AMENDED AND RESTATED LOAN AGREEMENT
By and Among
WASHINGTON MUTUAL BANK doing business as WESTERN BANK
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION doing business as
SEAFIRST BANK
The Several Lenders from Time to Time Parties Hereto
as the Lenders
and
WASHINGTON MUTUAL BANK doing business as WESTERN BANK
as the Letter of Credit Issuer
and
CUTTER & BUCK INC.
as the Borrower
and
WASHINGTON MUTUAL BANK doing business as WESTERN BANK
as the Administrative Agent to the Lenders and the Letter of Credit Issuer
Dated as of April 28, 1999
TABLE OF CONTENTS
PAGE
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ARTICLE I DEFINITIONS AND ACCOUNTING TERMS........................................ 1
Section 1.1 Certain Defined Terms......................................... 1
Section 1.2 Computation of Time Periods................................... 8
Section 1.3 Accounting Terms.............................................. 9
ARTICLE II AMOUNTS AND TERMS OF THE BORROWINGS.................................... 9
Section 2.1 The Facilities................................................ 9
Section 2.2 The Borrowings................................................ 10
Section 2.3 Making the Borrowings......................................... 14
Section 2.4 Interest Rates; Late Charges.................................. 16
Section 2.5 Repayment..................................................... 17
Section 2.6 Fees.......................................................... 18
Section 2.7 Prepayments................................................... 18
Section 2.8 Payments and Computations..................................... 18
Section 2.9 Increased Costs............................................... 19
Section 2.10 Illegality.................................................... 20
Section 2.11 Prepayment Indemnity; Fee..................................... 20
Section 2.12 Evidence of Debt.............................................. 21
Section 2.13 Collateral.................................................... 22
Section 2.14 Use of Proceeds............................................... 22
ARTICLE III CONDITIONS OF BORROWING............................................... 22
Section 3.1 Conditions Precedent to Effective Date........................ 22
Section 3.2 Conditions Precedent to Each Borrowing........................ 23
ARTICLE IV REPRESENTATIONS AND WARRANTIES......................................... 24
Section 4.1 Organization.................................................. 24
Section 4.2 Authorization................................................. 24
Section 4.3 Financial Information......................................... 24
Section 4.4 Legal Effect.................................................. 25
Section 4.5 Properties.................................................... 25
Section 4.6 Hazardous Substances.......................................... 25
Section 4.7 Litigation and Claims......................................... 25
Section 4.8 Taxes......................................................... 25
Section 4.9 Lien Priority................................................. 25
Section 4.10 Binding Effect................................................ 26
Section 4.11 Commercial Purposes........................................... 26
Section 4.12 Employee Benefit Plans........................................ 26
Section 4.13 Location of The Borrower's Offices and Records................ 26
Section 4.14 Information................................................... 26
Section 4.15 Survival of Representations and Warranties.................... 26
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PAGE
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ARTICLE V COVENANTS OF THE BORROWER............................................... 27
Section 5.1 Affirmative Covenants......................................... 27
Section 5.2 Negative Covenants............................................ 30
Section 5.3 Financial Covenants........................................... 31
ARTICLE VI EVENTS OF DEFAULT...................................................... 32
Section 6.1 Events of Default............................................. 32
Section 6.2 Remedies...................................................... 34
Section 6.3 Adjustments; Right of Set-Off................................. 34
Section 6.4 Cumulative Remedies........................................... 35
Section 6.5 Application of Payments....................................... 35
ARTICLE VII THE ADMINISTRATIVE AGENT.............................................. 35
Section 7.1 Appointment................................................... 35
Section 7.2 Delegation of Duties.......................................... 36
Section 7.3 Exculpatory Provisions........................................ 36
Section 7.4 Reliance by Administrative Agent.............................. 36
Section 7.5 Notice of Default............................................. 36
Section 7.6 Non-Reliance on Administrative Agent and Other Lenders........ 37
Section 7.7 Indemnification............................................... 37
Section 7.8 Administrative Agent in Its Individual Capacity............... 38
Section 7.9 Successor Administrative Agent................................ 38
ARTICLE VIII MISCELLANEOUS........................................................ 38
Section 8.1 Amendments.................................................... 38
Section 8.2 Notices....................................................... 39
Section 8.3 No Waiver; Remedies........................................... 39
Section 8.4 Costs and Expenses; Indemnification........................... 39
Section 8.5 Binding Effect; Successors and Assigns; Participations
and Assignments............................................... 40
Section 8.6 Execution in Counterparts..................................... 42
Section 8.7 Governing Law................................................. 43
Section 8.8 Mediation/Arbitration Provisions.............................. 43
Section 8.9 Severability.................................................. 44
Section 8.10 Entire Agreement.............................................. 45
Section 8.11 Descriptive Headings.......................................... 45
Section 8.12 Gender and Number............................................. 45
EXHIBIT A-1 FORM OF REVOLVING FACILITY NOTE
EXHIBIT A-2 FORM OF TERM FACILITY NOTE
EXHIBIT B FORM OF NOTICE OF BORROWING
EXHIBIT C FORM OF ASSIGNMENT AND ACCEPTACE
EXHIBIT D COMMITMENT AMOUNTS
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AMENDED AND RESTATED LOAN AGREEMENT
THIS AMENDED AND RESTATED LOAN AGREEMENT (this "Agreement") dated as
of April 28, 1999 is made by and among CUTTER & BUCK INC., a Washington
corporation (the "Borrower"), WASHINGTON MUTUAL BANK doing business as
WESTERN BANK ("Western Bank"), BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION doing business as SEAFIRST BANK ("Seafirst"), the several banks
and other financial institutions from time to time parties to this Agreement
(including Western Bank and Seafirst in their respective capacities as
lenders, the "Lenders"), Western Bank, as issuer of letters of credit (the
"Letter of Credit Issuer") and as issuer of credit cards (the "Credit Card
Issuer"), and Western Bank, as administrative agent for the Lenders, the
Letter of Credit Issuer and the Credit Card Issuer (in such capacity, the
"Administrative Agent"), and amends and restates in their entirety (a) the
Amended and Restated Loan Agreement dated as of July 21, 1998 between the
Borrower and Western Bank, which loan agreement amended and restated the Loan
Agreement dated as of January 28, 1997 between the Borrower and Western Bank,
and (b) the Promissory Note dated July 21, 1998 made by the Borrower to the
order of Western Bank, which promissory note amended and restated the
Promissory Note dated as of January 28, 1997 made by the Borrower to the
order of Western Bank (collectively, the "Original Loan Agreements").
RECITALS
The Borrower and Western Bank are parties to the Original Loan
Agreements pursuant to which the Western Bank agreed to make advances to the
Borrower and issue letters of credit for the Borrower's account from time to
time. The Original Loan Agreements are secured by the Amended and Restated
Security Agreement dated July 31, 1998 between the Borrower and Western Bank
(the "Original Security Agreement").
The Borrower and Western Bank have agreed, among other things, to
increase the amount of the loan commitment under the Original Loan Agreements
and to allow Western Bank to assign a portion of its rights and obligations
in this Agreement to Seafirst and, from time to time, to one or more other
banks, financial institutions or other entities. Concurrently with the
execution and delivery of this Agreement, the Borrower and the Lenders are
entering into an Amended and Restated Security Agreement, which amends and
restates the Original Security Agreement.
Accordingly, the parties agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.1 CERTAIN DEFINED TERMS. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be
equally applicable to both the singular and plural forms of the terms
defined):
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"ADVANCE" means an advance to the Borrower pursuant to Article II, and
refers to a Floating Rate Advance or a Fixed Rate Advance (each of which
shall be a "TYPE" of Advance). Revolving Facility Advances may be borrowed
as Floating Rate Advances or LIBOR Rate Advances. Term Facility Advances may
be borrowed as Floating Rate Advances, LIBOR Rate Advances or Term Rate
Advances.
"AFFILIATE" means, as to any Person, any other Person which, 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 20% or more of
the voting interests of such Person or (b) direct or cause the direction of
the management and policies of such Person, whether by contract or otherwise.
"AUTHORIZED OFFICER" means the President, any Senior Vice-President or
the Chief Financial Officer or Controller of the Borrower.
"BORROWER" means Cutter & Buck Inc., a Washington corporation.
"BORROWING" means a borrowing consisting of (a) the making of an
Advance, (b) the issuance of a Letter of Credit or (c) the funding of risk
participations pursuant to Section 2.2(b)(iii) or 2.2(c)(ii).
"BORROWING REQUEST" means a request made by the Borrower to the
Administrative Agent for (a) a Borrowing or (b) the conversion or
continuation of an Advance pursuant to the terms of this Agreement and shall,
if requested by the Administrative Agent, be in the form of a Notice of
Borrowing attached as Exhibit B.
"BUSINESS DAY" means a day of the year on which banks are not required
or authorized to close in Seattle, Washington and, if the applicable Business
Day relates to any LIBOR Rate Advances, on which dealings are carried on in
the London interbank market.
"COLLATERAL" means the collateral described in the Security Agreement
or any other Loan Document at any time now or hereafter in effect between the
Borrower and the Administrative Agent, acting on behalf and for the benefit
of each of the Lenders, the Letter of Credit Issuer and the Credit Card
Issuer, including all items of real and personal property in which the
Administrative Agent holds a Lien to secure the credit facilities provided in
this Agreement.
"COMMERCIAL LETTERS OF CREDIT" means irrevocable commercial letters of
credit issued pursuant to Section 2.2(b) from time to time by the Letter of
Credit Issuer or one of its correspondents for the account of the Borrower.
"COMMITMENT" means, with respect to each Lender, the dollar amount
constituting a portion of the Revolving Commitment set forth opposite such
Lender's name on Exhibit D hereof, including any recalculation thereof
resulting from an assignment of any portion of its rights and obligations
under this Agreement pursuant to Section 8.5(c).
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"COMMITMENT PERCENTAGE" means, as to any Lender at any time, the
percentage which such Lender's Commitment then constitutes of the Revolving
Commitment.
"CREDIT CARDS" means one or more Business Visa Cards issued pursuant
to Section 2.2(c) for the account of the Borrower.
"CREDIT CARD PARTICIPANT" means as to any Credit Card, each Lender
other than the Letter of Credit Issuer and Seafirst.
"CREDIT CARD ISSUER" means Washington Mutual Bank doing business as
Western Bank.
"DEFAULT" has the meaning specified in the definition of "Event of
Default."
"DEFAULT RATE" has the meaning specified in Section 2.4(b).
"DOLLARS", "DOLLARS" or the symbol "$" means lawful money of the
United States of America denominated in United States dollars.
"EBITDA" means, for any period, the net income or net loss of Borrower
and its subsidiaries computed on a consolidated basis in accordance with GAAP
(but excluding extraordinary gains or losses), after restoring amounts
deducted for, without duplication, (a) interest expense, (b) taxes based upon
net income and (c) depreciation and amortization.
"EFFECTIVE DATE" means April 28, 1999.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"EVENT OF DEFAULT" means any of the events specified in Section 6.1,
provided that there has been satisfied any requirement in connection with
such event for the giving of notice, or the lapse of time, or the happening
of any further condition, event or act, and "DEFAULT" shall mean any of such
events, whether or not any such requirement has been satisfied.
"FACTORING AGREEMENT" means the Factoring Agreement dated as of March
1, 1995 between the Borrower and Republic Factors Corporation, and any
renewal extension or modification thereof.
"FEDERAL FUNDS EFFECTIVE RATE" shall mean, 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 which is a Business Day, the
average of the quotations for the day of such transactions received by the
Administrative Agent from three federal funds brokers of recognized standing
selected by it.
"FIXED RATE" means a LIBOR Rate or a Term Rate.
"FIXED RATE ADVANCE" means a LIBOR Rate Advance or a Term Rate Advance.
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"FLOATING RATE" means, with respect to any Floating Rate Advance, the
interest rate per annum reported as the Prime Rate in the Money Rates section
of the Wall Street Journal. If the Wall Street Journal ceases reporting the
Prime Rate as currently reported, the Floating Rate shall be another
reasonably comparable rate selected by the Lender.
"FLOATING RATE ADVANCE" means an Advance which bears interest at a
rate determined by reference to the Floating Rate as provided in Section
2.4(a)(i).
"FUNDED DEBT" means, as of any date of determination, (a) the
Indebtedness of the Borrower under this Agreement other than Indebtedness
under the Revolving Facility, plus (b) any other Indebtedness of the Borrower
or its subsidiaries that (i) has a stated maturity date in excess of one year
from the date of the creation of such Indebtedness or (ii) has a stated
maturity date of one year or less from the date of creation of such
Indebtedness but is renewable or extendable at the option of the Borrower.
"GAAP" means generally accepted accounting principles in the United
States.
"INDEBTEDNESS" means, with respect to any Person: (i) all items of
indebtedness or liability which would be included in determining total
liabilities as shown on the liability side of a balance sheet as of the date
as of which indebtedness is determined; (ii) indebtedness secured by any Lien
on property carried on the asset side of the balance sheet of such Person
whether or not such indebtedness shall have been assumed; (iii) any other
indebtedness or liability for borrowed money or for the deferred purchase
price of property or services for which such Person is directly or
contingently liable as obligor, guarantor, or otherwise, or in respect of
which such Person otherwise assures a creditor against loss; and (iv) any
other obligations of such Person under leases which shall have been or,
pursuant to GAAP, should be recorded as capital leases.
"INTERCREDITOR AGREEMENT" means the Assignment of Monies Due Under
Factoring Agreement and Intercreditor Agreement dated as of February 20, 1997
among Republic Factors Corporation, the Borrower and the Lender, and all
amendments and modifications thereto.
"INTEREST PERIOD" means, for each Fixed Rate Advance, the period
beginning on the date of such Advance and ending on the last day of the
period selected by the Borrower pursuant to the provisions below. The
duration of each such Interest Period shall be (a) in the case of a LIBOR
Rate Advance, one, two, three or six months, and (b) in the case of a Term
Rate Advance, one, two, three, four or five years, in each case as selected
by the Borrower in its applicable Borrowing Request; provided, however, that:
(i) no Interest Period shall end after the Termination Date,
in the case of a Revolving Facility Advance, or after the Maturity Date, in
the case of a Term Facility Advance; and
(ii) if the last day of such Interest Period would otherwise
occur on a day which is not a Business Day, such last day shall be extended
to the next succeeding Business Day, EXCEPT if such Interest Period is for a
LIBOR Rate Advance and such extension would cause such last day
4
to occur in a new calendar month, then such last day shall occur on the next
preceding Business Day.
"LETTER OF CREDIT" means any letter of credit issued by the Letter of
Credit Issuer or one of its correspondents for the account of the Borrower in
accordance with the provisions of Section 2.2(b), which letter of credit
shall be: (i) in the case of a Commercial Letter of Credit, issued in
connection with the purchase of inventory by the Borrower and, in the case of
a Standby Letter of Credit, issued for such other purposes, if any, for which
the Borrower has historically obtained letters of credit or for such other
purposes as are acceptable to the Lender; (ii) denominated in United States
Dollars, and (iii) otherwise in such form as may be approved from time to
time by the Letter of Credit Issuer.
"LETTER OF CREDIT AGREEMENTS" means, collectively, the Continuing
Agreement for Commercial Letters of Credit dated as of January 29, 1997 from
the Borrower to the Letter of Credit Issuer and the Continuing Agreement for
Standby Letters of Credit dated as of January 29, 1997 from the Borrower to
the Letter of Credit Issuer.
"LETTER OF CREDIT ISSUER" means Washington Mutual Bank doing business
as Western Bank.
"LETTER OF CREDIT PARTICIPANT" means as to any Letter of Credit, each
Lender other than the Letter of Credit Issuer.
"LIBOR RATE" means, with respect to any LIBOR Rate Advance for any
Interest Period, an interest rate per annum (rounded upward to the next 1/100
of 1%) reported as the London Interbank Offered Rate in the Money Rates
section of the Wall Street Journal published on the Business Day next
preceding the date such LIBOR Rate Advance is made (which rate may be
reported as of an earlier date) for maturities equal to the requested
Interest Period. Unless and until the Wall Street Journal publishes such
rate for two-month periods, the LIBOR Rate for two-month Interest Periods
shall be the average of the one-month and the three-month London Interbank
Offered Rates as reported in the Wall Street Journal on the relevant day. If
the Wall Street Journal ceases reporting London Interbank Offered Rates
comparable to those currently reported, the LIBOR Rate shall be another
reasonably comparable rate selected by the Lender.
"LIBOR RATE ADVANCE" means an Advance which bears interest at a rate
determined by reference to the LIBOR Rate as provided in Section 2.4(a)(ii).
"LIEN" means any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including any agreement to give any of the
foregoing, any conditional sale or other title retention agreement, any lease
in the nature thereof, and the filing of or agreement to give any financing
statement under the Uniform Commercial Code of any jurisdiction).
"LOAN DOCUMENTS" means this Agreement, the Notes, the Letter of Credit
Agreements, the Security Documents, the Intercreditor Agreement and all other
documents, instruments and agreements related thereto, including all
documentation delivered pursuant to Section 2.2(b)(ii).
"MATURITY DATE" means, with respect to each Term Facility Advance,
August 1, 2005.
5
"NOTES" means the Revolving Facility Note and the Term Facility Note.
"NOTICE OF BORROWING" means a written notice in the form of Exhibit B.
"OUTSTANDING" means, as of any date of determination, (a) with respect
to Letters of Credit, all Letters of Credit issued pursuant to Section
2.2(b), with respect to which the full amount available to be drawn
thereunder has not been drawn and which have not expired at their stated
expiration dates or otherwise in accordance with their terms or been
surrendered to the Letter of Credit Issuer for cancellation, or (b) with
respect to Advances, the principal amount thereof remaining unpaid and owing
by the Borrower.
"PERMITTED LIENS" means (a) Liens securing Indebtedness owed by the
Borrower to the Lenders, (b) Liens for taxes, assessments or similar charges
either not yet due or being contested in good faith, (c) Liens of material
men, mechanics, warehousemen or carriers, or other like Liens arising in the
ordinary course of business and securing obligations which are not yet
delinquent, (d) purchase money Liens or purchase money security interests
upon or in any property acquired or held by the Borrower in the ordinary
course of business to secure Indebtedness outstanding on the Effective Date
or permitted to be incurred under Section 5.2(a), (e) Liens which, as of the
Effective Date, have been disclosed to and approved by the Lender in writing,
(f) Liens which in the aggregate constitute an immaterial and insignificant
monetary amount with respect to the net value of the Borrower's assets, (g)
Liens granted pursuant to the Factoring Agreement and (h) Liens granted
pursuant to capital leases.
"PERSON" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association,
joint venture or other entity, or any governmental authority or entity.
"REQUIRED LENDERS" means, at any date, the Lenders having an aggregate
Commitment Percentage equal to 100% of the Commitment.
"REVOLVING COMMITMENT" has the meaning specified in Section 2.1.
"REVOLVING FACILITY" has the meaning specified in Section 2.1(a).
"REVOLVING FACILITY ADVANCES" means Advances by the Lenders to the
Borrower under the Revolving Facility as Floating Rate Advances or LIBOR Rate
Advances.
"REVOLVING FACILITY NOTE" means the promissory note payable to the
order of each of the Lenders, in substantially the form of Exhibit A-1, in
the amount of such Lender's Commitment Percentage, evidencing the aggregate
Indebtedness of the Borrower to such Lender resulting from Borrowings under
the Revolving Facility.
"SECURITY AGREEMENT" means the Amended and Restated Security Agreement
dated the Effective Date between the Borrower and the Administrative Agent,
as secured party on behalf of the Lenders, the Letter of Credit Issuer and
the Credit Card Issuer.
6
"SECURITY DOCUMENTS" means the Security Agreement and all other
documents, instruments and agreements (a) under which any Person grants a
security interest to the Administrative Agent on behalf and for the benefit
of the Lenders, the Letter of Credit Issuer and the Credit Card Issuer for
the purpose of securing the obligations of the Borrower contained in this
Agreement and the other Loan Documents, or (b) which relate to the perfection
of such a security interest.
"STANDBY LETTERS OF CREDIT" means irrevocable standby letters of
credit issued pursuant to Section 2.2(b) from time to time by the Letter of
Credit Issuer or one of its correspondents for the account of the Borrower.
"TANGIBLE NET WORTH" means the sum of common stock, additional paid in
capital and retained earnings of the Borrower and its subsidiaries calculated
on a consolidated basis in accordance with GAAP.
"TERM COMMITMENT" has the meaning specified in Section 2.1.
"TERM FACILITY" has the meaning specified in Section 2.1(b).
"TERM FACILITY ADVANCES" means Advances by the Term Lender to the
Borrower under the Term Facility as Floating Rate Advances, LIBOR Rate
Advances or Term Rate Advances.
"TERM FACILITY NOTE" means the promissory note payable to the order of
the Term Lender, in substantially the form of Exhibit A-2 evidencing the
aggregate Indebtedness of the Borrower to the Term Lender resulting from
Borrowings under the Term Facility.
"TERM LENDER" means Washington Mutual Bank doing business as Western
Bank.
"TERM RATE" means, with respect to any Term Rate Advance, for any
Interest Period, an interest rate per annum (rounded upward to the next 1/100
of 1%) equal to the yield adjusted to constant maturity on U.S. Treasury
securities as reported by the Federal Reserve Bank of San Francisco based on
composites of quotations by five leading U.S. government securities dealers
to the Federal Reserve Bank of New York for maturities equal to the requested
Interest Period. Unless and until the Federal Reserve Bank reports yields
adjusted to constant maturity on U.S. Treasury securities with maturities of
four years, the Term Rate applicable to any Interest Period of four years
shall be determined by straight-line interpolation between the yield on U.S.
Treasury securities with maturities of two years and three years. If the
Federal Reserve Bank ceases reporting the U.S. Treasury yields adjusted to
constant maturities, the Term Rate shall be another reasonably comparable
rate selected by the Lender.
"TERM RATE ADVANCE" means an Advance which bears interest at a rate
determined by reference to the Term Rate as provided in Section 2.4(a)(iii).
"TERMINATION DATE" means August 1, 2000, unless earlier terminated
pursuant to Section 6.2.
"TYPE" has the meaning specified in the definition of "Advance".
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"UCC" means the Uniform Commercial Code as enacted in the state of
Washington (presently Revised Code of Washington title 62A).
"UNUSED REVOLVING FACILITY ADVANCE SUBLIMIT" means, as of any date of
determination, an amount equal to $25,000,000 minus the sum of: (a) the
aggregate principal amount of all Revolving Advances Outstanding and (b) the
aggregate principal amount of Revolving Advances for which a Borrowing
Request has been made pursuant to Section 2.2(a) but which have not been
disbursed as of the date of determination.
"UNUSED REVOLVING FACILITY COMMITMENT" means, as of any date of
determination, an amount equal to the Revolving Commitment minus the sum of:
(a) the aggregate principal amount of all Revolving Facility Advances
Outstanding, (b) the aggregate amount available to be drawn under all Letters
of Credit Outstanding and the aggregate amount drawn under Letters of Credit
for which the Letter of Credit Issuer has not been reimbursed or which has
not been converted into a Floating Rate Advance, as provided in Section
2.2(b)(iii), (c) the aggregate principal or stated amounts of Revolving
Facility Advances and Letters of Credit for which a Borrowing Request has
been made pursuant to Section 2.2(a) but which have not been disbursed or
issued as of the date of determination and (d) the Credit Card sublimit of
$250,000.
"UNUSED SLC SUBLIMIT" means, as of any date of determination, an
amount equal to $4,500,000 minus the sum of (a) the aggregate amount
available to be drawn under all Standby Letters of Credit Outstanding and the
aggregate amount drawn under Standby Letters of Credit for which the Letter
of Credit Issuer has not been reimbursed or which has not been converted into
a Floating Rate Advance, as provided in Section 2.2(b)(iii) and (b) the
aggregate stated amounts of Standby Letters of Credit for which a Borrowing
Request has been made pursuant to Section 2.3(a) but which have not been
issued as of the date of determination.
"UNUSED TERM FACILITY COMMITMENT" means, as of any date of
determination, an amount equal to the Term Commitment minus the sum of (a)
the aggregate principal amount of all Term Facility Advances Outstanding and
(b) the aggregate principal amount of Term Facility Advances for which a
Borrowing Request has been made pursuant to Section 2.3(a) but which have not
been issued as of the date of determination.
"WORKING CAPITAL" means current consolidated assets of the Borrower
and its subsidiaries minus current consolidated liabilities of the Borrower
and its subsidiaries, as defined according to GAAP.
Section 1.2 COMPUTATION OF TIME PERIODS. In this Agreement, in the
computation of periods of time from a specified date to a later specified
date: (a) the word "from" means "from and including," (b) the words "to" and
"until" each means "to but excluding"; and (c) the word "through" means
"through and including."
8
Section 1.3 ACCOUNTING TERMS. All accounting terms not specifically
defined in this Agreement shall be construed, and all accounting procedures
shall be performed, in accordance with GAAP applicable as of the date of this
Agreement, consistently applied.
ARTICLE II
AMOUNTS AND TERMS OF THE BORROWINGS
Section 2.1 THE FACILITIES.
(a) Subject to the terms and conditions of this Agreement,
each Lender severally agrees to make available to the Borrower for working
capital and general corporate purposes its Commitment Percentage of a
revolving credit facility and (the "Revolving Facility") in the maximum
amount of $40,000,000 (the "Revolving Commitment") consisting of (i) Floating
Rate Advances and LIBOR Advances, (ii) Standby Letters of Credit, (iii)
Commercial Letters of Credit and (iv) Credit Cards; provided, however, that:
(i) The aggregate principal amount of Advances under
the Revolving Facility at any time Outstanding may not exceed $25,000,000;
(ii) The aggregate stated amount of Standby Letters of
Credit at any time Outstanding may not exceed $4,500,000;
(iii) The aggregate credit limit of all Credit Cards
issued to the Borrower may not exceed $250,000;
(iv) The Letter of Credit Issuer shall be obligated to
issue Commercial Letters of Credit in an aggregate stated amount equal to,
but not to exceed, the full amount of the Unused Revolving Facility
Commitment; and
(v) The Letter of Credit Issuer shall be obligated to
issue Standby Letters of Credit in an aggregate stated amount equal to, but
not to exceed, the full amount of the Unused SLC Sublimit.
(b) Subject to the terms and conditions of this Agreement,
the Term Lender shall make available to the Borrower for financing equipment
and leasehold improvements a line of credit (the "Term Facility") in the
maximum amount of $5,000,000 (the "Term Commitment") consisting of Floating
Rate Advances, LIBOR Rate Advances and Term Rate Advances. The Term Facility
and the Revolving Facility are sometimes collectively referred to herein as
the "Facilities".
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Section 2.2 THE BORROWINGS.
(a) ADVANCES UNDER THE FACILITIES.
(i) In the case of Revolving Facility Advances, each
Lender agrees, on the terms and conditions set forth below, to make its pro
rata share of Advances to the Borrower from time to time on any Business Day
during the period from the Effective Date to the Termination Date in an
aggregate amount not to exceed such Lender's Commitment Percentage of the
lesser of the Unused Revolving Facility Advances Sublimit and the Unused
Revolving Facility Commitment. Within the limits of the Unused Revolving
Facility Advances Sublimit, the Borrower may request an Advance under the
Revolving Facility on any Business Day and may prepay such Advance pursuant
to Section 2.7 and re-borrow under the Revolving Facility pursuant to this
Section 2.2(a).
(ii) In the case of a Term Facility Advance, the Term
Lender agrees, on the terms and conditions set forth below, to make Advances
to the Borrower from time to time on any Business Day during the period from
the Effective Date to the Termination Date in an amount not to exceed the
Unused Term Facility Commitment. Any Borrowing under the Term Facility that
is repaid pursuant to Section 2.5(b) or prepaid pursuant to Section 2.7 may
not be reborrowed.
(iii) Each request for an Advance shall be in an amount
not less than $500,000, or an integral multiple of $100,000 in excess
thereof. At no time may LIBOR Rate Advances bearing more than four different
LIBOR Rates be Outstanding.
(b) ISSUANCE OF LETTERS OF CREDIT UNDER THE REVOLVING
FACILITY.
(i) The Letter of Credit Issuer agrees that it shall,
on the terms and conditions set forth below, provide Standby Letters of
Credit for the account of the Borrower; provided, however, that no Standby
Letter of Credit shall be issued if the stated amount thereof exceeds the
lesser of the Unused Revolving Facility Commitment or the Unused SLC
Sublimit. No Standby Letter of Credit shall have an expiration date that is
ninety (90) days after the Termination Date. A Standby Letter of Credit may
provide for a single draw or a number of partial draws, as specified by the
Borrower.
(ii) The Letter of Credit Issuer agrees that it shall,
on the terms and conditions set forth below, provide Commercial Letters of
Credit for the account of the Borrower; provided, however, that no Commercial
Letter of Credit shall be issued if the stated amount thereof exceeds the
Unused Revolving Facility Commitment. No Commercial Letter of Credit shall
have an expiration date that is ninety (90) days after the Termination Date.
A Commercial Letter of Credit may provide for a single draw or a number of
partial draws, as specified by the Borrower.
(iii) The Letter of Credit Issuer hereby grants to each
Letter of Credit Participant, and, to induce the Letter of Credit Issuer to
issue Letters of Credit hereunder, each Letter of Credit Participant hereby
accepts and purchases from the Letter of Credit Issuer, on the
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terms and conditions set forth below, for such Letter of Credit Participant's
own account and risk, an undivided interest equal to such Letter of Credit
Participant's Commitment Percentage in the Letter of Credit Issuer's
obligations and rights under each Letter of Credit issued by the Letter of
Credit Issuer hereunder and the amount of each draft paid by the Letter of
Credit Issuer thereunder. Each Letter of Credit Participant unconditionally
agrees with the Letter of Credit Issuer that, if a draft is paid under any
Letter of Credit issued by the Letter of Credit Issuer for which the Letter
of Credit Issuer is not reimbursed in full by the Borrower in accordance with
the terms of this Agreement, such Letter of Credit Participant shall, upon
demand by the Letter of Credit Issuer, pay to the Administrative Agent for
the account of the Letter of Credit Issuer an amount equal to such Letter of
Credit Participant's Commitment Percentage of the amount of such draft, or
any part thereof, which is not so reimbursed. Any amount so paid shall be a
Borrowing hereunder.
(iv) If any amount required to be paid by any Letter
of Credit Participant to the Letter of Credit Issuer pursuant to Section
2.2(b)(iii), in respect of any unreimbursed portion of any payment made by
the Letter of Credit Issuer under any Letter of Credit, is paid to the
Administrative Agent for the account of the Letter of Credit Issuer within
three Business Days after the date such payment is due, such Letter of Credit
Participant shall, upon demand by the Letter of Credit Issuer, pay to the
Administrative Agent for the account of the Letter of Credit Issuer an amount
equal to the product of (a) such amount, times (b) the 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 Letter of Credit Issuer, times
(c) 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 Letter of Credit Participant pursuant to Section
2.2(b)(iii) is not in fact made available to the Administrative Agent for the
account of the Letter of Credit Issuer by such Letter of Credit Participant
within three Business Days after the date such payment is due, the Letter of
Credit Issuer shall be entitled to recover from such Letter of Credit
Participant, on demand, such amount with interest thereon calculated from
such due date at the rate per annum applicable to Floating Rate Advances
hereunder. A certificate of any Letter of Credit Issuer submitted to any
Letter of Credit Participant with respect to any amounts owing under this
Section 2.2(b) shall be conclusive in the absence of manifest error.
(v) Whenever, at any time after the Letter of Credit
Issuer has made payment under any Letter of Credit issued by the Letter of
Credit Issuer and has received from any Letter of Credit Participant its PRO
RATA share of such payment in accordance with Section 2.2(b)(iii), the Letter
of Credit Issuer receives any payment related to such Letter of Credit
(whether directly from the Borrower or otherwise), or any payment of interest
on account thereof, the Letter of Credit Issuer will distribute to such
Letter of Credit Participant its PRO RATA share thereof; PROVIDED, HOWEVER,
that in the event that any such payment received by the Letter of Credit
Issuer shall be required to be returned by the Letter of Credit Issuer, such
Letter of Credit Participant shall return to the Letter of Credit Issuer the
portion thereof previously distributed by the Letter of Credit Issuer to it.
(vi) No Letter of Credit shall be issued unless it is
issued in accordance with the Letter of Credit Issuer's customary
requirements, standards, fees and procedures and as
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set forth in the Letter of Credit Agreements and the Letter of Credit
Issuer's other customary letter of credit documentation requirements, nor if
it is for a purpose not described in the definition of "Letter of Credit" in
Section 1.1.
(vii) The Borrower shall reimburse the Letter of Credit
Issuer for any draw on any Letter of Credit by making payment thereof to the
Lender by 3:00 P.M. (Seattle time) on the date on which such draw is paid or,
if any draw is to be made pursuant to a time draft, by 3:00 P.M. (Seattle
time) at least one Business Day prior to the maturity of such time draft.
Unless reimbursement is made by 3:00 P.M. (Seattle time) on any such date,
the Borrower shall be conclusively deemed to have made a Borrowing Request
requesting a Floating Rate Advance under the Facilities to be made on such
date in an amount equal to the amount of such draw. Such a deemed Borrowing
Request will be honored only if it would have been honored if actually made
by the Borrower.
(viii) The obligations of the Borrower to reimburse the
Letter of Credit Issuer for drawings made under each Letter of Credit shall
be unconditional and irrevocable and shall be paid strictly in accordance
with the terms of this Agreement under all circumstances, including without
limitation (it being understood that any such payment by the Borrower shall
be without prejudice to, and shall not constitute a waiver of, any rights the
Borrower might have or might acquire against the beneficiary of the Letter of
Credit as a result of the payment by the Letter of Credit Issuer of any draft
or the reimbursement by the Borrower thereof): (A) the existence of any
claim, setoff, defense or other right which the Borrower may have at any time
against a beneficiary of any Letter of Credit or against the Letter of Credit
Issuer, whether in connection with this Agreement, the transactions
contemplated herein or any unrelated transaction; (B) any lack of validity or
enforceability of any Letter of Credit or any other Loan Document, (C) any
draft, demand, certificate or other document presented under any Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any respect;
(D) any interruption, error or delay in transmission or delivery by facsimile
or any other method, (E) payment by the Letter of Credit Issuer of any Letter
of Credit against presentation of a demand, draft or certificate or other
document which does not comply with the terms of such Letter of Credit; (F)
any other circumstances or happening whatsoever, which is similar to any of
the foregoing; or (G) the fact that any Default or Event of Default shall
have occurred and be continuing.
(ix) In connection with the Letters of Credit to be
issued under the Revolving Facility, the Borrower may submit communications
(a "Faxed Document") to Letter of Credit Issuer by facsimile transmission.
With respect to such facsimile transmission, the Borrower agrees as follows:
(A) Each such Faxed Document shall be deemed
an original document and shall be effective for all purposes as if it were an
original. The Borrower shall retain the original of any Faxed Document and
shall deliver it to the Letter of Credit Issuer on request.
(B) If the Borrower sends the Letter of Credit
Issuer a manually signed confirmation of a Faxed Document, the Letter of
Credit Issuer shall have no duty to compare it to the previously received
Faxed Document nor shall it have any liability or duty to
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compare it to the previously received Faxed Document nor shall it have any
liability or duty to act should the contents of the confirmation differ
therefrom. Any manually signed confirmation of a Faxed Document must be
conspicuously marked "previously transmitted by facsimile," and the Letter of
Credit Issuer shall not be liable for the issuance of duplicate Letters of
Credit or amendments thereto that result from the Letter of Credit Issuer's
receipt of confirmations not so marked.
(C) The Borrower shall have sole
responsibility for the security of using facsimile transmissions and for any
authorized or unauthorized Faxed Document received by the Letter of Credit
Issuer, purportedly on behalf of the Borrower.
(D) The Borrower agrees to indemnify and hold
harmless the Letter of Credit Issuer from each and every claim, demand,
liability, loss, cost or expense (including attorneys' fees and expenses)
which may arise or be created by the Letter of Credit Issuer's acceptance of
telecommunication instructions in connection with any Letter of Credit,
including facsimile instructions in connection with any waiver of
discrepancies.
(x) The Borrower will promptly examine each Letter of
Credit issued hereunder, any amendments thereto and all information,
documents and instruments delivered to the Borrower from time to time by the
Letter of Credit Issuer or any of its correspondents. The Borrower shall
notify the Letter of Credit Issuer within five Business Days after receipt of
any of the foregoing if the Borrower claims that the Letter of Credit Issuer
has failed to comply with the Borrower's instructions or the Letter of Credit
Issuer's obligations with respect to such Letter of Credit or has wrongfully
honored or dishonored any presentation under the Letter of Credit or if the
Borrower claims any other irregularity. If the Borrower does not so notify
the Letter of Credit Issuer within such time period, the Borrower shall be
conclusively deemed to have waived, and therefore be precluded from
asserting, such claims.
(c) ISSUANCE OF CREDIT CARDS UNDER THE REVOLVING FACILITY.
(i) The Credit Card Issuer shall provide the Borrower
with one or more Credit Cards with an aggregate credit limit of $250,000
during the period from the Effective Date through the Termination Date. The
Borrower agrees to execute the Credit Card Issuer's standard business card
agreement and any other documents the Credit Card Issuer may request in
connection with the provision of such Credit Cards.
(ii) The Credit Card Issuer hereby grants to each
Credit Card Participant, and, to induce the Credit Card Issuer to issue
Credit Cards hereunder, each Credit Card Participant hereby accepts and
purchases for the Credit Card Issuer, on the terms and conditions set forth
below, for such Credit Card Participant's own account and risk, an undivided
interest equal to such Credit Card Participant's Commitment Percentage in the
Credit Card Issuer's obligations and rights under each Credit Card issued by
the Credit Card Issuer hereunder and the amount of each draft paid by the
Credit Card Issuer thereunder. Each Credit Card Participant unconditionally
agrees with the Credit Card Issuer that, if any amounts are disbursed under
any Credit Card issued by the Credit Card Issuer for which the Credit Card
Issuer is not reimbursed in full by the Borrower in accordance with the terms
of this Agreement, such Credit
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Card Participant shall, upon demand by the Credit Card Issuer, pay to the
Administrative Agent for the account of the Credit Card Issuer an amount
equal to such Credit Card Participant's Commitment Percentage of the amount
of such disbursement, or any part thereof, which is not so reimbursed.
(iii) If any amount required to be paid by any Credit
Card Participant to the Credit Card Issuer pursuant to Section 2.2(c)(ii), in
respect of any unreimbursed portion of any disbursement made by the Credit
Card Issuer under any Credit Card, is paid to the Administrative Agent for
the account of the Credit Card Issuer within three Business Days after the
date such payment is due, such Credit Card Participant shall, upon demand by
the Credit Card Issuer, pay to the Administrative Agent for the account of
the Credit Card Issuer an amount equal to the product of (a) such amount,
times (b) the 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
Credit Card Issuer, times (c) 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 Credit Card Participant
pursuant to Section 2.2(c)(ii) is not in fact made available to the
Administrative Agent for the account of the Credit Card Issuer by such Credit
Card Participant within three Business Days after the date such payment is
due, the Credit Card Issuer shall be entitled to recover from such Credit
Card Participant, on demand, such amount with interest thereon calculated
from such due date at the rate per annum applicable to Floating Rate Advances
hereunder. A certificate of any Credit Card Issuer submitted to any Credit
Card Participant with respect to any amounts owing under this Section 2.2(c)
shall be conclusive in the absence of manifest error.
(iv) Whenever, at any time after the Credit Card
Issuer has made a disbursement under any Credit Card issued by the Credit
Card Issuer and has received from any Credit Card Participant its PRO RATA
share of such disbursement in accordance with Section 2.2(c)(ii), the Credit
Card Issuer receives any payment related to such Credit Card (whether
directly from the Borrower or otherwise), or any payment of interest on
account thereof, the Credit Issuer will distribute to such Credit Card
Participant its PRO RATA share thereof; PROVIDED, HOWEVER, that in the event
that any such payment received by the Credit Card Issuer shall be required to
be returned by the Credit Card Issuer, such Credit Card Participant shall
return to the Credit Card Issuer the portion thereof previously distributed
by the Credit Card Issuer to it.
(v) If the balance owing on any Credit Card issued to
the Borrower under this Section 2.2(c) is more than 60 days past due, the
Administrative Agent may terminate such Credit Card.
Section 2.3 MAKING THE BORROWINGS.
(a) PROCEDURE FOR BORROWINGS.
(i) BORROWING REQUESTS. Each Borrowing Request for
an Advance shall be made by the Borrower to the Administrative Agent (A) in
the case of Floating Rate Advances, not later than 9:00 A.M. (Seattle time)
on the day of the proposed Borrowing; and (B)
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in the case of Fixed Rate Advances, not later than 9:00 A.M. on the third
Business Day prior to the date of the proposed Borrowing. Each Borrowing
Request (A) for the issuance of a Letter of Credit shall be made by the
Borrower to the Letter of Credit Issuer not later than 9:00 A.M. (Seattle
time) on the date of the proposed Borrowing, and (B) for the issuance of a
Credit Card shall be made by the Borrower to the Credit Card Issuer not later
than 9:00 A.M. on the date of the proposed issuance of a Credit Card. Each
Borrowing Request shall be made by an Authorized Officer of the Borrower by
telephone or, if requested by the Administrative Agent, the Letter of Credit
Issuer or the Credit Card Issuer, by telecopy or personal delivery, in
writing, in substantially the form of Exhibit B hereto, fully and accurately
specifying the information required therein. Upon receipt by the
Administrative Agent of a Borrowing Request from the Borrower requesting
either a Floating Rate Advance or a Fixed Rate Advance under the Revolving
Facility, the Administrative Agent shall promptly notify each Lender thereof.
Thereafter, each Lender shall make the amount of its pro rata share of each
Revolving Facility Advance available to the Administrative Agent for the
account of the Borrower at the office of the Administrative Agent specified
in Section 8.2 prior to 1:00 P.M. (Seattle time), on the date of the proposed
Borrowing in funds immediately available to the Administrative Agent. Such
Revolving Facility Advance shall then be made available to the Borrower by
the Administrative Agent.
(ii) AVAILABILITY OF BORROWINGS. The Administrative
Agent shall make Borrowings available to the Borrower as follows:
(A) In the case of a Borrowing consisting of
Advances, the Administrative Agent will make such funds available to the
Borrower in immediately available funds to the account of the Borrower at
Washington Mutual Bank doing business as Western Bank, Account No.
201-00000000, or such other account of the Borrower as may be approved by the
Lender.
(B) In the case of a Borrowing consisting of
the issuance of a Letter of Credit, the Letter of Credit Issuer shall deliver
the Letter of Credit to the beneficiary thereof on the date specified in the
applicable Borrowing Request.
(C) Unless the Administrative Agent shall have
been notified in writing by any Lender prior to a Borrowing of a Revolving
Facility Advance that such Lender will not make the amount that would
constitute such Lender's Commitment Percentage of such Revolving Facility
Advance 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 date
of the Borrowing, 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 Section 2.3(a)(ii)(C) shall be conclusive in the
absence of manifest error. If such Lender's Commitment Percentage of such
Revolving Facility Advance is not made available to the Administrative Agent
by such Lender
15
within three Business Days of the date of such Borrowing, the Administrative
Agent shall also be entitled to recover such amount with interest thereon at
the rate per annum applicable to Floating Rate Advances hereunder, on demand,
from the Borrower.
(b) Conversion and Continuation of Advances. The Borrower
may, pursuant to a Borrowing Request (A) received by the Administrative Agent
not later than 9:00 A.M. (Seattle time) on the last day of any applicable
Interest Period for a Fixed Rate Advance, elect to convert such Fixed Rate
Advance to a Floating Rate Advance; (B) received by the Administrative Agent
not later than 9:00 A.M. (Seattle time) on the third Business Day prior to
the day the conversion is to take effect, elect to convert any Floating Rate
Advance to a Fixed Rate Advance; and (C) received by the Administrative Agent
not later than 9:00 A.M. (Seattle time) on the third Business Day prior to
the last day of any applicable Interest Period for a Fixed Rate Advance,
elect to convert or continue such Fixed Rate Advance at the same or another
Fixed Rate. Each Borrowing Request shall be made by an Authorized Officer of
the Borrower by telephone or, if requested by the Administrative Agent, by
telecopy or personal delivery, in writing, in substantially the form of
Exhibit B hereto, fully and accurately specifying the information required
therein.
(c) UNAVAILABILITY OF FIXED RATES. Notwithstanding any
election of a Fixed Rate Advance for an Interest Period pursuant to Section
2.3(a) or (b) above, if:
(i) on or prior to the determination of the
applicable interest rate for such Advance, the Administrative Agent
determines (which determination shall be conclusive and binding) that
quotations of interest rates are not being provided in the relevant market in
the relevant amount, for an Interest Period; or
(ii) on or prior to the first day of an Interest
Period, the Administrative Agent determines (which determination shall be
conclusive and binding) that, as a result of conditions in or generally
affecting the relevant market, the rates of interest on the basis of which
the applicable Fixed Rate is to be computed do not accurately reflect the
cost to the Lenders of making or maintaining such Advance for such Interest
Period;
then the Administrative Agent shall give the Borrower prompt notice thereof
by telephone and the election by the Borrower of a Fixed Rate Advance for
such Interest Period shall not be effective, and such Advance shall be made
as a Floating Rate Advance.
Section 2.4 INTEREST RATES; LATE CHARGES.
(a) ADVANCES. The Borrower shall pay interest on the unpaid
principal amount of each Advance from the date of such Advance until such
principal amount is paid in full, at the following rates:
(i) FLOATING RATE ADVANCES. Except to the extent the
Borrower has made an effective election of a Fixed Rate with respect to such
Advance pursuant to Section 2.3(a) or (b), at a rate per annum equal at all
times to the Floating Rate in effect from time to time, payable monthly on
the first day of each month while such Advance is Outstanding.
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(ii) LIBOR RATE ADVANCES. If the Borrower has made an
effective election of a LIBOR Rate with respect to such Advance, at a rate
per annum equal at all times during each Interest Period for such Advance to
the sum of the LIBOR Rate for the applicable Interest Period plus two percent
(2%) per annum, payable on the last day of each such Interest Period;
provided, that if the Interest Period is longer than three months, interest
shall be payable on the last day of each three-month period during such
Interest Period and on the last day of such Interest Period.
(iii) TERM RATE ADVANCES. If the Borrower has made an
effective election of a Term Rate with respect to such Advance, at a rate per
annum equal at all times during each Interest Period for such Advance to the
sum of the Term Rate for the applicable Interest Period plus two percent (2%)
per annum, payable on the first day of each month.
(b) DEFAULT RATE. Any amount owing by the Borrower under
this Agreement or any other Loan Document which is not paid when due (whether
at stated maturity, by acceleration or otherwise) shall bear interest, from
the date on which such amount is due until such amount is paid in full,
payable on demand, at a rate per year equal at all times to the greater of
(i) the Floating Rate plus three percent (3%) and (ii) with respect to any
Fixed Rate Advance, the Fixed Rate then in effect plus three percent (3%).
(c) LATE CHARGE. If any payment due hereunder in respect of
any Borrowing Outstanding is ten (10) days or more late, the Borrower shall
be charged two percent (2%) of such payment or $25.00, whichever is greater;
provided that no such amount shall be charged on or after the date on which
the Administrative Agent has declared all amounts owing hereunder to be due
and payable as provided in Section 6.2.
Section 2.5 REPAYMENT.
(a) BORROWINGS UNDER THE REVOLVING FACILITY. The Borrower
shall repay the outstanding principal amount of each Revolving Facility
Advance made by the Lenders on the Termination Date, together with all
accrued and unpaid interest thereon. The Borrower shall reimburse the Letter
of Credit Issuer for all draws on each Letter of Credit as provided in
Section 2.2(b)(vii).
(b) BORROWINGS UNDER THE TERM FACILITY. The Borrower shall
repay the aggregate principal amount of all Term Facility Advances that are
Outstanding on August 1, 1999 (the "1999 Principal Amount") in installments
equal to 1/7 of the 1999 Principal Amount on each August 1, 2000, August 1,
2001, August 1, 2002, August 1, 2003 and August 1, 2004 and in a final
installment equal to the unpaid balance of the 1999 Principal Amount on the
Maturity Date, together with all accrued and unpaid interest thereon.
17
Section 2.6 FEES.
(a) REVOLVING FACILITY FEES.
(i) UPFRONT FACILITY FEE. On the Effective Date, the
Borrower shall pay to the Administrative Agent for the account of the
Administrative Agent a facility fee equal to $10,000.00.
(ii) UNUSED COMMITMENT FEE. On each September 30,
December 31, March 31 and June 30, commencing June 30, 1999, the Borrower
shall pay to the Administrative Agent for the benefit of the Lenders an
unused commitment fee equal to 3/16% per annum of the amount equal to (A)
$40,000,000 minus (B) the average of the aggregate principal and stated
amounts of Advances and Letters of Credit Outstanding on the last day of each
month in the fiscal quarter then ended.
(b) TERM FACILITY FEES. On the date of each Term Facility
Advance, the Borrower shall pay to the Term Lender a facility fee equal to
1/2% of the principal amount of such Term Facility Advance.
(c) LETTER OF CREDIT FEES. The fees and charges for the
issuance, payment and administration of Letters of Credit are set forth in
the Letter of Credit Agreements.
Section 2.7 PREPAYMENTS. If the Borrower desires to prepay any
Advances, the Borrower shall give the Administrative Agent the same number of
Business Days' written notice required in Section 2.3(a) for a Borrowing
Request given with respect to Advances, specifying the proposed date and
aggregate principal amount of the prepayment and the Interest Period or
Interest Periods (if any) relating to such Advances. If notice of prepayment
is given, the Borrower shall prepay the Advances comprising the same
Borrowing in whole or in part with (A) accrued interest to the date of such
prepayment on the amount prepaid and (B) in the case of Fixed Rate Advances,
any amounts required to be paid pursuant to Section 2.11.
Section 2.8 PAYMENTS AND COMPUTATIONS.
(a) The Borrower shall make each payment hereunder and under
the Note not later than 11:00 A.M. (Seattle time) on the day when due in U.S.
Dollars to the Administrative Agent at 0000 Xxxxx Xxxxxx, Xxxxx 0000,
Xxxxxxx, Xxxxxxxxxx 00000, or at such other location designated by notice
from the Administrative Agent pursuant to the notice provision of this
Agreement, in immediately available funds.
(b) All computations of interest and all fees pursuant to
Section 2.6 shall be made by the Administrative Agent on the basis of a year
of 360 days, in each case for the actual number of days (including the first
day but excluding the last day) occurring in the period for which such
interest or fees are payable. Each determination by the Administrative Agent
of an interest rate or an increased cost or of illegality hereunder shall be
presumptive evidence thereof and binding for all purposes if made reasonably
and in good faith.
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(c) Whenever any payment hereunder or under the Notes shall
be stated to be due (or an Interest Period shall be stated to end) on a day
other than a Business Day, such payment shall be made (and such Interest
Period shall end) on the next succeeding Business Day, and such extension of
time shall in such case be included in the computation of payment of interest
or fees, as the case may be; provided, however, if such extension would cause
payment of interest based on a LIBOR Rate to be made (or an Interest Period
for a Fixed Rate Advance to end) in the next following calendar month, such
payment shall be made (and such Interest Period shall end) on the next
preceding Business Day.
Section 2.9 INCREASED COSTS.
(a) If, due to either (i) the introduction after the date of
this Agreement of or any change after the date of this Agreement (including
any change by way of imposition or increase of reserve requirements or
assessments other than those referred to in the definition of LIBOR Rate) in
or in the interpretation of any law or regulation or (ii) the compliance with
any guideline or request issued or made after the date of this Agreement from
or by any central bank or other governmental authority (whether or not having
the force of law), in each case above, other than those referred to in
Section 2.9(b), there shall be any increase in the cost to any Lender of
agreeing to make or maintain, or of making or maintaining, Fixed Rate
Advances or there shall be any increase in the cost to the Letter of Credit
Issuer of agreeing to issue or maintain, or of issuing or maintaining any
Letter of Credit, then the Borrower shall from time to time, upon demand by
such Lender or the Letter of Credit Issuer, as the case may be, pay to such
Lender or Letter of Credit Issuer additional amounts sufficient to reimburse
such Lender or the Letter of Credit Issuer for all such increased costs. A
certificate as to the amount of such increased cost, submitted to the
Borrower by such Lender or the Letter of Credit Issuer, as the case may be,
shall be presumptive evidence of such increased cost and binding for all
purposes, if made reasonably and in good faith.
(b) If either (i) the introduction after the date of this
Agreement of, or the application after the date of this Agreement as a result
of phase-in or transitional rules of, or any change after the date of this
Agreement in or in the interpretation of, any law or regulation or (ii)
compliance by a Lender, the Letter of Credit Issuer or the Credit Card Issuer
with any guideline or request issued or made after the date of this Agreement
or deemed applicable after the date hereof as a result of phase-in or
transitional rules from or by any central bank or other governmental
authority (whether or not having the force of law) affects or would affect
the amount of capital required or expected to be maintained by such Lender,
the Letter of Credit Issuer or the Credit Card Issuer and such Lender, Letter
of Credit Issuer or Credit Card Issuer determine(s) that the amount of such
capital is increased by or based upon the existence of the Revolving
Commitment or its Commitment Percentage of the Revolving Commitment (or by or
based upon the making of Fixed Rate Advances or the issuance of or obligation
to issue or purchase risk participations in Letters of Credit or Credit
Cards), then, upon demand by such Lender, the Letter of Credit Issuer or the
Credit Card Issuer, the Borrower shall immediately pay to the Lender, the
Letter of Credit Issuer or the Credit Card Issuer, from time to time as
specified by the Lender, the Letter of Credit Issuer or the Credit Card
Issuer, additional amounts sufficient to compensate such Lender, the Letter
of Credit Issuer or the Credit Card Issuer in the light of such
circumstances, to the extent that such Lender, the Letter of Credit Issuer or
the Credit Card
19
Issuer reasonably determine(s) such increase in capital to be allocable to
the maintenance of the Revolving Commitment or its Commitment Percentage of
the Revolving Commitment (or the making of Fixed Rate Advances or the
issuance and maintenance of or obligation to issue Letters of Credit or
Credit Cards). A certificate as to such amounts submitted to the Borrower by
a Lender, the Letter of Credit Issuer or the Credit Card Issuer, shall, if
made reasonably and in good faith, be presumptive evidence of such amounts
and binding for all purposes.
Section 2.10 ILLEGALITY. Notwithstanding any other provision of this
Agreement, if the introduction of or any change in or in the interpretation
of any law or regulation shall make it unlawful, or any central bank or other
governmental authority shall assert that it is unlawful, for a Lender to
perform its obligations hereunder to make Fixed Rate Advances or to purchase
risk participations in any Letter of Credit or Credit Card, to continue to
fund or maintain such Advances hereunder, for the Letter of Credit Issuer to
issue or maintain Letters of Credit or for the Credit Card Issuer to issue or
maintain Credit Cards, such Lenders, the Letter of Credit Issuer or the
Credit Card Issuer may, by notice to the Borrower, suspend the right of the
Borrower to elect such Fixed Rate Advances or to request Letters of Credit to
be issued, as the case may be, and, if necessary in the reasonable opinion of
such Lender to comply with such law or regulation, Borrower shall prepay all
such Fixed Rate Advances at the latest time permitted by the applicable law
or regulation. The Borrower shall not be obligated to pay any amount
pursuant to Section 2.11 in respect of such prepayment.
Section 2.11 PREPAYMENT INDEMNITY; FEE. If (i) due to payments made
by the Borrower pursuant to Section 2.7 or due to acceleration of the
maturity of the Notes pursuant to Section 6.2 or due to any other reason
attributable to the Borrower (but not due to any prepayment pursuant to
Section 2.10), a Lender receives payments of principal of a Fixed Rate
Advance other than on the last day of an Interest Period relating to such
Advance, or (ii) the Borrower fails to prepay any Fixed Rate Advance pursuant
to a notice of prepayment given pursuant to Section 2.7, the Borrower shall,
upon demand by a Lender, pay to the Administrative Agent on behalf of such
Lender the following:
(a) LIBOR RATE ADVANCES. In the case of prepayment of LIBOR
Rate Advances, the Borrower shall pay any amounts required to compensate the
Lender for any additional losses, costs or expenses which it may reasonably
incur as a result of such payment or failure to prepay, including, without
limitation, any loss, cost or expense incurred by reason of the liquidation
or reemployment of deposits or other funds acquired by the Lender to fund or
maintain such Advances.
(b) TERM RATE ADVANCES. In the case of prepayment of Term
Rate Advances (but subject to the provisions of paragraph (v) below), the
Borrower shall pay a prepayment fee calculated separately for each Prepaid
Installment:
(i) The Term Lender shall first determine the amount
of interest which would have accrued each month on the Prepaid Installment
had it remained outstanding until the applicable Original Payment Date, using
the applicable Term Rate.
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(ii) The Term Lender shall then subtract from each
monthly interest amount determined in paragraph (i) above, the amount of
interest which would accrue on that Prepaid Installment if the Prepaid
Installment were reinvested from the date of prepayment through the Original
Payment Date at the Treasury Rate.
(iii) If the remainder determined in paragraph (ii)
with respect to the Prepaid Installment is greater than zero, the Term Lender
shall discount the monthly differences to the date of prepayment by the
Treasury Rate. The sum of the discounted monthly differences for the Prepaid
Installment shall be the amount of the prepayment fee due hereunder with
respect to the Prepaid Installment.
(iv) The following definitions will apply to the
calculation of the prepayment fee for purposes of this Section 2.11(b):
(A) "ORIGINAL PAYMENT DATES" means the dates
on which principal of a Term Rate Advance would have been paid if there had
been no prepayment.
(B) "PREPAID INSTALLMENT" means the amount of
the prepaid principal of a Term Rate Advance which would have been paid on a
single Original Payment Date.
(C) "TREASURY RATE" means the interest rate
yield for U.S. Treasury securities which the Lender determines could be
obtained by reinvesting a specified Prepaid Installment in such securities
from the date of prepayment through the Original Payment Date. The Treasury
Rate may be based on information from either the Telerate or Reuters
information services, the Wall Street Journal or other information sources
the Lender deems appropriate.
Notwithstanding the foregoing provisions of this Section 2.11(b), the
Borrower may prepay the principal of Term Rate Advances, without liability
for any prepayment fee that would otherwise be payable under this Section
2.11(b), in an amount of up to 10% of the aggregate principal amount of all
Term Rate Advances made by the Term Lender to the Borrower from time to time
under the Term Facility (including any Term Rate Advances that have
previously been prepaid or repaid pursuant to the terms of this Agreement).
Any prepayment in excess of such amount shall be subject to payment of a
prepayment fee in accordance with this Section 2.11(b).
Section 2.12 EVIDENCE OF DEBT. The Advances made by the Lenders to
the Borrower, and the obligations of the Borrower to both reimburse the
Letter of Credit Issuer for draws on Letters of Credit and reimburse the
Credit Card Issuer for disbursements made under Credit Cards, shall be
evidenced by a Note payable to the order of each Lender in a principal amount
equal to such Lender's Commitment Percentage of the Revolving Commitment.
Each Lender may maintain in accordance with its usual practice an account or
accounts evidencing the Indebtedness of the Borrower resulting from Advances
and payments made from time to time hereunder. In any legal action or
proceeding in respect of this Agreement or the Notes, the entries made in
such account or accounts shall be presumptive evidence of the existence and
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amounts of the obligations of the Borrower therein recorded, if made
reasonably and in good faith.
Section 2.13 COLLATERAL. As security for the obligation of the
Borrower to repay Advances, to pay the principal of and interest on the Notes
and the other Indebtedness of the Borrower under this Agreement and to
reimburse the Letter of Credit Issuer for draws on any Letter of Credit and
the Credit Card Issuer for disbursements made under any Credit Card, and for
the performance by the Borrower of its other obligations hereunder and under
all the other Loan Documents, the Borrower shall grant to the Administrative
Agent, on behalf and for the benefit of each Lender, the Letter of Credit
Issuer and the Credit Card Issuer, an attached, fully perfected,
first-priority security interest in the Collateral, subject to the terms of
the Security Agreement and the Factoring Agreement.
Section 2.14 USE OF PROCEEDS. Proceeds of the Revolving Facility
Advances and disbursements made under Credit Cards shall be used for general
corporate purposes of the Borrower, including, without limitation, for
repayment of any other Advances and reimbursement of draws under Letters of
Credit. Proceeds of the Term Facility Advances may be used to finance the
Borrower's equipment and leasehold improvements.
ARTICLE III
CONDITIONS OF BORROWING
Section 3.1 CONDITIONS PRECEDENT TO EFFECTIVE DATE. The occurrence
of the Effective Date is subject to the condition precedent that the
Administrative Agent shall have received in form and substance satisfactory
to the Administrative Agent and all duly executed by the parties thereto:
(a) The respective Revolving Facility Notes made payable to
each Lender and the Term Facility Note payable to the Term Lender.
(b) An Amended and Restated Security Agreement.
(c) An Amendment to the Intercreditor Agreement relating to
the execution and delivery of this Agreement.
(d) A copy of the Articles of Incorporation of the Borrower
certified by the Secretary of State of the state of its incorporation, and a
copy of the Bylaws of the Borrower certified by its secretary.
(e) Certified copies of the resolutions of the Board of
Directors of the Borrower approving the Borrowings contemplated hereby and
authorizing the execution of the Loan Documents, and of all documents
evidencing other necessary corporate action and governmental approvals, if
any, with respect to the Loan Documents.
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(f) A certificate of the Secretary or an Assistant Secretary
of the Borrower certifying the names and true signatures of the officers of
the Borrower authorized to sign the Loan Documents and the other documents to
be delivered hereunder.
(g) Evidence satisfactory to the Administrative Agent that
security interests created by the Security Agreement in the Collateral have
been duly perfected by the taking of all such acts as may be necessary or
advisable to create an attached, fully perfected, first-priority security
interest (subject to no liens other than Permitted Liens) to secure all
obligations of the Borrower to the Lenders under this Agreement and the other
Loan Documents.
(h) Certificates of good standing of a recent date for the
Borrower from the Secretary of State of the state of its incorporation.
(i) A completed Year 2000 Questionnaire
(j) The facility fee due pursuant to Section 2.6(a)(i).
(k) Such other documents or instruments as the
Administrative Agent may reasonably request.
Section 3.2 CONDITIONS PRECEDENT TO EACH BORROWING. The obligation
of the Lenders to make, continue or convert Revolving Facility Advances, or
the obligation of the Term Lender to continue or convert Term Facility
Advances, or the obligation of the Letter of Credit Issuer to issue Letters
of Credit or the Credit Card Issuer to issue Credit Cards, shall be subject
to the following further conditions precedent:
(a) On the date of a Borrowing pursuant to Section 2.3(a) or
the continuation or conversion of an Advance pursuant to Section 2.3(b),
before and immediately after giving effect thereto, the following statements
shall be true and correct, and the making by the Borrower of the applicable
Borrowing Request shall constitute its representation and warranty that on
and as of the date of such Borrowing, conversion or continuation, before and
immediately after giving effect thereto, the following statements are true
and correct:
(i) The representations and warranties contained in
Article IV of this Agreement are correct in all material respects as though
made on and as of such date, unless such representations and warranties are
expressly stated to be made as of an earlier date;
(ii) After giving effect to (A) a requested Borrowing,
conversion or continuation of a Revolving Facility Advance, neither the
Unused Revolving Facility Advance Sublimit nor the Unused Revolving Facility
Commitment is less than zero; (B) a requested Borrowing of a Letter of
Credit, the Unused Revolving Facility Commitment is not less than zero; and
(C) a requested Borrowing consisting of a Standby Letter of Credit, neither
the Unused Revolving Facility Commitment nor the Unused SLC Sublimit is less
than zero;
(iii) No event has occurred and is continuing, or would
result from such Borrowing, conversion or continuation, which constitutes an
Event of Default or Default;
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(iv) The most recent financial statements of the
Borrower delivered pursuant to Section 5.1(c)(i) present fairly the financial
position and results of operations of the Borrower as of the date of, and for
the periods presented in, such financial statements, and since the date of
such financial statements there has not been any material adverse change in
the financial condition or operations of the Borrower; and
(v) The Borrower is in compliance with all covenants
contained in Article V of this Agreement.
(b) If requested by the Administrative Agent, the Borrower
shall have delivered to the Administrative Agent a Notice of Borrowing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants as follows:
Section 4.1 ORGANIZATION. The Borrower is a corporation which is
duly organized, validly existing, and in good standing under the laws of the
State of Washington. The Borrower has the full power and authority to own
its properties and to transact the businesses in which it is presently
engaged or presently proposes to engage. The Borrower also is duly qualified
as a foreign corporation and is in good standing in all states in which the
failure to so qualify would have a material adverse effect on its businesses
or financial condition.
Section 4.2 AUTHORIZATION. The execution, delivery, and performance
of this Agreement and all other Loan Documents by the Borrower, to the extent
to be executed, delivered or performed by the Borrower, have been duly
authorized by all necessary action by the Borrower; do not require the
consent or approval of any other person, regulatory authority or governmental
body; and do not conflict with, result in a violation of, or constitute a
default under (a) any provision of its articles of incorporation or bylaws,
or any agreement or other instrument binding upon the Borrower or (b) any
law, governmental regulation, court decree, or order applicable to the
Borrower.
Section 4.3 FINANCIAL INFORMATION. Each financial statement of the
Borrower supplied to the Administrative Agent truly and completely disclosed
the Borrower's financial condition as of the date of the statement, and there
has been no material adverse change in the Borrower's financial condition
subsequent to the date of the most recent financial statement supplied to the
Administrative Agent. The Borrower has no material contingent obligations
except as disclosed in such financial statements.
Section 4.4 LEGAL EFFECT. This Agreement constitutes, and any
instrument or agreement required hereunder to be given by the Borrower when
delivered will constitute, legal, valid and binding obligations of the
Borrower enforceable against the Borrower in accordance
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with their respective terms, subject to applicable bankruptcy, insolvency or
similar laws affecting creditors' rights generally and to general principles
of equity (whether considered in a proceeding at law or in equity).
Section 4.5 PROPERTIES. Except for Permitted Liens, capital leases
and real property leases, the Borrower owns and has good title to all of the
Borrower's properties free and clear of all Liens, and has not executed any
security documents or financing statements relating to such properties. All
of the Borrower's properties are titled in the Borrower's legal name, and the
Borrower has not used, or filed a financing statement under, any other name
for at least the last five (5) years.
Section 4.6 HAZARDOUS SUBSTANCES. The Borrower's use of its
properties comply in all material respects with all applicable laws and
regulations relating to the environment, including without limitation, all
laws and regulations relating to pollution and environmental control.
Section 4.7 LITIGATION AND CLAIMS. No litigation, claim,
investigation, administrative proceeding or similar action (including those
for unpaid taxes) against the Borrower is pending or threatened, and no other
event has occurred which may materially adversely affect the Borrower's
financial condition or properties, except for (a) litigation, claims, or
other events, if any, that have been disclosed to and acknowledged by each of
the Lenders in writing and (b) threatened or pending claims which, if
adversely determined against the Borrower, would not either individually or
in the aggregate exceed $150,000.
Section 4.8 TAXES. To the best of the Borrower's knowledge, all tax
returns and reports of the Borrower that are or were required to be filed,
have been filed, and all taxes, assessments and other governmental charges
have been paid in full, except those presently being or to be contested by
the Borrower in good faith in the ordinary course of business and for which
adequate reserves have been provided.
Section 4.9 LIEN PRIORITY. Unless otherwise previously disclosed to
each of the Lenders in writing and except for Permitted Liens, the Borrower
has not entered into or granted any Lien, or permitted the filing or
attachment of any Lien on or affecting any of the Collateral that would be
prior or that may in any way be superior to the Administrative Agent's Lien
and rights, on behalf of the Lenders, in and to such Collateral.
Section 4.10 BINDING EFFECT. This Agreement and all of the other
Loan Documents are binding upon the Borrower as well as upon the Borrower's
successors, representatives and assigns, and are legally enforceable in
accordance with their respective terms, subject to applicable bankruptcy,
insolvency or similar laws affecting creditors' rights generally and to
general principles of equity (whether considered in a proceeding at law or in
equity).
Section 4.11 COMMERCIAL PURPOSES. The Borrower intends to use the
proceeds of all Advances solely for business or commercial related purposes,
and intends to use the proceeds of the Term Facility Advances for purposes of
financing equipment and leasehold improvements.
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Section 4.12 EMPLOYEE BENEFIT PLANS. Each employee benefit plan as
to which the Borrower may have any liability complies in all material
respects with all applicable requirements of law and regulations, and (a) no
Reportable Event or Prohibited Transaction (as defined in ERISA) has occurred
with respect to any such plan, (b) the Borrower has not withdrawn from any
such plan or initiated steps to do so, (c) no steps have been taken to
terminate any such plan, and (d) there are no unfunded liabilities other than
those previously disclosed to the Lenders in writing.
Section 4.13 LOCATION OF THE BORROWER'S OFFICES AND RECORDS. The
Borrower's place of business, or the Borrower's chief executive office, if
the Borrower has more than one place of business, is located at 0000 Xxxxx
Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxxxx 00000. Unless the Borrower has
designated otherwise in writing, this location is also the office or offices
where the Borrower keeps its records concerning the Collateral.
Section 4.14 INFORMATION. All information furnished by the Borrower
to either the Administrative Agent or the Lenders for the purposes of or in
connection with this Agreement or any transaction contemplated hereby is, and
all information hereafter furnished by or on behalf of the Borrower to either
the Administrative Agent or the Lenders will be, true and accurate in every
material respect on the date as of which such information is dated or
certified; and none of such information is or will be incomplete by omitting
to state any material fact necessary to make such information not misleading.
Section 4.15 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
Borrower understands and agrees that the Lenders, without independent
investigation, are relying upon the above representations and warranties in
extending the Facilities to the Borrower. The Borrower further agrees that
the foregoing representations and warranties shall be continuing in nature
and shall remain in full force and effect until such time as the Borrower's
Indebtedness under this Agreement shall be paid in full, or until this
Agreement shall be terminated in the manner provided above, whichever is the
last to occur.
ARTICLE V
COVENANTS OF THE BORROWER
Section 5.1 AFFIRMATIVE COVENANTS. So long as the Notes or other
amounts payable by the Borrower hereunder shall remain unpaid, or the Lenders
shall have any Revolving Commitment hereunder, or the Term Lender shall have
any Term Commitments hereunder, or the Term Lender Shall have any Term
Commitment hereunder, or any Letter of Credit remains Outstanding, the
Borrower covenants and agrees that it will:
(a) LITIGATION. Promptly inform the Administrative Agent in
writing of (i) all material adverse changes in the Borrower's financial
condition, and (ii) all existing and all threatened litigation, claims,
investigations, administrative proceedings or similar actions affecting the
Borrower which could materially affect the financial condition of the
Borrower.
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(b) FINANCIAL RECORDS. Maintain its books and records in
accordance with GAAP, applied on a consistent basis, and permit the
Administrative Agent or any Lender to examine and audit the Borrower's books
and records at all reasonable times upon reasonable prior notice from the
Administrative Agent or any such Lender to the Borrower.
(c) REPORTING REQUIREMENTS.
(i) FINANCIAL STATEMENTS. Furnish the Administrative
Agent with, as soon as available, but in no event later than ninety (90) days
after the end of each fiscal year, the consolidated balance sheet and
consolidated statement of income and retained earnings of the Borrower and
its subsidiaries for the year ended, audited by a certified public accountant
reasonably satisfactory to the Administrative Agent, and, as soon as
available, but in no event later than forty five (45) days after the end of
each fiscal quarter, the consolidated balance sheet and consolidated
statement of income and retained earnings of the Borrower and its
subsidiaries for the period ended, prepared and certified as correct to the
best knowledge and belief by the Borrower's chief financial officer or other
officer or person acceptable to the Administrative Agent. All financial
reports required to be provided under this Agreement (A) shall be prepared in
accordance with GAAP, applied on a consistent basis, (B) certified by the
Borrower as being true and correct and (C) accompanied by a certificate of
the Borrower's chief financial officer demonstrating compliance with the
financial covenants set forth in Section 5.3.
(ii) AGING AND LISTING OF ACCOUNTS RECEIVABLE.
Deliver to the Administrative Agent within thirty (30) days after the end of
each quarter, a summary of the Borrower's accounts and contracts receivable
aging as of the last day of the quarter, which shall be net of any
adjustments made at the end of that quarter, all in a form acceptable to the
Administrative Agent.
(iii) INVENTORY REPORT. Deliver to the Administrative
Agent within thirty (30) days after the end of each quarter inventory reports
detailing location, amounts of raw materials and finished goods on a
quarterly basis, prepared in form acceptable to the Administrative Agent.
(iv) INSURANCE REPORTS. Furnish to the Administrative
Agent, upon request of the Administrative Agent, reports on each existing
insurance policy showing such information as the Administrative Agent may
reasonably request, including without limitation the following: (A) the name
of the insurer; (B) the risks insured; (C) the amount of the policy; (D) the
properties insured; (E) the then current property values on the basis of
which insurance has been obtained, and the manner of determining those
values; and (F) the expiration date of the policy.
(v) ADDITIONAL INFORMATION. Furnish such additional
information and statements, lists of assets and liabilities, agings of
receivables and payables, inventory schedules, budgets, forecasts, tax
returns, and other reports with respect to the Borrower's financial condition
and business operations as the Administrative Agent may reasonably request
from time to time.
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(d) INSURANCE. Maintain fire and other risk insurance,
public liability insurance, and such other Insurance as the Administrative
Agent on behalf of the Lenders may require with respect to the Borrower's
properties and operations, in form, amounts, coverages and with insurance
companies reasonably acceptable to the Administrative Agent. The Borrower,
upon request of the Administrative Agent, will deliver to the Administrative
Agent from time to time the policies or certificates of insurance in form
satisfactory to the Administrative Agent, including stipulations that
coverages will not be cancelled or diminished without at least ten (10) days'
prior written notice to the Administrative Agent. Each insurance policy also
shall include an endorsement providing that coverage in favor of the
Administrative Agent on behalf of the Lenders will not be impaired in any way
by any act, omission or default of the Borrower or any other Person. In
connection with all policies covering the Collateral, the Borrower will
provide the Administrative Agent with such loss payable or other endorsements
as the Administrative Agent may require.
(e) OTHER AGREEMENTS. Comply with all terms and conditions
of all other agreements, whether now or hereafter existing, between the
Borrower and any other party and notify the Administrative Agent immediately
in writing of any default in connection with any other such agreements that
would likely have a material adverse effect on the Borrower's business or
financial condition.
(f) LOAN PROCEEDS. Use all proceeds of the Advances solely
for the Borrower's business operations, unless specifically consented to the
contrary by the Required Lenders in writing.
(g) TAXES, CHARGES AND LIENS. Pay and discharge when due
all of its Indebtedness and obligations, including without limitation all
assessments, taxes, governmental charges, levies and liens, of every kind and
nature, imposed upon the Borrower or its properties, income, or profits,
prior to the date on which penalties, would attach, and all lawful claims
that, if unpaid, might become a lien or charge upon any of the Borrower's
properties, income, or profits; provided however, the Borrower will not be
required to pay and discharge any such assessment, tax, charge, xxxx, xxxx or
claim so long as (i) the legality of the same shall be contested in good
faith by appropriate proceedings, and (ii) the Borrower shall have
established on its books adequate reserves with respect to such contested
assessment, tax, charge, levy, lien, or claim in accordance with GAAP. The
Borrower, upon demand of the Administrative Agent, will furnish to the
Administrative Agent evidence of payment of the assessments, taxes, charges,
levies, liens and claims and will authorize the appropriate governmental
official to deliver to the Administrative Agent at any time a written
statement of any assessments, taxes, charges, levies, liens and claims
against the Borrower's properties, income, or profits.
(h) PERFORMANCE. Perform and comply with all terms,
conditions, and provisions set forth in this Agreement and in the other Loan
Documents in a timely manner, and promptly notify the Administrative Agent if
the Borrower learns of the occurrence of any event which constitutes an Event
of Default under this Agreement or under any of the other Loan Documents.
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(i) OPERATIONS. Maintain executive and management personnel
with substantially the same qualifications and experience as the present
executive and management personnel; conduct its business affairs in a
reasonable and prudent manner and in material compliance with all applicable
federal, state and municipal laws, ordinances, rules and regulations
respecting its properties, charters, businesses and operations, including
without limitation, compliance with the Americans With Disabilities Act and
with all minimum funding standards and other requirements of ERISA and other
laws applicable to the Borrower's employee benefit plans.
(j) INSPECTION. Permit employees or agents of the
Administrative Agent at any reasonable time to inspect any and all Collateral
and the Borrower's other properties and to examine or audit the Borrower's
books, accounts, and records (including detailed aging reports of accounts
and contracts receivable) and to make copies and memoranda of the Borrower's
books, accounts, and records. If the Borrower now or at any time hereafter
maintains any records (including without limitation computer generated
records and computer software programs for the generation of such records) in
the possession of a third party, the Borrower, upon request of the
Administrative Agent, shall notify such party to permit the Administrative
Agent free access to such records at all reasonable times and to provide the
Administrative Agent with copies of any records it may request, all at the
Borrower's expense.
(k) COMPLIANCE CERTIFICATE. Upon request of the
Administrative Agent, provide the Administrative Agent at least annually with
a certificate executed by the Borrower's chief financial officer, or other
officer or person acceptable to the Administrative Agent, certifying that the
representations and warranties set forth in this Agreement are true and
correct as of the date of the certificate and further certifying that, as of
the date of the certificate, no Event of Default exists under this Agreement.
(l) ENVIRONMENTAL COMPLIANCE AND REPORTS. Comply in all
respects with all environmental protection federal, state and local laws,
statutes, regulations and ordinances.
(m) ADDITIONAL ASSURANCES. Make, execute and deliver to the
Administrative Agent such promissory notes, mortgages, deeds of trust,
security agreements, financing statements, instruments, documents and other
agreements as the Administrative Agent or its attorneys may reasonably
request to evidence and secure the Borrowings and to perfect all Liens in the
Collateral.
(n) YEAR 2000.
(i) The Borrower represents, warrants and covenants
that it has, or will have by a date that is acceptable to the Lenders: (a)
undertaken a detail inventory, review, and assessment of all areas within its
business and operations that could be adversely affected by the failure of
the Borrower to be Year 2000 compliant on a timely basis, (b) developed a
detailed plan and timeline and committed adequate resources for becoming Year
2000 compliant on a timely basis, and (c) implemented that plan in accordance
with that timetable in all material respects. The Borrower covenants and
agrees that the Borrower shall from time to time upon the Lenders' request
furnish periodic updates to the Lenders regarding the Borrower's progress on
29
its Year 2000 compliance efforts, and provide copies to the Lenders of any
internal and third-party assessments of the Borrower's Year 2000 compliance
efforts. The Borrower covenants to be and reasonably anticipates that it
will be Year 2000 compliant on timely basis.
(ii) The Borrower has made (or will make, by a date
acceptable to the Lenders) written inquiry (or, if acceptable to the Lenders,
oral inquiry) of each of its key suppliers and vendors as to whether such
persons will be Year 2000 compliant in all material respects on a timely
basis. Based on the results of that inquiry and consideration of the
Borrower's key supplier and vendor base, and to the best of the Borrower's
knowledge only, the Borrower believes that the Year 2000 will not have a
material adverse change in the business, properties, condition (financial or
otherwise), or prospects of the Borrower, or the Borrower's ability to repay
the indebtedness under this Agreement.
(iii) "Year 2000 compliant" means, with regard to any
entity, that all software, embedded microchips, and other processing
capabilities utilized by, and material to the business operations or
financial condition of, such entity are able to interpret and manipulate data
on and involving all calendar dates correctly and without causing any
abnormal ending scenario, including in relation to dates in and after the
Year 2000.
Section 5.2 NEGATIVE COVENANTS. So long as the Notes or other
amount payable by the Borrower hereunder shall remain unpaid or the Lenders
shall have any Commitment hereunder or any Letter of Credit remains
Outstanding, the Borrower covenants and agrees that it will not:
(a) INDEBTEDNESS AND LIENS. (i) Except for trade debt
incurred in the normal course of business and Indebtedness to the Lenders,
the Letter of Credit Issuer and the Credit Card Issuer contemplated by this
Agreement, create, incur or assume Indebtedness, other than capital leases,
(ii) except for Permitted Liens, grant or permit to exist any Lien on any of
the Borrower's assets, or (iii) sell with recourse any of the Borrower's
accounts, except to the Lenders or pursuant to the Factoring Agreement.
(b) CONTINUITY OF OPERATIONS. (i) Engage in any business
activities substantially different than those in which the Borrower is
presently engaged, (ii) cease operations, liquidate, merge, transfer, acquire
or consolidate with any other entity, other than mergers, transfers,
acquisitions or consolidations in which the consideration has a fair market
value of less than $3,500,000.00 and the Borrower is the acquiring or
surviving entity, or (iii) change its name, dissolve or transfer or sell
Collateral or other assets out of the ordinary course of business except (A)
sales of accounts receivable pursuant to the Factoring Agreement, (B)
transfers, sales or dispositions of Collateral that is obsolete or worn out
property disposed of in the ordinary course of business and (C) other asset
dispositions provided that such other asset dispositions do not exceed
$200,000.00 in the aggregate for any fiscal year.
(c) LOANS, ACQUISITIONS AND GUARANTIES. (i) Loan, invest in
or advance money or assets, or purchase, create or acquire any interest in
any other enterprise or entity, except (A) commercial bank demand deposits
and time deposits maturing within one year, (B) marketable general
obligations of the United States or a state or marketable obligations fully
30
guaranteed by the United States, (C) short-term commercial paper with the
highest rating of a generally recognized rating service, (D) loans and
advances to employees in the ordinary course of business related to expenses
incurred in the ordinary course of employment not to exceed $500,000
outstanding at any time, (E) bankers' acceptances, repurchase agreements, or
other investments reasonably acceptable to the Administrative Agent and (F)
loans or advances to, or investments in wholly owned subsidiaries in an
amount not to exceed $5,000,000.00 or (ii) incur any obligation as surety or
guarantor other than in the ordinary course of business.
Section 5.3 FINANCIAL COVENANTS. So long as the Notes or any other
amount payable by the Borrower hereunder shall remain unpaid, or the Lenders
shall have any Commitment hereunder, or the Term Lender shall have any Term
Commitment hereunder, or any Letter of Credit remains Outstanding, the
Borrower covenants and agrees that unless it receives the prior written
consent of the Required Lenders, it will:
(a) TANGIBLE NET WORTH. Not permit Tangible Net Worth to be
less than $45,000,000.00, as of the Effective Date and the last day of each
fiscal quarter occurring prior to April 30, 2000, or less than $51,000,000.00
as of April 30, 2000 and the last day of each fiscal quarter thereafter.
(b) WORKING CAPITAL. Not permit Working Capital to be less
than $40,000,000.00, as of the Effective Date and the last day of each fiscal
quarter occurring prior to April 30, 2000, or less than $46,000,000.00 as of
April 30, 2000 and the last day of each fiscal quarter thereafter.
(c) NET WORTH RATIO. Not permit the ratio of (i)
consolidated liabilities of the Borrower and its subsidiaries (defined in
accordance with GAAP) plus consolidated liabilities in respect of outstanding
letters of credit (which include Outstanding Letters of Credit) to (ii)
Tangible Net Worth to exceed 1.15 to 1.00 as of the Effective Date and the
last day of each fiscal quarter occurring prior to January 31, 2000, or to
exceed 1.25 to 1.00 as of January 31, 2000, or to exceed 1.20 to 1.00 as of
April 30, 2000 and the last day of each fiscal quarter occurring prior to
July 31, 2000, or to exceed 1.15 to 1.00 as of July 31, 2000.
(d) FUNDED DEBT TO EBITDA. Not permit, as of the Effective
Date and the last day of each fiscal quarter thereafter, the ratio of (i) the
daily average principal amount of Funded Debt outstanding during the four
consecutive fiscal quarters ending on such date to (ii) EBITDA for the four
consecutive fiscal quarters ending on such date to exceed 2.0 to 1.00.
(e) CAPITAL EXPENDITURES. Not permit capital expenditures
made during in any one fiscal year to exceed the sum of $11,000,000.00;
provided, however, that capital expenditures shall not, on a cumulative
basis, exceed: (i) $4,000,000.00 at any time during the fiscal quarter ended
July 31, 1999; $7,000,000.00 at any time during the fiscal quarter ended
October 30, 1999; $9,000,000.00 at any time during the fiscal quarter ended
January 31, 2000; $11,000,000.00 at any time during the fiscal quarter ended
April 30, 2000; and $5,000,000.00 at any time during the fiscal quarter ended
July 31, 2000.
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ARTICLE VI
EVENTS OF DEFAULT
Section 6.1 EVENTS OF DEFAULT. The following events shall
constitute events of default hereunder ("Events of Default"):
(a) DEFAULT ON INDEBTEDNESS. Failure of the Borrower (i) to
pay when due any principal of or interest on the Advances, (ii) to reimburse
the Letter of Credit Issuer when due for any drawing on any Letter of Credit,
(iii) to reimburse the Credit Card Issuer when due for any disbursement under
any Credit Card or (iv) to pay when due any other amount due hereunder or
under any of the other Loan Documents and, in the case of a failure described
in the foregoing clause (iv), the continuance thereof for a period of five
(5) days.
(b) OTHER DEFAULTS. Failure of the Borrower to comply with
or to perform when due any other term, obligation, covenant or condition
contained in this Agreement or in any of the other Loan Documents, or failure
of the Borrower to comply with or to perform any other term, obligation,
covenant or condition contained in any other agreement between the Lenders
and/or the Administrative Agent and the Borrower.
(c) DEFAULT IN FAVOR OF THIRD PARTIES. Default of the
Borrower under any loan, extension of credit, security agreement, purchase or
sales agreement, or any other agreement, in favor of any other creditor or
person that may materially affect any of the Borrower's property or the
Borrower's ability to repay the Borrowings or perform its obligations under
this Agreement or any of the other Loan Documents.
(d) FALSE STATEMENTS. Any warranty, representation or
statement made or furnished to the Lenders, the Letter of Credit Issuer, the
Credit Card Issuer and/or the Administrative Agent by or on behalf of the
Borrower under this Agreement or the other Loan Documents is false or
misleading in any material respect at the time made or furnished, or becomes
false or misleading at any time thereafter.
(e) DEFECTIVE COLLATERALIZATION. This Agreement or any of
the other Loan Documents ceases to be in full force and effect (including
failure of the Security Agreement or any other Loan Document to create a
valid and perfected Lien in the Collateral) at any time and for any reason.
(f) INSOLVENCY. The dissolution or termination of the
Borrower's existence as a going business, the insolvency of the Borrower, the
appointment of a receiver for any part of the Borrower's property, any
assignment for the benefit of creditors, any type of creditor workout, or the
commencement of any proceeding under any bankruptcy or insolvency laws by or
against the Borrower.
(g) CREDITOR OR FORFEITURE PROCEEDINGS. Commencement of
foreclosure or forfeiture proceedings, whether by judicial proceeding,
self-help, repossession or any other method, by any creditor of the Borrower
or by any governmental agency, including a
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garnishment, attachment, or levy on or of any of the Borrower's deposit
accounts, provided, however, that the foregoing shall not constitute an Event
of Default if there is a good faith dispute by the Borrower as to the
validity or reasonableness of the claim which is the basis of the creditor or
forfeiture proceeding (other than any such proceeding instituted by the
Administrative Agent), the Borrower gives the Administrative Agent written
notice of such creditor or forfeiture proceeding and the Borrower establishes
reserves or a surety bond for such creditor or forfeiture proceeding
reasonably satisfactory to the Administrative Agent.
(h) YEAR 2000. (x) Any of the Borrower's representations
and warranties regarding Year 2000 shall cease to be true in any material
respect (whether or not true when made) and, as a result, the Lender
reasonably believes that the Borrower's financial condition or its ability to
pay its debts as they become due will thereby be materially impaired, (y) the
Borrower fails to comply with any of its Year 2000 covenants, or (z) the
Borrower fails to be Year 2000 compliant (as defined in Section 5.1(n)) in
any material respect on a timely basis.
(i) ADVERSE CHANGE. A material adverse change occurs in the
Borrower's financial condition.
Provided, however, that none of the foregoing events (other than those
referred to in paragraph (a)) shall constitute an Event of Default hereunder
if (i) it is curable and if the Borrower has not been given a notice of a
similar default within the preceding twelve (12) months and (ii) the
Borrower, after receiving written notice from the Administrative Agent
demanding cure of such default, (A) cures the default within fifteen (15)
days or (B) if the cure requires more than fifteen (15) days, immediately
initiates steps which the Required Lenders deem in their sole discretion to
be sufficient to cure the default and thereafter continues and completes all
reasonable and necessary steps sufficient to produce compliance as soon as
reasonably practical.
Section 6.2 REMEDIES. If an Event of Default shall have occurred
and be continuing, the Administrative Agent may, by notice to the Borrower,
(a) declare the obligation of the Lenders to make Advances, the obligation of
the Letter of Credit Issuer to issue Letters of Credit and the obligation of
the Credit Card Issuer to issue a Credit Card to be terminated, whereupon the
same shall forthwith terminate, and (b) declare (i) the Notes and all
interest thereon, (ii) an amount equal to the stated amount of each
Outstanding Letter of Credit (notwithstanding that the obligation of the
Borrower to reimburse any draws under any such Letter of Credit may be
contingent or not matured), (iii) and an amount equal to the aggregate amount
of disbursements made under any issued Credit Cards, and (iv) all other
amounts payable under this Agreement and the other Loan Documents to be
immediately due and payable, whereupon the Notes, all such interest, all such
amounts payable with respect to Outstanding Letters of Credit and issued
Credit Cards and all such other amounts shall become and be immediately due
and payable, without presentment, demand, protest or further notice of any
kind, all of which are hereby expressly waived by the Borrower; provided,
however, that if an Event of Default under Section 6.01(f) shall occur, (A)
the obligation of the Lenders to make Advances, the obligation of the Letter
of Credit Issuer to issue Letters of Credit and the obligation of the Credit
Card Issuer to issue Credit Cards shall automatically be terminated and (B)
the Notes, all interest thereon, an amount equal to the stated amount of each
Outstanding Letter of Credit
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(notwithstanding that the obligation of the Borrower to reimburse any draws
under any such Letter of Credit may be contingent or not matured), an amount
equal to the aggregate amount of disbursements made under any issued Credit
Cards and all other amounts payable under this Agreement and the other Loan
Documents shall automatically become and be immediately due and payable,
without presentment, demand, protest or any notice of any kind, all of which
are hereby expressly waived by the Borrower.
Section 6.3 ADJUSTMENTS; RIGHT OF SET-OFF.
(a) If any Lender (a "Benefited Lender") shall at any time
receive any payment of all or part of its Revolving Facility Advance owing to
it, or interest thereon, 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 6.1(f) and (g), or
otherwise), in a greater proportion than any such payment to or Collateral
received by any other Lender, if any, in respect of each such other Lender's
Revolving Facility Advances owing to each such other Lender, or interest
thereon, such Benefited Lender shall purchase for cash from the other Lenders
a participating interest in such portion of each such other Lender's
Revolving Facility Advance owing to each such other Lender, or shall provide
such other Lenders with the benefits of any such Collateral, or the proceeds
thereof, as shall be necessary to cause such Benefited Lender to share the
excess payment or benefits of such Collateral or proceeds 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 Benefited Lender, such
purchase shall be rescinded, and the purchase price and benefits returned, to
the extent of such recovery, but without interest.
(b) Upon the declaration of the Notes, or the obligations of
the Borrower with respect to reimbursement of drawings under Outstanding
Letters of Credit or to reimbursement of disbursements under issued Credit
Cards, as due and payable pursuant to the provisions of Section 6.2, each
Lender is hereby authorized on behalf of the Lenders at any time and from
time to time, to the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or
final) at any time held and other Indebtedness at any time owing by said
Lender to or for the credit or the account of the Borrower against any and
all of the obligations of the Borrower now or hereafter existing under this
Agreement and the other Loan Documents irrespective of whether or not such
Lender shall have made any demand. The rights of the Lenders under this
Section are in addition to other rights and remedies (including, without
limitation, other rights of set-off) which the Lenders may have.
Section 6.4 CUMULATIVE REMEDIES. If an Event of Default shall occur
and be continuing, the Administrative Agent on behalf of the Lenders may
proceed to enforce the Loan Documents by exercising such remedies as are
available thereunder or in respect thereof under applicable law, whether for
specific performance of any covenant or other agreement contained in the Loan
Documents or in aid of the exercise of any power granted in the Loan
Documents. No remedy conferred in this Agreement or the other Loan Documents
is intended to be exclusive of any other remedy, and each and every such
remedy shall be cumulative and shall be in addition to every other remedy
conferred herein or therein or now or hereafter existing at law, in equity,
by statute or otherwise.
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Section 6.5 APPLICATION OF PAYMENTS. After the occurrence and
during the continuance of an Event of Default, the Administrative Agent on
behalf of the Lenders shall apply all funds received in respect of amounts
owing under this Agreement and the other Loan Documents in such order as the
Required Lenders may determine in their sole discretion notwithstanding any
instruction from the Borrower.
ARTICLE VII
THE ADMINISTRATIVE AGENT
Section 7.1 APPOINTMENT. Each Lender hereby irrevocably designates
and appoints the Administrative Agent as the agent of such Lender under this
Agreement and the other Loan Documents, and each such Lender irrevocably
authorizes the Administrative 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 the Administrative 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, the Administrative Agent shall not 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 the
Administrative Agent.
Section 7.2 DELEGATION OF DUTIES. The Administrative 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. The Administrative
Agent shall not be responsible for the negligence or misconduct of any agents
or attorneys-in-fact selected by it with reasonable care.
Section 7.3 EXCULPATORY PROVISIONS. Neither the Administrative
Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates shall be (i) liable to any of the Lenders 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 for
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 the Borrower or any representative
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 Administrative Agent 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 the Borrower to perform its
obligations hereunder or thereunder. The Administrative Agent 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 the Borrower.
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Section 7.4 RELIANCE BY ADMINISTRATIVE AGENT. The Administrative
Agent shall be entitled to rely, and shall be fully protected in relying,
upon any 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, without limitation, counsel to the
Borrower), independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent shall be fully justified in
taking any action or in failing or refusing to take any action under this
Agreement and the other Loan Documents in accordance with a request of the
Required 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 obligations owing by the Borrower hereunder.
Section 7.5 NOTICE OF DEFAULT. The Administrative Agent shall not
be deemed to have knowledge or notice of the occurrence of any Default or
Event of Default hereunder unless the Administrative 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 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;
provided that unless and until the Administrative Agent shall have received
such directions, and 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.
Section 7.6 NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS.
Each Lender expressly acknowledges that neither the Administrative Agent nor
any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates has made any representations or warranties to it and that no act
by the Administrative Agent hereinafter taken, including any review of the
affairs of the Borrower, shall be deemed to constitute any representation or
warranty by the Administrative Agent to any Lender. Each Lender represents
to the Administrative Agent that it has, independently and without reliance
upon the Administrative 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 Borrower and made
its own decision to make Advances hereunder and enter into this Agreement.
Each Lender also represents that it will, independently and without reliance
upon the Administrative 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 Borrower. 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 the Borrower which may come into the possession of the
Administrative Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates.
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Section 7.7 INDEMNIFICATION. The Lenders agree to indemnify the
Administrative 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 Commitment Percentages in effect on the
date on which indemnification is sought (or, if indemnification is sought
after the date upon which the Commitments shall have terminated and the
aggregate Advances Outstanding shall have been reduced to zero, ratably in
accordance with their Commitment 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 which may at any time (including, without limitation, at any
time following the payment of the amounts owing hereunder) be imposed on,
incurred by or asserted against the Administrative 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 the Administrative 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 resulting solely
from the Administrative Agent's gross negligence or willful misconduct. The
agreements in this Article VII shall survive the payment of the Loans and all
other amounts payable hereunder.
Section 7.8 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY. The
Administrative Agent and its Affiliates may make loans to, accept deposits
from and generally engage in any kind of business with the Borrower as though
the Administrative Agent were not the Administrative Agent hereunder and
under the other Loan Documents. With respect to the Advances made by it, the
Administrative 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 the Administrative Agent, and the terms "Lender",
"Term Lender", and "Lenders" shall include the Administrative Agent in its
individual capacity.
Section 7.9 SUCCESSOR ADMINISTRATIVE AGENT. The Administrative
Agent may resign as Administrative Agent upon 30 days' notice to the Lenders.
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 be approved by the Borrower, 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. After
any retiring Administrative Agent's resignation as Administrative Agent, the
provisions of this Article VII 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.
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ARTICLE VIII
MISCELLANEOUS
Section 8.1 AMENDMENTS. An amendment, modification or waiver of any
provision of this Agreement or the other Loan Documents, or a consent to any
departure by the Borrower therefrom, including, without limitation, any
amendment, modification or waiver reducing the amount of principal of an
Outstanding Advance, extending the Termination Date or reducing the stated
amount of any interest, fee or other amount payable to any Lender under this
Agreement, or any amendment, modification or waiver of any provision of this
Section 8.1, or any amendment reducing the percentage specified in the
definition of "Required Lenders", or any consent to the assignment or
transfer by the Borrower of any of its rights and obligations under this
Agreement and the other Loan Documents, shall be effective against the
Lenders if, but only if, it shall be in writing and approved and signed by
the Required Lenders, and then such a waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given;
PROVIDED, HOWEVER, that: (a) any amendment, modification or waiver of any
provision of Article VII must be approved by written consent of the
Administrative Agent and the Required Lenders; (b) any amendment,
modification or waiver of any provision of Section 2.2(b) must be approved by
written consent of the Letter of Credit Issuer and the Required Lenders; and
(c) any amendment, modification or waiver of any provision of Section 2.2(c)
must be approved by written consent of the Credit Card Issuer and the
Required Lenders.
Section 8.2 NOTICES. Except as otherwise specifically provided in
this Agreement, all notices and other communications provided for hereunder
shall be in writing (including telecopier) and mailed, telecopied or
otherwise transmitted or delivered, if to the Borrower, at:
Cutter & Buck Inc.
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attention: Xxxxx Xxxxxx, Chief Financial Officer
Telecopy: (000) 000-0000
Telephone (000) 000-0000
if to a Lender, the Administrative Agent, the Letter of Credit Issuer or the
Credit Card Issuer, at the address as set forth under its name on the
signature page of this Agreement; or, as to any party, at such other address
as shall be designated by such party in a written notice to the other party
or parties. All such notices and communications shall, (i) if mailed, be
effective three (3) Business Days following deposit in the United States
mail, postage prepaid; (ii) if delivered by air courier, be effective the
first Business Day following transmittal to the air courier and (iii) if
telecopied, be effective when telecopied and electronic confirmation of
transmission is received, except that notices and communications to the
Administrative Agent, the Letter of Credit Issuer or the Credit Card Issuer
pursuant to Article II shall not be effective until received by the
Administrative Agent, the Letter of Credit Issuer or the Credit Card Issuer,
as the case may be. A notice received by the Administrative Agent, the
Letter of Credit Issuer or the Credit Card Issuer by telephone pursuant to a
provision of this Agreement providing for telephone notice shall be effective
if such party believes
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in good faith that it was given by an Authorized Officer of the Borrower and
acts pursuant thereto, notwithstanding the absence of written confirmation.
Section 8.3 NO WAIVER; REMEDIES. No failure on the part of the
Administrative Agent to exercise, and no delay in exercising, on behalf of
the Lenders, any right hereunder or under any other Loan Document shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right hereunder or under any other Loan Document preclude any other or
further exercise thereof or the exercise of any other right. The remedies
provided herein and in the other Loan Documents are cumulative and not
exclusive of any remedies provided by law.
Section 8.4 COSTS AND EXPENSES; INDEMNIFICATION.
(a) COSTS OF PREPARATION AND ADMINISTRATION OF LOAN
DOCUMENTS. The Borrower agrees to pay on demand the reasonable fees and
out-of-pocket expenses of counsel for the Administrative Agent in connection
with the preparation, execution and delivery of this Agreement and the other
Loan Documents. In addition, the Borrower shall pay any and all stamp and
other taxes, recording fees, escrow fees, title insurance premiums, fees for
searches of public records, and all other out-of-pocket costs and expenses
payable in connection with the execution and delivery of this Agreement and
the other Loan Documents and the administration thereof, and shall save the
Administrative Agent and the Lenders harmless from and against any and all
liabilities with respect to or resulting from any delay in paying or omission
to pay such taxes, fees, costs and expenses.
(b) COSTS OF LITIGATION. In the event of any Default or
Event of Default under this Agreement, or in the event that any dispute
arises (whether or not such dispute is with the Borrower) relating to the
interpretation, enforcement or performance of this Agreement or any of the
other Loan Documents, the Administrative Agent, the Lenders, the Letter of
Credit Issuer and the Credit Card Issuer shall be entitled to collect from
the Borrower on demand all fees and expenses incurred in connection
therewith, including but not limited to fees of attorneys, accountants,
appraisers, environmental inspectors, consultants, expert witnesses,
arbitrators, mediators and court reporters, subject, in circumstances other
than a bankruptcy or insolvency proceeding, to applicable law providing that
the prevailing party is entitled to be awarded its reasonable costs and
attorneys' fees. Without limiting the generality of the foregoing, the
Borrower shall pay all such costs and expenses incurred in connection with:
(i) arbitration or other alternative dispute resolution proceedings, trial
court actions and appeals; (ii) bankruptcy or other insolvency proceedings of
the Borrower, any guarantor or other party liable for any of the obligations
under this Agreement or any of the other Loan Documents, or any party having
any interest in any security for any of those obligations; (iii) judicial or
nonjudicial foreclosure on, or appointment of a receiver for, any property
securing the obligations of the Borrower; (iv) post-judgment collection
proceedings; (v) all claims, counterclaims, cross-claims and defenses
asserted in any of the foregoing whether or not they arise out of or are
related to this Agreement or any other Loan Document; (vi) all preparation
for any of the foregoing; and (vii) all settlement negotiations with respect
to any of the foregoing.
(c) INDEMNIFICATION. The Borrower agrees to indemnify and
hold each of the Administrative Agent, the Lenders, the Letter of Credit
Issuer and the Credit Card Issuer and
39
their respective officers, directors, employees and agents (collectively,
"Indemnified Parties" and, individually, a "Indemnified Party") free and
harmless from and against any and all actions, causes of action, suits,
losses, costs, liabilities, damages and expenses (regardless of whether such
Indemnified Party is a party to the action for which indemnification
hereunder is sought), including without limitation reasonable attorneys' fees
and disbursements (the "Indemnified Liabilities") incurred by any of the
Indemnified Parties as a result of, or arising out of, or relating to, any
Letter of Credit or any transaction financed or to be financed in whole or in
part out of the proceeds of any thereof or otherwise involving any thereof,
except for any such Indemnified Liabilities arising on account of the
relevant Indemnified Party's negligence or misconduct.
Section 8.5 BINDING EFFECT; SUCCESSORS AND ASSIGNS; PARTICIPATIONS
AND ASSIGNMENTS.
(a) This Agreement shall be binding upon and inure to the
benefit of the Borrower, the Lenders, the Letter of Credit Issuer, the Credit
Card Issuer, the Administrative Agent 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 may, in the ordinary course of its business
and in accordance with applicable law, with the consent of the Borrower (such
consent not to be unreasonably withheld), at any time sell to one or more
banks or other entities ("Participants") participating interests in such
Lender's Commitment. 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, and the
Borrower, the Administrative Agent, the Letter of Credit Issuer and the
Credit Card Issuer 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 party of this Agreement therefrom, except to the extent that such
amendment, waiver or consent would reduce the principal of, or interest on,
any Advance or any fees payable hereunder, or postpone the Termination Date,
in each case to the extent subject to such participation. The Borrower
agrees that each Participant shall be entitled to the benefits of Sections
2.9, 2.11 and 8.3(c) with respect to its participation in the Commitment and
the Advances Outstanding from time to time as if it was a Lender; provided
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.
(c) Any Lender may, in the ordinary course of its business
and in accordance with applicable law, with the consent of the Borrower (such
consent not to be unreasonably withheld), at any time and from time to time
assign to any Lender or any Affiliate thereof or, with the consent of the
Borrower, the Letter of Credit Issuer, the Credit Card Issuer and the
Administrative Agent (which in each case shall not be unreasonably withheld),
to any other Person (collectively, "Purchasing Lenders") all or any part of
its rights and obligations under this Agreement and the other Loan Documents
pursuant to an Assignment and Acceptance,
40
substantially in the form of Exhibit C, executed by such Purchasing Lender
that is not then a Lender or an Affiliate thereof, by the Borrower, the
Administrative Agent, the Letter of Credit Issuer and the Credit Card Issuer)
and delivered to the Administrative Agent for its acceptance and recording in
the Register (as defined below); provided, that, except in the case of an
assignment of all of a Lender's rights and obligations under this Agreement,
(x) the amount of the Commitment of the assigning Lender being assigned
pursuant to each such assignment shall equal at least $5,000,000 and (y)
after giving effect to each such assignment, the amount of the remaining
Commitment of the assigning Lender shall equal at least $2,000,000 (or, in
each case, such lesser amount as the Borrower may consent to). Upon such
execution, delivery, acceptance and recording, from and after the effective
date determined pursuant to such Assignment and Acceptance, (x) the
Purchasing Lender 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 Percentage as set forth therein, and
(y) the transferor Lender 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 or
the remaining portion of an transferor Lender's rights and obligations under
this Agreement, such transferor Lender shall cease to be a party hereto).
Such Assignment and Acceptance shall be deemed to amend this Agreement to the
extent, and only to the extent, necessary to reflect the addition of such
Purchasing Lender and the resulting adjustment of Commitment Percentages
arising from the purchase by such Purchasing Lender of all or a portion of
the rights and obligations of such transferor Lender.
(d) The Administrative Agent, on behalf of the Borrower,
shall maintain at the address of the Administrative Agent referred to in
Section 8.2 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 Percentage of, and principal amount of the
Advances owing to, and risk participations in Letters of Credit or Credit
Cards purchased by, each Lender from time to time. The entries in the
Register shall be conclusive, in the absence of manifest error, and the
Borrower, the Administrative Agent and the Lenders shall treat each Person
whose name is recorded in the Register as the percentage owner of an Advance,
risk participation or other obligation hereunder as the owner thereof for all
purposes of this Agreement and the other Loan Documents, notwithstanding any
notice to the contrary. The Register shall be available for inspection by
the Borrower, the Letter of Credit Issuer, the Credit Card Issuer or any
Lender at any reasonable time and from time to time upon reasonable prior
notice.
(e) Upon its receipt of an Assignment and Acceptance
executed by a transferor Lender and a Purchasing Lender (and, in the case of
a Purchasing Lender that is not then a Lender or an Affiliate thereof, by the
Borrower, the Administrative Agent, the Letter of Credit Issuer and the
Credit Card Issuer), the Administrative Agent shall (i) promptly accept such
Assignment and Acceptance and (ii) on the effective date determined pursuant
thereto record the information contained therein in the Register and give
notice of such acceptance and recordation to the Lenders, the Letter of
Credit Issuer, the Credit Card Issuer and the Borrower.
(f) The Borrower authorizes each Lender to disclose to any
Participant or Purchasing Lender (each, a "Transferee") and any prospective
Transferee any and all financial
41
information in such Lender's possession concerning the Borrower and its
Affiliates which has been delivered to such Lender by or on behalf of the
Borrower pursuant to this Agreement or which has been delivered to such
Lender by or on behalf of the Borrower in connection with such Lender's
credit evaluation of the Borrower and its Affiliates prior to becoming a
party to this Agreement.
(g) Nothing herein shall prohibit any Lender from pledging
or assigning all or any portion of its Advance and its risk participation in
any Letter of Credit or Credit Card to any Federal Reserve Bank in accordance
with applicable law.
Section 8.6 EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of counterparts and by different parties hereto on
separate counterparts, each of which when so executed shall be deemed to be
an original and all of which taken together shall constitute one and the same
agreement.
Section 8.7 GOVERNING LAW. All of the Loan Documents shall be
governed by and construed in accordance with the laws of the state of
Washington, without regard to the choice of law provisions or principles of
Washington law, except to the extent that the Uniform Commercial Code as
enacted in the state of Washington provides that the validity or perfection
of any security interests in, or remedies in respect of, any particular
Collateral are governed by the laws of a jurisdiction other than the state of
Washington (the "Governing Laws"). Except as otherwise provided in this
Agreement or any of the other Loan Documents and unless inconsistent with any
provision of the Governing Laws that cannot be waived, the Uniform Customs
and Practice for Documentary Credits of the International Chamber of Commerce
("UCP") as in effect from time to time are fully incorporated herein and
shall apply to all Letters of Credit issued hereunder.
Section 8.8 MEDIATION/ARBITRATION PROVISIONS.
(a) POLICY -- MEDIATION. The parties hope there will be no
disputes arising out of their relationship. To that end, each commits to
cooperate in good faith and to deal fairly in performing its duties under
this Agreement in order to accomplish their mutual objectives and avoid
disputes. But, if a dispute arises, the parties agree to resolve all disputes
by the following alternate dispute resolution process: (i) the parties will
seek a fair and prompt negotiated resolution but if this is not successful,
(ii) all disputes shall be resolved by binding arbitration, provided that
during this process, (iii) at the request of either party made not later than
seventy-five (75) days after the initial arbitration demand, the parties will
attempt to resolve any dispute by nonbinding mediation (but without delaying
the arbitration hearing date). The parties recognize that negotiation or
mediation may not be appropriate to resolve some disputes and agree that
either party may proceed with arbitration without negotiating or mediating.
The parties confirm that by agreeing to this alternate dispute resolution
process, they intend to give up their right to have any dispute decided in
court by a judge or jury.
(b) BINDING ARBITRATION. Any claim between the parties
arising out of or relating to this Agreement shall be determined by
arbitration in Seattle commenced in accordance with RCW 7.04.060; provided
that the total award by a single arbitrator (as opposed
42
to a majority of three arbitrators) shall not exceed $250,000, including
interest, attorneys' fees and costs. If either party demands a total award
greater than $250,000, there shall be three (3) neutral arbitrators. If the
parties cannot agree on the identity of the arbitrator(s) within ten (10)
days of the arbitration demand, the arbitrator(s) shall be selected by the
American Arbitration Association (AAA) office in Seattle FROM ITS LARGE,
COMPLEX CASE PANEL (OR HAVE SIMILAR PROFESSIONAL CREDENTIALS). Each
arbitrator shall be an attorney with at least fifteen (15) years' experience
in banking or commercial law and shall reside in the Seattle metropolitan
area. Whether a claim is covered by this Agreement shall be determined by the
arbitrator(s). All statutes of limitations which would otherwise be
applicable shall apply to any arbitration hereunder.
(c) PROCEDURES. The arbitration shall be conducted in
accordance with the AAA Commercial Arbitration Rules, in effect on the date
hereof, as modified by this Agreement. Submission of dispositive motions
shall be at the discretion of arbitrator(s). As may be shown to be necessary
to ensure a fair hearing, the arbitrator(s) may authorize appropriate
discovery; and may enter pre-hearing orders regarding (without limitation)
scheduling, interrogatories, document exchange, depositions, witness and
exhibit disclosure and issues to be heard. The arbitrator(s) shall not be
bound by the rules of evidence or of civil procedure, but may consider such
writings and oral presentations as reasonable business people would use in
the conduct of their day-to-day affairs, and may require the parties to
submit some or all of their case by written declaration or such other manner
of presentations as the arbitrator(s) may determine to be appropriate.
(d) HEARING -- LAW -- APPEAL LIMITED. The arbitrator(s)
shall take such steps as may be necessary to hold a private hearing within
one hundred twenty (120) days of the initial demand for arbitration and to
conclude the hearing within three (3) days; and the arbitrator(s)' written
decision shall be made not later than fourteen (14) calendar days after the
hearing. The parties have included these time limits in order to expedite
the proceeding, but they are not jurisdictional, and the arbitrator(s) may
for good cause afford or permit reasonable extensions or delays, which shall
not affect the validity of the award. The written decision shall contain a
brief statement of the claim(s) determined and the award made on each claim.
In making the decision and award, the arbitrator(s) shall apply applicable
substantive law. Absent fraud, collusion or willful misconduct by an
arbitrator, the award shall be final, and judgment may be entered in any
court having jurisdiction thereof. The arbitrator(s) may award injunctive
relief or any other remedy available from a judge, including the joinder of
parties or consolidation of this arbitration with any other involving common
issues of law or fact or which may promote judicial economy, and may award
attorneys' fees and costs to the prevailing party but shall not have the
power to award punitive or exemplary damages. The decision and award of the
arbitrators need not be unanimous; rather, the decision and award of two
arbitrators shall be final.
(e) PROVISIONAL REMEDIES, SELF-HELP AND FORECLOSURE. In
addition to any actions taken under the preceding subparagraphs: (i) the
Administrative Agent on behalf of the Lenders may exercise all rights and
remedies available under law with respect to any collateral, deposits and
accounts, including but not limited to: offset, self-help, sale or other
disposition of collateral, attachment, injunction, appointment of a receiver,
judicial foreclosure and deficiency
43
judgment or foreclosure by power of sale; (ii) by exercising any such rights
and remedies under (i) the Administrative Agent shall not waive the
provisions of paragraphs (a) through (d) above; (iii) any issues of law or
fact which arise in connection with the exercise by the Administrative Agent
on behalf of the Lenders of any rights and remedies available to the Lenders
may at the Administrative Agent's election be determined by arbitration in
accordance with paragraphs (a) through (d) above; and (iv) notwithstanding
any other provision of this Agreement, so long as an arbitration demand has
not been filed or served with respect to a claim, either party may elect to
assert such claim in the small claims department of the appropriate district
court under RCW Ch. 12.40.
Section 8.9 SEVERABILITY. Any provision of the Loan Documents that
is prohibited or unenforceable in any jurisdiction shall be ineffective to
the extent of such prohibition or unenforceability in such jurisdiction
without invalidating the remaining provisions hereof or affecting the
validity or enforceability of such provision in any other jurisdiction. To
the extent permitted by applicable law, the parties waive any provision of
law which renders any provision of any other Loan Documents prohibited or
unenforceable in any respect.
Section 8.10 ENTIRE AGREEMENT. This Agreement and the other Loan
Documents constitute the final and complete expression of the parties with
respect to the transactions contemplated by this Agreement and replace and
supersede all prior discussions, negotiations and understandings with respect
thereto. Neither this Agreement nor any term hereof nor of the other Loan
Documents may be changed, waived, discharged or terminated except as provided
herein.
Section 8.11 DESCRIPTIVE HEADINGS. The descriptive headings of the
various provisions of this Agreement are for convenience of reference only,
do not constitute a part hereof, and shall not affect the meaning or
construction of any provision hereof.
Section 8.12 GENDER AND NUMBER. Whenever appropriate to the meaning
of this Agreement or the other Loan Documents, use of the singular shall be
deemed to refer to the plural, the use of the plural to the singular, and
pronouns of certain gender to either or both the other genders.
The parties have duly executed and delivered this Agreement as of the
date first written above.
ORAL AGREEMENTS OR ORAL COMMITMENTS TO LEND MONEY, EXTEND CREDIT OR TO
FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER
WASHINGTON LAW.
BORROWER: CUTTER & BUCK INC.
By: /s/ Xxxxx Xxxxxx
-----------------------------------
Its: CFO
------------------------------
44
ADMINISTRATIVE
AGENT, LETTER OF
CREDIT ISSUER AND
CREDIT CARD ISSUER: WASHINGTON MUTUAL BANK
doing business as WESTERN BANK
By: /s/ Xxxx Xxxxx
-----------------------------------
Its: Vice President
------------------------------
Address for Notices:
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx Xxxxx
Telecopy: (000) 000-0000
LENDERS: WASHINGTON MUTUAL BANK
doing business as WESTERN BANK
By: /s/ Xxxx Xxxxx
-----------------------------------
Its: Vice President
------------------------------
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION doing
business as SEAFIRST BANK
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Its: Vice President
------------------------------
TERM LENDER: WASHINGTON MUTUAL BANK
doing business as WESTERN BANK
By: /s/ Xxxx Xxxxx
-----------------------------------
Its: Vice President
------------------------------
45
EXHIBIT A-1
AMENDED AND RESTATED REVOLVING CREDIT FACILITY NOTE
Seattle, Washington
, 1999
--------------
For value received, CUTTER & BUCK INC. (the "Borrower") promises to
pay to the order of [NAME OF LENDER] (the "Lender") the unpaid principal
amount of all Borrowings made by the Lender to the Borrower under the
Revolving Facility pursuant to that certain Amended and Restated Loan
Agreement dated as of April 28, 1999 (as the same may be amended and modified
from time to time, the "Loan Agreement") by and among the Borrower, the
Lender, the several lenders also party thereto (the "Lenders"), WASHINGTON
MUTUAL BANK doing business as WESTERN BANK, as letter of credit issuer and as
credit card issuer, and WASHINGTON MUTUAL BANK doing business as WESTERN
BANK, as administrative agent to the Lenders (in such capacity, the
"Administrative Agent"), on the dates and in the amounts provided in the Loan
Agreement. The Borrower promises to pay interest on the unpaid principal
amount of all Borrowings under the Revolving Facility on the dates and at the
rate or rates provided for in the Loan Agreement. Interest on any overdue
principal of and, to the extent permitted by law, overdue interest on the
principal amount hereof shall bear interest at the Default Rate, as provided
for in the Loan Agreement. All such payments of principal of and interest on
any Borrowing shall be made as provided in the Loan Agreement.
All Borrowings and the Interest Periods and the interest rates from
time to time applicable thereto, and all payments of the principal thereof
shall be recorded by the Lender in accordance with its usual practices;
provided, that the failure of the Lender to make any such recordation shall
not affect the obligations of the Borrower hereunder or under the Loan
Agreement.
The Borrower hereby waives diligence, presentment, demand, protest
and, except for notices required to be given pursuant to the Loan Agreement,
notice of any kind whatsoever. The non-exercise by the holder of any of its
rights hereunder in any particular instance shall not constitute a waiver
thereof in that or any subsequent instance.
This Note amends and restates in its entirety and, as so amended and
restated, continues the Facility A Promissory Note dated July 31, 1998 made
by the Borrower to the order of WASHINGTON MUTUAL BANK doing business as
WESTERN BANK. This Note is one of the Notes referred to in the Loan
Agreement. Capitalized terms used in this Note without definition have the
meanings assigned to them in the Loan Agreement. Reference is made to the
Loan Agreement for provisions for the optional prepayment and the repayment
hereof and the acceleration of the maturity hereof. This Note is governed by
the laws of the State of Washington.
The Loan Agreement, among other things, amends and restates in their
entirety and, as so amended and restated, continues (a) the Loan Agreement
dated as of July 31, 1998 between the Borrower and WASHINGTON MUTUAL BANK
doing business as WESTERN BANK and (b) the Promissory Note dated July 31,
1998 made by the Borrower to the order of WASHINGTON
EXHIBIT A-1
-1-
MUTUAL BANK doing business as WESTERN BANK (the "Original Loan Agreements").
The indebtedness of the Borrower evidenced by this Note includes the
indebtedness of the Borrower resulting from Borrowings made by the Lender to
the Borrower from time to time pursuant to the Loan Agreement and the
indebtedness of the Borrower resulting from loans previously made by
WASHINGTON MUTUAL BANK doing business as WESTERN BANK to the Borrower under
the Original Loan Agreements.
ORAL AGREEMENTS OR ORAL COMMITMENTS TO LEND MONEY, EXTEND CREDIT, OR TO
FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER
WASHINGTON LAW.
CUTTER & BUCK INC.
By
------------------------------------
Its
-------------------------------
EXHIBIT X-0
-0-
XXXXXXX X-0
AMENDED AND RESTATED TERM CREDIT FACILITY NOTE
Seattle, Washington
April 28, 1999
For value received, CUTTER & BUCK INC. (the "Borrower") promises to
pay to the order of WASHINGTON MUTUAL BANK doing business as WESTERN BANK
(the "Term Lender") the unpaid principal amount of all Borrowings made by the
Term Lender to the Borrower under the Term Facility pursuant to that certain
Amended and Restated Loan Agreement dated as of April 28, 1999 (as the same
may be amended and modified from time to time, the "Loan Agreement") by and
among the Borrower, the Lender, the several lenders also party thereto (the
"Lenders"), WASHINGTON MUTUAL BANK doing business as WESTERN BANK, as letter
of credit issuer and as credit card issuer, and WASHINGTON MUTUAL BANK doing
business as WESTERN BANK, as administrative agent to the Lenders (in such
capacity, the "Administrative Agent"), on the dates and in the amounts
provided in the Loan Agreement. The Borrower promises to pay interest on the
unpaid principal amount of all Borrowings under the Term Facility on the
dates and at the rate or rates provided for in the Loan Agreement. Interest
on any overdue principal of and, to the extent permitted by law, overdue
interest on the principal amount hereof shall bear interest at the Default
Rate, as provided for in the Loan Agreement. All such payments of principal
of and interest on any Borrowing shall be made as provided in the Loan
Agreement.
All Borrowings and the Interest Periods and the interest rates from
time to time applicable thereto, and all payments of the principal thereof
shall be recorded by the Term Lender in accordance with its usual practices;
provided, that the failure of the Term Lender to make any such recordation
shall not affect the obligations of the Borrower hereunder or under the Loan
Agreement.
The Borrower hereby waives diligence, presentment, demand, protest
and, except for notices required to be given pursuant to the Loan Agreement,
notice of any kind whatsoever. The nonexercise by the holder of any of its
rights hereunder in any particular instance shall not constitute a waiver
thereof in that or any subsequent instance.
This Note amends and restates in its entirety and, as so amended and
restated, continues the Facility B Promissory Note dated July 31, 1998 made
by the Borrower to the order of WASHINGTON MUTUAL BANK doing business as
WESTERN BANK. This Note is one of the Notes referred to in the Loan
Agreement. Capitalized terms used in this Note without definition have the
meanings assigned to them in the Loan Agreement. Reference is made to the
Loan Agreement for provisions for the optional prepayment and the repayment
hereof and the acceleration of the maturity hereof. This Note is governed by
the laws of the State of Washington.
The Loan Agreement, among other things, amends and restates in their
entirety and, as so amended and restated, continues (a) the Loan Agreement
dated as of July 31, 1998 between the Borrower and WASHINGTON MUTUAL BANK
doing business as WESTERN BANK and (b)
EXHIBIT A-2
-1-
the Promissory Note dated July 31, 1998 made by the Borrower to the order of
WASHINGTON MUTUAL BANK doing business as WESTERN BANK (the "Original Loan
Agreements"). The indebtedness of the Borrower evidenced by this Note
includes the indebtedness of the Borrower resulting from Borrowings made by
the Lender to the Borrower from time to time pursuant to the Loan Agreement
and the indebtedness of the Borrower resulting from loans previously made by
WASHINGTON MUTUAL BANK doing business as WESTERN BANK to the Borrower under
the Original Loan Agreements.
ORAL AGREEMENTS OR ORAL COMMITMENTS TO LEND MONEY, EXTEND CREDIT, OR
TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER
WASHINGTON LAW.
CUTTER & BUCK INC.
By /s/ Xxxxx Xxxxxx
------------------------------------
Its CFO
-------------------------------
EXHIBIT A-2
-2-
EXHIBIT B
NOTICE OF BORROWING
Washington Mutual Bank doing business as
Western Bank, as Administrative Agent
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxxxx 00000
Attention: , 199
------------------------------- ----------------- --
The undersigned CUTTER & BUCK INC. (the Borrower") refers to the
Amended and Restated Loan Agreement dated as of April 28, 1999 (the "Loan
Agreement") (capitalized terms used herein and not otherwise defined have the
meanings given to them in the Loan Agreement), by and among the Borrower,
WASHINGTON MUTUAL BANK doing business as WESTERN BANK, BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION doing business as SEAFIRST BANK, and
the several banks and other financial institutions from time to time parties
thereto (collectively, the "Lenders"), WASHINGTON MUTUAL BANK doing business
as WESTERN BANK, as letter of credit issuer and credit card issuer, and
WASHINGTON MUTUAL BANK doing business as WESTERN BANK, as administrative
agent to the Lenders. The Borrower hereby gives you notice, irrevocably,
pursuant to Section 2.3(a) or (b) of the Loan Agreement, as the case may be,
that the undersigned hereby requests an Advance or the issuance of a Letter
of Credit or the issuance of a Credit Card, or the continuation or conversion
of an Advance Outstanding under the Loan Agreement, and in that connection
sets forth below the information relating to such Borrowing (the "Proposed
Borrowing") or conversion or continuation as required by Section 2.3(a) or
(b) of the Loan Agreement, as the case may be:
ADVANCES. If the Proposed Borrowing consists of an Advance:
1. The Business Day of the Proposed Borrowing is ___________ 19__.
2. The Proposed Borrowing is a [Revolving Facility Advance]
[Term Facility Advance].*
3. The Type of Advance comprising the Proposed Borrowing is a
[Floating Rate Advance] [LIBOR Rate Advance] [Term Rate Advance].
4. The amount of the Proposed Borrowing is $_______________.
5. The Interest Period for the Proposed Borrowing is
_________________.
LETTER OF CREDIT. If the Proposed Borrowing consists of the issuance
of a Letter of Credit:
---------------
*Only available for Term Facility Advances.
EXHIBIT B
-1-
1. The Business Day on which the Letter of Credit is to be issued
is _________, 19__.
2. The Letter of Credit is a [Commercial Letter of Credit]
[Standby Letter of Credit].
3. The stated amount and expiration date of the Letter of Credit
are $___________, and 19__.
4. The name and address of the beneficiary of the Letter of Credit
are:
----------------------------------------
----------------------------------------
----------------------------------------
5. Other terms of the Letter of Credit will be as set forth in the
Application relating thereto.
CONVERSION/CONTINUATION. If the Borrower elects to continue or
convert an Advance:
1. The Business Day of the proposed conversion/continuation is
__________, 19____.
2. The Advance being converted or continued is a [Revolving
Facility Advance] [Term Facility Advance].
3. The Advance being converted or continued currently is a [Floating
Rate Advance] [LIBOR Rate Advance] [Term Rate Advance].*
4. The Advance will be converted to or continued as a [Floating
Rate Advance] [Fixed Rate Advance].
5. The amount of the Advance being converted or continued is
$_______________.
6. The Interest Period for the continued or converted Advance is
_________________.
CERTIFICATIONS. The undersigned hereby certifies that the following
statements are true on the date hereof, and will be true on the date of the
Proposed Borrowing or on the date of the proposed conversion or continuation,
as the case may be, before and immediately after giving effect thereto:
(A) The representations and warranties contained in Article IV of
the Loan Agreement are correct as though made on and as of such dates, unless
such representations and warranties are expressly stated to be made as of an
earlier date;
---------------
*Only available for Term Facility Advances.
EXHIBIT B
-2-
(B) The most recent financial statements of the Borrower delivered
pursuant to Section 5.1(c)(i) of the Loan Agreement present fairly the
financial position and results of operations of the Borrower as of the date
of and for the periods presented in such financial statements, and since the
date of such financial statements delivered by the Borrower pursuant to
Section 5.1(c)(i) there has not been any material adverse change in the
financial condition or operations of the Borrower;
(C) The Borrower is in full compliance with all covenants contained
in Article V of the Loan Agreement.
(D) No event has occurred and is continuing, or would result from
such Proposed Borrowing or proposed conversion or continuation, which
constitutes an Event of Default or a Default under the Loan Agreement; and
(E) After giving effect to the Proposed Borrowing or the proposed
continuation or conversion of an Advance, none of the Unused Revolving
Facility Commitment, the Unused Term Facility Commitment, the Unused
Revolving Facility Advance Sublimit or the Unused SLC Sublimit will be less
than zero.
Very truly yours,
CUTTER & BUCK INC.
By:
-----------------------------------
Its:
------------------------------
EXHIBIT B
-3-
EXHIBIT C
FORM OF ASSIGNMENT AND ACCEPTANCE
Reference is made to the Amended and Restated Loan Agreement dated as
of April 28, 1999 (as the same may be further amended, supplemented or
otherwise modified from time to time, the "Loan Agreement"), by and among
Cutter & Buck Inc. (the "BORROWER"), WASHINGTON MUTUAL BANK doing business as
WESTERN BANK, BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION doing
business as SEAFIRST BANK, and the several banks and other financial
institutions from time to time parties thereto (collectively, the "Lenders"),
WASHINGTON MUTUAL BANK doing business as WESTERN BANK, as letter of credit
issuer and credit card issuer, and WASHINGTON MUTUAL BANK doing business as
WESTERN BANK, as administrative agent to the Lenders (in such capacity, the
"ADMINISTRATIVE AGENT"). Unless otherwise defined herein, terms defined in
the Loan Agreement and used herein shall have the meanings given to them in
the Loan Agreement.
__________ (the "ASSIGNOR") and __________ (the "ASSIGNEE") agree as
follows:
1. The Assignor hereby irrevocably sells and assigns to the Assignee
without recourse to the Assignor, and the Assignee hereby
irrevocably purchases and assumes from the Assignor without
recourse to the Assignor, as of the Effective Date (as defined
below), an interest (the "ASSIGNED INTEREST"), as specified on
SCHEDULE 1, in and to the Assignor's rights and obligations under
the Loan Agreement with respect to the revolving facility
contained in the Loan Agreement as are set forth on SCHEDULE 1
(individually, an "ASSIGNED FACILITY"; collectively, the "ASSIGNED
FACILITIES"), in a principal amount for each Assigned Facility as
set forth on SCHEDULE 1.
2. The Assignor (a) makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or
representations made in or in connection with the Loan Agreement
or with respect to the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Loan
Agreement, the other Loan Documents or any other instrument or
document furnished pursuant thereto, other than that the Assignor
has not created any adverse claim upon the interest being assigned
by it hereunder and that such interest is free and clear of any
such adverse claim; and (b) makes no representation or warranty
and assumes no responsibility with respect to the financial
condition of the Borrower, any of its Affiliates or any other
obligor or the performance or observance by the Borrower, any of
its Affiliates or any other obligor of any of their respective
obligations under the Loan Agreement or any of the other Loan
Documents or any other instrument or document furnished pursuant
hereto or thereto.
3. The Assignee (a) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance;
(b) confirms that it has received a copy of the
EXHIBIT C
-1-
Loan Agreement, together with copies of the financial
statements delivered pursuant to Section 5.1(c) thereof and
such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to
enter into this Assignment and Acceptance; (c) agrees that it
will, independently and without reliance upon the Assignor, the
Administrative Agent, the Letter of Credit Issuer or the Credit
Card Issuer, 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 decisions in taking or not
taking action under the Loan Agreement, the other Loan
Documents or any other instrument or document furnished
pursuant hereto or thereto; (d) appoints and authorizes the
Administrative Agent to take such action as agent on its behalf
and to exercise such powers and discretion under the Loan
Agreement, the other Loan Documents or any other instrument or
document furnished pursuant hereto or thereto as are delegated
to the Administrative Agent by the terms thereof, together with
such powers as are incidental thereto; and (e) agrees that it
will be bound by the provisions of the Loan Agreement and will
perform in accordance with its terms all the obligations which
by the terms of the Loan Agreement are required to be performed
by it as a Lender.
4. The effective date of this Assignment and Acceptance shall be
__________ _____, ________ (the "EFFECTIVE DATE"). Following the
execution of this Assignment and Acceptance, it will be delivered
to the Administrative Agent for acceptance by it and recording by
the Administrative Agent pursuant to the Loan Agreement, effective
as of the Effective Date (which shall not, unless otherwise agreed
to by the Administrative Agent, be earlier than five Business Days
after the date of such acceptance and recording by the
Administrative Agent).
5. Upon such acceptance and recording, from and after the Effective
Date, the Administrative Agent shall make all payments in respect
of the Assigned Interest (including payments of principal,
interest, fees and other amounts) to the Assignee whether such
amounts have accrued prior to the Effective Date or accrue
subsequent to the Effective Date. The Assignor and the Assignee
shall make all appropriate adjustments in payments by the
Administrative Agent for periods prior to the Effective Date or
with respect to the making of this assignment directly between
themselves.
6. From and after the Effective Date, (a) the Assignee shall be a
party to the Loan Agreement and, to the extent provided in this
Assignment and Acceptance, have the rights and obligations of a
Lender thereunder and under the other Loan Documents and shall be
bound by the provisions thereof and (b) the Assignor shall, to the
extent provided in this Assignment and Acceptance, relinquish its
rights and be released from its obligations under the Loan
Agreement.
7. This Assignment and Acceptance shall be governed by and construed
in accordance with the laws of the State of Washington.
EXHIBIT C
-2-
8. This Assignment and Acceptance may be executed by one or more of
the parties to this Assignment and Acceptance on any number of
separate counterparts (including by facsimile transmission), and
all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed as of the date first above written by their
respective duly authorized officers on Schedule 1 hereto.
EXHIBIT C
-3-
SCHEDULE I
TO ASSIGNMENT AND ACCEPTANCE
RELATING TO THE AMENDED AND RESTATED LOAN AGREEMENT,
DATED AS OF APRIL 28, 1999
AMONG
CUTTER & BUCK INC.,
THE LENDERS NAMED THEREIN
AND
WASHINGTON MUTUAL BANK DOING BUSINESS AS WESTERN BANK,
AS AGENT FOR THE LENDERS
(IN SUCH CAPACITY, THE "ADMINISTRATIVE AGENT")
--------------------------------------------------------------------------------
Name of Assignor:
Name of Assignee:
Effective Date of Assignment:
Credit Principal
Facility Assigned Amount Assigned Commitment Percentage Assigned(1)
----------------- --------------- ---------------------------------
$ . %
[NAME OF ASSIGNEE] [NAME OF ASSIGNOR]
By By
--------------------------------- ----------------------------------
Name: Name:
Title: Title:
---------------
(1) Calculate the Commitment Percentage that is assigned to at least 15
decimal places and show as a percentage of the aggregate commitments of all
Lenders.
Schedule I
-1-
Accepted for Recordation in the Consent To:(2)
Register:
Washington Mutual Bank doing Cutter & Buck, Inc.
business as Western Bank, as
Administrative Agent
By By
--------------------------------- ----------------------------------
Name: Name:
Title: Title:
Washington Mutual Bank doing business
as Western Bank, as Administrative
Agent, Letter of Credit Issuer and
Credit Card Issuer
By
----------------------------------
Name:
Title:
---------------
(2) If required.
Schedule I
-2-
EXHIBIT D
COMMITMENTS
LENDER COMMITMENT
------ ----------
Washington Mutual Bank $30,000,000.00
doing business as Western
Bank
Bank of America National $10,000,000.00
Trust and Savings Association
doing business as Seafirst Bank
EXHIBIT D
-1-
