CONFORMED COPY
$300,000,000
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of June 30, 1998
among
METRIS COMPANIES INC.,
THE LENDERS NAMED HEREIN,
NATIONSBANK, N.A., as Syndication Agent,
DEUTSCHE BANK, as Documentation Agent,
U.S. BANK NATIONAL ASSOCIATION, as Documentation Agent,
BARCLAYS BANK PLC, as Co-Agent,
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as Co-Agent,
and
THE CHASE MANHATTAN BANK, as Administrative Agent
TABLE OF CONTENTS
Page
ARTICLE I.
Definitions 1
SECTION 1.01 Defined Terms 1
SECTION 1.02 Classification of Loans and Borrowings 20
SECTION 1.03 Terms Generally 20
ARTICLE II.
The Credits 21
SECTION 2.01 Commitments 21
SECTION 2.02 Loans and Borrowings 21
SECTION 2.03 Borrowing Procedure 22
SECTION 2.04 Continuances and Conversions of Loans 23
SECTION 2.05 Fees 24
SECTION 2.06 Evidence of Debt; Repayment of Loans 25
SECTION 2.07 Interest on Loans 26
SECTION 2.08 Default Interest 26
SECTION 2.09 Alternate Rate of Interest 27
SECTION 2.10. Termination and Reduction of Commitments 27
SECTION 2.11. Prepayment 28
SECTION 2.12. Reserve Requirements; Change in Circumstances 28
SECTION 2.13. Change in Legality 30
SECTION 2.14. Letters of Credit 31
SECTION 2.15. Indemnity 34
SECTION 2.16. Pro Rata Treatment 35
SECTION 2.17. Sharing of Setoffs 35
SECTION 2.18. Payments 36
SECTION 2.19. Taxes 36
ARTICLE III.
Representations and Warranties 38
SECTION 3.01. Organization; Powers 38
SECTION 3.02. Authorization 38
SECTION 3.03. Enforceability 39
SECTION 3.04. Governmental Approvals 39
SECTION 3.05. Financial Statements 39
SECTION 3.06. No Material Adverse Change 39
SECTION 3.07. Title to Properties; Possession Under Leases 39
SECTION 3.08. Subsidiaries 40
SECTION 3.09. Litigation; Compliance with Laws 40
SECTION 3.10. Agreements 40
SECTION 3.11. Federal Reserve Regulations 40
SECTION 3.12. Investment Company Act; Public Utility
Holding Company Act 41
SECTION 3.13. Use of Proceeds 41
SECTION 3.14. Tax Returns 41
SECTION 3.15. No Material Misstatements 41
SECTION 3.16. Employee Benefit Plans 41
SECTION 3.17. Environmental Matters 42
SECTION 3.18. Security Interests 42
SECTION 3.19. Year 2000 42
ARTICLE IV.
Conditions of Lending 43
SECTION 4.01. Conditions to Closing 43
SECTION 4.02. Conditions to Initial Extensions of Credit 44
SECTION 4.03. Conditions to All Loans 45
ARTICLE V.
Affirmative Covenants 46
SECTION 5.01. Existence; Businesses and Properties 46
SECTION 5.02. Insurance 46
SECTION 5.03. Obligations and Taxes 46
SECTION 5.04. Financial Statements, Reports, etc 47
SECTION 5.05. Litigation and Other Notices 48
SECTION 5.06. Employee Benefits 49
SECTION 5.07. Maintaining Records; Access to Properties
and Inspections 49
SECTION 5.08. Further Assurances 50
SECTION 5.09. Information Regarding Collateral 51
SECTION 5.10. Sale of Accounts 51
SECTION 5.11. Regulatory Capital 51
ARTICLE VI.
Negative Covenants 52
SECTION 6.01. Financial Covenants. 52
SECTION 6.02. Limitations on Indebtedness 53
SECTION 6.03. Liens 54
SECTION 6.04. Sale and Lease-Back Transactions 55
SECTION 6.05. Mergers, Consolidations, and Sales of Assets 56
SECTION 6.06. Investments, Loans, Advances and Guarantees. 56
SECTION 6.07. Restricted Payments; Certain Payments of
Indebtedness 58
SECTION 6.08. Disposition of Assets 58
SECTION 6.09. Transactions with Affiliates 59
SECTION 6.10. Amendment of Material Documents. 59
SECTION 6.11. Limitations on Restrictions on Dividends 59
SECTION 6.12. Limitation on Negative Pledge Clauses 60
SECTION 6.13. Changes in Fiscal Periods 60
SECTION 6.14. Limitations on Lines of Business 60
SECTION 6.15. Certain Matters Related to Accounts 60
ARTICLE VII.
Events of Default 61
ARTICLE VIII.
The Administrative Agent 65
ARTICLE IX.
Miscellaneous 68
SECTION 9.01. Notices 68
SECTION 9.02. Survival of Agreement 68
SECTION 9.03. Binding Effect 68
SECTION 9.04. Successors and Assigns 69
SECTION 9.05. Expenses; Indemnity 71
SECTION 9.06. Right of Setoff 72
SECTION 9.07. Applicable Law 73
SECTION 9.08. Waivers; Amendment 73
SECTION 9.09. Interest Rate Limitation 73
SECTION 9.10. Entire Agreement 74
SECTION 9.11. Waiver of Jury Trial 74
SECTION 9.12. Severability 74
SECTION 9.13. Counterparts 74
SECTION 9.14. Headings 74
SECTION 9.15. Jurisdiction; Consent to Service of Process 74
SECTION 9.16. Confidentiality 75
SECTION 9.17. Effect of Amendment and Restatement of the
Existing Credit Agreement 75
Exhibits
Exhibit A Form of Borrowing Request
Exhibit B Form of Borrower Security Agreement
Exhibit C Form of Assignment and Acceptance
Exhibit D Form of Pledge Agreement
Exhibit E Form of Subsidiary Guaranty
Exhibit F Form of Non-Bank Certificate
Exhibit G Form of Borrowing Base Certificate
Exhibit H Form of Subsidiary Security Agreement
Schedules
Schedule 2.01 Commitments
Schedule 3.08 Subsidiaries
Schedule 3.09 Litigation
Schedule 3.14 Tax Returns
Schedule 3.18 UCC Filings
Schedule 6.03 Liens
Schedule 6.06 Investments
AMENDED AND RESTATED CREDIT AGREEMENT dated as
of June 30, 1998, among METRIS COMPANIES INC., a Delaware
corporation (the "Borrower"), the lenders listed in Schedule 2.01 hereto
(the "Lenders"), NATIONSBANK, N.A., as Syndication Agent (in such
capacity, the "Syndication Agent"), DEUTSCHE BANK, as
documentation agent, U.S. BANK NATIONAL ASSOCIATION, as
documentation agent (collectively in such capacity, the "Documentation
Agents"), BARCLAYS BANK PLC as co-agent, and BANK OF
AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as
co-agent (collectively in such capacity, the "Co-Agents"), and THE
CHASE MANHATTAN BANK, as administrative agent for the Lenders.
In connection with the tax-free distribution (the "Spin-off") to
shareholders of Fingerhut Companies, Inc. ("Fingerhut") of Fingerhut's interest
in the outstanding Capital Stock of the Borrower, the Borrower has requested
the Lenders to extend credit to the Borrower in an aggregate principal amount
of up to $300,000,000, of which (i) $100,000,000 shall be available in the
form of term loans, (ii) $200,000,000 minus the LC Exposure shall be
available in the form of revolving credit loans and (iii) up to $50,000,000
shall be available in the form of letters of credit. The proceeds of all
such borrowings and such letters of credit are to be used by the Borrower and
its subsidiaries to provide working capital and for other general corporate
purposes in the ordinary courseof business, including for permitted business
acquisitions. The Lenders are willing to extend such credit to the Borrower
on the terms and subject to the conditions herein set forth.
Accordingly, the Borrower, the Lenders and the Administrative
Agent agree as follows:
ARTICLE I.
Definitions
SECTION I.01 Defined Terms. As used in this Agreement, the
following terms shall have the meanings specified below:
"ABR Borrowing" shall mean a Borrowing comprised of ABR
Revolving Loans.
"ABR Revolving Loan" shall mean any Revolving Loan bearing
interest at a rate determined by reference to the Alternate Base Rate.
"Accounts" shall mean all accounts (excluding credit cardholder
accounts but not excluding accounts receivable arising therefrom), accounts
receivable, other receivables, contract rights, chattel paper, and related
instruments and documents, insurance claims and proceeds, and notes, whether
now owned or hereafter acquired by the Borrower or any Subsidiary.
"Adjusted Pre-Tax Income" shall mean, for any period,
Consolidated Net Income for such period, plus, without duplication and to the
extent deducted in calculating Consolidated Net Income for such period, the sum
of (a) income tax expense and (b) provisions for loan losses on a managed
basis, and minus, without duplication and to the extent added in calculating
Consolidated Net Income the sum of (i) charge-offs in respect of Managed
Accounts Receivable and (ii) extraordinary gains and gains on securitization
transactions to the extent such gains exceed related fees.
"Administrative Agent" shall mean The Chase Manhattan Bank,
together with its affiliates, as the arranger of the Commitments and as the
agent for the Lenders under this Agreement and the other Loan Documents.
"Administrative Agent Fees" shall have the meaning assigned to
such term in Section 2.05(b).
"Advance Rate" shall mean, at any time, the advance rate percentage
set forth below corresponding to the Receivables Ratio at such time
Receivables Ratio Advance Rate
<0.50% 85.0%
30.50% < 1.50% 90.0%
31.50% 92.5%
; provided that until the earlier of (a) the date that is 90 days after the
Effective Date and (b) the Equity Offering Date the advance rate in respect
of a Receivables Ratio 3 1.50% shall be 93.5%.
"Affiliate" shall mean, when used with respect to a specified
Person, another Person that directly, or indirectly through one or more
intermediaries, Controls or is Controlled by or is under common Control with
the Person specified.
"Alternate Base Rate" shall mean, for any day, a rate per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) equal to the greatest
of(a) the Prime Rate in effect on such day, (b) the Base CD Rate in effect on
such day plus 1% and (c) the Federal Funds Effective Rate in effect on such
day plus 1/2 of 1%. For purposes hereof, "Prime Rate" shall mean the rate of
interest per annum publicly announced from time to time by the Administrative
Agent as its prime rate in effect at its principal office in New York City;
each change in the Prime Rate shall be effective on the date such change is
publicly announced as effective. "Base CD Rate" shall mean the sum of (a)
the product of (i) the Three-Month Secondary CD Rate and (ii) Statutory
Reserves and (b) the Assessment Rate. "Three-Month Secondary CD Rate" shall
mean, for any day, the secondary market rate for three-month certificates of
deposit reported as being in effect on such day (or, if such day shall not be
a Business Day, the next preceding Business Day) by the Board through the
public information telephone line of the Federal Reserve Bank of New York
(which rate will, under the current practices of the Board, be published in
Federal Reserve Statistical Release H.15(519) during the week following such
day), or, if such rate shall not be so reported on such day or such next
preceding Business Day, the average of the secondary market quotations for
three-month certificates of deposit of major money center banks in New York
City received at approximately 10:00 a.m., New York City time, on such day
(or, if such day shall not be a Business Day, on the next preceding Business
Day) by the Administrative Agent from three New York City negotiable
certificate of deposit dealers ofrecognized standing selected by it.
"Federal Funds Effective Rate" shall mean,
for any day, the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by federal
funds brokers, as published on the next succeeding Business Day by the
Federal Reserve Bank of New York, or, if such rate is not so published for
any day which is a Business Day, the average of the quotations for the day of
such transactions received by the Administrative Agent from three Federal
funds brokers of recognized standing selected by it. If for any reason the
Administrative Agent shall have determined (which determination shall be
presumed conclusive absent manifest error but subject to rebuttal by the
Borrower) that it is unable to ascertain the Base CD Rate or the Federal
Funds Effective Rate or both for any reason, including the inability or
failure of the Administrative Agent to obtain sufficient quotations in
accordance with the terms thereof, the Alternate Base Rate shall be
determined without regard to clause (b) or (c), or both, of the
first sentence of this definition, as appropriate, until the circumstances
giving rise to such inability no longer exist. Any change in the Alternate
Base Rate due to a change in the Prime Rate, the Three-Month Secondary CD
Rate or the Federal Funds Effective Rate shall be effective on the effective
date of such change in the Prime Rate, the
Three-Month Secondary CD Rate or the Federal Funds Effective Rate, respectively.
"Applicable Margin and Commitment Fee Percentage" shall mean, (a) with
respect to Term Loans comprising (i) any ABR Borrowing, 1.50% and (ii) any
Eurodollar Borrowing, 2.50% and (b) with respect to the LC Fee, the Revolving
Loans and the Commitment Fee, the applicable percentage per annum set forth
below based upon the ratings by S&P and Xxxxx'x, respectively, applicable on
such date to the Index Debt:
Rating
ABR LIBOR Commitment
Percentage Percentage Fee Percentage
Category 1
BB+/Ba1 0.75% 1.75% .325%
or above
Category 2
BB/Ba2 1.00% 2.00% .375%
Category 3
BB-/Ba3 1.25% 2.25% .500%
Category 4
below B+/B1 1.50% 2.50% .625%
or unrated
For purposes of the foregoing, (i) if at any time either S&P or Xxxxx'x
shall not have in effect a rating for the Index Debt (other than by reason of
the circumstances referred to in the last sentence of this definition), then
Category 4 shall apply; (ii) if the ratings established or
deemed to have been established by S&P or Xxxxx'x for the Index Debt shall
fall within different Categories, the numerically higher Category (with
Category 4 being the numerically highest Category) shall apply; and (iii) if
any rating established or deemed to have been established by
S&P or Xxxxx'x shall be changed (other than as a result of a change in the
rating system of S&P or Xxxxx'x), such change shall be effective as of the
date on which such change is first announced by the applicable rating agency.
Each change in the Applicable Margin and Commitment Fee Percentage shall
apply during the period commencing on the effective date of
such change and ending on the date immediately preceding the effective date
of the next such change. If the rating system of S&P or Xxxxx'x shall
change, or if any such rating agency shall cease to be in the business of
rating corporate debt obligations, the Borrower and the Lenders
shall negotiate in good faith to amend this definition to reflect such
changed rating system or the nonavailability of ratings from such rating
agency (and pending the effectiveness of such amendment, the Applicable
Margin and Commitment Fee Percentage will be determined by
reference to the rating most recently in effect from such rating agency).
"Assessment Rate" shall mean for any date the annual rate (rounded upwards,
if necessary, to the next 1/100 of 1%) most recently estimated by the
Administrative Agent as the then current net annual assessment rate that will
be employed in determining amounts payable by the Administrative Agent to the
Federal Deposit Insurance Corporation (or any successor) for
insurance by such Corporation (or such successor) of time deposits made in
dollars at the Administrative Agent's domestic offices.
"Assignment and Acceptance" shall mean an assignment and acceptance entered
into by a Lender and an assignee, and accepted by the Administrative Agent,
in the form of Exhibit C.
"Available Commitment" shall mean, with respect to any Lender at any time,
the difference between such Lender's Revolving Commitment and its Revolving
Exposure at such time.
"Bank Regulatory Authority" shall mean the Board, the Comptroller of the
Currency, the Federal Deposit Insurance Corporation and all other relevant
bank regulatory authorities (including, without limitation, relevant state
bank regulatory authorities).
"Big Six Accounting Firm" shall mean any of Price Waterhouse & Co., Xxxxxx
Xxxxxxxx & Co., Ernst & Young, KPMG Peat Marwick LLP, Deloitte & Touche and
Coopers & Xxxxxxx or their respective successors.
"Board" shall mean the Board of Governors of the Federal Reserve System of
the United States.
"Borrower Security Agreement" shall mean the Borrower Security Agreement,
substantially in the form of Exhibit B hereto, made by the Borrower in favor
of the Administrative Agent, as such agreement may be amended, supplemented,
modified or restated from time to time as permitted thereby or replaced by a
comparable agreement.
"Borrowing" shall mean Loans of the same Class and Type, made, converted or
continued on the same date and, in the case of Eurodollar Loans, as to which
a single Interest Period is in effect.
"Borrowing Base" shall mean, at any time, an amount equal to the product of
(x) Managed Accounts Receivable times (y) the Advance Rate. The Borrowing
Base at any time shall be determined by reference to the most recent
Borrowing Base Certificate delivered to the Administrative Agent, absent any
error in such Borrowing Base Certificate.
"Borrowing Base Certificate" shall mean a certificate in the form of
Exhibit G or any other form approved by the Administrative Agent, together
with all attachments contemplated thereby.
"Borrowing Request" shall mean a request by the Borrower for a Borrowing in
accordance with Section 2.03.
"Business Day" shall mean any day (other than a day which is a Saturday,
Sunday or legal holiday in the State of New York) on which banks are
permitted to open for business in New York City; provided, however, that,
when used in connection with a Eurodollar Loan, the
term "Business Day" shall also exclude any day on which banks are not open
for dealings in dollar deposits in the London interbank market.
"Capital Lease" shall have the meaning given such term in the definition of
Capital Lease Obligation.
"Capital Lease Obligations" of any Person shall mean the obligations of such
Person to pay rent or other amounts under any lease (a "Capital Lease") of
(or other arrangement conveying the right to use) real or personal property,
or a combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person
under GAAP consistently applied and, for the purposes of this Agreement, the
amount of such obligations at any time shall be the capitalized amount
thereof at such time determined in accordance with GAAP consistently applied.
"Capital Stock": shall mean any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a corporation,
any and all equivalent ownership interests in a Person (other than a
corporation) and any and all warrants, rights or options to purchase any of
the foregoing; provided that Capital Stock shall not include any
certificates or other interests in or issued by a trust or other conduit in
connection with a Receivables Transfer Program.
A "Change in Control" shall be deemed to have occurred if (a) any person
(as such term is used in Sections 13(d) and 14(d) of the Exchange Act) shall
beneficially own (within the meaning of Rule 13d-3 under the Exchange Act)
shares representing more than 30% of the aggregate ordinary voting power
represented by the issued and outstanding Capital Stock of the
Borrower or any Person directly or indirectly Controlling the Borrower, (b)
at any time, individuals who on the Effective Date (after giving effect to
the Spin-off) were directors of the Borrower (together with any replacement
or additional directors nominated or appointed by the majority of directors
then in office) cease to constitute a majority of the Board of Directors of the
Borrower or (c) a "Change of Control" shall occur as defined in the Senior
Note Indenture.
"Class", when used in reference to any Loan or Borrowing, shall refer to
whether such Loan, or the Loans comprising such Borrowing, are Revolving
Loans or Term Loans, and, when used in reference to any Commitment, refers to
whether such Commitment is a Revolving Commitment or a Term Loan Commitment.
"Closing Date" shall have the meaning assigned to such term in Section 4.01.
"Code" shall mean the Internal Revenue Code of 1986, as the same may be
amended from time to time.
"Collateral" shall mean any and all "Collateral", as defined in any
applicable Collateral Document.
"Collateral Documents" shall mean the Borrower Security Agreement, the
Subsidiary Security Agreement and the Pledge Agreement and the executed stock
powers
referred to therein.
"Commitment" shall mean a Revolving Commitment or a Term Loan
Commitment, or any combination thereof (as the context requires).
"Commitment Fee" shall have the meaning assigned to such term in
Section 2.05(a).
"Consolidated Net Income" shall mean, for any period, the net income of the
Borrower and its consolidated Subsidiaries, as determined on a consolidated
basis in conformity with GAAP consistently applied.
"Consolidated Net Worth" shall mean, as at any date of determination, the
consolidated stockholders' equity of the Borrower and its Subsidiaries, as
determined on a consolidated basis in conformity with GAAP consistently applied.
"Consolidated Tangible Net Worth" shall mean, as at any date of
determination, Consolidated Net Worth less (to the extent reflected in
determining Consolidated Net Worth) the sum of (without duplication) (a) all
write-ups subsequent to March 31, 1998 in the book value of
any asset by the Borrower or any of its Subsidiaries, (b) all investments in
Persons that are not consolidated Subsidiaries and (c) all unamortized debt
discount and expense (other than unamortized fees), unamortized deferred
charges (except to the extent offset by deferred income),
goodwill, patents, trademarks, service marks, trade names, anticipated future
benefit of tax loss carry-forwards, copyrights, organization or developmental
expenses and other intangible assets.
"Consolidated Total Assets" shall mean, at any date of determination, the
consolidated total assets of the Borrower and its Subsidiaries, as determined
on a consolidated basis in accordance with GAAP consistently applied.
"Consolidated Total Revenues" shall mean, for any period, the consolidated
total revenues of the Borrower and its Subsidiaries, as determined on a
consolidated basis in conformity with GAAP consistently applied.
"Control" shall have the meaning given such term in Rule 12b-2 under the
Exchange Act and "Controlling" and "Controlled" shall have meanings correlative
thereto.
"Credit Card Bank" shall mean DMCCB and any other Person that issues credit
cards to be formed or acquired by the Borrower or one of the Subsidiaries.
"Credit Event" shall mean each Borrowing, each issuance of a Letter of Credit
and each amendment of a Letter of Credit that increases the principal amount
thereof.
"Credit Loss Reserves" shall mean, at any date of determination, the amount of
reserves for credit losses in respect of Managed Accounts Receivable.
"Cumulative Consolidated Net Income" shall mean, as at any date of
determination, the aggregate net income of the Borrower and its consolidated
Subsidiaries, as determined on a consolidated basis in conformity with GAAP
consistently applied ("Net Operating Income"), for each fiscal quarter of the
Borrower commencing with the fiscal quarter ended April 1, 1998 and ending
with the fiscal quarter most recently ended on or prior to such
date of determination, provided that "Cumulative Consolidated Net Income"
shall be determined exclusive of any fiscal quarter of the Borrower for which
Net Operating Income is less than zero.
"Cumulative Securitization Gains" shall mean cumulative gains on
securitization transactions to the extent such gains exceed cumulative related
fees, to the extent the foregoing are first reflected on a consolidated
balance sheet of the Borrower and its Subsidiaries on or after
March 31, 1998, as determined on a consolidated basis in conformity with GAAP
consistently applied to the extent applicable.
"Default" shall mean any event or condition which upon notice, lapse of time
or both would constitute an Event of Default.
"Depositary Institution" shall mean any Person that is a bank, savings and
loan or similar financial institution.
0 "Designated Debt" shall mean, as at any date, all obligations of the Borrower
and its consolidated Subsidiaries which are (or, as of such date, should be)
accounted for as indebtedness on a consolidated balance sheet of the Borrower in
conformity with GAAP consistently applied whether such obligations are
classified as long-term or short-term under GAAP consistently applied.
"DMCCB" shall mean Direct Merchants Credit Card Bank, National Association,
or its successor.
"dollars" or "$" shall mean lawful money of the United States of America.
"Effective Date" shall have the meaning assigned to such term in Section 4.02.
"Equity Offering Date" shall mean the date on which the first public
offering of the Borrower's common stock is consummated after the Closing Date.
"Equity plus Credit Reserves to Delinquent Assets Ratio" shall mean, at any
time, the ratio of (a) Consolidated Tangible Net Worth (excluding Cumulative
Securitization Gains) plus Credit Loss Reserves at such time to (b) the
amount of Managed Accounts Receivable that are more than 90 days
contractually past due at such time or otherwise non-performing.
"Equity plus Credit Reserves to Managed Accounts Receivable Ratio" shall
mean, at any time, the ratio (expressed as a percentage) of (a) Consolidated
Tangible Net Worth (excluding Cumulative Securitization Gains) at such time
plus Credit Loss Reserves at such time to (b) Managed Accounts Receivable at
such time.
"Equity to Managed Accounts Receivable Ratio" shall mean, at any time, the
ratio (expressed as a percentage) of (a) Consolidated Tangible Net Worth
(excluding Cumulative Securitization Gains) at such time to (b) Managed
Accounts Receivable less Credit Loss Reserves at such time.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
the same may be amended from time to time.
"ERISA Affiliate" shall mean any trade or business (whether or not
incorporated) that is a member of a group of which the Borrower is a member
and that is treated as a single employer under Section 414(b) or (c) of the
Code or, solely for purposes of Section 412 of the Code, that is treated as a
single employer under Section 414 of the Code.
"Eurodollar Borrowing" shall mean a Borrowing composed of Eurodollar Loans.
"Eurodollar Loan" shall mean any Loan bearing interest at a rate determined
by reference to the LIBO Rate in accordance with the provisions of Article II.
"Event of Default" shall have the meaning assigned to such term in Article
VII.
"Excess Spread" shall mean, for any three consecutive Monthly Periods (a
"Test Period"), the average of the Series Excess Spreads determined in
respect of such Test Period for each outstanding series (a "Series") of
certificates relating to the Metris Master Trust (which average shall be
determined on a weighted basis by reference to the average aggregate invested
amount with respect to each such Series). As used in this definition,
"Series Excess Spread" means, with respect to any Series, (a) the average of
the Portfolio Yields for each of the three Monthly Periods in the relevant
Test Period minus (b) the weighted average Base Rates for such
three Monthly Periods.
In addition, as used in this definition, (i) with respect to the series of
certificates captioned 1996-1 or 1998-1 and issued pursuant to the Master
Trust Agreement, "Base Rate" and "Portfolio Yield" shall have the respective
meanings assigned to such terms in the relevant supplement to the Master
Trust Agreement as in effect on the Closing Date (or, in the case of the
1998-1 supplement, the Effective Date), and (ii) with respect to any other
series of certificates relating to the Metris Master Trust, (x) "Base Rate"
shall mean, as of any Business Day, the average of the per annum certificate
rates applicable to such certificates on such Business Day
weighted by the unpaid principal amount of each respective class of
certificates as of such Business Day plus the product of the per annum
servicing fee rate applicable to such series times a fraction the numerator
of which is the amount by reference to which such servicing fee is
payable and the denominator of which is the aggregate invested amount in
respect of such series and (y) "Portfolio Yield" shall mean, for any Monthly
Period, the annualized percentage equivalent of a fraction, the numerator of
which is an amount equal to the sum of the aggregate
amount of available finance charge collections allocated to such series for
such Monthly Period (excluding amounts on deposit in any reserve account
established for such series), calculated on a
cash basis, minus the aggregate amount allocated to such series for such
Monthly Period in respect of defaulted Accounts and amounts required to be
deposited, but not deposited, in any excess funding account in connection
with the adjustment of an Account, and the denominator of which is the
average daily aggregate invested amount of the certificates with respect to
such series for such Monthly Period; provided that, for the purposes of this
clause (ii), the Base Rate and Portfolio Yield will instead be calculated in
the manner set forth in the documentation governing the relevant series of
certificates so long as such terms (or their equivalent) are defined
in such documentation in a manner no less favorable to the Lenders (i.e.,
that would be expected to materially increase the reported Series Excess
Spread) than the relevant definitions set forth in
the Master Trust Agreement.
"Exchange Act" shall mean the Securities Exchange Act of 1934.
"Excluded Subsidiaries" shall mean (i) any Credit Card Bank, (ii) any
Receivables Transfer Subsidiary and (iii) any Subsidiary that is an insurance
company or other regulated financial institution that is not permitted by
applicable law or regulation to guarantee the Obligations.
"FDIA" shall mean the Federal Deposit Insurance Act, as amended from time
to time.
"Fee Letter" shall have the meaning assigned to such term in Section 2.05(d).
"Fees" shall mean the Commitment Fee, the LC Fee, the fees referred to in
Section 2.05(d) and the Administrative Agent Fees.
"Financial Officer" of any corporation shall mean the chief financial
officer, principal accounting officer, treasurer, assistant treasurer or
controller of such corporation.
"Fingerhut" shall have the meaning assigned to such term in the recitals
hereto.
"Funded Senior Debt" shall mean, at any time, without duplication, the sum
of (a) the aggregate principal amount of the Term Loans and the Revolving
Exposures, (b) the amount of utilization under any receivables financing
entered into by or on behalf of the Borrower or any of its Subsidiaries
(including any liquidity facility associated therewith and Indebtedness of the
type referred to in Section 6.03(h)), (c) the amount of deposits held by any
Subsidiary that is a Depositary Institution and (d) the aggregate principal
amount of all outstanding unsecured Indebtedness of the Borrower and its
Subsidiaries (excluding (i) the aggregate principal amount
of unsecured Indebtedness having no scheduled principal payments prior to the
final stated maturity of each of the credit facilities provided for herein
(provided that the exclusion pursuant to this clause (i) shall not exceed the
amount of Consolidated Net Worth at such time) and (ii)
Indebtedness of the Borrower or a Subsidiary Guarantor subordinated to any
Indebtedness outstanding hereunder on terms and conditions that either (A)
qualifies as Subordinated Debt or (B) are satisfactory to the Required
Lenders (as evidenced by their prior written approval).
"GAAP" shall mean generally accepted accounting principles in the United
States.
"Governmental Authority" shall mean any federal, state, local or foreign
court or governmental agency, authority, instrumentality or regulatory body
with jurisdiction over the Borrower, any Subsidiary or any Lender, as the
case may be.
"Guarantee" of or by any Person shall mean, without duplication, any
obligation, contingent or otherwise, of such Person guaranteeing or having
the economic effect of guaranteeing any Indebtedness of any other Person (the
"primary obligor") (or any other obligation of a primary obligor if the
anticipated liability of such guarantor shall have been
reserved against in the financial statements of such guarantor or quantified
in the notes thereto), including third party mortgages or third party
security interests, in any manner, whether directly or indirectly, and
including any obligation of such Person, direct or indirect, (a) to purchase or
pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply
funds for the purchase of) any security for the payment of such Indebtedness
or other obligation, (b) to purchase property, securities or services
for the purpose of assuring the owner of such Indebtedness or other
obligation of the payment of such Indebtedness or other obligation or (c) to
maintain working capital, equity capital or other financial statement
condition or liquidity of the primary obligor for purposes of enabling the
primary obligor to pay such Indebtedness or other obligation; provided that
the term Guarantee shall not include endorsements for collection or deposit,
in either case, in the ordinary course of business. For purposes of
determining compliance with any covenant contained herein, the
"amount" of any Guarantee shall be deemed to equal (i) the lesser of the
amount of the Indebtedness guaranteed or otherwise benefited by such
Guarantee or the maximum amount of the Borrower's or the applicable
Subsidiary's liability with respect to such Guarantee or (ii) if
such Guarantee shall not be a guarantee of Indebtedness, the amount of the
anticipated liability reserved against in connection with such Guarantee in
the most recent balance sheet of the guarantor or any anticipated liability
of the guarantor thereunder quantified in the notes accompanying such balance
sheet.
"Immaterial Subsidiary" shall mean, at any date, any Subsidiary (other than
an Excluded Subsidiary) that represents less than 10% of each of the
following (I) Consolidated Total Assets as of the most recently ended fiscal
quarter of the Borrower, (II) Consolidated Net Worth as of the most recently
ended fiscal quarter of the Borrower and (III) Consolidated Total
Revenues for the four fiscal quarters of the Borrower most recently ended .
"Indebtedness" of any Person shall mean, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid, (d) all obligations
of such Person under conditional sale or other title retention agreements
relating to property or assets purchased by such Person, (e) all obligations
of such Person issued or assumed as the deferred purchase price of property
or services (other than trade payables and payroll expenses,
so long as such trade payables and payroll expenses are incurred in the
ordinary course of business), (f) Indebtedness of others secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on property owned or acquired by such
Person, whether or not the obligations secured thereby have been assumed to
the extent of the amount of such Indebtedness or, if such Indebtedness is
nonrecourse, to the extent of the lesser of the amount of such Indebtedness
and the value of the property securing such Indebtedness, (g) all Guarantees
by such Person of Indebtedness of others, (h) all Capital
Lease Obligations of such Person, and (i) all obligations of such Person,
actual or contingent, as an account party in respect of letters of credit
other than trade letters of credit. Notwithstanding the foregoing,
Indebtedness shall exclude sales of Accounts accounted for as sales under GAAP
and obligations in respect of Rate Protection Agreements. The Indebtedness
of any Person shall include the Indebtedness of any partnership (other than
the Metris Master Trust) in which such Person is a general partner.
"Index Debt" shall mean the senior secured debt of the Borrower outstanding
pursuant to the Revolving Commitments.
"Information Memorandum" shall mean the Confidential Information
Memorandum dated April 1998 relating to the Borrower and the Transactions.
"Insured Subsidiary" shall mean any insured depository institution (as
defined in 12 U.S.C. 1813(c) (or any successor provision), as amended,
re-enacted or redesignated from
time to time), that is controlled (within the meaning of 12 U.S.C. 1841 (or
any successor provision), as amended, re-enacted or redesignated from time to
time) by the Borrower.
"Interest Election Request" shall mean a request by the Borrower to convert
or continue a Revolving Borrowing or Term Borrowing in accordance with
Section 2.04.
"Interest Payment Date" shall mean, with respect to any ABR Loan, the last
day of each March, June, September and December, (b) with respect to any
other Loan, the last day of the Interest Period applicable thereto and, in
the case of a Eurodollar Loan with an Interest Period of more than three
months' duration, each day that would have been an Interest Payment Date for
such Loan had successive Interest Periods of three months' duration, been
applicable to such Loan and, in addition, the date of any refinancing or
conversion of such Loan with or to a Loan of a different Type.
"Interest Period" shall mean as to any Eurodollar Borrowing, the period
commencing on the date of such Borrowing or on the last day of the
immediately preceding Interest Period applicable to such Borrowing, as the
case may be, and ending on the numerically corresponding day (or, if there is
no numerically corresponding day, on the last day) in the
calendar month that is 1, 2, 3 or 6 months thereafter, as the Borrower may
elect, provided that, if any Interest Period would end on a day other than a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless, in the case of Eurodollar Loans only, such
next succeeding Business Day would fall in the next calendar month, in which
case such Interest Period shall end on the next preceding Business Day.
Interest shall accrue from and including the first day of an Interest Period
to but excluding the last day of such Interest Period.
"Issuing Banks" shall mean The Chase Manhattan Bank, NationsBank, N.A., U.S.
Bank National Association and one or more other Lenders which shall be
designated in writing from time to time by the Borrower with the consent of
such Lender and the Administrative Agent, which consent, in the case of the
Administrative Agent, shall not be unreasonably withheld.
"LC Commitment" shall mean, with respect to each Lender, the commitment of
such Lender to acquire participation in Letters of Credit hereunder as set
forth in Section 2.14, in an amount not in excess of the amount set forth
opposite such Lender's name as its LC Commitment in Schedule 2.01, as the
same may be permanently reduced from time to time pursuant to Section 2.10.
"LC Disbursement" shall mean any payment or disbursement made by the Issuing
Bank under or pursuant to a Letter of Credit.
"LC Exposure" shall mean, at any time, the sum of (a) the aggregate undrawn
amount of all Letters of Credit outstanding at such time and (b) the
aggregate amount of all LC Disbursements for which the Lenders have not been
reimbursed pursuant to Section 2.14 (and, when used with respect to a
particular Lender, shall mean such Lender's pro rata share,
based upon its LC Commitment, of such aggregate LC Exposure).
"LC Fee" shall have the meaning set forth in Section 2.05(c).
"Letter of Credit" shall mean any letter of credit issued pursuant to the
terms of Section 2.14(a).
"Leverage Ratio" shall mean, at any time, the ratio of (a) Designated Debt
of the Borrower at such time to (b) Consolidated Tangible Net Worth
(excluding Cumulative Securitization Gains) at such time.
"LIBO Rate" shall mean, with respect to each day during each Interest Period
pertaining to a Eurodollar Borrowing, the rate per annum determined on the
basis of the rate for deposits in dollars for a period equal to such Interest
Period commencing on the first day of such Interest Period appearing on Page
3750 of the Dow Xxxxx Markets service as of 11:00 A.M., London time, two
Business Days prior to the beginning of such Interest Period. In the event
that such rate does not appear on Page 3750 of the Dow Xxxxx Markets service
(or otherwise on such service), the "Eurodollar Base Rate" for purposes of
this definition shall be determined by reference to such other comparable
publicly available service for displaying eurodollar rates as
may be selected by the Administrative Agent or, in the absence of such
availability, by reference to the rate at which the Administrative Agent is
offered dollar deposits at or about 11:00 A.M., New York City time, two
Business Days prior to the beginning of such Interest Period in the
interbank eurodollar market where its eurodollar and foreign currency and
exchange operations are then being conducted for delivery on the first day of
such Interest Period for the number of days comprised therein.
"Lien" shall mean, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, encumbrance, charge or security interest in or on such
asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement relating
to such asset and (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities.
"Liquidity Facility" shall have the meaning assigned to such term in
Section 4.02.
"Loan" shall mean a Term Loan or a Revolving Loan, whether made as a
Eurodollar Loan or as an ABR Loan, as permitted hereby.
"Loan Documents" shall mean this Agreement, the Subsidiary Guaranty and the
Collateral Documents.
"Loan Parties" shall mean the Borrower and each Subsidiary Guarantor.
"Managed Accounts Receivable" shall mean, at any time, the sum for the
Borrower and its Subsidiaries (without duplication) of (a) all on-balance
sheet accounts receivable (determined on a consolidated basis without
duplication in accordance with GAAP) and (b) all owned or securitized
accounts receivable.
"Margin Stock" shall have the meaning given such term under Regulation U.
"Master Trust Agreement" shall mean the Metris Master Trust Pooling and
Servicing Agreement dated as of May 26, 1995 among MRI, DMCCB and Bank of New
York (Delaware), as trustee, as amended, supplemented or otherwise modified
from time to time.
"Material Adverse Effect" shall mean (a) a materially adverse effect on the
business, assets, operations or financial condition of the Borrower and the
Subsidiaries taken as a whole, (b) material impairment of the ability of the
Borrower or any Subsidiary to perform any material obligation under any Loan
Document to which it now is or hereafter becomes a party or (c) material
impairment of any of the material rights of or benefits available to the
Lenders under the Loan Documents.
"Metris Master Trust" shall mean (i) the Metris Master Trust formed
pursuant to the Master Trust Agreement, as amended or supplemented from time
to time, and (ii) any other independent trust formed for the purpose of
acquiring interests in the accounts receivable of the
Borrower or any of its Subsidiaries and issuing certificates of beneficial
interest in such receivables or commercial paper pursuant to a Receivables
Transfer Program.
"Monthly Period" shall mean the period from and including the first day of
each fiscal month of the Borrower to and including the last day of such
fiscal month.
"Moody's" shall mean Xxxxx'x Investors Service, Inc., and its successors.
"MDI" shall mean Metris Direct, Inc., a Minnesota corporation.
"MRI" shall mean Metris Receivables, Inc., a Delaware special purpose
corporation, or its successors.
"Multiemployer Plan" shall mean a multiemployer plan as defined in
Section 4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate
(other than one considered an ERISA Affiliate only pursuant to subsection (m)
or (o) of Section 414 of the Code) is making or accruing an obligation to
make contributions, or has within any of the preceding
five plan years made or accrued an obligation to make contributions.
"Obligations" shall mean (a) the Borrower's obligations in respect of the
due and punctual payment of principal of and interest on the Loans when and
as due, whether at maturity or upon any Interest Payment Date, by
acceleration, upon one or more dates set for prepayment or otherwise, (b) all
amounts required to be paid by the Borrower under Section 2.14 or otherwise in
respect of any LC Disbursement, (c) all Fees, expenses, indemnities,
reimbursements and other obligations, monetary or otherwise, of the Borrower
under this Agreement or any other Loan Document and (d) all obligations,
monetary or otherwise, of each Subsidiary under each Loan Document to which
it is a party.
"PBGC" shall mean the Pension Benefit Guaranty Corporation referred to and
defined in ERISA.
"Permitted Business Acquisition" shall mean any acquisition if immediately
after giving effect thereto: (a) in the case of clause (ii) of Section 6.06
(g), such acquisition is of all or substantially all the assets of, or shares
or other equity interests in, a Person or division or line of
business of a Person (or any subsequent investment made in a previously
acquired Permitted Business Acquisitions), (b) no Default or Event of Default
shall have occurred and be continuing or would result therefrom, (c) all
transactions related thereto shall be consummated in accordance
with applicable laws, (d) any acquired or newly formed corporation,
partnership, association or other business entity shall be a domestic wholly
owned Subsidiary and all actions required to be taken, if any, with respect
to such acquired or newly formed Subsidiary under Section 5.10 shall
have been taken and (e) the Borrower and the Subsidiaries shall be in
compliance, on a pro forma basis after giving effect to such acquisition or
formation, with the covenants contained in Sections 6.01 recomputed as at the
last day of the most recently ended fiscal quarter of the Borrower and the
Subsidiaries as if such acquisition and related financings or other
transactions had occurred on the first day of the period for testing such
compliance, and, if the amount of such investment or series of related
investments exceeds $5,000,000, then the Borrower shall have delivered to the
Administrative Agent an officers' certificate to such effect, together with all
relevant financial information for such Subsidiary or assets.
"Permitted Investments" shall mean:
(a) direct obligations of, or obligations the principal of and interest on
which are unconditionally guaranteed by, the United States of America (or by
any agency thereof to the extent such obligations are backed by the full
faith and credit of the United States of America), in each case maturing
within one year from the date of acquisition thereof;
(b) investments in commercial paper maturing within 270 days from the date
of acquisition thereof and having, at such date of acquisition, a rating from
S&P or from Moody's of at least A1/P1 (or equivalent rating), respectively;
(c) investments in certificates of deposit, banker's acceptances and time
deposits maturing within 180 days from the date of acquisition thereof issued
or guaranteed by or placed with, and money market deposit accounts issued or
offered by, any domestic office of any commercial bank organized under the
laws of the United States of America or any State thereof which has a
combined capital and surplus and undivided profits of not less than
$500,000,000; and
(d) fully collateralized repurchase agreements with a term of not more
than 30 days for securities described in clause (a) above and entered into
with a financial institution satisfying the criteria described in clause (c)
above.
"Person" shall mean any natural person, corporation, limited liability
company, business trust, joint venture, association, company, partnership or
government, or any agency or political subdivision thereof.
"Plan" shall mean any pension plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Code
which is maintained for employees of the Borrower or any ERISA Affiliate.
"Pledge Agreement" shall mean the Pledge Agreement, substantially in the form
of Exhibit D hereto, made by the parties thereto in favor of the
Administrative Agent, as such agreement may be amended, supplemented,
modified or restated from time to time as permitted thereby or replaced by a
comparable agreement.
"Rate Protection Agreements" shall mean interest rate protection or swap
agreements, exchange rate hedging agreements, foreign currency exchange
agreements or other interest, currency or exchange rate hedging, cap or
collar agreements or arrangements.
"Receivables Ratio" shall mean, at any time, the ratio of (a) the product
of (i) Adjusted Pre-Tax Income for the two fiscal quarters of the Borrower
and its Subsidiaries most recently ended times (ii) two to (b) the average of
Managed Accounts Receivable for the two fiscal quarters of the Borrower and
its Subsidiaries most recently ended.
"Receivables Transfer Program" shall mean (i) the structured receivables
program conducted pursuant to that certain Bank Receivables Purchase
Agreement dated as of May 26, 1995, between DMCCB and Fingerhut (whose rights
and obligations were assigned to and assumed by the Borrower pursuant to an
Assignment and Assumption Agreement dated as of September 16, 1996 (the
"Assignment Agreement") between Fingerhut and the Borrower), that
certain Purchase Agreement dated as of May 26, 1995, between Fingerhut (whose
rights and obligations thereunder were assigned to and assumed by the
Borrower under the Assignment Agreement) and MRI and the Master Trust
Agreement, each as amended and supplemented from time to time or replaced by
a similar agreement and related agreements; and (ii) any other program under
which the Borrower and/or any of its Subsidiaries sell or may sell interests
in its Accounts to one or more purchasers on a limited recourse basis as
determined in accordance with GAAP, but excluding any sales of Accounts made
in conjunction with any sale of other assets of the Borrower or any of the
Subsidiaries. Interests in Accounts sold by the Borrower and/or any
of its Subsidiaries under clause (i) above will for all purposes be deemed
sold pursuant to a Receivables Transfer Program as of the date the Accounts
are initially transferred to the relevant Receivables Transfer Subsidiary.
"Receivables Transfer Subsidiary" shall mean (i) MRI and (ii) any other
special purpose Subsidiary formed pursuant to a Receivables Transfer Program.
"Register" shall have the meaning given such term in Section 9.04(d).
"Regulation D" shall mean Regulation D of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
"Regulation U" shall mean Regulation U of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
"Regulation X" shall mean Regulation X of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
"Replacement Letter of Credit" shall mean a letter of credit issued by a
bank the long term debt of which has a rating of at least A by both Moody's
and S&P, for the benefit of the Administrative Agent to secure the repayment
of any future drawings under any outstanding Letters of Credit issued hereunder.
"Reportable Event" shall mean any reportable event as defined in
Section 4043(b) of ERISA or the regulations issued thereunder with respect to
a Plan (other than a Plan maintained by an ERISA Affiliate that is considered
an ERISA Affiliate only pursuant to subsection (m) or (o) of Section 414 of
the Code).
"Required Lenders" shall mean, at any time, Lenders having Revolving
Exposures, Term Loans and unused Commitments representing more than 50% of
the sum of the total Revolving Exposures, Term Loans and unused Commitments
at such time.
"Responsible Officer" of any corporation shall mean any executive officer or
Financial Officer of such corporation and any other officer or similar
official thereof responsible for the administration of the obligations of
such corporation in respect of this Agreement.
"Restricted Payment" shall mean any dividend or other distribution (whether
in cash, securities or other property) with respect to any shares of any
class of Capital Stock of the Borrower or any Subsidiary, or any payment
(whether in cash, securities or other property), including any sinking fund
or similar deposit, on account of the purchase, redemption,
retirement, acquisition, cancellation or termination of any such shares of
Capital Stock of the Borrower or any Subsidiary or any option, warrant or
other right to acquire any such shares of Capital Stock of the Borrower or
any Subsidiary.
"Revolving Borrowing" shall mean a borrowing consisting of simultaneous
Revolving Loans from each of the Lenders.
"Revolving Commitment" shall mean, with respect to each Lender, the
commitment, if any, of such Lender to make Revolving Loans and to acquire a
participation in Letters of Credit, expressed as an amount representing the
maximum aggregate amount of such Lender's Revolving Exposure hereunder, as
such commitment may be (a) reduced from time to time pursuant to Section 2.10
and (b) reduced or increased from time to time pursuant to
assignments by or to such Lender pursuant to Section 9.04. The initial
amount of each Lender's Revolving Commitment is set forth on Schedule 2.01,
or in the Assignment and Acceptance pursuant to which such Lender shall have
assumed its Revolving Commitment, as applicable. The initial aggregate
amount of the Lenders' Revolving Commitments is $200,000,000.
"Revolving Exposure" shall mean, with respect to any Lender at any time,
the sum of the outstanding principal amount of such Lender's Revolving Loans
and its LC Exposure at such time.
"Revolving Lender" means a Lender with a Revolving Commitment or, if the
Revolving Commitments have terminated or expired, a Lender with Revolving
Exposure.
"Revolving Loans" shall mean the revolving loans made by the Lenders to the
Borrower pursuant to Section 2.01. Each Revolving Loan shall be an
Eurodollar Revolving Loan or an ABR Revolving Loan.
"Revolving Maturity Date" shall mean the date that is the third anniversary
of the Closing Date.
"Sale-Leaseback Transaction" shall have the meaning given such term in
Section 6.04.
"Senior Note Indebtedness" shall mean the indebtedness of the Borrower issued
pursuant to the Senior Note Indenture.
"Senior Note Indenture" shall mean the $100,000,000 Indenture governing the
Borrower's Senior Notes due 2004 among the Borrower, the guarantors parties
thereto and the trustee named therein, as the same may be amended,
supplemented, modified or restated from time to time as permitted thereby and
hereby.
"Series" shall have the meaning assigned to such term in the definition of
"Excess Spread."
"S&P" shall mean Standard & Poor's Ratings Services and its successors.
"Spin-off" shall have the meaning assigned to such term in the recitals
hereto.
"Statutory Reserves" shall mean a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the
number one minus the aggregate of the maximum reserve percentages (including
any marginal, special, emergency or supplemental reserves) expressed as a
decimal established by the Board and any other banking authority to which the
Administrative Agent is subject for new negotiable nonpersonal time
deposits in dollars of over $100,000 with maturities approximately equal to
three months. Statutory Reserves shall be adjusted automatically on and as
of the effective date of any change in any reserve percentage.
"Subordinated Debt": any unsecured Indebtedness: (a) no part of the
principal of which is required to be paid (whether by way of mandatory
sinking fund, mandatory redemption, mandatory prepayment or otherwise) prior
to January 1, 2004; (b) the payment of the principal of and interest on which
and other obligations in respect thereof are subordinated to the prior
payment in full of the Obligations on material terms and conditions no less
favorable to the Lenders than the subordination provisions of comparable
subordinated indebtedness entered into by similar borrowers at the time of
incurrence; (c) the rate of interest for which is comparable to
the interest rate on comparable subordinated indebtedness entered into by
similar borrowers at the time of incurrence and (d) for which the covenants
and events of default contained in the related documentation are no more
restrictive in any material respect on the Borrower than the
covenants and events of default contained herein.
"subsidiary" shall mean, with respect to any Person (herein referred to as
the "parent"), any corporation, limited liability company, partnership,
association or other business entity of which securities or other ownership
interests representing more than 50% of the ordinary voting power or more
than 50% of the general partnership or membership interests are,
at the time any determination is being made, owned, controlled or held by the
parent and/or one or more subsidiaries of the parent.
"Subsidiary" shall mean any subsidiary of the Borrower including any
subsidiary of the Borrower created or acquired by the Borrower after the date
hereof other than Metris Master Trust.
"Subsidiary Guarantors" shall mean each Subsidiary of the Borrower party to
the Subsidiary Guaranty.
"Subsidiary Guaranty" shall mean the Guaranty to be executed and delivered by
each Subsidiary of the Borrower other than the Excluded Subsidiaries,
substantially in the form of Exhibit E hereto, as the same may be amended,
supplemented, modified or restated from timeto time as permitted thereby or
replaced by a comparable guaranty.
"Subsidiary Security Agreement" shall mean the Security Agreement to be
executed and delivered by each Subsidiary Guarantor, substantially in the
form of Exhibit H hereto, as the same may be amended, supplemented, modified
or restated from time to time as permitted thereby or replaced by a
comparable guaranty.
"Term Loan" shall mean a Loan made pursuant to clause (a) of Section 2.01.
"Term Loan Commitment" shall mean, with respect to each Lender, the
commitment, if any, of such Lender to make a Term Loan hereunder on the
Effective Date, expressed as an amount representing the maximum principal
amount of the Term Loan to be made by such Lender hereunder, as such
commitment may be (a) reduced from time to time pursuant to Section 2.10 and
(b) reduced or increased from time to time pursuant to assignments
by or to such Lender pursuant to Section 9.04. The initial amount of each
Lender's Term Loan Commitment is set forth on Schedule 2.01, or in the
Assignment and Acceptance pursuant to which such Lender shall have assumed
its Term Loan Commitment, as applicable. The initial
aggregate amount of the Lenders' Term Loan Commitments is $100,000,000.
"Term Loan Lender" shall mean a Lender with a Term Loan Commitment or an
outstanding Term Loan.
"Term Maturity Date" shall mean the date that is the fifth anniversary of the
Closing Date.
"Total LC Commitment" shall mean, at any time, the aggregate amount of the
Lenders' LC Commitments, as in effect at such time.
"Total Revolving Commitment" shall mean, at any time, the aggregate amount of
Revolving Commitments of all the Revolving Lenders, as in effect at such time.
"Transactions" shall have the meaning assigned to such term in Section 3.02.
"Type" when used in respect of any Loan or Borrowing, shall refer to the
Rate by reference to which interest on such Loan or on the Loans comprising
such Borrowing is determined. For purposes hereof, "Rate" shall include the
LIBO Rate and the Alternate Base Rate.
"Withdrawal Liability" shall mean liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION I.02 Classification of Loans and Borrowings. For purposes of this
Agreement, Loans may be classified and referred to by Class (e.g., a
"Revolving Loan") or by Type (e.g., a "Eurodollar Loan") or by Class and Type
(e.g., a "Eurodollar Revolving Loan"). Borrowings also may be classified and
referred to by Class (e.g., a "Revolving Borrowing") or by
Type (e.g., a "Eurodollar Borrowing") or by Class and Type (e.g., a
"Eurodollar Revolving Borrowing").
SECTION I.03 Terms Generally. The definitions in Section 1.01 shall apply
equally to both the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without
limitation". All references herein to Articles, Sections, Exhibits and
Schedules shall be deemed references to Articles and Sections of, and
Exhibits and Schedules to, this Agreement unless the context shall otherwise
equire. All terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; provided
that, if the Borrower notifies the Administrative Agent that the Borrower
requests an amendment to any provision hereof to eliminate the effect of any
change occurring after the date hereof in GAAP or in the application thereof
on the operation of such provision (or if the Administrative Agent
notifies the Borrower that the Required Lenders request an amendment to any
provision hereof for such purpose), regardless of whether any such notice is
given before or after such change in GAAP or in the application thereof, then
such provision shall be interpreted on the basis of GAAP as in effect and
applied immediately before such change shall have become effective until
such notice shall have been withdrawn or such provision amended in accordance
herewith.
ARTICLE II.
The Credits
SECTION II.01 Commitments. Subject to the terms and conditions and relying
upon the representations and warranties herein set forth, each Lender agrees,
severally and not jointly, (a) to make a Term Loan to the Borrower on the
Effective Date in a principal amount not exceeding its Term Loan Commitment
and (b) to make Revolving Loans to the Borrower, at any time and from time to
time on and after the Effective Date and until the earlier of the Revolving
Maturity Date and the termination of the Revolving Commitment of such Lender,
in an aggregate principal amount that will not result in (i) such Lender's
Revolving Exposure exceeding such Lender's Revolving Commitment or (ii) the
aggregate principal amount of Funded Senior Debt at such time exceeding the
Borrowing Base then in effect. The Term Loan Commitments and the
Revolving Commitments of the Lenders are set forth in Schedule 2.01. Within
the foregoing limits and subject to the terms and conditions set forth
herein, the Borrower may borrow, prepay and reborrow Revolving Loans. Amounts
repaid in respect of Term Loans may not be reborrowed.
SECTION II.02 Loans and Borrowings. (a) Each Loan shall be made as part
of a Borrowing consisting of Loans of the same Class and Type made by the
Lenders ratably in accordance with their Commitments of the applicable Class;
provided, however, that the failure of any Lender to make any Loan shall not
in itself relieve any other Lender of its obligation to
lend hereunder (it being understood, however, that no Lender shall be
responsible for the failure of any other Lender to make any Loan required to
be made by such other Lender). The Loans comprising any Borrowing shall be
in an aggregate principal amount which is an integral multiple of $1,000,000
and not less than $5,000,000 (or, if made as an ABR Loan, an aggregate
principal amount equal to the remaining balance of the Available Commitments).
(b) Subject to Section 2.13, each Revolving Borrowing shall be comprised
entirely of Eurodollar Loans or ABR Loans as the Borrower may request
pursuant to Section 2.03. Each Lender at its option may make any Eurodollar
Loan by causing any domestic or foreign branch or Affiliate of such Lender to
make such Loan; provided that any exercise of such option shall not affect
the obligation of the Borrower to repay such Loan in accordance with
the terms of this Agreement. Borrowings of more than one Type and Class may
be outstanding at the same time; provided, however, that the Borrower shall
not be entitled to request any Borrowing which, if made, would result in an
aggregate of more than 10 separate Eurodollar Borrowings of any Lender being
outstanding at any one time. For purposes of the foregoing,
Loans having different Interest Periods, regardless of whether they commence
on the same date, shall be considered separate Loans.
(c) Each Lender shall make each Loan to be made by it hereunder on the
proposed date thereof by wire transfer of immediately available funds to the
Administrative Agent in New York, New York, not later than 2:00 p.m.,
New York City time, and the Administrative Agent shall by 3:00 p.m., New York
City time, credit the amounts so received to the general deposit account of
the Borrower with the Administrative Agent or, if a Borrowing
shall not occur on such date because any condition precedent herein specified
shall not have been met, return the amounts so received to the respective
Lenders. Revolving Loans and Term Loans shall be made by the Lenders pro
rata in accordance with their respective Commitments, subject
to Section 2.16. Unless the Administrative Agent shall have received notice
from a Lender prior to the date of any Borrowing that such Lender will not
make available to the Administrative Agent such Lender's portion of such
Borrowing, the Administrative Agent may assume that such
Lender has made such portion available to the Administrative Agent on the
date of such Borrowing in accordance with this paragraph (c) and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower on such date a corresponding amount. In such event, if a Lender
has not in fact made its share of the applicable Borrowing available to the
Administrative Agent, then the applicable Lender and the Borrower severally
agree to pay to the Administrative Agent forthwith on demand such
corresponding amount with interest thereon, for
each day from and including the date such amount is made available to the
Borrower to but excluding the date of payment to the Administrative Agent, at
(i) in the case of such Lender, the greater of the Federal Funds Effective
Rate and a rate determined by the Administrative Agent in accordance with
banking industry rules on interbank compensation or (ii) in the case of the
Borrower, the interest rate applicable to ABR Loans. If such Lender pays
such amount to the Administrative Agent, then such amount shall constitute
such Lender's Loan included in such Borrowing.
(d) Notwithstanding any other provision of this Agreement, the Borrower
shall not be entitled to request any Eurodollar Borrowing if the Interest
Period requested with respect thereto would end after the Revolving Maturity
Date or the Term Maturity Date, as applicable.
SECTION II.03 Borrowing Procedure. (a) To request a Borrowing, the
Borrower shall hand deliver or telecopy to the Administrative Agent a
borrowing request in the form of Exhibit A hereto (a) in the case of a
Eurodollar Borrowing, not later than 12:00 noon, New York City time, three
Business Days before any such proposed Borrowing and (b) in the
case of an ABR Borrowing, not later than 12:00 noon, New York City time
(except that the Borrower shall use its best efforts to make such request by
11:00 a.m., New York City time), on the day of such proposed Borrowing. Such
notice shall be irrevocable and shall in each case specify (i) whether such
Borrowing is to be of Revolving Loans or Term Loans, a Eurodollar
Borrowing or an ABR Borrowing, (ii) the date of such Borrowing (which shall
be a Business Day) and the amount thereof and (iii) if such Borrowing is to
be a Eurodollar Borrowing, the Interest Period with respect thereto. If no
election as to the Type of Borrowing is specified in any
such notice, then the requested Borrowing shall be an ABR Borrowing. If no
Interest Period with respect to any Eurodollar Borrowing is specified in any
such notice, then the Borrower shall be deemed to have selected an Interest
Period of one month's duration. If the Borrower shall not have given notice
in accordance with this Section 2.03 of its election to continue or convert a
Borrowing prior to the end of the Interest Period in effect for such
Borrowing, then the Borrower shall (unless such Borrowing is repaid at the
end of such Interest Period) be deemed to have given notice of an election to
convert or continue such Borrowing with an ABR Borrowing. The
Administrative Agent shall promptly advise the Lenders of any notice given
pursuant to this Section 2.03 and of each Lender's portion of the requested
Borrowing.
SECTION II.04 Continuances and Conversions of Loans. Each Revolving
Borrowing and Term Loan Borrowing initially shall be of the Type specified in
the applicable Borrowing Request and, in the case of a Eurodollar Borrowing,
shall have an initial Interest Period as specified in such Borrowing Request.
Thereafter, the Borrower may elect to convert such Borrowing to a different
Type or to continue such Borrowing and, in the case of a
Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in
this Section. The Borrower may elect different options with respect to
different portions of the affected Borrowing, in which case each such portion
shall be allocated ratably among the Lenders holding the Loans
comprising such Borrowing, and the Loans comprising each such portion shall
be considered a separate Borrowing. The Borrower shall have the right at any
time upon prior irrevocable notice to the Administrative Agent (i) not later
than 12:00 (noon), New York City time (except that the Borrower shall use its
best efforts to make such request by 11:00 a.m., New York City time), on
the day of conversion, to convert any Eurodollar Borrowing into an ABR
Borrowing, (ii) not later than 12:00 (noon), New York City time, three
Business Days prior to conversion or continuation, to convert any ABR
Borrowing into a Eurodollar Borrowing or to continue any Eurodollar
Borrowing as a Eurodollar Borrowing for an additional Interest Period, and
(iii) not later than 12:00 (noon), New York City time, three Business Days
prior to conversion, to convert the Interest Period with respect to any
Eurodollar Borrowing to another permissible Interest Period,
subject in each case to the following:
(i) each conversion or continuation shall be made pro rata among the
Lenders in accordance with the respective principal amounts of the Loans
comprising the converted or continued Borrowing, as the case may be;
(ii) if less than all the outstanding principal amount of any Borrowing
shall be converted or continued, the aggregate principal amount of such
Borrowing converted or continued shall be an integral multiple of $1,000,000
and not less than $5,000,000;
(iii) if any Eurodollar Borrowing is converted at a time other than the
end of the Interest Period applicable thereto, the Borrower shall pay, upon
demand, any amounts due to the Banks pursuant to Section 2.15;
(iv) any portion of a Borrowing maturing or required to be repaid in
less than one month may not be converted into or continued as a Eurodollar
Borrowing;
(v) any portion of a Eurodollar Borrowing which cannot be converted
into or continued as a Eurodollar Borrowing by reason of clause (iv) above
shall be automatically converted at the end of the Interest Period in effect
for such Borrowing into an ABR Borrowing; and
(vi) no Interest Period may be selected for any Eurodollar Borrowing
that would end after the Revolving Maturity Date or the Term Maturity Date, as
applicable.
Each notice pursuant to this Section 2.04 shall be irrevocable and shall
refer to this Agreement and specify (i) the identity and amount of the
Borrowing that the Borrower requests be converted or continued, (ii) whether
such Borrowing is to be converted to or continued as a Eurodollar Borrowing
or an ABR Borrowing, (iii) if such notice requests a conversion, the date of
such conversion (which shall be a Business Day) and (iv) if such
Borrowing is to be converted to or continued as a Eurodollar Borrowing, the
Interest Period with respect thereto. If no Interest Period is specified in
any such notice with respect to any conversion to or continuation as a
Eurodollar Borrowing, the Borrower shall be deemed to have
selected an Interest Period of one month's duration. The Administrative
Agent shall promptly advise the other Lenders of any notice given pursuant to
this Section 2.04 and of each Lender's portion of any converted or continued
Borrowing. If the Borrower shall not have given notice in accordance with
this Section 2.04 to continue any Borrowing into a subsequent Interest Period
(and shall not otherwise have given notice in accordance with this Section
2.04 to convert such Borrowing), such Borrowing shall, at the end of the
Interest Period applicable thereto (unless repaid pursuant to the terms
hereof), automatically be continued into a new Interest Period as an
ABR Borrowing. Notwithstanding any contrary provision hereof, if an Event of
Default has occurred and is continuing and the Administrative Agent, at the
request of the Required Lenders, so notifies the Borrower, then, so long as
an Event of Default is continuing (i) no outstanding Borrowing may be
converted to or continued as a Eurodollar Borrowing and (ii) unless repaid,
each Eurodollar Borrowing shall be converted to an ABR Borrowing at the end
of the Interest Period applicable thereto.
SECTION II.05 Fees. (a) The Borrower agrees to pay to each Revolving
Lender, through the Administrative Agent, on each March 31, June 30,
September 30 and December 31, and on the date on which the Commitment of such
Lender shall be terminated as provided herein, a commitment fee (the
"Commitment Fee") equal to the Commitment Fee Percentage (as determined in
accordance with the definition of Applicable Margin and Commitment Fee
Percentage) in effect from time to time on the amount of the Available
Commitment of such Lender, during the quarter then ended (or shorter period
commencing with the Closing Date or ending with the Revolving Maturity Date
or any date on which the Revolving Commitment of such Lender shall be
terminated), commencing on the first such date to occur after the date
hereof. The Commitment Fee shall be computed on the basis of the actual
number of days elapsed in a year of 365 or 366 days, as the case may be. The
Commitment Fee due to each Revolving Lender shall commence to accrue on the
Closing Date and shall cease to accrue on the earlier of (I) the Revolving
Maturity Date and (II) the termination of the Revolving Commitment
of such Lender as provided herein.
(b) The Borrower agrees to pay to the Administrative Agent the fees (the
"Administrative Agent Fees") relating to this Agreement at the times and in
the amounts agreed upon in the letter agreement dated April 6, 1998, between
the Borrower and The Chase Manhattan Bank (the "Fee Letter").
(c) The Borrower agrees to pay each Revolving Lender, through the
Administrative Agent, on each March 31, June 30, September 30 and December
31, and on the date on which the Letters of Credit are no longer outstanding,
a fee (the "LC Fee") equal to a percentage per annum equal to the LIBOR
Percentage (as determined in accordance with the definition of Applicable
Margin and Commitment Fee Percentage) in effect on such date on such
Lender's pro rata share, based upon its Revolving Commitment, of the average
daily amount of all Letters of Credit outstanding during the preceding
period. The LC Fee shall be computed on the basis of the actual number of
days elapsed in a year of 365 or 366 days, as the case may be. The LC Fee
due to each Revolving Lender shall commence to accrue on the Closing Date and
shall cease to accrue on the date on which Letters of Credits are no longer
outstanding.
(d) The Borrower shall pay to the applicable Issuing Lender for its own
account a fronting fee of 1/8 of 1% per annum (or any lower rate agreed to by
any Issuing Bank) of the average daily face amount of any Letter of Credit
issued by such Issuing Bank, payable quarterly in arrears on each March 31,
June 30, September 30 and December 31 and on the date on which
the Revolving Commitment of such Lender shall be terminated as provided
herein after the date a Letter of Credit is issued. In addition to the
foregoing fees, the Borrower shall pay or reimburse the Issuing Lender for
such normal and customary costs and expenses as are incurred or charged
by the Issuing Lender in issuing, negotiating, effecting payment under,
amending or otherwise administering any Letter of Credit.
(e) All Fees shall be paid on the dates due, in immediately available
funds, to the Administrative Agent for distribution, if and as appropriate,
among the Lenders. Once paid, none of the Fees shall be refundable under any
circumstances.
SECTION II.06 Evidence of Debt; Repayment of Loans. (a) Each Lender shall
maintain in accordance with its usual practice an account or accounts
evidencing the indebtedness to such Lender resulting from each Loan made by
it from time to time, including the amounts of principal and interest payable
and paid to such Lender from time to time under this Agreement. The
Administrative Agent shall maintain the Register pursuant to Section
9.04(d) in which it will record (i) the amount of each Loan made hereunder,
the Type of each Loan and each Interest Period applicable thereto, (ii) the
amount of any principal or interest due and payable or to become due and
payable from the Borrower to each Lender hereunder and (iii)
the amount of any sum received by the Administrative Agent hereunder from the
Borrower and each Lender's share thereof. The entries made in the Register
and the accounts of each Lender maintained pursuant to this paragraph (a)
shall, to the extent permitted by applicable law, be prima facie evidence of
the existence and amounts of the obligations therein recorded; provided,
however, that the failure of any Lender or the Administrative Agent to
maintain the Register or any accounts or any error therein shall not in any
manner affect the obligations of the Borrower to repay the Loans in
accordance with their terms.
(b) The outstanding principal balance of each Revolving Loan shall be
payable on the Revolving Maturity Date. The Borrower hereby unconditionally
promises to pay (i) to the Administrative Agent for the account of each
Revolving Lender the then unpaid principal amount of each Revolving Loan of
such Revolving Lender on the Revolving Maturity Date, (ii) to the
Administrative Agent for the account of each Term Loan Lender the then unpaid
principal amount of each Term Loan of such Term Loan Lender on the Term
Maturity Date.
(c) Each repayment of a Borrowing shall be applied ratably to the Loans
included in the repaid Borrowing. Repayments of Loans shall be accompanied
by accrued interest on the amount repaid.
SECTION II.07 Interest on Loans. (a) Subject to the provisions of
Sections 2.08 and 2.09, the Loans comprising each Eurodollar Borrowing shall
bear interest (computed on the basis of the actual number of days elapsed
over a year of 360 days) at a rate per annum equal to the LIBO Rate for the
Interest Period in effect for such Borrowing plus the LIBOR Percentage (as
determined in accordance with the definition of Applicable Margin and
Commitment Fee Percentage). Interest on each Eurodollar Borrowing shall be
payable on each applicable Interest Payment Date. The LIBO Rate for each
Interest Period shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error. The
Administrative Agent shall promptly advise the Borrower and each Lender of such
determination.
(b) Subject to the provisions of Section 2.08, the Loans comprising each
ABR Borrowing shall bear interest (computed on the basis of the actual number
of days elapsed over a year of (i) 365 or 366 days, as the case may be,
during any period in which the Alternate Base Rate is based on the Prime
Rate, and (ii) 360 days, during any period in which the Alternate
Base Rate is based on the Base CD Rate or the Federal Funds Effective Rate)
at a rate per annum equal to the Alternate Base Rate plus the ABR Percentage
(as determined in accordance with the definition of Applicable Margin and
Commitment Fee Percentage). Interest on each ABR Borrowing shall be payable
on each applicable Interest Payment Date. The Alternate Base Rate
shall be determined by the Administrative Agent, and such determination shall
be conclusive absent manifest error. The Administrative Agent shall promptly
advise the Borrower and each Lender of such determination.
SECTION II.08 Default Interest. (i) If all or a portion of the principal
amount of any Loan or reimbursement obligation shall not be paid when due
(whether at the stated maturity, by acceleration or otherwise), all
outstanding Loans and reimbursement obligations (whether or
not overdue) shall bear interest at a rate per annum which is equal to (x) in
the case of the Loans, the rate that would otherwise be applicable thereto
pursuant to the foregoing provisions of Section 2.07 plus 2% or (y) in the
case of reimbursement obligations, the rate applicable to ABR
Revolving Loans plus 2%, and (ii) if all or a portion of any interest payable
on any Loan or reimbursement obligation or any commitment fee or other amount
payable hereunder shall not be paid when due (whether at the stated maturity,
by acceleration or otherwise), such overdue amount shall bear interest at a
rate per annum equal to the rate applicable to ABR Loans under the relevant
credit facility plus 2% (or, in the case of any such other amounts that do
not relate to a particular facility, the ABR plus 3.50%), in each case, with
respect to clauses (i) and (ii) above, from the date of such non-payment
until such amount is paid in full (as well after as before
judgment).
SECTION II.09 Alternate Rate of Interest. In the event, and on each
occasion, that on the day two Business Days prior to the commencement of any
Interest Period for a Eurodollar Borrowing the Administrative Agent shall
have determined that dollar deposits in the principal amounts of the
Eurodollar Loans comprising such Borrowing are not generally available in the
London interbank market, or that the rates at which such dollar deposits are
being offered will not adequately and fairly reflect the cost to the Lenders
of making or maintaining Eurodollar Loans during such Interest Period, or
that reasonable means do not exist for ascertaining the LIBO Rate, the
Administrative Agent shall, as soon as practicable thereafter,
give written notice of such determination to the Borrower and the Lenders.
In the event of any such determination, until the Administrative Agent shall
have advised the Borrower and the Lenders that the circumstances giving rise
to such notice no longer exist, any request by the Borrower for a Eurodollar
Borrowing shall be deemed to be a request for an ABR Borrowing.
The Administrative Agent agrees to give written notice to the Borrower
promptly after it determines that the conditions giving rise to any notice
under the first sentence of this paragraph shall no longer be in effect.
Each determination by the Administrative Agent hereunder shall be
presumed conclusive absent manifest error but subject to rebuttal by the
Borrower.
SECTION II.10. Termination and Reduction of Commitments. (a) The
Revolving Commitments and the LC Commitments shall be automatically
terminated on the Revolving Maturity Date. The Term Loan Commitments shall
be automatically terminated at the close of business on the Effective Date.
(b) Upon at least three Business Days' prior irrevocable written notice to
the Administrative Agent, the Borrower may at any time in whole permanently
terminate, or from time to time in part permanently reduce, the Total
Revolving Commitment or the Total LC Commitment; provided that (i) each
partial reduction of the Total Revolving Commitment or the Total LC
Commitment, as the case may be, shall be in an integral multiple of
$1,000,000 and in a minimum principal amount of $5,000,000; (ii) no such
termination or reduction shall be made which would reduce the Total Revolving
Commitment to an amount less than the Revolving Exposure, (iii) no such
termination or reduction shall be made which would reduce the Total Revolving
Commitment below the Total LC Commitment and (iv) no such termination
or reduction shall be made which would reduce the Total LC Commitment below
the LC Exposure.
(c) Each reduction in the Total Revolving Commitment or the Total
LC Commitment hereunder shall be made ratably among the Revolving Lenders in
accordance with their respective Revolving Commitments or LC Commitments, as
applicable. The Borrower shall pay to the Administrative Agent for the
account of the Lenders, on the date of each termination or reduction
hereunder, the Commitment Fee on the amount of the Revolving
Commitments so terminated or reduced accrued through the date of such
termination or reduction.
SECTION II.11. Prepayment. (a) The Borrower shall have the right at any
time and from time to time to prepay any Borrowing, in whole or in part, upon
giving written notice (or telephone notice promptly confirmed by written
notice) to the Administrative Agent:
(i) before 12:00 noon, New York City time, three Business Days prior to
prepayment, in the case of Eurodollar Loans and before 12:00 noon, New York
City time, and (ii) on the day of the proposed prepayment (except that the
Borrower shall use its best efforts to make such request by
11:00 a.m., New York City time), in the case of ABR Loans; provided that each
partial pre-payment shall be in an amount which is an integral multiple of
$1,000,000 and not less than $5,000,000.
(b) On the date of any termination or reduction of the Revolving Commitments
pursuant to Section 2.10(b), the Borrower shall pay or prepay so much of the
Revolving Borrowings as shall be necessary in order that the Revolving
Exposure will not exceed the Total Revolving Commitment after giving effect
to such termination or reduction.
(c) If at any time the amount of Senior Funded Debt shall exceed the
Borrowing Base, the Borrower shall, within 30 days, pay or prepay so much of
the Loans then outstanding, together with accrued interest thereon, or
forthwith deposit cash with the Administrative Agent in such amount, which
cash deposit shall serve as collateral security for the repayment of any
further drawings under the Letters of Credit, so that the sum of the
aggregate amount of the Funded Senior Debt will not exceed the Borrowing Base
after giving effect to such prepayment or collateralization.
(d) Each notice of prepayment shall specify the prepayment date and the
principal amount of each Borrowing (or portion thereof) to be prepaid, shall
be irrevocable and shall commit the Borrower to prepay such Borrowing (or
portion thereof) by the amount stated therein on the date stated therein.
All prepayments under this Section 2.11 shall be subject to
Section 2.15 but otherwise without premium or penalty. All prepayments under
this Section 2.11 shall be accompanied by accrued interest on the principal
amount being prepaid to the date of payment.
SECTION II.12. Reserve Requirements; Change in Circumstances. (a)
Notwithstanding any other provision herein, if after the Closing Date, any
change in applicable law or regulation or in the interpretation or
administration thereof by any Governmental Authority charged with the
interpretation or administration thereof (whether or not having the
force of law) shall change the basis of taxation of payments to any Lender or
such Issuing Bank of the principal of or interest on any Eurodollar Loan made
by such Lender or any Fees or other amounts payable hereunder, including
reimbursement of drawings under the Letters of Credit (other than "Taxes"
covered by Section 2.19 and changes in the rate of tax imposed on the overall
net income of such Lender by any Governmental Authority as a result of a
present or former connection between the jurisdiction of the Governmental
Authority imposing such tax on such Lender (except a connection arising
solely from such Lender having executed, delivered or performed its
obligations or received a payment under, or enforced, this Agreement), or shall
impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for the account of or credit
extended by such Lender, or shall impose on such Lender or the London
interbank market any other condition affecting this Agreement or
any Eurodollar Loan made by such Lender, and the result of any of the
foregoing shall be to increase the cost to such Lender of making or
maintaining any Eurodollar Loan or to reduce the amount of any sum received
or receivable by such Lender hereunder (whether of principal, interest or
otherwise) in respect thereof by an amount deemed by such Lender to be
material, then the Borrower will pay to such Lender upon demand such
additional amount or amounts as will compensate such Lender on an after tax
basis for such additional costs incurred or reduction suffered.
(b) If any Lender shall have determined that the adoption after the
Closing Date of any other law, rule, regulation or guideline regarding
capital adequacy, or any change in any of the foregoing or in the
interpretation or administration of any of the foregoing by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or any lending office of
such Lender) or any Lender's holding company 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
would have the effect of reducing the rate of return on such Lender's capital
or on the capital of such Lender's holding company, if any, as a consequence
of this Agreement or the Loans made by such Lender pursuant hereto to a level
below that which such Lender or such Lender's holding
company could have achieved but for such adoption, change or compliance
(taking into consideration such Lender's policies and the policies of such
Lender's holding company with respect to capital adequacy) by an amount
deemed by such Lender to be material, then from time to time the Borrower
shall pay to such Lender such additional amount or amounts as will
compensate such Lender or such Lender's holding company on an after tax basis
for any such reduction suffered after the date hereof.
(c) A certificate of a Lender setting forth such amount or amounts, along
with the Lender's method of computation of such amounts, as shall be
necessary to compensate such Lender (or participating banks or other entities
pursuant to Section 9.04) as specified in paragraph (a) or (b) above, as the
case may be, shall be delivered to the Borrower and shall be
presumed conclusive absent manifest error but subject to rebuttal by the
Borrower. The Borrower shall pay each Lender the amount shown as due on any
such certificate delivered by it within 10 days of its receipt of the same.
In the event any Lender delivers such a certificate, the
Borrower may, at its own expense, require such Lender to transfer and assign
in whole or in part, without recourse (in accordance with Section 9.04) all
or part of its interests, rights and obligations under this Agreement to an
assignee which shall assume such assigned obligations (which assignee may be
another Lender, if a Lender accepts such assignment); provided that (i)
such assignment shall not conflict with any law, rule or regulation or order
of any court or other Governmental Authority, (ii) the Borrower shall have
received a written consent of the Administrative Agent in the case of an
entity that is not a Lender, which consent shall not unrea-
sonably be withheld, and (iii) the Borrower or such assignee shall have paid
to the assigning Lender in immediately available funds the principal of and
interest accrued to the date of such payment on the Loans made by it
hereunder and all other amounts owed to it hereunder as of
such date. Any Lender claiming any additional amounts payable pursuant to
this Section 2.12 shall use reasonable efforts (consistent with legal and
regulatory restrictions) to file any certificate or document requested by the
Borrower or to change the jurisdiction of its applicable lending office if
the making of such a filing or change would avoid the need for or reduce the
amount of any additional amount which may thereafter accrue and would not, in
the sole
determination of such Lender, be otherwise disadvantageous to such Lender.
(d) Failure on the part of any Lender to demand compensation for any
increased costs or reduction in amounts received or receivable or reduction
in return on capital with respect to any period shall not constitute a waiver
of such Lender's right to demand compensation with respect to such period or
any other period; provided, however, that no Lender shall be entitled to
compensation for any such increased costs or reductions unless it shall have
submitted a certificate under paragraph (c) above with respect thereto not
more than 90 days after the date that such Lender knows that such increased
costs have been incurred or such reduction suffered. Notwithstanding any
other provision of this Section 2.12, no Lender shall demand compensation
for any increased cost or reduction referred to above if it shall not at the
time be the general policy of such Lender to demand such compensation in
similar circumstances under comparable provisions of other credit agreements,
and each Lender shall in good faith endeavor to allocate
increased costs or reductions fairly among all of its affected commitments
and credit extensions (whether or not it seeks compensation from all affected
borrowers). The protection of this Section 2.12 shall be available to each
Lender regardless of any possible contention of the invalidity
or inapplicability of the law, rule, regulation, guideline or other change or
condition which shall have occurred or been imposed.
SECTION II.13. Change in Legality. (a) Notwithstanding any other provision
herein contained, if any change in any law or regulation or in the
interpretation thereof by any Governmental Authority charged with the
administration or interpretation thereof shall make it unlawful for any
Lender to make or maintain any Eurodollar Loan or to give effect to its
obligations as contemplated hereby with respect to any Eurodollar Loan, then,
by written notice to the Borrower and to the Administrative Agent, such
Lender may:
(i) declare that Eurodollar Loans will not thereafter be made by such
Lender hereunder, whereupon any request by the Borrower for a Eurodollar
Borrowing shall, as to such Lender only, be deemed a request for an ABR Loan
unless such declaration shall be subsequently withdrawn; and
(ii) require that all outstanding Eurodollar Loans made by it be
converted to ABR Loans, in which event all such Eurodollar Loans shall be
automatically converted to ABR Loans as of the effective date of such notice
as provided in paragraph (b) below.
In the event any Lender shall exercise its rights under (i) or (ii) above,
all payments and prepayments of principal which would otherwise have been
applied to repay the Eurodollar Loans that would have been made by such
Lender or the converted Eurodollar Loans of such Lender shall instead be
applied to repay the ABR Loans made by such Lender in lieu of, or resulting
from the conversion of, such Eurodollar Loans.
(b) For purposes of this Section 2.13, a notice to the Borrower by any
Lender shall be effective as to each Eurodollar Loan, if lawful, on the last
day of the Interest Period currently applicable to such Eurodollar Loan; in
all other cases such notice shall be effective on the date of receipt by the
Borrower. The Administrative Agent agrees to give written notice to
the Borrower promptly after it determines that the conditions giving rise to
any notice under paragraph (a) above shall no longer be in effect.
(c) Each Lender agrees to use reasonable efforts (consistent with legal and
regulatory restrictions) to file any certificate or document requested by the
Borrower or to change the jurisdiction of its applicable lending office if
the making of such filing or change would enable such Lender to legally make
or maintain any Eurodollar Loan referred to in paragraph (a)of this Section
2.13; provided, however, that (i) such Lender shall not be required to make
such filing or change if, in the sole determination of such Lender, such
`action would be otherwise disadvantageous to such Lender and (ii) until such
time as such Lender shall have determined that it can make or maintain such
Eurodollar Loan, the Lender may take the actions referred to in
Section 2.13(a).
SECTION II.14. Letters of Credit. (a) Subject to the terms and
conditions and relying upon the representations and warranties herein set
forth, each Issuing Bank shall issue and deliver to the Borrower at any time
and from time to time on or after the Effective Date and prior to the fifth
Business Day before the Revolving Maturity Date, Letters of Credit for the
account of the Borrower or any Subsidiary in an aggregate undrawn amount at
any one time outstanding not to exceed $50,000,000; provided that such
Issuing Bank shall not issue any Letter of Credit if, immediately after
giving effect to such issuance, the LC Exposure at such time
would exceed the Total LC Commitment or if the Revolving Exposure would
exceed the Total Revolving Commitment or if the aggregate principal amount of
Senior Funded Debt at such time would exceed the Borrowing Base then in
effect. Each Letter of Credit (x) shall be in form as shall have been agreed
upon in writing by the Borrower, the Administrative Agent and such
Issuing Bank, (y) shall be in a minimum face amount of $2,000 and (z) shall
permit drawings upon the presentation of one or more sight drafts and such
other documents as shall be specified by the Borrower in the applicable
notice delivered pursuant to paragraph (b) below and shall
expire on a date not later than the earlier of (i) the date one year after
the date of the issuance of such Letter of Credit (or, in the case of any
renewal or extension thereof, one year after such renewal or extension) and
(ii) the fifth Business Day prior to the Revolving Maturity Date. The
letters of credit set forth on Schedule 2.14 shall be deemed to be "Letters
of Credit" hereunder at all times such letters of credit are outstanding
after the Effective Date; and each of the issuing banks listed therein shall
be deemed to be the "Issuing Bank" with respect to such Letters of
Credit.
(b) The Borrower shall give such Issuing Bank written or telecopy notice or
notice via computer modem not later than 10:00 a.m., New York City time, one
Business Day (or such shorter period as shall be acceptable to such Issuing
Bank and the Administrative Agent) prior to any proposed issuance of a Letter
of Credit. Each such notice shall refer to this Agreement and shall specify
(i) the date on which such Letter of Credit is to be issued (which
shall be a Business Day), the account party on the Letter of Credit and the
face amount thereof (which shall be an amount in dollars), (ii) the name and
address of the beneficiary, (iii) whether such Letter of Credit shall permit
a single drawing or multiple drawings, (iv) the form of the sight draft and
any other documents required to be presented at the time of any drawing
(together with the exact wording of such documents or copies thereof) and (v)
the expiry date of such Letter of Credit. Such Issuing Bank shall give the
Administrative Agent, which shall in turn give to each Lender, prompt written
or telecopy advice of any notice received from the Borrower
pursuant to this Section 2.14.
(c) By the issuance of a Letter of Credit and without any further action
on the part of such Issuing Bank or the Lenders in respect thereof, such
Issuing Bank hereby grants to each Lender, and each Lender hereby acquires
from such Issuing Bank, a participation in such Letter of Credit equal to
such Lender's pro rata percentage, based upon its LC Commitment, of the face
amount of such Letter of Credit, effective upon the issuance of such Letter
of Credit; provided that no Lender shall be required to acquire
participations in Letters of Credit that would result in its pro rata
percentage, based upon its LC Commitment, of the LC Exposure exceeding its
LC Commitment, as the same may be reduced from time to time in accordance
with Section 2.10. In consideration and in furtherance of the foregoing,
each Lender hereby absolutely and unconditionally agrees severally and not
jointly to pay to the Administrative Agent, on behalf of such
Issuing Bank, in accordance with paragraph (e) below, such Lender's pro rata
percentage, based upon its LC Commitment, of each unreimbursed LC
Disbursement made by such Issuing Bank; provided that the Lenders shall not
be obligated to make any such payment with respect to any
payment or disbursement made under any Letter of Credit as a result of the
gross negligence or wilful misconduct of such Issuing Bank. Notwithstanding
the foregoing, if, as permitted by Section 2.14(f), an Issuing Bank has
separately agreed with the Borrower that the Issuing Bank will be held to a
higher standard of care, such standard shall govern as between the Issuing Bank
and the Lenders.
(d) Each Lender acknowledges and agrees that its acquisition of
participations pursuant to paragraph (c) above in respect of Letters of
Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including the occurrence and continuance
of any Default or Event of Default hereunder, and that each such payment
shall be made without any offset, abatement, withholding or reduction
whatsoever.
(e) Promptly after it shall have ascertained that any draft and any
accompanying documents presented under a Letter of Credit appear to be in
conformity with the terms and conditions of such Letter of Credit, such
Issuing Bank shall give written or telecopy notice to the
Borrower and the Administrative Agent of the receipt and amount of such draft
and the date on which payment thereon will be made. If the Administrative
Agent shall not have received from the Borrower the payment required pursuant
to paragraph (f) by the date and time required by such paragraph, the
Administrative Agent shall promptly notify such Issuing Bank and each
Lender of the LC Disbursement and, in the case of each Lender, its pro rata
percentage, based upon its LC Commitment of such LC Disbursement. Each
Lender shall pay to the Administrative Agent, not later than 2:00 p.m., New
York City time, on such date, such Lender's percentage of such LC
Disbursement, which the Administrative Agent shall promptly pay to such
Issuing Bank. The Administrative Agent will promptly remit to each Lender
such Lender's percentage of any amounts subsequently received by the
Administrative Agent from the Borrower in respect of such LC Disbursement;
provided that amounts so received for the account of any Lender prior to
payment by such Lender of amounts required to be paid by it hereunder in
respect of any LC Disbursement shall be remitted to such Issuing Bank.
(f) If the Issuing Bank shall make any LC Disbursement in respect of a
Letter of Credit, the Borrower shall reimburse such LC Disbursement by paying
to the Administrative Agent an amount equal to such LC Disbursement not later
than 2:00 p.m., New York City time, on the date that such LC Disbursement is
made, if the Borrower shall have received notice of such LC Disbursement
prior to 10:00 a.m., New York City time, on such date, or, if such notice
has not been received by the Borrower prior to such time on such date, then
not later than 2:00 p.m., New York City time, on (i) the Business Day that
the Borrower receives such notice, if such notice is received prior to 10:00
a.m., New York City time, on the day of receipt, or (ii) the Business Day
immediately following the day that the Borrower receives such notice, if such
notice is not received prior to such time on the day of receipt. The
Administrative Agent shall inform the applicable Issuing Bank of any such
payment by the Borrower. The obligations of the Borrower under this
paragraph (f) shall be absolute, unconditional and irrevocable and shall be
satisfied strictly in accordance with their terms irrespective of:
(i) any lack of validity or enforceability of any Letter of Credit;
(ii) the existence of any claim, setoff, defense or other right which
the Borrower or any other Person may at any time have against the
beneficiary under any Letter of Credit, the Administrative Agent, such
Issuing Bank or any other Lender (other than the defense of payment in
accordance with the terms of this Agreement or a defense based on the gross
negligence or wilful misconduct of the Administrative Agent or such
Issuing Bank) or any other Person in connection with this Agreement or any
other transaction;
(iii) any draft or other document presented under a Letter of Credit
proving to be forged, fraudulent, invalid or insufficient in any respect or
any statement therein being untrue or inaccurate in any respect; provided
that payment by such Issuing Bank under such Letter of Credit against
presentation of such draft or document shall not have constituted gross
negligence, wilful misconduct or breached any other standard
agreed to in writing by the applicable Issuing Bank;
(iv) payment by such Issuing Bank under a Letter of Credit against
presentation of a draft or other document which does not comply in any
immaterial respect with the terms of such Letter of Credit; provided that
such payment shall not have constituted gross negligence or wilful
misconduct; or
(v) any other circumstance or event whatsoever, whether or not
similar to any of the foregoing; provided that such other circumstance or
event shall not have been the result of gross negligence or wilful misconduct
of such Issuing Bank or the result of a violation by such Issuing Bank of the
standards of care specified in the Uniform Commercial Code of the State of
New York.
It is understood that in making any payment under a Letter of Credit (x) such
Issuing Bank's exclusive reliance on the documents presented to it under such
Letter of Credit as to any and all matters set forth therein, including
reliance on the amount of any draft presented under such Letter of Credit,
whether or not the amount due to the beneficiary equals the amount
of such draft and whether or not any document presented pursuant to such
Letter of Credit proves to be insufficient in any respect, if such document
on its face appears to be in order, and whether or not any other statement or
any other document presented pursuant to such Letter of Credit
proves to be forged or invalid or any statement therein proves to be
inaccurate or untrue in any respect whatsoever, and (y) any noncompliance in
any immaterial respect of the documents presented under a Letter of Credit
with the terms thereof shall, in either case, not be deemed
wilful misconduct or gross negligence of such Issuing Bank. Notwithstanding
the foregoing, to the extent such Issuing Bank has separately agreed with the
Borrower to a standard of care which varies from that set forth above, such
standard shall govern as between the Borrower and such Issuing Bank.
(g) Each Issuing Bank hereby agrees to share, pro rata in accordance with
its LC Exposure, with all of the Lenders, its security interest in all
documents and goods in which it will have a security interest in connection
with the issuance of any Letter of Credit and to share on the same basis all
amounts recovered by such Issuing Bank in connection with any such
security interest.
SECTION II.15. Indemnity. The Borrower shall indemnify each Lender against
any loss or reasonable expense which such Lender may sustain or incur as a
consequence of (a) any failure by the Borrower to fulfill on the date of any
Borrowing hereunder the applicable conditions set forth in Article IV, (b)
any failure by the Borrower to borrow or to convert or continue any Loan
hereunder after irrevocable notice of such Borrowing, conversion or
continuation has been given pursuant to Section 2.03 or 2.04, (c) any
payment, prepayment or conversion of a Eurodollar Loan required by any other
provision of this Agreement or otherwise made or deemed made on a date other
than the last day of the Interest Period applicable thereto or
(d) the occurrence of any Event of Default, including, in each such case, any
loss or reasonable expense sustained or incurred or to be sustained or
incurred in liquidating or employing deposits from third parties acquired to
effect or maintain such Loan or any part thereof as a Eurodollar
Loan. Such loss or reasonable expense shall include an amount equal to the
excess, if any, as reasonably determined by such Lender, of (i) its cost of
obtaining the funds for the Loan being paid, prepaid, converted, continued or
not borrowed (based on the LIBO Rate) for the period from the date of such
payment, prepayment or failure to borrow to the last day of the Interest
Period for such Loan (or, in the case of a failure to borrow, the Interest
Period for such Loan which would have commenced on the date of such failure)
over (ii) the amount of interest (as reasonably determined by such Lender)
that would be realized by such Lender in reemploying the
funds so paid, prepaid or not borrowed for such period or Interest Period, as
the case may be. A certificate of any Lender setting forth any amount or
amounts which such Lender is entitled to receive pursuant to this Section
2.15 and the method of calculation employed by such Lender
shall be delivered to the Borrower and shall be presumed conclusive absent
manifest error but subject to rebuttal by the Borrower.
SECTION II.16. Pro Rata Treatment. Except as required under Section 2.13,
each Borrowing, each payment or prepayment of principal of any Borrowing,
each payment of interest on the Loans, each payment of the Commitment Fee,
each payment of the LC Fees and each reduction of the Revolving Commitments
shall be allocated pro rata among the Lenders in accordance with their
respective Commitments (or, if such Commitments shall have expired or
been terminated, in accordance with the respective principal amounts of their
outstanding Loans). Each Lender agrees that in computing such Lender's
portion of any Borrowing to be made hereunder, the Administrative Agent may,
in its discretion, round each Lender's percentage of
such Borrowing to the next higher or lower whole dollar amount.
SECTION II.17. Sharing of Setoffs. Each Lender agrees that if it shall,
through the exercise of a right of banker's lien, setoff or counterclaim
against the Borrower, or pursuant to a secured claim under Section 506 of
Title 11 of the United States Code or other security or interest arising
from, or in lieu of, such secured claim, received by such Lender under any
applicable bankruptcy, insolvency or other similar law or otherwise, or by
any other means, obtain payment (voluntary or involuntary) in respect of any
Revolving Loan, Term Loans and participations in LC Disbursements as a result
of which the unpaid principal portion of the aggregate amount of its
Revolving Loans, Term Loans and participations in LC Disbursements
shall be proportionately less than the unpaid principal portion of the
Revolving Loans, Term Loans and participations in LC Disbursements of any
other Lender, it shall be deemed simultaneously to have purchased from such
other Lender at face value, and shall promptly pay to such other Lender the
purchase price for, a participation in the Revolving Loans, Term Loans
and participations in LC Disbursements of such other Lender, so that the
aggregate unpaid principal amount of the Revolving Loans, Term Loans and
participations in LC Disbursements and participations in Revolving Loans,
Term Loans and participations in LC Disbursements held
by each Lender shall be in the same proportion to the aggregate unpaid
principal amount of all Revolving Loans, Term Loans and participations in LC
Disbursements then outstanding as the principal amount of its Revolving
Loans, Term Loans and participations in LC Disbursements, prior to such
exercise of banker's lien, setoff or counterclaim or other event was to the
principal amount of all Revolving Loans, Term Loans and participations in LC
Disbursements, out-standing prior to such exercise of banker's lien, setoff
or counterclaim or other event; provided that, if any such purchase or
purchases or adjustments shall be made pursuant to this Section 2.17
and the payment giving rise thereto shall thereafter be recovered, such
purchase or purchases or adjustments shall be rescinded to the extent of such
recovery and the purchase price or prices or adjustment restored without
interest. The Borrower expressly consents to the foregoing arrange-
ments and agrees that any Lender holding a participation in a Revolving Loan,
Term Loan or participation in LC Disbursements, deemed to have been so
purchased may exercise any and all rights of banker's lien, setoff or
counterclaim with respect to any and all moneys owing by the
Borrower to such Lender by reason thereof as fully as if such Lender had made
a Revolving Loan, Term Loan or participation in LC Disbursements directly to
the Borrower in the amount of such participation.
SECTION II.18. Payments. (a) The Borrower shall make each payment
(including principal of or interest on any Borrowing or any Fees (other than
the fees referred to in paragraph (d) of Section 2.05) or other amounts)
hereunder and under any other Loan Document not later than 12:00 noon, New
York City time, on the date when due in dollars and without set
off or deduction to the Administrative Agent at its offices at 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx, in immediately available funds, except payments
to be made directly to the Issuing Bank as expressly provided herein and
except that payments pursuant to Sections 2.12, 2.15, 2.19 and 9.05 shall be
made directly to the Persons entitled thereto and payments pursuant to other
Loan Documents shall be made to the Persons specified therein. The
Administrative Agent shall distribute any such payments received by it for
the account of any other Person to the appropriate recipient promptly
following receipt thereof.
(b) Whenever any payment (including principal of or interest on any
Borrowing or any Fees or other amounts) hereunder or under any other Loan
Document shall become due, or otherwise would occur, on a day that is not a
Business Day, such payment may be made on the next succeeding Business Day,
and such extension of time shall in such case be included in the
computation of interest, if applicable.
SECTION II.19. Taxes. (a) Any and all payments by the Borrower hereunder
shall be made, in accordance with Section 2.18, free and clear of and without
deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect
thereto, excluding (i) taxes imposed on or measured by the net income of
the Administrative Agent or any Lender and (ii) franchise taxes imposed on
(or measured by) its net income by any Governmental Authority on the
Administrative Agent or any Lender as a result of a present or former
connection between the jurisdiction of the Governmental Authority imposing
such tax on the Administrative Agent or such Lender (except a connection
arising solely from the Administrative Agent or such Lender having executed,
delivered or performed its obligations or received a payment under, or
enforced, this Agreement) (all such nonexcluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred
to as "Taxes"). If the Borrower shall be required by law to deduct any Taxes
from or in respect of any sum payable hereunder to the Lenders or the
Administrative Agent, (i) the sum payable shall be increased by the amount
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 2.19) such Lender
or the Administrative Agent (as the case may be) shall receive an amount
equal to the sum it would have received had no such deductions been made,
(ii) the Borrower shall make such deductions and (iii) the Borrower shall pay
the full amount deducted to the relevant taxing authority or other
Governmental Authority in accordance with applicable law; provided that the
Borrower shall not be required to increase any such amounts payable to any
Lender with respect to any Taxes (i) that are attributable to such Lender's
failure to comply with the requirements of paragraph (f) of this Section or
(ii) that are United States withholding taxes imposed on amounts
payable to such Lender at the time the Lender becomes a party to this
Agreement, except to the extent that such Lender's assignor (if any) was
entitled, at the time of assignment, to receive additional amounts from the
Borrower with respect to such Taxes pursuant to Section 2.19(a).
(b) In addition, the Borrower agrees to pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies which arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement or
any other Loan Document (hereinafter referred to as "Other Taxes").
(c) The Borrower will indemnify each Lender and the Administrative Agent for
the full amount of Taxes and Other Taxes paid by such Lender or the
Administrative Agent, as the case may be, and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted
by the relevant taxing authority or other Governmental Authority. Such
indemnification shall be made within 30 days after the date any Lender or the
Administrative Agent, as the case may be, makes written demand therefor. If
any Lender or the Administrative Agent receives a refund in respect of any
Taxes or Other Taxes as to which it has been indemnified by the Borrower
pursuant to this Section 2.19, it shall promptly notify the Borrower of such
refund and shall, within 30 days after receipt of a request by the Borrower
(or promptly upon receipt, if the Borrower has requested application for such
refund pursuant hereto), repay such refund to the Borrower (to the extent of
amounts that have been paid by the Borrower under this Section 2.19
with respect to such refund), net of all out-of-pocket expenses of such
Lender and without interest (except to the extent such refund includes any
interest); provided that the Borrower, upon the request of such Lender or the
Administrative Agent, agrees to return such refund (plus penalties, interest
or other charges) to such Lender or the Administrative Agent in the event such
Lender or the Administrative Agent is required to repay such refund.
(d) Within 30 days after the date of any payment of Taxes or Other Taxes
withheld by the Borrower in respect of any payment to any Lender or the
Administrative Agent, the Borrower will furnish to the Administrative Agent,
at its address referred to in Section 9.01, the original or a certified copy
of a receipt evidencing payment thereof.
(e) Without prejudice to the survival of any other agreement contained
herein, the agreements and obligations contained in this Section 2.19 shall
survive the payment in full of the principal of and interest on all Loans
made hereunder.
(f) Each Lender that is not a United States (a "Non-U.S. Lender") person as
defined in Section 7701(a)(30) of the Code shall, if legally able to do so,
on or before the date it becomes a party to this Agreement, deliver to the
Borrower, Internal Revenue Service Form 1001 or Form 4224, or, in the case of
a Lender claiming exemption from U.S. federal withholding tax under Section
871(h) or 881(c) of the Code with respect to payments of "portfolio
interest", a statement substantially in the form of Exhibit F, and any other
certificate or statement of exemption or any subsequent version thereof or
successors thereto, properly completed and duly executed by such Lender
claiming complete exemption from or a reduced rate of United States
federal withholding tax. In addition, each Non-U.S. Lender shall deliver
such forms promptly upon the obsolescence, invalidity and prior to the
expiration of any form previously delivered by such Non-U.S. Lender. Each
Non-U.S. Lender shall promptly notify the Borrower in writing at
any time it determines that it is no longer in a position to provide any
previously delivered certificate to the Borrower (or any other form of
certification adopted by the U.S. taxing authorities for such purpose).
Notwithstanding any other provision of this paragraph, a Non-U.S.
Lender shall not be required to deliver any form pursuant to this paragraph
(other than the notification described in the preceding sentence) that such
Non-U.S. Lender is not legally able to deliver.
(g) Any Lender claiming any additional amounts payable pursuant to this
Section 2.19 shall use reasonable efforts (consistent with legal and
regulatory restrictions) to file any certificate or document requested by the
Borrower or to change the jurisdiction of its applicable lending office if
the making of such a filing or change would avoid the need for or reduce
the amount of any such additional amounts which may thereafter accrue and
would not, in the sole determination of such Lender, be otherwise
disadvantageous to such Lender.
ARTICLE III.
Representations and Warranties
The Borrower represents and warrants to each of the Lenders that:
SECTION III.01. Organization; Powers. Each of the Borrower and the
Subsidiaries (a) is an organization duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, (b) has
all requisite power and authority to own its property and assets and to carry
on its business as now conducted and as proposed to be conducted, (c) is
qualified to do business in every jurisdiction where such qualification is
required, except where the failure so to qualify is not materially likely to
result in a Material Adverse Effect, and (d) has the corporate power and
authority to execute, deliver and perform its obligations under each of the
Loan Documents and each other agreement or instrument contem-
plated thereby to which it is or will be a party and to borrow hereunder.
SECTION III.02. Authorization. The execution, delivery and performance by
the Borrower and each Subsidiary Guarantor of each of the Loan Documents to
which it is a party, the Borrowings and the issuances of Letters of Credit
(collectively, the "Transactions") (a) have been duly authorized by all
requisite corporate and, if required, stockholder action and (b) will
not (i) violate (A) any provision of law, statute, rule or regulation, or of
the certificate or articles of incorporation or other constitutive documents
or by-laws of the Borrower or any Subsidiary, (B) any order of any
Governmental Authority or (C) any provision of any material indenture,
agreement or other instrument to which the Borrower or any Subsidiary is a
party or by which any of them or any of their property is or may be bound,
(ii) result in a breach of or constitute (alone or with notice or lapse of
time or both) a default under any such indenture, agreement or
other instrument or (iii) result in the creation or imposition of any Lien
upon or with respect to any property or assets now owned or hereafter
acquired by the Borrower or any Subsidiary other than pursuant to the
Collateral Documents.
SECTION III.03. Enforceability. This Agreement has been duly executed and
delivered by the Borrower and constitutes, and each other Loan Document to
which the Borrower or any Subsidiary Guarantor is a party, when executed and
delivered by the Borrower or such Subsidiary Guarantor, as the case may be,
will constitute, a legal, valid and binding obligation of the Borrower or
such Subsidiary Guarantor, as the case may be, enforceable against the Borrower
or such Subsidiary Guarantor, as the case may be, in accordance with its
terms (subject, as to the enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium and similar laws affecting creditors'
rights generally and to general principles of equity).
SECTION III.04. Governmental Approvals; No Conflicts. No action, consent or
approval of, registration or filing with or any other action by any
Governmental Authority is or will be required by the Borrower or any of the
Subsidiaries in connection with the Transactions, except such as have been
made or obtained and are in full force and effect.
SECTION III.05. Financial Statements. (a) The Borrower has heretofore
furnished to the Lenders its balance sheets and statements of earnings and
statements of cash flows (a) as of and for the fiscal year ended December 31,
1997, audited by and accompanied by the opinion of KPMG Peat Marwick LLP,
independent public accountants, and (b) as of and for the fiscal quarter
ended March 31, 1998, certified by its chief financial officer. Such financial
statements present fairly the financial condition and results of operations
of the Borrower and its Subsidiaries as of such dates and for such periods.
Such financial statements and the notes thereto were prepared in accordance
with GAAP applied on a consistent basis, except as disclosed in such
statements and notes.
(b) Except as disclosed in the financial statements referred to above or
the notes thereto or in the Information Memorandum, after giving effect to
the Transactions, none of the Borrower or its Subsidiaries has, as of the
Closing Date, any material contingent liabilities, unusual long-term
commitments or unrealized losses.
SECTION III.06. No Material Adverse Change. There has been no material
adverse change in the business, assets, operations or financial condition of
the Borrower and the Subsidiaries, taken as a whole, since December 31, 1997.
SECTION III.07. Title to Properties; Possession Under Leases. Each of the
Borrower and the Subsidiaries has good and marketable title to, or valid,
subsisting and enforceable leasehold interests in, all its material
properties and assets, except for minor defects in title that do not
interfere with its ability to conduct its business as currently conducted or
to utilize such properties and assets for their intended purposes. All such
material properties and assets are free and clear of Liens, other than Liens
expressly permitted by Section 6.03.
(_) Each of the Borrower and its Subsidiaries owns, or is licensed to use,
all trademarks, tradenames, copyrights, patents and other intellectual
property material to its business, and the use thereof by the Borrower and
its Subsidiaries does not infringe upon the rights of any other Person,
except for any such infringements that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
(_) Each of the Borrower and the Subsidiaries has complied with all material
obligations under all material leases to which it is a party and all such
leases are in full force and effect. Each of the Borrower and the
Subsidiaries enjoys peaceful and undisturbed possession under all such
material leases.
SECTION III.08. Subsidiaries. Schedule 3.08 sets forth as of the Closing
Date a list of all direct or indirect Subsidiaries of the Borrower and the
percentage of the shares of each class of Capital Stock (other than
participations in a Receivables Transfer Subsidiary) owned beneficially or
record by the Borrower therein.
SECTION III.09. Litigation; Compliance with Laws. Except as set forth on
Schedule 3.09, (a) there are not any actions, suits or proceedings at law or
in equity or by or before any Governmental Authority pending or, to the
knowledge of the Borrower, threatened against or affecting the Borrower or
any Subsidiary or any business, property or rights of any such Person (i)
which involve any Loan Document or the Transactions or (ii) which would be
materially likely to result in a Material Adverse Effect.
(b) Neither the Borrower nor any of the Subsidiaries is in violation of
any law, rule or regulation, or in default with respect to any judgment,
writ, injunction or decree of any Governmental Authority, where such
violation or default would be materially likely to result in a
Material Adverse Effect.
SECTION III.10. Agreements. (a) Neither the Borrower nor any of the
Subsidiaries is a party to any agreement or instrument or subject to any
corporate restriction that would be materially likely to result in a Material
Adverse Effect.
(b) Neither the Borrower nor any of its Subsidiaries is in default in any
manner under any provision of any indenture or other agreement or instrument
evidencing Indebtedness, or any other material agreement or instrument to
which it is a party or by which it or any of its properties or assets are or
may be bound, where such default would be materially likely to result
in a Material Adverse Effect.
SECTION III.11. Federal Reserve Regulations. (a) Neither the Borrower
nor any of its Subsidiaries is engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
purchasing or carrying Margin Stock.
(b) No part of the proceeds of any Loan will be used, whether directly or
indirectly, and whether immediately, incidentally or ultimately, (i) to
purchase or carry Margin stock or to extend credit to others for the purpose
of purchasing or carrying Margin Stock or to refund indebtedness originally
incurred for such purpose, or (ii) for any purpose which entails a violation
of, or which is inconsistent with, the provisions of the regulations of the
Board, including Regulation U or X.
SECTION III.12. Investment Company Act; Public Utility Holding Company
Act. Neither the Borrower nor any Subsidiary is (a) an "investment company"
as defined in, or subject to regulation under, the Investment Company Act of
1940 or (b) a "holding company" as defined in, or subject to regulation
under, the Public Utility Holding Company Act of 1935.
SECTION III.13. Use of Proceeds. The Borrower will use the proceeds of the
Loans and the Letters of Credit only for working capital and other general
corporate purposes of the Borrower and its Subsidiaries in the ordinary
course of business including the financing of Permitted Business Acquisition
pursuant to Section 6.06.
SECTION III.14. Tax Returns. Except as described in Schedule 3.14, each
of the Borrower and the Subsidiaries has filed or caused to be filed all
federal, state and material local tax returns required to have been filed.
Each of the Borrower and its Subsidiaries have paid or caused to be paid all
taxes required to have been paid, except (a) taxes or assessments that are
being contested in good faith by appropriate proceedings and for which the
Borrower shall have set aside on its books whatever reserves are required in
accordance with GAAP consistently applied or (b) to the extent that the
failure to do so could not reasonably be expected to result in a
Material Adverse Effect.
SECTION III.15. No Material Misstatements. No statement or information
contained in this Agreement, any other Loan Document, the Information
Memorandum or any other document, certificate or statement furnished to the
Administrative Agent or the Lenders or any of them, by or on behalf of any
Loan Party for use in connection with the transactions contemplated by this
Agreement or the other Loan Documents, contained as of the date such
statement, information, document or certificate was so furnished (or, in the
case of the Information Memorandum, as of the date of this Agreement), any
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements contained herein or therein not
misleading. The projections and pro forma financial information contained in
the materials referenced above are based upon good faith estimates and
assumptions believed by management of the Borrower to be reasonable at the
time made, it being recognized by the Lenders that such financial information
as it relates to future events is not to be viewed as fact
and that actual results during the period or periods covered by such
financial information may differ from the projected results set forth therein
by a material amount. There is no fact known to any Loan Party that could
reasonably be expected to have a Material Adverse Effect that has not been
expressly disclosed herein, in the other Loan Documents, in the Information
Memorandum or in any other documents, certificates and statements furnished
to the Administrative Agent and the Lenders for use in connection with the
transactions contemplated hereby and by the other Loan Documents.
SECTION III.16. Employee Benefit Plans. The Borrower and each of its ERISA
Affiliates is in compliance in all material respects with the applicable
provisions of ERISA and the Code and the regulations and published
interpretations thereunder with respect to the employee benefit plans (as
defined in Section 3(3) of ERISA) of the Borrower and its ERISA Affiliates.
No Reportable Event has occurred in respect of any Plan of the Borrower or any
ERISA Affiliate. The present value of all benefit liabilities under each
Plan (based on those assumptions used to fund such Plan) did not, as of the
last annual valuation date applicable thereto, exceed by more than $5,000,000
the value of the assets of such Plan, and the present value of all benefit
liabilities of all underfunded Plans (based on those assumptions used to fund
each such Plan) did not, as of the last annual valuation dates applicable
thereto, exceed $5,000,000. Neither the Borrower nor any ERISA Affiliate has
incurred any Withdrawal Liability that would be materially likely to have a
Material Adverse Effect. Neither the Borrower nor any ERISA Affiliate has
received any notification that any Multiemployer Plan is in reorganization or
has been terminated, within the meaning of Title IV of ERISA, and no Multi-
employer Plan is reasonably expected to be in reorganization or to be
terminated, where such reorganization or termination would be materially
likely to result, through increases in the contributions required to be made
to such Plan or otherwise, in a Material Adverse Effect.
SECTION III.17. Environmental Matters. Each of the Borrower and the
Subsidiaries has complied in all material respects with all material federal,
state, local and other statutes, ordinances, orders, judgments, rulings and
regulations relating to environmental pollution or to environmental
regulation or control. Neither the Borrower nor any Subsidiary has received
notice of any failure so to comply which alone or together with any other
such failure is materially likely to result in a Material Adverse Effect.
The Borrower's and the Subsidiaries' plants do not manage any hazardous
wastes, hazardous substances, hazardous materials, toxic substances or toxic
pollutants, as those terms are used in the Resource Conservation and Recovery
Act, the Comprehensive Environmental Response Compensation and Liability Act,
the Hazardous Materials Transportation Act, the Toxic Substance Control Act,
the Clean Air Act, the Clean Water Act or any other applicable law, in
violation of any such law or any regulations promulgated pursuant thereto or
in any other applicable law where such violation is materially
likely to result, individually or together with other violations, in a
Material Adverse Effect.
SECTION III.18. Security Interests. (a) At all times after execution
and delivery of the Pledge Agreement by the parties thereto, the
Administrative Agent for the ratable benefit of the Lenders will have a
valid, first priority, perfected security interest in the Pledged Stock (as
defined in the Pledge Agreement), subject to no other Liens.
(b) At all times after execution and delivery of the Borrower Security
Agreement by the Borrower and the Subsidiary Security Agreement by the
Subsidiary Guarantors and completion of the filings listed on Schedule 3.18,
the security interests created in favor of the Administrative Agent, for the
ratable benefit of the Lenders, pursuant to such Security Agreements will
constitute valid, perfected security interests in the collateral subject
thereto, subject to no other Liens (it being understood that the foregoing
representation shall not apply to any such collateral sold in accordance with
this Agreement).
SECTION III.19. Year 2000. Any reprogramming required to permit the proper
functioning in and following the year 2000 of the Borrower's (i) computer
systems and (ii) equipment containing embedded microchips and the testing of
all such systems and equipment, as so reprogrammed, will be completed by June
30, 1999. The cost to the Borrower of such reprogramming and testing and of
the reasonably foreseeable consequences of year 2000 to the Borrower will not
result in an Event of Default or a Material Adverse Effect. Except for
such of the reprogramming referred to in the preceding sentence as may be
necessary, the computer and management information systems of the Borrower
and its Subsidiaries are and, with ordinary course upgrading and maintenance,
will continue for the term of this Agreement to be, sufficient to permit the
Borrower to conduct its business without a Material Adverse Effect.
ARTICLE IV.
Conditions of Lending
SECTION IV.01. Conditions to Closing. This Agreement shall become effective
on the date (the "Closing Date") on which each of the following conditions is
satisfied (which date shall not be later than June 30, 1998):
(a) The Administrative Agent shall have received (i) this Agreement,
executed and delivered by a duly authorized officer of the Borrower, with a
counterpart for each Lender, (ii) the Pledge Agreement, executed and
delivered by a duly authorized officer of each of the parties thereto, with a
counterpart or a conformed copy for each Lender, (iii) each of Subsidiary
Security Agreement and the Subsidiary Guaranty, each executed and delivered
by a duly authorized officer of the relevant Loan Parties, with a counterpart
or a conformed copy for each Lender, and (iv) the Borrower Security
Agreement, executed and delivered by a duly authorized officer of the
Borrower, with a counterpart or a conformed copy for each Lender.
(b)(_) The Administrative Agent shall have received, with a counterpart
for each Lender, a copy of the resolutions of the Board of Directors of each
Loan Party authorizing the execution, delivery and performance of the Loan
Documents to which such Loan Party is a party certified by the Secretary or
an Assistant Secretary of such Loan Party as of the Closing Date, which
certificate shall state that the resolutions thereby certified have
not been amended, modified, revoked or rescinded.
(c)(_) The Administrative Agent shall have received, with a counterpart
for each lender, true and complete copies of the certificate of incorporation
and by-laws of each Loan Party, certified as of the Closing Date as complete
and correct copies thereof by the Secretary or an Assistant Secretary of such
Loan Party.
(d)(_) The Administrative Agent shall have received, with a counterpart
for each Lender, an executed legal opinion of counsel to the Loan Parties
(which may be in-house), in form and substance reasonably satisfactory to the
Administrative Agent.
(e) The Lenders, Administrative Agent and the arranger of the credit
facilities provided for herein shall have received all fees (due and payable
pursuant to the Fee Letter) and other amounts due and payable on or prior to
the Closing Date, including, to the extent invoiced, reimbursement or payment
of all out-of-pocket expenses required to be reimbursed or paid by any Loan
Party hereunder or under any other Loan Document.
(f) All consents and approvals necessary to be obtained from any
Governmental Authority or other Person in connection with the financing
contemplated hereby and the continuing operation of the Borrower and its
Subsidiaries shall have been obtained and be in full force and effect, and
all applicable waiting periods and appeal periods shall have expired, in each
case without the imposition of any burdensome conditions.
SECTION IV.02. Conditions to Initial Extensions of Credit. The
obligations of the Lenders to make the initial Loans hereunder and of the
Issuing Banks to issue Letters of Credit hereunder, and the effectiveness of
any amendment to a Letter of Credit that increases the principal amount
thereof, are subject to the satisfaction of the conditions set forth below
(the date of any such satisfaction, the "Effective Date"; which date shall
not be later than the date that is 90 days after the Closing Date, or, if
earlier, September 30, 1998):
(a) An amended and restated $600 million liquidity facility (the "Liquidity
Facility"), together with any necessary changes in the commercial paper
program and certificates associated therewith, on behalf of the Metris Master
Trust shall have become effective.
(b) The Administrative Agent, the Lenders and the arranger of the credit
facilities provided for herein shall have received all fees (due and payable
pursuant to the Fee Letter) and other amounts due and payable on or prior to
the Effective Date, including, to the extent invoiced, reimbursement or
payment of all out-of-pocket expenses required to be reimbursed or paid by
any Loan Party hereunder or under any other Loan Document.
(c) The Administrative Agent shall have received the results of a recent
search of the Uniform Commercial Code, judgment and tax lien filings which
may have been filed with respect to the Borrower or any other Loan Party, and
the results of such search shall be satisfactory to the Lenders.
(d) The Spin-off shall have been consummated, (including receipt of a
favorable ruling from the Internal Revenue Service stating that the Spin-off
may be consummated on a tax-free basis) and intercompany arrangements between
the Borrower and Fingerhut shall have been completed.
(e) The credit facilities provided for herein shall have received a rating
of at least BB- and at least Ba3 from S&P and Xxxxx'x, respectively.
(f) The Administrative Agent shall have received a completed Borrowing Base
Certificate dated the Effective Date and signed by a Financial Officer of the
Borrower.
SECTION IV.03. Conditions to All Loans. The obligations of the Lenders to
make any Loans hereunder and of the Issuing Banks to issue any Letters of
Credit hereunder, and the effectiveness of any amendment to a Letter of
Credit that increases the principal amount thereof, are subject to the
satisfaction of the conditions that, on the date of each Credit Event, but
excluding each Borrowing in which Loans are continued or converted as
contemplated in Section 2.04:
(a) In the case of a Borrowing, the Administrative Agent shall have
received a notice of such Borrowing as required by Section 2.03, or, in the
case of an issuance of a Letter of Credit, the Issuing Bank shall have
received a notice in accordance with Sec-tion 2.14(b).
(b) The representations and warranties set forth in Article III hereof,
Section 3 of the Pledge Agreement, Section 3 of the Borrower Security
Agreement, Section 3 of the Subsidiary Security Agreement (to the extent
applicable to Persons that are parties to the Subsidiary Security Agreement
on the date of such Credit Event) and Section 3 of the Subsidiary Guaranty
(to the extent applicable to Persons that are parties to the Subsidiary
Guaranty on the date of such Credit Event) shall be true and correct in all
material respects on and as of the date of such Credit Event with the same
effect as though made on and as of such date, except to the extent such
representations and warranties expressly relate to an earlier date.
(c) The Borrower shall be in compliance with all the terms and provisions
set forth herein and in each other Loan Document on its part to be observed
or performed, and at the time of and immediately after such Credit Event no
Event of Default or Default shall have occurred and be continuing.
(d) In the case of any Credit Event at any time when, or after giving
effect to which, the aggregate amount of Revolving Exposures shall be in
excess of $150,000,000, for any such amount in excess of $150,000,000, the
Borrower or its Subsidiaries shall have available (and shall maintain to the
extent of such excess amount while such excess amount is outstanding) an
equal amount of unutilized financing commitments, including, without
limitation, under the Liquidity Facility, and cash in connection with a pre-
funded asset-backed term security.
Each Credit Event, excluding each Borrowing in which Loans are continued or
converted as contemplated in Section 2.04(b), shall be deemed to constitute a
representation and warranty by the Borrower (or any other relevant Loan
Party, as the case may be), on the date of such Borrowing as to the matters
specified in paragraphs (b), (c) and (d) of this Article IV.
ARTICLE V.
Affirmative Covenants
The Borrower covenants and agrees with each Lender and the Administrative
Agent that, so long as this Agreement shall remain in effect, the principal
of or interest on any Loan, any Fees or any other expenses or amounts payable
under any Loan Document shall be unpaid or any Letter of Credit shall remain
outstanding, unless the Required Lenders shall otherwise consent in writing,
the Borrower will, and will cause each of the Subsidiaries to:
SECTION V.01. Existence; Businesses and Properties. (a) Do or cause to be
done all things necessary to preserve, renew and keep in full force and
effect its legal existence, except as otherwise expressly permitted under
Section 6.05 and with regard to any Subsidiary which has no significant
assets and no significant liabilities.
(b) Do or cause to be done all things necessary to obtain, preserve,
renew, extend and keep in full force and effect the rights, licenses,
permits, franchises, authorizations, patents, copyrights, trademarks and
trade names material to the conduct of its business; maintain and operate
such business in substantially the manner in which it is presently conducted and
operated (except as permitted pursuant to Section 6.05); comply in all
material respects with all applicable laws, rules, regulations and orders of
any Governmental Authority, whether now in effect or hereafter enacted, the
failure to comply with which would be materially likely to result in a
Material Adverse Effect; and at all times maintain and preserve all property
material to the conduct of such business and keep such property in good
repair, working order and condition and from time to time make, or cause to
be made, all needful and proper repairs, renewals, additions, improvements
and replacements thereto necessary in order that the business carried on in
connection therewith may be properly conducted at all times.
SECTION V.02. Insurance. Keep its insurable properties adequately insured
at all times by financially sound and reputable insurers; maintain such other
insurance, to such extent and against such risks, (i) including fire and
other risks insured against by extended coverage, as is customary with
companies in the same or similar businesses; including public liability
insurance against claims for personal injury or death or property damage
occurring upon, in, about or in connection with the use of any properties
owned, occupied or controlled by it; and maintain such other insurance as may
be required by law.
SECTION V.03. Obligations and Taxes. Pay its Indebtedness and other obliga-
tions promptly and in accordance with their terms and pay and discharge
promptly when due all taxes, assessments and governmental charges or levies
imposed upon it or upon its income or profits or in respect of its property,
before the same shall become delinquent or in default, as well as all lawful
claims for labor, materials and supplies or otherwise which, if unpaid, might
give rise to a Lien upon such properties or any part thereof; provided,
however, that such payment and discharge shall not be required with respect
to any such tax, assessment, charge, levy or claim so long as (a) the
validity or amount thereof shall be contested in good faith by appropriate
proceedings, (b) the Borrower or such Subsidiary shall have set aside on its
books whatever reserves are required in accordance with GAAP, (c) such
contest effectively suspends collection of the contested obligation and the
enforcement of any Lien securing such obligation and (d) the failure to make
payment pending such contest could not reasonably be expected to result in a
Material Adverse Effect.
SECTION V.04. Financial Statements, Reports, etc. In the case of the
Borrower, furnish to the Administrative Agent and each Lender (by delivery of
a regular or periodic report filed under the Exchange Act containing such
items or otherwise):
(a) within 100 days after the end of each fiscal year, its consolidated
balance sheets and related statements of earnings and cash flows showing the
financial condition of the Borrower and its consolidated Subsidiaries as of
the close of such fiscal year and the results of its operations and the
operations of such Subsidiaries during such year, audited by KPMG Peat
Marwick LLP or any other Big Six Accounting Firm and accompanied by an
opinion of such accountants (which shall not be qualified in any
material respect) to the effect that such consolidated financial statements
fairly present the financial condition and results of operations of the
Borrower and its consolidated Subsidiaries on a consolidated basis in
accordance with GAAP consistently applied (except for changes concurred with
by the Borrower's independent public accountants and disclosed in such
statements or the notes thereto);
(b) within 50 days after the end of each of the first three fiscal
quarters of each fiscal year, its consolidated balance sheets and related
statements of earnings and cash flow showing the financial condition of the
Borrower and its consolidated subsidiaries as of the close of such fiscal
quarter and the results of its operations and the operations of such
Subsidiaries during such fiscal quarter and the then elapsed portion of the
fiscal year, all certified by one of its Financial Officers, as fairly
presenting the financial condition and results of operations of the Borrower
on a consolidated basis in accordance with GAAP consistently applied (except
for changes concurred with by the Borrower's independent public accountants
and disclosed in such statements or the notes thereto), subject to normal
year-end audit adjustments;
(c) concurrently with any delivery of financial statements under clause (a)
or (b) above, (x) a certificate of the accounting firm, in the case of (a),
or Financial Officer, in the case of (b), referred to in the applicable
paragraph certifying that no Event of Default or Default has occurred or, if
such an Event of Default or Default has occurred, specifying the nature and
extent thereof and any corrective action taken or proposed to be taken with
respect thereto and (y) a certificate of a Financial Officer setting forth
computations in reasonable detail satisfactory to the Administrative Agent
demonstrating compliance with the covenants contained in Section 6.01 (as of
the last day of each calendar month included in the relevant fiscal period)
and stating whether any change in GAAP or in the application thereof (not
previously communicated to the Administrative Agent in a certificate pursuant
to this subsection) has occurred since the date of the Borrower's audited
financial statements referred to in Section 3.05 and, if any such change has
occurred, specifying the effect of such change on the financial statements
accompanying such certificate;
(d) within 15 days after the end of each calendar month, a completed
Borrowing Base Certificate calculating and certifying the Borrowing Base as
of the last day of such calendar month, signed on behalf of the Borrower by a
Financial Officer;
(e) at least 30 days prior to the commencement of each fiscal year of the
Borrower, a detailed consolidated budget for such fiscal year (including a
projected consolidated balance sheet and related statements of projected
operations and cash flow as of the end of and for such fiscal year and, in a
manner consistent with the Information Memorandum, the assumptions used
therein) and, promptly when available, any significant revisions of such
budget;
(f) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by it
with the Securities and Exchange Commission, or any Governmental Authority
succeeding to any of or all the functions of said Commission, or with any
national securities exchange, or distributed to its shareholders, as the case
may be; and
(g) as soon as reasonably practicable, from time to time, such other
information regarding the operations, business affairs and financial
condition of the Borrower or any Subsidiary, or compliance with the terms of
any Loan Document, as the Administrative Agent or any Lender may reasonably
request.
SECTION V.05. Litigation and Other Notices. Furnish to the Administrative
Agent prompt written notice of the following promptly after a Responsible
Officer of the Borrower or any Subsidiary becomes aware of the same:
(a) any Event of Default or Default (provided that in the case of a
Default such notice may be oral, unless requested to be in writing by the
Administrative Agent), specifying the nature and extent thereof and the
corrective action (if any) proposed to be taken with respect thereto;
(b) the filing or commencement of, or receipt of notice of intention of
any Person to file or commence, any action, suit or proceeding, whether at
law or in equity or by or before any Governmental Authority, against the
Borrower or any Affiliate thereof which would be materially likely to result
in a Material Adverse Effect;
(c) the occurrence of any Reportable Event that, alone or together with
any other Reportable Events that have occurred, could reasonably be expected
to result in liability of the Borrower and its Subsidiaries in an aggregate
amount exceeding $5,000,000;
(d) any development affecting or relating to the Borrower or any
Subsidiary that in the reasonable judgment of the Borrower has resulted in,
or is materially likely to result in, a Material Adverse Effect referred to
in clause (a) of the definition of such term; and
(e) the occurrence of any event which constitutes a Change in Control.
Each notice delivered under this Section shall be accompanied by a statement
of a Financial Officer or other executive officer of the Borrower setting
forth the details of the event or development requiring such notice and any
action taken or proposed to be taken with respect thereto.
SECTION V.06. Employee Benefits. (a) Comply in all material respects with
the applicable provisions of ERISA and the Code with respect to the employee
benefit plans (as defined in Section 3(3) of ERISA) of the Borrower and the
ERISA Affiliates and (b) furnish to the Administrative Agent (i) as soon as
possible after, and in any event within 30 days after any Responsible Officer
of the Borrower or any ERISA Affiliate knows or has reason to know that any
Reportable Event has occurred that alone or together with any other Reportable
Event could reasonably be expected to result in liability of the Borrower or
any ERISA Affiliate to the PBGC in an aggregate amount exceeding $5,000,000,
a statement of a Financial Officer setting forth details as to such
Reportable Event and the action that the Borrower or such ERISA Affiliate
proposes to take with respect thereto, together with a copy of the notice, if
any, of such Reportable Event to the PBGC, (ii) promptly after receipt
thereof, a copy of any notice that the Borrower or any ERISA Affiliate may
receive from the PBGC relating to the intention of the PBGC to terminate any
Plan or Plans (other than a Plan maintained by an ERISA Affiliate that is
considered an ERISA Affiliate only pursuant to subsection (m) or (o) of Section
414 of the Code) or to appoint a trustee to administer any such Plan, (iii)
within 10 days after the due date for filing with the PBGC pursuant to
Section 412(n) of the Code a notice of failure to make a required installment
or other payment with respect to a Plan, a statement of a Financial Officer
setting forth details as to such failure and the action that the Borrower
proposes to take with respect thereto, together with a copy of any such
notice given to the PBGC and (iv) promptly and in any event within 30 days
after receipt thereof by the Borrower or any ERISA Affiliate from the sponsor
of a Multiemployer Plan, a copy of each notice received by the Borrower or
any ERISA Affiliate concerning (A) the imposition of Withdrawal Liability or
(B) a determination that a Multiemployer Plan is, or is expected to be,
terminated or in reorganization, both within the meaning of Title IV of ERISA.
SECTION V.07. Maintaining Records; Access to Properties and Inspections.
Maintain or cause to be maintained at all times true and complete books and
records of its financial operations and permit the Administrative Agent or
any Lender and their designated representatives reasonable access after
reasonable notice to all such books and records and to any of the properties
or assets of the Borrower and the Subsidiaries during regular business hours in
order that the Administrative Agent and the Lenders may make such
examinations and make abstracts from such books and records and may discuss
the affairs, finances and accounts with, and be advised as to the same by,
Financial Officers and, after consultation with the Borrower, the independent
accountants of the Borrower or any Subsidiary, all as the Administrative Agent
or any Lender may reasonably deem appropriate for the purpose of verifying
the accuracy of the various reports delivered by the Borrower or any
Subsidiary thereof to the Administrative Agent and/or the Lenders pursuant to
this Agreement or for otherwise ascertaining compliance with this Agreement.
Except during the continuance of any Event of Default, all requests by Lenders
under this Section shall be made through and coordinated by the
Administrative Agent with a view to minimizing inconvenience to the Borrower
and its Subsidiaries.
SECTION V.08. Further Assurances. (a) Promptly perform or cause to be
performed any and all such acts and execute or cause to be executed, at the
cost and expense of the Borrower, any and all documents under the provisions
of any applicable law, rule or regulation of any Governmental Authority, and
take all such further actions, which may be required under any applicable
law, or which the Administrative Agent or the Required Lenders may reasonably
request, to effectuate the transactions contemplated by the Loan Documents or
which are necessary from time to time, in order to grant, maintain, preserve
and protect in favor of the Administrative Agent, for the benefit of the
Lenders, the security interest in and pledge of the collateral under the
Collateral Documents, including the perfection and priority thereof, all as
provided in the Collateral Documents. The Borrower also agrees to provide to
the Administrative Agent, from time to time upon request, evidence reasonably
satisfactory to the Administrative Agent as to the perfection and priority of
the Liens created or intended to be created by the Collateral Documents.
(b) With respect to any Subsidiary organized in the United States (other
than as prohibited by law or regulation) that has not previously done so,
promptly (i) execute and deliver to the Administrative Agent, for the benefit
of the Lenders, a new pledge agreement or such amendments or supplements to
the Pledge Agreement as the Administrative Agent shall deem necessary or
advisable to grant to the Administrative Agent, for the benefit of the
Lenders, a Lien on all of the Capital Stock of such Subsidiary owned directly
or indirectly by the Borrower or any Subsidiary, and (ii) deliver to the
Administrative Agent the certificates representing such Capital Stock,
together with undated stock powers executed and delivered in blank by a duly
authorized officer of the parent company of such Subsidiary.
(c) With respect to any Subsidiary (other than an Excluded Subsidiary or an
Immaterial Subsidiary) that has not previously done so, provide the
Administrative Agent with written notice of the existence of such a
Subsidiary, and cause such Subsidiary to execute and deliver to the
Administrative Agent one or more instruments (as the Administrative Agent shall
request and satisfactory to the Administrative Agent in form and substance)
pursuant to which such Subsidiary shall (i) undertake the obligations of a
Subsidiary Guarantor under the Subsidiary Guaranty and (ii) become a party to
the Subsidiary Security Agreement.
(d) Cause MDI to be the direct or indirect parent of any Subsidiary whose
Capital Stock is not pledged by the Borrower pursuant to the Pledge Agreement.
(e) Cause any residual interest issued to or held by the Borrower or
any of its Subsidiaries (other than an Excluded Subsidiary) in connection
with the sale of Accounts into a Receivables Transfer Program to be pledged
as collateral pursuant to the Collateral Documents to secure the repayment of
the Obligations.
SECTION V.09. Information Regarding Collateral. (a) The Borrower will
furnish to the Administrative Agent prompt written notice of any change (i)
in any Loan Party's corporate name or in any trade name used to identify it
in the conduct of its business or in the ownership of its properties, (ii)
in the location of any Loan Party's chief executive office, its
principal place of business, any office in which it maintains books or
records relating to Collateral owned by it or any office or facility at which
Collateral owned by it is located (including the establishment of any such
new office or facility), (iii) in any Loan Party's identity or corporate
structure or (iv) in any Loan Party's Federal Taxpayer Identification Number.
The Borrower agrees not to effect or permit any change referred to in the
preceding sentence unless all filings have been made under the Uniform
Commercial Code or otherwise that are required in order for the
Administrative Agent to continue at all times following such change to have a
valid, legal and perfected security interest in all the Collateral. The
Borrower also agrees promptly to notify the Administrative Agent if any
material portion of the Collateral is damaged or destroyed.
(b) Each year, at the time of delivery of annual financial statements with
respect to the preceding fiscal year pursuant to clause (a) of Section 5.01,
the Borrower shall deliver to the Administrative Agent a certificate of a
Financial Officer of the Borrower certifying that all Uniform Commercial Code
financing statements or other appropriate filings, recordings or
registrations containing a description of the Collateral have been filed of
record in each governmental, municipal or other appropriate office in each
jurisdiction necessary to perfect, and an opinion of counsel (which may be
rendered by the chief legal officer of the Borrower) that such filings or
recordings are sufficient to perfect, the security interests under the
Collateral Documents (other than in respect of Collateral as to which the
sole method of perfection is possession) for a period of not less than 18
months after the date of such certificate and opinion (except as noted
therein with respect to any continuation statements to be filed within such
period).
SECTION .10. Sale of Accounts. Sell all Accounts comprising receivables
owing by any obligor pursuant to any credit card Account under a credit card
agreement held by a Credit Card Bank (to the extent not funded by deposits or
capital of such Credit Card Bank) to the Borrower or to another Depositary
Institution (for the purpose of investing its deposits) or directly or
indirectly through a Receivables Transfer Subsidiary, into any Receivables
Transfer Program. Notwithstanding the foregoing, any Credit Card Bank may
sell such Accounts in any manner as permitted by Section 6.08.
SECTION .11. Regulatory Capital. Cause each of its Insured Subsidiaries
to be at all times at least "adequately capitalized" for purposes of 12
U.S.C. 1831o, as amended, re-enacted or redesignated from time to time, and
at all times to maintain such amount of capital as may be prescribed from
time to time, whether by regulation, agreement or order, by each Bank
Regulatory Authority having jurisdiction over such Insured Subsidiary.
ARTICLE VI.
Negative Covenants
The Borrower covenants and agrees with each Lender and the Administrative
Agent that, so long as this Agreement shall remain in effect, the principal
of or interest on any Loan, any Fees or any other expenses or amounts payable
under any Loan Document shall be unpaid or any Letter of Credit shall remain
outstanding, unless the Required Lenders shall otherwise consent in writing,
the Borrower will not, and will not cause or permit any of the Subsidiaries to:
SECTION VI.01. Financial Covenants.
(a) Leverage Ratio. In the case of the Borrower, permit the Leverage
Ratio at any time to exceed 6.0 to 1.0.
(b) Minimum Consolidated Net Worth. In the case of the Borrower, permit
Consolidated Net Worth at any time to be less than the sum of (i)
$140,310,000 plus (ii) 40% of Cumulative Consolidated Net Income as of the
last day of the fiscal quarter of the Borrower most recently ended plus (iii)
40% of the net cash proceeds of any issuance by the Borrower of Capital
Stock after the Closing Date.
(c) Minimum Excess Spread. In the case of the Borrower, permit Excess
Spread on any Series to be less than 1%.
(d) Minimum Equity to Managed Accounts Receivable Ratio. In the case of the
Borrower, permit the Equity to Managed Accounts Receivable Ratio at any time
(i) prior to the earlier of (A) the date that is 90 days after the Effective
Date and (B) the Equity Offering Date to be less than 4% and (ii) at any time
thereafter to be less than 5%.
(e) Minimum Equity to Delinquent Assets Ratio. In the case of the Borrower,
permit the Equity plus Credit Reserves to Delinquent Assets Ratio at any time
to be less than 2.25 to 1.00.
(f) Minimum Equity plus Credit Reserves to Managed Accounts Receivable
Ratio. In the case of the Borrower, permit the Equity plus Credit Reserves
to Managed Accounts Receivable Ratio at any time to be less than 10%.
(g) Borrowing Base. In the case of the Borrower, permit the aggregate
principal amount of Funded Senior Debt at any time to exceed the Borrowing
Base then in effect.
SECTION VI.02. Limitations on Indebtedness. Create, incur, assume or
suffer to exist any Indebtedness, except:
(a) Indebtedness of the Borrower or any Subsidiary Guarantor under this
Agreement or the Subsidiary Guaranty;
(b) other Indebtedness of the Borrower or any of its Subsidiaries so long
as, on the date of incurrence thereof, after giving effect thereto, no
Default or Event of Default shall have occurred or would result therefrom,
provided that the aggregate principal amount of all Indebtedness of all
Subsidiaries that are not Subsidiary Guarantors shall not exceed $10,000,000
at any time;
(c) Indebtedness of the Borrower or any Subsidiary incurred to finance the
acquisition, construction or improvement of any fixed or capital assets,
including Capital Lease Obligations and any Indebtedness assumed in
connection with the acquisition of any such assets or secured by a Lien on
any such assets prior to the acquisition thereof, and extensions, renewals
and replacements of any such Indebtedness that do not increase the
outstanding principal amount thereof or result in an earlier maturity date or
decreased weighted average life thereof; provided that (A) such Indebtedness
is incurred prior to or within 90 days after such acquisition or the
completion of such construction or improvement and (B) the aggregate
principal amount of Indebtedness permitted by this clause (c) shall not
exceed $25,000,000 at any time outstanding plus the aggregate principal
amount of Indebtedness permitted by Section 6.02(h) to the extent such amount
is not utilized thereunder;
(d) (i) Indebtedness of the Borrower and any Subsidiary Guarantor pursuant
to the Senior Note Indenture in an aggregate principal amount not to exceed
$100,000,000 at any one time outstanding and (ii) Indebtedness of the
Borrower or any Subsidiary Guarantor issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease,
redeem or refund the Indebtedness referred to in clause (i) of this
subsection (d) (A) the terms of which have been provided to the Lenders at
least seven Business Days before the date of such renewal, refinancing,
extension or modification, (B) which do not shorten the date for payment of
interest thereon or shorten the maturity (or weighted average life) or
increase the principal amount thereof and which, after giving effect thereto,
contain terms and conditions (including, without limitation, covenants and
events of default) that are no less favorable taken as a whole to the Lenders
in any material respect than the terms and conditions thereof applicable
before giving effect thereto, and (C) at any time that a Default or Event of
Default shall not have occurred and be continuing or would result therefrom;
(e) Indebtedness arising out of the Receivables Transfer Program;
(f) Indebtedness in connection with loans and advances permitted by
Section 6.06(d);
(g) Indebtedness in respect of deposits held by any Depositary
Institution; and
(h) Indebtedness assumed by the Borrower or a Subsidiary in connection
with the merger, consolidation or acquisition of a Person or substantially
all of its assets existing at the time such Person is merged into or
consolidated with the Borrower or any Subsidiary or at the time of
acquisition thereof, as the case may be, by the Borrower or a Subsidiary in
aggregate principal amount not to exceed $25,000,000 plus the aggregate
principal amount of Indebtedness permitted by Section 6.02(c) to the extent
such amount is not utilized thereunder, which Indebtedness may be secured
pursuant to Section 6.03(b); provided that such Indebtedness was in existence
prior to the contemplation of such merger, consolidation or acquisition.
SECTION VI.03. Liens. Create, incur, assume or permit to exist any Lien
on any property or assets, including stock or other securities of any Person
(other than assets sold pursuant to the Receivables Transfer Program) now
owned or hereafter acquired or assign or convey any rights to or security
interests in any future revenue; provided that, notwithstanding
the foregoing, the following Liens shall be permitted so long as, in each
case, such Liens do not apply to the Capital Stock of any Credit Card Bank or
any other Subsidiary whose Capital Stock is not pledged to the Lenders
pursuant to a Loan Document:
(a) Liens on property or assets of the Borrower and its Subsidiaries
existing on the Closing Date which (with the exception of existing Liens
consisting of the interests of lessors under Capital Leases) are set forth in
Schedule 6.03; provided that such Liens shall secure only those obligations
which they secure on the Closing Date;
(b) any Lien existing on any fixed or capital asset prior to the
acquisition thereof by the Borrower or any Subsidiary or existing on any
fixed or capital asset of any Person that becomes a Subsidiary after the date
hereof prior to the time such Person becomes a Subsidiary; provided that (A)
such Lien is not created in contemplation of or in connection with such
acquisition or such Person becoming a Subsidiary, as the case may be, (B)
such Lien shall not apply to any other property or assets of the Borrower or
any Subsidiary, (C) such Lien shall secure only those obligations which it
secures on the date of such acquisition or the date such Person becomes a
Subsidiary, as the case may be and extensions, renewals and replacements
thereof that do not increase the outstanding principal amount thereof and (D)
the aggregate principal amount of Indebtedness secured by such Lien does not
exceed the amount permitted by Section 6.02(h);
(c) Liens for taxes not yet due or which are being contested in compliance
with Section 5.03 and judgment liens securing judgments which have not given
rise to Events of Default;
(d) carriers', warehousemen's, mechanics', materialmen's, repairmen's or
other like Liens arising in the ordinary course of business and securing
obligations that are not due or that are being contested in compliance with
Section 5.03;
(e) pledges and deposits made in the ordinary course of business in
compliance with workmen's compensation, unemployment insurance and other
social security laws or regulations;
(f) deposits to secure the performance of bids, trade contracts (other
than for Indebtedness), leases (other than Capital Lease Obligations),
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of business;
(g) zoning restrictions, easements, rights-of-way, restrictions on use of
real property and other similar encumbrances incurred in the ordinary course
of business which, in the aggregate, are not substantial in amount and do not
materially detract from the value of the property subject thereto or
interfere with the ordinary conduct of the business of the Borrower or any of
its Subsidiaries;
(h) Liens on Accounts and on credit cardholder accounts owned by the
Borrower or any of its Subsidiaries, in each case securing Indebtedness
incurred to finance the acquisition thereof so long as (i) such Liens do not
at any time encumber any asset other than the Accounts and credit cardholder
accounts financed by such Indebtedness and (ii) recourse for repayment of
such Indebtedness is limited to the Accounts and credit cardholder accounts
so financed (subject to customary limited recourse to the Borrower and its
Subsidiaries relating to representations and warranties made with respect to
such Accounts and credit cardholder accounts in connection with the
incurrence of such Indebtedness);
(i) other Liens to secure Indebtedness or obligations in respect of Rate
Protection Agreements of the Borrower and/or any Subsidiary, so long as after
giving effect thereto the aggregate outstanding principal amount of
Indebtedness or obligations in respect of Rate Protection Agreements secured
by Liens under this Section 6.03(i) does not exceed $10,000,000 at such time;
(j) Liens on fixed or capital assets acquired, constructed or improved by
the Borrower or any Subsidiary; provided that (A) such security interests
secure Indebtedness permitted by Section 6.02(c), (B) such security interests
and the Indebtedness secured thereby are incurred prior to or within 90 days
after such acquisition or the completion of such construction or improvement,
(C) the Indebtedness secured thereby does not exceed 90% of the cost of
acquiring, constructing or improving such fixed or capital assets and
(D) such security interests shall not apply to any other property or assets
of the Borrower or any Subsidiary; and
(k) Liens created by the Collateral Documents.
SECTION VI.04. Sale and Lease-Back Transactions. Enter into any
arrangement, directly or indirectly, with any Person whereby it shall sell or
transfer any property, real or personal, used or useful in its business,
whether now owned or hereafter acquired, and thereafter rent or lease such
property or other property which it intends to use for substantially the
same purpose or purposes as the property being sold or transferred (a "Sale-
Leaseback Transaction"), except that the Borrower and the Subsidiaries at any
time may enter into any Sale-Leaseback Transaction so long as prior to and
after giving effect thereto the Borrower and its Subsidiaries are in
compliance with Sections 6.02(c) and 6.08(b).
SECTION VI.05. Mergers, Consolidations, and Sales of Assets. Merge into or
consolidate with any other Person, or permit any other Person to merge into
or consolidate with it, or, sell, transfer, lease or otherwise dispose of
(in one transaction or in a series of transactions) all or any substantial
part of its assets (whether now owned or hereafter acquired) or sell, transfer,
lease or otherwise dispose of any Capital Stock of any Subsidiary, except that:
(a) if immediately after giving effect thereto no Event of Default or
Default shall have occurred and be continuing (i) any wholly owned Subsidiary
may (A) merge or consolidate into the Borrower in a transaction in which the
Borrower is the surviving corporation or (B) transfer assets to the Borrower,
and (ii) any wholly owned Subsidiary may merge into or consolidate with or
transfer assets to any Person that upon the consummation of such merger,
consolidation or transfer is a wholly owned Subsidiary Guarantor in a
transaction in which no Person other than the Borrower or a wholly owned
Subsidiary Guarantor receives any consideration; and
(b) sales of accounts receivable pursuant to the Receivables Transfer
Program.
SECTION VI.06. Investments, Loans, Advances and Guarantees. Purchase, hold
or acquire (including pursuant to any merger with any Person that was not a
wholly owned Subsidiary prior to such merger) any Capital Stock, evidences of
indebtedness or other securities (including any option, warrant or other
right to acquire any of the foregoing) of, make or permit to exist any loans
or advances to, Guarantee any obligations of, or make or permit to exist (other
than any increase in value of any prior investment) any investment or any
other interest in, or purchase or otherwise acquire (in one transaction or a
series of transactions) any assets of any other Person constituting a
business unit (or material portion thereof), except:
(a) Permitted Investments; provided that if a Permitted Investment ceases
to be a Permitted Investment due to a downgrading or withdrawal of a rating
assigned by a rating agency, then such investment shall cease to be a
Permitted Investment 30 days following such downgrading or withdrawal;
(b) investments existing on the date hereof and set forth on Schedule
6.06, to the extent such investments would not be permitted under any other
clause of this Section;
(c) investments existing on the date hereof by the Borrower and its
Subsidiaries in the Capital Stock of their Subsidiaries;
(d) loans, advances or investments made by the Borrower or any Subsidiary
after the Effective Date (i) to or in the Borrower or any Subsidiary
Guarantor, (ii) to or into any Immaterial Subsidiary that is not a Subsidiary
Guarantor in an aggregate amount not to exceed $10,000,000 at such time,
(iii) to or into a Receivables Transfer Subsidiary to establish or maintain
the Receivables Transfer Program, (iv) to or into DMCCB; provided that the
aggregate amount of loans, advances and investments made by the Borrower or
any Subsidiary after the Effective Date pursuant to this clause (iv) during
the duration of this Agreement shall not exceed the greater of (I)
$15,000,000 and (II) the amount necessary to provide that DMCCB complies with
the covenant contained in Section 5.11; and (v) to or into any other
Subsidiary that is an insurance company or other regulated financial
institution that is not a Depository Institution to the extent necessary to
comply with laws, regulations or orders with respect to such Subsidiary;
provided that the aggregate amount of loans, advances and investments made by
the Borrower or any Subsidiary after the Effective Date pursuant to this
clause (v) during the duration of this Agreement shall not exceed $15,000,000;
(e) investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes with,
customers and suppliers, in each case in the ordinary course of business;
(f) investments made in connection with a sale of assets permitted by
Section 6.08 to the extent of the non-cash consideration received by the
Borrower or a Subsidiary;
(g) Permitted Business Acquisitions so long as the aggregate consideration
paid by the Borrower and its Subsidiaries in respect of all Permitted
Business Acquisitions (i) of Accounts, consummated or entered into during any
period of four fiscal quarter periods of the Borrower (or, prior to September
30, 1998, the period of full fiscal quarters of the Borrower since January 1,
1998), shall not exceed 30% of the average Managed Accounts Receivable as of
the last day of each of the four fiscal quarter periods of the Borrower and
its Subsidiaries most recently ended (or, prior to September 30, 1998, the
period of full fiscal quarters of the Borrower since January 1, 1998) and
(ii) otherwise, the cash portion of such consideration does not exceed
$50,000,000; for purposes of the foregoing, the aggregate consideration shall
not include any payment with Capital Stock or assumption of Indebtedness
(which assumption must otherwise not cause an Event of Default after
giving effect to such assumption);
(h) investments in respect of Rate Protection Agreements entered into in the
ordinary course of business; and
(i) other investments by the Borrower or any of its Subsidiaries that do
not exceed $5,000,000 in the aggregate at any one time outstanding (measured
as of the date made and without giving effect to subsequent changes in value).
SECTION VI.07. Restricted Payments; Certain Payments of Indebtedness. (a)
Declare or make, or agree to pay or make, directly or indirectly, any
Restricted Payment, except (i) the Borrower may make Restricted Payments with
respect to its Capital Stock payable solely in additional Capital Stock, (ii)
Restricted Payments made to the Borrower or any Subsidiary Guarantor, (iii)
the Borrower may make Restricted Payments, not exceeding $1,000,000 during
any fiscal year, pursuant to and in accordance with stock option plans or
other benefit plans for management or employees of the Borrower and its
Subsidiaries; (iv) any distribution of rights to all shareholders of the
Borrower and any purchase, redemption or other acquisition or retirement of
equity interests issued pursuant to any shareholder rights plan of the
Borrower, as the same may be adopted or amended from time to time, as to
which the aggregate amount of the Restricted Payments does not exceed
$1,000,000 during the duration of this Agreement; (v) the Borrower may make
Restricted Payments in an aggregate amount in any fiscal year of the
Borrower not to exceed 40% of Consolidated Net Income for the prior fiscal
year of the Borrower; and (vi) the issuance by the Borrower of options or
other equity securities of the Borrower to outside directors, members of
management or employees of the Borrower or any of its Subsidiaries.
(b) Make or agree to pay or make, directly or indirectly, any payment or
other distribution (whether in cash securities or other property) of or in
respect of principal of or interest on any Indebtedness, or any payment or
other distribution (whether in cash, securities or other property), including
any sinking fund or similar deposit, on account of the purchase, redemption,
retirement, acquisition, cancellation or termination of any Indebtedness,
except:
(i) payment of Indebtedness created under the Loan Documents;
(ii) payment of regularly scheduled interest and principal payments as
and when due in respect of any Indebtedness (subject to any subordination
provisions thereof);
(iii) refinancings of Indebtedness to the extent permitted by Section
6.02(d); and
(iv) payment of secured Indebtedness that becomes due as a result of
the voluntary sale or transfer of the property or assets securing such
Indebtedness.
SECTION VI.08. Disposition of Assets. Sell, transfer, lease or otherwise
dispose of any asset, including any Capital Stock, nor will the Borrower
permit any of its Subsidiaries to issue any additional shares of its Capital
Stock or other ownership interest in such Subsidiary, except:
(a) sales of used or surplus equipment and Permitted Investments in the
ordinary course of business;
(b) sales, transfers and dispositions permitted by Section 6.05;
(c) sales, transfers and dispositions of assets (other than Capital Stock
of a Subsidiary) that are not permitted by any other clause of this Section
6.08; provided that the aggregate fair market value of all assets sold,
transferred or otherwise disposed of in reliance upon this clause (c) shall
not exceed $20,000,000 during any fiscal year of the Borrower;
(d) sales, transfers and dispositions of Accounts in connection with the
Receivables Transfer Program;
(e) sales, transfers and dispositions of Accounts (and, to the extent
necessary in connection with such sale, related credit cardholder accounts),
so long as the fair market value of the Accounts sold during any period of
four fiscal quarter periods of the Borrower (or, prior to September 30, 1998,
the period of full fiscal quarters of the Borrower since January 1, 1998)
shall not exceed 15% of the average Managed Accounts Receivable as of the
last day of each of the four fiscal quarters of the Borrower and its
Subsidiaries most recently ended (or, prior to September 30, 1998, the period
of full fiscal quarters of the Borrower since January 1, 1998); and
(f) sales, transfers and dispositions to a collection agency in the
ordinary course of business of Accounts that have been determined by the
Borrower to be uncollectible.
provided that all sales, transfers, leases and other dispositions permitted
hereby shall be made for fair value and for cash consideration equal to at
least 85% of such fair value.
SECTION VI.09. Transactions with Affiliates. Sell, lease or otherwise
transfer any property or assets to, or purchase, lease or otherwise acquire
any property or assets from, or otherwise engage in any other transactions
with, any of its Affiliates, except (a) transactions in the ordinary course
of business (provided that this requirement shall be deemed satisfied in
respect of the Receivables Transfer Program) that are at prices and on terms
and conditions not less favorable to the Borrower or such Subsidiary than
could be obtained on an arm's-length basis from unrelated third parties, (b)
transactions between or among the Borrower and one or more Subsidiary
Guarantors not involving any other Affiliate and (c) any Restricted Payment
permitted by Section 6.07.
SECTION .10. Amendment of Material Documents. Amend, modify or waive
(a) any of its rights under its certificate of incorporation, by-laws or
other organizational documents or (b) the Senior Note Indenture, in each case
in any respect materially adverse to the Lenders.
SECTION .11. Limitations on Restrictions on Dividends by Subsidiaries.
Permit or place, or permit any Subsidiary to permit or place, any
restriction, directly or indirectly on (i) the payment of dividends or other
distributions by any Subsidiary to the Borrower or (ii) the making of
advances or other cash payments by any Subsidiary to the Borrower, except, in
either case, (x) as specifically set forth in this Agreement, (y) as may be
required under a Receivables Transfer Program with respect to the frequency
of dividends from any Receivables Transfer Subsidiary and (z) as may be
required by non-consensual restrictions imposed by applicable requirements of
law.
SECTION .12. Limitation on Negative Pledge Clauses. Enter into or suffer
to exist or become effective any agreement which prohibits or limits the
ability of the Borrower or any of its Subsidiaries to create, incur, assume
or suffer to exist any Lien upon any of its Property or revenues, whether now
owned or hereafter acquired, to secure the Obligations or, in the case
of any guarantor, its obligations under the Guarantee and Collateral
Agreement, other than (a) this Agreement and the other Loan Documents, (b)
the Senior Note Indenture (or the documentation in respect of any exchange,
refinancing, extension or renewal of the Senior Note Indebtedness permitted
by Section 6.02(d)(ii)), (c) any agreements entered into by a Receivables
Transfer Subsidiary in respect of its assets or property and (d) any
agreements governing any purchase money Liens or Capital Lease Obligations
otherwise permitted hereby (in which case, any prohibition or limitation
shall only be effective against the assets financed thereby).
SECTION .13. Changes in Fiscal Periods. Permit the fiscal year of the
Borrower to end on a day other than December 31 or change the Borrower's
method of determining fiscal quarters; provided that the Borrower may make
one election after the Closing Date to change its fiscal year end if the
Borrower shall provide the Administrative Agent and the Lenders with such
financial information as is reasonably useful to allow the Administrative
Agent and the Lenders to compare the financial position and results of
operations of the Borrower and its Subsidiaries prior and subsequent to such
change for all relevant fiscal periods of the Borrower and its Subsidiaries.
SECTION .14. Limitations on Lines of Business, etc. Enter into any
business or business activity other than (i) in the case of any Receivables
Transfer Subsidiary, the purchasing, holding, owning and selling of the
Accounts of the Borrower and its Subsidiaries and any activities incidental
to and necessary or convenient for the accomplishment of such purposes and
(ii) in the case of the Borrower or any other Subsidiary, businesses in which
the Borrower or any of such Subsidiaries are engaged on the date hereof or
businesses reasonably related thereto, including direct marketing and
providing financial products and services (including, but not
limited to, consumer credit products, extended service plans and fee-based
products) primarily to credit card account holders.
SECTION .15. Certain Matters Related to Accounts. In the case of the
Borrower, sell, transfer or otherwise dispose of any Accounts owned by it to
any Person except (i) to a Receivables Transfer Subsidiary whose Capital
Stock has been pledged pursuant to the Pledge Agreement, (ii) directly into a
Receivables Transfer Program, (iii) to a Subsidiary Guarantor or (iv) as
permitted by Section 6.08.
ARTICLE I.
Events of Default
In case of the happening of any of the following events ("Events of Default"):
(a) any representation or warranty made or deemed made in or in connection
with any Loan Document or the borrowings hereunder, or any representation,
warranty, statement or information contained in any report, certificate,
financial statement or other instrument furnished in connection with or
pursuant to any Loan Document, shall prove to have been false or misleading
in any respect material to the interests of the Lenders when so made, deemed
made or furnished;
(b) default shall be made in the payment of any principal of any Loan when
and as the same shall become due and payable, whether at the due date thereof
or at a date fixed for prepayment thereof or by acceleration thereof or
otherwise, or default shall be made in the payment of any reimbursement
obligation in respect of any Letter of Credit when and as the same shall
become due and payable;
(c) default shall be made in the payment of any interest on any Loan or
any Fee (other than an amount referred to in (b) above) due under any Loan
Document, when and as the same shall become due and payable, and such default
shall continue unremedied for a period of three Business Days;
(d) default shall be made in the due observance or performance of any
covenant, condition or agreement contained in Section 5.01(a), Section
5.05(a) or Article VI (other than Section 6.01(g)) of this Agreement;
(e) default shall be made in the due observance or performance of any
covenant, condition or agreement contained in Section 5.05(b), (c) or (d) of
this Agreement and such default shall continue unremedied for a period of 10
Business Days;
(f) default shall be made in the due observance or performance of any
covenant, condition or agreement contained in any Loan Document (other than
those specified in clause (b), (c), (d) or (e) above) and such default shall
continue unremedied for a period of 30 days after notice thereof from the
Administrative Agent or the Required Lenders to the Borrower;
(g) the Borrower or any of its Subsidiaries shall (i) fail to pay any
principal or interest, regardless of amount, due in respect of any
Indebtedness in a principal amount in excess of $10,000,000 or fail to pay
any amount in excess of $10,000,000 due in respect of any Rate Protection
Agreement, in each case when and as the same shall become due and payable
(after giving effect to any applicable period of grace specified in the instru-
ment evidencing or governing such Indebtedness or Rate Protection Agreement),
(ii) fail to observe or perform any other term, covenant, condition or
agreement contained in any agreement or instrument evidencing or governing
any such Indebtedness in a principal amount in excess of $15,000,000 after
giving effect to any applicable period of grace specified in the instrument
evidencing or governing such Indebtedness, if the effect of any failure
referred to in this clause (ii) is to cause, or to permit the holder or
holders of such Indebtedness (or any Person acting on their behalf) to cause,
with the giving of notice if required, such Indebtedness to become due prior
to its stated maturity, or (iii) in the case of the Borrower, fail to observe
or perform any term, covenant, condition or agreement contained in the Senior
Note Indenture or any other agreement or instrument evidencing
or governing any of the Senior Note Indebtedness if the effect of any failure
referred to in this clause (iii) is to cause, or to permit the holder or
holders of such Senior Note Indebtedness (or any Person acting on their
behalf) to cause, with the giving of notice if required, all or any portion
of such Senior Note Indebtedness to become due prior to its stated maturity;
(h) (i) an event of default, termination event or similar event shall
occur which results in the suspension or termination of the ability of the
Borrower or any of its Subsidiaries to sell receivables for cash pursuant to
the Receivables Transfer Program; provided this clause (i) will not be
applicable, in the case of any such event with respect to a Receivables
Transfer Program, so long as the Borrower obtains a commitment for an
alternative Receivables Transfer Program (for a comparable or greater amount)
within 30 days after the occurrence of such event and such commitment is
maintained throughout the remaining scheduled term of the affected
Receivables Transfer Program, or (ii) the Borrower or any of its Subsidiaries
shall fail to maintain the existence of the Receivables
Transfer Program for a period of 30 consecutive days other than as a result
of an event or condition described in clause (i) of this paragraph (h);
(i) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking (i)
relief in respect of the Borrower or any of its Subsidiaries, or of a
substantial part of the property or assets of the Borrower or any of its
Subsidiaries, under Title 11 of the United States Code, as now constituted or
hereafter amended, or any other federal or state bankruptcy, insolvency,
receivership or similar law, (ii) the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for the Borrower or
any of its Subsidiaries or for a substantial part of the property or assets
of the Borrower or any of its Subsidiaries or (iii) the winding-up or
liquidation of the Borrower or any of its Subsidiaries; and such
proceeding or petition shall continue undismissed for 60 days or an order or
decree approving or ordering any of the foregoing shall be entered;
(j) the Borrower or any of its Subsidiaries shall (i) voluntarily commence
any proceeding or file any petition seeking relief under Title 11 of the
United States Code, as now constituted or hereafter amended, or any other
federal or state bankruptcy, insolvency, receivership or similar law, (ii)
consent to the institution of, or fail to contest in a timely and appropriate
manner, any proceeding or the filing of any petition described in paragraph
(i) above, (iii) apply for or consent to the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for the
Borrower or any of its Subsidiaries or for a substantial part of the property
or assets of the Borrower or any of its Subsidiaries, (iv) file an answer
admitting the material allegations of a petition filed against it in any such
proceeding, (v) make a general assignment for the benefit of
creditors, (vi) become unable, admit in writing its inability or fail
generally to pay its debts as they become due or (vii) take any action for
the purpose of effecting any of the foregoing;
(k) one or more judgments for the payment of money in an aggregate amount in
excess of $10,000,000 shall be rendered against the Borrower, any of its
Subsidiaries or any combination thereof (unless such judgment is covered by
insurance and the insurer has offered to defend such judgment or
acknowledged, in writing, its liability with respect thereto) and the same
shall remain undischarged for a period of 30 consecutive days
during which execution shall not be effectively stayed, or any action shall
be legally taken by a judgment creditor to levy upon assets or properties of
the Borrower or any of its Subsidiaries to enforce any such judgment (unless
the Borrower or the relevant Subsidiary, as applicable, has previously
established reserves under GAAP consistently applied for the full amount of
such judgment);
(l) a Reportable Event or Reportable Events, or a failure to make a required
installment or other payment (within the meaning of Section 412(n)(1) of the
Code) shall have occurred with respect to any Plan or Plans that reasonably
could be expected to result in liability of the Borrower to the PBGC or to a
Plan in an aggregate amount exceeding $5,000,000 and, within 30 days after
the reporting of any such Reportable Event to the Administrative Agent or
after the receipt by the Administrative Agent of the
statement required pursuant to Section 5.06(b)(iii) hereof, the
Administrative Agent shall have notified the Borrower in writing that (i) the
Required Lenders have made a determination that, on the basis of such
Reportable Event or Reportable Events or the failure to make a required
payment, there are reasonable grounds (A) for the termination
of such Plan or Plans by the PBGC, (B) for the appointment by the appropriate
United States district court of a trustee to administer such Plan or Plans or
(C) for the imposition of a lien in favor of a Plan and (ii) as a result
thereof an Event of Default exists hereunder; or a trustee shall be appointed
by a United States district court to administer any such Plan or Plans; or
the PBGC shall institute proceedings (including giving notice
of intent thereof) to terminate any such Plan or Plans;
(m)(i) the Borrower or any ERISA Affiliate shall have been notified by the
sponsor of a Multiemployer Plan that it has incurred Withdrawal Liability to
such Multiemployer Plan, (ii) the Borrower or such ERISA Affiliate does not
have reasonable grounds for contesting such Withdrawal Liability or is not
contesting such Withdrawal Liability in a timely and appropriate manner and
(iii) the amount of such Withdrawal Liability specified in such notice, when
aggregated with all other amounts required to be paid to Multiemployer Plans
in connection with Withdrawal Liabilities (determined as of
the date or dates of such notification) either (A) exceeds $5,000,000 or
requires payments exceeding $5,000,000 in any year or (B) is less than
$5,000,000 but any Withdrawal Liability payment remains unpaid 30 days after
such payment is due;
(n) the Borrower or any ERISA Affiliate shall have been notified by the
sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or is being terminated, within the meaning of Title IV of
ERISA, if solely as a result of such reorganization or termination the
aggregate annual contributions of the Borrower and its ERISA Affiliates to
all Multiemployer Plans that are then in reorganization or have been
or are being terminated have been or will be increased over the amounts
required to be contributed to such Multiemployer Plans for their most
recently completed plan years by an amount exceeding $5,000,000;
(o) any Collateral Document or Subsidiary Guaranty shall not be in full
force and effect, enforceable in accordance with its terms, or the security
interest purported to be created by any Collateral Document shall not be a
valid and enforceable perfected first priority security interest in any
collateral subject thereto (except, in the case of the Borrower Security
Agreement and the Subsidiary Security Agreement, in connection with
releases of collateral thereunder in accordance with the terms thereof);
(p) a Change in Control shall occur; or
(q) (i) any of the Borrower's Subsidiaries that is an Insured Subsidiary
shall be required to cease accepting deposits or making loans as a result of
a cease and desist order or other formal supervisory action (other than an
instruction generally applicable to banks organized under the jurisdiction of
organization of such Insured Subsidiary) by any Bank Regulatory Authority;
(ii) the federal deposit insurance of any of the Borrower's
Subsidiaries that is an Insured Subsidiary shall be terminated pursuant to 12
U.S.C. 1818(a) or any successor provision); or (iii) any of the Borrower's
Subsidiaries that is an Insured Subsidiary shall be required (whether or not
the time allowed by the appropriate Bank Regulatory Authority for the
submission of such plan has been established or elapsed) to submit a capital
restoration plan of the type referred to in 12 U.S.C. 1831o(b)(2)(C),
as amended, re-enacted or redesignated from time to time;
then, and in every such event (other than an event with respect to the
Borrower described in paragraph (i) or (j) above), and at any time
thereafter during the continuance of such event, the
Administrative Agent, at the request of the Required Lenders, shall, by
notice to the Borrower, take any of the following actions, at the same or
different times: (i) terminate forthwith the Commitments; (ii) declare the
Loans then outstanding to be forthwith due and payable in whole or in part,
whereupon the principal of the Loans so declared to be due and payable,
together with accrued interest thereon and any unpaid accrued Fees and all
other liabilities of the Borrower accrued hereunder and under any other Loan
Document, shall become forthwith due and payable, without presentment,
demand, protest or any other notice of any kind, all of which are hereby
expressly waived by the Borrower, anything contained herein or in any other
Loan Document to the contrary notwithstanding and (iii) require that the
Borrower deposit cash with the Administrative Agent, in an amount equal to
the aggregate LC Exposure, as collateral security for the repayment of any
future drawings under the Letters of Credit; and in any event with
respect to the Borrower described in paragraph (i) or (j) above, the
Commitments shall automatically terminate and the principal of the Loans then
outstanding, together with accrued interest thereon and any unpaid accrued
Fees and all other liabilities of the Borrower accrued here-
under and under any other Loan Document, shall automatically become due and
payable, without presentment, demand, protest or any other notice of any
kind, all of which are hereby expressly waived by the Borrower, anything
contained herein or in any other Loan Document to the contrary
notwithstanding, and the Borrower shall forthwith be required to deposit cash
with the Administrative Agent in an amount equal to the aggregate LC Exposure
or shall deliver to the Administrative Agent a Replacement Letter of Credit
drawable without condition and in a face amount equal to the aggregate LC
Exposure and otherwise satisfactory in all respects to the
Administrative Agent, which Letter of Credit or cash deposit shall serve as
collateral security for the repayment of any further drawings under the
Letters of Credit.
ARTICLE II.
The Administrative Agent
In order to expedite the transactions contemplated by this Agreement, the
Administrative Agent is hereby appointed to act as agent on behalf of the
Lenders. Each of the Lenders, and each subsequent holder of any Loan by its
acceptance thereof, hereby irrevocably authorizes the Administrative Agent to
take such actions on behalf of such Lender or holder and to exercise such
powers as are specifically delegated to the Administrative Agent by the terms
and provisions hereof, together with such actions and powers as are
reasonably incidental thereto.
The Administrative Agent is hereby expressly authorized by the Lenders,
without hereby limiting any implied authority, (a) to receive on behalf of
the Lenders all payments of principal of and interest on the Loans and all
other amounts due to the Lenders hereunder, and promptly to
distribute to each Lender its proper share of each payment so received; (b)
to give notice on behalf of each of the Lenders to the Borrower of any Event
of Default specified in this Agreement of which the Administrative Agent has
actual knowledge acquired in connection with its agency hereunder; (c) to act
as Administrative Agent on behalf of the Lenders under the other
Loan Documents and to exercise all rights granted to the Administrative Agent
under the other Loan Documents; (d) to distribute to each Lender copies of
all notices, financial statements and other materials delivered by the
Borrower pursuant to this Agreement as received by the
Administrative Agent; and (e) take the actions it is authorized to take
pursuant to the Collateral Documents in order to release collateral thereunder.
Neither the Administrative Agent nor any of its directors, officers,
employees or agents shall be liable as such for any action taken or omitted
by any of them except for its or his own gross negligence or wilful
misconduct, or be responsible for any statement, warranty or
representation herein or the contents of any document delivered in connection
herewith, or be required to ascertain or to make any inquiry concerning the
performance or observance by any Loan Party of any of the terms, conditions,
covenants or agreements contained in any Loan Document. The Administrative
Agent shall not be responsible to the Lenders or the holders of the Loans for
the due execution, genuineness, validity, enforceability or effectiveness of
this Agreement, or any other Loan Documents or other notes, instruments or
agreements. The Administrative Agent shall in all cases be fully protected
in acting, or refraining from acting, in accordance with written instructions
signed by the Required Lenders and, except as otherwise specifically provided
herein, such instructions and any action or inaction pursuant thereto shall be
binding on all the Lenders and each subsequent holder of any Loan. The
Administrative Agent shall, in the absence of knowledge to the contrary, be
entitled to rely on any instrument or document believed by it in good faith
to be genuine and correct and to have been signed or sent by the proper
Person or Persons. Neither the Administrative Agent nor any of its directors,
officers, employees or agents shall have any responsibility to the Borrower
on account of the failure of or delay in performance or breach by any Lender
of any of its obligations hereunder or to any Lender on account of the
failure of or delay in performance or breach by any other Lender
or the Borrower of any of their respective obligations hereunder or under any
other Loan Document or in connection herewith or therewith. The
Administrative Agent may execute any and all duties hereunder by or through
agents or employees and shall be entitled to rely upon the advice of legal
counsel selected by it with respect to all matters arising hereunder and
shall not be liable for any action taken or suffered in good faith by it in
accordance with the advice of such counsel.
The Lenders hereby acknowledge that the Administrative Agent shall be under
no duty to take any discretionary action permitted to be taken by it pursuant
to the provisions of this Agreement unless it shall be requested in writing
to do so by the Required Lenders.
Subject to the appointment and acceptance of a successor Administrative
Agent as provided below, (i) the Administrative Agent may resign at any time
by notifying the Lenders, the Issuing Banks and the Borrower and (ii) the
Administrative Agent, at the request of the Borrower and with the consent of
the Required Lenders (which consent shall not be unreasonably
withheld) shall resign. Upon any such resignation, the Borrower shall have
the right to appoint a successor, subject to the approval of the Required
Lenders (which approval shall not be unreasonably withheld). If no successor
shall have been so appointed by the Borrower and approved by the Required
Lenders and shall have accepted such appointment within 30 days after
the retiring Administrative Agent gives notice of its resignation or the
Required Lenders consent to the resignation of the Administrative Agent, then
(i) the retiring Administrative Agent may, on behalf of the Lenders, appoint
a successor Administrative Agent, if the Administrative Agent shall have
resigned by notifying the Lenders or (ii) otherwise, the Required Lenders may
appoint a successor Administrative Agent to replace the terminated
Administrative Agent, in each case which successor shall be a bank with an
office in New York, New York, having a combined capital and surplus of at
least $500,000,000 or an Affiliate of any such bank. Upon the acceptance of
any appointment as Administrative Agent hereunder by a successor bank, such
successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder. After the Administrative Agent's resignation hereunder, the
provisions of this Article and Section 9.05 shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as Administrative Agent.
With respect to the Loans made by it and the Letter of Credit participations
acquired by it hereunder, the Administrative Agent in its individual capacity
and not as Administrative Agent shall have the same rights and powers as any
other Lender and may exercise the same as though it were not the
Administrative Agent, and the Administrative Agent and its Affiliates may
accept deposits from, lend money to and generally engage in any kind of
business with the Borrower or any Subsidiary or other Affiliate thereof as if
it were not the Administrative Agent.
Each Lender agrees (i) to reimburse the Administrative Agent, on demand, in
the amount of its pro rata share of any expenses incurred for the benefit of
the Lenders by the Administrative Agent, including counsel fees and
compensation of agents paid for services rendered on behalf of the Lenders,
which shall not have been reimbursed by the Borrower and
(ii) to indemnify and hold harmless the Administrative Agent and any of its
directors, officers, employees or agents, on demand, in the amount of such
pro rata share, from and against any and all liabilities, taxes, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed on,
incurred by or asserted against it in its capacity as the Administrative
Agent or any of them in any way relating to or arising out of this Agreement
or any other Loan Document or any action taken or omitted by it or any of
them under this Agreement or any other Loan Document, to the extent the
same shall not have been reimbursed by the Borrower; provided that no Lender
shall be liable to the Administrative Agent for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the gross negligence
or wilful misconduct of the Administrative Agent or any of its directors,
officers, employees or agents. For purposes hereof, a Lender's "pro rata
share" shall be determined based upon its share of the sum of the total
Revolving Exposures, outstanding Term Loans and unused Commitments at the time.
Each Lender acknowledges that it has, independently and without reliance upon
the Administrative Agent or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Administrative Agent or any
other Lender and based on such documents and information as it
shall from time to time deem appropriate, continue to make its own decisions
in taking or not taking action under or based upon this Agreement or any
other Loan Document, any related agreement or any document furnished
hereunder or thereunder.
The Syndication Agent, the Documentation Agents and the Co-Agents shall have
no duties, rights, obligations or liabilities hereunder (other than under
Section 9.16) or under the other Loan Documents in their roles as such.
ARTICLE IX.
Miscellaneous
SECTION IX.01. Notices. Notices and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight
courier service, mailed or sent by telecopier, as follows:
(a) if to the Borrower, to it at Metris Companies Inc., 000 Xxxxx Xxxxxxx
000, Xxxxx 0000, Xx. Xxxxx Xxxx, Xxxxxxxxx 00000, Attention of
Vice President, Chief Financial Officer (Telephone No. (000) 000-0000)
(Telecopy No. (000) 000-0000);
(b) if to the Administrative Agent, to it at Chase Loan and Agency
Services, Xxx Xxxxx Xxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Xxxxxxx Xxxx (Telecopy No. 212-552-5658), with a copy to The Chase Manhattan
Bank, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxx Xxxxx
(Telecopy No. 212-270-1789); and
(c) if to a Lender, to it at its address (or telecopy number) set forth in
Schedule 2.01 or in the Assignment and Acceptance pursuant to which such Lender
became a party hereto.
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on
the date of receipt if delivered by hand or overnight courier service or sent
by telecopy or other telegraphic communications equipment of the sender, or
on the date five Business Days after dispatch by certified or registered mail
if mailed, in each case delivered, sent or mailed (properly addressed)
to such party as provided in this Section 9.01 or in accordance with the
latest unrevoked direction from such party given in accordance with this
Section 9.01.
SECTION IX.02. Survival of Agreement. All covenants, agreements,
representations and warranties made by the Borrower herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Lenders and shall survive the making by the
Lenders of the Loans, regardless of any investigation made by the Lenders or
on their behalf, and shall continue in full force and effect as long as the
principal of or any accrued interest on any Loan or any Fee or any other
amount payable under this Agreement or any other Loan Document is outstanding
and unpaid and so long as the Commitments have not been terminated.
SECTION IX.03. Binding Effect. This Agreement shall become effective when
it shall have been executed by the Borrower, the Administrative Agent and
each Lender and thereafter shall be binding upon and inure to the benefit of
the Borrower, the Administrative Agent and each Lender and their respective
successors and assigns, except that the Borrower shall not have the right to
assign its rights hereunder or any interest herein without the prior
consent of all the Lenders.
SECTION IX.04. Successors and Assigns. (a) Whenever in this Agreement any
of the parties hereto is referred to, such reference shall be deemed to
include the successors and assigns of such party; and all covenants, promises
and agreements by or on behalf of the Borrower, the Administrative Agent or
the Lenders that are contained in this Agreement shall bind and inure to the
benefit of their respective successors and assigns.
(b) Each Lender may assign to one or more assignees all or a portion of its
interests, rights and obligations under this Agreement (including all or a
portion of any Commitment and Loans at the time owing to it); provided that
(i) except in the case of an assignment to a Lender or an Affiliate of such
Lender, the Borrower, the Issuing Banks (in the case of any Revolving
Commitment or Revolving Loan) and the Administrative Agent must give
their prior written consent to such assignment (which consent, in each case,
shall not be unreasonably withheld or delayed); (ii) unless otherwise agreed
by the Borrower and the Administrative Agent, the amount of the Commitment of
the assigning Lender subject to each such assignment (determined as of the
date the Assignment and Acceptance with respect to such
assignment is delivered to the Administrative Agent) shall not be less than
$5,000,000 (or, if less, the then-remaining Commitment of the assigning
Lender) and the amount of the Commitment of such Lender remaining after such
assignment shall not be less than $5,000,000 or shall be zero;
and (iii) the parties to each such assignment shall execute and deliver to
the Administrative Agent an Assignment and Acceptance, together with a
processing and recordation fee of $3,500 (to be paid by the assignee or the
assignor). Upon acceptance and recording pursuant to paragraph (e) of this
Section 9.04, from and after the effective date specified in each Assignment
and Acceptance, which effective date shall be at least five Business Days
after the execution thereof, (A) the assignee thereunder shall be a party
hereto and, to the extent of the interest assigned by such Assignment and
Acceptance, have the rights and obligations of a Lender under this Agreement
and (B) the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Acceptance, be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance
covering all or the remaining portion of an assigning Lender's rights and
obligations under this Agreement, such Lender shall cease to be a party
hereto (but shall continue to be entitled to the benefits of Sections 2.12,
2.15, 2.19 and 9.05, as well as to any Fees accrued for its account hereunder
and not yet paid)).
(c) By executing and delivering an Assignment and Acceptance, the assigning
Lender thereunder and the assignee thereunder shall be deemed to confirm to
and agree with each other and the other parties hereto as follows: (i) such
assigning Lender warrants that it is the legal and beneficial owner of the
interest being assigned thereby free and clear of any adverse claim and that
its Commitment, and the outstanding balances of its Revolving Loans without
giving effect to assignments thereof which have not become effective, are as
set forth in such Assignment and Acceptance, (ii) except as set forth in (i)
above, such assigning Lender makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement, or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
Agreement, any other Loan Document or any other instrument or document
furnished pursuant hereto or the financial condition of any Loan Party or the
performance or observance by any Loan Party of any of its obligations under
this Agreement, any other Loan Document or any other instrument or
document furnished pursuant hereto; (iii) such assignee represents and
warrants that it is legally authorized to enter into such Assignment and
Acceptance; (iv) such assignee confirms that it has received a copy of this
Agreement, together with copies of the most recent financial statements
delivered pursuant to Section 5.04 and such other documents and information
as it has deemed appropriate to make its own credit analysis and decision to
enter into such Assignment and Acceptance; (v) such assignee will
independently and without reliance upon the Administrative
Agent, such assigning Lender or any other Lender and based on such documents
and information as it shall deem appropriate at the time, continue to make
its own credit decisions in taking or not taking action under this Agreement;
(vi) such assignee appoints and authorizes the Administrative Agent to take
such action as agent on its behalf and to exercise such powers
under this Agreement as are delegated to the Administrative Agent by the
terms hereof, together with such powers as are reasonably incidental thereto;
and (vii) such assignee agrees that it will perform in accordance with their
terms all the obligations which by the terms of this Agreement
are required to be performed by it as a Lender.
(d) The Administrative Agent shall maintain at one of its offices in the
City of New York a copy of each Assignment and Acceptance delivered to it and
a register for the recordation of the names and addresses of the Lenders, and
the Commitment of, and principal amount of the Loans owing to, each Lender
pursuant to the terms hereof from time to time (the "Register"). The entries
in the Register shall be conclusive in the absence of manifest error and
the Borrower, the Administrative Agent and the Lenders may treat each Person
whose name is recorded in the Register pursuant to the terms hereof as a
Lender hereunder for all purposes of this Agreement. Any assignment of any
Loan shall be effective only upon appropriate entries with respect thereto
being made in the Register. The Register shall be available for inspection by
the Borrower and any Lender, at any reasonable time and from time to time
upon reasonable prior notice.
(e) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, an administrative
questionnaire in form satisfactory to the Administrative Agent completed in
respect of the assignee (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b)
above and, if required, the written consent of the Borrower and the
Administrative Agent to such assignment, the Administrative Agent shall (i)
accept such Assignment and Acceptance, (ii) record the information contained
therein in the Register and (iii) give prompt notice thereof to the Lender
and the Issuing Banks.
(f) Each Lender may without the consent of the Borrower or the
Administrative Agent sell participations to one or more banks or other
entities in all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitment and the Loans
owing to it); provided, however, that (i) such Lender's obligations under
this Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such
obligations, (iii) the participating banks or other entities shall be entitled
to the benefit of the cost protection provisions contained in Sections 2.12,
2.15 and 2.19 limited, as to each participant, to the amount the selling
Lender could claim and (iv) the Borrower, the Administrative Agent and the
other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement, and such Lender shall retain the sole right to enforce the
obligations of the Borrower relating to the Loans and to approve any
amendment, modification or waiver of any provision of this Agreement (other
than amendments, modifications or waivers decreasing any fees payable
hereunder or the amount of principal of or the rate at which interest is
payable on the Loans, or extending any scheduled principal payment date or
date fixed for the payment of principal of or interest or fees on the Loans).
(g) Any Lender or participant may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this
Section 9.04, disclose to the assignee or participant or proposed assignee or
participant any information relating to the Borrower furnished to such Lender
by or on behalf of the Borrower; provided that, prior to any
such disclosure of information designated by the Borrower as confidential,
each such assignee or participant or proposed assignee or participant shall
execute an agreement whereby such assignee or participant shall agree
(subject to customary exceptions) to preserve the confidentiality of such
confidential information on substantially similar terms to those set forth in
Section 9.16.
(h) Notwithstanding the limitations set forth in paragraph (b) above, (i)
any Lender may at any time assign or pledge all or any portion of its rights
under this Agreement to a Federal Reserve Bank and (ii) any Lender which is a
"fund" may at any time assign or pledge all or any portion of its rights
under this Agreement to secure such Lender's indebtedness, in each case
without the prior written consent of the Borrower, the Administrative Agent
or any Issuing Bank; provided that each such assignment shall be made in
accordance with applicable law and no such assignment shall release a Lender
from any of its obligations hereunder. In order to facilitate any such
assignment, the Borrower shall, at the request of the assigning Lender, duly
execute and deliver to the assigning Lender a registered promissory note or
notes evidencing the Loans made to the Borrower by the assigning Lender
hereunder.
(i) The Borrower shall not assign or delegate any of its respective rights
and duties hereunder.
SECTION IX.05. Expenses; Indemnity. (a) The Borrower agrees to pay all
reasonable out-of-pocket expenses incurred by the Administrative Agent in
connection with the preparation of this Agreement and the other Loan
Documents or in connection with any amendments, modifications or waivers of
the provisions hereof or thereof (whether or not the transactions hereby
contemplated shall be consummated) or incurred by the Administrative
Agent, Issuing Banks or any Lender in connection with the enforcement or
protection of their rights in connection with this Agreement and the other
Loan Documents or in connection with the Loans made hereunder, including (i)
the reasonable fees and disbursements of Xxxxxxx Xxxxxxx & Xxxxxxxx, counsel
for the Administrative Agent, (ii) in connection with any such
amendment, modification or waiver, the fees and disbursements of any common
counsel, and (iii) in connection with any such enforcement or protection, the
fees and disbursements of any counsel for the Administrative Agent or any
Lender.
(b) The Borrower agrees to indemnify the Administrative Agent, the Issuing
Banks, the Syndication Agent, the Documentation Agent, the Co-Agents,
each Lender and their directors, officers, employees and agents (each such
Person being called an "Indemnitee") against, and to hold each Indemnitee
harmless from, any and all losses, claims, damages, liabilities and related
expenses, including reasonable counsel fees and expenses, incurred by or
asserted against any Indemnitee arising out of, in any way connected with, or
as a result of (i) the execution or delivery of this Agreement or any other
Loan Document or any agreement or instrument contemplated thereby, the
performance by the parties thereto of their respective obligations thereunder
or the consummation of the Transactions and the other transactions
contemplated thereby, (ii) the use of the proceeds of the Loans or (iii) any
claim, litigation, investigation or proceeding relating to any of the
foregoing, whether or not any Indemnitee is a party thereto; provided that
such indemnity shall not, as to any Indemnitee, be available to the
extent that such losses, claims, damages, liabilities or related expenses are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or wilful misconduct of
such Indemnitee; provided, however, that the Borrower will only be liable for
the fees of a single firm which shall act as common counsel for the Lenders,
except in the case where (i) a Lender reasonably determines based upon the
written advice of legal counsel, a copy of which shall be provided to the
Borrower, in its judgment that having common counsel would present such
counsel with a conflict of interest, (ii) a Lender reasonably concludes that
there may be legal defenses available to it that are different from or in
addition to those available to other Lenders or (iii) defense of any action
or proceeding is not assumed by the Lenders.
(c) The provisions of this Section 9.05 shall remain operative and in full
force and effect regardless of the expiration of the term of this Agreement,
the consummation of the transactions contemplated hereby, the repayment of
any of the Loans, the invalidity or unenforceability of any term or provision
of this Agreement or any other Loan Document, or any
investigation made by or on behalf of the Administrative Agent or any Lender.
All amounts due under this Section 9.05 shall be payable on written demand
therefor accompanied by evidence in reasonable detail sufficient to identify
the nature and amount of the expense so incurred.
SECTION IX.06. Right of Setoff. If an Event of Default shall have
occurred and be continuing, each Lender is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other indebtedness at any time owing by such
Lender to or for the credit or the account of the Borrower against any of and
all the obligations of the Borrower now or hereafter existing under this
Agreement or any other Loan Document held by such Lender, irrespective of
whether or not such Lender shall have made any demand under this Agreement or
such other Loan Document and although such obligations may be unmatured.
The rights of each Lender under this Section are in addition to other rights
and remedies (including other rights of setoff) which such Lender may have.
Each Lender agrees promptly to notify the Borrower of any such setoff and the
application thereof made by such Lender.
SECTION IX.07. Applicable Law. THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS SHALL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SECTION IX.08. Waivers; Amendment. (a) No failure or delay of the
Administrative Agent, the Issuing Bank or any Lender in exercising any power
or right hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude
any other or further exercise thereof or the exercise of any other right or
power. The rights and remedies of the Administrative Agent, the Issuing Bank
and the Lenders hereunder and under the other Loan Documents are cumulative
and are not exclusive of any rights or remedies which they
would otherwise have. No waiver of any provision of this Agreement or any
other Loan Document or consent to any departure by the Borrower therefrom
shall in any event be effective unless the same shall be permitted by
paragraph (b) below, and then such waiver or consent shall be effective only
in the specific instance and for the purpose for which given. No notice or
demand on the Borrower in any case shall entitle the Borrower to any other or
further notice or demand in similar or other circumstances.
(b) Neither this Agreement, any other Loan Document nor any provision hereof
or thereof may be waived, amended or modified except pursuant to an agreement
or agreements in writing entered into by the Borrower, each other affected
Loan Party and the Required Lenders; provided, however, that no such
agreement shall (i) decrease the principal amount of, or extend the scheduled
date of amortization or the maturity of or date for the payment of any
principal, interest or Fee on any Loan or Commitment, or waive or excuse any
such payment or any part thereof, or decrease the rate of interest on any
Loan, without the prior written consent of each Lender affected thereby, (ii)
increase the Commitment of or decrease any Fee to be paid to
any Lender without the prior written consent of such Lender, (iii) amend or
modify the provisions of this Section or the definition of the "Required
Lenders", without the prior written consent of each Lender or (iv) release or
otherwise limit or modify the obligations of any material Subsidiary
Guarantor (except as provided in the Subsidiary Guaranty) or release all or any
substantial part of the collateral securing the Obligations (except as
provided in the Borrower Security Agreement or the Subsidiary Security
Agreement) in each case without the prior written consent of each Lender;
provided, further, that no such agreement shall amend, modify or otherwise
affect the rights or duties of the Administrative Agent hereunder without the
prior written consent of the Administrative Agent. Each Lender and each
holder of a Loan shall be bound by any waiver, amendment or modification
authorized by this Section, and any consent by any Lender or holder of a Loan
pursuant to this Section shall bind any Person subsequently acquiring a Loan
from it.
SECTION IX.09. Interest Rate Limitation. Notwithstanding anything herein to
the contrary, if at any time the applicable interest rate, together with all
fees and charges which are treated as interest under applicable law
(collectively, the "Charges"), as provided for herein or
in any other document executed in connection herewith, or otherwise
contracted for, charged, received, taken or reserved by any Lender, shall
exceed the maximum lawful rate (the "Maximum Rate") which may be contracted
for, charged, taken, received or reserved by such Lender in accordance with
applicable law, the rate of interest payable in respect of the Loans held
by such Lender, together with all Charges payable to such Lender, shall be
limited to the Maximum Rate.
SECTION IX.10. Entire Agreement. This Agreement and the other Loan
Documents and the letter agreement referred to in Section 2.05 constitute the
entire contract between the parties relative to the subject matter hereof.
Any previous agreement among the parties with respect to the subject matter
hereof is superseded by this Agreement and the other Loan Documents. Nothing
in this Agreement or in the other Loan Documents, expressed or
implied, is intended to confer upon any party other than the parties hereto
and thereto any rights, remedies, obligations or liabilities under or by
reason of this Agreement or the other Loan Documents.
SECTION IX.11. Waiver of Jury Trial. Each party hereto hereby waives, to
the fullest extent permitted by applicable law, any right it may have to a
trial by jury in respect of any litigation directly or indirectly arising out
of, under or in connection with this Agreement or any of the other Loan
Documents. Each party hereto (a) certifies that no representative, agent or
attorney of any other party has represented, expressly or otherwise, that
such other party would not, in the event of litigation, seek to enforce the
foregoing waiver and (b) acknowledges that it and the other parties hereto
have been induced to enter into this Agreement and the other Loan
Documents, as applicable, by, among other things, the mutual waivers and
certifications in this Section 9.11.
SECTION IX.12. Severability. In the event any one or more of the provisions
contained in this Agreement or in any other Loan Document should be held
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected or impaired thereby. The parties
shall endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
SECTION IX.13. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original but all of which
when taken together shall constitute but one contract, and shall become
effective as provided in Section 9.03.
SECTION IX.14. Headings. The cover page, the Article and Section headings
and the Table of Contents used herein are for convenience of reference only,
are not part of this Agreement and are not to affect the construction of, or
to be taken into consideration in interpreting, this Agreement.
SECTION IX.15. Jurisdiction; Consent to Service of Process. (a) Each of
the parties hereto agrees that a final judgment in any New York State court
or any federal court of the United States of America sitting in New York City
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement
shall affect any right that any party hereto may have to bring any action or
proceeding relating to this Agreement or the other Loan Documents in the
courts of any jurisdiction.
(b) The Borrower hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or the other Loan
Documents in any New York State or federal court. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 9.01. Nothing in this
Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.
SECTION IX.16. Confidentiality. Unless otherwise agreed to in writing by
the Borrower, the Administrative Agent, the Syndication Agent, the
Documentation Agents, the Co-Agents and each Lender hereby agree to keep all
Proprietary Information (as defined below) confidential and not to disclose
or reveal any Proprietary Information to any Person other than the
Administrative Agent's or such Lender's directors, officers, employees,
Affiliates and agents and to actual or potential assignees and participants,
and then only on a confidential basis; provided, however, that the
Administrative Agent or any Lender may disclose Proprietary Information (a)
as required by law, rule, regulation or judicial process, (b) to its
attorneys and accountants or (c) as requested or required by any state or
federal or foreign authority or examiner regulating banks or banking. For
purposes of this Agreement, the term "Proprietary Information" shall include
all information about the Borrower or any of its Affiliates which has
been furnished by the Borrower or any of its Affiliates, whether furnished
before or after the date hereof, and regardless of the manner in which it is
furnished; provided, however, that Proprietary Information does not include
information which (x) is or becomes generally available to the
public other than as a result of a disclosure by the Administrative Agent or
any Lender not permitted by this Agreement, (y) was available to the
Administrative Agent or any Lender on a nonconfidential basis prior to its
disclosure to the Administrative Agent or such Lender by the Borrower or any
of its Affiliates from a Person who is not otherwise bound by a confidentiality
agreement with the Company or any of its Affiliates or is not otherwise
prohibited from transmitting the information to the Administrative Agent or
such Lender or (z) becomes available to the Administrative Agent or any
Lender on a nonconfidential basis from a Person other than the Borrower or
its Affiliates who is not otherwise bound by a confidentiality agreement with
the Company or any of its Affiliates, or is not otherwise prohibited from
transmitting the information to the Administrative Agent or such Lender. In
addition, the terms of any confidentiality agreement between any Lender and
the Borrower will remain in full force and effect pursuant to the terms thereof.
SECTION IX.17. Effect of Amendment and Restatement of the Existing Credit
Agreement. On the Effective Date, the Borrower's existing credit agreement
shall be amended, restated and superseded in its entirety. The parties
hereto acknowledge and agree that (a) this Agreement and the other Loan
Documents executed and delivered in connection herewith do not constitute a
novation, payment and reborrowing, or termination of the "Obligations" (as
defined in the existing credit agreement) under the existing credit agreement
as in effect prior to the Effective Date; (b) such "Obligations" are in all
respects continuing (as amended and restated hereby) with only the terms
thereof being modified as provided in this Agreement; and (c) the
Liens and security interests as granted under the Security Documents securing
payment of such "Obligations" are in all respects continuing and in full
force and effect and secure the payment of the Obligations (as defined in
this Agreement).
IN WITNESS WHEREOF, the Borrower the Administrative Agent and the
Lenders have caused this Agreement to be duly executed by their respective
authorized officers as of the day and year first above written.
METRIS COMPANIES INC., as Borrower
By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Vice President & Treasurer
By: /s/ Xxxxxx X. Xxxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxxx
Title: Senior Vice President
& Chief Financial Officer
THE CHASE MANHATTAN BANK, as
Administrative Agent, Lender and Issuing
Bank
By: /s/ Xxxx X. Xxxxx
Name: Xxxx X. Xxxxx
Title: Vice President
