EXHIBIT 5.1
REVOLVING CREDIT AGREEMENT
THIS REVOLVING CREDIT AGREEMENT (this "Agreement") is made
and entered into as of the 27th day of June, 2000, by and among
CPI CORP., a Delaware corporation ("Borrower"), and the
undersigned Banks, including FIRSTAR BANK MISSOURI, NATIONAL
ASSOCIATION, in its capacity as a Bank and as agent for the Banks
under this Agreement.
WITNESSETH:
WHEREAS, Borrower has applied for a revolving credit facility
from the Banks consisting of revolving credit loans and letters of
credit in an aggregate amount of up to $30,000,000.00; and
WHEREAS, the Banks are willing to extend said revolving
credit facility to Borrower upon, and subject to, the terms,
provisions and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and for
other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Borrower, the Banks and the
Agent hereby covenant and agree as follows:
SECTION 1. DEFINITIONS.
------------------------
1.01 DEFINITIONS. In addition to the terms defined
elsewhere in this Agreement or in any Exhibit or Schedule hereto,
when used in this Agreement, the following terms shall have the
following meanings (such meanings shall be equally applicable to
the singular and plural forms of the terms used, as the context
requires):
ACQUISITION shall mean any transaction or series of related
transactions, consummated on or after the date of this Agreement,
by which Borrower or any Subsidiary directly or indirectly (a)
acquires all or substantially all of the assets comprising one or
more business units of any other Person, whether through purchase
of assets, merger or otherwise or (b) acquires (in one transaction
or as the most recent transaction in a series of transactions) at
least (i) a majority (in number of votes) of the stock and/or
other securities of a corporation having ordinary voting power
for the election of directors (other than stock and/or other
securities having such power only by reason of the happening of a
contingency), (ii) a majority (by percentage of voting power) of
the outstanding partnership interests of a partnership, (iii) a
majority (by percentage of voting power) of the outstanding
membership interests of a limited liability company or (iv) a
majority of the ownership interests in any organization or entity
other than a corporation, partnership or limited liability
company.
ADJUSTED PRIME RATE shall mean the Prime Rate plus the
Applicable Prime Margin. The Adjusted Prime Rate shall be adjusted
automatically on and as of the effective date of any change in the
Prime Rate and/or the Applicable Prime Margin.
AFFILIATE shall mean, at any time, (a) with respect to any
Person, any other Person that at such time directly or indirectly
through one or more intermediaries Controls, or is Controlled by,
or is under common Control with, such first Person and (b) with
respect to Borrower, (i) any Person beneficially owning or
holding, directly or indirectly, Ten Percent (10%) or more of any
class of voting or equity interests of Borrower or any Subsidiary,
(ii) any corporation or other entity of which Borrower and its
Subsidiaries beneficially own or hold, in the aggregate, directly
or indirectly, Ten Percent (10%) or more of any class of voting or
equity interests and/or (iii) any Person who is a director or
officer of Borrower or any Subsidiary. As used in this definition,
"Control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting
securities, by contract or otherwise. Unless the context otherwise
clearly requires, any reference to an "Affiliate" is a reference
to an Affiliate of Borrower.
AGENT shall mean Firstar Bank Missouri, National Association
in its capacity as agent for the Banks under this Agreement and
certain of the other Transaction Documents and its successors in
such capacity.
APPLICABLE COMMITMENT FEE RATE, APPLICABLE LIBOR MARGIN,
APPLICABLE PRIME MARGIN AND APPLICABLE LETTER OF CREDIT COMMITMENT
FEE RATE shall mean the per annum rate shown in the applicable
column below based on the applicable Consolidated Debt to
Consolidated EBITDA Ratio:
If Consolidated Applicable
Debt to Letter of
Consolidated Applicable Applicable Applicable Credit
EBITDA Ratio is, Commitment LIBOR Prime Commitment
then Fee Rate is Margin is Margin is Fee Rate is
---------------- ----------- --------- --------- -----------
* 2.0 to 1.0 .375% 2.00% 0.50% 2.00%
* 1.75 to 1.0
but
** 2.0 to 1.0 .300% 1.75% 0.25% 1.75%
* 1.5 to 1.0
but
** 1.75 to 1.0 .250% 1.50% 0.00% 1.50%
*** 1.0 to 1.0
but
** 1.5 to 1.0 .250% 1.25% 0.00% 1.25%
****1.0 to 1.0 .200% 1.00% 0.00% 1.00%
* Greater than.
** Less than or equal to.
*** Greater than or equal to.
**** Less than.
The determination of the Applicable Commitment Fee Rate, the
Applicable LIBOR Margin, the Applicable Prime Margin and the
Applicable Letter of Credit Commitment Fee Rate as of any date
shall be based on the Consolidated Debt to Consolidated EBITDA
Ratio as of the end of the most recently ended fiscal quarter of
Borrower for which financial statements of Borrower and its
Subsidiaries have been delivered to the Agent and the Banks
pursuant to Section 5.01(a), and shall be effective for purposes
of determining the Applicable Commitment Fee Rate, the Applicable
LIBOR Margin, the Applicable Prime Margin and the Applicable
Letter of Credit Commitment Fee Rate from and after the first day
of the first month immediately following the date on which such
delivery of financial statements is required until the first day
of the first month immediately following the next such date on
which delivery of financial statements of Borrower and its
Subsidiaries is so required. For example, the Consolidated Debt
to Consolidated EBITDA Ratio as of the end of the fiscal quarter
of Borrower ending November 11, 2000, will be determined from the
financial statements of Borrower and its Subsidiaries as of and
for the fiscal quarter of Borrower ending November 11, 2000 (which
are required to be delivered to the Agent and the Banks on or
before December 26, 2001), and will be used in determining the
Applicable Commitment Fee Rate, the Applicable LIBOR Margin, the
Applicable Prime Margin and the Applicable Letter of Credit
Commitment Fee Rate from and after January 1, 2001.
Notwithstanding the foregoing, during the period commencing on the
date of this Agreement and ending December 31, 2000, (a)
Applicable Commitment Fee Rate shall mean .300% per annum, (b)
Applicable LIBOR Margin shall mean 1.75% per annum, (c) Applicable
Prime Margin shall mean .25% per annum and (d) Applicable Letter
of Credit Commitment Fee Rate shall mean 1.75% per annum.
ASSET SALE shall have the meaning ascribed thereto in Section
5.02(d).
ATTORNEY'S FEES shall mean the reasonable value of the
services (and costs, charges and expenses related thereto) of the
attorneys (and all paralegals, accountants and other staff
employed by such attorneys) employed by the Agent or any Bank
(including, without limitation, attorneys and paralegals who are
employees of the Agent or any Bank or of any direct or indirect
parent corporation, subsidiary or affiliate of the Agent or any
Bank) from time to time (a) in connection with the negotiation,
preparation, execution, delivery, amendment, modification,
extension, renewal, restatement, administration and/or enforcement
of this Agreement and/or any other Transaction Document, (b) in
connection with the preparation, negotiation or execution of any
waiver or consent with respect to this Agreement and/or any other
Transaction Document, (c) in connection with any Default or Event
of Default under this Agreement, (d) to represent the Agent and/or
any Bank in any litigation, contest, dispute, suit or proceeding,
or to commence, defend or intervene in any litigation, contest,
dispute, suit or proceeding, or to file any petition, complaint,
answer, motion or other pleading or to take any other action in or
with respect to any litigation, contest, dispute, suit or
proceeding (whether instituted by the Agent, any Bank, Borrower
and/or any other Person and whether in bankruptcy or otherwise) in
any way or respect relating to this Agreement and/or any other
Transaction Document, Borrower, any other Obligor, any Subsidiary
and/or (e) to enforce any of the rights and/or remedies of the
Agent and/or any Bank to collect any of the Borrower's Obligations
and/or any Guarantee thereof.
BANK(S) shall mean each bank or other financial institution
listed on the signature pages hereof, and its successors and
assigns.
BORROWER'S OBLIGATIONS shall mean any and all present and
future indebtedness (principal, interest, fees, collection costs
and expenses, Attorney's Fees and other amounts), liabilities and
obligations (including, without limitation, guaranty obligations,
letter of credit reimbursement obligations and indemnity
obligations) of Borrower to the Agent and/or any Bank evidenced by
or arising under or in respect of this Agreement, any Note, any
Letter of Credit Application and/or any other Transaction
Document.
CAPITAL EXPENDITURE shall mean any expenditure which, in
accordance with GAAP, should be capitalized on the balance sheet
of the Person making the same.
CAPITALIZED LEASE shall mean any lease of Property, whether
real and/or personal, by a Person as lessee which in accordance
with GAAP should be capitalized on the balance sheet of such
Person.
CAPITALIZED LEASE OBLIGATIONS of any Person shall mean, as of
the date of any determination thereof, the amount at which the
aggregate rental obligations due and to become due under all
Capitalized Leases under which such Person is a lessee should be
reflected as a liability on a balance sheet of such Person in
accordance with GAAP.
CENTRICS shall mean the Centrics division of Borrower and its
Subsidiaries as in existence on the date of this Agreement.
CENTRICS JOINT VENTURE shall mean the entity created by
Borrower and one or more other Persons to acquire all or
substantially all of the assets of Centrics from Borrower, which
entity will not be a Subsidiary.
CERCLA shall mean the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended by the
Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C.
Sub-section 9601 et seq., and as the same may from time to time be
further amended, modified, extended or renewed.
CHANGE OF CONTROL EVENT means the beneficial ownership or
acquisition by any Person or group of Persons who are Affiliates
(in any transaction or series of related transactions) of (a) more
than Fifty Percent (50%) of the Voting Stock of Borrower, (b) the
power to elect, appoint or cause the election or appointment of at
least a majority of the members of the Board of Directors of
Borrower or (c) all or substantially all of the assets and
Properties of Borrower.
CODE shall mean the Internal Revenue Code of 1986, as
amended, and any successor statute of similar import, together
with the regulations thereunder, in each case as in effect from
time to time. References to sections of the Code shall be
construed to also refer to any successor sections.
COMMITMENT shall mean, subject to termination or reduction as
set forth in Section 2.09 and subject to any assignment of the
Commitments by any Bank: with respect to Firstar, $20,000,000.00;
and with respect to Commerce Bank, National Association,
$10,000,000.00.
CONSOLIDATED ASSETS shall mean, as of the date of any
determination thereof, the total assets of Borrower and its
Subsidiaries which would be shown as assets on a consolidated
balance sheet of Borrower and its Subsidiaries as of such date
prepared in accordance with GAAP, after eliminating all amounts
properly attributable to minority interests, if any, in the stock
and surplus of Subsidiaries.
CONSOLIDATED DEBT shall mean, as of the date of any
determination thereof, all Debt of Borrower and its
Subsidiaries as of such date, determined on a consolidated basis
and in accordance with GAAP.
CONSOLIDATED DEBT TO CONSOLIDATED EBITDA RATIO shall mean, as
of the last day of any fiscal quarter of Borrower, the ratio of
(a) Consolidated Debt as of such day to (b) Consolidated EBITDA
for the four (4) consecutive fiscal quarter period of Borrower
ending on such day.
CONSOLIDATED EBITDA shall mean, for the period in question,
the sum of (a) Consolidated Net Income during such period plus (b)
to the extent deducted in determining such Consolidated Net Income
(but without duplication), the sum of (i) Consolidated Interest
Expense during such period, plus (ii) all provisions for any
Federal, state, local and/or foreign income taxes made by Borrower
and its Subsidiaries during such period (whether paid or
deferred), plus (iii) all depreciation and amortization expenses
of Borrower and its Subsidiaries during such period, plus (iv) any
extraordinary losses during such period plus (v) any losses from
the sale or other disposition of Property other than in the
ordinary course of business during such period (excluding,
however, the $5,142,150.00 loss incurred during the fiscal quarter
of Borrower ended February 5, 2000, as a result of the write-
down of certain assets of Prints Plus) plus (vi) any losses
incurred during such period for or in connection with
litigation and/or transaction costs related to the failed merger
between Borrower and American Securities Capital Partners
(provided, however, that the maximum amount of such losses which
Borrower may add back for purposes of this definition of EBITDA
shall not exceed $10,000,000.00 in the aggregate for all periods)
minus (c) to the extent added in determining such Consolidated Net
Income (but without duplication), the sum of (i) any extraordinary
gains during such period plus (ii) any gains from the sale or
other disposition of Property other than in the ordinary course of
business during such period, all determined on a consolidated
basis and in accordance with GAAP.
CONSOLIDATED EBITDAR shall mean, for the period in question,
the sum of (a) Consolidated EBITDA during such period plus (b) to
the extent deducted in determining such Consolidated EBITDA,
Consolidated Operating Lease Expense during such period, all
determined on a consolidated basis and in accordance with
GAAP.
CONSOLIDATED FIXED CHARGE COVERAGE RATIO shall mean, for the
period in question, the ratio of (a) Consolidated EBITDAR during
such period to (b) Consolidated Fixed Charges during such period,
all determined on a consolidated basis and in accordance with
GAAP.
CONSOLIDATED FIXED CHARGES shall mean, for the period in
question, the sum of (a) the aggregate amount of all principal
payments required to be made by Borrower and its Subsidiaries on
all Debt during such period (including the principal portion of
payments in respect of Capitalized Leases but excluding principal
payments on the Loans), plus (b) Consolidated Interest Expense
during such period, plus (b) Consolidated Operating Lease
Expense during such period, plus (d) the lesser of (i) all Capital
Expenditures made by Borrower and its Subsidiaries during such
period (net of any Debt incurred by Borrower or such Subsidiary
(other than Loans) to finance such Capital Expenditure) or (ii)
$20,000,000.00 plus (e) all provisions for any Federal, state,
local and/or foreign income taxes made by Borrower and its
Subsidiaries during such period (whether paid or deferred) plus
(f) all dividends paid by Borrower on or with respect to any of
its capital stock during such period, all determined on a
consolidated basis and in accordance with GAAP.
CONSOLIDATED INTEREST EXPENSE shall mean, for the period in
question, without duplication, all gross interest expense of
Borrower and its Subsidiaries (including, without limitation,
capitalized interest expense, the interest portion of Capitalized
Lease Obligations, the interest portion of any deferred payment
obligation and amortization of debt discount and expense) during
such period, all determined on a consolidated basis and in
accordance with GAAP.
CONSOLIDATED NET INCOME shall mean the after-tax net income
(or loss) of Borrower and its Subsidiaries for the period in
question, determined on a consolidated basis and in accordance
with GAAP; provided, however, that for purposes of this Agreement
"Consolidated Net Income" shall not include the income or loss of
Prints Plus so long as Prints Plus is treated as a discontinued
operation in accordance with GAAP.
CONSOLIDATED NET WORTH shall mean, as of the date of any
determination thereof, the amount of the capital stock accounts
(net of treasury stock, at cost) of Borrower and its Subsidiaries
as of such date plus (or minus in the case of a deficit) the
surplus and retained earnings of Borrower and its Subsidiaries as
of such date, all determined on a consolidated basis and in
accordance with GAAP.
CONSOLIDATED OPERATING LEASE EXPENSE shall mean, for the
period in question, the aggregate amount of all Operating Lease
Expenses of Borrower and its Subsidiaries during such period, all
determined on a consolidated basis and in accordance with GAAP.
DEBT OF ANY PERSON shall mean, as of the date of
determination thereof, the sum of (a) all Indebtedness of such
Person for borrowed money or which has been incurred in connection
with the purchase or other acquisition of Property (other than
unsecured trade accounts payable incurred in the ordinary course
of business) plus (b) all Capitalized Lease Obligations of such
Person plus (c) all Guarantees by such Person of Debt of others
plus (d) the aggregate undrawn face amount of all letters of
credit issued for the account and/or upon the application of such
Person together with all unreimbursed drawings with respect
thereto.
DEFAULT shall mean any event or condition the occurrence of
which would, with the lapse of time or the giving of notice or
both, become an Event of Default.
DISTRIBUTION IN RESPECT OF ANY CORPORATION OR OTHER ENTITY
shall mean: (a) dividends or other distributions (other than stock
dividends and stock splits) on or in respect of any of the capital
stock or other equity interests of such corporation or other
entity; and (b) the redemption, repurchase or other acquisition of
any capital stock or other equity interests of such corporation or
other entity or of any warrants, rights or other options to
purchase any such capital stock or other equity interests.
DOMESTIC BUSINESS DAY shall mean any day except a Saturday,
Sunday or legal holiday observed by the Agent or by commercial
banks located in St. Louis, Missouri.
ENVIRONMENTAL CLAIM shall mean any administrative, regulatory
or judicial action, judgment, order, consent decree, suit, demand,
demand letter, claim, Lien, notice of noncompliance or violation,
investigation or other proceeding arising (a) pursuant to any
Environmental Law or governmental or regulatory approval issued
under any such Environmental Law, (b) from the presence, use,
generation, storage, treatment, Release, threatened Release,
disposal, remediation or other existence of any Hazardous
Substance, (c) from any removal, remedial, corrective or other
response action pursuant to an Environmental Law or the order of
any governmental or regulatory authority or agency, (d) from any
third party seeking damages, contribution, indemnification, cost
recovery, compensation, injunctive or other relief in connection
with a Hazardous Substance or arising from alleged injury or
threat of injury to health, safety, natural resources or the
environment or (e) from any Lien against any Property owned,
leased or operated by Borrower or any Subsidiary in favor of any
governmental or regulatory authority or agency in connection with
a Release, threatened Release or disposal of a Hazardous
Substance.
ENVIRONMENTAL LAW shall mean any Federal, state, local,
foreign or other statute, law, rule, regulation, order, consent
decree, judgment, permit, license, code, covenant, deed
restriction, common law, treaty, convention, ordinance or other
requirement relating to public health, safety or the environment,
including, without limitation, those relating to Releases,
discharges or emissions to air, water, land or groundwater, to the
withdrawal or use of groundwater, to the use and handling of
polychlorinated biphenyls or asbestos, to the disposal, treatment,
storage or management of hazardous or solid waste, Hazardous
Substances or crude oil, or any fraction thereof, to exposure to
toxic or hazardous materials, to the handling, transportation,
discharge or release of gaseous or liquid Hazardous Substances and
any rule, regulation, order, notice or demand issued pursuant to
such law, statute or ordinance, in each case applicable to any of
the Property owned, leased or operated by Borrower or any
Subsidiary or the operation, construction or modification of any
such Property, including, without limitation, the following:
CERCLA, the Solid Waste Disposal Act, as amended by the Resource
Conservation and Recovery Act of 1976 and the Hazardous and Solid
Waste Amendments of 1984, the Hazardous Materials Transportation
Act, as amended, the Federal Water Pollution Control Act, as
amended by the Clean Water Act of 1976, the Safe Drinking
Water Control Act, the Clean Air Act of 1966, as amended, the
Toxic Substances Control Act of 1976, the Occupational Safety and
Health Act of 1970, as amended, the Emergency Planning and
Community Right-to-Know Act of 1986, the National Environmental
Policy Act of 1975, the Oil Pollution Act of 1990 and any similar
or implementing state or local law, and any state or local statute
and any further amendments to these laws providing for financial
responsibility for cleanup or other actions with respect to the
Release or threatened Release of Hazardous Substances or crude
oil, or any fraction thereof and all rules, regulations, guidance
documents and publication promulgated thereunder.
ERISA shall mean the Employee Retirement Income Security Act
of 1974, as amended, and any successor statute of similar import,
together with the regulations thereunder, in each case as in
effect from time to time. References to sections of ERISA shall
be construed to also refer to any successor sections.
ERISA AFFILIATE shall mean any corporation, trade or business
that is, along with Borrower or any Subsidiary, a member of a
controlled group of corporations or a controlled group of trades
or businesses, as described in Sections 414(b) and 414(c),
respectively, of the Code or Section 4001 of ERISA.
EURODOLLAR BUSINESS DAY shall mean any Domestic Business Day
on which commercial banks are open for international business
(including dealings in dollar deposits) in London.
EVENT OF DEFAULT shall have the meaning ascribed thereto in
Section 6.
EXCHANGE ACT shall mean the Securities Exchange Act of 1934,
as amended.
EXISTING LETTERS OF CREDIT shall have the meaning ascribed
thereto in Section 2.02(e).
EXISTING REVOLVING CREDIT AGREEMENT shall mean that certain
Revolving Credit Agreement dated June 16, 1997, by and among
Borrower, the banks party thereto and Mercantile Bank National
Association (now known as Firstar Bank Missouri, National
Association), as agent for the banks.
FED FUNDS RATE shall mean a rate per annum equal to Firstar's
quoted rate as of the opening of business by Firstar on each
Domestic Business Day for purchasing overnight federal funds in
the national market, which rate shall fluctuate as and when said
quoted rate shall change.
FINANCIAL COVENANT shall mean, with respect to any agreement,
document or instrument representing or governing Debt, any
covenant (whether expressed as a covenant, an event of default or
a condition to a borrowing) contained therein expressed in terms
of (a) a minimum or maximum amount in or derived from the
financial statements of Borrower and/or its Subsidiaries or (b) a
minimum or maximum ratio between any such amounts described in
clause (a) above or (c) any other financial or finance-related
test as the same may relate to the assets, liabilities, revenues
or expenses of Borrower and/or its Subsidiaries; provided that the
above shall not include a negative pledge covenant.
FIRSTAR shall mean Firstar Bank Missouri, National
Association, a national banking association, in its individual
corporate capacity as a Bank and not as the Agent.
GAAP shall mean, at any time, generally accepted accounting
principles at such time in the United States of America.
GUARANTEE BY ANY PERSON shall mean any obligation (other than
endorsements of negotiable instruments for deposit or collection
in the ordinary course of business), contingent or otherwise, of
such Person guaranteeing, or in effect guaranteeing, any
Indebtedness, liability, dividend or other obligation of any other
Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, all obligations
incurred through an agreement, contingent or otherwise, by such
Person: (a) to purchase such Indebtedness or obligation or any
Property constituting security therefor, (b) to advance or supply
funds (i) for the purchase or payment of such Indebtedness or
obligation or (ii) to maintain working capital or other balance
sheet condition or otherwise to advance or make available funds
for the purchase or payment of such Indebtedness or obligation,
(c) to lease property or to purchase securities or other property
or services primarily for the purpose of assuring the owner of
such Indebtedness or obligation of the ability of the primary
obligor to make payment of the Indebtedness or obligation or (d)
otherwise to assure the owner of the Indebtedness or obligation of
the primary obligor against loss in respect thereof. For the
purposes of all computations made under this Agreement, a
Guarantee in respect of any Indebtedness for borrowed money shall
be deemed to be Indebtedness equal to the then outstanding
principal amount of such Indebtedness for borrowed money which has
been guaranteed or such lesser amount to which the maximum
exposure of the guarantor shall have been specifically limited,
and a Guarantee in respect of any other obligation or liability or
any dividend shall be deemed to be Indebtedness equal to the
maximum aggregate amount of such obligation, liability or dividend
or such lesser amount to which the maximum exposure of the
guarantor shall have been specifically limited. Guarantee when
used as a verb shall have a correlative meaning.
GUARANTOR(S) shall mean each Subsidiary of Borrower which now
or hereafter executes a Guaranty.
GUARANTY shall mean each Guaranty now or hereafter executed
by one or more Guarantors in favor of the Agent and the Banks with
respect to the indebtedness of Borrower to the Agent and the
Banks, as the same may from time to time be amended, modified,
extended, renewed or restated.
HAZARDOUS SUBSTANCE shall mean any hazardous or toxic
material, substance or waste, pollutant or contaminant which is
regulated under any Environmental Law or any other statute, law,
ordinance, rule or regulation of any Federal, state, local,
foreign or other body, instrumentality, agency, authority or
official having jurisdiction over any of the Property owned,
leased or operated by Borrower or any Subsidiary or its use,
including, without limitation, any material, substance or waste
which is: (a) defined as a hazardous substance under Section 311
of the Federal Water Pollution Control Act (33 U.S.C. Sub-section
1317), as amended; (b) regulated as a hazardous waste under
Section 1004 or Section 3001 of the Federal Solid Waste Disposal
Act, as amended by the Resource Conservation and Recovery Act (42
U.S.C. Sub-section 6901 et seq.), as amended; (c) defined as a
hazardous substance under Section 101 of the Comprehensive
Environmental Response, Compensation and Liability Act (42 U.S.C.
Sub-section 9601 et seq.), as amended; or (d) defined or regulated
as a hazardous substance or hazardous waste under any rules or
regulations promulgated under any of the foregoing statutes.
INDEBTEDNESS shall mean, with respect to any Person, without
duplication, all indebtedness, liabilities and obligations of such
Person which in accordance with GAAP are required to be classified
upon a balance sheet of such Person as liabilities of such Person,
and in any event shall include all (a) obligations of such Person
for borrowed money or which have been incurred in connection with
the purchase or other acquisition of Property, (b) obligations
secured by any Lien on, or payable out of the proceeds of or
production from, any Property owned by such Person, whether or not
such Person has assumed or become liable for the payment of such
obligations, (c) indebtedness, liabilities and obligations of
third parties, including joint ventures and partnerships of which
such Person is a venturer or general partner, recourse to which
may be had against such Person, (d) obligations created or arising
under any conditional sale or other title retention agreement with
respect to Property acquired by such Person, notwithstanding the
fact that the rights and remedies of the seller, lender or lessor
under such agreement in the event of default are limited to
repossession or sale of such Property, (e) Capitalized Lease
Obligations of such Person, (f) the aggregate undrawn face amount
of all letters of credit issued for the account of and/or upon
the application of such Person together with all unreimbursed
drawings with respect thereto and (g) indebtedness,
liabilities and obligations of such Person under Guarantees.
INTEREST PERIOD shall mean with respect to each LIBOR Loan:
(a) initially, the period commencing on the date of
such Loan and ending 1, 2, 3 or 6 months thereafter (or such
other period agreed upon in writing by Borrower and all of
the Banks), as the Borrower may elect in the applicable
Notice of Borrowing; and
(b) thereafter, each period commencing on the last day
of the next preceding Interest Period applicable to such Loan
and ending 1, 2, 3 or 6 months thereafter (or such other
period agreed upon in writing by Borrower and all of the
Banks), as Borrower may elect pursuant to Section 2.05;
provided that:
(c) subject to clauses (d) and (e) below, any Interest
Period which would otherwise end on a day which is not a
Eurodollar Business Day shall be extended to the next
succeeding Eurodollar Business Day unless such Eurodollar
Business Day falls in another calendar month, in which case
such Interest Period shall end on the next preceding
Eurodollar Business Day;
(d) subject to clause (e) below, any Interest Period
which begins on the last Eurodollar Business Day of a
calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Eurodollar Business
Day of a calendar month; and
(e) no Interest Period shall extend beyond the last day
of the Revolving Credit Period.
INVESTMENT shall mean any investment by Borrower or any
Subsidiary in any Person, whether payment therefor is made in cash
or in capital stock or other equity interests of Borrower or any
Subsidiary, and whether such investment is by acquisition of
capital stock or other equity interests or Indebtedness, or by
loan, advance, transfer of Property out of the ordinary course of
business, capital contribution, equity or profit sharing interest
or extension of credit on terms other than those normal in the
ordinary course of business or otherwise.
LETTER OF CREDIT AND LETTERS OF CREDIT shall have the
meanings ascribed thereto in Section 2.02(a), and shall include,
in any event, the Existing Letters of Credit, as the same may from
time to time be amended, modified, extended, renewed or restated.
LETTER OF CREDIT APPLICATION shall mean an application and
agreement for irrevocable standby letter of credit in the form of
Exhibit C attached hereto and incorporated herein by reference (or
such other form as may then be Firstar's standard form of
application and agreement for irrevocable standby letter of
credit) or an application and agreement for irrevocable commercial
letter of credit in the form of Exhibit D attached hereto and
incorporated herein by reference (or such other form as may then
be Firstar's standard form of application and agreement for
irrevocable commercial letter of credit), as the case may be, in
either case executed by Borrower, as applicant and account party,
and delivered to Firstar pursuant to Section 2.02, as the same may
from time to time be amended, modified, extended, renewed or
restated, and shall include, in any event, the Letter of Credit
Applications executed by Borrower, as account party, with respect
to the Existing Letters of Credit, as the same may from time to
time be amended, modified, extended, renewed or restated.
LETTER OF CREDIT COMMITMENT FEE shall have the meaning
ascribed thereto in Section 2.02(d).
LETTER OF CREDIT ISSUANCE FEE shall have the meaning ascribed
thereto in Section 2.02(d).
LETTER OF CREDIT NEGOTIATION FEE shall have the meaning
ascribed thereto in Section 2.02(d).
LETTER OF CREDIT REQUEST shall have the meaning ascribed
thereto in Section 2.02(a).
LIBOR BASE RATE shall mean, with respect to the applicable
Interest Period, (a) the LIBOR Index Rate for such Interest
Period, if such rate is available or (b) if the LIBOR Index Rate
is not available, the average (rounded upward, if necessary, to
the next higher 1/100 of 1%) of the respective rates per annum of
interest at which deposits in Dollars are offered to Firstar in
the London interbank market by two (2) Eurodollar dealers of
recognized standing, selected by Firstar in its sole discretion,
at or about 11:00 a.m. (St. Louis time) on the date two (2)
Eurodollar Business Days before the first day of such Interest
Period, for delivery on the first day of the applicable Interest
Period for a number of days comparable to the number of days in
such Interest Period and in an amount approximately equal to the
principal amount of the LIBOR Loan to which such Interest Period
is to apply.
LIBOR INDEX RATE shall mean, with respect to the applicable
Interest Period, the rate per annum (rounded upwards, if
necessary, to the next higher 1/100 of 1%) appearing on Dow Xxxxx
Markets Page 3750 (or any successor page) as the London interbank
offered rate for deposits in Dollars at approximately 11:00 a.m.
(St. Louis time) on the day two (2) Eurodollar Business Days
before the first day of such Interest Period.
LIBOR LOAN shall mean any Loan bearing interest based on the
LIBOR Rate.
LIBOR RATE shall mean (a) the quotient of the (i) LIBOR Base
Rate divided by (ii) one minus the applicable LIBOR Reserve
Percentage plus (b) the Applicable LIBOR Margin. The LIBOR Rate
shall be adjusted automatically on and as of the effective date of
any change in the LIBOR Reserve Percentage and/or the Applicable
LIBOR Margin.
LIBOR RESERVE PERCENTAGE shall mean for any day that
percentage (expressed as a decimal) which is in effect on such
day, as prescribed by The Board of Governors of the Federal
Reserve System (or any successor), for determining the maximum
reserve requirement (including, without limitation, any basic,
supplemental, emergency, special or marginal reserves) with
respect to "Eurocurrency liabilities" as defined in Regulation D
or with respect to any other category of liabilities which
includes deposits by reference to which the interest rate on LIBOR
Loans is determined, whether or not any Bank has any Eurocurrency
liabilities subject to such reserve requirement at such time.
LIBOR Loans shall be deemed to constitute Eurocurrency liabilities
and as such shall be deemed subject to reserve requirements
without the benefit of any credits for proration, exceptions or
offsets which may be available from time to time to a Bank. The
LIBOR Rate shall be adjusted automatically on and as of the
effective date of any change in the LIBOR Reserve Percentage.
LIEN shall mean any interest in Property securing an
obligation owed to, or a claim by, a Person other than the owner
of the Property, whether such interest is based on common law,
statute or contract, including, without limitation, any security
interest, mortgage, deed of trust, pledge, hypothecation, judgment
lien or other lien or encumbrance of any kind or nature
whatsoever, any conditional sale or trust receipt, any lease,
consignment or bailment for security purposes and any Capitalized
Lease. The term "Lien" shall include reservations, exceptions,
encroachments, easements, rights-of-way, covenants, conditions,
restrictions, leases and other title exceptions and encumbrances
affecting Property.
LOAN AND LOANS shall have the meanings ascribed thereto in
Section 2.01(a).
MATERIAL ADVERSE EFFECT shall mean (a) a material adverse
effect on the Properties, assets, liabilities, business,
operations, prospects, income or condition (financial or
otherwise) of Borrower and its Subsidiaries taken as a whole, (b)
material impairment of the ability of Borrower and/or Borrower and
its Subsidiaries taken as a whole to perform any of its or their
obligations under this Agreement, any Note, any Letter of Credit
Application and/or any other Transaction Document or (c) material
impairment of the enforceability of the rights of, or benefits
available to, the Agent and/or any Bank under this Agreement, any
Note, any Letter of Credit Application and/or any other
Transaction Document.
MOODY'S shall mean Xxxxx'x Investors Service, Inc. or its
successor.
MULTI-EMPLOYER PLAN shall mean a "multi-employer plan" as
defined in Section 4001(a)(3) of ERISA which is maintained for
employees of Borrower, any Subsidiary or any ERISA Affiliate or to
which Borrower, any Subsidiary or any ERISA Affiliate has
contributed in the past or currently contributes.
NOTE AND NOTES shall have the meanings ascribed thereto in
Section 2.04(a).
NOTE AGREEMENTS shall mean those certain Note Agreements
dated June 16, 1997, by and between Borrower and each of The
Prudential Insurance Company of America and The Guardian Life
Insurance Company of America, as the same may from time to time be
amended, modified, extended, renewed or restated.
NOTICE OF BORROWING shall have the meaning ascribed thereto
in Section 2.03.
OBLIGOR shall mean Borrower, each Guarantor and each other
Person who is or shall at any time hereafter become primarily or
secondarily liable on any of the Borrower's Obligations or who
grants the Agent or any of the Banks a Lien upon any of the
Property or assets of such Person as security for any of the
Borrower's Obligations and/or any Guarantee thereof.
OCCUPATIONAL SAFETY AND HEALTH LAWS shall mean the
Occupational Safety and Health Act of 1970, as amended, and any
other Federal, state, local, foreign or other statute, law,
ordinance, code, rule, regulation, order or decree regulating,
relating to or imposing liability or standards of conduct
concerning employee health and/or safety, as now or at any time
hereafter in effect.
OTHER TAXES shall have the meaning ascribed thereto in
Section 2.20(a).
OPERATING LEASE shall mean any lease of real and/or personal
property under which Borrower or a Subsidiary is lessee other than
Capitalized Leases.
OPERATING LEASE EXPENSES shall mean with respect to any
Person, for the period in question, the aggregate amount of
operating lease expense (i.e. all minimum rental payments plus all
additional rentals payable under percentage Operating Leases)
during such period under all Operating Leases, all determined in
accordance with GAAP, but excluding any amounts required to be
paid by such Person (whether or not designated as rent or
additional rent) on account of maintenance, repairs, insurance,
taxes, assessments, amortization and/or similar charges.
PBGC shall mean the Pension Benefit Guaranty Corporation
and any entity succeeding to any or all of its functions under
ERISA.
PENSION PLAN shall mean a "pension plan," as such term is
defined in Section 3(2) of ERISA, which is established or
maintained by Borrower, any Subsidiary or any ERISA Affiliate,
other than a Multi-Employer Plan.
PERMITTED ACQUISITION shall mean any Acquisition by Borrower
or any Wholly-Owned Subsidiary of an ongoing business in the same
line of business of Borrower and its Subsidiaries on the date of
this Agreement so long as (a) Borrower has given the Agent and
each Bank at least ten (10) Domestic Business Days prior written
notice of such Acquisition (or such lesser notice as the Required
Bank(s) may agree to in writing) and has provided the Agent and
each Bank with such financial and other information concerning
such Acquisition as the Agent or any Bank may reasonably request,
(b) such Acquisition has been (i) in the event a corporation or
its assets is the subject of such Acquisition, either (A) approved
by the Board of Directors of the corporation which is the subject
of such Acquisition or (B) recommended by such Board of Directors
to the shareholders of such corporation, (ii) in the event a
partnership or its assets is the subject of such Acquisition,
approved by a majority (by percentage of voting power) of the
partners of the partnership which is the subject of such
Acquisition, (iii) in the event a limited liability company or its
assets is the subject of such Acquisition, approved by a majority
(by percentage of voting power) of the members of the limited
liability company which is the subject of such Acquisition, (iv)
in the event an organization or entity other than a corporation,
partnership or limited liability company or its assets is the
subject of such Acquisition, approved by a majority (by percentage
of voting power) of the governing body, if any, or by a majority
(by percentage of ownership interest) of the owners of the
organization or entity which is the subject of such Acquisition or
(v) in the event the corporation, partnership, limited liability
company or other organization or entity which is the subject of
such Acquisition is in bankruptcy, approved by the bankruptcy
court or another court of competent jurisdiction, (c) if such
Acquisition involves a merger or consolidation of Borrower or any
Subsidiary and another entity, Borrower or such Subsidiary, as the
case may be, is the surviving entity, (d) both immediately before
and immediately after giving effect to such Acquisition, Borrower
is, and on a pro forma basis projects that it will continue to be,
in compliance with all of the terms, provisions, covenants and
conditions contained in this Agreement and the other Transaction
Documents, which pro forma compliance shall be demonstrated by
Borrower to the Agent and each Bank pursuant to such financial and
other information concerning such Acquisition as the Agent or any
Bank may reasonably request, (e) the total purchase price for such
Acquisition (whether payable at closing or at any time or times
after closing of such Acquisition, and if payable after closing
and not determinable prior to closing, as reasonably estimated by
Borrower, and in any event including the amount of any
Indebtedness assumed by Borrower or any Subsidiary of Borrower as
a part of such Acquisition) does not exceed $15,000,000.00, (f)
the total purchase price for all Acquisitions consummated by
Borrower and/or any Subsidiary on or after the date of this
Agreement (including the Acquisition in question) (whether payable
at closing or at any time or times after closing of the applicable
Acquisition, and if payable after closing and not determinable
prior to closing, as reasonably estimated by Borrower, and in any
event including the amount of any Indebtedness assumed by Borrower
or any Subsidiary of Borrower as a part of the applicable
Acquisition) does not exceed the sum of $30,000,000.00 and (g)
both immediately before and immediately after giving effect to
such Acquisition, no Default or Event of Default shall exist.
PERMITTED LIENS shall mean any of the following:
(a) Liens on Property of a Subsidiary to secure
obligations of such Subsidiary to Borrower;
(b) Liens for property taxes and assessments or other
governmental charges or levies and statutory Liens securing
claims or demands of suppliers, mechanics and/or materialmen,
provided payment thereof is not at the time required by
Sections 5.01(b), 5.01(d) and/or 5.01(e);
(c) Liens (other than any Liens imposed by ERISA)
incidental to the conduct of business or the ownership of
Properties and assets (including Liens in connection with
worker's compensation, unemployment insurance and other like
laws, carriers', warehousemen's and attorneys' liens and
statutory landlords' liens) and Liens to secure the
performance of bids, tenders or trade contracts, or to secure
statutory obligations, surety or appeal bonds or other Liens
of like general nature incurred in the ordinary course of
business and not in connection with the borrowing of money or
the purchase or other acquisition of Property; provided in
each case the obligation secured is not overdue or, if
overdue, is being contested in good faith by appropriate
actions or proceedings being diligently conducted and for
which adequate reserves in accordance with GAAP have been
established;
(d) Liens of or resulting from any judgment or award,
the time for the appeal of which shall not have expired, or
in respect of which Borrower or the applicable Subsidiary
shall at any time in good faith be diligently prosecuting an
appeal and in respect of which a stay of execution pending
such appeal shall have been secured and for which reserves
shall have been set aside on the books of Borrower or such
Subsidiary in accordance with GAAP which judgment or award is
not for an amount exceeding $5,000,000;
(e) survey exceptions, easements, reservations, rights
of others for rights-of-way, utilities and other similar
purposes and/or zoning or other restrictions as to the use of
real properties, which are necessary or desirable for the
conduct of the activities of Borrower and its Subsidiaries or
which customarily exist on properties of Persons engaged in
similar activities and similarly situated and which do not in
any event materially impair the use of such real properties
in the operation of the business of the Borrower and its
Subsidiaries;
(f) Liens existing as of the date of this Agreement and
listed on Schedule 4.12 attached hereto (without giving
effect to any amendment to Schedule 4.12 made after the date
of this Agreement);
(g) Capitalized Leases permitted by Section
5.02(a)(vi); and
(h) Liens in favor of Firstar under the Letter of
Credit Applications.
PERSON shall mean any individual, sole proprietorship,
partnership, joint venture, limited liability company, trust,
unincorporated organization, association, corporation,
institution, entity or government (whether national, Federal,
state, county, city, municipal, foreign or otherwise, including,
without limitation, any instrumentality, division, agency, body or
department thereof).
PRIME LOAN shall mean any Loan bearing interest based on the
Adjusted Prime Rate.
PRIME RATE shall mean the interest rate announced from time
to time by Firstar as its "prime rate" (which rate shall fluctuate
as and when said prime rate shall change). Borrower acknowledges
that such "prime rate" is a reference rate and does not
necessarily represent the lowest or best rate offered by Firstar
or any other Bank to its customers.
PRINTS PLUS shall mean CPI Prints Plus, Inc., a Delaware
corporation which is a Wholly-Owned Subsidiary of Borrower, and
its wholly-owned subsidiaries
PROPERTY shall mean any interest in any kind of property or
asset, whether real, personal or mixed, or tangible or intangible.
Properties shall mean the plural of Property. For purposes of
this Agreement, Borrower and each Subsidiary shall be deemed to be
the owner of any Property which it has acquired or holds subject
to a conditional sale agreement, financing lease or other
arrangement pursuant to which title to the Property has been
retained by or vested in some other Person for security purposes.
PRO RATA SHARE shall mean for the item at issue, with respect
to each Bank, a percentage, the numerator of which is the portion
of such item owned or held by such Bank and the denominator of
which is the total amount of such item owned or held by all of the
Banks. For example, (a) if the amount of the Commitment of a Bank
is $1,000,000.00 and the total amount of the Commitments of all of
the Banks is $5,000,000.00, such Bank's Pro Rata Share of the
Commitments would be Twenty Percent (20%) and (b) if the original
principal amount of a Loan is $5,000,000.00 and the portion of
such Loan made by one Bank is $500,000.00, such Bank's Pro Rata
Share of such Loan would be Ten Percent (10%). As of the date of
this Agreement, the Pro Rata Shares of the Banks with respect to
the Commitments and the Loans are as follows: (a) Firstar -
Sixty-Six and Two-Thirds Percent (66-2/3%) and (b) Commerce Bank,
National Association - Thirty-Three and One-Third Percent
(33-1/3%).
RCRA shall mean the Solid Waste Disposal Act, as amended by
the Resource Conservation and Recovery Act of 1976 and Hazardous
and Solid Waste Amendments of 1984, 42 U.S.C. Sub-section 6901 et
seq., and any future amendments.
REGULATION D shall mean Regulation D of the Board of
Governors of the Federal Reserve System, as from time to time
amended.
REGULATORY CHANGE shall have the meaning ascribed thereto in
Section 2.15.
RELATED PARTY ARRANGEMENT shall have the meaning ascribed
thereto in Section 5.02(g).
RELEASE shall mean any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching,
dumping or disposing into the environment, including, without
limitation, the abandonment or discarding of barrels, drums,
containers, tanks and/or other receptacles containing (or
containing traces of) any Hazardous Substance.
REPORTABLE EVENT shall have the meaning given to such term in
ERISA.
RESPONSIBLE OFFICER shall mean the chief executive officer,
chief operating officer, chief financial officer or chief
accounting officer of Borrower or any other officer of Borrower
involved principally in the financial administration or
controllership function of Borrower.
REQUIRED BANKS shall mean at any time Banks having Sixty-Six
and Two-Thirds Percent (66-2/3%) of the aggregate amount of Loans
then outstanding or, if no Loans are then outstanding, Sixty-Six
and Two-Thirds Percent (66-2/3%) of the total Commitments of all
of the Banks; provided, however, that if there are two or fewer
Banks (with "Bank" for purposes of this proviso to include
affiliates of a Bank; for example, if Firstar assigns any or all
of its rights or obligations under this Agreement to an affiliate
of Firstar pursuant to Section 8.12(c), Firstar and such affiliate
would constitute one (1) Bank for purposes of this provision),
Required Banks shall mean all of the Banks.
RESTRICTED INVESTMENT shall mean any Investment, or any
expenditure or any incurrence of any liability to make any
expenditure for an Investment, other than:
(a) loans and/or advances by Borrower or a Wholly-Owned
Subsidiary to a Wholly-Owned Subsidiary;
(b) loans and/or advances by any Subsidiary to Borrower
which are subordinated to the payment and priority of the
Borrower's Obligations pursuant to a subordination agreement
in form and substance satisfactory to the Required Banks;
(c) Investments which constitute "Eligible Investments"
as defined in and within the meaning of the CPI Corp. Cash
Investment Policy dated March 25, 1998, a copy of which has
been provided to the Agent and each Bank;
(d) Investments existing as of the date of this
Agreement as described in Schedule 4.18 attached hereto, and
any future retained earnings in respect thereof (without
giving effect to any amendment to Schedule 4.18 made after
the date of this Agreement);
(e) loans or advances in the usual and ordinary course
of business to officers and/or employees of Borrower or a
Subsidiary for business expenses in the aggregate principal
amount of up to $100,000.00 (or the equivalent thereof in any
foreign currency) at any one time outstanding;
(f) Investments received in total or partial
satisfaction of any past due obligation owed to Borrower or
any Subsidiary by financially troubled Persons in the
ordinary course of Borrower's or such Subsidiary's business
to the extent deemed necessary by Borrower or such Subsidiary
to prevent or limit loss;
(g) Investments received by Borrower as consideration
for the sale of all of the capital stock or all or
substantially all of the assets of Prints Plus;
(h) Investments received by Borrower as consideration
for the sale of all or substantially all of the assets of
Centrics;
(i) acquisitions of stock or assets in connection with
a Permitted Acquisition; and
(j) additional Investments by Borrower in (including
loans and/or advances by Borrower to) the Centrics Joint
Venture in the aggregate principal amount of up to
$10,000,000.00 at any one time outstanding.
RESTRICTED AGREEMENT shall have the meaning ascribed thereto
in Section 5.02(q).
REVOLVING CREDIT PERIOD shall mean the period commencing on
the date of this Agreement and ending June 27, 2003; provided,
however, that the Revolving Credit Period shall end on the date
the Commitments are terminated pursuant to Section 6 or otherwise.
S&P shall mean Standard and Poor's Ratings Group or its
successor.
SUBORDINATED DEBT shall mean, as of the date of any
determination thereof, the aggregate principal amount of all Debt
of Borrower outstanding as of such date which is subordinated to
the payment and priority of all of the Borrower's Obligations
pursuant to a subordination agreement in form and substance
satisfactory to the Required Banks.
SUBSIDIARY shall mean any corporation or other entity of
which more than Fifty Percent (50%) of the issued and outstanding
capital stock or other equity interests entitled to vote for the
election of directors or persons performing similar functions
(other than by reason of default in the payment of dividends or
other distributions) is at the time owned directly or indirectly
by Borrower and/or any Subsidiary.
TAXES shall have the meaning ascribed thereto in Section
2.20.
TOTAL OUTSTANDINGS shall mean, as of any date, the sum of (a)
the aggregate principal amount of all Loans outstanding as of such
date plus (b) the aggregate undrawn face amount of all Letters of
Credit outstanding as of such date plus all unreimbursed drawings
with respect thereto.
TRANSACTION DOCUMENTS shall mean this Agreement, the Notes,
the Letter of Credit Applications, each Guaranty and any and all
other agreements, documents and instruments heretofore, now or
hereafter delivered to the Agent or any Bank with respect to or in
connection with or pursuant to this Agreement, any Loan made
hereunder, any Letter of Credit issued hereunder and/or any of the
other Borrower's Obligations, and executed by or on behalf of
Borrower and/or any other Obligor, including, without limitation,
any agreement, document or instrument heretofore, now or hereafter
executed by Borrower with or in favor of the Agent or any Bank
providing for any interest rate swap, interest rate cap, interest
rate collar or other interest rate hedge, all as the same may from
time to time be amended, modified, extended, renewed or restated.
VOTING STOCK shall mean, with respect to any Person, any
shares of stock or other equity interests of any class or classes
of such Person whose holders are entitled under ordinary
circumstances (irrespective of whether at the time stock or other
equity interests of any other class or classes shall have or might
have voting power by reason of the happening of any contingency)
to vote for the election of a majority of the directors, managers,
trustees or other governing body of such Person.
WELFARE PLAN shall mean a "welfare plan" as such term is
defined in Section 3(1) of ERISA, which is established or
maintained by Borrower, any Subsidiary or any ERISA Affiliate,
other than a Multi-Employer Plan.
WHOLLY-OWNED SUBSIDIARY shall mean any Subsidiary all of the
equity interests (except directors' qualifying shares) and voting
interests of which are owned by Borrower and/or one or more of its
Wholly-Owned Subsidiaries.
1.02 ACCOUNTING TERMS AND DETERMINATIONS; PRO FORMA
COMPUTATIONS.
(a) Except as otherwise specified in this Agreement, all
accounting terms used in this Agreement shall be interpreted, all
accounting determinations under this Agreement shall be made and
all financial statements required to be delivered under this
Agreement shall be prepared in accordance with GAAP as in effect
from time to time, applied on a basis consistent (except
for changes approved by the Required Banks and by Borrower's
independent certified public accountants) with the most recent
audited financial statements of Borrower delivered to Banks.
Notwithstanding the foregoing, Borrower may from time to time
change its accounting methods, either at its option or in order to
comply with GAAP, provided that (a) any such change(s) are in
accordance with GAAP and are approved by the independent
certified public accountants of Borrower and (b) if the Required
Banks, in good faith, determine that any such accounting
change(s), individually or in the aggregate, have any significant
effect on any of the financial covenants contained in this
Agreement (i) with respect to those financial covenant(s) upon
which the effect of such accounting change(s) can be determined
with mathematical certainty, such financial covenant(s) shall be
amended to reflect the effect of such accounting change(s) (and
Borrower, the Agent and each Bank shall be obligated to promptly
execute an amendment to such effect) and (ii) with respect to
those financial covenant(s) upon which the effect of such
accounting change(s) cannot be determined with mathematical
certainty, Borrower and the Banks shall, in good faith, negotiate
and use their best efforts to agree upon new financial covenant(s)
reasonably acceptable to Borrower and the Required Banks to
replace the affected financial covenant(s) (which new financial
covenant(s) shall, to the extent reasonably possible, approximate
the effect of such accounting change(s) on the existing financial
covenant(s)), and if Borrower and the Required Banks cannot, in
good faith, agree on said new financial covenant(s), the existing
financial covenant(s) shall remain in full force and effect and
shall be computed using the accounting methods in effect prior to
the applicable change in accounting methods. Each such amendment
shall be evidenced by an instrument in writing signed by Borrower,
the Agent, the Required Banks and until such amendment has been
fully executed the existing financial covenant(s) shall remain in
full force and effect and shall be computed using the accounting
methods in effect prior to the applicable change in accounting
methods.
(b) Any reference in this Agreement to a Subsidiary of
Borrower, and any financial definition, ratio, restriction or
other provision of this Agreement which is stated to be applicable
to Borrower and its Subsidiaries or which is to be determined on a
"consolidated" basis, shall apply only to "Subsidiaries" of
Borrower as defined in this Agreement and shall not include any
other entity which is consolidated with Borrower for financial
reporting purposes in accordance with GAAP.
1.03 CONTINUANCE OF AN EVENT OF DEFAULT. For purposes of
this Agreement and the other Transaction Documents, an Event of
Default shall deemed to be continuing until it is waived in
writing by the Required Banks as required by Section 8.10 of this
Agreement.
SECTION 2. THE LOANS.
----------------------
2.01 COMMITMENTS TO MAKE LOANS. Subject to the terms and
conditions set forth in this Agreement and so long as no Default
or Event of Default has occurred and is continuing, during the
Revolving Credit Period, each Bank severally agrees to make such
loans to Borrower (individually, a "Loan" and collectively, the
"Loans") as Borrower may from time to time request pursuant to
Section 2.03. Each Loan under this Section 2.01 which is a Prime
Loan shall be for an aggregate principal amount of at least
$500,000.00 or any larger multiple of $25,000.00. Each Loan under
this Section 2.01 which is a LIBOR Loan shall be for an aggregate
principal amount of at least $1,000,000.00 or any larger multiple
of $500,000.00. The aggregate principal amount of Loans which each
Bank shall be required to have outstanding under this Agreement at
any one time shall not exceed the lesser of (a) such Bank's
Commitment at such time or (b) such Bank's Pro Rata Share of the
sum of (i) the total Commitments of all of the Banks at such time
minus (ii) the aggregate undrawn face amount of all Letters of
Credit outstanding at such time plus all unreimbursed drawings
with respect thereto. Each Loan under this Section 2.01 shall be
made from the several Banks ratably in proportion to their
respective Pro Rata Shares. Within the foregoing limits, Borrower
may borrow under this Section 2.01, prepay under Section 2.10 and
reborrow at any time during the Revolving Credit Period under this
Section 2.01. The failure of any Bank to make any Loan required
under this Agreement shall not release any other Bank from its
obligation to make Loans as provided herein. All Loans not paid
prior to the last day of the Revolving Credit Period, together
with all accrued and unpaid interest thereon and all fees and
other amounts owing by Borrower to the Agent and/or any Bank with
respect thereto, shall be due and payable on the last day of the
Revolving Credit Period.
2.02 LETTER OF CREDIT COMMITMENT.
(a) Subject to the terms and conditions of this Agreement
and so long as no Default or Event of Default has occurred and is
continuing (provided, however, that Firstar shall have no
liability to any other Bank for issuing a Letter of Credit after
the occurrence or during the continuance of any Default or Event
of Default unless Firstar has previously received notice in
writing from Borrower or any other Bank of the occurrence of such
Default or Event of Default), during the Revolving Credit Period,
Firstar hereby agrees to issue irrevocable commercial letters of
credit payable at sight and/or standby letters of credit for the
account of Borrower (individually, a "Letter of Credit" and
collectively, the "Letters of Credit") in an amount and for the
term specifically requested by Borrower by notice in writing to
Firstar in the form of Exhibit B attached hereto and incorporated
herein by reference (a "Letter of Credit Request") at least three
(3) Domestic Business Days prior to the requested issuance
thereof; provided, however, that:
(i) Borrower shall have executed and delivered to
Firstar a Letter of Credit Application with respect to such
Letter of Credit;
(ii) the term of any such Letter of Credit shall not
extend beyond the earlier of (A) the date one (1) year after
the date of issuance thereof or (B) the last day of the
Revolving Credit Period;
(iii) any Letter of Credit may only be utilized to
guaranty the payment of obligations of Borrower or a
Subsidiary to third parties;
(iv) after giving effect to the issuance of the
requested Letter of Credit, the Total Outstandings must not
exceed the total Commitments of all of the Banks at such
time;
(v) after giving effect to the issuance of the
requested Letter of Credit, the sum of the aggregate undrawn
face amount of all outstanding Letters of Credit plus all
unreimbursed drawings with respect thereto must not exceed
the lesser of (A) the total Commitments of all of the Banks
at such time or (B) $5,000,000.00; and
(vi) the text of any such Letter of Credit is
provided to Firstar no less than three (3) Domestic Business
Days prior to the requested issuance date, which text must be
acceptable to Firstar in its sole and absolute discretion.
(b) The payment of drafts under each Letter of Credit
shall be made in accordance with the terms thereof and, in that
connection, Firstar shall be entitled to honor any drafts and
accept any documents presented to it by the beneficiary of such
Letter of Credit in accordance with the terms of such Letter of
Credit and believed in good faith by Firstar to be genuine.
Firstar shall not have any duty to inquire as to the accuracy or
authenticity of any draft or other drawing document that may be
presented to it other than the duties contemplated by the
applicable Letter of Credit Application. If Firstar shall have
received documents that in its good faith judgment constitute all
of the documents that are required to be presented before payment
or acceptance of a draft under a Letter of Credit, it shall be
entitled to pay or accept such draft provided such documents
substantially conform on their face to the requirements of such
Letter of Credit.
(c) In the event of any payment by Firstar of a draft
presented under a Letter of Credit in accordance with Section
2.02(b) above and the applicable Letter of Credit Application,
Borrower agrees to pay to Firstar in immediately available funds
at the time of such drawing an amount equal to the sum of such
drawing plus Firstar's customary published processing and other
fees related thereto. Borrower hereby authorizes Firstar to
charge or cause to be charged Borrower's bank accounts at Firstar
to the extent there are balances of immediately available funds
therein, in an amount equal to the sum of such drawing plus
Firstar's customary published processing and other fees related
thereto (and Firstar agrees to give Borrower prompt written notice
of any amount so charged to any bank account of Borrower at
Firstar), and Borrower agrees to pay the amount of any such
drawing (and/or Firstar's customary published processing and other
fees related thereto) not so charged prior to the close of
business of Firstar on the day of such drawing. In the event any
payment under a Letter of Credit is made by Firstar prior to
receipt of payment from Borrower, such payment by Firstar shall
constitute a request by Borrower for a Prime Loan under Section
2.01 above (and the Banks will make such Loan to Borrower
regardless of whether any Default or Event of Default under this
Agreement has occurred and is continuing and regardless of whether
such Loan would otherwise be permitted under the requirements of
Section 2.01 of this Agreement) and the proceeds of such Loan
shall be paid directly to Firstar and applied by Firstar to the
payment of any amounts owed by Borrower to Firstar under this
Section 2.02.
(d) Borrower hereby further agrees to pay to the order of
Firstar:
(i) with respect to each Letter of Credit which is
a standby Letter of Credit, a nonrefundable issuance fee in
the amount of $125.00 and with respect to each Letter of
Credit which is a commercial Letter of Credit, a
nonrefundable issuance fee in the amount of $50.00 (the
"Letter of Credit Issuance Fees"), which Letter of Credit
Issuance Fees shall be due and payable on the date of
issuance of each such Letter of Credit;
(ii) with respect to each Letter of Credit which is
a standby Letter of Credit, a nonrefundable commitment fee at
a rate per annum equal to (A) so long as no Event of Default
has occurred and is continuing, the Applicable Letter of
Credit Commitment Fee Rate (calculated on an actual day,
360-day year basis) and (B) so long as any Event of Default
has occurred and is continuing, Two Percent (2%) over and
above the Applicable Letter of Credit Commitment Fee Rate
(calculated on an actual day, 360-day year basis), on the
undrawn face amount of each such Letter of Credit ("Letter of
Credit Commitment Fees"), which Letter of Credit Commitment
Fees shall be due and payable quarterly in arrears on each
January 1, April 1, July 1 and October 1 during the Revolving
Credit Period and on the last day of the Revolving Credit
Period; and
(iii) with respect to each Letter of Credit which is
a commercial Letter of Credit, a nonrefundable negotiation
fee in an amount equal to (A) so long as no Event of Default
has occurred and is continuing, Three-Eighths of One Percent
(3/8%) and (B) so long as any Event of Default has occurred
and is continuing, Two and Three-Eighths Percent (2-3/8%), of
the amount of each draw on each such Letter of Credit, with a
minimum fee of $85.00 per draw ("Letter of Credit Negotiation
Fee"), which Letter of Credit Negotiation Fee shall be due
and payable on the date of each draw on each such Letter of
Credit; and
(iv) with respect to each Letter of Credit, such
other fees (other than additional issuance fees, additional
commitment fees and/or additional negotiation fees) as may be
charged by Firstar from time to time in accordance with
Firstar's published schedule of fees in effect from time to
time, which fees shall be due and payable on demand by
Firstar.
(e) Notwithstanding any provision contained in this
Agreement to the contrary, (i) all references in this Agreement to
Letters of Credit shall include the irrevocable standby and/or
commercial letters of credit listed on Schedule 2.02 attached
hereto which have heretofore been issued by Mercantile Bank
National Association (now known as Firstar Bank Missouri, National
Association) for the account of Borrower (the "Existing Letters
of Credit") and (ii) all references in this Agreement to the
Letter of Credit Applications shall include the applications and
agreements for irrevocable standby and commercial letters of
credit heretofore executed by Borrower, as account party, with
respect to the Existing Letters of Credit.
(f) Upon the issuance of a Letter of Credit by Firstar
(and on the date of this Agreement with respect to each Existing
Letter of Credit), an undivided participation interest therein
(including, without limitation, an undivided participation
interest in the reimbursement risk relating to such Letter of
Credit, in all payments made by Firstar in connection with such
Letter of Credit and in all collateral for such Letter of Credit)
shall automatically be granted by Firstar to and accepted by each
other Bank in an amount equal to each such other Bank's Pro Rata
Share (based on such other Bank's Pro Rata Share of the total
Commitments) of the face amount of such Letter of Credit. If
Firstar shall make payment on any draft presented or accepted
under a Letter of Credit, Firstar shall give notice of such
payment to the other Banks, and each of the other Banks hereby
authorizes and requests Firstar to advance for their respective
accounts, pursuant to the terms hereof, their respective shares of
any such payment based upon their respective Pro Rata Shares of
such Letter of Credit. If such drawing is not paid by Borrower in
immediately available funds prior to the close of business of
Firstar on the date of such drawing, Firstar shall promptly so
notify the other Banks and each of the other Banks agrees to
immediately reimburse Firstar in immediately available funds for
its Pro Rata Share of the amount of such drawing, plus interest
calculated on its Pro Rata Share of such amount at a rate per
annum equal to the Fed Funds Rate calculated from the date of such
payment by Firstar to but excluding the date of reimbursement by
such other Bank and on an actual-day, 360-day year basis. Each of
the other Banks will be entitled to its Pro Rata Share of any
Letter of Credit Commitment Fees and Letter of Credit Negotiation
Fees paid by Borrower, but such other Banks shall have no right to
share in any Letter of Credit Issuance Fees or any other fees paid
by Borrower to Firstar in connection with any of the Letters of
Credit.
(g) Notwithstanding any provision contained in this
Agreement to the contrary, if any Letters of Credit remain
outstanding on the last day of the Revolving Credit Period,
Borrower shall, on or before 12:00 noon (St. Louis time) on the
last day of the Revolving Credit Period, (i) surrender the
originals of the applicable Letter(s) of Credit to Firstar for
cancellation, (ii) provide Firstar with a clean irrevocable
standby letter of credit in a face amount at least equal to One
Hundred Ten Percent (110%) of the aggregate undrawn face amount of
all outstanding Letter(s) of Credit plus all unreimbursed drawings
with respect thereto (the "Back-Up Letter of Credit"), which
Back-Up Letter of Credit must be in form and substance
satisfactory to the Required Banks and issued by a domestic
commercial bank acceptable to the Required Banks or (iii) provide
Firstar with cash collateral (or other collateral acceptable to
the Required Banks in their sole and absolute discretion) in an
amount at least equal to the aggregate undrawn face amount of all
outstanding Letter(s) of Credit plus all unreimbursed drawings
with respect thereto and execute and deliver to Firstar such
agreements as Firstar or the Required Banks may require to grant
Firstar a first priority perfected security interest in such cash
or other collateral. Any such cash collateral received by Firstar
pursuant to this Section 2.02(g) shall be held by Firstar in a
separate account at Firstar appropriately designated as a cash
collateral account in relation to this Agreement and the Letters
of Credit and retained by Firstar as collateral security for the
payment of the Borrower's Obligations. Cash amounts delivered to
Firstar pursuant to the foregoing requirements of this Section
2.02(g) shall be invested, at the request and for the account of
Borrower in investments of a type and nature and with a term
acceptable to the Required Banks. Such amounts, including in the
case of cash amounts invested in the manner set forth above, shall
not be used by Firstar to pay any amounts drawn or paid under or
pursuant to any Letter of Credit, but may be applied to reimburse
Firstar for drawings or payments under or pursuant to such Letters
of Credit which Firstar has paid, or if no such reimbursement is
required to the payment of such of the other Borrower's
Obligations as the Required Banks shall determine. Any amounts
remaining in any cash collateral account established pursuant to
this Section 2.02(g) after the payment in full of all of the
Borrower's Obligations and the expiration or cancellation of all
of the Letters of Credit shall be returned to Borrower (after
deduction of Firstar's reasonable expenses, if any).
2.03 METHOD OF BORROWING.
(a) Borrower shall give notice (a "Notice of Borrowing")
to the Agent by 11:30 a.m. (St. Louis time) on the Domestic
Business Day of each Prime Loan, and by 11:30 a.m. (St. Louis
Time) at least three (3) Eurodollar Business Days before each
LIBOR Loan, specifying:
(i) the date of such Loan, which shall be a
Domestic Business Day in the case of a Prime Loan and a
Eurodollar Business Day in the case of a LIBOR Loan,
(ii) the aggregate principal amount of such Loan,
(iii) whether such Loan is to be a Prime Loan or a
LIBOR Loan,
(iv) in the case of a LIBOR Loan, the duration of
the initial Interest Period applicable thereto, subject to
the provisions of the definition of Interest Period.
(b) Upon receipt of a Notice of Borrowing given to it, the
Agent shall notify each Bank by 1:00 p.m. (St. Louis time) on the
date of receipt of such Notice of Borrowing by the Agent (which
must be a Domestic Business Day) of the contents thereof and of
such Bank's Pro Rata Share of such Loan. A Notice of Borrowing
shall not be revocable by Borrower.
(c) Not later than 2:00 p.m. (St. Louis time) on the date
of each Loan, each Bank shall (except as provided in subsection
(d) of this Section) make available its Pro Rata Share of such
Loan, in Federal or other funds immediately available in St.
Louis, Missouri, to the Agent at its address specified in or
pursuant to Section 8.07. Unless the Agent determines that any
applicable condition specified in Section 3 has not been
satisfied, the Agent will make the funds so received from the
Banks available to Borrower immediately thereafter at the Agent's
aforesaid address by crediting such funds to Borrower's Account
No. 1001665965 at Firstar (or such other account of Borrower at
Firstar as may from time to time be mutually agreed upon in
writing between the Agent and Borrower). The Agent shall not be
required to make any amount available to Borrower hereunder except
to the extent the Agent shall have received such amounts from the
Banks as set forth herein; provided, however, that unless the
Agent shall have been notified by a Bank prior to the time a Loan
is to be made hereunder that such Bank does not intend to make its
Pro Rata Share of such Loan available to the Agent, the Agent may
assume that such Bank has made such Pro Rata Share available to
the Agent prior to such time, and the Agent may in reliance upon
such assumption make available to Borrower a corresponding amount.
If such corresponding amount is not in fact made available to the
Agent by such Bank and the Agent has made such amount available to
Borrower, the Agent shall be entitled to receive such amount from
such Bank forthwith upon its demand, together with interest
thereon in respect of each day during the period commencing on the
date such amount was made available to Borrower and ending on but
excluding the date the Agent recovers such amount from such Bank
at a rate per annum equal to the Fed Funds Rate.
(d) If any Bank makes a new Loan under this Agreement on a
day on which Borrower is required to or has elected to repay all
or any part of an outstanding Loan from such Bank, such Bank shall
apply the proceeds of its new Loan to make such repayment and only
an amount equal to the difference (if any) between the amount
being borrowed and the amount being repaid shall be made available
by such Bank to the Agent as provided in subsection (c) of this
Section, or remitted by Borrower to the Agent as provided in
Section 2.11, as the case may be.
(e) Borrower hereby authorizes the Agent and each Bank to
rely on telephonic, telegraphic, telecopy, telex or written
instructions of any person identifying himself or herself as one
of the individuals listed on Schedule 2.03 attached hereto (or any
other individual from time to time authorized to act on behalf of
Borrower pursuant to a resolution adopted by the Board of
Directors of Borrower and certified by the Secretary of Borrower
and delivered to the Agent) (each, an "Authorized Person") with
respect to any request to make a Loan or a repayment under this
Agreement, and on any signature which the Agent or such Bank, as
the case may be, believes to be genuine, and Borrower shall be
bound thereby in the same manner as if such individual were
actually authorized or such signature were genuine. Borrower also
hereby agrees to defend and indemnify the Agent and each Bank and
hold the Agent and each Bank harmless from and against any and all
claims, demands, damages, liabilities, losses, costs and expenses
(including, without limitation, attorneys' fees and expenses)
relating to or arising out of or in connection with the acceptance
of any notices or instructions believed by the Agent or such Bank,
as the case may be, in good faith to have been sent or delivered
by an Authorized Person, regardless of whether such notice or
instruction was in fact delivered by an Authorized Person.
2.04 NOTES.
(a) The Loans of each Bank to Borrower shall be evidenced
by a Revolving Credit Note payable to the order of such Bank in a
principal amount equal to the maximum amount of such Bank's
Commitment, each of which Revolving Credit Notes shall be in
substantially the form of Exhibit A attached hereto and
incorporated herein by reference (with appropriate insertions) (as
the same may from time to time be amended, modified, extended,
renewed, restated or replaced (including, without limitation, any
Note issued in full or partial replacement of an existing Note as
a result of an assignment by a Bank), individually referred to as
a "Note" and collectively referred to as the "Notes").
(b) Each Bank shall record in its books and records the
date, amount, type and maturity of each Loan made by it and the
date, amount and currency of each payment of principal and/or
interest made by Borrower with respect thereto; provided, however,
that the obligation of Borrower to repay each Loan made to
Borrower under this Agreement shall be absolute and unconditional,
notwithstanding any failure of such Bank to make any such
recordation or any mistake by such Bank in connection with any
such recordation. The books and records of each Bank showing the
account between such Bank and Borrower shall be admissible in
evidence in any action or proceeding and shall constitute prima
facie proof of the items therein set forth in the absence of
manifest error.
2.05 DURATION OF INTEREST PERIODS AND SELECTION OF INTEREST
RATES.
(a) The duration of the initial Interest Period for each
LIBOR Loan shall be as specified in the applicable Notice of
Borrowing. Borrower shall elect the duration of each subsequent
Interest Period applicable to such LIBOR Loan and the interest
rate to be applicable during such subsequent Interest Period (and
Borrower shall have the option (i) in the case of any Prime Loan,
to elect that such Loan become a LIBOR Loan and the Interest
Period to be applicable thereto, and (ii) in the case of any LIBOR
Loan, to elect that such Loan become a Prime Loan), by giving
notice of such election to the Agent by 11:30 a.m. (St. Louis
time) on the Domestic Business Day of, in the case of the election
of the Prime Rate, and by 11:30 a.m. (St. Louis time) at least
three (3) Eurodollar Business Days before, in the case of the
election of the LIBOR Rate, the end of the immediately preceding
Interest Period applicable thereto, if any; provided, however,
that notwithstanding the foregoing, in addition to and without
limiting the rights and remedies of the Agent and the Banks under
Section 6 of this Agreement, so long as any Default or Event of
Default has occurred and is continuing, Borrower shall not be
permitted to renew any LIBOR Loan as a LIBOR Loan or to convert
any Prime into a LIBOR Loan.
(b) If the Agent does not receive a notice of election for
a Loan pursuant to Section 2.05(a) above within the applicable
time limits specified therein, Borrower shall be deemed to have
elected to pay such Loan in whole pursuant to Section 2.11 on the
last day of the current Interest Period with respect thereto and
to reborrow the principal amount of such Loan on such date as a
Prime Loan.
(c) Borrower may not have outstanding and the Banks shall
not be obligated to make more than ten (10) LIBOR Loans at any one
time.
2.06 INTEREST RATES AND INTEREST PAYMENTS.
(a) So long as no Event of Default has occurred and is
continuing, each Prime Loan shall bear interest on the outstanding
principal amount thereof, for each day from the date such Loan is
made until it becomes due, at a rate per annum equal to the
Adjusted Prime Rate. So long as any Event of Default has occurred
and is continuing, each Prime Loan shall, unless otherwise agreed
in writing by each Bank, bear interest on the outstanding
principal amount thereof, for each day from the date such Loan is
made until it becomes due, at a rate per annum equal to Two
Percent (2%) over and above the Adjusted Prime Rate. Such
interest shall be payable monthly in arrears on the first (1st)
day of each month commencing on the first such date after such
Prime Loan is made, and at the maturity of the Notes (whether by
reason of acceleration or otherwise). From and after the maturity
of the Notes, whether by reason of acceleration or otherwise, each
Prime Loan shall bear interest, payable on demand, for each day
until paid at a rate per annum equal to Two Percent (2%) over and
above the Adjusted Prime Rate.
(b) So long as no Event of Default has occurred and is
continuing, each LIBOR Loan shall bear interest on the outstanding
principal amount thereof for each Interest Period applicable
thereto at a rate per annum equal to the applicable LIBOR Rate.
So long as any Event of Default has occurred and is continuing,
each LIBOR Loan shall, unless otherwise agreed in writing by each
Bank, bear interest on the outstanding principal amount thereof
for each Interest Period applicable thereto at a rate per annum
equal to Two Percent (2%) over and above the applicable LIBOR
Rate. Interest shall be payable for each Interest Period on the
last day thereof, unless the duration of such Interest Period
exceeds three (3) months, in which case such interest shall be
payable at the end of the first three (3) months of such Interest
Period and on the last day of such Interest Period, and at the
maturity of the Notes (whether by reason of acceleration or
otherwise). From and after the maturity of the Notes, whether by
reason of acceleration or otherwise, each LIBOR Loan shall bear
interest, payable on demand, for each day until paid, at a rate
per annum equal to Two Percent (2%) over and above the higher of
(i) the LIBOR Rate for the immediately preceding Interest Period
applicable to such LIBOR Loan or (ii) the Adjusted Prime Rate.
(c) The Agent shall determine each interest rate
applicable to the Loans under this Agreement and its determination
thereof shall be conclusive in the absence of manifest error.
2.07 COMPUTATION OF INTEREST. Interest on Prime Loans under
this Agreement shall be computed on the basis of a year of 360
days and paid for the actual number of days elapsed (including the
first day but excluding the last day). Interest on LIBOR Loans
shall be computed on the basis of a year of 360 days and paid for
the actual number of days elapsed, calculated as to each Interest
Period from and including the first day thereof to but excluding
the last day thereof.
2.08 FEES.
(a) From the date of this Agreement to but excluding the
last day of the Revolving Credit Period, Borrower shall pay to the
Agent for the account of each Bank a nonrefundable commitment fee
on the unused portion of the Commitment of such Bank (determined
by subtracting such Bank's Pro Rata Share of the Total
Outstandings (other than any portion of the Total Outstandings
consisting of the undrawn face amount of any Letters of Credit
which are commercial Letters of Credit) from such Bank's
Commitment) at a rate per annum equal to the Applicable Commitment
Fee Rate. Such commitment fee shall be (i) calculated on a daily
basis, (ii) payable quarterly in arrears on the first (1st) day of
each January, April, July and October during the Revolving Credit
Period commencing July 1, 2000, and on the last day of the
Revolving Credit Period and (iii) calculated on an actual day,
360-day year basis.
(b) Borrower agrees to pay the Agent certain fees in the
amounts set forth in a letter agreement between Borrower and the
Agent dated June 22, 2000, as the same may from time to time be
amended, modified, extended, renewed or restated.
(c) If Borrower fails to make any payment of any principal
of or interest on any Loan within ten (10) days after the date the
same shall become due and payable, whether by reason of maturity,
acceleration or otherwise, in addition to all of the other rights
and remedies of the Agent and the Banks under this Agreement
and at law or in equity, Borrower shall pay the Agent for the
ratable benefit of the Banks on demand with respect to each such
late payment a late fee in an amount equal to the greater of
$100.00 or Five Percent (5%) of the amount of each such late
payment.
2.09 Termination or Reduction of Commitments. Borrower
may, upon three (3) Domestic Business Days' prior written notice
to the Agent, terminate entirely at any time, or proportionately
reduce from time to time on a pro rata basis among the Banks based
on their respective Pro Rata Shares by an aggregate amount of
$5,000,000.00 or any larger multiple of $1,000,000.00 the unused
portions of the Commitments; provided, however, that (i) at no
time shall the Commitments be reduced to a figure less than the
Total Outstandings, (ii) at no time shall the Commitments be
reduced to a figure greater than zero but less than $5,000,000.00
and (iii) any such termination or reduction shall be permanent and
Borrower shall have no right to thereafter reinstate or increase,
as the case may be, the Commitment of any Bank.
2.10 VOLUNTARY PREPAYMENTS.
(a) Borrower may, upon notice to the Agent specifying that
it is paying the Prime Loans, pay without penalty or premium the
Prime Loans in whole at any time or in part from time to time in
amounts aggregating $500,000.00 or any larger multiple of
$25,000.00, by paying the principal amount to be paid; provided,
however, that in no event may Borrower make a partial payment of
Prime Loans which results in the total outstanding Prime Loans
being greater than zero but less than $500,000.00. Each such
optional payment shall be applied to pay the Prime Loans of the
several Banks in proportion to their respective Pro Rata Shares.
(b) Borrower may, upon at least three (3) Eurodollar
Business Day's notice to the Agent specifying that it is paying
the LIBOR Loans, pay the LIBOR Loans to which a given Interest
Period applies, in whole, or in part in amounts aggregating
$1,000,000.00 or any larger multiple of $500,000.00, by paying the
principal amount to be paid together with all accrued and unpaid
interest thereon to and including the date of payment and any
funding losses and other amounts payable under Section 2.12;
provided, however, that in no event may Borrower make a partial
payment of LIBOR Loans which results in the total outstanding
LIBOR Loans with respect to which a given Interest Period applies
being greater than $0.00 but less than $1,000,000.00. Each such
optional payment shall be applied to pay the LIBOR Loans of the
several Banks in proportion to their respective Pro Rata Shares.
(c) Upon receipt of a notice of prepayment pursuant to
this Section, the Agent shall promptly notify each Bank of the
contents thereof and of such Bank's Pro Rata Share of such payment
and such notice shall not thereafter be revocable by Borrower.
2.11 GENERAL PROVISIONS AS TO PAYMENTS. Borrower shall
make each payment of principal of, and interest on, the Loans and
of fees and all other amounts payable under this Agreement, not
later than 12:00 p.m. (St. Louis time) on the date when due, in
Federal or other funds immediately available in St. Louis,
Missouri, to the Agent at its address referred to in Section 8.07.
All payments received by the Agent after 12:00 p.m. (St. Louis
time) on a Domestic Business Day shall be deemed to be received by
the Agent on the next succeeding Domestic Business Day. The Agent
and the Banks agree that irrevocable authorization from Borrower
to the Agent to debit an account of Borrower at Firstar shall
constitute "payment" by Borrower under this Section at the time
such authorization is given provided there are sufficient
collected funds in such account to cover the requested payment(s).
The Agent will distribute to each Bank in immediately available
funds its Pro Rata Share of each such payment received by the
Agent for the account of the Banks by 2:00 p.m. (St. Louis time)
on the day of receipt of such payment by the Agent if such payment
is received by the Agent from Borrower by 12:00 noon (St. Louis
time) on such day or by 12:00 noon (St. Louis time) on the next
succeeding Domestic Business Day if such payment is received by
the Agent from Borrower after 12:00 noon (St. Louis time) on such
day. Any such payment owed by the Agent to any Bank which is not
paid within the applicable time period shall bear interest
(payable by the Agent) until paid at the Fed Funds Rate. Whenever
any payment of principal of, or interest on, the Loans or of fees
shall be due on a day which is not a Domestic Business Day, the
date for payment thereof shall be extended to the next succeeding
Domestic Business Day. If the date for any payment of principal
is extended by operation of law or otherwise, interest thereon, at
the then applicable rate, shall be payable for such extended time.
2.12 FUNDING LOSSES. Notwithstanding any provision
contained in this Agreement to the contrary, (a) if Borrower makes
any payment of principal with respect to any LIBOR Loan (pursuant
to Sections 2 or 6 or otherwise) on any day other than the last
day of the Interest Period applicable thereto, or if Borrower
fails to borrow or pay any LIBOR Loan after notice has been given
to by Borrower to the Agent in accordance with Section 2.03, 2.05,
2.10 or otherwise, or if Borrower fails to pay any principal of or
interest on a LIBOR Loan on the date when due (whether by reason
of maturity, acceleration or otherwise), Borrower shall reimburse
each Bank on demand for any resulting losses and expenses incurred
by it, including, without limitation, any losses incurred in
obtaining, liquidating or employing deposits from third parties
and any loss of margin for the period after any such payment,
provided that such Bank shall have delivered to Borrower a
certificate setting forth in reasonable detail the calculation of
the amount of such losses and expenses, which calculation shall be
conclusive in the absence of manifest error.
2.13 BASIS FOR DETERMINING INTEREST RATE INADEQUATE OR
UNFAIR. If with respect to any Interest Period:
(a) deposits in Dollars (in the applicable amounts)
are not being offered to any one or more Banks in the
relevant market for such Interest Period (despite good faith
efforts by such Bank(s) to request such offers (whether
through brokers or otherwise)), or
(b) any Bank determines in good faith that the
LIBOR Rate as determined pursuant to the definition thereof
will not adequately and fairly reflect the cost to such Bank
of maintaining or funding the LIBOR Loans for such Interest
Period,
such Bank shall forthwith give notice thereof to the Agent, each
other Bank and Borrower which notice shall set forth in detail the
basis for such notice, whereupon (i) until the Agent notifies
Borrower that the circumstances giving rise to such suspension no
longer exist, the LIBOR Rate shall not be available to Borrower as
an interest rate option on any Loans and (ii) all of the then
outstanding LIBOR Loans shall automatically convert to Prime
Loans on the last day of the then current Interest Period
applicable to each such LIBOR Loan. Interest accrued on each such
Loan prior to any such conversion shall be due and payable on the
date of such conversion together with any funding losses and other
amounts due under Section 2.12.
2.14 ILLEGALITY. If, after the date of this Agreement, the
adoption of any applicable law, rule or regulation, or any change
therein, or any change in the interpretation or administration
thereof by any governmental or regulatory authority, central bank
or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank with any request
or directive (whether or not having the force of law) of any such
governmental or regulatory authority, central bank or comparable
agency shall make it unlawful or impossible for any Bank to make,
maintain or fund its LIBOR Loans to Borrower, such Bank shall
forthwith give notice thereof to the Agent, each other Bank and
Borrower. Upon receipt of such notice, Borrower shall convert all
of its then outstanding LIBOR Loans to Prime Loans on either (a)
the last day of the then current Interest Period applicable to
such LIBOR Loan if each Bank may lawfully continue to maintain and
fund such LIBOR Loan to such day or (b) immediately if any Bank
may not lawfully continue to fund and maintain such LIBOR Loan to
such day. Interest accrued on each such Loan prior to any such
conversion shall be due and payable on the date of such conversion
together with any funding losses and other amounts due under
Section 2.12.
2.15 INCREASED COST. If (a) Regulation D or (b) after the
date hereof, the adoption of any applicable law, rule or
regulation, or any change therein, or any change in the
interpretation or administration thereof by any governmental or
regulatory authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance
by any Bank with any request or directive (whether or not having
the force of law) of any such governmental or regulatory
authority, central bank or comparable agency (a "Regulatory
Change"):
(i) shall subject any Bank to any tax, duty or
other charge with respect to its LIBOR Loans, its Note or its
obligation to make LIBOR Loans, or shall change the basis of
taxation of payments to any Bank of the principal of or
interest on its LIBOR Loans or any other amounts due under
this Agreement in respect of its LIBOR Loans or its
obligation to make LIBOR Loans (except for taxes on or
changes in the rate of tax on the overall net income of such
Bank imposed by the jurisdiction under the laws of which such
Bank is organized or any political subdivision thereof); or
(ii) shall impose, modify or deem applicable any
reserve (including, without limitation, any reserve imposed
by The Board of Governors of the Federal Reserve System),
special deposit, capital or similar requirement against
assets of, deposits with or for the account of, or credit
extended or committed to be extended by, any Bank or shall,
with respect to any Bank impose, modify or deem applicable
any other condition affecting such Bank's LIBOR Loans, such
Bank's Note or such Bank's obligation to make LIBOR Loans;
and the result of any of the foregoing is to increase the cost to
(or in the case of Regulation D, to impose a cost on or increase
the cost to) such Bank of making or maintaining any LIBOR Loan, or
to reduce the amount of any sum received or receivable by such
Bank under this Agreement or under its Note with respect thereto,
by an amount deemed by such Bank to be material, and if such Bank
is not otherwise fully compensated for such increase in cost or
reduction in amount received or receivable by virtue of the
inclusion of the reference to "LIBOR Reserve Percentage" in the
calculation of the LIBOR Rate, then upon notice by such Bank to
Borrower, which notice shall set forth such Bank's supporting
calculations in reasonable detail and the details of the
Regulatory Change, Borrower shall pay such Bank, as additional
interest, such additional amount or amounts as will compensate
such Bank for such increased cost or reduction. The determination
by any Bank under this Section of the additional amount or amounts
to be paid to it hereunder shall be conclusive in the absence of
manifest error. In determining such amount or amounts, the Banks
may use any reasonable averaging and attribution methods.
2.16 PRIME LOANS SUBSTITUTED FOR AFFECTED LIBOR LOANS. If
notice has been given by a Bank pursuant to Sections 2.14 or 2.15
then, unless and until the Agent notifies Borrower that the
circumstances giving rise to such repayment no longer apply, all
Loans which would otherwise be made to Borrower as LIBOR Loans
shall be made instead as Prime Loans. The applicable Bank shall
promptly notify the Agent and Borrower if and when the
circumstances giving rise to such repayment no longer apply.
2.17 CAPITAL ADEQUACY. If, after the date of this
Agreement, any Bank shall have determined in good faith that the
adoption of any applicable law, rule, regulation or guideline
regarding capital adequacy, or any change therein, or any change
in the interpretation or administration thereof by any
governmental or regulatory authority, central bank or comparable
agency charged with the interpretation or administration thereof,
or compliance by such Bank with any request or directive regarding
capital adequacy (whether or not having the force of law) of any
such authority, central bank or comparable agency, has or will
have the effect of reducing the rate of return on such Bank's
capital in respect of its obligations under this Agreement to a
level below that which such Bank could have achieved but for such
adoption, change or compliance (taking into consideration such
Bank's policies with respect to capital adequacy), then from time
to time Borrower shall pay to such Bank upon demand such
additional amount or amounts as will compensate such Bank for such
reduction. All determinations made in good faith by such Bank of
the additional amount or amounts required to compensate such Bank
in respect of the foregoing shall be conclusive in the absence of
manifest error. In determining such amount or amounts, such Bank
may use any reasonable averaging and attribution methods.
2.18 SURVIVAL OF INDEMNITIES. All indemnities and all
provisions relating to reimbursement to the Banks of amounts
sufficient to protect the yield to the Banks with respect to the
Loans, including, without limitation, Sections 2.12, 2.13, 2.14,
2.15 and 2.17 of this Agreement, shall survive the payment of the
Notes and the other Borrower's Obligations and the termination of
this Agreement.
2.19 DISCRETION OF BANKS AS TO MANNER OF FUNDING.
Notwithstanding any provision contained in this Agreement to the
contrary, each Bank shall be entitled to fund and maintain its
funding of all or any part of its LIBOR Loans in any manner it
elects, it being understood, however, that for purposes of this
Agreement all determinations hereunder (including, without
limitation, the determination of each Bank's funding losses and
expenses under Section 2.12) shall be made as if such Bank had
actually funded and maintained each LIBOR Loan through the
purchase of deposits in Dollars having a maturity corresponding to
the maturity of the applicable Interest Period relating to the
applicable LIBOR Loan and bearing an interest rate equal to the
applicable LIBOR Base Rate.
2.20 TAXES.
(a) Any and all payments by Borrower to or for the account
of the Agent or any Bank under this Agreement, any Note and/or any
other Transaction Document shall be made free and clear of and
without deduction for any and all present or future taxes, duties,
levies, imposts, deductions, charges or withholdings, and
all liabilities with respect thereto, excluding, in the case of
the Agent and each Bank, taxes imposed on or measured by its net
income, and franchise taxes imposed on it, by the jurisdiction
under the laws of which the Agent or such Bank (as the case may
be) is organized or any political subdivision thereof (all such
non-excluded taxes, duties, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as
"Taxes"). If Borrower shall be required by law to deduct any
Taxes from or in respect of any sum payable under this Agreement,
any Note and/or any other Transaction Document to the Agent or any
Bank, (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions
applicable to additional sums payable under this Section 2.20(a))
the Agent or such Bank (as the case may be) receives an amount
equal to the sum it would have received had no such deduction of
Taxes been made, (ii) Borrower shall make such deductions, (iii)
Borrower shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with
applicable law and (iv) Borrower shall furnish to the Agent (who
shall forward the same to the applicable Bank), at its address
referred to in Section 8.07, the original or a certified copy of a
receipt evidencing payment thereof.
(b) In addition, Borrower agrees to pay any present or
future stamp or documentary taxes and any other excise or property
taxes, or charges or similar levies which arise from any payment
made under this Agreement, any Note and/or any other Transaction
Document or from the execution or delivery of, or otherwise with
respect to, this Agreement, any Note and/or any other Transaction
Document (hereinafter referred to as "Other Taxes").
(c) Borrower agrees to indemnify the Agent and each Bank
for the full amount of Taxes or Other Taxes, respectively
(including, without limitation, any Taxes or Other Taxes imposed
or asserted by any jurisdiction on amounts payable under this
Section 2.20), paid by the Agent or such Bank (as the case may be)
and any liability (including penalties, interest and expenses)
arising therefrom or with respect thereto. This indemnification
shall be made within fifteen (15) days from the date the Agent or
such Bank (as the case may be) makes demand therefor, accompanied
by a certificate of the Agent or such Bank (as the case may be)
setting forth in reasonable detail its computation of the amount
or amounts to be paid to it hereunder.
(d) The provisions of this Section 2.20 shall survive any
expiration or termination of this Agreement and the payment of the
Notes and the other Borrower's Obligations.
2.21 SHARING OF PAYMENTS. The Banks agree among themselves
that, in the event that any Bank shall directly or indirectly
obtain any payment (whether voluntary, involuntary, through the
exercise of any right of set-off, banker's lien or counterclaim,
through the realization, collection, sale or liquidation of any
collateral or otherwise) on account of or in respect of any of the
Loans or any of the other Borrower's Obligations in excess of its
Pro Rata Share of all such payments, such Banks shall immediately
purchase from the other Banks participations in the Loans or other
Borrower's Obligations owed to such other Banks in such amounts,
and make such other adjustments from time to time, as shall be
equitable to the end that the Banks share such payment ratably in
accordance with their respective Pro Rata Shares of the
outstanding Loans and other Borrower's Obligations. The Banks
further agree among themselves that if any such excess payment to
a Bank shall be rescinded or must otherwise be restored, the other
Banks which shall have shared the benefit of such payment shall,
by repurchase of participation theretofore sold, or otherwise,
return its share of that benefit to the Bank whose payment shall
have been rescinded or otherwise restored. Borrower agrees that
any Banks so purchasing a participation in the Loans or other
Borrower's Obligations to the other Banks may exercise all rights
of set-off, banker's lien and/or counterclaim as fully as if such
Banks were a holder of such Loan or other Borrower's Obligations
in the amount of such participation. If under any applicable
bankruptcy, insolvency or other similar law any Bank receives a
secured claim in lieu of a set-off to which this Section 2.21
would apply, such Banks shall, to the extent practicable, exercise
their rights in respect of such secured claim in a manner
consistent with the rights of the Banks entitled under this
Section 2.21 to share in the benefits of any recovery of such
secured claim.
SECTION 3. PRECONDITIONS TO LOANS AND LETTERS OF CREDIT.
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3.01 INITIAL LOAN OR LETTER OF CREDIT. Notwithstanding any
provision contained in this Agreement to the contrary, no Bank
shall have any obligation to make the initial Loan under this
Agreement and Firstar shall have no obligation to issue the
initial Letter of Credit under this Agreement unless the Agent
shall have first received:
(a) this Agreement, executed by a duly authorized
officer of Borrower;
(b) the Notes, each executed by a duly authorized
officer of Borrower;
(c) a copy of resolutions of the Board of Directors
of Borrower, duly adopted, which authorize the execution,
delivery and performance of this Agreement, the Notes, the
Letter of Credit Applications and the other Transaction
Documents, certified by the Secretary of Borrower;
(d) a copy of the Certificate of Incorporation of
Borrower, including any amendments thereto, certified by the
Secretary of State of the State of Delaware;
(e) a copy of the By-Laws of Borrower, including
any amendments thereto, certified by the Secretary of
Borrower;
(f) an incumbency certificate, executed by the
Secretary of Borrower, which shall identify by name and title
and bear the signatures of all of the officers of Borrower
executing any of the Transaction Documents;
(g) certificates of corporate good standing of
Borrower issued by the Secretaries of State of the States of
Delaware and Missouri;
(h) an opinion of counsel of Husch & Eppenberger,
outside counsel for Borrower, in the form of Exhibit E
attached hereto and incorporated herein by reference; and an
opinion of Xxxx X. Xxxxxx, Esq., General Counsel of Borrower,
in the form of Exhibit F attached hereto and incorporated
herein by reference;
(i) the Notice of Borrowing required by Section
2.03 and/or the Letter of Credit Request and the Letter of
Credit Application required by Section 2.02(a), as the case
may be; and
(j) such other agreements, documents, instruments
and certificates as the Agent and/or any Bank may reasonably
request.
3.02 ALL LOANS. Notwithstanding any provision contained in
this Agreement to the contrary, no Bank shall have any obligation
to make any Loan under this Agreement unless:
(a) the Agent shall have received a Notice of
Borrowing for such Loan as required by Section 2.03;
(b) both immediately before and immediately after
the making of such Loan, no Default or Event of Default shall
have occurred and be continuing;
(c) no material adverse change in the Properties,
assets, liabilities, business, operations, prospects, income
or condition (financial or otherwise) of Borrower and its
Subsidiaries taken as a whole shall have occurred since the
date of this Agreement and be continuing; and
(d) all of the representations and warranties made
by Borrower and/or any other Obligor in this Agreement and/or
in any other Transaction Document shall be true and correct
in all material respects on and as of the date of such Loan
as if made on and as of the date of such Loan (and for
purposes of this Section 3.02(d), the representations and
warranties made by Borrower in Section 4.04 shall be deemed
to refer to the most recent financial statements of Borrower
and its Subsidiaries delivered to the Banks pursuant to
Section 5.01(a)).
Each request for a Loan by Borrower under this Agreement
shall be deemed to be a representation and warranty by Borrower on
the date of such Loan as to the facts specified in clauses (b),
(c) and (d) of this Section 3.02.
3.03 ALL LETTERS OF CREDIT. Notwithstanding any provision
contained herein to the contrary, Firstar shall have no obligation
to issue any Letter of Credit under this Agreement unless:
(a) Firstar shall have received a Letter of Credit
Request for such Letter of Credit as required by Section
2.02(a);
(b) Firstar shall have received a Letter of Credit
Application for such Letter of Credit as required by Section
2.02(a), duly executed by an authorized officer of Borrower
as applicant and account party;
(c) Borrower shall have complied with all of the
procedures and requirements set forth in Section 2.02;
(d) both immediately before and immediately after
the issuance of such Letter of Credit, no Default or Event of
Default shall have occurred and be continuing;
(e) no material adverse change in the Properties,
assets, liabilities, business, operations, prospects, income
or condition (financial or otherwise) of Borrower and its
Subsidiaries taken as a whole shall have occurred since the
date of this Agreement and be continuing;
(f) all of the representations and warranties made
by Borrower and/or any other Obligor in this Agreement and/or
in any other Transaction Document shall be true and correct
in all material respects on and as of the date of the
issuance of such Letter of Credit as if made on and as of the
date of the issuance of such Letter of Credit (and for
purposes of this Section 3.03(f), the representations and
warranties made by Borrower in Section 4.04 shall be deemed
to refer to the most recent financial statements of Borrower
and its Subsidiaries delivered to the Banks pursuant to
Section 5.01(a)); and
(g) Firstar shall have received such other
documents, certificates and agreements as it may reasonably
request.
Each request for the issuance of a Letter of Credit by Borrower
under this Agreement shall be deemed to be a representation and
warranty by Borrower on the date of the issuance of such Letter of
Credit as to the facts specified in clauses (d), (e) and (f) of
this Section 3.03.
SECTION 4. REPRESENTATIONS AND WARRANTIES.
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Borrower hereby represents and warrants to the Agent and each
Bank that:
4.01 CORPORATE EXISTENCE AND POWER. Borrower and each
Subsidiary: (a) is duly incorporated, validly existing and in good
standing under the laws of the jurisdiction of its incorporation;
(b) has all requisite corporate powers required to carry on its
business as now conducted; (c) has all requisite governmental and
regulatory licenses, authorizations, consents and approvals
required to carry on its business as now conducted, except such
licenses, authorizations, consents and approvals the failure to
have could not reasonably be expected to have a Material Adverse
Effect; and (d) is qualified to transact business as a foreign
corporation in, and is in good standing under the laws of, all
jurisdictions in which it is required by applicable law to
maintain such qualification and good standing except for those
states in which the failure to qualify or maintain good standing
could not reasonably be expected to have a Material Adverse
Effect.
4.02 CORPORATE AUTHORIZATION. The execution, delivery and
performance by Borrower of this Agreement, the Notes, the Letter
of Credit Applications and the other Transaction Documents to
which it is a party are within the corporate powers of Borrower
and have been duly authorized by all necessary corporate action on
the part of Borrower.
4.03 BINDING EFFECT. This Agreement, the Notes, the Letter
of Credit Applications and the other Transaction Documents to
which Borrower is a party and which have been executed
contemporaneously with or prior to the execution of this Agreement
have been duly executed and delivered by Borrower and constitute
the legal, valid and binding obligations of Borrower enforceable
in accordance with their respective terms, except as such
enforceability may be limited by (a) bankruptcy, insolvency or
other similar laws affecting creditors' rights generally and (b)
general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law);
and the Letter of Credit Applications and the other Transaction
Documents to which Borrower is a party which were not executed
contemporaneously with or prior to the execution of this
Agreement, when executed and delivered in accordance with this
Agreement, will constitute the legal, valid and binding
obligations of Borrower enforceable in accordance with their
respective terms, except as such enforceability may be limited by
(a) bankruptcy, insolvency or other similar laws affecting
creditors' rights generally and (b) general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law).
4.04 FINANCIAL STATEMENTS. Borrower has furnished the
Agent and each Bank with (a) a consolidated balance sheet and
consolidated statements of income, cash flows and changes in
stockholders' equity of Borrower and its Subsidiaries as of and
for the fiscal year ended February 5, 2000, all certified by
Borrower's independent certified public accountants, which
financial statements have been prepared in accordance with GAAP
consistently applied and (b) an unaudited consolidated balance
sheet and unaudited consolidated statements of income, cash flows
and changes in stockholders' equity of Borrower and its
Subsidiaries as of and for the fiscal quarter ended April 29,
2000, certified by the chief financial officer of Borrower as
being true and correct to the best of his or her knowledge and as
being prepared in accordance with GAAP consistently applied.
Borrower further represents and warrants to the Agent and each
Bank that (a) said balance sheets fairly present the condition of
Borrower and its Subsidiaries as of the dates thereof, (b) there
has been no material adverse change in the condition or operation,
financial or otherwise, of Borrower and its Subsidiaries taken as
a whole since April 29, 2000, and (c) neither Borrower nor any of
its Subsidiaries had any direct or contingent liabilities which
are not disclosed on said balance sheets (to the extent such
disclosure is required by GAAP).
4.05 LITIGATION. Except as disclosed on Schedule 4.05
attached hereto, there is no action or proceeding pending against
or, to the knowledge of any Responsible Officer of Borrower,
threatened against or affecting Borrower or any Subsidiary before
any court, arbitrator or any governmental, regulatory or
administrative body, agency, instrumentality, authority or
official which, if determined adversely against Borrower or any
Subsidiary, could reasonably be expected to have a Material
Adverse Effect. Neither Borrower nor any Subsidiary is in default
with respect to any order, writ, injunction, decision or decree of
any court, arbitrator or any governmental, regulatory or
administrative body, agency, instrumentality, authority or
official, a default under which could reasonably be expected to
have a Material Adverse Effect. To the best knowledge of Borrower
after due inquiry, there are no outstanding judgments against
Borrower or any Subsidiary.
4.06 Pension and Welfare Plans. Each Pension Plan and
Welfare Plan complies in all material respects with ERISA (to the
extent ERISA is applicable to such Pension Plan or Welfare Plan)
and all other applicable statutes and governmental and regulatory
rules and regulations; no Reportable Event has occurred and is
continuing with respect to any Pension Plan which is subject to
ERISA; neither Borrower nor any Subsidiary nor any ERISA
Affiliate has withdrawn from any Multi-Employer Plan in a
"complete withdrawal" or a "partial withdrawal" as defined in
Sections 4203 or 4205 of ERISA, respectively; neither Borrower nor
any Subsidiary nor any ERISA Affiliate has entered into an
agreement pursuant to Section 4204 of ERISA; neither Borrower nor
any Subsidiary nor any ERISA Affiliate has in the past contributed
to or currently contributes to a Multi-Employer Plan; neither
Borrower nor any Subsidiary nor any ERISA Affiliate has any
withdrawal liability with respect to a Multi-Employer Plan; no
steps have been instituted by Borrower or any Subsidiary or any
ERISA Affiliate to terminate any Pension Plan; no condition exists
or event or transaction has occurred in connection with any
Pension Plan, Multi-Employer Plan or Welfare Plan which could
result in the incurrence by Borrower or any Subsidiary or any
ERISA Affiliate of any material liability, fine or penalty; and
neither Borrower nor any Subsidiary nor any ERISA Affiliate is a
"contributing sponsor" as defined in Section 4001(a)(13) of ERISA
of a "single-employer plan" as defined in Section 4001(a)(15) of
ERISA which has two or more contributing sponsors at least two of
whom are not under common control. Except as disclosed on the
consolidated financial statements of Borrower and its Subsidiaries
delivered by Borrower to the Agent and each Bank, neither Borrower
nor any Subsidiary nor any ERISA Affiliate has any unfunded
liability with respect to any Welfare Plan.
4.07 TAX RETURNS AND PAYMENT. Except as disclosed on
Schedule 4.07 attached hereto, Borrower and its Subsidiaries have
filed all United States Federal and all other tax returns which
are required to be filed and have paid all taxes which have become
due pursuant to such returns and all other taxes, assessments,
fees and other governmental charges upon Borrower and its
Subsidiaries and upon their respective Properties, assets, income
and franchises which have become due and payable by Borrower or
any of its Subsidiaries, except for (a) the filing of state and
local tax returns which the failure to file (i) by the Borrower or
any Subsidiary was not willful and (ii) could not, individually or
in the aggregate, reasonably be expected to result in a Material
Adverse Effect, (b) taxes, assessments, fees and other
governmental charges wherein the amount, applicability or validity
are being contested by Borrower or any such Subsidiary by
appropriate proceedings being diligently conducted in good faith
and in respect of which adequate reserves in accordance with GAAP
have been established and (c) taxes, assessments, fees and other
governmental charges the nonpayment of which (i) by the Borrower
or any Subsidiary was not willful and (ii) could not, individually
or in the aggregate, reasonably be expected to result in a
Material Adverse Effect. All material tax liabilities of Borrower
and its Subsidiaries were adequately provided for as of April 29,
2000, and are now so provided for on the books of Borrower and its
Subsidiaries. Except as disclosed on Schedule 4.07 attached
hereto, there is no proposed, asserted or assessed tax deficiency
against Borrower or any of its Subsidiaries which, individually or
in the aggregate, could reasonably be expected to have a Material
Adverse Effect.
4.08 SUBSIDIARIES. Borrower has no Subsidiaries other than
as identified on Schedule 4.08 attached hereto, as the same may
from time to time be amended, modified or supplemented as provided
herein. Schedule 4.08 attached hereto correctly sets forth, for
each Subsidiary, the number of shares of each class of stock or
other equity interests authorized for such Subsidiary, the number
of outstanding and the percentage of the outstanding shares of
each such class owned, directly or indirectly, by Borrower or one
or more of its Subsidiaries. All of the issued and outstanding
capital stock and other equity interests of each Subsidiary is
duly authorized, validly issued and fully paid and nonassessable.
Except as disclosed on Schedule 4.08 attached hereto, neither
Borrower nor any Subsidiary, individually or collectively, owns or
holds, directly or indirectly, any capital stock of or equity
interest in any other Person other than Borrower's Subsidiaries.
Borrower may at any time amend, modify or supplement Schedule 4.08
by notifying the Agent and each Bank in writing of any changes
thereto, including any formation, acquisition, merger or
liquidation of any Subsidiary or any change in the capitalization
of any Subsidiary, in each case, in accordance with the terms of
this Agreement, and thereby the representations and warranties
contained in this Section 4.08 shall be amended accordingly so
long as such amendment, modification or supplement is made within
thirty (30) days after the occurrence of any such changes in the
facts stated therein and that such changes reflect transactions
that are permitted under this Agreement.
4.09 COMPLIANCE WITH OTHER INSTRUMENTS; NONE BURDENSOME.
Neither Borrower nor any Subsidiary is a party to any contract,
agreement, document or instrument or subject to any charter or
other corporate restriction which could reasonably be expected to
have a Material Adverse Effect; none of the execution and
delivery by Borrower of the Transaction Documents to which it is a
party, the consummation of the transactions therein contemplated
or the compliance with the provisions thereof will violate any
law, rule, regulation, order, writ, judgment, injunction, decree
or award binding on Borrower, or any of the provisions of the
Certificate of Incorporation or By-Laws of Borrower or any of the
provisions of any indenture, agreement, document, instrument
or undertaking to which Borrower is a party or subject, or by
which Borrower or any Property of Borrower is bound, or conflict
with or constitute a default thereunder or result in the creation
or imposition of any Lien pursuant to the terms of any such
indenture, agreement, document, instrument or undertaking (other
than in favor of the Agent pursuant to the Transaction Documents).
No order, consent, approval, license, authorization or validation
of, or filing, recording or registration with, or exemption by,
any governmental, regulatory, administrative or public body or
authority, or any subdivision thereof, or any other Person is
required to authorize, or is required in connection with, the
execution, delivery or performance of, or the legality, validity,
binding effect or enforceability of, any of the Transaction
Documents.
4.10 OTHER DEBT, GUARANTEES AND CAPITALIZED LEASES. Except
as disclosed on Schedule 4.10 attached hereto and except for Debt
of any Wholly-Owned Subsidiary to Borrower or any other
Wholly-Owned Subsidiary, neither Borrower nor any Subsidiary is a
borrower, guarantor or obligor with respect to, or a lessee under,
any Debt, Guarantees or Capitalized Leases other than the
Borrower's Obligations. Borrower may at any time amend, modify or
supplement Schedule 4.10 by notifying the Agent and each Bank in
writing of any changes thereto, and thereby the representations
and warranties contained in this Section 4.10 shall be amended
accordingly so long as such amendment, modification or supplement
is made within thirty (30) days after the occurrence of any such
changes in the facts stated therein and that such changes reflect
transactions that are permitted under this Agreement.
4.11 LABOR MATTERS. Neither Borrower nor any Subsidiary
is a party to any labor dispute which could reasonably be expected
to have a Material Adverse Effect. There are no strikes or
walkouts relating to any labor contract to which Borrower or any
Subsidiary is subject which could reasonably be expected to have a
Material Adverse Effect. Hours worked and payments made to the
employees of Borrower and its Subsidiaries have not been in
violation of (a) the Fair Labor Standards Act (if applicable) or
(b) any other applicable law dealing with such matters, the
violation of which could reasonably be expected to have a Material
Adverse Effect. All payments due from Borrower or any Subsidiary,
or for which any claim may be made against any of them, in respect
of wages, employee health and welfare insurance and/or other
benefits have been paid or accrued as a liability on their
respective books in accordance with GAAP.
4.12 TITLE TO PROPERTY. Except as disclosed on Schedule
4.12 attached hereto, Borrower and each Subsidiary is the sole
owner of, or has the legal right to use and occupy, all Property
it claims to own or which is necessary for Borrower or such
Subsidiary to conduct its business, and all of such Property is
free and clear of all Liens other than Permitted Liens. Borrower
and each Subsidiary enjoys peaceful and undisturbed possession in
all material respects under all leases under which it is operating
as a lessee.
4.13 REGULATION U. Borrower is not engaged principally, or
as one of its important activities, in the business of extending
credit for the purpose of buying or carrying margin stock (within
the meaning of Regulation U of The Board of Governors of the
Federal Reserve System, as amended) and no part of the proceeds of
any Loan will be used, whether directly or indirectly, and whether
immediately, incidentally or ultimately (a) for the purpose of
buying or carrying margin stock (other than repurchases by
Borrower of shares of common stock of Borrower) or to extend
credit to others for the purpose of buying or carrying margin
stock, or to refund or repay indebtedness originally incurred for
such purpose or (b) for any purpose which entails a violation of,
or which is inconsistent with, the provisions of any of the
Regulations of The Board of Governors of the Federal Reserve
System, including, without limitation, Regulations U, T or X
thereof, as amended. If requested by the Agent or any Bank,
Borrower shall furnish to the Agent a statement in conformity with
the requirements of Federal Reserve Form U-1 referred to in
Regulation U.
4.14 MULTI-EMPLOYER PENSION PLAN AMENDMENTS ACT OF 1980.
Borrower and each Subsidiary is in compliance with the
Multi-Employer Pension Plan Amendments Act of 1980, as amended
("MEPPAA"), except to the extent the noncompliance therewith could
not reasonably be expected to have a Material Adverse Effect.
Neither Borrower nor any Subsidiary has any liability for pension
contributions pursuant to MEPPAA.
4.15 INVESTMENT COMPANY ACT OF 1940; PUBLIC UTILITY HOLDING
COMPANY ACT OF 1935. Borrower is not an "investment company"
within the meaning of, and is not otherwise subject to regulation
under, the Investment Company Act of 1940, as amended. Borrower
is not a "holding company" or a "subsidiary company" of a "holding
company" or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company" within the meaning of,
and is not otherwise subject to regulation under, the Public
Utility Holding Company Act of 1935, as amended.
4.16 PATENTS, TRADEMARKS, COPYRIGHTS, LICENSES, ETC.
Borrower and each Subsidiary possesses all patents, patent rights,
trademarks, trademark rights, trade names, trade name rights,
copyrights, licenses and other intellectual property necessary to
conduct its business without conflict with any patent, patent
right, trademark, trademark right, trade name, copyright, license
or other intellectual property of any other Person, except where
such failure to possess or such conflict could not reasonably be
expected to have a Material Adverse Effect.
4.17 ENVIRONMENTAL AND SAFETY AND HEALTH MATTERS. Except
as disclosed on Schedule 4.17 attached hereto: (i) the operations
of Borrower and each Subsidiary comply with all applicable
Environmental Laws and all applicable Occupational Safety and
Health Laws, the violation or noncompliance with which could
reasonably be expected to have a Material Adverse Effect; (ii)
none of the operations of Borrower or any Subsidiary are subject
to any Environmental Claim or any judicial, governmental,
regulatory or administrative proceeding alleging the violation of
any Occupational Safety and Health Law, which, if determined
adversely against Borrower or any Subsidiary, could reasonably be
expected to have a Material Adverse Effect; (iii) none of the
operations of Borrower or any Subsidiary is the subject of any
Federal, state or other investigation evaluating whether any
remedial action is needed to respond to any Release of Hazardous
Substances or any unsafe or unhealthful condition at any premises
owned, leased or operated by Borrower or such Subsidiary, which,
if determined adversely to Borrower or any Subsidiary, could
reasonably be expected to have a Material Adverse Effect; (iv)
neither Borrower nor any Subsidiary has filed any notice under any
Environmental Law or Occupational Safety and Health Law indicating
or reporting any past or present spillage, leakage or Release into
the environment of, or treatment, storage or disposal of, any
Hazardous Substances which could reasonably be expected to have a
Material Adverse Effect; and (v) neither Borrower nor any
Subsidiary has any material contingent liability in connection
with any spillage, disposal or Release into the environment of, or
otherwise with respect to, any Hazardous Substances.
4.18 INVESTMENTS. Neither Borrower nor any Subsidiary has
any Restricted Investments.
4.19 NO DEFAULT. No Default or Event of Default under this
Agreement has occurred and is continuing. There is no existing
default or event of default under or with respect to any
indenture, contract, agreement, lease or other instrument to which
Borrower or any Subsidiary is a party or by which any Property of
Borrower or any Subsidiary is bound or affected, a default under
which could reasonably be expected to have a Material Adverse
Effect. Borrower and each Subsidiary has and is in full
compliance with and in good standing with respect to all
governmental and/or regulatory permits, licenses, certificates,
consents and franchises necessary to continue to conduct its
business as previously conducted by it and to own or lease and
operate its Properties as now owned or leased by it, the failure
to have or noncompliance with which could reasonably be expected
to have a Material Adverse Effect, and, to the best of Borrower's
knowledge, none of said permits, certificates, consents or
franchises contain any term, provision, condition or limitation
more burdensome than such as are generally applicable to Persons
engaged in the same or similar business as Borrower or such
Subsidiary, as the case may be. Neither Borrower nor any
Subsidiary is in violation of any applicable Federal, state,
local, foreign or other statute, law, rule, regulation or
ordinance, a violation of which could reasonably be expected to
have a Material Adverse Effect.
4.20 PURCHASE AND OTHER COMMITMENTS AND OUTSTANDING BIDS.
No material purchase or other commitment of Borrower or any
Subsidiary is in excess of the normal, ordinary and usual
requirements of its business, or was made at any price in excess
of the then current market price, or, to the actual knowledge of
the Responsible Officers of Borrower, contains terms and
conditions more onerous than those usual and customary in the
applicable industry. There is no material outstanding bid, sales
proposal, contract or unfilled order of Borrower or any Subsidiary
which (a) will, or could if accepted, require Borrower or any
Subsidiary to supply goods or services at a cost to Borrower or
any Subsidiary in excess of the revenues to be received therefor
or (b) quotes prices which do not include a markup over reasonably
estimated costs consistent with past markups on similar business
based on market conditions current at that time.
4.21 DISCLOSURE. Neither this Agreement nor any of the
Exhibits or Schedules hereto nor any certificate or other data
furnished to the Agent and/or any Bank in writing by or on behalf
of Borrower or any Subsidiary in connection with the transactions
contemplated by this Agreement contains any untrue or incorrect
statement of a material fact or omits to state a material fact
necessary to make the statements contained herein or therein not
misleading. To the actual knowledge of the Responsible Officers
of Borrower, there is no fact peculiar to Borrower or any
Subsidiary which presently has a Material Adverse Effect or in the
future (so far as the Responsible Officers of Borrower can now
foresee) could reasonably be expected to have a Material Adverse
Effect, which has not heretofore been disclosed in writing by
Borrower to the Agent and each Bank.
SECTION 5. COVENANTS.
----------------------
5.01 AFFIRMATIVE COVENANTS OF BORROWER. Borrower covenants
and agrees that, so long as (i) any Bank has any obligation to
make any Loan under this Agreement, (ii) Firstar has any
obligation to issue any Letter of Credit under this Agreement,
(iii) any Letter of Credit remains outstanding or (iv) any of
Borrower's Obligations
remain unpaid:
(a) INFORMATION. Borrower will deliver to each Bank:
(i) as soon as available and in any event within
ninety (90) days after the end of each fiscal year of
Borrower: (A) a consolidated balance sheet of Borrower and
its Subsidiaries as of the end of such fiscal year and the
related consolidated statements of income, cash flows and
changes in stockholders' equity for such fiscal year, setting
forth in each case, in comparative form, the figures for the
previous fiscal year, all such financial statements to be
prepared in accordance with GAAP consistently applied and
reported on by and accompanied by the unqualified opinion of
independent certified public accountants of nationally
recognized standing selected by Borrower and reasonably
acceptable to the Required Banks together with (1) a
certificate from such accountants to the effect that, in
making the examination necessary for the signing of such
annual audit report (including, without limitation, reviewing
the computations of Borrower evidencing Borrower's compliance
with the covenants contained in Section 5.01(o) of this
Agreement), such accountants have not become aware of any
Default or Event of Default that has occurred and is
continuing, or, if such accountants have become aware of any
such event, describing it and the steps, if any, being taken
to cure it and (2) industry segment information prepared
in the same amount of detail as set forth in Borrower's
annual report to shareholders for the fiscal year ended
February 5, 2000, certified by the chief financial officer
of Borrower as fairly presenting the information therein;
provided, however, that delivery within the time period
specified above of copies of the Annual Report on Form 10-K
of Borrower for such fiscal year as filed with the Securities
and Exchange Commission (together with Borrower's annual
report to shareholders, if any, prepared pursuant to Rule
14a-3 under the Exchange Act) together with the accountant's
certificate described above shall be deemed to satisfy the
requirements of this Section 5.01(a)(i) with respect to
delivery of the audited consolidated financial statements
referred to above and, so long as the annual report to
shareholders accompanying such Annual Report on Form 10-K
is prepared as to business segment information in the same
amount of detail as set forth in the annual report to
shareholders for the fiscal year ended February 5, 2000, the
industry segment information referred to above;
(ii) as soon as available and in any event within
forty-five (45) days after the end of each of the first three
(3) fiscal quarters of each fiscal year of Borrower: (A) a
consolidated balance sheet of Borrower and its Subsidiaries
as of the end of such fiscal quarter and the related
consolidated statements of income, cash flows and changes in
stockholders' equity for such fiscal quarter and for the
portion of Borrower's fiscal year ended at the end of such
fiscal quarter, setting forth in each case in comparative
form, the figures for the corresponding fiscal quarter and
the corresponding portion of Borrower's previous fiscal year,
all in reasonable detail and satisfactory in form to the
Required Banks and certified (subject to normal year-end
adjustments and absence of footnotes) as to fairness of
presentation, GAAP and consistency by the chief financial
officer of Borrower; provided, however, that delivery within
the time period specified above of copies of the Quarterly
Report on Form 10-Q of Borrower for such fiscal quarter as
filed with the Securities and Exchange Commission shall be
deemed to satisfy the requirements of this Section
5.01(a)(ii) with respect to consolidated financial
statements;
(iii) promptly upon transmission thereof, one copy of
(A) each financial statement, report, notice or proxy
statement sent by Borrower or any Subsidiary generally to its
stockholders or to its creditors (other than Borrower or
another Subsidiary) and (B) each regular or periodic report,
each registration statement (without exhibits except as
expressly requested by the Agent or any Bank), and each
prospectus and all amendments thereto filed by Borrower or
any Subsidiary with the Securities and Exchange Commission
(or any governmental body or agency succeeding to the
functions of the Securities and Exchange Commission) and of
each press release and other statement made available
generally by Borrower or any Subsidiary to the public
concerning developments that are material;
(iv) simultaneously with the delivery of each set of
financial statements referred to in Sections 5.01(a)(i) and
5.01(a)(ii) above, a certificate of the chief financial
officer of Borrower in the form attached hereto as Exhibit G
and incorporated herein by reference, accompanied by
supporting financial work sheets where appropriate, (A)
evidencing Borrower's compliance with the covenants contained
in Section 5.01(o) of this Agreement, (B) stating whether
there exists on the date of such certificate any Default or
Event of Default and, if any Default or Event of Default then
exists, setting forth the details thereof and the action
which Borrower is taking or proposes to take with respect
thereto, (C) certifying that all of the representations and
warranties made by Borrower and/or any other Obligor in this
Agreement and/or in any other Transaction Document are true
and correct in all material respects on and as of the date of
such certificate as if made on and as of the date of such
certificate and (D) containing a detailed description
of any Related Party Arrangement entered into during the
period covered by such financial statements;
(v) promptly upon receipt thereof, any reports
submitted to Borrower or any Subsidiary (other than reports
previously delivered pursuant to Sections 5.01(a)(i) and (ii)
above) by independent accountants in connection with any
annual, interim or special audit made by them of the books of
Borrower or any Subsidiary;
(vi) as soon as available and in any event within
ninety (90) days after the beginning of each fiscal year of
Borrower, consolidated balance sheet, income statement and
cash flow projections for Borrower and its Subsidiaries for
such fiscal year and the succeeding one (1) year period, all
in form and detail reasonably acceptable to the Required
Banks; and
(vii) with reasonable promptness, such further
information regarding the business, affairs and financial
condition of Borrower or any Subsidiary as the Agent or any
Bank may from time to time reasonably request.
Each Bank is hereby authorized to deliver a copy of any
financial statement or other information made available by
Borrower or any Subsidiary to any regulatory authority having
jurisdiction over such Bank pursuant to any request therefor.
(b) PAYMENT OF INDEBTEDNESS. Borrower will, and it will
cause each Subsidiary to, (i) pay and discharge any and all
Indebtedness payable or Guaranteed by Borrower or such Subsidiary,
as the case may be, and any interest or premium thereon, when due
and payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise) in accordance with the
agreement, document or instrument relating to such Indebtedness or
Guarantee (provided, however, that neither Borrower nor any
Subsidiary shall be required to pay any such Indebtedness which
does not constitute Debt the payment of which is being contested
in good faith and by appropriate proceedings being diligently
conducted and for which adequate reserves in accordance with GAAP
have been provided, except that Borrower or such Subsidiary, as
the case may be, shall pay or cause to be paid all such
Indebtedness forthwith upon the commencement of proceedings to
foreclose any Lien which is attached as security therefor, unless
such foreclosure is stayed by the filing of an appropriate bond in
a manner reasonably satisfactory to the Required Banks) and (ii)
perform, observe and discharge all covenants, conditions and
obligations which are imposed upon Borrower or such Subsidiary, as
the case may be, by any and all agreements, documents, instruments
and indentures evidencing, securing or otherwise relating to such
Indebtedness or Guarantee.
(c) Maintenance of Books and Records; Consultations and
Inspections. Borrower will, and it will cause each Subsidiary to,
maintain books and records sufficient to permit the preparation of
financial statements in accordance with GAAP and in which true,
correct and complete entries shall be made of all dealings and
transactions in relation to its business. Borrower will, and it
will cause each Subsidiary to, permit the Agent and each Bank (and
any Person appointed by the Agent or any Bank to whom Borrower
does not reasonably object) to discuss the affairs, finances and
accounts of Borrower and each Subsidiary with the officers of
Borrower and each Subsidiary and, upon oral or written notice to
Borrower, their independent public accountants (during which
discussions, representatives of Borrower shall have the right to
be present), all at such reasonable times during normal business
hours and as often as the Agent or any Bank may from time to time
reasonably request. Borrower will also permit, and will cause
each Subsidiary to permit, inspection of its Properties, books and
records by the Agent and each Bank during normal business hours
and at other reasonable times. Borrower will reimburse the Agent
and each Bank upon demand for all reasonable costs and expenses
incurred by the Agent or any Bank in connection with any such
inspection conducted by the Agent or any Bank while any Default or
Event of Default under this Agreement has occurred and is
continuing. Borrower irrevocably authorizes the Agent and each
Bank to, upon oral or written notice to Borrower, communicate
directly with Borrower's independent public accountants and
irrevocably authorizes and directs such accountants to disclose to
the Agent and each Bank any and all information with respect to
the business and financial condition of Borrower and its
Subsidiaries as the Agent or any Bank may from time to time
reasonably request in writing.
(d) PAYMENT OF TAXES. Borrower will, and it will cause
each Subsidiary to, duly file all Federal, state, local, foreign
and other income tax returns and all other tax returns and reports
of Borrower or such Subsidiary, as the case may be, which are
required to be filed and duly pay and discharge promptly all
taxes, assessments and other governmental charges imposed upon it
or any of its Property; provided, however, that neither Borrower
nor any Subsidiary shall be required to pay any such tax,
assessment or other governmental charge the payment of which is
being contested in good faith and by appropriate proceedings being
diligently conducted and for which adequate reserves in accordance
with GAAP have been provided, except that Borrower or such
Subsidiary, as the case may be, shall pay or cause to be paid all
such taxes, assessments and governmental charges forthwith upon
the commencement of proceedings to foreclose any Lien which is
attached as security therefor, unless such foreclosure is stayed
by the filing of an appropriate bond in a manner reasonably
satisfactory to the Required Banks.
(e) PAYMENT OF CLAIMS. Borrower will, and it will cause
each Subsidiary to, promptly pay and discharge (i) all trade
accounts payable in accordance with its usual and customary
business practices as in effect on the date of this Agreement (but
in no event later than thirty (30) days after the due date
thereof) and (ii) all claims for work, labor, materials or
supplies which if unpaid does or could reasonably be expected to
become a Lien upon any of its Property; provided, however, that
neither Borrower nor any Subsidiary shall be required to pay any
such account payable or claim the payment of which is being
contested in good faith and by appropriate proceedings being
diligently conducted and for which adequate reserves in accordance
with GAAP have been provided, except that Borrower or such
Subsidiary, as the case may be, shall pay or cause to be paid all
such accounts payable and claims forthwith upon the commencement
of proceedings to foreclose any Lien which is attached as security
therefor, unless such foreclosure is stayed by the filing of an
appropriate bond in a manner reasonably satisfactory to the
Required Banks.
(f) CORPORATE EXISTENCE. Borrower will, and it will cause
each Subsidiary to, do all things necessary to (i) preserve and
keep in full force and effect at all times its corporate existence
and all permits, licenses, franchises and other rights material to
its business and (ii) be duly qualified to do business and be in
good standing in all jurisdictions where the nature of its
business or its ownership of Property requires such qualification
except for those jurisdictions in which the failure to qualify or
be in good standing could not reasonably be expected to have a
Material Adverse Effect.
(g) MAINTENANCE OF PROPERTY. Borrower will, and it will
cause each Subsidiary to, at all times, preserve and maintain all
of the Property used or useful in the conduct of its business in
good condition, working order and repair, ordinary wear and tear
excepted.
(h) COMPLIANCE WITH LAWS, REGULATIONS, ETC. Borrower
will, and it will cause each Subsidiary to, (i) comply with any
and all laws, ordinances and governmental and regulatory rules and
regulations to which Borrower or such Subsidiary, as the case may
be, is subject (including, without limitation, all Occupational
Safety and Health Laws and all Environmental Laws), the violation
of which or failure to comply with which could reasonably be
expected to have a Material Adverse Effect and (ii) obtain any and
all licenses, permits, franchises and other governmental and
regulatory authorizations necessary to the ownership of its
Properties or to the conduct of its business, the failure to
obtain which license, permit, franchise and/or other governmental
or regulatory authorization could reasonably be expected to have a
Material Adverse Effect.
(i) ENVIRONMENTAL MATTERS. Borrower will give the Agent
and each Bank prompt written notice of (i) any Environmental Claim
or any other action or investigation with respect to the existence
or potential existence of any Hazardous Substances instituted or
threatened with respect to Borrower or any Subsidiary or any
of the Properties or facilities owned, leased or operated by
Borrower or any Subsidiary which, if determined adversely to
Borrower or any Subsidiary, could reasonably be expected to have a
Material Adverse Effect and (ii) any condition or occurrence on
any of the Properties or facilities owned, leased or operated by
Borrower or any Subsidiary which constitutes a violation of any
Environmental Laws or which gives rise to a reporting obligation
or requires removal or remediation under any Environmental Laws
and which could reasonably be expected to have a Material Adverse
Effect. Within thirty (30) days after the giving of any such
notice, Borrower shall deliver to the Agent and each Bank
Borrower's plan with respect to any removal or remediation
required by any Environmental Law or any other applicable law,
rule or regulation and Borrower agrees to complete any such
removal and/or remediation within the time required thereby.
Borrower shall promptly provide the Agent and each Bank with
copies of all documentation relating thereto, and such other
information with respect to environmental matters as the Agent or
any Bank may reasonably request from time to time.
(j) ERISA Compliance. If Borrower, any Subsidiary or any
ERISA Affiliate shall have any Pension Plan, Borrower, such
Subsidiary or such ERISA Affiliate, as the case may be, shall
comply in all material respects with all requirements of ERISA
relating to such Pension Plan. Without limiting the generality of
the foregoing, Borrower will not, and it will not cause or permit
any Subsidiary or any ERISA Affiliate to:
(i) permit any Pension Plan maintained by Borrower,
any Subsidiary or any ERISA Affiliate to engage in any
nonexempt "prohibited transaction," as such term is defined
in Section 4975 of the Code;
(ii) permit any Pension Plan maintained by Borrower,
any Subsidiary or any ERISA Affiliate to incur any
"accumulated funding deficiency", as such term is defined in
Section 302 of ERISA, 29 U.S.C. Sub-section 1082, whether or
not waived;
(iii) terminate any Pension Plan in a manner which
could result in the imposition of a Lien on any Property of
Borrower, any Subsidiary or any ERISA Affiliate pursuant to
Section 4068 of ERISA, 29 U.S.C. Sub-section 1368; or
(iv) take any action which would constitute a
complete or partial withdrawal from a Multi-Employer Plan
within the meaning of Sections 4203 or 4205 of Title IV of
ERISA.
Notwithstanding any provision contained in this Section
5.01(j) to the contrary, an act by Borrower or any Subsidiary
shall not be deemed to constitute a violation of this Section
5.01(j) unless said action, individually or cumulatively with
other acts of Borrower and its Subsidiaries, has or could
reasonably be expected to have a Material Adverse Effect.
(k) NOTICES. Borrower will notify the Agent and each Bank
in writing of any of the following within three (3) Domestic
Business Days after any Responsible Officer of Borrower has actual
knowledge thereof, describing the same and, if applicable, the
steps being taken by the Person(s) affected with respect thereto:
(i) the occurrence of any Default or Event of
Default under this Agreement;
(ii) the occurrence of any default or event of
default by Borrower, any other Obligor or any Subsidiary
under any note, indenture, loan agreement, mortgage, deed of
trust, security agreement, lease or other similar agreement,
document or instrument to which Borrower, any other Obligor
or any Subsidiary, as the case may be, is a party or by which
it is bound or to which it is subject;
(iii) the institution of any litigation, arbitration
proceeding or governmental or regulatory proceeding affecting
Borrower, any other Obligor or any Subsidiary, whether or not
considered to be covered by insurance, in which the prayer or
claim for relief seeks recovery of an amount in excess of
$5,000,000.00 (or, if no dollar amount is specified in the
prayer or claim for relief, in which there is a reasonable
likelihood of recovery of an amount in excess of
$5,000,000.00) or any form of equitable relief which, if
granted, could reasonably be expected to have a Material
Adverse Effect;
(iv) the entry of any judgment or decree in an
amount in excess of $100,000.00 against Borrower, any other
Obligor or any Subsidiary;
(v) the occurrence of a Reportable Event with
respect to any Pension Plan; the filing of a notice of intent
to terminate a Pension Plan by Borrower, any ERISA Affiliate
or any Subsidiary; the institution of proceedings to
terminate a Pension Plan by the PBGC or any other Person; the
withdrawal in a "complete withdrawal" or a "partial
withdrawal" as defined in Sections 4203 and 4205,
respectively, of ERISA by Borrower, any ERISA Affiliate or
any Subsidiary from any Multi-Employer Plan; or the
incurrence of any material increase in the contingent
liability of Borrower or any Subsidiary with respect to any
"employee welfare benefit plan" as defined in Section 3(1) of
ERISA which covers retired employees and their beneficiaries;
(vi) the occurrence of any event which could
reasonably be expected to have a Material Adverse Effect;
(vii) any change in the name of Borrower, any other
Obligor or any Subsidiary;
(viii) any material change in Borrower's or any
Subsidiary's line(s) of business;
(ix) the occurrence of any Change of Control Event;
and
(x) the occurrence of such other events as the
Agent or any Bank may from time to time reasonably specify.
(l) INSURANCE. Borrower will, and it will cause each
Subsidiary to, insure all of its Property of the character usually
insured by Persons engaged in the same or similar businesses
similarly situated, against loss or damage of the kind customarily
insured against by such Persons, unless higher limits or coverage
are reasonably required in writing by the Required Banks (in which
event Borrower and/or the applicable Subsidiary will have thirty
(30) days after written request by the Required Banks to obtain
such additional insurance), and carry liability insurance and
other insurance of a kind and in an amount generally carried by
Persons engaged in the same or similar businesses similarly
situated, unless higher limits or coverage are reasonably required
in writing by the Required Banks (in which event Borrower and/or
the applicable Subsidiary will have thirty (30) days after written
request by the Required Banks to obtain such additional
insurance). All insurance required by this Section 5.01(l) shall
be with insurers rated A-IX or better by A.M Best Company (or
accorded a similar rating by another nationally or internationally
recognized insurance rating agency of similar standing if A.M.
Best Company is not then in the business of rating insurers or
rating foreign insurers) or such other insurers as may from time
to time be reasonably acceptable to the Required Banks. All such
insurance may be subject to reasonable deductible amounts.
Simultaneously with each delivery of financial statements under
Section 5.01(a)(i), Borrower shall deliver to the Agent and each
Bank a certificate of an officer of Borrower specifying the
details of all insurance then in effect and certifying that all of
the premiums therefor which are then due and payable have been
paid in full.
(m) FURTHER ASSURANCES. Borrower will, promptly upon
request, execute and deliver to the Agent, at any time and from
time to time, any and all further agreements, documents and
instruments, and take any and all further actions which may be
required under applicable law, or which the Agent or any Bank may
from time to time reasonably request, in order to effectuate the
transactions contemplated by this Agreement and the other
Transaction Documents.
(n) ACCOUNTANT. Borrower will give the Agent and each
Bank prompt notice of any change of Borrower's independent
certified public accountants and a statement of the reasons for
such change. Borrower shall at all times utilize independent
certified public accountants reasonably acceptable to the
Required Banks.
(o) FINANCIAL COVENANTS.
(i) MINIMUM CONSOLIDATED EBITDA. Borrower will
have a Consolidated EBITDA of at least (A) $30,000,000.00
($35,000,000.00 if Prints Plus is still a Subsidiary of
Borrower but is no longer treated as a discontinued operation
in accordance with GAAP) during each four (4) consecutive
fiscal quarter period of Borrower ending during the period
commencing on the date of this Agreement and ending
November 11, 2000, and (B) $45,000,000.00 ($50,000,000.00 if
Prints Plus is still a Subsidiary of Borrower but is no
longer treated as a discontinued operation in accordance with
GAAP) during each four (4) consecutive fiscal quarter period
of Borrower ending on or after November 12, 2000.
(ii) MINIMUM CONSOLIDATED FIXED CHARGE COVERAGE
RATIO. Borrower will have a Consolidated Fixed Charge
Coverage Ratio of at least (A) 1.05 to 1.0 for each four (4)
consecutive fiscal quarter period of Borrower ending during
the period commencing on the date of this Agreement and
ending November 11, 2000, and (B) 1.25 to 1.0 for each four
(4) consecutive fiscal quarter period of Borrower ending on
or after November 12, 2000.
(iii) MAXIMUM CONSOLIDATED DEBT TO CONSOLIDATED
EBITDA RATIO. Borrower will have a Consolidated Debt to
Consolidated EBITDA Ratio of not more than (A) 2.25 to 1.0
as of the last day of each fiscal quarter of Borrower ending
during the period commencing on the date of this Agreement
and ending November 11, 2000, and (B) 1.75 to 1.0 as of the
last day of each fiscal quarter of Borrower ending on or
after November 12, 2000.
(iv) MINIMUM CONSOLIDATED NET WORTH. Borrower will,
as of the last day of each fiscal quarter of Borrower, have a
Consolidated Net Worth of at least the sum of (i)
$40,000,000.00 plus (ii) Fifty Percent (50%) of Consolidated
Net Income (with no deductions for losses) for each fiscal
quarter of Borrower ending on or after the date of this
Agreement, such required increases to be cumulative for each
such fiscal quarter.
(v) CAPITAL EXPENDITURES. Borrower will not, and
it will not cause or permit any Subsidiary to, make any
Capital Expenditure if the aggregate amount of all Capital
Expenditures (including the Capital Expenditure in question)
made by Borrower and all of its Subsidiaries on a combined
basis during any fiscal year of Borrower would exceed
$30,000,000.00; provided that if the aggregate amount of
Capital Expenditures made by Borrower and its Subsidiaries on
a combined basis during any fiscal year of Borrower is less
than $30,000,000.00, the $30,000,000.00 limit for the
immediately succeeding fiscal year of Borrower shall be
increased by the difference between $30,000,000.00 and such
actual aggregate Capital Expenditures for the preceding
fiscal year.
(p) COVENANT TO SECURE BORROWER'S OBLIGATIONS EQUALLY.
Borrower will, if it or any Subsidiary shall create or assume any
Lien upon any of its Property or assets, whether now owned or
hereinafter acquired, other than Permitted Liens (unless prior
written consent to the creation or assumption thereof shall have
been obtained pursuant to Section 8.10 of this Agreement), make or
cause to be made effective provision whereby all of the Borrower's
Obligations will be secured by such Lien equally and ratably with
any and all other Indebtedness thereby secured so long as any such
other Indebtedness shall be so secured as evidenced by
documentation which is acceptable to the Required Banks. Borrower
acknowledges and agrees that compliance with this covenant will
not cure a violation of Section 5.02(b) of this Agreement or any
other covenant contained in this Agreement.
(q) AMENDMENT OF NOTE AGREEMENTS. Borrower shall provide
the Agent and each Bank with a written copy of any proposed
amendment to any of the Note Agreements at least fifteen (15)
Domestic Business Days prior to the effective date of such
amendment and shall promptly furnish the Agent and each Bank with
a copy of each effective amendment to any of the Note Agreements.
(r) SUBSIDIARIES. If the Note Agreements expire or are
otherwise terminated, (a) Borrower shall, within five (5) Domestic
Business Days after such expiration or termination, cause each
existing Subsidiary to guaranty the payment and performance of all
of the Borrower's Obligations pursuant to a Guaranty in
substantially the form of Exhibit I attached hereto (and
contemporaneously with the execution of such guaranty, Borrower
shall execute and/or obtain and deliver to the Agent such other
documentation, including, without limitation, certified corporate
documents, resolutions and legal opinions, as the Agent and/or
Required Banks may require in connection therewith, all of which
must be in form and substance reasonably satisfactory to the
Required Banks) and (ii) if Borrower or any Subsidiary creates,
forms or acquires any Subsidiary on or after the date of such
expiration or termination, Borrower shall cause such Subsidiary to
guaranty the payment and performance of all of the Borrower's
Obligations pursuant to a Guaranty in substantially the form of
Exhibit I attached hereto (and contemporaneously with the
execution of each such guaranty, Borrower shall execute and/or
obtain and deliver to the Agent such other documentation,
including, without limitation, certified corporate documents,
resolutions and legal opinions, as the Agent and/or Required Banks
may require in connection therewith, all of which must be in form
and substance reasonably satisfactory to the Required Banks).
5.02 NEGATIVE COVENANTS OF BORROWER. Borrower covenants
and agrees that, so long as (i) any Bank has any obligation to
make any Loan under this Agreement, (ii) Firstar has any
obligation to issue any Letter of Credit under this Agreement,
(iii) any Letter of Credit remains outstanding or (iv) any of
Borrower's Obligations remain unpaid, unless the prior written
consent of the Required Banks is obtained:
(a) LIMITATION ON INDEBTEDNESS. Borrower will not, and it
will not cause or permit any Subsidiary to, incur or be obligated
on any Indebtedness, either directly or indirectly, by way of
Guarantee, suretyship or otherwise, other than:
(i) the Borrower's Obligations;
(ii) Indebtedness of a Wholly-Owned Subsidiary to
Borrower or to another Wholly-Owned Subsidiary;
(iii) unsecured trade accounts payable and other
normal accruals incurred in the ordinary course of business
which are not more than (A) in the case of unsecured trade
accounts payable and/or other normal accruals owed to any one
or more of the ten (10) largest creditors of Borrower or the
applicable Subsidiary, as the case may be (measured by the
aggregate amount of unsecured trade accounts payable and/or
other normal accruals then owed by Borrower or the applicable
Subsidiary, as the case may be, to such creditor) thirty (30)
days past due and (B) in the case of unsecured trade accounts
payable and/or other normal accruals owed to all other
creditors of the Borrower and/or any Subsidiary, sixty (60)
past due (provided, however, that neither Borrower nor any
Subsidiary shall be required to pay any such account payable
or other accrual the payment of which is being contested in
good faith and by appropriate proceedings being diligently
conducted and for which adequate reserves in accordance with
GAAP have been provided, except that Borrower or such
Subsidiary, as the case may be, shall pay or cause to be paid
all such accounts payable and accruals forthwith upon the
commencement of proceedings to foreclose any Lien which is
attached as security therefor, unless such foreclosure is
stayed by the filing of an appropriate bond in a manner
reasonably satisfactory to the Required Banks);
(iv) Indebtedness existing as of the date of this
Agreement and listed on Schedule 4.10 attached hereto (and
without giving effect to any amendment to Schedule 4.10 made
by Borrower after the date of this Agreement);
(v) Subordinated Debt;
(vi) Capitalized Lease Obligations incurred on or
after the date of this Agreement in an aggregate amount of up
to $5,000,000.00 at any one time outstanding for Borrower and
all of its Subsidiaries on a combined basis; and
(vii) other Indebtedness of Borrower not otherwise
permitted by this Section 5.02(a) in an aggregate principal
amount at any one time outstanding not to exceed the sum of
(A) $5,000,000.00 minus (B) the then aggregate outstanding
amount of all Capitalized Lease Obligations incurred by
Borrower and/or any Subsidiary on or after the date of this
Agreement.
(b) LIMITATION ON LIENS. Borrower will not, and will not
cause or permit any Subsidiary to, create, incur or assume, or
suffer to be incurred or to exist, any Lien on any of its Property
(other than treasury stock of Borrower), whether now owned or
hereafter acquired, or upon any income or profits therefrom
(whether or not provision is made for the equal and ratable
securing of the Borrower's Obligations in accordance with the
provisions of Section 5.01(p)), except for Permitted Liens.
(c) MERGER, CONSOLIDATION, ETC.. Borrower will not, and
it will not cause or permit any Subsidiary to, merge or
consolidate with or into any other Person, permit any other Person
to merge into or with or consolidate with it or convey, transfer
or lease all or substantially all of its assets in a single
transaction or series of transactions to any Person, except:
(i) any Wholly-Owned Subsidiary may merge or
consolidate with or into Borrower (provided that Borrower
shall be the continuing or surviving corporation) or with or
into any other Wholly-Owned Subsidiary and any Subsidiary may
convey, transfer or lease all or substantially all of its
assets in a single transaction or series of transactions to
Borrower or any Wholly-Owned Subsidiary; and
(ii) any Wholly-Owned Subsidiary may merge or
consolidate with or into any other Person in order to
consummate a Permitted Acquisition so long as the surviving
entity is a Wholly-Owned Subsidiary; and
(iii) Asset Sales permitted by Section 5.2(d) below.
(d) ASSET SALES. Borrower will not, and it will not cause
or permit any Subsidiary to, directly or indirectly, make any
sale, transfer, lease (as lessor), loan or other disposition
(each, an "Asset Sale") of any Property or assets (other than
treasury stock of Borrower), other than:
(i) Asset Sales in the ordinary course of business;
(ii) Asset Sales of Property or assets by a
Subsidiary to Borrower or a Wholly-Owned Subsidiary;
(iii) the sale of all of the capital stock or all or
substantially all of the assets of Prints Plus to an
unrelated third party; and
(iv) the sale of all or all or substantially all of
the assets of Centrics to the Centrics Joint Venture.
(e) SALE AND LEASEBACK TRANSACTIONS. Borrower will not,
and it will not cause or permit any Subsidiary to, enter into any
arrangement, directly or indirectly, whereby Borrower or such
Subsidiary shall in one or more related transactions sell,
transfer or otherwise dispose of any Property owned by Borrower or
such Subsidiary to any Person and then rent or lease, as lessee,
such Property or any part thereof for a period or periods which in
the aggregate would exceed twelve (12) months from the date of
commencement of the lease term.
(f) SALE OR DISCOUNT OF ACCOUNTS. Borrower will not, and
it will not cause or permit any Subsidiary to, sell or discount
(other than prompt payment discounts granted in the ordinary
course of business) any of its notes or accounts receivable or
chattel paper.
(g) TRANSACTIONS WITH AFFILIATES. Except for the
transactions and arrangements described on Schedule 5.02(g)
attached hereto as in effect on the date of this Agreement,
Borrower will not, and it will not cause or permit any Subsidiary
to, enter into or be a party to any transaction or arrangement
with any Affiliate (other than Borrower or a Wholly-Owned
Subsidiary) (including, without limitation, the purchase from,
sale to or exchange of Property with, or the rendering of any
service by or for, any Affiliate), except in the ordinary course
of business and pursuant to the reasonable requirements of
Borrower's or such Subsidiary's business and upon fair and
reasonable terms no less favorable to Borrower or such Subsidiary
than would be obtained in a comparable arm's-length transaction
with a Person not an Affiliate. The provisions of this Section
5.02(g) shall not apply to any arrangements between Borrower or
any of its Subsidiaries and any entity subsequently created to
continue development and licensing of certain of Borrower's
software and related intellectual property; provided that the
terms of such arrangements are determined to be fair and
reasonable from Borrower's point of view by Borrower's Board of
Directors (any such arrangement being herein referred to as a
"Related Party Arrangement").
(h) CHANGES IN NATURE OF BUSINESS. Borrower will not, and
it will not cause or permit any Subsidiary to, engage in any
business if, as a result, the general nature of the business which
would then be engaged in by Borrower and its Subsidiaries,
considered as a whole, would be substantially changed from the
general nature of the business engaged in by Borrower and its
Subsidiaries, considered as a whole, as of the date of this
Agreement.
(i) FISCAL YEAR. Borrower will not, and it will not cause
or permit any Subsidiary to, change its fiscal year.
(j) STOCK REDEMPTIONS AND DISTRIBUTIONS. Borrower will
not declare or incur any liability to make any Distribution in
respect of the capital stock of Borrower; provided, however, that
so long as no Default or Event of Default has occurred and is
continuing or would be created by or result from the payment of
such dividends and/or from such stock redemptions, (i) Borrower
shall be permitted to declare and pay cash dividends on its
capital stock and (ii) Borrower shall be permitted to redeem
shares of its capital stock for cash.
(k) PENSION PLANS. Borrower will not, and it will not
cause or permit any Subsidiary to, (a) permit any condition to
exist in connection with any Pension Plan which might constitute
grounds for the PBGC to institute proceedings to have such Pension
Plan terminated or a trustee appointed to administer such Pension
Plan or (b) engage in, or permit to exist or occur, any other
condition, event or transaction with respect to any Pension
Plan which could result in the incurrence by Borrower, any
Subsidiary or any ERISA Affiliate of any material liability, fine
or penalty.
(l) SUBORDINATED DEBT. Borrower will not make any
payments of principal, interest or other amounts on or with
respect to any of its Subordinated Debt to the extent prohibited
by the subordination provisions governing the same.
(m) RESTRICTED INVESTMENTS. Borrower will not, and it
will not cause or permit any Subsidiary to, directly or
indirectly, make any Restricted Investments.
(n) ACQUISITIONS. Borrower will not, and it will not
cause or permit any Subsidiary to, directly or indirectly, make
any Acquisitions other than Permitted Acquisitions.
(o) SUBSIDIARIES. Borrower will not, and it will not
cause or permit any Subsidiary to, create, form or acquire any
Subsidiaries other than Wholly-Owned Subsidiaries.
(p) LIMITATIONS ON RESTRICTIVE AGREEMENTS. Borrower will
not, and it will not cause or permit any Subsidiary to, enter
into, or permit to exist, any agreement with any Person which
prohibits or limits the ability of Borrower or such Subsidiary, as
the case may be, to (a) pay dividends or make other distributions
or prepay any Indebtedness owed to Borrower and/or any Subsidiary,
(b) make loans or advances to Borrower and/or any Subsidiary, (c)
transfer any of its properties or assets to Borrower and/or any
Subsidiary (other than with respect to assets subject to Liens
permitted by clause (g) of the definition of Permitted Liens) or
(d) create, incur, assume or suffer to exist any Lien upon any of
its property, assets or revenues, whether now owned or hereafter
acquired (other than with respect to assets subject to Liens
permitted by clause (g) of the definition of Permitted Liens);
provided that the foregoing shall not apply to restrictions in
effect on the date of this Agreement contained in agreements
governing Debt outstanding on the date of this Agreement and
listed on Schedule 5.02(p) attached hereto and, if such Debt is
renewed, extended or refinanced, restrictions in the agreements
governing the renewed, extended or refinanced Debt (and successive
renewals, extensions and refinancings thereof) if such
restrictions are no more restrictive in any material respect than
those contained in the agreements governing the Debt being
renewed, extended or refinanced.
(q) FINANCIAL COVENANTS AND COLLATERAL PROVISIONS OF NOTE
PURCHASE AGREEMENTS AND OTHER RESTRICTED AGREEMENTS. Borrower
will not, and it will not cause or permit any Subsidiary to: (i)
enter into any indenture, agreement or other instrument under
which any Debt of Borrower or any Subsidiary may be issued (a
"Restricted Agreement") or (ii) agree to any amendment, waiver,
consent, modification, refunding, refinancing or replacement of
any of the Note Purchase Agreements or any other Restricted
Agreement, in either case, with terms the effect of which is to
(A) include a Financial Covenant which is not contained in this
Agreement, (B) revise or alter any Financial Covenant contained
therein the effect of which is to increase or expand the
restriction on Borrower or any Subsidiary or (C) except for
Permitted Liens, grant collateral for the obligations of Borrower
or any Subsidiary thereunder, unless Borrower or such Subsidiary,
as the case may be, concurrently incorporates herein such
additional, altered or revised Financial Covenant or grant of
collateral (as the case may be). The incorporation of each such
additional Financial Covenant is hereby deemed to occur
automatically and concurrently by reason of the execution of this
Agreement without any further action or the execution of any
additional document by any of the parties to this Agreement (and
Borrower hereby agrees to give the Agent and each Bank prompt
written notice of each such Financial Covenant so incorporated
into this Agreement). Without limiting the foregoing, neither
Borrower nor any Subsidiary, directly or indirectly, will offer
any economic inducement (including, without limitation, any
collateral) to any holder of notes under the Note Purchase
Agreements or to any other Person who is a party to any other
Restricted Agreement for the purpose of inducing such holder or
such other Person to enter into any waiver of any event of default
under the Note Purchase Agreements or such other Restricted
Agreement or event which with the lapse of time or the giving of
notice, or both, would constitute such an event of default, unless
the same such economic inducement has been concurrently offered
and paid on a pro-rata basis (determined with respect to the
aggregate Commitments under this Agreement, whether used or
unused) to all of the Banks (it being understood and agreed that
the offering of such economic inducement to the Banks shall not be
deemed or construed to obligate any such Bank to enter into any
waiver of any Default or Event of Default under this Agreement).
Borrower acknowledges and agrees that compliance with this
covenant will not cure a violation of Section 5.02(b) of this
Agreement or any other covenant contained in this Agreement.
5.03 USE OF PROCEEDS. Borrower hereby represents and
warrants to the Agent and each Bank and covenants and agrees with
the Agent and each Bank that: (a) the proceeds of the Loans will
be used solely (i) for the working capital and general corporate
purposes of Borrower and (ii) to enable Borrower to make loans to
one or more of its Wholly-Owned Subsidiaries for their respective
working capital and general corporate purposes; (b) none of such
proceeds will be used in violation of any applicable law or
regulation; (c) Borrower will not directly or indirectly use the
proceeds of any Loan for the purpose of buying or carrying margin
stock within the meaning of Regulation U of The Board of Governors
of the Federal Reserve System, as amended, other than for the
purpose of financing Borrower's repurchase of shares of common
stock of Borrower; and (d) not more than Twenty-Five Percent (25%)
of the value of the consolidated assets of Borrower and its
Subsidiaries (other than any treasury stock of Borrower) is now,
or will at any time be, represented by margin stock. As used in
this Section, the terms "margin stock" and "purpose of buying or
carrying" shall have the respective meanings ascribed to them in
Regulation U of The Board of Governors of the Federal Reserve
System, as amended.
SECTION 6. EVENTS OF DEFAULT.
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If any of the following (each of the following herein
sometimes called an "Event of Default") shall occur and be
continuing:
6.01 Borrower shall fail to pay any of Borrower's
Obligations constituting interest within five (5) days after the
date the same shall first become due and payable, whether by
reason of demand, maturity, acceleration or otherwise; or
6.02 Borrower shall fail to pay any of Borrower's
Obligations (other than interest) as and when the same shall
become due and payable, whether by reason of demand, maturity,
acceleration or otherwise; or
6.03 Any representation or warranty made Borrower and/or
any other Obligor in this Agreement, in any other Transaction
Document or in any certificate, agreement, instrument or statement
furnished or made or delivered pursuant hereto or thereto or in
connection herewith or therewith, shall prove to have been untrue
or incorrect in any material respect when made or effected; or
6.04 Borrower shall fail to perform or observe any term,
covenant or provision contained in Section 2.01, Section 2.02(f),
Section 5.01(c), 5.01(f), Section 5.01(k), Section 5.01(l),
Section 5.01(m), Section 5.01(o), Section 5.01(p), Section
5.01(q), Section 5.01(r), Section 5.02 or Section 5.03; or
6.05 Borrower shall fail to perform or observe any term,
covenant or provision contained in Section 5.01(a) and any such
failure shall remain unremedied for ten (10) days after the
earlier of (a) written notice of default is given to Borrower by
the Agent or any Bank or (b) any Responsible Officer of Borrower
obtaining knowledge of such default; or
6.06 Borrower shall fail to perform or observe any other
term, covenant or provision contained in this Agreement (other
than those specified in Sections 6.01, 6.02, 6.03, 6.04 or 6.05
above) and any such failure shall remain unremedied for thirty
(30) days after the earlier of (a) written notice of default is
given to Borrower by the Agent or any Bank or (b) any Responsible
Officer of Borrower obtaining knowledge of such default; or
6.07 This Agreement or any other Transaction Document
shall at any time for any reason cease to be in full force and
effect or shall be declared to be null and void by a court of
competent jurisdiction, or if the validity or enforceability
thereof shall be contested or denied by Borrower and/or any other
Obligor, or if the transactions completed hereunder or thereunder
shall be contested by Borrower and/or any other Obligor or if
Borrower and/or any other Obligor shall deny that it has any or
further liability or obligation hereunder or thereunder; or
6.08 Borrower, any other Obligor or any Subsidiary shall
(a) voluntarily commence any proceeding or file any petition
seeking relief under Title 11 of the United States Code or any
other Federal, state or foreign bankruptcy, insolvency,
receivership, liquidation or similar law, (b) consent to the
institution of, or fail to contravene in a timely and appropriate
manner, any such proceeding or the filing of any such petition,
(c) apply for or consent to the appointment of a receiver,
trustee, custodian, sequestrator or similar official of itself or
of a substantial part of its Property or assets, (d) file an
answer admitting the material allegations of a petition filed
against itself in any such proceeding, (e) make a general
assignment for the benefit of creditors, (f) become unable,
admit in writing its inability or fail generally to pay its debts
as they become due or (g) take any corporate or other action for
the purpose of effecting any of the foregoing; or
6.09 An involuntary proceeding shall be commenced or an
involuntary petition shall be filed in a court of competent
jurisdiction seeking (a) relief in respect of Borrower, any other
Obligor or any Subsidiary, or of a substantial part of the
Property or assets of Borrower, any other Obligor or any
Subsidiary, under Title 11 of the United States Code or any other
Federal, state or foreign bankruptcy, insolvency, receivership,
liquidation or similar law, (b) the appointment of a receiver,
trustee, custodian, sequestrator or similar official of Borrower,
any other Obligor or any Subsidiary or of a substantial part of
the Property or assets of Borrower, any other Obligor or any
Subsidiary or (c) the winding-up or liquidation of Borrower, any
other Obligor or any Subsidiary; and such proceeding or petition
shall continue undismissed for thirty (30) consecutive days or an
order or decree approving or ordering any of the foregoing shall
continue unstayed and in effect for thirty (30) consecutive days;
or
6.10 Any Letter of Credit Application shall at any time
for any reason cease to be in full force and effect or shall be
declared to be null and void by a court of competent jurisdiction,
or if the validity or enforceability of any Letter of Credit
Application shall be contested or denied by Borrower, or if
Borrower shall deny that it has any further liability or
obligation under any Letter of Credit Application or if Borrower
shall fail to comply with or observe any of the terms, provisions
or conditions contained in any Letter of Credit Application; or
6.11 Any Guaranty shall at any time for any reason cease to
be in full force and effect or shall be declared to be null and
void by a court of competent jurisdiction, or if the validity or
enforceability of any Guaranty shall be contested or denied by any
Guarantor, or if any Guarantor shall deny that it has any further
liability or obligation under any Guaranty or if any Guarantor
shall fail to comply with or observe any of the terms, provisions
or conditions contained in any Guaranty;
6.12 Borrower, any other Obligor or any Subsidiary shall be
declared by any Bank to be in default on, or pursuant to the terms
of, (a) any other present or future obligation to such Bank,
including, without limitation, any other loan, line of credit,
revolving credit, guaranty or letter of credit reimbursement
obligation or (b) any other present or future agreement purporting
to convey to such Bank a Lien upon any Property or assets of
Borrower, such other Obligor or such Subsidiary, as the case may
be; or
6.13 (a) Borrower, any other Obligor or any Subsidiary
shall default (as principal or as guarantor or other surety) in
the payment of any principal of or premium or make-whole amount or
interest on any Debt (other than the Borrower's Obligations) that
is outstanding in an aggregate principal amount of at least
$5,000,000.00 beyond any period of grace provided with respect
thereto; (b) Borrower, any other Obligor or any Subsidiary shall
be in default in the performance of or compliance with any term,
provision, condition or covenant contained in any agreement,
document or instrument evidencing, securing, guaranteeing the
payment of or otherwise relating to any Debt having an aggregate
outstanding principal balance equal to or in excess of
$5,000,000.00 or any other condition exists, and as a consequence
of such default or condition described in this clause (b) such
Debt has become, or has been declared (or one or more Persons are
entitled to declare such Debt to be), due and payable before its
stated maturity or before its regularly scheduled dates of
payment; or (c) as a consequence of the occurrence or continuation
of any event or condition (other than the passage of time or the
right of the holder of Debt to convert such Debt into equity
interests or a sale of assets or other transaction that is
permitted if made in connection with a repayment of Debt),
Borrower or any Subsidiary has become obligated to purchase or
repay (or one or more Persons are entitled to cause Borrower or
any Subsidiary to purchase or repay) Debt in an aggregate
principal amount of at least $5,000,000.00 before its regular
maturity or before its regularly scheduled dates of payment; or
6.14 Borrower, any other Obligor or any Subsidiary shall
have a judgment in excess of $1,000,000.00 entered against it by a
court having jurisdiction in the premises and such judgment shall
not be appealed in good faith (and execution of such judgment
stayed during such appeal) or satisfied by Borrower, such other
Obligor or such Subsidiary, as the case may be, within the time
period permitted by applicable law for an appeal of such
judgment; or
6.15 The occurrence of a Reportable Event with respect to
any Pension Plan; the filing of a notice of intent to terminate a
Pension Plan by Borrower, any ERISA Affiliate or any Subsidiary;
the institution of proceedings to terminate a Pension Plan by the
PBGC or any other Person; the withdrawal in a "complete
withdrawal" or a "partial withdrawal" as defined in Sections 4203
and 4205, respectively, of ERISA by Borrower, any ERISA Affiliate
or any Subsidiary from any Multi-Employer Plan; or the incurrence
of any material increase in the contingent liability of Borrower
or any Subsidiary with respect to any "employee welfare benefit
plan" as defined in Section 3(1) of ERISA which covers retired
employees and their beneficiaries; or
6.16 The institution by Borrower, any ERISA Affiliate or
any Subsidiary of steps to terminate any Pension Plan if, in order
to effectuate such termination, Borrower, such ERISA Affiliate or
such Subsidiary, as the case may be, would be required to make a
contribution to such Pension Plan, or would incur a liability or
obligation to such Pension Plan, in excess of $1,000,000.00; or
the institution by the PBGC of steps to terminate any Pension
Plan; or
6.17 Any "Event of Default" (as defined therein) shall
occur under or within the meaning of any of the Note Agreements;
or
6.18 The occurrence of any Change of Control Event;
THEN, and in each such event (other than an event described
in Sections 6.08 or 6.09), the Agent may, or if requested in
writing by the Required Banks, the Agent shall, declare that the
obligation of the Banks to make Loans under this Agreement and the
obligation of Firstar to issue Letters of Credit under this
Agreement have terminated, whereupon such obligations of the Banks
and Firstar shall be immediately and forthwith terminated, and the
Agent may, and if requested in writing by the Required Banks, the
Agent shall, declare the entire outstanding principal balance of
and all accrued and unpaid interest on the Notes and all of the
other Loans under this Agreement and all of the other Borrower's
Obligations to be forthwith due and payable, whereupon all of the
unpaid principal balance of and all accrued and unpaid interest on
the Notes and all of the other Loans under this Agreement and all
such other Borrower's Obligations shall become and be immediately
due and payable, without presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived by
Borrower, and the Agent and each of the Banks may exercise any and
all other rights and remedies which they may have under any of the
other Transaction Documents or under applicable law; provided,
however, that upon the occurrence of any event described in
Sections 6.08 or 6.09, the obligation of the Banks to make Loans
under this Agreement and the obligation of Firstar to issue
Letters of Credit under this Agreement shall automatically
terminate and the entire outstanding principal balance of and all
accrued and unpaid interest on the Notes and all of the other
Loans under this Agreement and all of the other Borrower's
Obligations shall automatically become immediately due and
payable, without presentment, demand, protest or further notice of
any kind, all of which are hereby expressly waived by Borrower,
and the Agent and each of the Banks may exercise any and all other
rights and remedies which they may have under any of the other
Transaction Documents or under applicable law.
SECTION 7. AGENT
-----------------
7.01 APPOINTMENT. Firstar Bank Missouri, National
Association is hereby appointed by the Banks as Agent under this
Agreement, the Notes and the other Transaction Documents. The
Agent agrees to act as such upon the express conditions contained
in this Agreement.
7.02 POWERS. The Agent shall have and may exercise such
powers hereunder as are specifically delegated to the Agent by the
terms of this Agreement and the other Transaction Documents,
together with such powers as are reasonably incidental thereto.
The Agent shall have no implied duties to the Banks, nor any
obligation to the Banks to take any action under this Agreement or
any of the other Transaction Documents, except any action
specifically provided by this Agreement or any of the other
Transaction Documents to be taken by the Agent. Without limiting
the generality of the foregoing, the Agent shall not be required
to take any action with respect to any Default or Event of
Default, except as expressly provided in Section 6 or in Section
7.06.
7.03 GENERAL IMMUNITY. Neither the Agent nor any of its
directors, officers, employees, agents or advisors shall be liable
to any of the Banks for any action taken or not taken by it in
connection with this Agreement or any of the other Transaction
Documents (a) with the consent or at the request of the Required
Banks or (b) in the absence of its own gross negligence or willful
misconduct as determined by a court of competent jurisdiction in a
final, nonappealable order.
7.04 NO RESPONSIBILITY FOR LOANS, RECITALS, ETC. Neither
the Agent nor any of its directors, officers, employees, agents or
advisors shall (a) be responsible for or have any duty to
ascertain, inquire into or verify any recitals, reports,
statements, representations or warranties contained in this
Agreement or any of the other Transaction Documents or furnished
pursuant hereto or thereto, (b) be responsible for any Loans or
Letters of Credit hereunder, (c) be bound to ascertain or inquire
as to the performance or observance of any of the terms of
this Agreement or any of the other Transaction Documents, (d) be
responsible for the satisfaction of any condition specified in
Section 3, except receipt of items required to be delivered to the
Agent, (e) be responsible for the validity, effectiveness,
genuineness or enforceability of this Agreement or any of the
other Transaction Documents or (f) be responsible for the
creation, attachment, perfection or priority of any security
interests or liens purported to be granted to the Agent or any of
the Banks pursuant to this Agreement or any of the other
Transaction Documents.
7.05 RIGHT TO INDEMNITY. Notwithstanding any other
provision contained in this Agreement to the contrary, to the
extent Borrower fails to reimburse the Agent pursuant to Section
8.03, Section 8.04 or Section 8.05, or if any Default or Event of
Default shall occur under this Agreement, the Banks shall ratably
in accordance with their respective Pro Rata Shares of the
aggregate principal amount of outstanding Loans indemnify the
Agent and hold it harmless from and against any and all
liabilities, losses (except losses occasioned solely by failure of
Borrower to make any payments or to perform any obligations
required by this Agreement (excepting those described in Sections
8.03, 8.04 and 8.05), the Notes, the Letter of Credit Applications
or any of the other Transaction Documents), costs and/or expenses,
including, without limitation, any liabilities, losses, costs
and/or expenses arising from the failure of any Bank to perform
its obligations hereunder or in respect of this Agreement, and
also including, without limitation, reasonable attorneys' fees and
expenses, which the Agent may incur, directly or indirectly, in
connection with this Agreement, the Notes, the Letter of Credit
Applications or any of the other Transaction Documents, or any
action or transaction related hereto or thereto; provided only
that the Agent shall not be entitled to such indemnification for
any losses, liabilities, costs and/or expenses directly
and solely resulting from its own gross negligence or willful
misconduct as determined by a court of competent jurisdiction in a
final, nonappealable order. This indemnity shall be a continuing
indemnity, contemplates all liabilities, losses, costs and
expenses related to the execution, delivery and performance of
this Agreement, the Notes, the Letter of Credit Applications and
the other Transaction Documents, and shall survive the
satisfaction and payment of the Borrower's Obligations and the
termination of this Agreement.
7.06 ACTION UPON INSTRUCTIONS OF REQUIRED BANKS. The Agent
agrees, upon the written request of the Required Banks, to take
any action of the type specified in this Agreement or any of the
other Transaction Documents as being within the Agent's rights,
duties, powers or discretion. Notwithstanding the foregoing, the
Agent shall be fully justified in failing or refusing to take any
action hereunder, unless it shall first be indemnified to its
satisfaction by the Banks pro rata against any and all
liabilities, losses, costs and expenses (including, without
limitation, attorneys' fees and expenses) which may be incurred by
it by reason of taking or continuing to take any such action,
other than any liability which is directly and solely caused by
the Agent's gross negligence or willful misconduct as determined
by a court of competent jurisdiction in a final, nonappealable
order. The Agent shall in all cases be fully protected in acting,
or in refraining from acting, hereunder in accordance with written
instructions signed by the Required Banks, and such instructions
and any action taken or failure to act pursuant thereto shall be
binding on all of the Banks and on all holders of the Notes. In
the absence of a request by the Required Banks, the Agent shall
have authority, in its good faith discretion, to take or not to
take any action, unless this Agreement or any of the other
Transaction Documents specifically requires the consent of the
Required Banks or of all of the Banks.
7.07 EMPLOYMENT OF AGENTS AND COUNSEL. The Agent may
execute any of its duties as Agent hereunder by or through
employees, agents and attorneys-in-fact and shall not be
answerable to the Banks, except as to money or securities received
by it or its authorized agents, for the default or misconduct of
any such agents or attorneys-in-fact selected by it in good faith
and with reasonable care. The Agent shall be entitled to advice
and opinion of legal counsel concerning all matters pertaining to
the duties of the agency hereby created.
7.08 RELIANCE ON DOCUMENTS; COUNSEL. The Agent shall be
entitled to rely upon any note, notice, consent, certificate,
affidavit, letter, telegram, statement, paper or document believed
by it to be genuine and correct and to have been signed or sent by
the proper person or persons, and, in respect to legal matters,
upon the opinion of legal counsel selected by the Agent.
7.09 MAY TREAT PAYEE AS OWNER. The Agent may deem and
treat the payee of any Note as the owner thereof for all purposes
hereof unless and until a written notice of the assignment or
transfer thereof shall have been filed with the Agent. Any
request, authority or consent of any person, firm or corporation
who at the time of making such request or giving such authority or
consent is the holder of any such Note shall be conclusive and
binding on any subsequent holder, transferee or assignee of such
Note or of any Note issued in exchange therefor.
7.10 AGENT'S REIMBURSEMENT. Each Bank agrees to reimburse
the Agent pro rata in accordance with its Pro Rata Share of the
aggregate principal amount of outstanding Loans for (a) any
out-of-pocket costs and expenses not reimbursed by Borrower for
which the Agent is entitled to reimbursement by the Borrower under
this Agreement or any of the other Transaction Documents and (b)
for any other out-of-pocket costs and expenses incurred by the
Agent on behalf of the Banks in connection with the preparation,
execution, delivery, amendment, modification, extension, renewal
and/or enforcement of this Agreement and/or any of the other
Transaction Documents.
7.11 RIGHTS AS A BANK. With respect to its Commitment, the
Loans made by it and the Notes issued to it, the Agent shall have
the same rights and powers hereunder as any Bank and may exercise
the same as though it were not the Agent, and the terms "Bank" and
"Banks" shall, unless the context otherwise indicates, include the
Agent in its individual capacity. The Agent may accept deposits
from, lend money to, issue letters of credit for the account of
and generally engage in any kind of banking or trust business with
the Borrower and its Subsidiaries and Affiliates as if it were not
the Agent.
7.12 INDEPENDENT CREDIT DECISION. Each Bank acknowledges
that it has, independently and without reliance upon the Agent or
any other Bank and based on the financial statements referred to
in Section 4.04 and such other documents and information as it has
deemed appropriate, made its own credit analysis and decision to
enter into this Agreement and the other Transaction Documents.
Each Bank also acknowledges that it will, independently and
without reliance upon the Agent or any other Bank and based on
such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not
taking action under this Agreement and the other Transaction
Documents.
7.13 RESIGNATION OF AGENT. Subject to the appointment of a
successor Agent, the Agent may resign as Agent for the Banks under
this Agreement and the other Transaction Documents at any time by
thirty (30) days' notice in writing to the Banks and Borrower.
Such resignation shall take effect upon appointment of such
successor Agent. Subject to the consent of Borrower (which
consent shall not be unreasonably withheld or delayed and which
consent shall not be required if any Event of Default shall have
occurred and be continuing), the Required Banks shall have the
right to appoint a successor Agent who shall be entitled to all of
the rights of, and vested with the same powers as, the original
Agent under this Agreement and the other Transaction Documents.
In the event a successor Agent shall not have been appointed
within the thirty (30) day period following the giving of notice
by the Agent, subject to the consent of Borrower (which consent
shall not be unreasonably withheld or delayed and which consent
shall not be required if any Event of Default shall have occurred
and be continuing), the Agent may appoint its own successor.
Resignation by the Agent shall not affect or impair the rights of
the Agent under Sections 7.05 and 7.10 hereof with respect to all
matters preceding such resignation. Any successor Agent must be a
national banking association or a bank chartered in any State of
the United States having a combined capital and surplus of at
least $100,000,000.00.
7.14 DELIVERY OF DOCUMENTS. The Agent agrees to promptly
provide each Bank with copies of (a) this Agreement and the other
Transaction Documents (including any amendments thereto), (b) any
written default notices sent by the Agent to Borrower or any other
Obligor with respect to this Agreement or any of the other
Transaction Documents, (c) any written waivers or consents signed
by the Agent or otherwise sent by the Agent to Borrower or any
other Obligor with respect to this Agreement or any of the other
Transaction Documents, (d) any written notices of default sent by
Borrower, any other Obligor or any Bank to the Agent with respect
to this Agreement or any of the other Transaction Documents and
(e) any written requests for any amendments, waivers or consents
sent to the Agent by Borrower or any other Obligor with respect to
this Agreement or any of the other Transaction Documents. The
Agent agrees to provide each Bank, within seven (7) Domestic
Business Days after written request by such Bank and at such
Bank's expense, a copy of such other information, reports,
certificates and/or other materials prepared by Borrower or
otherwise required by the Transaction Documents and which are in
the possession of the Agent which are reasonably requested by such
Bank in writing.
7.15 DURATION OF AGENCY. The agency established by Section
7.01 hereof shall continue, and Sections 7.01 through and
including this Section 7.15 shall remain in full force and effect,
until all of the Borrower's Obligations shall have been paid in
full and the Banks' commitments to make Loans and/or extend credit
to or for the benefit of the Borrower shall have terminated or
expired.
SECTION 8. GENERAL.
--------------------
8.01 NO WAIVER. No failure or delay by the Agent or any
Bank in exercising any right, remedy, power or privilege under
this Agreement or under any other Transaction Document shall
operate as a waiver thereof; nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The
rights and remedies provided in this Agreement and in the other
Transaction Documents are cumulative and not exclusive of any
rights and/or remedies provided by law. Nothing contained in this
Agreement or any other Transaction Document shall in any way
affect the right of any Bank to exercise any statutory or common
law right of banker's lien or set-off.
8.02 RIGHT OF SET-OFF. Upon the occurrence and during the
continuance of any Event of Default, each Bank is hereby
authorized at any time and from time to time, without notice to
Borrower (any such notice being expressly waived by Borrower) and
to the fullest extent permitted by law, to set-off and apply any
and all deposits (general or special, time or demand, provisional
or final) at any time held by such Bank and any and all other
indebtedness at any time owing by such Bank to or for the credit
or account of Borrower against any and all of Borrower's
Obligations irrespective of whether or not such Bank shall have
made any demand under this Agreement or under any of the other
Transaction Documents and although such obligations may be
contingent or unmatured. Each Bank agrees to promptly notify
Borrower after any such set-off and application made by such Bank,
provided, however, that the failure to give such notice shall not
affect the validity of such set-off and application. The rights
of the Banks under this Section 8.02 are in addition to any other
rights and remedies (including, without limitation, other rights
of set-off) which the Banks may have. Nothing contained in this
Agreement or any other Transaction Document shall impair the right
of any Bank to exercise any right of set-off or counterclaim it
may have against Borrower and to apply the amount subject to such
exercise to the payment of indebtedness of Borrower unrelated to
this Agreement or the other Transaction Documents.
8.03 COST AND EXPENSES. Borrower agrees, whether or not
any Loan is made under this Agreement or any Letter of Credit is
issued under this Agreement, to pay or reimburse the Agent and
each Bank upon demand (a) all reasonable out-of-pocket costs and
expenses and all Attorneys' Fees of the Agent and each Bank in
connection with the preparation, documentation, negotiation and
execution of this Agreement, the Notes, the Letter of Credit
Applications and the other Transaction Documents; provided,
however, that such Attorneys' Fees of Commerce Bank, National
Association shall not exceed the sum of $1,500.00, (b) all
recording, filing and search fees and expenses incurred in
connection with this Agreement and the other Transaction
Documents, (c) all out-of-pocket costs and expenses and all
Attorneys' Fees of the Agent and each Bank in connection with the
(i) the preparation, documentation, negotiation and execution of
any amendment, modification, extension, renewal or restatement of
this Agreement, the Notes, the Letter of Credit Applications
and/or any of the other Transaction Documents, (ii) the
preparation of any waiver or consent under this Agreement or under
any of the other Transaction Documents or (iii) any Default or
Event of Default or alleged Default or Event of Default under this
Agreement, (d) if an Event of Default occurs, all out-of-pocket
costs and expenses and all Attorneys' Fees incurred by the Agent
and each Bank in connection with such Event of Default and
collection and other enforcement proceedings resulting therefrom
and (e) all other Attorneys' Fees incurred by the Agent or any
Bank relating to or arising out of or in connection with this
Agreement or any of the other Transaction Documents. Borrower
further agrees to pay or reimburse the Agent and each Bank for any
stamp or other taxes which may be payable with respect to the
execution, delivery, recording and/or filing of this Agreement,
the Notes, the Letter of Credit Applications or any of the other
Transaction Documents. All of the obligations of Borrower under
this Section 8.03 shall survive the satisfaction and payment of
Borrower's Obligations and the termination of this Agreement.
8.04 ENVIRONMENTAL INDEMNITY. Borrower hereby agrees to
defend and indemnify the Agent and each Bank and hold the Agent
and each Bank harmless from and against any and all losses,
liabilities, damages, injuries, claims, costs and expenses of any
and every kind whatsoever (including, without limitation, court
costs and reasonable attorneys' fees and expenses) which at any
time or from time to time may be paid, incurred or suffered by, or
asserted against, the Agent or any Bank for, with respect to or as
a direct or indirect result of the violation by Borrower or any
Subsidiary of any Environmental Laws; or with respect to, or as a
direct or indirect result of the presence on or under, or the
Release from, properties owned, leased or operated by Borrower
and/or any Subsidiary in the conduct of their respective
businesses into or upon any land, the atmosphere or any
watercourse, body of water or wetland, of any Hazardous Substances
or any other hazardous or toxic waste, substance or constituent or
other substance (including, without limitation, any losses,
liabilities, damages, injuries, claims, costs or expenses asserted
or arising under the Environmental Laws); and the provisions of
and undertakings and indemnification set out in this Section 8.04
shall survive the satisfaction and payment of the Borrower's
Obligations and the termination of this Agreement.
8.05 GENERAL INDEMNITY. In addition to the payment of
expenses pursuant to Section 8.03, whether or not the transactions
contemplated hereby shall be consummated, Borrower hereby agrees
to defend, indemnify, pay and hold the Agent and each Bank and any
holder(s) of the Notes, and the officers, directors, employees,
agents and affiliates of the Agent and each Bank and such
holder(s) (collectively, the "Indemnitees") harmless from and
against any and all other liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, claims,
disbursements, costs and expenses of any kind or nature whatsoever
(including, without limitation, the reasonable fees and
disbursements of counsel for such Indemnitees in connection with
any investigative, administrative or judicial proceeding commenced
or threatened, whether or not such Indemnitees shall be designated
a party thereto), that may be imposed on, incurred by or asserted
against the Indemnitees, in any manner relating to or arising out
of this Agreement, any of the other Transaction Documents, any
other agreement, document or instrument executed and delivered by
Borrower or any other Obligor in connection herewith or therewith
or any commitment letter delivered by the Agent or any Bank to
Borrower, the agreement of the Banks to make the Loans under this
Agreement, the agreement of Firstar to issue Letters of Credit
under this Agreement or the use or intended use of the proceeds of
any Loan or Letter of Credit under this Agreement (collectively,
the "indemnified liabilities"); provided that (a) Borrower shall
have no obligation to an Indemnitee hereunder with respect to
indemnified liabilities directly and solely caused by the gross
negligence or willful misconduct of that Indemnitee as determined
by a court of competent jurisdiction in a final, nonappealable
order and (b) Borrower shall have no obligation to indemnify the
Agent or any Bank with respect to disputes between the Agent and
any one or more of the Banks or with respect to disputes among the
Banks. To the extent that the undertaking to indemnify, pay and
hold harmless set forth in the preceding sentence may be
unenforceable because it is violative of any law or public
policy, Borrower shall contribute the maximum portion that it is
permitted to pay and satisfy under applicable law to the payment
and satisfaction of all indemnified liabilities incurred by the
Indemnitees or any of them. The provisions of the undertakings
and indemnification set out in this Section 8.05 shall survive
satisfaction and payment of the Borrower's Obligations and the
termination of this Agreement.
8.06 AUTHORITY TO ACT. The Agent and each Bank shall be
entitled to act on any notices and instructions (telephonic or
written) believed by the Agent or such Bank in good faith to have
been sent or delivered by an Authorized Person, regardless of
whether such notice or instruction was in fact delivered by an
Authorized Person, and Borrower hereby agrees to defend and
indemnify the Agent and each Bank and hold the Agent and each Bank
harmless from and against any and all losses and expenses, if any,
ensuing from any such action.
8.07 NOTICES. Each notice, request, demand, consent,
confirmation or other communication under this Agreement shall be
in writing and delivered in person or sent by telecopy, recognized
overnight courier or registered or certified mail, return receipt
requested and postage prepaid, to the applicable party at its
address or telecopy number set forth on the signature pages of
this Agreement, or at such other address or telecopy number as any
party hereto may designate as its address for communications under
this Agreement by notice so given. Such notices shall be deemed
effective on the day on which delivered or sent if delivered in
person or sent by telecopy (with answerback confirmation
received), on the first (1st) Domestic Business Day after the day
on which sent, if sent by recognized overnight courier or on the
third (3rd) Domestic Business Day after the day on which mailed,
if sent by registered or certified mail.
8.08 CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL.
BORROWER HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE
JURISDICTION OF ANY MISSOURI STATE COURT SITTING IN THE CITY OR
COUNTY OF ST. LOUIS, MISSOURI AND/OR ANY UNITED STATES OF AMERICA
COURT SITTING IN THE EASTERN DISTRICT OF MISSOURI, EASTERN
DIVISION, AS THE AGENT OR ANY BANK MAY ELECT, IN ANY SUIT, ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
OTHER TRANSACTION DOCUMENT. BORROWER HEREBY IRREVOCABLY AGREES
THAT ALL CLAIMS IN RESPECT TO SUCH SUIT, ACTION OR PROCEEDING MAY
BE HELD AND DETERMINED IN ANY OF SUCH COURTS. BORROWER
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION WHICH BORROWER MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY
SUCH COURT, AND BORROWER FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT
SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM. BORROWER AUTHORIZES THE SERVICE
OF PROCESS UPON BORROWER BY REGISTERED MAIL SENT TO BORROWER AT
ITS ADDRESS DETERMINED PURSUANT TO SECTION 8.07. BORROWER, THE
AGENT AND EACH BANK HEREBY IRREVOCABLY WAIVE THE RIGHT TO TRIAL BY
JURY WITH RESPECT TO ANY ACTION IN WHICH BORROWER AND THE AGENT OR
ANY BANK ARE PARTIES RELATING TO OR ARISING OUT OF OR IN
CONNECTION WITH THIS AGREEMENT AND/OR ANY OTHER TRANSACTION
DOCUMENT.
8.09 GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the substantive laws of the State
of Missouri (without reference to conflict of law principles).
8.10 AMENDMENTS AND WAIVERS. Any provision of this
Agreement, any Note and/or any other Transaction Document to which
Borrower is a party may be amended or waived if, but only if, such
amendment or waiver is in writing and is signed by Borrower and
the Required Banks (and, if the rights or duties of the Agent in
its capacity as Agent are affected thereby, by the Agent);
provided that no such amendment or waiver shall, unless signed by
all of the Banks, (a) increase the Commitment of any Bank, (b)
reduce the principal amount of or rate of interest on any Loan or
any fees under this Agreement (other than any fees relating to the
Letters of Credit other than the Letter of Credit Commitment Fees
and the Letter of Credit Negotiation Fees), (c) postpone the date
fixed for any payment of principal of or interest on any Loan or
any fees under this Agreement, (d) extend the Revolving Credit
Period beyond June 27, 2003, (e) change the percentage of the
Commitments or of the aggregate principal amount of Loans which
shall be required for the Banks or any of them to take any action
or obligations under this Section or any other provision of this
Agreement, (f) change the definition of "Required Banks", (g)
voluntarily release any Obligor, (h) amend Section 2.21 or (i)
amend this Section 8.10.
8.11 REFERENCES; HEADINGS FOR CONVENIENCE. Unless
otherwise specified herein, all references herein to Section
numbers refer to Section numbers of this Agreement, all references
herein to Exhibits "A", "B", "C", "D", "E", "F", "G" and "H" refer
to annexed Exhibits "A", "B", "C", "D", "E", "F", "G" and "H"
which are hereby incorporated herein by reference and all
references herein to Schedules 2.02, 2.03, 4.05, 4.07, 4.08, 4.10,
4.12, 4.17, 4.18, 5.02(f) and, 5.02(p) refer to annexed Schedules
2.02, 2.03, 4.05, 4.07, 4.08, 4.10, 4.12, 4.17, 4.18, 5.02(f) and,
5.02(p) which are hereby incorporated herein by reference. The
Section headings are furnished for the convenience of the parties
and are not to be considered in the construction or interpretation
of this Agreement.
8.12 SUCCESSORS AND ASSIGNS.
(a) The provisions of this Agreement shall be binding upon
and inure to the benefit of the parties hereto and their
respective successors and assigns, except that Borrower may not
assign or otherwise transfer any of its rights or delegate any of
its obligations or duties under this Agreement without the prior
written consent of the Agent and each Bank.
(b) Any Bank may at any time grant to one or more Banks or
other financial institutions (each a "Participant") participating
interests in its Commitment and/or any or all of its Loans. In
the event of any such grant by a Bank of a participating interest
to a Participant, whether or not upon notice to Borrower and the
Agent, such Bank shall remain responsible for the performance of
its obligations under this Agreement, and Borrower and the Agent
shall continue to deal solely and directly with such Bank in
connection with such Bank's rights and obligations under this
Agreement. Any agreement pursuant to which any Bank may grant
such a participating interest to any Person which is not an
affiliate of the granting Bank shall provide that such Bank shall
retain the sole right and responsibility to enforce the
obligations of Borrower under this Agreement and the other
Transaction Documents, including, without limitation, the right to
approve any amendment, modification or waiver of any provision of
this Agreement and/or any other Transaction Document; provided
that such participation agreement may provide that the applicable
Bank will not agree to any amendment, modification or waiver of
this Agreement described in clauses (a), (b) or (c) of Section
8.10 without the consent of the Participant. Borrower agrees that
each Participant shall, to the extent provided in its
participation agreement, be entitled to the benefits of Sections
2.12, 2.13, 2.14, 2.15, 2.16, 2.17, 2.18, 2.19 and 2.20 of this
Agreement with respect to its participating interest, but
Borrower's liability in respect thereof shall not be greater than
its liability thereunder to the Bank granting the applicable
participation.
(c) Any Bank may at any time assign to one or more Banks
or other financial institutions (each an "Assignee") all, or a
proportionate part of all, of its rights and obligations under
this Agreement and its Note in a minimum amount of at least
$5,000,000.00, and such Assignee shall assume such rights and
obligations, pursuant to an Assignment and Assumption Agreement in
substantially the form of Exhibit H attached hereto executed by
such Assignee and such transferor Bank, with (and subject to) the
subscribed consent of Borrower and the Agent, which, in each case,
shall not be unreasonably withheld or delayed; provided, however,
that (i) if any Assignee is an affiliate of such transferor Bank
or, immediately prior to such assignment, a Bank, no consent shall
be required and (ii) if any Event of Default under this Agreement
has occurred and is continuing no consent of Borrower to such
assignment shall be required. Upon execution and delivery of such
instrument and payment by such Assignee to such transferor Bank of
an amount equal to the purchase price agreed between such
transferor Bank and such Assignee, such Assignee shall be a Bank
party to this Agreement and shall have all the rights and
obligations of a Bank with a Commitment as set forth in such
instrument of assumption, and the transferor Bank shall be
released from its obligations under this Agreement to a
corresponding extent, and no further consent or action by any
party shall be required. Upon the consummation of any assignment
pursuant to this subsection (c), the transferor Bank, the Agent
and Borrower shall make appropriate arrangements so that, if
required, new Note(s) are issued to the Assignor and/or the
Assignee, as applicable. In connection with any such assignment,
the transferor Bank shall pay to the Agent an administrative fee
for processing such assignment in the amount of $3,500.00.
(d) Any Bank may at any time assign all or any portion of
its rights under this Agreement and its Notes to secure its
obligations to a Federal Reserve Bank. No such assignment shall
release the transferor Bank from any of its obligations under this
Agreement.
8.13 NO ORAL AGREEMENTS; ENTIRE AGREEMENT. ORAL AGREEMENTS
OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR FROM
ENFORCING REPAYMENT OF A DEBT, INCLUDING PROMISES TO EXTEND OR
RENEW SUCH DEBT, ARE NOT ENFORCEABLE. TO PROTECT BORROWER, THE
AGENT AND THE BANKS FROM MISUNDERSTANDING OR DISAPPOINTMENT, ANY
AGREEMENTS REACHED BY BORROWER, THE AGENT AND THE BANKS COVERING
SUCH MATTERS ARE CONTAINED IN THIS AGREEMENT AND THE OTHER
TRANSACTION DOCUMENTS, WHICH AGREEMENT AND OTHER TRANSACTION
DOCUMENTS ARE A COMPLETE AND EXCLUSIVE STATEMENT OF THE
AGREEMENTS AMONG BORROWER, THE AGENT AND THE BANKS, EXCEPT AS
BORROWER, THE AGENT AND THE BANKS MAY LATER AGREE IN WRITING TO
MODIFY THEM. This Agreement embodies the entire agreement and
understanding between the parties hereto and supersedes all prior
agreements and understandings (oral or written) relating to the
subject matter hereof.
8.14 SEVERABILITY. In the event any one or more of the
provisions contained in this Agreement should be invalid, illegal
or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby.
8.15 COUNTERPARTS. This Agreement may be executed in any
number of counterparts (including telecopy counterparts), each of
which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
8.16 RESURRECTION OF THE BORROWER'S OBLIGATIONS. To the
extent that the Agent or any Bank receives any payment on account
of any of the Borrower's Obligations, and any such payment(s) or
any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside, subordinated and/or
required to be repaid to a trustee, receiver or any other Person
under any bankruptcy act, state or Federal law, common law or
equitable cause, then, to the extent of such payment(s) received,
the Borrower's Obligations or part thereof intended to be
satisfied and any and all Liens upon or pertaining to any Property
of Borrower and/or any other Obligor and theretofore created
and/or existing in favor of the Agent and/or any Bank as security
for the payment of such Borrower's Obligations shall be revived
and continue in full force and effect, as if such payment(s) had
not been received by the Agent or such Bank, as the case may be,
and applied on account of the Borrower's Obligations.
8.17 INDEPENDENCE OF COVENANTS. All of the covenants
contained in this Agreement and the other Transaction Documents
shall be given independent effect so that if a particular action,
event or condition is prohibited by any one of such covenants, the
fact that it would be permitted by an exception to, or otherwise
be in compliance within the provisions of, another covenant shall
not avoid the occurrence of a Default or Event of Default if such
action is taken, such event occurs or such condition exists.
8.18 COLLATERAL. Each of the Banks represents to the Agent
and each other Bank that it in good faith is not relying upon any
"margin stock" (as defined in Regulation U of the Board of
Governors of the Federal Reserve System, as amended) as collateral
in the extension or maintenance of the credit provided for in this
Agreement.
IN WITNESS WHEREOF, Borrower, the Agent and the Banks have
executed this Revolving Credit Agreement as of the 27th day of
June, 2000.
CPI CORP.
/s/ Xxxxx Xxxxxx
-----------------------------------------------------
Xxxxx Xxxxxx
Title: Chief Financial Officer
ADDRESS:
0000 Xxxxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
Telecopy No.: (000) 000-0000
FIRSTAR BANK MISSOURI, NATIONAL ASSOCIATION
/s/ Xxxxxx X. Xxxxxx, Xx.
-----------------------------------------------------
Xxxxxx X. Xxxxxx, Xx.
Title: Vice President
ADDRESS:
Xxx Xxxxxxx Xxxxx
00xx Xxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Large Corporate Accounts
Telecopy No.: (314)
COMMERCE BANK, NATIONAL ASSOCIATION
/s/ Xxxxxx Xxxxxx
-----------------------------------------------------
Xxxxxx Xxxxxx
Title: Assistant Vice President
ADDRESS:
0000 Xxxxxxx Xxxxxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Metro II
Telecopy No.: (000)000-0000
FIRSTAR BANK MISSOURI, NATIONAL ASSOCIATION, as Agent
/s/ Xxxxxx X. Xxxxxx, Xx.
-----------------------------------------------------
Xxxxxx X. Xxxxxx, Xx.
Title: Vice President
ADDRESS:
Xxx Xxxxxxx Xxxxx
00xx Xxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Large Corporate Accounts
Telecopy No.: (314)
SCHEDULE 2.02
Existing Letters of Credit
--------------------------
As of 6/27/00
Days
Dollar Amount Bank Renewal Notice Purpose
------------- ------------- ------- ------- --------------
Stand-by:
$ 164,750 Mercantile 7/1/00 30 days 92-93 American
(Firstar) Motorist Ins.
# 210-2706936 Nondeductible
$ 342,680 Mercantile 7/1/00 30 days 92-93 American
(Firstar) Motorist Ins.
# 210-2706935 Deductible
$ 2,950,000 Mercantile 7/1/00 45 days Traveler's
(Firstar) Insurance
# 210-2707674
Commercial:
None
Foreign Exchange
Contracts:
None
SCHEDULE 2.03
Authorized Persons
------------------
Xxxx X. Xxxxxx - CPI Chairman and Chief Executive Officer
Xxxxxxx Xxxxx - President
Xxxxxxx X. Xxxxxx - Senior Executive Vice President
Xxxxx Xxxxxx - Executive Vice President, Finance and
Chief Financial Officer
Xxxxxxx X. Xxxx - Treasurer
Xxx X. Xxxxxx - Assistant Treasurer
SCHEDULE 4.05
Litigation
----------
1.) SPS INTERNATIONAL HOLDINGS, INC., and SPS ACQUISITION, INC.
("Plaintiffs") v. CPI CORP. ("Defendant") and CPI CORP.
("Counterclaim-Plaintiff") v. SPS INTERNATIONAL HOLDINGS,
INC., SPS ACQUISITION, INC. and AMERICAN SECURITIES CAPITAL
PARTNERS, L.P. ("Counterclaim-Defendants")
Supreme Court of the State of New York, Index No. 99604645
This action arose from termination of Merger Agreement
October 1997.
2.) XXXXXXX XXXXXXXXXX, as Personal Representative of the
Estate of XXXXX XXXXXXXXXX, deceased and on behalf of XXXXXXX
XXXXXXXXXX, individually and XXXXXX XXXXXXXXXX, individually,
("Plaintiffs") v. CONSUMER PROGRAMS HOLDING, INC., CONSUMER
PROGRAMS, INC., CPI CORPORATION, CPI CORP., CONSUMER PROGRAMS
INCORPORATED, RREEF CORPORATION, and XXXX XXXXX XXXXXXX
("Defendants")
Circuit Court of the Seventeenth Judicial Circuit, Broward
County, Florida Case No. 99-005085(07)
GATEWAY FLORIDA PROPERTIES, INC., a foreign corporation and
RREEF MANAGEMENT COMPANY, a Florida corporation
("Plaintiffs") v. CONSUMER PROGRAMS INC., a foreign
corporation and THE TRAVELERS INSURANCE COMPANY, a foreign
corporation ("Defendants")
Circuit Court of the Seventeenth Judicial Circuit, Broward
County, Florida, Case No. 99-013886
Both of the actions arose from the murder of a Sears Portrait
Studio employee and injury to her father in 1997. The
assailant entered a guilty plea.
SCHEDULE 4.07
Tax Matters
-----------
NONE
SCHEDULE 4.08
SUBSIDIARIES
AS OF JUNE 27, 2000
STATE/PROVINCE/ # OF SHARES # OF SHARES
SUBSIDIARIES COUNTRY AUTHORIZED OUTSTANDING HOLDINGS
-------------------------------- ----------------- ----------- ----------- -------------
Consumer Programs, Incorporated Missouri, USA 6,000 50 CPI-100%
("Programs")
d/b/a Sears Portrait Studios
CPI Images L.L.C. Missouri, USA Programs-100%
CPI Research and Development,Inc. Delaware, USA 3,000 1,000 Programs-100%
Xxxxxxxxxxx.xxx, Inc. Missouri, USA 30,000 100 Programs-100%
Consumer Programs Partner,Inc. Delaware, USA 1,000 1,000 Programs-100%
CPI Prints Plus, Inc. ("PP") Delaware, USA 3,000 3,000 CPI-100%
Ridgedale Prints Plus, Inc. Minnesota, USA 100 100 PP-100%
("RPP") d/b/a Prints Plus
Prints Plus,Inc. d/b/a Prints Plus California, USA 60,000 50,000 RPP-100%
CPI Technology Corp. Missouri, USA 3,000 3,000 CPI-100%
CPI Corp. Canada Ontario, Canada 4,000 4 CPI-100%
d/b/a Sears Portrait Studios
CPI Corp. or one of its Subsidiaries is the sole member or general partner, and the holder
of all of the equity, of the following entities: LBP Partnership (MO); Texas Portraits, LP
(DE)
SCHEDULE 4.10
Other Debt, Guaranties and Capitalized Leases
---------------------------------------------
The following information represents Other Debt, Guaranties and
Capitalized Leases of CPI Corp. as of its most recent fiscal
period close, May 27, 2000. No additional short- or long-term
debt, loan or guarantees agreements have been entered into as of
June 27, 2000.
OTHER DEBT
----------
NAME AMOUNT DESCRIPTION
------------------- ------------ -----------------------------
Guardian/Prudential $60,000,000 Senior long-term debt--see
Senior Notes further disclosure in Note A
St. Louis Equity 7,598 Investment in St. Louis
Fund Equity Fund 1990 Limited
Partnership
------------
60,007,598
Insurance costs (344,290) Senior long-term debt--see
------------ further disclosure in Note A
Total as of $59,663,308
May 27, 2000 ============
financial
statements
Note A:
------
The Company has a $60.0 million Senior Note Agreement
(the "Note Agreement") privately placed with two major insurance
companies. The notes issued pursuant to the Note Agreement
mature over a ten-year period with an average maturity age of
seven years and with the first principal payment due in 2001.
Interest on the notes is payable semi-annually at an average
effective fixed rate of 7.46%. The Note Agreement requires the
Company maintain certain financial ratios and comply with certain
restrictive covenants. The Company incurred $591,322 in issuance
costs associated with the private placement of the notes. These
costs are being amortized ratably over the ten-year life of the
notes.
SCHEDULE 4.10
Other Debt, Guaranties and Capitalized Leases (...continued)
---------------------------------------------
Guaranties
----------
1. CPI Corp. guarantees all lines of credits to its
subsidiaries and routinely guarantees leases entered into
by subsidiaries.
2. There are numerous intercompany accounts payable and notes
arising in the ordinary course of business of the Company
and its subsidiaries.
3. Guarantee, dated March 4, 1991, between Fleetwood Square
Joint Venture and CPI Corp.
4. Lease Guaranty, dated May 2, 1991, between Premisys Real
Estate Services, Inc., as agent for The Prudential Insurance
Company of America and CPI Corp.
5. In 1997, the Company completed the disposition of the photo
finishing business to Xxxxxxx Kodak Company ("Kodak").
Many of the leases associated with the photo finishing
business were and remain guaranteed by the Company and
its Subsidiaries. As part of such transaction, Kodak
agreed to indemnify the Company fully from and against any
obligations of the Company under such guarantees to the
extent set forth in the Stock Purchase Agreement, dated
October 2, 1997, among Kodak, Fox Photo, Inc., CPI Corp.,
Consumer Programs Holdings, Inc. and Consumer Programs
Incorporated.
6. The Company is a guarantor of certain leases of Copy USA,
Inc., which leases and the associated guarantee may be in
default following the close of Copy USA, Inc., in March of
1999. CPI Corp. does not believe there will be additional
claims under any Copy USA, Inc. guaranties.
Capitalized Leases
------------------
Lease Agreement, dated February 23, 1999, between ESI Group
and Prints Plus Incorporated. The lease is for the IBM AS/400
with an original lease value of $255,999 for 28 months with a
remaining balance of $112,538 as of May 27, 2000.
SCHEDULE 4.12
Existing Liens
--------------
On September 20, 1995, AJS Design & Contracting Inc. filed
Notice of Lien in the amount of $75,533.98 at Xxxx County,
Georgia. Deed Book is #9126, Page #0110.
We posted a Cash Bond to Discharge Lien on March 27, 1996 after
which time AJS Design & Contracting Inc. filed bankruptcy.
SCHEDULE 4.17
Environmental and Health and Safety Matters
-------------------------------------------
NONE
SCHEDULE 4.18
Existing Investments
--------------------
NONE
SCHEDULE 5.02(g)
Affiliate Transactions
----------------------
NONE
SCHEDULE 5.02(p)
Restrictive Agreements
----------------------
Note Agreements as defined in Section 1. DEFINITIONS of this
Revolving Credit Agreement dated June 27, 2000.
