EXECUTION COPY
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AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
FLEET RETAIL FINANCE INC.,
AS ADMINISTRATIVE AGENT AND
COLLATERAL AGENT FOR THE LENDERS REFERENCED HEREIN,
FLEET NATIONAL BANK,
AS ISSUER,
SHOPKO STORES, INC.,
AS LEAD BORROWER
FOR:
SHOPKO STORES, INC.
PAMIDA, INC.,
AS BORROWERS,
AND
EACH OF THE SUBSIDIARIES OF SHOPKO STORES, INC.,
NAMED HEREIN,
EACH AS A GUARANTOR
-------------------------------------
FLEET SECURITIES, INC.,
AS ARRANGER
GENERAL ELECTRIC CAPITAL CORPORATION
AS SYNDICATION AGENT
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DATED AS OF AUGUST 19, 2003
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EXECUTION COPY
TABLE OF CONTENTS
Page
SECTION 1 DEFINITIONS............................................................................................ 9
SECTION 2 THE REVOLVING CREDIT................................................................................... 35
2.1 Establishment Of Revolving Credit............................................................ 35
2.2 Advances In Excess Of Borrowing Base (OverLoans)............................................. 36
2.3 Risks Of Value Of Collateral................................................................. 37
2.4 Commitment To Make Revolving Credit Loans And Support Letters Of Credit...................... 37
2.5 Loan Requests................................................................................ 37
2.6 Making Of Revolving Credit Loans............................................................. 39
2.7 Swing Line Loans............................................................................. 39
2.8 [Intentionally Omitted] ..................................................................... 40
2.9 The Loan Account............................................................................. 40
2.10 The Notes.................................................................................... 41
2.11 Payment Of The Loan Account.................................................................. 41
2.12 Interest On Loans............................................................................ 43
2.13 Voluntary Reduction Of Commitment And Revolving Credit Ceiling............................... 43
2.14 Renewal Fee.................................................................................. 44
2.15 Administrative Agent's Fee................................................................... 44
2.16 Unused Fee................................................................................... 44
2.17 Early Termination Fee........................................................................ 44
2.18 Procedures For Issuance Of L/Cs.............................................................. 45
2.19 Fees For L/Cs................................................................................ 45
2.20 Concerning L/Cs.............................................................................. 47
2.21 Changed Circumstances........................................................................ 48
2.22 Designation Of Lead Borrower As Borrowers' Agent............................................. 49
2.23 Lenders' Commitments......................................................................... 50
2.24 Replacement Of Lender....................................................................... 51
SECTION 3 CONDITIONS PRECEDENT................................................................................... 52
3.1 Corporate Due Diligence...................................................................... 52
3.2 Legal Opinions............................................................................... 53
3.3 Documents.................................................................................... 53
3.4 Officers' Certificates....................................................................... 53
3.5 Representations And Warranties............................................................... 53
3.6 All Fees And Expenses Paid................................................................... 53
3.7 No Default................................................................................... 53
3.8 No Adverse Change............................................................................ 53
3.9 Perfection Of Encumbrances................................................................... 53
3.10 [Intentionally Omitted]...................................................................... 53
3.11 Consents And Approvals....................................................................... 53
3.12 No Defaults Under Applicable Law Or Material Agreements...................................... 54
3.13 No Litigation................................................................................ 54
3.14 No Negative Impact On Syndication............................................................ 54
3.15 No Change In Governmental Regulations........................................................ 54
3.16 Excess Availability.......................................................................... 54
3.17 [Intentionally Omitted]...................................................................... 54
3.18 [Intentionally Omitted]...................................................................... 54
3.19 [Intentionally Omitted]...................................................................... 54
3.20 [Intentionally Omitted]...................................................................... 54
3.21 Benefit of Conditions Precedent.............................................................. 54
SECTION 4 GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS...................................................... 55
4.1 Payment And Performance Of Liabilities....................................................... 55
4.2 Due Organization; Authorization; No Conflicts................................................ 55
4.3 Trade Names.................................................................................. 56
4.4 Intellectual Property........................................................................ 57
4.5 Locations.................................................................................... 57
4.6 Title To Assets; Liens; Limitations on Liens................................................. 58
4.7 Indebtedness................................................................................. 60
4.8 Insurance.................................................................................... 60
4.9 Licenses..................................................................................... 61
4.10 Leases....................................................................................... 61
4.11 Requirements Of Law.......................................................................... 62
4.12 Labor Relations.............................................................................. 62
4.13 Maintain Collateral.......................................................................... 63
4.14 Taxes........................................................................................ 63
4.15 No Margin Stock; Investment Company.......................................................... 65
4.16 ERISA........................................................................................ 65
4.17 Hazardous Materials.......................................................................... 65
4.18 Litigation................................................................................... 66
4.19 Dividends; Investments; Corporate Action..................................................... 66
4.20 Loans........................................................................................ 67
4.21 Protection Of Assets......................................................................... 68
4.22 Lines of Business............................................................................ 68
4.23 Affiliate Transactions....................................................................... 68
4.24 Further Assurances........................................................................... 68
4.25 Adequacy Of Disclosure....................................................................... 69
4.26 No Restrictions On Liabilities............................................................... 69
4.27 Permitted Refinancing of Certain Indebtedness; Amendments.................................... 70
4.28 Limitations on Capital Expenditures.......................................................... 70
4.29 Store Closings............................................................................... 70
4.30 Certain Proceeds............................................................................. 70
4.31 Post Closing Matters......................................................................... 71
4.32 Other Covenants.............................................................................. 71
SECTION 5 FINANCIAL REPORTING AND PERFORMANCE COVENANTS.......................................................... 71
5.1 Maintain Records............................................................................. 71
5.2 Access To Records............................................................................ 72
5.3 Immediate Notice To Administrative Agent..................................................... 72
5.4 Borrowing Base Certificate................................................................... 74
5.5 Monthly Reports.............................................................................. 74
5.6 Quarterly Reports............................................................................ 74
5.7 Annual Reports............................................................................... 75
5.8 Officers' Certificates....................................................................... 75
5.9 Inventories, Appraisals, And Audits.......................................................... 76
5.10 Additional Financial Information............................................................. 77
5.11 Financial Performance Covenants.............................................................. 77
SECTION 6 USE OF COLLATERAL...................................................................................... 78
6.1 Use Of Inventory Collateral.................................................................. 78
6.2 Inventory Quality............................................................................ 78
6.3 Adjustments and Allowances................................................................... 78
6.4 Validity of Accounts......................................................................... 78
6.5 Notification to Account Debtors.............................................................. 79
SECTION 7 CASH MANAGEMENT; PAYMENT OF LIABILITIES................................................................ 79
7.1 Depository Accounts.......................................................................... 79
7.2 Credit Card Receipts......................................................................... 80
7.3 The Concentration, Blocked, and Operating Accounts........................................... 80
7.4 Proceeds and Collections..................................................................... 81
7.5 Payment of Liabilities....................................................................... 82
SECTION 8 GRANT OF SECURITY INTEREST............................................................................. 82
8.1 Grant of Security Interest................................................................... 82
8.2 Extent and Duration of Security Interest..................................................... 84
SECTION 9 ADMINISTRATIVE AGENT AS CREDIT PARTIES' ATTORNEY-IN-FACT............................................... 84
9.1 Appointment as Attorney-In-Fact.............................................................. 84
9.2 No Obligation to Act......................................................................... 85
SECTION 10 EVENTS OF DEFAULT..................................................................................... 85
10.1 Failure to Pay Loans......................................................................... 85
10.2 Failure to Make Other Payments............................................................... 85
10.3 Failure to Perform Covenant Or Liability (No Grace Period)................................... 86
10.4 Failure to Perform Covenant or Liability (Grace Period)...................................... 86
10.5 Misrepresentation............................................................................ 86
10.6 Acceleration of Other Debt; Breach of Lease.................................................. 86
10.7 Uninsured Casualty Loss...................................................................... 86
10.8 Attachment; Judgment; Restraint of Business.................................................. 86
10.9 Business Failure............................................................................. 87
10.10 Bankruptcy................................................................................... 87
10.11 Indictment - Forfeiture...................................................................... 87
10.12 Challenge to Loan Documents.................................................................. 87
10.13 Change in Control............................................................................ 88
SECTION 11 RIGHTS AND REMEDIES UPON DEFAULT...................................................................... 88
11.1 Acceleration................................................................................. 88
11.2 Rights of Enforcement........................................................................ 88
11.3 Sale of Collateral........................................................................... 89
11.4 Occupation of Business Location.............................................................. 89
11.5 Grant of Nonexclusive License................................................................ 90
11.6 Assembly of Collateral....................................................................... 90
11.7 Rights and Remedies.......................................................................... 90
SECTION 12 FUNDINGS AND DISTRIBUTIONS............................................................................ 91
12.1 Funding Procedures........................................................................... 91
12.2 Swing Line Loans............................................................................. 91
12.3 Administrative Agent's Covering of Funding................................................... 92
12.4 Ordinary Course Distributions................................................................ 94
SECTION 13 ACCELERATION AND LIQUIDATION.......................................................................... 95
13.1 Acceleration Notices......................................................................... 95
13.2 Acceleration................................................................................. 95
13.3 Initiation of Liquidation.................................................................... 95
13.4 Actions at and Following Initiation of Liquidation........................................... 95
13.5 Administrative Agent's Conduct of Liquidation................................................ 96
13.6 Distribution of Liquidation Proceeds......................................................... 96
13.7 Relative Priorities to Proceeds of Liquidation............................................... 97
SECTION 14 THE ADMINISTRATIVE AGENT.............................................................................. 98
14.1 Appointment of the Administrative Agent...................................................... 98
14.2 Responsibilities of Administrative Agent; Other Agents....................................... 98
14.3 Concerning Distributions by the Administrative Agent......................................... 99
14.4 Dispute Resolution........................................................................... 100
14.5 Distributions of Notices and of Documents.................................................... 100
14.6 Confidential Information..................................................................... 100
14.7 Reliance By Administrative Agent............................................................. 101
14.8 Non-Reliance on Administrative Agent and Other Lenders....................................... 101
14.9 Indemnification.............................................................................. 102
14.10 Resignation of Administrative Agent.......................................................... 102
SECTION 15 ACTION BY ADMINISTRATIVE AGENT - CONSENTS - AMENDMENTS - WAIVERS...................................... 103
15.1 Administration of Credit Facilities.......................................................... 103
15.2 Actions Requiring or on Direction of Majority Lenders........................................ 103
15.3 Actions Requiring or on Direction Of Supermajority Revolving Credit Lenders.................. 103
15.4 Actions Requiring or Directed by Unanimous Consent........................................... 104
15.5 Actions Requiring Swing Line Lender Consent.................................................. 105
15.6 Actions Requiring Issuer Consent............................................................. 105
15.7 Actions Requiring Administrative Agent's Consent............................................. 105
15.8 Miscellaneous Actions........................................................................ 106
15.9 Actions Requiring Lead Borrower's Consent.................................................... 106
15.10 NonConsenting Lender......................................................................... 107
SECTION 16 ASSIGNMENTS BY LENDERS................................................................................ 108
16.1 Assignments and Assumptions.................................................................. 108
16.2 Assignment Procedures........................................................................ 109
16.3 Effect of Assignment......................................................................... 109
SECTION 17 NOTICES............................................................................................... 110
17.1 Notice Addresses............................................................................. 110
17.2 Notice Given................................................................................. 111
SECTION 18 TERMINATION........................................................................................... 112
18.1 Termination of Revolving Credit.............................................................. 112
18.2 Actions on Termination....................................................................... 112
SECTION 19 GUARANTY.............................................................................................. 113
19.1 Guaranty..................................................................................... 113
19.2 No Impairment of Guaranty.................................................................... 114
19.3 Subrogation.................................................................................. 114
19.4 Credit Agreement............................................................................. 114
19.5 Maximum Guaranteed Amount.................................................................... 114
SECTION 20 MISCELLANEOUS......................................................................................... 115
20.1 Protection of Collateral..................................................................... 115
20.2 Publicity.................................................................................... 115
20.3 Successors and Assigns....................................................................... 115
20.4 Severability................................................................................. 115
20.5 Amendments; Course of Dealing................................................................ 115
20.6 Power of Attorney............................................................................ 116
20.7 Application of Proceeds...................................................................... 116
20.8 Increased Costs.............................................................................. 117
20.9 Costs and Expenses of the Administrative Agent............................................... 117
20.10 Copies and Facsimiles........................................................................ 118
20.11 Governing Law................................................................................ 118
20.12 Consent to Jurisdiction...................................................................... 118
20.13 Indemnification.............................................................................. 119
20.14 Rules of Construction........................................................................ 119
20.15 Intent....................................................................................... 121
20.16 Participations............................................................................... 122
20.17 Right of Set-Off............................................................................. 122
20.18 Pledges...................................................................................... 122
20.19 Maximum Interest Rate........................................................................ 122
20.20 Waivers...................................................................................... 123
20.21 Additional Waivers........................................................................... 123
20.22 Confidentiality.............................................................................. 125
EXHIBITS
Exhibit A Form of Swing Line Note
Exhibit B-1 Form of Revolving Credit Note
Exhibit C Restatement Documents List
Exhibit D Form of Borrowing Base Certificate
Exhibit E Form of Assignment and Acceptance
Exhibit F Form of Blocked Account Agreement
Exhibit G Form of DDA Notification
Exhibit H Form of Credit Card Notification
SCHEDULES
Schedule 1.1(a) Payables
Schedule 2.23 Commitments and Percentages
Schedule 4.2(b) Corporate Information
Schedule 4.2(d) Corporate Structure
Schedule 4.2(e) Affiliates
Schedule 4.3 Trade Names
Schedule 4.5 Locations and Landlords
Schedule 4.6(a) Encumbrances
Schedule 4.6(b) Consigned Property
Schedule 4.7 Existing Indebtedness
Schedule 4.8 Insurance Policies
Schedule 4.10 Leases
Schedule 4.12 Employee Matters
Schedule 4.14 Taxes
Schedule 4.18 Litigation
Schedule 4.19 Existing Investments
Schedule 4.23 Affiliate Transactions
Schedule 5.5 Financial Reporting Requirements
Schedule 7.1 Deposit Accounts
Schedule 7.2 Credit Card Arrangements
Schedule 7.3 Blocked Account Banks
THIS AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT, dated
as of August 19, 2003, is made by and among Fleet Retail Finance Inc., as
Administrative Agent and Collateral Agent (in any such capacity, herein the
"Administrative Agent"), a Delaware corporation with offices at 00 Xxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000, as agent for the ratable benefit of the Issuer (as
defined below) and the "Lenders", who are, at present, those financial
institutions identified on the signature pages of this Agreement and who in the
future are those Persons (if any) who become "Lenders" in accordance with the
provisions of Section 2.23, below; Fleet National Bank ("Fleet"), a bank
organized under the laws of the United States of America, having an office at
000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, as issuing bank (in such
capacity, the "Issuer"); ShopKo Stores, Inc. (in such capacity, the "Lead
Borrower"), a Wisconsin corporation with its principal executive offices at 000
Xxxxxxx Xxx, Xxxxx Xxx, Xxxxxxxxx, 00000, as agent for ShopKo Stores, Inc. and
Pamida, Inc., a Delaware corporation with its principal executive offices at
0000 X Xxxxxx, Xxxxx, Xxxxxxxx 00000, (each, a "Borrower" and collectively with
the Lead Borrower, the "Borrowers") and each of the guarantors listed in
Schedule 4.2(b) (each a "Guarantor" and collectively, "Guarantors"), and AMENDS
AND RESTATES IN FULL the Loan and Security Agreement, dated as of March 9, 2001,
by and among the Borrowers, each of the Guarantors, the lenders and financial
institutions party thereto (the "Original Lenders"), the Administrative Agent
and the Issuer (the "Original Loan and Security Agreement"); this amendment and
restatement of the Original Loan and Security Agreement, as amended,
supplemented, restated or otherwise modified from time to time, is hereinafter
referred to as this "Agreement").
W I T N E S S E T H:
WHEREAS, the Borrowers, the Guarantors and certain of the
Lenders are parties to the Original Loan and Security Agreement; and
WHEREAS, the Lead Borrower has requested that the
Administrative Agent arrange for the amendment and restatement of the Original
Loan and Security Agreement to restructure the obligations of the Borrowers
thereunder (the "Refinancing"), including provision for the purchase of the
Loans and Revolving Credit Commitments of the Original Lenders by the Lenders;
and
WHEREAS, it is the intent of the Borrowers, the Guarantors,
the Lenders, the Administrative Agent and the Issuer that this Agreement amend
and restate in its entirety the Original Loan and Security Agreement and that,
from and after the Restatement Effective Date, the Original Loan and Security
Agreement shall be of no force and effect except to evidence the terms and
conditions under which the Borrowers incurred obligations and liabilities prior
to the Restatement Effective Date (as evidenced by the Original Loan and
Security Agreement and the Administrative Agent's books and records); and
WHEREAS, the Lenders are willing to amend and restate the
Original Loan and Security Agreement and continue to extend credit to the
Borrowers upon and subject to the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the agreements hereinafter
set forth, the parties hereto hereby agree as follows:
SECTION 1
DEFINITIONS
As used herein, the following terms have the following
meanings or are defined in the section of this Agreement so indicated:
"Account Advance Rate": 85%.
"Accounts" and "Accounts Receivable": include, without
limitation, "accounts" as defined in the Uniform Commercial Code in effect in
the State of New York on the date hereof and also all: accounts, accounts
receivable, health-care-insurance receivables, Receivables and rights to payment
(whether or not earned by performance) (i) for property that has been or is to
be sold, leased, assigned, or otherwise disposed of; (ii) for services rendered
or to be rendered; (iii) for a policy of insurance issued or to be issued
insuring Accounts or Inventory; and (iv) arising out of the use of a credit or
charge card or information contained on or used with such card; and also all
reclaimed, returned, rejected or repossessed Inventory (if any), the sale of
which gave rise to any Account.
"ACH": Automated clearing house.
"Acquisition": The purchase or acquisition of all or
substantially all of the assets of any Person, the purchase of a controlling
equity interest in any Person, or the merger or consolidation of any Person with
any other Person, in any transaction or group of transactions which are part of
a common plan.
"Administrative Agent": As defined in the Preamble hereto.
"Administrative Agent's Cover": As defined in Section
12.3(c)(i).
"Administrative Agent's Rights and Remedies": As defined in
Section 11.7.
"Affiliate": The following:
(a) With respect to any two Persons, a
relationship in which (i) one such Person holds, directly or
indirectly, not less than twenty five percent (25%) of the
capital stock, beneficial interests, partnership interests, or
other equity interests of the other Person; or (ii) one such
Person has, directly or indirectly, the right, under ordinary
circumstances, to vote for the election of a majority of the
directors (or other body or Person who has those powers
customarily vested in a board of directors of a corporation)
of the other Person; or (iii) not less than twenty five
percent (25%) of their respective ownership is directly or
indirectly held by the same third Person.
(b) Any Person which: is a parent,
brother-sister or Subsidiary, of any Credit Party; could have
its tax returns or financial statements consolidated with any
Credit Party's; could be a member of the same controlled group
of corporations (within the meaning of Section 1563(a)(1), (2)
and (3) of the Internal Revenue Code of 1986, as amended from
time to time) of which any Credit Party is a member; controls,
is controlled by or is under common control with any Credit
Party.
"Agent's Fee": As defined in Section 2.15.
"Agreement": As defined in the Preamble hereto.
"Applicable Law": As to any Person: (i) All statutes, rules,
regulations, orders, or other requirements having the force of law and (ii) all
court orders and injunctions, arbitrator's decisions, and/or similar rulings, in
each instance ((i) and (ii)) of or by any federal, state, municipal, and other
Governmental Authority, or court, tribunal, panel, or other body which has or
claims jurisdiction over such Person, or any property of such Person.
"Applicable Margin": The rates for Base Margin Loans and
Eurodollar Loans based upon the following criteria:
Base Margin Eurodollar Loan
Loan Applicable Applicable
Level Average Availability Margin Margin
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1 >300,000,000.00 0% 1.50%
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2 < or = 300,000,000.00 0% 1.75%
and >$100,000,000.00
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3 < or = 100,000,000.00 0.25% 2.00%
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The Applicable Margin shall initially be established at the rates set forth in
Level 1 and shall remain at such Level until the first Change Date. Thereafter
the Applicable Margin shall be determined on a quarterly basis as of the first
day of each Fiscal quarter (the "Change Date"), based on the Average
Availability for the preceding Fiscal quarter; provided that the Applicable
Margin with respect to any Loan outstanding as of the Change Date shall change
effective as of the Interest Payment Date with respect to such Loan first
occurring on or after such Change Date. Notwithstanding the foregoing, from and
after the Restatement Effective Date, Level 3 shall be in effect for each day in
any month (as of the first day of such month) if Availability falls below
$45,000,000.00 during such month regardless of the then applicable Average
Availability. During the existence of an Event of Default, interest shall accrue
at the rate set forth in Section 2.12(f).
"Appraised Inventory Liquidation Value": The product of (a)
the Cost of Eligible Inventory (net of Inventory Reserves) multiplied by (b) a
percentage, determined from the then most recent appraisal of the Inventory
Credit Parties' Inventory undertaken at the request of the Administrative Agent
by an independent appraiser reasonably acceptable to the Administrative Agent,
that reflects the appraiser's opinion of the net recovery on the Inventory
Credit Parties' Inventory in the event of an in-store liquidation of such
Inventory. The appraisal referred to in clause (b) of the preceding sentence
shall include Prescription Lists, at a value to be reasonably determined by the
Administrative Agent, based on the low range value therefore, as determined by
such independent appraisal.
"Appraised Inventory Percentage": 85%.
"Assignee Lender": As defined in Section 16.1(a).
"Assigning Lender": As defined in Section 16.1(a).
"Assignment and Acceptance": As defined in Section 16.2.
"Availability": The lesser of (a) or (b), where:
(a) is the result of ((i)- ((ii)+(iii)+(iv)),
where
(i) is the Revolving Credit Ceiling,
(ii) is the aggregate unpaid balance of
the Loan Account,
(iii) is, without duplication, the
aggregate undrawn Stated Amount of all then
outstanding L/Cs, and
(iv) is the aggregate amount of any
unreimbursed drawings under any L/C
and
(b) is the result of (i) - ((ii)+(iii)+(iv)),
where
(i) is the Borrowing Base,
(ii) is the aggregate unpaid balance of
the Loan Account,
(iii) is, without duplication, the
aggregate undrawn Stated Amount of all then
outstanding L/Cs, and
(iv) is the aggregate amount of any
unreimbursed drawings under any L/C.
"Availability Reserves": Such reserves as the Administrative
Agent from time to time determines (after consultation with the Lead Borrower
(whose consent to any Availability Reserve shall not be required)) in the
Administrative Agent's reasonable business judgment and in good faith as being
appropriate to reflect the impediments to the Administrative Agent's ability to
realize upon the Collateral. Without limiting the generality of the foregoing,
Availability Reserves may include (but are not limited to) reserves based on the
following:
(a) Customer Credit Liabilities.
(b) To the extent the Inventory or Accounts
subject to such taxes or other governmental charges or claims
are otherwise included in the Borrowing Base, taxes and other
governmental charges or claims, including, ad valorem,
personal property, and other taxes and claims for wages, in
each case, which have priority over the Collateral Interests
of the Administrative Agent in the Collateral.
(c) Payables beyond normal terms, other than
payables described on Schedule 1.1(a); provided that the
amount of the payables so described are not increased.
(d) Amounts payable to Payless for sales of
Payless Inventory pursuant to the Payless Agreement.
"Average Availability": As to any period, the average
Availability for each day in such period.
"Bankruptcy Code": Title 11, U.S.C., as amended from time to
time.
"Base Rate": For any day, (a) the Base Rate announced from
time to time by Fleet (or any successor in interest to Fleet) as its "Base Rate"
or (b) if no such Base Rate is announced by Fleet, the Federal Funds Effective
Rate in effect on such day plus one-half of one percent (0.50%) per annum. Any
change in the Base Rate due to a change in Fleet's Base Rate or the Federal
Funds Effective Rate shall be effective on the effective date of such change in
Fleet's Base Rate or the Federal Funds Effective Rate, respectively.
"Base Margin Loan": Each Loan while bearing interest at the
Base Margin Rate.
"Base Margin Rate": The aggregate of Base Rate plus the
Applicable Margin for Base Margin Loans.
"Blocked Account": Any DDA into which the contents of any
other DDA is transferred and any account maintained by the Administrative Agent
to receive the proceeds of Capital Events and casualty insurance proceeds
related to Collateral.
"Blocked Account Agreement": An agreement in the form of
Exhibit F, with such changes as may be acceptable to the Administrative Agent.
"Borrower" and "Borrowers": As defined in the Preamble hereto.
"Borrowing Base": The aggregate of the following:
The aggregate of the face amount of Eligible Credit Card
Receivables and Eligible Pharmacy Accounts multiplied by the Account Advance
Rate
plus
the lesser of (a) the Cost of Eligible Inventory (net
of Inventory Reserves) multiplied by the Inventory Advance
Rate or (b) the Appraised Inventory Percentage of the
Appraised Inventory Liquidation Value
minus
the aggregate of the Availability Reserves.
"Borrowing Base Certificate": As defined in Section 5.4.
"Business Day": Any day other than (a) a Saturday or Sunday;
(b) any day on which banks in Boston, Massachusetts or Green Bay, Wisconsin, and
when involving any DDA or Blocked Account, the office of the financial
institution at which that DDA or Blocked Account, as the case may be, is
maintained, generally are not open to the general public for the purpose of
conducting commercial banking business; or (c) a day on which the principal
office of the Administrative Agent is not open to the general public to conduct
business.
"Capital Event": The issuance by any Credit Party on or after
the Restatement Effective Date (a) of Indebtedness for borrowed money (other
than Indebtedness permitted
pursuant to Sections 4.7(f) and 4.7(g)) or (b) of any equity interest for cash,
excluding (i) any sale or issuance to management, employees or directors
pursuant to stock option or similar plans and (ii) the sale or issuance of
equity resulting in an aggregate amount of gross proceeds on and after the
Restatement Effective Date not to exceed $25,000,000.00. Nothing contained in
this definition or in any provision relating to Capital Events shall permit or
be deemed to permit any Credit Party to effectuate a Capital Event which is
otherwise prohibited hereunder.
"Capital Expenditures": The expenditure of funds or the
incurrence of liabilities which are capitalized in accordance with GAAP.
"Capital Lease": Any lease which is capitalized in accordance
with GAAP.
"Cash Control Event": Either (a) the occurrence and
continuance of any Event of Default, or (b) Availability at any time is less
than $60,000,000.00 for three consecutive Business Days or less than
$45,000,000.00 on any Business Day. For purposes hereof, the occurrence of a
Cash Control Event under clause (b) hereof shall be deemed continuing
notwithstanding that Availability may thereafter exceed the amounts set forth in
such clause unless and until Availability exceeds $85,000,000.00 for thirty
consecutive days, in which case a Cash Control Event shall no longer be deemed
to be continuing for purposes of clause (b) hereof (until a subsequent
occurrence of (b) above).
"Change in Control": The occurrence of any of the following:
(a) The acquisition, by any group of persons
(within the meaning of the Securities Exchange Act of 1934, as
amended) or by any Person, of beneficial ownership (within the
meaning of Rule 13d-3 of the Securities and Exchange
Commission) of 33 1/3% or more of the issued and outstanding
capital stock of the Lead Borrower having the right, under
ordinary circumstances, to vote for the election of directors
of the Lead Borrower, other than (i) the Lead Borrower or (ii)
any trustee or other fiduciary holding securities under an
employee benefit plan of the Lead Borrower.
(b) More than half of the persons who were
directors of the Lead Borrower on the first day of any period
consisting of twelve (12) consecutive calendar months (the
first of which twelve (12) month periods commencing with the
first day of the month during which this Agreement was
executed), cease, for any reason other than retirement, death
or disability, to be directors of the Lead Borrower, and their
respective replacements are not nominated or appointed by a
majority of the Persons who were directors on the first day of
such twelve (12) consecutive calendar months or who were
nominated or appointed by directors so nominated or appointed.
(c) Any failure of the Lead Borrower to own,
beneficially and of record, 100% of the capital stock of all
other Credit Parties, either directly or indirectly through
one or more other Credit Parties.
"Chattel Paper": As defined in the Uniform Commercial Code as
in effect in the State of New York on the date hereof.
"Collateral": As defined in Section 8.1.
"Collateral Interest": Any interest in property to secure an
obligation, including, without limitation, a security interest, lien, mortgage,
or deed of trust.
"Commitment": As to any Lender, the Revolving Credit
Commitment of such Lender.
"Concentration Account": As defined in Section 7.3.
"Consent": Actual consent given by the Lender from whom such
consent is sought; or the passage of seven (7) Business Days from receipt of
written notice to a Lender from the Administrative Agent of a proposed course of
action to be followed by the Administrative Agent without such Lender's giving
the Administrative Agent written notice of that Lender's objection to such
course of action, provided that the Administrative Agent may rely on such
passage of time as consent by a Lender only if such written notice states that
consent will be deemed effective if no objection is received within such time
period.
"Consolidated": When used to modify a financial term, test,
statement, or report, refers to the application or preparation of such term,
test, statement or report (as applicable) based upon the consolidation, in
accordance with GAAP, of the financial condition or operating results of the
Lead Borrower and its Subsidiaries.
"Cost": The lower of (a) or (b), where:
(a) is the calculated cost of purchases, based
upon the accounting practices of the Credit Parties in effect
on the date on which this Agreement was executed, as such
calculated cost is determined from the Inventory Credit
Parties' perpetual inventory system.
(b) is, the value of Inventory at market, as
determined in accordance with GAAP.
"Cost" does not include inventory capitalization costs or other non-purchase
price charges (such as freight) used in the Inventory Credit Parties'
calculation of cost of goods sold.
"Costs of Collection": Includes, without limitation, all
reasonable attorneys' fees and out-of-pocket expenses incurred by the
Administrative Agent, and all reasonable out-of-pocket costs incurred by the
Administrative Agent in the administration of the Liabilities and/or the Loan
Documents, including, without limitation, reasonable costs and expenses
associated with travel by or on behalf of the Administrative Agent, where such
costs and expenses are related to or in respect of the Administrative Agent's:
administration and management of the Liabilities; negotiation, documentation,
and amendment of any Loan Document; or efforts to preserve, protect, collect, or
enforce the Collateral, the Liabilities, and/or the Administrative
Agent's Rights and Remedies and/or any of the rights and remedies of the
Administrative Agent against or in respect of any guarantor or other person
liable in respect of the Liabilities (whether or not suit is instituted in
connection with such efforts). "Costs of Collection" shall also include the
reasonable fees and expenses of Lenders' Special Counsel. The Costs of
Collection are Liabilities, and at the Administrative Agent's option may bear
interest at the then effective Base Margin Rate.
"Covenant Compliance Event": Availability at any time is less
than $45,000,000.00.
"Credit Parties": The Borrowers, the Guarantors and any other
Subsidiary of the Lead Borrower that becomes a party to any Loan Document.
"Customer Credit Liability": Gift certificates, merchandise
credits, layaway obligations, frequent shopping programs, and similar
liabilities of any Credit Party to its retail customers and prospective
customers.
"DDA": Any checking or other demand daily depository account
maintained by any Credit Party in which proceeds of any Credit Party's Inventory
or Accounts are deposited.
"Default": Any occurrence, circumstance, or state of facts
with respect to a Credit Party which (a) is an Event of Default; or (b) would
become an Event of Default if any requisite notice were given and/or any
requisite period of time were to run and such occurrence, circumstance, or state
of facts were not absolutely cured or waived in writing by the requisite Lenders
hereunder within any applicable grace period.
"Delinquent Lender": As defined in Section 12.3(c).
"Deposit Account": As defined in the Uniform Commercial Code
as in effect in the State of New York on the date hereof.
"Diversion Inventory": Inventory purchased and/or held by a
Credit Party for sale to a retailer, wholesaler, distributor or other
non-consumer who is not a Credit Party.
"Documentary L/Cs": L/Cs issued pursuant to this Agreement for
the account of any Borrower to support any Inventory Credit Party's purchases in
the ordinary course of business of Inventory for use in its retail store
business, the drawing under which requires the delivery of bills of lading,
airway bills or other similar types of documents of title.
"Documents": As defined in the Uniform Commercial Code in
effect in the State of New York on the date hereof.
"Early Termination Fee": As defined in Section 2.17.
"EBITDA": Consolidated earnings before interest, taxes,
depreciation, and amortization, each as determined in accordance with GAAP;
EBITDA shall be calculated to
exclude the effect on earnings of any one-time non-cash charges related to store
closings permitted by Section 4.29.
"Eligible Assignee": A bank, insurance company, finance
company or other financial institution or fund engaged in the business of making
or investing in commercial loans in the ordinary course of its business having a
combined capital and surplus or assets under management in excess of
$300,000,000 or any Affiliate of any Lender, or any Person to whom a Lender
assigns its rights and obligations under this Agreement as part of a programmed
assignment and transfer of such Lender's rights in and to a material portion of
such Lender's portfolio of asset-based credit facilities.
"Eligible Credit Card Receivables": Accounts of any Inventory
Credit Party due on a non-recourse basis (other than any unasserted chargebacks)
from major credit card processors as arise in the ordinary course of business,
and as have been earned by performance. Unless otherwise approved in writing by
the Administrative Agent, none of the following shall be deemed to be Eligible
Credit Card Receivables:
(a) Accounts that have been outstanding for more
than six (6) Business Days from the date of sale;
(b) Accounts with respect to which a Credit
Party does not have good, valid and marketable title thereto,
free and clear of any Encumbrance (other than Encumbrances
granted to the Administrative Agent, for its benefit and the
ratable benefit of the other Lenders, pursuant to the Loan
Documents and unasserted claims pursuant to the merchant bank
agreement relating to the credit card account);
(c) Accounts which are disputed, are with
recourse, or with respect to which a claim, counterclaim,
offset or chargeback has been asserted (to the extent of such
claim, counterclaim, offset or chargeback);
(d) Accounts in which the Administrative Agent
does not have a perfected security interest which is prior and
superior to all other security interests, claims and
Encumbrances (other than unasserted claims pursuant to the
merchant bank agreement relating to the credit card); and
(e) Accounts which the Administrative Agent
determines in its reasonable discretion and in good faith to
be uncertain of collection.
"Eligible Inventory": Inventory owned by any Inventory Credit
Party and maintained by an Inventory Credit Party at a warehouse or held for
sale in any of the Inventory Credit Parties' retail stores, in each case in the
United States of America (including its territories and possessions), which is
reflected in the perpetual inventory system of the Inventory Credit Parties, as
to which Inventory the Administrative Agent has a perfected security interest
which is prior and superior to all other security interests, claims, and
Encumbrances. "Eligible Inventory" also includes (a) Inventory ("Eligible L/C
Inventory") as to which a Documentary L/C has been
issued with an expiry date within sixty (60) days of such date of determination
and which, if owned by and in the possession of the applicable Inventory Credit
Party, would be treated as Eligible Inventory hereunder (as determined by the
Administrative Agent in good faith and in its reasonable discretion), but only
if such Inventory has been consigned to the Issuer or the applicable Inventory
Credit Party (along with delivery to the Issuer or such Inventory Credit Party,
as applicable, of the documents of title with respect thereto) and is subject to
custom broker agreement in form and substance satisfactory to the Administrative
Agent and (b) Eligible Pharmacy Inventory. In no event, however, does "Eligible
Inventory" include: any inventory in transit to any Inventory Credit Party
(other than Eligible L/C Inventory), any inventory in foreign locations (other
than Eligible L/C Inventory), prescription optical inventory, samples,
non-merchandise inventory (such as labels, bags, and packaging materials);
damaged goods; return to vendor merchandise; packaways; Diversion Inventory or
consigned inventory (including, without limitation, the Payless Inventory).
"Eligible L/C Inventory": As defined in the definition of
Eligible Inventory.
"Eligible Pharmacy Accounts": Pharmacy Accounts other than
those Accounts listed below unless such Accounts have been approved in writing
by the Administrative Agent:
(a) Pharmacy Accounts that have been outstanding
for more than sixty (60) days from invoice;
(b) All Pharmacy Accounts of an account debtor
if 25% or more of such account debtor's Pharmacy Accounts have
been outstanding for more than sixty (60) days from invoice;
(c) Pharmacy Accounts with respect to which a
Credit Party does not have good, valid and marketable title
thereto, free and clear of any Encumbrance (other than
Encumbrances granted to the Administrative Agent, for its
benefit and the ratable benefit of the other Secured Parties,
pursuant to the Loan Documents);
(d) Pharmacy Accounts which are disputed, are
with recourse, or with respect to which a claim, counterclaim,
offset or chargeback has been asserted (to the extent of such
claim, counterclaim, offset or chargeback);
(e) Pharmacy Accounts with respect to which the
Administrative Agent does not have a perfected security
interest which is prior and superior to all other security
interests, claims and Encumbrances; and
(f) Pharmacy Accounts collected at the
store-level.
"Eligible Pharmacy Inventory": Eligible Inventory consisting
of prescription and pharmaceutical merchandise which is, under prevailing
industry standards, a covered medication under medical insurance and
prescription drug plans together with all diabetic supplies.
"Employee Benefit Plan": As defined in ERISA.
"Encumbrance": Each of the following:
(a) A Collateral Interest or agreement to create
or grant a Collateral Interest; the interest of a lessor under
a Capital Lease; conditional sale or other title retention
agreement; a sale of accounts receivable or chattel paper; or
any other arrangement pursuant to which any Person is entitled
to any preference or priority with respect to the property or
assets of another Person or the income or profits of such
other Person; each of the foregoing whether consensual or
non-consensual and whether arising by way of agreement,
operation of law, legal process or otherwise.
(b) The filing of any financing statement under
the UCC or comparable law of any jurisdiction.
"End Date": The date upon which all of the following shall
have occurred (a) all Liabilities (excluding any unmatured contingent
reimbursement and indemnification Liabilities) have been paid in full, (b) all
L/C's issued hereunder have been terminated or secured to the satisfaction of
the Administrative Agent (or cash collateralized in an amount equal to 103% of
the undrawn face amount thereof in a manner acceptable to the Administrative
Agent) and (c) all obligations of any Lender to make loans and advances and to
provide other financial accommodations to the Borrowers hereunder shall have
been irrevocably terminated.
"Environmental Laws": All of the following:
(a) Any Applicable Law which regulates or
relates to, or imposes any standard of conduct or liability on
account of or in respect to environmental protection matters,
including, without limitation, Hazardous Materials, as are now
or hereafter in effect.
(b) The common law relating to damage to Persons
or property from Hazardous Materials.
"ERISA": The Employee Retirement Income Security Act of 1974,
as amended.
"ERISA Affiliate": Any Person which is under common control
with any Credit Party within the meaning of Section 4001 of ERISA or is part of
a group which includes any Credit Party and which would be treated as a single
employer under Section 414 of the Internal Revenue Code of 1986, as amended.
"Eurodollar Business Day": Any day which is both a Business
Day and a day on which the principal market in Eurodollars in which Fleet
participates is open for dealings in United States Dollar deposits.
"Eurodollar Loan": Any Loan which bears interest at a
Eurodollar Rate.
"Eurodollar Offer Rate": That rate of interest (rounded
upwards, if necessary, to the next 1/100 of 1%) determined by the Administrative
Agent to be the prevailing rate per
annum at which deposits in U.S. Dollars are offered to Fleet, by first-class
banks in the Eurodollar market in which Fleet participates at or about 10:00 AM
(Boston) two (2) Eurodollar Business Days before the first day of the Interest
Period for the subject Eurodollar Loan, for a deposit approximately in the
amount of the subject loan for a period of time approximately equal to such
Interest Period.
"Eurodollar Rate": That per annum rate which is the aggregate
of the Eurodollar Offer Rate plus the Applicable Margin for Eurodollar Loans,
except that, in the event that the Administrative Agent determines that any
Lender may be subject to the Reserve Percentage, the "Eurodollar Rate" shall
mean, with respect to any Eurodollar Loans then outstanding (from the date on
which that Reserve Percentage first became applicable to such Eurodollar Loans),
and with respect to all Eurodollar Loans thereafter made (but only so long as a
Lender is subject to a Reserve Percentage), an interest rate per annum equal the
sum of (a) plus (b), where:
(a) is the decimal equivalent of the following
fraction:
Eurodollar Offer Rate
---------------------
1 minus Reserve Percentage
(b) is the Applicable Margin for Eurodollar Loans.
"Events of Default": As defined in Article 10.
"Excluded Asset": All Operating Property of the Credit
Parties, all Subsidiary Stock and any other property of the Credit Parties which
is not Collateral hereunder.
"Exempt DDA": A depository account maintained by any Credit
Party, the only contents of which may be transfers from the Operating Account
which are used solely (i) for xxxxx cash purposes; or (ii) for payroll.
"Existing Indentures": Collectively, all of the following:
(a) Indenture between the Lead Borrower and
First Trust National Association, as Trustee, dated as of
March 12, 1992, as supplemented May 22, 1998, with respect to
the Lead Borrower's 9.25% Senior Notes due March 15, 2022;
(b) Indenture between the Lead Borrower and
First Trust National Association, as Trustee, dated as of July
15, 1993, as supplemented May 22, 1998 with respect to the
Lead Borrower's 9.00% Senior Notes due November 15, 2004.
"Federal Funds Effective Rate". For any day, a fluctuating
interest rate per annum equal to the weighted average of the rates on overnight
federal funds transactions with members of the Federal Reserve System arranged
by federal fund brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day that is a Business
Day, the average of the quotations for such day on such transactions received by
the
Administrative Agent from three federal funds brokers of recognized standing
selected by the Administrative Agent.
"Fiscal": When followed by "month" or "quarter", the relevant
fiscal period based on the Lead Borrower's fiscal year and accounting
conventions.
"Fleet": As defined in the Preamble hereto.
"GAAP": Principles which are consistent with those promulgated
or adopted by the Financial Accounting Standards Board and its predecessors (or
successors) in effect and applicable to that accounting period in respect of
which reference to GAAP is being made, provided, however, in the event of a
Material Accounting Change, then unless otherwise specifically agreed to by the
Administrative Agent and the Lead Borrower, (a) the Credit Parties' compliance
with the financial performance covenants imposed pursuant to Section 5.11 shall
be determined as if such Material Accounting Change had not taken place and (b)
the Lead Borrower shall include, with its monthly, quarterly, and annual
financial statements a schedule, certified by the Lead Borrower's chief
financial officer, on which the effect of such Material Accounting Change on
that statement shall be described.
"General Intangible": As defined in the Uniform Commercial
Code in effect in the State of New York on the date hereof.
"Goods": As defined in the Uniform Commercial Code in effect
in the State of New York on the date hereof, and also includes all things that
are movable when a security interest therein attaches and also all computer
programs embedded in goods and any supporting information provided in connection
with a transaction relating to the program if (i) the program is associated with
the goods in such manner that it customarily is considered part of the goods or
(ii) by becoming the owner of the goods, a Person acquires a right to use the
program in connection with the goods.
"Governmental Authority": Any nation or government, any state
or other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Guarantors": As defined in the Preamble hereto and includes
all direct and indirect wholly owned domestic subsidiaries of the Lead Borrower
now in existence or hereafter acquired or created.
"Hazardous Materials": Any (a) substance which is defined or
regulated as a hazardous material in or under any Environmental Law and (b) oil
in any physical state.
"Hedge Agreements": All obligations of any Person in respect
of interest rate swap agreements, currency swap agreements and other similar
agreements designed to hedge against fluctuations in interest rates or foreign
exchange rates.
"Indebtedness": All indebtedness and obligations of or assumed
by any Person on account of or in respect to, without duplication, any of the
following: (a) in respect of money
borrowed (including any indebtedness which is non-recourse to the credit of such
Person but which is secured by an Encumbrance on any asset of such Person)
whether or not evidenced by a promissory note, bond, debenture or other written
obligation to pay money; (b) in connection with any letter of credit or
acceptance transaction (including, without limitation, the face amount of all
letters of credit and acceptances issued for the account of such Person or
reimbursement on account of which such Person would be obligated); (c) in
connection with the sale or discount of accounts receivable or chattel paper of
such Person; (d) as lessee under Capital Leases; (e) on account of Hedge
Agreements; or (f) in connection with any sale and leaseback transaction.
"Indebtedness" also includes: (a) indebtedness of others secured by an
Encumbrance on any asset of such Person, whether or not such Indebtedness is
assumed by such Person; (b) any guaranty, endorsement, suretyship or other
undertaking pursuant to which that Person may be liable on account of any
obligation of any third party; or (c) the Indebtedness of a partnership or joint
venture for which such Person is liable as a general partner or joint venturer.
"Indemnified Person": As defined in Section 20.13.
"Information": As defined in Section 20.22.
"Intercompany Subordinated Demand Promissory Note" the
intercompany note required to be executed and delivered by the Credit Parties on
the Original Closing Date.
"Instruments": As defined in the Uniform Commercial Code in
effect in the State of New York on the date hereof.
"Interest Payment Date": With reference to (a) each Eurodollar
Loan: the last day of the Interest Period relating thereto (provided that if the
Interest Period is greater than three months in length, the Interest Payment
Date shall be the last day of the third month of such Interest Period and the
last day of the Interest Period); the Termination Date; and the End Date; and
(b) each Base Margin Loan: the first day of each month; the Termination Date;
and the End Date.
"Interest Period": The following:
(a) With respect to each Eurodollar Loan:
Subject to Subsection (c), below, the period commencing on the
date of the making or continuation of, or conversion to, the
subject Eurodollar Loan and ending one, two, three, or six
months and, if available and agreed to by each Lender, two
weeks, thereafter, as the Lead Borrower may elect by notice
(pursuant to Section 2.5) to the Administrative Agent.
(b) With respect to each Base Margin Loan:
Subject to Subsection (c), below, the period commencing on the
date of the making or continuation of or conversion to such
Base Margin Loan and ending on that date (i) as of which the
subject Base Margin Loan is converted to a Eurodollar Loan, as
the Lead Borrower may elect by notice (pursuant to Section
2.5) to the Administrative Agent, or (ii) on which the subject
Base Margin Loan is paid by the Borrowers.
(c) The setting of Interest Periods is in all
instances subject to the following:
(i) Any Interest Period for a Base
Margin Loan which would otherwise end on a day which
is not a Business Day shall be extended to the next
succeeding Business Day.
(ii) Any Interest Period for a
Eurodollar Loan which would otherwise end on a day
that is not a Business Day shall be extended to the
next succeeding Business Day, unless that succeeding
Business Day is in the next calendar month, in which
event such Interest Period shall end on the last
Business Day of the month during which the Interest
Period ends.
(iii) Subject to Subsection (iv) below,
any Interest Period applicable to a Eurodollar Loan,
which Interest Period begins on a day for which there
is no numerically corresponding day in the calendar
month during which such Interest Period ends, shall
end on the last Business Day of the month during
which that Interest Period ends.
(iv) Any Interest Period which would
otherwise end after the Termination Date shall end on
the Termination Date.
(v) The number of Interest Periods in
effect at any one time is subject to Section 2.12(d)
hereof.
"Inventory": Includes, without limitation, "inventory" as
defined in the Uniform Commercial Code in effect in the State of New York on the
date hereof and also all: (a) Goods which are leased by a Person as lessor; are
held by a Person for sale or lease or to be furnished under a contract of
service; are furnished by a Person under a contract of service; or consist of
raw materials, work in process, or materials used or consumed in a business; (b)
Goods of said description in transit; (c) Goods of said description which are
returned, repossessed and rejected; (d) packaging, advertising, and shipping
materials related to any of the foregoing; and (e) Documents which represent any
of the foregoing.
"Inventory Advance Rate":
(a) As to Eligible Inventory owned by the ShopKo
Inventory Pool, 75% of the Cost of such Eligible Inventory
(from January 1 through July 31 of each year), 77% of the Cost
of such Eligible Inventory (from August 1 though September 30
of each year) and 83% of the Cost of such Eligible Inventory
(at all other times); and
(b) as to Eligible Inventory owned by the Pamida
Inventory Pool, 70% of the Cost of such Eligible Inventory
(from January 1 through September 30 of each year) and 75% of
the Cost of such Eligible Inventory (at all other times).
"Inventory Credit Party": Any Credit Party which is a member
of the ShopKo Inventory Pool or the Pamida Inventory Pool.
"Inventory Reserves": Such Reserves as may be established from
time to time by the Administrative Agent (after consultation with the Lead
Borrower (whose consent to any Inventory Reserve shall not be required)),
without duplication, in the Administrative Agent's reasonable business judgment
with respect to the determination of the saleability, at retail, of the Eligible
Inventory or which reflect such other factors as affect the market value of the
Eligible Inventory. Without limiting the generality of the foregoing, Inventory
Reserves may include (but are not limited to) reserves based on, without
duplication, the following:
(a) Obsolescence (based upon Inventory on hand
beyond a given number of days);
(b) seasonality;
(c) shrinkage;
(d) imbalance;
(e) change in Inventory character;
(f) change in Inventory composition;
(g) change in Inventory mix;
(h) markdowns (both permanent and point of
sale); and
(i) retail markons and markups inconsistent with
prior period practice and performance; or advertising calendar
and planned advertising events.
"Investment Property": As defined in the Uniform Commercial
Code in effect in the State of New York on the date hereof.
"Issuer": The issuer of any L/C. The Issuer shall be Fleet or
such other Revolving Credit Lender (or Affiliate of a Revolving Credit Lender)
as the Administrative Agent may, in its discretion, select with the consent of
the Lead Borrower whose consent shall not be unreasonably delayed or withheld.
"L/C": Any letter of credit, the issuance of which is procured
by the Administrative Agent for the account of any Borrower and any acceptance
made on account of such letter of credit.
"Lead Borrower": As defined in the Preamble hereto.
"Lease": Any lease or other agreement, no matter how styled or
structured, pursuant to which a Credit Party is entitled to the use or occupancy
of any space.
"Lenders": The Revolving Credit Lenders.
"Lenders' Special Counsel": A single counsel, selected by the
Majority Lenders during the existence of an Event of Default, to represent the
interests of the Lenders in connection with the enforcement, attempted
enforcement, or preservation of any rights and remedies under this, or any other
Loan Document, as well as in connection with any "workout", forbearance, or
restructuring of the credit facility contemplated hereby.
"Letter-of-Credit Right": Any right to payment or performance
under an L/C, whether or not the beneficiary has demanded or is at the time
entitled to demand payment or performance.
"Liabilities": Collectively, the following:
(a) All and each of the following, whether now
existing or hereafter arising, under this Agreement or under
any of the other Loan Documents:
(i) Any and all direct and indirect
liabilities, debts, and obligations of each Credit
Party to the Secured Parties, each of every kind,
nature, and description.
(ii) Each obligation to repay any loan,
advance, indebtedness, note, obligation, overdraft,
or amount now or hereafter owing by any Credit Party
to the Secured Parties (including all future advances
whether or not made pursuant to a commitment by any
Secured Parties), whether or not any of such are
liquidated, unliquidated, primary, secondary,
secured, unsecured, direct, indirect, absolute,
contingent, or of any other type, nature, or
description, or by reason of any cause of action
which any Secured Party may hold against any Credit
Party.
(iii) All notes and other obligations of
each Credit Party now or hereafter assigned to or
held by any Secured Party, each of every kind,
nature, and description.
(iv) All interest, fees, charges,
expenses and other amounts which may be charged by
any Secured Party to any Credit Party and/or which
may be due from any Credit Party to any Secured Party
from time to time.
(v) All costs and expenses incurred or
paid by any Secured Party in respect of any agreement
between any Credit Party and such Secured Party or
instrument furnished by any Credit Party to any
Secured Party (including, without limitation, Costs
of Collection, attorneys' fees, and all reasonable
court and litigation costs and expenses).
(vi) Any and all covenants of each
Credit Party to or with any Secured Party and any and
all obligations of each Credit Party to act or to
refrain from acting in accordance with any agreement
between that Credit Party and any Secured Party or
instrument furnished by that Credit Party to any
Secured Party.
(vii) Each of the foregoing as if each
reference to "any Secured Party" includes each
Affiliate of the Administrative Agent.
(b) Any and all direct or indirect liabilities,
debts, and obligations of each Credit Party to the
Administrative Agent or any Affiliate of the Administrative
Agent, each of every kind, nature, and description owing on
account of any service or accommodation provided to, or for
the account of any Credit Party pursuant to this or any other
Loan Document, including cash management services and the
issuances of L/Cs.
(c) All expenditures on behalf of any Credit
Party made by any Secured Party as permitted hereunder or
under any other Loan Document.
"Line Fee": A fee equal to 0.375% per annum of the average
difference, during the quarter just ended (or relevant period with respect to
the payment being made on the Termination Date) between the Revolving Credit
Ceiling and the sum of (a) the aggregate of the unpaid principal balance of the
Revolving Credit Loans (other than the Swing Line Loans) and (b) the undrawn
Stated Amount of L/Cs outstanding during the relevant period.
"Liquidation": The exercise, by the Administrative Agent of
those rights accorded to the Administrative Agent under the Loan Documents as a
creditor of the Credit Parties during the existence of an Event of Default
looking towards the realization on the Collateral. Derivations of the word
"Liquidation" (such as "Liquidate") are used with like meaning in this
Agreement.
"Loan Account": As defined in Section 2.9(a).
"Loan Documents": This Agreement, the Restatement Fee Letter,
the Notes, each instrument and document executed and/or delivered as
contemplated by Section 3, below, and each other instrument or document from
time to time executed and/or delivered in connection with the arrangements
contemplated hereby, including in connection with any transaction with the
Administrative Agent or any Affiliate of the Administrative Agent, including,
without limitation, any transaction which arises out of any cash management,
depository or letter of credit services provided by the Administrative Agent or
any Affiliate of the Administrative Agent (such Affiliates, the "Other
Transactions Counterparties") to any Credit Party, as each may be amended or
otherwise modified from time to time.
"Loans": The Revolving Credit Loans.
"Majority Lenders": at any time, Lenders (other than
Delinquent Lenders) holding more than 50% of the aggregate amount of Revolving
Credit Commitments (other than any Revolving Credit Commitments held by
Delinquent Lenders) then in effect, or, if the
Revolving Credit Commitments have been terminated, the aggregate amount of
Revolving Credit Loans then outstanding (other than any Revolving Credit Loans
held by Delinquent Lenders).
"Material Accounting Change": Any change in GAAP applicable to
accounting periods subsequent to the Credit Parties' fiscal year most recently
completed prior to the execution of the Original Loan and Security Agreement,
which change has a material effect on the Credit Parties' Consolidated financial
condition or operating results, as reflected on financial statements and reports
prepared by or for the Credit Parties, when compared with such condition or
results as if such change had not taken place or where preparation of the Credit
Parties' statements and reports in compliance with such change results in the
breach of a financial performance covenant imposed pursuant to Section 5.11
where such a breach would not have occurred if such change had not taken place
or vice versa. The expensing of stock options shall be deemed to be a Material
Accounting Change.
"Material Adverse Effect": A material adverse effect on the
business, assets or condition (financial or otherwise) of the Credit Parties,
taken as a whole, or on the value of the Collateral taken as a whole.
"Maturity Date": August 19, 2007.
"Nominee": A business entity (such as a corporation or limited
partnership) formed by the Administrative Agent to own or manage any Post
Foreclosure Asset.
"NonConsenting Lender": As defined in Section 15.10.
"Notice of Acceleration": Written notice as follows:
(a) From the Administrative Agent to the
Revolving Credit Lenders, as provided in Section 13.1(a).
(b) From the Majority Lenders to the
Administrative Agent, as provided in Section 13.1(b).
"Notes": As defined in Section 2.10(b).
"Operating Account": As defined in Section 7.3.
"Operating Cash Flow": As to the Lead Borrower and its
Subsidiaries, for any period, Consolidated EBITDA minus Capital Expenditures
incurred during such period, all as determined in accordance with GAAP.
"Operating Property": Any retail store, warehouse,
distribution center, office, land or other facility or real property owned or
used by the Lead Borrower or any of its Subsidiaries having an area (including
all floor area) in excess of 30,000 square feet in the aggregate; provided that
any parcel of land (including all facilities and improvements thereon) which is
owned by the Lead Borrower or any of its Subsidiaries and no part of which is
used by the Lead Borrower or any of its Subsidiaries and no part of which is
under construction or
development for use by the Lead Borrower or any of its Subsidiaries shall not
constitute an Operating Property until such time as any such use, construction
or development begins.
"Original Closing Date": March 12, 2001.
"Original Lenders": As defined in the Preamble hereto.
"Original Loan and Security Agreement": As defined in the
Preamble hereto.
"Other Transactions Counterparties": As defined in the
definition of Loan Documents.
"OverLoan": A loan, advance, or providing of credit support
(such as the issuance of any L/C) to the extent that, immediately after its
having been made, Availability is less than zero.
"Pamida Inventory Pool": collectively, Pamida Inc. and P.M.
Place Stores Company.
"Participant": As defined in Section 20.16.
"Payless": Payless Shoe Source, Inc.
"Payless Agreement": The License Agreement dated July 23, 1999
(as in effect on such date) between Payless and ShopKo Stores, Inc.
"Payless Inventory": Inventory owned by Payless which is sold
through the Credit Parties' stores pursuant to the Payless Agreement.
"Payment Intangible": Any general intangible under which the
account debtor's principal obligation is a monetary obligation.
"Permissible OverLoans": Revolving Credit Loans which are
OverLoans, but as to which each of the following conditions is satisfied: (a)
the Revolving Credit Ceiling is not exceeded; and (b) when aggregated with all
other Permissible OverLoans, such Revolving Credit Loans do not aggregate more
than five percent (5%) of the aggregate of the Borrowing Base; (c) the
Permissible OverLoans shall not remain outstanding for more than forty-five (45)
consecutive days, and (d) such Revolving Credit Loans are made or undertaken in
the Administrative Agent's discretion to protect and preserve the interests of
the Revolving Credit Lenders.
"Permitted Acquisitions": An Acquisition in which each of the
following conditions are satisfied:
(a) No Default or Event of Default then exists
or would arise from the consummation of such Acquisition.
(b) Such Acquisition shall have been approved by
the Board of Directors of the Person (if such Person is a
corporation) which is the subject or "target" of such
Acquisition and such Person shall not have announced that it
will oppose such Acquisition or shall not have commenced any
action which alleges that such Acquisition will violate
applicable law.
(c) The Lead Borrower shall have furnished the
Administrative Agent with thirty (30) days prior notice of
such intended Acquisition and shall have furnished the
Administrative Agent with a business plan, a current draft of
the acquisition agreement, summary of any due diligence
undertaken by any Credit Party in connection with such
Acquisition, appropriate financial statements of the Person
which is the subject of such Acquisition, pro forma financial
statements for the twelve month period following such
Acquisition after giving effect to such Acquisition, and such
other information as the Administrative Agent may reasonably
require.
(d) The structure of the Acquisition shall be
acceptable to the Administrative Agent in its reasonable
judgment, which acceptance shall not be unreasonably withheld
or delayed. After consummation of the Acquisition, a Credit
Party shall own directly or indirectly a majority of the
equity interests in the Person being acquired and shall
control a majority of any voting interests, and/or shall
otherwise control the governance of the Person being acquired.
(e) If the Acquisition involves a merger,
consolidation or stock acquisition, the Person which is the
subject of such Acquisition shall be engaged in a line of
business reasonably related to that of the Lead Borrower.
(f) If the Person which is the subject of such
Acquisition will be maintained as a Subsidiary of the Lead
Borrower, the Administrative Agent shall have received a
guaranty of the Liabilities from such Subsidiary and a
security interest in such Subsidiary's inventory, accounts and
other property of the same nature as constitutes Collateral in
order to secure the Liabilities.
(g) After giving effect to the Acquisition,
Availability shall be at least $100,000,000.00 and
Availability is projected on a pro forma basis to be at least
$100,000,000.00 for the twelve months immediately following
such Acquisition.
provided that, Acquisitions of Prescription Lists and individual Acquisitions of
less than $3,000,000.00 and aggregating less than (x) $15,000,000.00 in any
Fiscal year and (y) $40,000,000.00 during the term of this Agreement shall be
permitted without the need to satisfy subsections (b) through (g), above.
"Permitted Encumbrances": Any of the following:
(a) Encumbrances for taxes, assessments or
governmental charges not yet due or which are being contested
in good faith by appropriate proceedings,
provided that adequate reserves with respect thereto are
maintained on the books of the Credit Parties in accordance
with GAAP, and provided further that no notice of tax or other
lien has been filed with respect thereto.
(b) Carrier's, warehousemen's, mechanics',
materialmen's, repairmen's, landlord's, or similar
Encumbrances arising in the ordinary course of business which
are not overdue by more than thirty (30) days or that are
being contested in good faith by appropriate proceedings,
provided that adequate reserves with respect thereto are
maintained on the books of the Credit Parties in accordance
with GAAP.
(c) Pledges or deposits in connection with
workers' compensation, unemployment insurance and other social
security legislation.
(d) Deposits to secure customs, duties, the
performance of bids, trade contracts (other than for borrowed
money), leases, statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like
nature in the ordinary course of business.
(e) Easements, rights of way, leases,
restrictions, minor title irregularities and other similar
encumbrances incurred in the ordinary course of business that
in the aggregate are not substantial in amount and which do
not in any case materially detract from the value of the real
estate subject thereto or materially interfere with the
conduct of the business of the Credit Parties.
(f) Any interest or title of a lessor under any
lease entered into by any Credit Party in the ordinary course
of business but only with respect to the assets so leased.
The inclusion of the foregoing as "Permitted Encumbrances" shall not limit or
impair the right of the Administrative Agent to impose Reserves on account
thereof in accordance with the provisions of this Agreement.
"Permitted Investments": Each of the following:
(a) direct obligations of, or obligations the
principal of and interest on which are unconditionally
guaranteed by, the United States of America (or by any agency
thereof to the extent such obligations are backed by the full
faith and credit of the United States of America), in each
case maturing not more than one year from the date of
acquisition thereof;
(b) investments in commercial paper maturing not
more than one year from the date of acquisition thereof and
having, at such date of acquisition, the highest credit rating
obtainable from Standard & Poor's or from Xxxxx'x Investment
Services, Inc.;
(c) investments in certificates of deposit,
banker's acceptances and time deposits maturing not more than
one year from the date of acquisition thereof issued or
guaranteed by or placed with, and money market deposit
accounts issued or offered by, any domestic office of any
commercial bank organized under the laws of the United States
of America or any State thereof that has a combined capital
and surplus and undivided profits of not less than
$500,000,000.00;
(d) fully collateralized repurchase agreements
with a term of not more than 30 days for securities described
in clause (a) above (without regard to the limitation on
maturity contained in such clause) and entered into with a
financial institution satisfying the criteria described in
clause (c) above;
(e) marketable direct obligations issued by any
state of the United States of America or any political
subdivision of any such state or any public instrumentality
thereof maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having one of the two
highest ratings obtainable from either Standard & Poor's or
from Xxxxx'x Investment Services, Inc.; and
(f) investments in money market funds,
substantially all the assets of which are comprised of
securities of the types described in clauses (a) through (e)
above.
"Person": Any natural person, and any corporation, limited
liability company, trust, partnership, joint venture, or other enterprise or
entity.
"Pharmacy Accounts": All of the Inventory Credit Parties' now
owned or hereinafter acquired and arising rights to payment for services
rendered and/or goods sold or leased, in each case, in connection with
dispensing prescriptions, pharmaceuticals, medications and controlled
substances, whether or not earned by performance, and whether constituting
accounts, general intangibles, chattel paper, interests or claims in or under
insurance policies, or otherwise, and all rights to payment from insurance
companies, managed care organizations, pharmacy plans, governmental entities and
other third parties (or the pharmacy plan administrators of such companies,
organizations, plans, entities and other third parties) that support or secure
any of the foregoing in whole or in part, all proceeds and insurance proceeds of
the foregoing, and any contracts and records with respect to any of the
foregoing.
"Post Foreclosure Asset": All or any part of the Collateral,
ownership of which is acquired by the Administrative Agent or a Nominee on
account of the "bidding in" at a disposition as part of a Liquidation or by
reason of a "deed in lieu" type of transaction.
"Prescription Lists": Lists of customers for which specific
prescription information is regularly maintained in the ordinary course of
business.
"Proceeds": Includes, without limitation, "Proceeds" as
defined in the Uniform Commercial Code in effect in the State of New York on the
date hereof and shall also include: (i) whatever is collected on, or distributed
on account of, Collateral; (ii) rights arising out of Collateral; (iii) to the
extent of the value of Collateral, claims arising out of the loss,
non-conformity, or interference with the use of, defects or infringement of
rights in, or damage to, Collateral; and (iv) to the extent of the value of
Collateral and to the extent payable to any Credit Party or Secured Party,
insurance payable by reason of the loss or nonconformity of, defects or
infringement of rights in, or damage to, Collateral.
"Realty Sale": Any sale, lease, conveyance, transfer,
financing, or other disposition by any Credit Party (including by way of merger,
consolidation or a sale-leaseback transaction) in any transaction or group of
transactions that are part of a common plan, of any real estate or any other
assets other than Accounts or Inventory.
"Receipts": All cash, cash equivalents, money, checks, credit
card slips, receipts and other proceeds from any sale of the Collateral.
"Receivable": Any right to payment for goods sold or leased or
for services rendered, whether or not such right is evidenced by an Instrument
or Chattel Paper and whether or not it has been earned by performance
(including, without limitation, any Account).
"Receivables Collateral": That portion of the Collateral which
consists of (a) Accounts, (b) instruments arising from, relating to, or
constituting proceeds of, the Credit Parties' Accounts, Inventory and Pharmacy
Accounts, (c) documents relating to the Credit Parties' Inventory, (d) Payment
Intangibles arising from, relating to, or constituting proceeds of, the Credit
Parties' Accounts, Inventory and Pharmacy Accounts and (e) Letter-of-Credit
Rights, bankers' acceptances, and all other rights to payment arising from, or
relating to, or constituting proceeds of, the Credit Parties' Accounts,
Inventory and Pharmacy Accounts.
"Register": As defined in Section 16.2(c).
"Related Entity": Any Person in which a Credit Party is a
partner, joint venturer, stockholder, or member or in which a Credit Party holds
an equity or other ownership interest, and which Person does not constitute a
Subsidiary of any Credit Party.
"Requirements of Law": As to any Person:
(a) Applicable Law;
(b) that Person's organizational documents; or
(c) that Person's by-laws and/or other
instruments which deal with corporate or similar governance,
as applicable.
"Renewal Fee": As defined in Section 2.14.
"Reserve Percentage": The decimal equivalent of that rate
applicable to a Lender under regulations issued from time to time by the Board
of Governors of the Federal Reserve System for determining the maximum reserve
requirement of that Lender with respect to "Eurocurrency liabilities" as defined
in such regulations. The Reserve Percentage applicable to a particular
Eurodollar Loan shall be based upon that in effect during the subject Interest
Period, with changes in the Reserve Percentage which take effect during such
Interest Period to take effect (and to consequently change any interest rate
determined with reference to the Reserve Percentage) if and when such change is
applicable to such loans.
"Reserves": The following: Availability Reserves and Inventory
Reserves. Notwithstanding any provisions of this Agreement to the contrary, (a)
the imposition of a new Reserve or a change to a then existing Reserve may be
made only with not less than five (5) Business Days prior notice to the Lead
Borrower, except that an increase or decrease in the amount of a then existing
Reserve, which increase or decrease is calculated in accordance with the same
methodology as was utilized to establish the existing Reserve and merely
reflects the results of mathematical computations of the items already in the
category to which such Reserve applies (such as a change in the aggregate of
Customer Credit Liabilities), may be made without such notice and (b) the
Administrative Agent shall impose a new Reserve or change a Reserve only
utilizing the same criteria as the Administrative Agent utilizes in imposing or
changing Reserves for other of its similar borrowers and in the exercise of good
faith.
"Restatement Documents List": As attached hereto as Exhibit C.
"Restatement Effective Date": The date upon which the
conditions precedent set forth in Section 3 hereof have been satisfied or
waived.
"Restatement Fee Letter": That letter dated August 19, 2003
between the Lead Borrower and the Administrative Agent, as such letter may from
time to time be amended or modified.
"Revolving Credit": As defined in Section 2.1.
"Revolving Credit Ceiling": $450,000,000.00.
"Revolving Credit Commitment": With respect to each Revolving
Credit Lender, that amount set forth on Schedule 2.23, (as such amounts may
change in accordance with the provisions of this Agreement).
"Revolving Credit Commitment Percentage": With respect to each
Revolving Credit Lender, that percentage set forth on Schedule 2.23, (as such
percentages may change in accordance with the provisions of this Agreement).
"Revolving Credit Lenders": Each Person who is or becomes a
"Revolving Credit Lender" in accordance with the provisions of this Agreement.
"Revolving Credit Loans": Loans made under the Revolving
Credit, except that where the term "Revolving Credit Loan" is used with
reference to available interest rates
applicable to the loans under the Revolving Credit, it refers to so much of the
unpaid principal balance of the Loan Account as bears the same rate of interest
for the same Interest Period.
"Revolving Credit Note": As defined in Section 2.10.
"SEC": The United States Securities and Exchange Commission.
"Secured Parties": collectively, the Administrative Agent, the
Lenders, the Issuer and the Other Transactions Counterparties, and a "Secured
Party" shall mean any of the foregoing.
"ShopKo Inventory Pool": collectively, ShopKo Stores, Inc.,
ShopKo Properties, Inc., Xxxx-Xxxxxxx, Incorporated and SKO Holdings, Inc.
"Standby L/Cs": L/Cs issued pursuant to this Agreement, the
drawing under which does not require the delivery of bills of lading, airway
bills or other similar types of documents of title, or which are customarily
referred to as standby letters of credit.
"Stated Amount": The maximum amount for which an L/C may be
honored.
"Subsidiary": Any corporation, association, partnership,
limited liability company, trust, or other business entity of which the
designated parent shall at any time own directly or indirectly through a
Subsidiary or Subsidiaries at least a majority (by number of votes or
controlling interests) of the outstanding voting interests.
"Subsidiary Stock": All shares of capital stock of any
Subsidiary of the Lead Borrower.
"Supermajority Revolving Credit Lenders": Prior to termination
of the Revolving Credit Commitments, Revolving Credit Lenders (other than
Delinquent Lenders) holding 66 2/3% or more of the Revolving Credit Commitments
(other than any Revolving Credit Commitments held by Delinquent Lenders). After
termination of the Revolving Credit Commitments, Revolving Credit Lenders (other
than Delinquent Lenders) holding 66 2/3% or more of the Liabilities (other than
any Liabilities held by Delinquent Lenders).
"Supporting Obligation": A Letter-of-Credit Right or secondary
obligation which supports the payment or performance of an Account, Chattel
Paper, a Document, a General Intangible, an Instrument or Investment Property.
"Swing Line": The facility pursuant to which the Swing Line
Lender may advance Revolving Credit Loans aggregating up to the Swing Line Loan
Ceiling.
"Swing Line Lender": Fleet Retail Finance Inc.
"Swing Line Loan Ceiling": $40,000,000.00.
"Swing Line Loans": As defined in Section 2.7(a).
"Swing Line Note" As defined in Section 2.7(c).
"Syndication Agent": General Electric Capital Corporation.
"Termination Date": The earliest of (a) the Maturity Date; or
(b) the occurrence of any event described in Section 10.10, below; or (c) the
Administrative Agent's notice to the Lead Borrower setting the Termination Date
on account of the occurrence of any Event of Default other than as described in
Section 10.10, below.
"Total Commitment Percentage": As to any Lender, the
percentage that such Lender's Commitment constitutes of the aggregate Commitment
of all Lenders.
"Transfer": Wire transfer pursuant to the wire transfer system
maintained by the Board of Governors of the Federal Reserve Board, or as
otherwise may be agreed to from time to time by the Administrative Agent making
such Transfer and the subject Revolving Credit Lender. Wire instructions may be
changed in the same manner that Notice Addresses may be changed (Section 17.1),
except that no change of the wire instructions for Transfers to any Revolving
Credit Lender shall be effective without the consent of the Administrative
Agent.
"UCC": The Uniform Commercial Code as in effect from time to
time in the State of New York.
"Unanimous Consent": Consent of Lenders (other than Delinquent
Lenders) holding 100% of (i) prior to termination of the Revolving Credit
Commitments, the Revolving Credit Commitments (other than Revolving Credit
Commitments held by Delinquent Lenders) or (ii) after termination of the
Revolving Credit Commitments, the aggregate unpaid principal amount of the
Revolving Credit Loans then outstanding (other than Revolving Credit Loans held
by Delinquent Lenders).
"Unused Fee": A fee equal to 0.375% per annum of the average
difference, during the quarter just ended (or relevant period with respect to
the payment being made on the Termination Date) between the Revolving Credit
Ceiling and the sum of (a) the aggregate of the unpaid principal balance of the
Revolving Credit Loans (including the Swing Line Loans) and (b) the undrawn
Stated Amount of L/Cs outstanding during the relevant period.
SECTION 2
THE REVOLVING CREDIT
2.1 Establishment Of Revolving Credit. (a) The Revolving
Credit Lenders have established a revolving line of credit (the "Revolving
Credit") in the Borrowers' favor pursuant to which each Revolving Credit Lender,
subject to, and in accordance with, this Agreement, acting through the
Administrative Agent, shall make loans and advances and otherwise provide
financial accommodations to and for the account of the Borrowers as provided
herein.
(b) Loans, advances, and financial accommodations under
the Revolving Credit shall be made with reference to the Borrowing Base and
shall be subject to Availability. The Borrowing Base and Availability shall be
determined by the Administrative Agent by reference to Borrowing Base
Certificates furnished as provided in Section 5.4, below. Such determination
shall take into account those Reserves as may be applicable thereto. The
Reserves as of the Restatement Effective Date are the following:
(i) Customer Credit Liabilities (an Availability
Reserve): An amount equal to 50% of the outstanding Customer
Credit Liabilities from time to time.
(ii) Shrinkage (an Inventory Reserve): As to the
Lead Borrower, $10,000,000.00, and as to Pamida,
$5,000,000.00.
(iii) Damaged Goods (an Inventory Reserve): An
amount equal to the value of damaged and return to vendors
Inventory as reflected in the Credit Parties' books and
records.
(iv) Rent (an Availability Reserve): An amount
equal to all past due rent and warehouse charges for any of
the Credit Parties' locations where Collateral is located and
where such charges have priority over the Collateral Interests
of the Administrative Agent in the Collateral.
(v) L/C Landing Costs Reserve (an Inventory
Reserve): An amount equal to the historical amount that the
Credit Parties are required to pay for customs, duties and
other similar charges incurred in connection with Inventory
purchases.
(c) The commitment of each Revolving Credit Lender to
provide such loans, advances, and financial accommodations is subject to Section
2.23.
(d) The proceeds of borrowings under the Revolving Credit
shall be used solely to refinance Indebtedness under the Existing Indentures as
they mature (subject to Section 4.27), and for general corporate purposes of the
Borrowers, including, without limitation, to fund certain stock and bond
repurchases (subject to Section 4.27), to finance the issuance of Standby and
Documentary L/Cs, purchases of Inventory by the Inventory Credit Parties and to
provide for the Credit Parties' other working capital and Capital Expenditures
needs, all solely to the extent permitted by this Agreement.
2.2 Advances In Excess Of Borrowing Base (OverLoans). (a)
No Revolving Credit Lender has any obligation to make any Revolving Credit Loan,
or otherwise to provide any credit to or for the benefit of the Borrowers where
the result of such Revolving Credit Loan or credit is an OverLoan; provided that
the Administrative Agent is permitted (but not obligated) to make Permissible
OverLoans and to be reimbursed therefor by the Revolving Credit Lenders pursuant
to Section 12.3.
(b) The Revolving Credit Lenders' obligations, among
themselves, are subject to Section 12.3(a) (which relates to each Revolving
Credit Lender's making amounts available to the Administrative Agent).
(c) The Revolving Credit Lenders' providing of an
OverLoan on any one occasion does not affect the obligations of each Borrower
hereunder (including each Borrower's obligation to immediately repay any amount
which otherwise constitutes an OverLoan) nor obligate the Revolving Credit
Lenders to do so on any other occasion.
2.3 Risks Of Value Of Collateral. The Administrative
Agent's reference to a given asset in connection with the making of Revolving
Credit Loans and the providing of financial accommodations under the Revolving
Credit and/or the monitoring of compliance with the provisions hereof shall not
be deemed a determination by the Administrative Agent or any Revolving Credit
Lender relative to the actual value of the asset in question. All risks
concerning the value of the Collateral are and remain upon the Credit Parties.
All Collateral secures the prompt, punctual, and faithful performance of the
Liabilities whether or not relied upon by the Administrative Agent in connection
with the making of Revolving Credit Loans and the providing of financial
accommodations under the Revolving Credit.
2.4 Commitment To Make Revolving Credit Loans And Support
Letters Of Credit. Subject to the provisions of this Agreement (including with
respect to the making of Permissible OverLoans), the Revolving Credit Lenders
shall make a loan or advance under the Revolving Credit and the Issuer shall
issue an L/C for the account of any Borrower, in each instance if duly and
timely requested by the Lead Borrower as provided herein provided that:
(a) Availability will not be exceeded.
(b) no Default has occurred and is continuing.
2.5 Loan Requests. (a) Requests for Revolving Credit
Loans or for the continuance or conversion of an interest rate applicable to a
Loan may be requested by the Lead Borrower in such manner as may from time to
time be reasonably acceptable to the Administrative Agent.
(b) Subject to the provisions of this Agreement, the Lead
Borrower may request a Revolving Credit Loan and elect an interest rate and
Interest Period to be applicable to a Loan or continue or convert an interest
rate applicable to existing Loans by giving notice to the Administrative Agent
by no later than the following:
(i) If such Loan is to be, or is to be converted
to, a Base Margin Loan: By 1:00 PM Boston time one (1)
Business Day before the date on which the subject Loan is to
be made or is to be so converted. Base Margin Loans requested
by the Lead Borrower, other than those resulting from the
conversion of a Eurodollar Loan, shall not be less than
$500,000.00.
(ii) If such Loan is to be, or is to be continued
as, or converted to, a Eurodollar Loan: By 1:00 PM Boston time
three (3) Eurodollar Business Days before the commencement of
any new Interest Period or the end of the then applicable
Interest Period. Eurodollar Loans and conversions to
Eurodollar Loans shall each be not less than $1,000,000.00 and
in increments of $1,000,000.00 in excess of such minimum.
(iii) Any Eurodollar Loan which matures while an
Event of Default exists shall be converted, at the option of
the Administrative Agent, to a Base Margin Loan
notwithstanding any notice from the Lead Borrower that such
Loan is to be continued as a Eurodollar Loan.
(c) Any request for a Revolving Credit Loan or for the
continuance or conversion of an interest rate applicable to a Loan which is made
after the applicable deadline therefor, as set forth above, shall be deemed to
have been made at the opening of business on the then next Business Day or
Eurodollar Business Day, as applicable.
(d) The Lead Borrower may request that the Administrative
Agent cause the issuance by the Issuer of L/Cs for the account of the Borrowers
as provided in Section 2.18.
(e) The Administrative Agent may rely on any request for
a Loan or other financial accommodation under the Revolving Credit which the
Administrative Agent, in good faith, believes to have been made by a Person duly
authorized to act on behalf of the Lead Borrower and may decline to make any
such requested loan or advance, or issuance, or to provide any such financial
accommodation pending the Administrative Agent's being furnished with such
documentation concerning that Person's authority to act as may be satisfactory
to the Administrative Agent.
(f) A request by the Lead Borrower for a loan or advance,
or other financial accommodation under this Agreement shall be irrevocable and
shall constitute certification by each Credit Party that as of the date of such
request, each of the following is true and correct:
(i) Each representation which is made herein or
in any of the Loan Documents is then true and complete in all
material respects as of and as if made on the date of such
request (except for representations that relate to an earlier
date, in which case that representation shall have been true
on such earlier date).
(ii) No Default then exists.
(g) If, at any time or from time to time, any Default
exists:
(i) The Administrative Agent may, or at the
request of the Majority Lenders shall, suspend the Revolving
Credit immediately.
(ii) Neither the Administrative Agent nor any
Revolving Credit Lender shall be obligated, during such
suspension, to make any Revolving Credit Loans or to provide
any financial accommodation hereunder nor shall the
Administrative
Agent, any Revolving Credit Lender or the Issuer be obligated,
during such suspension, to issue, or cause to be issued, any
L/C.
(iii) The Administrative Agent may suspend the
right of the Lead Borrower to request any Eurodollar Loan or
to convert any Base Margin Loan to a Eurodollar Loan.
2.6 Making Of Revolving Credit Loans. (a) A Loan shall be
made by the transfer of the proceeds of such Loan to the Operating Account or as
otherwise instructed by the Lead Borrower.
(b) A Loan shall be deemed to have been made under this
Agreement (and the Borrowers shall be indebted to the Administrative Agent and
the Lenders for the amount thereof immediately) at the following:
(i) The Administrative Agent's initiation of the
transfer of the proceeds of such Loan in accordance with the
Lead Borrower's instructions (if such Loan is of funds
requested by the Lead Borrower).
(ii) The charging of the amount of such Loan to
the Loan Account (in all other circumstances).
(c) There shall not be any recourse to or liability of
the Administrative Agent or any Lender, on account of:
(i) Any delay in the making of any Loan
requested under this Agreement.
(ii) Any delay by any bank or other depository
institution in treating the proceeds of any such Loan as
collected funds.
(iii) Any delay in the receipt, and/or any loss,
of funds which constitute a Loan under this Agreement, the
wire transfer of which was properly initiated by the
Administrative Agent in accordance with wire instructions
provided to the Administrative Agent by the Lead Borrower.
2.7 Swing Line Loans. (a) For ease of administration,
Base Margin Loans may be made by the Swing Line Lender (in the aggregate, the
"Swing Line Loans") in accordance with the procedures set forth in this
Agreement for the making of loans and advances under the Revolving Credit,
except that the Lead Borrower may request a Swing Line Loan by giving notice to
the Administrative Agent by no later than 1:00 PM on the Business Day on which
the subject Swing Line Loan is to be made. The unpaid principal balance of the
Swing Line Loans shall not at any one time be in excess of the Swing Line Loan
Ceiling.
(b) The aggregate unpaid principal balance of Swing Line
Loans shall bear interest at the rate applicable to Base Margin Loans and shall
be repayable as a loan under the Revolving Credit.
(c) The Borrowers' obligation to repay Swing Line Loans
shall be evidenced by a Note in the form of Exhibit A (the "Swing Line Note"),
executed by the Borrowers, and payable to the Swing Line Lender. Neither the
original nor a copy of that Note shall be required, however, to establish or
prove any Liability. Upon the Swing Line Lender's request, the Borrowers shall
execute a replacement of any Swing Line Note which has been lost, mutilated, or
destroyed thereof and deliver such replacement to the Swing Line Lender.
(d) For all purposes of this Loan Agreement, the Swing
Line Loans and the Borrowers' obligations to the Swing Line Lender constitute
Revolving Credit Loans and are secured as "Liabilities".
(e) Swing Line Loans may be subject to periodic
settlement with the Revolving Credit Lenders as provided in this Agreement.
2.8 [Intentionally Omitted]
2.9 The Loan Account.
(a) An account ("Loan Account") shall be opened on the
books of the Administrative Agent in which a record shall be kept of all Loans
made and L/Cs issued under this Agreement.
(b) The Administrative Agent shall also keep a record
(either in the Loan Account or elsewhere, as the Administrative Agent may from
time to time elect) of all interest, fees, service charges, costs, expenses and
other debits owed to the Administrative Agent and each Lender on account of the
Liabilities and of all credits against such amounts so owed.
(c) All credits against the Liabilities shall be
conditional upon final payment to the Administrative Agent for the account of
each Lender of the items giving rise to such credits. The amount of any item
credited against the Liabilities which is charged back against the
Administrative Agent or any Lender for any reason or is not so paid shall be a
Liability and shall be added to the Loan Account, whether or not the item so
charged back or not so paid is returned.
(d) Except as otherwise provided herein, all fees,
service charges, costs, and expenses for which any Borrower is obligated
hereunder are payable on demand. In the determination of Availability, the
Administrative Agent may deem fees, service charges, accrued interest, and other
payments which are due and payable as having been advanced under the Revolving
Credit when such amounts are due and payable.
(e) The Administrative Agent, without the request of the
Lead Borrower, may advance under the Revolving Credit any interest, fee, service
charge, expense or other payment to which the Administrative Agent or any Lender
is entitled from any Borrower pursuant hereto and may charge the same to the
Loan Account notwithstanding that such amount so advanced may result in the
Borrowing Base being exceeded. Such action on the part of the Administrative
Agent shall not constitute a waiver of the Administrative Agent's rights and
each Borrower's
obligations under Section 2.11(b). Any amount which is added to the principal
balance of the Loan Account as provided in this Section 2.9(e) shall bear
interest at the interest rate then and thereafter applicable to Base Margin
Loans.
(f) Any statement rendered by the Administrative Agent or
any Lender to the Lead Borrower concerning the Liabilities shall be considered
correct and accepted by each Borrower and shall be conclusively binding upon
each Borrower unless the Lead Borrower provides the Administrative Agent with
written objection thereto within one hundred twenty (120) days from the mailing
of such statement, which written objection shall indicate, with particularity,
the reason for such objection. The Loan Account and the Administrative Agent's
books and records concerning the loan arrangement contemplated herein and the
Liabilities shall be prima facie evidence and proof of the items described
therein.
2.10 The Notes.
(a) The Borrowers' obligation to repay loans and advances
under the Revolving Credit, with interest as provided herein, shall be evidenced
by notes (each, a "Revolving Credit Note") in the form of Exhibit B-1, executed
by each Borrower, one payable to each Revolving Credit Lender.
(b) [Intentionally Omitted]
(c) Neither the original nor a copy of any Note shall be
required, however, to establish or prove any Liability. Upon a Lender's request
and, if applicable, the delivery of an appropriate lost instrument indemnity,
each Borrower shall execute a replacement thereof and deliver such replacement
to the Administrative Agent in the event that any Revolving Credit Note or Term
Note is ever lost, mutilated, or destroyed.
2.11 Payment Of The Loan Account. (a) Subject to Section
2.17, the Borrowers may repay all or any portion of the principal balance of the
Loan Account from time to time until the Termination Date.
(b) The Borrowers, without notice or demand from the
Administrative Agent or any Lender, shall pay the Administrative Agent that
amount, from time to time, which is necessary so that there is no OverLoan
outstanding.
(c) During the continuance of a Cash Control Event, the
Borrowers shall repay, first, the Revolving Credit and, second, all other
Liabilities:
(i) in an amount equal to the proceeds realized
from the sale or other disposition of, or realization upon,
any Collateral;
(ii) in an amount equal to the proceeds realized
from any Capital Event and/or casualty insurance proceeds
relating to Collateral received by any Borrower to the extent
that such proceeds are not reinvested in replacement assets
within 180 days after the date of receipt of such proceeds;
and
(iii) in accordance with the provisions of Article
7 hereof;
provided that if no Revolving Loans or other Liabilities are outstanding all
such amounts described in clauses (c)(i), (ii) and (iii) shall be held pending
such application in the Concentration Account or a cash collateral account
established with the Administrative Agent on terms and conditions satisfactory
to the Administrative Agent (and each of the Credit Parties hereby grants to the
Administrative Agent a continuing security interest in all amounts at any time
on deposit in such cash collateral account to secure the Liabilities).
All amounts prepaid under this Section 2.11(c) on account of the Revolving
Credit may be reborrowed under the Revolving Credit, subject to and in
accordance with, the terms of this Agreement.
(d) Subject to Section 2.17, the Borrowers shall repay
the then entire unpaid balance of the Loan Account and all other Liabilities on
the Termination Date.
(e) No payment of Eurodollar Loans shall be permitted
hereunder other than on the last day of an Interest Period applicable thereto,
unless the Borrowers simultaneously reimburse the Lenders for all amounts
described in Section 2.11(f) below associated therewith. In order to avoid
payment of the amounts described in Section 2.11(f) below, as long as no Event
of Default has occurred and is continuing, at the request of the Lead Borrower,
the Administrative Agent shall hold all amounts required to be applied to
Eurodollar Loans in a non-interest bearing cash collateral account and will
apply such funds to the applicable Eurodollar Loans at the end of the then
pending Interest Period therefor (provided that the foregoing shall in no way
limit or restrict the Administrative Agent's rights upon the subsequent
occurrence of an Event of Default).
(f) The Borrowers shall indemnify the Administrative
Agent and each Lender and hold the Administrative Agent and each Lender harmless
from and against any actual loss, cost or expense (including loss of anticipated
profits and amounts payable by the Administrative Agent or such Lender on
account of "breakage fees" (so-called)) which the Administrative Agent or such
Lender actually sustains or incurs, in each case, as calculated in a
commercially reasonable manner by the Administrative Agent (including, without
limitation, by virtue of acceleration after the occurrence of any Event of
Default) as a consequence of the following:
(i) Default by any Borrower in payment of the
principal amount of or any interest on any Eurodollar Loan as
and when due and payable, including any such loss or expense
arising from interest or fees payable by such Lender in order
to maintain its Eurodollar Loans.
(ii) Default by any Borrower in making a
borrowing or conversion after the Lead Borrower has given (or
is deemed to have given) a request for a Loan or a request to
convert a Loan from one applicable interest rate to another.
(iii) The making of any payment on a Eurodollar
Loan or the making of any conversion of any such Loan to a
Base Margin Loan on a day that is not the last day of the
applicable Interest Period with respect thereto.
2.12 Interest On Loans. (a) Each Loan shall bear interest
at the Base Margin Rate unless timely notice is given (as provided in Section
2.5) that the subject Loan (or a portion thereof) is, or is to be converted to,
a Eurodollar Loan.
(b) Each Loan which consists of a Eurodollar Loan shall
bear interest at the applicable Eurodollar Rate.
(c) Subject to, and in accordance with, the provisions of
this Agreement, the Lead Borrower may cause all or a part of the unpaid
principal balance of the Loan Account to bear interest at the Base Margin Rate
or the Eurodollar Rate as specified from time to time by the Lead Borrower.
(d) The Lead Borrower shall not select, renew, or convert
any interest rate for a Loan such that, in addition to interest at the Base
Margin Rate, there are more than nine (9) Eurodollar Rates applicable to the
Loans at any one time.
(e) The Borrowers shall pay accrued and unpaid interest
on each Loan in arrears as follows:
(i) on each Interest Payment Date for that Loan;
and
(ii) during the existence of any Event of
Default, with such frequency as may be determined by the
Administrative Agent.
(f) During the existence of any Event of Default (and
whether or not the Administrative Agent exercises the Administrative Agent's
rights on account thereof), all Loans shall bear interest, at the option of the
Administrative Agent or at the instruction of the Majority Lenders at a rate
which is the rate then in effect plus two percent (2%) per annum.
(g) Interest shall be calculated (i) with respect to Base
Margin Loans, on the basis of a 365 day year and for actual days elapsed, and
(ii) with respect to Eurodollar Loans, on the basis of a 360 day year and for
actual days elapsed. L/C Fees, the Line Fee and Unused Fees shall be calculated
on the basis of a 365 day year and for actual days elapsed.
2.13 Voluntary Reduction Of Commitment And Revolving
Credit Ceiling. The Lead Borrower may reduce, or terminate the Revolving Credit
Commitments and the Revolving Credit Ceiling, in whole or in part from time to
time, by furnishing three (3) Business Days' written notice to the
Administrative Agent, whereupon the Commitments of the applicable Lenders shall
be reduced pro rata in accordance with their Revolving Credit Commitment
Percentages. Upon the effective date of any such reduction or termination, (i)
the Borrowers shall pay to the Administrative Agent for the benefit of the
applicable Lenders a pro rata portion of any Early Termination Fee that would be
payable under Section 2.17 as a result of such reduction or termination (based
upon the amount by which the amount so reduced or terminated
exceeds $75,000,000.00 in any 12-month period), (ii) the Borrowers shall pay to
the Administrative Agent for the benefit of the Revolving Credit Lenders the
accrued Unused Fee as of the date of such reduction or termination, and (iii)
the Borrowers shall pay to the Administrative Agent for the benefit of the
Lenders any amounts required under Section 2.11(b) and Section 2.11(f) hereof.
No reduction or termination of the Revolving Credit Commitments or the Revolving
Credit Ceiling may be reinstated.
2.14 Renewal Fee. In consideration of the agreement of the
Agent and the Lenders to amend and restate the Original Loan and Security
Agreement, there has been earned and the Borrowers shall pay the "Renewal Fee"
(so referred to herein) in the amount and payable as provided in the Restatement
Fee Letter.
2.15 Administrative Agent's Fee. In addition to any other
fee or expense to be paid by the Borrowers on account of the Revolving Credit,
the Borrowers shall pay the Administrative Agent the "Agent's Fee" at the times
and in the amounts as set forth in the Restatement Fee Letter.
2.16 Unused Fee. In addition to any other fee to be paid
by the Borrowers on account of the Revolving Credit, each Revolving Credit
Lender shall be paid the Line Fee by the Administrative Agent at the times and
in the manner set forth below. The Borrowers shall pay to the Administrative
Agent for the account of the Revolving Credit Lenders, the Unused Fee. If the
Unused Fee actually paid by the Borrowers is insufficient to pay an amount equal
to the Line Fee to the Revolving Credit Lenders, the deficiency shall be paid to
the Revolving Credit Lenders by the Swing Line Lender from its own funds (and
the Borrowers shall have no liability with respect thereto). The Administrative
Agent shall pay the Line Fee (and any amounts payable by the Swing Line Lender
hereunder) to the Revolving Credit Lenders based upon their pro rata share of an
amount equal to the aggregate Line Fee due to all Revolving Credit Lenders;
provided that, for purposes of calculating the pro rata share of any Person
which is both the Swing Line Lender and a Revolving Credit Lender, such Person's
share shall be equal to the difference between (i) the sum of such Person's
Revolving Credit Commitment, and (ii) the sum of (A) such Person's Revolving
Credit Commitment Percentage of the principal amount of the Revolving Loans then
outstanding (including the principal amount of Swing Line Loans then
outstanding), and (B) such Person's Revolving Credit Commitment Percentage of
the then undrawn Stated Amount of outstanding L/Cs. The Unused Fee shall be paid
in arrears, on the first day of each quarter after the execution of this
Agreement and on the Termination Date.
2.17 Early Termination Fee. In the event that (i) the
Termination Date occurs, for any reason, prior to the second anniversary of the
Restatement Effective Date (other than by virtue of the Borrowers' refinancing
of the Liabilities with the Administrative Agent or any of its Affiliates) or
(ii) the Lead Borrower voluntarily reduces the Commitments pursuant to Section
2.13, the Borrowers shall pay to the Administrative Agent for the benefit of the
Lenders whose Commitments are terminated or reduced, an "Early Termination Fee"
(so referred to herein) in an amount equal to (a) one-half of one percent
(0.50%) of the aggregate amount of the Commitments so terminated or reduced, if
the Termination Date or reduction occurs before the first anniversary after the
Restatement Effective Date, or (b) one quarter of one percent (0.25%) of the
aggregate amount of the Commitments so terminated or reduced, if the Termination
Date
or reduction occurs on or after the first anniversary after the Restatement
Effective Date and on or before the second anniversary of the Restatement
Effective Date.
2.18 Procedures For Issuance Of L/Cs. (a) The Lead
Borrower may request that the Administrative Agent cause the issuance by the
Issuer of L/Cs for the account of any Borrower. Each such request shall be in
such manner as may from time to time be acceptable to the Administrative Agent.
(b) The Issuer shall issue any L/C so requested by the
Lead Borrower, provided that, at the time that the request is made, the
Revolving Credit has not been suspended as provided in Section 2.5(g) and if so
issued:
(i) the aggregate Stated Amount of all L/Cs then
outstanding, does not exceed $200,000,000.00; and
(ii) the expiry of the L/C is not later than the
earlier of thirty (30) days prior to the Maturity Date or the
following:
(A) Standby's: One (1) year from
initial issuance, or
(B) Documentary's: One hundred eighty
(180) days from issuance.
(iii) an OverLoan will not result from the
issuance of the subject L/C.
(c) Each Borrower shall execute such documentation to
apply for and support the issuance of an L/C as may be reasonably required by
the Issuer.
(d) There shall not be any recourse to, nor liability of,
the Administrative Agent or any Revolving Credit Lender on account of
(i) any delay or refusal by an Issuer to issue
an L/C;
(ii) any action or inaction of an Issuer on
account of or in respect to, any L/C.
(e) The Borrowers shall reimburse the Issuer for the
amount of any honoring of a drawing under an L/C on the same day on which such
honoring takes place. The Administrative Agent, without the request of any
Borrower, may advance under the Revolving Credit (and charge to the Loan
Account) the amount of any honoring of any L/C and other amount for which any
Borrower, the Issuer, or the Revolving Credit Lenders become obligated on
account of, or in respect to, any L/C. Such advance shall be made whether or not
any Default exists or such advance would result in an OverLoan. Such action
shall not constitute a waiver of the Administrative Agent's rights under Section
2.11(b) hereof.
2.19 Fees For L/Cs. (a) The Borrowers shall pay to the
Administrative Agent (for the benefit of the Revolving Credit Lenders) a fee, on
account of L/Cs, the issuance of which
had been procured by the Administrative Agent, quarterly in arrears, and on the
Termination Date and on the End Date, equal to the following:
(i) with respect to all Standby L/Cs: At a rate
per annum equal to the Applicable Margin for Eurodollar Loans
at the time of calculation of such fees multiplied by the
weighted average Stated Amount of all such Standby L/Cs
outstanding during the period in respect of which such fee is
being paid; and
(ii) with respect to all Documentary L/Cs: At a
rate per annum equal to 1.00% multiplied by the weighted
average Stated Amount of all such Documentary L/Cs outstanding
during the period in respect of which such fee is being paid;
provided that, during the existence of any Event of Default, such fees shall be
increased by two percent (2%) per annum.
(b) In addition to the fees to be paid as provided in
Subsection 2.19(a), above, the Borrowers shall pay to the Administrative Agent
(or to the Issuer, if so requested by Administrative Agent), on demand, all
issuance, processing, negotiation, amendment, and administrative fees and other
amounts customarily charged by the Issuer on account of, or in respect to, any
L/C.
(c) If any change in Applicable Law shall either:
(i) impose, modify or deem applicable any
reserve, special deposit or similar requirements against
letters of credit heretofore or hereafter issued by any Issuer
or with respect to which any Revolving Credit Lender or any
Issuer has an obligation to lend to fund drawings under any
L/C; or
(ii) impose on any Issuer any other condition or
requirements relating to any such letters of credit;
and the result of any event referred to in Section 2.19(c)(i) or 2.19(c)(ii),
above, shall be to increase the cost to any Revolving Credit Lender or to any
Issuer of issuing or maintaining any L/C (which increase in cost shall be the
result of such Issuer's reasonable allocation among that Revolving Credit
Lender's or Issuer's letter of credit customers of the aggregate of such cost
increases resulting from such events), then, upon demand by the Administrative
Agent and delivery by the Administrative Agent to the Lead Borrower of a
certificate of an officer of the subject Revolving Credit Lender or the subject
Issuer describing such change in law, executive order, regulation, directive, or
interpretation thereof, its effect on such Revolving Credit Lender or such
Issuer, and the basis for determining such increased costs and their allocation,
the Borrowers shall, within thirty (30) days after demand therefor, pay to the
Administrative Agent, from time to time as specified by the Administrative
Agent, such amounts as shall be sufficient to compensate the subject Revolving
Credit Lender or the subject Issuer for such increased cost. Any Revolving
Credit Lender's or any Issuer's determination of costs incurred under Section
2.19(c)(i) or 2.19(c)(ii), above, and the allocation, if any, of such costs
among the
Borrowers and other letter of credit customers of such Revolving Credit Lender
or such Issuer, if done in good faith and made on an equitable basis and in
accordance with such officer's certificate, shall be conclusive and binding on
the Borrowers.
2.20 Concerning L/Cs. (a) None of the Issuer, the Issuer's
correspondents, any Revolving Credit Lender, the Administrative Agent or any
advising, negotiating, or paying bank with respect to any L/C shall be
responsible in any way for:
(i) The performance by any beneficiary under any
L/C of that beneficiary's obligations to any Borrower.
(ii) The form, sufficiency, correctness,
genuineness, authority of any person signing; falsification;
or the legal effect of; any documents called for under any L/C
if (with respect to the foregoing) such documents on their
face appear to be in order.
(b) The Issuer may honor, as complying with the terms of
any L/C and of any drawing thereunder, any drafts or other documents otherwise
in order, but signed or issued by an administrator, executor, conservator,
trustee in bankruptcy, debtor in possession, assignee for the benefit of
creditors, liquidator, receiver, or other legal representative of the party
authorized under such L/C to draw or issue such drafts or other documents.
(c) Unless otherwise agreed to, in the particular
instance, each Borrower hereby authorizes any Issuer to:
(i) Select an advising bank, if any.
(ii) Select a paying bank, if any.
(iii) Select a negotiating bank.
(d) All directions, correspondence, and funds transfers
relating to any L/C are at the risk of the Borrowers. The Issuer shall have
discharged the Issuer's obligations under any L/C which, or the drawing under
which, includes payment instructions, by the initiation of the method of payment
called for in, and in accordance with, such instructions (or by any other
commercially reasonable and comparable method). None of the Administrative
Agent, any Revolving Credit Lender, or the Issuer shall have any responsibility
for any inaccuracy, interruption, error, or delay in transmission or delivery by
post, facsimile, telegraph or cable, or for any inaccuracy of translation.
(e) The Administrative Agent's, each Revolving Credit
Lender's, and the Issuer's rights, powers, privileges and immunities specified
in or arising under this Agreement are in addition to any heretofore or at any
time hereafter otherwise created or arising, whether by statute or rule of law
or contract.
(f) Except to the extent otherwise expressly provided
hereunder or agreed to in writing by the Issuer and the Lead Borrower,
documentary L/Cs will be governed by the
Uniform Customs and Practice for Documentary Credits, International Chamber of
Commerce, Publication No. 500, and standby L/Cs will be governed by
International Standby Practices ISP98 (adopted by the International Chamber of
Commerce on April 6, 1998) and any respective subsequent revisions thereof.
(g) The obligations of the Borrowers under this Agreement
with respect to L/Cs are absolute, unconditional, and irrevocable and shall be
performed strictly in accordance with the terms hereof under all circumstances,
whatsoever including, without limitation, the following:
(i) Any lack of validity or enforceability or
restriction, restraint, or stay in the enforcement of this
Agreement, any L/C, or any other agreement or instrument
relating thereto.
(ii) Any Borrower's consent to any amendment or
waiver of, or consent to the departure from, any L/C.
(iii) The existence of any claim, set-off,
defense, or other right which any Borrower may have at any
time against the beneficiary of any L/C.
(iv) Absent the gross negligence or willful
misconduct of the Issuer, any honoring of a drawing under any
L/C, which drawing possibly could have been dishonored due to
a non-material technicality based upon a strict construction
of the terms of the L/C.
2.21 Changed Circumstances. (a) The Administrative Agent
may advise the Lead Borrower that the Administrative Agent has made the good
faith determination (which determination shall be final and conclusive) of any
of the following:
(i) Adequate and fair means do not exist for
ascertaining the rate for Eurodollar Loans;
(ii) The continuation of or conversion of any
Loan to a Eurodollar Loan has been made impracticable or
unlawful by the occurrence of a contingency that materially
and adversely affects the applicable market or the compliance
by the Administrative Agent or any Lender in good faith with
any Applicable Law; or
(iii) The indices on which the interest rates for
Eurodollar Loans are based shall no longer represent the
effective cost to the Administrative Agent or any Lender for
U.S. dollar deposits in the interbank market for deposits in
which it regularly participates.
(b) In the event that the Administrative Agent advises
the Lead Borrower of an occurrence described in Section 2.21(a), then, until the
Administrative Agent notifies the Lead Borrower that the circumstances giving
rise to such notice no longer apply:
(i) the obligation of the Administrative Agent
or each Lender to make loans of the type affected by such
changed circumstances or to permit the Lead Borrower to select
the affected interest rate as otherwise applicable to any
Loans shall be suspended; and
(ii) any notice which the Lead Borrower had given
the Administrative Agent with respect to any Eurodollar Loan,
the time for action with respect to which has not occurred
prior to the Administrative Agent's having given notice
pursuant to Section 2.21(a), shall be deemed at the option of
the Administrative Agent to not have been given.
2.22 Designation Of Lead Borrower As Borrowers' Agent. (a)
Each Borrower hereby irrevocably designates and appoints the Lead Borrower as
that Borrower's agent to obtain Loans and L/Cs under this Agreement, the
proceeds of which shall be available to each Borrower for those uses as those
set forth in Section 2.1(d). As the disclosed principal for its agent, each
Borrower shall be obligated to the Administrative Agent and each Lender on
account of Loans so made and L/Cs so issued under this Agreement as if made
directly by the Lenders to that Borrower, notwithstanding the manner by which
such Loans and L/Cs are recorded on the books and records of the Lead Borrower
and of any Borrower.
(b) Each Borrower recognizes that credit available to it
under this Agreement is in excess of and on better terms than it otherwise could
obtain on and for its own account and that one of the reasons therefor is its
joining in the credit facility contemplated herein with all other Borrowers.
Consequently, each Borrower hereby assumes and agrees to discharge all
Liabilities of all other Borrowers as if the Borrower so assuming were each
other Borrower.
(c) The Lead Borrower shall act as a conduit for each
Borrower (including itself, as a Borrower) on whose behalf the Lead Borrower has
requested a Loan.
(d) The proceeds of each loan and advance provided under
this Agreement which is requested by the Lead Borrower shall be deposited into
the Operating Account or as otherwise indicated by the Lead Borrower. The Lead
Borrower shall cause the transfer of the proceeds thereof to the (those)
Borrower(s) on whose behalf such loan and advance was obtained. Neither the
Administrative Agent nor any Lender shall have any obligation to see to the
application of such proceeds.
(e) If, for any reason, and at any time during the term
of this Agreement,
(i) any Borrower, including the Lead Borrower,
as agent for the Borrowers, shall be unable to, or prohibited
from carrying out the terms and conditions of this Agreement
(as determined by the Administrative Agent in the
Administrative Agent's sole and absolute discretion); or
(ii) the Administrative Agent deems it
inexpedient (in the Administrative Agent's sole and absolute
discretion) to continue making Revolving Credit Loans and
issue L/Cs to or for the account of any particular
Borrower, or to channel such Revolving Credit Loans and L/Cs
through the Lead Borrower,
then the Revolving Credit Lenders may make Revolving Credit Loans directly to,
and issue L/Cs directly for the account of such of the Borrowers as the
Administrative Agent determines to be expedient, which loans or advances may be
made without regard to the procedures otherwise included herein.
(f) In the event that the Administrative Agent determines
to forgo the procedures included herein pursuant to which Revolving Credit Loans
and L/Cs are to be channeled through the Lead Borrower, then the Administrative
Agent may designate one or more of the Borrowers to fulfill the financial and
other reporting requirements otherwise imposed herein upon the Lead Borrower.
(g) Each of the Borrowers shall remain liable to the
Administrative Agent and the Lenders for the payment and performance of all
Liabilities (which payment and performance shall continue to be secured by all
Collateral granted by each of the Borrowers) notwithstanding any determination
by the Administrative Agent to cease making Revolving Credit Loans or L/Cs to or
for the benefit of any Borrower.
(h) The authority of the Lead Borrower to request loans
on behalf of, and to bind, the Borrowers, shall continue unless and until the
Administrative Agent acts as provided in Section 2.22(e), above, or the
Administrative Agent actually receives
(i) written notice of: (A) the termination of
such authority, and (B) the subsequent appointment of a
successor Lead Borrower, which notice is signed by the
respective Presidents of each Borrower (other than the
President of the Lead Borrower being replaced) then eligible
for borrowing under this Agreement; and
(ii) written notice from such successive Lead
Borrower (A) accepting such appointment; (B) acknowledging
that such removal and appointment has been effected by the
respective Presidents of such Borrowers eligible for borrowing
under this Agreement; and (C) acknowledging that from and
after the date of such appointment, the newly appointed Lead
Borrower shall be bound by the terms hereof, and that as used
herein, the term "Lead Borrower" shall mean and include the
newly appointed Lead Borrower.
2.23 Lenders' Commitments. (a) Subject to Section 16.1
(which provides for assignments and assumptions of Commitments), each Revolving
Credit Lender's "Revolving Credit Commitment Percentage", and "Revolving Credit
Commitment" (respectively so referred to herein) is set forth on Schedule 2.23.
(b) The obligations of each Revolving Credit Lender are
several and not joint. No Revolving Credit Lender shall have any obligation to
make any loan or advance under this Agreement in excess of the lesser of the
following:
(i) that Revolving Credit Lender's Revolving
Credit Commitment Percentage of the subject loan or advance or
of Availability; or
(ii) that Revolving Credit Lender's Commitment.
(c) [Intentionally Omitted]
(d) No Lender shall have any liability to the Credit
Parties on account of the failure of any other Lender to provide any loan or
advance under the nor any obligation to make up any shortfall which may be
created by such failure.
(e) The Commitments, Revolving Credit Commitment
Percentages, and identities of the Lenders may be changed, from time to time by
the reallocation or assignment of Commitments and Revolving Credit Commitment
Percentages amongst the Lenders or with other Persons who determine to become
"Lenders" in accordance with the provisions of Article 16 hereof.
(f) Upon written notice given the Lead Borrower from time
to time by the Administrative Agent, of any assignment or allocation referenced
in Section 2.23(e):
(i) Each Borrower shall execute one or more
replacement Notes to reflect such changed Commitments,
Revolving Credit Commitment Percentages, and identities and
shall deliver such replacement Notes to the Administrative
Agent (which promptly thereafter shall deliver to the Lead
Borrower the Notes so replaced) provided however, in the event
that a Note is to be exchanged following its acceleration or
the entry of an order for relief under the Bankruptcy Code
with respect to any Borrower, the Administrative Agent, in
lieu of causing the Borrowers to execute one or more new
Notes, may issue the Administrative Agent's Certificate
confirming the resulting Commitments and Revolving Credit
Commitment Percentages.
(ii) Such change shall be effective from the
effective date specified in such written notice and any Person
added as a Lender shall have all rights and privileges of a
Lender hereunder thereafter as if such Person had been a
signatory to this Agreement and any other Loan Document to
which a Lender is a signatory and any Person removed as a
Lender shall be relieved of any obligations or
responsibilities of a Lender hereunder thereafter.
2.24 Replacement Of Lender. (a) If any Lender requests
compensation under Sections 2.19(c) or 20.8, then such Lender shall use its
reasonable best efforts to designate a different lending office for funding or
booking L/Cs hereunder or to assign its rights and obligations hereunder to
another of its offices, branches or affiliates, if, in the judgment of such
Lender, such designation or assignment (i) would eliminate or reduce amounts
payable pursuant to Sections 2.19(c) or 20.8, in the future and (ii) would not
subject such Lender to any unreimbursed cost or expense and would not otherwise
be disadvantageous to such Lender. The
Borrowers hereby agree to pay all reasonable costs and expenses incurred by any
Lender in connection with any such designation or assignment.
(b) If any Lender requests compensation under Sections
2.19(c) or 20.8, then the Borrowers may, at their sole expense and effort, upon
notice to such Lender and the Administrative Agent, require such Lender to
assign and delegate, without recourse (in accordance with and subject to the
restrictions contained in Article 16), all its interests, rights and obligations
under this Agreement to an assignee that shall assume such obligations (which
assignee may be another Lender, if a Lender accepts such assignment), provided
that (i) if such assignee is not an existing Lender, the Borrowers shall have
received the prior written consent of the Administrative Agent, the Issuers and
Swing Line Lender, which consent shall not unreasonably be delayed or withheld,
(ii) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans and participations in unreimbursed drawings
under L/Cs and Swing Line Loans, accrued interest thereon, accrued fees and all
other amounts payable to it hereunder, from the assignee (to the extent of such
outstanding principal and accrued interest and fees) or the Borrowers (in the
case of all other amounts) and (iii) such assignment will result in a reduction
in such compensation, payments or costs. A Lender shall not be required to make
any such assignment and delegation if, prior thereto, as a result of a waiver by
such Lender or otherwise, the circumstances entitling the Borrowers to require
such assignment and delegation cease to apply.
SECTION 3
CONDITIONS PRECEDENT
As a condition to the effectiveness of this Agreement, each of
the documents respectively described in Sections 3.1 through and including 3.4,
(each in form and substance satisfactory to the Administrative Agent) shall have
been delivered to the Administrative Agent, and the conditions respectively
described in Sections 3.5 through and including 3.19, shall have been satisfied:
3.1 Corporate Due Diligence. (a) Certificates of
corporate good standing for each Credit Party, respectively issued by the
Secretary of State for the state in which that Credit Party is incorporated.
(b) Certificates of due qualification, in good standing,
issued by the Secretary(ies) of State of each State in which the nature of the
business conducted by the Credit Parties, or assets owned by any Credit Party,
requires such qualification and the failure to so qualify would have a Material
Adverse Effect.
(c) Certificates of each Credit Party's Secretary (or, if
such Credit Party has no Secretary, its Assistant Secretary) of the due
adoption, continued effectiveness, and setting forth the texts of, each
corporate resolution adopted in connection with the establishment of the loan
arrangement contemplated by the Loan Documents and attesting to the true
signatures of each Person authorized as a signatory to any of the Loan
Documents.
3.2 Legal Opinions. Opinions of counsel to the Credit
Parties in form and substance reasonably satisfactory to the Administrative
Agent.
3.3 Documents. Originals of this Agreement duly executed
by each of the parties hereto, the documents and instruments listed on the
Restatement Documents List, in each case, duly executed by each of the parties
thereto, and such additional instruments and documents as the Administrative
Agent or its counsel may reasonably require or request.
3.4 Officers' Certificates. Certificates executed by the
President or the Chief Financial Officer of each Credit Party and stating that
the representations and warranties made by the Credit Parties to the
Administrative Agent, the Issuer and the Lenders in the Loan Documents are true
and complete in all material respects as of the date of such Certificate, and
that no event has occurred which is or which, solely with the giving of notice
or passage of time (or both) would be an Event of Default.
3.5 Representations And Warranties. Each of the
representations made by or on behalf of each Credit Party in this Agreement or
in any of the other Loan Documents or in any other report, statement, document,
or paper provided by or on behalf of each Credit Party shall be true and
complete in all material respects as of the date as of which such representation
or warranty was made.
3.6 All Fees And Expenses Paid. All fees currently due
and all costs and expenses incurred by the Administrative Agent in connection
with the administration or amendment and restatement of this credit facility
(including the fees and expenses of counsel to the Administrative Agent) shall
have been paid in full.
3.7 No Default. No Default shall then exist.
3.8 No Adverse Change. No event shall have occurred or
failed to occur, which occurrence or failure has had or could reasonably be
expected to have a materially adverse effect upon any Credit Party's assets,
operations, business, condition (financial or otherwise) or income when compared
with such at the Fiscal quarter ending on or about May 3, 2003.
3.9 Perfection Of Encumbrances. The Administrative Agent
shall have received all documents and instruments, including Uniform Commercial
Code financing statements, required by law or reasonably requested by the
Administrative Agent to be filed, registered or recorded to create or perfect
the first priority Encumbrances intended to be created under the Loan Documents
and all such documents and instruments shall have been so filed, registered or
recorded to the satisfaction of the Administrative Agent.
3.10 [Intentionally Omitted]
3.11 Consents And Approvals. All necessary consents and
approvals to the transactions contemplated hereby shall have been obtained and
shall be reasonably satisfactory to the Administrative Agent.
3.12 No Defaults Under Applicable Law Or Material
Agreements. The consummation of the transactions contemplated hereby shall not
(a) violate any Requirement of Law or (b) conflict with, or result in a default
or event of default under, any material agreement of any Credit Party,
including, without limitation, the Existing Indentures. No event shall exist
which is, or solely with the passage of time, the giving of notice or both,
would be a default under the Existing Indentures or any other material agreement
of any Credit Party.
3.13 No Litigation. Except as set forth in Schedule 4.18,
there shall not exist any litigation or other proceedings the result of which
could have a Material Adverse Effect.
3.14 No Negative Impact On Syndication. There shall not
have occurred any disruption or material adverse change in the financial or
capital markets in general that would, in the reasonable opinion of the
Administrative Agent, have a material adverse effect on the markets for loan
syndications or equity securities in particular, or adversely affect the
syndication of the Loans.
3.15 No Change In Governmental Regulations. No material
changes shall have occurred in governmental regulations or policies affecting
the Credit Parties, the Administrative Agent, the Issuer, or the Lenders prior
to the Restatement Effective Date.
3.16 Excess Availability. After giving effect to all Loans
made and L/Cs issued on the Restatement Effective Date, Availability on the
Restatement Effective Date shall be at least $100,000,000.00.
3.17 [Intentionally Omitted]
3.18 [Intentionally Omitted]
3.19 [Intentionally Omitted]
3.20 [Intentionally Omitted]
3.21 Benefit Of Conditions Precedent. The conditions set
forth in this Article 3 are for the sole benefit of the Administrative Agent,
the Issuer and each Lender and may be waived by the Administrative Agent in
whole or in part without prejudice to the Administrative Agent, the Issuer or
any Lender.
No document shall be deemed delivered to the Administrative
Agent or any Lender until received and accepted by the Administrative Agent at
its offices in Boston, Massachusetts. Under no circumstances shall this
Agreement take effect until executed and accepted by the Administrative Agent at
said offices.
SECTION 4
GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS
To induce each Lender and the Issuer to establish the credit
facility contemplated herein and to induce the Lenders to provide Loans and the
Issuer to issue L/Cs under the Revolving Credit (each of which Loans shall be
deemed to have been made, and L/Cs to have been issued, in reliance thereupon)
the Credit Parties, in addition to all other representations, warranties, and
covenants made by any Credit Party in any other Loan Document, make those
representations, warranties, and covenants included in this Agreement:
4.1 Payment And Performance Of Liabilities. The Credit
Parties shall pay each of their respective payment Liabilities when due (or when
demanded, if payable on demand) and shall promptly, punctually, and faithfully
perform each other Liability.
4.2 Due Organization; Authorization; No Conflicts. (a)
Each Credit Party presently is and hereafter shall remain in good standing as a
corporation under the laws of the State in which it is organized, and is and
shall hereafter remain duly qualified and in good standing in every other State
in which, by reason of the nature or location of each Credit Party's assets or
operation of each Credit Party's business, such qualification may be necessary,
except where the failure to so qualify would not have a Material Adverse Effect.
(b) As of the Restatement Effective Date, each Credit
Party's respective organizational identification number assigned to it by the
State of its incorporation and its respective federal employer identification
number is stated on Schedule 4.2(b). A mailing address at which each of the
Credit Parties may be contacted is 000 Xxxxxxx Xxx, Xxxxx Xxx, Xxxxxxxxx 00000.
(c) No Credit Party shall change its State of
organization; any organizational identification number assigned to that Credit
Party by that State; or that Credit Party's federal taxpayer identification
number, except with the prior written consent of the Administrative Agent (such
consent not to be unreasonably withheld).
(d) The corporate ownership structure of the Lead
Borrower and each of its Subsidiaries is set forth on Schedule 4.2(d). Each
Credit Party (other than the Lead Borrower) is a wholly-owned direct or indirect
Subsidiary of the Lead Borrower. Each direct and indirect Subsidiary of the Lead
Borrower is a Credit Party hereunder. Pamida Foundation does not own and shall
not obtain any material assets, has no and shall not incur any material
liabilities, does not and shall not conduct any operations and is and shall
maintain its status as a tax-exempt foundation under Section 501(c)(3) of the
Internal Revenue Code. None of ShopKo Holdings, Pamida One LLC, Pamida Two LLC,
Pamida Three LLC, Pamida Four LLC, Pamida Five LLC, Pamida Six LLC or Pamida
Seven LLC is a Subsidiary or Affiliate of any Credit Party.
(e) Each Affiliate, as of the Restatement Effective Date,
is listed on Schedule 4.2(e). The Lead Borrower shall provide the Administrative
Agent with prior written notice of any entity's becoming or ceasing to be an
Affiliate.
(f) Each Credit Party has all requisite corporate power
and authority to execute and deliver all Loan Documents to which that Credit
Party is a party and has and will hereafter retain all requisite corporate power
to perform all Liabilities.
(g) The execution and delivery by each Credit Party of
each Loan Document to which it is a party; each Credit Party's consummation of
the transactions contemplated by such Loan Documents (including, without
limitation, the creation of Collateral Interests by that Credit Party to secure
the Liabilities); each Credit Party's performance under those of the Loan
Documents to which it is a party; the borrowings hereunder; and the use of the
proceeds thereof:
(i) have been duly authorized by all necessary
corporate action;
(ii) do not, and will not, contravene in any
material respect any provision of any Requirement of Law, any
Existing Indenture or any other material obligation of that
Credit Party; and
(iii) will not result in the creation or
imposition of, or the obligation to create or impose, any
Encumbrance upon any assets of that Credit Party pursuant to
any Requirement of Law or obligation, except pursuant to the
Loan Documents;
(h) The Loan Documents have been duly executed and
delivered by each Credit Party and are the legal, valid and binding obligations
of each Credit Party, enforceable against each Credit Party in accordance with
their respective terms, except as enforceability is limited by bankruptcy,
insolvency, or other laws relating to or affecting generally the enforcement of
creditors' rights and except to the extent that the availability of the remedy
of specific performance or injunctive relief is subject to the discretion of the
court before which any proceeding therefor may be brought.
4.3 Trade Names. (a) Schedule 4.3 is a listing, as of the
Restatement Effective Date, of:
(i) all names under which any Credit Party ever
conducted its business during the preceding five (5) years
other than names associated exclusively with the ProVantage
Health Services business that have not been used in at least
the six months immediately preceding the Restatement Effective
Date; and
(ii) all Persons with whom any Credit Party ever
consolidated or merged, or from whom any Credit Party ever
acquired in a single transaction or in a series of related
transactions substantially all of such Person's assets, in
each case within the preceding five (5) years, other than
acquisitions of, and consolidations and mergers with, single
store local retail pharmacy businesses occurring more than six
months prior to the Restatement Effective Date.
(b) The Lead Borrower will provide the Administrative
Agent with not less than twenty-one (21) days prior written notice (with
reasonable particularity) of any change to any Credit Party's name from that
under which that Credit Party is conducting its business at the Restatement
Effective Date and will not effect such change unless each Credit Party is then
in compliance with all provisions of this Agreement.
4.4 Intellectual Property. (a) Each Credit Party owns and
possesses, or has the right to use (and will hereafter own, possess, or have
such right to use) all patents, industrial designs, trademarks, trade names,
trade styles, brand names, service marks, logos, copyrights, trade secrets,
know-how, confidential information, and other intellectual or proprietary
property of any third Person reasonably necessary for that Credit Party's
conduct of that Credit Party's business, except where the failure to so own,
possess or have the right to use would not have a Material Adverse Effect.
(b) The conduct by each Credit Party of that Credit
Party's business does not presently infringe (nor will any Credit Party conduct
its business in the future so as to infringe) the patents, industrial designs,
trademarks, trade names, trade styles, brand names, service marks, logos,
copyrights, trade secrets, know-how, confidential information, or other
intellectual or proprietary property of any third Person in any manner that
would have a Material Adverse Effect.
4.5 Locations. (a) The Collateral, and the books,
records, and papers of the Credit Parties pertaining thereto, are kept and
maintained solely at the following locations:
(i) the Lead Borrower's chief executive offices
which, as of the Restatement Effective Date, are at 000
Xxxxxxx Xxx, Xxxxx Xxx, Xxxxxxxxx, 00000; and
(ii) those locations which are listed on Schedule
4.5 which Schedule includes, as of the Restatement Effective
Date, with respect to each such location, the name of the
Credit Party that uses such premises, the name of the Credit
Party that owns the Inventory located at such premises, the
name and address of the landlord on the Lease which covers
such location (or an indication that a Credit Party owns the
subject location) and of all service bureaus with which any
such records are maintained and the names and addresses of
each of the Credit Parties' landlords.
(b) No Credit Party shall remove any of the Collateral
from said chief executive office or those locations listed with respect to such
Credit Party on Schedule 4.5 or any location with respect to such Credit Party
opened in accordance with Section 4.5(c) or transfer, sell or otherwise convey
title to such Collateral to another Credit Party except for the following
purposes:
(i) to accomplish sales of Inventory in the
ordinary course of business;
(ii) to move Inventory from one such location to
another such location;
(iii) to utilize such of the Collateral as is
removed from such locations in the ordinary course of
business;
(iv) to dispose of Inventory that is not Eligible
Inventory; or
(v) to open or close stores or to move the chief
executive office.
unless the Administrative Agent, to the extent required by the Administrative
Agent, shall have received and filed additional UCC financing statements with
respect to such removed or transferred Collateral.
(c) The Credit Parties will not open any new locations at
which any Credit Party maintains, offers for sale or stores any of the
Collateral unless, to the extent required by the Administrative Agent, the
Administrative Agent shall have received and filed additional UCC financing
statements with respect to Collateral at such new location if required by any
Requirement of Law then in effect (as determined by the Administrative Agent).
The Lead Borrower will promptly notify the Administrative Agent in writing of
any new location at which any Credit Party maintains, offers for sale, or stores
any of the Collateral. The Credit Parties will not enter into any leases for any
new locations at any time an Event of Default exists.
(d) Except as otherwise disclosed pursuant to this
Section 4.5 or as hereafter disclosed to the Administrative Agent, no Inventory
of the Credit Parties with an aggregate Cost greater than $5,000,000.00 is in
the care or custody of any third party or stored or entrusted with a bailee or
other third party and Inventory with an aggregate Cost greater than
$5,000,000.00 shall not hereafter be placed under such care, custody, storage,
or entrustment unless a warehouseman's or bailee's agreement reasonably
acceptable to the Administrative Agent has been provided to the Administrative
Agent in respect thereof.
4.6 Title To Assets; Liens; Limitations on Liens. (a) The
Credit Parties are, and shall hereafter remain, the owners of all Collateral, in
each case free and clear of all Encumbrances with the exception of the
following:
(i) Encumbrances in favor of the Administrative
Agent, or, with respect to L/Cs issued hereunder, the Issuer;
(ii) those Encumbrances (if any) listed on
Schedule 4.6(a) and any renewals or refinancings thereof that
do not increase the amount of Indebtedness secured thereby or
extend such Encumbrances to other property of the Credit
Parties;
(iii) Permitted Encumbrances;
(iv) Encumbrances granted to secure Indebtedness
incurred to finance the acquisition of fixed or capital
assets, provided that (1) any such Encumbrance shall attach
only to the assets so acquired by the Borrowers with the
proceeds of such Indebtedness and shall not extend to any
other assets of the Borrowers and (2) that the amount of
Indebtedness secured thereby is not increased;
(v) Encumbrances granted to secure Indebtedness
permitted pursuant to Section 4.7(f) hereof, provided that any
such Encumbrance shall attach only to the real estate, and
improvements thereto, so financed by the Borrowers with the
proceeds of such Indebtedness and shall not extend to any
other assets of the Borrowers, and further provided that if
there is located on such real estate any Inventory of the
Borrowers or any other Collateral or any books and records
relating thereto, the mortgagee obtaining such Encumbrance
shall have furnished the Administrative Agent with an
agreement permitting the Administrative Agent reasonable
access to the real estate on which the mortgagee holds such
Encumbrance for the purpose of repossessing and/or disposing
of any Collateral located therein and waiving any rights in
and to all Collateral, all on terms reasonably acceptable to
the Administrative Agent;
(vi) Judgment liens with respect to judgments
that do not constitute an Event of Default under Section 10.8
hereof;
(vii) Encumbrances upon any property or assets
(other than Collateral) of any Person existing immediately
prior to the time of any Permitted Acquisition of such Person
or such Person's property or assets by a Borrower, provided
that such Encumbrances were not granted in contemplation of,
or in connection with, such Permitted Acquisition;
(viii) Encumbrances in favor of Payless to secure
the Lead Borrower's obligations for sales of Payless Inventory
pursuant to the Payless Agreement and consisting solely of
liens on receivables and proceeds arising directly from sales
of Payless Inventory; and
(ix) Encumbrances consisting of (1) unasserted
claims and (2) asserted claims not to exceed $25,000.00 at any
time unpaid and outstanding for more than five Business Days,
in each case related to credit card receivables pursuant to
merchant bank agreements related thereto.
(b) Except as disclosed on Schedule 4.6(b), no Credit
Party has, and none shall have, possession of any property on consignment to
that Credit Party in excess of $30,000,000.00 unless (i) the Lead Borrower has
furnished the Administrative Agent with ten (10) days prior written notice of
its intent to acquire such property on consignment, and (ii) if the
Administrative Agent so requests, an intercreditor agreement with the consignor
on terms reasonably acceptable to the Administrative Agent has been delivered to
the Administrative Agent, and (iii) the aggregate amount of property consigned
to the Credit Parties shall not exceed ten percent of the Cost of the Credit
Parties' Inventory at any time.
(c) No Credit Party will, or will allow any of its
Subsidiaries to, directly or indirectly, create, incur, assume of suffer to
exist any Lien (other than a Lien of the type described in clauses (a)(ii),
(iii), (vi) and (viii) of this Section 4.6) of any kind on any now owned or
hereafter acquired Excluded Asset securing any Indebtedness (other than Liens
permitted to secure Indebtedness permitted to be incurred under Sections 4.7(f)
and (g)) unless such Credit
Party secures or causes such Subsidiary to secure the Liabilities equally and
ratably with such Indebtedness for so long as such Indebtedness is so secured;
provided however, that if any of the Liens permitted above cause any of the
Existing Indentures to be secured by the assets subject to such Lien, the Credit
Parties will cause the Liabilities to become secured by such assets equally and
ratably with such Existing Indentures.
4.7 Indebtedness. The Credit Parties do not and shall not
hereafter have any Indebtedness with the exceptions of the following:
(a) any Indebtedness on account of the Revolving
Credit or the L/Cs;
(b) the Indebtedness (if any) listed on Schedule
4.7, and any renewals or refinancings thereof that does not
increase the principal amount thereof;
(c) unsecured Indebtedness due to any Credit
Party by any other Credit Party that is subordinated to the
Liabilities in a manner satisfactory to the Administrative
Agent;
(d) Indebtedness not otherwise permitted in this
Section, not to exceed $50,000,000.00 in the aggregate at any
time outstanding;
(e) Indebtedness on account of Hedge Agreements
on terms and in such amounts as may be reasonably acceptable
to the Administrative Agent;
(f) Indebtedness secured by Operating Properties
not to exceed $300,000,000.00 in aggregate principal amount
outstanding at any time to the extent such Indebtedness is
permitted to be so incurred and secured under the Existing
Indentures and would not require or result in the granting of
an Encumbrance on any Operating Property in favor of the
holders of the notes issued under any such Existing Indenture;
(g) Indebtedness not to exceed $50,000,000.00 in
the aggregate at any time outstanding secured by Encumbrances
permitted by Section 4.6(a)(iv); and
(h) Indebtedness of the Borrowers consisting of
a guaranty of obligations of a Credit Party otherwise
permitted hereunder.
4.8 Insurance. (a) Schedule 4.8 is a schedule of all
insurance policies owned by the Credit Parties or under which any Credit Party
is the named insured as of the Restatement Effective Date. Each of such material
policies is in full force and effect. Neither the issuer of any such policy nor
any Credit Party is in default or violation of any such policy in any material
respect.
(b) The Credit Parties shall have and maintain at all
times insurance covering such risks, in such amounts, containing such terms, in
such form, for such periods, and written by such companies as is customarily
maintained by prudent companies in the Credit Parties' industry (including such
levels of self-insurance as are deemed prudent by the Lead Borrower).
The Credit Parties shall also have and maintain at all times insurance covering
the Collateral, in such amounts, containing such terms, in such form, for such
periods, and written by such companies as may be reasonably satisfactory to the
Administrative Agent.
(c) All property insurance related to the Collateral and
liability insurance carried by the Credit Parties shall provide for a minimum of
thirty (30) days' written notice of cancellation to the Administrative Agent and
all such liability insurance and insurance which covers the Collateral shall
include an endorsement in favor of the Administrative Agent (and the Issuer and
the Lenders, in the case of liability insurance), which endorsement shall
provide that the insurance, to the extent of the Administrative Agent's interest
therein, shall not be impaired or invalidated, in whole or in part, by reason of
any act or neglect of any Credit Party or by the failure of any Credit Party to
comply with any warranty or condition of the policy.
(d) The Lead Borrower shall furnish the Administrative
Agent from time to time with certificates or other evidence satisfactory to the
Administrative Agent regarding compliance by the Credit Parties with the
foregoing requirements.
(e) In the event of the failure by the Credit Parties to
maintain insurance as required herein, the Administrative Agent, at its option,
may obtain such insurance, provided, however, the Administrative Agent's
obtaining of such insurance shall not constitute a cure or waiver of any Event
of Default occasioned by the Credit Parties' failure to have maintained such
insurance.
4.9 Licenses. Each material license, distributorship,
franchise, and similar agreement issued to any Credit Party, or to which any
Credit Party is a party, is in full force and effect, except where the failure
to be in full force and effect would not have a Material Adverse Effect. No
party to any such license or agreement is in default or violation thereof, where
such default or violation would have a Material Adverse Effect. As of the
Restatement Effective Date, no Credit Party has received any notice or threat of
cancellation of any such license or agreement. The Lead Borrower shall promptly
furnish the Administrative Agent with copies of any notice or threat of
cancellation of any such license or agreement which would have a Material
Adverse Effect.
4.10 Leases. Schedule 4.10 is a schedule of all effective
Leases and Capital Leases in an amount greater than $1,000,000.00 as of the
Restatement Effective Date, except locations where no Inventory is located. Each
of such Leases and Capital Leases is in full force and effect, except where the
failure to be in full force and effect would not have a Material Adverse Effect.
No party to any such Lease or Capital Lease is in default or violation of any
such Lease or Capital Lease where such default or violation would have a
Material Adverse Effect. As of the Restatement Effective Date, no Credit Party
has received any notice or threat of cancellation of any such Lease or Capital
Lease, except for cancellations which would not have a Material Adverse Effect.
Each Credit Party hereby authorizes the Administrative Agent at any time and
from time to time during the existence of an Event of Default to contact any of
the Credit Parties' respective landlords in order to confirm the Credit Parties'
continued compliance with the terms and conditions of the Lease(s) between the
subject Credit Party and
that landlord and to discuss such issues, concerning the subject Credit Party's
occupancy under such Lease(s), as the Administrative Agent may determine.
4.11 Requirements Of Law. Each Credit Party is in
compliance with, and shall hereafter comply with and use its assets in
compliance with, all Requirements of Law except where the failure of such
compliance will not have a Material Adverse Effect. No Credit Party has received
any notice of any violation of any Requirement of Law (other than of a violation
which would not have a Material Adverse Effect), which violation has not been
cured or otherwise remedied.
4.12 Labor Relations. (a) As of the Restatement Effective
Date, no Credit Party is a party to any collective bargaining or other labor
contract.
(b) There is not presently pending and, to any Credit
Party's knowledge, there is not threatened any of the following which would have
a Material Adverse Effect:
(i) any strike, slowdown, picketing, work
stoppage, or employee grievance process;
(ii) any proceeding against or affecting any
Credit Party relating to the alleged violation of any
Applicable Law pertaining to labor relations or before the
National Labor Relations Board, the Equal Employment
Opportunity Commission, or any comparable governmental body,
organizational activity, or other labor or employment dispute
against or affecting any Credit Party;
(iii) any lockout of any employees by any Credit
Party (and no such action is contemplated by any Credit
Party); or
(iv) any application for the certification of a
collective bargaining agent.
(c) No event has occurred or circumstance exists which
would provide the basis for any work stoppage or other labor dispute that would
have a Material Adverse Effect.
(d) Except as set forth on Schedule 4.12, each Credit
Party:
(i) has complied and will comply with all
Applicable Laws relating to employment, equal employment
opportunity, nondiscrimination, immigration, wages, hours,
benefits, collective bargaining, the payment of social
security and similar taxes, occupational safety and health,
and plant closing, except where the failure to so comply would
not have a Material Adverse Effect; and
(ii) is not and will not become liable for the
payment of more than any amount of compensation, damages,
taxes, fines, penalties, or other amounts, however designated,
for that Credit Party's failure to comply with any Applicable
Law referenced in Section 4.12(d)(i), which would have a
Material Adverse
Effect or would result in a claim in excess of $1,000,000.00
on any Collateral with priority over the Encumbrances of the
Administrative Agent therein.
(e) The Lead Borrower shall furnish prompt notice to the
Administrative Agent of the occurrence of any event described in subparagraphs
4.12(a) through and including 4.12(d) which would have been disclosed to the
Administrative Agent had such occurrence existed as of the Restatement Effective
Date.
4.13 Maintain Collateral. The Credit Parties shall:
(a) keep the Collateral in good order and repair
(ordinary wear and tear and insured casualty excepted);
(b) not suffer or cause the waste or destruction
of any material part of the Collateral;
(c) not use any of the Collateral in violation
in any material respect of any policy of insurance thereon;
(d) maintain a system to ensure that, with
respect to sales of pharmacy Inventory (such as prescriptions,
pharmaceuticals, medications and controlled substances) giving
rise to rights to payment from any third-party payor insurance
companies, managed care organizations, government entities,
pharmacy plans (or the pharmacy plan administrators of such
companies, organizations or entities), which are Pharmacy
Accounts and with whom the Credit Parties do not have an
existing contractual relationship, (i) each purchaser of
pharmacy Inventory executes an assignment of benefits form
(assigning reimbursement rights to the Lead Borrower) and (ii)
copies of such assignments are sent to all such third-party
payors, it being understood that the term "third-party payor"
in this clause (d) shall not include any retail purchaser of
such pharmacy Inventory.
(e) not sell, lease, or otherwise dispose of any
of the Collateral, other than the following:
(i) the sale of Inventory in the ordinary course
of business or in compliance with this Agreement; and
(ii) the turning over to the Administrative Agent
of all Receipts during the existence of a Cash Control Event
as provided herein.
4.14 Taxes. (a) With respect to the Credit Parties'
federal, state, and local tax liability and obligations:
(i) The Lead Borrower, in material compliance
with all Applicable Law, has properly filed all returns due to
be filed up to the Restatement Effective Date.
(ii) As of the Restatement Effective Date, except
as described on Schedule 4.14:
(A) At no time has any Credit Party
received from any taxing authority any request to
perform any examination of or with respect to any
Credit Party nor any other written or verbal notice
in any way relating to any claimed failure by any
Credit Party to comply with all Applicable Law
concerning payment of any taxes or other amounts in
the nature of taxes.
(B) No agreement exists which waives or
extends any statute of limitations applicable to the
right of any taxing authority to assert a deficiency
or make any other claim for or in respect of federal
income taxes.
(C) No issue has been raised in any tax
examination of any Credit Party which, by application
of similar principles, reasonably would be expected
to result in the assertion of a deficiency for any
fiscal year open for examination, assessment, or
claim by any taxing authority which would have a
Material Adverse Effect.
(b) The Credit Parties have, and hereafter shall: pay, as
they become due and payable, all taxes and unemployment contributions and other
charges of any kind or nature levied, assessed or claimed against any Credit
Party or the Collateral by any person or entity whose claim could result in an
Encumbrance upon any asset of any Credit Party or by any Governmental Authority
(provided that the Credit Party shall not be required to pay any such taxes or
claims as long as such tax or claim is being disputed by the Credit Parties in
good faith, the Credit Parties have established adequate reserves therefor in
accordance with GAAP, and no notice of tax lien has been filed with respect
thereto); properly exercise any trust responsibilities imposed upon any Credit
Party by reason of withholding from employees' pay or by reason of any Credit
Party's receipt of sales tax or other funds for the account of any third party;
timely make all contributions and other payments as may be required pursuant to
any Employee Benefit Plan now or hereafter established by any Credit Party; and
timely file all tax and other returns and other reports with each Governmental
Authority to whom any Credit Party is obligated to so file.
(c) During the existence of any Event of Default, at its
option, the Administrative Agent may, but shall not be obligated to, pay any
such taxes, unemployment contributions, and any and all other charges levied or
assessed upon any Credit Party or the Collateral by any Person or Governmental
Authority, and make any contributions or other payments on account of the Credit
Parties' Employee Benefit Plan as the Administrative Agent, in the
Administrative Agent's discretion, may deem necessary or desirable, to protect,
maintain, preserve, collect, or realize upon any or all of the Collateral or the
value thereof or any right or remedy pertaining thereto, provided, however, the
Administrative Agent's making of any such payment shall not constitute a cure or
waiver of any Event of Default occasioned by the Credit Parties' failure to have
made such payment.
4.15 No Margin Stock; Investment Company. No Credit Party
is engaged in the business of extending credit for the purpose of purchasing or
carrying any margin stock (within the meaning of Regulations U, T, and X of the
Board of Governors of the Federal Reserve System of the United States). No part
of the proceeds of any borrowing hereunder will be used at any time to purchase
or carry any such margin stock or to extend credit to others for the purpose of
purchasing or carrying any such margin stock. No Credit Party is (i) an
investment company or a company controlled by an investment company within the
meaning of the Investment Company Act of 1940, as amended, or (ii) subject to
any other law which purports to regulate or restrict its ability to borrow money
or to consummate the transactions contemplated by this Agreement or the other
Loan Documents or to perform its obligations hereunder or thereunder (other than
Regulation X of the Board).
4.16 ERISA. (a) Neither any Credit Party nor any ERISA
Affiliate has ever taken any of the following actions that would have a Material
Adverse Effect:
(i) violated or failed to be in compliance with
any Credit Party's Employee Benefit Plan;
(ii) failed timely to file all reports and
filings required by ERISA to be filed by any Credit Party;
(iii) engaged in any nonexempt "prohibited
transactions" or "reportable events" (respectively as
described in ERISA);
(iv) engaged in, or committed, any act such that
a tax or penalty reasonably could be imposed upon any Credit
Party on account thereof pursuant to ERISA;
(v) accumulated any material cumulative funding
deficiency within the meaning of ERISA;
(vi) terminated any Employee Benefit Plan such
that a lien could be asserted against any assets of any Credit
Party on account thereof pursuant to ERISA; or
(vii) have any obligation under any Employee
Benefit Plan which is a multiemployer plan within the meaning
of Section 4001(a) of ERISA for withdrawal liability.
(b) Neither any Credit Party nor any ERISA Affiliate
shall ever engage in any action of the type described in Section 4.16(a) to the
extent that any of the foregoing would have a Material Adverse Effect.
4.17 Hazardous Materials. (a) No Credit Party has ever:
(i) been legally responsible for any release or threat of release of any
Hazardous Material or (ii) received notification of the incurrence of any
expense in connection with the assessment, containment, or removal of any
Hazardous Material for which that Credit Party would be responsible, except
where such release or threat of release or incurrence of such expense would not
have a Material Adverse Effect.
(b) Each Credit Party shall: (i) dispose of any Hazardous
Material only in compliance with all Environmental Laws and (ii) have possession
of any Hazardous Material only in the ordinary course of that Credit Party's
business and in compliance with all Environmental Laws, except, in each case,
where the failure to do so would not have a Material Adverse Effect.
4.18 Litigation. As of the Restatement Effective Date,
except as described in Schedule 4.18, there is not presently pending or
threatened by or against any Credit Party any suit, action, proceeding, or
investigation which, if determined adversely to any Credit Party, could have a
Material Adverse Effect.
4.19 Dividends; Investments; Corporate Action. No Credit
Party shall:
(a) pay any cash dividend or make any other
distribution in respect of any class of that Credit Party's
capital stock, except (i) the Subsidiaries of the Lead
Borrower may pay such dividends or make such distributions to
the Lead Borrower and (ii) the Lead Borrower may pay such
dividends or make such distributions to its shareholders so
long as prior to and after giving effect to such dividend or
distribution Availability is at least $100,000,000.00 and
Availability is projected on a pro forma basis to be at least
$100,000,000.00 for the twelve month period immediately
following such dividend or distribution.
(b) redeem, retire, purchase, or acquire any of
the Lead Borrower's capital stock, provided that, as long as
no Default exists or would arise therefrom, the Lead Borrower
may redeem, purchase, retire or acquire its capital stock so
long as prior to and after giving effect to such repurchase
Availability is at least $100,000,000.00 and Availability is
projected on a pro forma basis to be at least $100,000,000.00
for the twelve month period immediately following such
redemption, purchase, retirement or acquisition.
(c) Invest in or purchase any stock or
securities or rights to purchase any such stock or securities,
of any Person, except (i) investments described in Schedule
4.19, (ii) investments and purchases of equity by the Lead
Borrower in any other Borrower, (iii) Permitted Investments,
(iv) investments representing stock or obligations issued to a
Credit Party in settlement of claims against any other Person
by reason of a composition or adjustment of debt or a
reorganization of any debtor of a Credit Party, (v) Permitted
Acquisitions, as long as no Default exists or would arise
therefrom, (vi) as permitted in Section 4.20, (vii) warrants
or other similar rights received for no additional
consideration in connection with a transaction otherwise
permitted pursuant to this Agreement, and (viii) other
investments so long as prior to and after giving effect to
such investment Availability is at least $100,000,000.00 and
Availability is projected on a pro
forma basis to be at least $100,000,000.00 for the twelve
month period immediately following such investment.
(d) Merge or consolidate or be merged or
consolidated with or into any other Person, except that (i)
any Subsidiary of a Credit Party may merge with or into the
Lead Borrower or any other wholly owned Subsidiary of the Lead
Borrower, and (ii) Permitted Acquisitions, as long as no
Default exists or would arise therefrom.
(e) Consolidate any of that Credit Party's
operations with those of any other Person, except that any
Subsidiary of a Credit Party may consolidate its operations
with or into the Lead Borrower or any other wholly owned
Subsidiary of the Lead Borrower.
(f) Organize or create any Affiliate or Related
Entity to the extent that the Credit Parties' investment in
all such Affiliates and Related Entities after the Restatement
Effective Date (whether as equity, intercompany loan or
otherwise and whether such Affiliate or Related Entity is
organized or created after the Restatement Effective Date)
exceeds $1,000,000.00 in the aggregate, provided that no such
investment shall be made during the existence of a Cash
Control Event and provided, further, that, if any such
Affiliate or Related Party becomes a subsidiary of the Lead
Borrower it shall become a Guarantor hereunder in a manner
satisfactory to the Administrative Agent.
(g) Subordinate any other material debts or
other material obligations owed to that Credit Party by any
third party to any other debts owed by such third party to any
other Person.
(h) Acquire any assets other than in the
ordinary course and conduct of that Credit Party's business as
conducted at the execution of this Agreement, except for
Permitted Acquisitions, as long as no Default exists or would
arise therefrom.
4.20 Loans. No Credit Party shall make or suffer to exist
any loans or advances to, nor acquire the Indebtedness of, any Person, provided,
however, the foregoing does not prohibit any of the following:
(a) advance payments made to that Credit Party's
suppliers in the ordinary course;
(b) advances to that Credit Party's officers,
employees, and salespersons with respect to reasonable
expenses to be incurred by such officers, employees, and
salespersons for the benefit of that Credit Party, which
expenses are properly substantiated by the person seeking such
advance and properly reimbursable by that Credit Party;
(c) unsecured intercompany loans amongst the
Credit Parties that are subordinated to the Liabilities in a
manner satisfactory to the Administrative Agent;
(d) in addition to any loans permitted by
clauses (b) and (e) of this Section 4.20, loans to Affiliates
and Related Entities of the Credit Parties (other than Credit
Parties) provided that the Credit Parties' investment in all
such Affiliates and Related Entities after the Restatement
Effective Date (whether as equity, intercompany loans or
otherwise and whether such Affiliate or Related Entity is
organized or created after the Restatement Effective Date)
shall not exceed $1,000,000.00 in the aggregate provided that
no loans permitted solely by this Section 4.20(d) shall be
made during the existence of a Cash Control Event;
(e) loans made after the Restatement Effective
Date to employees, officers and salespersons of the Credit
Parties consistent with past practices provided that (i) any
loans to any individual shall not exceed $500,000.00 in the
aggregate outstanding at any time, and (ii) all such loans to
employees, officers and salespersons of the Credit Parties
shall not exceed $2,500,000.00 in the aggregate outstanding at
any time.
4.21 Protection Of Assets. The Administrative Agent, in
the Administrative Agent's reasonable discretion, and from time to time during
the existence of an Event of Default, may discharge any tax or Encumbrance on
any of the Collateral, or take any other action which the Administrative Agent
may deem necessary or desirable to repair, insure, maintain, preserve, collect,
or realize upon any of the Collateral. The Administrative Agent shall not have
any obligation to undertake any of the foregoing and shall have no liability on
account of any action so undertaken except where there is a specific finding in
a judicial proceeding (in which the Administrative Agent has had an opportunity
to be heard), from which finding no further appeal is available, that the
Administrative Agent had acted in actual bad faith or in a grossly negligent
manner. The Credit Parties shall pay to the Administrative Agent, on demand, or
the Administrative Agent, in its discretion, may add to the Loan Account, all
amounts paid or incurred by the Administrative Agent pursuant to this Section
4.21.
4.22 Lines of Business. No Credit Party shall engage in
any business other than the business in which it is currently engaged or a
business reasonably related thereto.
4.23 Affiliate Transactions. Except as described on
Schedule 4.23 or as otherwise permitted under this Agreement, no Credit Party
shall make any payment, nor give any value, to any Affiliate that is not a
Credit Party except for goods and services actually purchased by that Credit
Party from, or sold by that Credit Party to, such Affiliate for a price and on
terms which shall be no less favorable to that Credit Party than those which
would have been charged and imposed in an arms length transaction.
4.24 Further Assurances. (a) Each Credit Party shall
execute and deliver to the Administrative Agent such instruments, documents, and
papers, and shall do all such things from time to time hereafter as the
Administrative Agent may reasonably request to carry into effect the
provisions and intent of this Agreement; to protect and perfect the
Administrative Agent's Collateral Interests in the Collateral; and to comply in
all material respects with all applicable statutes and laws, and facilitate the
collection of the Receivables Collateral. Each Credit Party shall execute all
such instruments as may be reasonably required by the Administrative Agent with
respect to the recordation and/or perfection of the Collateral Interests created
or contemplated herein.
(b) Each Credit Party hereby designates the
Administrative Agent as that Credit Party's true and lawful attorney, with full
power of substitution, to sign and file any financing statements and other
documents and instruments in order to perfect or protect the Administrative
Agent's Collateral Interests in the Collateral.
(c) A carbon, photographic, or other reproduction of this
Agreement or of any financing statement or other instrument executed pursuant to
this Section 4.24 shall be sufficient for filing to perfect the security
interests granted herein.
4.25 Adequacy Of Disclosure.
(a) All financial statements furnished to the
Administrative Agent and to each Lender by each Credit Party have been prepared
in accordance with GAAP consistently applied and present fairly in all material
respects the condition of the Credit Parties at the date(s) thereof and the
results of operations and cash flows for the period(s) covered (provided,
however, that unaudited financial statements are subject to normal year end
adjustments and to the absence of footnotes). There has been no change in the
Consolidated financial condition, results of operations, or cash flows of the
Credit Parties since the date(s) of such financial statements, other than
changes in the ordinary course of business, and changes which have not had a
Material Adverse Effect.
(b) As of the Restatement Effective Date, no Credit Party
has any material contingent obligations or obligation under any Lease, excluding
synthetic leases not reported under GAAP, or Capital Lease which is not noted in
the Credit Parties' Consolidated financial statements furnished to the
Administrative Agent and to each Lender prior to the execution of this
Agreement.
(c) No document, instrument, agreement, or paper now or
hereafter given to the Administrative Agent or to any Lender by or on behalf of
each Credit Party in connection with the execution or amendment of this
Agreement by the Administrative Agent and each Lender (other than projections
and forecasts, which are and will be made in good faith using reasonable
assumptions) contains or will contain any untrue statement of a material fact or
omits or will omit to state a material fact necessary in order to make the
statements therein not misleading. There is no fact known to any Credit Party
which has, or which, in the foreseeable future would likely have, a Material
Adverse Effect which has not been disclosed in writing to the Administrative
Agent and to each Lender.
4.26 No Restrictions On Liabilities. Except for agreements
in existence on the Original Closing Date as disclosed in Schedule 4.7, no
Credit Party shall enter into or directly or
indirectly become subject to any agreement which prohibits or restricts, in any
manner, any Credit Party's:
(a) creation of, and granting of Collateral
Interests in favor of the Administrative Agent; and
(b) incurrence of Liabilities.
4.27 Permitted Refinancing of Certain Indebtedness;
Amendments. No Borrower shall (1) incur Indebtedness under this Agreement for
the purpose of (a) making a payment on the Indebtedness outstanding under the
Existing Indentures at the maturity date thereof unless, both before and
immediately after giving effect to any such payment, (i) no Default or Event of
Default exists and (ii) Availability as projected by the Lead Borrower (to the
reasonable satisfaction of the Administrative Agent) equals or exceeds
$45,000,000.00 at all times during the twelve month period immediately following
such payment or (b) making any optional prepayment on or redemption or purchase
of any Indebtedness (other than Indebtedness in respect of Capital Leases and
purchase money Indebtedness and other similar Indebtedness permitted under
Section 4.7(g)), other than on the maturity date thereof, unless, both before
and immediately after giving effect to any such prepayment, redemption or
purchase, (i) no Default or Event of Default exists and (ii) Availability as
projected by the Lead Borrower (to the reasonable satisfaction of the
Administrative Agent) equals or exceeds $100,000,000.00 at all times during the
twelve month period immediately following such prepayment, redemption or
purchase or (2) make any payment with respect to any Indebtedness owing to any
other Credit Party that is not a Borrower. No Credit Party shall amend or modify
the terms of the Existing Indentures in a manner adverse to the Lenders (in the
reasonable judgment of the Administrative Agent) or amend, terminate, replace or
otherwise modify the Intercompany Subordinated Demand Promissory Note.
4.28 Limitations on Capital Expenditures. If Availability
is less than $100,000,000.00 for 14 consecutive days during a Fiscal year, then
the Credit Parties shall not make or commit to make any Capital Expenditures in
excess of $120,000,000.00 in such Fiscal year.
4.29 Store Closings. The Credit Parties shall not close or
announce the closure of any store locations unless (a) the Cost of all Inventory
located in such closed stores does not exceed, in the aggregate over the term of
this Agreement, thirty percent (30%) of the Cost of the Credit Parties'
Inventory existing as of the Restatement Effective Date and (b) the Cost of all
Inventory located in such closed stores in any Fiscal year does not exceed, in
the aggregate, twenty percent (20%) of the Cost of the Credit Parties' Inventory
existing as of the first Business day of such Fiscal year. In addition, the
Credit Parties shall not close substantially contemporaneously more than ten
Shopko store locations or twenty-five Pamida store locations unless the Lead
Borrower has engaged a professional liquidator reasonably acceptable to the
Administrative Agent to manage such store location closings.
4.30 Certain Proceeds. (a) During the continuance of a
Cash Control Event, the Credit Parties shall deposit all proceeds from Capital
Events and casualty insurance proceeds
relating to Collateral into a Blocked Account maintained by the Administrative
Agent solely to hold such proceeds.
(b) The Credit Parties shall maintain a system to track
proceeds received with respect to Payless Inventory and shall transmit all such
proceeds within ten (10) days of the receipt thereof to Payless or an account
maintained by the Credit Parties solely for the deposit of such proceeds.
4.31 Maturities of Indebtedness under the Existing
Indentures. At all times during the period beginning thirty (30) days prior to
any scheduled maturity of any Indebtedness under any Existing Indenture through
the date of such scheduled maturity, the Credit Parties shall (a) cause
Availability to be at least $45,000,000.00 (after giving effect to the repayment
in full of such Indebtedness) and (b) have, either through additional
Availability (in excess of $45,000,000.00) or cash (not subject to any Lien,
other than Permitted Encumbrances) in a segregated account (or a combination
thereof) funds available to repay such maturing Indebtedness in its entirety.
4.32 Other Covenants. No Credit Party shall indirectly do
or cause to be done any act which, if done directly by that Credit Party, would
breach any covenant contained in this Agreement.
SECTION 5
FINANCIAL REPORTING AND PERFORMANCE COVENANTS
5.1 Maintain Records. The Credit Parties shall:
(a) at all times, keep proper books of account,
in which full, true, and accurate entries shall be made in all
material respects of all of the Credit Parties' financial
transactions, all in accordance with GAAP applied consistently
with prior periods to fairly reflect the Consolidated
financial condition of the Credit Parties at the close of, and
its results of operations for, the periods in question;
(b) timely provide the Administrative Agent with
those financial reports, statements, and schedules required by
this Article 5 or otherwise, each of which reports, statements
and schedules shall be prepared, to the extent applicable, in
accordance with GAAP applied consistently with prior periods
to fairly reflect in all material respects the Consolidated
financial condition of the Credit Parties at the close of, and
the results of operations for, the period(s) covered therein;
(c) at all times, keep accurate current records
of the Collateral including, without limitation, accurate
current stock, cost, and sales records of its Inventory,
accurately and sufficiently itemizing and describing the
kinds, types, and quantities of Inventory and the cost and
selling prices thereof;
(d) at all times, retain independent certified
public accountants who are reasonably satisfactory to the
Administrative Agent (Deloitte & Touche LLP or any other
nationally recognized accounting firm being acceptable) and
instruct such accountants to fully cooperate with, and be
available to, the Administrative Agent to discuss the Credit
Parties' financial performance, financial condition, operating
results, controls, and such other matters, within the scope of
the retention of such accountants, as may be raised by the
Administrative Agent.
(e) not change any Credit Party's fiscal year
without furnishing the Administrative Agent with at least
ninety (90) days prior written notice thereof.
5.2 Access To Records. (a) Each Credit Party shall accord
the Administrative Agent with access from time to time during normal business
hours and, as long as no Event of Default exists, upon reasonable prior notice,
as the Administrative Agent may reasonably require to all properties owned by or
over which any Credit Party has control. Subject to the provisions of Section
5.9(d) hereof, the Administrative Agent shall have the right (as long as no
Event of Default exists, upon reasonable prior notice), and each Credit Party
will permit the Administrative Agent from time to time as Administrative Agent
may reasonably request, to examine, inspect, copy, and make extracts from any
and all of the Credit Parties' books, records, electronically stored data,
papers, and files relating to the financial condition of such Credit Party or to
the Collateral and in connection therewith, each Credit Party shall make all of
that Credit Party's copying facilities available to the Administrative Agent.
(b) Subject to the provisions of Section 5.2(a), each
Credit Party hereby authorizes the Administrative Agent to:
(i) inspect, copy, duplicate, review, cause to
be reduced to hard copy, run off, draw off, and otherwise use
any and all computer or electronically stored information or
data which relates to the financial condition of such Credit
Party or to the Collateral, or any service bureau, contractor,
accountant, or other person, and directs any such service
bureau, contractor, accountant, or other person fully to
cooperate with the Administrative Agent with respect thereto;
and
(ii) during the existence of a Cash Control
Event, verify at any time the Collateral or any portion
thereof, including verification with account debtors, and/or
with each Credit Party's computer billing companies,
collection agencies, and accountants and to sign the name of
each Credit Party on any notice to each Credit Party's account
debtors or verification of the Collateral.
(c) The Administrative Agent from time to time may
designate one or more representatives to exercise the Administrative Agent's
rights under this Section 5.2 as fully as if the Administrative Agent were doing
so.
5.3 Immediate Notice To Administrative Agent. (a) The
Lead Borrower shall provide the Administrative Agent with written notice
promptly upon the occurrence of any of the
following events, which written notice shall be with reasonable particularity as
to the facts and circumstances in respect of which such notice is being given:
(i) any change in any Credit Party's President,
chief executive officer, chief operating officer, and chief
financial officer (without regard to the title(s) actually
given to the Persons discharging the duties customarily
discharged by officers with those titles);
(ii) any cessation of any Credit Party's making
of payment, in the ordinary course, to any of its creditors
(other than its cessation of making of such payments on
account of a dispute with such creditor), which would have a
Material Adverse Effect;
(iii) any failure by any Credit Party to pay rent
at any of that Credit Party's locations, which failure
continues for more than three (3) days following the last day
on which such rent was payable and which failure is likely to
have a Material Adverse Effect, unless such rent is being
disputed by the Credit Parties in good faith and the Credit
Parties have established adequate reserves therefor in
accordance with GAAP;
(iv) any event which the Lead Borrower determines
to have a Material Adverse Effect;
(v) the occurrence of any Default;
(vi) any intention on the part of any Credit
Party to discharge that Credit Party's present independent
accountants or any withdrawal or resignation by such
independent accountants from their acting in such capacity (as
to which, see Subsection 5.1(d)); and
(vii) any litigation which, if determined
adversely to any Credit Party, would have a Material Adverse
Effect.
(b) The Lead Borrower shall:
(i) provide the Administrative Agent, when so
distributed, with copies of any materials distributed to the
shareholders of the Lead Borrower;
(ii) provide the Administrative Agent:
(A) when filed, copies of all filings
with the SEC; and
(B) when received, copies of all
correspondence from the SEC, other than routine
non-substantive general communications from the SEC.
(iii) add the Administrative Agent as an addressee
on all investor mailing lists maintained by each Credit Party;
and
(iv) provide the Administrative Agent, when
received by any Credit Party, with a copy of any management
letter or similar communications from any accountant of any
Credit Party.
5.4 Borrowing Base Certificate. The Lead Borrower shall
provide the Administrative Agent with a Borrowing Base Certificate (in the form
of Exhibit D, as such form may be revised from time to time by the
Administrative Agent)(a "Borrowing Base Certificate") (a) if after the
Restatement Effective Date Availability has been equal to or greater than
$100,000,000.00 or, if Availability has been equal to or greater than
$100,000,000.00 for a period of 30 consecutive days since the date of the most
recent Borrowing Base Certificate delivered to the Administrative Agent pursuant
to this clause (a), monthly within 15 days from the Fiscal month end as of the
close of business at such Fiscal month end (or more frequently at the election
of the Borrower) or (b) if Availability has been less than $100,000,000.00 at
any time after the Restatement Effective Date (and Availability has not been
equal to or greater than $100,000,000.00 for a period of 30 consecutive days
since the date of the most recent monthly Borrowing Base Certificate delivered
to the Administrative Agent pursuant to clause (a) above), weekly on Wednesday
of each week (or if not a Business Day, the next succeeding Business Day) as of
the close of business on the immediately preceding Saturday. Such Certificate
may be sent to the Administrative Agent by facsimile transmission, provided that
the original thereof is forwarded to the Administrative Agent on the date of
such transmission.
5.5 Monthly Reports. Monthly, the Lead Borrower shall
provide the Administrative Agent with original counterparts of the following
(each in such form as the Administrative Agent from time to time may reasonably
specify):
(a) those reports described in Schedule 5.5, at
the times set forth in such Schedule;
(b) within thirty (30) days following the end of
each fiscal month (except for any month which corresponds to
the end of a fiscal quarter of the Credit Parties), an
internally prepared financial statement of the Credit Parties'
Consolidated financial condition and the results of its
operations for, the period ending with the end of the subject
month, which financial statement shall include, at a minimum,
a balance sheet, income statement, cash flow and comparison of
same store sales for the corresponding month of the then
immediately previous year, as well as to the Credit Parties'
business plan or most recent forecast.
5.6 Quarterly Reports. Quarterly, within forty-five (45)
days following the end of each of the Credit Parties' fiscal quarters, the Lead
Borrower shall provide the Administrative Agent with the following:
(a) an original counterpart of a management
prepared financial statement of the Credit Parties for the
period from the beginning of the Credit Parties' then current
fiscal year through the end of the subject fiscal quarter,
with comparative information for the same period of the
previous fiscal year, which statement shall include, at a
minimum, a balance sheet, income statement,
statement of changes in shareholders' equity, and cash flows
and comparisons for the corresponding fiscal quarter of the
then immediately previous fiscal year, as well as to the
Credit Parties' business plan or most recent forecast;
(b) the officer's compliance certificate
described in Section 5.8; and
(c) the Credit Parties' 10Q report filed with
the SEC.
5.7 Annual Reports. Annually, within ninety (90) days
following the end of the Credit Parties' fiscal year, the Lead Borrower shall
furnish the Administrative Agent with the following:
(a) an original signed counterpart of the Credit
Parties' Consolidated annual financial statement, which
statement shall have been prepared by, and bear the
unqualified opinion of, the Lead Borrower's independent
certified public accountants reasonably acceptable to the
Administrative Agent (Deloitte & Touche LLP or another
nationally recognized accounting firm being acceptable) (i.e.,
said statement shall be "certified" by such accountants) and
shall include, at a minimum (with comparative information for
the then prior fiscal year) a balance sheet, income statement,
statement of changes in shareholders' equity, cash flows, and
schedules of consolidation; and
(b) the Credit Parties' 10K report filed with
the SEC.
5.8 Officers' Certificates. The Lead Borrower shall cause
either the Lead Borrower's President or its Chief Financial Officer, in each
instance, to provide such Person's Certificate with those monthly, quarterly,
and annual statements to be furnished pursuant to this Agreement, which
Certificate shall:
(a) indicate that the subject statement was
prepared in accordance with GAAP consistently applied and
presents fairly in all material respects the Consolidated
financial condition of the Credit Parties at the close of, and
the results of the Credit Parties' operations and cash flows
for, the period(s) covered, subject, however to the following:
(i) usual year end adjustments and the absence
of footnotes (this exception shall not be included in the
Certificate which accompanies such annual statement); and
(ii) Material Accounting Changes (in which event,
such Certificate shall include a schedule (in reasonable
detail) of the effect of each such Material Accounting Change)
not previously specifically taken into account in the
determination of the financial performance covenant imposed
pursuant to Section 5.11;
(b) indicate either that (i) no Default exists,
or (ii) if such an event has occurred, its nature (in
reasonable detail) and the steps (if any) being taken or
contemplated by the Credit Parties to be taken on account
thereof.
(c) include calculations concerning the Credit
Parties' compliance (or failure to comply) at the date of the
subject statement with the financial performance covenant
included in Section 5.11 (whether or not a Covenant Compliance
Event then exists).
5.9 Inventories, Appraisals, And Audits. (a) The
Administrative Agent, at the reasonable expense of the Credit Party, may
participate in and/or observe each physical count and/or inventory of so much of
the Collateral as consists of Inventory which is undertaken on behalf of any
Credit Party.
(b) The Credit Parties, at their own expense, shall cause
not less than one (1) physical inventory of each of their locations to be
undertaken in each twelve (12) month period during which this Agreement is in
effect and shall cause cycle counts to be undertaken in a manner consistent with
their practices in effect on the Restatement Effective Date (or such other
procedures as may be reasonably satisfactory to the Administrative Agent).
(i) The Lead Borrower, within forty-five (45)
days following the completion of such physical inventory,
shall provide the Administrative Agent with a reconciliation
of the results of each such physical inventory or cycle count
and shall post such results to the Credit Parties' perpetual
inventory system and, as applicable to the Credit Parties'
other financial books and records.
(ii) The Administrative Agent, in its reasonable
discretion, if any Event of Default exists, may cause such
additional inventories to be taken as the Administrative Agent
reasonably determines (each, at the expense of the Credit
Parties).
(c) The Administrative Agent may obtain appraisals of the
Collateral, from time to time conducted by such appraisers as are reasonably
satisfactory to the Administrative Agent. If Availability is equal to or greater
than $100,000,000.00 at all times in any Fiscal year (and no Event of Default
has occurred and is continuing), the first such appraisal conducted during such
Fiscal year (plus any such appraisals conducted during the continuance of an
Event of Default) shall be at the Credit Parties' expense. If Availability is
less than $100,000,000.00 at any time in any Fiscal year, the second such
appraisal conducted during such Fiscal year shall also be at the Credit Parties'
expense.
(d) The Administrative Agent may conduct commercial
finance field examinations of the Credit Parties' books and records from time to
time. If Availability is equal to or greater than $100,000,000.00 at all times
in any Fiscal year (and no Event of Default has occurred and is continuing), the
first such field examination conducted during such Fiscal year (plus any such
field examinations conducted during the continuance of an Event of Default)
shall be at the Credit Parties' expense. If Availability is less than
$100,000,000.00 at any time in any
Fiscal year, the second such field examination conducted during such Fiscal year
shall also be at the Credit Parties' expense.
5.10 Additional Financial Information. (a) In addition
to all other information required to be provided pursuant to this Article 5, the
Lead Borrower promptly shall provide the Administrative Agent with such other
and additional information concerning the Credit Parties, the Collateral, the
operation of the Credit Parties' business, and the Credit Parties' financial
condition, including original counterparts of financial reports and statements,
as the Administrative Agent may from time to time reasonably request from the
Lead Borrower.
(b) The Lead Borrower may provide the Administrative
Agent, from time to time hereafter, with updated forecasts of the Credit
Parties' anticipated performance and operating results.
(c) In all events, the Lead Borrower, no later than
thirty (30) days after the end of each of the Credit Parties' fiscal years,
shall provide the Administrative Agent with an updated and extended forecast
which shall go out at least through the end of that fiscal year and shall
include an income statement, balance sheet, and statement of cash flow, by
month, each Consolidated (with consolidating schedules) and each prepared in
conformity with GAAP and consistent with the Credit Parties' then current
practices.
(d) Each Credit Party recognizes that all inventories,
analysis, financial information, and other materials which the Administrative
Agent may obtain, develop, or receive with respect to the Credit Parties are
confidential to the Administrative Agent and that, except as otherwise provided
herein, no Credit Party is entitled to receipt of any of such inventories,
analysis, financial information, and other materials, nor copies or extracts
thereof or therefrom. Notwithstanding the foregoing, as long as no Event of
Default exists, the Administrative Agent shall furnish the Lead Borrower with a
copy of each appraisal obtained by the Administrative Agent.
5.11 Financial Performance Covenants. (a) If a Covenant
Compliance Event exists, the Credit Parties shall not permit their Operating
Cash Flow for the trailing twelve-month period (commencing with the Fiscal month
ending immediately prior to the date of the Covenant Compliance Event for which
a financial statement has been delivered to the Administrative Agent pursuant to
Section 5.5(b)) as determined from the Lead Borrower's most recently delivered
financial statements with respect to such period, as of the last day of each
Fiscal month, to be less than $115,000,000.00.
(b) Compliance with such financial performance covenant
shall be made as if no Material Accounting Changes had been made (other than any
Material Accounting Changes specifically taken into account in the setting of
such covenants). The Administrative Agent may determine the Credit Parties'
compliance with such covenants based upon financial reports and statements
provided by the Lead Borrower to the Administrative Agent as well as by
reference to interim financial information provided to the Administrative Agent.
SECTION 6
USE OF COLLATERAL
6.1 Use Of Inventory Collateral. (a) No Credit Party
shall engage in:
(i) any sale of the Inventory other than for
fair consideration in the conduct of the Credit Parties'
business in the ordinary course or as permitted under this
Agreement;
(ii) sales or other dispositions in bulk other
than in connection with any store closings and sales of
Diversion Inventory, provided that in no event shall Inventory
sold in bulk as a result of store closings after the
Restatement Effective Date, exceed the limitations set forth
in Section 4.29; and
(iii) sales of any Collateral in breach of any
provision of this Agreement.
(b) No sale of Inventory shall be on consignment,
approval, or under any other circumstances such that such Inventory may be
returned to a Credit Party without the consent of the Administrative Agent (with
the exception of the Credit Parties' customary return policy applicable to the
return of inventory purchased by the Credit Parties' retail customers in the
ordinary course).
6.2 Inventory Quality. All Inventory now owned or
hereafter acquired by each Credit Party and at the time included in the
Borrowing Base is and will be of good and merchantable quality and free from
defects (other than defects within customary trade tolerances).
6.3 Adjustments and Allowances. Each Credit Party may
grant such allowances or other adjustments to that Credit Party's account
debtors (exclusive of extending the time for payment of any Account, which shall
not be done without first obtaining the Administrative Agent's prior written
consent in each instance, which consent shall not be unreasonably delayed or
withheld) as that Credit Party may reasonably deem to accord with sound business
practice, provided, however, the authority granted the Credit Parties pursuant
to this Section 6.3 may be limited or terminated by the Administrative Agent at
any time during the existence of an Event of Default in the Administrative
Agent's reasonable discretion.
6.4 Validity of Accounts.
(a) The amount of each Account shown on the books,
records, and invoices of the Credit Parties represented as owing by each account
debtor is and will be the correct amount actually owing by such account debtor
and shall have been fully earned by performance by the Credit Parties.
(b) No Credit Party has any knowledge of any impairment
of the validity or collectibility of any of the Accounts included in the
Borrowing Base. The Lead Borrower shall
notify the Administrative Agent of any such impairment immediately after any
Credit Party becomes aware of any such impairment.
(c) Except for Permitted Encumbrances and Standby L/Cs
permitted hereunder, no Credit Party shall post any bond to secure any Credit
Party's performance under any agreement to which any Credit Party is a party nor
cause any surety, guarantor, or other third party obligee to become liable to
perform any obligation of any Credit Party (other than to the Administrative
Agent) in the event of any Credit Party's failure so to perform.
6.5 Notification to Account Debtors. The Administrative
Agent shall have the right, during the existence of a Cash Control Event or an
Event of Default, to notify any of the Credit Parties' account debtors to make
payment directly to the Administrative Agent and to collect all amounts due on
account of the Collateral.
SECTION 7
CASH MANAGEMENT; PAYMENT OF LIABILITIES
7.1 Depository Accounts.
(a) Schedule 7.1 lists all present DDA's as of the
Restatement Effective Date and includes, with respect to each depository (i) the
name and address of that depository; (ii) the account number(s) of the
account(s) maintained with such depository; and (iii) a contact person (with
telephone and facsimile number) at such depository.
(b) The Lead Borrower shall deliver the following to the
Administrative Agent, as a condition to the effectiveness of this Agreement:
(i) Notification, executed on behalf of each
Credit Party, to each depository institution with which any
DDA is maintained (other than any Exempt DDA and any Blocked
Account), in the form of Exhibit G, with such changes as are
acceptable to the Administrative Agent.
(ii) A Blocked Account Agreement with any
depository institution at which a Blocked Account is required
to be maintained;
(c) No Credit Party will establish any DDA hereafter
(other than an Exempt DDA) unless, contemporaneous with such establishment, the
Lead Borrower delivers the following to the Administrative Agent:
(i) Notification to the depository at which such
DDA is established if the same would have been required
pursuant to Section 7.1(b)(i) if the subject DDA were open at
the execution of this Agreement.
(ii) A Blocked Account Agreement executed on
behalf of the depository at which such DDA is established if
the same would have been
required pursuant to Section 7.1(b)(ii) if the subject DDA
were open at the execution of this Agreement.
7.2 Credit Card Receipts.
(a) Schedule 7.2 describes all arrangements to which any
Credit Party is a party as of the Restatement Effective Date with respect to the
payment to that Credit Party of the proceeds of credit card charges for sales by
that Credit Party.
(b) The Lead Borrower shall deliver to the Administrative
Agent, as a condition to the effectiveness of this Agreement, notifications,
executed on behalf of each Credit Party, to each of each Credit Party's credit
card clearinghouses and processors (in the form of Exhibit H, with such changes
as are acceptable to the Administrative Agent), which notice provides that
payment of all credit card charges submitted by that Credit Party to that
clearinghouse or other processor and any other amount payable to that Credit
Party by such clearinghouse or other processor shall, during the existence of a
Cash Control Event, be directed to the Blocked Accounts, the Concentration
Account or as otherwise designated from time to time by the Administrative
Agent. No Credit Party shall change such direction or designation except upon
and with the prior written consent of the Administrative Agent.
7.3 The Concentration, Blocked, and Operating Accounts.
(a) The following checking accounts have been (and are so
referred to herein):
(i) The "Concentration Account" (so referred to
herein): Established by the Administrative Agent with Fleet.
(ii) The "Blocked Accounts" (so referred to
herein): Established by the Lead Borrower with those financial
institutions described on Schedule 7.3.
(iii) The "Operating Account" (so referred to
herein): Established by the Lead Borrower with Fleet (Account
No. 9428400778).
(b) The contents of each DDA and of the Blocked Accounts
constitutes Collateral and Proceeds of Collateral and amounts realized from
Capital Events and/or casualty insurance proceeds relating to Collateral payable
to the Administrative Agent pursuant to Section 2.11(c)(ii). The contents of the
Concentration Account constitutes the Administrative Agent's property and shall
be applied to the Liabilities in accordance with the provisions of Section 7.5
hereof.
(c) The Credit Parties shall pay all fees and charges of,
and maintain such impressed balances as may be required by the depository in
which any account is opened as required hereby (even if such account is opened
by and/or is the property of the Administrative Agent).
7.4 Proceeds and Collections.
(a) All Receipts and all cash proceeds of any sale or
other disposition of Inventory and Accounts of each Credit Party:
(i) Constitute Collateral and proceeds of
Collateral.
(ii) During the existence of a Cash Control
Event, shall be held in trust by the Credit Parties for the
Administrative Agent.
(iii) During the existence of a Cash Control
Event, shall not be commingled with any of any Credit Party's
other funds.
(iv) During the existence of a Cash Control
Event, shall be deposited and/or transferred only to the
Blocked Accounts or the Concentration Account.
(b) During the existence of a Cash Control Event, the
Lead Borrower shall cause the ACH or wire transfer to the Blocked Accounts or
the Concentration Account, no less frequently than daily (and whether or not
there is then an outstanding balance in the Loan Account) of the following:
(i) The then collected funds in each DDA (other
than any Blocked Account or any Exempt DDA), each such
transfer to be net of any minimum balance, not to exceed
$10,000.00, as may be required to be maintained in the subject
DDA by the bank at which such DDA is maintained).
(ii) The proceeds of all credit card charges not
otherwise provided for pursuant hereto.
Telephone advice (confirmed by written notice) shall be provided to the
Administrative Agent on each Business Day on which any such transfer is made.
(c) Whether or not any Liabilities are then outstanding,
during the existence of a Cash Control Event, the Lead Borrower shall cause the
ACH or wire transfer to the Concentration Account, no less frequently than daily
on each Business Day, of all collected funds in each Blocked Account, net of
such minimum balance, not to exceed $250,000.00, as may be required to be
maintained in the Blocked Account by the depository which the Blocked Account is
maintained.
(d) In the event that, notwithstanding the provisions of
this Section 7.4, during the existence of a Cash Control Event, any Credit Party
receives or otherwise has dominion and control of any Receipts, or any proceeds
or collections of any Collateral or proceeds from Capital Events and/or casualty
insurance proceeds relating to Collateral, such Receipts, proceeds, and
collections shall be held in trust by that Credit Party for the Administrative
Agent and shall not be commingled with any of that Credit Party's other funds or
deposited in any account of any Credit Party other than as instructed by the
Administrative Agent.
7.5 Payment of Liabilities.
(a) During the existence of a Cash Control Event (or, at
other times, as the Lead Borrower may direct), on each Business Day, the
Administrative Agent shall apply the then collected balance of the Concentration
Account (net of fees charged, and of such impressed balances as may be required
by the bank at which the Concentration Account is maintained), as of the day of
receipt of such collected funds, first, towards the Swing Line Loans and second,
towards the unpaid balance of the Loan Account and all other Liabilities, in the
order specified in Section 2.11(c) and subject to the provisions of Section
2.11(e).
(b) All deposits to the Concentration Account and other
payments to the Administrative Agent are subject to clearance and collection.
(c) The Administrative Agent shall transfer to the
Operating Account any surplus in the Concentration Account remaining after the
application towards the Liabilities referred to in Section 7.5(a), above (less
those amount which are to be netted out, as provided therein) provided, however,
in the event that
(i) any Event of Default exists; and
(ii) one or more L/Cs are then outstanding,
then the Administrative Agent may establish a funded reserve of up to 103% of
the aggregate Stated Amounts of such L/Cs. Such funded reserve shall either be
(i) returned to the Lead Borrower provided that no Default exists or (ii)
applied towards the Liabilities during the existence of any Event of Default
described in Section 10.10 or acceleration during the existence of any other
Event of Default.
SECTION 8
GRANT OF SECURITY INTEREST
8.1 Grant of Security Interest. To secure their prompt,
punctual, and faithful performance of all and each of the Liabilities, each
Credit Party hereby grants to the Administrative Agent, for its benefit and the
ratable benefit of the other Secured Parties, a continuing security interest in
and to, and assigns to the Administrative Agent, for its benefit and the ratable
benefit of the other Secured Parties, and reconfirms its grant set forth in the
Original Loan and Security Agreement, all of such Credit Party's right, title
and interest (whether now owned or hereafter acquired or arising) in and to the
following (all of which, together with any other property in which the
Administrative Agent may in the future be granted a security interest, is
referred to herein as the "Collateral"):
(a) all Accounts;
(b) all Inventory;
(c) all Letter-of-Credit Rights arising from or relating
to the Credit Parties' Accounts or Inventory;
(d) all Payment Intangibles arising from, relating to, or
constituting proceeds of the Credit Parties' Accounts or Inventory;
(e) all Supporting Obligations arising from, relating to,
or constituting proceeds of the Credit Parties' Accounts or Inventory;
(f) all Instruments arising from, relating to, or
constituting proceeds of the Credit Parties' Accounts or Inventory;
(g) all Documents relating to the Credit Parties'
Inventory;
(h) the Operating Account, the Concentration Account,
each Blocked Account and all other Deposit Accounts in which any monies
deposited therein arise from, relate to or constitute proceeds of the Credit
Parties' Accounts or Inventory;
(i) money, cash, and policies and certificates of
insurance, in each case, arising from, relating to, or constituting proceeds of
the Credit Parties' Accounts or Inventory;
(j) all insurance proceeds, refunds, and premium rebates,
including, without limitation, proceeds of fire and credit insurance,
constituting proceeds of the Credit Parties' Inventory and Accounts;
(k) all Prescription Lists;
(l) all Pharmacy Accounts;
(m) all liens, guaranties, rights, remedies, and
privileges relating or pertaining to any Credit Parties' Inventory or Accounts,
including the right of stoppage in transit; and
(n) all cash Proceeds of or substitutions to any of the
foregoing.
8.2 Extent and Duration of Security Interest. The
security interest created and granted herein is in addition to, and supplemental
of, any security interest previously granted by any Credit Party to the
Administrative Agent and shall continue in full force and effect applicable to
all Liabilities until both (a) all Liabilities have been paid and/or satisfied
in full and (b) the security interest created herein is specifically terminated
in writing by a duly authorized officer of the Administrative Agent; provided,
however, that the Administrative Agent shall release the security interest
granted in Inventory and Prescription Lists which are sold or otherwise disposed
of by the Credit Parties in connection with store closings expressly permitted
hereunder and consistent with the Credit Parties' business plan provided to the
Administrative Agent that do not otherwise cause a Default under Sections 4.29
or 6.1(iii). The Administrative Agent will terminate the security interest
created hereunder promptly upon payment in full, in cash, of all the Liabilities
and the termination and release of the Secured Parties' obligations hereunder
and under the other Loan Documents.
SECTION 9
ADMINISTRATIVE AGENT AS CREDIT PARTIES' ATTORNEY-IN-FACT
9.1 Appointment as Attorney-In-Fact. Each Credit Party
hereby irrevocably constitutes and appoints the Administrative Agent (acting
through any of its officers) as that Credit Party's true and lawful attorney,
with full power of substitution, during the existence of an Event of Default, to
convert the Collateral into cash at the sole risk, cost, and expense of that
Credit Party, but for the sole benefit of the Secured Parties. The rights and
powers granted the Administrative Agent by this appointment include but are not
limited to the right and power to:
(a) Prosecute, defend, compromise, or release any action
relating to the Collateral.
(b) Sign change of address forms to change the address to
which each Credit Party's mail is to be sent to such address as the
Administrative Agent shall designate; receive and open each Credit Party's mail;
remove any Receivables Collateral and Proceeds of Collateral therefrom and turn
over the balance of such mail either to the Lead Borrower or to any trustee in
bankruptcy or receiver of the Lead Borrower, or other legal representative of a
Credit Party whom the Administrative Agent determines to be the appropriate
person to whom to so turn over such mail.
(c) Endorse the name of the relevant Credit Party in
favor of the Administrative Agent upon any and all checks, drafts, notes,
acceptances, or other items or instruments which are proceeds of Accounts and
Inventory; sign and endorse the name of the relevant Credit Party on, and
receive as secured party, any of the Collateral, any invoices, schedules of
Collateral, freight or express receipts, or bills of lading, storage receipts,
warehouse receipts, or other documents of title respectively relating to the
Collateral.
(d) Sign the name of the relevant Credit Party on any
notice to that Credit Party's account debtors or verification of the Receivables
Collateral; sign the relevant Credit Party's name on any Proof of Claim in
Bankruptcy against account debtors, and on notices of
lien, claims of mechanic's liens, or assignments or releases of mechanic's liens
securing the Accounts.
(e) Take all such action as may be necessary to obtain
the payment of any letter of credit and/or banker's acceptance relating to
Accounts and Inventory of which any Credit Party is a beneficiary.
(f) Repair, manufacture, assemble, complete, package,
deliver, alter or supply Inventory, if necessary to fulfill in whole or in part
the purchase order of any customer of each Credit Party.
9.2 No Obligation to Act. The Administrative Agent shall
not be obligated to do any of the acts or to exercise any of the powers
authorized by Section 9.1 herein, but if the Administrative Agent elects to do
any such act or to exercise any of such powers, it shall not be accountable for
more than it actually receives as a result of such exercise of power, and shall
not be responsible to any Credit Party for any act or omission to act except for
any act or omission to act as to which there is a final determination made in a
judicial proceeding (in which proceeding the Administrative Agent has had an
opportunity to be heard) which determination includes a specific finding that
the subject act or omission to act had been grossly negligent or in actual bad
faith.
SECTION 10
EVENTS OF DEFAULT
The occurrence of any event described in this Article 10
respectively shall constitute an "Event of Default" herein. Upon the occurrence
of any Event of Default described in Section 10.10, any and all Liabilities
shall become due and payable without any further act on the part of the
Administrative Agent. During the existence of any other Event of Default, the
Administrative Agent may, and on the instruction of the Majority Lenders as
provided in Section 13.1(b) shall, declare any and all Liabilities to be
immediately due and payable. The existence of any Event of Default shall also
constitute, without notice or demand, a default under all other agreements
between any Secured Party and any Credit Party and instruments and papers
heretofore, now, or hereafter given to any Secured Party by any Credit Party.
Events of Default:
10.1 Failure to Pay Loans. The failure by any Credit Party
to pay when due any principal of the Revolving Credit (including, without
limitation, any reimbursement for any drawing under any L/C).
10.2 Failure to Make Other Payments. The failure by any
Credit Party to pay within two (2) Business Days when due (or upon demand, if
payable on demand) any interest on, or fees in respect of, the Revolving Credit
(including, without limitation, L/C fees), or any other payment Liability (other
than any payment liability on account of the principal of the Loans).
10.3 Failure to Perform Covenant Or Liability (No Grace
Period). The failure by any Credit Party to promptly, punctually, faithfully and
timely perform, discharge, or comply with any covenant or Liability included in
Sections 4.6, 4.7, 4.8, 4.11, 4.13, 4.19, 4.20, 4.27, 4.28, 4.29, 4.30, 4.31,
4.32, 5.11, 6.1 or 7.4 hereof.
10.4 Failure to Perform Covenant or Liability (Grace
Period). The failure by the Credit Parties to promptly, punctually, faithfully
and timely perform, discharge, or comply with any covenants under any Loan
Document or any other Liabilities in each case not described in Sections 10.1,
10.2 or 10.3, which failure continues for thirty (30) days after (i) the Lead
Borrower's receipt of written notice from the Administrative Agent or (ii) the
breach of any such covenant or Liabilities.
10.5 Misrepresentation. The determination by the
Administrative Agent that any representation or warranty at any time made by any
Credit Party to the Administrative Agent or any Lender was not true or complete
in all material respects when given or deemed given.
10.6 Acceleration of Other Debt; Breach of Lease.
(a) The occurrence of any event such that any
Indebtedness of any Credit Party in excess of $10,000,000.00 (other than
Indebtedness under this Agreement) could be accelerated (whether or not the
subject creditor takes any action on account of such occurrence).
(b) The termination of any Lease as the result of a
default thereunder, which termination individually or in the aggregate with all
other Lease terminations after the date hereof could reasonably be expected to
have a Material Adverse Effect.
10.7 Uninsured Casualty Loss. The occurrence of any
cumulative uninsured loss, theft, damage, or destruction of or to any material
portion of the Collateral in excess of $5,000,000.00 in any fiscal year of the
Credit Parties.
10.8 Attachment; Judgment; Restraint of Business.
(a) The service of process upon any Secured Party or any
Participant seeking to attach, by trustee or other process, funds in excess of
$2,000,000.00 of any Credit Party on deposit with, or assets of any Credit Party
in the possession of, the Secured Party or such Participant unless contested in
good faith by the Credit Party in appropriate proceedings.
(b) The entry of any judgment against any Credit Party,
which, when aggregated with all other such judgments against all Credit Parties
exceeds $2,000,000.00 (unless adequately insured by a solvent unaffiliated
insurance company that has acknowledged coverage), and which judgment is not
satisfied (if a money judgment), bonded, or appealed from (with execution or
similar process stayed) within thirty (30) days of its entry.
(c) The entry of any order or the imposition of any other
process having the force of law, the effect of which is to restrain in any
material way the conduct by any Credit Party of its business in the ordinary
course and which has a Material Adverse Effect.
10.9 Business Failure. Any act by, against, or relating to
any Credit Party, or its property or assets, which act constitutes the
determination, by any Credit Party, to initiate a program of substantial or
total self-liquidation; application for, consent to, or sufferance of the
appointment of a receiver, trustee, or other person, pursuant to court action or
otherwise, over all, or any part of any Credit Party's property; the granting of
any trust mortgage or execution of an assignment for the benefit of the
creditors of any Credit Party, or the occurrence of any other voluntary or
involuntary liquidation or extension of debt agreement for any Credit Party; the
offering by or entering into by any Credit Party of any composition, extension,
or any other arrangement seeking relief from or extension of the debts of any
Credit Party; or the initiation of any judicial or non-judicial proceeding or
agreement by, against, or including any Credit Party which seeks or intends to
accomplish a reorganization or arrangement with creditors; and/or the initiation
by or on behalf of any Credit Party of the liquidation or winding up of all or
any substantial part of any Credit Party's business or operations; provided that
if any of the foregoing is commenced against a Credit Party, no Event of Default
shall be deemed to have arisen hereunder if such action is timely contested in
good faith by that Credit Party by appropriate proceedings and is terminated or
dismissed within sixty (60) days of when commenced.
10.10 Bankruptcy. The failure by any Credit Party to
generally pay the debts of that Credit Party as they mature; adjudication of
bankruptcy or insolvency relative to any Credit Party; the entry of an order for
relief or similar order with respect to any Credit Party in any proceeding
pursuant to the Bankruptcy Code or any other federal bankruptcy law; the filing
of any complaint, application, or petition by any Credit Party initiating any
matter in which any Credit Party is or may be granted any relief from the debts
of that Credit Party pursuant to the Bankruptcy Code or any other insolvency
statute or procedure; the filing of any complaint, application, or petition
against any Credit Party initiating any matter in which that Credit Party is or
may be granted any relief from the debts of that Credit Party pursuant to the
Bankruptcy Code or any other insolvency statute or procedure, which complaint,
application, or petition is not timely contested in good faith by that Credit
Party by appropriate proceedings or, if so contested, is not dismissed within
sixty (60) days of when filed.
10.11 Indictment - Forfeiture. The indictment of, or
institution of any legal process or proceeding against, any Credit Party, under
any Applicable Law where the relief, penalties, or remedies sought or available
include the forfeiture of any property of any Credit Party and/or the imposition
of any stay or other order, the effect of which would reasonably be expected to
have a Material Adverse Effect.
10.12 Challenge to Loan Documents.
(a) Any challenge by or on behalf of any Credit Party to
the validity of any Loan Document or the applicability or enforceability of any
Loan Document strictly in accordance with the subject Loan Document's material
terms or which seeks to void, avoid, limit, or otherwise adversely affect any
security interest created by, in or under any Loan Document or any payment made
pursuant thereto.
(b) Any determination by any court or any other judicial
or government authority that any Loan Document is not enforceable strictly in
accordance with the subject Loan
Document's material terms or which voids, avoids, limits, or otherwise adversely
affects any security interest created by any Loan Document or any payment made
pursuant thereto.
10.13 Change in Control. Any Change in Control.
SECTION 11
RIGHTS AND REMEDIES UPON DEFAULT
11.1 Acceleration. During the existence of any Event of
Default as described in Section 10.10, the Commitments shall be terminated and
all Liabilities of the Credit Parties to the Secured Parties shall be
immediately due and payable. During the existence of any Event of Default other
than as described in Section 10.10, the Administrative Agent may (and on the
issuance of Notice(s) of Acceleration, the Administrative Agent shall) terminate
the Commitments and declare all Liabilities of the Credit Parties to the Secured
Parties to be immediately due and payable, and may exercise all of the
Administrative Agent's Rights and Remedies as the Administrative Agent from time
to time thereafter determines as appropriate.
11.2 Rights of Enforcement. During the existence of any
Event of Default, the Administrative Agent shall have all of the rights and
remedies of a secured party upon default under the UCC, in addition to which the
Administrative Agent shall have all and each of the following rights and
remedies:
(a) To give notice to any bank at which any DDA or
Blocked Account is maintained and in which Proceeds of Collateral are deposited,
to turn over such Proceeds directly to the Administrative Agent.
(b) To collect the Receivables Collateral with or without
the taking of possession of any of the Collateral.
(c) To take possession of all or any portion of the
Collateral.
(d) To sell, lease, or otherwise dispose of any or all of
the Collateral, in its then condition or following such preparation or
processing as the Administrative Agent deems advisable and with or without the
taking of possession of any of the Collateral.
(e) To conduct one or more going out of business sales
which include the sale or other disposition of the Collateral, subject to the
rights of lessors under any Leases and applicable law.
(f) To apply the Proceeds of the Collateral in reduction
of the Liabilities.
(g) To exercise all or any of the rights, remedies,
powers, privileges, and discretions under all or any of the Loan Documents.
11.3 Sale of Collateral.
(a) Any sale or other disposition of the Collateral may
be at public or private sale upon such terms and in such manner as the
Administrative Agent deems advisable, having due regard to compliance with any
statute or regulation which might affect, limit, or apply to the Administrative
Agent's disposition of the Collateral.
(b) The Administrative Agent, in the exercise of the
Administrative Agent's Rights and Remedies during the existence of an Event of
Default, may conduct one or more going out of business sales, in the
Administrative Agent's own right or by one or more agents and contractors. Such
sale(s) may be conducted upon any premises owned, leased, or occupied by any
Credit Party, subject to the rights of lessors under any Leases and applicable
law.
(c) Unless the Collateral is perishable or threatens to
decline speedily in value, or is of a type customarily sold on a recognized
market (in which event the Administrative Agent shall provide the Lead Borrower
with such notice as may be practicable under the circumstances), the
Administrative Agent shall give the Lead Borrower at least ten (10) days prior
written notice of the date, time, and place of any proposed public sale, and of
the date after which any private sale or other disposition of the Collateral may
be made. Each Credit Party agrees that such written notice shall satisfy all
requirements for notice to that Credit Party which are imposed under the UCC or
other applicable law with respect to the exercise of the Administrative Agent's
rights and remedies upon default.
(d) The Administrative Agent and any Lender may purchase
the Collateral, or any portion of it at any sale held under this Article.
(e) If any of the Collateral is sold, leased, or
otherwise disposed of by the Administrative Agent on credit, the Liabilities
shall not be deemed to have been reduced as a result thereof unless and until
payment is finally received thereon by the Administrative Agent.
(f) The Administrative Agent shall apply the proceeds of
the Administrative Agent's exercise of its rights and remedies upon default
pursuant to this Article 11 in accordance with Sections 13.6 and 13.7.
11.4 Occupation of Business Location. In connection with
the Administrative Agent's exercise of the Administrative Agent's rights under
this Article 11, during the existence of an Event of Default, the Administrative
Agent may enter upon, occupy, and use any premises owned or occupied by any
Credit Party, subject to the rights of lessors under any Leases existing on the
Restatement Effective Date and applicable law, and may exclude each Credit Party
from such premises or portion thereof as may have been so entered upon,
occupied, or used by the Administrative Agent. The Administrative Agent shall
not be required to remove any of the Collateral from any such premises upon the
Administrative Agent's taking possession thereof, and may render any Collateral
unusable to the Credit Parties. In no event shall the Administrative Agent be
liable to any Credit Party for use or occupancy by the Administrative Agent of
any premises pursuant to this Article 11, nor for any charge (such as wages for
any Credit Party's employees and utilities) incurred in connection with the
Administrative Agent's
exercise of the Administrative Agent's Rights and Remedies. To the extent any
Credit Party enters into after the Original Closing Date any Lease or financing
of any owned or leased real property, (i) if such property is to be used as a
warehouse, such Credit Party will ensure that the lessor or mortgagee thereunder
agrees in writing for the benefit of the Administrative Agent to allow the
Administrative Agent (or its designees) to access such property in the exercise
of its rights under this Section 11 and, (ii) if such property is to be used as
a store location or a warehouse, in either case holding Inventory valued in
excess of $5,000,000.00, such Credit Party will use good faith efforts such that
the lessor or mortgagee thereunder agrees in writing for the benefit of the
Administrative Agent not to interfere with the Administrative Agent's exercise
of its rights under this Section 11 to the extent that such lessor or mortgagee
has rights to the Inventory which have priority over the Collateral Interests of
the Administrative Agent in the Collateral.
11.5 Grant of Nonexclusive License. Each Credit Party
hereby grants to the Administrative Agent a royalty free nonexclusive
irrevocable license during the existence of an Event of Default and subject to
the rights of any third Person (including, without limitation, any lessor under
a Lease) and Applicable Law (a) to use, apply, and affix any trademark, trade
name, logo, or the like in which any Credit Party now or hereafter has rights,
such license being with respect to the Administrative Agent's exercise of the
rights hereunder including, without limitation, in connection with any
completion of the sale or other disposition of Inventory, and (b) to use any or
all furniture, fixtures and equipment located at any of the stores or other
leased facilities of the Credit Parties in connection with any completion of the
sale or other disposition of Inventory, and (c) to use any or all intellectual
property, general intangibles (including, without limitation, the Credit
Parties' trade names), books, records, and information relating to the
Collateral and/or to the operation of each Credit Party's business, and all
rights of access to such books, records, and information, and all property in
which such books, records, and information are stored, recorded, and maintained,
and other assets of each Credit Party.
11.6 Assembly of Collateral. The Administrative Agent may
require any Borrower to assemble the Collateral and make it available to the
Administrative Agent at the Credit Parties' sole risk and expense at a place or
places which are reasonably convenient to both the Administrative Agent and the
Lead Borrower.
11.7 Rights and Remedies. The rights, remedies, powers,
privileges, and discretions of the Administrative Agent under this Agreement
(herein, the "Administrative Agent's Rights and Remedies") shall be cumulative
and not exclusive of any rights or remedies which it would otherwise have. No
delay or omission by the Administrative Agent in exercising or enforcing any of
the Administrative Agent's Rights and Remedies shall operate as, or constitute,
a waiver thereof. No waiver by the Administrative Agent of any Event of Default
or of any default under any other agreement shall operate as a waiver of any
other default hereunder or under any other agreement. No single or partial
exercise of any of the Administrative Agent's Rights or Remedies, and no express
or implied agreement or transaction of whatever nature entered into between the
Administrative Agent and any person, at any time, shall preclude the other or
further exercise of the Administrative Agent's Rights and Remedies. No waiver by
the Administrative Agent of any of the Administrative Agent's Rights and
Remedies on any one occasion shall be deemed a waiver on any subsequent
occasion, nor shall it be deemed a
continuing waiver. The Administrative Agent's Rights and Remedies may be
exercised at such time or times and in such order of preference as the
Administrative Agent may determine. The Administrative Agent's Rights and
Remedies may be exercised without resort or regard to any other source of
satisfaction of the Liabilities.
SECTION 12
FUNDINGS AND DISTRIBUTIONS
12.1 Funding Procedures. Subject to Section 12.2:
(a) The Administrative Agent shall advise each Revolving
Credit Lender, no later than 1:30 PM Boston time on a date on which any
Revolving Credit Loan (other than a Swing Line Loan) is to be made on that date.
Such advice, in each instance, may be by telephone or facsimile transmission,
provided that if such advice is by telephone, it shall be confirmed in writing.
Advice of a Revolving Credit Loan shall include the amount of and interest rate
applicable to the subject Revolving Credit Loan.
(b) Subject to that Revolving Credit Lender's Revolving
Credit Commitment, each Revolving Credit Lender, by no later than the end of
business on the day on which the subject Revolving Credit Loan (including any
Permissible OverLoan) is to be made, shall Transfer that Revolving Credit
Lender's Revolving Credit Commitment Percentage of the subject Revolving Credit
Loan to the Administrative Agent.
12.2 Swing Line Loans.
(a) In the event that, when a Revolving Credit Loan is
requested, the aggregate unpaid balance of the Swing Line Loan is less than the
Swing Line Loan Ceiling, then the Swing Line Lender may advise the
Administrative Agent that the Swing Line Lender has determined to include up to
the amount of the requested Revolving Credit Loan as part of the Swing Line
Loan. In such event, the Swing Line Lender shall Transfer the amount of the
requested Revolving Credit Loan to the Administrative Agent.
(b) The Swing Line Loan shall be converted to a Revolving
Credit Loan in which all Revolving Credit Lenders participate as follows:
(i) At any time and from time to time, the Swing
Line Lender may advise the Administrative Agent that all, or
any part of the Swing Line Loan is to be converted to a
Revolving Credit Loan in which all Revolving Credit Lenders
participate.
(ii) At the initiation of a Liquidation, the then
entire unpaid principal balance of the Swing Line Loan shall
be converted to a Revolving Credit Loan in which all Revolving
Credit Lenders participate.
In either such event, the Administrative Agent shall advise each Revolving
Credit Lender of such conversion as if, and with the same effect as if such
conversion were the making of a Revolving Credit Loan as provided in Section
12.1.
(c) The Swing Line Lender, in separate capacities, may
also be the Administrative Agent and a Revolving Credit Lender.
(d) The Swing Line Lender, in its capacity as Swing Line
Lender, is not a Revolving Credit Lender for any of the following purposes:
(i) Except as otherwise specifically provided in
the relevant Section, any distribution pursuant to Section
13.6.
(ii) Determination of whether the requisite
Revolving Credit Commitments have Consented to action
requiring such Consent.
12.3 Administrative Agent's Covering of Funding.
(a) Each Lender shall make available to the
Administrative Agent, as provided herein, that Lender's Revolving Credit
Commitment Percentage of the following:
(i) Each Revolving Credit Loan (including any
Permissible OverLoan), up to the maximum amount of that
Revolving Credit Lender's Revolving Credit Commitment.
(ii) Up to the maximum amount of that Revolving
Credit Lender's Revolving Credit Commitment of each L/C
Drawing (to the extent that such L/C Drawing is not "covered"
by a Revolving Credit Loan as provided herein).
(b) In all circumstances, the Administrative Agent may:
(i) Assume that each Revolving Credit Lender,
subject to Sections 2.5 and 12.3(a), timely shall make
available to the Administrative Agent that Revolving Credit
Lender's Revolving Credit Commitment Percentage of each
Revolving Credit Loan (including any Permissible OverLoan),
notice of which is provided pursuant to Section 12.1.
(ii) [Intentionally Omitted]
(iii) In reliance upon such assumption, make
available the corresponding amount to the Borrowers.
(iv) Assume that each Lender timely shall pay,
and shall make available, to the Administrative Agent all
other amounts which that Lender is obligated to so pay and/or
make available hereunder or under any of the Loan Documents.
(c) In the event that, in reliance upon any of such
assumptions, the Administrative Agent makes available a Revolving Credit
Lender's Revolving Credit Commitment Percentage of one or more Revolving Credit
Loans (including any permissible OverLoan), or any other amount to be made
available hereunder or under any of the Loan Documents, which amount a Lender (a
"Delinquent Lender") fails to provide to the Administrative Agent within one (1)
Business Day of written notice of such failure, then:
(i) The amount which had been made available by
the Administrative Agent is an "Administrative Agent's Cover"
(and is so referred to herein).
(ii) All interest paid by the Borrowers on
account of the Loan or coverage of the subject L/C Drawing
which consist of the Administrative Agent's Cover shall be
retained by the Administrative Agent until the Administrative
Agent's Cover, with interest, has been paid.
(iii) The Delinquent Lender shall pay to the
Administrative Agent, on demand, interest at a rate equal to
the prevailing federal funds rate on any Administrative
Agent's Cover in respect of that Delinquent Lender.
(iv) The Administrative Agent shall have
succeeded to all rights to payment to which the Delinquent
Lender otherwise would have been entitled hereunder in respect
of those amounts paid by or in respect of the Borrowers on
account of the Administrative Agent's Cover together with
interest until it is repaid. Such payments shall be deemed
made first towards the amounts in respect of which the
Administrative Agent's Cover was provided and only then
towards amounts in which the Delinquent Lender is then
participating. For purposes of distributions to be made
pursuant to Section 12.4(a) (which relates to ordinary course
distributions) or Section 13.6 (which relates to distributions
of proceeds of a Liquidation) below, amounts shall be deemed
distributable to a Delinquent Lender (and consequently, to the
Administrative Agent to the extent to which the Administrative
Agent is then entitled) at the highest level of distribution
(if applicable) at which the Delinquent Lender would otherwise
have been entitled to a distribution.
(v) Subject to Subsection 12.3(c)(iv), the
Delinquent Lender shall be entitled to receive any payments
from the Borrowers to which the Delinquent Lender is then
entitled, provided however there shall be deducted from such
amount and retained by the Administrative Agent any interest
to which the Administrative Agent is then entitled on account
of Section 12.3(c)(ii), above.
(d) A Delinquent Lender shall not be relieved of any
obligation of such Delinquent Lender hereunder (all and each of which shall
constitute continuing obligations on the part of any Delinquent Lender).
(e) A Delinquent Lender may cure its status as a
Delinquent Lender by paying the Administrative Agent the aggregate of the
following:
(i) The Administrative Agent's Cover (to the
extent not previously repaid by the Borrowers and retained by
the Administrative Agent in accordance with Subsection
12.3(c)(iv), above) with respect to that Delinquent Lender.
Plus
(ii) The aggregate of the amount payable under
Subsection 12.3(c)(iii), above (which relates to interest to
be paid by that Delinquent Lender).
Plus
(iii) All such costs and expenses as may be
incurred by the Administrative Agent in the enforcement of the
Administrative Agent's rights against such Delinquent Lender.
12.4 Ordinary Course Distributions. (This Section 12.4
applies, and sets forth rights and obligations amongst the Lenders only, unless
the provisions of Section 13.6 (which relates to distributions in the event of a
Liquidation) become operative).
(a) Weekly, on such day as may be set from time to time
by the Administrative Agent (or more frequently at the Administrative Agent's
option) the Administrative Agent and each Lender shall settle up on amounts
advanced under the Revolving Credit and collected funds received in the
Concentration Account or otherwise paid by the Borrowers.
(b) The Administrative Agent shall distribute to the
Swing Line Lender and to each Lender, such Person's respective pro rata share of
interest payments on the Loans when actually received and collected by the
Administrative Agent. For purposes of calculating interest due to a Lender, that
Lender shall be entitled to receive interest on the actual amount contributed by
that Lender towards the principal balance of the Loans outstanding during the
applicable period covered by the interest payment made by the Borrowers. Any net
principal reductions to the Loans received by the Administrative Agent in
accordance with the Loan Documents during such period shall not reduce such
actual amount so contributed, for purposes of calculation of interest due to
that Lender, until the Administrative Agent has distributed to that Lender its
pro rata share thereof.
(c) The Administrative Agent shall distribute (i) Early
Termination Fees to the applicable Lenders pro rata based upon their Revolving
Credit Commitment Percentage and (ii) L/C fees and, except as otherwise provided
in Section 2.16, Line Fees paid on account of the Revolving Credit to the
Revolving Credit Lenders pro rata based upon their Revolving Credit Commitment
Percentages.
(d) No Lender shall have any interest in, or right to
receive any part of, the Renewal Fee or the Agent's Fee to be paid by the
Borrowers to the Administrative Agent pursuant to this Agreement. Each Lender
shall be paid such fees upon becoming a Lender hereunder as may be agreed
between such Lender and the Arranger.
(e) Any amount received by the Administrative Agent as
reimbursement for any cost or expense (including without limitation, attorneys'
reasonable fees) shall be distributed by the Administrative Agent to that Person
which is entitled to such reimbursement as provided in this Agreement (and if
such Person(s) is (are) the Lenders, pro rata based upon their respective
Revolving Credit Commitment Percentages at the date on which the expense, in
respect of which such reimbursement is being made, was incurred).
(f) Each distribution pursuant to this Section 12.4 is
subject to Section 12.3(c), above.
SECTION 13
ACCELERATION AND LIQUIDATION
13.1 Acceleration Notices.
(a) The Administrative Agent may give the Lenders a
Notice of Acceleration at any time during the existence of an Event of Default.
(b) The Majority Lenders may give the Administrative
Agent a Notice of Acceleration at any time during the existence of an Event of
Default. Such notice may be by multiple counterparts.
13.2 Acceleration. Unless stayed by judicial or statutory
process, the Administrative Agent shall accelerate the time for payment of the
Liabilities and declare the Liabilities immediately due and payable in full
within a commercially reasonable time following:
(a) The Administrative Agent's giving of a Notice of
Acceleration to the Lenders as provided in Section 13.1(a).
(b) The Administrative Agent's receipt of a Notice of
Acceleration from the Majority Lenders, in compliance with Section 13.1(b).
13.3 Initiation of Liquidation. Unless stayed by judicial
or statutory process, a Liquidation shall be initiated by the Administrative
Agent within a commercially reasonable time following acceleration of the
Liabilities.
13.4 Actions at and Following Initiation of Liquidation.
(a) At the initiation of a Liquidation:
(i) The unpaid principal balance of the Swing
Line Loan (if any) shall be converted, pursuant to Section
12.2(b)(ii), to a Revolving Credit Loan in which all Revolving
Credit Lenders participate.
(ii) The Administrative Agent and the Revolving
Credit Lenders shall "net out" each Revolving Credit Lender's
respective contributions towards the
Revolving Credit Loans, so that each Revolving Credit Lender
holds that Revolving Credit Lender's Revolving Credit
Commitment Percentage of the Revolving Credit Loans and
advances.
(b) Following the initiation of a Liquidation,
each Revolving Credit Lender shall contribute, towards any L/C
thereafter honored and not immediately reimbursed by the
Borrowers, that Revolving Credit Lender's Revolving Credit
Commitment Percentage of such honoring.
13.5 Administrative Agent's Conduct of Liquidation.
(a) Any Liquidation shall be conducted by the
Administrative Agent, with the advice and assistance of the Lenders.
(b) The Administrative Agent may establish one or more
Nominees to "bid in" or otherwise acquire ownership to any Post Foreclosure
Asset, provided that the Administrative Agent may "bid in" for any such assets
only at such prices as may be directed by the Majority Lenders.
(c) The Administrative Agent shall manage the Nominee and
manage and dispose of any Post Foreclosure Assets with a view towards the
realization of the economic benefits of the ownership of the Post Foreclosure
Assets and in such regard, the Administrative Agent and/or the Nominee may
operate, repair, manage, maintain, develop, and dispose of any Post Foreclosure
Asset in such manner as the Administrative Agent determines as appropriate under
the circumstances.
(d) The Administrative Agent may decline to undertake or
to continue taking a course of action or to execute an action plan (whether
proposed by the Administrative Agent or any Lender) unless indemnified to the
Administrative Agent's satisfaction by the Lenders against any and all liability
and expense which may be incurred by the Administrative Agent by reason of
taking or continuing to take that course of action or action plan.
(e) Each Secured Party shall execute all such instruments
and documents not inconsistent with the provisions of this Agreement as the
Administrative Agent and/or the Nominee reasonably may request with respect to
the creation and governance of any Nominee, the conduct of the Liquidation, and
the management and disposition of any Post Foreclosure Asset.
13.6 Distribution of Liquidation Proceeds. (a) During the
existence of an Event of Default, the Administrative Agent may establish one or
more reasonably funded reserve accounts into which proceeds of the conduct of
any Liquidation may be deposited in anticipation of future expenses which may be
incurred by the Administrative Agent in the exercise of rights as a secured
creditor of the Credit Parties and prior claims which the Administrative Agent
reasonably anticipates may need to be paid.
(b) The Administrative Agent shall distribute the net
proceeds of Liquidation in accordance with the relative priorities set forth in
Section 13.7.
(c) Each Lender, on the written request of the
Administrative Agent and/or any Nominee, not more frequently than once each
month, shall reimburse the Administrative Agent and/or any Nominee, pro rata,
for any cost or expense reasonably incurred by the Administrative Agent and/or
the Nominee in the conduct of a Liquidation, which amount is not covered out of
current proceeds of the Liquidation, which reimbursement shall be paid over to
and distributed by the Administrative Agent.
13.7 Relative Priorities to Proceeds of Liquidation. The
relative priorities to the proceeds of a Liquidation are as follows:
(a) To the Administrative Agent as reimbursement for all
reasonable third party costs and expenses incurred by the Administrative Agent
and to Lenders' Special Counsel and to any funded reserve established pursuant
to Section 13.6(a); and then
(b) To the Swing Line Lender, on account of any Swing
Line Loans not converted to Revolving Credit Loans pursuant to Section
13.4(a)(i); and then
(c) To the Lenders (other than any Delinquent Lender),
pro rata, to the unpaid principal balance of the Revolving Credit Loans; and
then
(d) To the Lenders (other than any Delinquent Lender),
pro rata, to accrued interest on the Revolving Credit Loans; and then
(e) To the Lenders (other than any Delinquent Lender),
pro rata, to those fees distributable hereunder to the Lenders; and then
(f) To any Delinquent Lenders, pro rata to amounts to
which such Revolving Credit Lenders otherwise would have been entitled pursuant
to Sections 13.7(c), 13.7(d) or 13.7(e); and then
(g) To any applicable Lenders, pro rata, to the extent of
the Early Termination Fee; and then
(h) To any other Liabilities then outstanding (including,
without limitation on account of any claims then threatened or asserted against
any Secured Party for which the Credit Parties are obligated to provide an
indemnity).
(i) To the Lead Borrower or whoever may be lawfully
entitled thereto.
SECTION 14
THE ADMINISTRATIVE AGENT
14.1 Appointment of the Administrative Agent.
(a) Each of the Lenders and the Issuer appoints and
designates Fleet Retail Finance Inc. as the "Administrative Agent" hereunder and
under the Loan Documents.
(b) Each of the Lenders and the Issuer authorizes the
Administrative Agent:
(i) To execute those of the Loan Documents and
all other instruments relating thereto to which the
Administrative Agent is a party.
(ii) To take such action on behalf of the Lenders
and the Issuer and to exercise all such powers as are
expressly delegated to the Administrative Agent hereunder and
in the Loan Documents and all related documents, together with
such other powers as are reasonably incident thereto.
14.2 Responsibilities of Administrative Agent; Other
Agents.
(a) The Administrative Agent shall not have any duties or
responsibilities to, or any fiduciary relationship with, any Secured Party
except for those expressly set forth in this Agreement.
(b) Neither the Administrative Agent nor any of its
Affiliates shall be responsible to any Secured Party for any of the following:
(i) Any recitals, statements, representations or
warranties made by any Credit Party or any other Person.
(ii) Any appraisals or other assessments of the
assets of any Credit Party or of any other Person responsible
for or on account of the Liabilities.
(iii) The value, validity, effectiveness,
genuineness, enforceability, or sufficiency of this Agreement,
the other Loan Documents or any other document referred to or
provided for therein.
(iv) Any failure by any Credit Party or any other
Person (other than the Administrative Agent) to perform its
obligations under the Loan Documents.
(c) The Administrative Agent may employ attorneys,
accountants, and other professionals and agents and attorneys-in-fact and shall
not be responsible for the negligence or misconduct of any such attorneys,
accountants, and other professionals or agents or attorneys-in-fact selected by
the Administrative Agent with reasonable care. No such attorney, accountant,
other professional, agent, or attorney-in-fact shall be responsible for any
action taken or omitted to be taken by any other such Person.
(d) Neither the Administrative Agent, nor any of its
directors, officers, or employees shall be responsible for any action taken or
omitted to be taken by any other of them in connection herewith in reliance upon
advice of its counsel nor, in any other event except for any action taken or
omitted to be taken as to which a final judicial determination has been or is
made (in a proceeding in which such Person has had an opportunity to be heard)
that such Person had acted in a grossly negligent manner, in actual bad faith,
or in willful misconduct.
(e) The Administrative Agent shall not have any
responsibility in any event for more funds than the Administrative Agent
actually receives and collects.
(f) The Administrative Agent, in its separate capacity as
a Lender, shall have the same rights and powers hereunder as any other Lender.
(g) The Arranger and the Syndication Agent, in their
respective capacities as such, shall have no duties or responsibilities, and
shall incur no liability, under this Agreement and the other Loan Documents.
14.3 Concerning Distributions by the Administrative Agent.
(a) The Administrative Agent in the Administrative
Agent's reasonable discretion based upon the Administrative Agent's
determination of the likelihood that additional payments will be received,
expenses incurred, and/or claims made by third parties to all or a portion of
such proceeds, may delay the distribution of any payment received on account of
the Liabilities.
(b) The Administrative Agent may disburse funds prior to
determining that the sums which the Administrative Agent expects to receive have
been finally and unconditionally paid to the Administrative Agent. If and to the
extent that the Administrative Agent does disburse funds and it later becomes
apparent that the Administrative Agent did not then receive a payment in an
amount equal to the sum paid out, then any Lender to whom the Administrative
Agent made the funds available, on demand from the Administrative Agent, shall
refund to the Administrative Agent the sum paid to that person.
(c) If, in the opinion of the Administrative Agent, the
distribution of any amount received by the Administrative Agent might involve
the Administrative Agent in liability, or might be prohibited hereby, or might
be questioned by any Person, then the Administrative Agent may refrain from
making distribution until the Administrative Agent's right to make distribution
has been adjudicated by a court of competent jurisdiction.
(d) The proceeds of any Lenders exercise of any right of,
or in the nature of, set-off shall be deemed, First, to the extent that a Lender
is entitled to any distribution hereunder, to constitute such distribution and
Second, shall be shared with the other Lenders as if distributed pursuant to
(and shall be deemed as distributions under) Section 13.7.
(e) Each Lender recognizes that the crediting of the
Borrowers with the "proceeds" of any transaction in which a Post Foreclosure
Asset is acquired is a non-cash
transaction and that, in consequence, no distribution of such "proceeds" will be
made by the Administrative Agent to any Lender.
(f) In the event that (x) a court of competent
jurisdiction shall adjudge that any amount received and distributed to the
Lenders by the Administrative Agent is to be repaid or disgorged or (y) the
Majority Lenders determine to effect such repayment or disgorgement, then each
Lender to which any such distribution shall have been made shall repay, to the
Administrative Agent which had made such distribution, that Lender's pro rata
share of the amount so adjudged or determined to be repaid or disgorged.
14.4 Dispute Resolution. Any dispute among the Lenders,
the Issuer, the Administrative Agent and/or any other Secured Party concerning
the interpretation, administration, or enforcement of the financing arrangements
contemplated by this or any other Loan Document or the interpretation or
administration of this or any other Loan Document which cannot be resolved
amicably shall be resolved in the United States District Court for the District
of New York, sitting in New York or in the Supreme Court of New York County, New
York, to the jurisdiction of which courts each of the Lenders and the Issuer
hereby submits.
14.5 Distributions of Notices and of Documents. The
Administrative Agent will forward to each Lender, promptly after the
Administrative Agent's receipt thereof, a copy of each notice or other document
furnished to the Administrative Agent pursuant to this Agreement, including
monthly, quarterly, and annual financial statements received from the Lead
Borrower pursuant to Article 5 of this Agreement, other than any of the
following:
(a) Routine communications associated with requests for
Revolving Credit Loans and/or the issuance of L/Cs.
(b) Routine or nonmaterial communications.
(c) Any notice or document of which the Administrative
Agent has knowledge that such notice or document had been forwarded to the
Lenders other than by the Administrative Agent.
14.6 Confidential Information.
(a) Each Lender will maintain, as confidential, all of
the following:
(i) Proprietary approaches, techniques, and
methods of analysis which are applied by the Administrative
Agent in the administration of the credit facility
contemplated by this Agreement.
(ii) Proprietary forms and formats utilized by
the Administrative Agent in providing reports to the Lenders
pursuant hereto, which forms or formats are not of general
currency.
(b) Nothing included herein shall prohibit the disclosure
of any such information as may be required to be provided by judicial process or
by regulatory authorities having jurisdiction over any party to this Agreement.
14.7 Reliance By Administrative Agent. The Administrative
Agent shall be entitled to rely upon any certificate, notice or other document
(including any cable, telegram, telex, or facsimile) reasonably believed by the
Administrative Agent to be genuine and correct and to have been signed or sent
by or on behalf of the proper person or persons, and upon advice and statements
of attorneys, accountants and other experts selected by the Administrative
Agent. As to any matters not expressly provided for in this Agreement, any Loan
Document, or in any other document referred to therein, the Administrative Agent
shall in all events be fully protected in acting, or in refraining from acting,
in accordance with the applicable Consent required by this Agreement.
Instructions given with the requisite Consent shall be binding on all Lenders.
14.8 Non-Reliance on Administrative Agent and Other
Lenders.
(a) Each Lender represents to all other Lenders and to
the Administrative Agent that such Lender:
(i) Independently and without reliance on any
representation or act by Administrative Agent or by any other
Lender, and based on such documents and information as that
Lender has deemed appropriate, has made such Lender's own
appraisal of the financial condition and affairs of the Credit
Parties and decision to enter into this Agreement.
(ii) Has relied upon that Lender's review of the
Loan Documents by that Lender and by counsel to that Lender as
that Lender deemed appropriate under the circumstances.
(b) Each Lender agrees that such Lender, independently
and without reliance upon Administrative Agent or any other Lender, and based
upon such documents and information as such Lender shall deem appropriate at the
time, will continue to make such Lender's own appraisals of the financial
condition and affairs of the Credit Parties when determining whether to take or
not to take any discretionary action under this Agreement.
(c) The Administrative Agent, in the discharge of that
Administrative Agent's duties hereunder, shall not be required to make inquiry
of, or to inspect the properties or books of, any Person.
(d) Except for notices, reports, and other documents and
information expressly required to be furnished to the Lenders by the
Administrative Agent hereunder (as to which, see Section 14.5), the
Administrative Agent shall not have any affirmative duty or responsibility to
provide any Secured Party with any credit or other information concerning any
Person, which information may come into the possession of Administrative Agent
or any Affiliate of the Administrative Agent.
(e) Each Lender, at such Lender's request, shall have
reasonable access to all nonprivileged documents in the possession of the
Administrative Agent, which documents relate to the Administrative Agent's
performance of its duties hereunder.
(f) Each Lender understands that Xxxxxx & Xxxxxxx LLP is
acting as legal counsel to Fleet National Bank, Fleet Retail Finance and Fleet
Securities, Inc. in this transaction in their respective capacities hereunder.
14.9 Indemnification. Without limiting the liabilities of
the Credit Parties under this Agreement or any of the other Loan Documents, each
Lender shall indemnify the Administrative Agent, pro rata based upon their
respective Total Commitment Percentages for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever (including reasonable
attorneys' fees and expenses and other out-of-pocket expenditures) which may at
any time be imposed on, incurred by, or asserted against the Administrative
Agent and in any way relating to or arising out of this Agreement or any other
Loan Document or any documents contemplated by or referred to therein or the
transactions contemplated thereby or the enforcement of any of terms hereof or
thereof or of any such other documents, provided, however, no Lender shall be
liable for any of the foregoing to the extent that any of the foregoing arises
from any action taken or omitted to be taken by the Administrative Agent as to
which a final judicial determination has been or is made (in a proceeding in
which the Administrative Agent has had an opportunity to be heard) that the
Administrative Agent had acted in a grossly negligent manner, in actual bad
faith, or in willful misconduct.
14.10 Resignation of Administrative Agent.
(a) The Administrative Agent may resign at any time by
giving sixty (60) days prior written notice thereof to the Lenders. Upon receipt
of any such notice of resignation, the Majority Lenders shall have the right to
appoint a successor to such Administrative Agent, which shall be a Lender (and
if no Event of Default has occurred, with the consent of the Lead Borrower, not
to be unreasonably withheld and, in any event, deemed given by the Lead Borrower
if no written objection is provided by the Lead Borrower to the (resigning)
Administrative Agent within seven (7) Business Days notice of such proposed
appointment). If a successor Administrative Agent shall not have been so
appointed and accepted such appointment within thirty (30) days after the giving
of notice by the resigning Administrative Agent, then the resigning
Administrative Agent may appoint a successor Administrative Agent, which shall
be a bank or finance company where the making or administration of commercial
loans is a significant part of the ordinary course of its business and which has
a combined capital and surplus in excess of $300,000,000.00. The consent of the
Lead Borrower otherwise required by this Section 14.10(a) shall not be required
if an Event of Default has occurred.
(b) Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor Administrative Agent, such
successor shall thereupon succeed to, and become vested with, all the rights,
powers, privileges, and duties of the (resigning) Administrative Agent so
replaced, and the (resigning) Administrative Agent shall be discharged from the
(resigning) Administrative Agent's duties and obligations hereunder, other than
on
account of any responsibility for any action taken or omitted to be taken by the
(resigning) Administrative Agent as to which a final judicial determination has
been or is made (in a proceeding in which the (resigning) Person has had an
opportunity to be heard) that such Person had acted in a grossly negligent
manner or in bad faith.
(c) After any retiring Administrative Agent's
resignation, the provisions of this Agreement and of all other Loan Documents
shall continue in effect for the retiring Person's benefit in respect of any
actions taken or omitted to be taken by it while it was acting as Administrative
Agent.
SECTION 15
ACTION BY ADMINISTRATIVE AGENT - CONSENTS - AMENDMENTS - WAIVERS
15.1 Administration of Credit Facilities.
(a) Except as otherwise specifically provided in this
Agreement, the Administrative Agent may take any action with respect to the
credit facility contemplated by the Loan Documents as the Administrative Agent
determines to be appropriate, provided, however, the Administrative Agent is not
under any affirmative obligation to take any action which it is not required by
this Agreement or the Loan Documents specifically to so take.
(b) Except as specifically provided in the following
Sections of this Agreement, whenever a Loan Document or this Agreement provides
that action may be taken or omitted to be taken in an Administrative Agent's
discretion, the Administrative Agent shall have the sole right to take, or
refrain from taking, such action without, and notwithstanding, any vote of the
Lenders:
Action Described in Section Type of Consent Required
--------------------------- ------------------------
15.2 Majority Lenders
15.3 Supermajority Revolving Credit Lenders
15.4 Unanimous Consent
15.5 Swing Line Lender Consent
15.6 Consent of Issuer
15.7 Consent of the Administrative Agent
(c) The rights granted to the Lenders in those sections
referenced in Section 15.1(b) shall not otherwise limit or impair the
Administrative Agent's exercise of its discretion under the Loan Documents.
15.2 Actions Requiring or on Direction of Majority
Lenders. Except as otherwise provided in this Agreement, the Consent or
direction of the Majority Lenders is required for any amendment, waiver, or
modification of any Loan Document.
15.3 Actions Requiring or on Direction Of Supermajority
Revolving Credit Lenders. The Swing Line Loan Ceiling may not be increased to an
amount in excess of
$40,000,000.00 (or such greater amount to which such Swing Line Loan Ceiling has
been previously increased in accordance with the provisions of this Section 15.3
without the Consent of the Supermajority Revolving Credit Lenders.
15.4 Actions Requiring or Directed by Unanimous Consent.
None of the following may take place except with the Consent of each Lender
directly adversely affected thereby or with Unanimous Consent (as set forth
below):
(a) Any increase in any Lender's Commitment or Revolving
Credit Commitment Percentage (other than by reason of the application of Section
15.10 (which deals with NonConsenting Lenders) or Section 16.1 (which deals with
assignments and participations)) requires the consent of the Majority Lenders
and each Lender whose Commitment and/or Revolving Credit Commitment Percentage
is being so increased.
(b) Any decrease in any interest rate or fee payable to
the Lenders on account of the Loans requires Unanimous Consent.
(c) Any extension of the Maturity Date requires Unanimous
Consent.
(d) Any permanent forgiveness of all or any portion of
any payment Liability requires the consent of the Majority Lenders and each
Lender to whom such a forgiven payment Liability is owed.
(e) Any decrease in any interest rate or fee payable
under any of the Loan Documents (other than any Agent's Fee (for which the
consent of the Administrative Agent shall also be required) and of any fee
provided for by the Restatement Fee Letter (which may be amended by written
agreement between the Lead Borrower on the one hand, and the Administrative
Agent on the other)) requires Unanimous Consent.
(f) Any release of a material portion of the Collateral
(except as otherwise required or provided for in the Loan Documents or to
facilitate a Liquidation) requires Unanimous Consent.
(g) Any amendment of the definition of the terms
"Borrowing Base" or of any definition of any component thereof, such that more
credit would be available to the Borrowers, based on the same assets, as would
have been available to the Borrowers immediately prior to such amendment
requires Unanimous Consent, it being understood, however, that:
(i) The foregoing shall not limit the adjustment
by the Administrative Agent of any Reserve in the
Administrative Agent's administration of the Revolving Credit
as otherwise permitted by this Agreement.
(ii) The foregoing shall not prevent the
Administrative Agent, in its administration of the Revolving
Credit, from restoring any component of the Borrowing Base
which had been lowered by the Administrative Agent back to the
value of such component, as stated in this Agreement or to an
intermediate value.
(h) Any release of any Person obligated on account of the
Liabilities requires Unanimous Consent.
(i) The making of any Revolving Credit Loan which, when
made, exceeds Availability and is not a Permissible OverLoan requires Unanimous
Consent, provided, however,
(i) no Consent shall be required in connection
with the making of any Revolving Credit Loan to "cover" any
honoring of a drawing under any L/C; and
(ii) each Lender recognizes that subsequent to
the making of a Revolving Credit Loan which does not
constitute a Permissible OverLoan, the unpaid principal
balance of the Loan Account may exceed the Borrowing Base on
account of changed circumstances beyond the control of the
Administrative Agent (such as a drop in collateral value).
(j) The waiver of the obligation of the Borrowers to
reduce the unpaid principal balance of Revolving Credit Loans under the
Revolving Credit to an amount which does not exceed a Permissible OverLoan or to
eliminate an OverLoan requires Unanimous Consent.
(k) Any amendment of this Article 15 requires Unanimous
Consent.
(l) Amendment of any of the following Definitions
requires Unanimous Consent:
"Appraised Inventory Liquidation Value"
"Appraised Inventory Percentage"
"Majority Lenders"
"Permissible OverLoan"
"Supermajority Revolving Credit Lenders"
"Unanimous Consent"
15.5 Actions Requiring Swing Line Lender Consent. No
action, amendment, or waiver of compliance with, any provision of the Loan
Documents or of this Agreement which directly affects the Swing Line Lender may
be undertaken without the Consent of the Swing Line Lender.
15.6 Actions Requiring Issuer Consent. No action,
amendment, or waiver of compliance with, any provision of the Loan Documents or
of this Agreement which directly affects the Issuer may be undertaken without
the Consent of the Issuer.
15.7 Actions Requiring Administrative Agent's Consent.
(a) No action, amendment, or waiver of
compliance with, any provision of the Loan Documents or of
this Agreement which affects the Administrative Agent in its
capacity as Administrative Agent may be undertaken without the
written consent of the Administrative Agent.
(b) No action referenced herein which affects
the rights, duties, obligations, or liabilities of the
Administrative Agent shall be effective without the written
consent of the Administrative Agent.
15.8 Miscellaneous Actions.
(a) Notwithstanding any other provision of this
Agreement, no single Lender independently may exercise any right of action or
enforcement against or with respect to any Credit Party.
(b) The Administrative Agent shall be fully justified in
failing or refusing to take action under this Agreement or any Loan Document on
behalf of any Secured Party unless the Administrative Agent shall first
(i) receive such clear, unambiguous, written
instructions as the Administrative Agent deems appropriate
from the required parties; and
(ii) be indemnified to the Administrative Agent's
satisfaction by the Secured Parties against any and all
liability and expense which may be incurred by the
Administrative Agent by reason of taking or continuing to take
any such action, unless such action had been grossly
negligent, in willful misconduct, or in bad faith.
(c) The Administrative Agent may establish reasonable
procedures for the providing of direction and instructions from the Lenders to
the Administrative Agent, including its reliance on multiple counterparts,
facsimile transmissions, and time limits within which such direction and
instructions must be received in order to be included in a determination of
whether the requisite percentage of Lenders has provided its direction, Consent,
or instructions.
15.9 Actions Requiring Lead Borrower's Consent.
(a) The Lead Borrower's consent is required for any
amendment of this Agreement, except that each of the following Articles of this
Agreement may be amended without the consent of the Lead Borrower or any other
Credit Party:
Section Title of Section
------- ----------------
12 Revolving Credit Fundings and Distributions to Lenders
14.1 The Administrative Agent
15 Action by Administrative Agent - Consents - Amendments - Waivers
(other than 15.8(a), 15.8(b), 15.9 and 15.10)
(b) Subject to Section 15.9(c), Section 15.4 (Unanimous
Consent) may not be amended without the consent of the Lead Borrower:
(c) The Lead Borrower's consent to the amendment of those
provisions referenced in Section 15.9(b)
(i) Shall be deemed given unless written
objection is made, within seven (7) Business Days following
the Administrative Agent's giving notice to the Lead Borrower
of the proposed amendment; and
(ii) shall not be required during the existence
of any Event of Default.
15.10 NonConsenting Lender.
(a) In the event that a Lender (in this Section 15.10, a
"NonConsenting Lender") does not provide its Consent to a proposal by the
Administrative Agent to take action which requires consent under this Article
15, then subject to the prior consent of the Administrative Agent, one or more
Lenders who provided Consent to such action may require the assignment, without
recourse and in accordance with the procedures outlined in Section 16.1, below,
of the NonConsenting Lender's commitment hereunder on fifteen (15) days written
notice to the Administrative Agent and to the NonConsenting Lender.
(b) At the end of such fifteen (15) days, and provided
that the NonConsenting Lender delivers the Note held by the NonConsenting Lender
to the Administrative Agent, the Lenders who have given such written notice
shall Transfer the following to the NonConsenting Lender:
(i) Such NonConsenting Lender's pro rata share
of the principal and interest of the Loans to the date of such
assignment.
(ii) All fees distributable hereunder to the
NonConsenting Lender to the date of such assignment.
(iii) Any out-of-pocket costs and expenses for
which the NonConsenting Lender is entitled to reimbursement
from the Borrowers.
(c) In the event that the NonConsenting Lender fails to
deliver to the Administrative Agent the Note(s) held by the NonConsenting Lender
as provided in Section 15.10(b), then:
(i) The amount otherwise to be Transferred to
the NonConsenting Lender shall be Transferred to the
Administrative Agent and held by the Administrative Agent,
without interest, to be turned over to the NonConsenting
Lender upon delivery of the Note(s) held by that NonConsenting
Lender.
(ii) The Note(s) held by the NonConsenting Lender
shall have no force or effect whatsoever.
(iii) The NonConsenting Lender shall cease to be a
"Lender".
(iv) The Lender(s) which have Transferred the
amount to the Administrative Agent as described above shall
have succeeded to all rights and become subject to all of the
obligations of the NonConsenting Lender as "Lender".
(d) In the event that more than one (1) Lender wishes to
require such assignment, the NonConsenting Lender's commitment hereunder shall
be divided among such Lenders, pro rata based upon their Revolving Credit
Commitment Percentages with the Administrative Agent coordinating such
transaction.
(e) The Administrative Agent shall coordinate the
retirement of the Note(s) held by the NonConsenting Lender and the issuance of
Notes to those Lenders which "take-out" such NonConsenting Lender, provided,
however, no processing fee otherwise to be paid as provided in Section 16.2(b)
shall be due under such circumstances.
SECTION 16
ASSIGNMENTS BY LENDERS
16.1 Assignments and Assumptions.
(a) Except as provided herein, each Lender (in this
Section 16.1(a), an "Assigning Lender") may assign to one or more Eligible
Assignees (in this Section 16.1(a), each an "Assignee Lender") all or a portion
of that Lender's interests, rights and obligations under this Agreement and the
Loan Documents (including all or a portion of its Commitment) and the same
portion of the Loans at the time owing to it, and of the Note held by the
Assigning Lender, provided that:
(i) The Administrative Agent (and, if no Event
of Default then exists, the Lead Borrower) shall have given
its prior written consent to such assignment, which consent
shall not be unreasonably withheld, but may be withheld if the
proposed assignment would result in any resulting Lender's
having a Dollar Commitment of less than the "minimum hold"
amount specified in Section 16.1(a)(iii), provided that any
assignment complying with all other terms of this Section
16(a) to a Person then a Lender or an affiliate thereof shall
not be subject to the prior consent of the Lead Borrower.
(ii) Each such assignment shall be of a constant,
and not a varying, percentage of all the Assigning Lender's
rights and obligations under this Agreement.
(iii) Following the effectiveness of such
assignment, the Assigning Lender's Commitment (if not an
assignment of all of the Assigning Lender's Commitment) shall
not be less than $10,000,000.00.
(b) Notwithstanding the foregoing, at any time when no
Default or Event of Default exists, Fleet Retail Finance Inc. may not assign any
of its Commitment if, following the effectiveness of such assignment, the
Administrative Agent's Commitment is less than $60,000,000.00.
16.2 Assignment Procedures. (This Section 16.2 describes
the procedures to be followed in connection with an assignment effected pursuant
to this Article 16 and permitted by Section 16.1).
(a) The parties to such an assignment shall execute and
deliver to the Administrative Agent, for recording in the Register, an
Assignment and Acceptance substantially in the form of Exhibit E, (an
"Assignment and Acceptance").
(b) The Assigning Lender shall deliver to the
Administrative Agent, with such Assignment and Acceptance, the Note held by the
subject Assigning Lender and the Administrative Agent's processing fee of
$3,500.00, provided, however, no such processing fee shall be due where the
Assigning Lender is one of the Lenders (or an affiliate thereof) at the initial
execution of this Agreement.
(c) The Administrative Agent shall maintain a copy of
each Assignment and Acceptance delivered to it and a register or similar list
(the "Register") for the recordation of the names and addresses of the Lenders
and of the Revolving Credit Commitment Percentage of each Lender. The Register
shall be available for inspection by the Lenders at any reasonable time and from
time to time upon reasonable prior notice. In the absence of manifest error, the
entries in the Register shall be conclusive and binding on all Lenders. The
Administrative Agent and the Lenders may treat each Person whose name is
recorded in the Register as a "Lender" hereunder for all purposes of this
Agreement.
(d) The Assigning Lender and Assignee Lender, directly
between themselves, shall make all appropriate adjustments in payments for
periods prior to the effective date of an Assignment and Assumption.
16.3 Effect of Assignment.
(a) From and after the effective date specified in an
Assignment and Acceptance which has been executed, delivered, and recorded
(which effective date the Administrative Agent may delay by up to five (5)
Business Days after the delivery of such Assignment and Acceptance):
(i) The Assignee Lender:
(B) Shall be a party to this Agreement
and the Loan Documents (and to any amendments
thereof) as fully as if the Assignee Lender had
executed each.
(C) Shall have the rights of a Lender
hereunder to the extent of the Revolving Credit
Commitment Percentage assigned by such Assignment and
Acceptance.
(ii) The Assigning Lender shall be released from
the Assigning Lender's obligations under this Agreement and
the Loan Documents to the extent of the Commitment assigned by
such Assignment and Acceptance.
(iii) The Administrative Agent shall undertake to
obtain and distribute replacement Notes to the subject
Assigning Lender and Assignee Lender.
(b) By executing and delivering an Assignment and
Acceptance, the parties thereto confirm to and agree with each other and with
all parties to this Agreement as to those matters which are set forth in the
subject Assignment and Acceptance.
SECTION 17
NOTICES
17.1 Notice Addresses. All notices, demands, and other
communications made in respect of any Loan Document (other than a request for a
loan or advance or other financial accommodation under the Revolving Credit)
shall be made to the following addresses, each of which may be changed upon
seven (7) days written notice to all others given by certified mail, return
receipt requested:
If to the Administrative Agent:
Fleet Retail Finance Inc.
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx Xxxx
Fax: (000) 000-0000
With a copy to:
Xxxxxx & Xxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxxxx X. Xxxxx
Fax: (000) 000-0000
If to the Lead Borrower
And All Credit Parties:
ShopKo Stores, Inc.
000 Xxxxxxx Xxx
Xxxxx Xxx, Xxxxxxxxx 00000
Attention: Xxxx Xxxxxxx
Fax: (000) 000-0000
With a copy to:
Xxxxxxx & Xxxx, S.C.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Xxxxxxxxxxx Xxxxx
Fax: (000) 000-0000
and
ShopKo Stores, Inc.
000 Xxxxxxx Xxx
Xxxxx Xxx, Xxxxxxxxx 00000
Attention: General Counsel
Fax: (000) 000-0000
17.2 Notice Given.
(a) Except as otherwise specifically provided herein,
notices shall be deemed made and correspondence received, as follows (all times
being local to the place of delivery or receipt):
(i) By mail: the sooner of when actually
received or three (3) days following deposit in the United
States mail, postage prepaid.
(ii) By recognized overnight express delivery:
the Business Day following the day when sent.
(iii) By Hand: If delivered on a Business Day
after 9:00 AM and no later than 4:00 PM, when delivered.
Otherwise, at the opening of the then next Business Day.
(iv) By Facsimile transmission (which must
include a header on which the party sending such transmission
is indicated): If sent on a Business Day after 9:00 AM and no
later than 4:00 PM, one (1) hour after being sent. Otherwise,
at the opening of the then next Business Day.
(b) Rejection or refusal to accept delivery and inability
to deliver because of a changed address or facsimile number for which no due
notice was given shall each be deemed receipt of the notice sent.
SECTION 18
TERMINATION
18.1 Termination of Revolving Credit. The Revolving Credit
shall remain in effect (subject to suspension as provided in Section 2.5(g)
hereof) until the Termination Date.
18.2 Actions on Termination.
(a) On the Termination Date, the Borrowers shall pay the
Administrative Agent (whether or not then due), in immediately available funds,
all Liabilities then due and owing, including, without limitation: the
following:
(i) The entire balance of the Loan Account
(including the unpaid principal balance of the Revolving
Credit Loans and the Swing Line Loan).
(ii) Any then remaining installments of the
Agent's Fee.
(iii) Any payments due on account of the
indemnification obligations included in Section 2.11(f).
(iv) Any accrued and unpaid Unused Fee.
(v) Any applicable portion of the Early
Termination Fee.
(vi) All unreimbursed costs and expenses
(including legal expenses) of the Administrative Agent and of
Lenders' Special Counsel for which each Credit Party is
responsible.
(b) On the Termination Date, the Borrowers shall also
shall make such arrangements concerning any L/Cs then outstanding as are
reasonably satisfactory to the Administrative Agent (such as cash
collateralizing such L/Cs in an amount equal to 103% of the undrawn face amount
thereof in a manner reasonably acceptable to the Administrative Agent).
(c) Until such payment (Section 18.2(a)) and arrangements
concerning L/Cs (Section 18.2(b)), all provisions of this Agreement, other than
those included in Article 2 which place any obligation on the Administrative
Agent or any Revolving Credit Lender to make any loans or advances or to provide
any financial accommodations to any Borrower, shall remain in full force and
effect until all Liabilities shall have been paid in full.
(d) The release by the Administrative Agent of the
Collateral Interests granted the Administrative Agent by the Credit Parties
hereunder may be upon such conditions and indemnifications as the Administrative
Agent may reasonably require.
SECTION 19
GUARANTY
19.1 Guaranty.
(a) Each of the Guarantors unconditionally and
irrevocably guarantees the due and punctual payment and performance by the
Borrowers of the Liabilities. Each of the Guarantors further agrees that the
Liabilities may be extended or renewed, in whole or in part, without notice to
or further assent from it, and it will remain bound upon this guaranty
notwithstanding any extension or renewal of any of the Liabilities. The
Liabilities of the Guarantors shall be joint and several.
(b) Each of the Guarantors waives presentation to, demand
for payment from and protest to the Borrowers or any other Guarantor, and also
waives notice of protest for nonpayment. The obligations of the Guarantors
hereunder shall not be affected by (i) the failure of any Secured Party to
assert any claim or demand or to enforce any right or remedy against any
Borrower or any other Guarantor under the provisions of this Agreement or any
other Loan Document or otherwise; (ii) any extension or renewal of any provision
hereof or thereof; (iii) any rescission, waiver, compromise, acceleration,
amendment or modification of any of the terms or provisions of any of the Loan
Documents; (iv) the release, exchange, waiver or foreclosure of any security
held by any Secured Party; (v) the failure of any Secured Party to exercise any
right or remedy against any other Guarantor; (vi) the release or substitution of
any Guarantor or any other guarantor or (vii) any bankruptcy, insolvency,
reorganization, arrangement, adjustment, composition, liquidation or the like of
any Borrower or any Guarantor including, but not limited to, (x) any Secured
Party's election, in any proceeding instituted under the Bankruptcy Code, of the
application of Section 1111(b)(2) of the Bankruptcy Code, (y) any borrowing or
grant of an Encumbrance by the Borrower or any Guarantor as
debtor-in-possession, under Section 364 of the Bankruptcy Code, or (z) the
disallowance of all or any portion of any Secured Party's claim(s) for repayment
of the Liabilities under Section 502 of the Bankruptcy Code.
(c) Each of the Guarantors further agrees that this
guaranty constitutes a guaranty of performance and of payment when due and not
just of collection, and waives any right to require that any resort be had by
any Secured Party to any security held for payment of the Liabilities or to any
balance of any deposit, account or credit on the books of any Secured Party in
favor of any Credit Party other than the Guarantor or any other Person.
(d) Each of the Guarantors hereby waives any defense that
it might have based on a failure to remain informed of the financial condition
of any Borrower and of any other Guarantor and any circumstances affecting the
ability of any Borrower to perform under this Agreement.
(e) Each Guarantor's guaranty shall not be affected by
the genuineness, validity, regularity or enforceability of the obligations, the
Notes or any other instrument evidencing any Liabilities, or by the existence,
validity, enforceability, perfection, or extent of any collateral therefor or by
any other circumstance relating to the obligations which might otherwise
constitute a defense to this Guaranty. None of the Secured Parties makes any
representation or warranty in respect to any such circumstances or shall have
any duty or responsibility whatsoever to any Guarantor in respect of the
management and maintenance of the obligations.
(f) Subject to the provisions of Article 10, upon the
Liabilities becoming due and payable (by acceleration or otherwise), the Secured
Parties shall be entitled to immediate payment of such Liabilities by the
Guarantors upon written demand by the Administrative Agent.
19.2 No Impairment of Guaranty. The obligations of the
Guarantors hereunder shall not be subject to any reduction, limitation,
impairment or termination for any reason, including, without limitation, any
claim of waiver, release, surrender, alteration or compromise, and shall not be
subject to any defense or set-off, counterclaim, recoupment, or termination
whatsoever by reason of the invalidity, illegality or unenforceability of the
Liabilities. Without limiting the generality of the foregoing, the obligations
of the Guarantors hereunder shall not be discharged or impaired or otherwise
affected by the failure of any Secured Party to assert any claim or demand or to
enforce any remedy under this Agreement or any other agreement, by any waiver or
modification of any provision thereof, by any default, failure or delay, willful
or otherwise, in the performance of the Liabilities, or by any other act or
thing or omission or delay to do any other act or thing which may or might in
any manner or to any extent vary the risk of the Guarantors or would otherwise
operate as a discharge of the Guarantors as a matter of law, unless and until
the Liabilities are paid in full.
19.3 Subrogation. Upon payment by any Guarantor of any
sums to any Secured Party hereunder, all rights of such Guarantor against any
Borrower arising as a result thereof by way of right of subrogation or
otherwise, shall in all respects be subordinate and junior in right of payment
to the prior final and indefeasible payment in full of all the Liabilities. If
any amount shall be paid to such Guarantor for the account of any Borrower, such
amount shall be held in trust for the benefit of the Secured Parties and shall
forthwith be paid to the Administrative Agent to be credited and applied to the
Liabilities, whether matured or unmatured.
19.4 Credit Agreement. Each of the Guarantors acknowledges
that it has read the Loan Documents and agrees to perform and observe all of the
terms and provisions herein and therein applicable thereto.
19.5 Maximum Guaranteed Amount. Without in any way
limiting each Guarantor's obligations under this Agreement and the other Loan
Documents as a "Credit Party," the maximum dollar amount of any Guarantor's
payment obligation under this guaranty shall not exceed the greater of (i) the
actual dollar amount of the recovery by the Administrative Agent upon a
Liquidation of the Collateral owned by such Guarantor and (ii) the difference
between (a) the Cost value of the Collateral owned by such Guarantor on the date
on which a Default occurs under this Agreement which results in an uninterrupted
period of time from the time of occurrence of such Default to a Liquidation of
such Collateral during which one or more Defaults or Events of Default exist
unwaived and uncured continuously under this Agreement plus the Cost value of
any Collateral transferred (whether by sale, intercompany transfer or otherwise)
to such Guarantor after such date and (b) repayments of the Loans directly from
the
Proceeds of Collateral owned by such Guarantor after the date of occurrence of
such Default. Moreover, notwithstanding any other provision of this Guaranty to
the contrary, if the obligations of any Guarantor hereunder would otherwise be
held or determined by a court of competent jurisdiction in any action or
proceeding involving any state corporate law or any state or Federal bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or other law
affecting the rights of creditors generally, to be void, invalid or
unenforceable to any extent on account of the amount of such Guarantor's
liability under this Guaranty, then notwithstanding any other provision of this
Guaranty to the contrary, the amount of such liability shall, without any
further action by such Guarantor or any other Person, be automatically limited
and reduced to the highest amount which is valid and enforceable as determined
in such action or proceeding.
SECTION 20
MISCELLANEOUS
20.1 Protection of Collateral. The Administrative Agent
has no duty as to the collection or protection of the Collateral beyond the safe
custody of such of the Collateral as may come into the possession of the
Administrative Agent.
20.2 Publicity. The Administrative Agent may issue one
"tombstone" notice of the establishment of the credit facility contemplated by
this Agreement and may make reference to each Credit Party (and may utilize any
logo or other distinctive symbol associated with each Credit Party with the Lead
Borrower's consent, which will not be unreasonably withheld) in connection with
any advertising, promotion, or marketing undertaken by the Administrative Agent.
20.3 Successors and Assigns. This Agreement shall be
binding upon the Credit Parties and their respective representatives,
successors, and assigns and shall enure to the benefit of the Administrative
Agent, the Issuer and each Lender and their respective successors and permitted
assigns, provided, however, no trustee or other fiduciary appointed with respect
to any Credit Party shall have any rights hereunder, and provided further that
no Credit Party may assign or otherwise transfer any of its rights or
obligations hereunder. In the event that the Administrative Agent, the Issuer or
any Lender assigns or transfers its rights under this Agreement, the assignee
shall thereupon succeed to and become vested with all rights, powers,
privileges, and duties of such assignor hereunder and such assignor shall
thereupon be discharged and relieved from its duties and obligations hereunder.
20.4 Severability. Any determination that any provision of
this Agreement or any application thereof is invalid, illegal, or unenforceable
in any respect in any instance shall not affect the validity, legality, or
enforceability of such provision in any other instance, or the validity,
legality, or enforceability of any other provision of this Agreement.
20.5 Amendments; Course of Dealing.
(a) This Agreement and the other Loan Documents
incorporate all discussions and negotiations between each Credit Party and the
Administrative Agent, the Issuer and each Lender, either express or implied,
concerning the matters included herein and in such other
instruments, any custom, usage, or course of dealings to the contrary
notwithstanding. No such discussions, negotiations, custom, usage, or course of
dealings shall limit, modify, or otherwise affect the provisions thereof.
Notwithstanding the foregoing, Sections 2, 3 and 4 of the Commitment Letter,
dated as of January 24, 2001, among the Lead Borrower and the other parties
thereto, shall survive the execution and delivery of this Agreement and the
closing of the transactions contemplated hereby. No failure by the
Administrative Agent, the Issuer or any Lender to give notice to the Lead
Borrower of any Credit Party's having failed to observe and comply with any
warranty or covenant included in any Loan Document shall constitute a waiver of
such warranty or covenant or the amendment of the subject Loan Document.
(b) Each Credit Party may undertake any action otherwise
prohibited hereby, and may omit to take any action otherwise required hereby,
upon and with the express prior written consent of the Administrative Agent.
Subject to Article 15, no consent, modification, amendment, or waiver of any
provision of any Loan Document shall be effective unless executed in writing by
or on behalf of the party to be charged with such modification, amendment, or
waiver (and if such party is the Administrative Agent then by a duly authorized
officer thereof). Any modification, amendment, or waiver provided by the
Administrative Agent shall be in reliance upon all representations and
warranties theretofore made to the Administrative Agent by or on behalf of the
Credit Parties (and any guarantor, endorser, or surety of the Liabilities) and
consequently may be rescinded in the event that any of such representations or
warranties was not true and complete in all material respects when given.
(c) Each reference in the Loan Documents to the exercise
of discretion or the like by the Administrative Agent, the Issuer or any Lender
shall be to such Person's exercise of its judgment, in good faith, based upon
such Person's consideration of any such factors as the Administrative Agent, the
Issuer or that Lender, determines as having a material bearing on credit risks
associated with the providing of Loans and financial accommodations to the
Borrowers, taking into account information of which that Person then has actual
knowledge. The burden of establishing the failure of the Administrative Agent,
the Issuer or any Lender to have acted in a reasonable manner in such Person's
exercise of such discretion shall be the Borrowers'.
20.6 Power of Attorney. In connection with all powers of
attorney included in this Agreement, each Credit Party hereby grants unto the
Administrative Agent (acting through any of its officers) full power to do any
and all things necessary or appropriate during the existence of an Event of
Default in connection with the exercise of such powers as fully and effectually
as that Credit Party might or could do, hereby ratifying all that said attorney
shall do or cause to be done by virtue of this Agreement. No power of attorney
set forth in this Agreement shall be affected by any disability or incapacity
suffered by any Credit Party and each shall survive the same. All powers
conferred upon the Administrative Agent by this Agreement, being coupled with an
interest, shall be irrevocable until this Agreement is terminated by a written
instrument executed by a duly authorized officer of the Administrative Agent.
20.7 Application of Proceeds. The proceeds of any
collection, sale, or disposition of the Collateral, or of any other payments
received hereunder, shall be applied towards the Liabilities in such order and
manner as the Administrative Agent determines in its
sole discretion, consistent, however, with Sections 13.6 and 13.7 and any other
applicable provisions of this Agreement. The Credit Parties shall remain liable
for any deficiency remaining following such application.
20.8 Increased Costs. If, as a result of any change in any
Requirement of Law, or of the interpretation or application thereof by any court
or by any governmental or other authority or entity charged with the
administration thereof, whether or not having the force of law, which:
(a) subjects any Lender to any taxes or changes the basis
of taxation, or increases any existing taxes, on payments of principal, interest
or other amounts payable by any Borrower to the Administrative Agent, the Issuer
or any Lender under this Agreement (except for taxes on the Administrative
Agent, the Issuer or any Lender based on net income or capital imposed by the
jurisdictions in which the principal or lending offices of the Administrative
Agent, the Issuer or that Lender are located);
(b) imposes, modifies or deems applicable any reserve,
cash margin, special deposit or similar requirements against assets held by, or
deposits in or for the account of or loans by or any other acquisition of funds
by the relevant funding office of any Lender;
(c) imposes on the Issuer or any Lender any other
condition with respect to any Loan Document; or
(d) imposes on the Issuer or any Lender a requirement to
maintain or allocate capital in relation to the Liabilities; and the result of
any of the foregoing, in the Issuer's or such Lender's reasonable opinion, is to
increase the cost to the Issuer or that Lender of making or maintaining any
loan, advance or financial accommodation or to reduce the income receivable by
the Issuer or that Lender in respect of any loan, advance or financial
accommodation by an amount which the Issuer or that Lender deems to be material,
then upon written notice from the Administrative Agent, from time to time, to
the Lead Borrower (such notice to set out in reasonable detail the facts giving
rise to and a summary calculation of such increased cost or reduced income and
such calculation to be consistent with the manner by which such increased costs
would be calculated for the Lender's similar customers), the Borrowers shall
forthwith pay to the Administrative Agent, for the benefit of the subject
Lender, within thirty (30) days after receipt of such notice, that amount which
shall compensate the Issuer or the subject Lender for such additional cost or
reduction in income.
20.9 Costs and Expenses of the Administrative Agent.
(a) The Credit Parties shall pay from time to time on
demand all Costs of Collection and all reasonable costs, expenses, and
disbursements (including reasonable attorneys' fees and expenses) which are
incurred by the Administrative Agent in connection with the preparation,
negotiation, execution, delivery, administration, interpretation, amendment,
modification and enforcement of this Agreement and of any other Loan Documents,
and all other reasonable costs, expenses, and disbursements which may be
incurred connection with or in
respect to the credit facility contemplated hereby or which otherwise are
incurred with respect to the Liabilities.
(b) The Credit Parties shall pay from time to time on
demand all reasonable costs and expenses (including reasonable attorneys' fees
and expenses) incurred, during the existence of any Event of Default, by the
Administrative Agent and by the Lenders to Lenders' Special Counsel.
(c) Each Credit Party authorizes the Administrative Agent
to pay all such fees and expenses set forth in (a) and (b) above and, in the
Administrative Agent's discretion, to add such fees and expenses to the Loan
Account.
(d) The undertaking on the part of each Credit Party in
this Section 20.9 shall survive payment of the Liabilities and/or any
termination, release, or discharge executed by the Administrative Agent in favor
of any Credit Party, other than a termination, release, or discharge which makes
specific reference to this Section 20.9.
20.10 Copies and Facsimiles. Each Loan Document and all
documents and papers which relate thereto which have been or may be hereinafter
furnished to the Administrative Agent or any Lender may be reproduced by that
Lender or by the Administrative Agent by any photographic, microfilm,
xerographic, digital imaging, or other process, and such Person making such
reproduction may destroy any document so reproduced. Any such reproduction shall
be admissible in evidence as the original itself in any judicial or
administrative proceeding (whether or not the original is in existence and
whether or not such reproduction was made in the regular course of business).
Any facsimile which bears proof of transmission shall be binding on the party
which or on whose behalf such transmission was initiated and likewise shall be
so admissible in evidence as if the original of such facsimile had been
delivered to the party which or on whose behalf such transmission was received.
20.11 Governing Law. This Agreement and all rights and
obligations hereunder, including matters of construction, validity, and
performance, shall be governed by the law of the State of New York.
20.12 Consent to Jurisdiction.
(a) Each Credit Party agrees that any legal action,
proceeding, case, or controversy against any Credit Party with respect to any
Loan Document may be brought in the Supreme Court of New York in New York County
or in the United States District Court, District of New York, sitting in New
York, New York, as the Administrative Agent may elect in the Administrative
Agent's sole discretion. By execution and delivery of this Agreement, each
Credit Party, for itself and in respect of its property, accepts, submits, and
consents generally and unconditionally, to the jurisdiction of the aforesaid
courts.
(b) Each Credit Party WAIVES personal service of any and
all process upon it, and irrevocably consents to the service of process out of
any of the aforementioned courts in any such action or proceeding by the mailing
of copies thereof by certified mail, postage prepaid,
to the Lead Borrower at the Lead Borrower's address for notices as specified
herein, such service to become effective five (5) Business Days after such
mailing.
(c) Each Credit Party WAIVES any objection based on forum
non conveniens and any objection to venue of any action or proceeding instituted
under any of the Loan Documents and consents to the granting of such legal or
equitable remedy as is deemed appropriate by the Court.
(d) Nothing herein shall affect the right of the
Administrative Agent to bring legal actions or proceedings in any other
competent jurisdiction.
(e) Each Credit Party agrees that any action commenced by
any Credit Party asserting any claim arising under or in connection with this
Agreement or any other Loan Document shall be brought solely in the Supreme
Court of New York in New York County or in the United States District Court,
District of New York, sitting in New York, New York, and that such Courts shall
have exclusive jurisdiction with respect to any such action.
20.13 Indemnification. Each Credit Party shall indemnify,
defend, and hold the Administrative Agent, the Issuer, the Arranger, the
Syndication Agent and each Lender and any Participant and any of their
respective employees, officers, attorneys or agents (each, an "Indemnified
Person") harmless of and from any claim brought or threatened against any
Indemnified Person by any Credit Party, any guarantor or endorser of the
Liabilities, or any other Person (as well as from reasonable attorneys' fees,
expenses, and disbursements in connection therewith) on account of the Revolving
Credit, this Agreement or any other Loan Document, any transaction contemplated
hereby or thereby, or relationship of the Credit Parties or of any other
guarantor or endorser of the Liabilities, in each case including all costs,
expenses, liabilities, and damages as may be suffered by any Indemnified Person
in connection with (w) the administration or enforcement of the Loan Documents;
(x) the Collateral; (y) the occurrence of any Event of Default; or (z) the
exercise of any rights or remedies under any of the Loan Documents (each of
claims which may be defended, compromised, settled, or pursued by the
Indemnified Person with counsel of the Indemnified Person's selection, but at
the expense of the Credit Parties) other than any claim as to which a final
determination is made in a judicial proceeding (in which the Administrative
Agent and any other Indemnified Person has had an opportunity to be heard),
which determination includes a specific finding that the Indemnified Person
seeking indemnification had acted in a grossly negligent manner or in actual bad
faith. This indemnification shall survive payment of the Liabilities and/or any
termination, release, or discharge executed by the Administrative Agent in favor
of the Credit Parties, other than a termination, release, or discharge duly
executed on behalf of the Administrative Agent which makes specific reference to
this Section 20.13 as being released or terminated.
20.14 Rules of Construction. The following rules of
construction shall be applied in the interpretation, construction, and
enforcement of this Agreement and of the other Loan Documents:
(a) Words in the singular include the plural and words in
the plural include the singular.
(b) Titles, headings (indicated by being underlined or
shown in SMALL CAPITALS) and any Table of Contents are solely for convenience of
reference, do not constitute a part of the instrument in which included, and do
not affect such instrument's meaning, construction, or effect.
(c) The words "includes" and "including" are not
limiting.
(d) Text which follows the words "including, without
limitation" (or similar words) is illustrative and not limitational.
(e) Text which is shown in italics (except for
parenthesized italicized text), shown in bold, shown IN ALL CAPITAL LETTERS, or
in any combination of the foregoing, shall be deemed to be conspicuous.
(f) The words "may not" are prohibitive and not
permissive.
(g) Any reference to a Person's "knowledge" (or words of
similar import) are to such Person's knowledge assuming that such Person has
undertaken reasonable and diligent investigation with respect to the subject of
such "knowledge" (whether or not such investigation has actually been
undertaken).
(h) Terms which are defined in one section of any Loan
Document are used with such definition throughout the instrument in which so
defined.
(i) The symbol "$" refers to United States Dollars.
(j) Unless limited by reference to a particular Section
or provision, any reference to "herein", "hereof", or "within" is to the entire
Loan Document in which such reference is made.
(k) References to "this Agreement" or to any other Loan
Document is to the subject instrument as amended to the date on which
application of such reference is being made.
(l) Except as otherwise specifically provided, all
references to time are to Boston time.
(m) In the determination of any notice, grace, or other
period of time prescribed or allowed hereunder:
(i) Unless otherwise provided (A) the day of the
act, event, or default from which the designated period of
time begins to run shall not be included and the last day of
the period so computed shall be included unless such last day
is not a Business Day, in which event the last day of the
relevant period shall be the then next Business Day and (B)
the period so computed shall end at 5:00 PM on the relevant
Business Day.
(ii) The word "from" means "from and including".
(iii) The words "to" and "until" each mean "to,
but excluding".
(iv) The word "through" means "to and including".
(n) The Loan Documents shall be construed and interpreted
in a harmonious manner and in keeping with the intentions set forth in Section
20.15 hereof, provided, however, in the event of any inconsistency between the
provisions of this Agreement and any other Loan Document, the provisions of this
Agreement shall govern and control.
(o) Interrelationship with Original Loan and Security
Agreement.
(i) As stated in the preamble hereof, this
Agreement is intended to amend and restate the provisions of
the Original Loan and Security Agreement notwithstanding any
substitution of Notes as of the Restatement Effective Date.
Except as expressly modified herein, (x) all of the terms and
provisions of the Original Loan and Security Agreement shall
continue to apply for the period prior to the Restatement
Effective Date, including any determinations of payment dates,
interest rates, Events of Default or any amount that may be
payable to the Administrative Agent or the financial
institutions from time to time party to the Original Loan and
Security Agreement (or their assignees or replacements
hereunder), and (y) the obligations under the Original Loan
and Security Agreement shall continue to be paid or prepaid on
or prior to the Restatement Effective Date, and shall from and
after the Restatement Effective Date continue to be owing and
be subject to the terms of this Agreement. All references in
any Loan Documents to (i) the "Loan Agreement" shall be deemed
to include references to this Agreement and (ii) the "Lenders"
or a "Lender" or to the "Administrative Agent" shall mean such
terms as defined in this Agreement. As to all periods
occurring on or after the Restatement Effective Date, all of
the covenants set forth in the Original Loan and Security
Agreement shall be of no further force and effect, it being
understood that all obligations of the Borrowers under the
Original Loan and Security Agreement shall be governed by this
Agreement from and after the Restatement Effective Date.
(ii) The Borrowers, the Administrative Agent and
the Lenders acknowledge and agree that all principal,
interest, fees, costs, reimbursable expenses and
indemnification obligations accruing or arising under or in
connection with the Original Loan and Security Agreement which
remain unpaid and outstanding as of the Restatement Effective
Date shall be and remain outstanding and payable as an
obligation under this Agreement and the other Loan Documents;
provided that no Lender hereunder which was not an Original
Lender shall be liable for any obligation or indemnification
of Lenders under the Original Loan and Security Agreement.
20.15 Intent. It is intended that:
(a) This Agreement take effect as a sealed instrument.
(b) The scope of all Collateral Interests created by any
Credit Party to secure the Liabilities be broadly construed in favor of the
Administrative Agent.
(c) All Collateral Interests created in favor of the
Administrative Agent at any time and from time to time by any Credit Party shall
secure all Liabilities, whether now existing or contemplated or hereafter
arising.
(d) Unless otherwise explicitly provided herein, the
Administrative Agent's consent to any action of any Credit Party which is
prohibited unless such consent is given may be given or refused by the
Administrative Agent in its sole discretion.
20.16 Participations. Each Lender may sell participations
to one or more financial institutions (each, a "Participant") in that Lender's
interests herein provided that in no event shall any Participant under any such
participation have any right to participate in the approval by a requisite
number or proportion of the Lenders of any action including to make any
instruction following the happening of a Default or Event of Default such as to
issue a Notice of Acceleration or commence a Liquidation, or to approve any
amendment or waiver of any provision of any Loan Document except to the extent
that such amendment or waiver would reduce the principal of, or rate or interest
on, the Loans or any fees payable hereunder, or postpone the date of the final
maturity of the Loans. No such sale of a participation shall relieve a Lender
from that Lender's obligations hereunder nor obligate the Administrative Agent
to any Person other than a Lender.
20.17 Right of Set-Off. Any and all deposits or other sums
at any time credited by or due to any Credit Party from the Administrative
Agent, the Issuer or any Lender or any Participant or from any Affiliate of any
of the foregoing, and any cash, securities, instruments or other property of any
Credit Party in the possession of any of the foregoing, whether for safekeeping
or otherwise (regardless of the reason such Person had received the same) shall
at all times constitute security for all Liabilities and for any and all
obligations of each Credit Party to the Administrative Agent, the Issuer and
such Lender or any Participant or such Affiliate and may be applied or set off
against the Liabilities and against such obligations at any time an Event of
Default exists, whether or not such are then due and whether or not other
collateral is then available to the Administrative Agent, the Issuer or that
Lender.
20.18 Pledges. Nothing included in this Agreement shall
prevent or limit any Lender from pledging all or any portion of that Lender's
interest and rights under this Agreement, provided, however, neither such pledge
nor the enforcement thereof shall release the pledging Lender from any of its
obligations hereunder or under any of the other Loan Documents.
20.19 Maximum Interest Rate. Regardless of any provision of
any Loan Document, none of the Administrative Agent, the Issuer or any Lender
shall be entitled to contract for, charge, receive, collect, or apply as
interest on any Liability, any amount in excess of the maximum rate imposed by
Applicable Law. Any payment which is made which, if treated
as interest on a Liability would result in such interest's exceeding such
maximum rate shall be held, to the extent of such excess, as additional
collateral for the Liabilities as if such excess were "Collateral."
20.20 Waivers.
(a) The Credit Parties make each of the waivers included
in Section 20.20(b), below, knowingly, voluntarily, and intentionally, and
understands that the Administrative Agent, the Issuer and each Lender, in
establishing the facilities contemplated hereby and in providing loans and other
financial accommodations to or for the account of the Borrowers as provided
herein, whether not or in the future, is relying on such waivers.
(b) EACH CREDIT PARTY RESPECTIVELY WAIVES THE FOLLOWING:
(i) Except as otherwise specifically required
hereby, notice of non-payment, demand, presentment, protest
and all forms of demand and notice, both with respect to the
Liabilities and the Collateral.
(ii) Except as otherwise specifically required
hereby, the right to notice and/or hearing prior to the
Administrative Agent's exercising of the Administrative
Agent's rights upon default.
(iii) THE RIGHT TO A JURY IN ANY TRIAL OF ANY CASE
OR CONTROVERSY IN WHICH THE ADMINISTRATIVE AGENT, THE ISSUER
OR ANY LENDER IS OR BECOMES A PARTY (WHETHER SUCH CASE OR
CONTROVERSY IS INITIATED BY OR AGAINST THE ADMINISTRATIVE
AGENT, THE ISSUER OR ANY LENDER OR IN WHICH THE ADMINISTRATIVE
AGENT, THE ISSUER OR ANY LENDER IS JOINED AS A PARTY
LITIGANT), WHICH CASE OR CONTROVERSY ARISES OUT OF OR IS IN
RESPECT OF, ANY RELATIONSHIP AMONGST OR BETWEEN ANY CREDIT
PARTY OR ANY OTHER PERSON AND THE ADMINISTRATIVE AGENT, THE
ISSUER OR ANY LENDER (EACH OF WHOM LIKEWISE WAIVES THE RIGHT
TO A JURY IN ANY TRIAL OF ANY SUCH CASE OR CONTROVERSY).
(iv) Any defense, counterclaim, set-off,
recoupment, or other basis on which the amount of any
Liability, as stated on the books and records of the
Administrative Agent, could be reduced or claimed to be paid
otherwise than in accordance with the tenor of and written
terms of such Liability.
(v) Any claim to consequential, special, or
punitive damages.
20.21 Additional Waivers.
(a) Except as otherwise provided in Section 19.5, the
Liabilities are the joint and several obligations of each Credit Party. To the
fullest extent permitted by applicable law,
the obligations of each Credit Party hereunder shall not be affected by (i) the
failure of the Administrative Agent, the Issuer or any Lender to assert any
claim or demand or to enforce or exercise any right or remedy against any other
Credit Party under the provisions of this Agreement, any other Loan Document or
otherwise, (ii) any rescission, waiver, amendment or modification of, or any
release from any of the terms or provisions of, this Agreement, any other Loan
Document, or any other agreement, including with respect to any other Credit
Party of the Liabilities under this Agreement, or (iii) the failure to perfect
any security interest in, or the release of, any of the security held by or on
behalf of the Administrative Agent.
(b) The obligations of each Credit Party hereunder shall
not be subject to any reduction, limitation, impairment or termination for any
reason (other than the indefeasible payment in full in cash of the Liabilities),
including any claim of waiver, release, surrender, alteration or compromise of
any of the Liabilities, and shall not be subject to any defense or set-off,
counterclaim, recoupment or termination whatsoever by reason of the invalidity,
illegality or unenforceability of the Liabilities or otherwise. Without limiting
the generality of the foregoing, the obligations of each Credit Party hereunder
shall not be discharged or impaired or otherwise affected by the failure of any
Secured Party to assert any claim or demand or to enforce any remedy under this
Agreement, any other Loan Document or any other agreement, by any waiver or
modification of any provision of any thereof, by any default, failure or delay,
willful or otherwise, in the performance of the Liabilities, or by any other act
or omission that may or might in any manner or to any extent vary the risk of
any Credit Party or that would otherwise operate as a discharge of any Credit
Party as a matter of law or equity (other than the indefeasible payment in full
in cash of all the Liabilities).
(c) To the fullest extent permitted by applicable law,
each Credit Party waives any defense based on or arising out of any defense of
any other Credit Party or the unenforceability of the Liabilities or any part
thereof from any cause, or the cessation from any cause of the liability of any
other Credit Party, other than the indefeasible payment in full in cash of all
the Liabilities. The Administrative Agent may, at its election, foreclose on any
security held by it by one or more judicial or nonjudicial sales, accept an
assignment of any such security in lieu of foreclosure, compromise or adjust any
part of the Liabilities, make any other accommodation with any other Credit
Party, or exercise any other right or remedy available to them against any other
Credit Party, without affecting or impairing in any way the liability of any
Credit Party hereunder except to the extent that all the Liabilities have been
indefeasibly paid in full in cash. To the fullest extent permitted by applicable
law, each Credit Party waives any defense arising out of any such election even
though such election operates, pursuant to applicable law, to impair or to
extinguish any right of reimbursement or subrogation or other right or remedy of
such Credit Party against any other Credit Party, as the case may be, or any
security.
(d) Upon payment by any Credit Party of any Liabilities,
all rights of such Credit Party against any other Credit Party arising as a
result thereof by way of right of subrogation, contribution, reimbursement,
indemnity or otherwise shall in all respects be subordinate and junior in right
of payment to the prior indefeasible payment in full in cash of all the
Liabilities. In addition, any indebtedness of any Credit Party now or hereafter
held by any other Credit Party is hereby subordinated in right of payment to the
prior payment in full of the
Liabilities. No Credit Party will demand, xxx for, or otherwise attempt to
collect any such indebtedness. If any amount shall erroneously be paid to any
Credit Party on account of (a) such subrogation, contribution, reimbursement,
indemnity or similar right or (b) any such indebtedness of any Credit Party,
such amount shall be held in trust for the benefit of the Administrative Agent,
the Issuer and the Lenders and shall forthwith be paid to the Administrative
Agent to be credited against the payment of the Liabilities, whether matured or
unmatured, in accordance with the terms of the Loan Documents.
20.22 Confidentiality. The Administrative Agent, the Issuer
and the Lenders agree to maintain the confidentiality of the Information (as
defined below), except that Information may be disclosed (a) to their and their
Affiliates' directors, officers, employees and agents, including accountants,
legal counsel and other advisors (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority, (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process, (d)
to any other party to this Agreement, (e) in connection with the exercise of any
remedies hereunder or any suit, action or proceeding relating to this Agreement
or any other Loan Document or the enforcement of rights hereunder or thereunder,
(f) subject to an agreement containing provisions substantially the same as
those of this Section, to any assignee of or Participant in, or any prospective
assignee of or Participant in, any of its rights or obligations under this
Agreement, (g) with the consent of the Lead Borrower or (h) to the extent such
Information (1) becomes publicly available other than as a result of a breach of
this Section or (2) becomes available to the Administrative Agent, the Issuer or
any Lender on a nonconfidential basis from a source other than the Credit
Parties. For the purposes of this Section, the term "Information" means all
information received from the Credit Parties relating to their businesses, other
than any such information that is available to the Administrative Agent, the
Issuer or any Lender on a nonconfidential basis prior to disclosure by the
Credit Parties. Any Person required to maintain the confidentiality of
Information as provided in this Section shall be considered to have complied
with its obligation to do so if such Person has exercised the same degree of
care to maintain the confidentiality of such Information as such Person would
accord to its own confidential information. Notwithstanding any other express or
implied agreement, arrangement or understanding to the contrary, each of the
parties hereto hereby agree that, each party hereto (and each of its employees,
representatives or agents) is permitted to disclose to any and all persons,
without limitation, the tax treatment and tax aspects of the Loans and any other
transactions contemplated hereby, and all materials of any kind (including
opinions or other tax analyses) that are provided to the Credit Parties, the
Lenders or the Administrative Agent related to such tax treatment and tax
aspects. To the extent not inconsistent with the immediately preceding sentence,
this authorization does not extend to disclosure of any other information or any
other term or detail not related to the tax treatment or tax aspects of the
Loans or any other transactions contemplated hereby.
20.23 Confirmation of Existing Obligations. Each of the
Credit Parties hereby reaffirms and admits the validity and enforceability of
this Agreement, the other Loan Documents and all of its obligations hereunder
and thereunder and agrees and admits that, as of
the date hereof, it has no defenses to, or offsets or counterclaims against, any
of its obligations to the Secured Parties under the Loan Documents of any kind
whatsoever.
20.24 Existing Agreement Superseded. As set forth in
Section 20.14(o), the Original Loan and Security Agreement is superseded by this
Agreement, which has been executed in renewal, amendment, restatement and
modification, but not in novation or extinguishment of, the obligations under
the Original Loan and Security Agreement.
[signature pages to follow]
