1
EXHIBIT 4.1
EXECUTION COPY
$215,000,000
CREDIT AGREEMENT
AMONG
CLAIRE'S STORES, INC.,
AS BORROWER,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTIES HERETO,
BEAR ▇▇▇▇▇▇▇ CORPORATE LENDING INC.,
AS SYNDICATION AGENT,
SUNTRUST BANK, SOUTH FLORIDA, N.A.
AS DOCUMENTATION AGENT,
AND
FLEET NATIONAL BANK,
AS ADMINISTRATIVE AGENT
DATED AS OF DECEMBER 1, 1999
BEAR, ▇▇▇▇▇▇▇ & CO. INC., AS SOLE LEAD ARRANGER AND SOLE BOOK MANAGER
2
TABLE OF CONTENTS
SECTION 1
DEFINITIONS
PAGE
----
1.1 Defined Terms...................................................... 1
1.2 Other Definitional Provisions......................................16
SECTION 2
AMOUNT AND TERMS OF COMMITMENTS
2.1 Term Commitments...................................................17
2.2 Procedure for Term Loan Borrowing..................................17
2.3 Repayment of Term Loans............................................17
2.4 Revolving Commitments..............................................18
2.5 Procedure for Revolving Loan Borrowing.............................18
2.6 Commitment Fees, etc...............................................19
2.7 Termination or Reduction of Revolving Commitments..................19
2.8 Optional Prepayments...............................................19
2.9 Mandatory Prepayments and Commitment Reductions....................19
2.10 Conversion and Continuation Options................................20
2.11 Limitations on Eurodollar Tranches.................................21
2.12 Interest Rates and Payment Dates...................................21
2.13 Computation of Interest and Fees...................................21
2.14 Inability to Determine Interest Rate...............................22
2.15 Pro Rata Treatment and Payments....................................22
2.16 Requirements of Law................................................24
2.17 Taxes..............................................................25
2.18 Indemnity..........................................................26
2.19 Change of Lending Office...........................................27
2.20 Replacement of Lenders.............................................27
2.21 Evidence of Debt...................................................28
SECTION 3
LETTERS OF CREDIT
3.1 L/C Commitment.....................................................28
3.2 Procedure for Issuance of Letter of Credit.........................29
3.3 Fees and Other Charges.............................................29
3.4 L/C Participations.................................................30
3.5 Reimbursement Obligation of the Borrower...........................31
3.6 Obligations Absolute...............................................31
(i)
3
PAGE
----
3.7 Letter of Credit Payments..........................................32
3.8 Applications.......................................................32
SECTION 4
REPRESENTATIONS AND WARRANTIES
4.1 Financial Condition................................................32
4.2 No Change..........................................................33
4.3 Corporate Existence; Compliance with Law...........................33
4.4 Corporate Power; Authorization; Enforceable Obligations............33
4.5 No Legal Bar.......................................................33
4.6 Litigation.........................................................34
4.7 No Default.........................................................34
4.8 Ownership of Property; Liens.......................................34
4.9 Intellectual Property..............................................34
4.10 Taxes..............................................................34
4.11 Federal Regulations................................................35
4.12 Labor Matters......................................................35
4.13 ERISA..............................................................35
4.14 Investment Company Act; Other Regulations..........................35
4.15 Subsidiaries.......................................................36
4.16 Use of Proceeds....................................................36
4.17 Environmental Matters..............................................36
4.18 Accuracy of Information, etc.......................................37
4.19 Solvency...........................................................37
4.20 Senior Indebtedness................................................37
4.21 Year 2000 Matters..................................................37
4.22 Certain Documents..................................................38
SECTION 5
CONDITIONS PRECEDENT
5.1 Conditions to Initial Extension of Credit..........................38
5.2 Conditions to Each Extension of Credit.............................39
SECTION 6
AFFIRMATIVE COVENANTS
6.1 Financial Statements...............................................40
6.2 Certificates; Other Information....................................40
6.3 Payment of Obligations.............................................41
6.4 Maintenance of Existence; Compliance...............................41
6.5 Maintenance of Property; Insurance.................................41
6.6 Inspection of Property; Books and Records; Discussions.............42
6.7 Notices............................................................42
6.8 Environmental Laws.................................................43
(ii)
4
PAGE
----
6.9 Additional Subsidiaries............................................43
6.10 Compliance with Year 2000..........................................43
SECTION 7
NEGATIVE COVENANTS
7.1 Financial Condition Covenants......................................43
7.2 Indebtedness.......................................................43
7.3 Liens..............................................................44
7.4 Fundamental Changes................................................45
7.5 Disposition of Property............................................46
7.6 Restricted Payments................................................46
7.7 Investments........................................................47
7.8 Optional Payments and Modifications of Certain Debt Instruments....47
7.9 Transactions with Affiliates.......................................48
7.10 Sales and Leasebacks...............................................48
7.11 Changes in Fiscal Periods..........................................48
7.12 Negative Pledge Clauses............................................48
7.13 Clauses Restricting Subsidiary Distributions.......................48
7.14 Lines of Business..................................................49
7.15 Amendments to Acquisition Documents................................49
SECTION 8
EVENTS OF DEFAULT
SECTION 9
THE AGENTS
9.1 Appointment........................................................52
9.2 Delegation of Duties...............................................52
9.3 Exculpatory Provisions.............................................52
9.4 Reliance by Administrative Agent...................................53
9.5 Notice of Default..................................................53
9.6 Non-Reliance on Agents and Other Lenders...........................53
9.7 Indemnification....................................................54
9.8 Agent in Its Individual Capacity...................................54
9.9 Successor Administrative Agent.....................................54
9.10 Agents Generally...................................................55
SECTION 10
MISCELLANEOUS
10.1 Amendments and Waivers.............................................55
10.2 Notices............................................................57
10.3 No Waiver; Cumulative Remedies.....................................58
(iii)
5
PAGE
----
10.4 Survival of Representations and Warranties.........................58
10.5 Payment of Expenses and Taxes......................................58
10.6 Successors and Assigns; Participations and Assignments.............59
10.7 Adjustments; Set-off...............................................62
10.8 Counterparts.......................................................62
10.9 Severability.......................................................62
10.10 Integration........................................................62
10.11 GOVERNING LAW......................................................63
10.12 Submission To Jurisdiction; Waivers................................63
10.13 Acknowledgments....................................................63
10.14 Releases of Guarantees.............................................64
10.15 Confidentiality....................................................64
10.16 WAIVERS OF JURY TRIAL..............................................64
(iv)
6
ANNEX:
A Pricing Grid
SCHEDULES:
1.1A Commitments
4.4 Consents, Authorizations, Filings and Notices
4.15 Subsidiaries
7.2(d) Existing Indebtedness
7.3(f) Existing Liens
EXHIBITS:
A Form of Compliance Certificate
B-1 Form of Borrower Closing Certificate
B-2 Form of Guarantor Closing Certificate
C Form of Assignment and Acceptance
D Form of Legal Opinion of Greenberg, Traurig, P.A.
E Form of Tax Exemption Certificate
F Form of Guarantee
(v)
7
CREDIT AGREEMENT, dated as of December 1, 1999, among CLAIRE'S STORES,
INC., a Delaware corporation (the "BORROWER"), the several banks and other
financial institutions or entities from time to time parties to this Agreement
(the "LENDERS") BEAR, ▇▇▇▇▇▇▇ & CO. INC., as sole lead arranger and sole book
manager (in such capacity, the "LEAD ARRANGER"), BEAR ▇▇▇▇▇▇▇ CORPORATE LENDING
INC., as syndication agent (in such capacity, the "SYNDICATION AGENT"), SUNTRUST
BANK, SOUTH FLORIDA, N.A., as documentation agent (in such capacity, the
"DOCUMENTATION AGENT"), and FLEET NATIONAL BANK, as administrative agent (in
such capacity, the "ADMINISTRATIVE AGENT").
RECITALS
WHEREAS, the Borrower has entered into that certain Asset Purchase
Agreement dated as of November 1, 1999 (as amended, supplemented or otherwise
modified from time to time, the "Acquisition Agreement"), among the Borrower,
Venator Group, Inc., Venator Group Specialty, Inc., Venator Group Canada Inc.,
Afterthoughts Boutiques, Inc. and AfterThoughts, Inc. (collectively, the
"Seller") pursuant to which the Borrower will acquire the assets and properties
of the Afterthoughts division of the Seller (the "Acquired Business") for
approximately $250,000,000 in cash (the "Acquisition"); and
WHEREAS, the Borrower has requested $215,000,000 in senior credit
facilities from the Lenders pursuant to this Agreement (a) to finance the
Acquisition and to pay related fees and expenses, (b) to refinance its existing
Revolving Credit Agreement, dated as of August 19, 1996 (as amended, the
"EXISTING CREDIT AGREEMENT"), with Bank Leumi USA (f/k/a Bank Leumi Trust
Company of New York), and (c) to finance the general corporate purposes of the
Borrower and its subsidiaries after the Acquisition; and
WHEREAS, the Lenders are willing to provide the requested senior credit
facilities on the terms and conditions set forth herein;
NOW, THEREFORE, the parties hereto hereby agree as follows:
SECTION 1
DEFINITIONS
1.1 DEFINED TERMS. As used in this Agreement, the terms listed
in this Section 1.1 shall have the respective meanings set forth in this
Section 1.1.
"ABR": for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the greater of (a) the Prime Rate in
effect on such day and (b) the Federal Funds Effective Rate in effect on such
day plus 0.50%. For purposes hereof: "PRIME RATE" shall mean the rate of
interest per annum publicly announced from time to time by the Reference Lender
as its prime rate in effect at its principal office in Boston, Massachusetts
(the Prime Rate not being intended to be the lowest rate of interest charged by
the Reference Lender in connection with extensions of credit to debtors). Any
change in the ABR due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective as of the opening of business on the effective
day of such change in the Prime Rate or the Federal Funds Effective Rate,
respectively.
8
"ABR LOANS": Loans the rate of interest applicable to which is
based upon the ABR.
"ACQUIRED BUSINESS": as defined in the recitals to the
Agreement.
"ACQUISITION": as defined in the recitals to this Agreement.
"ACQUISITION AGREEMENT": as defined in the recitals to this
Agreement.
"ACQUISITION DOCUMENTATION": collectively, the Acquisition
Agreement and all schedules, exhibits and annexes thereto and all side letters
and agreements affecting the terms thereof or entered into in connection
therewith, in each case as amended, supplemented or otherwise modified from time
to time in accordance with Section 7.15.
"ADJUSTMENT DATE": as defined in the Pricing Grid.
"ADMINISTRATIVE AGENT": as defined in the preamble to this
Agreement.
"AFFILIATE": as to any Person, any other Person that, directly
or indirectly, is in control of, is controlled by, or is under common control
with, such Person. For purposes of this definition, "control" of a Person means
the power, directly or indirectly, either to (a) vote 10% or more of the
securities having ordinary voting power for the election of directors (or
persons performing similar functions) of such Person or (b) direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise.
"AGENTS": the collective reference to the Syndication Agent,
the Documentation Agent, the Lead Arranger and the Administrative Agent.
"AGGREGATE EXPOSURE": with respect to any Lender at any time,
an amount equal to (a) until the Closing Date, the aggregate amount of such
Lender's Commitments at such time and (b) thereafter, the sum of (i) the
aggregate then unpaid principal amount of such Lender's Term Loans and (ii) the
amount of such Lender's Revolving Commitment then in effect or, if the Revolving
Commitments have been terminated, the amount of such Lender's Revolving
Extensions of Credit then outstanding.
"AGGREGATE EXPOSURE PERCENTAGE": with respect to any Lender at
any time, the ratio (expressed as a percentage) of such Lender's Aggregate
Exposure at such time to the Aggregate Exposure of all Lenders at such time.
"AGREEMENT": this Credit Agreement, as amended, supplemented
or otherwise modified from time to time.
"APPLICABLE MARGIN": for each Type of Loan, the rate per annum
set forth under the relevant column heading below:
-2-
9
ABR LOANS EURODOLLAR LOANS
--------- ----------------
Revolving Loans 0% 1.25%
Term Loans 0% 1.25%
; PROVIDED, that on and after the first Adjustment Date occurring after the date
which is six months after the Closing Date, the Applicable Margin with respect
to Revolving Loans and Term Loans will be determined pursuant to the Pricing
Grid.
"APPLICATION": an application, in such form as the Issuing
Lender may specify from time to time, requesting the Issuing Lender to open a
Letter of Credit.
"APPROVED FUND": with respect to any Lender that is a fund
that invests in commercial loans, any other fund that invests in commercial
loans and is managed or advised by the same investment advisor as such Lender or
by an Affiliate of such investment advisor.
"ASSET SALE": any Disposition of property or series of related
Dispositions of property (excluding any such Disposition permitted by clause
(a), (b), (c) or (d) of Section 7.5) that yields gross proceeds to the Borrower
or any of its Subsidiaries (valued at the initial principal amount thereof in
the case of non-cash proceeds consisting of notes or other debt securities and
valued at fair market value in the case of other non-cash proceeds) in excess of
$1,000,000.
"ASSIGNEE": as defined in Section 10.6(c).
"ASSIGNMENT AND ACCEPTANCE": an Assignment and Acceptance,
substantially in the form of Exhibit C.
"ASSIGNOR": as defined in Section 10.6(c).
"AVAILABLE REVOLVING COMMITMENT": as to any Revolving Lender
at any time, an amount equal to the excess, if any, of (a) such Lender's
Revolving Commitment then in effect LESS (b) such Lender's Revolving Extensions
of Credit then outstanding.
"BENEFITTED LENDER": as defined in Section 10.7(a).
"BOARD": the Board of Governors of the Federal Reserve System
of the United States (or any successor).
"BORROWER": as defined in the preamble to this Agreement.
"BORROWING DATE": any Business Day specified by the Borrower
as a date on which the Borrower requests the relevant Lenders to make Loans
hereunder.
"BUSINESS": as defined in Section 4.17(b).
"BUSINESS DAY": a day other than a Saturday, Sunday or other
day on which commercial banks in Boston, Massachusetts or New York City are
authorized or required by law to close, PROVIDED, that with respect to notices
and determinations in connection with, and payments of principal and interest
on, Eurodollar Loans, such day is also a day for trading by and between banks in
Dollar deposits in the interbank eurodollar market.
-3-
10
"CAPITAL EXPENDITURES": for any period, with respect to any
Person, the aggregate of all expenditures by such Person and its Subsidiaries
for the acquisition or leasing (pursuant to a capital lease) of fixed or capital
assets or additions to equipment (including replacements, capitalized repairs
and improvements during such period) that should be capitalized under GAAP on a
consolidated balance sheet of such Person and its Subsidiaries.
"CAPITAL LEASE OBLIGATIONS": as to any Person, the obligations
of such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP
and, for the purposes of this Agreement, the amount of such obligations at any
time shall be the capitalized amount thereof at such time determined in
accordance with GAAP.
"CAPITAL STOCK": any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants, rights or options to purchase any of the foregoing.
"CASH EQUIVALENTS": (a) marketable direct obligations issued
by, or unconditionally guaranteed by, the United States Government or issued by
any agency thereof and backed by the full faith and credit of the United States,
in each case maturing within one year from the date of acquisition thereof; (b)
certificates of deposit, time deposits, eurodollar time deposits or overnight
bank deposits having maturities of twelve months or less from the date of
acquisition thereof issued by any Lender or by any commercial bank organized
under the laws of the United States or any state thereof having a bank deposit
rating of at least A by Standard & Poor's Ratings Services ("S&P") or A2 by
▇▇▇▇▇'▇ Investors Service, Inc. ("MOODY'S"); (c) commercial paper of an issuer
rated at least A-1 by S&P or P-1 by Moody's, or carrying an equivalent rating by
a nationally recognized rating agency, if both of the two named rating agencies
cease publishing ratings of commercial paper issuers generally, and maturing
within twelve months from the date of acquisition thereof; (d) repurchase
obligations of any Lender or of any commercial bank satisfying the requirements
of clause (b) of this definition, having a term of not more than 30 days, with
respect to securities issued or fully guaranteed or insured by the United States
government; (e) securities with maturities of one year or less from the date of
acquisition thereof issued or fully guaranteed by any state, commonwealth or
territory of the United States, by any political subdivision or taxing authority
of any such state, commonwealth or territory or by the governments of the United
Kingdom or Canada, the securities of which state, commonwealth, territory,
political subdivision, taxing authority or government (as the case may be) are
rated at least A by S&P or A2 by Moody's; (f) securities with maturities of
twelve months or less from the date of acquisition thereof backed by standby
letters of credit issued by any Lender or any commercial bank satisfying the
requirements of clause (b) of this definition; or (g) shares of money market
mutual or similar funds which invest exclusively in assets satisfying the
requirements of clauses (a) through (f) of this definition.
-4-
11
"CLOSING DATE": the date on which the conditions precedent set
forth in Section 5.1 shall have been satisfied, which date is December 1, 1999.
"CODE": the Internal Revenue Code of 1986, as amended from
time to time.
"COMMITMENT": as to any Lender, the sum of the Term Commitment
and the Revolving Commitment of such Lender.
"COMMITMENT FEE RATE": 0.25% per annum.
"COMMONLY CONTROLLED ENTITY": an entity, whether or not
incorporated, that is under common control with the Borrower within the meaning
of Section 4001 of ERISA or is part of a group that includes the Borrower and
that is treated as a single employer under Section 414 of the Code.
"COMPLIANCE CERTIFICATE": a certificate duly executed by a
Responsible Officer substantially in the form of Exhibit A.
"CONDUIT LENDER": any special purpose entity organized and
administered by any Lender for the purpose of making Loans hereunder otherwise
required to be made by such Lender and designated by such Lender in a written
instrument, subject to the consent of the Administrative Agent and the Borrower;
PROVIDED, that the designation by any Lender of a Conduit Lender shall not
relieve the designating Lender of any of its obligations to fund a Loan under
this Agreement if, for any reason, its Conduit Lender fails to fund any such
Loan, and the designating Lender (and not the Conduit Lender) shall have the
sole right and responsibility to deliver all consents and waivers required or
requested under this Agreement with respect to its Conduit Lender, and PROVIDED,
FURTHER, that no Conduit Lender shall (a) be entitled to receive any greater
amount pursuant to Section 2.16, 2.17, 2.18 or 10.5 than the designating Lender
would have been entitled to receive in respect of the extensions of credit made
by such Conduit Lender or (b) be deemed to have any Commitment hereunder.
"CONFIDENTIAL INFORMATION MEMORANDUM": the Confidential
Information Memorandum dated November 1999 and furnished to the Lenders.
"CONSOLIDATED CURRENT ASSETS": at any date, all amounts that
would, in conformity with GAAP, be set forth opposite the caption "total current
assets" (or any like caption) on a consolidated balance sheet of the Borrower
and its Subsidiaries at such date.
"CONSOLIDATED CURRENT LIABILITIES": at any date, all amounts
that would, in conformity with GAAP, be set forth opposite the caption "total
current liabilities" (or any like caption) on a consolidated balance sheet of
the Borrower and its Subsidiaries at such date.
"CONSOLIDATED CURRENT RATIO": at any date, the ratio of (a)
Consolidated Current Assets on such date to (b) Consolidated Current Liabilities
on such date.
"CONSOLIDATED EBITDA": for any period of four consecutive
fiscal quarters of the Borrower, Consolidated Net Income for such period PLUS,
without duplication and to the extent reflected as a charge in the statement of
such Consolidated Net Income for such period, the sum of (a) income tax expense,
(b) Consolidated Interest Expense, (c) depreciation and amortization expense,
(d) amortization of intangibles (including, but not limited to, goodwill) and
organization costs and (e) up to $15,000,000 of any extraordinary, unusual or
non-recurring expenses or losses incurred on or prior to January 31, 2001
(including, whether or not otherwise includable as a separate item in the
statement of such Consolidated Net Income for such period, non-cash losses on
sales of assets outside of the ordinary course of business), and MINUS, to the
extent included in the statement of such Consolidated Net Income for such
period, any extraordinary, unusual or non-recurring income or gains (including,
whether or not otherwise includable as a separate item in the statement of such
Consolidated Net Income for such period, gains on the sales of assets outside of
the ordinary course of business), as determined on a consolidated basis.
-5-
12
"CONSOLIDATED EXCESS LIQUID ASSETS": at any date, the excess,
if any, of (a) all cash and Cash Equivalents of the Borrower and its
Subsidiaries at such date, as determined on a consolidated basis in accordance
with GAAP, over (b) $25,000,000.
"CONSOLIDATED FIXED CHARGE COVERAGE RATIO": for any period of
four consecutive fiscal quarters of the Borrower, the ratio of (a) the sum of
(i) Consolidated EBITDA for such period, (ii) Consolidated Lease Expense for
such period and (iii) Consolidated Excess Liquid Assets on the last day of such
period to (b) Consolidated Fixed Charges for such period.
"CONSOLIDATED FIXED CHARGES": for any period of four
consecutive fiscal quarters of the Borrower, the sum (without duplication) of
(a) Consolidated Interest Expense for such period, (b) the aggregate amount
actually paid by the Borrower and its Subsidiaries during such period on account
of Capital Expenditures, (c) Consolidated Lease Expense for such period and (d)
scheduled payments made during such period on account of principal of
Indebtedness of the Borrower or any of its Subsidiaries (including scheduled
principal payments in respect of the Term Loans).
"CONSOLIDATED INTEREST EXPENSE": for any period of four
consecutive fiscal quarters of the Borrower, total interest expense (including
that attributable to Capital Lease Obligations) of the Borrower and its
Subsidiaries for such period with respect to all outstanding Indebtedness of the
Borrower and its Subsidiaries (including all commissions, discounts and other
fees and charges owed with respect to letters of credit and bankers' acceptance
financing and net costs under Hedge Agreements in respect of interest rates to
the extent such net costs are allocable to such period) determined on a
consolidated basis in accordance with GAAP).
"CONSOLIDATED LEASE EXPENSE": for any period of four
consecutive fiscal quarters of the Borrower, the aggregate amount of fixed and
contingent rentals payable by the Borrower and its Subsidiaries for such period
with respect to leases of real and personal property, determined on a
consolidated basis in accordance with GAAP.
"CONSOLIDATED LEVERAGE RATIO": at any time, the ratio of (a)
Consolidated Total Net Debt at such time to (b) Consolidated EBITDA of the
Borrower for the most recent period of four consecutive fiscal quarters ending
prior to such time.
-6-
13
"CONSOLIDATED NET INCOME": for any period of four consecutive
fiscal quarters of the Borrower, the consolidated net income (or loss) of the
Borrower and its Subsidiaries, determined on a consolidated basis in accordance
with GAAP.
"CONSOLIDATED NET TANGIBLE ASSETS": at any date, all amounts
that would, in conformity with GAAP, be set forth opposite the caption "total
assets" (or any like caption) on a consolidated balance sheet of the Borrower
and its Subsidiaries at such date after deducting therefrom the following to the
extent otherwise included therein: (a) goodwill, including, without limitation,
any amounts (however designated on the balance sheet) representing the costs of
acquisitions in excess of underlying tangible assets; (b) patents, trademarks
and copyrights; (c) leasehold improvements which are not recoverable at the
expiration of the relevant lease; and (d) deferred charges, including, without
limitation, unauthorized debt discount and expenses, organization expenses and
experimental and development expenses (but including prepaid expenses).
"CONSOLIDATED TOTAL NET DEBT": at any time, (a) the aggregate
principal amount of all Indebtedness of the Borrower and its Subsidiaries
(excluding all obligations of the Borrower and its Subsidiaries in respect of
undrawn letters of credit) at such date MINUS (b) Consolidated Excess Liquid
Assets at such date, in each case as determined on a consolidated basis in
accordance with GAAP.
"CONTINUING DIRECTORS": the directors of the Borrower on the
Closing Date, and each other director, if, in each case, such other director's
nomination for election to the board of directors of the Borrower is recommended
by at least 66-2/3% of the then Continuing Directors.
"CONTINUING LETTERS OF CREDIT": the letters of credit
outstanding on the date hereof that were issued for the account of CBI
Distributing Corp. pursuant to the Existing Credit Agreement by the Issuing
Lender.
"CONTRACTUAL OBLIGATION": as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"CONTROL INVESTMENT AFFILIATES": as to the ▇▇▇▇▇▇▇▇ Family,
any Person that is, directly or indirectly, controlled by any member of the
▇▇▇▇▇▇▇▇ Family. For purposes of this definition, "controlled by" means the
power, directly or indirectly, to direct or cause the direction of the
management of a Person whether by contract or otherwise.
"DEFAULT": any of the events specified in Section 8, whether
or not any requirement for the giving of notice, the lapse of time, or both, has
been satisfied.
"DERIVATIVES COUNTERPARTY": as defined in Section 7.6.
"DISPOSITION": with respect to any property, any sale, lease,
sale and leaseback, assignment, conveyance, transfer or other disposition
thereof. The terms "DISPOSE" and "DISPOSED OF" shall have correlative meanings.
"DOCUMENTATION AGENT": as defined in the preamble to this
Agreement.
-7-
14
"DOLLARS" and "$": dollars in lawful currency of the United
States.
"DOMESTIC SUBSIDIARY": any Subsidiary of the Borrower
organized under the laws of any jurisdiction within the United States.
"ENVIRONMENTAL LAWS": any and all foreign, Federal, state,
local or municipal laws, rules, orders, regulations, statutes, ordinances,
codes, decrees, requirements of any Governmental Authority or other Requirements
of Law (including common law) regulating, relating to or imposing liability or
standards of conduct concerning protection of human health or the environment,
as now or may at any time hereafter be in effect.
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"EUROCURRENCY RESERVE REQUIREMENTS": for any day as applied to
a Eurodollar Loan, the aggregate (without duplication) of the maximum rates
(expressed as a decimal fraction) of reserve requirements in effect on such day
(including basic, supplemental, marginal and emergency reserves under any
regulations of the Board or other Governmental Authority having jurisdiction
with respect thereto) dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board) maintained by a member bank of the Federal Reserve
System.
"EURODOLLAR BASE RATE": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, the rate per annum determined
on the basis of the rate for deposits in Dollars for a period equal to such
Interest Period commencing on the first day of such Interest Period appearing on
Page 3750 of the Dow ▇▇▇▇▇ Markets screen as of 11:00 A.M., London time, two
Business Days prior to the beginning of such Interest Period. In the event that
such rate does not appear on Page 3750 of the Dow ▇▇▇▇▇ Markets screen (or
otherwise on such screen), the "EURODOLLAR BASE RATE" shall be determined by
reference to such other comparable publicly available service for displaying
eurodollar rates as may be selected by the Administrative Agent or, in the
absence of such availability, by reference to the rate at which the
Administrative Agent is offered Dollar deposits at or about 11:00 A.M., New York
City time, two Business Days prior to the beginning of such Interest Period in
the interbank eurodollar market where its eurodollar and foreign currency and
exchange operations are then being conducted for delivery on the first day of
such Interest Period for the number of days comprised therein.
"EURODOLLAR LOANS": Loans the rate of interest applicable to
which is based upon the Eurodollar Rate.
"EURODOLLAR RATE": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, a rate per annum determined for
such day in accordance with the following formula (rounded upward to the nearest
1/100th of 1%):
Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
-8-
15
"EURODOLLAR TRANCHE": the collective reference to Eurodollar
Loans under a particular Facility the then current Interest Periods with respect
to all of which begin on the same date and end on the same later date (whether
or not such Loans shall originally have been made on the same day).
"EVENT OF DEFAULT": any of the events specified in Section 8,
PROVIDED that any requirement for the giving of notice, the lapse of time, or
both, has been satisfied.
"EXISTING CREDIT AGREEMENT": as defined in the recitals to
this Agreement.
"FACILITY": each of (a) the Term Commitments and the Term
Loans made thereunder (the "TERM LOAN FACILITY") and (b) the Revolving
Commitments and the extensions of credit made thereunder (the "REVOLVING
FACILITY").
"FEDERAL FUNDS EFFECTIVE RATE": for any day, 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 on the
next succeeding 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 the day of such transactions received by the Reference Lender
from three federal funds brokers of recognized standing selected by it. "FOREIGN
SUBSIDIARY": any Subsidiary of the Borrower that is not a Domestic Subsidiary.
"FUNDING OFFICE": the office of the Administrative Agent specified in Section
10.2 or such other office as may be specified from time to time by the
Administrative Agent as its funding office by written notice to the Borrower and
the Lenders. "GAAP": generally accepted accounting principles in the United
States as in effect from time to time, except that for purposes of Section 7.1,
GAAP shall be determined on the basis of such principles in effect on the date
hereof and consistent with those used in the preparation of the most recent
audited financial statements referred to in Section 4.1(b). In the event that
any Accounting Change (as defined below) shall occur and such change results in
a change in the method of calculation of financial covenants, standards or terms
in this Agreement, then the Borrower and the Administrative Agent agree to enter
into negotiations in order to amend such provisions of this Agreement so as to
equitably reflect such Accounting Changes with the desired result that the
criteria for evaluating the Borrower's financial condition shall be the same
after such Accounting Changes as if such Accounting Changes had not been made.
Until such time as such an amendment shall have been executed and delivered by
the Borrower, the Administrative Agent and the Required Lenders, all financial
covenants, standards and terms in this Agreement shall continue to be calculated
or construed as if such Accounting Changes had not occurred. "ACCOUNTING
CHANGES" refers to changes in accounting principles required by the promulgation
of any rule, regulation, pronouncement or opinion by the Financial Accounting
Standards Board of the American Institute of Certified Public Accountants or, if
applicable, the SEC. "GOVERNMENTAL AUTHORITY": any nation or government, any
state or other political subdivision thereof, any agency, authority,
instrumentality, regulatory body, court, central bank or other entity exercising
executive, legislative, judicial, taxing, regulatory or administrative functions
of or pertaining to government, any securities exchange and any self-regulatory
organization (including the National Association of Insurance Commissioners).
"GUARANTEE": the Guarantee to be executed and delivered by each Subsidiary
Guarantor, substantially in the form of Exhibit F, as the same may be amended,
supplemented or otherwise modified from time to time. "GUARANTEE OBLIGATION": as
to any Person (the "GUARANTEEING PERSON"), any obligation of (a) the
guaranteeing person or (b) another Person (including any bank under any letter
of credit) to induce the creation of which the guaranteeing person has issued a
reimbursement, counterindemnity or similar obligation, in either case
guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends or
other obligations (the "PRIMARY OBLIGATIONS") of any other third Person (the
"PRIMARY OBLIGOR") in any manner, whether directly or indirectly, including any
obligation of the guaranteeing person, whether or not contingent, (i) to
purchase any such primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds (1) for the purchase
or payment of any such primary obligation or (2) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (iii) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such primary
obligation or (iv) otherwise to assure or hold harmless the owner of any such
-9-
16
primary obligation against loss in respect thereof; PROVIDED, HOWEVER, that the
term Guarantee Obligation shall not include endorsements of instruments for
deposit or collection in the ordinary course of business. The amount of any
Guarantee Obligation of any guaranteeing person shall be deemed to be the lower
of (a) an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Guarantee Obligation is made and (b) the
maximum amount for which such guaranteeing person may be liable pursuant to the
terms of the instrument embodying such Guarantee Obligation, unless such primary
obligation and the maximum amount for which such guaranteeing person may be
liable are not stated or determinable, in which case the amount of such
Guarantee Obligation shall be such guaranteeing person's maximum reasonably
anticipated liability in respect thereof as determined by the Borrower in good
faith. "HEDGE AGREEMENTS": all interest rate swaps, caps or collar agreements or
similar arrangements dealing with interest rates or currency exchange rates or
the exchange of nominal interest obligations, either generally or under specific
contingencies.
"INDEBTEDNESS": of any Person at any date, without
duplication, (a) all indebtedness of such Person for borrowed money, (b) all
obligations of such Person for the deferred purchase price of property or
services (other than current trade payables incurred in the ordinary course of
such Person's business), (c) all obligations of such Person evidenced by notes,
bonds, debentures or other similar instruments, (d) all indebtedness created or
arising under any conditional sale or other title retention agreement with
respect to property acquired by such Person (even though the rights and remedies
of the seller or lender under such agreement in the event of default are limited
to repossession or sale of such property), (e) all Capital Lease Obligations of
such Person, (f) all obligations of such Person, contingent or otherwise, as an
account party or applicant under or in respect of acceptances, letters of
credit, surety bonds or similar arrangements, (g) the liquidation value of all
redeemable preferred Capital Stock of such Person, (h) all Guarantee Obligations
of such Person in respect of obligations of the kind referred to in clauses (a)
through (g) above, (i) all obligations of the kind referred to in clauses (a)
through (h) above secured by (or for which the holder of such obligation has an
existing right, contingent or otherwise, to be secured by) any Lien on property
(including accounts and contract rights) owned by such Person, whether or not
such Person has assumed or become liable for the payment of such obligation, and
(j) for the purposes of Sections 7.2 and 8(e) only, all obligations of such
Person in respect of Hedge Agreements. The Indebtedness of any Person shall
-10-
17
include the Indebtedness of any other entity (including any partnership in which
such Person is a general partner) to the extent such Person is liable therefor
as a result of such Person's ownership interest in or other relationship with
such entity, except to the extent the terms of such Indebtedness expressly
provide that such Person is not liable therefor. "INSOLVENCY": with respect to
any Multiemployer Plan, the condition that such Plan is insolvent within the
meaning of Section 4245 of ERISA. "INSOLVENT": pertaining to a condition of
Insolvency. "INTELLECTUAL PROPERTY": the collective reference to all rights,
priorities and privileges relating to intellectual property, whether arising
under United States, multinational or foreign laws or otherwise, including
copyrights, copyright licenses, patents, patent licenses, trademarks, trademark
licenses, technology, know-how and processes, and all rights to ▇▇▇ at law or in
equity for any infringement or other impairment thereof, including the right to
receive all proceeds and damages therefrom. "INTEREST PAYMENT DATE": (a) as to
any ABR Loan, the last day of each March, June, September and December to occur
while such Loan is outstanding and the final maturity date of such Loan, (b) as
to any Eurodollar Loan having an Interest Period of three months or less, the
last day of such Interest Period, (c) as to any Eurodollar Loan having an
Interest Period longer than three months, each day that is three months, or a
whole multiple thereof, after the first day of such Interest Period and the last
day of such Interest Period and (d) as to any Loan (other than any Loan that is
an ABR Loan), the date of any prepayment made in respect thereof. "INTEREST
PERIOD": as to any Eurodollar Loan, (a) initially, the period commencing on the
borrowing or conversion date, as the case may be, with respect to such
Eurodollar Loan and ending one, two, three or six months thereafter, as selected
by the Borrower in its notice of borrowing or notice of conversion, as the case
may be, given with respect thereto; and (b) thereafter, each period commencing
on the last day of the next preceding Interest Period applicable to such
Eurodollar Loan and ending one, two, three or six months thereafter, as selected
by the Borrower by irrevocable notice to the Administrative Agent not less than
three Business Days prior to the last day of the then current Interest Period
with respect thereto; PROVIDED that, all of the foregoing provisions relating to
Interest Periods are subject to the following: (i) if any Interest Period would
otherwise end on a day that is not a Business Day, such Interest Period shall be
extended to the next succeeding 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 Business Day;
(ii) the Borrower may not select an Interest Period under a particular Facility
that would extend beyond the Revolving Termination Date or beyond the date final
payment is due on the Term Loans, as the case may be; (iii) any Interest Period
that begins on the last Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar month at the end of
such Interest Period) shall end on the last Business Day of a calendar month;
and (iv) the Borrower shall select Interest Periods so as not to require a
payment or prepayment of any Eurodollar Loan during an Interest Period for such
LOAN. "INVESTMENTS": as defined in Section 7.7. "ISSUING LENDER": Bank Leumi
USA, in its capacity as issuer of any Letter of Credit or any successor thereto.
"L/C COMMITMENT": $25,000,000. "L/C FEE PAYMENT DATE": the
last day of each March, June, September and December and the last day of the
Revolving Commitment Period. "L/C OBLIGATIONS": at any time, an amount equal to
the sum of (a) the aggregate then undrawn and unexpired amount of the then
outstanding Letters of Credit and (b) the aggregate amount of drawings under
Letters of Credit that have not then been reimbursed pursuant to Section 3.5.
"L/C PARTICIPANTS": the collective reference to all the Revolving Lenders other
than the Issuing Lender. "LEAD ARRANGER" as defined in the recitals to this
Agreement. "LENDERS": as defined in the preamble hereto; PROVIDED, that unless
the context otherwise requires, each reference herein to the Lenders shall be
deemed to include any Conduit Lender. "LETTERS OF CREDIT": as defined in Section
3.1(a).
-11-
18
"LIEN": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including any
conditional sale or other title retention agreement and any capital lease having
substantially the same economic effect as any of the foregoing). "LOAN": any
loan made by any Lender pursuant to this AGREEMENT. "LOAN DOCUMENTS": this
Agreement, the Guarantee and the Notes. "LOAN PARTIES": the Borrower and each
Subsidiary Guarantor. "MAJORITY FACILITY LENDERS": with respect to any Facility,
the holders of more than 50% of the aggregate unpaid principal amount of the
Term Loans or the Total Revolving Extensions of Credit, as the case may be,
outstanding under such Facility (or, in the case of the Revolving Facility,
prior to any termination of the Revolving Commitments, the holders of more than
50% of the Total Revolving Commitments). "MATERIAL ADVERSE EFFECT": a material
adverse effect on (a) the Transaction, (b) the business, assets, liabilities
(factual or contingent) property, condition (financial or otherwise), results of
operations or prospects of the Borrower and its Subsidiaries taken as a whole or
(c) the validity or enforceability of this Agreement or any of the other Loan
Documents or the rights or remedies of the Agents or the Lenders hereunder or
thereunder. "MATERIALS OF ENVIRONMENTAL CONCERN": any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as such
in or under any Environmental Law, including asbestos, polychlorinated biphenyls
and urea-formaldehyde insulation. "MULTIEMPLOYER PLAN": a Plan that is a
multiemployer plan as defined in Section 4001(a)(3) of ERISA.
"NET CASH PROCEEDS": (a) in connection with any Asset Sale or
any Recovery Event, the proceeds thereof in the form of cash and Cash
Equivalents (including any such proceeds received by way of deferred payment of
principal pursuant to a note or installment receivable or purchase price
adjustment receivable or otherwise, but only as and when received) of such Asset
Sale or Recovery Event, net of attorneys' fees, accountants' fees, investment
banking fees, amounts required to be applied to the repayment of Indebtedness
secured by a Lien expressly permitted hereunder on any asset that is the subject
of such Asset Sale or Recovery Event (other than the Lien created pursuant to
the Guarantee) and other customary fees and expenses actually incurred in
connection therewith and net of taxes paid or reasonably estimated to be payable
as a result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements) and (b) in connection with any
issuance or sale of Capital Stock or any incurrence of Indebtedness, the cash
proceeds received from such issuance or incurrence, net of attorneys' fees,
investment banking fees, accountants' fees, underwriting discounts and
commissions and other customary fees and expenses actually incurred in
connection therewith.
"NON-EXCLUDED TAXES": as defined in Section 2.17(a).
-12-
19
"NON-U.S. LENDER": as defined in Section 2.17(d). "NOTES": the
collective reference to any promissory note evidencing Loans. "OBLIGATIONS": the
unpaid principal of and interest on (including interest accruing after the
maturity of the Loans and Reimbursement Obligations and interest accruing after
the filing of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Borrower, whether or not a
claim for post-filing or post-petition interest is allowed in such proceeding)
the Loans and all other obligations and liabilities of the Borrower to the
Administrative Agent or to any Lender (or, in the case of Hedge Agreements, any
affiliate of any Lender), whether direct or indirect, absolute or contingent,
due or to become due, or now existing or hereafter incurred, which may arise
under, out of, or in connection with, this Agreement, any other Loan Document,
the Letters of Credit, any Hedge Agreement entered into with any Lender or any
affiliate of any Lender or any other document made, delivered or given in
connection herewith or therewith, whether on account of principal, interest,
reimbursement obligations, fees, indemnities, costs, expenses (including all
fees, charges and disbursements of counsel to any Agent or any Lender that are
required to be paid by the Borrower pursuant hereto) or otherwise.
"OTHER TAXES": any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution, delivery
or enforcement of, or otherwise with respect to, this Agreement or any other
Loan Document. "PARTICIPANT": as defined in Section 10.6(b). "PBGC": the Pension
Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of
ERISA (or any successor).
"PERSON": an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature. "PLAN": at a particular time, any employee benefit plan that is covered
by ERISA and in respect of which the Borrower or a Commonly Controlled Entity is
(or, if such plan were terminated at such time, would under Section 4069 of
ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.
"PRICING GRID": the pricing grid attached hereto as Annex A. "PRO FORMA BALANCE
SHEET": as defined in Section 4.1(a). "PROJECTIONS": as defined in Section
6.2(c). "PROPERTIES": as defined in Section 4.17(a). "RECOVERY EVENT": any
settlement of or payment in respect of any property or casualty insurance claim
or any condemnation proceeding relating to any asset of the Borrower or any of
its Subsidiaries. "REFERENCE LENDER": the Administrative Agent. "REGISTER": as
defined in Section 10.6(D). "REGULATION U": Regulation U of the Board as in
effect from time to time. "REIMBURSEMENT OBLIGATION": the obligation of the
Borrower to reimburse the Issuing Lender pursuant to Section 3.5 for amounts
drawn under Letters of Credit. "REINVESTMENT DEFERRED AMOUNT": with respect to
any Reinvestment Event, the aggregate Net Cash Proceeds received by the Borrower
or any of its Subsidiaries in connection therewith that are not applied to
prepay the Term Loans pursuant to Section 2.9(b) as a result of the delivery of
a Reinvestment Notice. "REINVESTMENT EVENT": any Asset Sale or Recovery Event in
respect of which the Borrower has delivered a Reinvestment Notice. "REINVESTMENT
NOTICE": a written notice executed by a Responsible Officer stating that no
Event of Default has occurred and is continuing and that the Borrower (directly
or indirectly through a Subsidiary) intends and expects to use all or a
-13-
20
specified portion of the Net Cash Proceeds of an Asset Sale or Recovery Event to
acquire or repair fixed or capital assets useful in its business. "REINVESTMENT
PREPAYMENT AMOUNT": with respect to any Reinvestment Event, the Reinvestment
Deferred Amount relating thereto less any amount expended prior to the relevant
Reinvestment Prepayment Date to acquire or repair fixed or capital assets useful
in the Borrower's business. "REINVESTMENT PREPAYMENT DATE": with respect to any
Reinvestment Event, the earlier of (a) the date occurring twelve months after
such Reinvestment Event and (b) the date on which the Borrower shall have
determined not to, or shall have otherwise ceased to, acquire or repair fixed or
capital assets useful in the Borrower's business with all or any portion of the
relevant Reinvestment Deferred Amount. "REORGANIZATION": with respect to any
Multiemployer Plan, the condition that such plan is in reorganization within the
meaning of Section 4241 of ERISA. "REPORTABLE EVENT": any of the events set
forth in Section 4043(b) of ERISA, other than those events as to which the
thirty day notice period is waived under subsections .27, .28, .29, .30, .31,
.32, .34 or .35 of PBGC Reg. ss. 4043. "REQUIRED LENDERS": at any time, the
holders of more than 50% of (a) until the Closing Date, the Commitments then in
effect and (b) thereafter, the sum of (i) the aggregate unpaid principal amount
of the Term Loans then outstanding and (ii) the Total Revolving Commitments then
in effect or, if the Revolving Commitments have been terminated, the Total
Revolving Extensions of Credit then outstanding. "REQUIREMENT OF LAW": as to any
Person, the Certificate of Incorporation and By-Laws or other organizational or
governing documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental Authority, in
each case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject. "RESPONSIBLE OFFICER": the
chief executive officer, president or chief financial officer of the Borrower,
but in any event, with respect to financial matters, the chief financial officer
of the BORROWER. "RESTRICTED PAYMENTS": as defined in Section 7.6. "REVOLVING
COMMITMENT": as to any Lender, the obligation of such Lender, if any, to make
Revolving Loans and participate in Letters of Credit in an aggregate principal
and/or face amount not to exceed the amount set forth under the heading
"Revolving Commitment" opposite such Lender's name on Schedule 1.1A or in the
Assignment and Acceptance pursuant to which such Lender became a party hereto,
as the same may be changed from time to time pursuant to the terms hereof. The
original amount of the Total Revolving Commitments is $40,000,000. "REVOLVING
COMMITMENT PERIOD": the period from and including the Closing Date to the
Revolving Termination Date. "REVOLVING EXTENSIONS OF CREDIT": as to any
Revolving Lender at any time, an amount equal to the sum of (a) the aggregate
principal amount of all Revolving Loans held by such Lender then outstanding and
(b) such Lender's Revolving Percentage of the L/C Obligations then outstanding.
"REVOLVING LENDER": each Lender that has a Revolving Commitment or that holds
Revolving Loans. "REVOLVING LOANS": as defined in Section 2.4(a). "REVOLVING
PERCENTAGE": as to any Revolving Lender at any time, the percentage which such
Lender's Revolving Commitment then constitutes of the Total Revolving
Commitments (or, at any time after the Revolving Commitments shall have expired
or terminated, the percentage which the aggregate principal amount of such
Lender's Revolving Loans then outstanding constitutes of the aggregate principal
amount of the Revolving Loans then outstanding). "REVOLVING TERMINATION DATE":
December 1, 2004. "▇▇▇▇▇▇▇▇ FAMILY": collectively, ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Ms. E. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, together with
trusts established for their benefit and for the benefit of their immediate
family members. "SEC": the Securities and Exchange Commission, any successor
thereto and any analogous Governmental Authority. "SELLER": as defined in the
recitals to this Agreement. "SINGLE EMPLOYER PLAN": any Plan that is covered by
Title IV of ERISA, but that is not a Multiemployer Plan.
-14-
21
"SOLVENT": when used with respect to any Person, means that,
as of any date of determination, (a) the amount of the "present fair saleable
value" of the assets of such Person will, as of such date, exceed the amount of
all "liabilities of such Person, contingent or otherwise", as of such date, as
such quoted terms are determined in accordance with applicable federal and state
laws governing determinations of the insolvency of debtors, (b) the present fair
saleable value of the assets of such Person will, as of such date, be greater
than the amount that will be required to pay the liability of such Person on its
debts as such debts become absolute and matured, (c) such Person will not have,
as of such date, an unreasonably small amount of capital with which to conduct
its business, and (d) such Person will be able to pay its debts as they mature.
For purposes of this definition, (i) "debt" means liability on a "claim", and
(ii) "claim" means any (x) right to payment, whether or not such a right is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or unsecured or (y)
right to an equitable remedy for breach of performance if such breach gives rise
to a right to payment, whether or not such right to an equitable remedy is
reduced to judgment, fixed, contingent, matured or unmatured, disputed,
undisputed, secured or unsecured. "SPECIFIED CHANGE OF CONTROL": a "Change of
Control" as defined in any Subordinated Debt Indenture. "SUBORDINATED DEBT": any
unsecured indebtedness of the Borrower, no part of the principal of which is
required to be paid (whether by way of mandatory sinking fund, mandatory
redemption or mandatory prepayment), prior to the date which is at least one
hundred eighty-three days after the then scheduled final maturity of the Loans
hereunder; and the payment of principal of and interest of which and other
obligations of the Borrower in respect thereof are subordinated to the prior
payment in full of the principal of and interest (including pre-petition
interest) on the Obligations on terms and conditions satisfactory to the
Administrative Agent, the Syndication Agent and the Required Lenders.
"SUBORDINATED DEBT INDENTURE": with respect to any Subordinated Debt, the
Indenture entered into by the Borrower in connection with the issuance of such
Subordinated Debt, together with all instruments and other agreements entered
into by the Borrower in connection therewith, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with Section
7.8.
"SUBSIDIARY": as to any Person, a corporation, partnership,
limited liability company or other entity of which shares of stock or other
ownership interests having ordinary voting power (other than stock or such other
ownership interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other managers of
such corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer
to a Subsidiary or Subsidiaries of the Borrower. "SUBSIDIARY GUARANTOR": each
Subsidiary of the Borrower other than Foreign Subsidiaries.
-15-
22
"SYNDICATION AGENT": as defined in the preamble to this
Agreement. "TERM COMMITMENT": as to any Lender, the obligation of such Lender,
if any, to make a Term Loan to the Borrower hereunder in a principal amount not
to exceed the amount set forth under the heading "Term Commitment" opposite such
Lender's name on Schedule 1.1A. The original aggregate amount of the Term
Commitments is $175,000,000. "TERM LENDER": each Lender that has a Term
Commitment or is the holder of a Term Loan. "TERM LOAN": as defined in Section
2.1. "TERM PERCENTAGE": as to any Term Lender at any time, the percentage which
such Lender's Term Commitment then constitutes of the aggregate Term Commitments
(or, at any time after the Closing Date, the percentage which the aggregate
principal amount of such Lender's Term Loans then outstanding constitutes of the
aggregate principal amount of the Term Loans then outstanding). "TOTAL REVOLVING
COMMITMENTS": at any time, the aggregate amount of the Revolving Commitments
then in effect. "TOTAL REVOLVING EXTENSIONS OF CREDIT": at any time, the
aggregate amount of the Revolving Extensions of Credit of the Revolving Lenders
outstanding at such time. "TRANSACTION": the Acquisition and all other
transactions contemplated to occur hereunder on the Closing Date. "TRANSFEREE":
any Assignee or Participant.
"TYPE": as to any Loan, its nature as an ABR Loan or a
Eurodollar Loan. "UNITED STATES": the United States of America. "WHOLLY OWNED
SUBSIDIARY": as to any Person, any other Person all of the Capital Stock of
which (other than directors' qualifying shares required by law) is owned by such
Person directly and/or through other Wholly Owned Subsidiaries. "WHOLLY OWNED
SUBSIDIARY GUARANTOR": any Subsidiary Guarantor that is a Wholly Owned
Subsidiary of the Borrower.
1.2 OTHER DEFINITIONAL PROVISIONS.
(a) Unless otherwise specified therein, all terms defined in
this Agreement shall have the defined meanings when used in the other Loan
Documents or any certificate or other document made or delivered pursuant hereto
or thereto.
(b) As used herein and in the other Loan Documents, and any
certificate or other document made or delivered pursuant hereto or thereto, (i)
accounting terms relating to the Borrower and its Subsidiaries not defined in
Section 1.1 and accounting terms partly defined in Section 1.1, to the extent
not defined, shall have the respective meanings given to them under GAAP, (ii)
the words "include", "includes" and "including" shall be deemed to be followed
by the phrase "without limitation", (iii) the word "incur" shall be construed to
mean incur, create, issue, assume, become liable in respect of or suffer to
exist (and the words "incurred" and "incurrence" shall have correlative
meanings), and (iv) the words "asset" and "property" shall be construed to have
the same meaning and effect and to refer to any and all tangible and intangible
assets and properties, including cash, Capital Stock, securities, revenues,
accounts, leasehold interests and contract rights.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
(d) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
-16-
23
SECTION 2
AMOUNT AND TERMS OF COMMITMENTS.
2.1 TERM COMMITMENTS. Subject to the terms and conditions hereof, each
Term Lender severally agrees to make a term loan (a "Term Loan") to the Borrower
on the Closing Date in an amount equal to the amount of the Term Commitment of
such Lender. The Term Loans may from time to time be Eurodollar Loans or ABR
Loans, as determined by the Borrower in its sole discretion (subject to Section
2.2) and notified to the Administrative Agent in accordance with Sections 2.2
and 2.10.
2.2 PROCEDURE FOR TERM LOAN BORROWING. The Borrower shall give the
Administrative Agent irrevocable notice (which notice must be received by the
Administrative Agent prior to 10:00 A.M., New York City time, at least one
Business Day prior to the anticipated Closing Date) requesting that the Term
Lenders make the Term Loans on the Closing Date and specifying the amount to be
borrowed. The Term Loans made on the Closing Date shall initially be ABR Loans
and no Term Loan may be made as, converted into or continued as a Eurodollar
Loan prior to December 8, 1999. Upon receipt of such notice the Administrative
Agent shall promptly notify each Term Lender thereof. Not later than 10:00 A.M.,
New York City time, on the Closing Date each Term Lender shall make available to
the Administrative Agent at the Funding Office an amount in immediately
available funds equal to the Term Loan to be made by such Lender. The
Administrative Agent shall credit the account of the Borrower on the books of
such office of the Administrative Agent with the aggregate of the amounts made
available to the Administrative Agent by the Term Lenders in immediately
available funds. Any Lender may elect to make funds available for any Term Loan
to be made by such Lender hereunder through a Conduit Lender.
2.3 REPAYMENT OF TERM LOANS. (a) The Term Loan of each Lender shall
mature in 17 consecutive installments, commencing on December 31, 2000, each of
which shall be in an amount equal to such Lender's Term Percentage multiplied by
the amount set forth below opposite such installment:
INSTALLMENT PRINCIPAL AMOUNT
----------- ----------------
December 31, 2000 $20,000,000
March 31, 2001 2,500,000
June 30, 2001 2,500,000
September 30, 2001 2,500,000
December 31, 2001 22,500,000
March 31, 2002 3,333,333
June 30, 2002 3,333,333
September 30, 2002 3,333,334
December 31, 2002 30,000,000
March 31, 2003 3,333,333
June 30, 2003 3,333,333
September 30, 2003 3,333,334
December 31, 2003 30,000,000
March 31, 2004 3,750,000
June 30, 2004 3,750,000
September 30, 2004 3,750,000
December 1, 2004 33,750,000
-17-
24
2.4 REVOLVING COMMITMENTS.
(a) Subject to the terms and conditions hereof, each Revolving
Lender severally agrees to make revolving credit loans ("REVOLVING LOANS") to
the Borrower from time to time during the Revolving Commitment Period in an
aggregate principal amount at any one time outstanding which, when added to the
amount equal to such Lender's Revolving Percentage of the L/C Obligations then
outstanding, does not exceed the amount of such Lender's Revolving Commitment.
During the Revolving Commitment Period the Borrower may use the Revolving
Commitments by borrowing, prepaying the Revolving Loans in whole or in part, and
reborrowing, all in accordance with the terms and conditions hereof. The
Revolving Loans may from time to time be Eurodollar Loans or ABR Loans, as
determined by the Borrower and notified to the Administrative Agent in
accordance with Sections 2.5 and 2.10. Any Lender may elect to make funds
available for any Revolving Loan to be made by such Lender hereunder through a
Conduit Lender.
(b) The Borrower shall repay all outstanding Revolving Loans
on the Revolving Termination Date.
2.5 PROCEDURE FOR REVOLVING LOAN BORROWING. The Borrower may borrow
under the Revolving Commitments during the Revolving Commitment Period on any
Business Day, PROVIDED that the Borrower shall give the Administrative Agent
irrevocable notice (which notice must be received by the Administrative Agent
prior to 12:00 Noon, New York City time, (a) at least three Business Days prior
to the requested Borrowing Date, in the case of Eurodollar Loans, or (b) at
least one Business Day prior to the requested Borrowing Date, in the case of ABR
Loans), specifying (i) the amount and Type of Revolving Loans to be borrowed,
(ii) the requested Borrowing Date and (iii) in the case of Eurodollar Loans, the
respective amounts of each such Type of Loan and the respective lengths of the
initial Interest Period therefor. Any Revolving Loans made on the Closing Date
shall initially be ABR Loans and no Revolving Loans may be made as, converted
into or continued as a Eurodollar Loan prior to December 8, 1999. Each borrowing
under the Revolving Commitments shall be in an amount equal to (x) in the case
of ABR Loans, $1,000,000 or a whole multiple thereof (or, if the then aggregate
Available Revolving Commitments are less than $1,000,000, such lesser amount)
and (y) in the case of Eurodollar Loans, $5,000,000 or a whole multiple of
$1,000,000 in excess thereof. Upon receipt of any such notice from the Borrower,
the Administrative Agent shall promptly notify each Revolving Lender thereof.
Each Revolving Lender will make the amount of its PRO RATA share of each
borrowing available to the Administrative Agent for the account of the Borrower
at the Funding Office prior to 12:00 Noon, New York City time, on the Borrowing
Date requested by the Borrower in funds immediately available to the
Administrative Agent. Such borrowing will then be made available to the Borrower
by the Administrative Agent crediting the account of the Borrower on the books
of such office with the aggregate of the amounts made available to the
Administrative Agent by the Revolving Lenders and in like funds as received by
the Administrative Agent.
-18-
25
2.6 COMMITMENT FEES, ETC.
(a) The Borrower agrees to pay to the Administrative Agent for
the account of each Revolving Lender a commitment fee for the period from and
including the Closing Date to the last day of the Revolving Commitment Period,
computed at the Commitment Fee Rate on the average daily amount of the Available
Revolving Commitment of such Lender during the period for which payment is made,
payable quarterly in arrears on the last day of each March, June, September and
December and on the Revolving Termination Date, commencing on the first of such
dates to occur after the date hereof.
(b) The Borrower agrees to pay to the Administrative Agent the
fees in the amounts and on the dates previously agreed to in writing by the
Borrower and the Administrative Agent.
2.7 TERMINATION OR REDUCTION OF REVOLVING COMMITMENTS. The
Borrower shall have the right, upon not less than three Business Days' notice to
the Administrative Agent, to terminate the Revolving Commitments or, from time
to time, to reduce the amount of the Revolving Commitments; PROVIDED that no
such termination or reduction of Revolving Commitments shall be permitted if,
after giving effect thereto and to any prepayments of the Revolving Loans made
on the effective date thereof, the Total Revolving Extensions of Credit would
exceed the Total Revolving Commitments. Any such reduction shall be in an amount
equal to $1,000,000, or a whole multiple thereof, and shall reduce permanently
the Revolving Commitments then in effect.
2.8 OPTIONAL PREPAYMENTS. The Borrower may at any time and from
time to time prepay the Loans, in whole or in part, without premium or penalty,
upon irrevocable notice delivered to the Administrative Agent at least three
Business Days prior thereto in the case of Eurodollar Loans and at least one
Business Day prior thereto in the case of ABR Loans, which notice shall specify
the date and amount of prepayment and whether the prepayment is of Eurodollar
Loans or ABR Loans; PROVIDED, that if a Eurodollar Loan is prepaid on any day
other than the last day of the Interest Period applicable thereto, the Borrower
shall also pay any amounts owing pursuant to Section 2.18. Upon receipt of any
such notice the Administrative Agent shall promptly notify each relevant Lender
thereof. If any such notice is given, the amount specified in such notice shall
be due and payable on the date specified therein, together with (except in the
case of Revolving Loans that are ABR Loans) accrued interest to such date on the
amount prepaid. Partial prepayments of Term Loans and Revolving Loans shall be
in an aggregate principal amount of $1,000,000 or a whole multiple thereof.
2.9 MANDATORY PREPAYMENTS AND COMMITMENT REDUCTIONS.
(a) If any Capital Stock or Indebtedness shall be issued or
incurred by the Borrower or any of its Subsidiaries (excluding any Indebtedness
incurred in accordance with Section 7.2 (other than paragraphs (f) and (i)
thereof) and excluding any Capital Stock issued pursuant to management stock
option and incentive plans), an amount equal to 100% (or 50%, in the case of
Capital Stock or Subordinated Debt) of the Net Cash Proceeds thereof shall be
applied on the date of such issuance or incurrence toward the prepayment of the
Term Loans as set forth in Sections 2.9(c) and 2.15.
-19-
26
(b) If on any date the Borrower or any of its Subsidiaries
shall receive Net Cash Proceeds from any Asset Sale or Recovery Event then,
unless a Reinvestment Notice shall be delivered in respect thereof, such Net
Cash Proceeds shall be applied on such date toward the prepayment of the Term
Loans as set forth in Sections 2.9(c) and 2.15 to the extent such prepayment is
required pursuant to Section 7.5(e); PROVIDED, that, notwithstanding the
foregoing, (i) the aggregate Net Cash Proceeds of Asset Sales and Recovery
Events that may be excluded from the foregoing requirement pursuant to a
Reinvestment Notice shall not exceed $10,000,000 in any fiscal year of the
Borrower and (ii) on each Reinvestment Prepayment Date, an amount equal to the
Reinvestment Prepayment Amount with respect to the relevant Reinvestment Event
shall be applied toward the prepayment of the Term Loans as set forth in
Sections 2.9(c) and 2.15.
(c) The application of any prepayment pursuant to Section 2.9
shall be made, FIRST, to Term Loans which are ABR Loans and, SECOND, to Term
Loans which are Eurodollar Loans. Each prepayment of the Loans (other than any
Loan that is an ABR Loan) under Section 2.9 shall be accompanied by accrued
interest to the date of such prepayment on the amount prepaid.
2.10 CONVERSION AND CONTINUATION OPTIONS.
(a) The Borrower may elect from time to time to convert
Eurodollar Loans to ABR Loans by giving the Administrative Agent at least three
Business Days' prior irrevocable notice of such election, PROVIDED that any such
conversion of Eurodollar Loans may only be made on the last day of an Interest
Period with respect thereto. The Borrower may elect from time to time to convert
ABR Loans to Eurodollar Loans by giving the Administrative Agent at least three
Business Days' prior irrevocable notice of such election (which notice shall
specify the length of the initial Interest Period therefor), PROVIDED that no
ABR Loan under a particular Facility may be converted into a Eurodollar Loan
when any Event of Default has occurred and is continuing and the Administrative
Agent or the Majority Facility Lenders in respect of such Facility have
determined in its or their sole discretion not to permit such conversions. Upon
receipt of any such notice the Administrative Agent shall promptly notify each
relevant Lender thereof.
(b) Any Eurodollar Loan may be continued as such upon the
expiration of the then current Interest Period with respect thereto by the
Borrower giving irrevocable notice to the Administrative Agent, in accordance
with the applicable provisions of the term "Interest Period" set forth in
Section 1.1, of the length of the next Interest Period to be applicable to such
Loans, PROVIDED that no Eurodollar Loan under a particular Facility may be
continued as such when any Event of Default has occurred and is continuing and
the Administrative Agent has or the Majority Facility Lenders in respect of such
Facility have determined in its or their sole discretion not to permit such
continuations, and PROVIDED, FURTHER, that if the Borrower shall fail to give
any required notice as described above in this paragraph or if such continuation
is not permitted pursuant to the preceding proviso such Loans shall be
automatically converted to ABR Loans on the last day of such then expiring
Interest Period. Upon receipt of any such notice the Administrative Agent shall
promptly notify each relevant Lender thereof.
-20-
27
2.11 LIMITATIONS ON EURODOLLAR TRANCHES. Notwithstanding anything
to the contrary in this Agreement, all borrowings, conversions and continuations
of Eurodollar Loans hereunder and all selections of Interest Periods hereunder
shall be in such amounts and be made pursuant to such elections so that, (a)
after giving effect thereto, the aggregate principal amount of the Eurodollar
Loans comprising each Eurodollar Tranche shall be equal to $5,000,000 or a whole
multiple of $1,000,000 in excess thereof and (b) no more than ten Eurodollar
Tranches shall be outstanding at any one time.
2.12 INTEREST RATES AND PAYMENT DATES.
(a) Each Eurodollar Loan shall bear interest for each day
during each Interest Period with respect thereto at a rate per annum equal to
the Eurodollar Rate determined for such day plus the Applicable Margin.
(b) Each ABR Loan shall bear interest at a rate per annum
equal to the ABR plus the Applicable Margin.
(c) (i) If all or a portion of the principal amount of any
Loan or Reimbursement Obligation shall not be paid when due (whether at the
stated maturity, by acceleration or otherwise), such overdue amount shall bear
interest at a rate per annum equal to (x) in the case of the Loans, the rate
that would otherwise be applicable thereto pursuant to the foregoing provisions
of this Section PLUS 2% or (y) in the case of Reimbursement Obligations, the
rate applicable to ABR Loans under the Revolving Facility PLUS 2%, and (ii) if
all or a portion of any interest payable on any Loan or Reimbursement Obligation
or any commitment fee or other amount payable hereunder shall not be paid when
due (whether at the stated maturity, by acceleration or otherwise), such overdue
amount shall bear interest at a rate per annum equal to the rate then applicable
to ABR Loans under the relevant Facility PLUS 2% (or, in the case of any such
other amounts that do not relate to a particular Facility, the rate then
applicable to ABR Loans under the Revolving Facility PLUS 2%), in each case,
with respect to clauses (i) and (ii) above, from the date of such non-payment
until such amount is paid in full (as well after as before judgment).
(d) Interest shall be payable in arrears on each Interest
Payment Date, PROVIDED that interest accruing pursuant to paragraph (c) of this
Section shall be payable from time to time on demand.
2.13 COMPUTATION OF INTEREST AND FEES.
(a) Interest and fees payable pursuant hereto shall be
calculated on the basis of a 360-day year for the actual days elapsed, except
that, with respect to ABR Loans the rate of interest on which is calculated on
the basis of the Prime Rate, the interest thereon shall be calculated on the
basis of a 365- (or 366-, as the case may be) day year for the actual days
elapsed. The Administrative Agent shall as soon as practicable notify the
Borrower and the relevant Lenders of each determination of a Eurodollar Rate.
Any change in the interest rate on a Loan resulting from a change in the ABR or
the Eurocurrency Reserve Requirements shall become effective as of the opening
of business on the day on which such change becomes effective. The
Administrative Agent shall as soon as practicable notify the Borrower and the
relevant Lenders of the effective date and the amount of each such change in
interest rate.
-21-
28
(b) Each determination of an interest rate by the
Administrative Agent pursuant to any provision of this Agreement shall be
conclusive and binding on the Borrower and the Lenders in the absence of
manifest error. The Administrative Agent shall, at the request of the Borrower,
deliver to the Borrower a statement showing the quotations used by the
Administrative Agent in determining any interest rate pursuant to Section
2.12(a).
2.14 INABILITY TO DETERMINE INTEREST RATE. If prior to the first
day of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that, by reason
of circumstances affecting the relevant market, adequate and reasonable means do
not exist for ascertaining the Eurodollar Rate for such Interest Period, or
(b) the Administrative Agent shall have received notice from
the Majority Facility Lenders in respect of the relevant Facility that the
Eurodollar Rate determined or to be determined for such Interest Period will not
adequately and fairly reflect the cost to such Lenders (as conclusively
certified by such Lenders) of making or maintaining their affected Loans during
such Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the relevant Lenders as soon as practicable thereafter. If such
notice is given (x) any Eurodollar Loans under the relevant Facility requested
to be made on the first day of such Interest Period shall be made as ABR Loans,
(y) any Loans under the relevant Facility that were to have been converted on
the first day of such Interest Period to Eurodollar Loans shall be continued as
ABR Loans and (z) any outstanding Eurodollar Loans under the relevant Facility
shall be converted, on the last day of the then-current Interest Period, to ABR
Loans. Until such notice has been withdrawn by the Administrative Agent, no
further Eurodollar Loans under the relevant Facility shall be made or continued
as such, nor shall the Borrower have the right to convert Loans under the
relevant Facility to Eurodollar Loans.
2.15 PRO RATA TREATMENT AND PAYMENTS.
(a) Each borrowing by the Borrower from the Lenders hereunder,
each payment by the Borrower on account of any commitment fee and any reduction
of the Commitments of the Lenders shall be made PRO RATA according to the
respective Term Percentages or Revolving Percentages, as the case may be, of the
relevant Lenders.
(b) Each payment (including each prepayment) by the Borrower
on account of principal and interest on the Term Loans shall be made PRO RATA
according to the respective outstanding principal amounts of the Term Loans then
held by the Term Lenders. The amount of each principal prepayment of the Term
Loans shall be applied to reduce the then remaining installments of the Term
Loans PRO RATA based upon the then remaining principal amount thereof, except
that optional prepayments pursuant to Section 2.8 shall be applied to the
remaining installments of the Term Loans in the scheduled order of maturity.
Amounts prepaid on account of the Term Loans may not be reborrowed.
-22-
29
(c) Each payment (including each prepayment) by the Borrower
on account of principal of and interest on the Revolving Loans shall be made PRO
RATA according to the respective outstanding principal amounts of the Revolving
Loans then held by the Revolving Lenders.
(d) All payments (including prepayments) to be made by the
Borrower hereunder, whether on account of principal, interest, fees or
otherwise, shall be made without setoff or counterclaim and shall be made prior
to 12:00 Noon, New York City time, on the due date thereof to the Administrative
Agent, for the account of the Lenders, at the Funding Office, in Dollars and in
immediately available funds. The Administrative Agent shall distribute such
payments to the Lenders promptly upon receipt in like funds as received. If any
payment hereunder (other than payments on the Eurodollar Loans) becomes due and
payable on a day other than a Business Day, such payment shall be extended to
the next succeeding Business Day. If any payment on a Eurodollar Loan becomes
due and payable on a day other than a Business Day, the maturity thereof shall
be extended to the next succeeding Business Day unless the result of such
extension would be to extend such payment into another calendar month, in which
event such payment shall be made on the immediately preceding Business Day. In
the case of any extension of any payment of principal pursuant to the preceding
two sentences, interest thereon shall be payable at the then applicable rate
during such extension.
(e) Unless the Administrative Agent shall have been notified
in writing by any Lender prior to a borrowing that such Lender will not make the
amount that would constitute its share of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the Administrative
Agent may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. If such amount is not made available to the Administrative
Agent by the required time on the Borrowing Date therefor, such Lender shall pay
to the Administrative Agent, on demand, such amount with interest thereon at a
rate equal to the daily average Federal Funds Effective Rate for the period
until such Lender makes such amount immediately available to the Administrative
Agent. A certificate of the Administrative Agent submitted to any Lender with
respect to any amounts owing under this paragraph shall be conclusive in the
absence of manifest error. If such Lender's share of such borrowing is not made
available to the Administrative Agent by such Lender within three Business Days
of such Borrowing Date, the Administrative Agent shall also be entitled to
recover such amount with interest thereon at the rate per annum applicable to
ABR Loans under the relevant Facility, on demand, from the Borrower.
(f) Unless the Administrative Agent shall have been notified
in writing by the Borrower prior to the date of any payment being made hereunder
that the Borrower will not make such payment to the Administrative Agent, the
Administrative Agent may assume that the Borrower is making such payment, and
the Administrative Agent may, but shall not be required to, in reliance upon
such assumption, make available to the Lenders their respective PRO RATA shares
of a corresponding amount. If such payment is not made to the Administrative
Agent by the Borrower within three Business Days of such required date, the
Administrative Agent shall be entitled to recover, on demand, from each Lender
to which any amount which was made available pursuant to the preceding sentence,
such amount with interest thereon at the rate per annum equal to the daily
average Federal Funds Effective Rate. Nothing herein shall be deemed to limit
the rights of the Administrative Agent or any Lender against the Borrower.
-23-
30
2.16 REQUIREMENTS OF LAW.
(a) If the adoption of or any change in any Requirement of Law
or in the interpretation or application thereof or compliance by any Lender with
any request or directive (whether or not having the force of law) from any
central bank or other Governmental Authority made subsequent to the date hereof:
(i) shall subject any Lender to any tax of any kind
whatsoever with respect to this Agreement, any Letter of Credit, any Application
or any Eurodollar Loan made by it, or change the basis of taxation of payments
to such Lender in respect thereof (except for Non-Excluded Taxes covered by
Section 2.17 and changes in the rate of tax on the overall net income of such
Lender);
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans or other
extensions of credit by, or any other acquisition of funds by, any office of
such Lender that is not otherwise included in the determination of the
Eurodollar Rate hereunder; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount that such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit, or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the Borrower shall promptly pay such Lender,
upon its demand, any additional amounts necessary to compensate such Lender for
such increased cost or reduced amount receivable. If any Lender becomes entitled
to claim any additional amounts pursuant to this paragraph, it shall promptly
notify the Borrower (with a copy to the Administrative Agent) of the event by
reason of which it has become so entitled.
(b) If any Lender shall have determined that the adoption of
or any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder or under or in respect of any Letter of
Credit to a level below that which such Lender or such corporation could have
achieved but for such adoption, change or compliance (taking into consideration
such Lender's or such corporation's policies with respect to capital adequacy)
by an amount deemed by such Lender to be material, then from time to time, after
submission by such Lender to the Borrower (with a copy to the Administrative
Agent) of a written request therefor, the Borrower shall pay to such Lender such
additional amount or amounts as will compensate such Lender for such reduction;
PROVIDED that the Borrower shall not be required to compensate a Lender pursuant
to this paragraph for any amounts incurred more than six months prior to the
date that such Lender notifies the Borrower of such Lender's intention to claim
compensation therefor; and PROVIDED FURTHER that, if the circumstances giving
rise to such claim have a retroactive effect, then such six-month period shall
be extended to include the period of such retroactive effect.
-24-
31
(c) A certificate as to any additional amounts payable
pursuant to this Section submitted by any Lender to the Borrower (with a copy to
the Administrative Agent) shall be conclusive in the absence of manifest error.
The obligations of the Borrower pursuant to this Section shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
2.17 TAXES.
(a) All payments made by the Borrower under this Agreement
shall be made free and clear of, and without deduction or withholding for or on
account of, any present or future income, stamp or other taxes, levies, imposts,
duties, charges, fees, deductions or withholdings, now or hereafter imposed,
levied, collected, withheld or assessed by any Governmental Authority, excluding
net income taxes and franchise taxes (imposed in lieu of net income taxes)
imposed on any Agent or any Lender as a result of a present or former connection
between such Agent or such Lender and the jurisdiction of the Governmental
Authority imposing such tax or any political subdivision or taxing authority
thereof or therein (other than any such connection arising solely from such
Agent or such Lender having executed, delivered or performed its obligations or
received a payment under, or enforced, this Agreement or any other Loan
Document). If any such non-excluded taxes, levies, imposts, duties, charges,
fees, deductions or withholdings ("NON-EXCLUDED TAXES") or Other Taxes are
required to be withheld from any amounts payable to any Agent or any Lender
hereunder, the amounts so payable to such Agent or such Lender shall be
increased to the extent necessary to yield to such Agent or such Lender (after
payment of all Non-Excluded Taxes and Other Taxes) interest or any such other
amounts payable hereunder at the rates or in the amounts specified in this
Agreement, PROVIDED, HOWEVER, that the Borrower shall not be required to
increase any such amounts payable to any Lender with respect to any Non-Excluded
Taxes (i) that are attributable to such Lender's failure to comply with the
requirements of paragraph (d) or (e) of this Section or (ii) that are United
States withholding taxes imposed on amounts payable to such Lender at the time
the Lender becomes a party to this Agreement, except to the extent that such
Lender's assignor (if any) was entitled, at the time of assignment, to receive
additional amounts from the Borrower with respect to such Non-Excluded Taxes
pursuant to this paragraph.
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
-25-
32
(c) Whenever any Non-Excluded Taxes or Other Taxes are payable
by the Borrower, as promptly as possible thereafter the Borrower shall send to
the Administrative Agent for its own account or for the account of the relevant
Agent or Lender, as the case may be, a certified copy of an original official
receipt received by the Borrower showing payment thereof. If the Borrower fails
to pay any Non-Excluded Taxes or Other Taxes when due to the appropriate taxing
authority or fails to remit to the Administrative Agent the required receipts or
other required documentary evidence, the Borrower shall indemnify the Agents and
the Lenders for any incremental taxes, interest or penalties that may become
payable by the Administrative Agent or any Lender as a result of any such
failure.
(d) Each Lender (or Transferee) that is not a "U.S. Person" as
defined in Section 7701(a)(30) of the Code (a "NON-U.S. LENDER") shall deliver
to the Borrower and the Administrative Agent (or, in the case of a Participant,
to the Lender from which the related participation shall have been purchased)
two copies of either U.S. Internal Revenue Service Form W-8BEN or Form W-89ECI,
or, in the case of a Non-U.S. Lender claiming exemption from U.S. federal
withholding tax under Section 871(h) or 881(c) of the Code with respect to
payments of "portfolio interest", a statement substantially in the form of
Exhibit E and a Form W-8BEN, or any subsequent versions thereof or successors
thereto, properly completed and duly executed by such Non-U.S. Lender claiming
complete exemption from, or a reduced rate of, U.S. federal withholding tax on
all payments by the Borrower under this Agreement and the other Loan Documents.
Such forms shall be delivered by each Non-U.S. Lender on or before the date it
becomes a party to this Agreement (or, in the case of any Participant, on or
before the date such Participant purchases the related participation). In
addition, each Non-U.S. Lender shall deliver such forms promptly upon the
obsolescence or invalidity of any form previously delivered by such Non-U.S.
Lender. Each Non-U.S. Lender shall promptly notify the Borrower at any time it
determines that it is no longer in a position to provide any previously
delivered certificate to the Borrower (or any other form of certification
adopted by the U.S. taxing authorities for such purpose). Notwithstanding any
other provision of this paragraph, a Non-U.S. Lender shall not be required to
deliver any form pursuant to this paragraph that such Non-U.S. Lender is not
legally able to deliver.
(e) A Lender that is entitled to an exemption from or
reduction of non-U.S. withholding tax under the law of the jurisdiction in which
the Borrower is located, or any treaty to which such jurisdiction is a party,
with respect to payments under this Agreement shall deliver to the Borrower
(with a copy to the Administrative Agent), at the time or times prescribed by
applicable law or reasonably requested by the Borrower, such properly completed
and executed documentation prescribed by applicable law as will permit such
payments to be made without withholding or at a reduced rate, PROVIDED that such
Lender is legally entitled to complete, execute and deliver such documentation
and in such Lender's judgment such completion, execution or submission would not
materially prejudice the legal position of such Lender.
(f) The agreements in this Section shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
2.18 INDEMNITY. The Borrower agrees to indemnify each Lender and to
hold each Lender harmless from any loss or expense that such Lender may sustain
or incur as a consequence of (a) default by the Borrower in making a borrowing
of, conversion into or continuation of Eurodollar Loans after the Borrower has
given a notice requesting the same in accordance with the provisions of this
-26-
33
Agreement, (b) default by the Borrower in making any prepayment of or conversion
from Eurodollar Loans after the Borrower has given a notice thereof in
accordance with the provisions of this Agreement or (c) the making of a
prepayment of Eurodollar Loans on a day that is not the last day of an Interest
Period with respect thereto. Such indemnification may include an amount equal to
the excess, if any, of (i) the amount of interest that would have accrued on the
amount so prepaid, or not so borrowed, converted or continued, for the period
from the date of such prepayment or of such failure to borrow, convert or
continue to the last day of such Interest Period (or, in the case of a failure
to borrow, convert or continue, the Interest Period that would have commenced on
the date of such failure) in each case at the applicable rate of interest for
such Loans provided for herein (excluding, however, the Applicable Margin
included therein, if any) OVER (ii) the amount of interest (as reasonably
determined by such Lender) that would have accrued to such Lender on such amount
by placing such amount on deposit for a comparable period with leading banks in
the interbank eurodollar market. A certificate as to any amounts payable
pursuant to this Section submitted to the Borrower by any Lender shall be
conclusive in the absence of manifest error. This covenant shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
2.19 CHANGE OF LENDING OFFICE. Each Lender agrees that, upon the
occurrence of any event giving rise to the operation of Section 2.16 or 2.17(a)
with respect to such Lender, it will, if requested by the Borrower, use
reasonable efforts (subject to overall policy considerations of such Lender) to
designate another lending office for any Loans affected by such event with the
object of avoiding the consequences of such event; PROVIDED, that such
designation is made on terms that, in the sole judgment of such Lender, cause
such Lender and its lending office(s) to suffer no economic, legal or regulatory
disadvantage, and PROVIDED, FURTHER, that nothing in this Section shall affect
or postpone any of the obligations of any Borrower or the rights of any Lender
pursuant to Section 2.16 or 2.17(a).
2.20 REPLACEMENT OF LENDERS. The Borrower shall be permitted to replace
any Lender that (a) requests reimbursement for amounts owing pursuant to Section
2.16 or 2.17(a) or (b) defaults in its obligation to make Loans hereunder, with
a replacement financial institution; PROVIDED that (i) such replacement does not
conflict with any Requirement of Law, (ii) no Event of Default shall have
occurred and be continuing at the time of such replacement, (iii) prior to any
such replacement, such Lender shall have taken no action under Section 2.18 so
as to eliminate the continued need for payment of amounts owing pursuant to
Section 2.16 or 2.17(a), (iv) the replacement financial institution shall
purchase, at par, all Loans and other amounts owing to such replaced Lender on
or prior to the date of replacement, (v) the Borrower shall be liable to such
replaced Lender under Section 2.18 if any Eurodollar Loan owing to such replaced
Lender shall be purchased other than on the last day of the Interest Period
relating thereto, (vi) the replacement financial institution, if not already a
Lender, shall be reasonably satisfactory to the Administrative Agent, (vii) the
replaced Lender shall be obligated to make such replacement in accordance with
the provisions of Section 10.6 (provided that the Borrower shall be obligated to
pay the registration and processing fee referred to therein), (viii) until such
time as such replacement shall be consummated, the Borrower shall pay all
additional amounts (if any) required pursuant to Section 2.16 or 2.17(a), as the
case may be, and (ix) any such replacement shall not be deemed to be a waiver of
any rights that the Borrower, the Administrative Agent or any other Lender shall
have against the replaced Lender.
-27-
34
2.21 EVIDENCE OF DEBT.
(a) Each Lender shall maintain in accordance with its
usual practice an account or accounts evidencing indebtedness of the Borrower to
such Lender resulting from each Loan of such Lender from time to time, including
the amounts of principal and interest payable and paid to such Lender from time
to time under this Agreement.
(b) The Administrative Agent, on behalf of the Borrower,
shall maintain the Register pursuant to Section 10.6(d), and a subaccount
therein for each Lender, in which shall be recorded (i) the amount of each Loan
made hereunder and any Note evidencing such Loan, the Type of such Loan and each
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
hereunder and (iii) both the amount of any sum received by the Administrative
Agent hereunder from the Borrower and each Lender's share thereof.
(c) The Borrower agrees that, upon the request to the
Administrative Agent by any Lender, the Borrower will execute and deliver to
such Lender a promissory note of the Borrower evidencing any Loans of such
Lender, with appropriate insertions as to date and principal amount.
SECTION 3
LETTERS OF CREDIT
3.1 L/C COMMITMENT.
(a) Subject to the terms and conditions hereof, the
Issuing Lender, in reliance on the agreements of the other Revolving Lenders set
forth in Section 3.4(a), agrees to issue standby and documentary letters of
credit ("LETTERS OF CREDIT") for the account of the Borrower and, if applicable,
CBI Distributing Corp. on any Business Day during the Revolving Commitment
Period in such form as may be approved from time to time by the Issuing Lender;
PROVIDED that the Issuing Lender shall have no obligation to issue any Letter of
Credit if, after giving effect to such issuance, (i) the L/C Obligations would
exceed the L/C Commitment or (ii) the aggregate amount of the Available
Revolving Commitments would be less than zero. Each Letter of Credit shall (i)
be denominated in Dollars and (ii) expire no later than the earlier of (x) the
first anniversary of its date of issuance and (y) the date that is five Business
Days prior to the Revolving Termination Date, PROVIDED that any Letter of Credit
with a one-year term may provide for the renewal thereof for additional one-year
periods (which shall in no event extend beyond the date referred to in clause
(y) above). The Continuing Letters of Credit shall be deemed to be Letters of
Credit issued under this Agreement on the Closing Date (to the extent such
Continuing Letters of Credit have not been fully drawn or have not expired or
been terminated as of the Closing Date) and shall be Letters of Credit for all
purposes hereof and the other Loan Documents.
-28-
35
(b) The Issuing Lender shall not at any time be obligated
to issue any Letter of Credit hereunder if such issuance would conflict with, or
cause the Issuing Lender or any L/C Participant to exceed any limits imposed by,
any applicable Requirement of Law.
3.2 PROCEDURE FOR ISSUANCE OF LETTER OF CREDIT. The Borrower or
any of its Subsidiaries may from time to time request that the Issuing Lender
issue a Letter of Credit by delivering to the Issuing Lender at its address for
notices specified herein an Application therefor, completed to the satisfaction
of the Issuing Lender, and such other certificates, documents and other papers
and information as the Issuing Lender may request. Upon receipt of any
Application, the Issuing Lender will notify the Administrative Agent of the
amount, the beneficiary and the requested expiration of the requested Letter of
Credit, and upon receipt of confirmation from the Administrative Agent that
after giving effect to the requested issuance, the Available Revolving
Commitments would not be less than zero, the Issuing Lender will process such
Application and the certificates, documents and other papers and information
delivered to it in connection therewith in accordance with its customary
procedures and shall promptly issue the Letter of Credit requested thereby (but
in no event shall the Issuing Lender be required to issue any Letter of Credit
earlier than three Business Days after its receipt of the Application therefor
and all such other certificates, documents and other papers and information
relating thereto) by issuing the original of such Letter of Credit to the
beneficiary thereof or as otherwise may be agreed to by the Issuing Lender and
the Borrower. The Issuing Lender shall furnish a copy of such Letter of Credit
(and all amendments, renewals and extensions thereof) to the Borrower (with a
copy to the Administrative Agent) promptly following the issuance thereof. The
Administrative Agent shall promptly furnish to the Lenders notice of the
issuance of each Letter of Credit (including the amount thereof).
3.3 FEES AND OTHER CHARGES.
(a) The Borrower will pay a fee to the Administrative
Agent for the ratable benefit of the Revolving Lenders, on all outstanding
Letters of Credit at a per annum rate equal to the Applicable Margin then in
effect with respect to Eurodollar Loans under the Revolving Facility, shared
ratably among the Revolving Lenders and payable quarterly in arrears on each L/C
Fee Payment Date after the issuance date. In addition, the Borrower shall pay to
the Administrative Agent for the account of the Issuing Lender for its own
account a fronting fee on the undrawn and unexpired amount of each Letter of
Credit as agreed by the Borrower and the Issuing Lender, payable quarterly in
arrears on each L/C Fee Payment Date after the Issuance Date.
(b) In addition to the foregoing fees, the Borrower shall
pay or reimburse the Issuing Lender for such normal and customary costs and
expenses as are incurred or charged by the Issuing Lender in issuing,
negotiating, effecting payment under, amending or otherwise administering any
Letter of Credit.
-29-
36
3.4 L/C PARTICIPATIONS.
(a) The Issuing Lender irrevocably agrees to grant and
hereby grants to each L/C Participant, and, to induce the Issuing Lender to
issue Letters of Credit hereunder, each L/C Participant irrevocably agrees to
accept and purchase and hereby accepts and purchases from the Issuing Lender, on
the terms and conditions set forth below, for such L/C Participant's own account
and risk an undivided interest equal to such L/C Participant's Revolving
Percentage in the Issuing Lender's obligations and rights under and in respect
of each Letter of Credit issued hereunder and the amount of each draft paid by
the Issuing Lender thereunder. Each L/C Participant unconditionally and
irrevocably agrees with the Issuing Lender that, if a draft is paid under any
Letter of Credit for which the Issuing Lender is not reimbursed in full by the
Borrower in accordance with the terms of this Agreement, such L/C Participant
shall pay to the Administrative Agent upon demand of the Issuing Lender an
amount equal to such L/C Participant's Revolving Percentage of the amount of
such draft, or any part thereof, that is not so reimbursed. The Administrative
Agent shall promptly forward such amounts to the Issuing Lender. Each L/C
Participant acknowledges and agrees that its obligation to acquire
participations pursuant to this paragraph in respect of Letters of Credit is
absolute and unconditional and shall not be affected by any circumstance
whatsoever, including any amendment, renewal or extension of any Letter of
Credit or the occurrence and continuance of a Default or Event of Default or
reduction or termination of the Revolving Commitments, and that each such
payment shall be made without any offset, abatement, withholding or reduction
whatsoever.
(b) If any amount required to be paid by any L/C
Participant to the Administrative Agent for the account of the Issuing Lender
pursuant to Section 3.4(a) in respect of any unreimbursed portion of any payment
made by the Issuing Lender under any Letter of Credit is paid to the
Administrative Agent for the account of the Issuing Lender within three Business
Days after the date such payment is due, such L/C Participant shall pay to the
Administrative Agent for the account of the Issuing Lender on demand an amount
equal to the product of (i) such amount, times (ii) the daily average Federal
Funds Effective Rate during the period from and including the date such payment
is required to the date on which such payment is immediately available to the
Administrative Agent for the account of the Issuing Lender, times (iii) a
fraction the numerator of which is the number of days that elapse during such
period and the denominator of which is 360. If any such amount required to be
paid by any L/C Participant pursuant to Section 3.4(a) is not made available to
the Administrative Agent for the account of the Issuing Lender by such L/C
Participant within three Business Days after the date such payment is due, the
Administrative Agent for the account of the Issuing Lender shall be entitled to
recover from such L/C Participant, on demand, such amount with interest thereon
calculated from such due date at the rate per annum applicable to ABR Loans
under the Revolving Facility. A certificate of the Issuing Lender submitted to
any L/C Participant with respect to any amounts owing under this Section shall
be conclusive in the absence of manifest error.
(c) Whenever, at any time after the Issuing Lender has
made payment under any Letter of Credit and the Administrative Agent (for the
account of the Issuing Lender) has received from any L/C Participant its PRO
RATA share of such payment in accordance with Section 3.4(a), the Administrative
Agent or the Issuing Lender receives any payment related to such Letter of
Credit (whether directly from the Borrower or otherwise, including proceeds of
collateral applied thereto by the Issuing Lender), or any payment of interest on
account thereof, the Administrative Agent or the Issuing Lender, as the case may
be, will distribute to such L/C Participant its PRO RATA share thereof;
PROVIDED, HOWEVER, that in the event that any such payment received by the
Administrative Agent or the Issuing Lender, as the case may be, shall be
required to be returned by the Administrative Agent or the Issuing Lender, as
the case may be, such L/C Participant shall return to the Administrative Agent
for the account of the Issuing Lender the portion thereof previously distributed
by the Administrative Agent or the Issuing Lender, as the case may be, to it.
-30-
37
3.5 REIMBURSEMENT OBLIGATION OF THE BORROWER. The Borrower agrees to
reimburse the Issuing Lender on each date on which the Issuing Lender notifies
the Borrower of the date and amount of a draft presented under any Letter of
Credit and paid by the Issuing Lender for the amount of (a) such draft so paid
and (b) any taxes, fees, charges or other costs or expenses incurred by the
Issuing Lender in connection with such payment. Each such payment shall be made
to the Issuing Lender at its address for notices specified herein in lawful
money of the United States and in immediately available funds. Interest shall be
payable on any and all amounts remaining unpaid by the Borrower under this
Section from the date such amounts become payable (whether at stated maturity,
by acceleration or otherwise) until payment in full at the rate set forth in (i)
until the second Business Day following the date of the applicable drawing,
Section 2.12(b) and (ii) thereafter, Section 2.12(c).
3.6 OBLIGATIONS ABSOLUTE. The Borrower's obligations under this Section
3 shall be absolute and unconditional under any and all circumstances and
irrespective of any setoff, counterclaim or defense to payment that the Borrower
may have or have had against the Issuing Lender, any beneficiary of a Letter of
Credit or any other Person. The Borrower also agrees with the Issuing Lender
that the Issuing Lender shall not be responsible for, and the Borrower's
Reimbursement Obligations under Section 3.5 shall not be affected by, among
other things, the validity or genuineness of documents or of any endorsements
thereon, even though such documents shall in fact prove to be invalid,
fraudulent or forged, or any dispute between or among the Borrower and any
beneficiary of any Letter of Credit or any other party to which such Letter of
Credit may be transferred or any claims whatsoever of the Borrower against any
beneficiary of such Letter of Credit or any such transferee. The Issuing Lender
shall not be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit, except for errors or
omissions found by a final and nonappealable decision of a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct of
the Issuing Lender. The Borrower agrees that any action taken or omitted by the
Issuing Lender under or in connection with any Letter of Credit or the related
drafts or documents, if done in the absence of gross negligence or willful
misconduct and in accordance with the standards of care specified in the Uniform
Commercial Code of the State of New York, shall be binding on the Borrower and
shall not result in any liability of the Issuing Lender to the Borrower.
-31-
38
3.7 LETTER OF CREDIT PAYMENTS. If any draft shall be presented for
payment under any Letter of Credit, the Issuing Lender shall promptly notify the
Borrower of the date and amount thereof. The responsibility of the Issuing
Lender to the Borrower in connection with any draft presented for payment under
any Letter of Credit shall, in addition to any payment obligation expressly
provided for in such Letter of Credit, be limited to determining that the
documents (including each draft) delivered under such Letter of Credit in
connection with such presentment are substantially in conformity with such
Letter of Credit.
3.8 APPLICATIONS. To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the provisions
of this Section 3, the provisions of this Section 3 shall apply.
SECTION 4
REPRESENTATIONS AND WARRANTIES
To induce the Agents and the Lenders to enter into this Agreement and
to make the Loans and issue or participate in the Letters of Credit, the
Borrower hereby represents and warrants to each Agent and each Lender that:
4.1 FINANCIAL CONDITION.
(a) The unaudited PRO FORMA consolidated balance sheet of
the Borrower and its consolidated Subsidiaries as at July 31, 1999 (the "PRO
FORMA BALANCE SHEET"), copies of which have heretofore been furnished to each
Lender, has been prepared giving effect (as if such events had occurred on such
date) to (i) the consummation of the Transaction, (ii) the Loans to be made on
the Closing Date and the use of proceeds thereof and (iii) the payment of fees
and expenses in connection with the foregoing. The Pro Forma Balance Sheet
presents fairly on a PRO FORMA basis, based on information available to the
Borrower as of the date of delivery thereof, the estimated financial position of
Borrower and its consolidated Subsidiaries as at July 31, 1999, assuming that
the events specified in the preceding sentence had actually occurred at such
date.
(b) The audited consolidated balance sheets of the
Borrower as at January 30, 1997, January 30, 1998 and January 30, 1999, and the
related consolidated statements of income and comprehensive income, of changes
in stockholders' equity, and of cash flows for the fiscal years ended on such
dates, reported on by and accompanied by an unqualified report from KPMG LLP,
present fairly the consolidated financial condition of the Borrower as at such
date, and the consolidated results of its operations and its consolidated cash
flows for the respective fiscal years then ended. The unaudited consolidated
balance sheet of the Borrower as at July 31, 1999, and the related unaudited
consolidated statements of income and comprehensive income, of changes in
stockholders' equity, and of cash flows for the six-month period ended on such
date, present fairly the consolidated financial condition of the Borrower as at
such date, and the consolidated results of its operations and its consolidated
cash flows for the six-month period then ended (subject to normal year-end audit
adjustments). All such financial statements, including the related schedules and
notes thereto, have been prepared in accordance with GAAP applied consistently
throughout the periods involved (except as approved by the aforementioned firm
of accountants and disclosed therein). The Borrower and its Subsidiaries do not
have any material Guarantee Obligations, contingent liabilities and liabilities
for taxes, or any long-term Capital Lease Obligations or unusual forward or
long-term commitments, including any interest rate or foreign currency swap or
exchange transaction or other obligation in respect of derivatives, that are not
reflected in the most recent financial statements referred to in this paragraph.
During the period from January 30, 1999 to and including the date hereof, there
has been no Disposition by the Borrower or any of its Subsidiaries of any
material part of its business or property.
-32-
39
4.2 NO CHANGE. Since July 31, 1999, there has been no development
or event that has had or could reasonably be expected to have a Material Adverse
Effect.
4.3 CORPORATE EXISTENCE; COMPLIANCE WITH LAW. Each of the Borrower
and its Subsidiaries (a) is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (b) has the
corporate power and authority, and the legal right, to own and operate its
property, to lease the property it operates as lessee and to conduct the
business in which it is currently engaged, (c) is duly qualified as a foreign
corporation and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of its business
requires such qualification, except to the extent the failure to be so qualified
or in good standing could not, in the aggregate, reasonably be expected to have
a Material Adverse Effect, and (d) is in compliance with all Requirements of Law
except to the extent that the failure to comply therewith could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
4.4 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. Each
Loan Party has the corporate power and authority, and the legal right, to make,
deliver and perform the Loan Documents to which it is a party and, in the case
of the Borrower, to obtain extensions of credit hereunder. Each Loan Party has
taken all necessary corporate action to authorize the execution, delivery and
performance of the Loan Documents to which it is a party and, in the case of the
Borrower, to authorize the extensions of credit on the terms and conditions of
this Agreement. No consent or authorization of, filing with, notice to or other
act by or in respect of, any Governmental Authority or any other Person is
required in connection with the Transaction and the extensions of credit
hereunder or with the execution, delivery, performance, validity or
enforceability of this Agreement or any of the Loan Documents, except consents,
authorizations, filings and notices described in SCHEDULE 4.4, which consents,
authorizations, filings and notices have been obtained or made and are in full
force and effect. Each Loan Document has been duly executed and delivered on
behalf of each Loan Party party thereto. This Agreement constitutes, and each
other Loan Document upon execution will constitute, a legal, valid and binding
obligation of each Loan Party party thereto, enforceable against each such Loan
Party in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law).
-33-
40
4.5 NO LEGAL BAR. The execution, delivery and performance of this
Agreement and the other Loan Documents, the issuance of Letters of Credit, the
borrowings hereunder and the use of the proceeds thereof will not violate any
Requirement of Law or any Contractual Obligation of the Borrower or any of its
Subsidiaries and will not result in, or require, the creation or imposition of
any Lien on any of their respective properties or revenues pursuant to any
Requirement of Law or any such Contractual Obligation (other than the Liens
created pursuant to the Guarantee), except to the extent that any such violation
or Lien could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect or reasonably be expected to materially adversely affect the
interests or obligations of the Agents or the Lenders in respect of this
Agreement. No Requirement of Law or Contractual Obligation applicable to the
Borrower or any of its Subsidiaries could reasonably be expected to have a
Material Adverse Effect.
4.6 LITIGATION. No litigation, investigation or proceeding of or
before any arbitrator or Governmental Authority is pending or, to the knowledge
of the Borrower, threatened by or against the Borrower or any of its
Subsidiaries or against any of their respective properties or revenues (a) with
respect to any of the Loan Documents or any of the transactions contemplated
hereby or thereby, or (b) that could reasonably be expected to have a Material
Adverse Effect.
4.7 NO DEFAULT. Neither the Borrower nor any of its Subsidiaries
is in default under or with respect to any of its Contractual Obligations in any
respect that could reasonably be expected to have a Material Adverse Effect. No
Default or Event of Default has occurred and is continuing.
4.8 OWNERSHIP OF PROPERTY; LIENS. Each of the Borrower and its
Subsidiaries has title in fee simple to, or a valid leasehold interest in, all
its real property, and good title to, or a valid leasehold interest in, all its
other property, and none of such property is subject to any Lien except as
permitted by Section 7.3.
4.9 INTELLECTUAL PROPERTY. The Borrower and each of its
Subsidiaries owns, or is licensed to use, all Intellectual Property necessary
for the conduct of its business as currently conducted, except to the extent the
failure to so own or license Intellectual Property could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect. No material claim has
been asserted and is pending by any Person challenging or questioning the use of
any Intellectual Property or the validity or effectiveness of any Intellectual
Property, nor does the Borrower know of any valid basis for any such claim. To
the Borrower's knowledge, the use of Intellectual Property by the Borrower and
its Subsidiaries does not infringe on the rights of any Person in any material
respect.
4.10 TAXES. Each of the Borrower and each of its Subsidiaries has
filed or caused to be filed all material Federal, state and other tax returns
that are required to be filed and has paid all taxes shown to be due and payable
on said returns or on any assessments made against it or any of its property and
all other taxes, fees or other charges imposed on it or any of its property by
any Governmental Authority (other than any the amount or validity of that are
currently being contested in good faith by appropriate proceedings and with
respect to which reserves in conformity with GAAP have been provided on the
books of the Borrower or its Subsidiaries, as the case may be and other than any
payments which the failure to pay could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect); no tax Lien has been filed, and, to
the knowledge of the Borrower, no claim is being asserted, with respect to any
such tax, fee or other charge.
-34-
41
4.11 FEDERAL REGULATIONS. No part of the proceeds of any Loans, and
no other extensions of credit hereunder, will be used for "buying" or "carrying"
any "margin stock" within the respective meanings of each of the quoted terms
under Regulation U as now and from time to time hereafter in effect or for any
purpose that violates the provisions of the Regulations of the Board. If
requested by any Lender or the Administrative Agent, the Borrower will furnish
to the Administrative Agent and each Lender a statement to the foregoing effect
in conformity with the requirements of FR Form G-3 or FR Form U-1, as
applicable, referred to in Regulation U.
4.12 LABOR MATTERS. Except as, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect: (a) there are no
strikes or other labor disputes against the Borrower or any of its Subsidiaries
pending or, to the knowledge of the Borrower, threatened; (b) hours worked by
and payment made to employees of the Borrower and its Subsidiaries have not been
in violation of the Fair Labor Standards Act or any other applicable Requirement
of Law dealing with such matters; and (c) all payments due from the Borrower or
any of its Subsidiaries on account of employee health and welfare insurance have
been paid or accrued as a liability on the books of the Borrower or the relevant
Subsidiary.
4.13 ERISA. Neither a Reportable Event nor an "accumulated funding
deficiency" (within the meaning of Section 412 of the Code or Section 302 of
ERISA) has occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan, and each Plan
has complied in all material respects with the applicable provisions of ERISA
and the Code. No termination of a Single Employer Plan has occurred, and no Lien
in favor of the PBGC or a Plan has arisen, during such five-year period. The
present value of all accrued benefits under each Single Employer Plan (based on
those assumptions used to fund such Plans) did not, as of the last annual
valuation date prior to the date on which this representation is made or deemed
made, exceed the value of the assets of such Plan allocable to such accrued
benefits by a material amount. Neither the Borrower nor any Commonly Controlled
Entity has had a complete or partial withdrawal from any Multiemployer Plan that
has resulted or could reasonably be expected to result in a material liability
under ERISA, and neither the Borrower nor any Commonly Controlled Entity would
become subject to any material liability under ERISA if the Borrower or any such
Commonly Controlled Entity were to withdraw completely from all Multiemployer
Plans as of the valuation date most closely preceding the date on which this
representation is made or deemed made. No such Multiemployer Plan is in
Reorganization or Insolvent.
4.14 INVESTMENT COMPANY ACT; OTHER REGULATIONS. No Loan Party is an
"investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended. No Loan
Party is subject to regulation under any Requirement of Law (other than
Regulation X of the Board) that limits its ability to incur Indebtedness.
-35-
42
4.15 SUBSIDIARIES. Except as disclosed to the Administrative Agent
by the Borrower in writing from time to time after the Closing Date, (a)
SCHEDULE 4.15 sets forth the name and jurisdiction of incorporation of each
Subsidiary and, as to each such Subsidiary, the percentage of each class of
Capital Stock owned by any Loan Party and (b) there are no outstanding
subscriptions, options, warrants, calls, rights or other agreements or
commitments (other than stock options granted to employees or directors and
directors' qualifying shares) of any nature relating to any Capital Stock of the
Borrower or any Subsidiary, except as created by the Loan Documents.
4.16 USE OF PROCEEDS. The proceeds of the Term Loans shall be used
to finance a portion of the Transaction and to pay related fees and expenses. A
portion of the proceeds of the Revolving Loans shall be used to finance a
portion of the Transaction and for general corporate purposes. The Letters of
Credit, shall be used for general corporate purposes.
4.17 ENVIRONMENTAL MATTERS. To the best of the Borrower's
knowledge, except as, in the aggregate, could not reasonably be expected to have
a Material Adverse Effect:
(a) the facilities and properties owned, leased or
operated by the Borrower or any of its Subsidiaries (the "PROPERTIES") do not
contain, and have not previously contained, any Materials of Environmental
Concern in amounts or concentrations or under circumstances that constitute or
constituted a violation of, or could give rise to liability under, any
Environmental Law;
(b) neither the Borrower nor any of its Subsidiaries has
received or is aware of any notice of violation, alleged violation,
non-compliance, liability or potential liability regarding environmental matters
or compliance with Environmental Laws with regard to any of the Properties or
the business operated by the Borrower or any of its Subsidiaries (the
"BUSINESS"), nor does the Borrower have knowledge or reason to believe that any
such notice will be received or is being threatened;
(c) Materials of Environmental Concern have not been
transported or disposed of from the Properties in violation of, or in a manner
or to a location that could give rise to liability under, any Environmental Law,
nor have any Materials of Environmental Concern been generated, treated, stored
or disposed of at, on or under any of the Properties in violation of, or in a
manner that could give rise to liability under, any applicable Environmental
Law;
(d) no judicial proceeding or governmental or
administrative action is pending or, to the knowledge of the Borrower,
threatened, under any Environmental Law to which the Borrower or any Subsidiary
is or will be named as a party with respect to the Properties or the Business,
nor are there any consent decrees or other decrees, consent orders,
administrative orders or other orders, or other administrative or judicial
requirements outstanding under any Environmental Law with respect to the
Properties or the Business;
(e) there has been no release or threat of release of
Materials of Environmental Concern at or from the Properties, or arising from or
related to the operations of the Borrower or any Subsidiary in connection with
the Properties or otherwise in connection with the Business, in violation of or
in amounts or in a manner that could give rise to liability under Environmental
Laws;
-36-
43
(f) the Properties and all operations at the Properties
are in compliance, and have in the last five years been in compliance, with all
applicable Environmental Laws, and there is no contamination at, under or about
the Properties or violation of any Environmental Law with respect to the
Properties or the Business; and
(g) neither the Borrower nor any of its Subsidiaries has
assumed any liability of any other Person under Environmental Laws.
4.18 ACCURACY OF INFORMATION, ETC. All written information included
in the Confidential Information Memorandum and any written supplements thereto
(other than information relating to the Acquired Business) is correct in all
material respects and does not contain any untrue statement of a material fact
or omit any material fact required to be stated or necessary to make any
statements contained therein, in light of the circumstances under which they
were made, not misleading. To the best of our knowledge, all written information
included in the Confidential Information Memorandum and any written supplements
thereto which relates to the Acquired Business is correct in all material
respects and does not contain any untrue statement of a material fact or omit
any material fact required to be stated or necessary to make any statements
contained therein, in light of the circumstances under which they were made, not
misleading. So long as the Borrower remains subject to the periodic filing
requirements of the Securities Exchange Act of 1934, as amended, and continues
to file all reports required thereunder in a timely manner, the representations
and warranties made in this Section 4.18 shall only be made as of the Closing
Date.
4.19 SOLVENCY. Each Loan Party is, and after giving effect to the
Acquisition and the incurrence of all Indebtedness and obligations being
incurred in connection herewith and therewith will be and will continue to be,
Solvent.
4.20 SENIOR INDEBTEDNESS. The Obligations constitute "Senior
Indebtedness" of the Borrower under and as defined in each Subordinated Debt
Indenture. The obligations of each Subsidiary Guarantor under the Guarantee
constitute "Guarantor Senior Indebtedness" of such Subsidiary Guarantor under
and as defined in any Subordinated Debt Indenture.
4.21 YEAR 2000 MATTERS. Any reprogramming required to permit the
proper functioning (but only to the extent that such proper functioning would
otherwise be impaired by the occurrence of the year 2000) in and following the
year 2000 of computer systems and other equipment containing embedded
microchips, in either case owned or operated by the Borrower or any of its
Subsidiaries or used or relied upon in the conduct of their business and the
testing of all such systems and other equipment as so reprogrammed, have been
completed, except to the extent that the failure to do so could not reasonably
be expected to have a Material Adverse Effect. The costs to the Borrower and its
Subsidiaries for such reprogramming and testing and for the other reasonably
foreseeable consequences to them of any improper functioning of other computer
systems and equipment containing embedded microchips due to the occurrence of
the year 2000 could not reasonably be expected to result in a Default or Event
of Default or to have a Material Adverse Effect. The computer systems of the
Borrower and its Subsidiaries are and, with ordinary course upgrading and
maintenance, will continue for the term of this Agreement to be, sufficient for
the conduct of their business as currently conducted.
-37-
44
4.22 CERTAIN DOCUMENTS. The Borrower has delivered to the
Syndication Agent a complete and correct copy of the Acquisition Documentation,
including any amendments, supplements or modifications with respect to any of
the foregoing.
SECTION 5
CONDITIONS PRECEDENT
5.1 CONDITIONS TO INITIAL EXTENSION OF CREDIT. The agreement of
each Lender to make the initial extension of credit requested to be made by it
is subject to the satisfaction, prior to or concurrently with the consummation
of the Acquisition and the making of such extension of credit on the Closing
Date (but in any event no later than January 31, 2000), of the following
conditions precedent:
(a) CREDIT AGREEMENT; GUARANTEE. The Administrative Agent
and the Syndication Agent shall have received (i) this Agreement, executed and
delivered by the Agents, the Lead Arranger, the Borrower and each Person listed
on Schedule 1.1A, and (ii) the Guarantee, executed and delivered by each
Subsidiary Guarantor.
In the event that this Agreement has not been duly executed and
delivered by each Person listed on Schedule 1.1A on the date scheduled to be the
Closing Date, the condition referred to in clause (i) above shall nevertheless
be deemed satisfied if on such date the Borrower and the Syndication Agent shall
have designated one or more Persons (the "DESIGNATED LENDERS") to assume, in the
aggregate, all of the Commitments that would have been held by the Persons
listed on Schedule 1.1A (the "NON-EXECUTING PERSONS") which have not so executed
and delivered this Agreement (subject to each such Designated Lender's consent
and its execution and delivery of this Agreement). Schedule 1.1A shall
automatically be deemed to be amended to reflect the respective Commitments of
the Designated Lenders and the omission of the Non-Executing Persons as Lenders
hereunder.
(b) ACQUISITION, ETC. The following shall occur concurrently
with the making of such extension of credit, in each case on terms and
conditions reasonably satisfactory to the Lenders:
(i) the Acquisition shall have been consummated for an
aggregate purchase price not exceeding $250,000,000 pursuant to documentation
satisfactory to the Lead Arranger and each of the Lenders, and no material
provision thereof shall have been waived, amended, supplemented or otherwise
modified without the consent of the Lead Arranger and each of the Lenders (which
shall not be unreasonably withheld);
(ii) the Administrative Agent and the Syndication Agent
shall have received satisfactory evidence that the Existing Credit Agreement
shall have been terminated and all amounts thereunder shall have been paid in
full and satisfactory arrangements shall have been made for the termination of
all Liens granted in connection therewith.
-38-
45
(c) PRO FORMA BALANCE SHEET; FINANCIAL STATEMENTS. The
Lenders shall have received (i) the Pro Forma Balance Sheet and (ii) the
financial statements of the Borrower referred to in Section 4.1, and such
financial statements shall not, in the reasonable judgment of the Lenders,
reflect any material adverse change in the consolidated financial condition of
the Borrower, as reflected in the financial statements or projections contained
in the Confidential Information Memorandum (such receipt to be acknowledged by
such Lender's execution of this Agreement).
(d) PROJECTIONS. The Lenders shall have received
satisfactory financial projections for fiscal years 2000 through 2005 and a
satisfactory written analysis of the business and prospects of the Borrower and
its Subsidiaries for the period from the Closing Date through December 1, 2004
(such receipt to be acknowledged by such Lender's execution of this Agreement).
(e) APPROVALS. All governmental and third party approvals
necessary in connection with the Transaction, the continuing operations of the
Borrower and its Subsidiaries and the transactions contemplated hereby shall
have been obtained and be in full force and effect, and all applicable waiting
periods shall have expired without any action being taken or threatened by any
competent authority that would restrain, prevent or otherwise impose adverse
conditions on the Acquisition or the financing contemplated hereby.
(f) LIEN SEARCHES. The Administrative Agent and the
Syndication Agent shall have received the results of a recent lien search in
each of the jurisdictions where assets of the Borrower and its Subsidiaries are
located, and such search shall reveal no liens on any of the assets of the
Borrower or its Subsidiaries except for liens permitted by Section 7.3 or
discharged on or prior to the Closing Date pursuant to documentation
satisfactory to the Syndication Agent.
(g) FEES. The Borrower shall have paid to the Syndication
Agent for the account of the Lenders and the Agents all fees required to be
paid, and all expenses for which invoices have been presented (including the
reasonable fees and expenses of legal counsel), on or before the Closing Date.
(h) CLOSING CERTIFICATE. The Administrative Agent and the
Syndication Agent shall have received, with a counterpart for each Lender, a
certificate of each Loan Party, dated the Closing Date, substantially in the
form of Exhibit B-1 or B-2, as applicable, with appropriate insertions and
attachments.
(i) LEGAL OPINION. The Administrative Agent and the
Syndication Agent shall have received the legal opinion of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
P.A. counsel to the Borrower and its Subsidiaries, substantially in the form of
Exhibit D.
5.2 CONDITIONS TO EACH EXTENSION OF CREDIT. The agreement of each
Lender to make any extension of credit requested to be made by it on any date
(including its initial extension of credit) is subject to the satisfaction of
the following conditions precedent:
-39-
46
(a) REPRESENTATIONS AND WARRANTIES. Each of the
representations and warranties made by any Loan Party in or pursuant to the Loan
Documents shall be true and correct on and as of such date as if made on and as
of such date.
(b) NO DEFAULT. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the extensions
of credit requested to be made on such date.
Each borrowing by and issuance of a Letter of Credit on behalf of the Borrower
hereunder shall constitute a representation and warranty by the Borrower as of
the date of such extension of credit that the conditions contained in this
Section 5.2 have been satisfied.
SECTION 6
AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments remain in
effect, any Letter of Credit remains outstanding or any Loan or other amount is
owing to any Lender or Agent hereunder, the Borrower shall and shall cause each
of its Subsidiaries to:
6.1 FINANCIAL STATEMENTS. Furnish to the Administrative Agent and
each Lender:
(a) as soon as available, but in any event within 90 days
after the end of each fiscal year of the Borrower, a copy of the audited
consolidated balance sheet of the Borrower and its consolidated Subsidiaries as
at the end of such year and the related audited consolidated statements of
income and comprehensive income, of changes in stockholders' equity and of cash
flows for such year, setting forth in each case in comparative form the figures
for the previous year, reported on without a "going concern" or like
qualification or exception, or qualification arising out of the scope of the
audit, by KPMG LLP or other independent certified public accountants of
nationally recognized standing; and
(b) as soon as available, but in any event not later than
45 days after the end of each of the first three quarterly periods of each
fiscal year of the Borrower, the unaudited consolidated balance sheet of the
Borrower and its consolidated Subsidiaries as at the end of such quarter and the
related unaudited consolidated statements of income and comprehensive income, of
changes in stockholders' equity and of cash flows for such quarter and the
portion of the fiscal year through the end of such quarter, setting forth in
each case in comparative form the figures for the previous year, certified by a
Responsible Officer as being fairly stated in all material respects (subject to
normal year-end audit adjustments).
All such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).
6.2 CERTIFICATES; OTHER INFORMATION. Furnish to the Administrative
Agent and each Lender (or, in the case of clause (e), to the relevant Lender):
-40-
47
(a) concurrently with the delivery of the financial
statements referred to in Section 6.1(a), a certificate of the independent
certified public accountants reporting on such financial statements stating that
in making the examination necessary therefor no knowledge was obtained of any
Default or Event of Default, except as specified in such certificate;
(b) concurrently with the delivery of any financial
statements pursuant to Section 6.1, (i) a certificate of a Responsible Officer
stating that, to the best of each such Responsible Officer's knowledge, each
Loan Party and each of its Subsidiaries during such period has observed or
performed all of its covenants and other agreements, and satisfied every
condition, contained in this Agreement and the other Loan Documents to which it
is a party to be observed, performed or satisfied by it, and that such
Responsible Officer has obtained no knowledge of any Default or Event of Default
except as specified in such certificate and (ii) in the case of quarterly or
annual financial statements, a Compliance Certificate containing all information
and calculations necessary for determining compliance by the Borrower and its
Subsidiaries with the provisions of this Agreement referred to therein as of the
last day of the fiscal quarter or fiscal year of the Borrower, as the case may
be;
(c) no later than 10 Business Days prior to the
effectiveness thereof, copies of substantially final drafts of any proposed
amendment, supplement, waiver or other modification with respect to any
Subordinated Debt Indenture or the Acquisition Documentation;
(d) within five days after the same are sent, copies of
all financial statements and reports that the Borrower sends to the holders of
any class of its debt securities or public equity securities and, within five
days after the same are filed, copies of all financial statements and reports
that the Borrower may make to, or file with, the SEC; and
(e) promptly, such additional financial and other information
as any Lender may from time to time reasonably request.
6.3 PAYMENT OF OBLIGATIONS. Pay, discharge or otherwise satisfy at
or before maturity or before they become delinquent, as the case may be, all its
material obligations of whatever nature, except where the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and reserves in conformity with GAAP with respect thereto have been provided on
the books of the Borrower or its Subsidiaries, as the case may be.
6.4 MAINTENANCE OF EXISTENCE; COMPLIANCE. (a)(i) Preserve, renew
and keep in full force and effect its corporate existence and (ii) take all
reasonable action to maintain all rights, privileges and franchises necessary or
desirable in the normal conduct of its business, except, in each case, as
otherwise permitted by Section 7.4 and except, in the case of clause (ii) above,
to the extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect; and (b) comply with all Contractual Obligations and
Requirements of Law except to the extent that failure to comply therewith could
not, in the aggregate, reasonably be expected to have a Material Adverse Effect.
6.5 MAINTENANCE OF PROPERTY; INSURANCE. (a) Keep all property
useful and necessary in its business in good working order and condition
consistent with past practice, ordinary wear and tear excepted and (b) maintain
with financially sound and reputable insurance companies insurance on all its
property consistent with past practice.
-41-
48
6.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS. (a)
Keep proper books of records and account in which full, true and correct entries
in conformity with GAAP and all Requirements of Law shall be made of all
dealings and transactions in relation to its business and activities and (b)
permit representatives of any Lender to visit and inspect any of its properties
and examine and make abstracts from any of its books and records at any
reasonable time and as often as may reasonably be desired and to discuss the
business, operations, properties and financial and other condition of the
Borrower and its Subsidiaries with officers and employees of the Borrower and
its Subsidiaries and with its independent certified public accountants.
6.7 NOTICES. Promptly give notice to the Administrative Agent, the
Syndication Agent and each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any
Contractual Obligation of the Borrower or any of its Subsidiaries or (ii)
litigation, investigation or proceeding that may exist at any time between the
Borrower or any of its Subsidiaries and any Governmental Authority, that in
either case, if not cured or if adversely determined, as the case may be, could
reasonably be expected to have a Material Adverse Effect;
(c) any litigation or proceeding affecting the Borrower
or any of its Subsidiaries (i) in which the amount involved is $5,000,000 or
more and not covered by insurance, (ii) in which injunctive or similar relief is
sought or (iii) which relates to any Loan Document;
(d) the following events, as soon as possible and in any
event within 30 days after the Borrower knows or has reason to know thereof: (i)
the occurrence of any Reportable Event with respect to any Plan, a failure to
make any required contribution to a Plan, the creation of any Lien in favor of
the PBGC or a Plan or any withdrawal from, or the termination, Reorganization or
Insolvency of, any Multiemployer Plan or (ii) the institution of proceedings or
the taking of any other action by the PBGC or the Borrower or any Commonly
Controlled Entity or any Multiemployer Plan with respect to the withdrawal from,
or the termination, Reorganization or Insolvency of, any Plan; and
(e) any development or event that has had or could
reasonably be expected to have a Material Adverse Effect.
Each notice pursuant to this Section 6.7 shall be accompanied by a statement of
a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action the Borrower or the relevant Subsidiary proposes
to take with respect thereto.
-42-
49
6.8 ENVIRONMENTAL LAWS.
(a) Comply in all material respects with all applicable
Environmental Laws, and obtain and comply in all material respects with and
maintain any and all material licenses, approvals, notifications, registrations
or permits required by applicable Environmental Laws.
(b) Conduct and complete all investigations, studies,
sampling and testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws.
6.9 ADDITIONAL SUBSIDIARIES. With respect to any new Subsidiary
(other than a new Foreign Subsidiary) created or acquired after the Closing Date
by the Borrower, or any of its Subsidiaries, promptly cause such new Subsidiary
to become a party to the Guarantee.
6.10 COMPLIANCE WITH YEAR 2000. The Borrower shall do or cause to
be done all things reasonably necessary such that the representation and
warranty in Section 4.21 remains true and correct in all material respects.
SECTION 7
NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments remain in
effect, any Letter of Credit remains outstanding or any Loan or other amount is
owing to any Lender or Agent hereunder, the Borrower shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly:
7.1 FINANCIAL CONDITION COVENANTS.
(a) CONSOLIDATED LEVERAGE RATIO. Permit the Consolidated
Leverage Ratio at any time to exceed 2.00 to 1.00.
(b) CONSOLIDATED FIXED CHARGE COVERAGE RATIO. Permit the
Consolidated Fixed Charge Coverage Ratio for any period of four consecutive
fiscal quarters of the Borrower to be less than 1.50 to 1.00.
(c) CONSOLIDATED CURRENT RATIO. Permit the Consolidated
Current Ratio at any time to be less than 2.00 to 1.00.
7.2 INDEBTEDNESS. Create, issue, incur, assume, become liable in
respect of or suffer to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party pursuant to any Loan
Document;
(b) Indebtedness of the Borrower to any Subsidiary and of
any Subsidiary Guarantor to the Borrower or any other Subsidiary and of any
Foreign Subsidiary to any Foreign Subsidiary and, subject to Section 7.7(d), of
any Foreign Subsidiary to the Borrower or any Subsidiary Guarantor;
-43-
50
(c) Guarantee Obligations incurred in the ordinary course of
business by the Borrower or any of its Subsidiaries of obligations of any
Subsidiary Guarantor or, subject to Section 7.7(d), any Foreign Subsidiary;
(d) Indebtedness outstanding on the date hereof and listed on
SCHEDULE 7.2(D) and any refinancings, refundings, renewals or extensions thereof
(without increasing, or shortening the maturity of, the principal amount
thereof);
(e) Indebtedness (including, without limitation, Capital Lease
Obligations) secured by Liens permitted by Section 7.3(g) in an aggregate
principal amount not to exceed $10,000,000 at any one time outstanding;
(f) Indebtedness of the Borrower in respect of Subordinated
Debt in an aggregate principal amount not to exceed $150,000,000 at any time
outstanding;
(g) Hedge Agreements in respect of Indebtedness otherwise
permitted hereby that bears interest at a floating rate, so long as such
agreements are not entered into for speculative purposes;
(h) Indebtedness of Foreign Subsidiaries not to exceed
$15,000,000 in the aggregate at any time outstanding; and
(i) Indebtedness of a Person which becomes a Subsidiary after
the Closing Date; PROVIDED that (i) such Indebtedness was not created in
contemplation of such Person becoming a Subsidiary and (ii) such Indebtedness is
not increased.
7.3 LIENS. Create, incur, assume or suffer to exist any Lien upon
any of its property, whether now owned or hereafter acquired, except for:
(a) Liens for taxes not yet due or that are being contested in
good faith by appropriate proceedings, PROVIDED that adequate reserves with
respect thereto are maintained on the books of the Borrower or its Subsidiaries,
as the case may be, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', landlords',
materialmen's, repairmen's or other like Liens arising in the ordinary course of
business that are not overdue for a period of more than 30 days or that are
being contested in good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security legislation;
(d) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory obligations, surety
and appeal bonds, performance bonds and other obligations of a like nature
incurred in the ordinary course of business;
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business that, in the aggregate,
are not substantial in amount and that do not in any case materially detract
from the value of the property subject thereto or materially interfere with the
ordinary conduct of the business of the Borrower or any of its Subsidiaries;
-44-
51
(f) Liens in existence on the date hereof listed on SCHEDULE
7.3(f), securing Indebtedness permitted by Section 7.2(d), PROVIDED that no such
Lien is spread to cover any additional property after the Closing Date and that
the amount of Indebtedness secured thereby is not increased;
(g) Liens securing Indebtedness of the Borrower or any other
Subsidiary incurred pursuant to Section 7.2(e) to finance the acquisition of
fixed or capital assets, PROVIDED that (i) such Liens shall be created
substantially simultaneously with the acquisition of such fixed or capital
assets, (ii) such Liens do not at any time encumber any property other than the
property financed by such Indebtedness and (iii) the amount of Indebtedness
secured thereby is not increased;
(h) Liens securing Indebtedness of the Borrower or any
Subsidiary incurred pursuant to Section 7.2(i); PROVIDED that the aggregate
outstanding principal amount of Indebtedness secured thereby does not at any
time exceed $20,000,000; and
(i) any interest or title of a lessor under any lease entered
into by the Borrower or any other Subsidiary in the ordinary course of its
business and covering only the assets so leased.
7.4 FUNDAMENTAL CHANGES. Enter into any merger, consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or Dispose of, all or substantially all of its
property or business, except that:
(a) any Subsidiary of the Borrower may be merged or
consolidated with or into the Borrower (PROVIDED that the Borrower shall be the
continuing or surviving corporation) or with or into any other Subsidiary
(PROVIDED that if any party to the merger or consolidation is a Subsidiary
Guarantor, a Subsidiary Guarantor shall be the continuing or surviving
corporation) or, subject to Section 7.7(d), any Foreign Subsidiary;
(b) any Subsidiary of the Borrower may Dispose of any or
all of its assets (upon voluntary liquidation or otherwise) to the Borrower or
any Subsidiary Guarantor or, subject to Section 7.7(d), any Foreign Subsidiary;
and
(c) the Borrower may merge with another Person; PROVIDED
that (i) the Borrower shall be the continuing or surviving corporation, (ii) no
Default or Event of Default has occurred and is continuing or would occur as a
result thereof, (iii) immediately after giving effect to such transaction, the
Borrower and its Subsidiaries are in compliance, on a PRO FORMA basis, with the
covenants contained in Section 7.1, recomputed as of the last day of the most
recently ended fiscal quarter of the Borrower, as if such transaction had
occurred on the first day of each relevant four quarter period for testing such
compliance, (iv) after giving effect to such merger, holders of the Capital
Stock of the Borrower immediately prior to such merger shall hold at least 66_%
of the outstanding Capital Stock of the Borrower after giving effect to such
merger and (v) the Borrower shall have delivered a certificate to the
Administrative Agent at least five Business Days prior to the consummation of
any such merger certifying as to compliance with the requirements of clauses
(i), (ii), (iii) and (iv) above and setting forth calculations in reasonable
detail demonstrating compliance with clause (iii) above.
-45-
52
7.5 DISPOSITION OF PROPERTY. Dispose of any of its property,
whether now owned or hereafter acquired, or, in the case of any Subsidiary,
issue or sell any shares of such Subsidiary's Capital Stock to any Person,
except:
(a) the Disposition of obsolete or worn out property in the
ordinary course of business;
(b) the sale of inventory in the ordinary course of business;
(c) Dispositions permitted by Section 7.4(b);
(d) the sale or issuance of any Subsidiary's Capital Stock to
the Borrower or any Subsidiary Guarantor; and
(e) the Disposition of other property having a fair market
value not to exceed $225,000,000 during the term of this Agreement; PROVIDED
that the Net Cash Proceeds of any such Disposition of other property having a
fair market value in excess of the greater of (i) $50,000,000 and (ii) 10% of
Consolidated Net Tangible Assets shall be used to prepay the Term Loans in
accordance with Section 2.9(b).
7.6 RESTRICTED PAYMENTS. Declare or pay any dividend (other than
dividends payable solely in common stock of the Person making such dividend) on,
or make any payment on account of, or set apart assets for a sinking or other
analogous fund for, the purchase, redemption, defeasance, retirement or other
acquisition of, any Capital Stock of the Borrower or any Subsidiary, whether now
or hereafter outstanding, or make any other distribution in respect thereof,
either directly or indirectly, whether in cash or property or in obligations of
the Borrower or any Subsidiary, or enter into any derivatives or other
transaction with any financial institution, commodities or stock exchange or
clearinghouse (a "DERIVATIVES COUNTERPARTY") obligating the Borrower or any
Subsidiary to make payments to such Derivatives Counterparty as a result of any
change in market value of any such Capital Stock, (collectively, "RESTRICTED
PAYMENTS"), except that:
(a) any Subsidiary may make Restricted Payments to the
Borrower or any Wholly Owned Subsidiary Guarantor;
(b) so long as no Default or Event of Default shall have
occurred and be continuing, the Borrower may pay dividends in an aggregate
amount not to exceed for any fiscal year the greater of (i) 20% of Consolidated
Net Income for the immediate preceding fiscal year and (ii) $10,000,000;
(c) so long as no Default or Event of Default shall have
occurred and be continuing, the Borrower may make Restricted Payments for the
purchase of its own Capital Stock in an aggregate amount not to exceed during
the term of this Agreement, the sum of (x) $25,000,000 and (y) 50% of (i)
cumulative Consolidated Net Income since the Closing Date minus (ii) the
aggregate amount of dividends paid in cash by the Borrower since the Closing
Date.
-46-
53
7.7 INVESTMENTS. Make any advance, loan, extension of credit (by
way of guaranty or otherwise) or capital contribution to, or purchase any
Capital Stock, bonds, notes, debentures or other debt securities of, or any
assets constituting a business unit of, or make any other investment in, any
Person (all of the foregoing, "INVESTMENTS"), except:
(a) Investments in Cash Equivalents;
(b) Guarantee Obligations permitted by Section 7.2(c);
(c) the Acquisition;
(d) (i) intercompany Investments by the Borrower or any of its
Subsidiaries in the Borrower or any Person that, prior to such Investment, is a
Subsidiary Guarantor, (ii) intercompany Investments by any Foreign Subsidiary in
any Person that, prior to such Investment, is a Foreign Subsidiary, (iii)
Investments by the Borrower or any of its Subsidiaries in any Foreign Subsidiary
(including, without limitation, Guarantee Obligations with respect to
obligations of any such Foreign Subsidiary, loans made to any such Foreign
Subsidiary, and Investments resulting from mergers with or sales of assets to
any such Foreign Subsidiary); PROVIDED that the aggregate amount of all such
Investments during the term of this Agreement, together with any Investment
pursuant to paragraph (e) of this Section that results in the creation or
acquisition of a Foreign Subsidiary or the acquisition of assets by a Foreign
Subsidiary or any Investment in the Capital Stock of any Person which is
incorporated outside the United States of America, shall not exceed $25,000,000
plus 20% of cumulative Consolidated Net Income measured from the Closing Date;
(e) subject to paragraph (d) of this Section, Investments in
the Capital Stock or all or substantially all the assets of any Person; PROVIDED
that (i) no Default or Event of Default shall have occurred and be continuing or
would occur after giving effect to such Investment and (ii) in the case of any
acquisition by the Borrower of the Capital Stock of any Person which results in
such Person becoming a Subsidiary, the Board of Directors of such Person has
formally approved such acquisition;
(f) extensions of trade credit in the ordinary course of
business; and
(g) advances, loans and extensions of credit to employees,
officers and directors in the ordinary course of business; PROVIDED that the
aggregate principal amount of such loans shall not exceed $5,000,000 in the
aggregate at any time outstanding.
7.8 OPTIONAL PAYMENTS AND MODIFICATIONS OF CERTAIN DEBT
INSTRUMENTS. (a) Make or offer to make any optional or voluntary payment,
prepayment, repurchase or redemption of or otherwise optionally or voluntarily
defease or segregate funds with respect to any Subordinated Debt, or enter into
any derivative or other transaction with any Derivatives Counterparty obligating
the Borrower or any Subsidiary to make payments to such Derivatives Counterparty
as a result of any change in market value of any Subordinated Debt, (b) amend,
modify, waive or otherwise change, or consent or agree to any amendment,
modification, waiver or other change to, any of the terms of any Subordinated
Debt (other than any such amendment, modification, waiver or other change that
(i) would extend the maturity or reduce the amount of any payment of principal
thereof or reduce the rate or extend any date for payment of interest thereon
and (ii) does not involve the payment of a consent fee), or (c) designate any
Indebtedness (other than obligations of the Borrower pursuant to the Loan
Documents) as "Designated Senior Indebtedness" for the purposes of any
Subordinated Debt Indenture.
-47-
54
7.9 TRANSACTIONS WITH AFFILIATES. Enter into any transaction,
including any purchase, sale, lease or exchange of property, the rendering of
any service or the payment of any management, advisory or similar fees, with any
Affiliate (other than the Borrower or any Wholly Owned Subsidiary Guarantor)
unless such transaction is (a) otherwise permitted under this Agreement, or (b)
(i) in the ordinary course of business of the Borrower or such Subsidiary, as
the case may be, and (ii) upon fair and reasonable terms no less favorable to
the Borrower or such Subsidiary, as the case may be, than it would obtain in a
comparable arm's length transaction with a Person that is not an Affiliate.
7.10 SALES AND LEASEBACKS. Enter into any arrangement with any
Person providing for the leasing by the Borrower or any Subsidiary of real or
personal property that has been or is to be sold or transferred by the Borrower
or such Subsidiary to such Person or to any other Person to whom funds have been
or are to be advanced by such Person on the security of such property or rental
obligations of the Borrower or such Subsidiary.
7.11 CHANGES IN FISCAL PERIODS. Permit the fiscal year of the
Borrower to end on a day other than the Saturday closest to January 31 of each
calendar year or change the Borrower's method of determining fiscal quarters.
7.12 NEGATIVE PLEDGE CLAUSES. Enter into or suffer to exist or
become effective any agreement that prohibits or limits the ability of the
Borrower or any of its Subsidiaries to create, incur, assume or suffer to exist
any Lien upon any of its property or revenues, whether now owned or hereafter
acquired, to secure its obligations under the Loan Documents to which it is a
party other than (a) this Agreement and the other Loan Documents and (b) any
agreements governing any purchase money Liens or Capital Lease Obligations
otherwise permitted hereby (in which case, any prohibition or limitation shall
only be effective against the assets financed thereby).
7.13 CLAUSES RESTRICTING SUBSIDIARY DISTRIBUTIONS. Enter into or
suffer to exist or become effective any consensual encumbrance or restriction on
the ability of any Subsidiary of the Borrower to (a) make Restricted Payments in
respect of any Capital Stock of such Subsidiary held by, or pay any Indebtedness
owed to, the Borrower or any other Subsidiary of the Borrower, (b) make loans or
advances to, or other Investments in, the Borrower or any other Subsidiary of
the Borrower or (c) transfer any of its assets to the Borrower or any other
Subsidiary of the Borrower, except for such encumbrances or restrictions
existing under or by reason of (i) any restrictions existing under the Loan
Documents and (ii) any restrictions with respect to a Subsidiary imposed
pursuant to an agreement that has been entered into in connection with the
Disposition of all or substantially all of the Capital Stock or assets of such
Subsidiary.
-48-
55
7.14 LINES OF BUSINESS. Enter into any business, either directly or
through any Subsidiary, except for the specialty retail business or any other
business that is reasonably related thereto.
7.15 AMENDMENTS TO ACQUISITION DOCUMENTS. (a) Amend, supplement or
otherwise modify (pursuant to a waiver or otherwise) the terms and conditions of
the indemnities and licenses furnished to the Borrower or any of its
Subsidiaries pursuant to the Acquisition Documentation such that after giving
effect thereto such indemnities or licenses shall be materially less favorable
to the interests of the Borrower or any of its Subsidiaries or the Lenders with
respect thereto or (b) otherwise amend, supplement or otherwise modify the terms
and conditions of the Acquisition Documentation or any such other documents
except for any such amendment, supplement or modification that (i) becomes
effective after the Closing Date and (ii) could not reasonably be expected to
have a Material Adverse Effect.
SECTION 8
EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) the Borrower shall fail to pay any principal of any Loan
or Reimbursement Obligation when due in accordance with the terms hereof; or the
Borrower shall fail to pay any interest on any Loan or Reimbursement Obligation,
or any other amount payable hereunder or under any other Loan Document, within
five days after any such interest or other amount becomes due in accordance with
the terms hereof; or
(b) any representation or warranty made or deemed made by any
Loan Party herein or in any other Loan Document or that is contained in any
certificate, document or financial or other statement furnished by it at any
time under or in connection with this Agreement or any such other Loan Document
shall prove to have been inaccurate in any material respect on or as of the date
made or deemed made; or
(c) any Loan Party shall default in the observance or
performance of any agreement contained in clause (i) or (ii) of Section 6.4(a)
(with respect to the Borrower only), Section 6.7(a) or Section 7 of this
Agreement; or
(d) any Loan Party shall default in the observance or
performance of any other agreement contained in this Agreement or any other Loan
Document (other than as provided in paragraphs (a) through (c) of this Section),
and such default shall continue unremedied for a period of 30 days after the
occurrence of such default; or
(e) the Borrower or any of its Subsidiaries shall (i) default
in making any payment of any principal of any Indebtedness (including any
Guarantee Obligation, but excluding the Loans) on the scheduled or original due
date with respect thereto; or (ii) default in making any payment of any interest
on any such Indebtedness beyond the period of grace, if any, provided in the
instrument or agreement under which such Indebtedness was created; or (iii)
default in the observance or performance of any other agreement or condition
relating to any such Indebtedness or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event shall occur or
condition exist, the effect of which default or other event or condition is to
cause, or to permit the holder or beneficiary of such Indebtedness (or a trustee
or agent on behalf of such holder or beneficiary) to cause, with the giving of
notice if required, such Indebtedness to become due prior to its stated maturity
or (in the case of any such Indebtedness constituting a Guarantee Obligation) to
become payable; PROVIDED, that a default, event or condition described in clause
(i), (ii) or (iii) of this paragraph (e) shall not at any time constitute an
Event of Default unless, at such time, one or more defaults, events or
conditions of the type described in clauses (i), (ii) and (iii) of this
paragraph (e) shall have occurred and be continuing with respect to Indebtedness
the outstanding principal amount of which exceeds in the aggregate $5,000,000;
or
-49-
56
(f) (i) the Borrower or any of its Subsidiaries shall commence
any case, proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief entered
with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts, or (B)
seeking appointment of a receiver, trustee, custodian, conservator or other
similar official for it or for all or any substantial part of its assets, or the
Borrower or any of its Subsidiaries shall make a general assignment for the
benefit of its creditors; or (ii) there shall be commenced against the Borrower
or any of its Subsidiaries any case, proceeding or other action of a nature
referred to in clause (i) above that (A) results in the entry of an order for
relief or any such adjudication or appointment or (B) remains undismissed,
undischarged or unbonded for a period of 60 days; or (iii) there shall be
commenced against the Borrower or any of its Subsidiaries any case, proceeding
or other action seeking issuance of a warrant of attachment, execution,
distraint or similar process against all or any substantial part of its assets
that results in the entry of an order for any such relief that shall not have
been vacated, discharged, or stayed or bonded pending appeal within 60 days from
the entry thereof; or (iv) the Borrower or any of its Subsidiaries shall take
any action in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above;
or (v) the Borrower or any of its Subsidiaries shall generally not, or shall be
unable to, or shall admit in writing its inability to, pay its debts as they
become due; or
(g) (i) any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code)
involving any Plan, (ii) any "accumulated funding deficiency" (as defined in
Section 302 of ERISA), whether or not waived, shall exist with respect to any
Plan or any Lien in favor of the PBGC or a Plan shall arise on the assets of the
Borrower or any Commonly Controlled Entity, (iii) a Reportable Event shall occur
with respect to, or proceedings shall commence to have a trustee appointed, or a
trustee shall be appointed, to administer or to terminate, any Single Employer
Plan, which Reportable Event or commencement of proceedings or appointment of a
trustee is, in the reasonable opinion of the Required Lenders, likely to result
in the termination of such Plan for purposes of Title IV of ERISA, (iv) any
Single Employer Plan shall terminate for purposes of Title IV of ERISA, (v) the
Borrower or any Commonly Controlled Entity shall, or in the reasonable opinion
of the Required Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan or
(vi) any other event or condition shall occur or exist with respect to a Plan;
and in each case in clauses (i) through (vi) above, such event or condition,
together with all other such events or conditions, if any, could, in the sole
judgment of the Required Lenders, reasonably be expected to have a Material
Adverse Effect; or
-50-
57
(h) one or more judgments or decrees shall be entered against
the Borrower or any of its Subsidiaries involving in the aggregate a liability
(not paid or fully covered by insurance as to which the relevant insurance
company has acknowledged coverage) of $5,000,000 or more, and all such judgments
or decrees shall not have been vacated, discharged, stayed or bonded pending
appeal within 45 days from the entry thereof; or
(i) at any time after (x) the ▇▇▇▇▇▇▇▇ Family and its Control
Investment Affiliates shall have ceased to have the power to vote or direct the
voting of securities having 25% of the ordinary voting power for the election of
directors of the Borrower or (y) the approval of any amendment to the
certificate of incorporation of the Borrower relating to the approval of mergers
and other business combinations, (i) any "person" or "group" (as such terms are
used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended (the "EXCHANGE ACT"), shall become, or obtain rights (whether by means
or warrants, options or otherwise) to become, the "beneficial owner" (as defined
in Rules 13(d)-3 and 13(d)-5 under the Exchange Act ), directly or indirectly,
of more than 30% of the outstanding common stock of the Borrower or, (ii) the
Board of Directors of the Borrower shall cease to consist of a majority of
Continuing Directors, or (iii) a Specified Change of Control shall occur; or
(j) the guarantee contained in the Guarantee shall cease, for
any reason, to be in full force and effect or any Loan Party or any Affiliate of
any Loan Party shall so assert;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement and the other Loan Documents (including all amounts of L/C
Obligations, whether or not the beneficiaries of the then outstanding Letters of
Credit shall have presented the documents required thereunder) shall immediately
become due and payable, and (B) if such event is any other Event of Default,
either or both of the following actions may be taken: (i) with the consent of
the Required Lenders, the Administrative Agent may, or upon the request of the
Required Lenders, the Administrative Agent shall, by notice to the Borrower
declare the Revolving Commitments to be terminated forthwith, whereupon the
Revolving Commitments shall immediately terminate; and (ii) with the consent of
the Required Lenders, the Administrative Agent may, or upon the request of the
Required Lenders, the Administrative Agent shall, by notice to the Borrower,
declare the Loans hereunder (with accrued interest thereon) and all other
amounts owing under this Agreement and the other Loan Documents (including all
amounts of L/C Obligations, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents required
thereunder) to be due and payable forthwith, whereupon the same shall
immediately become due and payable. With respect to all Letters of Credit with
respect to which presentment for honor shall not have occurred at the time of an
acceleration pursuant to this paragraph, the Borrower shall at such time deposit
in a cash collateral account opened by the Administrative Agent an amount equal
to the aggregate then undrawn and unexpired amount of such Letters of Credit.
Amounts held in such cash collateral account shall be applied by the
Administrative Agent to the payment of drafts drawn under such Letters of
Credit, and the unused portion thereof after all such Letters of Credit shall
have expired or been fully drawn upon, if any, shall be applied to repay other
obligations of the Borrower hereunder and under the other Loan Documents. After
all such Letters of Credit shall have expired or been fully drawn upon, all
Reimbursement Obligations shall have been satisfied and all other obligations of
the Borrower hereunder and under the other Loan Documents shall have been paid
in full, the balance, if any, in such cash collateral account shall be returned
to the Borrower (or such other Person as may be lawfully entitled thereto).
Except as expressly provided above in this Section, presentment, demand, protest
and all other notices of any kind are hereby expressly waived by the Borrower.
-51-
58
SECTION 9
THE AGENTS
9.1 APPOINTMENT. Each Lender hereby irrevocably designates and
appoints each Agent as the agent of such Lender under this Agreement and the
other Loan Documents, and each such Lender irrevocably authorizes such Agent, in
such capacity, to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to such Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, no Agent shall have any duties or responsibilities,
except those expressly set forth herein, or any fiduciary relationship with any
Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against any Agent.
9.2 DELEGATION OF DUTIES. Each Agent may execute any of its duties
under this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. No Agent shall be responsible for the
negligence or misconduct of any agents or attorneys in-fact selected by it with
reasonable care.
9.3 EXCULPATORY PROVISIONS. Neither any Agent nor any of their
respective officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except to the extent that any of the foregoing are found by
a final and nonappealable decision of a court of competent jurisdiction to have
resulted from its or such Person's own gross negligence or willful misconduct)
or (ii) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by any Loan Party or any officer
thereof contained in this Agreement or any other Loan Document or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agents under or in connection with, this Agreement or any
other Loan Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document or
for any failure of any Loan Party a party thereto to perform its obligations
hereunder or thereunder. The Agents shall not be under any obligation to any
Lender to ascertain or to inquire as to the observance or performance of any of
the agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of any Loan Party.
-52-
59
9.4 RELIANCE BY ADMINISTRATIVE AGENT. Each Agent shall be entitled
to rely, and shall be fully protected in relying, upon any instrument, writing,
resolution, notice, consent, certificate, affidavit, letter, telecopy, telex or
teletype message, statement, order or other document or conversation believed by
it to be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including
counsel to the Borrower), independent accountants and other experts selected by
such Agent. The Administrative Agent may deem and treat the payee of any Note as
the owner thereof for all purposes unless a written notice of assignment,
negotiation or transfer thereof shall have been filed with the Administrative
Agent. The Agents shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Required Lenders (or, if so specified
by this Agreement, all Lenders) as it deems appropriate or it shall first be
indemnified to its satisfaction by the Lenders against any and all liability and
expense that may be incurred by it by reason of taking or continuing to take any
such action. The Agents shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement and the other Loan Documents in
accordance with a request of the Required Lenders (or, if so specified by this
Agreement, all Lenders), and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders and all future holders of
the Loans.
9.5 NOTICE OF DEFAULT. No Agent shall be deemed to have knowledge
or notice of the occurrence of any Default or Event of Default hereunder unless
such Agent has received notice from a Lender or the Borrower referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default." In the event that the Administrative Agent
receives such a notice, the Administrative Agent shall promptly give notice
thereof to the Lenders. The Administrative Agent shall take such action with
respect to such Default or Event of Default as shall be reasonably directed by
the Required Lenders (or, if so specified by this Agreement, all Lenders);
PROVIDED that unless and until the Administrative Agent shall have received such
directions, the Administrative Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the best interests of the
Lenders.
9.6 NON-RELIANCE ON AGENTS AND OTHER LENDERS. Each Lender
expressly acknowledges that neither the Agents nor any of their respective
officers, directors, employees, agents, attorneys-in-fact or affiliates have
made any representations or warranties to it and that no act by any Agent
hereafter taken, including any review of the affairs of a Loan Party or any
affiliate of a Loan Party, shall be deemed to constitute any representation or
warranty by any Agent to any Lender. Each Lender represents to the Agents that
it has, independently and without reliance upon any Agent or any other Lender,
and based on such documents and information as it has deemed appropriate, made
its own appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Loan Parties and their
affiliates and made its own decision to make its Loans hereunder and enter into
this Agreement. Each Lender also represents that it will, independently and
without reliance upon any Agent or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
-53-
60
Loan Parties and their affiliates. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall not have any duty
or responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of any Loan Party or any affiliate of
a Loan Party that may come into the possession of the Administrative Agent or
any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates.
9.7 INDEMNIFICATION. The Lenders agree to indemnify each Agent in
its capacity as such (to the extent not reimbursed by the Borrower and without
limiting the obligation of the Borrower to do so), ratably according to their
respective Aggregate Exposure Percentages in effect on the date on which
indemnification is sought under this Section (or, if indemnification is sought
after the date upon which the Commitments shall have terminated and the Loans
shall have been paid in full, ratably in accordance with such Aggregate Exposure
Percentages immediately prior to such date), from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever that may at any time
(whether before or after the payment of the Loans) be imposed on, incurred by or
asserted against such Agent in any way relating to or arising out of, the
Commitments, this Agreement, any of the other Loan Documents or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by such Agent
under or in connection with any of the foregoing; PROVIDED that no Lender shall
be liable for the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements that are found by a final and nonappealable decision of a court of
competent jurisdiction to have resulted from such Agent's gross negligence or
willful misconduct. The agreements in this Section shall survive the payment of
the Loans and all other amounts payable hereunder.
9.8 AGENT IN ITS INDIVIDUAL CAPACITY. Each Agent and its
affiliates may make loans to, accept deposits from and generally engage in any
kind of business with any Loan Party as though such Agent were not an Agent.
With respect to its Loans made or renewed by it and with respect to any Letter
of Credit issued or participated in by it, each Agent shall have the same rights
and powers under this Agreement and the other Loan Documents as any Lender and
may exercise the same as though it were not an Agent, and the terms "Lender" and
"Lenders" shall include each Agent in its individual capacity.
-54-
61
9.9 SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent may
resign as Administrative Agent upon 10 days' notice to the Lenders and the
Borrower. If the Administrative Agent shall resign as Administrative Agent under
this Agreement and the other Loan Documents, then the Required Lenders shall
appoint from among the Lenders a successor agent for the Lenders, which
successor agent shall (unless an Event of Default under Section 8(a) or Section
8(f) with respect to the Borrower shall have occurred and be continuing) be
subject to approval by the Borrower (which approval shall not be unreasonably
withheld or delayed), whereupon such successor agent shall succeed to the
rights, powers and duties of the Administrative Agent, and the term
"Administrative Agent" shall mean such successor agent effective upon such
appointment and approval, and the former Administrative Agent's rights, powers
and duties as Administrative Agent shall be terminated, without any other or
further act or deed on the part of such former Administrative Agent or any of
the parties to this Agreement or any holders of the Loans. If no successor agent
has accepted appointment as Administrative Agent by the date that is 10 days
following a retiring Administrative Agent's notice of resignation, the retiring
Administrative Agent's resignation shall nevertheless thereupon become effective
and the Lenders shall assume and perform all of the duties of the Administrative
Agent hereunder until such time, if any, as the Required Lenders appoint a
successor agent as provided for above. The Syndication Agent may, at any time,
by notice to the Lenders and the Administrative Agent, resign as Syndication
Agent hereunder, whereupon the duties, rights, obligations and responsibilities
of the Syndication Agent hereunder shall automatically be assumed by, and inure
to the benefit of, the Administrative Agent, without any further act by the
Syndication Agent, the Administrative Agent or any Lender. After any retiring
Administrative Agent's resignation as Administrative Agent, the provisions of
this Section 9 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Administrative Agent under this Agreement and the
other Loan Documents.
9.10 AGENTS GENERALLY. Except as expressly set forth herein,
neither any Agent nor any Co-Agent shall have any duties or responsibilities
hereunder in its capacity as such.
SECTION 10
MISCELLANEOUS
10.1 AMENDMENTS AND WAIVERS. Neither this Agreement, any other Loan
Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section 10.1. The
Required Lenders and each Loan Party party to the relevant Loan Document may,
or, with the written consent of the Required Lenders, the Administrative Agent
and each Loan Party party to the relevant Loan Document may, from time to time,
(a) enter into written amendments, supplements or modifications hereto and to
the other Loan Documents for the purpose of adding any provisions to this
Agreement or the other Loan Documents or changing in any manner the rights of
the Lenders or of the Loan Parties hereunder or thereunder or (b) waive, on such
terms and conditions as the Required Lenders or the Administrative Agent, as the
case may be, may specify in such instrument, any of the requirements of this
Agreement or the other Loan Documents or any Default or Event of Default and its
consequences; PROVIDED, HOWEVER, that no such waiver and no such amendment,
supplement or modification shall (i) forgive the principal amount or extend the
final scheduled date of maturity of any Loan, extend the scheduled date of any
amortization payment in respect of any Term Loan, reduce the stated rate of any
interest or fee payable hereunder (except (x) in connection with the waiver of
applicability of any post-default increase in interest rates, which waiver shall
be effective with the consent of the Majority Facility Lenders of each adversely
affected Facility and (y) that any amendment or modification of defined terms
used in the financial covenants in this Agreement shall not constitute a
reduction in the rate of interest or fees for purposes of this clause (i)) or
extend the scheduled date of any payment thereof, or increase the amount or
extend the expiration date of any Lender's Revolving Commitment, in each case
without the written consent of each Lender directly affected thereby; (ii)
eliminate or reduce the voting rights of any Lender under this Section 10.1
without the written consent of such Lender; (iii) reduce any percentage
specified in the definition of Required Lenders, consent to the assignment or
transfer by the Borrower of any of its rights and obligations under this
Agreement and the other Loan Documents, consent to the assignment or transfer by
any Subsidiary Guarantor of any of its rights and obligations under the
-55-
62
Guarantee, or release all or substantially all of the Subsidiary Guarantors from
their obligations under the Guarantee in each case without the written consent
of all Lenders; (iv) amend, modify or waive any condition precedent to any
extension of credit under the Revolving Facility set forth in Section 5.2
(including in connection with any waiver of an existing Default or Event of
Default) without the written consent of the Majority Facility Lenders with
respect to the Revolving Facility; (v) amend, modify or waive any provision of
Section 2.15 without the written consent of the Majority Facility Lenders in
respect of each Facility adversely affected thereby; (vi) reduce the amount of
Net Cash Proceeds required to be applied to prepay Term Loans under this
Agreement without the written consent of the Majority Facility Lenders with
respect to the Term Facility; (vii) reduce the percentage specified in the
definition of Majority Facility Lenders with respect to any Facility without the
written consent of all Lenders under such Facility; (viii) amend, modify or
waive any provision of Section 9 without the written consent of the
Administrative Agent and the Syndication Agent; or (ix) amend, modify or waive
any provision of Section 3 without the written consent of the Issuing Lender.
Any such waiver and any such amendment, supplement or modification shall apply
equally to each of the Lenders and shall be binding upon the Loan Parties, the
Lenders, the Administrative Agent and all future holders of the Loans. In the
case of any waiver, the Loan Parties, the Lenders and the Administrative Agent
shall be restored to their former position and rights hereunder and under the
other Loan Documents, and any Default or Event of Default waived shall be deemed
to be cured and not continuing; but no such waiver shall extend to any
subsequent or other Default or Event of Default, or impair any right consequent
thereon.
For the avoidance of doubt, this Agreement may be amended (or amended
and restated) with the written consent of the Required Lenders, the
Administrative Agent, the Syndication Agent and the Borrower (a) to add one or
more additional credit facilities to this Agreement and to permit the extensions
of credit from time to time outstanding thereunder and the accrued interest and
fees in respect thereof (collectively, the "ADDITIONAL EXTENSIONS OF CREDIT") to
share ratably in the benefits of this Agreement and the other Loan Documents
with the Term Loans and Revolving Extensions of Credit and the accrued interest
and fees in respect thereof and (b) to include appropriately the Lenders holding
such credit facilities in any determination of the Required Lenders and Majority
Facility Lenders; PROVIDED, that no such amendment shall permit the Additional
Extensions of Credit to share ratably with or with preference to the Term Loans
in the application of mandatory prepayments without the consent of the Majority
Facility Lenders with respect to each Facility (other than the Revolving
Facility) or otherwise to share ratably with or with preference to the Revolving
Extensions of Credit without the consent of the Majority Facility Lenders with
respect to the Revolving Facility.
-56-
63
10.2 NOTICES. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered, or three Business Days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received, addressed as follows in the case of the Borrower and the
Administrative Agent, and as set forth in an administrative questionnaire
delivered to the Administrative Agent in the case of the Lenders, or to such
other address as may be hereafter notified by the respective parties hereto:
The Borrower: Claire's Stores, Inc.
▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇▇▇▇▇ Traurig, P.A.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
The Administrative Agent: Fleet National Bank
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
(Loan Administrator)
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
The Syndication Agent: Bear ▇▇▇▇▇▇▇ Corporate Lending Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
PROVIDED that any notice, request or demand to or upon the Administrative Agent
or the Lenders shall not be effective until received.
-57-
64
10.3 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and no
delay in exercising, on the part of any Agent or any Lender, any right, remedy,
power or privilege hereunder or under the other Loan Documents shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not exclusive
of any rights, remedies, powers and privileges provided by law.
10.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made hereunder, in the other Loan Documents and
in any document, certificate or statement delivered pursuant hereto or in
connection herewith shall survive the execution and delivery of this Agreement
and the making of the Loans and other extensions of credit hereunder.
10.5 PAYMENT OF EXPENSES AND TAXES. The Borrower agrees (a) to pay
or reimburse the Agents for all their out-of-pocket costs and expenses incurred
in connection with the development, preparation and execution of, and any
amendment, supplement or modification to, this Agreement and the other Loan
Documents and any other documents prepared in connection herewith or therewith,
and the consummation and administration of the transactions contemplated hereby
and thereby, including the reasonable fees and disbursements of counsel to each
Agent and filing and recording fees and expenses, with statements with respect
to the foregoing to be submitted to the Borrower prior to the Closing Date (in
the case of amounts to be paid on the Closing Date) and from time to time
thereafter on a quarterly basis or such other periodic basis as such Agent shall
deem appropriate, (b) to pay or reimburse each Lender and Agent for all its
costs and expenses incurred in connection with the enforcement or preservation
of any rights under this Agreement, the other Loan Documents and any such other
documents, including the fees and disbursements of counsel (including the
allocated fees and expenses of in-house counsel) to each Lender and of counsel
to each Agent, (c) to pay, indemnify, and hold each Lender and Agent harmless
from, any and all recording and filing fees and any and all liabilities with
respect to, or resulting from any delay in paying, stamp, excise and other
taxes, if any, that may be payable or determined to be payable in connection
with the execution and delivery of, or consummation or administration of any of
the transactions contemplated by, or any amendment, supplement or modification
of, or any waiver or consent under or in respect of, this Agreement, the other
Loan Documents and any such other documents, and (d) to pay, indemnify, and hold
each Lender and Agent and their respective officers, directors, employees,
affiliates, agents and controlling persons (each, an "INDEMNITEE") harmless from
and against any and all other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement, the other Loan Documents and
any such other documents, including any of the foregoing relating to the use of
proceeds of the Loans or the violation of, noncompliance with or liability
under, any Environmental Law applicable to the operations of the Borrower any of
its Subsidiaries or any of the Properties and the reasonable fees and expenses
of legal counsel in connection with claims, actions or proceedings by any
Indemnitee against any Loan Party under any Loan Document (all the foregoing in
this clause (d), collectively, the "INDEMNIFIED LIABILITIES"), PROVIDED, that
the Borrower shall have no obligation hereunder to any Indemnitee with respect
to Indemnified Liabilities to the extent such Indemnified Liabilities are found
by a final and nonappealable decision of a court of competent jurisdiction to
have resulted from the gross negligence or willful misconduct of such
Indemnitee. Without limiting the foregoing, and to the extent permitted by
applicable law, the Borrower agrees not to assert and to cause its Subsidiaries
not to assert, and hereby waives and agrees to cause its Subsidiaries to waive,
all rights for contribution or any other rights of recovery with respect to all
claims, demands, penalties, fines, liabilities, settlements, damages, costs and
expenses of whatever kind or nature, under or related to Environmental Laws,
that any of them might have by statute or otherwise against any Indemnitee. All
amounts due under this Section 10.5 shall be payable not later than 10 days
after written demand therefor. Statements payable by the Borrower pursuant to
this Section 10.5 shall be submitted to ▇▇▇ ▇▇▇▇▇▇ (Telephone No. (954)
▇▇▇-▇▇▇▇) (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇), at the address of the Borrower set
forth in Section 10.2, or to such other Person or address as may be hereafter
designated by the Borrower in a written notice to the Administrative Agent. The
agreements in this Section 10.5 shall survive repayment of the Loans and all
other amounts payable hereunder.
-58-
65
10.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS AND ASSIGNMENTS.
(a) This Agreement shall be binding upon and inure to the
benefit of the Borrower, the Lenders, the Administrative Agent, all future
holders of the Loans and their respective successors and assigns, except that
the Borrower may not assign or transfer any of its rights or obligations under
this Agreement without the prior written consent of each Lender.
(b) Any Lender other than any Conduit Lender may, without the
consent of the Borrower, in accordance with applicable law, at any time sell to
one or more banks, financial institutions or other entities (each, a
"PARTICIPANT") participating interests in any Loan owing to such Lender, any
Commitment of such Lender or any other interest of such Lender hereunder and
under the other Loan Documents. In the event of any such sale by a Lender of a
participating interest to a Participant, such Lender's obligations under this
Agreement to the other parties to this Agreement shall remain unchanged, such
Lender shall remain solely responsible for the performance thereof, such Lender
shall remain the holder of any such Loan for all purposes under this Agreement
and the other Loan Documents, and the Borrower and the Administrative Agent
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement and the other Loan
Documents. In no event shall any Participant under any such participation have
any right to approve any amendment or waiver of any provision of any Loan
Document, or any consent to any departure by any Loan Party therefrom, except to
the extent that such amendment, waiver or consent would reduce the principal of,
or interest on, the Loans or any fees payable hereunder, or postpone the date of
the final maturity of the Loans, in each case to the extent subject to such
participation. The Borrower agrees that if amounts outstanding under this
Agreement and the Loans are due or unpaid, or shall have been declared or shall
have become due and payable upon the occurrence of an Event of Default, each
Participant shall, to the maximum extent permitted by applicable law, be deemed
to have the right of setoff in respect of its participating interest in amounts
owing under this Agreement to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under this
Agreement, PROVIDED that, in purchasing such participating interest, such
Participant shall be deemed to have agreed to share with the Lenders the
proceeds thereof as provided in Section 10.7(a) as fully as if it were a Lender
hereunder. The Borrower also agrees that each Participant shall be entitled to
the benefits of Sections 2.16, 2.17 and 2.18 with respect to its participation
in the Commitments and the Loans outstanding from time to time as if it was a
Lender; PROVIDED that, in the case of Section 2.17, such Participant shall have
complied with the requirements of said Section and PROVIDED, FURTHER, that no
Participant shall be entitled to receive any greater amount pursuant to any such
Section than the transferor Lender would have been entitled to receive in
respect of the amount of the participation transferred by such transferor Lender
to such Participant had no such transfer occurred.
-59-
66
(c) Any Lender other than any Conduit Lender (an "ASSIGNOR")
may, in accordance with applicable law, at any time and from time to time assign
to any Lender, any affiliate of any Lender, any Approved Fund or an additional
bank, financial institution or other entity (an "ASSIGNEE") all or any part of
its rights and obligations under this Agreement and the other Loan Documents
pursuant to an Assignment and Acceptance, executed by such Assignee, such
Assignor and any other Person whose consent is required pursuant to this
paragraph, and delivered to the Administrative Agent (with a copy to the
Syndication Agent) for its acceptance and recording in the Register; PROVIDED
that (i) the consent of the Borrower and the Administrative Agent (which, in
each case, shall not be unreasonably withheld or delayed) shall be required in
connection with any assignment of Revolving Loans and/or Revolving Commitments
to any Assignee that is not a Lender, an affiliate of any Lender or an Approved
Fund at the time of such assignment and (ii) no such assignment to an Assignee
(other than any Lender, any affiliate of any Lender or any Approved Fund) shall
be in an aggregate principal amount of less than $5,000,000 (other than in the
case of an assignment of all of a Lender's interests under this Agreement and
after giving effect thereto, the Assignor shall have Commitments and Loans
aggregating at least $5,000,000), unless otherwise agreed by the Borrower and
the Administrative Agent. For purposes of the proviso contained in the preceding
sentence, the amount described therein shall be aggregated in respect of each
Lender and its related Approved Funds, if any. Any such assignment need not be
ratable as among the Facilities. Upon such execution, delivery, acceptance and
recording, from and after the effective date determined pursuant to such
Assignment and Acceptance, (x) 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 Lender hereunder with a Commitment and/or Loans as set
forth therein, and (y) the Assignor thereunder shall, to the extent provided in
such Assignment and Acceptance, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering all of an
Assignor's rights and obligations under this Agreement, such Assignor shall
cease to be a party hereto). Notwithstanding any provision of this Section 10.6,
the consent of the Borrower shall not be required for any assignment that occurs
when an Event of Default pursuant to Section 8(f) shall have occurred and be
continuing with respect to the Borrower. Notwithstanding the foregoing, any
Conduit Lender may assign at any time to its designating Lender hereunder
without the consent of the Borrower or the Administrative Agent any or all of
the Loans it may have funded hereunder and pursuant to its designation agreement
and without regard to the limitations set forth in the first sentence of this
Section 10.6(c).
-60-
67
(d) The Administrative Agent shall, on behalf of the Borrower,
maintain at its address referred to in Section 10.2 a copy of each Assignment
and Acceptance delivered to it and a register (the "REGISTER") for the
recordation of the names and addresses of the Lenders and the Commitment of, and
the principal amount of the Loans owing to, each Lender from time to time. The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Borrower, each other Loan Party, the Administrative Agent and the
Lenders shall treat each Person whose name is recorded in the Register as the
owner of the Loans and any Notes evidencing the Loans recorded therein for all
purposes of this Agreement. Any assignment of any Loan, whether or not evidenced
by a Note, shall be effective only upon appropriate entries with respect thereto
being made in the Register (and each Note shall expressly so provide). Any
assignment or transfer of all or part of a Loan evidenced by a Note shall be
registered on the Register only upon surrender for registration of assignment or
transfer of the Note evidencing such Loan, accompanied by a duly executed
Assignment and Acceptance, and thereupon one or more new Notes shall be issued
to the designated Assignee.
(e) Upon its receipt of an Assignment and Acceptance executed
by an Assignor, an Assignee and any other Person whose consent is required by
Section 10.6(c), together with payment to the Administrative Agent of a
registration and processing fee of $3,500 (except in the case of assignments by
the Syndication Agent, which shall pay a fee of $1,000) , the Administrative
Agent shall (i) promptly accept such Assignment and Acceptance and (ii) record
the information contained therein in the Register on the effective date
determined pursuant thereto.
(f) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this Section 10.6 concerning assignments of
Loans and Notes relate only to absolute assignments and that such provisions do
not prohibit assignments creating security interests, including any pledge or
assignment by a Lender of any Loan or Note to any Federal Reserve Bank in
accordance with applicable law.
(g) The Borrower, upon receipt of written notice from the
relevant Lender, agrees to issue Notes to any Lender requiring Notes to
facilitate transactions of the type described in paragraph (f) above.
(h) The Borrower, each Lender and the Administrative Agent
hereby confirms that it will not institute against a Conduit Lender or join any
other Person in instituting against a Conduit Lender any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding under any
state bankruptcy or similar law, for one year and one day after the payment in
full of the latest maturing commercial paper note issued by such Conduit Lender;
PROVIDED, however, that each Lender designating any Conduit Lender hereby agrees
to indemnify, save and hold harmless each other party hereto for any loss, cost,
damage or expense arising out of its inability to institute such a proceeding
against such Conduit Lender during such period of forbearance.
-61-
68
10.7 ADJUSTMENTS; SET-OFF.
(a) Except to the extent that this Agreement expressly
provides for payments to be allocated to a particular Lender or to the Lenders
under a particular Facility, if any Lender (a "BENEFITTED LENDER") shall, at any
time after the Loans and other amounts payable hereunder shall immediately
become due and payable pursuant to Section 8, receive any payment of all or part
of the Obligations owing to it, or receive any collateral in respect thereof
(whether voluntarily or involuntarily, by set-off, pursuant to events or
proceedings of the nature referred to in Section 8(f), or otherwise), in a
greater proportion than any such payment to or collateral received by any other
Lender, if any, in respect of the Obligations owing to such other Lender, such
Benefitted Lender shall purchase for cash from the other Lenders a participating
interest in such portion of the Obligations owing to each such other Lender, or
shall provide such other Lenders with the benefits of any such collateral, as
shall be necessary to cause such Benefitted Lender to share the excess payment
or benefits of such collateral ratably with each of the Lenders; PROVIDED,
HOWEVER, that if all or any portion of such excess payment or benefits is
thereafter recovered from such Benefitted Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders
provided by law, each Lender shall have the right, without prior notice to the
Borrower, any such notice being expressly waived by the Borrower to the extent
permitted by applicable law, upon any amount becoming due and payable by the
Borrower hereunder (whether at the stated maturity, by acceleration or
otherwise), to set off and appropriate and apply against such amount any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Lender or any branch or agency
thereof to or for the credit or the account of the Borrower, as the case may be.
Each Lender agrees promptly to notify the Borrower and the Administrative Agent
after any such setoff and application made by such Lender, PROVIDED that the
failure to give such notice shall not affect the validity of such setoff and
application.
10.8 COUNTERPARTS. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts, and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument. Delivery of an executed signature page of this Agreement by
facsimile transmission shall be effective as delivery of a manually executed
counterpart hereof. A set of the copies of this Agreement signed by all the
parties shall be lodged with the Borrower and the Administrative Agent.
10.9 SEVERABILITY. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
10.10 INTEGRATION. This Agreement and the other Loan Documents
represent the entire agreement of the Borrower, the Agents and the Lenders with
respect to the subject matter hereof and thereof, and there are no promises,
undertakings, representations or warranties by any Agent or any Lender relative
to subject matter hereof not expressly set forth or referred to herein or in the
other Loan Documents.
-62-
69
10.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
10.12 SUBMISSION TO JURISDICTION; WAIVERS. The Borrower hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which it
is a party, or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of the courts of the State of
New York, the courts of the United States for the Southern District of New York,
and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, or the
Borrower, as the case may be at its address set forth in Section 10.2 or at such
other address of which the Administrative Agent shall have been notified
pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall limit
the right to ▇▇▇ in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding referred
to in this Section any special, exemplary, punitive or consequential damages.
10.13 ACKNOWLEDGMENTS. The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents;
(b) no Agent or Lender has any fiduciary relationship with or
duty to the Borrower arising out of or in connection with this Agreement or any
of the other Loan Documents, and the relationship between the Agents and
Lenders, on the one hand, and the Borrower, on the other hand, in connection
herewith or therewith is solely that of debtor and creditor; and
-63-
70
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated hereby
among the Lenders or among the Borrower and the Lenders.
10.14 RELEASES OF GUARANTEES. (a) Notwithstanding anything to the
contrary contained herein or in any other Loan Document, the Administrative
Agent is hereby irrevocably authorized by each Lender (without requirement of
notice to or consent of any Lender except as expressly required by Section 10.1)
to take any action requested by the Borrower having the effect of releasing any
guarantee obligations (i) to the extent necessary to permit consummation of any
transaction not prohibited by any Loan Document or that has been consented to in
accordance with Section 10.1 or (ii) under the circumstances described in
paragraph (b) below.
(b) At such time as the Loans, the Reimbursement Obligations
and the other obligations under the Loan Documents (other than obligations under
or in respect of Hedge Agreements) shall have been paid in full, the Commitments
have been terminated and no Letters of Credit shall be outstanding, the
Guarantee and all obligations (other than those expressly stated to survive such
termination) of the Administrative Agent and each Loan Party under the Guarantee
shall terminate, all without delivery of any instrument or performance of any
act by any Person.
10.15 CONFIDENTIALITY. Each Agent and each Lender agrees to keep
confidential all non- public information provided to it by the Borrower pursuant
to this Agreement that is designated by the Borrower as confidential; PROVIDED
that nothing herein shall prevent the Administrative Agent or any Lender from
disclosing any such information (a) to any Agent, any other Lender, any
affiliate of any Lender or any Approved Fund, (b) to any actual or prospective
Transferee or Hedge Agreement counterparty that agrees to comply with the
provisions of this Section, (c) to its employees, directors, agents, attorneys,
accountants and other professional advisors, examiners or bank regulators or
those of any of its affiliates, (d) upon the request or demand of any
Governmental Authority, (e) in response to any order of any court or other
Governmental Authority or as may otherwise be required pursuant to any
Requirement of Law, (f) if requested or required to do so in connection with any
litigation or similar proceeding, (g) that has been publicly disclosed, (h) to
the National Association of Insurance Commissioners or any similar organization
or any nationally recognized rating agency that requires access to information
about a Lender's investment portfolio in connection with ratings issued with
respect to such Lender, or (i) in connection with the exercise of any remedy
hereunder or under any other Loan Document.
10.16 WAIVERS OF JURY TRIAL. THE BORROWER, THE AGENTS AND THE
LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND
FOR ANY COUNTERCLAIM THEREIN.
[REMAINDER OF PAGE INTENTIONALLY BLANK]
-64-
71
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
-65-
72
CLAIRE'S STORES, INC.
By:___________________________________
Name:
Title:
BEAR, ▇▇▇▇▇▇▇ & CO. INC., as Sole Lead
Arranger and Sole Book Manager
By:___________________________________
Name:
Title:
BEAR ▇▇▇▇▇▇▇ CORPORATE LENDING INC.,
as Syndication Agent and as a Lender
By:___________________________________
Name:
Title:
FLEET NATIONAL BANK, as Administrative
Agent and as a Lender
By:___________________________________
Name:
Title:
SUNTRUST BANK, SOUTH FLORIDA, N.A.,
as Documentation Agent and as a Lender
By:___________________________________
Name:
Title:
-66-
73
ANNEX A
PRICING GRID FOR REVOLVING LOANS AND TERM LOANS
----------------------- -------------------------- -------------------------
Fixed Charge Coverage Applicable Margin Applicable Margin for
Ratio for Eurodollar Loans ABR Loans
----------------------- -------------------------- -------------------------
=> 2.00 to 1.00 1.00% 0%
----------------------- -------------------------- -------------------------
=> 1.75 to 1.00 1.125% 0.125%
----------------------- -------------------------- -------------------------
< 1.75 to 1.00 1.250% 0.25%
----------------------- -------------------------- -------------------------
Changes in the Applicable Margin resulting from changes in the Consolidated
Fixed Charge Coverage Ratio shall become effective on the date (the "ADJUSTMENT
DATE") that is three Business Days after the date on which financial statements
are delivered to the Lenders pursuant to Section 6.1 and shall remain in effect
until the next change to be effected pursuant to this paragraph. If any
financial statements referred to above are not delivered within the time periods
specified in Section 6.1, then, until the date that is three Business Days after
the date on which such financial statements are delivered, the highest rate set
forth in each column of the Pricing Grid shall apply. Each determination of the
Consolidated Fixed Charge Coverage Ratio pursuant to the Pricing Grid shall be
made in a manner consistent with the determination thereof pursuant to Section
7.1.
