EXHIBIT 4.1
AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
by and among
STAGE STORES, INC.
SPECIALTY RETAILERS, INC.,
PALAIS ROYAL, INC.,
THE FIRST NATIONAL BANK OF BOSTON
and the other lending institutions listed
on SCHEDULE 1 hereto
and
THE FIRST NATIONAL BANK OF BOSTON,
as Agent
January 31, 1997
TABLE OF CONTENTS
Page
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SS.1. DEFINITION AND RULES OF INTERPRETATION
ss.1.1 Definitions.............................................. 1
ss.1.2 Rules of Interpretation.................................. 15
SS.2. THE REVOLVING CREDIT FACILITY
ss.2.1 Commitment to Lend....................................... 16
ss.2.2 Commitment Fee........................................... 16
ss.2.3 Reduction of Total Commitment............................ 16
2.3.1. Mandatory Reduction of Total Commitment.......... 16
2.3.2. Optional Reduction of Total Commitment........... 16
ss.2.4 The Revolving Credit Notes............................... 17
ss.2.5 Interest on Revolving Credit Loans....................... 17
ss.2.6 Requests for Revolving Credit Loans...................... 17
ss.2.7 Conversion Options....................................... 18
2.7.1. Conversion to Different Type of Revolving
Credit Loan.................................... 18
2.7.2. Continuation of Type of Revolving Credit Loan.... 18
2.7.3 Eurodollar Rate Loans............................. 19
ss.2.8 Funds for Loan........................................... 19
2.8.1. Funding Procedures............................... 19
2.8.2. Advances by Agent................................ 19
SS.3. REPAYMENT OF THE REVOLVING CREDIT LOANS
ss.3.1 Maturity .............................................. 20
ss.3.2 Mandatory Repayments of Loans............................ 20
3.2.1. Exceeding Total Commitment....................... 20
ss.3.3 Optional Repayments of Loans............................. 20
SS.4. CERTAIN GENERAL PROVISIONS
ss.4.1 Closing Fee.............................................. 20
ss.4.2 Agent's Fee.............................................. 21
ss.4.3 Funds for Payments....................................... 21
4.3.1 Payments to Agent................................. 21
4.3.2 No Offset, etc.................................... 21
ss.4.4 Computations............................................. 21
ss.4.5 Inability to Determine Eurodollar Rate................... 21
ss.4.6 Illegality .............................................. 22
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ss.4.7 Additional Costs, Etc.................................... 22
ss.4.8 Capital Adequacy......................................... 23
ss.4.9 Certificate.............................................. 24
ss.4.10 Indemnity .............................................. 24
ss.4.11 Interest After Default................................... 24
ss.4.12 Interest Limitation...................................... 24
SS.5. GUARANTIES ............................................ 25
SS.6. REPRESENTATIONS AND WARRANTIES
ss.6.1 Corporate Authority...................................... 25
6.1.1 Incorporation; Good Standing...................... 25
6.1.2 Authorization..................................... 26
6.1.3 Enforceability.................................... 26
ss.6.2 Governmental Approvals................................... 26
ss.6.3 Title to Properties; Leases.............................. 26
ss.6.4 Financial Statements and Projections..................... 26
6.4.1 Financial Statements.............................. 26
6.4.2 Projections....................................... 27
ss.6.5 No Material Changes, Etc................................. 27
ss.6.6 Franchises, Patents, Copyrights, Etc..................... 27
ss.6.7 Litigation .............................................. 28
ss.6.8 No Materially Adverse Contracts, Etc..................... 28
ss.6.9 Compliance with Other Instruments, Law, Etc.............. 28
ss.6.10 Tax Status .............................................. 28
ss.6.11 No Event of Default...................................... 28
ss.6.12 Holding Company and Investment Company Acts.............. 29
ss.6.13 Absence of Financing Statements, Etc..................... 29
ss.6.14 Certain Transactions..................................... 29
ss.6.15 Employee Benefit Plans................................... 29
6.15.1 In General....................................... 29
6.15.2 Terminability of Welfare Plans................... 29
6.15.3 Guaranteed Pension Plans......................... 30
6.15.4 Multiemployer Plans.............................. 30
ss.6.16 Regulations U and X...................................... 30
ss.6.17 Environmental Compliance................................. 30
ss.6.18 Subsidiaries, Etc........................................ 32
ss.6.19 Senior Debt.............................................. 33
ss.6.20 Fiscal Year.............................................. 33
ss.6.21 Insurance .............................................. 33
SS.7. AFFIRMATIVE COVENANTS OF THE BORROWER
ss.7.1 Punctual Payment......................................... 33
ss.7.2 Maintenance of Office.................................... 33
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ss.7.3 Records and Accounts..................................... 33
ss.7.4 Financial Statements, Certificates and Information....... 34
ss.7.5 Notices .............................................. 37
7.5.1 Defaults.......................................... 37
7.5.2 Environmental Events.............................. 37
7.5.3 Notice of Litigation and Judgments................ 37
ss.7.6 Corporate Existence; Maintenance of Properties........... 38
ss.7.7 Insurance .............................................. 38
ss.7.8 Taxes .............................................. 38
ss.7.9 Inspection of Properties and Books, Etc.................. 38
7.9.1 General........................................... 38
7.9.2 Appraisals........................................ 39
7.9.3 Communications with Accountants................... 39
ss.7.10 Compliance with Laws, Contracts, Licenses and Permits.... 39
ss.7.11 Employee Benefit Plans................................... 40
ss.7.12 Use of Proceeds.......................................... 40
ss.7.13 Further Assurances....................................... 40
SS.8. CERTAIN NEGATIVE COVENANTS OF THE BORROWER
ss.8.1 Restrictions on Indebtedness............................. 40
ss.8.2 Restrictions on Liens.................................... 42
ss.8.3 Restrictions on Investments.............................. 43
ss.8.4 Distributions; Repayment................................. 44
ss.8.5 Merger, Consolidation and Disposition of Assets.......... 45
8.5.1 Mergers and Acquisitions.......................... 45
8.5.2 Disposition of Assets............................. 46
ss.8.6 Sale and Leaseback....................................... 46
ss.8.7 Compliance with Environmental Laws....................... 46
ss.8.8 Senior Note and Senior Subordinated Note Payments........ 47
ss.8.9 Changes in Terms of Senior Notes and Senior
Subordinated Notes............................... 47
ss.8.10 Employee Benefit Plans................................... 47
ss.8.11 Transactions with Affiliates............................. 48
ss.8.12 Fiscal Year.............................................. 48
ss.8.13 Negative Pledges......................................... 48
ss.8.14 Upstream Limitations..................................... 49
SS.9. FINANCIAL COVENANT OF THE BORROWER
ss.9.1 Debt Service Ratio....................................... 49
ss.9.2 Capital Expenditures..................................... 49
ss.9.3 Total Funded Debt to EBITDA.............................. 50
ss.9.4 Minimum EBITDA........................................... 50
ss.9.5 Current Assets........................................... 51
ss.9.6 Seasonal Debt Service Ratio.............................. 51
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SS.10. CLOSING CONDITIONS
ss.10.1 Loan Documents........................................... 51
ss.10.2 Certified Copies of Charter Documents.................... 51
ss.10.3 Corporate, Action........................................ 51
ss.10.4 Incumbency Certificate................................... 51
ss.10.5 Certificates of Insurance................................ 52
ss.10.6 Solvency Certificate..................................... 52
ss.10.7 Opinion of Counsel....................................... 52
ss.10.8 Payment of Fees.......................................... 52
SS.11. CONDITIONS TO ALL BORROWINGS
ss.11.1. Representations True; No Event of Default................ 52
ss.11.2. No Legal Impediment...................................... 52
ss.11.3 Governmental Regulation.................................. 53
ss.11.4 Proceedings and Documents................................ 53
SS.12. EVENTS OF DEFAULT; ACCELERATION; ETC.
ss.12.1 Events of Default and Acceleration....................... 53
ss.12.2 Termination of Commitments............................... 57
ss.12.3 Remedies .............................................. 57
SS.13. SETOFF ............................................ 57
SS.14. THE AGENT
ss.14.1 Authorization............................................ 58
ss.14.2 Employees and Agents..................................... 59
ss.14.3 No Liability............................................. 59
ss.14.4 No Representations....................................... 59
ss.14.5 Payments .............................................. 59
14.5.1. Payments to Agent............................... 59
14.5.2. Distribution by Agent........................... 60
14.5.3. Delinquent Banks................................ 60
ss.14.6 Holders of Notes......................................... 60
ss.14.7 Indemnity .............................................. 60
ss.14.8 Agent as Bank............................................ 61
ss.14.9 Resignation.............................................. 61
ss.14.10 Notification of Defaults and Events of Default........... 61
SS.15. EXPENSES ............................................ 61
SS.16. INDEMNIFICATION ............................................ 62
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SS.17. SURVIVAL OF COVENANTS, ETC....................................... 63
SS.18. ASSIGNMENT AND PARTICIPATION..................................... 63
ss.18.1 Conditions to Assignment by Banks........................ 63
ss.18.2 Certain Representations and Warranties;
Limitations; Covenants........................... 63
ss.18.3 Register .............................................. 64
ss.18.4 New Notes .............................................. 64
ss.18.5 Participations........................................... 65
ss.18.6 Disclosure .............................................. 65
ss.18.7 Assignee or Participant Affiliated with the Borrower..... 65
ss.18.8 Miscellaneous Assignment Provisions...................... 66
ss.18.9 Assignment by Borrower................................... 66
SS.19. NOTICES, ETC. ............................................ 66
SS.20. GOVERNING LAW ............................................ 67
SS.21. HEADINGS ............................................ 67
SS.22. COUNTERPARTS ............................................ 67
SS.23. ENTIRE AGREEMENT, ETC............................................ 68
SS.24. WAIVER OF JURY TRIAL ............................................ 68
SS.25. CONSENTS, AMENDMENTS, WAIVERS, ETC............................... 68
SS.26. SEVERABILITY ............................................ 69
SS.27. TRANSITIONAL ARRANGEMENTS........................................ 69
ss.27.1 Original Credit Agreement Superseded..................... 69
ss.27.2 Return and Cancellation of Notes......................... 69
ss.27.3 Interest and Fees Under Superseded Agreement............. 69
SS.28. COVENANT OF SSI ............................................ 69
SCHEDULES
Schedule 1 Banks/Commitments
Schedule 6.3 Title to Properties; Leases
Schedule 6.7 Litigation
Schedule 6.14 Transactions with Affiliates
Schedule 6.15.3 ERISA Matters
Schedule 6.17 Environmental Matters
Schedule 6.18 Joint Ventures
Schedule 6.21 Insurance
Schedule 8.1 Indebtedness
Schedule 8.2 Liens
EXHIBITS
Exhibit A Form of Revolving Credit Note
Exhibit B Form of Loan Request
Exhibit C Form of Compliance Certificate
Exhibit D Form of Assignment and Acceptance
Exhibit E Form of Guaranty
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AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
This AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT is made as of
the 31st day of January, 1997, by and among STAGE STORES, INC. ("SSI"), a
Delaware corporation (for the limited purpose of ss.28 hereof only), SPECIALTY
RETAILERS, INC. ("SRI"), a Delaware corporation, PALAIS ROYAL, INC. (the
"Borrower"), a Texas corporation having its principal place of business at 00000
Xxxx Xxxxxx, Xxxxxxx, Xxxxx 00000, and THE FIRST NATIONAL BANK OF BOSTON and the
other lending institutions listed on SCHEDULE 1 and THE FIRST NATIONAL BANK OF
BOSTON as agent for itself and such other lending institutions.
WHEREAS, pursuant to a Revolving Credit Agreement dated as of March
31, 1995 (as amended and in effect from time to time, the "Original Credit
Agreement") by and among SRI, the Borrower, certain of the Banks (as hereinafter
defined) and the Agent (as hereinafter defined), the Banks party thereto made
available revolving credit loans for general corporate and working capital
purposes; and
WHEREAS, the Borrower has requested, among other things, additional
financing to refinance certain Indebtedness and for general corporate and
working capital purposes, and the Banks are willing to provide such additional
financing on the terms and conditions set forth herein;
NOW, THEREFORE, SRI, the Borrower, the Banks and the Agent agree that
on the Closing Date the Original Credit Agreement is hereby amended and restated
in its entirety and shall remain in full force and effect only as set forth
herein.
SS.1. DEFINITIONS AND RULES OF INTERPRETATION.
SS.1.1. DEFINITIONS. The following terms shall have the
meanings set forth in this ss.1 or elsewhere in the provisions of this Credit
Agreement referred to below:
ACQUISITION CAPITAL EXPENDITURES. Capital Expenditures made
by SRI or the Borrower and (a) funded by Indebtedness incurred or
assumed by the Borrower or SRI as permitted by ss.8.1(l) in
connection with any acquisition permitted by ss.8.5.1 or (b) which
the Borrower can demonstrate to the satisfaction of the Agent,
pursuant to an officer's certificate signed by an officer of the
Borrower and completed with sufficient detail, (i) were made in
connection with an acquisition permitted by ss.8.5.1 or the expansion
of the Borrower's business if such expansion is not considered an
acquisition; and (ii) were made with proceeds of a Loan; and (iii) do
not exceed, in the aggregate, $10,000,000 during the term of this
Credit Agreement.
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ADJUSTMENT DATE. The first day of the next calendar month
immediately following the day in which a Compliance Certificate is to
be delivered by the Borrower pursuant to ss.7.4(e).
AFFILIATE. Any Person that would be considered to be an
affiliate of the Borrower under Rule 144(a) of the Rules and
Regulations of the Securities and Exchange Commission, as in effect
on the date hereof, if the Borrower were issuing securities.
AGENT'S HEAD OFFICE. The Agent's head office located at 000
Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, or at such other
location as the Agent may designate from time to time.
AGENT. The First National Bank of Boston acting as agent
for the Banks.
AGENT'S FEE. See ss.4.2.
AGENT'S SPECIAL COUNSEL. Xxxxxxx, Xxxx & Xxxxx LLP or such
other counsel as may be approved by the Agent.
APPLICABLE MARGIN. For each period commencing on an
Adjustment Date through the date immediately preceding the next
Adjustment Date (each a "Rate Adjustment Period"), the Applicable
Margin shall be the applicable margin set forth below with respect to
the Borrower's Debt Service Ratio, as determined for the fiscal
period of the Borrower and its Subsidiaries ending immediately prior
to the applicable Rate Adjustment Period.
---------- ---------------------------------- ---------------- -----------------
EURODOLLAR
TIER DEBT SERVICE RATIO BASE RATE LOANS RATE LOANS
---------- ---------------------------------- ---------------- -----------------
1 Less than 1.10:1.00 1 1/2% 2 3/4%
---------- ---------------------------------- ---------------- -----------------
Equal to or greater than
2 1.10:1.00 but less than 1.30:1.00 1 1/4% 2 1/2%
---------- ---------------------------------- ---------------- -----------------
Equal to or greater than
3 1:30:1.00 but less than 1.50:1.00 1% 2 1/4%
---------- ---------------------------------- ---------------- -----------------
Equal to or greater than
4 1:50:1.00 but less than 1.70:1.00 3/4% 2%
---------- ---------------------------------- ---------------- -----------------
Equal to or greater than
5 1.70:1.00 1/2% 1 3/4%
---------- ---------------------------------- ---------------- -----------------
Notwithstanding the foregoing, (a) for Loans outstanding
during the period commencing on the Closing Date through the date
immediately preceding the Adjustment Date occurring after the fiscal
quarter ending April 30, 1997, the Applicable Margin shall be the
Applicable Margin set forth in Tier 3; (b) in the event the Debt
Service Ratio reflected in the financial statements delivered with
the Compliance Certificate pursuant to ss.7.4(a) differs from such
ratio in the financial statements delivered pursuant to ss.7.4(b) for
the fiscal quarter which is
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the last fiscal quarter of a fiscal year, then the Debt Service Ratio
as reflected in the financial statements delivered pursuant to
ss.7.4(a) shall govern from and after the date of delivery of such
financial statement pursuant to ss.7.4(a); and (c) if the Borrower
fails to deliver any Compliance Certificate pursuant to ss.7.4(e)
hereof of if a Default or Event of Default has occurred and is
continuing, then, for the period commencing on the next Adjustment
Date to occur subsequent to such failure or occurrence through the
date immediately following the date on which such Compliance
Certificate is delivered or such Default or Event of Default has been
cured or waived, as the case may be, the Applicable Margin shall be
the highest Applicable Margin set forth above.
ASSIGNMENT AND ACCEPTANCE. See ss.18.1.
BALANCE SHEET DATE. November 2, 1996.
BANKS. FNBB and the other lending institutions listed on
SCHEDULE 1 hereto and any other Person who becomes an assignee of any
rights and obligations of a Bank pursuant to ss.18.
BASE RATE. The higher of (a) the annual rate of interest
announced from time to time by FNBB at its head office in Boston,
Massachusetts, as its "base rate" and (b) one-half of one percent
(1/2%) above the Federal Funds Effective Rate. For the purposes of
this definition, "Federal Funds Effective Rate" shall mean for any
day, the 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 Agent from three funds brokers of recognized standing
selected by the Agent.
BASE RATE LOANS. Loans bearing interest calculated by
reference to the Base Rate.
BORROWER. As defined in the preamble hereto.
BUSINESS DAY. Any day on which banking institutions in
Boston, Massachusetts, are open for the transaction of banking
business and, in the case of Eurodollar Rate Loans, also a day which
is a Eurodollar Business Day.
CAPITAL ASSETS. Fixed assets, both tangible (such as land,
buildings, fixtures, machinery and equipment) and intangible (such as
patents, copyrights, trademarks, franchises and good will) and
including the capital stock or other equity interests of another
Person; PROVIDED that Capital Assets shall not include any item
customarily charged directly to expense or depreciated over a
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useful life of twelve (12) months or less in accordance with
Generally Accepted Accounting Principles.
CAPITAL EXPENDITURES. Without duplication, amounts paid or
indebtedness incurred by SRI or any of its Subsidiaries in connection
with the purchase or lease under Capitalized Leases by SRI or any of
its Subsidiaries of Capital Assets that would be required to be
capitalized and shown on the balance sheet of such Person in
accordance with Generally Accepted Accounting Principles.
CAPITALIZED LEASES. Leases under which SRI or any of its
Subsidiaries is the lessee or obligor, the discounted future rental
payment obligations under which are required to be capitalized on the
balance sheet of the lessee or obligor in accordance with Generally
Accepted Accounting Principles.
CERCLA. See ss.6.17.
CLOSING DATE. The first date on which the conditions set
forth in ss.10 have been satisfied.
CODE. The Internal Revenue Code of 1986.
COMMITMENT. With respect to each Bank, the amount set forth
on SCHEDULE 1 hereto as the amount of such Bank's commitment to make
Loans to the Borrower, as the same may be reduced from time to time;
or if such commitment is terminated pursuant to the provisions
hereof, zero.
COMMITMENT PERCENTAGE. With respect to each Bank, the
percentage set forth on SCHEDULE 1 hereto as such Bank's percentage
of the aggregate Commitments of all of the Banks.
COMPLIANCE CERTIFICATE. See ss.7.4(e).
CONSOLIDATED OR CONSOLIDATED. With reference to any term
defined herein, shall mean that term as applied to the accounts of
SRI, the Borrower and their Subsidiaries, consolidated in accordance
with Generally Accepted Accounting Principles.
CONSOLIDATED CURRENT ASSETS. All assets of SRI, the
Borrower and their Subsidiaries on a consolidated basis that, in
accordance with Generally Accepted Accounting Principles are properly
classified as current assets, PROVIDED that (a) notes and accounts
receivable shall be included only if good and collectible as
determined by SRI or the Borrower in accordance with the Borrower's
established practice consistently applied and, with respect to such
notes, only if payable on demand or within one (1) year from the date
as of which Consolidated Current Assets are to be determined and if
not directly or
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indirectly renewable or extendible at the option of the debtors, by
their terms, or by the terms of any instrument or agreement relating
thereto, beyond one (1) year, and, with respect to such accounts
receivable, only if payable on terms which are determined by SRI or
the Borrower in accordance with established credit terms consistently
applied; and such notes and accounts receivable shall be taken at
their face value less reserves determined to be sufficient in
accordance with Generally Accepted Accounting Principles; and (ii)
inventory shall be included only if and to the extent that the same
shall consist of saleable finished goods ready and available for
shipment to purchasers thereof or saleable finished goods available
for shipment and located on the Mortgaged Property or classified as
"in transit" consistent with the Borrower's past practices.
CONSOLIDATED CURRENT LIABILITIES. All liabilities of SRI,
the Borrower and their Subsidiaries on a consolidated basis maturing
on demand or within one (1) year from the date as of which
Consolidated Current Liabilities are to be determined, and such other
liabilities as may properly be classified as current liabilities in
accordance with Generally Accepted Accounting Principles; provided,
however that Consolidated Current Liabilities shall exclude
outstanding Loans and the principal amount of the loans outstanding
under the Seasonal Revolving Agreement.
CONSOLIDATED FINANCIAL OBLIGATIONS. With respect to any
fiscal period, an amount equal to the sum of all scheduled and other
mandatory principal payments in respect of Indebtedness of SRI, the
Borrower and its Subsidiaries paid or due and payable in such period,
including without limitation the principal portion of all payments in
respect of Capitalized Leases of SRI, the Borrower and their
Subsidiaries paid or due and payable in such period. Demand
obligations shall be deemed to be due and payable during any fiscal
quarter during which such obligations are outstanding.
CONSOLIDATED NET INCOME. The consolidated net income (or
deficit) of SRI, the Borrower and their Subsidiaries, after deduction
of all expenses, taxes, and other proper charges, determined in
accordance with Generally Accepted Accounting Principles, after
eliminating therefrom all extraordinary nonrecurring items of income
or expense.
CONSOLIDATED OPERATING CASH FLOW. For any period, an amount
equal to (a) EBITDA for such period, LESS (b) the sum of (i) cash
payments for all income taxes paid during such period, calculated on
a consolidated basis, PLUS (ii) Capital Expenditures made by SRI or
any of its Subsidiaries during such period other than Acquisition
Capital Expenditures, PLUS (iii) without duplication of amounts
included in Capital Expenditures, the cash portion of the purchase
price for the assets purchased in any acquisition permitted pursuant
to ss.8.5.1 and paid in such period, PLUS (iv) distributions to SRI
(including distributions for income taxes) not otherwise deducted in
calculating Consolidated Net Income.
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CONSOLIDATED TOTAL INTEREST EXPENSE. For any period, the
aggregate amount of interest required to be paid or accrued by SRI,
the Borrower and their Subsidiaries during such period on all
Indebtedness of SRI, the Borrower and their Subsidiaries outstanding
during all or any part of such period, other than interest accrued on
the Junior Subordinated Notes, whether such interest was or is
required to be reflected as an item of expense or capitalized,
including payments consisting of interest in respect of Capitalized
Leases and including commitment fees, agency fees, facility fees and
similar fees or expenses in connection with the borrowing of money,
LESS interest income actually received in the period.
CONVERSION REQUEST. A notice given by the Borrower to the
Agent of the Borrower's election to convert or continue a Loan in
accordance with ss.2.7.
CREDIT AGREEMENT. This Amended and Restated Revolving
Credit Agreement, including the Schedules and Exhibits hereto.
DEBT SERVICE. The sum of Consolidated Total Interest
Expense PLUS Consolidated Financial Obligations.
DEBT SERVICE RATIO. At any time and for any period, the
ratio of Consolidated Operating Cash Flow to Debt Service.
DEFAULT. See ss.12.1.
DISTRIBUTION. The declaration or payment of any dividend on
or in respect of any shares of any class of capital stock of any
Person, other than dividends payable solely in shares of common stock
of such Person; the purchase, redemption, or other retirement of any
shares of any class of capital stock of any Person, directly or
indirectly through a Subsidiary of such Person or otherwise; the
return of capital by any Person to its shareholders as such; or any
other distribution on or in respect of any shares of any class of
capital stock of any Person.
DOLLARS or $. Dollars in lawful currency of the United
States of America.
DOMESTIC LENDING OFFICE. Initially, the office of each Bank
designated as such in SCHEDULE 1 hereto; thereafter, such other
office of such Bank, if any, located within the United States that
will be making or maintaining Base Rate Loans.
DRAWDOWN DATE. The date on which any Loan is made or is to
be made, and the date on which any Loan is converted or continued in
accordance with ss.2.7.
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EBITDA. With respect to any fiscal period, an amount
calculated on a consolidated basis equal to the sum of (a)
Consolidated Net Income for such period, PLUS (b) all depreciation
and all amortization for such period (excluding amortization related
to interest expense previously added in calculating Consolidated Net
Income), PLUS (c) without duplication, other noncash charges made in
calculating Consolidated Net Income for such period, PLUS (d) without
duplication, tax expense for such period, PLUS (e) without
duplication, Consolidated Total Interest Expense paid or accrued
during 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 $1,000,000,000; (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 Generally
Accepted Accounting Principles; (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
$1,000,000,000, PROVIDED that such bank is acting through a branch or
agency located in the country in which it is organized or another
country which is also a member of the OECD; (d) the central bank of
any country which is a member of the OECD; and (e) 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 Agent, such approval not
to be unreasonably withheld.
EMPLOYEE BENEFIT PLAN. Any employee benefit plan within the
meaning of ss.3(3) of ERISA maintained or contributed to by SRI or
the Borrower, other than a Guaranteed Pension Plan or a Multiemployer
Plan.
ENVIRONMENTAL LAWS. See ss.6.17(a).
ERISA. The Employee Retirement Income Security Act of 1974.
ERISA AFFILIATE. Any Person which is treated as a single
employer with the Borrower under ss.414 of the Code.
ERISA REPORTABLE EVENT. A reportable event with respect to
a Guaranteed Pension Plan within the meaning of ss.4043 of ERISA and
the regulations promulgated thereunder as to which the requirement of
notice has not been waived.
EUROCURRENCY RESERVE RATE. For any day with respect to a
Eurodollar Rate Loan, the maximum rate (expressed as a decimal) at
which any lender subject thereto would be required to maintain
reserves under Regulation D of the Board of Governors of the Federal
Reserve System (or any successor or
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similar regulations relating to such reserve requirements) against
"Eurocurrency Liabilities" (as that term is used in Regulation D), if
such liabilities were outstanding. The Eurocurrency Reserve Rate
shall be adjusted automatically on and as of the effective date of
any change in the Eurocurrency Reserve Rate.
EURODOLLAR BUSINESS DAY. Any day on which commercial banks
are open for international business (including dealings in Dollar
deposits) in London or such other eurodollar interbank market as may
be selected by the Agent in its sole discretion acting in good faith.
EURODOLLAR LENDING OFFICE. Initially, the office of each
Bank designated as such in SCHEDULE 1 hereto; thereafter, such other
office of such Bank, if any, that shall be making or maintaining
Eurodollar Rate Loans.
EURODOLLAR RATE. For any Interest Period with respect to a
Eurodollar Rate Loan, the rate of interest equal to (a) the per annum
rate at which the Reference Bank's Eurodollar Lending Office is
offered Dollar deposits two (2) Eurodollar Business Days prior to the
beginning of such Interest Period in the interbank eurodollar market
where the eurodollar and foreign currency and exchange operations of
such Eurodollar Lending Office are customarily conducted, for
delivery on the first day of such Interest Period for the number of
days comprised therein and in an amount comparable to the amount of
the Eurodollar Rate Loan of the Reference Bank to which such Interest
Period applies, divided by (b) a number equal to 1.00 minus the
Eurocurrency Reserve Rate.
EURODOLLAR RATE LOANS. Loans bearing interest calculated by
reference to the Eurodollar Rate.
EVENT OF DEFAULT. See ss.12.1.
FEE LETTER. The Fee Letter dated on or prior to the Closing
Date between the Borrower and the Agent, and in form and substance
satisfactory to the Agent.
FNBB. The First National Bank of Boston, a national banking
association, in its individual capacity.
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. (a) When used in
ss.9, whether directly or indirectly through reference to a
capitalized term used therein, means (i) principles that are
consistent with the principles promulgated or adopted by the
Financial Accounting Standards Board and its predecessors, in effect
for the fiscal year including the Balance Sheet Date,
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and (ii) to the extent consistent with such principles, the
accounting practice of the Borrower reflected in its financial
statements for the fiscal year including the Balance Sheet Date, and
(b) when used in general, other than as provided above, means
principles that are (i) consistent with the principles promulgated or
adopted by the Financial Accounting Standards Board and its
predecessors, as in effect from time to time, and (ii) consistently
applied with past financial statements of the Borrower adopting the
same principles, provided that in each case referred to in this
definition of "Generally Accepted Accounting Principles" a certified
public accountant would, insofar as the use of such accounting
principles is pertinent, be in a position to deliver an unqualified
opinion (other than a qualification regarding changes in Generally
Accepted Accounting Principles) as to financial statements in which
such principles have been properly applied.
GUARANTEED PENSION PLAN. Any employee pension benefit plan
within the meaning of ss.3(2) of ERISA maintained or contributed to
by SRI, the Borrower or any ERISA Affiliate the benefits of which are
guaranteed on termination in full or in part by the PBGC pursuant to
Title IV of ERISA, other than a Multiemployer Plan.
GUARANTY. The Amended and Restated Guaranty, dated or to be
dated on or prior to the Closing Date, made by SRI in favor of the
Banks and the Agent pursuant to which SRI guaranties to the Banks and
the Agent the payment and performance of the Obligations and in
substantially the form of EXHIBIT E hereto.
HAZARDOUS SUBSTANCES. See ss.6.17(b).
INDEBTEDNESS. All obligations, contingent and otherwise,
that in accordance with Generally Accepted Accounting Principles
should be classified upon the obligor's balance sheet as liabilities,
or to which reference should be made by footnotes thereto, including
in any event and whether or not so classified: (a) all debt and
similar monetary obligations, whether direct or indirect; (b) all
liabilities secured by any mortgage, pledge, security interest, lien,
charge or other encumbrance existing on property owned or acquired
subject thereto, whether or not the liability secured thereby shall
have been assumed; and (c) all guarantees, endorsements and other
contingent obligations whether direct or indirect in respect of
indebtedness of others, including any obligation to supply funds to
or in any manner to invest in, directly or indirectly, the debtor, to
purchase indebtedness, or to assure the owner of indebtedness against
loss, through an agreement to purchase goods, supplies, or services
for the purpose of enabling the debtor to make payment of the
indebtedness held by such owner or otherwise, and the obligations to
reimburse the issuer in respect of any letters of credit.
INTEREST PAYMENT DATE. (a) As to any Base Rate Loan, the
last day of each fiscal quarter for such fiscal quarter; and (b) as
to any Eurodollar Rate Loan in respect of which the Interest Period
is (i) three (3) months or less, the last day of such Interest Period
and (ii) more than three (3) months, the date that is three
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(3) months from the first day of such Interest Period and, in
addition, the last day of such Interest Period.
INTEREST PERIOD. With respect to each Loan, (a) initially,
the period commencing on the Drawdown Date of such Loan and ending on
the last day of one of the periods set forth below (with respect to a
Eurodollar Rate Loan, as selected by the Borrower in a Loan Request)
(i) for any Base Rate Loan, the last day of the fiscal quarter; and
(ii) for any Eurodollar Rate Loan, 1, 2, 3, or 6 months; and (b)
thereafter, each period commencing on the last day of the next
preceding Interest Period applicable to such Loan and ending on the
last day of one of the periods set forth above, as selected by the
Borrower in a Conversion Request; PROVIDED that all of the foregoing
provisions relating to Interest Periods are subject to the following:
(A) if any Interest Period with respect to a
Eurodollar Rate Loan would otherwise end on a day that is
not a Eurodollar Business Day, that Interest Period shall
be extended to the next succeeding Eurodollar Business Day
unless the result of such extension would be to carry such
Interest Period into another calendar month, in which event
such Interest Period shall end on the immediately preceding
Eurodollar Business Day;
(B) if any Interest Period with respect to a Base
Rate Loan would end on a day that is not a Business Day,
that Interest Period shall end on the next succeeding
Business Day;
(C) if the Borrower shall fail to give notice as
provided in ss.2.7, the Borrower shall be deemed to have
requested a conversion of the affected Eurodollar Rate Loan
to a Base Rate Loan and the continuance of all Base Rate
Loans as Base Rate Loans on the last day of the then
current Interest Period with respect thereto;
(D) any Interest Period relating to any
Eurodollar Rate Loan that begins on the last Eurodollar
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 end on the
last Eurodollar Business Day of a calendar month; and
(E) any Interest Period relating to any
Eurodollar Rate Loan that would otherwise extend beyond the
Maturity Date shall end on the Maturity Date.
INVESTMENTS. All expenditures made and all liabilities
incurred (contingently or otherwise) for the acquisition of stock or
Indebtedness of, or for loans, advances, capital contributions or
transfers of property to, or in respect of any guaranties (or other
commitments as described under Indebtedness), or
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obligations of, any Person. In determining the aggregate amount of
Investments outstanding at any particular time: (a) the amount of any
Investment represented by a guaranty shall be taken at the principal
amount of the obligations guaranteed and still outstanding; (b) there
shall be deducted in respect of each such Investment any amount
received as a return of capital (but only by repurchase, redemption,
retirement, repayment, liquidating dividend or liquidating
distribution); (c) there shall not be deducted in respect of any
Investment any amounts received as earnings on such Investment,
whether as dividends, interest or otherwise; and (d) there shall not
be deducted from the aggregate amount of Investments any decrease in
the value thereof.
JUNIOR SUBORDINATED NOTES. Collectively, the subordinated
promissory notes issued by SRI or the Borrower to SSI evidencing
subordinated intercompany loans from SSI to SRI or the Borrower, as
the case may be, which notes shall contain terms, conditions and
subordination provisions acceptable to the Agent, including, without
limitation, no cash payments of interest or principal prior to
December 31, 2003.
LOAN DOCUMENTS. This Credit Agreement, the Notes and the
Guaranty.
LOAN REQUEST. See ss.2.6.
LOANS. Revolving credit loans made or to be made by the
Banks to the Borrower pursuant to ss.2.
MAJORITY BANKS. As of any date, the Banks holding at least
sixty-six and two-thirds percent (66 2/3%) of the outstanding
principal amount of the Notes on such date; and if no principal is
outstanding, the Banks whose aggregate Commitments constitute at
least sixty-six and two-thirds percent (66 2/3%) of the Total
Commitment.
MATURITY DATE. January 29, 2000.
MULTIEMPLOYER PLAN. Any multiemployer plan within the
meaning of ss.3(37) of ERISA maintained or contributed to by the
Borrower or any ERISA Affiliate.
NOTES. The Revolving Credit Notes.
OBLIGATIONS. All indebtedness, obligations and liabilities
of any of SRI, the Borrower and its Subsidiaries to any of the Banks
and the Agent, individually or collectively, existing on the date of
this Credit Agreement or arising thereafter, direct or indirect,
joint or several, absolute or contingent, matured or unmatured,
liquidated or unliquidated, secured or unsecured, arising by
contract, operation of law or otherwise, provided that such
indebtedness, obligations or liabilities arise or are incurred under
this Credit
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Agreement or any of the other Loan Documents or in respect of any of
the Loans made or any of the Notes or other instruments at any time
evidencing any thereof. For the avoidance of doubt, the term
Obligations does not include any indebtedness, obligations and/or
liabilities of any of SRI, the Borrower and its Subsidiaries to any
of the Seasonal Revolver Banks or the Seasonal Revolver Agent arising
or incurred under the Seasonal Revolving Agreement.
OUTSTANDING. With respect to the Loans, the aggregate
unpaid principal thereof as of any date of determination.
PBGC. The Pension Benefit Guaranty Corporation created by
ss.4002 of ERISA and any successor entity or entities having similar
responsibilities.
PERMITTED LIENS. Liens, security interests and other
encumbrances permitted by ss.8.2.
PERSON. Any individual, corporation, partnership, trust,
unincorporated association, business, or other legal entity, and any
government or any governmental agency or political subdivision
thereof.
POOLING AND SERVICING AGREEMENT. The Amended and Restated
Pooling and Servicing Agreement, dated as of August 11, 1995, among
the Receivables Subsidiary, as Transferor, SRI, as Servicer and
Bankers Trust (Delaware), as trustee in the form of the counterpart
previously delivered to the Agent, including all supplements and
amendments thereto, whether entered into prior to or after the
Closing Date.
RATE ADJUSTMENT PERIOD. As defined in the definition of
Applicable Margin.
REAL ESTATE. All real property at any time owned or leased
(as lessee or sublessee) by the Borrower or any of its Subsidiaries.
RECEIVABLES PURCHASE AGREEMENT. The Amended and Restated
Receivables Purchase Agreement by and among the Borrower and the
Receivables Subsidiary dated as of May 30, 1996.
RECEIVABLES SUBSIDIARY. SRI Receivables Purchase Co., Inc.,
a Delaware corporation.
RECEIVABLES SUBSIDIARY NOTES. The promissory notes issued
by the Receivables Subsidiary on May 30, 1996 in the aggregate
principal amount of not more than $30,000,000, and which notes are
secured by the Transferor Retained Certificates (as such term is
defined in the Pooling and Servicing Agreement) and/or rights in the
Transferor Interest (as such term is defined in
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the Pooling and Servicing Agreement) and are in form and substance
reasonably satisfactory to the Agent.
RECORD. The grid attached to a Note, or the continuation of
such grid, or any other similar record, including computer records,
maintained by any Bank with respect to any Loan referred to in such
Note.
REFERENCE BANK. FNBB.
REPURCHASE AMOUNT. See ss.8.8.
REPURCHASE DATE. See ss.8.8.
REVOLVING AGREEMENT. The Amended and Restated Revolving
Credit Agreement dated as of the date hereof among SSI, SRI, the
Borrower, The First National Bank of Boston and the other lending
institutions listed on SCHEDULE 1 thereto (the "Revolver Banks") and
The First National Bank of Boston as agent for the Revolver Banks
(the "Revolver Agent"), as the same may be amended, restated,
modified or supplemented from time to time, pursuant to which the
Revolver Banks have agreed, subject to the terms and conditions
contained therein, to make loans and other extensions of credit
available to the Borrower in the aggregate principal amount of not
more than $65,000,000.
REVOLVING CREDIT NOTE RECORD. A Record with respect to a
Revolving Credit Note.
REVOLVING CREDIT NOTES. See ss.2.4.
SEASONAL DEBT SERVICE RATIO. For any period consisting of
the immediately preceding twelve (12) fiscal months (treated as a
single accounting period) from such test date of SRI and its
Subsidiaries, the ratio of Consolidated Operating Cash Flow to Debt
Service.
SRI. As defined in the preamble hereto.
SEASONAL PERIOD. August 15 through January 15 of each
calendar year.
SENIOR NOTES. The 10% Series A Senior Notes Due 2000 and
the 10% Series B Senior Notes Due 2000, issued pursuant to the Senior
Notes Indenture.
SENIOR NOTES INDENTURE. The Indenture, dated as of August
2, 1993, entered into by SRI, the Borrower and The First National
Bank of Boston as Trustee in connection with the issuance of the
Senior Notes, in the form of the counterpart previously delivered to
the Agent, and as amended, supplemented or modified from time to time
as permitted by ss.8.9.
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SENIOR SUBORDINATED NOTES. The 11% Series A Senior
Subordinated Notes Due 2003 and the 11% Series B Senior Subordinated
Notes Due 2003, issued pursuant to the Senior Subordinated Notes
Indenture.
SENIOR SUBORDINATED NOTES INDENTURE. The Indenture, dated
as of August 2, 1993, entered into by SRI, the Borrower and The First
National Bank of Boston as Trustee in connection with the issuance of
the Senior Subordinated Notes, in the form of the counterpart
previously delivered to the Agent, and as amended, supplemented or
modified from time to time as permitted by ss.8.9.
SRI INDENTURE CONSENT. The Consent Solicitation Statement
of SRI dated October 1, 1996, which sets forth the amendments to each
of the Senior Notes Indenture, the Senior Subordinated Notes
Indenture and the SRI Subordinated Notes Indenture in the form
delivered to the Agent on October 8, 1996.
SRI SUBORDINATED NOTES. The 11% Series C Senior
Subordinated Notes Due 2003 and the 11% Series D Senior Subordinated
Notes Due 2003, issued pursuant to the SRI Subordinated Notes
Indenture in an aggregate principal amount not to exceed $18,250,000.
SRI SUBORDINATED NOTES INDENTURE. The Indenture, dated as
of July 27, 1995, entered into between SRI and The First National
Bank of Boston as Trustee in connection with the issuance of the SRI
Subordinated Notes, in the form of the counterpart previously
delivered to the Agent, and as amended, supplemented or modified from
time to time as permitted by ss.8.9.
SUBORDINATED DEBT. The Senior Subordinated Notes, the SRI
Subordinated Notes and such other unsecured Indebtedness of SRI, the
Borrower or any of its Subsidiaries that is consented to by the
Majority Banks in their sole discretion and is expressly subordinated
and made junior to the payment and performance in full of the
Obligations, and evidenced as such by a written instrument containing
subordination provisions in form and substance approved by the Banks
in writing.
SUBSIDIARY. Any corporation, association, trust, or other
business entity of which the designated parent shall at any time own
directly or indirectly through a Subsidiary or Subsidiaries at least
a majority (by number of votes) of the outstanding Voting Stock.
TOTAL COMMITMENT. The sum of the Commitments of the Banks,
as in effect from time to time.
TOTAL FUNDED INDEBTEDNESS. All Indebtedness of SRI, the
Borrower and their Subsidiaries for borrowed money (other than)
Indebtedness consisting of the Loans and Indebtedness consisting of
the "Loans" as such term is defined in the Revolving Agreement,
purchase money Indebtedness evidenced by notes or
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bonds, and with respect to Capitalized Leases, determined on a
consolidated basis in accordance with Generally Accepted Accounting
Principles.
TYPE. As to any Loan, its nature as a Base Rate Loan or a
Eurodollar Rate Loan.
VOTING STOCK. Stock or similar interests, of any class or
classes (however designated), the holders of which are at the time
entitled, as such holders, to vote for the election of a majority of
the directors (or persons performing similar functions) of the
corporation, association, trust or other business entity involved,
whether or not the right so to vote exists by reason of the happening
of a contingency.
SS.1.2. RULES OF INTERPRETATION.
(a) A reference to any document or agreement shall include such
document or agreement as amended, modified or supplemented
from time to time in accordance with its terms and the
terms of this Credit Agreement.
(b) The singular includes the plural and the plural includes
the singular.
(c) A reference to any law includes any amendment or
modification to such law.
(d) A reference to any Person includes its permitted successors
and permitted assigns.
(e) Accounting terms not otherwise defined herein have the
meanings assigned to them by Generally Accepted Accounting
Principles applied on a consistent basis by the accounting
entity to which they refer.
(f) The words "include", "includes" and "including" are not
limiting.
(g) All terms not specifically defined herein or by Generally
Accepted Accounting Principles, which terms are defined in
the Uniform Commercial Code as in effect in the
Commonwealth of Massachusetts, have the meanings assigned
to them therein, with the term "instrument" being that
defined under Article 9 of the Uniform Commercial Code.
(h) Reference to a particular "ss." refers to that section of
this Credit Agreement unless otherwise indicated.
(i) The words "herein", "hereof", "hereunder" and words of like
import shall refer to this Credit Agreement as a whole and
not to any particular section or subdivision of this Credit
Agreement.
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SS.2. THE REVOLVING CREDIT FACILITY.
SS.2.1. COMMITMENT TO LEND. Subject to the terms and conditions set
forth in this Credit Agreement, each of the Banks severally agrees to lend to
the Borrower and the Borrower may borrow, repay, and reborrow from time to time
between the Closing Date and the Maturity Date upon notice by the Borrower to
the Agent given in accordance with ss.2.6, such sums as are requested by the
Borrower up to a maximum aggregate amount Outstanding (after giving effect to
all amounts requested) at any one time equal to such Bank's Commitment, PROVIDED
that the sum of the Outstanding amount of the Loans (after giving effect to all
amounts requested) shall not at any time exceed the Total Commitment. The Loans
shall be made PRO RATA in accordance with each Bank's Commitment Percentage.
Each request for a Loan hereunder shall constitute a representation and warranty
by the Borrower that the conditions set forth in ss.10 and ss.11, in the case of
the initial Loans to be made on the Closing Date, and ss.11, in the case of all
other Loans, have been satisfied on the date of such request.
SS.2.2. COMMITMENT FEE. The Borrower agrees to pay to the Agent for
the accounts of the Banks in accordance with their respective Commitment
Percentages a commitment fee calculated at the rate of one-half of one percent
(1/2%) per annum on the average daily amount during each Seasonal Period or
portion thereof from the first day of the first Seasonal Period to the Maturity
Date by which the Total Commitment exceeds the Outstanding amount of Loans
during such Seasonal Period. The commitment fee shall be payable quarterly in
arrears on the first day following the conclusion of each Seasonal Period for
the Seasonal Period then concluded, commencing on the first such date following
the date hereof, with a final payment on the first Business Day following the
conclusion of the most recent Seasonal Period or any earlier date on which the
Commitments shall terminate.
SS.2.3. REDUCTION OF TOTAL COMMITMENT.
2.3.1. MANDATORY REDUCTION OF TOTAL COMMITMENT. On January
15 of each calendar year (the "Reduction Date") the Total Commitment shall
automatically be reduced to $0. If on the Reduction Date any Loans are
outstanding after giving effect to the reduction of the Total Commitment that
occurred on the Reduction Date pursuant to this ss.2.3.1, the Borrower shall
immediately pay the amounts of such outstanding Loans to the Agent for the
respective accounts of the Banks for application to the Loans. If no Default or
Event of Default has occurred and is continuing, the Total Commitment shall
automatically be increased to the amount set forth on Schedule 1 hereto on
August 15 of each calendar year.
2.3.2. OPTIONAL REDUCTION OF TOTAL COMMITMENT. The Borrower
shall have the right at any time and from time to time upon five (5) Business
Days' prior written notice to the Agent to reduce by $1,000,000 or an integral
multiple thereof or terminate entirely the Total Commitment, whereupon the
Commitments of the Banks shall be reduced PRO RATA in accordance with their
respective Commitment Percentages of the amount specified in such notice or, as
the case may be, terminated. Promptly
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after receiving any notice of the Borrower delivered pursuant to this ss.2.3,
the Agent will notify the Banks of the substance thereof. Upon the effective
date of any such reduction or termination, the Borrower shall pay to the Agent
for the respective accounts of the Banks the full amount of any commitment fee
then accrued on the amount of the reduction. No reduction or termination of the
Commitments under this ss.2.3 may be reinstated.
SS.2.4. THE REVOLVING CREDIT NOTES. The Loans shall be evidenced by
separate amended and restated promissory notes of the Borrower in substantially
the form of EXHIBIT A hereto (each a "Revolving Credit Note"), dated as of the
Closing Date and completed with appropriate insertions. One Revolving Credit
Note shall be payable to the order of each Bank in a principal amount equal to
such Bank's Commitment or, if less, the Outstanding amount of all Loans made by
such Bank, plus interest accrued thereon, as set forth below. The Borrower
irrevocably authorizes each Bank to make or cause to be made, at or about the
time of the Drawdown Date of any Loan or at the time of receipt of any payment
of principal on such Bank's Revolving Credit Note, an appropriate notation on
such Bank's Revolving Credit Note Record reflecting the making of such Loan or
(as the case may be) the receipt of such payment. The Outstanding amount of the
Loans set forth on such Bank's Revolving Credit Note Record shall be PRIMA FACIE
evidence of the principal amount thereof owing and unpaid to such Bank, but the
failure to record, or any error in so recording, any such amount on such Bank's
Revolving Credit Note Record shall not limit or otherwise affect the obligations
of the Borrower hereunder or under any Revolving Credit Note to make payments of
principal of or interest on any Revolving Credit Note when due.
SS.2.5. INTEREST ON REVOLVING CREDIT LOANS. Except as otherwise
provided in ss.4.11,
(a) each Base Rate Loan shall bear interest for the period
commencing with the Drawdown Date thereof and ending on the last day
of the Interest Period with respect thereto at the rate per annum
equal to the Base Rate PLUS the Applicable Margin;
(b) each Eurodollar Rate Loan shall bear interest for the
period commencing with the Drawdown Date thereof and ending on the
last day of the Interest Period with respect thereto at the rate per
annum equal to the Eurodollar Rate for such Interest Period PLUS the
Applicable Margin; and
(c) the Borrower promises to pay interest on each Loan in
arrears on each Interest Payment Date with respect thereto and at
maturity of such Loan.
SS.2.6. REQUESTS FOR REVOLVING CREDIT LOANS. The Borrower shall give
to the Agent written notice (which may be by facsimile) in the form of EXHIBIT B
hereto (or telephonic notice confirmed in a writing in the form of EXHIBIT B
hereto) of each Loan requested hereunder (a "Loan Request") no less than (a) one
(1) Business Day prior to the proposed Drawdown Date of any Base Rate Loan and
(b) three (3) Eurodollar
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Business Days prior to the proposed Drawdown Date of any Eurodollar Rate Loan.
Each such notice shall specify (i) the principal amount of the Loan requested,
(ii) the proposed Drawdown Date of such Loan, (iii) with respect to a Eurodollar
Rate Loan, the Interest Period for such Loan and (iv) the Type of such Loan.
Promptly upon receipt of any such notice, the Agent shall notify each of the
Banks thereof. Each Loan Request shall be irrevocable and binding on the
Borrower and shall obligate the Borrower to accept the Loan requested from the
Banks on the proposed Drawdown Date. Each Loan Request (i) pertaining to
Eurodollar Rate Loans shall be in a minimum aggregate amount of $1,000,000 or a
whole multiple of $250,000 in excess thereof; and (ii) pertaining to Base Rate
Loans shall be in a minimum aggregate amount of $100,000 or a whole multiple of
$50,000 in excess thereof.
SS.2.7. CONVERSION OPTIONS.
2.7.1. CONVERSION TO DIFFERENT TYPE OF REVOLVING CREDIT
LOAN. The Borrower may elect from time to time to convert any Outstanding Loan
to a Loan of another Type, PROVIDED that (a) with respect to any such conversion
of a Loan to a Base Rate Loan, the Borrower shall give the Agent at least one
(1) Business Days' prior written notice of such election and such conversion
shall only be made on the last day of the Interest Period with respect thereto;
(b) with respect to any such conversion of a Base Rate Loan to a Eurodollar Rate
Loan, the Borrower shall give the Agent at least three (3) Eurodollar Business
Days' prior written notice of such election; and (c) no Loan may be converted
into a Eurodollar Rate Loan when any Default or Event of Default has occurred
and is continuing. On the date on which such conversion is being made each Bank
shall take such action as is necessary to transfer its Commitment Percentage of
such Loans to its Domestic Lending Office or its Eurodollar Lending Office, as
the case may be. All or any part of Outstanding Loans of any Type may be
converted into a Loan of another Type as provided herein, PROVIDED that any
partial conversion (a) into a Eurodollar Rate Loan shall be in an aggregate
principal amount of $1,000,000 or a whole multiple of $250,000 in excess thereof
and (b) into a Base Rate Loan shall be in an aggregate principal amount of
$100,000 or a whole multiple of $50,000 in excess thereof. Each Conversion
Request relating to the conversion of a Loan to a Eurodollar Rate Loan shall be
irrevocable by the Borrower.
2.7.2. CONTINUATION OF TYPE OF REVOLVING CREDIT LOAN. Any
Loan of any Type may be continued as a Loan of the same Type upon the expiration
of an Interest Period with respect thereto by compliance by the Borrower with
the notice provisions contained in ss.2.7.1; PROVIDED that no Eurodollar Rate
Loan may be continued as such when any Default or Event of Default has occurred
and is continuing, but shall be automatically converted to a Base Rate Loan on
the last day of the first Interest Period relating thereto ending during the
continuance of any Default or Event of Default of which officers of the Agent
active upon the Borrower's account have actual knowledge. In the event that the
Borrower fails to provide any such notice with respect to the continuation of
any Eurodollar Rate Loan as such, then such Eurodollar Rate Loan shall be
automatically converted to a Base Rate Loan on the last day of the first
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Interest Period relating thereto. The Agent shall notify the Banks promptly when
any such automatic conversion contemplated by this ss.2.7 is scheduled to occur.
2.7.3. EURODOLLAR RATE LOANS. Any conversion to or from
Eurodollar Rate Loans shall be in such amounts and be made pursuant to such
elections so that, after giving effect thereto, the aggregate principal amount
of all Eurodollar Rate Loans having the same Interest Period shall not be less
than $1,000,000 or a whole multiple of $250,000 in excess thereof.
SS.2.8. FUNDS FOR LOAN.
2.8.1. FUNDING PROCEDURES. Not later than 11:00 a.m.
(Boston time) on the proposed Drawdown Date of any Loans, each of the Banks will
make available to the Agent, at the Agent's Head Office, in immediately
available funds, the amount of such Bank's Commitment Percentage of the amount
of the requested Loans. Upon receipt from each Bank of such amount, and upon
receipt of the documents required by ss.ss.11 and 12 and the satisfaction of the
other conditions set forth therein, to the extent applicable, the Agent will
make available to the Borrower the aggregate amount of such Loans made available
to the Agent by the Banks. The failure or refusal of any Bank to make available
to the Agent at the aforesaid time and place on any Drawdown Date the amount of
its Commitment Percentage of the requested Loans shall not relieve any other
Bank from its several obligation hereunder to make available to the Agent the
amount of such other Bank's Commitment Percentage of any requested Loans.
2.8.2. ADVANCES BY AGENT. The Agent may, unless notified to
the contrary by any Bank prior to a Drawdown Date, assume that such Bank has
made available to the Agent on such Drawdown Date the amount of such Bank's
Commitment Percentage of the Loans to be made on such Drawdown Date, and the
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 Agent such amount on a date after such Drawdown Date, such Bank
shall pay to the Agent on demand an amount equal to the product of (a) the
average computed for the period referred to in clause (c) below, of the weighted
average interest rate paid by the Agent for federal funds acquired by the Agent
during each day included in such period, TIMES (b) the amount of such Bank's
Commitment Percentage of such Loans, TIMES (c) a fraction, the numerator of
which is the number of days that elapse from and including such Drawdown Date to
the date on which the amount of such Bank's Commitment Percentage of such Loans
shall become immediately available to the Agent, and the denominator of which is
365. A statement of the Agent submitted to such Bank with respect to any amounts
owing under this paragraph shall be PRIMA FACIE evidence of the amount due and
owing to the Agent by such Bank. If the amount of such Bank's Commitment
Percentage of such Loans is not made available to the Agent by such Bank within
three (3) Business Days following such Drawdown Date, the Agent shall be
entitled to recover such amount from the Borrower on demand, with interest
thereon at the rate per annum applicable to the Loans made on such Drawdown
Date.
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SS.3. REPAYMENT OF THE REVOLVING CREDIT LOANS.
SS.3.1. MATURITY. The Borrower promises to pay on the Maturity Date,
and there shall become absolutely due and payable on the Maturity Date, all of
the Loans Outstanding on such date, together with any and all accrued and unpaid
interest thereon and any outstanding fees, expenses and other amounts owing
hereunder.
SS.3.2. MANDATORY REPAYMENTS OF LOANS.
ss.3.2.1. EXCEEDING TOTAL COMMITMENT. If at any time the
sum of the Outstanding amount of the Loans exceeds the Total Commitment, then
the Borrower shall immediately pay the amount of such excess to the Agent for
the respective accounts of the Banks for application to the Loans. Each payment
of the Loans shall be allocated among the Banks, in proportion, as nearly as
practicable, to each Bank's Commitment Percentage of the respective unpaid
principal amount of each Bank's Revolving Credit Note, with adjustments to the
extent practicable to equalize any prior payments or repayments not exactly in
proportion.
SS.3.3. OPTIONAL REPAYMENTS OF LOANS. The Borrower shall have the
right, at its election, to repay the Outstanding amount of the Loans, as a whole
or in part, at any time without penalty or premium, PROVIDED that any full or
partial prepayment of the Outstanding amount of any Eurodollar Rate Loans
pursuant to this ss.3.3 may be made only on the last day of the Interest Period
relating thereto. The Borrower shall give the Agent, no later than 12:00 noon,
Boston time, at least one (1) Business Day's prior written notice of any
proposed prepayment pursuant to this ss.3.3 of Base Rate Loans, and three (3)
Eurodollar Business Days' notice of any proposed prepayment pursuant to this
ss.3.3 of Eurodollar Rate Loans, in each case specifying the proposed date of
prepayment of Loans and the principal amount to be prepaid. Each such partial
prepayment of the Loans shall be in a minimum aggregate amount of $100,000 or a
whole multiple of $50,000 in excess thereof, shall be accompanied by the payment
of accrued interest on the principal prepaid to the date of prepayment and shall
be applied, in the absence of instruction by the Borrower, first to the
principal of Base Rate Loans and then to the principal of Eurodollar Rate Loans.
Each partial prepayment shall be allocated among the Banks, in proportion, as
nearly as practicable, to the respective unpaid principal amount of each Bank's
Revolving Credit Note, with adjustments to the extent practicable to equalize
any prior repayments not exactly in proportion.
SS.4. CERTAIN GENERAL PROVISIONS.
SS.4.1. CLOSING FEE. The Borrower agrees to pay to the Agent on the
Closing Date a closing fee as described in a fee letter dated as of the date
herewith (the "Fee Letter").
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SS.4.2. AGENT'S FEE. The Borrower shall pay to the Agent an Agent's
fee as provided in the Fee Letter.
SS.4.3. FUNDS FOR PAYMENTS.
4.3.1. PAYMENTS TO AGENT. All payments of principal,
interest, commitment fees and any other amounts due hereunder or under any of
the other Loan Documents shall be made to the Agent, for the respective accounts
of the Banks and the Agent, at the Agent's Head Office or at such other location
in the Boston, Massachusetts, area that the Agent may from time to time
designate, in each case in immediately available funds.
4.3.2. NO OFFSET, ETC. All payments by the Borrower
hereunder and under any of the other Loan Documents shall be made without setoff
or counterclaim and free and clear of and without deduction for any taxes,
levies, imposts, duties, charges, fees, deductions, withholdings, compulsory
loans, restrictions or conditions of any nature now or hereafter imposed or
levied by any jurisdiction or any political subdivision thereof or taxing or
other authority therein unless the Borrower is compelled by law to make such
deduction or withholding. If any such obligation is imposed upon the Borrower
with respect to any amount payable by it hereunder or under any of the other
Loan Documents, the Borrower will pay to the Agent, for the account of the Banks
or (as the case may be) the Agent, on the date on which such amount is due and
payable hereunder or under such other Loan Document, such additional amount in
Dollars as shall be necessary to enable the Banks or the Agent to receive the
same net amount which the Banks or the Agent would have received on such due
date had no such obligation been imposed upon the Borrower. The Borrower will
deliver promptly to the Agent certificates or other valid vouchers for all taxes
or other charges deducted from or paid with respect to payments made by the
Borrower hereunder or under such other Loan Document.
SS.4.4. COMPUTATIONS. All computations of interest on the Base Rate
Loans shall be based on a 365 or 366 day year, as the case may be, and paid for
the actual number of days elapsed, and all computations of interest on the
Eurodollar Rate Loans and of commitment fees or other fees shall be based on a
360-day year and paid for the actual number of days elapsed. Except as otherwise
provided in the definition of the term "Interest Period" with respect to
Eurodollar Rate Loans, whenever a payment hereunder or under any of the other
Loan Documents becomes due on a day that is not a Business Day, the due date for
such payment shall be extended to the next succeeding Business Day, and interest
shall accrue during such extension. The Outstanding amount of the Loans as
reflected on the Revolving Credit Note Records from time to time shall be
considered correct and binding on the Borrower unless the Agent or such Bank
shall notify the Borrower to the contrary.
SS.4.5. INABILITY TO DETERMINE EURODOLLAR RATE. In the event, prior
to the commencement of any Interest Period relating to any Eurodollar Rate Loan,
the Agent
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shall determine or be notified by the Majority Banks that adequate and
reasonable methods do not exist for ascertaining the Eurodollar Rate that would
otherwise determine the rate of interest to be applicable to any Eurodollar Rate
Loan during any Interest Period, the 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 Loan Request or
Conversion Request with respect to Eurodollar Rate Loans shall be automatically
withdrawn and shall be deemed a request for Base Rate Loans, (b) each Eurodollar
Rate 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 Eurodollar Rate Loans shall be suspended until the Agent or the
Majority Banks determines that the circumstances giving rise to such suspension
no longer exist, whereupon the Agent or, as the case may be, the Agent upon the
instruction of the Majority Banks, shall so notify the Borrower and the Banks.
SS.4.6. ILLEGALITY. Notwithstanding any other provisions herein, if
any present or future law, regulation, treaty or directive or the interpretation
or application thereof shall make it unlawful for any Bank to make or maintain
Eurodollar Rate Loans, such Bank shall forthwith give notice of such
circumstances to the Borrower and the other Banks and thereupon (a) the
commitment of such Bank to make Eurodollar Rate Loans or convert Loans of
another Type to Eurodollar Rate Loans shall forthwith be suspended and (b) such
Bank's Loans then Outstanding as Eurodollar Rate Loans, if any, shall be
converted automatically to Base Rate Loans on the last day of each Interest
Period applicable to such Eurodollar Rate Loans or within such earlier period as
may be required by law. The Borrower hereby agrees promptly to pay the Agent for
the account of such Bank, upon demand by such Bank, any additional amounts
necessary to compensate such Bank for any costs incurred by such Bank in making
any conversion in accordance with this ss.4.6, including any interest or fees
payable by such Bank to lenders of funds obtained by it in order to make or
maintain its Eurodollar Rate Loans hereunder.
SS.4.7. ADDITIONAL COSTS, ETC. If any present or future applicable
law, which expression, as used herein, includes statutes, rules and regulations
thereunder and interpretations thereof by any competent court or by any
governmental or other regulatory body or official charged with the
administration or the interpretation thereof 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 Agent by any central bank or other fiscal,
monetary or other authority (whether or not having the force of law), shall:
(a) subject any Bank or the Agent to any tax, levy, impost,
duty, charge, fee, deduction or withholding of any nature
with respect to this Credit Agreement, the other Loan
Documents, such Bank's Commitment or the Loans (other than
taxes based upon or measured by the income or profits of
such Bank or the Agent), or
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(b) materially change the basis of taxation (except for changes
in taxes on income or profits) 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 Agent under this Credit
Agreement or any of the other Loan Documents, or
(c) impose or increase or render applicable (other than to the
extent specifically provided for elsewhere in this Credit
Agreement) any special deposit, reserve, assessment,
liquidity, capital adequacy 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 Agent any other conditions or
requirements with respect to this Credit Agreement, the
other Loan Documents, the Loans, such Bank's Commitment or
any class of loans, letters of credit 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) to increase the cost to any Bank of
making, funding, issuing, renewing,
extending or maintaining any of the
Loans or such Bank's Commitment, or
(ii) to reduce the amount of principal,
interest or other amount payable to
such Bank or the Agent hereunder on
account of such Bank's Commitment or
any of the Loans, or
(iii) to require such Bank or the Agent to
make any payment or to forego any
interest or other sum payable
hereunder, 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 Agent
from the Borrower hereunder,
then, and in each such case, the Borrower will, upon demand made by such Bank or
(as the case may be) the Agent at any time and from time to time and as often as
the occasion therefor may arise, pay to such Bank or the Agent such additional
amounts as will be sufficient to compensate such Bank or the Agent for such
additional cost, reduction, payment or foregone interest or other sum.
SS.4.8. CAPITAL ADEQUACY. If after the date hereof any Bank or the
Agent determines that (a) the adoption of or change in any law, governmental
rule, regulation, policy, guideline or directive (whether or not having the
force of law) regarding capital requirements for banks or bank holding companies
or any change in the interpretation or application thereof by a court or
governmental authority with appropriate jurisdiction, or (b) compliance by such
Bank or the Agent or any corporation controlling
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such Bank or the Agent with any law, governmental rule, regulation, policy,
guideline or directive (whether or not having the force of law) of any such
entity regarding capital adequacy, has the effect of reducing the return on such
Bank's or the Agent's commitment with respect to any Loans to a level below that
which such Bank or the Agent could have achieved but for such adoption, change
or compliance (taking into consideration such Bank's on the Agent's then
existing policies with respect to capital adequacy and assuming full utilization
of such entity's capital) by any amount deemed by such Bank or (as the case may
be) the Agent to be material, then such Bank or the Agent may notify the
Borrower of such fact. To the extent that the amount of such reduction in the
return on capital is not reflected in the Base Rate, the Borrower agrees to pay
such Bank or (as the case may be) the Agent for the amount of such reduction in
the return on capital as and when such reduction is determined upon presentation
by such Bank or (as the case may be) the Agent of a certificate in accordance
with ss.4.9 hereof. Each Bank shall allocate such cost increases among its
customers in good faith and on an equitable basis.
SS.4.9. CERTIFICATE. A certificate setting forth any additional
amounts payable pursuant to ss.ss.4.7 or 4.8 and a brief explanation of such
amounts which are due, submitted by any Bank or the Agent to the Borrower, shall
be conclusive, absent manifest error, that such amounts are due and owing.
SS.4.10. INDEMNITY. The Borrower agrees to indemnify each Bank and to
hold each Bank harmless from and against any loss, cost or expense (including
loss of anticipated profits) that such Bank may sustain or incur as a
consequence of (a) default by the Borrower in payment of the principal amount of
or any interest on any Eurodollar Rate Loans as and when due and payable,
including any such loss or expense arising from interest or fees payable by such
Bank to lenders of funds obtained by it in order to maintain its Eurodollar Rate
Loans, (b) default by the Borrower in making a borrowing or conversion after the
Borrower has given (or is deemed to have given) a Loan Request or a Conversion
Request relating thereto in accordance with ss.2.6 or ss.2.7 or (c) the making
of any payment of a Eurodollar Rate Loan or the making of any conversion of any
such Loan to a Base Rate Loan on a day that is not the last day of the
applicable Interest Period with respect thereto, including interest or fees
payable by such Bank to lenders of funds obtained by it in order to maintain any
such Loans.
SS.4.11. INTEREST AFTER DEFAULT. During the continuance of a Default
or an Event of Default, the principal and interest of the Loans shall, until
such Default or Event of Default has been cured or remedied or such Default or
Event of Default has been waived by the Majority Banks pursuant to ss.26, bear
interest at a rate per annum equal to two percent (2%) above the rate of
interest otherwise applicable to such Loans pursuant to ss.2.5.
SS.4.12. INTEREST LIMITATION. Notwithstanding any other term of this
Credit Agreement or any Note 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 any Note by the Banks, shall be
absolutely limited to, and
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shall in no event exceed, the maximum amount of interest (the "Maximum Rate")
which could lawfully be charged to 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 the
Maximum Rate, and any term of this Credit Agreement or any Note 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. If, in any month,
the effective interest rate on any amounts owing pursuant to this Credit
Agreement, the Notes or any of the other Loan Documents, absent the Maximum Rate
limitation contained herein, would have exceeded the Maximum Rate, and if in the
future months, such effective interest rate would otherwise be less than the
Maximum Rate, then the effective interest rate for such month shall be increased
to the Maximum Rate until such time as the amount of interest paid hereunder
equals the amount of interest which would have been paid if the same had not
been limited by the Maximum Rate. In the event that, upon payment in full of the
Borrower's Obligations pursuant to this Credit Agreement, the Notes or the other
Loan Documents, the total amount of interest paid or accrued under the terms of
this Credit Agreement is less than the total amount of interest which would have
been paid or accrued had the interest not been limited hereby to the Maximum
Rate, then the Borrower shall, to the extent permitted by such applicable
federal, state or other law, pay to the Banks hereunder or under the Notes an
amount equal to the excess, if any, of (i) the lesser of (A) the amount of
interest which would have been charged if the Maximum Rate had, at all times,
been in effect with respect to the Obligations hereunder or under the Notes and
(B) the amount of interest which would have accrued had the effective interest
rate applicable not been limited hereunder by the Maximum Rate over (ii) the
amount of interest actually paid or accrued under this Credit Agreement.
SS.5. GUARANTIES. The Obligations shall be guaranteed pursuant to the
terms of the Guaranty.
SS.6. REPRESENTATIONS AND WARRANTIES. Each of the Borrower and SRI
represents and warrants to the Banks and the Agent as follows:
SS.6.1. CORPORATE AUTHORITY.
6.1.1. INCORPORATION; GOOD STANDING. Each of SRI, the
Borrower and each of their respective Subsidiaries (a) is a corporation duly
organized, validly existing and in good standing under the laws of its state of
incorporation, (b) has all requisite corporate power to own its property and
conduct its business as now conducted and as presently contemplated, and (c) is
in good standing as a foreign corporation and is duly authorized to do business
in each jurisdiction where such qualification is necessary except where a
failure to be so qualified would not have a materially adverse effect on
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the business, assets or financial condition of SRI, the Borrower and their
Subsidiaries on a consolidated basis.
6.1.2. AUTHORIZATION. The execution, delivery and
performance of this Credit Agreement and the other Loan Documents to which SRI,
the Borrower or any of their Subsidiaries is or is to become a party and the
transactions contemplated hereby and thereby (a) are within the corporate
authority of such Person, (b) have been duly authorized by all necessary
corporate proceedings, (c) do not conflict with or result in any breach or
contravention of any provision of law, statute, rule or regulation to which SRI,
the Borrower or any Subsidiary is subject or any judgment, order, writ,
injunction, license or permit applicable to SRI, the Borrower or any Subsidiary
and (d) do not conflict with any provision of the corporate charter or bylaws
of, or any agreement or other instrument binding upon, SRI, the Borrower or any
of their Subsidiaries.
6.1.3. ENFORCEABILITY. The execution and delivery of this
Credit Agreement and the other Loan Documents to which SRI, the Borrower or any
of their Subsidiaries is or is to become a party will result in valid and
legally binding obligations of such Person enforceable against it in accordance
with the respective terms and provisions hereof and thereof, except as
enforceability is limited by bankruptcy, insolvency, reorganization, moratorium
or other laws relating to or affecting generally the enforcement of creditors'
rights and except to the extent that availability of the remedy of specific
performance or injunctive relief is subject to the discretion of the court
before which any proceeding therefor may be brought.
SS.6.2. GOVERNMENTAL APPROVALS. The execution, delivery and
performance by SRI, the Borrower and any of their Subsidiaries of this Credit
Agreement and the other Loan Documents to which SRI, the Borrower or any of
their Subsidiaries is or is to become a party and the transactions contemplated
hereby and thereby do not require the approval or consent of, or filing with,
any governmental agency or authority other than those already obtained.
SS.6.3. TITLE TO PROPERTIES; LEASES. Except as indicated on SCHEDULE
6.3 hereto, SRI, the Borrower and their Subsidiaries own all of the assets
reflected in the consolidated and consolidating balance sheet of SRI, the
Borrower and their Subsidiaries as at the Balance Sheet Date or acquired since
that date (except property and assets sold or otherwise disposed of in the
ordinary course of business since that date), subject to no rights of others,
including any mortgages, leases, conditional sales agreements, title retention
agreements, liens or other encumbrances except Permitted Liens.
SS.6.4. FINANCIAL STATEMENTS AND PROJECTIONS.
6.4.1. FINANCIAL STATEMENTS. There has been furnished to
each of the Banks a consolidated and consolidating balance sheet of SSI and its
Subsidiaries as at the Balance Sheet Date, and a consolidated and consolidating
statement of income of SSI and its Subsidiaries for the period then ended,
certified by a member of senior
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management of the Borrower. Such balance sheet and statement of income have been
prepared in accordance with Generally Accepted Accounting Principles and fairly
present the financial condition of SSI, SRI and the Borrower as at the close of
business on the date thereof (excluding normal year-end adjustments) and the
results of operations for the period then ended. There are no contingent
liabilities of SSI or any of its Subsidiaries as of such date involving material
amounts, known to the officers of SSI, SRI or the Borrower, which were not
disclosed in such balance sheet and the notes related thereto. In addition,
there has been furnished to each of the Banks SSI's most recent Form 10-K (the
"10-K") for the fiscal year ended January, 1996 and Form 10-Q (the "10-Q") for
the fiscal quarter ended November 2, 1996.
6.4.2. PROJECTIONS. The six (6) month seasonal income
statement plan of SSI and its Subsidiaries on a consolidated basis, for the six
(6) month period commencing January 30, 1997 and through July 30, 1997 (and,
with the six month seasonal income statement plan for the six month period
commencing on the Saturday closest to July 30 through the Saturday closest to
January 30, the "Seasonal Projections"), the projected capital budget and
projected cash flow statements for the fiscal year ended January 28, 1997 (the
"Fiscal Year Projections") and the annual projected balance sheets, income
statements and cash flow statements of SSI and its Subsidiaries on a
consolidated basis for the 1996 to 2000 fiscal years (the "Annual Projections"
and, collectively with the Seasonal Projections, and the Fiscal Year
Projections, the "Projections"), copies of which have been delivered to each
Bank, disclose all assumptions made with respect to general economic, financial
and market conditions used in formulating such Projections. The Projections are
based upon reasonable estimates and assumptions, have been prepared on the basis
of the assumptions stated therein and as at the Closing Date reflect the
reasonable estimates of SSI and its Subsidiaries of the results of operations
and other information projected therein, it being understood that the
projections are not guarantees of results and that actual results will vary from
the projections, and such variations may be material.
SS.6.5. NO MATERIAL CHANGES, ETC. Since the Balance Sheet Date there
has occurred no materially adverse change in the financial condition or business
of SRI, the Borrower and their Subsidiaries as shown on or reflected in the
consolidated balance sheet of SRI, the Borrower and their Subsidiaries as at the
Balance Sheet Date, or the consolidated and consolidating statement of income
for the fiscal year then ended, other than changes in the ordinary course of
business that have not had any materially adverse effect either individually or
in the aggregate on the business or financial condition of SRI, the Borrower and
their Subsidiaries on a consolidated basis. Since the Balance Sheet Date,
neither SRI nor the Borrower has made any Distributions.
SS.6.6. FRANCHISES, PATENTS, COPYRIGHTS, ETC. Each of SRI, the
Borrower and each of their Subsidiaries possesses all franchises, patents,
copyrights, trademarks, trade names, licenses and permits, and rights in respect
of the foregoing, adequate for the conduct of its business substantially as now
conducted without known conflict with any rights of others.
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SS.6.7. LITIGATION. Except as set forth in SCHEDULE 6.7 hereto, there
are no actions, suits, proceedings or investigations of any kind pending or
threatened against SRI, the Borrower or any of their Subsidiaries before any
court, tribunal or administrative agency or board that, if adversely determined,
would reasonably be expected, either in any case or in the aggregate, materially
adversely affect the properties, assets, financial condition or business of SRI,
the Borrower or any of their Subsidiaries or materially impair the right of SRI,
the Borrower and their Subsidiaries, considered as a whole, to carry on business
substantially as now conducted by them, or result in any substantial liability
not adequately covered by insurance, or for which adequate reserves are not
maintained on the consolidated balance sheet of SRI, the Borrower and their
Subsidiaries, or which question the validity of this Credit Agreement or any of
the other Loan Documents, or any action taken or to be taken pursuant hereto or
thereto.
SS.6.8. NO MATERIALLY ADVERSE CONTRACTS, ETC. Neither SRI, the
Borrower nor any of their Subsidiaries is subject to any charter, corporate or
other legal restriction, or any judgment, decree, order, rule or regulation that
has or is expected in the future to have a materially adverse effect on the
business, assets or financial condition of SRI, the Borrower or any of their
Subsidiaries. Neither SRI, the Borrower nor any of their Subsidiaries is a party
to any contract or agreement that has or is expected, in the judgment of the
Borrower's officers, to have any materially adverse effect on the business of
SRI, the Borrower and their Subsidiaries on a consolidated basis.
SS.6.9. COMPLIANCE WITH OTHER INSTRUMENTS, LAWS, ETC. Each of SRI,
the Borrower and any of their Subsidiaries is not in violation of any provision
of its charter documents, bylaws, or any agreement or instrument to which it may
be subject or by which it or any of its properties may be bound or any decree,
order, judgment, statute, license, rule or regulation, in any of the foregoing
cases in a manner that could reasonably be expected to materially and adversely
affect the financial condition, properties or business of SRI, the Borrower and
their Subsidiaries on a consolidated basis.
SS.6.10. TAX STATUS. SRI, the Borrower and their Subsidiaries (a)
have made or filed all federal and state income and all other tax returns,
reports and declarations required by any jurisdiction to which any of them is
subject, (b) have paid all taxes and other governmental assessments and charges
shown or determined to be due on such returns, reports and declarations, except
those being contested in good faith and by appropriate proceedings and (c) have
set aside on their books provisions reasonably adequate for the payment of all
taxes for periods subsequent to the periods to which such returns, reports or
declarations apply. There are no unpaid taxes in any material amount claimed to
be due by the taxing authority of any jurisdiction, and the officers of the
Borrower know of no basis for any such claim.
SS.6.11. NO EVENT OF DEFAULT. No Default or Event of Default has
occurred and is continuing.
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SS.6.12. HOLDING COMPANY AND INVESTMENT COMPANY ACTS. Neither SRI,
the Borrower nor any of their Subsidiaries is a "holding company", or a
"subsidiary company" of a "holding company", or an affiliate" of a "holding
company", as such terms are defined in the Public Utility Holding Company Act of
1935; nor is it an "investment company", or an "affiliated company" or a
"principal underwriter" of an "investment company", as such terms are defined in
the Investment Company Act of 1940.
SS.6.13. ABSENCE OF FINANCING STATEMENTS, ETC. Except with respect to
Permitted Liens, there is no financing statement, security agreement, chattel
mortgage, real estate mortgage or other document filed or recorded with any
filing records, registry or other public office, that purports to cover, affect
or give notice of any present or possible future lien on, or security interest
in, any assets or property of SRI, the Borrower or any of their Subsidiaries or
any rights relating thereto.
SS.6.14. CERTAIN TRANSACTIONS. Except (a) as disclosed on SCHEDULE
6.14 hereto; (b) for consulting arrangements with Xxxx Capital, Inc. and (c) for
arm's length transactions pursuant to which SRI, the Borrower or any of their
Subsidiaries makes payments in the ordinary course of business upon terms no
less favorable than SRI, the Borrower or such Subsidiary could obtain from third
parties, none of the officers, directors, or employees of SRI, the Borrower or
any of their Subsidiaries is presently a party to any contract, agreement or
other arrangement with SRI, the Borrower or any of their Subsidiaries (other
than for services as employees, officers and directors), 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,
director or such employee or, to the knowledge of the Borrower, any corporation,
partnership, trust or other entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director, trustee or
partner.
SS.6.15. EMPLOYEE BENEFIT PLANS.
6.15.1. IN GENERAL. Each Employee Benefit Plan and each
Guaranteed Pension Plan has been maintained and operated in compliance in all
material respects with the provisions of ERISA and, to the extent applicable,
the Code, including but not limited to the provisions thereunder respecting
prohibited transactions and the bonding of fiduciaries and other persons
handling plan funds as required by ss.412 of ERISA. The Borrower has heretofore
delivered to the Agent the most recently completed annual report, Form 5500,
with all required attachments, and actuarial statement required to be submitted
under ss.103(d) of ERISA, with respect to each Guaranteed Pension Plan.
6.15.2. TERMINABILITY OF WELFARE PLANS. No Employee Benefit
Plan which is an employee welfare benefit plan within the meaning of ss.3(1) or
ss.3(2)(B) of ERISA, provides benefit coverage subsequent to termination of
employment except as required by Title I, Part 6 of ERISA or applicable state
insurance laws. The Borrower may terminate each such Plan at any time (or at any
time subsequent to the expiration of any applicable bargaining agreement) in the
discretion of the Borrower without liability to any Person other than for claims
arising prior to termination.
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6.15.3. GUARANTEED PENSION PLANS. Each contribution
required to be made to a Guaranteed Pension Plan, whether required to be made to
avoid the incurrence of an accumulated funding deficiency, the notice or lien
provisions of ss.302(f) of ERISA, or otherwise, has been timely made. No waiver
of an accumulated funding deficiency or extension of amortization periods has
been received with respect to any Guaranteed Pension Plan, and neither the
Borrower not any ERISA Affiliate is obligated to or has posted security in
connection with an amendment of a guaranteed Pension Plan pursuant to ss.307 of
ERISA or ss.401(a)(29) of the Code. Except as set forth on SCHEDULE 6.15.3
hereto, no liability to the PBGC (other than required insurance premiums, all of
which have been paid) has been incurred by the Borrower or any ERISA Affiliate
with respect to any Guaranteed Pension Plan and there has not been any ERISA
Reportable Event, or any other event or condition which presents a material risk
of termination of any Guaranteed Pension Plan by the PBGC. Based on the latest
valuation of each Guaranteed Pension Plan (which in each case occurred within
twelve months of the date of this representation), and on the actuarial methods
and assumptions employed for that valuation, the aggregate benefit liabilities
of all such Guaranteed Pension Plans within the meaning of ss.4001 of ERISA did
not exceed the aggregate value of the assets of all such Guaranteed Pension
Plans, disregarding for this purpose the benefit liabilities and assets of any
Guaranteed Pension Plan with assets in excess of benefit liabilities, by more
than $100,000.
6.15.4. MULTIEMPLOYER PLANS. Neither the Borrower nor any
ERISA Affiliate has incurred any material liability (including secondary
liability) to any Multiemployer Plan as a result of a complete or partial
withdrawal from such Multiemployer Plan under ss.4201 of ERISA or as a result of
a sale of assets described in ss.4204 of ERISA that has not been satisfied in
full. Neither the Borrower nor any ERISA Affiliate has been notified that any
Multiemployer Plan is in reorganization or insolvent under and within the
meaning of ss.4241 or ss.4245 of ERISA or is at risk of entering reorganization
or becoming insolvent, or that any Multiemployer Plan intends to terminate or
has been terminated under ss.4041A of ERISA.
SS.6.16. REGULATIONS U AND X. The proceeds of the Loans shall be used
to convert existing Indebtedness to the Banks under the Original Credit
Agreement to Loans hereunder and for working capital and general corporate
purposes No portion of any Loan is to be used for the purpose of purchasing or
carrying any "margin security" or "margin stock" as such terms are used in
Regulations U and X of the Board of Governors of the Federal Reserve System, 12
C.F.R. Parts 221 and 224.
SS.6.17. ENVIRONMENTAL COMPLIANCE. Except as set forth on SCHEDULE
6.17 hereto:
(a) none of SRI, the Borrower, any of their Subsidiaries or any
operator of the Real Estate or any operations thereon is in
violation of any judgment, decree, order, law, license,
rule or regulation pertaining to environmental matters,
including without limitation, those arising under the
Resource
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Conservation and Recovery Act ("RCRA"), the Comprehensive
Environmental Response, Compensation and Liability Act of
1980 as amended ("CERCLA"), the Superfund Amendments and
Reauthorization Act of 1986 ("XXXX"), the Federal Clean
Water Act, the Federal Clean Air Act, the Toxic Substances
Control Act, or any state or local statute, regulation,
ordinance, order or decree relating to health, safety or
the environment (hereinafter "Environmental Laws"), which
violation would reasonably be expected to have a material
adverse effect on the environment or the business, assets
or financial condition of SRI, the Borrower and their
Subsidiaries on a consolidated basis;
(b) neither SRI, the Borrower nor any of their Subsidiaries has
received written notice from any third party including,
without limitation: any federal, state or local
governmental authority, (i) that any one of them has been
identified by the United States Environmental Protection
Agency ("EPA") as a potentially responsible party under
CERCLA with respect to a site listed on the National
Priorities List, 40 C.F.R. Part 000 Xxxxxxxx X (1986); (ii)
that any hazardous waste, as defined by 42 X.X.X.xx.
9601(5), any hazardous substances as defined by 42
X.X.X.xx. 9601(14), any pollutant or contaminant as defined
by 42 U.S.C.ss.9601(33) and any toxic substances, oil or
hazardous materials or other chemicals or substances
regulated by any Environmental Laws ("Hazardous
Substances") which any one of them has generated,
transported or disposed of has been found at any site at
which a federal, state or local agency or other third party
has conducted or has ordered that SRI, the Borrower or any
of its Subsidiaries conduct a remedial investigation,
removal or other response action pursuant to any
Environmental Law; or (iii) that it is or shall be a named
party to any claim, action, cause of action, complaint, or
legal or administrative proceeding (in each case,
contingent or otherwise) arising out of any third party's
incurrence of costs, expenses, losses or damages of any
kind whatsoever in connection with the release of Hazardous
Substances except for such of the foregoing clauses (i)
through (iii) which would not reasonably be expected to
have a materially adverse effect on the business, assets or
financial condition of SRI, the Borrower and their
Subsidiaries on a consolidated basis;
(c) except as would not reasonably be expected to have a
materially adverse effect on the business, assets or
financial condition of SRI, the Borrower and their
Subsidiaries on a consolidated basis: (i) no portion of the
Real Estate has been used for the handling, processing,
storage or disposal of Hazardous Substances except in
accordance with applicable Environmental Laws; and no
underground tank or other underground storage receptacle
for Hazardous Substances is located on any portion of the
Real Estate; (ii) in the course of any activities conducted
by SRI, the Borrower, their Subsidiaries or operators of
its properties, no Hazardous Substances have been generated
or are being used on the Real Estate
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except in accordance with applicable Environmental Laws;
(iii) there have been no releases (i.e. any past or present
releasing, spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, disposing or
dumping) or threatened releases of Hazardous Substances on,
upon, into or from the properties of the Borrower or its
Subsidiaries, which releases would have a material adverse
effect on the value of any of the Real Estate or adjacent
properties or have a materially adverse effect on the
environment; (iv) to the best of the Borrower's knowledge,
there have been no releases on, upon, from or into any real
property in the vicinity of any of the Real Estate which,
through soil or groundwater contamination, has come to be
located on, and which would have a material adverse effect
on the value of, the Real Estate; and (v) in addition, to
the best of the Borrower's knowledge, any Hazardous
Substances that have been generated on any of the Real
Estate have been transported offsite only by carriers
having an identification number issued by the EPA, treated
or disposed of only by treatment or disposal facilities
maintaining valid permits as required under applicable
Environmental Laws, which transporters and facilities have
been and are operating in compliance with such permits and
applicable Environmental Laws; and
(d) Neither SRI, the Borrower nor any of their Subsidiaries,
any Mortgaged Property or any of the other Real Estate is
subject to any applicable Environmental Law requiring the
performance of Hazardous Substances site assessments, or
the removal or remediation of Hazardous Substances, or the
giving of notice to any governmental agency or the
recording or delivery to other Persons of an environmental
disclosure document or statement by virtue of the
transactions set forth herein and contemplated hereby, or
as a condition to the recording of any Mortgage or to the
effectiveness of any other transactions contemplated hereby
where the failure to comply with such Environmental Laws
would be expected to have a materially adverse effect on
the business, assets or financial condition of SRI, the
Borrower and their Subsidiaries on a consolidated basis.
SS.6.18. SUBSIDIARIES, ETC. The Receivables Subsidiary is the only
Subsidiary of the Borrower, and the Borrower owns one hundred percent (100%) of
the issued and outstanding capital stock of the Receivables Subsidiary. The
Borrower is the only direct Subsidiary of SRI, and SRI owns one hundred percent
(100%) of the issued and outstanding capital stock of the Borrower. SRI is the
only Subsidiary of SSI, and SSI owns one hundred percent (100%) of the issued
and outstanding capital stock of SRI. Except as set forth on SCHEDULE 6.18
hereto, neither SRI, the Borrower nor any Subsidiary of the Borrower or SRI is
engaged in any joint venture or partnership with any other Person.
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SS.6.19. SENIOR DEBT. The execution, delivery and performance of this
Credit Agreement and the other Loan Documents to which SRI, the Borrower or any
of their Subsidiaries is or is to become a party and, the transactions
contemplated hereby and thereby (a) does not violate any provision of the Senior
Notes, the Senior Subordinated Notes, the Senior Notes Indenture or the Senior
Subordinated Notes Indenture (b) the Indebtedness arising hereunder constitutes
permitted "Indebtedness" (as defined in the Senior Notes Indenture and Senior
Subordinated Notes Indenture (collectively, the "Indentures")) pursuant to the
terms of the Indentures, (c) the liens arising as a result of this transaction
constitute "Permitted Liens" (as defined in the Indentures) pursuant to the
terms of the Indentures and (d) the Obligations constitute "Senior Debt" (as
defined in the Senior Subordinated Notes Indenture) pursuant to the terms of the
Senior Subordinated Notes Indenture, to which the Senior Subordinated Notes are
subordinated and junior in rights of payment.
SS.6.20. FISCAL YEAR. Each of SRI and the Borrower has a fiscal year
which ends on the Saturday closest to the end of January of each year.
SS.6.21. INSURANCE. Each of SRI, the Borrower and each of their
Subsidiaries maintains with financially sound and reputable insurers insurance
with respect to its properties and businesses against such casualties and
contingencies as are in accordance with general practices of businesses engaged
in similar activities and similar geographic areas, with the details of such
coverage being more fully described on SCHEDULE 6.21 hereto.
SS.7. AFFIRMATIVE COVENANTS OF THE BORROWER. Each of SRI and the
Borrower covenants and agrees that, so long as any Loan or Note is outstanding
or any Bank has any obligation to make any Loans:
SS.7.1. PUNCTUAL PAYMENT. The Borrower will duly and punctually pay
or cause to be paid the principal and interest on the Loans, the commitment
fees, the Agent's fee and all other amounts provided for in this Credit
Agreement and the other Loan Documents to which the Borrower or any of its
Subsidiaries is a party, all in accordance with the terms of this Credit
Agreement and such other Loan Documents.
SS.7.2. MAINTENANCE OF OFFICE. The Borrower will maintain its chief
executive office in 00000 Xxxx Xxxxxx, Xxxxxxx, Xxxxx, or at such other place in
the United States of America as the Borrower shall designate upon written notice
to the Agent, where notices, presentations and demands to or upon the Borrower
in respect of the Loan Documents to which the Borrower is a party may be given
or made.
SS.7.3. RECORDS AND ACCOUNTS. SRI and the Borrower will (a) keep, and
cause each of their Subsidiaries to keep, true and accurate records and books of
account in which full, true and correct entries will be made in accordance with
Generally Accepted Accounting Principles and (b) maintain adequate accounts and
reserves for all taxes (including income taxes), depreciation, depletion,
obsolescence and amortization of its properties and the properties of its
Subsidiaries, contingencies, and other reserves.
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SS.7.4. FINANCIAL STATEMENTS, CERTIFICATES AND INFORMATION. The
Borrower will deliver to each of the Banks:
(a) as soon as practicable, but in any event not later than one
hundred ten (110) days after the end of each fiscal year of
the Borrower, the consolidated balance sheet of SSI and its
Subsidiaries and the consolidating balance sheet of SSI and
its Subsidiaries, each as at the end of such year, and the
related consolidated statement of income and consolidated
statement of cash flow and consolidating statement of
income, each setting forth in comparative form the figures
for the previous fiscal year and all such consolidated and
consolidating statements to be in reasonable detail,
prepared in accordance with Generally Accepted Accounting
Principles, and certified (as to consolidated statements)
without qualification by SSI's accountants or by other
independent certified public accountants satisfactory to
the Agent, together with a written statement from such
accountants to the effect that they have read a copy of
this Credit Agreement, and that, in making the examination
necessary to said certification, they have obtained no
knowledge of any Default or Event of Default, or, if such
accountants shall have obtained knowledge of any then
existing Default or Event of Default they shall disclose in
such statement any such Default or Event of Default;
PROVIDED that such accountants shall not be liable to the
Banks for failure to obtain knowledge of any Default or
Event of Default;
(b) as soon as practicable, but in any event not later than
fifty (50) days after the end of each of the fiscal
quarters of the Borrower, copies of the unaudited
consolidated balance sheet of SSI and its Subsidiaries and
the unaudited consolidating balance sheets of SSI and its
Subsidiaries, each as at the end of such quarter, and the
related consolidated and consolidating statements of income
and consolidated and consolidating statement of cash flow
for the portion of the fiscal year then elapsed, all in
reasonable detail and prepared in accordance with Generally
Accepted Accounting Principles, together with a
certification by the principal financial or accounting
officer of SRI and the Borrower that the information
contained in such financial statements fairly presents the
financial position of SRI and its Subsidiaries on the date
thereof and for the period then ended (subject to year-end
adjustments);
(c) as soon as practicable, but in any event within thirty-five
(35) days after the end of each month in each fiscal year
of the Borrower, preliminary and unaudited monthly
consolidated income statement and balance sheet of SSI and
its Subsidiaries for such month and unaudited monthly
consolidating income statement and balance sheet of SSI and
its Subsidiaries for such month, and the related
consolidated and consolidating financial statements of SSI
and its Subsidiaries for the
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portion of the Borrower's fiscal year then elapsed, setting
forth in comparative form the figures set forth in the
Seasonal Projections and projected capital budget portion
of the Fiscal Year Projections delivered pursuant to
ss.6.4.2 (or, if updated, pursuant toss.8.3(d) or (h)) for
the comparable period and those figures for the comparable
period in the preceding fiscal year (in the consolidated
statement only), each prepared in accordance with Generally
Accepted Accounting Principles, together with a
certification by the principal financial or accounting
officer of SSI that the information contained in such
financial statements fairly presents the financial
condition of SRI and its Subsidiaries on the date thereof
and for the period then ended (subject to any quarterly and
year-end adjustments);
(d) not later than January 1 and July 1 of each year, the
Seasonal Projections of SRI, the Borrower and their
Subsidiaries, and not later than January 15 of each year,
(i) the Fiscal Year Projections of SRI, the Borrower and
their Subsidiaries, updating those Seasonal Projections and
Fiscal Year Projections delivered to the Banks and referred
to in ss.6.4.2 and (ii) the cash flow budget of SSI and its
Subsidiaries for such year;
(e) simultaneously with the delivery of the financial
statements referred to in subsections (a) and (b) above, a
statement certified by the principal financial or
accounting officer of the Borrower in substantially the
form of EXHIBIT C hereto (the "Compliance Certificate") and
setting forth in reasonable detail computations evidencing
compliance with the covenants contained inss.10 and (if
applicable) reconciliations to reflect changes in Generally
Accepted Accounting Principles since the Balance Sheet
Date, and within ten (10) Business Days after the
Borrower's fiscal month ending in December of each fiscal
year, a Compliance Certificate setting forth in reasonable
detail computations evidencing compliance with the covenant
contained inss.10.6 hereof to the extent that the
Compliance Certificate states that (i) the financial
statements of SSI and its Subsidiaries fairly present in
all material respects the financial condition of SRI and
its Subsidiaries for the period in respect of which such
certificate shall be given and (ii) the consolidated
revenue of SRI and its Subsidiaries constitutes
substantially all of the consolidated revenues of SSI and
its Subsidiaries and that the combined assets of SSI and
its Subsidiaries constitute substantially all of the
consolidated assets of SSI and its Subsidiaries, then for
the purpose of demonstrating compliance ofss.10 hereof, SRI
and the Borrower may use the consolidated financial
statements of SSI in lieu of the actual consolidated
financial statements of SRI and the Borrower;
(f) as soon as practicable, but in any event within thirty-five
(35) days after the end of each month in each fiscal year
of the Borrower, (i) a store by
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store analysis setting forth the financial information for
each store (including such store's monthly sales) for such
month, a comparison of such information to the Borrower's
current budget for such store and a comparison of such
information to the similar financial information for such
store in the prior year, as well as an aggregate financial
statement for all stores as compared to the similar
financial information for all stores contained in the
Borrower's budget and a comparison of such information to
the same information for all stores in the prior year and
(ii) a calculation of the Borrower's EBITDA for the prior
month;
(g) contemporaneously with the filing or mailing thereof,
copies of all material of a financial nature filed with the
Securities and Exchange Commission and sent to the
stockholders of SSI generally, including without
limitation, copies of the 10-K and 10-Q of SSI;
(h) contemporaneously with the receipt by the Borrower thereof,
copies of all letters and other reports of substance
submitted to SSI, the Borrower or SRI by independent
certified public accountants in connection with any annual
or interim audit of the books of SSI, the Borrower or SRI
made by such accountants, including, without limitation,
all reconciliations made from SSI's management prepared
financial statements to its 10-K and 10-Q for the same
period;
(i) from time to time upon request of the Agent, Annual
Projections of SRI, the Borrower and their Subsidiaries
updating those Annual Projections delivered to the Banks
and referred to in ss.6.4.2 or, if applicable, updating any
later such Annual Projections delivered in response to a
request pursuant to this ss.7.4(i);
(j) as soon as practicable, but in any event within three (3)
days after the end of each of the Borrower's fiscal weeks
for the Borrower's fiscal month of December of each year, a
store by store analysis setting forth the sales for each
store for such fiscal week and a comparison of such
information to the similar information for such store in
the prior year, as well as an aggregate financial statement
for all stores as compared to the similar information for
all stores contained in the Borrower's budget and a
comparison of such information to the same information for
all stores in the prior year;
(k) as soon as practicable, but in any event within thirty-five
(35) days after the end of each fiscal month of the
Borrower, the Borrower's "cash flow report", which report
shall set forth the Borrower's cash flow for such month, a
comparison of such information to the Borrower's current
monthly budget for such month, together with a comparison
of such information to the Borrower's actual budget,
together with any and all updates to the Borrower's budget;
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(l) contemporaneously with the mailing or other dissemination
thereof, copies of all press releases by SSI or any of its
Subsidiaries; and
(m) from time to time such other financial data and information
as the Agent or any Bank may reasonably request.
SS.7.5. NOTICES.
7.5.1. DEFAULTS. The Borrower will promptly notify the
Agent and each of the Banks in writing of the occurrence of any Default or Event
of Default. If any Person shall give any notice or take any other action in
respect of a claimed default (whether or not constituting an Event of Default)
under this Credit Agreement or any other note, evidence of indebtedness,
indenture or other obligation to which or with respect to which the Borrower or
any of its Subsidiaries is a party or obligor, whether as principal, guarantor,
surety or otherwise, the Borrower shall forthwith give written notice thereof to
the Agent and each of the Banks, describing the notice or action and the nature
of the claimed default.
7.5.2. ENVIRONMENTAL EVENTS. The Borrower will promptly
give notice to the Agent and each of the Banks (a) of any violation of any
Environmental Law that SRI, the Borrower or any of their Subsidiaries reports in
writing or is reportable by such Person in writing (or for which any written
report supplemental to any oral report is made) to any federal, state or local
environmental agency and (b) upon becoming aware thereof, of any inquiry,
proceeding, investigation, or other action pursuant or related to Environmental
Laws, including a written notice from any agency of potential environmental
liability, or any federal, state or local environmental agency or board, that
could reasonably be expected to materially adversely affect the assets,
liabilities, financial conditions or operations of SRI, the Borrower and their
Subsidiaries on a consolidated basis.
7.5.4. NOTICE OF LITIGATION AND JUDGMENTS. SRI and the
Borrower will, and will cause each of their Subsidiaries to, give notice to the
Agent and each of the Banks in writing within fifteen (15) days of becoming
aware of any litigation or proceedings threatened in writing or any pending
litigation and proceedings affecting SRI, the Borrower or any of their
Subsidiaries or to which SRI, the Borrower or any of their Subsidiaries is or
becomes a party involving an uninsured claim against SRI, the Borrower or any of
their Subsidiaries that could reasonably be expected to have a materially
adverse effect on SRI, the Borrower and their Subsidiaries on a consolidated
basis and stating the nature and status of such litigation or proceedings. SRI
and the Borrower will, and will cause each of their Subsidiaries to, give notice
to the Agent and each of the Banks, in writing, in form and detail satisfactory
to the Agent, within ten (10) days of any judgment not covered by insurance,
final or otherwise, against SRI, the Borrower or any of their Subsidiaries in an
amount in excess of $200,000.
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SS.7.6. CORPORATE EXISTENCE; MAINTENANCE OF PROPERTIES. Each of SRI
and the Borrower will do or cause to be done all things necessary to preserve
and keep in full force and effect its corporate existence, rights and franchises
and those of their Subsidiaries. Each (a) will cause all of its properties and
those of their Subsidiaries used or useful in the conduct of its business or the
business of their Subsidiaries to be maintained and kept in good condition,
repair and working order and supplied with all necessary equipment, (b) will
cause to be made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in the judgment of the Borrower may be necessary so
that the business carried on in connection therewith may be properly and
advantageously conducted at all times, and (c) will, and will cause each of
their Subsidiaries to, continue to engage primarily in the businesses now
conducted by them and in related businesses; PROVIDED that nothing in this
ss.7.6 shall prevent SRI or the Borrower from discontinuing the operation and
maintenance of any of its properties or any of those of its Subsidiaries (unless
such Subsidiary is the Borrower) if such discontinuance is, in the judgment of
SRI or the Borrower, as the case may be, desirable in the conduct of its or
their business and that do not in the aggregate materially adversely affect the
business of SRI, the Borrower and their Subsidiaries on a consolidated basis.
SS.7.7. INSURANCE. SRI and the Borrower will, and will cause each of
their Subsidiaries to, maintain with financially sound and reputable insurers
insurance with respect to its properties and business against such casualties
and contingencies as described on SCHEDULE 6.21 hereto, and as shall be in
accordance with the general practices of businesses engaged in similar
activities in similar geographic areas and in amounts, containing such terms, in
such forms and for such periods as may be reasonable and prudent.
SS.7.8. TAXES. SRI and the Borrower will, and will cause each of
their Subsidiaries to, duly pay and discharge, or cause to be paid and
discharged, before the same shall become overdue, all taxes, assessments and
other governmental charges imposed upon it and its real properties, sales and
activities, or any part thereof, or upon the income or profits therefrom, as
well as all claims for labor, materials, or supplies that if unpaid would
reasonably be expected by law to become a lien or charge upon any of its
property; PROVIDED that any such tax, assessment, charge, levy or claim need not
be paid if the validity or amount thereof shall currently be contested in good
faith by appropriate proceedings and if SRI, the Borrower or such Subsidiary
shall have set aside on its books adequate reserves with respect thereto; and
PROVIDED FURTHER that SRI, the Borrower and each of their Subsidiaries will pay
all such taxes, assessments, charges, levies or claims forthwith upon the
commencement of proceedings to foreclose any lien that may have attached as
security therefor.
SS.7.9. INSPECTION OF PROPERTIES AND BOOKS, ETC.
7.9.1. GENERAL. SRI and the Borrower shall permit the
Banks, through the Agent or any of the Banks' other designated representatives,
to visit, during normal business hours, and inspect any of the properties of
SRI, the Borrower or any of their
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Subsidiaries, to examine the books of account of SRI, the Borrower and their
Subsidiaries (and to make copies thereof and extracts therefrom), and to discuss
the affairs, finances and accounts of SRI, the Borrower and their Subsidiaries
with, and to be advised as to the same by, their and their officers, all at such
reasonable times and intervals as the Agent or any Bank may reasonably request.
Each of SRI, the Borrower and any of their Subsidiaries shall permit the Agent,
the Banks or any of their or their designated representatives to conduct
commercial finance examinations, such examinations to be at the Borrower's
expense, PROVIDED, HOWEVER, if no Default or Event of Default exists or is
continuing, the Borrower shall only be required to pay for one such examination
per calendar year.
7.9.2. APPRAISALS. If an Event of Default shall have
occurred and be continuing, or if any Bank is required by any law, rule,
regulation or directive to obtain an appraisal, upon the request of the Agent,
the Borrower will obtain and deliver to the Agent appraisal reports in form and
substance and from appraisers satisfactory to the Agent, stating the then
current business value of each of the Borrower and its Subsidiaries. All such
appraisals shall be conducted and made at the expense of the Borrower.
7.9.3. COMMUNICATIONS WITH ACCOUNTANTS. Each of SRI and the
Borrower authorizes the Agent and, if accompanied by the Agent, the Banks to
communicate directly with SRI's and the Borrower's independent certified public
accountants and authorizes such accountants to disclose to the Agent and the
Banks any and all financial statements and other supporting financial documents
and schedules including copies of any management letter with respect to the
business, financial condition and other affairs of SRI, the Borrower or any of
their Subsidiaries. At the request of the Agent, SRI or the Borrower shall
deliver a letter addressed to such accountants instructing them to comply with
the provisions of this ss.7.9.3.
SS.7.10. COMPLIANCE WITH LAWS, CONTRACTS, LICENSES, AND PERMITS. Each
of SRI and the Borrower will, and will cause each of their Subsidiaries to,
comply with (a) the applicable laws and regulations wherever its business is
conducted, including all Environmental Laws except for such noncompliance which
would not reasonably be expected to have a materially adverse effect on the
business, assets or financial condition of SRI, the Borrower and their
Subsidiaries on a consolidated basis, (b) the provisions of its charter
documents and by-laws, (c) all agreements and instruments by which it or any of
its properties may be bound and (d) all applicable decrees, orders, and
judgments. If any authorization, consent, approval, permit or license from any
officer, agency or instrumentality of any government shall become necessary or
required in order that SRI, the Borrower or any of their Subsidiaries may
fulfill any of its obligations hereunder or any of the other Loan Documents to
which SRI, the Borrower or such Subsidiary is a party, SRI and the Borrower
will, or (as the case may be) will cause such Subsidiary to, immediately take or
cause to be taken all reasonable steps within the power of SRI or the Borrower
or such Subsidiary to obtain such authorization, consent, approval, permit or
license and furnish the Agent and the Banks with evidence thereof.
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SS.7.11. EMPLOYEE BENEFIT PLANS. Upon the Agent's request, the
Borrower will (i) promptly furnish to the Agent a copy of the most recent
actuarial statement required to be submitted under ss.103(d) of ERISA and Annual
Report, Form 5500, with all required attachments, in respect of each Guaranteed
Pension Plan and (ii) promptly upon receipt or dispatch, furnish to the Agent
any notice, report or demand sent or received in respect of a Guaranteed Pension
Plan under ss.ss.302, 4041, 4042, 4043, 4063, 4065, 4066 and 4068 of ERISA, or
in respect of a Multiemployer Plan, under ss.ss.4041A, 4202, 4219, 4242, or 4245
of ERISA.
SS.7.12. USE OF PROCEEDS. The Borrower will use the proceeds of the
Loans to convert existing Indebtedness to the Banks under the Original Credit
Agreement to Loans hereunder and for working capital and general corporate
purposes.
SS.7.13. FURTHER ASSURANCES. Each of SRI and the Borrower will, and
will cause each of their Subsidiaries to, cooperate with the Banks and the Agent
and execute such further instruments and documents as the Banks or the Agent
shall reasonably request to carry out to their satisfaction the transactions
contemplated by this Credit Agreement and the other Loan Documents.
SS.8. CERTAIN NEGATIVE COVENANTS OF THE BORROWER. Each of SRI and the
Borrower covenants and agrees that, so long as any Loan or Note is outstanding
or any Bank has any obligation to make any Loans:
SS.8.1. RESTRICTIONS ON INDEBTEDNESS. Each of SRI and the Borrower
will not, and will not permit any of their Subsidiaries to, create, incur,
assume, guarantee or be or remain liable, contingently or otherwise, with
respect to any Indebtedness other than:
(a) Indebtedness to the Banks and the Agent arising under any
of the Loan Documents;
(b) current liabilities of SRI, the Borrower or such Subsidiary
incurred in the ordinary course of business not incurred
through (i) the borrowing of money, or (ii) the obtaining
of credit except for credit on an open account basis
extended in connection with normal purchases of goods and
services;
(c) Indebtedness in respect of taxes, assessments or
governmental charges to the extent that payment therefor
shall not at the time be required to be made in accordance
with the provisions of ss.7.8;
(d) Indebtedness in respect of judgments or awards that have
been in force for less than the applicable period for
taking an appeal so long as execution is not levied
thereunder or in respect of which SRI, the Borrower or such
Subsidiary shall at the time in good faith be
-47-
prosecuting an appeal or proceedings for review and in
respect of which a stay of execution shall have been
obtained pending such appeal or review;
(e) endorsements for collection, deposit or negotiation and
warranties of products or services, in each case incurred
in the ordinary course of business;
(f) Indebtedness of SRI and the Borrower evidenced by the
Senior Notes and Indebtedness of SRI and the Borrower
consisting of Subordinated Debt;
(g) obligations of SRI or the Borrower under Capitalized Leases
not exceeding $4,000,000 in aggregate amount at any time
outstanding;
(h) Indebtedness incurred in connection with the acquisition
after the date hereof of any real or personal property by
SRI or the Borrower, PROVIDED that the aggregate principal
amount of such Indebtedness of SRI and the Borrower shall
not exceed the aggregate amount of $3,000,000 outstanding
at any one time;
(i) Indebtedness existing on the date hereof and listed and
described on SCHEDULE 8.1 hereto;
(j) Indebtedness of a Subsidiary of the Borrower to the
Borrower, which Indebtedness exists on the Closing Date;
(k) Indebtedness arising under the Receivables Purchase
Agreement and Pooling and Servicing Agreement;
(l) in addition to the Indebtedness incurred pursuant to clause
(h) above, Indebtedness incurred or assumed by SRI or the
Borrower in connection with acquisitions permitted by
ss.8.5.1, PROVIDED that the aggregate principal amount of
such Indebtedness incurred or assumed by SRI and the
Borrower shall not exceed the aggregate amount of
$8,000,000 during the term of this Credit Agreement and
PROVIDED, FURTHER that such Indebtedness is expressly
subordinated in right of payment to the Obligations on
terms acceptable to the Agent, including without limitation
no cash payments of principal until after the Maturity
Date;
(m) Indebtedness in respect of dividends declared by SRI, the
Borrower or the Receivables Subsidiary as permitted under
ss.8.4 but not yet paid;
(n) Indebtedness in respect of indemnification obligations of
SRI and the Borrower to their respective officers and
directors pursuant to their charter documents;
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(o) Indebtedness to the Revolver Banks and the Revolver Agent
arising under the Revolving Agreement;
(p) Indebtedness of the Receivables Subsidiary evidenced by the
Receivables Subsidiary Notes; and
(q) Indebtedness of SRI and the Borrower to SSI pursuant to the
Junior Subordinated Notes, PROVIDED, the aggregate
principal amount of all such Indebtedness shall not exceed
$65,000,000 outstanding at any one time.
SS.8.2. RESTRICTIONS ON LIENS. Each of SRI and the Borrower will not,
and will not permit any of their Subsidiaries to, (a) create or incur or suffer
to be created or incurred or to exist any lien, encumbrance, mortgage, pledge,
charge, restriction or other security interest of any kind upon any of its
property or assets of any character whether now owned or hereafter acquired, or
upon the income or profits therefrom; (b) transfer any of such property or
assets or the income or profits therefrom for the purpose of subjecting the same
to the payment of Indebtedness or performance of any other obligation in
priority to payment of its general creditors; (c) acquire, or agree or have an
option to acquire, any property or assets upon conditional sale or other title
retention or purchase money security agreement, device or arrangement; (d)
suffer to exist for a period of more than thirty (30) days after the same shall
have been incurred any Indebtedness or claim or demand against it that if unpaid
would reasonably be expected by law or upon bankruptcy or insolvency, or
otherwise, to be given any priority whatsoever over its general creditors; or
(e) sell, assign, pledge or otherwise transfer any accounts, contract rights,
general intangibles, chattel paper or instruments, with or without recourse;
PROVIDED that each of SRI, the Borrower and any Subsidiary of SRI or of the
Borrower may create or incur or suffer to be created or incurred or to exist:
(i) liens to secure taxes, assessments and other government
charges in respect of obligations not overdue;
(ii) deposits or pledges made in connection with, or to
secure payment of, workmen's compensation, unemployment insurance,
old age pensions or other social security obligations;
(iii) liens on properties other than the Mortgaged Property
in respect of judgments or awards, the Indebtedness with respect to
which is permitted by ss.8.1(d);
(iv) liens of carriers, warehousemen, mechanics and
materialmen, and other like liens on properties other than the
Mortgaged Property, in existence less than 120 days from the date of
creation thereof in respect of obligations not overdue;
(v) liens in respect of Capitalized Leases;
-49-
(vi) encumbrances on Real Estate consisting of easements,
rights of way, zoning restrictions, restrictions on the use of real
property and defects and irregularities in the title thereto,
landlord's or lessor's liens under leases to which the Borrower or a
Subsidiary of the Borrower is a party, and other minor liens or
encumbrances none of which in the reasonable opinion of the Borrower
interferes materially with the use of the property affected in the
ordinary conduct of the business of the Borrower and its
Subsidiaries, which defects do not individually or in the aggregate
have a materially adverse effect on the business of the Borrower
individually or of the Borrower and its Subsidiaries on a
consolidated basis;
(vii) liens existing on the date hereof and listed on
SCHEDULE 8.2 hereto;
(viii) purchase money security interests in or purchase
money mortgages on real or personal property other than Mortgaged
Properties acquired after the date hereof to secure purchase money
Indebtedness of the type and amount permitted by ss.8.1(h), incurred
in connection with the acquisition of such property, which security
interests or mortgages cover only the real or personal property so
acquired;
(ix) liens in favor of the Revolver Agent for the benefit
of the Revolver Banks and the Revolver Agent under the Revolving
Agreement;
(x) liens on the Borrower's or the Receivable Subsidiary's
credit card receivables in favor of the buyers pursuant to the
Receivables Purchase Agreement and the Pooling and Servicing
Agreement, to the extent that the same do not constitute a true sale;
(xi) liens on assets and property of SRI, the Borrower and
their Subsidiaries when such assets and property, individually and in
the aggregate, have a value of less than $50,000; and
(xii) liens in favor of the holders of the Receivables
Subsidiary Notes on the Transferor Retained Certificates and the
Transferor Interest (as such terms are defined in the Pooling and
Servicing Agreement).
SS.8.3. RESTRICTIONS ON INVESTMENTS. Each of SRI and the Borrower
will not, and will not permit any of their Subsidiaries to, make or permit to
exist or to remain outstanding any Investment except Investments in:
(a) marketable direct or guaranteed obligations of the United
States of America that mature within six (6) months from
the date of purchase by the Borrower;
-50-
(b) demand deposits, certificates of deposit, bankers
acceptances and time deposits with maturities of six (6)
months or less of United States banks having capital and
surplus in excess of $500,000,000;
(c) securities commonly known as "commercial paper" issued by a
corporation organized and existing under the laws of the
United States of America or any state thereof that at the
time of purchase have been rated and the ratings for which
are not less than "P 1" if rated by Xxxxx'x Investors
Services, Inc., and not less than "A 1" if rated by
Standard and Poor's;
(d) Investments consisting of acquisitions permitted by
ss.8.5.1 hereof;
(e) Investments with respect to Indebtedness permitted by
ss.8.1(j) so long as such entities remain Subsidiaries of
either SRI or the Borrower, as the case may be;
(g) Investments in the Receivables Subsidiary received in
consideration of sales of accounts receivable permitted
under ss.8.5.2; and
(h) Investments consisting of loans to officers, directors and
employees of SRI and the Borrower or Investments consisting
of the repurchase by SRI or the Borrower of real property
consisting of the personal residences of certain officers,
directors or employees of SRI or the Borrower in connection
with relocation of such officers, directors or employees,
which loans and repurchases shall not exceed at any one
time, in the aggregate, $3,000,000 LESS the sum of (i)
Investments consisting of loans to officers, directors and
employees of SRI and the Borrower then outstanding on the
Closing Date PLUS (ii) the amount of any Distributions made
for the repurchase of employee stock pursuant to ss.8.4 net
of the amount of any sales of stock to employees.
SS.8.4. DISTRIBUTIONS; REPAYMENT. SRI will not make any Distributions
or make any repayments in respect of intercompany indebtedness or any other
payments to any stockholder of SRI, PROVIDED, HOWEVER, if no Default or Event of
Default has occurred or is continuing or would exist after giving effect
thereto, SRI shall be permitted to (a) make a payment to SSI to reimburse it for
(i) its out-of-pocket administrative expenses (including without limitation,
legal, accounting, franchise tax and general operating expenses) in an amount
not to exceed, in the aggregate, $500,000 in any fiscal year, and (ii) the
amount of income tax payments to be made by SSI pursuant to the terms of the
Federal Income Tax Allocation Agreement dated as of August 2, 1993 by and among
SSI, SRI, the Borrower and the Receivables Subsidiary, in the form delivered to
the Agent prior to the Closing Date in an aggregate amount with respect to each
year not to exceed SSI's actual income tax paid with respect to such year, and
(b) make Distributions to SSI in an amount which shall not exceed at any time,
in the aggregate, $2,500,000 LESS the sum of (i) Distributions previously made
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to SSI for the repurchase of employee stock net of the amount of any sales of
stock to employees PLUS (ii) the amount of Investments made consisting of
employee loans or repurchases permitted pursuant to ss.8.3(h), PROVIDED such
Distribution is used by SSI for the repurchase of employee stock. The Borrower
will not, and will not permit its Subsidiaries to, directly or indirectly make
any repayments in respect of intercompany indebtedness or any other payments to
any Affiliate other than SRI or the Borrower. In addition, the Borrower will not
permit its Subsidiaries to, directly or indirectly, make any Distributions prior
to the repayment by such Subsidiary of all intercompany indebtedness of such
Subsidiary PROVIDED, HOWEVER, so long as no Default or Event of Default has
occurred or is continuing or would exist as a result thereof, the Receivables
Subsidiary shall be permitted to make Distributions to the Borrower prior to the
repayment of all of its intercompany indebtedness in an amount not to exceed the
amount of Defaulted Receivables (as defined in the Receivables Purchase
Agreement) repurchased by the Borrower from the Receivables Subsidiary pursuant
to the terms and conditions set forth in the Receivables Purchase Agreement and
Pooling and Servicing Agreement and provided that such Distributions are made by
the end of the calendar month in which the Borrower purchased such Defaulted
Receivables.
SS.8.5. MERGER, CONSOLIDATION AND DISPOSITION OF ASSETS.
8.5.1. MERGERS AND ACQUISITIONS. Neither SRI nor the
Borrower will become a party to any merger or consolidation, or agree to or
effect any asset acquisition or stock acquisition (other than the acquisition of
assets in the ordinary course of business consistent with past practice
(including, without limitation, the purchase of deminimis amounts of capital
stock by SRI or any of its Subsidiaries of another Person in the same or a
similar line of business) or the merger of SRI and the Borrower) except (a) the
merger of SRI with and into the Borrower, with the Borrower being the surviving
entity and changing its name to "Specialty Retailers, Inc.", PROVIDED that (i)
no Default or Event of Default has occurred and is continuing or would exist
after giving effect thereto; (ii) the Borrower has provided the Agent with prior
written notice of such merger; (iii) the Borrower has provided to the Agent
copies of all documents, instrument and agreements pertaining to the merger, and
such documents, instruments and agreements are in form and substance
satisfactory to the Agent; (iv) the Borrower has delivered to the Agent evidence
that the merger would not either (1) violate the terms of any other agreement to
which either the Borrower or SRI is a party or (2) if any violation would occur,
such violation of any such agreement or agreements would have a material adverse
effect on the SRI, the Borrower or any of their Subsidiaries, and (v) the Loan
Documents have been amended to reflect the change in the Borrower's name
thereunder; and (b) the Borrower may effect acquisitions of entities which are
in the same or a similar line of business as the Borrower, PROVIDED, that (i) no
Default or Event of Default has occurred or is continuing or would exist after
giving effect thereto; (ii) the Borrower has provided the Agent with prior
written notice of each such acquisition; (iii) the aggregate total consideration
for all such acquisitions (which shall include, without limitation, the cash
purchase price of such acquisition and any Indebtedness incurred or assumed by
the Borrower in connection therewith) does not exceed, in the aggregate,
$10,000,000 during the term of this Credit Agreement; (iv)
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the Borrower has demonstrated to the Agent based on a PRO FORMA Compliance
Certificate covenant compliance with ss.10 on a PRO FORMA basis immediately
prior to and after giving effect to each such acquisition on the assumption that
each such acquisition occurred at the beginning of the covenant calculations
period; (v) any payments on acquisition related debt instruments shall be
included in the calculation of Debt Service; and (vi) any acquisition related
debt instruments would not violate the restrictions on Indebtedness set forth in
ss.8.1.
In the event any new Subsidiary is formed as a result of or in
connection with any acquisition, and such Subsidiary is not immediately merged
with and into the Borrower with the Borrower being the surviving entity, the
Loan Documents shall be amended and/or supplemented as necessary to make the
terms and conditions of the Loan Documents applicable to such Subsidiary, and
such Subsidiary shall be required to execute and deliver to the Agent a guaranty
satisfactory to the Agent guaranteeing the Obligations of the Borrower to the
Agent and the Banks.
8.5.2. DISPOSITION OF ASSETS. Each of SRI and the Borrower
will not, and will not permit any of its Subsidiaries to, become a party to or
agree to or effect any disposition of assets, other than (a) the disposition of
assets (including obsolete assets) in the ordinary course of business,
consistent with past practices, (b) the sale of credit card receivables to the
Receivables Subsidiary pursuant to the Receivables Purchase Agreement and the
pooling and sale of such receivables in the Receivables Subsidiary pursuant to
the Pooling and Servicing Agreement, in each case for consideration having a
value at least equal to ninety-five percent (95%) of the book value thereof
determined in accordance with Generally Accepted Accounting Principles, (c) the
disposition of any assets pursuant to a trade-in of such asset for a similar
asset, and (d) the disposition by sale to an independent and unrelated third
party for fair value of assets, not to exceed $1,000,000 in the aggregate in any
fiscal year; PROVIDED, that only for the fiscal year ending in January 1997 such
$1,000,000 limit shall be increased to $2,000,000.
SS.8.6. SALE AND LEASEBACK. The Borrower will not, enter into any
arrangement, directly or indirectly, whereby the Borrower shall sell or transfer
the Mortgaged Property (as defined in the Revolving Agreement) in order then or
thereafter to lease such property or lease other property that the Borrower
intends to use for substantially the same purpose as the property being sold or
transferred.
SS.8.7. COMPLIANCE WITH ENVIRONMENTAL LAWS. Each of SRI and the
Borrower will not, and will not permit any of their Subsidiaries to, (a) use any
of the Real Estate or any portion thereof for the handling, processing, storage
or disposal of Hazardous Substances, (b) cause or permit to be located on any of
the Real Estate any underground tank or other underground storage receptacle for
Hazardous Substances, (c) generate any Hazardous Substances on any of the Real
Estate, (d) conduct any activity at any Real Estate or use any Real Estate in
any manner so as to cause a release (i.e. releasing, spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, leaching,
disposing or dumping) or threatened release of Hazardous Substances on, upon or
into the Real Estate or (e) otherwise conduct any
-53-
activity at any Real Estate or use any Real Estate in any manner where any of
the foregoing clauses (a) through (e) would reasonably be expected to have a
materially adverse effect on the business, financial condition or assets of SRI,
the Borrower and their Subsidiaries on a consolidated basis.
SS.8.8. SENIOR NOTE AND SENIOR SUBORDINATED NOTE PAYMENTS. Neither
the Borrower nor SRI will, nor will either of them permit any of their
Subsidiaries to, make any payment of, or in respect of, the Junior Subordinated
Notes, the Senior Subordinated Notes, or any other Subordinated Debt including,
without limitation, any direct or indirect purchase, repurchase, redemption or
other acquisition or retirement for value of all or any part of the Senior
Subordinated Notes, the Junior Subordinated Notes or any other Subordinated
Debt, or to optionally prepay, repurchase, redeem, defease or otherwise
optionally repay or retire for value all or any part of the Senior Notes except
that:
(a) SRI may, so long as no Default or Event of Default has
occurred or is continuing or would exist after giving
effect thereto, make regularly scheduled interest payments
when permitted by the terms of the Senior Subordinated
Notes and the SRI Subordinated Notes.
(b) SRI may, so long as no Default or Event of Default has
occurred or is continuing or would exist after giving
effect thereto and SRI and the Borrower can demonstrate to
the satisfaction of the Agent PRO FORMa compliance with the
covenants set forth in ss.10 hereof both before and after
giving effect to any payment, make regularly scheduled
required principal payments when permitted by the terms of
the Senior Subordinated Notes and the SRI Subordinated
Notes.
SS.8.9. CHANGES IN TERMS OF SENIOR NOTES AND SENIOR SUBORDINATED
NOTES. Without the written consent of the Majority Banks, neither the Borrower
nor SRI will make any changes of any promissory note, indenture, agreement or
other instrument evidencing or governing the Senior Notes, the Senior
Subordinated Notes, any Subordinated Debt, the Senior Note Indenture or the
Senior Subordinated Note Indenture; PROVIDED, HOWEVER, SRI shall be permitted to
amend the Senior Notes Indenture, the Senior Subordinated Notes Indenture and
the SRI Subordinated Notes Indenture pursuant to the SRI Indenture Consent or if
such an amendment is of an immaterial or ministerial nature that would not have
any adverse effect on the Agent's or the Banks' rights under the Loan Documents
or SRI's or the Borrower's rights under the Loan Documents.
SS.8.10. EMPLOYEE BENEFIT PLANS. Neither SRI, the Borrower nor any
ERISA Affiliate will
(a) engage in any "prohibited transaction" within the meaning
of ss.406 of ERISA or ss.4975 of the Code which could
result in a material liability for the Borrower or any of
its Subsidiaries; or
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(b) permit any Guaranteed Pension Plan to incur an "accumulated
funding deficiency", as such term is defined in ss.302 of
ERISA, whether or not such deficiency is or may be waived;
or
(c) fail to contribute to any Guaranteed Pension Plan to an
extent which, or terminate any Guaranteed Pension Plan in a
manner which, could result in the imposition of a lien or
encumbrance on the assets of the Borrower or any of its
Subsidiaries pursuant to ss.302(f) or ss.4068 of ERISA; or
(d) amend any Guaranteed Pension Plan in circumstances
requiring the posting of security pursuant to ss.307 of
ERISA or ss.401(a)(29) of the Code; or
(e) permit or take any action which would result in the
aggregate benefit liabilities (with the meaning of ss.4001
of ERISA) of all Guaranteed Pension Plans exceeding the
value of the aggregate assets of such Plans, disregarding
for this purpose the benefit liabilities and assets of any
such Plan with assets in excess of benefit liabilities by
more than $100,000.
SS.8.11. TRANSACTIONS WITH AFFILIATES. Except for arm's-lengths
transactions pursuant to which SRI, the Borrower or any of their Subsidiaries
makes payments in the ordinary course of business upon terms no less favorable
than SRI, the Borrower or such Subsidiary could obtain from third parties, no
officer, director or employee of SSI, the Borrower or any of their Subsidiaries
will become party to any transaction with SRI, the Borrower or any of their
Subsidiaries (other than for services as employees, officers and directors),
including any 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 other wise requiring payments to or from any officer,
director or such employee or any corporation, partnership, trust or other entity
in which any officer, director, or any such person has a substantial interest or
is an officer, director, trustee or partner; PROVIDED, HOWEVER, SRI shall be
permitted to pay to Xxxx Venture Capital, a California limited partnership
and/or its Affiliates, fees for services not to exceed, in the aggregate
$1,000,000 per annum, the Receivables Subsidiary shall be permitted to make
payments to SRI for collecting and servicing receivables in the amounts provided
in the Pooling and Servicing Agreement as in effect on the date hereof and the
Borrower shall be permitted, pursuant to the Receivables Purchase Agreement as
in effect on the date hereof, to repurchase the Defaulted Receivables (as such
term is defined in the Receivables Purchase Agreement) in the amounts and on the
terms in such Receivables Purchase Agreement as in effect on the date hereof.
8.12. FISCAL YEAR. Neither SRI nor the Borrower will change the date
of the end of their respective fiscal years from that set forth in ss.7.21
hereof.
8.13. NEGATIVE PLEDGES. Neither SRI, the Borrower nor any of their
Subsidiaries will enter into any agreement (excluding this Credit Agreement, the
Loan
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Documents, the Senior Notes Indenture, the SRI Subordinated Note Indenture and
the Senior Subordinated Notes Indenture) prohibiting the creation or assumption
of any lien upon its properties, revenues or assets or those of any of its
Subsidiaries, whether now owned or hereafter acquired other than agreements with
Persons prohibiting any such lien on assets in which such Person has a prior
security interest which is permitted by ss.8.2.
8.14. UPSTREAM LIMITATIONS. The Borrower will not, nor will the
Borrower permit any of its Subsidiaries to enter into any agreement, contract or
arrangement (other than the Credit Agreement and the other Loan Documents) and,
as to the Receivables Subsidiary, the Receivables Purchase Agreement and such
Receivables Subsidiary's charter and organizational documents, all as in effect
on the Closing Date) that restricts the ability of any Subsidiary to pay or make
dividends or distributions in cash or kind, to make loans, advances or other
payments of whatsoever nature or to make transfers or distributions of all or
any part of its assets to the Borrower or to any Subsidiary of such Subsidiary.
SS.9. FINANCIAL COVENANT OF THE BORROWER. The Borrower covenants and
agrees that, so long as any Loan or Note is outstanding or any Bank has any
obligation to make any Loans:
SS.9.1. DEBT SERVICE RATIO. The Borrower will not, for any period
consisting of the preceding four (4) consecutive fiscal quarters (treated as a
single accounting period), permit the Debt Service Ratio for any fiscal quarter
ending during any period described in the table set forth below to be less than
the ratio set forth opposite such period in such table:
Period Ratio
------ -----
Fourth fiscal quarter, 1996 1.30:1.00
First fiscal quarter, 1997 1.20:1.00
Second fiscal quarter, 1997 1.20:1.00
Third fiscal quarter, 1997 1.20:1.00
Fourth fiscal quarter, 1997 1.40:1.00
First fiscal quarter, 1998 1.20:1.00
Second fiscal quarter, 1998 1.30:1.00
Third fiscal quarter, 1998 1.30:1.00
Fourth fiscal quarter, 1998 1.40:1.00
First fiscal quarter, 1999 1.20:1.00
Second fiscal quarter, 1999 1.30:1.00
Third fiscal quarter, 1999 1.10:1.00
each fiscal quarter ending thereafter 1.20:1.00
SS.9.2 CAPITAL EXPENDITURES. Neither SSI, SRI nor the Borrower will
make, nor permit any Subsidiary to make, Capital Expenditures (including any
expenditures made in connection with any permitted acquisitions but excluding
any expenditures
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consisting of indebtedness incurred or assumed as permitted by ss.9.1(l) in
connection with any permitted acquisitions) in the fiscal year that exceed in
the aggregate, (a) $30,000,000 for the 1996 fiscal year; (b) $40,000,000 for the
1997 fiscal year; (c) $45,000,000 for the 1998 fiscal year; and (d) $50,000,000
for each fiscal year thereafter.
SS.9.3. TOTAL FUNDED DEBT TO EBITDA. The Borrower will not, at any
time during any period described in the table set forth below, permit the ratio
of Total Funded Indebtedness on such date to EBITDA for the four most recently
ended fiscal quarters to exceed the ratio set forth opposite such period in such
table:
Period Ratio
------ -----
Fourth fiscal quarter, 1996 3.75:1.00
First fiscal quarter, 1997 3.65:1.00
Second fiscal quarter, 1997 3.60:1.00
Third fiscal quarter, 1997 3.55:1.00
Fourth fiscal quarter, 1997 3.25:1.00
First fiscal quarter, 1998 3.15:1.00
Second fiscal quarter, 1998 3.10:1.00
Third fiscal quarter, 1998 3.05:1.00
Fourth fiscal quarter, 1998 2.75:1.00
First fiscal quarter, 1999 2.65:1.00
Second fiscal quarter, 1999 2.60:1.00
Third fiscal quarter, 1999 2.55:1.00
each fiscal quarter ending thereafter 2.25:1.00
SS.9.4. MINIMUM EBITDA. The Borrower will not, as of the end of any
fiscal quarter ending during any period described in the table set forth below,
permit the EBITDA of SSI, the Borrower and their Subsidiaries for the period of
the four (4) immediately preceding consecutive fiscal quarters then ending, to
be less than the amount set forth opposite such period in such table:
Period Amount
------ ------
Fourth fiscal quarter, 1996 $ 80,000,000
First fiscal quarter, 1997 $ 82,000,000
Second fiscal quarter, 1997 $ 84,000,000
Third fiscal quarter, 1997 $ 86,000,000
Fourth fiscal quarter, 1997 $ 95,000,000
First fiscal quarter, 1998 $ 97,000,000
Second fiscal quarter, 1998 $ 99,000,000
Third fiscal quarter, 1998 $101,000,000
Fourth fiscal quarter, 1998 $108,000,000
First fiscal quarter, 1999 $110,000,000
Second fiscal quarter, 1999 $112,000,000
Third fiscal quarter, 1999 $114,000,000
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each fiscal quarter ending thereafter $123,000,000
SS.9.5. CURRENT ASSETS. The Borrower will not at any time permit the
ratio of Consolidated Current Assets to Consolidated Current Liabilities to be
less than 2.50:1.00.
SS.9.6. SEASONAL DEBT SERVICE RATIO. The Borrower will not permit the
Seasonal Debt Service Ratio as at the last day of the Borrower's December fiscal
month for the period of the immediately preceding twelve (12) fiscal months of
the Borrower to be less than the ratio set forth opposite such period in such
table:
Period Ratio
------ -----
Last day of fiscal month ending December, 1997 1.40:1.00
Last day of fiscal month ending December, 1998 1.40:1.00
Last day of fiscal month ending December, 1999 1.20:1.00
SS.10. CLOSING CONDITIONS. The obligations of the Banks to make the
initial Loans shall be subject to the satisfaction of the following conditions
precedent on or prior to the date hereof:
SS.10.1. LOAN DOCUMENTS. Each of the Loan Documents shall have been
duly executed and delivered by the respective parties thereto, shall be in full
force and effect and shall be in form and substance satisfactory to each of the
Banks. Each Bank shall have received a fully executed copy of each such
document.
SS.10.2. CERTIFIED COPIES OF CHARTER DOCUMENTS. Each of the Banks
shall have received from SRI, the Borrower and each of their Subsidiaries which
is a party to any of the Loan Documents, a copy, certified by a duly authorized
officer of such Person to be true and complete on the Closing Date, of each of
(a) its charter or other incorporation documents as in effect on such date of
certification, and (b) its by-laws as in effect on such date.
SS.10.3. CORPORATE ACTION. All corporate action necessary for the
valid execution, delivery and performance by SRI, the Borrower and each of their
Subsidiaries of this Credit Agreement and the other Loan Documents to which it
is or is to become a party shall have been duly and effectively taken, and
evidence thereof satisfactory to the Banks shall have been provided to each of
the Banks.
SS.10.4. INCUMBENCY CERTIFICATE. Each of the Banks shall have
received from SRI, the Borrower and each of their Subsidiaries an incumbency
certificate, dated as of the Closing Date, signed by a duly authorized officer
of SRI, the Borrower or such Subsidiary, and giving the name and bearing a
specimen signature of each individual who shall be authorized: (a) to sign, in
the name and on behalf of each of SRI, the Borrower or such Subsidiary, each of
the Loan Documents to which SRI, the Borrower or such Subsidiary is or is to
become a party; (b) in the case of the Borrower, to make
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Loan Requests and Conversion Requests; and (c) to give notices and to take other
action on its behalf under the Loan Documents.
SS.10.5. CERTIFICATES OF INSURANCE. The Agent shall have received (a)
a certificate of insurance from an independent insurance broker dated as of the
Closing Date, identifying insurers, types of insurance, insurance limits, and
policy terms, and otherwise describing the insurance obtained in accordance with
the provisions of this Credit Agreement and (b) certified copies of all policies
evidencing such insurance (or certificates therefor signed by the insurer or an
agent authorized to bind the insurer).
SS.10.6. SOLVENCY CERTIFICATE. Each of the Banks shall have received
an officer's certificate of the Borrower dated as of the Closing Date as to the
solvency of SRI, the Borrower and their Subsidiaries both before and immediately
following the consummation of the transactions contemplated herein and in form
and substance satisfactory to the Banks.
SS.10.7. OPINION OF COUNSEL. Each of the Banks and the Agent shall
have received a favorable legal opinion addressed to the Banks and the Agent,
dated as of the Closing Date, in form and substance satisfactory to the Banks
and the Agent, from Xxxxxxxx & Xxxxx, counsel to SRI, the Borrower and its
Subsidiaries.
SS.10.8. PAYMENT OF FEES. The Borrower shall have paid to the Agent
the Closing Fee and Agent's Fee pursuant to ss.ss.4.1 and 4.2.
SS.11. CONDITIONS TO ALL BORROWINGS. The obligations of the Banks to
make any Loan, whether on or after the Closing Date, shall also be subject to
the satisfaction of the following conditions precedent:
SS.11.1. REPRESENTATIONS TRUE; NO EVENT OF DEFAULT. Each of the
representations and warranties of any of SRI, the Borrower and their
Subsidiaries contained in this Credit Agreement, the other Loan Documents or in
any document or instrument delivered pursuant to or in connection with this
Credit Agreement shall be true in all material respects as of the date as of
which they were made and shall also be true in all material respects at and as
of the time of the making of such Loan, with the same effect as if made at and
as of that time (except to the extent of changes resulting from transactions
contemplated or permitted by this Credit Agreement and the other Loan Documents
or changes occurring in the ordinary course of business that singly or in the
aggregate are not materially adverse, or to the extent that such representations
and warranties relate expressly to an earlier date) and no Default or Event of
Default shall have occurred and be continuing. The Agent shall have received a
certificate of the Borrower signed by an authorized officer of the Borrower to
such effect.
SS.11.2. NO LEGAL IMPEDIMENT. No change shall have occurred in any
law or regulations thereunder or interpretations thereof that in the reasonable
opinion of any Bank would make it illegal for such Bank to make such Loan.
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SS.11.3. GOVERNMENTAL REGULATION. Each Bank shall have received such
statements in substance and form reasonably satisfactory to such Bank as such
Bank shall require for the purpose of compliance with any applicable regulations
of the Comptroller of the Currency or the Board of Governors of the Federal
Reserve System.
SS.11.4. PROCEEDINGS AND DOCUMENTS. All proceedings in connection
with the transactions contemplated by this Credit Agreement, the other Loan
Documents and all other documents incident thereto shall be satisfactory in
substance and in form to the Banks and to the Agent and the Agent's Special
Counsel, and the Banks, the Agent and such counsel shall have received all
information and such counterpart originals or certified or other copies of such
documents as the Agent may reasonably request.
SS.12. EVENTS OF DEFAULT; ACCELERATION; ETC.
SS.12.1. EVENTS OF DEFAULT AND ACCELERATION. If any of the following
events ("Events of Default" or, if the giving of notice or the lapse of time or
both is required, then, prior to such notice or lapse of time, "Defaults") shall
occur:
(a) the Borrower shall fail to pay any principal of the Loans
or interest on the Loans when the same shall become due and
payable, whether at the stated date of maturity or any
accelerated date of maturity or at any other date fixed for
payment;
(b) the Borrower shall fail to pay the commitment fee, the
Agent's fee, or other sums due hereunder or under any of
the other Loan Documents, within three (3) days after the
same shall become due and payable, whether at the stated
date of maturity or any accelerated date of maturity or at
any other date fixed for payment;
(c) the Borrower or SRI shall fail to comply with any of its
covenants contained in ss.7.1, ss.7.3, ss.7.5-7.10,
ss.7.12, ss.8 or ss.9 or SSI shall fail to comply with the
covenant contained in ss.28;
(d) the Borrower or SRI shall fail to comply with the
provisions of ss.7.4 for a period of twenty-four (24) hours
after written notice of such failure has been given to the
Borrower by the Agent;
(e) SRI, the Borrower or any of their Subsidiaries shall fail
to perform any term, covenant or agreement contained herein
or in any of the other Loan Documents (other than those
specified elsewhere in this ss.12.1) for fifteen (15) days
after written notice of such failure has been given to the
Borrower by the Agent;
(f) any representation or warranty of SRI, the Borrower or any
of their Subsidiaries in this Credit Agreement or any of
the other Loan Documents or in any other document or
instrument delivered pursuant to
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or in connection with this Credit Agreement shall prove to
have been false in any material respect upon the date when
made or deemed to have been made or repeated;
(g) SRI, the Borrower or any of their Subsidiaries shall fail
to pay at maturity, or within any applicable period of
grace, any obligation for borrowed money or credit received
or in respect of any Capitalized Leases in an aggregate
amount in excess of $250,000, or fail to observe or perform
any material term, covenant or agreement contained in any
agreement by which it is bound, evidencing or securing such
borrowed money or credit received or in respect of any such
Capitalized Leases for such period of time as would permit
(assuming the giving of appropriate notice if required) the
holder or holders thereof or of any obligations issued
thereunder to accelerate the maturity thereof;
(h) any of SRI, the Borrower or any of their Subsidiaries shall
make an assignment for the benefit of creditors, or admit
in writing their inability to pay or generally fail to pay
their debts as they mature or become due, or shall petition
or apply for the appointment of a trustee or other
custodian, liquidator or receiver of SRI, the Borrower or
any of their Subsidiaries or of any substantial part of the
assets of SRI, the Borrower or any of their Subsidiaries or
shall commence any case or other proceeding relating to
SRI, the Borrower or any of their Subsidiaries under any
bankruptcy, reorganization, arrangement, insolvency,
readjustment of debt, dissolution or liquidation or similar
law of any jurisdiction, now or hereafter in effect, or
shall take any action to authorize or in furtherance of any
of the foregoing, or if any such petition or application
shall be filed or any such case or other proceeding shall
be commenced against SRI, the Borrower or any of their
Subsidiaries and SRI, the Borrower or any of their
Subsidiaries shall indicate their approval thereof, consent
thereto or acquiescence therein;
(i) a decree or order is entered appointing any such trustee,
custodian, liquidator or receiver or adjudicating any of
SRI, the Borrower or any of their Subsidiaries bankrupt or
insolvent, or approving a petition in any such case or
other proceeding, or a decree or order for relief is
entered in respect of SRI, the Borrower or any of their
Subsidiaries in an involuntary case under federal
bankruptcy laws as now or hereafter constituted;
(j) there shall remain in force, undischarged, unsatisfied and
unstayed, for more than thirty (30) days, whether or not
consecutive, any final judgment against SRI, the Borrower
or any of their Subsidiaries that, with other outstanding
final judgments, undischarged, against SRI, the Borrower or
any of their Subsidiaries exceeds in the aggregate
$250,000;
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(k) any default or event of default shall have occurred and be
continuing under the Senior Notes Indenture of the Senior
Subordinated Notes Indenture, or the holders of all or any
part of the Senior Notes or the Subordinated Debt shall
accelerate the maturity of all or any part of the Senior
Notes or the Subordinated Debt or the Senior Notes or the
Subordinated Debt shall be prepaid, redeemed or repurchased
in whole or in part, except as permitted underss.8.8 or any
Servicer Default, Payout Event, Insolvency Event or Trigger
Event (as each of such terms is defined in the Pooling and
Servicing Agreement) shall have occurred or any Purchase
Termination Event or Incipient Purchase Termination Event
(as such terms are defined in the Receivables Purchase
Agreement) shall have occurred or any Change of Control or
Change of Control Offer (as such terms are defined in the
Senior Notes Indenture and the Senior Subordinated Notes
Indenture) shall have occurred;
(l) if any of the Loan Documents shall be cancelled,
terminated, revoked or rescinded otherwise than in
accordance with the terms thereof or with the express prior
written agreement, consent or approval of the Banks, or any
action at law, suit in equity or other legal proceeding to
cancel, revoke or rescind any of the Loan Documents shall
be commenced by or on behalf of SRI, the Borrower or any of
their Subsidiaries party thereto or any of their respective
stockholders, or any court or any other governmental or
regulatory authority or agency of competent jurisdiction
shall make a determination that, or issue a judgment,
order, decree or ruling to the effect that, any one or more
of the Loan Documents is illegal, invalid or unenforceable
in accordance with the terms thereof;
(m) the Borrower or any ERISA Affiliate incurs any liability to
the PBGC or a Guaranteed Pension Plan pursuant to Title IV
of ERISA in an aggregate amount exceeding $1,000,000; the
Borrower or any ERISA; the Borrower or any ERISA Affiliate
is assessed withdrawal liability pursuant to Title IV of
ERISA by a Multiemployer Plan requiring aggregate annual
payments exceeding $1,000,000, or any of the following
occurs with respect to a Guaranteed Pension Plan; (i) an
ERISA Reportable Event, or a failure to make a required
installment or other payment (within the meaning
ofss.302(f)(1) of ERISA), provided the Agent determines in
its reasonable discretion that such event (A) could be
expected to result in liability of the Borrower to the PBGC
or the Plan in an aggregate amount exceeding $1,000,000 and
(B) could constitute grounds for the termination of such
Plan by the PBGC, for the appointment by the appropriate
United States District Court of a trustee to administer
such Plan or for the imposition of a lien in favor of the
Guaranteed Pension Plan; (ii) the appointment by a United
States District Court of a trustee to administer such Plan;
or (iii) the institution by the PBGC of proceedings to
terminate such Plan.
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(n) SRI, the Borrower or any of their Subsidiaries 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 thirty (30)
days;
(o) there shall occur 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
fifteen (15) consecutive days, the cessation or substantial
curtailment of revenue producing activities at any facility
of SRI, the Borrower or any of their Subsidiaries if such
event or circumstance is not covered by business
interruption insurance and would have a material adverse
effect on the business or financial condition of SRI, the
Borrower and their Subsidiaries on a consolidated basis;
(p) there shall occur the loss, suspension or revocation of, or
failure to renew, any license or permit now held or
hereafter acquired by SRI, the Borrower or any of their
Subsidiaries if such loss, suspension, revocation or
failure to renew would have a material adverse effect on
the business or financial condition of SRI, the Borrower
and their Subsidiaries on a consolidated basis;
(q) SRI, the Borrower or any of their Subsidiaries shall be
indicted for a federal crime, a punishment for which could
include the forfeiture of any assets of SRI, the Borrower
or such Subsidiary having a fair market value in excess of
$250,000;
(r) SSI shall, at any time prior to the consummation of the
merger of SRI and the Borrower as contemplated by ss.8.5.1
hereof, legally or beneficially own less than one hundred
percent (100%) of the shares of the capital stock of SRI
and after such merger, shall at any time legally or
beneficially own less than one hundred percent (100%) of
the shares of the capital stock of the Borrower, and SRI
shall, at any time prior to the consummation of the merger
of SRI and the Borrower as contemplated by ss.8.5.1 hereof,
legally or beneficially own less than one hundred percent
(100%) of the shares of the capital stock of the Borrower;
(s) the Receivables Subsidiary shall make any Distribution
which, after giving effect to such Distribution, results in
the value of the Receivable Subsidiary's unencumbered
interest in the amount of the Aggregate Principal
Receivables PLUS the aggregate amount of the Finance Charge
Receivables (as such terms are defined in the Pooling and
Servicing Agreement) being less than $25,000,000; or
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(t) there shall occur a Default or Event of Default under any
of the Revolving Agreement.
then, and in any such event, so long as the same may be continuing, the Agent
may, and upon the request of the Majority Banks shall, by notice in writing to
the Borrower declare all amounts owing with respect to this Credit Agreement,
the Notes and the other Loan Documents to be, and they shall thereupon forthwith
become, immediately due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby expressly waived by the
Borrower; PROVIDED that in the event of any Event of Default specified in
ss.ss.12.1(h), 12.1(i) or 12.1(l), all such amounts shall become immediately due
and payable automatically and without any requirement of notice from the Agent
or any Bank.
SS.12.2. TERMINATION OF COMMITMENTS. If any one or more of the Events
of Default specified in ss.12.1(h), ss.12.1(i) or ss.12.1(l) shall occur, any
unused portion of the credit hereunder shall forthwith terminate and each of the
Banks shall be relieved of all further obligations to make Loans to the
Borrower. If any other Event of Default shall have occurred and be continuing,
or if on any Drawdown Date the conditions precedent to the making of the Loans
to be made on such Drawdown Date are not satisfied, the Agent may and, upon the
request of the Majority Banks, shall, by notice to the Borrower, terminate the
unused portion of the credit hereunder, and upon such notice being given such
unused portion of the credit hereunder shall terminate immediately and each of
the Banks shall be relieved of all further obligations to make Loans. No
termination of the credit hereunder shall relieve the Borrower or any of its
Subsidiaries of any of the Obligations.
SS.12.3. REMEDIES. In case any one or more of the Events of Default
shall have occurred and be continuing, and whether or not the Banks shall have
accelerated the maturity of the Loans pursuant to ss.12.1, each Bank, if owed
any amount with respect to the Loans, may, with the consent of the Majority
Banks but not otherwise, proceed to protect and enforce its rights by suit in
equity, action at law or other appropriate proceeding, whether for the specific
performance of any covenant or agreement contained in this Credit Agreement and
the other Loan Documents or any instrument pursuant to which the Obligations to
such Bank are evidenced, including as permitted by applicable law the obtaining
of the EX PARTE appointment of a receiver, and, if such amount shall have become
due, by declaration or otherwise, proceed to enforce the payment thereof or any
other legal or equitable right of such Bank. No remedy herein conferred upon any
Bank or the Agent or the holder of any Note is intended to be exclusive of any
other remedy and each and every remedy shall be cumulative and shall be in
addition to every other remedy given hereunder or now or hereafter existing at
law or in equity or by statute or any other provision of law.
SS.13. SETOFF. Regardless of the adequacy of any collateral, during
the continuance of any Event of Default, any deposits or other sums credited by
or due from any of the Banks to the Borrower and any securities or other
property of the Borrower in the possession of such Bank may be applied to or set
off by such Bank against the
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payment of Obligations and any and all other liabilities, direct, or indirect,
absolute or contingent, due or to become due, now existing or hereafter arising,
of the Borrower to such Bank. Each of the Banks agrees with each other Bank that
(a) if an amount to be set off is to be applied to Indebtedness of the Borrower
to such Bank, other than Indebtedness evidenced by the Notes held by such Bank,
such amount shall be applied ratably to such other Indebtedness and to the
Indebtedness evidenced by all such Notes held by such Bank, and (b) if such Bank
shall receive from the Borrower, whether by voluntary payment, exercise of the
right of setoff, counterclaim, cross action, enforcement of the claim evidenced
by the Notes held by such Bank by proceedings against the Borrower at law or in
equity or by proof thereof in bankruptcy, reorganization, liquidation,
receivership or similar proceedings, or otherwise, and shall retain and apply to
the payment of the Note or Notes held by such Bank any amount in excess of its
ratable portion of the payments received by all of the Banks with respect to the
Notes held by all of the Banks, such Bank will make such disposition and
arrangements with the other Banks with respect to such excess, either by way of
distribution, PRO TANTO assignment of claims, subrogation or otherwise as shall
result in each Bank receiving in respect of the Notes held by it, its
proportionate payment as contemplated by this Credit Agreement; PROVIDED that if
all or any part of such excess payment is thereafter recovered from such Bank,
such disposition and arrangements shall be rescinded and the amount restored to
the extent of such recovery, but without interest.
SS.14. THE AGENT.
SS.14.1. AUTHORIZATION. The Agent is authorized to take such action
on behalf of each of the Banks and to exercise all such powers as are hereunder
and under any of the other Loan Documents and any related documents delegated to
the Agent, together with such powers as are reasonably incident thereto,
PROVIDED that no duties or responsibilities not expressly assumed herein or
therein shall be implied to have been assumed by the Agent. The relationship
between the Agent and the Banks is that of an independent contractor. The term
"Agent" is for convenience only and is used to describe, as a form of
convention, the independent contractual relationship between the Agent and each
of the Banks. Nothing contained in this Credit Agreement or any of the other
Loan Documents shall be construed to create an agency, trust or other fiduciary
relationship between the Agent and any of the Banks. As an independent
contractor empowered by the Banks to exercise certain rights and perform certain
duties and responsibilities hereunder and under the other Loan Documents, the
Agent is nevertheless a "representative" of the Banks, as that term is defined
in Article I of the Uniform Commercial Code, for purposes of actions for the
benefit of the Banks and the Agent with respect to all collateral security and
guaranties as "secured party", "mortgagee" or the like on all financing
statements and other documents and instruments, whether recorded or otherwise,
relating to the attachment, perfection, priority or enforcement of any security
interests, mortgages or deeds of trust in collateral security intended to secure
the payment or performance of any of the Obligations, all for the benefit of the
Banks and the Agent.
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SS.14.2. EMPLOYEES AND AGENTS. The Agent may exercise its powers and
execute its duties by or through employees or agents and shall be entitled to
take, and to rely on, advice of counsel concerning all matters pertaining to its
rights and duties under this Credit Agreement and the other Loan Documents. The
Agent may utilize the services of such Persons as the Agent in its sole
discretion may reasonably determine, and all reasonable fees and expenses of any
such Persons shall be paid by the Borrower.
SS.14.3. NO LIABILITY. Neither the Agent nor any of its shareholders,
directors, officers or employees nor any other Person assisting them in their
duties nor any agent or employee thereof, shall be liable for any waiver,
consent or approval given or any action taken, or omitted to be taken, in good
faith by it or them hereunder or under any of the other Loan Documents, or in
connection herewith or therewith, or be responsible for the consequences of any
oversight or error of judgment whatsoever, except that the Agent or such other
Person, as the case may be, may be liable for losses due to its willful
misconduct or gross negligence.
SS.14.4. NO REPRESENTATIONS. The Agent shall not be responsible for
the execution or validity or enforceability of this Credit Agreement, the Notes,
any of the other Loan Documents or any instrument at any time constituting, or
intended to constitute, collateral security for the Notes, or for the value of
any such collateral security or for the validity, enforceability or
collectability of any such amounts owing with respect to the Notes, or for any
recitals or statements, warranties or representations made herein or in any of
the other Loan Documents or in any certificate or instrument hereafter furnished
to it by or on behalf of the Borrower or any of its Subsidiaries, or be bound to
ascertain or inquire as to the performance or observance of any of the terms,
conditions, covenants or agreements herein or in any instrument at any time
constituting, or intended to constitute, collateral security for the Notes or to
inspect any of the properties, books or records of the Borrower or any of its
Subsidiaries. The Agent shall not be bound to ascertain whether any notice,
consent, waiver or request delivered to it by the Borrower or any holder of any
of the Notes shall have been duly authorized or is true, accurate and complete.
The Agent has not made nor does it now make any representations or warranties,
express or implied, nor does it assume any liability to the Banks, with respect
to the credit worthiness or financial conditions of SRI, the Borrower or any of
its Subsidiaries. Each Bank acknowledges that it has, independently and without
reliance upon the Agent or any other Bank, and based upon such information and
documents as it has deemed appropriate, made its own credit analysis and
decision to enter into this Credit Agreement.
SS.14.5. PAYMENTS.
14.5.1. PAYMENTS TO AGENT. A payment by the Borrower to the
Agent hereunder or any of the other Loan Documents for the account of any Bank
shall constitute a payment to such Bank. The Agent agrees promptly to distribute
to each Bank such Bank's PRO RATA share of payments received by the Agent for
the account of
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the Banks except as otherwise expressly provided herein or in any of the other
Loan Documents.
14.5.2. DISTRIBUTION BY AGENT. If in the opinion of the
Agent the distribution of any amount received by it in such capacity hereunder,
under the Notes or under any of the other Loan Documents might involve it in
liability, it may refrain from making distribution until its right to make
distribution shall have been adjudicated by a court of competent jurisdiction.
If a court of competent jurisdiction shall adjudge that any amount received and
distributed by the Agent is to be repaid, each Person to whom any such
distribution shall have been made shall either repay to the Agent its
proportionate share of the amount so adjudged to be repaid or shall pay over the
same in such manner and to such Persons as shall be determined by such court.
14.5.3. DELINQUENT BANKS. Notwithstanding anything to the
contrary contained in this Credit Agreement or any of the other Loan Documents,
any Bank that fails (a) to make available to the Agent its PRO RATA share of any
Loan or (b) to comply with the provisions of ss.13 with respect to making
dispositions and arrangements with the other Banks, where such Bank's share of
any payment received, whether by setoff or otherwise, is in excess of its PRO
RATA share of such payments due and payable to all of the Banks, in each case
as, when and to the full extent required by the provisions of this Credit
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 nondelinquent Banks for application to, and reduction of, their
respective PRO RATA shares of all Outstanding Loans. The Delinquent Bank hereby
authorizes the Agent to distribute such payments to the nondelinquent Banks in
proportion to their respective PRO RATA shares of all Outstanding 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 Loans
of the nondelinquent 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.
SS.14.6. HOLDERS OF NOTES. The Agent may deem and treat the payee of
any Note as the absolute owner or purchaser thereof for all purposes hereof
until it shall have been furnished in writing with a different name by such
payee or by a subsequent holder, assignee or transferee.
SS.14.7. INDEMNITY. The Banks ratably agree hereby to indemnify and
hold harmless the Agent from and against any and all claims, actions and suits
(whether groundless or otherwise), losses, damages, costs, expenses (including
any expenses for which the Agent has not been reimbursed by the Borrower as
required by ss.15), and liabilities of every nature and character arising out of
or related to this Credit Agreement, the Notes, or any of the other Loan
Documents or the transactions
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contemplated or evidenced hereby or thereby, or the Agent's actions taken
hereunder or thereunder, except to the extent that any of the same shall be
directly caused by the Agent's willful misconduct or gross negligence.
SS.14.8. AGENT AS BANK. In its individual capacity, FNBB shall have
the same obligations and the same rights, powers and privileges in respect to
its Commitment and the Loans made by it, and as the holder of any of the Notes,
as it would have were it not also the Agent.
SS.14.9. RESIGNATION. The Agent may resign at any time by giving
sixty (60) days' prior written notice thereof to the Banks and the Borrower.
Upon any such resignation, the Majority Banks shall have the right to appoint a
successor Agent. Unless a Default or Event of Default shall have occurred and be
continuing, such successor Agent shall be reasonably acceptable to the Borrower.
If no successor Agent shall have been so appointed by the Majority Banks and
shall have accepted such appointment within thirty (30) days after the retiring
Agent's giving of notice of resignation, then the retiring Agent may, on behalf
of the Banks, appoint a successor Agent, which shall be a financial institution
having a rating of not less than A or its equivalent by Standard & Poor's
Corporation. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations
hereunder. After any retiring Agent's resignation, the provisions of this Credit
Agreement and the other Loan Documents shall continue in effect for its benefit
in respect of any actions taken or omitted to be taken by it while it was acting
as Agent.
SS.14.10. NOTIFICATION OF DEFAULTS AND EVENTS OF DEFAULT. Each Bank
hereby agrees that, upon learning of the existence of a Default or an Event of
Default, it shall promptly notify the Agent thereof. The Agent hereby agrees
that upon receipt of any notice under this ss.14.10 it shall promptly notify the
other Banks of the existence of such Default or Event of Default.
SS.15. EXPENSES. The Borrower agrees to pay (a) the reasonable costs
of producing and reproducing this Credit Agreement, the other Loan Documents and
the other agreements and instruments mentioned herein, (b) any taxes (including
any interest and penalties in respect thereto) payable by the Agent or any of
the Banks (other than taxes based upon the Agent's or any Bank's net income) on
or with respect to the transactions contemplated by this Credit Agreement (the
Borrower hereby agreeing to indemnify the Agent and each Bank with respect
thereto), (c) the reasonable fees, expenses and disbursements of the Agent's
Special Counsel or any local counsel to the Agent incurred in connection with
the preparation, administration or interpretation of the Loan Documents and
other instruments mentioned herein, each closing hereunder, and amendments,
modifications, approvals, consents or waivers hereto or hereunder, (d) the fees,
expenses and disbursements of the Agent incurred by the Agent in connection with
the preparation, administration or interpretation of the
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Loan Documents and other instruments mentioned herein, including all title
insurance premiums and surveyor, engineering and appraisal charges,
environmental site assessment charges, and expenses associated with commercial
finance examinations, (e) all fees, disbursements of the Agent incurred by the
Agent in connection with the administration and maintenance of the Loan
Documents and other instruments mentioned herein, including any additional title
insurance premiums, appraisal charges, site assessment charges, and periodic
commercial financial examinations; and (f) all reasonable out-of-pocket expenses
(including without limitation reasonable attorneys' fees and costs, which
attorneys may be employees of any Bank or the Agent, and reasonable consulting,
accounting, appraisal, investment banking and similar professional fees and
charges) incurred by any Bank or the Agent in connection with (i) the
enforcement of or preservation of rights under any of the Loan Documents against
the Borrower or any of its Subsidiaries or the administration thereof after the
occurrence of a Default or Event of Default and (ii) any litigation, proceeding
or dispute whether arising hereunder or otherwise, in any way related to any
Bank's or the Agent's relationship with the Borrower or any of its Subsidiaries.
The covenants of this ss.15 shall survive payment or satisfaction of all other
Obligations.
SS.16. INDEMNIFICATION. The Borrower agrees to indemnify and hold
harmless the Agent and the Banks from and against any and all claims, actions
and suits whether groundless or otherwise, and from and against any and all
liabilities, losses, damages and expenses of every nature and character arising
out of this Credit Agreement or any of the other Loan Documents or the
transactions contemplated hereby (except to the extent arising from the gross
negligence of willful misconduct of the Agent or the applicable Bank) including,
without limitation, (a) any actual or proposed use by the Borrower or any of its
Subsidiaries of the proceeds of any of the Loans, (b) SRI, the Borrower or any
of its Subsidiaries entering into or performing this Credit Agreement or any of
the other Loan Documents or (c) with respect to SRI, the Borrower and its
Subsidiaries and their respective properties and assets, the violation of any
Environmental Law, the presence, disposal, escape, seepage, leakage, spillage,
discharge, emission, release or threatened release of any Hazardous Substances
or any action, suit, proceeding or investigation brought or threatened with
respect to any Hazardous Substances (including, but not limited to, claims with
respect to wrongful death, personal injury or damage to property), in each case
including, without limitation, the reasonable fees and disbursements of counsel
and allocated costs of internal counsel incurred in connection with any such
investigation, litigation or other proceeding. In litigation, or the preparation
therefor, the Banks and the Agent shall be entitled to select their own counsel
and, in addition to the foregoing indemnity, the Borrower agrees to pay promptly
the reasonable fees and expenses of such counsel. If, and to the extent that the
obligations of the Borrower under this ss.16 are unenforceable for any reason,
the Borrower hereby agrees to make the maximum contribution to the payment in
satisfaction of such obligations which is permissible under applicable law. The
covenants contained in this ss.16 shall survive payment or satisfaction in full
of all other Obligations.
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SS.17. SURVIVAL OF COVENANTS, ETC. All covenants, agreements,
representations and warranties made herein, in the Notes, in any of the other
Loan Documents or in any documents or other papers delivered by or on behalf of
the Borrower or any of its Subsidiaries pursuant hereto shall be deemed to have
been relied upon by the Banks and the Agent, notwithstanding any investigation
heretofore or hereafter made by any of them, and shall survive the making by the
Banks of any of the Loans, as herein contemplated, and shall continue in full
force and effect so long as any amount due under this Credit Agreement or the
Notes or any of the other Loan Documents remains outstanding or any Bank has any
obligation to make any Loans, and for such further time as may be otherwise
expressly specified in this Credit Agreement. All statements contained in any
certificate or other paper delivered to any Bank or the Agent at any time by or
on behalf of the Borrower or any of its Subsidiaries pursuant hereto or in
connection with the transactions contemplated hereby shall constitute
representations and warranties by the Borrower or such Subsidiary hereunder.
SS.18. ASSIGNMENT AND PARTICIPATION.
SS.18.1. CONDITIONS TO ASSIGNMENT BY BANKS. Except as provided
herein, each Bank may assign to one or more Eligible Assignees all or a portion
of its interests, rights and obligations under this Credit Agreement (including
all or a portion of its Commitment Percentage and Commitment and the same
portion of the Loans at the time owing to it and the Notes held by it); PROVIDED
that (a) each of the Agent and (except in the case of an assignment to an
Affiliate of a Bank or if a Default or Event of Default has occurred and is
continuing) the Borrower shall have given its prior written consent to such
assignment, which consent, in the case of the Borrower and the Agent, will not
be unreasonably withheld, (b) each such assignment shall be of a constant, and
not a varying, percentage of all the assigning Bank's rights and obligations
under this Credit Agreement, (c) each assignment shall be in an amount of not
less than $5,000,000, (d) FNBB and its Affiliates shall retain, free of any such
assignment, an amount of its Commitment of not less than $3,000,000 and (e) the
parties to such assignment shall execute and deliver to the Agent, for recording
in the Register (as hereinafter defined), an Assignment and Acceptance,
substantially in the form of EXHIBIT D hereto (an "Assignment and Acceptance"),
together with any Notes subject to such assignment. Upon such execution,
delivery, acceptance and recording, from and after the effective date specified
in each Assignment and Acceptance, which effective date shall be at least five
(5) Business Days after the execution thereof, (i) the assignee thereunder shall
be a party hereto and, to the extent provided in such Assignment and Acceptance,
have the rights and obligations of a Bank hereunder, and (ii) the assigning Bank
shall, to the extent provided in such assignment and upon payment to the Agent
of the registration fee referred to in ss.18.3, be released from its obligations
under this Credit Agreement.
SS.18.2. CERTAIN REPRESENTATIONS AND WARRANTIES; LIMITATIONS;
COVENANTS. By executing and delivering an Assignment and Acceptance, the parties
to the assignment thereunder confirm to and agree with each other and the other
parties
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hereto as follows: (a) other than the representation and warranty that it is the
legal and beneficial owner of the interest being assigned thereby free and clear
of any adverse claim, the assigning Bank makes no representation or warranty,
express or implied, and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Credit Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Credit Agreement, the other Loan
Documents or any other instrument or document furnished pursuant hereto or the
attachment, perfection or priority of any security interest or mortgage; (b) the
assigning Bank makes no representation or warranty and assumes no responsibility
with respect to the financial condition of the Borrower and its Subsidiaries or
any other Person primarily or secondarily liable in respect of any of the
Obligations, or the performance or observance by the Borrower and its
Subsidiaries or any other Person primarily or secondarily liable in respect of
any of the Obligations of any of their obligations under this Credit Agreement
or any of the other Loan Documents or any other instrument or document furnished
pursuant hereto or thereto; (c) such assignee confirms that it has received a
copy of this Credit Agreement, together with copies of the most recent financial
statements referred to in ss.6.4 and ss.7.4 and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (d) such assignee will,
independently and without reliance upon the assigning Bank, the Agent or any
other Bank 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 Credit Agreement; (e) such assignee represents and
warrants that it is an Eligible Assignee; (f) such assignee appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers under this Credit Agreement and the other Loan Documents as are
delegated to the Agent by the terms hereof or thereof, together with such powers
as are reasonably incidental thereto; (g) such assignee agrees that it will
perform in accordance with their terms all of the obligations that by the terms
of this Credit Agreement are required to be performed by it as a Bank; and (h)
such assignee represents and warrants that it is legally authorized to enter
into such Assignment and Acceptance.
SS.18.3. REGISTER. The Agent shall maintain a copy of each Assignment
and Acceptance 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
Percentage of, and principal amount of the Revolving Credit 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 Agent and the Banks may treat
each Person whose name is recorded in the Register as a Bank hereunder for all
purposes of this Credit 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. Upon each such recordation, the assigning
Bank agrees to pay to the Agent a registration fee in the sum of $3,000.
SS.18.4. NEW NOTES. Upon its receipt of an Assignment and Acceptance
executed by the parties to such assignment, together with each Note subject to
such assignment,
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the Agent shall (a) record the information contained therein in the Register,
and (b) give prompt notice thereof to the Borrower and the Banks (other than the
assigning Bank). Within five (5) Business Days after receipt of such notice, the
Borrower, at its own expense, shall execute and deliver to the Agent, in
exchange for each surrendered Note, a new Note to the order of such Eligible
Assignee in an amount equal to the amount assumed by such Eligible Assignee
pursuant to such Assignment and Acceptance and, if the assigning Bank has
retained some portion of its obligations hereunder, a new Note to the order of
the assigning Bank in an amount equal to the amount retained by it hereunder.
Such new Notes shall provide that they are replacements for the surrendered
Notes, shall be in an aggregate principal amount equal to the aggregate
principal amount of the surrendered Notes, shall be dated the effective date of
such in Assignment and Acceptance and shall otherwise be substantially the form
of the assigned Notes. Within five (5) days of issuance of any new Notes
pursuant to this ss.18.4, the Borrower shall deliver an opinion of counsel,
addressed to the Banks and the Agent, relating to the due authorization,
execution and delivery of such new Notes and the legality, validity and binding
effect thereof, in form and substance satisfactory to the Banks. The surrendered
Notes shall be cancelled and returned to the Borrower.
SS.18.5. PARTICIPATIONS. Each Bank may sell participations to one or
more banks or other entities in all or a portion of such Bank's rights and
obligations under this Credit Agreement and the other Loan Documents; PROVIDED
that (a) each such participation shall be in an amount of not less than
$5,000,000, (b) any such sale or participation shall not affect the rights and
duties of the selling Bank hereunder to the Borrower and (c) the only rights
granted to the participant pursuant to such participation arrangements with
respect to waivers, amendments or modifications of the Loan Documents shall be
the rights to approve waivers, amendments or modifications that would reduce the
principal of or the interest rate on any Loans, extend the term or increase the
amount of the Commitment of such Bank as it relates to such participant or
reduce the amount of any commitment fees to which such participant is entitled
or extend any regularly scheduled payment date for principal or interest.
SS.18.6. DISCLOSURE. The Borrower agrees that in addition to
disclosures made in accordance with standard and customary banking practices any
Bank may disclose information obtained by such Bank pursuant to this Credit
Agreement to assignees or participants and potential assignees or participants
hereunder; PROVIDED that such assignees or participants or potential assignees
or participants shall agree (a) to treat in confidence such information unless
such information otherwise becomes public knowledge, (b) not to disclose such
information to a third party, except as required by law or legal process and (c)
not to make use of such information for purposes of transactions unrelated to
such contemplated assignment or participation.
SS.18.7. ASSIGNEE OR PARTICIPANT AFFILIATED WITH THE BORROWER. If any
assignee Bank is an Affiliate of the Borrower, then any such assignee Bank shall
have no right to vote as a Bank hereunder or under any of the other Loan
Documents for
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purposes of granting consents or waivers or for purposes of agreeing to
amendments or other modifications to any of the Loan Documents or for purposes
of making requests to the Agent pursuant to ss.12.1 or ss.12.2, and the
determination of the Majority Banks shall for all purposes of this Agreement and
the other Loan Documents be made without regard to such assignee Bank's interest
in any of the Loans. If any Bank sells a participating interest in any of the
Loans to a participant, and such participant is the Borrower or an Affiliate of
the Borrower, then such transferor Bank shall promptly notify the Agent of the
sale of such participation. A transferor Bank shall have no right to vote as a
Bank hereunder or under any of the other Loan Documents for purposes of granting
consents or waivers or for purposes of agreeing to amendments or modifications
to any of the Loan Documents or for purposes of making requests to the Agent
pursuant to ss.12.1 or ss.12.2 to the extent that such participation is
beneficially owned by the Borrower or any Affiliate of the Borrower, and the
determination of the Majority Banks shall for all purposes of this Agreement and
the other Loan Documents be made without regard to the interest of such
transferor Bank in the Loans to the extent of such participation.
SS.18.8. MISCELLANEOUS ASSIGNMENT PROVISIONS. Any assigning Bank
shall retain its rights to be indemnified pursuant to ss.16 with respect to any
claims or actions arising prior to the date of such assignment. If any assignee
Bank is not incorporated under the laws of the United States of America or any
state thereof, it shall, prior to the date on which any interest or fees are
payable hereunder or under any of the other Loan Documents for its account,
deliver to the Borrower and the Agent certification as to its exemption from
deduction or withholding of any United States federal income taxes. If any
Reference Bank transfers all of its interest, rights and obligations under this
Credit Agreement, the Agent shall, in consultation with the Borrower and with
the consent of the Borrower and the Majority Banks, appoint another Bank to act
as a Reference Bank hereunder. Anything contained in this ss.18 to the contrary
notwithstanding, any Bank may at any time pledge all or any portion of its
interest and rights under this Credit Agreement (including all or any portion of
its Notes) to any of the twelve Federal Reserve Banks organized under ss.4 of
the Federal Reserve Act, 12 U.S.C. ss.341. No such pledge or the enforcement
thereof shall release the pledgor Bank from its obligations hereunder or under
any of the other Loan Documents.
SS.18.9. ASSIGNMENT BY BORROWER. The Borrower shall not assign or
transfer any of its rights or obligations under any of the Loan Documents
without the prior written consent of each of the Banks.
SS.19. NOTICES, ETC. Except as otherwise expressly provided in this
Credit Agreement, all notices and other communications made or required to be
given pursuant to this Credit Agreement or the Notes shall be in writing and
shall be delivered in hand, mailed by United States registered or certified
first class mail, postage prepaid, sent by overnight courier, or sent by
telegraph, telecopy, facsimile or telex and confirmed by delivery via courier or
postal service, addressed as follows:
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(a) if to the Borrower, at 00000 Xxxx Xxxxxx, Xxxxxxx, Xxxxx
00000, Attention: _______________, or at such other address
for notice as the Borrower shall last have furnished in
writing to the Person giving the notice;
(b) if to the Agent, at 000 Xxxxxxx Xxxxxx, 00-00-00, Xxxxxx,
Xxxxxxxxxxxxx 00000, XXX, Attention: Xxxxx F.X. Xxxxxxxx,
Vice President, or such other address for notice as the
Agent shall last have furnished in writing to the Person
giving the notice; and
(c) if to any Bank, at such Bank's address set forth on
SCHEDULE 1 hereto, or such other address for notice as such
Bank shall have last furnished in writing to the Person
giving the notice.
Any such notice or demand shall be deemed to have been duly given or
made and to have become effective (i) if delivered by hand, overnight courier or
facsimile to a responsible officer of the party to which it is directed, at the
time of the receipt thereof by such officer or the sending of such facsimile and
(ii) if sent by registered or certified first-class mail, postage prepaid, on
the third Business Day following the mailing thereof.
SS.20. GOVERNING LAW. THIS CREDIT AGREEMENT AND, EXCEPT AS OTHERWISE
SPECIFICALLY PROVIDED THEREIN, EACH OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS
UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR ALL PURPOSES
BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID COMMONWEALTH
(EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). THE BORROWER
AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS CREDIT AGREEMENT OR ANY OF THE
OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF
MASSACHUSETTS OR ANY FEDERAL COURT SITTING THEREIN AND CONSENTS TO THE
NONEXCLUSIVE JURISDICTION OF SUCH COURT AND SERVICE OF PROCESS IN ANY SUCH SUIT
BEING MADE UPON THE BORROWER BY MAIL AT THE ADDRESS SPECIFIED IN SS.20. THE
BORROWER 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.
SS.21. HEADINGS. The captions in this Credit Agreement are for
convenience of reference only and shall not define or limit the provisions
hereof.
SS.22. COUNTERPARTS. This Credit Agreement and any amendment hereof
may be executed in several counterparts and by eacH party on a separate
counterpart, each of which when executed and delivered shall be an original, and
all of which together shall constitute one instrument. In proving this Credit
Agreement it shall not
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be necessary to produce or account for more than one such counterpart signed by
the party against whom enforcement is sought.
SS.23. ENTIRE AGREEMENT, ETC. The Loan Documents and any other
documents executed in connection herewith or therewitH express the entire
understanding of the parties with respect to the transactions contemplated
hereby. Neither this Credit Agreement nor any term hereof may be changed,
waived, discharged or terminated, except as provided in ss.25.
SS.24. WAIVER OF JURY TRIAL. The Borrower hereby waives its right to
a jury trial with respect to any action or claiM arising out of any dispute in
connection with this Credit Agreement, the Notes or any of the other Loan
Documents, any rights or obligations hereunder or thereunder or the performance
of which rights and obligations. Except as prohibited by law, the Borrower
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, or in addition to, actual
damages. The Borrower (a) certifies that no representative, agent or attorney of
any Bank or the Agent has represented, expressly or otherwise, that such Bank or
the Agent would not, in the event of litigation, seek to enforce the foregoing
waivers and (b) acknowledges that the Agent and the Banks have been induced to
enter into this Credit Agreement, the other Loan Documents to which it is a
party by, among other things, the waivers and certifications contained herein.
SS.25. CONSENTS, AMENDMENTS, WAIVERS, ETC. Any consent or approval
required or permitted by this Credit Agreement to bE given by all of the Banks
may be given, and any term of this Credit Agreement, the other Loan Documents or
any other instrument related hereto or mentioned herein may be amended, and the
performance or observance by the Borrower or any of its Subsidiaries of any
terms of this Credit Agreement, the other Loan Documents or such other
instrument or the continuance of any Default or Event of Default may be waived
(either generally or in a particular instance and either retroactively or
prospectively) with, but only with, the written consent of the Borrower and the
written consent of the Majority Banks. Notwithstanding the foregoing, the
reduction of the principal of or the rate of interest on the Notes (other than
interest accruing pursuant to ss.4.11 following the effective datE of any waiver
by the Majority Banks of the Default or Event of Default relating thereto), the
extension of the term of the Notes, any change in a date fixed for payment on
the Loans, the increase in the amount of the Commitments of the Banks, and the
decrease in the amount of commitment fee hereunder may not be changed without
the written consent of the Borrower and the written consent of each Bank
affected thereby; the definition of Majority Banks may not be amended without
the written consent of all of the Banks; and the amount of the Agent's Fee
payable for the Agent's account and ss.14 may not be amended without the written
consent of the Agent. No waiver shall extend to or affect any obligation not
expressly waived or impair any right consequent thereon. No course of dealing or
delay or omission on the part of the Agent or any Bank in exercising any right
shall operate as a waiver thereof or otherwise be prejudicial
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thereto. No notice to or demand upon the Borrower shall entitle the Borrower to
other or further notice or demand in similar or other circumstances.
SS.26. SEVERABILITY. The provisions of this Credit Agreement are
severable and if any one clause or provision hereof shalL be held invalid or
unenforceable in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect only such clause or provision, or part thereof, in
such jurisdiction, and shall not in any manner affect such clause or provision
in any other jurisdiction, or any other clause or provision of this Credit
Agreement in any jurisdiction.
SS.27. TRANSITIONAL ARRANGEMENTS.
27.1. ORIGINAL CREDIT AGREEMENT SUPERSEDED. This Credit
Agreement shall on the Closing Date supersede the Original Credit Agreement in
its entirety, except as provided in this ss.27. On the Closing Date, the rights
and obligations of thE parties evidenced by the Original Credit Agreement shall
be evidenced by the Credit Agreement and the other Loan Documents and the
"Loans" as defined in the Original Credit Agreement shall be converted to Loans
as defined herein.
27.2. RETURN AND CANCELLATION OF NOTES. As soon as
reasonably practicable after its receipt of its Revolving Credit Note hereunder
on the Closing Date, the Banks will promptly return to the Borrower, marked
"Substituted" or "Cancelled", as the case may be, any notes of the Borrower held
by the Banks pursuant to the Original Credit Agreement.
27.3. INTEREST AND FEES UNDER SUPERSEDED AGREEMENT. All
interest and fees and expenses, if any, owing or accruing under or in respect of
the Original Credit Agreement through the Closing Date shall be calculated as of
the Closing Date (prorated in the case of any fractional periods), and shall be
paid in accordance with the method, and on the dates, specified in the Original
Credit Agreement, as if the Original Credit Agreement were still in effect.
Commencing on the Closing Date, the commitment fees shall be payable by the
Borrower to the Agent for the account of the Banks in accordance with ss.2.2.
hereof.
SS.28. COVENANT OF SSI. SSI covenants and agrees that, so long as any
Loan, Unpaid Reimbursement Obligation, or Note iS outstanding or any Bank has
any obligation to make any Loans, SSI will not (a) create or incur or suffer to
be created or incurred or to exist any lien, encumbrance, mortgage, pledge,
charge, restriction or other security interest of any kind upon any of the
capital stock of SRI, and, subsequent to the merger of SRI and the Borrower as
contemplated by ss.8.5.1. hereof, the capital stock oF the Borrower or (b)
transfer any of such capital stock for the purpose of subjecting the same to the
payment of Indebtedness or performance of any other obligation in priority to
payment of its general creditors. The parties hereto hereby acknowledge and
agree that SSI is executing this Credit Agreement for the sole purpose of being
bound by the covenant contained in this ss.28.
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IN WITNESS WHEREOF, the undersigned have duly executed this Amended
and Restated Credit Agreement as a sealed instrument as of the date first set
forth above.
PALAIS ROYAL, INC.
By:____________________________________
Name: _________________________________
Title: ________________________________
SPECIALTY RETAILERS, INC.
By:____________________________________
Name: _________________________________
Title: ________________________________
STAGE STORES, INC.
By:____________________________________
Name: _________________________________
Title: ________________________________
THE FIRST NATIONAL BANK OF
BOSTON, individually and as Agent
By:____________________________________
Name: Xxxxx F.X. Xxxxxxxx
Title: Vice President
UNION BANK OF CALIFORNIA, N.A.
By:____________________________________
Name: _________________________________
Title: ________________________________
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CREDITANSTALT-BANKVEREIN
By:____________________________________
Name: _________________________________
Title: ________________________________
BANQUE PARIBAS
By:____________________________________
Name: _________________________________
Title: ________________________________
CREDIT SUISSE FIRST BOSTON
By:____________________________________
Name: _________________________________
Title: ________________________________
DLJ CAPITAL FUNDING
By:____________________________________
Name: _________________________________
Title: ________________________________
THE FUJI BANK, LIMITED
By:____________________________________
Name: _________________________________
Title: ________________________________
HIBERNIA NATIONAL BANK
By:____________________________________
Name: _________________________________
Title: ________________________________
Schedule 1
Commmittment of Committment
Banks Seasonal Revolver Percentage
First National Bank of Boston $2,666,667 26.00000000%
Union Bank of California, N.A. $2,000,000 20%
Creditanstalt-Bankverein $1,333,333 13.33333333%
Banque Paribas $800,000 8%
Credit Suisse First Boston $800,000 8%
DLJ Capital Funding $800,000 8%
The Fuji Bank, Limited $800,000 8%
Hibernia National Bank $800,000 8%
TOTAL $10,000,000 100%
