EXHIBIT 10.1
REVOLVING CREDIT AGREEMENT
GAMESTOP CORP.
Dated as of February 19, 2002
------------
FLEET NATIONAL BANK,
as Administrative Agent
UBS WARBURG LLC,
as Documentation Agent
AND
THE LENDING INSTITUTIONS PARTY TO THIS AGREEMENT
AND
FLEET SECURITIES, INC.,
as Arranger
TABLE OF CONTENTS
Section Title Page
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SECTION I - DEFINITIONS
1.1 Definitions................................................................1
1.2 Terms of General Application...............................................17
SECTION II - DESCRIPTION OF CREDIT
2. The Credit Facilities......................................................18
2.1 The Loans..................................................................18
2.2 Records; Notes.............................................................19
2.3 Conversion.................................................................20
2.4 Notice and Manner of Borrowing or
Conversion of Loans........................................................20
2.5 Commitment Fee.............................................................21
2.6 Fee Letter.................................................................21
2.7 Reduction of Total Commitment..............................................22
2.8 [Section Intentionally Omitted]............................................22
2.9 Duration of Interest Periods...............................................22
2.10 Interest Rates and Payments of Interest....................................22
2.11 Protective Provisions......................................................24
2.11.1 Inability to Determine Adjusted LIBOR Rate.................................24
2.11.2 Illegality.................................................................24
2.11.3 Additional Costs, etc......................................................24
2.11.4 Claims by Affected Banks;
Borrower's Rights to Replace Banks.........................................26
2.12 Capital Requirements.......................................................26
2.13 Payments and Prepayments of the Loans......................................27
2.14 Method of Payment; Withholding Tax Exemption...............................27
2.15 Default Rate Interest, etc.................................................30
2.16 Payments Not at End of Interest Period.....................................30
2.17 Computation of Interest and Fees; Maximum Interest.........................31
2.18 Letters of Credit..........................................................31
2.19 Letter of Credit Fees......................................................32
2.20 Interdependence of Borrower Affiliated Group...............................33
SECTION III - CONDITIONS OF LOANS
3.1 Conditions Precedent to Initial Revolving Credit Loan......................33
3.1.1 Loan Documents.............................................................34
3.1.2 Legality of Transactions...................................................34
3.1.3 Representations and Warranties.............................................34
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3.1.4 Performance, Consents, No Defaults, Litigation, etc........................34
3.1.5 Certified Copies of Charter Documents......................................34
3.1.6 Proof of Entity Action.....................................................35
3.1.7 Incumbency Certificate.....................................................35
3.1.8 Proceedings and Documents..................................................35
3.1.9 Good Standing, etc.........................................................35
3.1.10 Fees.......................................................................35
3.1.11 Legal Opinion..............................................................36
3.1.12 Financial Condition........................................................36
3.1.13 Security Documents; U.C.C. Search Reports;
Insurance; Patents, Trademarks and Copyrights..............................36
3.1.14 Solvency...................................................................37
3.1.15 Payoff and Release Letter..................................................37
3.1.16 Initial Public Offering....................................................37
3.2 Conditions Precedent to all Loans and Letters of Credit....................37
SECTION IV - REPRESENTATIONS AND WARRANTIES
4.1 Organization and Qualification.............................................38
4.2 Entity Authority...........................................................38
4.3 Valid Obligations..........................................................39
4.4 Consents or Approvals......................................................39
4.5 Title to Properties; Absence of Encumbrances...............................39
4.6 Material Contracts.........................................................40
4.7 Financial Statements.......................................................40
4.8 Changes....................................................................40
4.9 Defaults...................................................................40
4.10 Taxes......................................................................40
4.11 Litigation.................................................................41
4.12 Subsidiaries...............................................................41
4.13 Investment Company Act.....................................................41
4.14 Compliance with ERISA......................................................41
4.15 Environmental Matters......................................................41
4.16 Disclosure.................................................................41
4.17 Solvency...................................................................41
4.18 Compliance with Statutes, etc..............................................42
4.19 Capitalization.............................................................42
4.20 Labor Relations............................................................42
4.21 Certain Transactions.......................................................42
4.22 Restrictions on the Borrower Affiliated Group..............................43
4.23 Leases.....................................................................43
4.24 Franchises, Patents, Copyrights, etc.......................................43
4.25 Collateral.................................................................43
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SECTION V - AFFIRMATIVE COVENANTS
5.1 Financial Statements and other Reporting Requirements......................44
5.2 Conduct of Business........................................................46
5.3 Maintenance of Properties and Insurance....................................47
5.4 Taxes......................................................................47
5.5 Inspection by the Administrative Agent.....................................47
5.6 Maintenance of Books and Records...........................................48
5.7 Use of Proceeds............................................................48
5.8 Pension Plans..............................................................48
5.9 Fiscal Year................................................................48
5.10 Further Assurances.........................................................49
SECTION VI - NEGATIVE COVENANTS
6.1 Indebtedness...............................................................49
6.2 Sale and Leaseback.........................................................50
6.3 Encumbrances...............................................................50
6.4 Merger; Consolidation; Sale or Lease of Assets;
Acquisitions...............................................................52
6.5 Minimum Fixed Charge Coverage Ratio........................................52
6.6 Maximum Cash Flow Leverage Ratio...........................................53
6.7 Minimum Tangible Net Worth.................................................53
6.8 Maximum Capital Expenditures...............................................53
6.9 Restricted Payments........................................................53
6.10 Investments................................................................53
6.11 ERISA......................................................................53
6.12 Transactions with Affiliates...............................................54
6.13 Loans......................................................................54
6.14 Commitment.................................................................54
6.15 No Amendments to Certain Documents; No New
Agreements Requiring Breach of Loan Documents..............................54
SECTION VII - DEFAULTS
7.1 Events of Default..........................................................55
7.2 Remedies...................................................................58
SECTION VIII - CONCERNING THE ADMINISTRATIVE
AGENT AND THE BANKS
8.1 Appointment and Authorization..............................................58
8.2 Administrative Agent and Affiliates........................................59
8.3 Future Advances............................................................59
8.4 Delinquent Bank............................................................60
8.5 Payments...................................................................60
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8.6 Action by Administrative Agent.............................................61
8.7 Notification of Defaults and Events of Default.............................61
8.8 Consultation with Experts..................................................61
8.9 Liability of Administrative Agent..........................................62
8.10 Indemnification............................................................62
8.11 Independent Credit Decision................................................63
8.12 Successor Administrative Agent.............................................63
8.13 Other Agents...............................................................63
SECTION IX - MISCELLANEOUS
9.1 Notices....................................................................64
9.2 Expenses...................................................................65
9.3 Indemnification............................................................65
9.4 Set-Off....................................................................66
9.5 Term of Agreement..........................................................66
9.6 No Waivers.................................................................66
9.7 Governing Law..............................................................66
9.8 Amendments, Waivers, etc...................................................66
9.9 Binding Effect of Agreement................................................67
9.10 Successors and Assigns.....................................................67
9.11 Counterparts...............................................................68
9.12 Partial Invalidity.........................................................69
9.13 Captions...................................................................69
9.14 Waiver of Jury Trial.......................................................69
9.15 Waiver of Special Damages..................................................69
9.16 Entire Agreement...........................................................70
9.17 Replacement of Loan Documents, etc.........................................70
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EXHIBITS AND SCHEDULES
EXHIBIT A- Form of Revolving Credit Note
EXHIBIT B - Form of Notice of Borrowing or Conversion
EXHIBIT C - Indebtedness; Encumbrances
EXHIBIT D - Disclosure
EXHIBIT E - Form of Opinion of Counsel to the Borrower Affiliated Group
EXHIBIT F - Form of Report of Chief Financial Officer
EXHIBIT G - Form of Borrowing Base Report
EXHIBIT H - Form of Assignment and Assumption
EXHIBIT I - Form of Subsidiary Guaranty
EXHIBIT J - Form of Pledge Agreement
SCHEDULES
SCHEDULE 1 - Commitments and Commitment Percentages
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REVOLVING CREDIT AGREEMENT
Dated as of February 19, 2002
THIS
REVOLVING CREDIT AGREEMENT is made as of February 19, 2002, by and
among
GameStop Corp., a Delaware corporation having its principal place of
business and chief executive office at 0000 Xxxxxxx X. Xxxx Xxxxxx, Xxxxxxxxx,
Xxxxx 00000 (the "Borrower"), the lending institutions listed on Schedule 1 to
this Agreement, and the other lending institutions which may become parties
hereto pursuant to Section 9.10 (individually, a "Bank" and collectively, the
"Banks"), Fleet National Bank, as administrative agent for itself and each other
Bank (in such capacity, the "Administrative Agent"), and Fleet Securities, Inc.,
as arranger (the "Arranger").
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto hereby agree as follows:
SECTION I
DEFINITIONS
1.1. Definitions.
All capitalized terms used in this Agreement or in any other Loan
Document (as such terms are defined below), or in any certificate, report or
other document made or delivered pursuant to this Agreement (unless otherwise
defined therein), shall have the respective meanings assigned to them below:
Account and/or Accounts Receivable. As defined in Section 9-102(a)(2)
of the Uniform Commercial Code as in effect from time to time in the State of
New York.
Acquisition. See Section 6.4(c).
Adjusted LIBOR Rate. For any Interest Period, a rate per annum as
determined on the basis of the offered rates for deposits in Dollars, for a
period of time comparable to such Interest Period which appears on the Telerate
page 3750 as of 11:00 a.m. (London time) on the day that is two Business Days
preceding the first day of such Interest Period; provided, however, if the rate
described above does not appear on the Telerate System on any applicable
interest determination date, LIBOR shall be the rate (rounded upwards, if
necessary, to the nearest one hundred thousandth of a percentage point)
determined on the basis of the offered rates for deposits in Dollars for a
period of time comparable to such Interest Period which are offered to the
Administrative Agent by four major banks in the London interbank market at
approximately 11:00 a.m. (London time), on the day that is two Business Days
preceding the first day of such Interest Period as selected by the
Administrative Agent. The principal London office of each of the four major
London banks will be requested to provide a quotation of its Dollar deposit
offered rate to the
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Administrative Agent. If at least two such quotations are provided, the rate for
that date will be the arithmetic mean of the quotations. If fewer than two
quotations are provided as requested, the rate for that date will be determined
on the basis of the rates quoted for loans in Dollars to leading European banks
for a period of time comparable to such Interest Period offered by major banks
in
New York City at approximately 11:00 a.m. (
New York City time), on the day
that is two Business Days preceding the first day of such Interest Period. In
the event that the Administrative Agent is unable to obtain any such quotation
as provided above, it will be deemed that the Adjusted LIBOR Rate cannot be
determined. In the event that the Board of Governors of the Federal Reserve
System shall impose a Reserve Percentage with respect to LIBOR deposits of the
Administrative Agent, then for any period during which such Reserve Percentage
shall apply, the Adjusted LIBOR Rate shall be equal to the amount determined
above divided by an amount equal to one minus the Reserve Percentage.
Administrative Agent. Fleet National Bank, in its capacity as
Administrative Agent for the Banks under this Agreement and the other Loan
Documents, including (where the context so admits) any other Person or Persons
succeeding to the functions of the Administrative Agent pursuant to this
Agreement and the other Loan Documents.
Affected Bank. Any Bank that has suffered a loss or otherwise has a
claim for compensation from the Borrower or a right to be excused from
performing an obligation under any of Sections 2.11.2, 2.11.3, 2.12 or 2.14.
Affiliate. With reference to any Person, (i) any director or officer of
that Person, (ii) any other Person controlling, controlled by or under direct or
indirect common control with that Person (and if that Person is an individual,
any member of the immediate family (including parents, siblings, spouse,
children, stepchildren, nephews, nieces and grandchildren) of such individual
and any trust whose principal beneficiary is such individual or one or more
members of such immediate family and any Person who is controlled by any such
member or trust), (iii) any other Person directly or indirectly holding 10% or
more of any class of the capital stock or other equity interests (including
options, warrants, convertible securities and similar rights) of that Person,
(iv) any other Person 10% or more of any class of whose capital stock or other
equity interests (including options, warrants, convertible securities and
similar rights) is held directly or indirectly by that Person, and (v) any other
Person that possesses, directly or indirectly, power to direct or cause the
direction of management or policies (whether through ownership of securities or
partnership or other ownership interests, by contract or otherwise) of that
Person.
Agreement. This
Revolving Credit Agreement, as the same may be renewed,
extended, modified, supplemented or amended from time to time.
Applicable Authority. Any competent court or any governmental or other
regulatory body or official charged with the administration or the
interpretation of any law, treaty, statute, rule or regulation.
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Applicable Base Rate Margin. The Applicable Base Rate Margin is set
forth in Section 2.10(c).
Applicable LIBOR Margin. The Applicable LIBOR Margin is set forth in
Section 2.10(c).
Arranger. See preamble.
Assignment and Assumption. See Section 9.10(ii).
Availability. As at the date of determination, an amount equal to (a)
the lesser of the Total Commitment then in effect and the Borrowing Base, minus
(b) the aggregate principal amount of all Revolving Credit Loans then
outstanding, minus (c) the aggregate Stated Amount of Letters of Credit
outstanding, minus (d) the aggregate amount of all unreimbursed draws under
outstanding Letters of Credit (unless included as Revolving Credit Loans under
clause (b) above).
Banks. Collectively, (i) Fleet National Bank, and (ii) each of the
other Persons which may provide additional commitments and become a party to
this Agreement as a Bank hereunder, as shown on Schedule 1 as it may be updated
by the Administrative Agent from time to time.
Xxxxxx & Noble. Xxxxxx & Xxxxx, Inc., a Delaware corporation.
Base Rate. The greater of (a) the rate of interest publicly announced
from time to time by the Administrative Agent at its head office as its Base
Rate, and (b) the Federal Funds Effective Rate plus 1/2 of 1% per annum (rounded
upwards, if necessary, to the next 1/16 of 1%)
Borrower. See preamble.
Borrower Affiliated Group. Collectively, (i) the Borrower and (ii) each
of the Subsidiaries of the Borrower in existence from time to time.
Borrowing Base. At any date, an amount equal to 50% of the value of
Eligible Inventory.
Business Day. (i) For all purposes other than as covered by clause (ii)
below, any day other than a Saturday, Sunday or legal holiday on which banks in
Boston, Massachusetts and in
New York,
New York are open for the conduct of a
substantial part of their commercial banking business; and (ii) with respect to
all notices and determinations in connection with, and payments of principal and
interest on, LIBOR Loans, any day that is a Business Day described in clause (i)
and that is also a day on which trading takes place between banks in United
States dollar deposits in the London interbank market.
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Capital Expenditures. To the extent capitalized in accordance with
GAAP, any expenditure for fixed assets (both tangible and intangible), including
assets being constructed (whether or not completed), leasehold improvements,
capital leases under GAAP, installment purchases of machinery and equipment,
acquisitions of real estate and other similar expenditures including (i) in the
case of a purchase, the entire purchase price, whether or not paid during the
fiscal period in question, (ii) in the case of a Capitalized Lease, the
capitalized amount thereof (determined in accordance with GAAP) and (iii)
without duplication, expenditures in or from any construction-in-progress
account of any member of the Borrower Affiliated Group.
Capitalized Lease. Any lease of real property by a member of the
Borrower Affiliated Group as lessee which is shown as a liability on the
Consolidated balance sheet of the Borrower in accordance with GAAP.
Cash Flow Leverage Ratio. As of any date of calculation, for the
twelve-month period then ended, the ratio of (a) Consolidated Total Funded Debt
for such period to (b) Consolidated EBITDA for such period; provided that for
any period prior to the Borrower's initial public offering, such period shall be
included on a pro forma basis to give effect to the results of such offering
CERCLA. The Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as the same may from time to time be supplemented or
amended and remain in effect.
Change in Law. Any future applicable law or any change to any present
applicable law (which, in each case, includes treaties, statutes, rules and
regulations thereunder and the interpretation and application thereof by any
Applicable Authority), or any change in the interpretation or application of any
present applicable law by any Applicable Authority, and requests, directives,
instructions and notices at any time or from time to time hereafter made upon or
otherwise issued to any Bank or the Administrative Agent by any central bank or
other fiscal, monetary or other authority (whether or not having the force of
law).
Change of Control. The occurrence of any of the following: (i) Xxxxxx &
Noble shall cease to own, or to have the power to vote or direct the voting of,
voting securities constituting a majority of the voting power of the total
outstanding voting securities of the Borrower, (ii) Xxxxxx & Xxxxx shall cease,
in any other respect, to have effective control of the Borrower, or (iii) any
change in equity ownership of any Subsidiary of the Borrower, except as may be
expressly permitted by Section 6.4.
Closing Date. February 19, 2002 or such other mutually agreeable date
on which all of the conditions set forth in Section 3.1 have been satisfied and
any Loans are to be made hereunder.
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Code. The Internal Revenue Code of 1986 and the rules and regulations
thereunder, collectively, as the same may from time to time be supplemented or
amended and remain in effect.
Collateral. Collectively, all of the agreements, instruments,
contracts, property (real and personal, tangible and intangible), assets,
accounts, Accounts Receivable, Inventory, equipment, investment property,
patents, trademarks, copyrights, other intellectual property and monies, and all
of the income, proceeds and products of any thereof, under or in respect of
which the Administrative Agent or any Bank or any of the nominees, agents or
legal representatives of the Administrative Agent or any Bank shall have at the
relevant time of reference to the term "Collateral," any rights or interest as
security for the payment or performance of all or any part of the Obligations.
Commitment. At any time and with respect to any Bank, the amount set
forth for such Bank on Schedule 1 under the heading "Commitments," which amount
includes the aggregate of (a) the maximum amount of Revolving Credit Loans that
such Bank shall be committed to make to the Borrower plus (b) the maximum Stated
Amount of Letters of Credit which such Bank shall be committed to issue to, or
to participate in, in favor of the Borrower. Schedule 1 shall be updated by the
Administrative Agent from time to time to reflect any Commitment or portion
thereof which a Bank shall assume or relinquish upon an assignment pursuant to
Section 9.10(ii).
Commitment Fee. See Section 2.5.
Commitment Percentage. With respect to each Bank, the percentage set
forth on Schedule 1 hereto as such Bank's percentage of the aggregate Total
Commitment. Schedule 1 shall be updated by the Administrative Agent from time to
time to reflect any changes to the Commitment Percentages.
Consolidated. The term "Consolidated" shall have the meaning ascribed
to such term under GAAP.
Consolidated Cumulative Net Equity Raises. The aggregate net proceeds
received by the Borrower Affiliated Group, on a Consolidated basis, from all
sales of any equity securities (whether through a public offering, private
placement or otherwise) of any member of the Borrower Affiliated Group, on a
cumulative basis for the period beginning as of the Closing Date and ending as
of the date of determination, but excluding (i) the proceeds of the Borrower's
initial public offering required by Section 3.1.16, and (ii) any equity
contribution made by Xxxxxx & Noble in connection with the closing of the
initial public offering.
Consolidated Cumulative Net Income. The Consolidated net income (or
loss) of the Borrower Affiliated Group determined in accordance with GAAP and
determined on a cumulative basis for the period (a) beginning on the first day
of the first full fiscal quarter that begins after the Closing Date, and (b)
ending on the last day of the most recently completed fiscal quarter; and
provided, however, that there shall be excluded from such amount (i) the income
(or loss) of any Subsidiary that is not, directly or
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indirectly, a wholly-owned Subsidiary of the Borrower except to the extent of
the amount of dividends or other distributions actually paid during such period
by such Subsidiary to the Borrower or its directly or indirectly wholly-owned
Subsidiaries, and (ii) the income (or loss) of any Person prior to the date it
becomes a Subsidiary of the Borrower.
Consolidated Debt Amortization. For any period, the aggregate amount of
scheduled principal payments paid or required to be paid by the Borrower
Affiliated Group during such period with respect to any Indebtedness, but
excluding payments in respect of the Loans.
Consolidated Rent Expense. For any period, the aggregate rental
expenses payable by the Borrower on a Consolidated basis for such period
(including percentage rent) under any operating Lease classified as such under
GAAP but not including any amount included in the definition of "Consolidated
Total Interest Expense."
Consolidated Tangible Net Worth. As at any date of determination,
Stockholders' Equity less any intangible assets, with intangible assets defined
as goodwill, patents, trademarks, tradenames, lease rights, capitalized
pre-opening costs, franchises, organization costs and property rights.
Consolidated Total Funded Debt. As at any date of determination, on a
Consolidated basis for the Borrower Affiliated Group, and without duplication,
the sum of (i) the aggregate amount of Indebtedness for borrowed money
outstanding on such date (including, without limitation, the Loans outstanding
on such date), plus (ii) the Stated Amount of all outstanding Letters of Credit,
plus (iii) all Guaranties of Indebtedness for borrowed money or Capitalized
Leases of the Borrower Affiliated Group outstanding on such date.
Consolidated Total Interest Expense. For any period, all interest and
all amortization of debt discount and expense (including commitment fees, letter
of credit fees, balance deficiency fees and similar expenses) on all
Indebtedness of the Borrower on a Consolidated basis (including outstanding
letters of credit), paid or required to be paid, all as determined in accordance
with GAAP, together with all interest expense of the Borrower on a Consolidated
basis under Synthetic Leases. Computations of interest on a pro forma basis for
Indebtedness having a variable interest rate shall be calculated at the rate in
effect on the date of any determination.
Controlled Group. All trades or businesses (whether or not
incorporated) under common control that, together with the Borrower, are treated
as a single employer under Section 414(b) or 414(c) of the Code or Section 400l
of ERISA.
Covered Taxes. See Section 2.14(a)
Default. An event or condition that, but for the requirement that time
elapse or notice be given, or both, would constitute an Event of Default.
Delinquent Bank. See Section 8.4.
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Dollar or $. Dollars in lawful currency of the United States of
America.
Domestic Subsidiary. Any Subsidiary of the Borrower organized under the
laws of any jurisdiction of the United States of America.
EBITDA. In relation to the Borrower on a Consolidated basis for any
period, an amount equal to (a) the net income of the Borrower on a Consolidated
basis after deduction of all expenses, taxes and other proper charges,
determined in accordance with GAAP for such period, but, in determining such
Consolidated net income, any GAAP extraordinary gains shall be excluded from
such calculation, plus (b) the following to the extent deducted in computing
such Consolidated net income for such period: (i) Consolidated Total Interest
Expense for such period, (ii) Consolidated taxes on income for such period,
(iii) Consolidated depreciation for such period, (iv) Consolidated amortization
for such period, and (v) extraordinary non-cash losses to the extent such losses
have not been and will not become cash losses in a later fiscal period.
EBITDAR. In relation to the Borrower for any period, an amount equal to
EBITDA for such period, plus Consolidated Rent Expense for such period.
Eligible Assignee. Any of:
(a) a commercial bank or finance company organized under the
laws of the United States, or any state thereof or the District of Columbia, and
having total assets in excess of $500,000,000;
(b) a savings and loan association or savings bank organized
under the laws of the United States, or any state thereof or the District of
Columbia, and having a net worth of at least $100,000,000, calculated in
accordance with GAAP;
(c) a commercial bank organized under the laws of any other
country which is a member of the Organization for Economic Cooperation and
Development (the "OECD"), or a political subdivision of any such country, and
having total assets in excess of $500,000,000, or the central bank of any
country which is a member of the OECD;
provided, in each case, that such bank (i) is acting through a branch or agency
located in the United States and (ii) has delivered to the Administrative Agent,
on the date on which the Assignment and Assumption to which such Eligible
Assignee is a party becomes effective, the forms referred to in Section 2.14(b)
hereof;
and
(d) if, but only if, any Event of Default has occurred and is
continuing, any other bank, insurance company, commercial finance company or
other financial institution or other Person approved by the Administrative
Agent, such approval not to be unreasonably withheld.
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Eligible Inventory. The Borrower's Inventory (other than raw materials
and work in progress) wherever located, in each case held for sale in the
ordinary course of business, valued at the lower of cost or market; provided,
however, that no such Inventory shall be deemed eligible if (a) it is under
consignment to or from any Person, or (b) it is not owned by the Borrower free
and clear of all liens.
Encumbrances. See Section 6.3.
Environmental Claims. All claims, however asserted, alleging potential
liability or responsibility for violation of any Environmental Laws or for
release of Hazardous Materials or injury to the environment.
Environmental Laws. Any and all applicable foreign, federal, state and
local environmental, health or safety statutes, laws, regulations, ordinances,
policies and or common law (whether now existing or hereafter enacted or
promulgated), of all federal, state, local or other governmental authorities,
agencies, commissions, boards, bureaus or departments which may now or hereafter
have jurisdiction over the Borrower, any other member of the Borrower Affiliated
Group or any landlord under any real estate Lease under which the Borrower or
such other member of the Borrower Affiliated Group is a tenant, and all
applicable judicial and administrative and regulatory decrees, judgments and
orders, including common law rulings and determinations, relating to injury to,
or the protection of human health or the environment, including, without
limitation, all requirements pertaining to reporting, licensing, permitting,
investigation, remediation and removal of emissions, discharges, releases or
threatened releases of Hazardous Materials, chemical substances, pollutants or
contaminants whether solid, liquid or gaseous in nature, into the environment or
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of such Hazardous Materials, chemical
substances, pollutants or contaminants.
ERISA. The Employee Retirement Income Security Act of 1974 and the
rules and regulations thereunder, collectively, as the same may from time to
time be supplemented or amended and remain in effect.
Event of Default. Any event described in Section 7.1.
Federal Funds Effective Rate. For any day, a fluctuating interest rate
per annum equal to the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by federal
funds brokers, as published for such day (or, if such day is not a Business Day,
for the next preceding Business Day) by the Federal Reserve Bank of
New York,
or, if such rate is not so published for any day that is a Business Day, the
average of the quotations for such day on such transactions received by the
Administrative Agent from three federal funds brokers of recognized standing
selected by the Administrative Agent.
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Fee Letter. The letter agreement dated as of the date hereof among
Fleet National Bank, the Arranger, and the Borrower.
Fixed Charge Coverage Ratio. As of any date of calculation, for the
twelve-month period then ended, the ratio of (a) an amount equal to EBITDAR less
Capital Expenditures for such period, to (b) the sum of Consolidated Total
Interest Expense plus Consolidated Debt Amortization plus Consolidated Rent
Expense for such period; provided that for any period prior to the Borrower's
initial public offering, such period shall be included on a pro forma basis to
give effect to the results of such offering.
Foreign Bank. See Section 2.14(b).
Foreign Subsidiary. Any Subsidiary of the Borrower organized under the
laws of a jurisdiction outside the United States of America.
GAAP. Generally accepted accounting principles in the United States of
America, consistently applied.
Xxxxxx Xxxxxxxx. Xxxxxx Xxxxxxxx Asset Advisors, LLC, or an affiliate
thereof or successor thereto.
Guaranties. As applied to any Person, without duplication, all
guarantees, endorsements or other contingent or surety obligations with respect
to obligations of others whether or not reflected on such Person's Consolidated
balance sheet, including any obligation to furnish funds, directly or indirectly
(whether by virtue of partnership arrangements, by agreement to keep-well or
otherwise), through the purchase of goods, supplies or services, or by way of
stock purchase, capital contribution, advance or loan, or to enter into a
contract for any of the foregoing, for the purpose of payment of obligations of
any other Person, but excluding endorsements for collection or deposit in the
ordinary course of business.
Hazardous Material. Any substance (i) the presence of which requires or
may hereafter require notification, investigation or remediation under any
Environmental Law; (ii) which is or becomes defined as a "hazardous waste" or
"hazardous material" or "hazardous substance" or "controlled industrial waste"
or "pollutant" or "contaminant" under any present or future Environmental Law or
amendments thereto including, without limitation, CERCLA, and any applicable
local statutes and the regulations promulgated thereunder; (iii) which is toxic,
explosive, corrosive, infectious, radioactive, carcinogenic, mutagenic or
otherwise hazardous and is or becomes regulated by any governmental authority,
agency, department, commission, board or instrumentality of any foreign country,
the United States, any state of the United States, or any political subdivision
thereof to the extent any of the foregoing has or had jurisdiction over the
Borrower or any other member of the Borrower Affiliated Group or any Real
Property leased by the Borrower or any other member of the Borrower Affiliated
Group; or (iv) without limitation, which contains gasoline, diesel fuel or other
petroleum products,
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asbestos, asbestos containing materials ("ACM"), polychlorinated biphenyls
("PCB's") or radioactive material.
Income Taxes. Any franchise taxes, net income taxes or any other taxes
imposed on the net income of any Bank or the Administrative Agent, including
branch profits tax, minimum tax and other taxes imposed in lieu of net income
tax.
Indebtedness. As applied to any Person (but without duplication), (i)
all obligations for borrowed money or other extensions of credit whether secured
or unsecured, absolute or contingent, including, without limitation, unmatured
reimbursement obligations with respect to letters of credit or Guaranties issued
for the account of or on behalf of such Person, and all obligations representing
the deferred purchase price of property, other than accounts payable arising,
and accrued expenses incurred, in the ordinary course of business, (ii) all
obligations evidenced by bonds, notes, debentures or other similar instruments,
(iii) all obligations secured by any mortgage, pledge, security interest or
other lien on property owned or acquired by such Person, whether or not the
obligations secured thereby shall have been assumed, (iv) all obligations
arising under Capitalized Leases and Synthetic Leases, (v) all Guaranties, and
(vi) all obligations that are immediately due and payable out of the proceeds of
or production from property now or hereafter owned or acquired by such Person.
Initial Financial Statements. See Section 4.7.
Insolvent or Insolvency. The occurrence of one or more of the following
events with respect to a Person: death; dissolution; termination of existence;
insolvency within the meaning of the United States Bankruptcy Code or other
foreign or domestic applicable statutes; such Person's inability to pay its
debts as they come due; appointment of a receiver of any part of the property
of, execution of a trust mortgage or an assignment for the benefit of creditors
by, or the entry of an order for relief or the filing of a petition in
bankruptcy or the commencement of any proceedings under any bankruptcy or
insolvency laws, or any laws relating to the relief of debtors, readjustment of
indebtedness or reorganization of debtors, or the offering as debtor of a plan
to creditors for composition or extension, except for an involuntary proceeding
as debtor commenced against such Person which is dismissed within 60 days after
the commencement thereof without the entry or an order for relief or the
appointment of a trustee.
Interest Period. With respect to each LIBOR Loan, the period commencing
on the date of the making or continuation of or conversion to such LIBOR Loan
and ending one, two, three or six months thereafter, subject to availability, as
the Borrower may elect in the applicable Notice of Borrowing or Conversion;
provided that:
(a) any Interest Period (other than an Interest Period
determined pursuant to clause (c) below) that would otherwise end on a day that
is not a Business Day shall be extended to the next succeeding Business Day
unless such Business Day
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falls in the next calendar month, in which case such Interest Period shall end
on the immediately preceding Business Day;
(b) 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 (c) below, end on the last Business Day in the appropriate subsequent
calendar month;
(c) any Interest Period applicable to Revolving Credit Loans
that would otherwise end after the Revolving Credit Maturity Date shall end on
said Revolving Credit Maturity Date; and
(d) notwithstanding clause (c) above, no Interest Period shall
have a duration of less than one month; and if any Interest Period would be for
a shorter period, such Loan shall not be available hereunder for such period.
Inventory. Goods, merchandise and other personal property, now owned or
hereafter acquired by a Person, which are held for sale or lease or are
furnished or to be furnished under a contract of service.
Investment. As applied to any Person, (i) the purchase or acquisition
of any share of capital stock, partnership interest, limited liability company
membership interest, evidence of indebtedness or other equity security of any
other Person, (ii) any loan, advance or extension of credit to, or contribution
to the capital of, any other Person, (iii) any real estate held for sale or
investment, (iv) any commodities futures contracts held other than in connection
with bona fide hedging transactions, (v) any other investment in any other
Person, and (vi) the making of any commitment or acquisition of any option to
perform any of the acts specified in clauses (i) through (v) of this definition.
Issuing Bank. Fleet National Bank in its capacity as the issuer of
Letters of Credit hereunder, together with any such other Bank as may, with the
written consent of the Borrower and the Administrative Agent, become an Issuing
Bank hereunder.
L/C Availability. As of any date, an amount equal to (a), (b) or (c)
below, whichever is least:
(a) the Maximum L/C Sublimit minus the Stated Amount of all
Letters of Credit outstanding (including any requested Letters of Credit), minus
the aggregate amount of all unreimbursed draws under outstanding Letters of
Credit, or
(b) the Total Commitment minus the outstanding principal
amount of the Revolving Credit Loans then outstanding, minus the Stated Amount
of all Letters of Credit outstanding (including any requested Letters of
Credit), minus the aggregate amount of all unreimbursed draws under outstanding
Letters of Credit; or
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(c) the Borrowing Base as of such date minus the outstanding
principal amount of the Revolving Credit Loans then outstanding, minus the
Stated Amount of all Letters of Credit outstanding (including any requested
Letters of Credit), minus the aggregate amount of all unreimbursed draws under
outstanding Letters of Credit.
Leases or Lease. See Section 4.23.
Letters of Credit. Letters of credit in the form customarily issued by
the Issuing Bank as standby Letters of Credit or documentary Letters of Credit,
as the case may be, issued or to be issued for the account of the Borrower by
the Issuing Bank, under the joint responsibilities of the Banks, upon the terms
and subject to the conditions contained in this Agreement.
LIBOR Loan. Any Revolving Credit Loan bearing interest at a rate
determined with reference to the Adjusted LIBOR Rate.
Loan. A Revolving Credit Loan made to the Borrower by any Bank pursuant
to Section II of this Agreement, and "Loans" means all such Revolving Credit
Loans collectively.
Loan Account. The account or accounts on the books of the
Administrative Agent in which will be recorded Loans and advances (including
issued and outstanding Letters of Credit) made by the Banks to the Borrower
pursuant to this Agreement, payments made on such Loans and other appropriate
debits and credits as provided by this Agreement.
Loan Documents. Collectively, this Agreement (including, without
limitation, the agreements and other instruments listed or described in Section
III), the Notes, the Letters of Credit (and related documentation and
agreements, including any letter of credit application), the Security
Agreements, the Patent and Trademark Security Agreements, the Pledge Agreements,
the Subsidiary Guaranty, all other Subsidiary Security Documents and other
Security Documents, the Fee Letter and the Solvency Certificates, together with
all agreements and other instruments contemplated thereby, all certificates
delivered in connection therewith from time to time and all schedules, exhibits
and annexes thereto, as any of the foregoing may from time to time be amended
and in effect.
Material Adverse Effect. Any (a) material adverse change in the
business, operations, results of operations, assets, liabilities or condition
(financial or otherwise) of the Borrower Affiliated Group taken as a whole, (b)
material impairment of the ability of the Borrower Affiliated Group, taken as a
whole, to perform their obligations under the Loan Documents, or (c) material
impairment of the Administrative Agent's or the Banks' ability to enforce the
Obligations.
Maximum L/C Sublimit. $5,000,000.
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Notes. Collectively, the Revolving Credit Notes, if any, delivered by
the Borrower upon the request of any Banks pursuant to Section 2.2(d).
Notice of Borrowing or Conversion. See Section 2.4(a).
Obligations. Any and all obligations of the Borrower Affiliated Group
to the Administrative Agent, any Bank, or the Arranger under the Loan Documents
of every kind and description (including obligations in respect of Letters of
Credit, the Fee Letter and fees under each thereof), direct or indirect,
absolute or contingent, primary or secondary, due or to become due, now existing
or hereafter arising, regardless of how they arise or by what agreement or
instrument, if any, and including obligations to perform acts and refrain from
taking action as well as obligations to pay money.
Participant. See Section 9.10(i).
Patent and Trademark Security Agreements. The Patent and Trademark
Security Agreements dated as of the date hereof and executed and delivered by
the Borrower and each Domestic Subsidiary to the Administrative Agent for the
ratable benefit of the Banks.
PBGC. The Pension Benefit Guaranty Corporation or any entity succeeding
to any or all of its functions under ERISA.
PCB. See definition of Hazardous Material.
Permitted Acquisition. Any Acquisition by the Borrower or any other
member of the Borrower Affiliated Group that meets each of the following
criteria: (i) the capital stock (or other equity interests) or assets acquired
in such Acquisition relates to a line of business similar to the business in
which the Borrower Affiliated Group is engaged on the Closing Date, (ii) if
required by applicable law, the board of directors and the shareholders or the
equivalent of such other Person has approved such Acquisition, (iii) in the case
of an Acquisition of the capital stock (or other equity interests) of another
Person, such Person shall become a wholly-owned direct or indirect Subsidiary of
the Borrower or, in the case of a merger between the Borrower and another
Person, the Borrower shall be the surviving entity, or in the case of a merger
between another Person and a member of the Borrower Affiliated Group (other than
the Borrower), upon consummation of such merger, the surviving entity shall be a
direct or indirect wholly-owned Subsidiary of the Borrower and, if the surviving
entity is a Domestic Subsidiary, a party to the Subsidiary Security Documents,
(iv) the Borrower shall provide the Administrative Agent with at least 14 days'
prior written notice of each such Acquisition and such information relating
thereto as the Administrative Agent may reasonably request, (v) no Default or
Event of Default shall exist, in each case both before and after giving effect
to such Acquisition, (vi) the properties and assets acquired by the Borrower or
other member of the Borrower Affiliated Group in connection with such proposed
Acquisition shall be free from all liens, charges and encumbrances whatsoever,
other than Permitted Encumbrances, (vii) upon consummation of the Acquisition,
the Administrative Agent shall have a valid, perfected, first-priority security
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interest in all of the properties and assets being acquired by the Borrower or
other member of the Borrower Affiliated Group subject to Permitted Encumbrances,
and (viii) the aggregate consideration (including all cash and non-cash
consideration and any assumption of Indebtedness) for all Acquisitions occurring
after the Closing Date shall not exceed 15% of the Borrower's Consolidated
Tangible Net Worth, determined as of the end of the most recently completed
fiscal quarter of the Borrower.
Permitted Encumbrances. See Section 6.3.
Person or person. An individual, a company, a corporation, an
association, a partnership, a joint venture, a limited liability company or
partnership, an unincorporated trade or business enterprise, a trust, an estate,
or a government (national, regional or local) or an agency, instrumentality or
official thereof.
Plan. At any time, an employee pension or other benefit plan that is
subject to Title IV of ERISA or subject to the minimum funding standards under
Section 412 of the Code and is either (i) maintained by the Borrower, any member
of the Borrower Affiliated Group or any member of the Controlled Group for
employees of the Borrower or any member of the Controlled Group or (ii) if such
Plan is established or maintained pursuant to a collective bargaining agreement
or any other arrangement under which more than one employer makes contributions
and to which the Borrower or any member of the Controlled Group is then making
or accruing an obligation to make contributions or has within the preceding five
Plan years made contributions.
Pledge Agreements. (a) The Pledge Agreements dated as of the date
hereof and executed and delivered by each of the Borrower and GameStop, Inc. to
the Administrative Agent, for the ratable benefit of the Banks and the
Administrative Agent, pursuant to which, without limitation, all of the issued
and outstanding capital stock of all Domestic Subsidiaries is pledged to the
Administrative Agent, and (b) all Pledge Agreements to be delivered by the
Borrower from time to time in accordance with Section 5.2(d).
Prohibited Transaction. A transaction prohibited by Section 4975 of the
Code or Section 406 of ERISA, for which no statutory or administrative exemption
applies.
Qualified Investments. As applied to any member of the Borrower
Affiliated Group, investments in (i) notes, bonds or other obligations of the
United States of America or any agency thereof that as to principal and interest
constitute direct obligations of or are guaranteed by the United States of
America, (ii) certificates of deposit or other deposit instruments or accounts
of banks or trust companies organized under the laws of the United States or any
state thereof that have capital and surplus of at least $100,000,000, (iii)
commercial paper that is rated not less than prime-one or A-1 or their
equivalents by Xxxxx'x Investors Service, Inc. or Standard & Poor's Corporation,
respectively, or their successors, (iv) any repurchase agreement secured by any
one or more of the foregoing, and (v) Investment in wholly-owned Subsidiaries;
provided, however, that the aggregate amount of Investments in Foreign
Subsidiaries may not at
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any time exceed 15% of the Borrower's Consolidated Tangible Net Worth determined
as of the end of the most recently completed fiscal quarter of the Borrower.
Rate Period. The period beginning on the third Business Day following
delivery to the Administrative Agent of the annual or quarterly financial
statements required to be delivered pursuant to Section 5.1(a) or Section 5.1(b)
and ending on the second Business Day after the day on which the next such
quarterly (or annual, as applicable) financial statements are delivered to the
Administrative Agent.
Real Property or Real Properties. Collectively, (i) the several parcels
of land together with the improvements now or hereafter located thereon, which
are owned by any member of the Borrower Affiliated Group, as more fully set
forth on Exhibit D hereto, and (ii) the several parcels of land together with
the improvements now or hereafter located thereon, which are leased by any
member of the Borrower Affiliated Group pursuant to a real property Lease.
Registration Statement. The registration statement of the Borrower
under the Securities Act of 1933, as amended, which has been declared effective
by the Securities and Exchange Commission in connection with the initial public
offering of the Borrower described in Section 3.1.16.
Reportable Event. With respect to any Plan, a reportable event as
described in Section 4043(c) of ERISA for which notice to the PBGC has not been
waived.
Required Banks. Any two or more Banks whose aggregate Commitment
Percentages constitute at least 75.0% at the relevant time of reference, or if
the Commitments have been terminated, any two or more Banks whose aggregate
Loans and Letters of Credit outstanding constitute at least 75.0% of the
aggregate Loans and Letters of Credit outstanding at the relevant time of
reference.
Reserve Percentage. For any Interest Period, the rate (expressed as a
decimal) applicable to the Administrative Agent during such Interest Period
under regulations issued from time to time by the Board of Governors of the
Federal Reserve System for determining the maximum reserve requirement
(including, without limitation, any basic, supplemental, emergency or marginal
reserve requirement) of the Administrative Agent with respect to "Eurocurrency
liabilities" as that term is defined under such regulations.
Restricted Payment. (i) Any cash or property dividend, distribution or
payment, direct or indirect, by the Borrower or any of its Subsidiaries in
respect of its capital stock or other equity interests, to any Person who now
holds, or who in the future holds, an equity interest in the Borrower or any of
its Subsidiaries, whether evidenced by a security or not, other than regular
compensation and bonuses paid to employees of the Borrower and its Subsidiaries
in the ordinary course of business and consistent with past practices, and other
than dividends payable solely in shares of any class of capital stock (or other
equity), (ii) any payment on account of the purchase, redemption, retirement or
other acquisition for value of any capital stock of the Borrower or its
Subsidiaries, or any other
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payment or distribution made in respect thereof, either directly or indirectly,
and (iii) any management or similar fees paid or payable by the Borrower or any
of its Subsidiaries to any Person who now holds, or in the future holds,
directly or indirectly, an equity interest in the Borrower or any of its
Subsidiaries.
Revolving Credit Loans. Collectively, the loans in the maximum
aggregate principal amount of the Total Commitment in effect from time to time
made or to be made to the Borrower by the Banks pursuant to this Agreement
(including Section 2.1(a) hereof) and subject to the limitations contained
herein.
Revolving Credit Maturity Date. February 18, 2005, or such earlier date
on which the Loans become due and payable pursuant to Section 7.2.
Security Agreements. The Security Agreements dated as of the date
hereof and executed and delivered by the Borrower and each Domestic Subsidiary
to the Administrative Agent, for the ratable benefit of the Banks and the
Administrative Agent.
Security Documents. Collectively, (i) the Security Agreements, the
Patent and Trademark Security Agreements, the Pledge Agreements, the Subsidiary
Guaranty and all other Subsidiary Security Documents, and (ii) all other
agreements, instruments or contracts by which any of the Obligations shall be
evidenced or under or in respect of which the Administrative Agent, any Bank or
any of their respective nominees, agents, or representatives shall have, at such
time, any rights or interests as security for the payment or performance of all
or any part of the Obligations.
Solvency Certificates. Collectively, the separate solvency certificates
dated as of the date hereof and executed and delivered by the chief financial
officer of each member of the Borrower Affiliated Group to the Administrative
Agent, for the ratable benefit of the Banks and the Administrative Agent.
Stated Amount. With respect to each Letter of Credit outstanding at any
time, the maximum amount then available to be drawn thereunder (without regard
to whether any conditions to drawing could then be met).
Stockholders' Equity. The amount reported as "stockholders' equity" on
the Borrower's Consolidated balance sheet and determined in accordance with
GAAP.
Subsidiary. With respect to the Borrower, any corporation, association,
joint stock company, business trust or other similar organization of which more
than 50% of the ordinary voting power for the election of a majority of the
members of the board of directors or other governing body of such entity is held
or controlled by the Borrower or a Subsidiary of the Borrower; or any other such
organization the management of which is directly or indirectly controlled by the
Borrower or a Subsidiary of the Borrower through the exercise of voting power or
otherwise; or any joint venture, whether incorporated or not, in which the
Borrower has more than a 50% ownership interest.
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Subsidiary Guaranty. The Subsidiary Guaranty Agreement dated as of the
date hereof and executed and delivered by all Domestic Subsidiaries to the
Administrative Agent, for the ratable benefit of the Banks and the
Administrative Agent, which shall be in the form of Exhibit I hereto.
Subsidiary Security Documents. Collectively, (a) with respect to each
Domestic Subsidiary in existence as of the date hereof, the Subsidiary Guaranty,
the Security Agreement executed by such Domestic Subsidiary, and the Patent and
Trademark Security Agreement executed by such Domestic Subsidiary, in each case
executed and delivered by such Domestic Subsidiaries in connection with the
Closing or pursuant to Section 5.11, and (b) with respect to each Domestic
Subsidiary formed after the date hereof, a Subsidiary Guaranty, a Security
Agreement, a Patent and Trademark Security Agreement, and an agreement in a form
reasonably acceptable to the Administrative Agent constituting a collateral
assignment of material contracts (if such Subsidiary is a party to any
contracts, agreements or licenses which are material to its operations or
business), each to be executed and delivered by such new Domestic Subsidiary and
each to be in substantially the form of the respective documents delivered by
existing Domestic Subsidiaries under the foregoing clause (a).
Synthetic Lease. Any synthetic lease, tax retention operating lease,
off-balance sheet loan or similar off-balance sheet financing product where such
transaction is considered borrowed money Indebtedness for tax purposes but is
classified as an operating lease under GAAP.
Total Commitment. As of any date, the sum of the then-current
Commitments of the Banks. As of the date of this Agreement, the Total Commitment
is $75,000,000.
Uniform Commercial Code. The Uniform Commercial Code as in effect from
time to time in any applicable jurisdiction.
United States Bankruptcy Code. 11 U.S.C. Sections 101-1330.
1.2. Terms of General Application. For all purposes of this Agreement
and the other Loan Documents, except as otherwise expressly provided herein or
therein or unless the context otherwise requires:
(a) references to any Person defined in this Agreement refer
to such Person and its successor in title and permitted assigns or, for natural
persons, such Person's successors, heirs, executors, administrators and other
legal representatives;
(b) references to any agreement, instrument or document
defined in this Agreement refer to such document as originally executed, or if
subsequently varied, extended, renewed, modified, amended, restated or
supplemented from time to time, as so varied, extended, renewed, modified,
amended, restated or supplemented and in effect at the relevant time of
reference thereto;
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(c) words importing the singular only shall include the plural
and vice versa, and the words importing the masculine gender shall include the
feminine gender and vice versa, and all references to dollars, $, U.S. Dollars
or United States Dollars, shall be to Dollars;
(d) accounting terms not otherwise defined in this Agreement
or any of the other Loan Documents have the meanings assigned to them in
accordance with GAAP, on a basis consistent with the financial statements
referred to in Section 4.7 of this Agreement;
(e) all financial statements and other financial information
provided by the Borrower and each other member of the Borrower Affiliated Group
to the Administrative Agent or any Bank shall be provided with reference to
Dollars;
(f) this Agreement and the other Loan Documents are the result
of negotiation among, and have been reviewed by counsel to, among others, the
Borrower Affiliated Group and the Administrative Agent and are the product of
discussions and negotiations among all parties. Accordingly, this Agreement and
the other Loan Documents are not intended to be construed against the
Administrative Agent or any of the Banks merely on account of the Administrative
Agent's or any Bank's involvement in the preparation of such documents; and
(g) all references to a time of day shall mean the time then
prevailing in
New York,
New York, unless otherwise indicated.
SECTION II
DESCRIPTION OF CREDIT
2. The Credit Facilities.
2.1. The Loans.
(a) Revolving Credit Loans. Subject to the terms and
conditions set forth in this Agreement, each of the Banks severally agrees to
lend to the Borrower and the Borrower may borrow (and may repay and reborrow)
from time to time between the Closing Date and the Revolving Credit Maturity
Date, such amounts as are requested by the Borrower up to a maximum aggregate
principal amount outstanding (after giving effect to all amounts requested) at
any one time equal to such Bank's Commitment; provided, however, that the
maximum aggregate principal amount of all Revolving Credit Loans outstanding
(after giving effect to the amounts requested), plus the aggregate Stated Amount
of Letters of Credit outstanding at such time, plus the aggregate amount of all
unreimbursed draws under outstanding Letters of Credit, shall not at any time
exceed the lesser of (i) the Borrowing Base in effect at such time and (ii) the
Total Commitment in effect at such time, and provided, further, that at the time
the Borrower
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requests a Revolving Credit Loan and after giving effect to the making thereof,
no Default or Event of Default has occurred and is continuing.
The Revolving Credit Loans shall be made pro rata among the Banks in
accordance with the Commitment Percentage of each Bank having a Commitment. If
the aggregate principal amount of Revolving Credit Loans outstanding at any
time, plus the aggregate Stated Amount of Letters of Credit outstanding at such
time, plus the aggregate amount of any unreimbursed draws under outstanding
Letters of Credit shall at any time exceed the lesser of (i) the Borrowing Base
in effect at such time and (ii) the Total Commitment in effect at such time, the
Borrower shall immediately pay to the Administrative Agent for the respective
accounts of the Banks the amount of such excess. Failure to make such payment on
demand shall be an Event of Default hereunder.
(b) Loan Account. The Administrative Agent shall enter Loans
and advances made by the Banks to the Borrower pursuant to this Agreement
(including, without limitation, on account of any Letters of Credit) as debits
in the Loan Account. The Administrative Agent shall also record in the Loan
Account all payments made by the Borrower on account of the Loans and may also
record therein, in accordance with customary accounting practices, other debits
and credits, including customary banking charges and all interest, fees, charges
and expenses chargeable to the Borrower under this Agreement. The debit balance
of the Loan Account shall reflect the amount of the Borrower's Obligations
hereunder and shall be considered correct absent manifest error.
(c) Clean-Down Period. The Borrower covenants that, during the
term of this Agreement, in each 3-month period consisting of the calendar months
of December, January and February, the Borrower will maintain a period of at
least 30 consecutive days during which the aggregate principal amount of the
Loans outstanding shall be zero ($0) Dollars. In determining compliance with
this provision, the following shall be excluded: (i) the aggregate Stated Amount
of Letters of Credit outstanding, and (ii) the aggregate amount of all
unreimbursed draws under outstanding Letters of Credit that have not yet been
added to the Loan Account as Revolving Credit Loans pursuant to Section
2.18(a)(i).
2.2 Records; Notes.
(a) Banks' Records. Each Bank will note (manually or
electronically) on its records with respect to each Loan made by it (i) the date
and amount of such Loan, (ii) the interest rate and Interest Period, if any,
applicable to such Loan, and (iii) each payment and prepayment of the principal
thereof.
(b) Administrative Agent's Records. The Administrative Agent
shall keep records regarding the Loans, the Letters of Credit and this Agreement
in accordance with its customary procedures for agented credits.
(c) Prima Facie Evidence. The entries made in the records
maintained pursuant to subsections (a) and (b) above shall, to the extent not
prohibited by applicable
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law, be prima facie evidence of the existence and amount of the obligations of
the Banks and Borrower recorded therein; provided, however, that the failure of
the Administrative Agent or any Bank, as the case may be, to make any notation
on its records shall not affect the Borrower's obligations in respect of the
Loans, the Letters of Credit or this Agreement.
(d) Notes. Upon the request of any Bank to the Administrative
Agent and the Borrower, the Borrower agrees, at its expense, to execute and
deliver to the Administrative Agent for the account of such Bank one or more
promissory notes evidencing the Loan or Loans of such Bank to the Borrower, in
substantially the form of Exhibit A attached hereto.
2.3. Conversion. Provided that no Default or Event of Default shall
have occurred and be continuing, and subject to and in accordance with the
provisions of Section 2.4(a), the Borrower may convert all or any part (in an
amount equal to at least $1,000,000 and additional increments of $100,000) of
any outstanding Loan into a Loan of the other type provided for in this
Agreement in the same aggregate principal amount, on any Business Day (which, in
the case of a conversion of a LIBOR Loan, shall be the last day of the Interest
Period applicable to such LIBOR Loan). The Borrower shall give the
Administrative Agent and the Banks prior notice of each such conversion (which
notice shall be effective upon receipt) in accordance with Section 2.4. All such
conversions shall be made pro rata in accordance with each Bank's Commitment
Percentage applicable to the type of Loan being converted.
2.4. Notice and Manner of Borrowing or Conversion of Loans.
(a) Whenever the Borrower desires to obtain or continue a Loan
hereunder or convert an outstanding Loan into a Loan of the other type provided
for in this Agreement, the Borrower shall notify the Administrative Agent (which
notice shall be irrevocable) by telecopy or telephone (i) with respect to Base
Rate Loans, received no later than 11:00 a.m. on the date on which the requested
Loan is to be made or continued as or converted to a Base Rate Loan, and (ii)
with respect to LIBOR Loans, received no later than 11:00 a.m. on the date that
is three (3) Business Days before the day on which the requested Loan is to be
made or continued as or converted to a LIBOR Loan, provided that no more than 10
LIBOR Loans may be outstanding at any one time. Such notice by the Borrower
shall specify (i) the effective date and amount of each Loan to be obtained,
continued or converted (or portion thereof to be continued or converted, as the
case may be), subject to the limitations set forth in Section 2.1, (ii) the
interest rate option to be applicable thereto, and (iii) the duration of the
applicable Interest Period, if any (subject to the provisions of the definition
of Interest Period and Section 2.9). Each LIBOR Loan must be for an amount equal
to at least $1,000,000 and in additional increments of $100,000. Each such
notification by telephone pursuant to Section 2.3 or this Section 2.4(a) (a
"Notice of Borrowing or Conversion") shall be immediately followed by a written
confirmation thereof by the Borrower in substantially the form of Exhibit B
hereto, provided that if such written confirmation differs in any material
-20-
respect from the action taken by the Administrative Agent, the records of the
Administrative Agent shall be conclusive absent manifest error.
(b) Subject to the terms and conditions hereof, each Bank
shall make available to the Administrative Agent, in immediately available
funds, no later than 2:00 p.m. on the date upon which any Base Rate Loan or
LIBOR Loan is to be made, such Bank's Commitment Percentage of the requested
Loan. The Administrative Agent shall, in turn, make each Loan on the effective
date specified therefor by crediting the amount of such Loan to the Borrower's
demand deposit account with the Administrative Agent. In no event shall the
Administrative Agent (in its capacity as Administrative Agent) have any
obligation to make any funding or shall any Bank be obligated to fund more than
its Commitment Percentage of the requested Base Rate Loan or LIBOR Loan.
2.5. Commitment Fee. The Borrower shall pay to the Administrative Agent
for the accounts of the Banks in accordance with their respective Commitment
Percentages a commitment fee (the "Commitment Fee") computed at a rate per annum
on the average daily aggregate amount, during each calendar quarter or portion
thereof, of the unborrowed portion of the Total Commitment in effect at such
time, which rate shall be equal to (A) 0.375% from the Closing Date through the
second Business Day after the date on which the Compliance Certificate required
to be delivered pursuant to Section 5.1(d) for the second fiscal quarter of
fiscal 2002 of the Borrower Affiliated Group is delivered to the Administrative
Agent, and (B) thereafter, for each Rate Period, the percentage determined by
reference to the Fixed Charge Coverage Ratio for the most recent twelve-month
period of the Borrower Affiliated Group, as set forth in the table below:
Fixed Charge Coverage Ratio Commitment Fee
--------------------------- --------------
Level I. less than 1.60 to 1.00 0.500%
Level II. equal to or greater than 0.375%
1.60 to 1.00 and less than
3.25 to 1.00
Level III. equal to or greater than 0.300%
3.25 to 1.00
Commitment fees shall be payable quarterly in arrears on the last Business Day
of each fiscal quarter beginning on the Saturday closest to January 31, 2002 and
on the Revolving Credit Maturity Date. For purposes of calculating the
Commitment Fee, outstanding Letters of Credit shall be included in determining
the borrowed portion of the Total Commitment.
2.6. Fee Letter. The Borrower shall pay to the Administrative Agent
fees in the amounts and at the times outlined in the Fee Letter.
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2.7. Reduction of Total Commitment. The Borrower may from time to time
by written notice delivered to the Administrative Agent at least three Business
Days prior to the date of the requested reduction, reduce by a minimum amount of
$2,500,000, and in additional increments of $1,000,000, any unborrowed portion
of the Total Commitment. No reduction of the Total Commitment shall be subject
to reinstatement.
2.8. [Intentionally omitted].
2.9. Duration of Interest Periods.
(a) Subject to the provisions of the definition of "Interest
Period," the duration of each Interest Period applicable to a LIBOR Loan shall
be as specified in the applicable Notice of Borrowing or Conversion. The
Borrower shall have the option to elect a subsequent Interest Period to be
applicable to such Loan by giving notice of such election to the Bank received
no later than 10:00 a.m. on the date that is 3 Business Days before the end of
the then applicable Interest Period if such Loan is to be continued as or
converted to a LIBOR Loan.
(b) If the Administrative Agent does not receive a notice of
election of duration of an Interest Period for a LIBOR Loan pursuant to
subsection (a) above within the applicable time limits specified therein, or if,
when such notice must be given, an Event of Default exists, the Borrower shall
be deemed to have elected to convert such Loan in whole into a Base Rate Loan on
the last day of the then current Interest Period with respect thereto.
(c) Notwithstanding the foregoing, the Borrower may not select
an Interest Period that would end, but for the provisions of the definition of
Interest Period, after the Revolving Credit Maturity Date.
2.10. Interest Rates and Payments of Interest.
(a) Each Revolving Credit Loan which is a Base Rate Loan shall
bear interest on the outstanding principal amount thereof at a rate per annum
equal to the Base Rate plus the Applicable Base Rate Margin, which rate shall
change contemporaneously with any change in the Base Rate. Such interest shall
be payable on the last Business Day of any fiscal quarter in which a Base Rate
Loan is outstanding hereunder, and when such Loan is due (whether at maturity,
by reason of acceleration or otherwise).
(b) Each Revolving Credit Loan which is a LIBOR Loan shall
bear interest on the outstanding principal amount thereof, for each Interest
Period applicable thereto, at a rate per annum equal to the Adjusted LIBOR Rate
plus the Applicable LIBOR Margin. Such interest (including any adjustments made
in the Administrative Agent's discretion consistent with the definition of
Adjusted LIBOR Rate to take into consideration any change in the Reserve
Percentage) shall be payable for such Interest Period (i) on the earlier of the
last day of such Interest Period and, if such Interest Period is longer than
three months, at quarterly intervals after the first day of such Interest
-22-
Period and (ii) when such LIBOR Loan is due (whether at maturity, by reason of
acceleration or otherwise).
(c) For purposes of this Section 2.10, with reference to
Revolving Credit Loans, (i) the "Applicable Base Rate Margin" shall be equal to
(A) 0.25% from the Closing Date through the second Business Day after the date
of the Administrative Agent's receipt and satisfactory review of the financial
statements and compliance certificate required to be delivered pursuant to
Sections 5.1(b) and 5.1(d), respectively, for the second fiscal quarter of
fiscal 2002 of the Borrower Affiliated Group, and (B) thereafter, for each Rate
Period, the percentage determined by reference to the Fixed Charge Coverage
Ratio for the most recent twelve-month period of the Borrower Affiliated Group,
as set forth in the table below, and (ii) the "Applicable LIBOR Margin" shall be
equal to (A) 1.75% from the Closing Date through the second Business Day after
the date of the Administrative Agent's receipt and satisfactory review of the
financial statements and compliance certificate required to be delivered
pursuant to Sections 5.1(b) and 5.1(d), respectively, for the second fiscal
quarter of fiscal 2002 of the Borrower Affiliated Group, and (B) thereafter, for
each Rate Period, the percentage determined by reference to the Fixed Charge
Coverage Ratio for the most recent twelve-month period of the Borrower
Affiliated Group, as set forth in the table below:
Revolving Credit Loans
Applicable Applicable
Fixed Charge Coverage Base Rate LIBOR
Ratio Margin Margin
---------------------- ---------- ----------
Level I. less than 1.60 to 1.00 0.50% 2.00%
Level II. equal to or greater than 0.25% 1.75%
1.60 to 1.00 and less than
2.50 to 1.00
Level III. equal to or greater than 0.00% 1.50%
2.50 to 1 and less than
3.25 to 1.00
Level IV. equal to or greater than 0.00% 1.25%
3.25 to 1.00
For purposes of determining the Applicable Base Rate Margin and the Applicable
LIBOR Margin, the Fixed Charge Coverage Ratio will be tested quarterly,
commencing with the second full fiscal quarter of the Borrower Affiliated Group
in fiscal 2002, based on the financial statements and compliance certificate
required to be delivered pursuant to Sections 5.1(b) and 5.1(d), respectively.
For purposes of determining the interest rate for any Rate Period hereunder, any
interest rate change shall be effective two Business Days
-23-
after the date on which the financial statements and compliance certificate
required to be delivered pursuant to Sections 5.1(b) and 5.1(d), respectively,
is delivered to the Administrative Agent, together with a notice to the
Administrative Agent (which shall be verified by the Administrative Agent)
specifying any change in the Applicable Base Rate Margin and the Applicable
LIBOR Margin, and if the Borrower has failed to deliver the compliance
certificate required to be delivered pursuant to Sections 5.1(b) and 5.1(d),
respectively, the Applicable Base Rate Margin and the Applicable LIBOR Margin
that would otherwise be in effect shall automatically be increased by .25% until
such compliance certificate is delivered.
2.11. Protective Provisions.
2.11.1. Inability to Determine Adjusted LIBOR Rate. In the event, prior
to the commencement of any Interest Period relating to any LIBOR Loan, the
Administrative Agent shall determine in its good faith judgment or be notified
by the Required Banks that adequate and reasonable methods do not exist for
ascertaining the Adjusted LIBOR Rate that would otherwise determine the rate of
interest to be applicable to any LIBOR Loan during such Interest Period, the
Administrative Agent shall forthwith give notice of such determination (which
shall be conclusive and binding on the Borrower and the Banks) to the Borrower
and the Banks. In such event (a) any Notice of Borrowing or Conversion with
respect to LIBOR Loans shall be automatically withdrawn and shall be deemed a
request for Base Rate Loans, (b) each LIBOR Loan will automatically, on the last
day of the then current Interest Period relating thereto, become a Base Rate
Loan, and (c) the obligations of the Banks to make LIBOR Loans shall be
suspended until the Administrative Agent or the Required Banks, as applicable,
determine that the circumstances giving rise to such suspension no longer exist,
whereupon the Administrative Agent or, as the case may be, the Administrative
Agent upon the instruction of the Required Banks, shall so notify the Borrower
and the Banks.
2.11.2. Illegality. Notwithstanding any other provisions herein, if any
Change in Law shall make it unlawful for any Bank to make or maintain LIBOR
Loans, such Bank shall forthwith give notice of such circumstances to the
Borrower and the other Banks and thereupon the commitment of such Bank to make
LIBOR Loans or convert Base Rate Loans to LIBOR Loans shall forthwith be
suspended and such Bank's LIBOR Loans then outstanding as LIBOR Loans, if any,
shall be converted automatically to Base Rate Loans on the last day of each
Interest Period applicable to such LIBOR Loans or within such earlier period as
may be required by law. The Borrower hereby agrees promptly to pay the
Administrative Agent for the account of such Bank, upon demand by such Bank, any
additional amounts as such Bank may in good faith determine to be necessary to
compensate such Bank for any costs incurred by such Bank in making any
conversion in accordance with this Section 2.11.2, including any interest or
fees payable by such Bank to lenders of funds obtained by it in order to make or
maintain its LIBOR Loans hereunder.
2.11.3. Additional Costs, etc. After the Closing Date, if any Change in
Law shall:
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(a) subject any Bank or the Administrative Agent to any tax,
levy, impost, duty, charge, fee, deduction or withholding of any nature with
respect to this Agreement, the other Loan Documents, such Bank's Commitment or
Loans (other than Covered Taxes and Income Taxes); or
(b) materially change the basis of taxation (except for
changes in Income Taxes of such Bank or the Administrative Agent) of payments to
any Bank of the principal of or the interest on any Loans or any other amounts
payable to any Bank or the Administrative Agent under this Agreement or any of
the other Loan Documents; or
(c) without duplication of any amount required to be paid
pursuant to Section 2.12, impose or increase or render applicable (other than to
the extent specifically provided for elsewhere in this Agreement) any special
deposit, reserve, assessment, liquidity or other similar requirements (whether
or not having the force of law) against assets held by, or deposits in or for
the account of, or loans by, or letters of credit issued by, or commitments of
an office of any Bank; or
(d) impose on any Bank or the Administrative Agent any other
conditions or requirements with respect to this Agreement, the other Loan
Documents, the Loans, such Bank's Commitment, or any class of Loans or
commitments of which any of the Loans or such Bank's Commitment forms a part;
and the result of any of the foregoing is:
(i) in the good faith determination of an Affected
Bank, to materially increase the cost to such Bank of making, funding,
issuing, renewing, extending or maintaining any of the LIBOR Loans or
such Bank's Commitment; or
(ii) to reduce the amount of principal, interest, or
other amount payable to such Bank or the Administrative Agent hereunder
on account of such Bank's Commitment or any of the LIBOR Loans; or
(iii) to require such Bank or the Administrative
Agent to make any payment or to forego any interest or other sum
payable hereunder in relation to LIBOR Loans, the amount of which
payment or foregone interest or other sum is calculated by reference to
the gross amount of any sum receivable or deemed received by such Bank
or the Administrative Agent from the Borrower hereunder,
then, in each such case and to the extent that the amount of such additional
cost, reduction, payment, foregone interest or other sum is not reflected in the
Adjusted LIBOR Rate, the Borrower will, upon demand made by such Bank (with a
copy to the Administrative Agent) or (as the case may be) the Administrative
Agent at any time and from time to time and as often as the occasion therefor
may arise, pay to such Bank or the Administrative Agent such additional amounts
as will be sufficient to compensate such
-25-
Bank or the Administrative Agent for such additional cost, reduction, payment or
foregone interest or other sum (without duplication for recovery of such amounts
under any other provision hereof), provided, however, that the Borrower shall
not be liable to any Bank or the Administrative Agent for costs incurred more
than 90 days prior to the receipt by the Borrower of such demand for payment
from such Bank or (as the case may be) the Administrative Agent unless such
costs were incurred prior to such 90-day period as a result of such Change in
Law being retroactive to a date which occurred prior to such 90-day period, and
provided further that the Borrower is treated no differently than such Bank's
other customers.
2.11.4. Claims by Affected Banks; Borrower's Right to Replace Banks.
Before giving any notice to the Borrower and the other Banks of a claim (whether
for compensation or to be excused from an otherwise applicable obligation) under
Section 2.11.2, 2.11.3, 2.12 or 2.14, the Affected Bank shall designate a
different lending office with respect to its LIBOR Loans or other Loans if such
designation would avoid the need for giving such notice and would not, in the
judgment of such Affected Bank, be illegal or otherwise disadvantageous to the
Affected Bank. Any claim under any of Sections 2.11.2, 2.11.3, 2.12 or 2.14
shall be delivered to the Borrower promptly after the Affected Bank has
determined that it is entitled to such claim. Upon the Borrower's receipt of any
such claim, the Borrower may: (i) request one or more of the other Banks to
acquire and assume all or part of such Affected Bank's Loans and Commitment; or
(ii) designate a replacement bank or financial institution satisfactory to the
Administrative Agent in its reasonable discretion. If one or more of the other
Banks in its sole discretion agrees to acquire all or part of such Affected
Bank's Loans and Commitment or if such a satisfactory replacement bank or
financial institution is designated, the Affected Bank shall promptly assign all
or such part of its Loans and Commitment in accordance with Section 9.10(ii).
2.12. Capital Requirements. If after the date hereof the Administrative
Agent or any Bank in good faith determines that (i) any Change in Law or any new
or changed guideline regarding capital requirements for banks or bank holding
companies, or any change in the interpretation or application thereof by any
governmental authority charged with the administration thereof, or (ii)
compliance by the Administrative Agent or any Bank or its parent bank holding
company with any guideline, request or directive adopted after the date hereof
of any such authority regarding capital adequacy (whether or not having the
force of law), has the effect of reducing the return on the Administrative
Agent's or such Bank's or such holding company's capital as a consequence of the
Administrative Agent's or such Bank's commitment to make Loans hereunder and
other commitments of the type hereunder to a level below that which the
Administrative Agent or such Bank or such holding company could have achieved
but for such adoption, change or compliance (taking into consideration the
Administrative Agent's or such Bank's or such holding company's then existing
policies with respect to capital adequacy and assuming the full utilization of
such entity's capital) by any amount deemed by the Administrative Agent or such
Bank to be material, then the Administrative Agent shall promptly notify the
Borrower thereof. The Borrower agrees to pay to the Administrative Agent or such
Bank the amount of such reduction of capital as and when such reduction
-26-
is in good faith determined, upon presentation by the Administrative Agent or
such Bank of a written statement in the amount and setting forth in reasonable
detail the Administrative Agent's or such Bank's calculation thereof, which
statement shall be deemed true and correct absent manifest error. In determining
such amount, the Administrative Agent or such Bank may use any reasonable
averaging and attribution methods. Notwithstanding the foregoing, the Borrower
shall not be liable to any Bank or the Administrative Agent for such reductions
with respect to events that occurred more than 90 days prior to the receipt by
the Borrower of such demand for payment from such Bank or (as the case may be)
the Administrative Agent unless such reductions were with respect to events that
occurred prior to such 90-day period.
2.13. Payments and Prepayments of the Loans.
(a) The Borrower hereby absolutely and unconditionally
promises to pay the entire principal amount of the Loans, and the entire
principal amount of the Loans shall be absolutely due and payable by the
Borrower to the Banks, on the Revolving Credit Maturity Date. All of the other
Indebtedness evidenced by the Loan Documents shall, if not sooner paid, also be
absolutely due and payable by the Borrower to the Banks on the Revolving Credit
Maturity Date.
(b) Revolving Credit Loans that are Base Rate Loans may be
voluntarily prepaid at any time, without premium or penalty, upon not less than
one Business Day's prior written notice to the Administrative Agent and each
Bank. Subject to the provisions of Section 2.16, Revolving Credit Loans that are
LIBOR Loans may be voluntarily prepaid at any time, without premium or penalty,
upon not less than two Business Days' prior written notice to the Administrative
Agent and each Bank. Any interest accrued on the amounts so prepaid to the date
of such payment must be paid at the time of any such payment. No prepayment of
the Revolving Credit Loans prior to the Revolving Credit Maturity Date shall
affect the Total Commitment or impair the Borrower's right to borrow as set
forth in Section 2.l. Partial prepayments of the Revolving Credit Loans shall be
in an amount equal to $2,500,000 or additional increments of $1,000,000. In the
case of any partial payment of the Revolving Credit Loans, the total amount of
such partial payment shall be allocable among the Revolving Credit Loans subject
to adjustment as provided in Section 8.5, pro rata in accordance with the
Commitment Percentage of each Bank.
2.14. Method of Payment; Withholding Tax Exemption.
(a) All payments and prepayments of principal and all payments
of interest and other amounts due in respect of Loans shall be made by the
Borrower to the Administrative Agent, for the respective accounts of the Banks
or (as the case may be) the Administrative Agent, at 000 Xxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000, in immediately available funds, free and clear of, and
without any deduction or withholding for, any taxes (other than Income Taxes)
(all such taxes (other than Income Taxes) imposed by withholding or deduction,
"Covered Taxes") or other payments unless required by law, and without set-off,
recoupment or counterclaim. All payments and
-27-
collections received after 2:00 p.m. will be deemed applied to the outstanding
Loans one day after the Administrative Agent's receipt of such payments in
immediately available funds. If Covered Taxes are required to be withheld or
deducted by law, the Borrower shall pay additional amounts so that after the
required withholding or deduction the Banks and the Administrative Agent receive
the amount they would have received had no such deduction or withholding been
required; provided, however, that the Borrower shall not be required to pay any
additional amounts with respect to (i) Income Taxes, or (ii) amounts owing to a
Bank that (x) is not incorporated under the laws of the United Sates of America
or a state thereof, and (y) has not delivered to the Administrative Agent the
forms required by Section 2.14(b) below (other than pursuant to the proviso at
the end of such Section 2.14(b)).
(b) At least five Business Days prior to the first date on
which interest or fees are payable hereunder for the account of any Bank, each
Bank that is not incorporated under the laws of the United States of America or
a state thereof (herein, a "Foreign Bank") agrees that it will deliver to each
of the Borrower and the Administrative Agent (or, in the case of a Participant
or an Assignee, to the Bank from which the Commitment was transferred) two duly
completed and executed copies of either U.S. Internal Revenue Service Form
W-8BEN (relating to an exemption under an applicable treaty) or Form W-8ECI (or
any subsequent versions thereof or successors thereof), certifying in either
case that such Foreign Bank is entitled to receive payments under this Agreement
and the other Loan Documents without deduction or withholding of any United
States federal income taxes. Each Foreign Bank which so delivers a Form W-8BEN
(relating to an exemption under an applicable treaty) or Form W-8ECI further
undertakes to deliver to each of the Borrower and the Administrative Agent two
additional copies of such form (or a successor form) on or before the date that
such form expires or becomes obsolete or after the occurrence of any event
requiring a change in the most recent form so delivered by it, and such
amendments thereto or extensions or renewals thereof as may be reasonably
requested by the Borrower or the Administrative Agent, in each case certifying
that such Foreign Bank is entitled to receive payments under this Agreement and
the Notes (if any) without deduction or withholding of any United States federal
income taxes; provided, however, that such requirement will not apply to a
Foreign Bank if any Change in Law has occurred prior to the date on which any
such delivery would otherwise be required which renders all such forms
inapplicable or which would prevent such Foreign Bank from duly completing and
delivering any such form with respect to it and such Foreign Bank advises the
Borrower and the Administrative Agent in writing that it is no longer capable of
receiving payments without any deduction or withholding of United States federal
income taxes.
(c) If there is any Change in Law after the Closing Date, and
the result thereof is that any Bank or the Administrative Agent becomes subject
to Covered Taxes, the Borrower shall pay additional amounts so that after the
required withholding or deduction the Banks and the Administrative Agent receive
the amount they would have received had no such deduction or withholding been
required, provided, however, that the relevant Bank shall timely file the
appropriate forms to reduce the amount of
-28-
required withholding or deduction to the lowest applicable rate to which such
Bank is entitled.
(d) For any period with respect to which a Bank has failed to
provide the Borrower with the appropriate form described in (i) Section 2.14(b)
above (other than pursuant to the proviso thereto) or (ii) the proviso to
Section 2.14(c) above, such Bank shall not be entitled to any additional
payments under Section 2.11 or this Section 2.14 with respect to Covered Taxes
imposed by reason of such failure; provided, however, that in the event of a
failure described in the proviso to Section 2.14(c), such Bank shall be entitled
to such an additional payment to the extent of the amount of Covered Taxes to
which such Bank would be subject even if it delivered the appropriate form
required by the proviso to Section 2.14(c); and provided, further, however, that
should a Bank become subject to Covered Taxes because of its failure to deliver
a form required hereunder, the Borrower shall take such steps as the Bank
reasonably shall request to assist the Bank to recover such Covered Taxes.
(e) If a Bank or the Administrative Agent receives a refund or
credit in respect of any Covered Taxes as to which it has been indemnified by
the Borrower or with respect to which the Borrower has paid additional amounts
pursuant to Section 2.11 or this Section 2.14, it shall, reasonably promptly
after the date of such receipt, pay over the amount of such refund or credit to
the Borrower, net of all reasonable out-of-pocket expenses of such Bank or the
Administrative Agent in obtaining such refund (it being agreed that if such
expenses are expected by such Bank or the Administrative Agent to be material,
such Bank or the Administrative Agent will attempt in good faith to consult with
the Borrower prior to incurring such expenses) and without interest (other than
interest paid by the relevant taxation authority with respect to such refund);
provided that the Borrower, upon the written request of such Bank or the
Administrative Agent, agrees to repay the amount paid over to the Borrower (plus
penalties, interest or other reasonable charges) to such Bank or the
Administrative Agent in the event such Bank or the Administrative Agent is
required to repay such refund or credit to such taxation authority.
(f) If the Borrower is required to pay additional amounts to
any Bank or the Administrative Agent pursuant to this Section 2.14, then such
Bank shall designate a different lending office with respect to its LIBOR Loans
if such designation would avoid such additional payment and would not, in the
good faith judgment of such Bank, be illegal or otherwise disadvantageous to the
Bank.
(g) The Borrower authorizes the Administrative Agent to charge
to any deposit account which the Borrower may maintain with the Administrative
Agent, at maturity or otherwise when due, the principal, interest, fees,
charges, and expenses provided for in this Agreement or any other document
executed and delivered in connection herewith, or to advance to the Borrower and
to charge to it as a Revolving Credit Loan a sum sufficient to pay such
principal, interest, fees, charges, expenses or
-29-
additional amounts, with advice thereafter sent to the Borrower's chief
financial officer in accordance with the Administrative Agent's customary
practice.
2.15. Default Rate Interest, Etc.
(a) Upon the occurrence and during the continuance of an Event
of Default, at the request of the Administrative Agent or the Required Banks,
all amounts outstanding hereunder or under any other Loan Document (including,
without limitation, all principal, interest and fees outstanding) shall bear
interest from and including the due date thereof until paid, compounded daily
and payable on demand, at a rate per annum equal to (i) if such due date occurs
prior to the end of an Interest Period, 2.0% above the interest rate applicable
to such Loan for such Interest Period until the expiration of such Interest
Period, and thereafter, 2.0% above the rate then applicable to Base Rate Loans;
and (ii) in all other cases, 2.0% above the rate then applicable to Base Rate
Loans.
(b) Upon the occurrence and during the continuance of an Event
of Default, at the request of the Administrative Agent or the Required Banks,
the Letter of Credit fees payable under Section 2.19 shall be increased to a
rate per annum equal to 2.0% above the rate applicable thereto prior to the
occurrence thereof.
2.16. Payments Not at End of Interest Period. If the Borrower for any
reason makes any payment of principal with respect to any LIBOR Loan on any day
other than the last day of an Interest Period applicable to such LIBOR Loan, or
fails to borrow or continue or convert to a LIBOR Loan after giving a Notice of
Borrowing or Conversion pursuant to Section 2.4, the Borrower shall pay to the
Administrative Agent for the respective accounts of the Banks an amount computed
pursuant to the following formula:
L = (R - T) x P x D
---------------
360
L = amount payable to the Administrative Agent for the accounts of
the Banks
R = interest rate on such Loan
T = yield to maturity of any readily marketable bond or other
obligation of the United States, selected at the
Administrative Agent's sole discretion, maturing on or near
the last day of the then applicable Interest Period of such
Loan and in approximately the same amount as such Loan
P = the amount of principal prepaid or the amount of the requested
Loan
D = the number of days remaining in the Interest Period as of the
date of such payment or the number of days of the requested
Interest Period
The Borrower shall pay such amount upon presentation by the Administrative Agent
of a statement setting forth the amount and the Administrative Agent's
calculation thereof (in reasonable detail) pursuant hereto, which statement
shall be deemed prima facia evidence of the amount owed.
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2.17. Computation of Interest and Fees; Maximum Interest. Interest and
all fees payable hereunder on account of Base Rate Loans shall be computed daily
on the basis of a year of 365/366 days and paid for the actual number of days
for which due. Interest and all fees payable hereunder on account of LIBOR Rate
Loans shall be computed daily on the basis of 360 days and paid for the actual
number of days for which due. If the due date for any payment of principal is
extended by operation of law, interest shall be payable for such extended time.
If any payment required by this Agreement becomes due on a day that is not a
Business Day such payment may be made on the next succeeding Business Day
(subject to clause (i) of the definition of Interest Period), and such extension
shall be included in computing interest in connection with such payment.
Notwithstanding any other term of this Agreement, the other Loan Documents or
any other document referred to herein or therein, the maximum amount of interest
which may be charged to or collected from any person liable hereunder or under
other Loan Documents by any Bank shall be absolutely limited to, and shall in no
event exceed, the maximum amount of interest which could lawfully be charged or
collected under applicable law (including, to the extent applicable, the
provisions of Section 5197 of the Revised Statutes of the United States of
America, as amended, 12 U.S.C. Section 85, as amended), so that the maximum of
all amounts constituting interest under applicable law, howsoever computed,
shall never exceed as to any Person liable therefor such lawful maximum, and any
term of this Agreement, the Letter of Credit applications, the other Loan
Documents or any other document referred to herein or therein which could be
construed as providing for interest in excess of such lawful maximum shall be
and hereby is made expressly subject to and modified by the provisions of this
paragraph.
2.18. Letters of Credit.
(a) Upon the terms and subject to the conditions of this Agreement, and
in reliance upon the representations, warranties and covenants of the Borrower
made herein, each Issuing Bank agrees to issue, under the joint responsibilities
of the Banks having Commitments, to the extent permitted by law and subject to
the Uniform Custom Practices of the International Chamber of Commerce governing
Letters of Credit (Publication No. 500 or any successor thereto), one or more
Letters of Credit on the application of and for the account of the Borrower,
during the period from the Closing Date to 30 days prior to the Revolving Credit
Maturity Date; provided that the Stated Amount of Letters of Credit outstanding
at any time, plus the aggregate amount of all unreimbursed draws under such
outstanding Letters of Credit, shall not at any time exceed the L/C Availability
in effect at such time; and provided, further that at the time the Borrower
requests the issuance of a Letter of Credit and after giving effect to the
issuance thereof, there has not occurred and is not continuing a Default or an
Event of Default. It is understood and agreed by the parties hereto that amounts
drawn under such Letters of Credit shall become immediately due and payable by
the Borrower to the Issuing Bank, for the ratable accounts of the Administrative
Agent and the Banks, and shall bear interest at the rate then applicable to
Revolving Credit Loans that are Base Rate Loans, and, if not paid forthwith,
shall, (i) if there is Availability, be added to the Loan Account as Revolving
Credit Loans and shall be immediately due and payable upon the Revolving Credit
Maturity Date (or, if earlier, upon acceleration of the Loans), and (ii) if
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there is insufficient Availability, be immediately due and payable, bearing
interest until paid at the rate set forth in Section 2.15.
(b) To minimize the risk of issuance of any Letter of Credit
that would exceed the then-current L/C Availability, each Issuing Bank that is
not the Administrative Agent shall, prior to becoming an Issuing Bank, agree
with the Administrative Agent and the Borrower as to reporting and other
procedures to be followed by such Issuing Bank prior to and following the
issuance of each Letter of Credit, so as to minimize the risk of issuance of any
Letter of Credit that might exceed the then-current L/C Availability and to
permit the Administrative Agent to accurately xxxx the Borrower and account to
the Banks for Letter of Credit fees payable for the account of the Banks.
Notwithstanding the foregoing, the Borrower acknowledges that it is the
unconditional obligation of the Borrower to ensure that at no time shall any
Letter of Credit be drawn or outstanding that exceeds the then-current L/C
Availability.
(c) Upon the issuance of each Letter of Credit by the Issuing Bank,
each Bank shall be deemed to automatically have purchased a participation in
such Letter of Credit in accordance with its Commitment Percentage, and each
Bank severally agrees that it shall be absolutely liable, without regard to the
occurrence of any Default or Event of Default or any other condition precedent
whatsoever, to the extent of such Bank's Commitment Percentage thereof, to
reimburse the Issuing Bank on demand for the amount of each draft paid by such
Issuing Bank under each Letter of Credit to the extent that such amount is not
reimbursed by the Borrower pursuant hereto. In addition, all Letters of Credit
shall, unless the Administrative Agent and the Banks otherwise agree in writing,
have a stated expiration date not to exceed one year and shall, in any event,
expire not later than five (5) days prior to the Revolving Credit Maturity Date.
(d) To evidence such Letters of Credit, the Borrower shall enter into,
with the Issuing Bank, the Administrative Agent and the Banks, such agreements
and execute such customary instruments and documents as the Issuing Bank, the
Administrative Agent and the Banks reasonably require, including, but not
limited to, a letter of credit application and agreement.
2.19. Letter of Credit Fees. A per annum Letter of Credit fee shall be
payable to the Administrative Agent, for the ratable accounts of the Banks, (a)
on each standby Letter of Credit at a rate per annum equal to the Applicable
LIBOR Margin applicable to Revolving Credit Loans then in effect multiplied by
the face amount of such Letter of Credit, and (b) on each documentary Letter of
Credit at a rate per annum equal to one-half of the Applicable LIBOR Margin
applicable to Revolving Credit Loans then in effect multiplied by the face
amount of such Letter of Credit. Such Letter of Credit fees for each Letter of
Credit shall be payable quarterly in arrears on the last Business Day of each
fiscal quarter. In addition, the Borrower shall pay to the Issuing Bank, solely
for the account of the Issuing Bank, such documentary issuing, processing,
amendment, negotiation fees for document examination, and other administrative
fees as are customarily charged by the Issuing Bank on Letters of Credit
(including, without limitation, a fronting fee equal to 0.125% multiplied by the
face amount of such Letter of
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Credit payable on the issuance thereof), which fees and charges shall be payable
when required by such Issuing Bank.
2.20. Interdependence of Borrower Affiliated Group. In order to induce
each of the Banks to enter into this Agreement and the other Loan Documents to
which it is a party, and grant the Loans hereunder and issue the Letters of
Credit, the Borrower, on behalf of itself and each other member of the Borrower
Affiliated Group, and severally represents and warrants that:
(a) the business of each member of the Borrower Affiliated
Group shall benefit from the successful performance of the business of each
other member of the Borrower Affiliated Group, and the Borrower Affiliated Group
as a whole;
(b) each member of the Borrower Affiliated Group has
cooperated to the extent necessary and shall continue to cooperate with each
other member of the Borrower Affiliated Group to the extent necessary in the
development and conduct of each other member of the Borrower Affiliated Group's
business, and shall to the extent necessary share and participate in the
formulation of methods of operation, distribution, leasing, inventory control,
and other similar business matters essential to each member of the Borrower
Affiliated Group's business;
(c) the failure of any member of the Borrower Affiliated Group
to cooperate with all other members of the Borrower Affiliated Group in the
conduct of their respective businesses shall have an adverse impact on the
business of each other member of the Borrower Affiliated Group, and the failure
of any member of the Borrower Affiliated Group to associate or cooperate with
all other members of the Borrower Affiliated Group is reasonably likely to
impair the goodwill of such other members of Borrower Affiliated Group and the
Borrower Affiliated Group as a whole; and
(d) each member of the Borrower Affiliated Group is accepting
joint and several liability for the Obligations on the terms and conditions set
forth in the Subsidiary Guaranty and represents and warrants that the financial
accommodations being provided hereby are for the mutual benefit, directly and
indirectly, of each member of the Borrower Affiliated Group.
SECTION III
CONDITIONS OF LOANS
3.1. Conditions Precedent to Initial Revolving Credit Loan. The
obligation of the Banks to make the initial Revolving Credit Loan and to issue
any Letter of Credit on the Closing Date, is subject to the fulfillment on the
Closing Date of each of the following conditions precedent:
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3.1.1. Loan Documents.
(i) Each of the Loan Documents shall have been duly and
properly authorized, executed and delivered by the respective parties thereto
and shall be in full force and effect on and as of the Closing Date.
(ii) Executed original counterparts of each of the Loan
Documents shall have been furnished to the Administrative Agent.
3.1.2. Legality of Transactions. No change in applicable law or
regulation shall have occurred as a consequence of which it shall have become
and continue to be unlawful for the Borrower, any other member of the Borrower
Affiliated Group, the Administrative Agent or any of the Banks to perform any of
their agreements or obligations under any of the Loan Documents to which they
are a party on the Closing Date.
3.1.3. Representations and Warranties. Each of the representations and
warranties made by or on behalf of the Borrower and each other member of the
Borrower Affiliated Group to the Administrative Agent and the Banks in this
Agreement or the other Loan Documents (a) shall be true and correct when made,
(b) shall, for all purposes of this Agreement, be deemed to be repeated on and
as of the Closing Date, and (c) shall be true and correct on and as of such
date.
3.1.4. Performance, Consents, No Defaults, Litigation, Etc. The
Borrower and each other member of the Borrower Affiliated Group shall have duly
and properly performed, complied with and observed each of its covenants,
agreements and obligations contained in any of the Loan Documents to which it is
a party or by which it is bound which are required to be performed, complied
with or observed on the Closing Date. All necessary consents and/or waivers in
connection with the consummation of the transactions contemplated by the Loan
Documents shall have been obtained by the Borrower and the other members of the
Borrower Affiliated Group and copies thereof shall have been delivered to the
Administrative Agent and the Banks. No event shall have occurred on or prior to
the Closing Date and be continuing on such Closing Date, and no condition shall
exist on such Closing Date, which constitutes a Default or an Event of Default.
No litigation or other proceeding, and no tax matter, ERISA matter or
Environmental Claim shall be continuing, or pending or threatened in writing,
which individually or in the aggregate could reasonably be expected to have a
Material Adverse Effect.
3.1.5. Certified Copies of Charter Documents. The Administrative Agent
shall have received from each of the Borrower and the other members of the
Borrower Affiliated Group a copy, certified by a duly authorized officer of each
of the Borrower and such other members of the Borrower Affiliated Group to be
true and complete on the Closing Date, of (i) its charter or other formation
documents, as in effect on such date of certification, certified as of a recent
date by the Secretary of State of its jurisdiction of
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incorporation or formation, and (ii) where applicable, its by-laws or limited
liability company agreement as in effect on such date.
3.1.6. Proof of Entity Action. The Administrative Agent shall have
received from each of the Borrower and each other member of the Borrower
Affiliated Group a copy, certified by a duly authorized officer of each of the
Borrower and such other member of the Borrower Affiliated Group to be true and
complete on the Closing Date, of records of all corporate and other entity
action taken by each of the Borrower and such member of the Borrower Affiliated
Group to authorize, as applicable (i) its execution and delivery of the Loan
Documents to which it is or is to become a party, (ii) its performance of all of
its agreements and obligations under each of such documents, and (iii) any
borrowings and other transactions contemplated by this Agreement.
3.1.7. Incumbency Certificate. The Administrative Agent shall have
received from each of the Borrower and each other member of the Borrower
Affiliated Group an incumbency certificate, dated the Closing Date and signed by
the appropriate duly authorized officers of each of the Borrower and such other
member of the Borrower Affiliated Group, and giving the name and bearing a
specimen signature of each individual who shall be authorized, as applicable:
(i) to sign, in the name and on behalf of each of the Borrower and such other
member of the Borrower Affiliated Group, each of the Loan Documents to which it
is or is to become a party; (ii) to make application for the Loans or conversion
thereof; and (iii) to give notices or to take other action on its behalf under
the Loan Documents.
3.1.8. Proceedings and Documents. All corporate, company, governmental
and other proceedings in connection with the transactions contemplated by the
Loan Documents and all instruments and documents incidental thereto, shall be in
form and substance reasonably satisfactory to the Administrative Agent, and the
Administrative Agent shall have received all such counterpart originals or
certified or other copies of all such instruments and documents as the
Administrative Agent shall have reasonably requested.
3.1.9. Good Standing, Etc. The Administrative Agent shall have received
a long-form certificate of the Secretary of State of the respective
jurisdictions of formation of each of the Borrower and each other member of the
Borrower Affiliated Group as to each of the Borrower's and such other member of
the Borrower Affiliated Group's legal existence and good standing in such state
and listing all documents on file in the office of said Secretary of State. The
Administrative Agent shall also have received copies of certificates of
qualification to do business from any jurisdictions in which any of the Borrower
or any other member of the Borrower Affiliated Group is required to be
qualified, except in such jurisdictions where the failure to be so qualified
could not reasonably be expected to have a Material Adverse Effect.
3.1.10. Fees. The Borrower shall have complied with its obligations
under Section 2.6 to pay the fees described in the Fee Letter, and the Borrower
shall have paid all reasonable legal fees and expenses and collateral
examination fees and other
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reasonable fees and expenses incurred by the Administrative Agent in connection
with the consummation of the transactions contemplated by this Agreement.
3.1.11. Legal Opinion. The Administrative Agent shall have received a
written legal opinion, addressed to the Administrative Agent and the Banks,
dated the Closing Date, from Xxxxxxxx Xxxxxxxxx Xxxxxx Xxxxxxxx & Xxxxxx LLP,
counsel to the Borrower Affiliated Group, in or substantially in the form of
Exhibit E hereto.
3.1.12. Financial Condition. The Administrative Agent and the Banks
shall be satisfied that there has been no material adverse change in the
business, operations, results of operations, assets, liabilities or condition
(financial or otherwise) of the Borrower Affiliated Group taken as a whole since
the most recent financial statements referred to in Section 4.7.
3.1.13. Security Documents; U.C.C. Search Reports; Insurance; Patents,
Trademarks and Copyrights. The Security Documents and the appropriate financing
statements (in the name of the Borrower and each other member of the Borrower
Affiliated Group) and other documents in respect thereto and necessary to enable
the Administrative Agent to perfect a legal, valid and enforceable
first-priority security interest thereunder for the benefit of the Banks, shall
have been duly executed by each of the Borrower and such other members of the
Borrower Affiliated Group, and filed or recorded, as applicable, in all
appropriate filing offices or other locations necessary for the perfection of
such first-priority interests, and all other actions necessary for the
perfection of such interests shall have been completed; provided, however, that,
except for (a) filings and recordings to be made with the Secretaries of State
of the respective states of formation of the Borrower and the other members of
the Borrower Affiliated Group, and (b) fixture filings to be made with respect
to the principal executive offices and distribution center of the Borrower
located in Grapevine, Texas, no filings or recordings shall be made to perfect
the security interest of the Administrative Agent and the Banks in fixtures of
the Borrower and the other members of the Borrower Affiliated Group. The
Administrative Agent shall have received reports concerning the results of
searches of the Patent and Trademark Office and Uniform Commercial Code filing
offices for the Borrower and each other member of the Borrower Affiliated Group
in each jurisdiction where Collateral or other assets are located made no more
than 30 days prior to the Closing Date. The Administrative Agent shall have
received the original stock certificates, together with stock powers endorsed in
blank, for all of the issued and outstanding capital stock of each member of the
Borrower Affiliated Group except the Borrower. The Administrative Agent shall
have received satisfactory evidence that liability insurance and casualty
insurance, including any insurance as is required by the Security Documents to
be in effect in respect of all real and personal property and fixtures, of each
of the Borrower and each other member of the Borrower Affiliated Group is in
effect and the interest of the Administrative Agent as loss payee and additional
insured has been duly endorsed upon all instruments of insurance issued in
respect of such property and in respect of liability. All such insurance shall
provide for 30 days' advance written notice to the Administrative Agent of any
cancellation thereof.
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3.1.14. Solvency. The Administrative Agent and the Banks shall have
received reasonably satisfactory evidence that the Borrower and each other
member of the Borrower Affiliated Group is solvent, and will be solvent after
giving effect to the Loans to be made hereunder on the Closing Date.
3.1.15. Payoff and Release Letter. The Administrative Agent shall have
received a payoff and release letter and, if applicable, related UCC-3 financing
statements or other discharges, in form and substance satisfactory to the
Administrative Agent and the Banks from Xxxxxx & Xxxxx, and the Borrower shall
either have repaid all outstanding Indebtedness to Xxxxxx & Noble or such
Indebtedness shall have been converted into equity in the Borrower, and neither
the Borrower nor any other member of the Borrower Affiliated Group shall have
any outstanding Indebtedness, other than as permitted by Section 6.1.
3.1.16. Initial Public Offering. The Borrower shall have closed (or
shall be closing concurrently with the initial Loan) an underwritten public
offering pursuant to the Registration Statement covering the offer and sale of
Common Stock for the account of the Borrower in which the aggregate gross
proceeds to the Borrower are not less than $300,000,000.
3.2. Conditions Precedent to all Loans and Letters of Credit. The
obligation of each Bank to make each Loan and issue each Letter of Credit,
including the initial Loans, or continue or convert Loans to Loans of the other
type, is further subject to the following conditions:
(a) timely receipt by the Administrative Agent and the Banks
of the Notice of Borrowing or Conversion as provided in Section 2.4(a);
(b) the representations and warranties contained in Section IV
shall be true and accurate in all material respects on and as of the date of
such Notice of Borrowing or Conversion and on the effective date of the making,
continuation or conversion of each Loan as though made at and as of each such
date (except to the extent that such representations and warranties expressly
relate to an earlier date), and no Default or Event of Default shall have
occurred and be continuing, or would result from such Loan;
(c) the resolutions referred to in Section 3.1.6 shall remain
in full force and effect; and
(d) no change shall have occurred in any law or regulation or
interpretation thereof that, in the opinion of counsel for the Administrative
Agent or any Bank, would make it illegal or against the policy of any
governmental agency or authority for such Bank to make Loans hereunder.
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The making of each Loan shall be deemed to be a representation and
warranty by the Borrower on the date of the making, continuation or conversion
of such Loan as to the accuracy of the facts referred to in subsection (b) of
this Section 3.2.
SECTION IV
REPRESENTATIONS AND WARRANTIES
In order to induce the Administrative Agent and the Banks to enter into
this Agreement and to make Loans and issue Letters of Credit hereunder, the
Borrower, on behalf of itself and each other member of the Borrower Affiliated
Group, represents and warrants to the Administrative Agent and each Bank that:
4.1. Organization and Qualification. The Borrower and each other member
of the Borrower Affiliated Group (a) is an entity duly incorporated, organized
or formed, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or other formation as indicated on Exhibit D
hereto, (b) has all requisite corporate, partnership, limited liability company
or other power to own its property and conduct its business as now conducted and
as presently contemplated, and (c) is duly qualified and in good standing as a
foreign corporation, foreign limited liability company, foreign limited
partnership or other entity and is duly authorized to do business in each
jurisdiction where the nature of its properties or business requires such
qualification, except where the failure to be so qualified could not reasonably
be expected to have a Material Adverse Effect.
4.2. Entity Authority. The execution, delivery and performance of each
of the Loan Documents to which the Borrower or any other member of the Borrower
Affiliated Group is a party and the transactions contemplated hereby and thereby
are within the corporate, limited liability company, partnership or other power
and authority of the Borrower or such member of the Borrower Affiliated Group
and have been authorized by all necessary corporate or other entity proceedings,
and do not and will not (a) require any consent or approval of any creditors,
trustees for creditors, shareholders, members or partners of the Borrower or
such member of the Borrower Affiliated Group (other than any such consent that
has been obtained prior to the Closing Date and delivered to the Administrative
Agent), (b) contravene any provision of the charter documents, by-laws or other
organizational documents of the Borrower or such member of the Borrower
Affiliated Group or any law, rule or regulation applicable to the Borrower or
such member of the Borrower Affiliated Group, (c) contravene any provision of,
or constitute an event of default or event that, but for the requirement that
time elapse or notice be given, or both, would constitute an event of default
under, any other agreement, instrument, order or undertaking binding on the
Borrower or such member of the Borrower Affiliated Group other than those that
could not reasonably be expected to have a Material Adverse Effect, or (d)
result in or require the imposition of any Encumbrance on any of the properties,
assets or rights of the Borrower or such member of the Borrower Affiliated
Group.
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4.3. Valid Obligations. Each of the Loan Documents to which the
Borrower or any other member of the Borrower Affiliated Group is a party and all
of their respective terms and provisions are the legal, valid and binding
obligations of the Borrower or such member of the Borrower Affiliated Group
enforceable in accordance with their respective terms, except as limited by
bankruptcy, insolvency, reorganization, moratorium or other laws affecting the
enforcement of creditors' rights generally, and general principles of equity.
4.4. Consents or Approvals. The execution, delivery and performance of
each of the Loan Documents to which the Borrower or any other member of the
Borrower Affiliated Group is a party and the transactions contemplated herein
and therein do not require any approval or consent of, or filing or registration
with, any governmental or other agency or authority, or any other party, except
filings under the Uniform Commercial Code and with the Patent and Trademark
Office in connection with the Collateral.
4.5. Title to Properties; Absence of Encumbrances. Each of the Borrower
and each other member of the Borrower Affiliated Group has good title to all of
the properties, assets and rights of every name and nature now purported to be
owned by it, including, without limitation, such properties, assets and rights
as are reflected in the most recent of the Initial Financial Statements (except
such properties, assets or rights as have been disposed of in the ordinary
course of business since the date thereof), free from all Encumbrances except
Permitted Encumbrances, and, except as so disclosed, free from all defects of
title that might have a Material Adverse Effect. All such properties and assets
and all properties which are leaseholds are free and clear of all title defects
or objections, liens, claims, charges, security interests and other Encumbrances
of any nature whatsoever except Permitted Encumbrances, and are not, in the case
of real property, subject to any rights of way, building, use or other
restrictions, easements, exceptions, variances, reservations or limitations of
any nature whatsoever except, with respect to all such properties and assets,
(i) provisions of existing building and zoning laws, provided that such
provisions would not materially interfere with the Borrower's or any other
member of the Borrower Affiliated Group's use of such properties, (ii) liens for
current taxes not yet due, (iii) as otherwise disclosed on Exhibit D hereto, and
(iv) other Permitted Encumbrances. The rights, properties and other assets
presently owned, leased or licensed by each of the Borrower and each other
member of the Borrower Affiliated Group and described elsewhere in this
Agreement include all rights, properties and other assets necessary to permit
the Borrower and such member of the Borrower Affiliated Group to conduct its
businesses in all material respects in the same manner as its businesses have
been conducted prior to the date hereof. At the time the Borrower or any other
member of the Borrower Affiliated Group pledges, sells, assigns or transfers to
the Administrative Agent any instrument, document of title, security, chattel
paper or other property (including Inventory, contract rights and Accounts) or
any proceeds or products thereof, or any interest therein, the Borrower or such
member of the Borrower Affiliated Group shall be the lawful owner thereof and
shall have good right to pledge, sell, assign or transfer the same; none of such
properties shall have been pledged, sold, assigned or
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transferred to any Person other than the Administrative Agent or in any way
encumbered; and the Borrower or such member of the Borrower Affiliated Group
shall defend the same against the claims and demands of all Persons.
4.6. Material Contracts. Neither the Borrower nor any other member of
the Borrower Affiliated Group is a party to any contract, agreement or license
which is material to the operations or business of the Borrower or any other
member of the Borrower Affiliated Group.
4.7. Financial Statements. The Borrower has furnished to the
Administrative Agent and the Banks (a) the Consolidated balance sheet of the
Borrower as of February 3, 2001 and the related Consolidated statements of
income, changes in stockholders' equity and cash flow of the Borrower for the
fiscal year ended February 3, 2001, and related footnotes, audited and certified
by BDO Xxxxxxx without qualification and prepared in accordance with GAAP, and
(b) the unaudited Consolidated balance sheet of the Borrower as of November 3,
2001 and the related unaudited Consolidated statements of income, changes in
stockholders' equity and cash flow of the Borrower for the three fiscal quarters
then ended and certified by the chief financial officer of the Borrower (clauses
(a) and (b), collectively, the "Initial Financial Statements"). All the Initial
Financial Statements were prepared in accordance with GAAP (except that the
unaudited financial statements are without footnotes) and present fairly the
Consolidated financial position of the Borrower as of such dates and the
Consolidated results of the operations of the Borrower for such periods,
subject, in the case of the unaudited financial statements, to normal, recurring
year-end adjustments that shall not in the aggregate be materially adverse.
There are no liabilities, contingent or otherwise, not disclosed in any of the
Initial Financial Statements that involve a material amount, except, with
respect to the unaudited financial statements, for normal, recurring year-end
adjustments that shall not in the aggregate be materially adverse.
4.8. Changes. Since the respective dates of the Initial Financial
Statements, no Material Adverse Effect has occurred.
4.9. Defaults. No Default or Event of Default has occurred and is
continuing or would result from the consummation of the transactions
contemplated by this Agreement or any other Loan Document.
4.10. Taxes. Each of the Borrower and each other member of the Borrower
Affiliated Group has filed all federal, state and other tax returns required to
be filed, and all taxes, assessments and other governmental charges due from the
Borrower or such other member of the Borrower Affiliated Group have been fully
paid (other than any amount the validity of which is currently being contested
in good faith and with respect to which adequate reserves have been established
therefor). Neither the Borrower nor any other member of the Borrower Affiliated
Group has executed any waiver of limitations in respect of tax liabilities. Each
member of the Borrower Affiliated Group has established on its books reserves
adequate for the payment of all federal, state and other tax liabilities.
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4.11. Litigation. Except as set forth on Exhibit D hereto, there is no
litigation, arbitration, claim, proceeding or investigation pending or, to the
Borrower's knowledge, threatened against the Borrower or any other member of the
Borrower Affiliated Group that, individually or in the aggregate, if adversely
determined could reasonably be expected to have a Material Adverse Effect.
4.12. Subsidiaries. As of the date of this Agreement, no member of the
Borrower Affiliated Group has any Subsidiaries except as set forth on Exhibit D
hereto with respect to each such member of the Borrower Affiliated Group.
4.13. Investment Company Act. Neither the Borrower nor any other member
of the Borrower Affiliated Group is subject to regulation under the Investment
Company Act of l940, as amended.
4.14. Compliance with ERISA. Each of the Borrower, each other member of
the Borrower Affiliated Group, and each member of the Controlled Group, have
fulfilled their obligations under the minimum funding standards of ERISA and the
Code with respect to each Plan and are in compliance in all material respects
with the applicable provisions of ERISA and the Code, and have not incurred any
liability to the PBGC or a Plan under Title IV of ERISA; and no Prohibited
Transaction or Reportable Event has occurred with respect to any Plan.
4.15. Environmental Matters. Except as specifically disclosed in
Exhibit D hereto, there are (a) no violations by any member of the Borrower
Affiliated Group of any Environmental Law, and (b) no Environmental Claims, in
either case, that could, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
4.16. Disclosure. No representations and warranties made by each member
of the Borrower Affiliated Group in this Agreement, any other Loan Document or
in any other agreement, instrument, document, certificate, statement or letter
furnished to the Administrative Agent, the Arranger, or the Banks by or on
behalf of any member of the Borrower Affiliated Group, and no other factual
information heretofore or contemporaneously furnished by or on behalf of any
member of the Borrower Affiliated Group to the Administrative Agent, the
Arranger or the Banks, in connection with any of the transactions contemplated
by any of the Loan Documents contains any untrue statement of material fact or
omits to state a material fact necessary in order to make the statements
contained therein not materially misleading in light of the circumstances in
which they are made. Except as disclosed herein or therein, there is no fact
currently known to the Borrower which could reasonably be expected to cause a
Material Adverse Effect.
4.17. Solvency. Both before and after giving effect to all Indebtedness
incurred by the Borrower on the Closing Date, neither the Borrower nor any other
member of the Borrower Affiliated Group (i) is Insolvent, or will be rendered
Insolvent by the
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Indebtedness incurred in connection therewith, (ii) will be left with
unreasonably small capital with which to engage in its business, even allowing
for a reasonable margin of error in the projections of the future performance of
the Borrower and such other members of the Borrower Affiliated Group, (iii) will
have incurred Indebtedness beyond its ability to pay such Indebtedness as it
matures, or (iv) will fail to have assets (both tangible and intangible) having
a present fair salable value in excess of the amount required to pay the
probable liability on its then existing debts (whether matured or unmatured,
liquidated or unliquidated, absolute, fixed or contingent).
4.18. Compliance with Statutes, etc. Each of the Borrower and each
other member of the Borrower Affiliated Group is in compliance with all
applicable statutes, regulations and orders of, and all applicable restrictions
imposed by, all governmental bodies, domestic or foreign, in respect of the
conduct of its business and the ownership of its property, except for such
non-compliances as could not individually or in the aggregate reasonably be
expected to have a Material Adverse Effect.
4.19. Capitalization. On and as of the Closing Date, the authorized
capital stock or other equity, and the number of issued and outstanding shares
of capital stock or other equity, of the Borrower and each other member of the
Borrower Affiliated Group is as described in the Registration Statement. All
such outstanding shares of capital stock or other equity of the Borrower and
each other member of the Borrower Affiliated Group have been duly and validly
issued, in compliance with all legal requirements relating to the authorization
and issuance of shares of capital stock or other equity, and are fully paid and
non-assessable.
4.20. Labor Relations. Neither the Borrower nor any other member of the
Borrower Affiliated Group is engaged in any unfair labor practice in violation
of any applicable law or order of any court or governmental authority. Except as
disclosed on Exhibit D, there is (i) no unfair labor practice complaint pending
or, to the Borrower's knowledge, threatened against the Borrower or any other
member of the Borrower Affiliated Group before the National Labor Relations
Board, and no grievance or arbitration proceeding arising out of or under any
collective bargaining agreement is so pending against the Borrower or any other
member of the Borrower Affiliated Group or, to the knowledge of the Borrower
Affiliated Group, threatened against it, and (ii) no labor dispute, slowdown or
stoppage pending against the Borrower or any other member of the Borrower
Affiliated Group or, to the knowledge of the Borrower Affiliated Group,
threatened against the Borrower or any other member of the Borrower Affiliated
Group that individually or in the aggregate could reasonably be expected to
result in a Material Adverse Effect. To the knowledge of the Borrower, no union
representation question exists with respect to the employees of the Borrower or
any other member of the Borrower Affiliated Group and no union organizing
activities are taking place.
4.21. Certain Transactions. Except as set forth on Exhibit D, none of
the officers, partners, directors, or employees of any member of the Borrower
Affiliated Group is presently a party to any transaction with any other member
of the Borrower Affiliated Group (other than for services as employees, officers
and directors), including any
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contract, agreement or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal property to or from,
or otherwise requiring payments to or from any officer, partner, director or
such employee or, to the knowledge of the Borrower Affiliated Group, any
corporation, partnership, trust or other entity in which any officer, partner,
director, or any such employee or natural person related to such officer,
partner, director or employee or other Person in which such officer, partner,
director or employee has a direct or indirect beneficial interest, has a
substantial direct or indirect beneficial interest or is an officer, director,
trustee or partner.
4.22. Restrictions on the Borrower Affiliated Group. No member of the
Borrower Affiliated Group is a party to or bound by any contract, agreement or
instrument, or subject to any charter or other corporate restriction, that has
or could reasonably be expected to have a Material Adverse Effect.
4.23. Leases. The descriptions contained in the Registration Statement
regarding the Borrower's leases, occupancy agreements and all amendments thereto
and all other documents affecting rights and obligations thereunder, including
without limitation, assignments and subleases pursuant to which the Borrower or
any other member of the Borrower Affiliated Group leases real property, and
license agreements pursuant to which a third party would have the right to enter
upon the leased premises (herein individually referred to as a "Lease" and
collectively referred to as the "Leases"), are true and correct in all material
respects. Neither the tenant (or lessee) nor, to the knowledge of the Borrower,
the landlord (or lessor), under any Lease is in default under the applicable
Lease or has given or received any notice of cancellation or termination of such
Lease or condemnation of the leased premises that, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
4.24. Franchises, Patents, Copyrights, Etc. Except as otherwise set
forth on Exhibit D hereto, each of the Borrower and each other member of the
Borrower Affiliated Group possesses all franchises, patents, copyrights,
trademarks, tradenames, service marks, licenses and permits, and rights in
respect of the foregoing, adequate for the conduct of its business as
substantially now conducted without known conflict with any rights of others
and, in each case, free of any Encumbrance that is not a Permitted Encumbrance.
4.25. Collateral. All of the Obligations of the Borrower Affiliated
Group to the Administrative Agent and the Banks under or in respect of the Loan
Documents will, at all times from and after the execution and delivery of each
of the Security Documents, be entitled to the benefits of and be secured by each
of such Security Documents to the extent provided therein. No Collateral is or
will at any time be located at any public warehouse or any location other than
real estate owned by a member of the Borrower Affiliated Group or subject to a
Lease.
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SECTION V
AFFIRMATIVE COVENANTS
So long as any Bank has any commitment to make Loans or issue Letters
of Credit hereunder or any Loan or other Obligation hereunder remains
outstanding, the Borrower covenants as follows on behalf of itself and each
other member of the Borrower Affiliated Group:
5.1. Financial Statements and other Reporting Requirements. The
Borrower shall furnish to the Administrative Agent and each Bank:
(a) as soon as available, but in any event within 90 days
after the end of each fiscal year of the Borrower Affiliated Group, a
Consolidated balance sheet as of the end of, and a related Consolidated
statement of income, changes in stockholders' equity and cash flow for, such
year, prepared in accordance with GAAP and audited and certified without
qualification by BDO Xxxxxxx, or a "Big Five" accounting firm, or another
accounting firm reasonably acceptable to the Administrative Agent; and,
concurrently with such financial statements, a copy of said certified public
accountants' management letter and a written statement by such accountants that,
in the making of the audit necessary for their report and opinion upon such
financial statements they have obtained no knowledge of any Default or Event of
Default or, if in the opinion of such accountants any such Default or Event of
Default exists, they shall disclose in such written statement the nature and
status thereof;
(b) as soon as available, but in any event within 45 days
after the end of each fiscal quarter of the Borrower Affiliated Group, a
Consolidated balance sheet as of the end of, and a related Consolidated
statement of income, changes in stockholders' equity and cash flow for, the
portion of the fiscal year then ended and for the fiscal quarter then ended,
prepared in accordance with GAAP (without footnotes) and certified by the chief
financial officer of the Borrower, but subject, however, to normal, recurring
year-end adjustments that shall not in the aggregate be materially adverse;
(c) no more than 30 days after the first day of each fiscal
year of the Borrower Affiliated Group (starting with the fiscal year beginning
February 1, 2003), Consolidated projections of the Borrower Affiliated Group for
such succeeding fiscal year in form acceptable to the Administrative Agent and
the Banks (it being recognized by the Administrative Agent and the Banks that
projections as to future results are not to be viewed as facts and that the
actual results for the period or periods covered by the projections may differ
from the projected results);
(d) concurrently with the delivery of each financial statement
pursuant to subsections (a) and (b) of this Section 5.l, a report in
substantially the form of Exhibit F hereto signed on behalf of the Borrower
Affiliated Group by the chief financial officer of the Borrower, and including,
without limitation, computations in reasonable detail evidencing compliance with
the covenants contained in Sections 6.5 through 6.8 hereof,
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inclusive, and a representation by such officer that no Default or Event of
Default has occurred or is continuing;
(e) within five Business Days after the end of each fiscal
month, a Borrowing Base Report in substantially the form of Exhibit G hereto
signed on behalf of the Borrower Affiliated Group by the chief financial officer
of the Borrower;
(f) promptly upon the filing thereof, copies of all
registration statements, proxy statements and annual, quarterly, monthly or
other reports which the Borrower or any other member of the Borrower Affiliated
Group files with the Securities and Exchange Commission (including without
limitation, copies of all reports on Form 8-K that the Borrower files with the
Securities and Exchange Commission);
(g) if and when the Borrower or any other member of the
Borrower Affiliated Group gives or is required to give notice to the PBGC of any
Reportable Event with respect to any Plan that might constitute grounds for a
termination of such Plan under Title IV of ERISA, or knows that any member of
the Controlled Group or the plan administrator of any Plan has given or is
required to give notice of any such Reportable Event, a copy of the notice of
such Reportable Event given or required to be given to the PBGC or, if such
notice is not given to the PBGC, a description of the content of the notice that
would be required to be given;
(h) immediately upon becoming aware of the existence of any
condition or event (i) that constitutes a Default or Event of Default, or (ii)
affecting the Borrower or any other member of the Borrower Affiliated Group
which could reasonably be expected to have a Material Adverse Effect, written
notice thereof specifying the nature thereof and the action being or proposed to
be taken with respect thereto; and immediately upon receipt thereof, copies of
any notice (whether formal or informal) of any cancellation, termination or
material change in any insurance maintained by any member of the Borrower
Affiliated Group;
(i) promptly upon becoming aware of any litigation or of any
investigative proceedings by any Person, including, without limitation, any
governmental agency or authority commenced or threatened against the Borrower or
any other member of the Borrower Affiliated Group of which it has notice, or of
a material change in any such existing litigation or proceedings, the outcome of
which would or might have a Material Adverse Effect, written notice thereof and
the action being or proposed to be taken with respect thereto;
(k) promptly upon becoming aware of any investigative
proceedings by a governmental agency or authority commenced or threatened
against the Borrower or any other member of the Borrower Affiliated Group
regarding any potential violation of Environmental Laws or any spill, release,
discharge or disposal of any Hazardous Material, in either case, the outcome of
which could have a Material Adverse Effect, written notice thereof, copies of
all correspondence, reports and other materials furnished
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to or prepared by any member of the Borrower Affiliated Group (or its
representatives) in connection therewith and the action being or proposed to be
taken with respect thereto;
(l) at least 30 days' prior written notice of any change in
its name or corporate form or any change in the name or names under which the
Borrower's or any other member of the Borrower Affiliated Group's business is
transacted; and
(m) from time to time, with reasonable promptness, such other
financial data and other information or documents (financial or non-financial)
about the Borrower and each other member of the Borrower Affiliated Group
(including accountants' management letters) as the Administrative Agent or any
Bank (through the Administrative Agent) may reasonably request.
5.2. Conduct of Business. The Borrower shall, and shall cause each
other member of the Borrower Affiliated Group to:
(a) duly observe and comply in all material respects with all
applicable laws and requirements of any governmental authorities relative to its
corporate existence, rights and franchises, to the conduct of its business and
to its property and assets (including without limitation all Environmental Laws
and ERISA), and shall maintain and keep in full force and effect all licenses
and permits necessary in any material respect to the proper conduct of its
business;
(b) maintain its corporate existence, except as permitted
under Section 6.4(b);
(c) remain engaged in substantially the same lines of business
as those in which it is now engaged, except that the Borrower or any other
member of the Borrower Affiliated Group may withdraw from any business activity
which its Board of Directors reasonably deems unprofitable or unsound, provided
that promptly after such withdrawal, the Borrower shall provide the
Administrative Agent with written notice thereof; and
(d) at least five Business Days prior to forming any Domestic
Subsidiary, deliver to the Administrative Agent the Borrower's agreement, and
immediately upon formation, such Subsidiary's agreement, in each case reasonably
satisfactory to counsel for the Administrative Agent, that the Subsidiary shall
be a member of the Borrower Affiliated Group, and shall be bound by the terms of
this Agreement, the other Security Documents and the related documents, opinions
and instruments as a guarantor or otherwise as the Administrative Agent may
determine in its sole discretion. Without limiting the foregoing, each such
Domestic Subsidiary shall deliver to the Administrative Agent a Subsidiary
Guaranty in the form of Exhibit I, and the Borrower or other stockholders of
such Domestic Subsidiary shall deliver to the Administrative Agent a Pledge
Agreement in the form of Exhibit J.
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5.3. Maintenance of Properties and Insurance. The Borrower shall, and
shall cause each other member of the Borrower Affiliated Group to, maintain its
properties in good repair, working order and condition (normal wear and tear
excepted) as required for the normal conduct of its business and from time to
time the Borrower will make or cause to be made, and cause each other member of
the Borrower Affiliated Group to make or cause to be made, all necessary and
proper repairs, renewals, replacements, additions and improvements thereto so
that the Borrower and such other members of the Borrower Affiliated Group may
conduct their business substantially as conducted on the Closing Date and shall
maintain or cause to be maintained all material Leases as may be required for
the conduct of the Borrower's and each other member of the Borrower Affiliated
Group's business. The Borrower shall and shall cause each other member of the
Borrower Affiliated Group to at all times maintain liability and casualty
insurance with financially sound and reputable insurers in such amounts as the
officers of the Borrower and such other member of the Borrower Affiliated Group
in the exercise of their reasonable judgment deem to be adequate. The
Administrative Agent shall be named as loss payee and additional insured and
shall be given 30 days' prior written notice of any cancellation or modification
of such insurance. If the Borrower or any other member of the Borrower
Affiliated Group fails to provide such insurance, the Administrative Agent, in
its sole discretion, may provide such insurance and charge the cost thereof to
the Loan Account or to the Borrower's or any such other member of the Borrower
Affiliated Group's deposit account with the Administrative Agent. Any payment
not recovered from the Borrower or any other member of the Borrower Affiliated
Group shall bear interest at the Base Rate plus the Applicable Base Rate Margin
then in effect applicable to Revolving Credit Loans. The Administrative Agent
shall not, by the fact of approving, disapproving, accepting, obtaining or
failing to obtain any such insurance, incur liability for the form or legal
sufficiency of insurance contracts, solvency of insurance companies or payment
of lawsuits, and the Borrower and each other member of the Borrower Affiliated
Group hereby expressly assumes full responsibility therefor and liability, if
any, thereunder. The Borrower shall, and shall cause each other member of the
Borrower Affiliated Group to, furnish to the Administrative Agent certificates
or other evidence satisfactory to the Administrative Agent of compliance with
the foregoing insurance provisions. The provisions of this Section 5.3 shall be
deemed to be supplemental to, but not duplicative of, the provisions of any of
the Security Documents that require the maintenance of insurance.
5.4. Taxes. The Borrower shall, and shall cause each other member of
the Borrower Affiliated Group to, pay or cause to be paid all taxes, assessments
or governmental charges on or against it or its properties on or prior to the
time when they become due; provided that this covenant shall not apply to any
tax, assessment or charge that is being contested in good faith by appropriate
proceedings and with respect to which adequate reserves have been established
and are being maintained in accordance with GAAP if no lien shall have been
filed to secure such tax, assessment or charge.
5.5. Inspection by the Administrative Agent. The Borrower shall, and
shall cause each other member of the Borrower Affiliated Group to, permit the
Banks, through the Administrative Agent or the Administrative Agent's designee,
at any time and from time
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to time in the Administrative Agent's reasonable discretion during regular
business hours upon reasonable advance notice, to (i) visit and inspect the
properties (including the Real Properties) of the Borrower and such other
members of the Borrower Affiliated Group, and (ii) discuss the affairs, finances
and accounts of the Borrower and such other members of the Borrower Affiliated
Group with its appropriate officers, employees and accountants. In handling such
information the Administrative Agent and the Banks shall exercise the same
degree of care that each exercises with respect to its own proprietary
information of the same types to maintain the confidentiality of any non-public
information thereby received, except that disclosure of such information may be
made (w) to the subsidiaries or affiliates of the Arranger, the Administrative
Agent and each Bank in connection with their present or prospective business
relations with the Borrower Affiliated Group, (x) to prospective transferees or
purchasers of an interest in the Loans, (y) as required by law, regulation, rule
or order, subpoena, judicial order or similar order and (z) as may be required
in connection with the examination, audit or similar investigation of the
Arranger, the Administrative Agent or any Bank, and provided, however, that in
the case of any disclosure made under clauses (w) or (x), the Person to whom
such disclosure is made shall agree to be subject to the same degree of care and
confidentiality required of the Administrative Agent, the Banks and their
representatives hereunder.
5.6. Maintenance of Books and Records. The Borrower shall, and shall
cause each other member of the Borrower Affiliated Group to, keep adequate books
and records of account, in which true and complete entries will be made
reflecting all of its business and financial transactions, and such entries will
be made in accordance with GAAP and applicable law.
5.7. Use of Proceeds. The proceeds of the Revolving Credit Loans will
be used by the Borrower to finance ongoing working capital needs of the Borrower
Affiliated Group and for general corporate purposes for the Borrower Affiliated
Group. No portion of any Loans shall be used for the purpose of purchasing or
carrying any "margin security" or "margin stock" as such terms are used in
Regulations U or X of the Board of Governors of the Federal Reserve System.
5.8. Pension Plans. With respect to any Plan, the benefits under which
are guaranteed, in whole or in part, by the PBGC or any governmental authority
succeeding to any or all of the functions of the PBGC, the Borrower will, and
will cause each other member of the Borrower Affiliated Group to, (i) fund each
Plan as required by the provisions of Section 412 of the Code; (ii) cause each
Plan to pay all benefits when due; and (iii) furnish the Administrative Agent
(a) promptly with a copy of any notice of each Plan's termination sent to the
PBGC and (b) no later than the date of submission to the Department of Labor or
to the Internal Revenue Service, as the case may be, a copy of any request for
waiver from the funding standards or extension of the amortization periods
required by Section 412 of the Code.
5.9. Fiscal Year. Each of the Borrower and each other member of the
Borrower Affiliated Group shall have a fiscal year ending on the Saturday
closest to January 31 of
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each year and shall notify the Administrative Agent of any change in such fiscal
year (whereupon, notwithstanding the provisions of Section 9.8, the
Administrative Agent and the Banks shall have the right to modify the timing of
the financial covenants hereunder accordingly in order to correspond to any such
change in fiscal year).
5.10. Further Assurances. At any time and from time to time the
Borrower shall, and shall cause each other member of the Borrower Affiliated
Group to, execute and deliver such further instruments and take such further
action as may reasonably be requested by the Administrative Agent or any Bank
(through the Administrative Agent) to effect the purposes of the Loan Documents
and the Security Documents.
SECTION VI
NEGATIVE COVENANTS
So long as any Bank has any commitment to make Loans and issue Letters
of Credit hereunder or any Loan or other Obligation hereunder remains
outstanding, the Borrower covenants as follows on behalf of itself and each
other member of the Borrower Affiliated Group:
6.1. Indebtedness. The Borrower shall not, and shall not permit any
other member of the Borrower Affiliated Group to, create, incur, assume,
guaranty or be or remain liable with respect to any Indebtedness other than the
following:
(a) Indebtedness of the Borrower to the Administrative Agent
or the Banks under any Loan Document and Guaranties of other members of the
Borrower Affiliated Group in favor of the Administrative Agent or the Banks
under any Loan Document;
(b) Indebtedness in respect of current liabilities, other than
for borrowed money, of the Borrower Affiliated Group incurred in the ordinary
course of business;
(c) Indebtedness in respect of Capitalized Leases and purchase
money security interests of the Borrower Affiliated Group representing
obligations permitted to be incurred by the terms of this Agreement and incurred
in the ordinary course of business and consistent with past practices; provided,
that the aggregate principal amount of Indebtedness permitted by this clause (c)
shall not exceed $5,000,000 at any one time outstanding;
(d) Indebtedness existing on the date of this Agreement and
disclosed on Exhibit C hereto and any refinancings, refundings, renewals or
extensions thereof (provided the principal amount of any such Indebtedness is
not thereby increased);
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(e) Indebtedness secured by Encumbrances permitted by Section
6.3(b);
(f) Indebtedness of Domestic Subsidiaries to the Borrower or
to other Domestic Subsidiaries of the Borrower; and
(g) Other Indebtedness (including Guaranties of Indebtedness
of Foreign Subsidiaries) not secured by any Encumbrances and in an aggregate
principal amount not exceeding $10,000,000.
6.2. Sale and Leaseback. The Borrower shall not, nor shall it permit
any other member of the Borrower Affiliated Group to, enter into any
arrangement, directly or indirectly, whereby it shall sell or transfer any
property owned by it in order to lease such property or lease other property
that the Borrower or such other member of the Borrower Affiliated Group intends
to use for substantially the same purpose as the property being sold or
transferred.
6.3. Encumbrances. The Borrower shall not, and shall not permit any
other member of the Borrower Affiliated Group to, create, incur, assume or
suffer to exist any mortgage, pledge, security interest, lien or other charge or
encumbrance, including the lien or retained security title of a conditional
vendor upon or with respect to any of its property or assets ("Encumbrances"),
or assign or otherwise convey any right to receive income, including the sale or
discount of Accounts Receivable with or without recourse, except the following
("Permitted Encumbrances"):
(a) Encumbrances in favor of the Administrative Agent or the
Banks under any Security Document;
(b) Encumbrances existing on the date of this Agreement and
disclosed in Exhibit C hereto;
(c) Liens for taxes, fees, assessments and other governmental
charges to the extent that payment of the same may be postponed or is not
required in accordance with the provisions of Section 5.4;
(d) Possessory liens in favor of brokers and dealers arising
in connection with the acquisition or disposition of Investments owned as of the
date hereof and Qualified Investments, provided that such liens (a) attach only
to such Investments and (b) secure only obligations incurred in the ordinary
course and arising in connection with the acquisition or disposition of such
Investments and not any obligation in connection with margin financing;
(e) Landlords' and lessors' liens in respect of rent not in
default, or liens in respect of pledges or deposits under worker's compensation,
unemployment insurance, social security laws, or similar legislation (other than
ERISA) or in connection with appeal and similar bonds incidental to litigation;
mechanics', laborers', carriers',
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warehousemans', materialmen's and similar liens, if the obligations secured by
such liens are not then delinquent; liens securing the performance of bids,
tenders, contracts (other than for the payment of money); and statutory
obligations, surety and appeal bonds, performance bonds and other obligations of
a like nature incidental to the conduct of its business and that do not in the
aggregate materially detract from the value of its property or materially impair
the use thereof in the operation of its business;
(f) Judgment liens that shall not have been in existence for a
period longer than 30 days after the creation thereof or, if a stay of execution
shall have been obtained, for a period longer than 30 days after the expiration
of such stay;
(g) Easements, rights of way, zoning restrictions, licenses,
restrictions on the use of property or minor imperfections in title thereto
which, in the aggregate, do not interfere in a material way with the ordinary
conduct of its business;
(h) Security interests and liens securing charges or
obligations of the Borrower Affiliated Group in amounts not to exceed $5,000,000
in the aggregate outstanding at any time in addition to those Encumbrances
permitted under subsection (a) through (f) of this Section, provided, however,
that with respect to purchase money liens securing the purchase price of capital
assets (including rights of lessors under Capitalized Leases), (A) each such
Encumbrance is given solely to secure the purchase price of, or the lease
obligations relating to, such asset, does not extend to any other property, and
is given at the time or within 30 days of the acquisition of such asset, and (B)
the Indebtedness secured thereby does not exceed the lesser of the cost of such
asset or its fair market value at the time such security interest attaches;
(i) Security interests in favor of the issuer of any
documentary letters of credit for the account of the Borrower covering only the
following: (i) any documentation presented in connection with a drawing under
such letter of credit, (ii) all goods which are described in such documents or
any such letter of credit, and (iii) the proceeds thereof;
(j) Any extension, renewal or replacement of the foregoing;
provided that the Encumbrances permitted by this paragraph (j) shall not extend
to or cover any additional Indebtedness or property (other than a substitution
of like property); and
(k) Encumbrances upon real property or other fixed assets
acquired after the date hereof (by purchase, construction or otherwise) by the
Borrower or any other member of the Borrower Affiliated Group, each of which
Encumbrance was created solely for the purpose of securing Indebtedness
permitted under Section 6.1 and representing, or incurred to finance, refinance
or refund, the cost (including the cost of construction) of such property or
asset; provided that (i) no such Encumbrance shall extend to cover any property
or asset of the Borrower or such member of the Borrower Affiliated Group other
than the property or asset so acquired and improvements thereon, (ii) the
principal amount of Indebtedness secured by any such Encumbrance shall not
exceed 100% of the lesser of the cost of such asset or its fair market value (as
determined
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in good faith by a senior financial officer of the Borrower) of such property or
asset at the time it was acquired (by purchase, construction or otherwise), and
(iii) the security interest is given at the time or within 60 days of the
construction or acquisition of such property or asset.
In addition, the Borrower shall not, nor shall the Borrower permit any
other member of the Borrower Affiliated Group or any of its other Subsidiaries
to, enter into or permit to exist any arrangement or agreement which directly or
indirectly prohibits the Borrower or any such other member of the Borrower
Affiliated Group or Subsidiary from creating or incurring any Encumbrance in
favor of the Administrative Agent for the benefit of the Banks and the
Administrative Agent under the Loan Documents.
6.4. Merger; Consolidation; Sale or Lease of Assets; Acquisitions. The
Borrower shall not, nor shall permit any other member of the Borrower Affiliated
Group to,
(a) sell, lease or otherwise dispose of assets or properties
(valued at the lower of cost or fair market value), other than (i) sales of
inventory in the ordinary course of business, and (ii) sales of assets not in
the ordinary course of business including, without limitation, sales or
dispositions of obsolete or worn out property, tools or equipment no longer used
or useful in its business in an aggregate amount not to exceed $2,000,000 in any
fiscal year of the Borrower Affiliated Group, and (iii) sales of any Qualified
Investments; or
(b) liquidate, merge or consolidate into or with any other
Person or enter into or undertake any plan or agreement of liquidation, merger
or consolidation with any other Person, provided that (i) the Borrower may merge
with another company in connection with a Permitted Acquisition if the Borrower
is the surviving company, (ii) any wholly-owned Subsidiary of the Borrower may
merge or consolidate into or with the Borrower or any other wholly-owned
Subsidiary of the Borrower if no Default or Event of Default has occurred and is
continuing or would result from such merger and if the Borrower or such
Subsidiary is the surviving company, and (iii) a Subsidiary of the Borrower may
merge into another entity in connection with a Permitted Acquisition if, upon
consummation of such merger, the surviving entity shall be a direct or indirect
wholly-owned Subsidiary of the Borrower and, if the surviving entity is a
Domestic Subsidiary, a party to the Subsidiary Security Documents; or
(c) make any acquisition of all or substantially all of the
capital stock (or other equity interests) or all or substantially all of the
assets of another Person, or of a division or business unit of a Person, whether
or not involving a merger or consolidation with such Person (an "Acquisition"),
except in connection with a Permitted Acquisition.
6.5. Minimum Fixed Charge Coverage Ratio. The Borrower shall not permit
the Fixed Charge Coverage Ratio of the Borrower Affiliated Group, determined as
at the last day of any fiscal quarter for the twelve-month period then ended, to
be less than (a) for the period through and including the second fiscal quarter
of 2003, the ratio of 1.5 to 1.0, and (b) thereafter, the ratio of 1.75 to 1.0.
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6.6. Maximum Cash Flow Leverage Ratio. The Borrower shall not permit
the Cash Flow Leverage Ratio of the Borrower Affiliated Group, determined as at
the last day of each fiscal quarter, to be greater than the ratio of 1.0 to 1.0
for the twelve-month period then ended.
6.7. Minimum Tangible Net Worth. The Borrower shall not permit the
Consolidated Tangible Net Worth of the Borrower Affiliated Group, determined as
at the last day of any fiscal quarter, to be less than the sum of (i)
$110,000,000 plus (ii) 50% of Consolidated Cumulative Net Income plus (iii) 100%
of Consolidated Cumulative Net Equity Raises.
6.8. Maximum Capital Expenditures. The Borrower Affiliated Group shall
not make Capital Expenditures in an aggregate amount in any fiscal year
exceeding the sum of $40,000,000; provided, however, that up to $5,000,000 of
Capital Expenditures permitted to be expended in any one fiscal year that are
not expended in such fiscal year may be carried over for expenditure in the
following fiscal year.
6.9. Restricted Payments. The Borrower shall not, and shall not permit
any other member of the Borrower Affiliated Group to, pay, make or declare any
Restricted Payment. Notwithstanding the foregoing, (a) the Borrower's
Subsidiaries may from time to time make distributions to the Borrower, and (b)
the Borrower may effect redemptions and repurchases of its stock and pay
dividends to its stockholders, provided that, with respect to this clause (b),
(i) no Default or Event of Default has occurred or is continuing, both before
and after giving effect to any such distributions, dividends, redemptions and
repurchases, and (ii) the cumulative aggregate amount of redemptions and
repurchases made from and after the Closing Date shall not at any time exceed
10% of the Borrower's Consolidated Cumulative Net Income, determined as of the
date of the Borrower's most recently completed fiscal quarter. Neither the
Borrower nor any other member of the Borrower Affiliated Group will enter into
any agreement, contract or arrangement (other than the Loan Documents)
restricting the ability of any Subsidiary of the Borrower or any other member of
the Borrower Affiliated Group (other than the Borrower) to pay or make dividends
or distributions in cash or kind, to make loans, advances or other payments of
any nature or to make transfers or distributions of all or any part of its
assets to the Borrower or any other member of the Borrower Affiliated Group.
6.10. Investments. The Borrower shall not, nor shall permit any other
member of the Borrower Affiliated Group to, make or maintain any Investments
other than Qualified Investments.
6.11. ERISA. Neither the Borrower nor any member of the Controlled
Group shall permit any Plan maintained by it to (i) engage in any Prohibited
Transaction, (ii) incur any "accumulated funding deficiency" (as defined in
Section 302 of ERISA) whether or not waived, or (iii) terminate any Plan in a
manner that could result in the imposition of a lien or encumbrance on the
assets of the Borrower or any other member of the Borrower Affiliated Group
pursuant to Section 4068 of ERISA.
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6.12. Transactions with Affiliates. Other than those set forth in the
Registration Statement, the Borrower shall not, nor shall permit any other
member of the Borrower Affiliated Group to, enter into or participate in any
agreements or transactions of any kind with any Affiliate, except (i) agreements
or transactions contemplated, required or allowed by any Loan Document as in
effect on the date of this Agreement, provided that such agreements or
transactions are not otherwise prohibited by this Agreement or any of the Loan
Documents; (ii) agreements or transactions (in each case) in the ordinary course
of business and on an arms-length basis which (A) include only terms which are
fair and equitable to the Borrower or such other member of the Borrower
Affiliated Group, (B) do not violate or otherwise conflict with any of the terms
of any of the Loan Documents, and (C) involve terms no less favorable to the
Borrower or such other member of the Borrower Affiliated Group than would be the
terms of a similar agreement or transaction with any Person other than an
Affiliate; and (iii) the loans permitted by Section 6.13.
6.13. Loans. The Borrower shall not, and shall not permit any other
member of the Borrower Affiliated Group to, make to any Person any loan, advance
or other transfer with the anticipation of repayment, except for loans and
advances to employees of the Borrower or such other member of the Borrower
Affiliated Group, made in the ordinary course of business and consistent with
past practices, not exceeding $500,000 in the aggregate at any time outstanding;
provided, that no such advances to any single employee shall exceed $250,000 in
the aggregate.
6.14. Borrowing Base and Total Commitment. The Borrower shall not cause
or permit the aggregate principal amount of all Revolving Credit Loans
outstanding at any time, plus the aggregate Stated Amount of Letters of Credit
outstanding at such time, plus the aggregate amount of any unreimbursed draws
under outstanding Letters of Credit, to exceed the lesser of (i) the Borrowing
Base in effect at such time and (ii) the Total Commitment in effect at such
time.
6.15. No Amendments to Certain Documents; No New Agreements Requiring
Breach of Loan Documents. The Borrower shall not, and shall not permit any other
member of the Borrower Affiliated Group to, at any time cause or permit any of
the charter or other incorporation or organizational documents of the Borrower
or such other member of the Borrower Affiliated Group to be modified, amended or
supplemented in any material respect whatever adverse to the Banks or the
Administrative Agent, without (in each case) the express prior written
agreement, consent or approval of the Administrative Agent. Neither the Borrower
nor any other member of the Borrower Affiliated Group will enter into any
agreement containing any provision which would be violated or breached by the
performance by the Borrower or such other member of the Borrower Affiliated
Group of its obligations hereunder or under any of the other Loan Documents.
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SECTION VII
DEFAULTS
7.1. Events of Default. There shall be an Event of Default hereunder if
any of the following events occurs:
(a) the Borrower shall fail to pay (i) any amount of principal
of any Loans when due or (ii) any amount of interest thereon or any fees or
expenses payable hereunder or under any Loan Document within three Business Days
after the due date therefor; or
(b) the Borrower or any other member of the Borrower
Affiliated Group shall fail to perform, comply with or observe or shall
otherwise breach any one or more of the terms, obligations, covenants or
agreements contained in Section 5.1(a), (b), (c), (d), (e), (h), (i) or (l), or
Sections 5.2(b), 5.2(d), 5.3 (with respect to maintenance of insurance), 5.5 or
5.7 or Section 6; or
(c) the Borrower or any other member of the Borrower
Affiliated Group shall fail to perform, comply with or observe or shall
otherwise breach any one or more of the terms, covenants, obligations or
agreements (other than in respect of subsections 7.1(a) and (b)) contained in
this Agreement or in any other Loan Document and such failure shall continue
unremedied for a period of 30 days; or
(d) any representation or warranty of the Borrower or any
other member of the Borrower Affiliated Group made in any Loan Document or any
other documents or agreements executed in connection with the transactions
contemplated by this Agreement or in any certificate delivered hereunder shall
prove to have been false in any material respect upon the date when made or
deemed to have been made; or
(e) the Borrower or any other member of the Borrower
Affiliated Group shall fail to pay at maturity, or within any applicable period
of grace (not to exceed 30 days), any obligations in excess of $5,000,000 in the
aggregate for borrowed monies or advances, or for the lease or other use of real
or personal property, or fail to observe or perform any term, covenant or
agreement evidencing or securing such obligations for borrowed monies or
advances, or relating to such lease or use of real or personal property, the
result of which failure is to permit the holder or holders of such Indebtedness
to cause such Indebtedness to become due prior to its stated maturity upon
delivery of required notice, if any, or to permit any party to any agreement
evidencing such obligations to terminate or cancel such agreement; or
(f) the Borrower or any other member of the Borrower
Affiliated Group shall (i) apply for or consent to the appointment of, or the
taking of possession by, a receiver, custodian, trustee, liquidator or similar
official of itself or of all or a substantial part of its property, (ii) be
generally not paying its debts as such debts become due, (iii) make a general
assignment for the benefit of its creditors, (iv) commence a
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voluntary case as debtor under the United States Bankruptcy Code (as now or
hereafter in effect), (v) take any action or commence any case or proceeding as
debtor under any law relating to bankruptcy, insolvency, reorganization,
winding-up or composition or adjustment of debts, or any other law providing for
the relief of debtors, (vi) fail to contest in a timely or appropriate manner,
or acquiesce in writing to, any petition filed against it as debtor in an
involuntary case under the United States Bankruptcy Code (as now or hereafter in
effect) or other law, (vii) take any action under the laws of its jurisdiction
of incorporation or organization similar to any of the foregoing, (viii) be
Insolvent, or (ix) pass any board resolution or take any corporate action for
the purpose of effecting any of the foregoing; or
(g) a proceeding or case shall be commenced, without the
application or consent of the Borrower or other applicable member of the
Borrower Affiliated Group in any court of competent jurisdiction, seeking (i)
the liquidation, reorganization, dissolution, winding up, or composition or
readjustment of its debts, (ii) the appointment of a trustee, receiver,
custodian, liquidator or the like of it or of all or any substantial part of its
assets, or (iii) similar relief in respect of it, under any law relating to
bankruptcy, insolvency, reorganization, winding-up or composition or adjustment
of debts or any other law providing for the relief of debtors, and such
proceeding or case shall continue undismissed, or unstayed and in effect, for a
period of 60 days; or an order for relief shall be entered in an involuntary
case under the United States Bankruptcy Code (as now or hereafter in effect),
against the Borrower or any other member of the Borrower Affiliated Group as
debtor; or action under the laws of the jurisdiction of incorporation or
organization of the Borrower or any other member of the Borrower Affiliated
Group similar to any of the foregoing shall be taken with respect to the
Borrower or any such member of the Borrower Affiliated Group and shall continue
unstayed and in effect for any period of 60 days; or
(h) judgments or orders for the payment of money shall be
entered against the Borrower or any other member of the Borrower Affiliated
Group by any court, or a warrant of attachment or execution or similar process
shall be issued or levied against property of the Borrower or any other member
of the Borrower Affiliated Group, that in the aggregate exceed $5,000,000 in
value (to the extent not covered by independent third party insurance as to
which the insurer does not dispute coverage) and such judgments, orders,
warrants or process shall continue undischarged or unstayed for 45 days; or
(i) the Borrower, any other member of the Borrower Affiliated
Group or any member of the Controlled Group shall fail to pay when due an
aggregate amount in excess of $5,000,000 which it shall have become liable to
pay to the PBGC or to a Plan under Title IV of ERISA; or notice of intent to
terminate a Plan or Plans in a distress termination under Section 4062 of ERISA
shall be filed by the Borrower, any other member of the Borrower Affiliated
Group or any member of the Controlled Group, any plan administrator or any
combination of the foregoing; or the PBGC shall institute or have grounds to
institute proceedings under Title IV of ERISA to terminate or to cause a trustee
to be appointed to administer any such Plan or Plans or a proceeding shall be
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instituted by a fiduciary of any such Plan or Plans against the Borrower or any
other member of the Borrower Affiliated Group and such proceedings shall not
have been dismissed within 30 days thereafter; or a condition shall exist by
reason of which the PBGC would be entitled to obtain a decree adjudicating that
any such Plan or Plans must be terminated; or
(j) a Change of Control shall have occurred; or
(k) the Borrower or any other member of the Borrower
Affiliated Group shall be enjoined, restrained or in any way prevented by the
order of any court or any administrative or regulatory agency from conducting
any material part of its business and such order shall continue in effect for
more than 45 days, or the Borrower or any other member of the Borrower
Affiliated Group shall be indicted for a state or federal crime, or any civil or
criminal action shall otherwise have been brought or threatened against the
Borrower or any other member of the Borrower Affiliated Group, a punishment for
which in any such case could include forfeiture of any assets of the Borrower
Affiliated Group having a fair market value in excess of $5,000,000; or
(l) there shall occur any material damage to, or loss, theft
or destruction of, any Collateral, whether insured or not insured, or any
strike, lockout, labor dispute, embargo, condemnation, act of God or public
enemy, or other casualty, which in any such case causes, for more than 30
consecutive days, the cessation or substantial curtailment of revenue producing
activities at any facility of the Borrower or any other member of the Borrower
Affiliated Group if such event or circumstance is not covered by business
interruption insurance and in any such case described above, such event or
condition, individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect; or
(m) there shall occur the loss, suspension or revocation of,
or failure to renew, any license or permit now held or hereafter acquired if
such loss, suspension, revocation or failure to renew could reasonably be
expected to have a Material Adverse Effect; or
(n) any covenant, agreement or obligation of the Borrower or
any other member of the Borrower Affiliated Group contained in or evidenced by
any Loan Document to which the Borrower or such member of the Borrower
Affiliated Group is a party shall, prior to the date on which such document
shall terminate with the express prior written agreement, consent or approval of
the Administrative Agent and the Banks, cease in any material respect to be
legal, valid, binding or enforceable in accordance with the terms thereof; or
(o) any Loan Document shall be canceled, terminated, revoked
or rescinded (or any notice of such cancellation, termination, revocation or
rescission given) otherwise than with the express prior written agreement,
consent or approval of the Administrative Agent and the Banks; or any action at
law, suit in equity or other legal proceeding to cancel, revoke, or rescind any
Loan Document shall be commenced by or
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on behalf of the Borrower or any other member of the Borrower Affiliated Group,
or by any court or any other governmental or regulatory authority or agency of
competent jurisdiction; or any court or any other governmental or regulatory
authority or agency of competent jurisdiction shall make a determination that,
or shall issue a judgment, order, decree or ruling to the effect that, any one
or more of the Loan Documents or any one or more of the obligations of the
Borrower or any other member of the Borrower Affiliated Group under any one or
more of the Loan Documents are illegal, invalid or unenforceable in accordance
with the terms thereof.
7.2. Remedies. (1) Upon the occurrence of an Event of Default described
in subsections 7.1(f) and (g), immediately and automatically, and (2) upon the
occurrence of any other Event of Default, at any time thereafter while such
Event of Default is continuing, at the option of the Required Banks and upon the
Administrative Agent's declaration:
(a) each Bank's commitment to make any further Loans or issue
additional Letters of Credit hereunder shall terminate;
(b) the unpaid principal amount of the Loans together with
accrued interest, all other Obligations, and all other obligations of the
Borrower to the Administrative Agent and each Bank of any kind shall become
immediately due and payable without presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived;
(c) with respect to existing Letters of Credit, the Borrower
shall provide to the Administrative Agent cash collateral in an amount equal to
105% of the aggregate Stated Amount of Letters of Credit outstanding, which cash
collateral shall be held by the Administrative Agent subject to and in
accordance with the Borrower's Security Agreement; and
(d) the Administrative Agent may exercise (on behalf of itself
and the Banks) any and all rights the Administrative Agent and the Banks have
under this Agreement, the other Loan Documents, or any other documents or
agreements executed in connection herewith, or at law or in equity, and proceed
to protect and enforce the Administrative Agent's and the Banks' rights by any
action at law, in equity or other appropriate proceeding.
SECTION VIII
CONCERNING THE ADMINISTRATIVE AGENT AND THE BANKS
8.1. Appointment and Authorization. Each of the Banks hereby appoints
Fleet National Bank to serve as Administrative Agent under this Agreement and
irrevocably authorizes the Administrative Agent to take such action on such
Bank's behalf under this Agreement and to exercise such powers and to perform
such duties under this Agreement and the other documents and instruments
executed and delivered in connection with the
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consummation of the transactions contemplated hereby (including, without
limitation, all Loan Documents) as are delegated to the Administrative Agent by
the terms hereof or thereof, together with all such powers as are reasonably
incidental thereto.
8.2. Administrative Agent and Affiliates. Fleet National Bank shall
also have the same rights and powers under this Agreement of a Bank and may
exercise or refrain from exercising the same as though it were not the
Administrative Agent, and Fleet National Bank and its Affiliates may accept
deposits from, lend money to, and generally engage in any kind of business with
the Borrower or any other member of the Borrower Affiliated Group or any
Affiliate of any member of the Borrower Affiliated Group as if it were not the
Administrative Agent hereunder. Except as otherwise provided by the terms of
this Agreement, nothing herein shall prohibit any Bank from accepting deposits
from, lending money to or generally engaging in any kind of business with the
Borrower or any other member of the Borrower Affiliated Group or any Affiliate
of any member of the Borrower Affiliated Group.
8.3. Future Advances.
(a) In order to more conveniently administer the Loans, the
Administrative Agent may, unless notified to the contrary by any Bank prior to
the date upon which any Revolving Credit Loan is to be made, assume that such
Bank has made available to the Administrative Agent on such date the amount of
such Bank's share of such Revolving Credit Loan to be made on such date as
provided in this Agreement, and the Administrative Agent may (but it shall not
be required to), in reliance upon such assumption, make available to the
Borrower a corresponding amount. If any Bank makes available to the
Administrative Agent such amount on a date after the date upon which the
Revolving Credit Loan is made, such Bank shall pay to the Administrative Agent
on demand an amount equal to the product of (i) the average computed for the
period referred to in clause (iii) below, of the weighted average interest rate
paid by the Administrative Agent for federal funds acquired by the
Administrative Agent during each day included in such period, multiplied by (ii)
the amount of such Bank's share of such Revolving Credit Loan, multiplied by
(iii) a fraction, the numerator of which is the number of days that elapsed from
and including such date to the date on which the amount of such Bank's share of
such Revolving Credit Loan shall become immediately available to the
Administrative Agent, and the denominator of which is 360 or 365, as applicable.
A statement of the Administrative Agent submitted to such Bank with respect to
any amounts owing under this subsection shall be prima facie evidence of the
amount due and owing to the Administrative Agent by such Bank.
(b) The Administrative Agent may at any time, in its sole
discretion, upon notice to any Bank, refuse to make any Revolving Credit Loan to
the Borrower on behalf of such Bank unless such Bank shall have provided to the
Administrative Agent immediately available federal funds equal to such Bank's
share of such Revolving Credit Loan in accordance with this Agreement.
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(c) Anything in this Agreement to the contrary
notwithstanding, the obligations to make Loans under the terms of this Agreement
shall be the several and not joint obligation of each of the Banks and any
advances made by the Administrative Agent on behalf of any Bank are strictly for
the administrative convenience of the parties and shall in no way diminish any
Bank's liability to repay the Administrative Agent for such Loans and advances.
If the amount of any Bank's share of any Revolving Credit Loan which the
Administrative Agent has advanced to the Borrower is not made available to the
Administrative Agent by such Bank within 1 Business Day following the date upon
which such Revolving Credit Loan is made, the Administrative Agent shall be
entitled to recover such amount from the Borrower on demand, with interest
thereon at the rate per annum applicable to the Revolving Credit Loans made on
such date.
8.4. Delinquent Bank. Notwithstanding anything to the contrary
contained in this Agreement, any Bank that fails to make available to the
Administrative Agent its share of any Revolving Credit Loan when and to the full
extent required by the provisions of this Agreement shall be deemed delinquent
(a "Delinquent Bank") and shall be deemed a Delinquent Bank until such time as
such delinquency is satisfied. A Delinquent Bank shall be deemed to have
assigned any and all payments due to it from the Borrower, whether on account of
outstanding Loans, interest, fees or otherwise, to the remaining non-delinquent
Banks for application to, and reduction of, their respective pro rata shares of
all outstanding Revolving Credit Loans. The Delinquent Bank hereby authorizes
the Administrative Agent to distribute such payments to the non-delinquent Banks
in proportion to their respective pro rata shares of all outstanding Revolving
Credit Loans. A Delinquent Bank shall be deemed to have satisfied in full a
delinquency when and if, as a result of application of the assigned payments to
all outstanding Revolving Credit Loans of the non-delinquent Banks, the Banks'
respective pro rata shares of all outstanding Loans have returned to those in
effect immediately prior to such delinquency and without giving effect to the
nonpayment causing such delinquency. No Delinquent Bank shall have a right to
participate in any vote taken by the Banks hereunder, which shall be calculated
as if the Commitments of the Delinquent Bank did not exist.
8.5. Payments.
(a) All payments and prepayments of principal of and interest
on Revolving Credit Loans received by the Administrative Agent shall be paid to
each of the Banks pro rata in accordance with their respective interests in such
Loans subject to Section 8.4 above; and any other payments received by the
Administrative Agent hereunder shall be paid to the Banks or the Administrative
Agent or both pro rata as their respective interests appear. All such payments
received by the Administrative Agent hereunder for the accounts of the Banks
prior to 1:00 p.m. on any Business Day shall be paid to the Banks on such
Business Day and all such payments received by the Administrative Agent
hereunder for the accounts of the Banks at or after 1:00 p.m. shall be paid to
the Banks on the next Business Day.
(b) Each of the Banks and the Administrative Agent hereby
agrees that if it should receive any amount (whether by voluntary payment, by
the exercise of the right
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of set-off or banker's lien, by counterclaim or cross action, by the enforcement
of any right hereunder or otherwise) in respect of principal of, or interest on,
the Loans or any fees which are to be shared among the Banks, which, as compared
to the amounts theretofore received by the other Banks with respect to such
principal, interest or fees, is in excess of such Bank's pro rata share of such
principal, interest or fees as provided in this Agreement, such Bank shall share
such excess, less the costs and expenses (including, reasonable attorneys' fees
and disbursements) incurred by such Bank in connection with such realization,
exercise, claim or action, pro rata with all other Banks in proportion to their
respective interests therein, and such sharing shall be deemed a purchase
(without recourse) by such sharing party of participation interests in the Loans
or such fees, as the case may be, owed to the recipients of such shared payments
to the extent of such shared payments; provided, however, that if all or any
portion of such excess amount is thereafter recovered from such Bank, such
purchase shall be rescinded and the purchase price restored to the extent of
such recovery, but without interest.
8.6. Action by Administrative Agent.
(a) The obligations of the Administrative Agent hereunder are
only those expressly set forth herein. The Administrative Agent shall have no
duty to exercise any right or power or remedy hereunder or under any other
document or instrument executed and delivered in connection with or as
contemplated by this Agreement or to take any affirmative action hereunder or
thereunder.
(b) The Administrative Agent shall keep all records of the
Loans and payments hereunder, and shall give and receive notices and other
communications to be given or received by the Administrative Agent hereunder on
behalf of the Banks.
(c) Upon the occurrence and during the continuance of an Event
of Default the Administrative Agent may, and upon the direction of the Required
Banks pursuant to Section 7.2 the Administrative Agent shall, exercise the
option of the Banks pursuant to Section 7.2 to declare all Loans and other
Obligations immediately due and payable and may take such action as may appear
necessary or desirable to collect the Obligations and enforce the rights and
remedies of the Administrative Agent or the Banks.
8.7. Notification of Defaults and Events of Default. The Administrative
Agent shall not be deemed to have knowledge or notice of the occurrence of any
Default or Event of Default, except with respect to defaults in the payment of
principal, interest and fees required to be paid to the Administrative Agent for
the account of the Banks, unless the Agent shall have received written notice
from a Bank or the Borrower referring to this Agreement, describing such Default
or Event of Default and stating that such notice is a "notice of default". In
the event that the Administrative Agent receives such a notice, the
Administrative Agent shall give notice thereof to the Banks.
8.8. Consultation with Experts. The Administrative Agent shall be
entitled to retain and consult with legal counsel, independent public
accountants and other experts
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selected by it and shall not be liable to the Banks for any action taken,
omitted to be taken or suffered in good faith by it in accordance with the
advice of such counsel, accountants or experts. The Administrative Agent may
employ administrative agents and attorneys-in-fact and shall not be liable to
the Banks for the default or misconduct of any such administrative agents or
attorneys.
8.9. Liability of Administrative Agent. The Administrative Agent shall
exercise the same care to protect the interests of each Bank as it does to
protect its own interests, so that so long as the Administrative Agent exercises
such care it shall not be under any liability to any of the Banks, except for
the Administrative Agent's gross negligence or willful misconduct with respect
to anything it may do or refrain from doing. Subject to the immediately
preceding sentence, neither the Administrative Agent nor any of its directors,
officers, administrative agents or employees shall be liable for any action
taken or not taken by it in connection herewith in its capacity as
Administrative Agent. Without limiting the generality of the foregoing, neither
the Administrative Agent nor any of its directors, officers, administrative
agents or employees shall be responsible for or have any duty to ascertain,
inquire into or verify: (i) any statement, warranty or representation made in
connection with this Agreement, any Loan Document, or any borrowing hereunder;
(ii) the performance or observance of any of the covenants or agreements of the
Borrower; (iii) the satisfaction of any condition specified in Sections 3.1 or
3.2, except receipt of items required to be delivered to the Administrative
Agent; (iv) the validity, effectiveness, enforceability or genuineness of this
Agreement, the Notes, any other Loan Document or any other document or
instrument executed and delivered in connection with or as contemplated by this
Agreement; (v) the existence, value, collectibility or adequacy of the
Collateral or any part thereof or the validity, effectiveness, perfection or
relative priority of the liens and security interests of the Banks (through the
Administrative Agent) therein; or (vi) the filing, recording, refiling,
continuing or re-recording of any financing statement or other document or
instrument evidencing or relating to the security interests or liens of the
Banks (through the Administrative Agent) in the Collateral. The Administrative
Agent shall not incur any liability by acting in reliance upon any notice,
consent, certificate, statement or other writing (which may be a bank wire,
telecopy or similar writing) believed by it to be genuine or to be signed or
sent by the proper party or parties.
8.10. Indemnification. Each Bank agrees to indemnify the Administrative
Agent (to the extent the Administrative Agent is not reimbursed by the
Borrower), ratably in accordance with its Commitment Percentage, from and
against any cost, expense (including attorneys' fees and disbursements), claim,
demand, action, loss or liability which the Administrative Agent may suffer or
incur in connection with this Agreement, or any action taken or omitted by the
Administrative Agent hereunder, or the Administrative Agent's relationship with
the Borrower hereunder, including, without limitation, the costs and expenses of
defending itself against any claim or liability in connection with the exercise
or performance of any of its powers and duties hereunder and of taking or
refraining from taking any action hereunder, but excluding any costs, expenses
or losses directly arising from the Administrative Agent's gross negligence or
willful misconduct. No payment by any Bank under this Section shall in any way
relieve
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the Borrower of its obligations under this Agreement with respect to the amounts
so paid by any Bank, and the Banks shall be subrogated to the rights of the
Administrative Agent, if any, in respect thereto.
8.11. Independent Credit Decision. Each of the Banks represents and
warrants to the Administrative Agent that it has, independently and without
reliance upon the Administrative Agent or any other Bank and based on the
financial statements referred to in Section 4.7 and such other documents and
information as it has deemed appropriate, made its own independent credit
analysis and decision to enter into this Agreement. Each of the Banks
acknowledges that it has not relied upon any representation by the
Administrative Agent and that the Administrative Agent shall not be responsible
for any statements in or omissions from any documents or information concerning
the Borrower, this Agreement, the Notes, any other Loan Document or any other
document or instrument executed and delivered in connection with or as
contemplated by this Agreement. Each of the Banks acknowledges that it will,
independently and without reliance upon the Administrative Agent or other Banks
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement.
8.12. Successor Administrative Agent. Fleet National Bank, or any
successor Administrative Agent, may resign as Administrative Agent at any time
by giving 30 days' prior written notice thereof to the Banks and to the
Borrower. Upon any such resignation, the Banks shall have the right to appoint a
successor Administrative Agent, which successor Administrative Agent shall be
reasonably acceptable to the Borrower. If no successor Administrative Agent
shall have been so appointed by the Banks, and shall have accepted such
appointment, within 30 days after the retiring Administrative Agent's giving of
notice of resignation, then the retiring Administrative Agent may, on behalf of
the Banks, appoint a successor Administrative Agent, which shall be a commercial
bank (or Affiliate thereof) or savings and loan association organized under the
laws of the United States of America or any State thereof or under the laws of
another country which is doing business in the United States of America or any
State thereof and having a combined capital, surplus and undivided profits of at
least $100,000,000 and shall be reasonably acceptable to the Borrower. Upon the
acceptance of any appointment as Administrative Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Administrative Agent, and the retiring Administrative Agent
shall be discharged from all further duties and obligations under this
Agreement. After any retiring Administrative Agent's resignation or removal
hereunder as Administrative Agent, the provisions of this Section VIII shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Administrative Agent under this Agreement.
8.13. Other Agents. The Bank identified on the facing page and the
signature pages of this Agreement as a "documentation agent" shall not have any
right, power, liability, responsibility or duty under this Agreement other than
those applicable to all Banks as such.
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SECTION IX
MISCELLANEOUS
9.1. Notices. Unless otherwise specified herein, all notices hereunder
to any party hereto shall be in writing and shall be deemed to have been given
(i) when delivered by hand, (ii) when sent by electronic facsimile transmission
with confirmation of receipt if sent prior to 5:00 p.m. of the recipient's
prevailing time, and otherwise deemed to have been given on the next Business
Day, (iii) three Business Days after being sent by certified mail, return
receipt requested, and properly deposited in the mails, postage prepaid, or (iv)
one Business Day after being delivered to an overnight courier, addressed to
such party at its address indicated below:
If to the Borrower, at
GameStop Corp.
0000 Xxxxxxx X. Xxxx Xxxxxx
Xxxxxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxxxx, Chief Financial Officer
Telecopy: (000) 000-0000
with a copy to
Xxxxxxxx Xxxxxxxxx Xxxxxx Xxxxxxxx & Xxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxx Xxxxxx, Esq.
Telecopy: (000) 000-0000
If to the Administrative Agent or Fleet National Bank, at
Fleet National Bank
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Director
Telecopy: (000) 000-0000
with a copy to
Goulston & Storrs, P.C.
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Telecopy: (000) 000-0000
-64-
If to any Bank, at the address for such Bank set forth on Schedule 1
or at any other address specified by such party in writing to the other parties
listed in this Section 9.1. Notwithstanding the foregoing, the Administrative
Agent and the Banks shall have been deemed for all purposes to have delivered
any notice required to be delivered to the Borrower Affiliated Group by this
Agreement or otherwise, by sending such notification to the address set forth
above for the "Borrower."
9.2. Expenses. The Borrower will pay on demand all reasonable expenses
of (a) the Arranger and the Administrative Agent in connection with the
preparation, syndication, waiver and/or amendment of this Agreement, the Loan
Documents or other documents executed in connection therewith, and (b) the
Arranger, the Administrative Agent or any Bank in connection with the
administration, default or collection of the Loans or other Obligations or
administration, default, collection in connection with the Arranger's, the
Administrative Agent's or any Bank's exercise, preservation or enforcement of
any of its rights, remedies or options hereunder or thereunder, including
without limitation,
(i) under clauses (a) and (b), reasonable fees of outside
legal counsel and all accounting, consulting, brokerage or other
similar professional fees or expenses, and any fees or expenses
associated with any travel or other costs relating to any appraisals,
field examinations, or other examinations conducted in connection with
the Obligations or any Collateral therefor, plus
(ii) under clause (b) only, the allocated costs of in-house
legal counsel,
and the amount of all such expenses shall, until paid, bear interest at the rate
applicable to principal hereunder (including any default rate).
9.3. Indemnification. The Borrower absolutely and unconditionally
indemnifies and holds harmless the Administrative Agent, the Arranger and each
of the Banks against any and all claims, demands, suits, actions, causes of
action, damages, losses, settlement payments, obligations, costs, expenses
(including, without limitation, reasonable fees and disbursements of counsel)
and all other liabilities whatsoever which shall at any time or times be
incurred or sustained by the Administrative Agent, the Arranger or any of the
Banks or by any of their shareholders, directors, officers, employees,
subsidiaries, affiliates or administrative agents (other than as a result of the
gross negligence or willful misconduct of the Administrative Agent, the Arranger
or any of the Banks) arising out of or in connection with, any of the
transactions contemplated by, associated with or ancillary to this Agreement or
any of the other Loan Documents, whether or not all or any of the transactions
contemplated by, associated with or ancillary to this Agreement or any of such
Loan Documents, are ultimately consummated. Without prejudice to the survival of
any other covenant of the Borrower hereunder, the covenants of this Section 9.3
shall survive the termination of this Agreement and the payment or satisfaction
of payment of amounts owing with respect to the Notes or any other Loan
Document.
-65-
9.4. Set-Off. Regardless of the adequacy of any Collateral or other
means of obtaining repayment of the Obligations, any deposits, balances or other
sums credited by or due from any Bank or any of its branch or affiliate offices
to the Borrower or any other member of the Borrower Affiliated Group may, at any
time and from time to time upon the occurrence and during the continuance of an
Event of Default, without notice to the Borrower or such member of the Borrower
Affiliated Group or compliance with any other condition precedent now or
hereafter imposed by statute, rule of law, or otherwise (all of which are hereby
expressly waived) be set off, appropriated, and applied by any Bank against any
and all obligations of the Borrower or such member of the Borrower Affiliated
Group to such Bank or any of its affiliates in such manner as the head office of
the Bank or any of its branch offices in their sole discretion may determine
(with notice to be given to the Borrower promptly thereafter), and the Borrower
and each other member of the Borrower Affiliated Group hereby grants such Bank a
continuing security interest in such deposits, balances or other sums for the
payment and performance of all such obligations.
9.5. Term of Agreement. This Agreement shall continue in force and
effect so long as any Bank has any commitment to make Loans hereunder or any
Loan or any Obligation shall be outstanding.
9.6. No Waivers. No failure or delay by the Administrative Agent or any
Bank in exercising any right, power or privilege hereunder or under any Note or
under any other documents or agreements executed in connection herewith shall
operate as a waiver thereof; nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies herein and in the Notes
provided are cumulative and not exclusive of any rights or remedies otherwise
provided by agreement or law.
9.7. Governing Law. This Agreement and the other Loan Documents shall
be deemed to be contracts made under seal and shall be construed in accordance
with and governed by the laws of the State of
New York (without giving effect to
any conflicts of laws provisions contained therein). Any legal action or
proceeding arising out of or relating to this Agreement, any other Loan Document
or any Obligation may be instituted, in the Administrative Agent's sole
discretion, in the courts of the State of
New York or the United States of
America for the Southern District of New York, and the Borrower and each other
member of the Borrower Affiliated Group hereby irrevocably submits to the
jurisdiction of each such court in any such action or proceeding; provided,
however, that the foregoing shall not limit the Administrative Agent's rights to
bring any legal action or proceeding in any other appropriate jurisdiction.
9.8. Amendments, Waivers, Etc. Except as otherwise expressly provided
in this Agreement or any of the other Loan Documents: (i) each of the Loan
Documents may be modified, amended or supplemented in any respect whatever only
with the prior written consent or approval of the Required Banks and the
Borrower; and (ii) the performance or observance by the Borrower of any of its
covenants, agreements or obligations under any
-66-
of the Loan Documents may be waived only with the written consent of the
Required Banks; provided, however, that the following changes shall require the
written consent, agreement or approval of all of the Banks directly affected
thereby (with respect to clauses (A), (B) and (C) below) and of all the Banks
(with respect to Section 8.5(b) and clauses (D), (E), (F) and (G) below): (A)
any decrease in the amount of or postponement of the regularly scheduled or
otherwise required payment date for any of the Obligations (including, without
limitation, principal, interest and fees); (B) any decrease in the interest
rates prescribed in any of the Notes; (C) any increase in the Commitment or
Commitment Percentage of any of the Banks, except as permitted by Section 9.10;
(D) any release of all or any substantial part of the Collateral (except for any
such releases of Collateral permitted or provided for in the Loan Documents);
(E) any change in the definition of Required Banks; (F) the release or
termination of any Subsidiary Guaranty; and (G) any change in the terms of this
Section 9.8. Any change to Section IX or any other provision of this Agreement
affecting the rights or obligations of the Administrative Agent shall not be
amended or modified without the prior written consent of the Administrative
Agent.
9.9. Binding Effect of Agreement. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns; provided that (i) the Borrower may not assign or transfer its
rights or obligations hereunder, except by merger permitted hereunder, and (ii)
no Bank may assign or transfer its rights or obligations hereunder to any Person
except in accordance with the provisions of Section 9.10.
9.10. Successors and Assigns.
(i) Any Bank may at any time grant to one or more banks or other
financial institutions (each, a "Participant") participating interests in any of
its Commitments or any or all of its Loans in an amount and on such terms as
such Bank may deem appropriate. In the event of any such grant by a Bank of a
participating interest to a Participant, whether or not upon notice to the
Borrower and the Administrative Agent, such Bank shall remain responsible for
the performance of its obligations hereunder, and the Borrower and the
Administrative Agent shall continue to deal solely and directly with such Bank
in connection with such Bank's rights and obligations under this Agreement. Any
agreement pursuant to which any Bank may grant such a participating interest
shall provide that such Bank shall retain the sole right and responsibility to
enforce the obligations of the Borrower hereunder including, without limitation,
the right to approve any amendment, modification or waiver of any provision of
this Agreement; provided, however, that such participation agreement may provide
that such Bank will not agree, without the consent of the Participant, to any
modification, amendment or waiver of this Agreement requiring the consent,
agreement or approval of all of the Banks, as described in Section 9.8. The
Borrower agrees that each Participant shall be entitled to the benefits of
Sections 2.11, 2.12 and 2.16 with respect to its participating interest. An
assignment or other transfer which is not permitted by subsection (ii) below
shall be given effect for purposes of this Agreement only to the extent of a
participating interest granted in accordance with this subsection (i).
-67-
(ii) Any Bank may at any time assign to one or more Eligible Assignees
all, or a part of all, of its rights, interests and obligations under this
Agreement and the Notes (or any one of its Notes) on such terms, as between such
Bank and each of its Eligible Assignees, as such Bank may deem appropriate, and
such Eligible Assignee shall assume such rights, interests and obligations,
pursuant to an instrument executed by such Eligible Assignee and such transferor
Bank substantially in the form of Exhibit G hereto (an "Assignment and
Assumption"); provided, however, that (A) prior to assigning any interest to any
Eligible Assignee hereunder, such Bank will (x) notify the Borrower and the
Administrative Agent in writing identifying the proposed Eligible Assignee and
stating the aggregate principal amount of the proposed interest to be assigned,
and (y) receive the prior written consent of the Administrative Agent and, so
long as no Event of Default has occurred and is continuing, the Borrower, which
consent may not be unreasonably withheld by either the Borrower or the
Administrative Agent, and (B) no Bank will assign to any Eligible Assignee less
than an aggregate amount equal to the lesser of (x) $5,000,000 of such Bank's
Commitments and interest in the Loans (as such interest may be reduced pursuant
to the terms hereof) or (y) the remaining amount of such Bank's Commitments. It
is understood and agreed that the proviso contained in the immediately preceding
sentence shall not be applicable in the case of, and this subsection (ii) shall
not restrict, an assignment or other transfer by any Bank to an Affiliate of
such Bank or to any other Bank or a collateral assignment or other similar
transfer to a Federal Reserve Bank or an assignment required under applicable
law. Upon execution and delivery of such an Assignment and Assumption and
payment by such Eligible Assignee to such transferor Bank of an amount equal to
the purchase price agreed between such transferor Bank and such Eligible
Assignee, such Eligible Assignee shall be a Bank party to this Agreement and
shall have all the rights, interests and obligations of a Bank with the
Commitments as set forth in such instrument of assumption, and the transferor
Bank shall be released from its obligations hereunder to a corresponding extent,
and no further consent or action by any party shall be required. Upon the
consummation of any assignment pursuant to this subsection (ii), the transferor
Bank, the Administrative Agent and the Borrower shall make appropriate
arrangements so that, if required, new Notes are issued to the Eligible Assignee
and the transferor Bank, as applicable.
(iii) No Eligible Assignee, Participant or other transferee of any
Bank's rights shall be entitled to receive any greater payment under Sections
2.10, 2.11, 2.14 and 2.16 than such Bank would have been entitled to receive
with respect to the rights transferred, unless such transfer is made with the
Borrower's prior written consent or at a time when the circumstances giving rise
to such greater payment did not exist.
(iv) Assignments require a fee payable to the Administrative Agent by
the transferor Bank, solely for the account of the Administrative Agent, in the
amount of $3,500.
9.11. Counterparts. This Agreement may be signed in any number of
counterparts with the same effect as if the signatures hereto and thereto were
upon the same instrument, and each counterpart will be deemed an original.
-68-
9.12. Partial Invalidity. The invalidity or unenforceability of any one
or more phrases, clauses or sections of this Agreement shall not affect the
validity or enforceability of the remaining portions of it.
9.13. Captions. The captions and headings of the various sections and
subsections of this Agreement are provided for convenience only and shall not be
construed to modify the meaning of such sections or subsections.
9.14. WAIVER OF JURY TRIAL. THE BORROWER, THE BANKS AND THE
ADMINISTRATIVE AGENT MUTUALLY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM, COUNTERCLAIM OR
DEFENSE BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH OR
ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR
WRITTEN) OR ACTIONS OF ANY PARTY. THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT
FOR THE ADMINISTRATIVE AGENT AND THE BANKS TO ENTER INTO THIS AGREEMENT AND TO
MAKE LOANS AND EXTEND CREDIT TO THE BORROWER. THE BORROWER (i) CERTIFIES THAT
NEITHER THE ADMINISTRATIVE AGENT, NOR ANY BANK NOR ANY REPRESENTATIVE,
ADMINISTRATIVE AGENT OR ATTORNEY OF THE ADMINISTRATIVE AGENT OR ANY BANK HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE ADMINISTRATIVE AGENT OR ANY BANK
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND
(II) ACKNOWLEDGES THAT, IN ENTERING INTO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS TO WHICH THE BORROWER IS A PARTY, THE ADMINISTRATIVE AGENT AND THE
BANKS ARE RELYING UPON, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS
CONTAINED IN THIS SECTION 9.14.
9.15. WAIVER OF SPECIAL DAMAGES. EXCEPT AS PROHIBITED BY LAW, THE
BORROWER, THE ADMINISTRATIVE AGENT AND THE BANKS EACH HEREBY WAIVES ANY RIGHTS
WHICH IT MAY HAVE TO CLAIM OR RECOVER, IN ANY LITIGATION WITH RESPECT TO ANY
ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THE LOAN DOCUMENTS
(INCLUDING WITHOUT LIMITATION THIS AGREEMENT AND THE NOTES AND ANY AMENDMENTS
THEREOF), ANY SPECIAL EXEMPLARY OR PUNITIVE DAMAGES. THE BORROWER (A) CERTIFIES
THAT NO BANK, ADMINISTRATIVE AGENT OR REPRESENTATIVE, AGENT OR ATTORNEY THEREOF
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH ENTITY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (B) ACKNOWLEDGES
THAT, IN ENTERING INTO THIS AGREEMENT, THE BANKS AND THE ADMINISTRATIVE AGENT
ARE RELYING UPON, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS CONTAINED
IN THIS SECTION 9.15.
-69-
9.16. Entire Agreement. This Agreement, the other Loan Documents and
the other documents and agreements executed in connection herewith constitute
the final agreement of the parties hereto and supersede any prior agreement or
understanding, written or oral, with respect to the matters contained herein and
therein.
9.17. Replacement of Loan Documents, Etc. Upon receipt of an affidavit
of an officer of any Bank as to the loss, theft, destruction or mutilation of
one or more of the Loan Documents which is not of public record, and, in the
case of any such loss, theft, destruction or mutilation, upon cancellation of
such Loan Document and, with respect to any instrument, the customary
indemnification of the Borrower by such Bank, the Borrower will issue, in lieu
thereof, a replacement Loan Document containing the same terms and conditions.
-70-
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers as of the day and year first above
written.
counterpart signature page to
Revolving Credit Agreement,
dated as of February 19, 2002,
among
GameStop Corp.,
Fleet National Bank, as Administrative Agent,
and certain other Lending Institutions
The Borrower:
GAMESTOP CORP.
By: /s/ XXXXX X. XXXXXXX
------------------------------------------
Name: Xxxxx Xxxxxxx
Title: Chief Financial Officer
The Administrative Agent:
FLEET NATIONAL BANK, individually,
and in its capacity as Administrative Agent
By: /s/ XXXXXX X. XXXXXXX
------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Director
-71-
counterpart signature page to
Revolving Credit Agreement,
dated as of February __, 2002,
among
GameStop Corp.,
Fleet National Bank, as Administrative Agent,
and certain other Lending Institutions
SOVEREIGN BANK
By: /s/ XXXXXX X. XXXX
-----------------------------------------
Name: Xxxxxx X. Xxxx
Title: Vice President
-72-
counterpart signature page to
Revolving Credit Agreement,
dated as of February __, 2002,
among
GameStop Corp.,
Fleet National Bank, as Administrative Agent,
and certain other Lending Institutions
FIFTH THIRD BANK
By: /s/ XXXXXXXXXXX XXXXXX
------------------------------------------
Name: Xxxxxxxxxxx Xxxxxx
Title: Assistant Vice President
-73-
counterpart signature page to
Revolving Credit Agreement,
dated as of February 19, 2002,
among
GameStop Corp.,
Fleet National Bank, as Administrative Agent,
and certain other Lending Institutions
UBS AG, Stamford Branch
By: /s/ XXXXX X. XXXX
-------------------------------------------
Name: Xxxxx X. Xxxx
Title: Managing Director
By: /s/ XXXXXX X. XXXXXX XX
-------------------------------------------
Name: Xxxxxx X. Xxxxxx XX
Title: Director
UBS WARBURG LLC,
solely in its capacity as Documentation Agent
By: /s/ XXXXX X. XXXX
-------------------------------------------
Name: Xxxxx X. Xxxx
Title: Managing Director
By: /s/ XXXXXX X. XXXXXX XX
-------------------------------------------
Name: Xxxxxx X. Xxxxxx XX
Title: Director
-74-
SCHEDULE 1
Commitments and Commitment Percentages
Bank Commitment Percentage
---- ---------- ----------
Fleet National Bank $35,000,000 46.667%
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Sovereign Bank $15,000,000 20.000%
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxx Xxxx and
Xxxxx Xxxx
Fifth Third Bank $ 5,000,000 6.667%
Fifth Third Center
00 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxxx Xxxxxx
UBS AG, Stamford Branch $20,000,000 26.667%
000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxxx
TOTAL $75,000,000 100.001%*
*Total is more than 100% due to rounding of .66666 up to the next highest digit
in the case of three of the Banks.
-75-
EXHIBIT A
[FORM OF REVOLVING CREDIT NOTE]
REVOLVING CREDIT NOTE
$ Date: , 2002
---------------- ------------ --
FOR VALUE RECEIVED, the undersigned,
GAMESTOP CORP., a Delaware
corporation (the "BORROWER"), absolutely and unconditionally promises to pay to
the order of _____________________ (together with its successors in title and
assigns, "PAYEE") (i) the principal sum of __________________AND 00/100 DOLLARS
($___________) or the aggregate unpaid principal amount of all Revolving Credit
Loans made to the Borrower by Payee (whichever is less) on the Revolving Credit
Maturity Date, (ii) interest from the date of this Revolving Credit Note (this
"NOTE") at the times and at the rate(s) per annum as provided in the Loan
Agreement (as defined below), and (iii) such other fees, expenses, costs and
charges as may be due and payable by the Borrower to ___________ pursuant to the
Loan Agreement.
This Note is made and delivered by the Borrower to Payee pursuant to
that certain
Revolving Credit Agreement dated as of _____________ __, 2002 (as
it may be amended from time to time, the "LOAN AGREEMENT") by and among the
Borrower, the lending institutions that are party thereto (collectively, the
"BANKS"), and Fleet National Bank, as administrative agent for itself and each
other Bank (the "ADMINISTRATIVE AGENT"). The Loan Agreement, among other things,
contains provisions governing (i) the timing and method of payment (Sections
2.13 and 2.14), (ii) prepayment (Section 2.13), (iii) calculation of interest
and default interest (Section 2.10; Sections 2.15 through 2.17) and (iv)
acceleration of maturity (Section 7.2). The terms of the Loan Agreement are
incorporated by reference as though fully set forth herein. Capitalized terms
used but not defined herein shall have the meanings ascribed to such terms in
the Loan Agreement.
No delay or omission on the part of the Administrative Agent, Payee or
any subsequent holder hereof in exercising any right hereunder shall operate as
a waiver of such right or of any other rights of such Person, nor shall any
delay, omission or waiver on any one occasion be deemed a bar or waiver of the
same or any other right on any further occasion.
The Borrower irrevocably waives notice of acceptance, presentment,
demand, notice of nonpayment, protest, notice of protest, suit and all other
demands, notices and other conditions precedent in connection with the delivery,
acceptance, performance, default, collection and/or enforcement of this Note or
any Collateral therefor, except for notices expressly provided for in the Loan
Agreement or any other Loan Document. The
A-1
Borrower assents to any extension or postponement of the time of payment or any
other indulgence, to any substitution, exchange or release of Collateral and to
the addition or release of any other Person primarily or secondarily liable.
The Borrower absolutely and irrevocably consents and submits to the
non-exclusive jurisdiction of (i) the courts of the State of New York and of any
federal court located in New York County, New York, and (ii) any appellate court
to which appeals may be taken from the courts referred to in clause (i) in
connection with any actions or proceedings arising out of or relating to this
Note or any of the other Loan Documents.
EACH OF THE BORROWER AND PAYEE HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM,
COUNTERCLAIM OR DEFENSE BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION
WITH THIS NOTE OR ANY OF THE OTHER LOAN DOCUMENTS, OR ANY COURSE OF CONDUCT,
COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY
PARTY. THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR PAYEE TO ACCEPT THIS
NOTE AND TO MAKE LOANS AND EXTEND CREDIT TO THE BORROWER.
This Note and the Obligations of the Borrower hereunder shall be
governed by, and interpreted and determined in accordance with, the laws of the
State of New York (without regard to its principles relating to choice and
conflicts of law). The Borrower's Obligations hereunder, and under the other
Loan Documents, shall be binding upon the Borrower's successors and permitted
assigns, and upon every subsequent holder of this Note.
IN WITNESS WHEREOF, this REVOLVING CREDIT NOTE has been duly executed
by the undersigned as of the date and year first above written.
WITNESS: THE BORROWER:
GAMESTOP CORP.
---------------------------
By:
-----------------------------
Name:
Title:
Hereunto Duly Authorized
A-2
SCHEDULE TO REVOLVING CREDIT NOTE
TYPE OF LOAN
AMOUNT OF (BASE RATE OR APPLICABLE INTEREST INTEREST AMOUNT NOTATION
DATE LOAN LIBOR) MARGIN RATE PERIOD PAID MADE BY
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A-3
EXHIBIT B
[FORM OF NOTICE OF BORROWING OR CONVERSION]
GAMESTOP CORP.
Fleet National Bank,
as Administrative Agent
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Re: Loan Agreement
Gentlemen:
Reference is hereby made to that certain
Revolving Credit Agreement
dated as of ___________ __, 2002 (as it may be amended from time to time, the
"LOAN AGREEMENT") by and among GAMESTOP CORP. (the "BORROWER"), the lending
institutions that are party thereto (collectively, the "BANKS"), and FLEET
NATIONAL BANK, as administrative agent for itself and each other Bank (the
"ADMINISTRATIVE AGENT"). Capitalized terms used but not defined herein shall
have the meanings ascribed to such terms in the Loan Agreement.
Pursuant to Section 2.4(a) of the Loan Agreement, the undersigned, on
behalf of the Borrower and not individually, hereby confirms its request made on
_____________, 200_ for a [Base Rate] [LIBOR] Loan in the amount of
$_______________ effective on ______________________, 200_.
[The Interest Period applicable to said Loan will be [one] [two]
[three] [six] months.]*
[Said Loan represents a conversion of the [Base Rate] [LIBOR] Loan in
the same amount made on ____________________.]**
The representations and warranties contained or referred to in Section
IV of the Loan Agreement are true and correct in all material respects on and as
of the effective date of the Loan as though made at and as of such date (except
to the extent that such representations and warranties expressly relate to an
earlier date); and no Default or Event of Default has occurred and is continuing
or will result from the Loan.
GAMESTOP CORP.
By:
-------------------------------
Name:
Title:
Date:
----------------------
* To be inserted in any request for a LIBOR Loan.
[** To be inserted in any request for a conversion.]
B-1
EXHIBIT C
INDEBTEDNESS; ENCUMBRANCES
[To be provided by the Borrower]
C-1
EXHIBIT D
DISCLOSURE
[To be provided by the Borrower]
D-1
EXHIBIT E
FORM OF OPINION OF COUNSEL TO THE BORROWER AND THE GUARANTORS, ETC.
[To be inserted]
E-1
EXHIBIT F
[FORM OF REPORT OF CHIEF FINANCIAL OFFICER]
CERTIFICATE OF CHIEF FINANCIAL OFFICER
GAMESTOP CORP. (the "BORROWER") DOES HEREBY CERTIFY THAT:
This Certificate is furnished pursuant to Section 5.1(d) of the
Revolving Credit Agreement (the "LOAN AGREEMENT") dated as of February 19, 2002
(as it may be amended from time to time, the "LOAN AGREEMENT") by and among the
Borrower, the lending institutions that are party thereto (collectively, the
"BANKS"), and Fleet National Bank, as administrative agent for itself and each
other Bank. Capitalized terms used but not defined herein shall have the
meanings ascribed to such terms in the Loan Agreement.
As required by Section 5.1(a) or (b) of the Loan Agreement,
Consolidated financial statements of the Borrower Affiliated Group for the
(year) (quarter) ended _________, 200_ (the "FINANCIAL STATEMENTS") prepared in
accordance with GAAP (subject, in the case of quarterly statements, to the
addition of footnotes and normal year-end audit adjustments, none of which are
materially adverse) accompany this Certificate. The Financial Statements present
fairly the financial position of the Borrower Affiliated Group as at the date
thereof and the results of operations of the Borrower Affiliated Group for the
period covered thereby.
Schedule 1 attached hereto sets forth financial data and computations
evidencing compliance with the covenants set forth in Sections 6.5, 6.6, 6.7 and
6.8 of the Loan Agreement, all of which data and computations, to the knowledge
of the Borrower's chief financial officer (the "CHIEF FINANCIAL OFFICER")
executing and delivering this Certificate on behalf of the Borrower, are true,
complete and correct.
The activities of the Borrower Affiliated Group during the period
covered by the Financial Statements have been reviewed by the Chief Financial
Officer and by employees or agents under his immediate supervision. Based on
such review, to the knowledge of the Chief Financial Officer, during the period
covered by the Financial Statements, and as of the date of this Certificate, (a)
the Borrower has, or has caused to have, kept, observed, performed and fulfilled
in all material respects each and every covenant and condition of the Loan
Agreement (except to the extent waived by the Banks and noted on Schedule 1
attached hereto) and the Notes, and (b) no Default or Event of Default has
occurred or is continuing.
F-1
IN WITNESS WHEREOF, I have hereunto signed my name as of this _____ day
of __________, 200_.
GAMESTOP CORP.
By:
---------------------------
Name: Xxxxx Xxxxxxx
Title: Chief Financial Officer
Hereunto Duly Authorized
F-2
SCHEDULE 1
to
CERTIFICATE OF CHIEF FINANCIAL OFFICER
FINANCIAL COVENANTS
MINIMUM FIXED CHARGE COVERAGE RATIO (SECTION 6.5)
MINIMUM: 1.50 : 1.00(1)
ACTUAL: : 1.00
----
(1) CONSOLIDATED EBITDAR LESS CAPITAL EXPENDITURES
(sum of (a) through (g) minus (h)) $
------------
(all amounts calculated for any period of 4 consecutive fiscal quarters)
(a) Consolidated net income of Borrower $
----------
(b) plus Consolidated Total Interest Expense $
----------
(c) plus Consolidated income taxes $
----------
(d) plus Consolidated depreciation $
----------
(e) plus Consolidated amortization $
----------
(f) plus Extraordinary non-cash losses $
----------
(g) plus Consolidated Rent Expense $
----------
(h) less Capital Expenditures $
----------
(2) FIXED CHARGES
(sum of (a) through (c)) $
------------
(all amounts calculated for any period of 4 consecutive fiscal quarters)
(a) Consolidated Total Interest Expense $
----------
(b) plus Consolidated Debt Amortization $
----------
(c) plus Consolidated Rent Expense $
----------
(3) RATIO OF (1) TO (2) : 1.00
---
--------
(1) Becomes minimum ratio of 1.75 to 1.00 after the second quarter of 2003.
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MAXIMUM CASH FLOW LEVERAGE RATIO (SECTION 6.6)
MAXIMUM: 1.00 : 1.00
ACTUAL: : 1.00
----
(1) CONSOLIDATED TOTAL FUNDED DEBT $
------------
(sum of (a) through (c))
(a) aggregate Consolidated Indebtedness
for borrowed money (including the
Loans outstanding as of date of calculation) $
----------
(b) plus Stated Amount of outstanding Letters of Credit $
----------
(c) plus Guaranties and Capitalized Leases $
----------
(2) CONSOLIDATED EBITDA
(sum of (a) through (f)) $
------------
(all amounts calculated for any period of 4 consecutive fiscal quarters)
(a) Consolidated net income of Borrower $
----------
(b) plus Consolidated Total Interest Expense $
----------
(c) plus Consolidated income taxes $
----------
(d) plus Consolidated depreciation $
----------
(e) plus Consolidated amortization $
----------
(f) plus Extraordinary non-cash losses $
----------
(3) RATIO OF (1) TO (2) : 1.00
---
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MINIMUM TANGIBLE NET WORTH (SECTION 6.7)
REQUIRED: $
------------
(sum of (a) through (c))
(a) $110,000,000 $ 110,000,000
(b) plus 50% of Consolidated Cumulative Net Income $
------------
(c) plus 100% of Consolidated Cumulative
Net Equity Raises $
------------
ACTUAL: $
------------
(result of (a) minus (b))
CONSOLIDATED TANGIBLE NET WORTH (ACTUAL):
(a) Stockholders' Equity $
------------
(b) minus intangible assets $
------------
MAXIMUM CAPITAL EXPENDITURES (SECTION 6.8)
MAXIMUM PERMITTED: $
------------
(sum of (a) plus (b))
(a) $40,000,000 $ 40,000,000
(b) plus carryover from prior year
(not to exceed $5,000,000) $
------------
ACTUAL (YEAR TO DATE): $
------------
F-5
EXHIBIT G
[FORM OF BORROWING BASE REPORT]
GAMESTOP CORP.
BORROWING BASE REPORT
As of _______________
The undersigned is an authorized officer of GameStop Corp. (the
"BORROWER").
Reference is hereby made to that certain Revolving Credit Agreement
dated as of February 19, 2002 (as it may be amended from time to time, the "LOAN
AGREEMENT") by and among the Borrower, the lending institutions that are party
thereto (collectively, the "BANKS"), and Fleet National Bank, as administrative
agent for itself and each other Bank (the "ADMINISTRATIVE AGENT"). Capitalized
terms used but not defined herein shall have the meanings ascribed to such terms
in the Loan Agreement. This Borrowing Base Report is subject in its entirety to
the terms of the Loan Agreement.
The undersigned hereby certifies, on behalf of the Borrower and not
individually, to the Banks and the Administrative Agent that the calculation of
the Borrowing Base below is true, complete, and accurate in all respects:
1. Eligible Inventory
(A) Net value of Inventory consisting of finished
goods held for resale, calculated at the lesser
of fair market value or cost $
---------
(B) Minus
(i) Damaged, defective, etc. Inventory $
---------
(ii) Inventory subject to
liens other than in favor
of the Administrative Agent $
---------
(iii) Inventory under consignment $
---------
Total ineligible Inventory $
---------
G-1
(C) Net value of Eligible Inventory
(Line 1A minus Line 1B) $
---------
(D) Formula [50%]
(E) Borrowing Base availability
(Line 1C multiplied by Line 1D) $
---------
3. Total Loans outstanding less Stated Amount of
outstanding Letters of Credit less aggregate
amount of unreimbursed draws under
outstanding Letters of Credit
(Not to exceed TOTAL COMMITMENT) $
---------
4. Total potential availability (TOTAL COMMITMENT minus Line 3) $
---------
5. Total Borrowing Base availability
(the lesser of (x) Line 1E, and (y) Line 4) $
---------
Submitted by:
GAMESTOP CORP.
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
Date:
------------------------------------
G-2
EXHIBIT H
[FORM OF ASSIGNMENT AND ASSUMPTION]
ASSIGNMENT AND ASSUMPTION
Dated as of __________, _____
Reference is made to the Revolving Credit Agreement dated as of
February 19, 2002 (as it may be amended from time to time, the "LOAN AGREEMENT")
by and among GAMESTOP CORP. (the "BORROWER"), the lending institutions that are
party thereto (collectively, the "BANKS") and FLEET NATIONAL BANK, as
administrative agent for itself and each other Bank (the "ADMINISTRATIVE
AGENT"). Capitalized terms used but not defined herein shall have the meanings
ascribed to such terms in the Loan Agreement.
______________________ (the "ASSIGNOR") and ______________________ (the
"ASSIGNEE") agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, that Commitment
Percentage under the Loan Documents as of the Effective Date (as hereinafter
defined) with respect to the Obligations as is specified on Annex I hereto.
After giving effect to such sale and assignment, the Assignor's and Assignee's
Commitment Percentages will be as set forth on Annex I hereto.
2. The Assignor (i) represents that it is legally authorized to enter
into this Assignment and Assumption and that, as of the date hereof, its
Commitment Percentage is as set forth on Annex I hereto; (ii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the Loan
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Loan Agreement, the other Loan Documents or any
other instrument or document furnished pursuant thereto, other than that it is
the legal and beneficial owner of the interest being assigned by it hereunder
and that such interest is free and clear of any adverse claim; and (iii) makes
no representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower, or any other person which may be primarily
or secondarily liable in respect of any of the Obligations or any of their
respective obligations under the Loan Agreement or the other Loan Documents or
any other instrument or document delivered or executed pursuant thereto.
3. The Assignee (i) represents and warrants that (a) it is an Eligible
Assignee, (b) it is legally authorized to enter into this Assignment and
Assumption, (c) the execution, delivery and performance of this Assignment and
Assumption do not conflict with any provision of law or of the charter or
by-laws of the Assignee, or of any
H-1
agreement binding on the Assignee and (d) all acts, conditions and things
required to be done and performed and to have occurred prior to the execution,
delivery and performance of this Assignment and Assumption, and to render the
same the legal, valid and binding obligation of the Assignee, enforceable
against it in accordance with its terms, have been done and performed and have
occurred in due and strict compliance with all applicable laws; (ii) confirms
that it has received a copy of the Loan Agreement, together with copies of the
most recent financial statements delivered pursuant to Sections 4.7 and 5.1
thereof and such other documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into this Assignment and
Assumption; (iii) agrees that it will, independently and without reliance upon
the Assignor, any other Bank or the Administrative Agent and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own appraisals and credit decisions in taking or not taking action
under the Loan Agreement; (iv) appoints and authorizes the Administrative Agent
to take such action as administrative agent on its behalf and to exercise such
powers as are reasonably incidental thereto pursuant to the terms of the Loan
Agreement and the other Loan Documents; and (v) agrees that it will perform all
the obligations which by the terms of the Loan Agreement are required to be
performed by it as a Bank in accordance with the terms of the Loan Agreement.
4. The effective date for this Assignment and Assumption shall be as
set forth on Annex I hereto (the "Effective Date"), provided, however, that on
or before such date (i) this Assignment and Assumption shall have been executed
and delivered by the parties hereto, (ii) executed copies hereof shall have been
delivered to and consented to by the Administrative Agent and, if required, the
Borrower, and (iii) the Assignor or the Assignee shall have paid to the
Administrative Agent the fee required by Section 9.10(iv) of the Loan Agreement.
Following the execution of this Assignment and Assumption and the consent
thereto by the Administrative Agent and, if required, the Borrower, it will be
delivered to the Administrative Agent for acceptance and recording by the
Administrative Agent. The Administrative Agent shall maintain a copy of each
Assignment and Assumption delivered to it and a register or similar list (the
"Register") for the recordation of the names and addresses of the Banks and the
Commitment Percentages of, and principal amount of the Loans owing to, the Banks
from time to time. The entries in the Register shall be conclusive, in the
absence of manifest error, and the Borrower, the Administrative Agent and the
Banks may treat each Person whose name is recorded in the Register as a Bank for
all purposes of the Loan Agreement. The Register shall be available for
inspection by the Borrower and the Banks at any reasonable time and from time to
time upon reasonable prior notice.
5. Upon such acceptance and recording, from and after the Effective
Date, (i) the Assignee shall be a party to the Loan Agreement and, to the extent
provided in this Assignment and Assumption, have the rights and obligations of a
Bank thereunder, and (ii) provided that the Administrative Agent and, if
required, the Borrower shall have approved the herein assignment pursuant to
Section 9.10 of the Loan Agreement, the Assignor shall, with respect to that
portion of its interest under the Loan Agreement assigned hereunder, relinquish
its rights and be released from its obligations under the
H-2
Loan Agreement accruing from and after the Effective Date; provided, however,
that the Assignor shall retain its rights to be indemnified pursuant to Section
9.3 of the Loan Agreement with respect to any claims or actions arising prior to
the Effective Date.
6. Upon such acceptance and recording, from and after the Effective
Date, the Administrative Agent shall make all payments in respect of the
interest assigned hereby (including payments of principal, interest, fees and
other amounts) to the Assignee. The Assignor and Assignee shall make all
appropriate adjustments directly between themselves with respect to payments by
the Administrative Agent for periods prior to the Effective Date or otherwise
with respect to the making of this assignment.
7. This Assignment and Assumption shall be governed by, and interpreted
and determined in accordance with, the laws of the State of New York (without
regard to its principles relating to choice and conflicts of law).
8. This Assignment and Assumption may be signed in any number of
counterparts with the same effect as if the signatures hereto and thereto were
upon the same instrument.
(signatures on next page)
H-3
IN WITNESS WHEREOF, each of the undersigned has caused this Assignment
and Assumption to be executed by its duly authorized officer, as of the day and
year first above written.
The Assignor:
-----------------------------------
By:
--------------------------------
Name:
Title:
The Assignee:
-----------------------------------
By:
--------------------------------
Name:
Title:
Notice Address of Assignee:
-----------------------------------
-----------------------------------
-----------------------------------
Attn:
--------------------------
Wire Instructions for Assignee:
-----------------------------------
-----------------------------------
-----------------------------------
H-4
CONSENTED TO:
The Administrative Agent
FLEET NATIONAL BANK,
as Administrative Agent
By:
-----------------------------------------
Name:
Title:
The Borrower:
GAMESTOP CORP.
By:
-----------------------------------------
Name:
Title:
H-5
ANNEX FOR ASSIGNMENT AND ASSUMPTION
ANNEX 1
1. Borrower:
GameStop Corp., a Delaware corporation (the "BORROWER")
2. Name and Date of Loan Agreement:
Revolving Credit Agreement dated as of February 19, 2002 by and among
the Borrower, the lending institutions that are party thereto
(collectively, the "BANKS"), and Fleet National Bank, as administrative
agent for itself and each other Bank
3. Date of Assignment and Assumption: , 200
-------------- -
4. Commitment Percentages:
a. Commitment Percentage being assigned
by Assignor to Assignee %
--
b. Assignor's Commitment Percentage
before giving effect to this Assignment
and Assumption %
--
c. Assignor's Commitment Percentage
after giving effect to this Assignment and Assumption
%
--
d. Assignee's Commitment Percentage after giving effect
to this Assignment and Assumption
%
--
5. Effective Date of assignment: , 200
----------------- -
ASSIGNOR: ASSIGNEE:
----------------------- -----------------------
----------------------- -----------------------
----------------------- -----------------------
----------------------- -----------------------
H-6
EXHIBIT I
[FORM OF SUBSIDIARY GUARANTY]
SUBSIDIARY GUARANTY
SUBSIDIARY GUARANTY (this "GUARANTY") dated as of February 19, 2002 by
and among GameStop, Inc., a Minnesota corporation, Babbage's Etc. LLC, a
Delaware limited liability company, Sunrise Publications, Inc., a Minnesota
corporation and XxxxXxxx.xxx, Inc., a Delaware corporation (each, a "GUARANTOR"
and collectively, the "GUARANTORS"), and FLEET NATIONAL BANK, a national banking
institution having an office located at 000 Xxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000 (the "ADMINISTRATIVE AGENT"), as administrative agent for
itself and each other Bank (as defined below) under the terms of that certain
Revolving Credit Agreement dated as of February 19, 2002 (as it may be amended
from time to time, the "LOAN AGREEMENT") by and among GameStop Corp., a Delaware
corporation (the "BORROWER"), the lending institutions that are party thereto
(collectively, the "BANKS"), and the Administrative Agent.
WHEREAS, the Borrower is the direct legal and beneficial owner of 100%
of the issued and outstanding shares of capital stock of XxxxXxxx.xxx, Inc. and
GameStop, Inc., and GameStop, Inc. is the direct legal and beneficial owner of
100% of the issued and outstanding shares and limited liability company
interests of Babbage's Etc. LLC and Sunrise Publications, Inc.;
WHEREAS, the Borrower has requested that the Banks enter into the Loan
Agreement with the Borrower, and to make Loans to the Borrower and issue Letters
of Credit on the Borrower's behalf, upon the terms and subject to the conditions
set forth therein;
WHEREAS, it is a condition precedent to the Banks' agreement to enter
into the Loan Agreement and extend credit to the Borrower thereunder that the
Guarantors execute and deliver this Guaranty to the Administrative Agent
agreeing to be bound by the terms and conditions set forth herein.
NOW, THEREFORE, in order to induce the Banks to enter into the Loan
Agreement and extend credit to the Borrower thereunder, and in consideration
thereof, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE 1. DEFINITIONS; INTERPRETATION.
1.01 Generally. Capitalized terms used but not defined herein shall
have the meanings ascribed to such terms in the Loan Agreement. Each Guarantor
hereby acknowledges receipt of a copy of the Loan Agreement.
I-1
1.02 Terms Defined in this Guaranty. For purposes of this Guaranty, the
following terms have the meanings set forth below:
"ADMINISTRATIVE AGENT" shall have the meaning set forth in the
Preamble.
"BANKS" shall have the meaning set forth in the Preamble.
"GUARANTOR" and "GUARANTORS" shall have the respective meanings set
forth in the Preamble.
"GUARANTY" shall have the meaning set forth in the Preamble.
"LOAN AGREEMENT" shall have the meaning set forth in the Preamble.
"OBLIGOR(S)" means the Borrower and any other Person who shall at any
time and from time to time be primarily or secondarily liable for
payment and/or performance of all or any part of the Obligations.
1.03 Matters of Interpretation and Construction.
(a) The language of this Guaranty, having been negotiated by
the parties hereto, shall not be construed against any party hereto by reason of
the extent to which such party or its counsel participated in the drafting
hereof or by reason of the extent to which any such provision is inconsistent
with any prior draft hereof.
(b) Use of the singular shall be deemed to include the plural
and use of the plural shall be deemed to include the singular. Use of any gender
shall be deemed to include all other genders.
(c) A reference to any law, agreement or other document
includes any amendment or modification to such law, agreement or document.
(d) A reference to any Person includes its successors and
permitted assigns.
(e) Unless the context clearly requires otherwise, reference
to a particular "Article" or "Section" refers to the corresponding article or
section of this Guaranty.
(f) Unless the context clearly requires otherwise, use of the
word "including" shall mean "including, without limitation".
I-2
ARTICLE 2. UNLIMITED GUARANTY.
2.01 Guaranty of Obligations. The Guarantors, jointly and severally,
hereby absolutely and unconditionally guaranty to the Administrative Agent, for
the benefit of the Administrative Agent and the Banks, the prompt and complete
payment in cash when due and payable (whether at the stated or accelerated
maturity thereof, or otherwise) of all Obligations of the Borrower to the
Administrative Agent and the Banks and the performance of the Borrower's
covenants under all Loan Documents and instruments evidencing any of the
Obligations, or under which the Obligations may have been issued, created,
assumed or guarantied, and all expenses incurred in collecting the same, all of
which shall conclusively be deemed to have been incurred in reliance upon this
Guaranty. This Guaranty is a guaranty of payment and not of collection, and is
absolute and unconditional. In the event that any part of the Obligations shall
not have been so paid in full when due and payable, the Guarantors will,
immediately upon notice from the Administrative Agent or, without notice,
immediately upon the occurrence of an Event of Default under Section 7.1(f) or
(g) of the Loan Agreement, pay or cause to be paid to the Administrative Agent
the unpaid amount of the Obligations which are then due and payable. The
obligations of each of the Guarantors hereunder shall not be affected by the
invalidity, unenforceability or irrecoverability of any of the Obligations as
against any of the other Guarantors or as against any other Obligor. For
purposes hereof, the Obligations shall be due and payable when and as the same
shall be due and payable under the terms of the Loan Agreement or any other Loan
Document notwithstanding the fact that the collection or enforcement thereof may
be stayed or enjoined under the United States Bankruptcy Code or other
applicable law.
2.02. Continuing Obligations. The Guarantors acknowledge that the
Administrative Agent and the Banks, in determining to enter into the Loan
Agreement, have relied upon the fact that this Guaranty constitutes the
continuing and irrevocable agreement of each of the Guarantors, and each
Guarantor agrees that its obligations hereunder may not be revoked in whole or
in part. The obligations of the Guarantors hereunder shall terminate when the
commitment of the Administrative Agent and the Banks to extend credit under the
Loan Agreement shall have terminated and all of the Obligations have been paid
in full in cash and discharged; provided, however, that:
(a) if a claim is made against the Administrative Agent or the
Banks at any time for repayment or recovery of any amounts or any property
received by the Administrative Agent or the Banks from any source on account of
any of the Obligations and the Administrative Agent or the Banks repay or return
any amounts or property so received (including interest thereon to the extent
required to be paid by the Administrative Agent or the Banks) or
(b) if the Administrative Agent or the Banks become liable for
any part of such claim by reason of (i) any judgment or order of any court or
administrative authority having competent jurisdiction, or (ii) any settlement
or compromise of any such claim,
then the Guarantors shall remain liable under this Guaranty for the amounts so
repaid or property so returned or the amounts for which the Administrative Agent
or the Banks become liable (such amounts being deemed part of the Obligations)
to the same extent as
I-3
if such amounts or property had never been received by the Administrative Agent
or the Banks, notwithstanding any termination hereof or the cancellation of any
instrument or agreement evidencing any such Obligations. Not later than five
days after receipt of notice from the Administrative Agent, the Guarantors shall
pay to the Administrative Agent an amount equal to the amount of such repayment
or return for which the Administrative Agent or the Banks have so become liable.
Payments hereunder by the Guarantors may be required by the Administrative Agent
on any number of occasions.
ARTICLE 3. WAIVERS.
3.01 Guarantor's Waivers. Except to the extent expressly required by
any of the Loan Documents, each Guarantor waives, to the fullest extent
permitted by law, all of the following (including all defenses, counterclaims
and other rights of any nature based upon any of the following):
(a) presentment, demand for payment and protest of nonpayment
of any of the Obligations, and notice of protest, dishonor or nonperformance;
(b) notice of acceptance of this Guaranty and notice that
credit has been extended in reliance on such Guarantor's guaranty of the
Obligations;
(c) notice of any Default or Event of Default, of any
inability to enforce the Obligations or any provision of the Loan Documents, or
any rights against any Collateral;
(d) demand for performance or observance of, and any
enforcement of any provision of any of the Loan Documents, or any pursuit or
exhaustion of rights or remedies with respect to the Obligations or the
Collateral, and any requirement of diligence or promptness on the part of the
Administrative Agent in connection with any of the foregoing;
(e) any act or omission on the part of the Administrative
Agent which may impair or prejudice any rights of such Guarantor, including
rights to obtain subrogation, exoneration, contribution, indemnification or any
other reimbursement from any Obligor or other Person, or otherwise operate as a
deemed release or discharge;
(f) failure or delay to perfect or continue the perfection of
any security interest in any Collateral or any other action which xxxxx or
impairs the value of, or any failure to preserve or protect the value of, any
Collateral;
(g) any statute of limitations or other rule of law which
provides that the obligation of a surety must be neither larger in amount nor in
other respects more burdensome than the obligation of the principal;
(h) any "single action" or "anti-deficiency" law which would
otherwise prevent the Administrative Agent from bringing any action, including
any claim for a
I-4
deficiency, against such Guarantor before or after the Administrative Agent's
commencement or completion of any foreclosure action, whether judicially, by
exercise of power of sale or otherwise, or any other law which would otherwise
require any election of remedies by the Administrative Agent;
(i) all demands and notices of every kind with respect to the
foregoing; and
(j) to the extent not referred to above, all defenses (other
than payment) which the Borrower may now or hereafter have to the payment of the
Obligations, together with all suretyship defenses, which could otherwise be
asserted by such Guarantor.
Each Guarantor represents that it has obtained the advice of legal counsel as to
the availability of suretyship and other defenses with respect to its
obligations hereunder in the absence of the waivers contained in this Section
3.01.
3.02 Administrative Agent's Power to Waive, Etc. Each Guarantor grants
to the Administrative Agent full power in its sole discretion, without notice to
or consent of such Guarantor (such notice and consent being expressly waived to
the fullest extent permitted by applicable law), and without in any way
affecting the liability of such Guarantor hereunder:
(a) to waive compliance with, and any Default or Event of
Default under, and to consent to any amendment to or modification or termination
of any terms or provisions of, or to give any waiver in respect of, any of the
Loan Documents, the Collateral, the Obligations or any guaranty thereof (each as
from time to time in effect);
(b) to grant any extensions of the Obligations, and any other
indulgence with respect thereto, and to effect any total or partial release (by
operation of law or otherwise), discharge, compromise or settlement with respect
to the obligations of the Obligors or any other Person in respect of the
Obligations, whether or not rights against any Guarantor hereunder are reserved
in connection therewith;
(c) to take security in any form for the Obligations, and to
consent to the addition to or the substitution, exchange, release or other
disposition of, or to deal in any other manner with, any part of any property
contained in the Collateral whether or not the property, if any, received upon
the exercise of such power shall be of a character or value the same as or
different from the character or value of any property disposed of, and to
obtain, modify or release any present or future guaranties of the Obligations
and to proceed against any of the Collateral or such guaranties in any order;
(d) to collect or liquidate or realize upon any of the
Obligations or the Collateral in any manner or to refrain from taking any such
action; and
I-5
(e) to extend credit under any of the Loan Documents, or
otherwise, in such amount and on such terms as the Administrative Agent may
determine in its sole discretion, including increasing the amount of credit and
the interest rate and fees with respect thereto, even though the condition of
the Obligors (financial or otherwise, on an individual or Consolidated basis)
may have deteriorated since the date hereof.
3.03 Non-Waiver by Administrative Agent. No delay or omission on the
part of the Administrative Agent in exercising any right under this Guaranty or
any other Loan Document, or under any guaranty of the Obligations, or with
respect to the Collateral, shall operate as a waiver or relinquishment of such
right. No action which the Administrative Agent or the Borrower may take or
refrain from taking with respect to the Obligations or any Collateral, including
the amendment or modification of any document relating thereto, or any waiver
with respect thereto, shall affect the provisions of this Guaranty or the
obligations of any Guarantor hereunder. None of the Administrative Agent's
rights shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of any Obligor, or by any noncompliance by the
Borrower with the terms, provisions and covenants of any Loan Document,
regardless of any knowledge thereof which the Administrative Agent may have or
with which the Administrative Agent may be charged.
ARTICLE 4. INFORMATION REGARDING THE BORROWER, ETC. Each Guarantor (a) has made
such investigation as it deems desirable of the risks undertaken by it in
entering into this Guaranty and is fully satisfied that it understands all such
risks, (b) releases the Administrative Agent and the Banks from any obligation
which may now or hereafter exist to disclose to such Guarantor (i) the risks
being undertaken by entering into this Guaranty or of any changes in such risks
or (ii) any matter related to the business, operations, character, collateral,
credit, condition (financial or otherwise), income or prospects of the Borrower
or its Affiliates or their respective properties or management, whether now or
hereafter known by the Administrative Agent. Each Guarantor represents, warrants
and agrees that it has sole responsibility for obtaining from the Borrower all
information concerning the Loan Documents and all other information as to the
Borrower and its Affiliates or their respective properties or management as such
Guarantor deems necessary or desirable, and, from and after the date hereof,
each Guarantor undertakes to keep itself so informed.
ARTICLE 5. CERTAIN GUARANTOR REPRESENTATIONS. Each Guarantor represents, as to
itself, as of the date hereof that:
(a) it is in the best interest of such Guarantor, is
consistent with the purposes for which such Guarantor was organized as an
integral part of the business conducted and proposed to be conducted by the
Borrower Affiliated Group, and is reasonably necessary and convenient to the
conduct of such business, to induce the Administrative Agent and the Banks to
enter into the Loan Agreement and to extend credit to the Borrower by
undertaking the obligations set forth in this Guaranty;
I-6
(b) the business of such Guarantor benefits from the
successful performance of the business of each other Guarantor and each other
member of the Borrower Affiliated Group, and the Borrower Affiliated Group as a
whole; the failure of any member of the Borrower Affiliated Group to cooperate
with all other members of the Borrower Affiliated Group in the conduct of their
respective businesses is reasonably likely to have an adverse impact on the
business of each other member of the Borrower Affiliated Group; and the failure
of any member of the Borrower Affiliated Group to associate or cooperate with
all other members of the Borrower Affiliated Group is reasonably likely to
impair the goodwill of the Borrower Affiliated Group as a whole;
(c) the credit to be made available by the Banks under the
Loan Documents will directly or indirectly inure to such Guarantor's benefit;
(d) by virtue of the foregoing such Guarantor is receiving at
least reasonably equivalent value from the Administrative Agent and the Banks
for its guaranty hereunder;
(e) such Guarantor (i) has the ability to pay its debts from
time to time incurred in connection therewith as such debts mature, (ii) has,
and will have, access to adequate capital for the conduct of its business, and
(iii) will not be rendered Insolvent as a result of entering into this Guaranty;
(f) after giving effect to the transactions contemplated by
this Guaranty, such Guarantor will have assets having a fair saleable value in
excess of the amount required to pay its probable liability on its existing
debts as such debts become absolute and matured; and
(g) such Guarantor has been advised by the Administrative
Agent that the Administrative Agent and the Banks are unwilling to enter into
the Loan Agreement unless such Guarantor provides to the Administrative Agent
the guaranty contained herein.
ARTICLE 6. SUBROGATION. Each Guarantor agrees that, until the Obligations are
paid in full in cash, it will not exercise any right of reimbursement,
subrogation, contribution, offset or other claims against any Obligor arising by
contract or operation of law in connection with any payment made or required to
be made by such Guarantor under this Guaranty.
ARTICLE 7. SUBORDINATION. Each Guarantor covenants and agrees that, after the
occurrence and during the continuance of a Default or Event of Default, all
indebtedness, claims and liabilities then or thereafter owing by any Obligor to
such Guarantor whether arising hereunder or otherwise are subordinated to the
prior payment in full of the Obligations, and are so subordinated as a claim
against the Borrower or such Obligor, or any of its assets, whether such claim
be in the ordinary course of business or in the event of voluntary or
involuntary liquidation, dissolution, insolvency or bankruptcy, so that no
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payment with respect to any such indebtedness, claim or liability will be made
or received while any Default or Event of Default exists.
ARTICLE 7A. LIMITATION ON GUARANTY OF OBLIGATIONS. In any action or proceeding
with respect to any Guarantor involving any state corporate law, or any state or
Federal bankruptcy, insolvency, reorganization or other law affecting the rights
of creditors generally, if the obligations of such Guarantor under Section 2.01
hereof would otherwise be held or determined to be void, invalid or
unenforceable, or subordinated to the claims of any other creditors, on account
of the amount of its liability under said Section 2.01, then, notwithstanding
any other provision hereof to the contrary, the amount of such liability shall,
without any further action by such Guarantor, any Bank, the Administrative Agent
or any other Person, be automatically limited and reduced to the highest amount
which is valid and enforceable and not subordinated to the claims of other
creditors as determined in such action or proceeding.
ARTICLE 8. MISCELLANEOUS.
8.01 Written Notices. Any notices expressly required by this Guaranty
to be in writing shall be deemed to have been given when delivered by hand, when
sent by telecopier, when delivered to any overnight delivery service freight
pre-paid or when sent by certified or registered mail and receipt thereof has
been acknowledged (or rejected), and addressed to such party at its address set
forth below.
If to the Guarantors, at the following address: with a copy to:
c/o GameStop Corp. Xxxxxxxx Xxxxxxxxx Xxxxxx Xxxxxxxx & Xxxxxx LLP
2250 Xxxxxxx X. Xxxx Avenue 1290 Avenue of the Americas
Xxxxxxxxx, Xxxxx 00000 Xxx Xxxx, Xxx Xxxx 00000
Fax No.: (000) 000-0000 Fax No.: (000) 000-0000
Attn: Xxxxx Xxxxxxx, Chief Financial Officer Attn: Xxx X. Xxxxxx, Esq.
If to the Administrative Agent, to with a copy to:
Fleet National Bank Goulston & Storrs, P.C.
000 Xxxxxxx Xxxxxx 000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000 Xxxxxx, XX 00000-0000
Fax No.: (000) 000-0000 Fax No.: (000) 000-0000
Attn: Xxxxxx X. Xxxxxxx, Director Attn: Xxxxxx X. Xxxxxx, Esq.
Unless otherwise specified, all notices required to be given hereunder shall be
given in writing. Any party may change its address for such notices to such
other address in the United States as the addressee shall have specified by
written notice given as set forth above. All periods of notice shall be measured
from the deemed date of delivery.
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8.02 Successors and Assigns. This Guaranty shall be binding upon and
inure to the benefit of each Guarantor and its successors and assigns, and shall
be binding upon and inure to the benefit of and be enforceable by the
Administrative Agent and its successors and assigns permitted under the Loan
Agreement, whether or not an express assignment of rights hereunder is made;
provided that no Guarantor may assign or transfer its rights or obligations
hereunder. Without limiting the generality of the foregoing sentence, any Bank
may, in the manner and to the extent set forth in the Loan Agreement, assign or
otherwise transfer any Note or other document held by it evidencing, securing or
otherwise executed in connection with the Obligations, or sell participations in
any interest therein, to any other Person, and such other Person shall thereupon
become vested, to the extent set forth in the agreement evidencing such
assignment, transfer or participation, with all the rights in respect thereof
granted to such Bank under the terms of the Loan Documents.
9.03 Amendment, Etc. This Guaranty may not be amended, modified or
supplemented except by a writing signed by the parties hereto.
9.04 Multiple Counterparts. This Guaranty may be signed in any number
of counterparts with the same effect as if the signatures hereto and thereto
were upon the same instrument. All such counterparts shall together constitute
one and the same agreement.
9.05 Captions. Captions and headings in this Guaranty are for
convenience only and in no way define, limit or describe the scope or intent of
the provisions hereof.
9.06 Survival. All representations, warranties, covenants and
agreements contained in this Guaranty shall survive the execution and delivery
of the Loan Documents and shall continue for so long as this Guaranty shall
remain in effect.
9.07 Severability. If any provision of this Guaranty shall be held
invalid or unenforceable by any court of competent jurisdiction, that holding
shall not invalidate or render unenforceable any other provision hereof.
9.08 Governing Law. This Guaranty shall be governed by, and interpreted
and determined in accordance with, the laws of the State of New York (without
regard to its principles relating to choice and conflicts of law).
9.09 CONSENT TO JURISDICTION. EACH OF THE GUARANTORS AND THE
ADMINISTRATIVE AGENT HEREBY CONSENTS TO THE JURISDICTION OF ANY OF THE COURTS OF
THE STATE OF NEW YORK LOCATED IN NEW YORK COUNTY AND OF THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK SITTING IN NEW YORK, NEW
YORK IN CONNECTION WITH ANY ACTION TO ENFORCE THE RIGHTS OF THE ADMINISTRATIVE
AGENT OR THE BANKS UNDER THIS GUARANTY. EACH
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OF THE GUARANTORS AND THE ADMINISTRATIVE AGENT IRREVOCABLY WAIVES ANY OBJECTION
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE EXERCISE OF JURISDICTION BY SAID
COURTS IN CONNECTION WITH ANY SUCH ACTION AND AGREES NOT TO ASSERT IN ANY SUCH
ACTION THAT SUCH ACTION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
9.10 WAIVER OF JURY TRIAL. EACH OF THE GUARANTORS AND THE
ADMINISTRATIVE AGENT HEREBY WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY
ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS GUARANTY, ANY
RIGHTS OR OBLIGATIONS HEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS AND
OBLIGATIONS. EXCEPT AS PROHIBITED BY LAW, EACH OF THE GUARANTORS AND THE
ADMINISTRATIVE AGENT HEREBY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN
ANY LITIGATION REFERRED TO IN THE PRECEDING SENTENCE ANY SPECIAL, EXEMPLARY,
PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN ACTUAL DAMAGES. EACH
GUARANTOR (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE
ADMINISTRATIVE AGENT OR THE BANKS HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
THE ADMINISTRATIVE AGENT OR THE BANKS WOULD NOT, IN THE EVENT OF LITIGATION,
SEEK TO ENFORCE THE FOREGOING WAIVERS AND (B) ACKNOWLEDGES THAT EACH OF THE
BANKS HAS BEEN INDUCED TO ENTER INTO THE LOAN AGREEMENT BECAUSE OF, AMONG OTHER
THINGS, EACH GUARANTOR'S WAIVERS AND CERTIFICATIONS CONTAINED HEREIN.
9.11 Entire Agreement. This Guaranty constitutes the entire agreement
between the parties concerning the subject matter hereof, and supersedes all
written or oral agreements or understandings with respect to such subject
matter.
(signatures on next page)
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IN WITNESS WHEREOF, the Guarantors have caused this Guaranty to be
executed by their respective duly authorized officers as of the day and year
first above written.
GAMESTOP, INC.
By:
-------------------------
Name:
Title:
Hereunto Duly Authorized
BABBAGE'S ETC. LLC
By:
-------------------------
Name:
Title:
Hereunto Duly Authorized
SUNRISE PUBLICATIONS, INC.
By:
-------------------------
Name:
Title:
Hereunto Duly Authorized
XXXXXXXX.XXX, INC.
By:
-------------------------
Name:
Title:
Hereunto Duly Authorized
Accepted as of the day and
year first above written.
FLEET NATIONAL BANK,
AS ADMINISTRATIVE AGENT
By:
-------------------------
Name:
Title:
Hereunto Duly Authorized
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EXHIBIT J
[FORM OF PLEDGE AGREEMENT]
GAMESTOP CORP.
SECURITIES COLLATERAL PLEDGE AGREEMENT
SECURITIES COLLATERAL PLEDGE AGREEMENT (this "AGREEMENT") dated as of
February 19, 2002 by and between GAMESTOP CORP., a Delaware corporation having
its chief executive office at 0000 Xxxxxxx X. Xxxx Xxxxxx, Xxxxxxxxx, Xxxxx
00000 (the "PLEDGOR"), and FLEET NATIONAL BANK, a national banking association
having an office located at 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 (the
"ADMINISTRATIVE AGENT"), as administrative agent for itself and each other Bank
(as defined below) under the terms of that certain Revolving Credit Agreement
dated as of February 19, 2002 (as it may be amended from time to time, the "LOAN
AGREEMENT") by and among the Pledgor, the lending institutions that are party
thereto (collectively, the "BANKS"), and the Administrative Agent.
WHEREAS, the Pledgor has requested that the Banks enter into the Loan
Agreement with the Pledgor, and to make Loans to the Pledgor and issue Letters
of Credit on the Pledgor's behalf, upon the terms and subject to the conditions
set forth therein;
WHEREAS, the Pledgor is the direct legal and beneficial owner of 100%
of the issued and outstanding shares of capital stock and membership interests,
as the case may be, of each of the entities listed on Schedule 1 (each, a
"SCHEDULED SUBSIDIARY" and collectively, the "SCHEDULED SUBSIDIARIES"); and
WHEREAS, it is a condition precedent to the Banks' agreement to enter
into the Loan Agreement and extend credit to the Pledgor thereunder that the
Pledgor execute and deliver this Agreement and pledge the Securities Collateral
(as defined below) to the Administrative Agent on the terms and conditions
described herein.
NOW, THEREFORE, in order to induce the Banks to enter into the Loan
Agreement and extend credit to the Pledgor thereunder, and in consideration
thereof, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE 1. DEFINITIONS; INTERPRETATION.
1.01 Generally. Capitalized terms used but not defined herein or in any
certificate, report or other document delivered pursuant hereto shall have the
meanings
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ascribed to such terms in the Loan Agreement. Except as otherwise defined
herein, terms defined in the NY UCC (as defined below) and used herein shall
have the meanings ascribed to such terms in the NY UCC; provided, however, that
if a term is defined in Article 9 of the NY UCC differently than in another
Article thereof, the term shall have the meaning set forth in Article 9.
1.02 Terms Defined in this Agreement. For purposes of this Agreement,
the following terms have the meanings set forth below:
"ADDITIONAL SECURITIES" shall have the meaning set forth in clause (b)
of Article 2.
"ADMINISTRATIVE AGENT" shall have the meaning set forth in the
Preamble.
"AGREEMENT" shall have the meaning set forth in the Preamble.
"BANKS" shall have the meaning set forth in the Preamble.
"CASH COLLATERAL" shall have the meaning set forth in Section 3.05(b).
"CASH COLLATERAL ACCOUNT" shall have the meaning set forth in Section
3.05(b).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"LOAN AGREEMENT" shall have the meaning set forth in the Preamble.
"NY UCC" means the Uniform Commercial Code in effect in the State of
New York, as it may be amended from time to time, provided, that if by reason of
mandatory provisions of law, matters pertaining to the perfection or
non-perfection of the security interest in any Securities Collateral, the effect
of such perfection or non-perfection, or the availability of any remedy
hereunder, is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than New York, "NY UCC" shall mean the Uniform Commercial
Code as in effect in such other jurisdiction for purposes of the provisions of
this Agreement relating to the matters so governed.
"PLEDGED SECURITIES" means the Scheduled Securities, any Additional
Securities, and all other Investment Property at any time pledged or required to
be pledged hereunder, including, without limitation, (a) with respect to any
Domestic Subsidiary, securities representing all of the ownership interest in
each such Domestic Subsidiary at any time owned by the Pledgor and (b) with
respect to any Foreign Subsidiary, securities representing not more than 65% of
the total combined voting power of all classes of ownership interest of such
Foreign Subsidiary entitled to vote and not more than 65% of any other
Investment Property of such Foreign Subsidiary, in each case at any time owned
by the Pledgor.
"PLEDGOR" shall have the meaning set forth in the Preamble.
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"SCHEDULED SECURITIES" shall have the meaning set forth in clause (a)
of Article 2.
"SCHEDULED SUBSIDIARY(IES)" shall have the meaning set forth in the
Preamble.
"SEC" means the United States Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITIES COLLATERAL" shall have the meaning set forth in Article 2.
"TIME DEPOSITS" shall have the meaning set forth in Section 3.05(b).
"UNIFORM COMMERCIAL CODE" means, in reference to any jurisdiction, the
Uniform Commercial Code as adopted and in effect in such jurisdiction, as it may
be amended from time to time.
1.03 Terms Defined in NY UCC. For purposes of this Agreement, the terms
for which definitions are supplied by the NY UCC include, without limitation,
the terms set forth below. Such term and section references are provided for
convenience only, and the omission of any term from the following list shall not
be construed to mean that the NY UCC definition of such omitted term does not
apply.
"CERTIFICATED SECURITY" Section 8-102(a)(4)
"ENTITLEMENT HOLDER" Section 8-102(a)(7)
"ENTITLEMENT ORDER" Section 8-102(a)(8)
"FILING OFFICE" Section 9-102(a)(37)
"FINANCIAL ASSET" Section 8-102(a)(9)
"FINANCING STATEMENT" Section 9-102(a)(39)
"INVESTMENT PROPERTY" Section 9-102(a)(49)
"ISSUER" Section 8-201
"PAYMENT INTANGIBLE" Section 9-102(a)(61)
"PROCEEDS" Section 9-102(a)(64)
"SECURITIES INTERMEDIARY" Section 8-102(a)(14)
"SECURITY" Section 8-102(a)(15)
"SECURITY ENTITLEMENT" Section 8-102(a)(17)
"SUPPORTING OBLIGATION" Section 9-102(a)(77)
"UNCERTIFICATED SECURITY" Section 8-102(a)(18)
1.04 Matters of Interpretation and Construction.
(a) The language of this Agreement, having been negotiated by
the parties hereto, shall not be construed against any party hereto by reason of
the extent to which such party or its counsel participated in the drafting
hereof or by reason of the extent to which any such provision is inconsistent
with any prior draft hereof.
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(b) Use of the singular shall be deemed to include the plural
and use of the plural shall be deemed to include the singular. Use of any gender
shall be deemed to include all other genders.
(c) A reference to any law, agreement or other document
includes any amendment or modification to such law, agreement or document.
(d) A reference to any Person includes its successors and
permitted assigns.
(e) Unless the context clearly requires otherwise, reference
to a particular "Article" or "Section" refers to the corresponding article or
section of this Agreement.
(f) Unless the context clearly requires otherwise, use of the
word "including" shall mean "including, without limitation".
ARTICLE 2. GRANT OF SECURITY. As security for the prompt and unconditional
payment and performance of the Obligations, and for the benefit of the
Administrative Agent and the Banks, the Pledgor hereby pledges, collaterally
assigns and transfers to the Administrative Agent, and grants the Administrative
Agent a security interest in, all of the Pledgor's right, title and interest in
and to the following, whether now owned or hereafter acquired, and all Proceeds
thereof (collectively, the "SECURITIES COLLATERAL"):
(a) the Securities owned by the Pledgor on the date hereof as described
in Schedule 1 hereto (the "SCHEDULED SECURITIES"), the certificates representing
the Scheduled Securities, if any, and all distributions or other property
(regardless of form) at any time received, receivable or otherwise distributed
(whether by dividend or distribution, or upon the consolidation, merger,
recapitalization, reclassification or liquidation of the Issuer, or otherwise)
in respect of or in exchange for any or all of the Scheduled Securities, and all
other Financial Assets, Investment Property and monies owned by the Pledgor and
relating thereto;
(b) all additional Securities of any Issuer of the Scheduled Securities
from time to time acquired by the Pledgor in any manner ("ADDITIONAL
SECURITIES"), the certificates representing such Additional Securities, if any,
and all distributions or other property (regardless of form) at any time
received, receivable or otherwise distributed (whether by dividend or
distribution, or upon the consolidation, merger, recapitalization,
reclassification or liquidation of the Issuer, or otherwise) in respect of or in
exchange for any or all of the such Additional Securities, and all other
Financial Assets, Investment Property and monies owned by the Pledgor and
relating thereto, provided, however, that the term "ADDITIONAL SECURITIES" shall
not include Securities issued by a Foreign Subsidiary if the pledge of such
Securities would result in more than 65% of the total combined voting power of
all classes of capital stock of such Foreign Subsidiary entitled to vote, or
more than 65% of any other Investment Property or other Securities of such
Foreign Subsidiary, to be subject to pledge pursuant to this Agreement; and
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(c) the Cash Collateral Account and all of the Cash Collateral.
Notwithstanding anything to the contrary stated herein, the term "SECURITIES
COLLATERAL" shall not include income or Proceeds received by the Pledgor to the
extent that the Pledgor is expressly permitted to retain such income or Proceeds
under Article 4.
ARTICLE 3. DELIVERY AND CONTROL; FINANCING STATEMENTS.
3.01 Certificated Securities. With respect to Pledged Securities that
are Certificated Securities, the Pledgor shall deliver to the Administrative
Agent the original certificates representing same accompanied by duly executed
instruments of transfer or assignment in blank, all in form and substance
reasonably satisfactory to the Administrative Agent, to be held by the
Administrative Agent upon the terms and conditions set forth in this Agreement.
3.02 Uncertificated Securities. With respect to Pledged Securities that
are Uncertificated Securities, the Pledgor shall, pursuant to an agreement in
form and substance reasonably satisfactory to the Administrative Agent, at the
Administrative Agent's option either (i) cause the Issuer to agree to comply
with instructions from the Administrative Agent as to such securities, without
further consent of the Pledgor, or (ii) arrange for the Administrative Agent to
become the registered owner of the Securities.
3.03 Additional Securities. If the Pledgor shall acquire by purchase,
stock dividend or otherwise any Additional Securities at any time or from time
to time after the date hereof, the Pledgor will forthwith notify the
Administrative Agent of such acquisition and shall immediately take such action
with respect to such Additional Securities as is required under Section 3.01 or
3.02, as the case may be. The Pledgor authorizes the Administrative Agent to
attach as Schedule 1 hereto from time to time an updated list of the Pledged
Securities (including the Issuers thereof) then pledged with the Administrative
Agent hereunder.
3.04 Securities Collateral Held By Intermediaries. If any Pledged
Securities, whether Certificated or Uncertificated, or other Securities
Collateral, now held or hereafter acquired by the Pledgor are held by the
Pledgor or its nominee through a Securities Intermediary, the Pledgor shall
immediately notify the Administrative Agent of such fact and, at the request and
option of the Administrative Agent, (a) cause any certificates representing such
Pledged Securities to be delivered to the Administrative Agent in accordance
with Section 3.01, or (b) pursuant to an agreement in form and substance
reasonably satisfactory to the Administrative Agent, either (i) cause such
Securities Intermediary to agree to comply with Entitlement Orders or other
instructions from the Administrative Agent to such Securities Intermediary as to
such Pledged Securities or other Securities Collateral without further consent
of the Pledgor or such nominee, or (ii) arrange for the Administrative Agent to
become the Entitlement Holder with respect to such Pledged Securities or other
Securities Collateral, with the Pledgor being permitted, only with the consent
of the Administrative Agent, to exercise rights to withdraw or otherwise deal
with such Pledged Securities or other Securities Collateral.
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3.05 Dividends, Distributions, Etc. Upon the occurrence and during the
continuance of an Event of Default:
(a) all sums of money and property paid or distributed in respect of
the Pledged Securities, whether as a dividend or upon a liquidation,
dissolution, recapitalization or reclassification of the Issuer, or otherwise,
that are received by the Pledgor shall be paid over and delivered to the
Administrative Agent and held or applied, as the case may be, as provided in
subsection (b) below. The Pledgor agrees to forthwith endorse, assign and
deliver such items to the Administrative Agent, accompanied by such instruments
of transfer or assignment duly executed in blank as the Administrative Agent may
from time to time reasonably specify.
(b) all sums of cash or cash equivalents that are delivered to the
Administrative Agent pursuant to this Section 3.05 shall be applied to pay the
Obligations, or if Letters of Credit are the only outstanding Obligations, shall
be deposited into an interest bearing account with the Administrative Agent (the
"CASH COLLATERAL ACCOUNT"). All other items of property shall be held by the
Administrative Agent as security for the payment and performance in full of the
Obligations. Some or all of the funds from time to time in the Cash Collateral
Account may be invested in time deposits, including, without limitation,
certificates of deposit issued by the Administrative Agent (such certificates of
deposit or other time deposits being hereinafter referred to, collectively, as
"TIME DEPOSITS"), that are satisfactory to the Administrative Agent after
consultation with the Pledgor, provided that, in each such case, arrangements
reasonably satisfactory to the Administrative Agent are made and are in place to
perfect and to ensure the first priority status of the security interest of the
Administrative Agent therein. Interest earned on the Cash Collateral Account and
on the Time Deposits, and the principal of the Time Deposits at maturity that is
not invested in new Time Deposits, shall be deposited in the Cash Collateral
Account. The Cash Collateral Account, all sums from time to time standing to the
credit of the Cash Collateral Account, all Time Deposits, all instruments or
other writings evidencing Time Deposits, and all Proceeds of any of the
foregoing, are hereinafter referred to as the "CASH COLLATERAL".
(c) except as otherwise expressly provided in Article 12, the Pledgor
shall have no right to withdraw sums from the Cash Collateral Account, to
receive any of the Cash Collateral or to require the Administrative Agent to
part with possession of any instruments or other writings evidencing any Time
Deposits.
3.06 Stock Transfer Records. Upon request of the Administrative Agent,
the Pledgor shall deliver to the Administrative Agent the stock transfer books
of each Scheduled Subsidiary to be held by the Administrative Agent for the
duration of the pledge hereunder, provided that prior to the occurrence and
continuance of an Event of Default, the Pledgor shall only be required to
deliver copies of such stock transfer books to the Administrative Agent.
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3.07 Items Held in Trust. All items required to be paid or delivered to
the Administrative Agent under this Article 3 shall, until so paid or delivered
to the Administrative Agent, be held in trust for the benefit of the
Administrative Agent and the Banks, as security for the payment and performance
in full of the Obligations.
3.08 Authorization to File Financing Statements and Take Other Action.
The Pledgor hereby irrevocably authorizes the Administrative Agent at any time
and from time to time to sign (if required) and file in any appropriate Filing
Office, wherever located, any Financing Statement that (a) describes the
Securities Collateral in a manner consistent with Article 2 hereof, and (b)
contains any other information required by Part 5 of Article 9 of the Uniform
Commercial Code of the applicable jurisdiction for the sufficiency or Filing
Office acceptance of any Financing Statement, including whether the Pledgor is
an organization, the type of organization and any organization identification
number issued to the Pledgor. The Pledgor also authorizes the Administrative
Agent to file a copy of this Agreement in lieu of a Financing Statement, and to
take any and all actions required by any earlier versions of the Uniform
Commercial Code or by any other applicable law. The Pledgor shall provide the
Administrative Agent with any information the Administrative Agent shall
reasonably request in connection with any of the foregoing.
ARTICLE 4. DIVIDENDS; VOTING.
4.01 Unless an Event of Default shall have occurred and be continuing,
the Pledgor shall be entitled to receive all cash dividends and distributions
paid in respect of the Pledged Securities without delivering such sums to the
Administrative Agent or depositing such sums in the Cash Collateral Account, to
vote and exercise any and all other voting and consensual rights with respect to
the Pledged Securities and to give consents, waivers or ratifications in respect
thereof, provided that no vote shall be cast or consent, waiver or ratification
given or action taken which would violate or be inconsistent with any of the
terms of this Agreement or the other Loan Documents or which could reasonably be
expected to have an adverse effect on the interest of the Administrative Agent
in the Securities Collateral.
4.02 Upon the occurrence and during the continuance of an Event of
Default, (i) the Pledgor's rights under Section 4.01 shall immediately cease,
(ii) all cash dividends and other distributions in respect of the Pledged
Securities shall be deposited to the Cash Collateral Account in accordance with
the provisions of Article 3, and (iii) the Administrative Agent shall have the
right to vote, and to give consents, waivers and ratifications with respect to,
the Pledged Securities. If the Administrative Agent elects not to exercise such
rights, the Pledgor may continue to exercise such rights, provided that the
Pledgor shall not take any vote or other action with respect to such Pledged
Securities that could reasonably be expected to have an adverse effect on the
interest of the Administrative Agent in the Securities Collateral, and if so
directed in writing, shall vote or take such other action as directed by the
Administrative Agent. The Pledgor hereby grants to the Pledgee, an irrevocable
proxy to exercise all voting and consensual rights with respect to the Pledged
Securities and to give consents, waivers or ratifications
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in respect thereof, which proxy shall only be effective upon the occurrence of
an Event of Default and shall remain effective during the continuance of an
Event of Default.
ARTICLE 5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF PLEDGOR. For so long as
this Agreement shall remain in effect, the Pledgor represents, warrants and
covenants to and with the Administrative Agent as follows:
5.01 The Pledgor has the requisite power, authority and legal right to
execute, deliver and perform its obligations under this Agreement and to pledge
and grant a security interest in all of the Securities Collateral. The
execution, delivery and performance of this Agreement, and the pledge of and
granting of a security interest in the Securities Collateral hereunder, have
been duly authorized by all necessary corporate or other action of the Pledgor
and do not contravene (i) any law, rule or regulation, (ii) any provision of the
Pledgor's charter documents or by-laws, (iii) any judgment, decree or order of
any arbitrator, court or other adjudicatory or regulatory body or (iv) any
agreement or instrument to which the Pledgor is a party or by which it or any of
its property is bound or affected or constitute a default thereunder other than
those, in the case of clauses (i) and (iv), that could not reasonably be
expected, individually or in the aggregate, to have a Material Adverse Effect.
5.02 The Pledgor is the owner, legally, beneficially and of record, of
all of the Scheduled Securities free of any Encumbrances, except for
Encumbrances specifically permitted under the terms of the Loan Agreement. All
of the Scheduled Securities have been duly and validly issued, and are fully
paid and nonassessable.
5.03 The Pledgor covenants that, with respect to any Additional
Securities that it may pledge to the Administrative Agent in the future, at the
time of such pledge, (a) the Pledgor will be the legal, beneficial and record
owner of such Additional Securities free of any Encumbrances, except for
Encumbrances specifically permitted under the terms of the Loan Agreement, (b)
the Pledgor will have the requisite legal right, power and authority to pledge
same to the Administrative Agent hereunder and (c) all such Additional
Securities shall be duly and validly issued, and will be fully paid and
nonassessable.
5.04 Schedule 1 accurately sets forth as to each Issuer of Scheduled
Securities (i) the total number of issued and outstanding Securities of such
Issuer and (ii) the total number of such Securities that have been pledged
hereunder. With respect to each Foreign Subsidiary whose capital stock is
pledged hereunder by the Pledgor, the Pledgor has pledged stock representing 65%
of the total combined voting power of all classes of capital stock of such
Foreign Subsidiary entitled to vote.
5.05 Upon execution and delivery of the Loan Documents by the parties
thereto and the delivery by the Pledgor of the Scheduled Securities and related
certificates to the Administrative Agent accompanied by instruments of transfer
or assignment duly executed in blank in form and substance reasonably
satisfactory to the Administrative Agent or, if a security interest in any of
the Securities Collateral may not under applicable
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law be perfected by possession, then upon the filing of appropriate Financing
Statements, the Administrative Agent will obtain a valid first lien on, and
perfected security interest in, the Securities Collateral and the Proceeds
thereof, subject to no prior Encumbrance.
5.06 The Pledgor will defend the security interest of the
Administrative Agent in the Securities Collateral against the competing claims
and demands of all other Persons, other than claims or demands related to
Encumbrances specifically permitted under the terms of the Loan Agreement.
5.07 Except as may be permitted by the Loan Agreement, the Pledgor will
not (a) sell or otherwise dispose of, grant any option with respect to, or
mortgage, pledge (except pursuant to this Agreement) or otherwise encumber any
of the Securities Collateral, any shares in the capital stock of any Subsidiary,
or any membership or other ownership interest therein, or (b) consent to or
approve the issuance of (i) any additional shares of any class of capital stock
of any Subsidiary, or the issuance of any membership or other ownership interest
in any Subsidiary; (ii) any securities convertible voluntarily by the holder
thereof or automatically upon the occurrence or nonoccurrence of any event or
condition into, or exchangeable for, any such shares or interests; or (iii) any
warrants, options, rights, or other commitments entitling any person to purchase
or otherwise acquire any such shares or interests except pursuant to an employee
stock option plan of such Subsidiary authorizing the grant of no more than 30%
of such Subsidiary's shares or interests.
5.08 The Pledgor, at its sole cost and expense, will execute and
deliver all such instruments, and take all such other action as the
Administrative Agent from time to time may reasonably request, in order to
further effectuate the purposes of this Agreement and to carry out the terms
hereof.
ARTICLE 6. REMEDIES UPON EVENT OF DEFAULT.
6.01 Remedies in General. Following the occurrence and during the
continuance of an Event of Default, the Administrative Agent shall be entitled
to exercise all of its rights, powers and remedies (whether vested in it by this
Agreement, the other Loan Documents or by law) for the protection and
enforcement of its rights in respect of the Securities Collateral, and the
Administrative Agent shall be entitled, without limitation, to exercise the
following rights and remedies (in addition to the rights and remedies of a
secured party under the NY UCC), which the Pledgor hereby agrees are
commercially reasonable:
(a) to cause the Pledged Securities and any other Securities
constituting Securities Collateral to be transferred into its own name or the
name(s) of its nominee(s) or successor(s) in interest on the books of the Issuer
of such Securities;
(b) to collect, receive and hold as Cash Collateral for the Obligations
(or apply the same to any Obligation) all dividends, distributions and other
income on the Pledged Securities and the other Securities Collateral;
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(c) to vote all or any part of the Pledged Securities (whether or not
transferred into the name of a Person other than the Pledgor pursuant to clause
(a)) and give all consents, waivers and ratifications in respect of the
Securities Collateral and otherwise act with respect thereto as though the
Administrative Agent was the outright owner thereof;
(d) to demand, xxx for, collect or make any compromise or settlement
the Administrative Agent deems suitable in respect of any Securities Collateral;
(e) subject to applicable law, at any time or from time to time to
sell, assign and deliver, or grant options to purchase, all or any part of the
Securities Collateral, or any interest therein in accordance with the provisions
of Section 6.02; and
(f) to set off against the Obligations any and all sums deposited with
the Administrative Agent or held by it, including without limitation, any sums
or Financial Assets standing to the credit of the Cash Collateral Account and
any Time Deposits issued by the Administrative Agent.
The Administrative Agent may enforce its rights hereunder without any other
notice and without compliance with any other condition precedent now or
hereafter imposed by statute, rule of law or otherwise (all of which are hereby
expressly waived by the Pledgor, to the fullest extent permitted by law).
6.02 Sale of Securities Collateral.
(a) In the event of any disposition of the Securities Collateral as
provided in Section 6.01(e), the Administrative Agent shall give to the Pledgor
at least ten (10) days' prior written notice of the time and place of any public
sale of the Securities Collateral or of the time after which any private sale or
any other intended disposition is intended to be made. The Pledgor hereby
acknowledges that ten (10) days' prior written notice of such sale or sales
constitutes reasonable notice. If any of the Securities Collateral is sold by
the Administrative Agent upon credit or for future delivery, the Administrative
Agent shall not be liable for the failure of the purchaser to pay for the same
and in such event the Administrative Agent may resell such Securities
Collateral. At any public sale of Securities Collateral, unless prohibited by
applicable law, the Administrative Agent or any holder of the Obligations may
bid for and purchase all or any part of the Securities Collateral so sold free
from any such right or equity of redemption; and if any part or all of the
Securities Collateral is of a type customarily sold in a recognized market or is
of the type which is the subject of widely-distributed standard price
quotations, the Administrative Agent or any holder of the Obligations may buy at
a private sale and may make payment therefor by any means including, without
limitation, cancellation of indebtedness secured thereby and payment of any
surplus to the Pledgor or such other party as may be required by applicable law.
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(b) The Pledgor recognizes that the Administrative Agent may be unable
to effect a public sale of the Pledged Securities by reason of certain
prohibitions contained in the Securities Act, federal banking laws or other
applicable laws, regulations, or agreements to which such Pledged Securities may
be subject and, therefore, may be compelled to resort to one or more private
sales thereof to a restricted group of purchasers. Notwithstanding the
foregoing, the Pledgor shall not be required to register the Pledged Securities
under the Securities Act or applicable state or foreign law securities laws. The
Pledgor agrees that any such private sales, which may be at prices and other
terms less favorable to the seller than if sold at public sales, shall be deemed
to have been made in a "commercially reasonable" manner within the meaning of
the NY UCC, provided that the notice specified in Section 6.02(a) shall have
been given to the Pledgor. The Administrative Agent shall be under no obligation
to delay a sale of any of the Pledged Securities for the period of time
necessary to permit the Issuer of such Pledged Securities to register same for
public sale under the Securities Act, or such other federal banking or
applicable laws, even if the Issuer agrees to do so. Subject to the foregoing,
the Administrative Agent agrees that any sale of the Securities Collateral shall
be made in a commercially reasonable manner.
(c) The Pledgor agrees to do or cause to be done all acts and things as
may be reasonably necessary to cause the sale(s) of all or any portion of the
Securities Collateral pursuant to this Article 6 to be valid and binding and to
comply with any and all applicable laws, including, without limitation, the
Securities Act, the Exchange Act, SEC and other regulations, orders, writs,
injunctions or decrees of any and all courts, arbitrators or governmental
agencies or similar regulatory bodies having jurisdiction over any such sale or
sales, all at the Pledgor's sole cost and expense except that the Pledgor shall
not be required to register the Pledged Securities under the Securities Act or
applicable state or foreign law securities laws. In furtherance and not in
limitation of the foregoing, at the request of the Administrative Agent, the
Pledgor shall use best efforts to cause any Issuer(s) of Securities Collateral
contemplated to be sold:
(i) to execute and deliver, and to cause its directors and
officers to execute and deliver, all instruments and documents, and to do or
cause to be done all other acts and things as may be necessary or advisable (in
the opinion of legal counsel to the Administrative Agent) to cause such Pledged
Securities to be exempt from the registration requirements of the Securities
Act; and
(ii) to comply with the provisions of the securities or "Blue
Sky" laws of any jurisdiction which the Administrative Agent shall reasonably
designate and, if required, to make available to its Security holders, as soon
as practicable, an earnings statement (which need not be audited) which will
allow Persons to take advantage of the provisions of Section 11(a) of the
Securities Act.
6.03 Appointment as Attorney-in-Fact. The Pledgor hereby irrevocably
appoints the Administrative Agent as the Pledgor's attorney-in-fact with full
power of substitution, effective upon the occurrence and during the continuance
of an Event of Default, to take any and all of the actions specified in this
Article 6 and elsewhere in this Agreement with
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full authority in the name of the Pledgor and at the Pledgor's sole cost and
expense. This power of attorney is coupled with an interest and shall be
irrevocable for so long as this Agreement shall remain in effect.
6.04 Injunctive Relief. The Pledgor acknowledges that a breach of any
of the covenants contained in this Article 6 will cause irreparable injury to
the Administrative Agent and the Banks, and that the Administrative Agent and
the Banks have no adequate remedy at law in respect of such breach. As a
consequence, the Pledgor agrees that each and every covenant contained in this
Article 6 shall be specifically enforceable against the Pledgor, and the Pledgor
hereby (i) agrees not to assert in defense of any action for specific
performance that the Administrative Agent has not suffered irreparable harm or
that the Administrative Agent has an adequate remedy at law, and (ii) waives any
defense based upon the grounds set forth in clause (i) of this Section 6.04.
ARTICLE 7. REMEDIES CUMULATIVE. Each right, power and remedy of the
Administrative Agent or any holder of the Obligations provided for in this
Agreement, the other Loan Documents, or now or hereafter existing at law or in
equity, or otherwise, shall be cumulative and concurrent and shall be in
addition to every other such right, power or remedy. The exercise or beginning
of the exercise by the Administrative Agent or any holder of the Obligations of
one or more of such rights, powers or remedies shall not preclude the
simultaneous or subsequent exercise by the Administrative Agent or any holder of
the Obligations of all such other rights, powers or remedies, and no failure or
delay on the part of the Administrative Agent or any holder of the Obligations
to exercise any such right, power or remedy shall operate as a waiver thereof.
ARTICLE 8. MARSHALLING. The Administrative Agent may exercise its rights with
respect to the Securities Collateral without resorting or regard to other
collateral or sources of reimbursement. The Administrative Agent shall not be
required to marshal any present or future collateral security for, or other
assurances of payment of, the Obligations or any of them, or to resort to such
collateral security or other assurances of payment in any particular order. To
the extent that it may lawfully do so, the Pledgor hereby (a) agrees that it
will not invoke any law relating to the marshalling of collateral that might
cause delay in or impede the enforcement of the Administrative Agent's rights
with respect to the Obligations or any of the Collateral and (b) irrevocably
waives the benefits of all such laws.
ARTICLE 9. APPLICATION OF MONEYS BY THE ADMINISTRATIVE AGENT. All monies
collected upon any sale of the Securities Collateral hereunder, together with
all other monies received by the Administrative Agent hereunder, shall be
applied as follows (i) first, to the payment of all reasonable costs and
expenses incurred by the Administrative Agent in connection with such sale, the
delivery of the Securities Collateral or the collection of any such monies
(including, without limitation, reasonable attorneys' fees and all other
expenses reasonably incurred); (ii) second, to satisfy the Obligations in such
manner as the Administrative Agent shall determine in its sole discretion
consistent with the Loan Agreement; and (iii) third, to the extent of any
surplus Proceeds, to the Pledgor or to such other Person(s) as may be legally
entitled to same.
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ARTICLE 10. PLEDGOR'S OBLIGATIONS ABSOLUTE. The Obligations of the Pledgor under
this Agreement shall be absolute and unconditional and shall remain in full
force and effect without regard to, and shall not be released, suspended,
discharged, terminated or otherwise affected by, any circumstance or occurrence
whatsoever, including, without limitation: (a) any renewal, extension, amendment
or modification of or addition or supplement to or deletion from the other Loan
Documents, or any assignment or transfer of the other Loan Documents; (b) any
waiver, consent, extension, indulgence or other action or inaction under or in
respect of the Loan Documents; (c) any furnishing of any additional collateral
security to the Administrative Agent or its assignee or any acceptance thereof
or any release of any collateral security by the Administrative Agent or its
assignee; (d) any limitation on any party's liability or obligations under the
Loan Documents or any invalidity or unenforceablity, in whole or in part, of the
same; or (e) any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation or other like proceeding relating to the
Pledgor or any other Person, or any action taken with respect to this Agreement
by any trustee or receiver or by any court, in any such proceeding; whether or
not the Pledgor shall have notice or knowledge of any of the foregoing. The
Pledgor expressly consents to any and all of the foregoing and, to the maximum
extent permitted by law, waives any rights or defenses relating to the
enforcement of this Agreement that the Pledgor may have in connection therewith.
Except for notices specifically provided for herein, the Pledgor hereby
expressly waives demand, notice, protest, notice of acceptance of this
Agreement, notice of loans made, credit extended, collateral received or
delivered or other action taken in reliance hereon and all other demands and
notices of any description.
ARTICLE 11. EXONERATION OF ADMINISTRATIVE AGENT. Under no circumstances shall
the Administrative Agent be deemed to assume any responsibility for or
obligation or duty with respect to any part or all of the Securities Collateral
of any nature or kind, or any matter or proceedings arising out of or relating
thereto, other than (i) to exercise reasonable care in the physical custody of
the Securities Collateral and (ii) following the occurrence and during the
continuance of an Event of Default, to act in a commercially reasonable manner.
The Administrative Agent shall not be required to take any action of any kind to
collect, preserve or protect its or the Pledgor's rights in the Securities
Collateral or against any other Person. The Administrative Agent's prior
recourse to any part or all of the Securities Collateral shall not constitute a
condition of any demand, suit or proceeding for payment or collection of the
Obligations.
ARTICLE 12. TERMINATION. The obligations of the Pledgor hereunder shall
terminate when the commitment of the Banks to extend credit under the Loan
Agreement shall have terminated and all of the Obligations have been paid in
full in cash and discharged and promptly upon such full and complete performance
and satisfaction, Pledgee shall surrender, at the request and expense of the
Pledgor, any remaining Securities Collateral and money received in respect
thereof to the Pledgor; provided, however, that:
(a) if a claim is made upon the Administrative Agent or the
Banks at any time for repayment or recovery of any amounts or any property
received by the
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Administrative Agent or the Banks from any source on account of any of the
Obligations and the Administrative Agent or the Banks repay or return any
amounts or property so received (including interest thereon to the extent
required to be paid by the Administrative Agent or the Banks) or
(b) if the Administrative Agent or the Banks become liable for
any part of such claim by reason of (i) any judgment or order of any court or
administrative authority having competent jurisdiction, or (ii) any settlement
or compromise of any such claim,
then the Pledgor shall remain obligated under this Agreement with respect to the
amounts so repaid or property so returned and the amounts for which the
Administrative Agent or the Banks become liable (such amounts being deemed part
of the Obligations), and the security interest granted herein shall apply with
full force and effect to such Obligations, to the same extent as if such amounts
or property had never been received by the Administrative Agent or the Banks,
notwithstanding any termination hereof or the cancellation of any instrument or
agreement evidencing any of the Obligations.
ARTICLE 13. OVERDUE AMOUNTS. Until paid, all amounts due and payable by the
Pledgor hereunder shall constitute an Obligation under the Loan Documents and
shall be secured by the Securities Collateral. Such amounts shall bear interest
at the rate per annum provided in the Loan Agreement to be paid on Base Rate
Loans after the occurrence of an Event of Default.
ARTICLE 14. MISCELLANEOUS.
14.01 Successors and Assigns. This Agreement shall be binding upon the
Pledgor, the Administrative Agent and the Banks and their respective successors
and assigns, and shall inure to the benefit of the Administrative Agent and the
Banks and their respective successors, transferees and assigns, as permitted by
the Loan Agreement. The Pledgor may not assign any of its obligations hereunder
without the prior written consent of the Administrative Agent.
14.02 Survival. All representations, warranties, covenants and
agreements contained in this Agreement shall survive the execution and delivery
of the Loan Documents and shall continue for so long as this Agreement shall
remain in effect.
14.03 Severability. If any provision of this Agreement shall be held
invalid or unenforceable by any court of competent jurisdiction, that holding
shall not invalidate or render unenforceable any other provision hereof.
14.04 Amendments; Waiver, Etc. No provision of this Agreement, or any
right of the Administrative Agent in respect of the Obligations, can be changed,
waived, modified, discharged or terminated except by an instrument in writing
signed by the Administrative Agent and the Pledgor expressly referring to the
provision of this Agreement or the right to which such instrument relates; and
no such waiver shall extend to, affect or impair any right with respect to any
obligation which is not expressly dealt
J-14
with therein. No course of dealing or delay or omission on the part of the
Administrative Agent or the Banks or any of them in exercising any right shall
operate as a waiver of such right or any other right, or otherwise be
prejudicial thereto. A waiver on any one occasion shall not be construed as a
bar to or waiver of any right on any future occasion.
14.05 Counterparts. This Agreement and any amendment hereof may be
executed in several counterparts by each party on a separate counterpart, each
of which when so executed and delivered shall be an original, but all of which
together shall constitute one and the same instrument.
14.06 Captions. Captions and headings in this Agreement are for
convenience only and in no way define, limit or describe the scope or intent of
the provisions hereof.
14.07 Notices. All notices, approvals, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
given when delivered in the manner provided in the Loan Agreement and delivered
to a party at its address for notice set forth in the Loan Agreement or to such
other address as a party shall furnish by notice to the other parties.
14.08 Governing Law. This Agreement shall be governed by, and
interpreted and defined in accordance with, the laws of the State of New York
(without regard to its principles relating to choice and conflicts of law).
14.09 CONSENT TO JURISDICTION. THE PLEDGOR AND ADMINISTRATIVE AGENT
EACH AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS AGREEMENT MAY BE BROUGHT
IN THE COURTS OF THE STATE OF NEW YORK LOCATED IN NEW YORK COUNTY, OR IN THE
UNITED STATES DISTRICT COURT SITTING IN NEW YORK, NEW YORK, OR ANY APPELLATE
COURT TO WHICH APPEALS MAY BE TAKEN FROM ANY OF THE FOREGOING COURTS, AND
CONSENTS TO THE NON-EXCLUSIVE JURISDICTION OF SUCH COURTS AND TO SERVICE OF
PROCESS IN ANY SUCH SUIT BEING MADE UPON THE PLEDGOR BY MAIL AT THE ADDRESS
ABOVE. THE PLEDGOR AND ADMINISTRATIVE AGENT EACH HEREBY WAIVES ANY OBJECTION
THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH
COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.
14.10 WAIVER OF JURY TRIAL. EACH OF THE PLEDGOR AND THE ADMINISTRATIVE
AGENT KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES THE RIGHT TO A TRIAL BY
JURY IN RESPECT OF ANY CLAIM BASED HEREON, ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS PLEDGE AGREEMENT OR ANY OTHER LOAN DOCUMENTS CONTEMPLATED
TO BE EXECUTED IN CONNECTION HEREWITH OR ANY COURSE OF CONDUCT, COURSE OF
DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY. THIS
WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR THE ADMINISTRATIVE
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AGENT TO ENTER INTO THIS PLEDGE AGREEMENT AND FOR THE BANKS TO MAKE LOANS AND
EXTEND CREDIT TO THE PLEDGOR. EXCEPT AS PROHIBITED BY LAW, EACH OF THE PLEDGOR
AND ADMINISTRATIVE AGENT WAIVES ANY RIGHT WHICH IT MAY HAVE TO CLAIM OR RECOVER
IN ANY LITIGATION REFERRED TO IN THE FIRST SENTENCE OF THIS SECTION ANY SPECIAL,
EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN
ADDITION TO, ACTUAL DAMAGES. THE PLEDGOR (I) CERTIFIES THAT NEITHER THE
ADMINISTRATIVE AGENT, NOR ANY BANK NOR ANY REPRESENTATIVE, ADMINISTRATIVE AGENT
OR ATTORNEY OF THE ADMINISTRATIVE AGENT OR ANY BANK HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT THE ADMINISTRATIVE AGENT OR ANY BANK WOULD NOT, IN THE EVENT
OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (II) ACKNOWLEDGES THAT,
IN ENTERING INTO THE LOAN AGREEMENT AND THE OTHER LOAN DOCUMENTS TO WHICH THE
ADMINISTRATIVE AGENT IS A PARTY, THE ADMINISTRATIVE AGENT AND THE BANKS ARE
RELYING UPON, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS CONTAINED IN
THIS SECTION.
(signatures on next page)
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective duly authorized officers as of the day and year
first above written.
PLEDGOR: ADMINISTRATIVE AGENT:
GAMESTOP CORP. FLEET NATIONAL BANK, as
Administrative Agent
By: By:
------------------------- -------------------------
Name: Name:
Title: Title:
Hereunto Duly Authorized Hereunto Duly Authorized
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SCHEDULE 1
Name/Address Jurisdiction Class of No. of Shares No. of Shares
of Subsidiary of Incorporation Securities Outstanding Pledged
------------- ---------------- ---------- ------------- -------------
[To be provided by RSPAB]
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