their respective individual capacities unless
Requisite Lenders shall otherwise agree in writing) shall be entitled, for the
purpose of bidding and making settlement or payment of the purchase price for
all or any portion of the Collateral sold at any such public sale, to use and
apply any of the Obligations as a credit on account of the purchase price for
any collateral payable by Administrative Agent at such sale.
SECTION 10. MISCELLANEOUS
10.1 ASSIGNMENTS AND PARTICIPATIONS IN LOANS AGAINST IMPORTS AND
DOCUMENTARY CREDITS.
A. GENERAL. Subject to subsection 10.1B, each Lender shall have the
right at any time to (i) sell, assign or transfer to any Eligible Assignee, or
(ii) sell participations to any Person in, all or any part of its Commitments or
any Loan or Loans Against Imports made by it or its Documentary Credits or
participations therein or any other interest herein or in any other Obligations
owed to it; provided that no such sale, assignment, transfer or participation
shall, without the consent of Company, require Company to file a registration
statement with the Securities and Exchange Commission or apply to qualify such
sale, assignment, transfer or participation under the securities laws of any
state; provided, further that no such sale, assignment or transfer described in
clause (i) above shall be effective unless and until an Assignment Agreement
effecting such sale, assignment or transfer shall have been accepted by
Administrative Agent as provided in subsection 10.1B(ii); and provided, further
that no such
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sale, assignment, transfer or participation of any Documentary Credit or any
participation therein may be made separately from a sale, assignment, transfer
or participation of a corresponding interest in the Commitments and the Loans
Against Imports of the Lender effecting such sale, assignment, transfer or
participation. Except as otherwise provided in this subsection 10.1, no Lender
shall, as between Company and such Lender, be relieved of any of its obligations
hereunder as a result of any sale, assignment or transfer of, or any granting of
participations in, all or any part of its Commitments or the Loans Against
Imports, the Documentary Credits or participations therein, or the other
Obligations owed to such Lender.
B. ASSIGNMENTS
(i) AMOUNTS AND TERMS OF ASSIGNMENTS. Each Commitment, Loan
Against Imports, Documentary Credit or participation therein, or other
Obligation may (a) be assigned in any fixed amount to another Lender,
or to an Affiliate of the assigning Lender or another Lender, with the
giving of notice to Company and Administrative Agent or (b) be
assigned in an aggregate amount (which amount shall be fixed and not
varying) of not less than $5,000,000 (or such lesser amount as shall
constitute the aggregate amount of the Commitment, Loans Against
Imports, Documentary Credits and participations therein, and other
Obligations of the assigning Lender) to any other Eligible Assignee
with the giving of notice to Company and with the consent of
Administrative Agent (which consent of Administrative Agent shall not
be unreasonably withheld or delayed). To the extent of any such
assignment in accordance with either clause (a) or (b) above, the
assigning Lender shall be relieved of its obligations with respect to
its Commitments, Loans Against Imports, Documentary Credits or
participations therein, or other Obligations or the portion thereof so
assigned. The parties to each such assignment shall execute and
deliver to Administrative Agent, for its acceptance, an Assignment
Agreement, together with a processing fee of $2,000. Upon such
execution, delivery and acceptance, from and after the effective date
specified in such Assignment Agreement, (y) the assignee thereunder
shall be a party hereto and, to the extent that rights and obligations
hereunder have been assigned to it pursuant to such Assignment
Agreement, shall have the rights and obligations of a Lender hereunder
and (z) the assigning Lender thereunder shall, to the extent that
rights and obligations hereunder have been assigned by it pursuant to
such Assignment Agreement, relinquish its rights (other than any
rights which survive the termination of this Agreement under
subsection 10.9B) and be released from its obligations under this
Agreement (and, in the case of an Assignment Agreement covering all or
the remaining portion of an assigning Lender's rights and obligations
under this Agreement, such Lender shall cease to be a party hereto);
provided that, anything contained in any of the Loan Documents to the
contrary notwithstanding, Xxxxx Fargo shall continue to have all
rights and obligations of the Issuing Lender with respect to all
Documentary Credits. The Commitments hereunder shall be modified to
reflect the Commitments of such assignee and any remaining Commitments
of such assigning Lender and, if any such assignment occurs after the
issuance of the Notes hereunder, the assigning Lender shall, upon the
effectiveness of such assignment or as promptly thereafter as
practicable, surrender its Note to Administrative Agent for
cancellation, and thereupon new Notes shall be issued to the assignee
and/or to the assigning Lender, substantially in the form of EXHIBIT V
annexed hereto with appropriate insertions, to reflect the new
Commitments of the assignee and/or the assigning Lender.
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(ii) ACCEPTANCE BY ADMINISTRATIVE AGENT. Upon its receipt of an
Assignment Agreement executed by an assigning Lender and an assignee
representing that it is an Eligible Assignee, together with the
processing fee referred to in subsection 10.1B(i) and any forms,
certificates or other evidence with respect to United States federal
income tax withholding matters that such assignee may be required to
deliver to Administrative Agent pursuant to subsection 2.7B(iii)(a),
Administrative Agent shall, if Administrative Agent has consented to
the assignment evidenced thereby (to the extent such consent is
required pursuant to subsection 10.1B(i)), (a) accept such Assignment
Agreement by executing a counterpart thereof as provided therein
(which acceptance shall evidence any required consent of
Administrative Agent to such assignment) and (c) give prompt notice
thereof to Company. Administrative Agent shall maintain a copy of each
Assignment Agreement delivered to and accepted by it as provided in
this subsection 10.1B(ii).
C. PARTICIPATIONS. The holder of any participation, other than an
Affiliate of the Lender granting such participation, shall not be entitled to
require such Lender to take or omit to take any action hereunder except action
directly affecting (i) the extension of the regularly scheduled maturity of any
portion of the principal amount of or interest on any Loan Against Imports
allocated to such participation or (ii) a reduction of the principal amount of
or the rate of interest payable on any Loan Against Imports allocated to such
participation, in each case to the extent of such participation, and all amounts
payable by Company hereunder (including amounts payable to such Lender pursuant
to subsections 2.6D and 2.7) shall be determined as if such Lender had not sold
such participation. Company and each Lender hereby acknowledge and agree that,
solely for purposes of subsections 10.4 and 10.5, (a) any participation will
give rise to a direct obligation of Company to the participant and (b) the
participant shall be considered to be a "Lender".
D. ASSIGNMENTS TO FEDERAL RESERVE BANKS. In addition to the
assignments and participations permitted under the foregoing provisions of this
subsection 10.1, any Lender may assign and pledge all or any portion of its
Loans Against Imports, the other Obligations owed to such Lender, and its Note
to any Federal Reserve Bank as collateral security pursuant to Regulation A of
the Board of Governors of the Federal Reserve System and any operating circular
issued by such Federal Reserve Bank; provided that (i) no Lender shall, as
between Company and such Lender, be relieved of any of its obligations hereunder
as a result of any such assignment and pledge and (ii) in no event shall such
Federal Reserve Bank be considered to be a "Lender" or be entitled to require
the assigning Lender to take or omit to take any action hereunder.
E. INFORMATION. Each Lender may furnish any information concerning
Company and its Subsidiaries in the possession of that Lender from time to time
to assignees and participants (including prospective assignees and
participants), subject to subsection 10.19.
F. REPRESENTATIONS OF LENDERS. Each Lender listed on the signature
pages hereof hereby represents and warrants (i) that it is an Eligible Assignee
described in clause (A) of the definition thereof; (ii) that it has experience
and expertise in the making of loans such as the Loans Against Imports; and
(iii) that it will make its Loans Against Imports for its own account in the
ordinary course of its business and without a view to distribution of such Loans
Against Imports within the meaning of the Securities Act or the Exchange Act or
other federal securities
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laws (it being understood that, subject to the provisions of this subsection
10.1, the disposition of such Loans Against Imports or any interests therein
shall at all times remain within its exclusive control). Each Lender that
becomes a party hereto pursuant to an Assignment Agreement shall be deemed to
agree that the representations and warranties of such Lender contained in
Section 2(c) of such Assignment Agreement are incorporated herein by this
reference.
10.2 EXPENSES.
Whether or not the transactions contemplated hereby shall be
consummated, Company agrees to pay promptly (i) all the actual and reasonable
costs and expenses of preparation of the Loan Documents and any consents,
amendments, waivers or other modifications thereto; (ii) all the costs of
furnishing all opinions by counsel for Company (including any opinions requested
by Lenders as to any legal matters arising hereunder) and of Company's
performance of and compliance with all agreements and conditions on its part to
be performed or complied with under this Agreement and the other Loan Documents
including with respect to confirming compliance with insurance and solvency
requirements; (iii) the reasonable fees, expenses and disbursements of counsel
to Administrative Agent in connection with the negotiation, preparation,
execution and administration of the Loan Documents and any consents, amendments,
waivers or other modifications thereto and any other documents or matters
requested by Company; (iv) all the actual costs and reasonable expenses of
creating and perfecting Liens in favor of Administrative Agent on behalf of
Lenders pursuant to any Collateral Document, including filing and recording
fees, expenses and taxes, stamp or documentary taxes, search fees and reasonable
fees, expenses and disbursements of counsel to Administrative Agent and of
counsel providing any opinions that Administrative Agent or Requisite Lenders
may request in respect of the Collateral Documents or the Liens created pursuant
thereto; (v) the lesser of (a) $5,000 and (b) all the actual costs and
reasonable expenses (including the reasonable fees, expenses and disbursements
of any auditors, accountants or other consultants, advisors and agents employed
or retained by Administrative Agent or its counsel) of obtaining and reviewing
any audits or reports provided for under subsection 6.5C with respect to
Inventory and Accounts of Company and its Subsidiaries; (vi) the custody or
preservation of any of the Collateral; (vii) all other actual and reasonable
costs and expenses incurred by Administrative Agent in connection with the
negotiation, preparation and execution of the Loan Documents and any consents,
amendments, waivers or other modifications thereto and the transactions
contemplated thereby; and (viii) after the occurrence of an Event of Default,
all costs and expenses, including reasonable attorneys' fees (including
allocated costs of internal counsel) and costs of settlement, incurred by
Administrative Agent and Lenders in enforcing any Obligations of or in
collecting any payments due from Company hereunder or under the other Loan
Documents by reason of such Event of Default (including in connection with the
sale of or collection from, or other realization upon any of the Collateral) or
in connection with any refinancing or restructuring of the credit arrangements
provided under this Agreement in the nature of a "work-out" or pursuant to any
insolvency or bankruptcy proceedings. Such costs and expenses shall include
lockbox, wire transfer and other bank fees, and out-of-pocket expenses incurred
in connection with collateral examinations.
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10.3 INDEMNITY.
In addition to the payment of expenses pursuant to subsection 10.2,
whether or not the transactions contemplated hereby shall be consummated,
Company agrees to defend (subject to Indemnitees' selection of counsel),
indemnify, pay and hold harmless Administrative Agent and Lenders, and the
officers, directors, employees, agents and affiliates of Administrative Agent
and Lenders (collectively called the "INDEMNITEES"), from and against any and
all Indemnified Liabilities (as hereinafter defined); PROVIDED that Company
shall not have any obligation to any Indemnitee hereunder with respect to any
Indemnified Liabilities to the extent such Indemnified Liabilities arise solely
from the gross negligence or willful misconduct of that Indemnitee as determined
by a final judgment of a court of competent jurisdiction.
As used herein, "INDEMNIFIED LIABILITIES" means, collectively, any and
all liabilities, obligations, losses, damages (including natural resource
damages), penalties, actions, judgments, suits, claims, costs, whether direct,
indirect or consequential and whether based on any federal, state or foreign
laws, statutes, rules or regulations (including securities and commercial laws,
statutes, rules or regulations), on common law or equitable cause or on contract
or otherwise, that may be imposed on, incurred by, or asserted against any such
Indemnitee, in any manner relating to or arising out of this Agreement or the
other Loan Documents or the transactions contemplated hereby or thereby
(including Lenders' agreement to make the Loans Against Imports hereunder or the
use or intended use of the proceeds thereof or the issuance of Documentary
Credits hereunder or the use or intended use of any thereof, or any enforcement
of any of the Loan Documents (including any sale of, collection from, or other
realization upon any of the Collateral).
To the extent that the undertakings to defend, indemnify, pay and hold
harmless set forth in this subsection 10.3 may be unenforceable in whole or in
part because they are violative of any law or public policy, Company shall
contribute the maximum portion that it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all Indemnified Liabilities
incurred by Indemnitees or any of them.
10.4 SET-OFF.
In addition to any rights now or hereafter granted under applicable law
and not by way of limitation of any such rights, upon the occurrence of any
Event of Default each Lender is hereby authorized by Company at any time or from
time to time, without notice to Company or to any other Person, any such notice
being hereby expressly waived, to set off and to appropriate and to apply any
and all deposits (general or special, including Indebtedness evidenced by
certificates of deposit, whether matured or unmatured, but not including trust
accounts) and any other Indebtedness at any time held or owing by that Lender to
or for the credit or the account of Company against and on account of the
obligations and liabilities of Company to that Lender under this Agreement, the
Documentary Credits and participations therein and the other Loan Documents,
including all claims of any nature or description arising out of or connected
with this Agreement, the Documentary Credits and participations therein or any
other Loan Document, irrespective of whether or not (i) that Lender shall have
made any demand hereunder or (ii) the principal of or the interest on the Loans
Against Imports or any amounts in respect of the Documentary Credits or any
other amounts due hereunder shall have become due and payable
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pursuant to Section 8 and although said obligations and liabilities, or any of
them, may be contingent or unmatured.
10.5 RATABLE SHARING.
Lenders hereby agree among themselves that if any of them shall,
whether by voluntary payment (other than a voluntary prepayment of Loans Against
Imports made and applied in accordance with the terms of this Agreement), by
realization upon security, through the exercise of any right of set-off or
banker's lien, by counterclaims or cross action or by the enforcement of any
right under the Loan Documents or otherwise, or as adequate protection of a
deposit treated as cash collateral under the Bankruptcy Code, receive payment or
reduction of a proportion of the aggregate amount of principal, interest,
amounts payable in respect of Documentary Credits, fees and other amounts then
due and owing to that Lender hereunder or under the other Loan Documents
(collectively, the "AGGREGATE AMOUNTS DUE" to such Lender) which is greater than
the proportion received by any other Lender in respect of the Aggregate Amounts
Due to such other Lender, then the Lender receiving such proportionately greater
payment shall (i) notify Administrative Agent and each other Lender of the
receipt of such payment and (ii) apply a portion of such payment to purchase
participations (which it shall be deemed to have purchased from each seller of a
participation simultaneously upon the receipt by such seller of its portion of
such payment) in the Aggregate Amounts Due to the other Lenders so that all such
recoveries of Aggregate Amounts Due shall be shared by all Lenders in proportion
to the Aggregate Amounts Due to them; PROVIDED that if all or part of such
proportionately greater payment received by such purchasing Lender is thereafter
recovered from such Lender upon the bankruptcy or reorganization of Company or
otherwise, those purchases shall be rescinded and the purchase prices paid for
such participations shall be returned to such purchasing Lender ratably to the
extent of such recovery, but without interest. Company expressly consents to the
foregoing arrangement and agrees that any holder of a participation so purchased
may exercise any and all rights of banker's lien, set-off or counterclaims with
respect to any and all monies owing by Company to that holder with respect
thereto as fully as if that holder were owed the amount of the participation
held by that holder.
10.6 AMENDMENTS AND WAIVERS.
No amendment, modification, termination or waiver of any provision of
this Agreement or of the Notes, and no consent to any departure by Company
therefrom, shall in any event be effective without the written concurrence of
Requisite Lenders; PROVIDED that any such amendment, modification, termination,
waiver or consent which: increases the amount of any of the Commitments or
reduces the principal amount of any of the Loans Against Imports; increases the
maximum amount of Commercial Documentary Credits or Standby Documentary Credits;
changes in any manner the definition of "Pro Rata Share" or the definition of
"Requisite Lenders"; changes in any manner any provision of this Agreement
which, by its terms, expressly requires the approval or concurrence of all
Lenders; postpones the scheduled final maturity date of any of the Loans Against
Imports ; postpones the date on which any interest or any fees are payable;
decreases the interest rate borne by any of the Loans Against Imports (other
than any waiver of any increase in the interest rate applicable to any of the
Loans Against Imports pursuant to subsection 2.2E) or the amount of any fees
payable hereunder; increases the maximum duration of Interest Periods permitted
hereunder; reduces the amount or postpones the
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due date of any amount payable in respect of, or extends the required expiration
date of, any Documentary Credit; changes in any manner the obligations of
Lenders relating to the purchase of participations in Documentary Credits;
releases any Lien granted in favor of Administrative Agent with respect to all
or substantially all of the Collateral other than in accordance with the Loan
Documents or changes in any manner the provisions contained in subsection 8.1 or
this subsection 10.6 shall be effective only if evidenced by a writing signed by
or on behalf of all Lenders. In addition, (i) any amendment, modification,
termination or waiver of any of the provisions contained in Section 4 shall be
effective only if evidenced by a writing signed by or on behalf of
Administrative Agent and Requisite Lenders, (ii) no amendment, modification,
termination or waiver of any provision of any Note shall be effective without
the written concurrence of the Lender which is the holder of that Note, and
(iii) no amendment, modification, termination or waiver of any provision of
Section 9 or of any other provision of this Agreement which, by its terms,
expressly requires the approval or concurrence of Administrative Agent shall be
effective without the written concurrence of Administrative Agent.
Administrative Agent may, but shall have no obligation to, with the concurrence
of any Lender, execute amendments, modifications, waivers or consents on behalf
of that Lender. Any waiver or consent shall be effective only in the specific
instance and for the specific purpose for which it was given. No notice to or
demand on Company in any case shall entitle Company to any other or further
notice or demand in similar or other circumstances. Any amendment, modification,
termination, waiver or consent effected in accordance with this subsection 10.6
shall be binding upon each Lender at the time outstanding, each future Lender
and, if signed by Company, on Company.
10.7 INDEPENDENCE OF COVENANTS.
All covenants hereunder shall be given independent effect so that if a
particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or would otherwise be within
the limitations of, another covenant shall not avoid the occurrence of an Event
of Default or Potential Event of Default if such action is taken or condition
exists.
10.8 NOTICES.
Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served or sent by telefacsimile or United States mail or
overnight mail or courier service and shall be deemed to have been given when
delivered in person or by overnight mail or courier service, upon receipt of
telefacsimile, or three Business Days after depositing it in the United States
mail with postage prepaid and properly addressed; PROVIDED that notices to
Administrative Agent shall not be effective until received. For the purposes
hereof, the address of each party hereto shall be as set forth under such
party's name on the signature pages hereof or (i) as to Company and
Administrative Agent, such other address as shall be designated by such Person
in a written notice delivered to the other parties hereto and (ii) as to each
other party, such other address as shall be designated by such party in a
written notice delivered to Administrative Agent.
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10.9 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
A. All representations, warranties and agreements made herein shall
survive the execution and delivery of this Agreement and the making of the Loans
and the issuance of the Documentary Credits hereunder.
B. Notwithstanding anything in this Agreement or implied by law to the
contrary, the agreements of Company set forth in subsections 2.6D, 2.7, 3.5A,
10.2, 10.3 and 10.4 and the agreements of Lenders set forth in subsections 9.2C,
9.4 and 10.5 shall survive the payment of the Loans Against Imports, the
cancellation or expiration of the Documentary Credits and the reimbursement of
any amounts drawn thereunder, and the termination of this Agreement.
10.10 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of Administrative Agent or any Lender
in the exercise of any power, right or privilege hereunder or under any other
Loan Document shall impair such power, right or privilege or be construed to be
a waiver of any default or acquiescence therein, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other power, right or privilege. All rights and
remedies existing under this Agreement and the other Loan Documents are
cumulative to, and not exclusive of, any rights or remedies otherwise available.
10.11 MARSHALLING; PAYMENTS SET ASIDE.
Neither Administrative Agent nor any Lender shall be under any
obligation to marshal any assets in favor of Company or any other party or
against or in payment of any or all of the Obligations. To the extent that
Company makes a payment or payments to Administrative Agent or Lenders (or to
Administrative Agent for the benefit of Lenders), or Administrative Agent or
Lenders enforce any security interests or exercise their rights of setoff, and
such payment or payments or the proceeds of such enforcement or setoff or any
part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to a trustee, receiver or
any other party under any bankruptcy law, any other state or federal law, common
law or any equitable cause, then, to the extent of such recovery, the obligation
or part thereof originally intended to be satisfied, and all Liens, rights and
remedies therefor or related thereto, shall be revived and continued in full
force and effect as if such payment or payments had not been made or such
enforcement or setoff had not occurred.
10.12 SEVERABILITY.
In case any provision in or obligation under this Agreement or the
Notes shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
10.13 OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS' RIGHTS.
The obligations of Lenders hereunder are several and no Lender shall be
responsible for the obligations or Commitments of any other Lender hereunder.
Nothing contained herein or in
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any other Loan Document, and no action taken by Lenders pursuant hereto or
thereto, shall be deemed to constitute Lenders as a partnership, an association,
a joint venture or any other kind of entity. The amounts payable at any time
hereunder to each Lender shall be a separate and independent debt, and each
Lender shall be entitled to protect and enforce its rights arising out of this
Agreement and it shall not be necessary for any other Lender to be joined as an
additional party in any proceeding for such purpose.
10.14 HEADINGS.
Section and subsection headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
10.15 APPLICABLE LAW.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF CALIFORNIA (INCLUDING SECTION 1646.5 OF THE
CIVIL CODE OF THE STATE OF CALIFORNIA), WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES.
10.16 SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the parties
hereto and the successors and assigns of Lenders (it being understood that
Lenders' rights of assignment are subject to subsection 10.1). Neither Company's
rights or obligations hereunder nor any interest therein may be assigned or
delegated by Company without the prior written consent of all Lenders.
10.17 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
All judicial proceedings brought against Company arising out of or
relating to this Agreement or any other Loan Document, or any obligations
thereunder, may be brought in any state or federal court of competent
jurisdiction in the State of California, County and City of San Francisco. By
executing and delivering this Agreement, Company, for itself and in connection
with its properties, irrevocably (i) accepts generally and unconditionally the
nonexclusive jurisdiction and venue of such courts; (ii) waives any defense of
forum non conveniens; (iii) agrees that service of all process in any such
proceeding in any such court may be made by registered or certified mail, return
receipt requested, to Company at its address provided in accordance with
subsection 10.8; (iv) agrees that service as provided in clause (iii) above is
sufficient to confer personal jurisdiction over Company in any such proceeding
in any such court, and otherwise constitutes effective and binding service in
every respect; (v) agrees that Lenders retain the right to serve process in any
other manner permitted by law or to bring proceedings against Company in the
courts of any other jurisdiction; and (vi) agrees that the provisions of this
subsection 10.17 relating to jurisdiction and venue shall be binding and
enforceable to the fullest extent permissible under California Code of Civil
Procedure Section 410.40 or otherwise.
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10.18 WAIVER OF JURY TRIAL.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIMS OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY DEALINGS
BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE
LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of this waiver
is intended to be all-encompassing of any and all disputes that may be filed in
any court and that relate to the subject matter of this transaction, including
contract claims, tort claims, breach of duty claims and all other common law and
statutory claims. Each party hereto acknowledges that this waiver is a material
inducement to enter into a business relationship, that each has already relied
on this waiver in entering into this Agreement, and that each will continue to
rely on this waiver in their related future dealings. Each party hereto further
warrants and represents that it has reviewed this waiver with its legal counsel
and that it knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN
WAIVER SPECIFICALLY REFERRING TO THIS SUBSECTION 10.18 AND EXECUTED BY EACH OF
THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS
MADE HEREUNDER. In the event of litigation, this Agreement may be filed as a
written consent to a trial by the court.
10.19 CONFIDENTIALITY.
Each Lender shall hold all non-public information obtained pursuant to
the requirements of this Agreement which has been identified as confidential by
Company in accordance with such Lender's customary procedures for handling
confidential information of this nature and in accordance with safe and sound
banking practices, it being understood and agreed by Company that in any event a
Lender may make disclosures to Affiliates of such Lender or disclosures
reasonably required by any bona fide assignee, transferee or participant that
agrees for the benefit of Company to hold such information in accordance with
this subsection 10.19 in connection with the contemplated assignment or transfer
by such Lender of any Loans or any participations therein or disclosures
required or requested by any governmental agency or representative thereof or
pursuant to legal process; PROVIDED that, unless specifically prohibited by
applicable law or court order, each Lender shall notify Company of any request
by any governmental agency or representative thereof (other than any such
request in connection with any examination of the financial condition of such
Lender by such governmental agency) for disclosure of any such non-public
information prior to disclosure of such information; and PROVIDED, FURTHER that
in no event shall any Lender be obligated or required to return any materials
furnished by Company or any of its Subsidiaries.
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10.20 COUNTERPARTS; EFFECTIVENESS.
This Agreement and any amendments, waivers, consents or supplements
hereto or in connection herewith may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document. This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto and receipt by Company and
Administrative Agent of written or telephonic notification of such execution and
authorization of delivery thereof.
10.21 ARBITRATION.
A. ARBITRATION. Upon the demand of any party, any Dispute shall be
resolved by binding arbitration (except as set forth in subsection 10.21E) in
accordance with the terms of this Agreement. A "DISPUTE" shall mean any action,
dispute, claim or controversy of any kind, whether in contract or tort,
statutory or common law, legal or equitable, now existing or hereafter arising
under or in connection with, or in any way pertaining to, any of the Loan
Documents, or any past, present or future extensions of credit and other
activities, transactions or obligations of any kind related directly or
indirectly to any of the Loan Documents, including any of the foregoing arising
in connection with the exercise of any self-help, ancillary or other remedies
pursuant to any of the Loan Documents. Any party may by summary proceedings
bring an action in court to compel arbitration of a Dispute. Any party who fails
or refuses to submit to arbitration following a lawful demand by any other party
shall bear all costs and expenses incurred by such other party in compelling
arbitration of any Dispute.
B. GOVERNING RULES. Arbitration proceedings shall be administered by
the American Arbitration Association ("AAA") or such other administrator as the
parties shall mutually agree upon in accordance with the AAA Commercial
Arbitration Rules. All Disputes submitted to arbitration shall be resolved in
accordance with the Federal Arbitration Act (Title 9 of the United States Code),
notwithstanding any conflicting choice of law provision in any of the Loan
Documents. The arbitration shall be conducted at a location in California
selected by the AAA or other administrator. If there is any inconsistency
between the terms hereof and any such rules, the terms and procedures set forth
herein shall control. All statutes of limitation applicable to any Dispute shall
apply to any arbitration proceeding. All discovery activities shall be expressly
limited to matters directly relevant to the Dispute being arbitrated. Judgment
upon any award rendered in an arbitration may be entered in any court having
jurisdiction; provided, however, that nothing contained herein shall be deemed
to be a waiver by any party that is a bank of the protections afforded to it
under 12 U.S.C. ss.91 or any similar applicable state law.
C. NO WAIVER; PROVISIONAL REMEDIES, SELF-HELP AND FORECLOSURE. No
provision hereof shall limit the right of any party to exercise self-help
remedies such as setoff, foreclosure against or sale of any real or personal
property collateral or security, or to obtain provisional or ancillary remedies,
including injunctive relief, sequestration, attachment, garnishment or the
appointment of a receiver, from a court of competent jurisdiction before, after
or during the
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pendency of any arbitration or other proceeding. The exercise of any such remedy
shall not waive the right of any party to compel arbitration or reference
hereunder.
D. ARBITRATOR QUALIFICATIONS AND POWERS; AWARDS. Arbitrators must be
active members of the California State Bar or retired judges of the state or
federal judiciary of California, with expertise in the substantive laws
applicable to the subject matter of the Dispute. Arbitrators are empowered to
resolve Disputes by summary rulings in response to motions filed prior to the
final arbitration hearing. Arbitrators (i) shall resolve all Disputes in
accordance with the substantive law of the state of California, (ii) may grant
any remedy or relief that a court of the State of California could order or
grant within the scope hereof and such ancillary relief as is necessary to make
effective any award, and (iii) shall have the power to award recovery of all
costs and fees, to impose sanctions and to take such other actions as they deem
necessary to the same extent a judge could pursuant to the Federal Rules of
Civil Procedure, the California Rules of Civil Procedure or other applicable
law. Any Dispute in which the amount in controversy is $5,000,000 or less shall
be decided by a single arbitrator who shall not render an award of greater than
$5,000,000 (including damages, costs, fees and expenses). By submission to a
single arbitrator, each party expressly waives any right or claim to recover
more than $5,000,000. Any Dispute in which the amount in controversy exceeds
$5,000,000 shall be decided by majority vote of a panel of three arbitrators;
provided, however, that all three arbitrators must actively participate in all
hearings and deliberations.
E. JUDICIAL REVIEW. Notwithstanding anything herein to the contrary,
in any arbitration in which the amount in controversy exceeds $25,000,000, the
arbitrators shall be required to make specific, written findings of fact and
conclusions of law. In such arbitrations (i) the arbitrators shall not have the
power to make any award which is not supported by substantial evidence or which
is based on legal error, (ii) an award shall not be binding upon the parties
unless the findings of fact are supported by substantial evidence and the
conclusions of law are not erroneous under the substantive law of the State of
California, and (iii) the parties shall have in addition to the grounds referred
to in the Federal Arbitration Act for vacating, modifying or correcting an award
the right to judicial review of (a) whether the findings of fact rendered by the
arbitrators are supported by substantial evidence, and (b) whether the
conclusions of law are erroneous under the substantive law of the State of
California. Judgment confirming an award in such a proceeding may be entered
only if a court determines the award is supported by substantial evidence and
not based on legal error under the substantive law of the State of California.
F. MISCELLANEOUS. To the maximum extent practicable, the AAA, the
arbitrators and the parties shall take all action required to conclude any
arbitration proceeding within 180 days of the filing of the Dispute with the
AAA. No arbitrator or other party to an arbitration proceeding may disclose the
existence, content or results thereof, except for disclosures of information by
a party required in the ordinary course of its business, by applicable law or
regulation, or to the extent necessary to exercise any judicial review rights
set forth herein. If more than one agreement for arbitration by or between the
parties potentially applies to a Dispute, the arbitration provision most
directly related to the Loan Documents or the subject matter of the Dispute
shall control. This arbitration provision shall survive termination, amendment
or expiration of any of the Loan Documents, the Notes or any relationship
between the parties.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
COMPANY:
CYRK, INC.
By: ________________________________
Title: ________________________________
Notice Address:
________________________________
________________________________
________________________________
________________________________
LENDERS:
XXXXX FARGO HSBC TRADE BANK, N.A.
individually and as Administrative Agent
By: ________________________________
Title: ________________________________
Notice Address:
________________________________
________________________________
________________________________
________________________________
S-1
89
ISSUING LENDER:
XXXXX FARGO BANK, NATIONAL ASSOCIATION
By: ________________________________
Title: ________________________________
Notice Address:
________________________________
________________________________
________________________________
________________________________
S-2
90
SCHEDULE 2.1
LENDERS' COMMITMENTS AND PRO RATA SHARES
Pro Rata
Lender Commitment Share
------ ---------- -----
$ %
----------- -------
TOTAL $ 100%
