EXHIBIT 10.2
[EXECUTION COPY]
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CREDIT AGREEMENT
DATED NOVEMBER 5, 1998
BETWEEN
HIBBETT SPORTING GOODS, INC., HIBBETT TEAM SALES, INC.
AND SPORTS WHOLESALE, INC.
AND
AMSOUTH BANK
RELATING TO A
$5,000,000 REVOLVING FACILITY LOAN
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CREDIT AGREEMENT
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THIS CREDIT AGREEMENT dated as of November 5, 1998 ("this Agreement") is
entered into by HIBBETT SPORTING GOODS, INC., a Delaware corporation
("Hibbett"), HIBBETT TEAM SALES, INC., an Alabama corporation ("HTS"), and
SPORTS WHOLESALE, INC., an Alabama corporation ("SW"; HTS and SW are sometimes
together referred to as the "Initial Participating Entities"; Hibbett and the
Initial Participating Entities, together with all entities that hereafter become
Participating Entities, being hereafter sometimes together referred to as the
"Borrowers") and AMSOUTH BANK, an Alabama banking corporation (the "Lender").
RECITALS
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A. The Borrowers have applied to the Lender for a short-term revolving
credit facility in an aggregate principal amount outstanding not to exceed
$5,000,000 (the "Revolving Facility"), the proceeds of which are to be used by
the Borrowers for general corporate purposes, including seasonal working
capital.
B. The Lender is willing to make the Revolving Facility available to the
Borrowers only if, among other things, the Borrowers enter into this Agreement
and the other Loan Documents (as hereinafter defined).
AGREEMENT
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NOW, THEREFORE, in consideration of the foregoing Recitals, and to induce
the Lender to make the Revolving Facility available, the Borrowers and the
Lender agree as follows:
ARTICLE 1
DEFINITIONS
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SECTION 1.1 For the purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires:
Unless otherwise specified, all accounting terms used herein have the
meanings assigned to them, and all computations herein provided shall be
made, in accordance with those generally accepted accounting principles
applied in the preparation of the audited financial statements of Hibbett
referred to in Section 53; provided that the financial statements required
to be delivered pursuant to clauses (1) and (2) of Section 73 shall be
prepared in accordance with generally accepted accounting principles as in
effect from time to time and provided further that quarterly financial
statements delivered pursuant
to such clause (1) are not required to contain footnote disclosure and
shall be subject to ordinary year-end audit adjustments. All references
herein to "generally accepted accounting principles" refer to such
principles as they exist at the date of application thereof.
All references in this Agreement to designated "Articles", "Sections"
and other subdivisions or to lettered Exhibits are to the designated
Articles, Sections and other subdivisions hereof and the lettered Exhibits
annexed hereto unless the context otherwise clearly indicates. All
Article, Section, other subdivision and Exhibit captions herein are used
for reference only and in no way limit or describe the scope or intent of,
or in any way affect, this Agreement.
The terms "herein", "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision.
The terms "include," "including" and similar terms shall be construed
as if followed by the phrase "without being limited to."
The terms defined in this article have the meanings attributed to them
in this article. Singular terms shall include the plural as well as the
singular, and vice versa. Words of masculine, feminine or neuter gender
shall mean and include the correlative words of other genders.
All recitals set forth in this Agreement are hereby incorporated in
the operative provisions of this Agreement.
No inference in favor of or against any party shall be drawn from the
fact that such party or its counsel has drafted any portion hereof.
All references herein to a separate instrument are to such separate
instrument as the same may be amended or supplemented from time to time
pursuant to the applicable provisions thereof.
Actual/360 Basis shall mean a method of computing interest or other
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charges hereunder on the basis of an assumed year of 360 days for actual
number of days elapsed, meaning that interest or other charges accrued for
each day will be computed by multiplying the rate applicable on that day by
the unpaid principal balance (or other relevant sum) on that day and
dividing the result by 360.
Advance shall mean a borrowing under the Revolving Facility pursuant
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to Section 21.
Affiliate of any specified person shall mean any person directly or
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indirectly controlling or controlled by or under direct or indirect common
control with such
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specified person. For purposes of this definition "control" when used with
respect to any specified person means the power to direct the management
and policies of such person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
Agreement shall mean, on any date, this Credit Agreement, as
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originally in effect on the Closing Date and as thereafter from time to
time amended, supplemented, restated or otherwise modified and in effect on
such date.
Assumption Agreement shall have the meaning attributed to that term in
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Section 21.
Base Rate shall mean (a) the higher of the (i) Federal Funds Effective
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Rate plus 1/2% per annum and (ii) Prime Rate plus (b) the applicable
Margin.
Base Rate Loans shall mean Loans that bear interest at rates based
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upon the Base Rate.
Business Day shall mean any day on which commercial banks are not
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authorized or required to close in Birmingham, Alabama.
Capital Expenditures shall mean any expenditure for fixed assets or
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that is properly chargeable to capital account in accordance with generally
accepted accounting principles.
Closing Date shall mean the date of this Agreement.
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Consolidated Entity shall mean a person whose financial statements are
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appropriately consolidated with Hibbett's financial statements.
Consolidated Net Income shall mean, with reference to any period, the
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net income of Hibbett and its Consolidated Entities (on a consolidated
basis) for such period after eliminating all non-recurring non-cash items
of income and expense.
Convert, Conversion and Converted shall refer to a conversion pursuant
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to Section 32 hereof of one Type of Loan into another Type of Loan.
Credit Obligations shall mean the Revolving Facility Obligations, and
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all other obligations and debts of the Borrowers owing to the Lender and
arising under the terms of this Agreement, the Note, and the other Loan
Documents, whether now or hereafter incurred, existing or arising,
including the principal amount of all Advances, any sums expended by the
Lender in exercising the rights and remedies described in Section 81, all
accrued interest on Advances, and all costs, fees, charges and expenses
incurred and payable in connection therewith, including fees payable under
the terms of, or in
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connection with, this Agreement, and all other obligations and debts owing
to the Lender arising in connection with, ancillary to, or in support of
Advances, and all extensions, alterations, modifications, revisions and
renewals of any of the foregoing.
Current Maturities shall mean principal maturing or coming due on
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Funded Debt (other than the Credit Obligations) during the next succeeding
period of twelve calendar months.
Debt of any person shall mean, without duplication, (i) the Credit
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Obligations and all other indebtedness, whether or not represented by
bonds, debentures, notes or other securities, for the repayment of borrowed
money or for reimbursement of drafts drawn or available to be drawn under
letters of credit (provided that letters of credit issued to secure trade
obligations, workmen's compensation or similar liabilities and other
obligations (not constituting Debt) arising in the ordinary course of
business shall count as Debt only to the extent that the aggregate face
amount of such letters of credit exceeds $2,000,000) and banker's
acceptances issued for the account of such person, (ii) all indebtedness
deferred for the payment of the purchase price of property or assets
purchased (except accounts payable arising in the ordinary course of
business and not incurred through the borrowing of money), (iii) all
capitalized lease obligations, (iv) all indebtedness secured by any
mortgage or pledge of, or Lien on, property of such person, whether or not
the indebtedness secured thereby shall have been assumed, (v) Guaranteed
Obligations, (vi) all obligations with respect to any conditional sale
contract or title retention agreement, and (vii) all obligations with
respect to interest rate swap agreements.
Default shall mean an Event of Default or an event that with notice or
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lapse of time or both would become an Event of Default.
Dollars and the symbol $ shall mean dollars constituting legal tender
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for the payment of public and private debts in the United States of
America.
EBITDA for any period shall mean Consolidated Net Income (or the net
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deficit, if expenses and charges exceed revenues and other proper income
credits) for such period, plus amounts that have been deducted for (i)
depreciation, (ii) amortization, (iii) Interest Expense and (iv) income and
profit taxes in determining Consolidated Net Income for such period.
EBITDAR for any period shall mean Consolidated Net Income (or the net
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deficit, if expenses and charges exceed revenues and other proper income
credits) for such period, plus amounts that have been deducted for (i)
Interest Expense, (ii) Operating Lease Payments, (iii) depreciation, (iv)
amortization and (v) income and profit taxes in determining Consolidated
Net Income for such period.
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ERISA shall mean the Employee Retirement Income Security Act of 1974,
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as amended from time to time, and the regulations promulgated and rulings
issued thereunder.
ERISA Affiliate shall mean, as of any date, any corporation,
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partnership or other trade or business (whether or not incorporated) under
common control with Hibbett and which together with Hibbett is treated as
single employer under Section 414 of the Internal Revenue Code, as amended.
Event of Default shall have the meaning assigned to such term in
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Article 8 hereof.
Federal Funds Effective Rate shall mean, for any day, the rate per
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annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to
the weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds
brokers on such day, as published by the Federal Reserve Bank of Atlanta on
the Business Day next succeeding such day, provided that (a) if the day for
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which such rate is to be determined is not a Business Day, the Federal
Funds Effective Rate for such day shall be such rate on such transactions
on the next preceding Business Day as so published for any Business Day,
and (b) if such rate is not so published for any Business Day, the Federal
Funds Effective Rate for such Business Day shall be the average rate
charged to the Lender on such Business Day on such transactions as
determined by the Lender.
Fixed Rate shall mean the Quoted Cost of Funds Rate.
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Fixed Rate Segment shall mean a Segment to which a Fixed Rate is (or
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is proposed to be) applicable.
Funded Debt shall mean all Debt of Hibbett and the Consolidated
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Entities, on a consolidated basis, that matures by its terms more than one
year after, or is renewable or extendible at the option of the debtor to a
date more than one year after, the date as of which Funded Debt is being
determined.
Governmental Authority shall mean any national, federal, state,
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county, municipal or other agency, authority, department, commission,
bureau, board, court or instrumentality thereof.
Governmental Requirements shall mean all laws, rules, regulations,
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requirements, ordinances, judgments, decrees, codes and orders of any
Governmental Authority applicable to the Borrowers or any Consolidated
Entity.
Guaranteed Obligations of any person shall mean all guaranties
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(including guaranties of guaranties and guaranties of dividends and other
monetary obligations), endorsement assumptions and other contingent
obligations with respect to, or to purchase or otherwise pay or acquire,
Debt of others.
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Hazardous Material shall mean (a) any asbestos or insulation or other
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material composed of or containing asbestos and (b) any hazardous, toxic or
dangerous waste, substance or material defined as such in the Comprehensive
Environmental Response, Compensation and Liability Act, any so-called
"Superfund" or "Superlien" law, or any other Governmental Requirement
regulating, relating to, or imposing liability or standards of conduct
concerning, any hazardous, toxic or dangerous waste, substance or material.
This definition refers to the amounts of such waste, substance or material
present at a particular facility in excess of the reportable quantity or
threshold planning quantity, if applicable, for such waste, substance or
material as may be listed in such act, law or other Governmental
Requirement described in the foregoing sentence.
Immaterial Subsidiary shall mean any Subsidiary of the Borrowers that
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either (a) has assets with a gross fair market value of less than $250,000
and gross revenues (determined for the most recently ended period of twelve
consecutive fiscal months) of less than $250,000 or (b) has been organized
by the Borrowers as an acquisition vehicle solely for the purpose of
merging with another person in connection with an acquisition permitted
under Section 7.7(15).
Interest Expense shall mean all interest incurred on Debt (including
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obligations payable under capitalized leases attributable to interest)
during the period in question.
Interest Period shall mean the period commencing on the date a Quoted
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Cost of Funds Rate Loan is made and ending on any Business Day up to 29
days thereafter, as Hibbett may select as provided in Section 32 hereof.
Each Interest Period that would otherwise end on a day which is not a
Business Day shall end on the next succeeding Business Day.
Liabilities shall mean all Debt and all other items (including taxes
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accrued as estimated) that, in accordance with generally accepted
accounting principles, would be included in determining total liabilities
as shown on the liabilities side of a balance sheet.
Lien shall mean any mortgage, pledge, assignment, charge, encumbrance,
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lien, security interest or financing lease.
Loan Documents shall mean this Agreement, any Assumption Agreement,
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the Note, and all other agreements, instruments and documents executed or
delivered at any time in connection with the Credit Obligations, or to
evidence or secure any of the Credit Obligations.
Loans shall mean the aggregate outstanding amount of all Advances and
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all extensions and renewals thereof.
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Margin shall mean, at any time with respect to the Loan the applicable
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percentage points as determined under the following matrix with reference
to the ratio of Funded Debt to EBITDA calculated as provided below:
APPLICABLE MARGIN
RATIO OF FUNDED APPLICABLE MARGIN (QUOTED COST OF
DEBT TO EBITDA (BASE RATE) FUNDS RATE)
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(1) Equal to or less than 0 .925%
1.25 to 1.00
(2) Greater than 1.25 to 0 1.1175%
1.00 but less than or
equal to 2.0 to 1.00
(3) Greater than 2.0 to .25% 1.425%
1.00 but less than or
equal to 3.0 to 1.0
From the Closing Date until receipt of the Lender of the financial
statements for the fiscal quarter ended October 31, 1998 pursuant to
Section 73 below, the Margin shall be 0% for Base Rate Loans and .925% for
Quoted Cost of Funds Rate Loans. The Margins shall be reset from time to
time in accordance with the above matrix on the day after receipt by the
Lender in accordance with Section 7.3 of financial statements together with
a Compliance Certificate that provides for different Margins than those
then in effect.
Margin Stock shall have the meaning attributed to that term in
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Regulation U of the Federal Reserve Board, as amended.
Material Adverse Change shall mean a material adverse change in the
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financial condition, results of operations or business of Hibbett and its
Subsidiaries, taken as a whole.
Material Adverse Effect shall mean a material adverse effect upon (i)
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the financial condition, results of operations or business of Hibbett and
its Subsidiaries, taken as a whole, (ii) the ability of Hibbett and the
Participating Entities, taken as a whole, to perform their obligations
under this Agreement or any of the other Loan Documents or (iii) the
legality, validity or enforceability of this Agreement or any of the other
Loan Documents or the rights and remedies of the Lender hereunder and
thereunder.
Material Contract shall mean any contract or agreement (i) to which
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Hibbett or any of its Subsidiaries is a party, by which any of them or
their respective properties is bound or to which any of them is subject and
(ii) that is required to be filed as an exhibit to Hibbett's registration
statements or periodic reports (including on Forms 10-Q and 10-K) submitted
to the Securities and Exchange Commission under the Securities Act of
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1933, as amended, and the rules and regulations from time to time
promulgated thereunder, or under the Exchange Act of 1934.
Maximum Credit Amount shall mean $5,000,000.
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Note shall have the meaning assigned to such term in Section 21
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hereof.
Operating Lease Payments shall mean all amounts payable under any
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lease or rental agreement (other than obligations under capital leases)
during the period in question (but excluding, in any event, amounts paid in
respect of taxes, utilities, insurance, common area maintenance and other
like charges associated with the lease and rental of real and personal
property).
Opinion of Counsel shall mean a favorable written opinion of an
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attorney or firm of attorneys duly licensed to practice law in the
jurisdiction the laws of which are applicable to the legal matters in
question and who is not an employee of the Borrowers or of an Affiliate of
the Borrowers.
Participating Entity shall mean any Subsidiary that hereafter executes
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and delivers to the Lender an Assumption Agreement and all other documents
necessary to assume joint and several liability as to the Credit
Obligations.
PBGC shall mean the Pension Benefit Guaranty Corporation and any
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successor thereto.
Permitted Encumbrances shall mean:
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(1) Liens for taxes, assessments and other governmental charges that
are not delinquent or that are being contested in good faith by appropriate
proceedings duly pursued, and for which adequate reserves have been
established and are being maintained;
(2) mechanics', materialmen's, contractors', landlords' or other
similar liens arising in the ordinary course of business, securing
obligations that are not delinquent or that are being contested in good
faith by appropriate proceedings duly pursued, and for which adequate
reserves have been established and are being maintained;
(3) restrictions, exceptions, reservations, easements, conditions,
limitations and other matters of record that do not materially adversely
affect the value or utility of the property affected thereby or the use to
which such property is being put;
(4) Liens and other matters approved in writing by the Lender;
(5) Liens for purchase money obligations or capital leases provided
that such Liens attach only to the property so purchased or leased;
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(6) Liens existing on any asset prior to the acquisition thereof by a
Borrower and not created in contemplation of such acquisition;
(7) deposits under workmen's compensation, unemployment insurance and
Social Security laws;
(8) Liens arising out of any litigation, legal proceeding or judgment
that are not delinquent or that are being contested in good faith by
appropriate proceedings duly pursued, and for which adequate reserves have
been established and are being maintained, and any pledges or deposits to
secure, or in lieu of, any surety, stay or appeal bond with respect to any
litigation, legal proceeding or judgment;
(9) the existing Liens described in Exhibit A hereto; and
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(10) Liens arising out of the refinancing, extension, renewal or
refunding of any Debt secured by Liens permitted by any of the foregoing
clauses (5) or (6), provided that such Debt is not increased other than by
an amount equal to any reasonable financing fees and is not secured by any
additional assets.
Permitted Investments shall mean:
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(1) direct obligations of, or obligations the payment of which is
guaranteed by, the United States of America or an interest in any trust or
fund that invests solely in such obligations or repurchase agreements,
properly secured, with respect to such obligations;
(2) direct obligations of agencies or instrumentalities of the United
States of America having a rating of A or higher by Standard & Poor's
Ratings Group or A2 or higher by Xxxxx'x Investors Service, Inc.;
(3) a certificate of deposit issued by, or other interest-bearing
deposits with, a bank having its principal place of business in the United
States of America and having equity capital of not less than $250,000,000;
(4) certificates of deposit issued by, or other interest-bearing
deposits with, any other bank organized under the laws of the United States
of America or any state thereof, provided that such deposit is either (i)
insured by the Federal Deposit Insurance Corporation or (ii) properly
secured by such bank by pledging direct obligations of the United States of
America having a market value not less than the face amount of such
deposits;
(5) commercial paper maturing within 270 days of the acquisition
thereof and, at the time of acquisition, having a rating of A-1 or higher
by Standard & Poor's Ratings Group, or P-1 or higher by Xxxxx'x Investors
Service, Inc.;
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(6) eligible banker's acceptances, repurchase agreements and tax-
exempt municipal bonds having a maturity of less than one year, in each
case having a rating of, or that is the full recourse obligation of a
person whose senior debt is rated, A or higher by Standard & Poor's Ratings
Group or A2 or higher by Xxxxx'x Investors Service, Inc.;
(7) any other investment having a rating of A or higher or A-1 or
higher by Standard & Poor's Ratings Group or A2 or higher or P-1 or higher
by Xxxxx'x Investors Service, Inc;
(8) mutual funds, the stated investment policies of which require
substantially all assets in such mutual funds to be invested in one or more
other itemized Permitted Investments;
(9) investments consisting of loans and advances by any of the
Borrowers to (i) the Consolidated Entities and (ii) employees for
reasonable travel, relocation, business expenses and other various purposes
in the ordinary course of business not exceeding $250,000 in the aggregate;
and
(10) other investments made with the express prior written approval of
the Lender.
person (whether or not capitalized) shall include natural persons,
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sole proprietorships, corporations, trusts, unincorporated organizations,
associations, companies, institutions, entities, joint ventures,
partnerships, limited liability companies and Governmental Authorities.
Plan shall mean an employee pension benefit plan as defined in Section
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3(2) of ERISA which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Internal Revenue Code
and which is maintained, or contributed to, by Hibbett or any ERISA
Affiliate for employees of Hibbett or any ERISA Affiliate.
Prime Rate shall mean that rate of interest designated by the Lender
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from time to time as its "prime rate", it being expressly understood and
agreed that its prime rate is merely an index rate used by the Lender to
establish lending rates and is not necessarily the Lender's most favorable
lending rate, and that changes in the Lender's prime rate are discretionary
with the Lender. Any change in the Prime Rate shall be effective as of the
date of such change.
Principal Office shall mean the principal office of the Lender located
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at AmSouth-Sonat Tower, 0000 Xxxxx Xxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxx 00000,
or such other location in Jefferson County, Alabama designated by the
Lender by notice to the Borrowers.
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Quarterly Payment Date shall have the meaning attributed to that term
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in Section 23.
Quoted Cost of Funds Rate shall mean the per annum rate of interest
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designated by the Lender as its quoted cost of funds determined by the
Lender in its sole discretion (provided market conditions and other
considerations allow the Lender to quote such rate), plus the applicable
Margin.
Quoted Cost of Funds Rate Loans shall mean Loans that bear interest at
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rates based upon the Quoted Cost of Funds Rate.
Request for Advance or Interest Rate Election shall have the meaning
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attributed to that term in Section 22.
Revolving Facility shall mean the credit facility made available to
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the Borrower by the Lender under the terms of Article 2 in an aggregate
amount of up to $5,000,000 as reduced by the Borrowers pursuant to Section
25 hereof.
Revolving Facility Obligations shall mean the outstanding principal
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amount of all Advances, all interest accrued thereon, all costs, charges,
fees and expenses payable in connection therewith and all extensions and
renewals thereof.
Segment shall mean a portion of the Advances (or all thereof) with
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respect to which a particular interest rate is (or is proposed to be)
applicable.
Solvent shall mean, as to any person, on a particular date, that such
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person has capital sufficient to carry on its business and transactions and
all business and transactions in which it is about to engage, is able to
pay its debts as they mature, owns property having a value, both at fair
valuation and at present fair saleable value, greater than the amount
required to pay its probable liability on existing debts as they become
mature (including known reasonable contingencies and contingencies that
should be included in notes of such person's financial statements pursuant
to generally accepted accounting principles), and does not intend to, and
does not believe that it will, incur debts or probable liabilities beyond
its ability to pay such debts or liabilities as they mature.
Stores shall mean the existing and hereafter acquired or opened retail
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sporting goods stores owned and operated by the Borrowers.
Subsidiary shall mean any corporation or other entity of which
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securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other persons performing
similar functions are at the time directly or indirectly owned by Hibbett,
and which is a Consolidated Entity.
Termination Date means November 4, 1999.
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Type shall have the meaning as assigned to such term in Section 1.2
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hereof.
SECTION 1.2 TYPES OF LOANS. The "Type" of an Advance refers to whether
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such Advance is a Base Rate Loan or a Quoted Cost of Funds Rate Loan, each of
which constitutes a Type.
ARTICLE 2
REVOLVING FACILITY TERMS
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SECTION 2.1 ADVANCES.
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(a) From and after the Closing Date to (but not including) the Termination
Date, on the terms and subject to the conditions set forth in this Agreement,
the Lender agrees to lend to the Borrowers, jointly and severally, and the
Borrowers may borrow, repay and reborrow, an amount not exceeding the Maximum
Credit Amount in effect from time to time; provided, however, that no more than
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four (4) different Interest Periods may be outstanding at the same time (for
which purpose Interest Periods described in different lettered clauses of the
definition of the term "Interest Period" shall be deemed to be different
Interest Periods even if they are coterminous). All Advances made by the Lender
to the Borrowers under this Agreement with respect to the Revolving Facility
shall be evidenced by a promissory note for the Lender dated the Closing Date
payable to the order of the Lender, duly executed by the Borrowers, and in the
aggregate maximum principal amount of $5,000,000 (the "Note"). The date,
amount, Type, interest rate and duration of Interest Period (if applicable) of
each Advance made by the Lender to the Borrowers, and each payment made on
account of the principal thereof, shall be recorded by the Lender on its books;
provided that the failure of the Lender to make, or any error by the Lender in
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making, any such recordation shall not affect the obligations of the Borrowers
to make a payment when due of any amount owing hereunder or under the Note with
respect to the Advances to be evidenced by the Note. The Advances shall bear
interest as provided in Article 3 below. The unpaid principal amount of all
Loans hereunder shall not exceed the Revolving Facility.
(b) Each Participating Entity, separately and severally, hereby appoints
and designates Hibbett as its agent and attorney-in-fact to act on behalf of it
for all purposes of the Loan Documents. Hibbett shall have authority to
exercise on behalf of each Participating Entity all rights and powers that
Hibbett deems necessary, incidental or convenient in connection with the Loan
Documents, including the authority to execute and deliver certificates,
documents, agreements and other instruments referred to or provided for in the
Loan Documents, request Advances and elect interest rate options hereunder,
receive all proceeds of Advances, give all notices, approvals and consents
required or requested from time to time by the Lender and take any other actions
and steps that each Participating Entity could take for its own account in
connection with the Loan Documents from time to time, it being the intent of
each Participating Entity to grant to Hibbett plenary power to act on behalf of
each Participating Entity in connection with and pursuant to the Loan Documents.
The appointment of Hibbett as agent and
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attorney-in-fact for each Participating Entity hereunder shall be coupled with
an interest and be irrevocable so long as any Loan Document shall remain in
effect. The Lender need not obtain each Participating Entity's consent or
approval for any act taken by Hibbett pursuant to any Loan Document, and all
such acts shall bind and obligate Hibbett and each Participating Entity, jointly
and severally. Each Participating Entity forever waives and releases any claim
(whether now or hereafter arising) against the Lender based on any claim of
Hibbett's lack of authority to act on behalf of each Participating Entity in
connection with the Loan Documents.
(c) The liability of each Participating Entity with respect to the Credit
Obligations shall be limited to an amount equal to the greater of (i) $1.00 less
than the greatest of (A) the Participating Entity's Net Worth (as hereinafter
defined) as of the end of the most recently concluded fiscal quarter of the
Participating Entity ended on or prior to the date the Participating Entity
became a Borrower, (B) the highest Net Worth of the Participating Entity at the
end of any fiscal quarter ending after the Participating Entity became a
Borrower and prior to the earlier of the date of the commencement of a case
under the United States Bankruptcy Code (the "Bankruptcy Code") involving the
Participating Entity or the date enforcement of this Agreement or any of the
other Loan Documents is sought against the Participating Entity and (C) the Net
Worth of the Participating Entity at the earlier of the date of the commencement
of a case under the Bankruptcy Code involving the Participating Entity or the
date enforcement of this Agreement or any of the other Loan Documents is sought
against the Participating Entity; or (ii) the amount that in a legal proceeding
brought within the applicable limitations period is determined by the final,
non-appealable order of a court having jurisdiction over the issue and the
applicable parties to be the amount of value or benefit given by the Lender, or
received by the Participating Entity, in exchange for the obligations of the
Participating Entity under this Agreement and the other Loan Documents. As used
in this subsection 2.1(c), "Net Worth" shall mean (x) the fair value of the
property of the Participating Entity from time to time (taking into
consideration the value, if any, of rights of subrogation, contribution and
indemnity), minus (y) the total liabilities of the Participating Entity
(including contingent liabilities [discounted in appropriate instances], but
excluding liabilities of the Participating Entity under this Agreement and the
other Loan Documents) from time to time.
(d) Each Initial Participating Entity (i) acknowledges that it has had full
and complete access to the underlying papers relating to the Credit Obligations
and all other papers executed by any person in connection with the Credit
Obligations, has reviewed them and is fully aware of the meaning and effect of
their contents; (ii) is fully informed of all circumstances that bear upon the
risks of executing this Agreement and the other Loan Documents that a diligent
inquiry would reveal; (iii) has adequate means to obtain from Hibbett on a
continuing basis information concerning Hibbett's financial condition and is not
depending on the Lender to provide such information, now or in the future; and
(iv) agrees that the Lender shall not have any obligation to advise or notify it
or to provide it with any data or information.
(e) Each Initial Participating Entity hereby agrees that its obligations
and liabilities with respect to the Credit Obligations are joint and several
with Hibbett, continuing, absolute and unconditional (subject to the provisions
of subsection (d) of this section). Without limiting the generality of the
foregoing, the obligations and liabilities of each Initial Participating Entity
13
with respect to the Credit Obligations shall not be released, discharged,
impaired, modified or in any way affected by (i) the invalidity or
unenforceability of any Loan Document, (ii) the failure of the Lender to give
each Initial Participating Entity a copy of any notice given to Hibbett, (iii)
any modification, amendment or supplement of any obligation, covenant or
agreement contained in any Loan Document, (iv) any compromise, settlement,
release or termination of any obligation, covenant or agreement in any Loan
Document, (v) any waiver of payment, performance or observance by or in favor of
Hibbett of any obligation, covenant or agreement under any Loan Document, (vi)
any consent, extension, indulgence or other action or inaction, or any exercise
or non-exercise of any right, remedy or privilege with respect to any Loan
Document, (vii) the extension of time for payment or performance of any of the
Credit Obligations, (viii) any other matter that might otherwise be raised in
avoidance of, or in defense against an action to enforce, the obligations of
each Initial Participating Entity under this Agreement, the Revolving Facility,
the Note or any other Loan Document.
(f) None of the Borrowers will exercise any rights that it may have or
acquire by way of subrogation under this Agreement or any of the other Loan
Documents or the Subrogation and Contribution Agreement referred to in
subsection (h) below, by any payment made hereunder or under any of the other
Loan Documents or otherwise, until all the Credit Obligations have been paid in
full and this Agreement has been terminated and is no longer subject to
reinstatement under Section 98. If any amount shall be paid to a Borrower on
account of any such subrogation rights at any time when all of the Credit
Obligations shall not have been paid in full and this Agreement terminated, such
amount shall be held in trust for the benefit of the Lender and shall be paid
forthwith to the Lender to be credited and applied upon the Credit Obligations,
whether matured or unmatured, in accordance with the terms of the Loan
Documents.
(g) The Borrowers will not amend or waive any provision of the Subrogation
and Contribution Agreement dated the Closing Date entered into by the Borrowers
nor consent to any departure from such Subrogation and Contribution Agreement,
without having obtained the prior written consent of the Lender to such
amendment, waiver or consent.
(h) Each person that is to become after the Closing Date a Participating
Entity shall, at the time it is to become a Participating Entity, execute and
deliver to the Lender, in accordance with the provisions of Section 713, an
Assumption Agreement in the form attached hereto as Exhibit E ("Assumption
---------
Agreement").
SECTION 2.2 ADVANCES OF LOANS. Advances shall be made no more frequently
-----------------
than once in each week, shall be in an amount not less than $250,000 and shall
be in an integral multiple of $50,000. Each request for an Advance must be
received by the Lender not later than 11:30 a.m., Birmingham, Alabama time, on
the day which such Advance is to be made in the case of a Base Rate Loan or
Quoted Cost of Funds Rate Loan. Each request for an Advance shall be in the
form attached hereto as Exhibit B ("Request for Advance or Interest Rate
---------
Election") and shall specify the amount of the Advance requested, the date as of
which the Advance is to be made, and shall provide the interest rate information
called for in Section 32. The Lender shall accept from the Borrowers telephonic
or facsimile requests for Advances
14
without requiring the submission of a Request for Advances or Interest Rate
Election form. Any request for Advances not made in writing shall be promptly
confirmed in writing. Not later than 1:00 P.M. Birmingham, Alabama time, on the
date specified for each Advance hereunder, the Lender shall make available the
amount of the Advance to be made by it on such date to the Borrowers by
depositing the proceeds thereof into an account with the Lender in the name of
the Borrowers. The Lender's obligation to make Advances shall terminate, if not
sooner terminated pursuant to other provisions of this Agreement, on the
Termination Date. The Lender shall have no obligation to make Advances if a
Default has occurred and is continuing. Each Request for Advance or Interest
Rate Election, whether submitted under this Section 22 in connection with a
requested Advance or under Section 32 in connection with an interest rate
election, shall be signed by an officer of Hibbett designated as authorized to
sign and submit Request for Advance or Interest Rate Election forms in the
documents submitted to the Lender pursuant to Section 63 below. Hibbett may,
from time to time, by notice to the Lender, terminate the authority of any
person to submit Request for Advance or Interest Rate Election forms and
designate new or additional persons to so act by delivering to the Lender a
certificate of the Secretary or Assistant Secretary of Hibbett certifying the
incumbency and specimen signature of each such person. The Lender shall be
entitled to rely conclusively upon the authority of any person so designated by
Hibbett.
SECTION 2.3 PAYMENTS. All interest accrued on Loans subject to the Base
--------
Rate shall be payable on the first day of each successive January, April, July
and October (each, a "Quarterly Payment Date"), commencing on January 1, 1999
and upon payment in full of such Advances. All interest accrued on each Loan
subject to a Fixed Rate shall be payable at the end of the applicable Interest
Period then in effect. The principal amount of Advances, together with accrued
interest thereon, shall be due on the Termination Date. All payments of Credit
Obligations shall be payable to the Lender on or before 10:00 a.m. Birmingham,
Alabama time on the date when due, at the Principal Office in Dollars and in
immediately available funds free and clear of all rights of set-off or
counterclaim. If any payment falls due on a day that is not a Business Day,
then such due date shall be extended to the next succeeding Business Day, and
such extension of time shall then be included in the computation of payment of
interest, fees or other applicable amounts. Payments received by the Lender
shall be applied first to expenses, fees and charges, then to accrued interest
and finally to principal.
SECTION 2.4 PREPAYMENT.
----------
(a) The Borrowers may at any time prepay all or any part of the Advances,
without premium or penalty (except as set forth below); provided, however, that
no Fixed Rate Segment may be prepaid during an Interest Period. The Borrowers
shall pay, on the date of prepayment, all interest accrued to the date of
prepayment on any amount prepaid.
(b) If at any time the principal amount of the Advances is greater than the
Maximum Credit Amount then in effect, the Borrower shall immediately make a
prepayment (notwithstanding the provisions of clause (a) of this section on the
Advances equal to the difference between (a) said aggregate principal amount of
the Advances and (b) the Maximum Credit Amount.
15
SECTION 2.5 REDUCTION IN REVOLVING FACILITY. The Borrowers shall have the
-------------------------------
right from time to time upon not less than three (3) Business Days' notice to
the Lender, to reduce the amount of the Revolving Facility. Each such reduction
shall be in the aggregate principal amount of $1,000,000 or a larger integral
multiple of $100,000, and shall permanently reduce the Maximum Credit Amount.
Any such reduction resulting in payment of a Fixed Rate Segment other than on
the last day of the respective Interest Period shall be permitted. Each
reduction of the Revolving Facility shall be accompanied by payment of the Loans
to the extent that the principal amount of the Advances exceed the Revolving
Facility after giving effect to such reductions together with accrued and unpaid
interest on the amounts prepaid.
SECTION 2.6 FEES. As consideration for the Lender's agreement to provide
----
the Revolving Facility, the Borrowers agree to pay to the Lender a facility fee
per annum equal to the then applicable Margin times the average daily amount of
the Maximum Credit Amount (the "Facility Fee"). The Facility Fee shall be
determined under the following matrix with reference to the ratio of Funded Debt
to EBITDA payable in arrears in each Quarterly Payment Date, commencing on
January 1, 1999 and on the Termination Date or the date of any earlier
termination of this Agreement:
RATIO OF FUNDED
DEBT TO EBITDA APPLICABLE MARGIN
--------------- ------------------
(1) Equal to or less than .125%
1.25 to 1.00
(2) Greater than 1.25 to .15%
1.00 but less than or
equal to 2.0 to 1.00
(3) Greater than 2.0 to 1.00 .175%
but less than or equal to
3.0 to 1.0
From the Closing Date until receipt by the Lender of the financial
statement for the fiscal quarter ending October 31, 1998 pursuant to Section 73
below, the fee percentage shall be .125%. The Facility Fee Rate shall be reset
from time to time as the calculation of Margin changes as set forth herein.
ARTICLE 3
INTEREST ON LOANS
-----------------
SECTION 3.1 APPLICABLE INTEREST RATES. The Borrowers shall have the
-------------------------
option to elect to have any Segment bear interest at the Base Rate or the Quoted
Cost of Funds Rate. For any period of time and for any Segment with respect to
which the Borrowers do not elect another interest rate, such Segment shall bear
interest at the Base Rate. The Borrowers' right to elect
16
a Quoted Cost of Funds Rate for a Segment shall be subject to the following
requirements: (a) each Segment shall be in the amount of $50,000 or more and in
an integral multiple thereof, (b) each Segment shall have a maturity selected by
the Borrower of from one to twenty-nine days, (c) no more than four Segments may
be outstanding at any time, and (d) no Segment may have a maturity date later
than the Termination Date.
SECTION 3.2 PROCEDURE FOR EXERCISING INTEREST RATE OPTIONS. Hibbett, on
----------------------------------------------
behalf of itself and each Participating Entity, may elect to have a particular
interest rate apply to a Segment by notifying the Lender in writing not later
than 9:00 a.m., Birmingham, Alabama time, on the same day on which a requested
Base Rate or Quoted Cost of Funds Rate is to become applicable. Any notice of
interest rate election hereunder shall be irrevocable and shall be in the form
attached hereto as Exhibit B and shall set forth the following: (a) the amount
---------
of the Segment to which the requested interest rate will apply, (b) the date on
which the selected interest rate will become applicable, (c) whether the
interest rate selected is the Base Rate or Quoted Cost of Funds Rate and (d) if
the interest rate selected is a Quoted Cost of Funds Rate, the maturity selected
for the Interest Period. The Lender shall accept from the Borrowers telephonic
requests to have a particular rate applied to a Segment without requiring the
submission of a Request for Advances or Interest Rate Election form. Any
request to have a particular rate applied to a Segment not made in writing shall
be promptly confirmed in writing. On the same day that a requested Quoted Cost
of Funds Rate is to become applicable, the Lender shall notify Hibbett by
telephone or by facsimile transmission of the applicable Quoted Cost of Funds
Rate by 11:00 a.m., Birmingham, Alabama time, or as earlier on that day as may
be practical in the circumstances. If Hibbett does not accept any Quoted Cost
of Funds Rate quoted by the Lender within 15 minutes of it being provided by the
Lender, the Lender may, in view of changing market conditions, revise the Quoted
Cost of Funds Rate at any time. No Quoted Cost of Funds Rate shall be effective
until mutually agreed upon by Hibbett and the Lender. If the Lender and Hibbett
attempt to agree on the Quoted Cost of Funds Rate but fail so to agree, or if
there is any uncertainty as to whether or not the Lender and Hibbett have agreed
upon the Quoted Cost of Funds Rate, interest shall accrue on the Segment for
which the Quoted Cost of Funds Rate has been selected at the then applicable
Base Rate.
SECTION 3.3 BASE RATE. Each Segment subject to the Base Rate shall bear
---------
interest from the date the Base Rate becomes applicable thereto until payment in
full, or until a Quoted Cost of Funds Rate is selected by the Borrowers and
becomes applicable thereto, on the unpaid principal balance of such Segment on
an Actual/360 Basis. Any change in the Base Rate shall take effect on the
effective date of such change in the Base Rate designated by the Lender, without
notice to the Borrowers and without any further action by the Lender.
Notwithstanding the foregoing, for the purpose of enabling the Lender to send
periodic billing statements in advance of each interest payment date reflecting
the amount of interest payable on such interest payment date, the Base Rate, in
effect 15 days prior to each interest payment date shall be deemed to be the
Base Rate, as continuing in effect until the date prior to such interest payment
date for purposes of computing the amount of interest payable on such interest
payment date. If the Lender elects to use the Base Rate, 15 days prior to the
interest payment date for billing purposes, and if the Base Rate changes during
such 15-day period, the difference between the amount of interest that in fact
accrues during such period and the amount of interest actually paid
17
will be added to or subtracted from, as the case may be, the interest otherwise
payable in preparing the periodic billing statement for the next succeeding
interest payment date. In determining the amount of interest payable at the
Termination Date or upon full prepayment of the Credit Obligations, all changes
in the Base Rate occurring on or prior to the day before the Termination Date or
the date of such full prepayment shall be taken into account.
SECTION 3.4 QUOTED COST OF FUNDS RATE. Each Segment subject to the Quoted
-------------------------
Cost of Funds Rate shall bear interest from the date the Quoted Cost of Funds
Rate becomes applicable thereto until the end of the applicable Interest Period
on the unpaid principal balance of such Segment at the Quoted Cost of Funds Rate
on an Actual/360 Basis.
SECTION 3.5 CHANGES IN MARGIN. Any change in the rate of interest payable
-----------------
because of a change in the Margin shall become effective as of the first day of
the fiscal quarter next following the receipt by the Lender of the Compliance
Certificate furnished by the Borrowers to the Lender pursuant to Section 7.3(3)
hereof, stating that as a result of a change in the ratio of Funded Debt to
EBITDA there has been a change in the Margin. Any such change in the Margin
shall be effective without notice to the Borrowers and without any further
action by the Lender.
SECTION 3.6 POST MATURITY INTEREST. Upon and after the occurrence of any
----------------------
Event of Default, the outstanding principal amount of all Advances and, to the
extent permitted by applicable law, any interest payments thereon not paid when
due and any fees and other amounts then due and payable hereunder, shall
thereafter bear interest (including post-petition interest in any proceeding
under applicable bankruptcy laws) payable upon demand at a rate that is 2.00%
per annum (calculated on an Actual/360 Basis) in excess of the interest rate
otherwise payable under this Agreement with respect to the applicable Advances
(or, in the case of any such fees and other amounts, at a rate that is 2.00% per
annum in excess of the interest rate otherwise payable under this Agreement for
Base Rate Loans); provided that, in the case of Advances subject to a Fixed
--------
Rate, upon the expiration of the Interest Period in effect at the time any such
increase in interest rate is effective, such Advances subject to a Fixed Rate
shall thereupon become Base Rate Loans and thereafter bear interest payable upon
demand at a rate that is 2.00% per annum (calculated on an Actual/360 Basis) in
excess of the interest rate otherwise payable under this Agreement for Base Rate
Loans. The payment or acceptance of the increased rate provided by this Section
36 shall not constitute a waiver of any Event of Default or an amendment to this
Agreement or otherwise prejudice or limit any rights or remedies of the Lender.
Interest on all Advances shall be calculated on an Actual/360 Basis.
18
ARTICLE 4
TERMINATION OF FIXED RATE AND YIELD PROTECTION
----------------------------------------------
SECTION 4.1 ADDITIONAL COSTS.
----------------
(a) Without limiting the effect of the foregoing provisions of this Section
41 (but without duplication), the Borrowers shall pay directly to the Lender
from time to time on written request such amounts as the Lender may determine in
good faith to be necessary to compensate the Lender for any increased costs
which it determines are attributable to the maintenance by the Lender of capital
in respect of its Loans pursuant to any regulatory change or implementing any
risk-based capital guideline or requirement (whether or not having the force of
law and whether or not the failure to comply therewith would be unlawful)
hereafter issued by any government or governmental or supervisory authority
implementing at the national level the Basle Accord (including the Final Risk-
Based Capital Guidelines of the Board of Governors of the Federal Reserve System
(12 CFR Part 208, Appendix A; 00 XXX Xxxx 000, Xxxxxxxx X) and the Final Risk-
Based Capital Guidelines of the Office of the Comptroller of the Currency (12
CFR Part 3, Appendix A)), such compensation to include an amount equal to any
reduction of the rate of return on assets or equity of the Lender to a level
below that which the Lender could have achieved but for such regulatory change.
For purposes of this Section 00, "Xxxxx Xxxxxx" shall mean the proposals for
risk-based capital framework described by the Basle Committee on Banking
Regulations and Supervisory Practices in its paper entitled "International
Convergence of Capital Measurement and Capital Standards" dated July 1988, as
amended, modified and supplemented in effect from time to time or any
replacement thereof.
(b) The Lender shall notify Hibbett of any event occurring after the
Closing Date that will entitle the Lender to compensation under Section 4.1(a)
or (c) as promptly as practicable, but in any event within 45 days after the
Lender obtains actual knowledge thereof; provided however, that if the Lender
fails to give such notice within 45 days after it obtains actual knowledge of
such an event, the Lender shall, with respect to compensation payable pursuant
to this Section 41 in respect of any costs resulting from such event, only be
entitled to payment under this Section 41 for costs incurred from and after the
date 45 days prior to the date that the Lender does give such notice. The
Lender will furnish to Hibbett a certificate setting forth in reasonable detail
the basis and amount of each request by the Lender for compensation under
Section 4.1(a) or (b) and such compensation shall be due five Business Days from
the date Hibbett receives such certificate. Determinations and allocations by
the Lender for purposes of this Section 41 of the effect of any regulatory
change pursuant to Section 4.1(a) or (b), of maintaining Loans or its obligation
to make Loans or on amounts receivable by it in respect of Loans, and of the
amounts required to compensate the Lender under this Section 41, shall be made
in a manner consistent with that applied by the Lender in similar contexts and
shall be conclusive in the absence of demonstrable error.
19
SECTION 4.2 TAXES.
-----
(a) Any and all payments by the Borrowers hereunder shall be paid (except
to the extent required by law) 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 franchise
taxes and taxes based on net income (including branch profit taxes and minimum
taxes) imposed on the Lender by the United States or the jurisdiction (or any
political subdivision thereof) in which the Lender is organized, is doing
business, or has its Principal Office (all such nonexcluded taxes, levies,
imposts deductions, charges, withholding and liabilities being hereinafter
referred to as "Taxes"). If the Borrowers shall be required by law to deduct
any Taxes from or in respect of any sum payable hereunder to the Lender (i) the
sum payable by the Borrowers shall be increased by the amount necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section 42) the Lender shall receive an
amount equal to the sum it would have received had no such deductions been made,
(ii) the Borrowers shall make such deduction, and (iii) the Borrowers shall pay
the full amount deducted to the relevant taxing authority or other Governmental
Authority in accordance with applicable law.
(b) In addition, the Borrowers agree to pay any present or future stamp or
documentary taxes or an 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 Borrowers will indemnify the Lender for the full amount of Taxes
and Other Taxes (including any Taxes or Other Taxes imposed by any jurisdiction
on amounts payable under this Section 42) imposed on amounts payable hereunder
paid by the Lender (net of any benefits as reasonably determined by the Lender),
and any liability (including penalties, interest and expenses) arising therefrom
or with respect thereto. Such indemnification shall be made within five
Business Days after the date of receipt of a written demand therefor from the
Lender together with evidence that payment of such Taxes and Other Taxes has
been made.
(d) Within 30 days after the date of any payment of Taxes or Other Taxes
withheld by the Borrowers in respect of any payment to the Lender, the Borrowers
will furnish to the Lender the original or a certified copy of a receipt
evidencing payment thereof or, if such receipt is not available, any other
evidence of payment reasonably satisfactory to the Agent.
(e) The Lender claiming any additional amounts payable pursuant to this
Section 42 shall use reasonable efforts (consistent with legal and regulatory
restrictions) to file any certificate or document reasonably requested by the
Borrowers if the making of such a filing would avoid the need for or reduce the
amount of any such additional amounts which may thereafter accrue and would not,
in the sole reasonable determination of the Lender, be otherwise disadvantageous
to the Lender. To the extent the Lender shall receive a refund (either by way
of a direct payment or an offset) or a credit in respect of all or a portion of
the additional amounts payable pursuant to this Section 42, the Lender shall
promptly notify the Borrowers
20
of the amount of such refund or credit and within 30 days after the receipt of
such refund or credit, pay to the Borrowers the amount of such refund or credit.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
------------------------------
Each of the Borrowers, jointly and severally, represents and warrants to
the Lender as follows:
SECTION 5.1 ORGANIZATION POWERS, EXISTENCE, ETC. (a) Hibbett and each
-----------------------------------
Consolidated Entity (other than Immaterial Subsidiaries) are duly organized,
validly existing and in good standing under the laws of the state in which it is
incorporated, (b) Hibbett and each Consolidated Entity (other than Immaterial
Subsidiaries) have the corporate power and authority to own its properties and
assets and to carry on its business as now being conducted, (c) Hibbett and each
Consolidated Entity (other than Immaterial Subsidiaries) have the corporate
power to execute, deliver and perform the Loan Documents to which they are a
party, (d) Hibbett and each Consolidated Entity (other than Immaterial
Subsidiaries) are duly qualified to do business in each state with respect to
which the failure to be so qualified would have a Material Adverse Effect and
(e) except as set forth in Exhibit D hereto, Hibbett and each Consolidated
---------
Entity has not done business under any other name, trade name or otherwise
within the five years immediately preceding the Closing Date.
SECTION 5.2 AUTHORIZATION OF BORROWING, ETC. The execution, delivery and
-------------------------------
performance of the Loan Documents (a) have been duly authorized by all requisite
corporate action and (b) will not violate any Governmental Requirement, the
certificate of incorporation or bylaws of Hibbett or any Consolidated Entity, or
any Material Contract to which Hibbett or any Consolidated Entity is a party, or
by which Hibbett or any Consolidated Entity or any of their properties are
bound, or be in conflict with, result in a breach of or constitute (with due
notice or lapse of time or both) a default under, any such Material Contract.
SECTION 5.3 LIABILITIES. Hibbett has furnished to the Lender a copy of
-----------
the audited consolidated balance sheet of Hibbett and the Consolidated Entities
dated as of January 31, 1998 and a statement of changes in shareholders' equity
and the related statements of income and cash flow as of the end of fiscal year
1998 and the unaudited consolidated balance sheet of Hibbett and the
Consolidated Entities dated as of August 1, 1998 and the related statements of
income and cash flow for the six month period then ended. Such financial
statements were prepared in conformity with generally accepted accounting
principles consistently applied throughout the period involved (subject, with
respect to the unaudited financial statements, to the absence of notes required
by generally accepted accounting principles and to normal year-end audit
adjustments), are in accordance with the books and records of Hibbett and the
Consolidated Entities in all material respects, are correct and complete in all
material respects and present fairly the financial condition of Hibbett and the
Consolidated Entities as of the date of such financial statements, and, since
the date of such financial statements, no material adverse change
21
in the financial condition, business or results of operations of Hibbett and the
Consolidated Entities, taken as a whole, has occurred. Neither Hibbett nor any
Consolidated Entity has any Liabilities, Guaranteed Obligations or other
obligations or liabilities, direct or contingent, that are material in amount
other than the Liabilities reflected in such balance sheet and the notes
thereto.
SECTION 5.4 TAXES. Hibbett and each Consolidated Entity has filed or
-----
caused to be filed all federal, state and local tax returns that are required to
be filed (other than such state or local tax returns and reports the failure to
file which would not be reasonably likely, individually or in the aggregate, to
have a Material Adverse Effect), and has paid all taxes as shown on said returns
or on any assessment received by Hibbett or any Consolidated Entity to the
extent that such taxes have become due, other than those that are being
contested in good faith and by proper proceedings and for which adequate
reserves have been established in accordance with generally accepted accounting
principles. The Borrowers have reserves which are believed by the officers of
the Borrowers to be adequate for the payment of additional taxes for years which
have not been audited by the respective tax authorities.
SECTION 5.5 LITIGATION. There are no actions, suits or proceedings
----------
pending or, to the best knowledge of the Borrowers, threatened against or
affecting Hibbett or any Consolidated Entity, by or before any Governmental
Authority that involve any of the transactions contemplated in this Agreement or
the reasonable likelihood of any judgment or liability that may result in a
Material Adverse Change; and neither Hibbett nor any Consolidated Entity is in
default with respect to any material Governmental Requirement which default
could reasonably be likely to have a Material Adverse Effect.
SECTION 5.6 AGREEMENTS. Neither Hibbett nor any Consolidated Entity is in
----------
default in the performance, observance or fulfillment of any of the obligations
contained in any Material Contract to which it is a party, which default could
reasonably be likely to have a Material Adverse Effect.
SECTION 5.7 USE OF PROCEEDS. None of the Borrowers intends to use any
---------------
part of the proceeds of Advances for the purpose of purchasing or carrying any
Margin Stock or retiring any debt incurred to purchase or carry any Margin Stock
or for any other purpose that is not expressly authorized by this Agreement.
SECTION 5.8 ERISA. Neither Hibbett nor any ERISA Affiliate maintains or
-----
contributes to, or has within the preceding five years maintained or contributed
to, any Plan that is a Plan subject to Title IV of ERISA.
SECTION 5.9 SUBSIDIARIES. As of the Closing Date, Hibbett has no
------------
Subsidiaries other than the Initial Participating Entities. The Participating
Entities have no direct or indirect equity ownership in any other person other
than other Subsidiaries of Hibbett. Hibbett's ownership interest in each
Participating Entity is free and clear of all Liens, warrants, options, rights
to purchase and other interests of any person. All capital stock of the
Participating Entity has been duly authorized and validly issued and is fully
paid and non-assessable.
22
SECTION 5.10 ENVIRONMENTAL LAWS.
------------------
(a) To the best knowledge of the Borrowers, all properties owned or used by
the Borrowers, while under the custody, care and control of the Borrowers, have
been maintained in compliance in all material respects with all applicable
federal, state and local environmental protection, occupational, health and
safety or similar laws, including the Federal Water Pollution Control Act (33
U.S.C. (S) 1251 et seq.), Resource Conservation & Recovery Act (42 U.S.C. (S)
-- ---
6901 et seq.), Safe Water Drinking Act (42 U.S.C. (S) 300(f) et seq.), Toxic
-- --- -- ---
Substances Control Act (15 U.S.C. (S) 2601 et seq.), Clean Air Act (42 U.S.C.
-- ---
(S) 7401 et seq.) and Comprehensive Environmental Response of Compensation and
-- ---
Liability Act (42 U.S.C. (S) 6901 et seq.) ("CERCLA").
-- ---
(b) The Borrowers have not received any material written notification from
any Governmental Authority with respect to current, existing violations of any
of the laws enumerated in clause (a) above, or pursuant to any of their
respective implementing regulations or state analogues to such laws or
regulations.
(c) To the best knowledge of the Borrowers, there has not been, at any
location owned or used by the Borrowers, any "Release" (as defined in Section
101(22) of CERCLA) by the Borrowers, anyone within the Borrowers' control, or
any other person, of any Hazardous Materials.
(d) To the best knowledge of the Borrowers, the Borrowers have not sent or
arranged for the transportation or disposal of Hazardous Materials or wastes to
a site which, pursuant to CERCLA or any similar state law (i) has been placed,
or is proposed (by the Environmental Protection Agency or relevant state
authority) to be placed, on the "National Priorities List" of hazardous waste
sites or its state equivalent, or (ii) is subject to a claim, an administrative
order or other request to take "removal" or "remedial" action (in each case as
defined in CERCLA) by any person.
SECTION 5.11 DISCLOSURE. No financial statement, document, certificate or
----------
other written communication furnished to the Lender by or on behalf of the
Borrowers in connection with any Loan Document contained when so furnished any
statement of a material fact that was untrue in any material respect.
SECTION 5.12 LICENSES. All material licenses, permits, accreditations and
--------
approvals required by all Governmental Authorities necessary in order for each
Store to be operated for its intended purpose have been obtained and are in full
force and effect, except for those the failure to obtain which would not be
reasonably likely, individually or in the aggregate, to have a Material Adverse
Effect.
SECTION 5.13 TITLE TO PROPERTIES. As of the Closing Date, the Borrowers
-------------------
have good and marketable title to all their properties and assets reflected on
the balance sheet referred to in Section 53 except for those matters shown on
such balance sheet and except for such properties and assets as have been
disposed of since the date of said balance sheet as no longer
23
used or useful in the conduct of its business or as have been disposed of in the
ordinary course of the business. All such properties and assets are free and
clear of all Liens, except as otherwise permitted or required by the provisions
of the Loan Documents.
SECTION 5.14 ENFORCEABILITY. This Agreement and each of the other Loan
--------------
Documents, when duly executed and delivered by the Borrowers, as appropriate, in
accordance with the provisions of this Agreement, will constitute the legal,
valid and binding, joint and several, obligations of the Borrowers, enforceable
in accordance with their respective terms, subject to the effect of bankruptcy,
insolvency, reorganization, receivership, moratorium and similar laws affecting
the rights and remedies of creditors generally.
SECTION 5.15 CONSENTS, REGISTRATIONS, APPROVALS, ETC. No registration
----------------------------------------
with or consent or approval of, or other action by, any Governmental Authority
is required for the execution, delivery and performance of this Agreement or the
other Loan Documents, or the borrowings under this Agreement, by the Borrowers.
SECTION 5.16 SOLVENCY. Hibbett is Solvent, and Hibbett will not, as a
--------
result of the transactions provided for herein (i) become not Solvent, (ii) be
left with unreasonably small capital, (iii) incur debts beyond its ability to
pay them as they mature or (iv) have Liabilities (including reasonable
contingencies) in excess of the fair saleable value of its assets.
ARTICLE 6
GENERAL CONDITIONS OF LENDING
-----------------------------
The Lender's obligation to make each Advance hereunder is subject to the
following conditions precedent:
SECTION 6.1 REPRESENTATIONS AND WARRANTIES. On the date of each Advance
------------------------------
hereunder, the representations and warranties set forth in this Agreement and in
all other Loan Documents shall be true and correct on and as of such date with
the same effect as though such representations and warranties had been made on
the date of the Advance (or in the case of any such representation and warranty
made as of a particular date, as of such particular date), except to the extent
previously fulfilled in accordance with the terms hereof, subsequently
inapplicable, or modified as a result of activities of the Borrowers, or any of
them. The borrowing of each Advance shall constitute a representation and
warranty by the Borrowers to the Lender that no material adverse change in the
financial condition of Hibbett and the Consolidated Entities, on a consolidated
basis, as reflected in the financial statements delivered to the Lender pursuant
to Section 53 has occurred since the date of such financial statements.
SECTION 6.2 NO DEFAULT. On the date of each Advance hereunder, the
----------
Borrowers shall be in compliance with all the terms and conditions set forth in
this Agreement on their part to be observed or performed, and no Default shall
have occurred and be continuing. The
24
borrowing of each Advance shall constitute a representation and warranty by the
Borrowers to the Lender that no Default has occurred and is continuing.
SECTION 6.3 SUPPORTING DOCUMENTS.
--------------------
(a) The Lender shall have also received on the Closing Date (i) a copy of
resolutions of the Board of Directors of each of the Borrowers, certified as in
full force and effect on such date by the Secretary or Assistant Secretary of
the respective Borrower, authorizing the execution, delivery and performance of
the Loan Documents and authorizing designated officers of the Borrowers to
execute and deliver the Loan Documents on behalf of the Borrowers, and with
respect to Hibbett, to execute and deliver to the Lender a Request for Advance
or Interest Rate Election forms; (ii) a certificate of the Secretary or
Assistant Secretary of each of the Borrowers, dated such date, certifying that
(A) an attached copy of the Certificate of Incorporation and bylaws of such
Borrower as true and correct as of such date, (B) that the Certificate of
Incorporation and Bylaws of such Borrower has not been amended since the date of
the last amendment attached thereto and (c) the incumbency and specimen
signatures of the designated officers referred to in clause (i) above; (iii) an
Opinion of Counsel to the Borrowers in the form required by the Lender and its
counsel; and (iv) such additional supporting documents as the Lender or its
counsel may reasonably request.
(b) The Lender shall also have received on or before any date after the
Closing Date on which a person becomes a Participating Entity (i) a copy of
resolutions of the Board of Directors and, if necessary, the shareholders,
partners or members of such person certified as in full force and effect on the
date thereof by the Secretary or Assistant Secretary of such person, authorizing
such person's execution, delivery and performance of, the Loan Documents and all
other agreements and instruments that this Agreement requires to be executed,
delivered and performed by such person; (ii) a copy of the organizational
documents of such person, certified as true and correct on and as of the date on
which Loan Documents are executed and delivered by such person; (iii)
certificates of good standing with respect to such person from the appropriate
Governmental Authorities in the jurisdiction under the laws of which such person
is incorporated or formed; (iv) an Opinion of Counsel to such person consistent
with the form of the Opinions of Counsel to the Borrowers delivered pursuant to
subsection (a) of this Section 63 (with such changes therein as are appropriate
in the circumstances) as to the execution and delivery by such person of the
Loan Documents and other matters related thereto; (v) fully executed copies of
all Loan Documents that this Agreement requires to be executed or delivered (or
both) by such person (including a fully executed Assumption Agreement); and (vi)
such additional supporting documents as the Lender or its counsel may reasonably
request.
ARTICLE 7
GENERAL COVENANTS OF THE BORROWERS
----------------------------------
From the Closing Date until payment in full of the Credit Obligations and
the termination of the Revolving Facility, the Borrowers, jointly and severally,
covenant and agree that:
25
SECTION 7.1 EXISTENCE, PROPERTIES, ETC. Each of the Borrowers shall, and
--------------------------
(to the extent of its right to do so) shall cause each other Consolidated Entity
(other than Immaterial Subsidiaries) to (a) do or cause to be done all things
necessary to preserve and keep in full force and effect its existence, rights
and franchises and comply with all Governmental Requirements applicable to it
except to the extent the failure to do so would not be reasonably likely to have
a Material Adverse Effect or as otherwise permitted by clause (i) of Section
7.7(6) and (b) at all times maintain, preserve and protect all franchises and
trade names and preserve all of its property used or useful in the conduct of
its business and keep the same in good repair, working order and condition, and
from time to time make, or cause to be made, all needful and proper repairs,
renewals and replacements, betterments and improvements thereto, so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times except to the extent the failure to do so would not be
reasonably likely to have a Material Adverse Effect.
SECTION 7.2 PAYMENT OF INDEBTEDNESS, TAXES, ETC. Each of the Borrowers
-----------------------------------
shall, and (to the extent of its right to do so) shall cause each Consolidated
Entity to, (a) pay its indebtedness and obligations in accordance with its terms
except to the extent the failure to do so would not be reasonably likely to have
a Material Adverse Effect and (b) pay and discharge or cause to be paid and
discharged promptly all taxes, assessments and other charges or levies of
Governmental Authorities imposed upon it or upon its income and profits or upon
any of its properties before the same shall become in default, as well as all
lawful claims for labor, materials and supplies or otherwise, which, if unpaid,
might become a Lien upon such properties or any part thereof except to the
extent the failure to do so would not be reasonably likely to have a Material
Adverse Effect; provided, however, that Hibbett and the other Consolidated
-------- -------
Entities shall not be required to pay and discharge or cause to be paid and
discharged any such indebtedness, obligation, tax, assessment, charge, levy or
claim so long as the validity or amount thereof is being duly contested in good
faith by appropriate proceedings and Hibbett and the Consolidated Entities shall
maintain adequate reserves for such taxes, indebtedness, obligations,
assessments, charges, levies or claims during such proceedings.
SECTION 7.3 FINANCIAL STATEMENTS, REPORTS, ETC. The Borrowers shall
----------------------------------
deliver or cause to be delivered to the Lender:
(1) Not later than 50 days after the end of each first, second and
third fiscal quarter, a copy of Hibbett's 10-Q as filed with the Securities
and Exchange Commission or if such filing is no longer required, a balance
sheet and a statement of revenues and expenses of Hibbett and its
Consolidated Entities on a consolidated basis and a statement of cash flow
of Hibbett and its Consolidated Entitles on a consolidated basis for such
fiscal quarter and for the period beginning on the first day of the fiscal
year and ending on the last day of such fiscal quarter (in sufficient
detail to indicate Hibbett's and each Consolidated Entity's compliance with
the financial covenants set forth in Section 77), together with statements
in comparative form for the corresponding periods in the preceding fiscal
year, and certified by the president or chief financial officer of Hibbett;
each certificate provided pursuant to this clause (1) shall state that,
except as disclosed in such certificate no Default has occurred and is
continuing as of such date or, if such
26
certificate discloses that a Default has occurred and is continuing as of
such date, such certificate shall describe such Default in reasonable
detail and state what action, if any, the Borrowers are taking or propose
to take with respect thereto.
(2) Not later than 100 days after the end of each fiscal year, a copy
of Hibbett's 10-K as filed with the Securities and Exchange Commission or
if such filing is no longer required, financial statements (including a
balance sheet, a statement of revenues and expenses, a statement of changes
in shareholders' equity and a statement of cash flow) of Hibbett and its
Consolidated Entities on a consolidated and for such fiscal year (in
sufficient detail to indicate Hibbett's and each Consolidated Entity's
compliance with the financial covenants set forth in this Article 7),
together with statements in comparative form for the preceding fiscal year,
and accompanied by an opinion of certified public accountants of recognized
national standing, which opinion shall state in effect that such financial
statements (A) were audited using generally accepted auditing standards,
(B) were prepared in accordance with generally accepted accounting
principles applied on a consistent basis, and (C) present fairly the
financial condition and results of operations of Hibbett and its
Consolidated Entities for the periods covered.
(3) Together with the financial statements required by paragraphs (1)
and (2) above a compliance certificate duly executed by the president or
chief financial officer of Hibbett in the form of Exhibit C attached hereto
---------
("Compliance Certificate").
(4) Promptly upon receipt thereof, copies of all management or similar
letters submitted to the Borrowers or any Consolidated Entity by
independent accountants in connection with any annual or interim audit of
the books of the Borrowers or any Consolidated Entity made by such
accountants.
(5) After the filing or receiving thereof, copies of all material
reports and notices that any Borrower or other ERISA Affiliate files under
ERISA with the Internal Revenue Service or the PBGC or the United States
Department of Labor.
(6) As soon as practicable, such other information regarding the
business affairs, financial condition or operations of the Borrower or its
Consolidated Entities as the Lender shall reasonably request from time to
time or at any time.
The Lender shall have no obligation to make Advances or issue Letters of
Credit at any time at which the Borrowers or any of them is delinquent in the
preparation and delivery of any of the items described above, whether or not
such delinquency constitutes an Event of Default.
SECTION 7.4 LITIGATION NOTICE. Each of the Borrowers shall, promptly
-----------------
after the same shall have become known to any officer of such Borrower, notify
the Lender in writing of any action, suit or proceeding at law or in equity or
by or before any Governmental Authority in which there is a reasonable
likelihood of an outcome that would have a Material Adverse Effect.
27
SECTION 7.5 DEFAULT NOTICE. Hibbett shall promptly give notice in writing
--------------
to the Lender of the occurrence of any Default, together with a written
statement of the chief executive officer or chief financial officer of Hibbett
setting forth the nature and period of existence thereof and the action that the
Borrowers have taken and propose to take with respect thereto.
SECTION 7.6 INSURANCE. The Borrowers shall and (to the extent of their
---------
right to do so) shall cause each of the Consolidated Entities to keep at all
times their insurable properties adequately insured with reputable insurers and
maintain in force, and pay all premiums and costs related to (a) insurance on
such properties to such extent and against such risks, including fire, as is
customary with companies in the same or a similar business of comparable size,
(b) necessary xxxxxxx'x compensation insurance and (c) such other insurance
(including liability insurance) as may be required by applicable Governmental
Requirements or as may otherwise be customarily maintained by companies in the
same or a similar business of comparable size.
SECTION 7.7 COVENANTS REGARDING FINANCIAL CONDITION. Except as otherwise
---------------------------------------
expressly provided in this Section 77, Hibbett shall also cause and require each
of the Consolidated Entities to observe and perform each of the covenants and
agreements of this section to be observed and performed by the Borrowers or any
of them, whether or not a specific reference is made to the Consolidated
Entities in each such covenant.
The Borrowers, jointly and severally, covenant and agree that:
(1) Fixed Charges Coverage Ratio. The ratio of (A) EBITDAR for any
----------------------------
consecutive four quarter period to (B) the sum of (i) Interest Expense,
Operating Lease Payments, all income taxes (but only to the extent actually
paid during such period), dividends (but only to the extent actually paid
during such period) and (ii) Current Maturities of Hibbett and the
Consolidated Entities on a consolidated basis at the end of such period
shall not be less than 1.25 to 1.0 at any time.
(2) Funded Debt to EBITDA Ratio. The ratio of Funded Debt on the
---------------------------
last day of any consecutive four quarter period to EBITDA for such period
shall not be greater than 3.0 to 1.0.
(3) Capital Expenditures. Hibbett and the Consolidated Entities on a
--------------------
consolidated basis will not make in the aggregate in any consecutive four
fiscal quarters Capital Expenditures (net of landlord allowances, proceeds
of asset sales and casualty insurance proceeds) that exceed $15,000,000.
(4) Investment and Loans. Hibbett and the Consolidated Entities on a
--------------------
consolidated basis will not, directly or indirectly, purchase or otherwise
acquire any stock, security, obligation or evidence of indebtedness of,
make any capital contribution to, own any equity interest in, or make any
loan or advance to, any other person; provided, however, that it may
acquire and continue to hold (A) all stock of and own interests in the
persons that constitute or, after giving effect to such purchase, will
constitute Consolidated Entities; and (B) Permitted Investments.
28
(5) Disposition of Assets. Hibbett and the Consolidated Entities on
---------------------
a consolidated basis will not without the consent of the Lender, sell,
lease, transfer or otherwise dispose of all or any substantial part of its
properties and assets.
(6) Consolidation or Merger. Hibbett and the Consolidated Entities
-----------------------
will not consolidate with or merge with or into another person or permit
any other person to merge into it; provided, however, (i) it may permit the
-----------------
Consolidated Entities to merge or consolidate with other Consolidated
Entities or Hibbett and (ii) it may merge or consolidate with another
person so long as (x) any Borrower is the surviving corporation, (y) if
such merger or consolidation is in connection with a permitted acquisition,
the applicable conditions of subparagraph (15) of this Section shall be
satisfied and (z) immediately after giving effect thereto, no Default would
exist.
(7) Liens. Hibbett will not, and will not permit any Consolidated
-----
Entity to, incur, create, assume or permit to exist any Lien upon any of
its accounts receivable, contract rights, chattel paper, inventory,
equipment, instruments, general intangibles or other personal or real
property of any character, whether now owned or hereafter acquired, other
than Liens that constitute Permitted Encumbrances.
(8) Sale of Receivables. Hibbett will not, and will not permit any
-------------------
Consolidated Entity to, sell, assign or discount, or grant or permit any
Lien on, any of its accounts receivable or any promissory note held by it,
with or without recourse, other than the discount of such notes in the
ordinary course of business for collection.
(9) Lease Obligations. Hibbett and the Consolidated Entities on a
-----------------
consolidated basis will not incur, create, permit to exist or assume any
obligation to make Operating Lease Payments under any lease (other than any
capital lease or the QRS Lease) that (x) has an unexpired term (including
renewals at the option of the lessee) of more than 20 years or (y) provides
for aggregate Operating Lease Payments during any consecutive four fiscal
quarters in excess of $1,000,000, if (z) immediately thereafter, the
aggregate Operating Lease Payments to be made by it under all leases (other
than any capital leases or the QRS Lease) described in the preceding
subclauses (x) or (y) would exceed $10,000,000 in any consecutive four
fiscal quarters.
(10) Indebtedness. Hibbett and the Consolidated Entities on a
------------
consolidated basis will not incur, create, assume or permit to exist any
Debt, except (A) the indebtedness evidenced by the Note, (B) other Debt
incurred in connection with the Credit Agreement of even date between the
Borrowers, the Lender, NationsBank, N.A., BankBoston, N.A. and the Lender
as Agent, (C) purchase money obligations allowed under Section 7.7(7), (D)
Debt not exceeding $4,000,000 in the aggregate (E) capitalized lease
obligations and (F) Debt owed to a Consolidated Entity.
(11) Guaranties. Except for the existing guaranty by Hibbett of the
----------
obligations of SW under the QRS Lease and any other guaranty by a Borrower
of another Consolidated Entity's obligations, Hibbett will not, and will
not permit any Consolidated
29
Entity to, guarantee, endorse, become surety for or otherwise in any way
become or be responsible for the indebtedness, liabilities or obligations
of any other person, whether by agreement to purchase the indebtedness or
obligations of any other person, or agreement for the furnishing of funds
to any other person (directly or indirectly, through the purchase of goods,
supplies or services or by way of stock purchase, capital contribution,
working capital maintenance agreement, advance or loan) or for the purpose
of paying or discharging the indebtedness or obligations of any other
person, or otherwise, except for the endorsement of negotiable instruments
in the ordinary course of business for collection.
(12) Take or Pay Contracts. Hibbett will not, and will not permit any
---------------------
Consolidated Entity to, enter into or be a party to any contract for the
purchase of merchandise, materials, supplies or other property if such
contract provides that payment for such merchandise, materials, supplies or
other property shall be made regardless of whether delivery of such
merchandise, materials, supplies or other property is ever made or
tendered.
(13) Sale-Leaseback. Except for (i) the Lease Agreement between QRS
--------------
12-14 (AL), Inc. and SW dated February 12, 1996 and any amendments or
supplements thereto (the "QRS Lease") and (ii) any sale leaseback of any
additions to its existing warehouse and headquarters in Birmingham,
Alabama, Hibbett will not, and will not permit any Consolidated Entity to,
enter into any arrangement, directly or indirectly, with any person whereby
it sells or transfers any property, real, personal or mixed, and used or
useful in its business, whether now owned or hereafter acquired, and
thereafter rents or leases such property or other property that it intends
to use for substantially the same purpose or purposes as the property sold
or transferred.
(14) Dividends and Distributions. Hibbett will not permit any
---------------------------
Consolidated Entity to be or become subject to any restrictions on the
ability of such Consolidated Entity to pay dividends or to make
distributions.
(15) Permitted Acquisitions. The Borrowers shall not make in any
----------------------
given fiscal year any acquisitions of stock or assets of persons engaged
primarily in the same line of business as the Borrowers having a cost in
excess of $5,000,000, if, on the date of the acquisition a Default exists
or would result from such acquisition without the express prior consent of
the Lender; provided that this Section 7.7(15) shall not prohibit Hibbett
from complying with its obligations under the Purchase Agreement relating
to the QRS Lease if Hibbett can do so without causing a Default under some
other provision of this Agreement.
SECTION 7.8 CONTINUATION OF CURRENT BUSINESS. Neither the Borrowers nor
--------------------------------
any Consolidated Entity will engage in any business other than the business now
being conducted by it or other business reasonably ancillary thereto.
30
SECTION 7.9 COOPERATION; INSPECTION OF PROPERTIES. The Borrowers shall,
-------------------------------------
and shall cause the Consolidated Entities to, permit the Lender and its
representatives, at the Lender's sole cost and expense (so long as no Default
exists) to inspect the Borrowers' and the Consolidated Entities' properties and
assets (including all Stores), and to inspect, review and audit the Borrowers'
and the Consolidated Entities' books and records from time to time and at any
time, after reasonable notice and at reasonable times.
SECTION 7.10 USE OF PROCEEDS. The Borrowers shall use the proceeds
---------------
exclusively for general corporate purposes.
SECTION 7.11 TRANSACTIONS WITH AFFILIATES. Except as set forth in Exhibit
---------------------------- -------
F, none of the Borrowers nor any other Consolidated Entity will, directly or
-
indirectly, enter into any lease or other transaction with any Affiliate (other
than a Borrower or another Consolidated Entity) on terms that are less favorable
to such Borrower or Consolidated Entity entering into such lease or other
transaction than would have been obtained on an arm's length basis with persons
who are not Affiliates of such Borrower or other Consolidated Entity.
SECTION 7.12 ERISA. The Borrowers will not and will not permit any other
-----
ERISA Affiliate to establish any Plan subject to Title IV of ERISA
SECTION 7.13 CREATION OR ACQUISITION OF SUBSIDIARIES. The Borrowers may
---------------------------------------
from time to time create or acquire new Subsidiaries in connection with
permitted acquisitions allowed under Section 7.7(15) or otherwise in accordance
with this Agreement, provided that neither the aggregate fair market value at
--------
any time of the assets of all Subsidiaries that are Immaterial Subsidiaries at
such time, nor the aggregate gross revenues (determined for the most recently
ended period of twelve consecutive fiscal months) of all Subsidiaries that are
Immaterial Subsidiaries at such time, shall exceed $4,000,000, and provided
--------
further that promptly (and in any event within fifteen (15) Business Days) after
-------
the creation or direct or indirect acquisition by any Borrower of any such new
Subsidiary (or, if such new Subsidiary is an Immaterial Subsidiary when so
created or acquired, promptly (and in any event within fifteen (15) Business
Days) after such new Subsidiary ceases to be an Immaterial Subsidiary ), such
new Subsidiary will execute and deliver to the Lender an Assumption Agreement
and all other documents necessary to cause it to become jointly and severally
liable for all the Credit Obligations (subject to the limitations provided in
the Assumption Agreement).
ARTICLE 8
EVENTS OF DEFAULT AND REMEDIES
------------------------------
SECTION 8.1 EVENTS OF DEFAULT. The following shall constitute Events of
-----------------
Default under this Agreement:
31
(a) default in the due payment of any principal or interest payable on
any Advance or any other amount payable under Articles 2, 3 and 4 of this
Agreement and such default shall continue unremedied for a period of 5 days
after the date the Lender gives Hibbett telephonic (confirmed promptly in
writing) or written notice of such default; provided, however, that the
Lender shall not be required to provide such notice more than 3 times in
any 12 consecutive month period; or
(b) any of the Borrowers shall default in the observance or
performance of any provision in Sections 77, 78, 710, 712 and 713; or
(c) any of the Borrowers shall default in the performance or
observance of any provision of this Agreement, except those covered by
clauses (a) or (b) above, and shall not cure such default within 30 days
after the date the Lender gives written or telephonic notice of the default
to Hibbett; or
(d) any statement, certification, representation or warranty contained
herein, or in any of the other Loan Documents or in any report, financial
statement, certificate or other instrument delivered to the Lender by or on
behalf of the Borrowers, was misleading or untrue in any material respect
at the time it was made; or
(e) default shall be made with respect to any Debt of any of the
Borrowers or of any other Consolidated Entity (other than the Credit
Obligations) when due or within any applicable grace period or the
performance of any other obligation incurred in connection with any Debt of
such Borrower or other Consolidated Entity (other than the Credit
Obligations), if the effect of such default is to accelerate the maturity
of such Debt or to permit the holder thereof to cause such Debt to become
due prior to its stated maturity, or any such Debt shall not be paid when
due or within any applicable grace period, if the aggregate amount of all
such Debt involved exceeds $1,000,000; or
(f) any of the Borrowers or any other Consolidated Entity (other than
an Immaterial Subsidiary) shall (i) apply for or consent to the appointment
of a receiver, trustee, liquidator or other custodian of it or any of its
properties or assets, (ii) fail or admit in writing its inability to pay
its debts generally as they become due, (iii) make a general assignment for
the benefit of creditors, (iv) suffer or permit an order for relief to be
entered against it in any proceeding under the federal Bankruptcy Code, or
(v) file a voluntary petition in bankruptcy, or a petition or an answer
seeking an arrangement with creditors or seeking to take advantage of any
bankruptcy, reorganization, insolvency, readjustment of debt, dissolution
or liquidation law or statute, or an answer admitting the material
allegations of a petition filed against it in any proceeding under any such
law or statute, or if corporate or partnership action shall be taken by the
Borrowers or any other Consolidated Entity (other than an Immaterial
Subsidiary) for the purpose of effecting any of the foregoing; or
(g) a petition shall be filed, without the application, approval or
consent of any of the Borrowers or any other Consolidated Entity (other
than an Immaterial Subsidiary),
32
in any court of competent jurisdiction, seeking bankruptcy, reorganization,
rearrangement, dissolution or liquidation of such Borrower or other
Consolidated Entity (other than an Immaterial Subsidiary) or of all or a
substantial part of the properties or assets of such Borrowers or other
Consolidated Entity (other than an Immaterial Subsidiary), or seeking any
other relief under any law or statute of the type referred to in clause (v)
of paragraph (h) above against such Borrower or other Consolidated Entity
(other than an Immaterial Subsidiary), or the appointment of a receiver,
trustee, liquidator or other custodian of the Borrower or any other
Consolidated Entity (other than an Immaterial Subsidiary) or of all or a
substantial part of the properties or assets of such Borrower or any other
Consolidated Entity (other than an Immaterial Subsidiary), and such
petition shall not have been dismissed within 60 days after the filing
thereof; or
(h) an Event of Default (as therein defined) under the QRS Lease shall
have occurred and be continuing, and the Landlord thereunder shall have
given notice pursuant to Section 23 of the QRS Lease of its intention to
exercise remedies thereunder; or
(i) final judgment or judgments for the payment of money in excess of
an aggregate of $500,000 shall be rendered against any of the Borrowers and
the same shall remain undischarged for a period of 30 days during which
execution shall not be effectively stayed; or
(j) (1) The persons listed on Exhibit G hereto and the beneficiaries
---------
of any trusts listed therein, taken together, shall cease to beneficially
own and control, directly or indirectly, at least (a) 50% of the number of
issued and outstanding shares of the capital stock of Hibbett entitled
(without regard to the occurrence of any contingency) to vote for the
election of a majority of the members of the board of directors of Hibbett
(the "Voting Shares") beneficially owned and controlled by them on the
Closing Date (as such number may be adjusted for stock splits, combinations
and similar events) and (b) 20% of the total issued and outstanding Voting
Shares at any time, or (2) Hibbett ceases to beneficially own and control
at least one hundred percent (100%) of the issued and outstanding shares of
each class of capital stock of the Initial Participating Entities.
then, and in any such event and at any time thereafter, if such Event of Default
shall then be continuing,
(A) either or both of the following actions may be taken: (i) the
Lender may declare any obligation of the Lender to make further Advances
terminated, whereupon the obligation of the Lender to make further Advances
hereunder shall terminate immediately, and (ii) the Lender may declare by
notice to the Borrowers any or all of the Credit Obligations to be
immediately due and payable, and the same, including all interest accrued
thereon and all other obligations of the Borrowers to the Lender, shall
forthwith become immediately due and payable without presentment, demand,
protest, notice or other formality of any kind, all of which are hereby
expressly waived, anything contained herein or in any instrument evidencing
the Credit Obligations to the contrary notwithstanding; provided, however,
--------
that notwithstanding the above, if there shall occur
33
an Event of Default under clauses (f) or (g) above, then the obligation of
the Lender to lend hereunder shall automatically terminate and any and all
of the Credit Obligations shall be immediately due and payable without the
necessity of any action by the Lender or notice to the Lender; and
(B) the Lender may exercise any and all rights and remedies available
to the Lender under the Loan Documents and applicable law.
SECTION 8.2 CUMULATIVE RIGHTS. No right or remedy herein conferred upon
-----------------
the Lender is intended to be exclusive of any other rights or remedies contained
herein or in any other Loan Document, and every such right or remedy shall be
cumulative and shall be in addition to every other such right or remedy
contained herein and therein or now or hereafter existing at law or in equity or
by statute, or otherwise.
SECTION 8.3 NO WAIVER. No course of dealing between the Borrowers and the
---------
Lender or any failure or delay on the part of the Lender in exercising any
rights or remedies hereunder shall operate as a waiver of any rights or remedies
hereunder and no single or partial exercise of any rights or remedies hereunder
shall operate as a waiver or preclude the exercise of any other rights or
remedies hereunder or of the same right or remedy on a future occasion.
SECTION 8.4 DEFAULT. The Lender shall have no right to accelerate any of
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the Loans except upon the occurrence of an Event of Default; provided, however,
--------
nothing contained in this sentence shall in any respect impair or adversely
affect the right, power and authority of the Lender (i) to take any action
expressly required or permitted to be taken under the Loan Documents upon the
occurrence of any Default (and including any action or proceeding which the
Lender may determine to be necessary or appropriate in furtherance of any such
expressly authorized action) and (ii) to take any action provided under the Loan
Documents or otherwise available by statute, at law or in equity upon the
occurrence of any Default.
ARTICLE 9
MISCELLANEOUS
-------------
SECTION 9.1 PARTICIPATIONS. The Borrowers and the Lender understand that
--------------
the Lender may grant a participation in the Note, Loans and interest in the
Credit Obligations and the Loan Documents to any Affiliate of the Lender, and
all communications with the Lender and the Borrowers shall be solely with the
Lender and not with any participant. The Borrowers agree that any participant
or subparticipant (which, like a participant, must be an Affiliate of the
Lender) may exercise any and all rights of banker's lien or set-off with respect
to any Borrower, as fully as if such participant or subparticipant had made a
loan directly to such Borrower in the amount of the participation or
subparticipation given to such participant or subparticipant in the Credit
Obligations and the Loan Documents. For purposes of this Section 91 only, the
Borrowers shall be deemed to be directly obligated to each participant or
subparticipant in the amount of its participating interest in the amount of the
principal of, and interest on, the Credit
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Obligations. Nothing contained in this section shall affect the Lender's right
of set-off (under Section 93 or applicable law) with respect to the entire
amount of the Credit Obligations, notwithstanding any such participation or
subparticipation. The Lender may divulge to any participant or subparticipant
all information, reports, financial statements, certificates and documents
obtained by the Lender from any of the Borrowers or any other person under any
provisions of this Agreement or the other Loan Documents or otherwise.
SECTION 9.2 NOTICES.
-------
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other document provided or permitted by this Agreement or the other Loan
Documents to be made upon, given or furnished to, or filed with, any of the
Borrowers the Lender must (except as otherwise provided in this Agreement or the
other Loan Documents) be in writing and be delivered by one of the following
means: (1) by personal delivery at the hand delivery address specified below,
(2) by first-class, registered or certified mail, postage prepaid and addressed
as specified below, or (3) if facsimile transmission facilities for such party
are identified below or pursuant to a separate notice from such party, sent by
facsimile transmission to the number specified below or in such notice.
(b) The hand delivery address, mailing address and (if applicable)
facsimile transmission number for receipt of notice or other documents by such
parties are as set forth below the signatures of the Borrowers and the Lender on
the attached signature pages. Any of such parties may change its address or
facsimile transmission number for receiving any such notice or other document by
giving notice of the change to the other parties referred to in this Section 92.
(c) Any such notice or other document shall be deemed delivered when
actually received by an officer, director, partner or other legal representative
of the party at the address or number specified pursuant to this Section 92, or,
if sent by mail, three Business Days after such notice or document is deposited
in the United States mail, addressed as provided above.
(d) Five (5) Business Days' notice to the Borrowers as provided above shall
constitute reasonable notification to the Borrowers when notification is
required by law; provided, however, that nothing contained in the foregoing
shall be construed as requiring five (5) Business Days' notice if, under
applicable law and the circumstances then existing, a shorter period of time
would constitute reasonable notice.
SECTION 9.3 SETOFF. Upon the occurrence and during the continuance of any
------
Event of Default each Lender is hereby authorized at any time and from time to
time, without notice to the Borrowers or any of them (any such notice being
expressly waived by the Borrowers), 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 the Lender (including any branches,
agencies or Affiliates of the Lender, wherever located) to or for the credit or
the account of the Borrowers or any of them against any and all of the
obligations of the Borrowers and each of them now or hereafter existing under
any of the Loan Documents, irrespective of
35
whether or not any demand shall have been made under the Loan Documents and
although such obligations may be unmatured. The Lender agrees promptly to
notify each affected Borrower after any such set-off and application, provided
that the failure to give such notice shall not affect the validity of such set-
off and application or impose any liability on the Lender. The rights of the
Lender under this Section 93 are in addition to all other rights and remedies
(including other rights of set-off or pursuant to any banker's lien) that the
Lender may have.
SECTION 9.4 SURVIVAL. All representations and warranties made under this
--------
Agreement shall be deemed to be made, and shall be true and correct, at and as
of the Closing Date and the date of each Loan except to the extent (a)
previously fulfilled in accordance with the terms hereof, (b) subsequently
inapplicable, (c) modified as a result of activities of the Borrowers or changes
in circumstances, in any case as permitted hereunder or consented to in
accordance with the provisions hereof or (d) such representations and warranties
specifically relate to an earlier date. All covenants, agreements,
representations and warranties made in this Agreement or in any of the other
Loan Documents and in the certificates delivered pursuant to any of the Loan
Documents shall survive the making by the Lender of the Loans and the execution
and delivery to the Lender of this Agreement, the Note and the other Loan
Documents and shall continue in full force and effect so long as any of the
Credit Obligations remain outstanding.
SECTION 9.5 EXPENSES. (a) The Borrowers shall pay all reasonable out-of-
--------
pocket expenses of the Lender, including fees and disbursements of counsel for
the Lender, in connection with the preparation of the Loan Documents, any waiver
or consent hereunder or thereunder or any amendment hereof or thereof or any
Default or alleged Default hereunder (including those in connection with
collection and other enforcement proceedings resulting therefrom), other than
expenses due to the Lender's own gross negligence or willful misconduct. Any
amount paid or advanced by the Lender under this section or the other Loan
Documents not immediately reimbursed to the Lender after demand shall bear
interest until paid at a rate equal to two percent (2%) in excess of the Base
Rate in effect from time to time, or the highest rate permitted by law,
whichever is less. The Borrowers shall pay all costs and expenses of performing
and satisfying their obligations under this Agreement. The Borrowers'
obligations under this Section 95 shall survive the payment in full of the
Credit Obligations and the termination of this Agreement.
SECTION 9.6 COUNTERPARTS. This Agreement may be executed in any number of
------------
counterparts, each of which when so executed and delivered shall be deemed an
original, and it shall not be necessary in making proof of this Agreement to
produce or account for more than one such fully-executed counterpart.
SECTION 9.7 SUBMISSION TO JURISDICTION. Each Borrower irrevocably (a)
--------------------------
acknowledges that this Agreement will be accepted by the Lender and performed by
such Borrower in the State of Alabama; (b) submits to the jurisdiction of each
state or federal court sitting in Jefferson County, Alabama (collectively, the
"Courts") over any suit, action or proceeding arising out of or relating to this
Agreement or any of the other Loan Documents (individually, an "Agreement
Action"); (c) waives, to the fullest extent permitted by law, any objection or
defense that such Borrower may now or hereafter have based on improper venue,
36
lack of personal jurisdiction, inconvenience of forum or any similar matter in
any Agreement Action brought in any of the Courts; (d) agrees that final
judgment in any Agreement Action brought in any of the Courts shall be
conclusive and binding upon such Borrower and may be enforced in any other court
to the jurisdiction of which such Borrower is subject, by a suit upon such
judgment; (e) consents to the service of process on such Borrower in any
Agreement Action by the mailing of a copy thereof by registered or certified
mail, postage prepaid, to such Borrower at its address designated in or pursuant
to Section 92; (f) agrees that service in accordance with this Section 97 shall
in every respect be effective and binding on such Borrower to the same extent as
though served on such Borrower in person by a person duly authorized to serve
such process; and (g) AGREES THAT THE PROVISIONS OF THIS SECTION, EVEN IF FOUND
NOT TO BE STRICTLY ENFORCEABLE BY ANY COURT, SHALL CONSTITUTE "FAIR WARNING" TO
SUCH BORROWER THAT THE EXECUTION OF THIS AGREEMENT MAY SUBJECT SUCH BORROWER TO
THE JURISDICTION OF EACH STATE OR FEDERAL COURT SITTING IN JEFFERSON COUNTY,
ALABAMA WITH RESPECT TO ANY AGREEMENT ACTIONS, AND THAT IT IS FORESEEABLE BY
SUCH BORROWER THAT IT MAY BE SUBJECTED TO THE JURISDICTION OF SUCH COURTS AND
MAY BE SUED IN THE STATE OF ALABAMA IN ANY AGREEMENT ACTIONS. Nothing in this
Section 97 shall limit or restrict the Lender's right to serve process or bring
Agreement Actions in manners and in courts otherwise than as herein provided.
SECTION 9.8 TERMINATION. The termination of this Agreement shall not
-----------
affect any rights of the Borrowers or the Lender or any obligation of the
Borrowers or the Lender, arising prior to the effective date of such
termination, and the provisions hereof shall continue to be fully operative
until all transactions entered into or rights created or obligations incurred
prior to such termination have been fully disposed of, concluded or liquidated
and the Credit Obligations arising prior to or after such termination have been
irrevocably paid in full. The rights granted to the Lender for the benefit of
the Lender hereunder and under the other Loan Documents shall continue in full
force and effect, notwithstanding the termination of this Agreement, until all
of the Credit Obligations have been paid in full after the termination hereof or
the Borrowers have furnished the Lender with an indemnification satisfactory to
the Lender with respect thereto. All representations, warranties, covenants,
waivers and agreements contained herein shall survive termination hereof until
payment in full of the Credit Obligations unless otherwise provided herein.
Notwithstanding the foregoing, if after receipt of any payment of all or any
part of the Credit Obligations, the Lender is for any reason compelled to
surrender such payment to any Person because such payment is determined to be
void or voidable as a preference, impermissible setoff, a diversion of trust
funds or for any other reason, this Agreement shall continue in full force and
the Borrowers shall be liable to, and shall indemnify and hold the Lender
harmless for, the amount of such payment surrendered until the Lender shall have
been finally and irrevocably paid in full. The provisions of the foregoing
sentence shall be and remain effective notwithstanding any contrary action which
may have been taken by the Lender in reliance upon such payment, and any such
contrary action so taken shall be without prejudice to the Lender's rights under
this Agreement and shall be deemed to have been conditioned upon such payment
having become final and irrevocable.
37
SECTION 9.9 GOVERNING LAW. All documents executed pursuant to the
-------------
transactions contemplated herein, including this Agreement and each of the Loan
Documents, shall be deemed to be contracts made under, and for all purposes
shall be construed in accordance with, the internal laws and judicial decisions
of the State of Alabama.
SECTION 9.10 INDEMNIFICATION. In consideration of the execution and
---------------
delivery of this Agreement by the Lender, and so long as the Lender has
fulfilled its obligations hereunder, each of the Borrowers hereby indemnifies,
exonerates and holds the Lender and its officers, directors, employees and
agents (collectively, the "Indemnified Parties") free and harmless from and
against any and all actions, causes of action, claims, suits, losses, costs,
liabilities and damages, and expenses incurred in connection therewith
(irrespective of whether any such Indemnified Party is a party to the action for
which indemnification hereunder is sought), including reasonable attorneys' fees
and disbursements (collectively, the "Indemnified Liabilities"), incurred by the
Indemnified Parties or any of them as a result of, or arising out of, or
relating to any of the following:
(a) any transaction financed or to be financed in whole or in part,
directly or indirectly, with the proceeds of any Loan;
(b) the entering into and performance of this Agreement and any other
Loan Document by any of the Indemnified Parties;
(c) any investigation, litigation or proceeding related to any
environmental cleanup, audit, compliance or other matter relating to the
protection of the environment in connection with the Borrowers or the
release by the Borrowers of any Hazardous Materials; or
(d) the presence on or under, or the escape, seepage, leakage,
spillage, discharge, emission, discharging or releases from, any real
property owned or operated by the Borrowers thereof of any Hazardous
Materials (including any losses, liabilities, damages, injuries, costs,
expenses or claims asserted or arising under any environmental laws),
regardless of whether caused by, or within the control of, the Borrower,
except for any such Indemnified Liabilities arising for the account of a
particular Indemnified Party by reason of the relevant Indemnified Party's gross
negligence or willful misconduct, and if and to the extent that the foregoing
undertaking may be unenforceable for any reason, the Borrower hereby agrees to
make the maximum contribution to the payment and satisfaction of each of the
Indemnified Liabilities which is permissible under applicable law.
SECTION 9.11 AGREEMENT CONTROLS. In the event that any term of any of the
------------------
Loan Documents other than this Agreement conflicts with any term of this
Agreement, the terms and provisions of this Agreement shall control.
SECTION 9.12 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
----------------------
and shall inure to the benefit of the parties hereto and their respective
successors and assigns;
38
provided, however, that the Borrowers may not assign or transfer their rights or
obligations hereunder without the prior written consent of the Lender. The
Lender may not assign or transfer its interest hereunder except as otherwise
provided in this Agreement.
SECTION 9.13 SEVERABILITY. Any provision of any of the Loan Documents
------------
that is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or thereof
or affecting the validity or enforceability of such provision in any other
jurisdiction.
SECTION 9.14 OBLIGATIONS OF HIBBETT ABSOLUTE. Hibbett hereby agrees that
-------------------------------
its obligations and liabilities with respect to the Credit Obligations are joint
and several with the Participating Entities, continuing, absolute and
unconditional. Without limiting the generality of the foregoing, the
obligations and liabilities of Hibbett with respect to the Credit Obligations
shall not be released, discharged, impaired, modified or in any way affected by
(a) the invalidity or unenforceability of any Loan Document executed by any
other person with respect to the Credit Obligations, (b) the failure of the
Lender to give Hibbett a copy of any notice given to any other person, (c) any
modification, amendment or supplement of any obligation, covenant or agreement
contained in any Loan Document executed by any other person with respect to the
Credit Obligations, (d) any compromise, settlement, release or termination of
any obligation, covenant or agreement in any Loan Document executed with respect
to the Credit Obligations, (e) any waiver of payment, performance or observance
by or in favor of any other person of any obligation, covenant or agreement
under any Loan Document, (f) any consent, extension, indulgence or other action
or inaction, or any exercise or non-exercise of any right, remedy or privilege
with respect to any Loan Document executed by any other person with respect to
the Credit Obligations, or (g) the extension of time for payment or performance
of any Credit Obligation by any other person.
SECTION 9.15 ARBITRATION; PRESERVATION AND LIMITATION OF REMEDIES.
----------------------------------------------------
(a) If any dispute or controversy shall arise among the parties hereto as
to any matter arising out of or in connection with the Loan Documents, the
parties shall attempt in good faith to resolve such controversy by mutual
agreement. If such dispute or controversy cannot be so resolved, it shall be
resolved solely in accordance with the provisions of this Section 915.
Institution of a judicial proceeding by a party does not waive the right of that
party to demand arbitration hereunder.
(b) Any dispute, controversy or claim between or among the parties hereto
(the "Disputing Parties"), including disputes, controversies and claims arising
out of or related to the Loan Documents, or the breach thereof, and the subject
matter hereof, shall, except as provided in this Section 915, be settled by a
single arbitrator by arbitration in Birmingham, Alabama in accordance with the
Commercial Arbitration Rules of the American Arbitration Association as amended
from time to time and as modified by this Agreement.
39
(c) The arbitrator shall be selected by the Disputing Parties within 15
days after demand for arbitration is made by a Disputing Party. If the
Disputing Parties are unable to agree on an arbitrator within such period, then
each Disputing Party shall select one arbitrator, and each such arbitrator shall
select a third arbitrator and the dispute shall be settled by the panel
consisting of such three arbitrators (such panel, or the single arbitrator
agreed to by both parties, as the case may be, being hereinafter referred to as
the "Arbiter"). Each arbitrator shall be a licensed attorney in the State of
Alabama and shall possess substantive legal experience with respect to the
principal issues in dispute.
(d) Except as may otherwise be agreed in writing by the Disputing Parties
or as ordered by the Arbiter upon substantial justification, the hearing of the
dispute shall be held and concluded within 90 days of submission of the dispute
to arbitration. The Arbiter shall render its final award within 30 days
following conclusion of the hearing. The Arbiter shall state the factual and
legal basis for the award. The decision of the Arbiter shall be final and
binding except as provided in the Federal Arbitration Act, 9 U.S.C. Section 1
et. seq., and except for errors of law based on findings of fact. Final
-- ---
judgment may be entered upon such an award in any court of competent
jurisdiction, but entry of such judgment shall not be required to make such
award effective.
(e) Nothing in this Section 915 shall limit any right that any party may
otherwise have to seek to obtain preliminary injunctive relief in order to
preserve the status quo pending the disposition of any such arbitration
proceeding.
40
IN WITNESS WHEREOF, each of the Borrowers and the Lender have caused this
Credit Agreement to be executed and delivered by its duly authorized corporate
officer as of the day and year first above written.
HIBBETT SPORTING GOODS, INC.
By: ___________________________________________
Its _______________________________________
HIBBETT TEAM SALES, INC.
By: ___________________________________________
Its _______________________________________
SPORTS WHOLESALE, INC.
By: ___________________________________________
Its _______________________________________
Hand Delivery and Mailing Address:
000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx 00000
FAX: (000) 000-0000
Attention: Chief Financial Officer
AMSOUTH BANK
By: ____________________________________________
Its Senior Vice President
Hand Delivery Address:
7th Floor, AmSouth-Sonat Tower
0000 Xxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
FAX: (000) 000-0000
Attention: Regional Banking Department
Mailing Address:
Xxxx Xxxxxx Xxx 00000
Xxxxxxxxxx, Xxxxxxx 00000
FAX: (000) 000-0000
Attention: Regional Banking Department
