Exhibit 10.9
REVOLVING CREDIT AGREEMENT
GAMESTOP CORP.
Dated as of ___________ __, 2002
FLEET NATIONAL BANK,
as Administrative Agent
AND
THE LENDING INSTITUTIONS PARTY TO THIS AGREEMENT
AND
FLEET SECURITIES, INC.,
as Arranger
TABLE OF CONTENTS
Section Title Page
------- ----- ----
SECTION I - DEFINITIONS
1.1 Definitions................................................................
1.2 Terms of General Application...............................................
SECTION II - DESCRIPTION OF CREDIT
2. The Credit Facilities......................................................
2.1 The Loans..................................................................
2.2 Records; Notes.............................................................
2.3 Conversion.................................................................
2.4 Notice and Manner of Borrowing or
Conversion of Loans........................................................
2.5 Commitment Fee.............................................................
2.6 Fee Letter.................................................................
2.7 Reduction of Total Commitment..............................................
2.8 Increases in Total Commitment..............................................
2.9 Duration of Interest Periods...............................................
2.10 Interest Rates and Payments of Interest....................................
2.11 Protective Provisions........................................................
2.11.1 Inability to Determine Adjusted LIBOR Rate.................................
2.11.2 Illegality.................................................................
2.11.3 Additional Costs, etc......................................................
2.11.4 Claims by Affected Banks;
Borrower's Rights to Replace Banks.........................................
2.12 Capital Requirements.......................................................
2.13 Payments and Prepayments of the Loans......................................
2.14 Method of Payment; Withholding Tax Exemption...............................
2.15 Default Rate Interest, etc.................................................
2.16 Payments Not at End of Interest Period.....................................
2.17 Computation of Interest and Fees; Maximum Interest.........................
2.18 Letters of Credit..........................................................
2.19 Letter of Credit Fees......................................................
2.20 Interdependence of Borrower Affiliated Group...............................
SECTION III - CONDITIONS OF LOANS
3.1 Conditions Precedent to Initial Revolving Credit Loan......................
3.1.1 Loan Documents.............................................................
3.1.2 Legality of Transactions...................................................
3.1.3 Representations and Warranties.............................................
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3.1.4 Performance, Consents, No Defaults, Litigation, etc........................
3.1.5 Certified Copies of Charter Documents......................................
3.1.6 Proof of Entity Action.....................................................
3.1.7 Incumbency Certificate.....................................................
3.1.8 Proceedings and Documents..................................................
3.1.9 Good Standing, etc.........................................................
3.1.10 Fees.......................................................................
3.1.11 Legal Opinion..............................................................
3.1.12 Financial Condition........................................................
3.1.13 Security Documents; U.C.C. Search Reports;
Insurance; Patents, Trademarks and Copyrights..............................
3.1.14 Solvency...................................................................
3.1.15 Payoff and Release Letter..................................................
3.1.16 Initial Public Offering....................................................
3.2 Conditions Precedent to all Loans and Letters of Credit....................
SECTION IV - REPRESENTATIONS AND WARRANTIES
4.1 Organization and Qualification.............................................
4.2 Entity Authority...........................................................
4.3 Valid Obligations..........................................................
4.4 Consents or Approvals......................................................
4.5 Title to Properties; Absence of Encumbrances...............................
4.6 Material Contracts.........................................................
4.7 Financial Statements.......................................................
4.8 Changes....................................................................
4.9 Defaults...................................................................
4.10 Taxes......................................................................
4.11 Litigation.................................................................
4.12 Subsidiaries...............................................................
4.13 Investment Company Act.....................................................
4.14 Compliance with ERISA......................................................
4.15 Environmental Matters......................................................
4.16 Disclosure.................................................................
4.17 Solvency...................................................................
4.18 Compliance with Statutes, etc..............................................
4.19 Capitalization.............................................................
4.20 Labor Relations............................................................
4.21 Certain Transactions.......................................................
4.22 Restrictions on the Borrower Affiliated Group..............................
4.23 Leases.....................................................................
4.24 Franchises, Patents, Copyrights, etc.......................................
4.25 Collateral.................................................................
SECTION V - AFFIRMATIVE COVENANTS
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5.1 Financial Statements and other Reporting Requirements......................
5.2 Conduct of Business........................................................
5.3 Maintenance of Properties and Insurance....................................
5.4 Taxes......................................................................
5.5 Inspection by the Administrative Agent.....................................
5.6 Maintenance of Books and Records...........................................
5.7 Use of Proceeds............................................................
5.8 Pension Plans..............................................................
5.9 Fiscal Year................................................................
5.10 Further Assurances.........................................................
SECTION VI - NEGATIVE COVENANTS
6.1 Indebtedness...............................................................
6.2 Sale and Leaseback.........................................................
6.3 Encumbrances...............................................................
6.4 Merger; Consolidation; Sale or Lease of Assets;
Acquisitions...............................................................
6.5 Minimum Fixed Charge Coverage Ratio........................................
6.6 Maximum Cash Flow Leverage Ratio...........................................
6.7 Minimum Tangible Net Worth.................................................
6.8 Maximum Capital Expenditures...............................................
6.9 Restricted Payments........................................................
6.10 Investments................................................................
6.11 ERISA......................................................................
6.12 Transactions with Affiliates...............................................
6.13 Loans......................................................................
6.14 Commitment.................................................................
6.15 No Amendments to Certain Documents; No New
Agreements Requiring Breach of Loan Documents..............................
SECTION VII - DEFAULTS
7.1 Events of Default..........................................................
7.2 Remedies...................................................................
SECTION VIII - CONCERNING THE ADMINISTRATIVE
AGENT AND THE BANKS
8.1 Appointment and Authorization..............................................
8.2 Administrative Agent and Affiliates........................................
8.3 Future Advances............................................................
8.4 Delinquent Bank............................................................
8.5 Payments...................................................................
8.6 Action by Administrative Agent.............................................
8.7 Notification of Defaults and Events of Default.............................
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8.8 Consultation with Experts..................................................
8.9 Liability of Administrative Agent..........................................
8.10 Indemnification............................................................
8.11 Independent Credit Decision................................................
8.12 Successor Administrative Agent.............................................
SECTION IX - MISCELLANEOUS
9.1 Notices....................................................................
9.2 Expenses...................................................................
9.3 Indemnification............................................................
9.4 Set-Off....................................................................
9.5 Term of Agreement..........................................................
9.6 No Waivers.................................................................
9.7 Governing Law..............................................................
9.8 Amendments, Waivers, etc...................................................
9.9 Binding Effect of Agreement................................................
9.10 Successors and Assigns.....................................................
9.11 Counterparts...............................................................
9.12 Partial Invalidity.........................................................
9.13 Captions...................................................................
9.14 Waiver of Jury Trial.......................................................
9.15 Waiver of Special Damages..................................................
9.16 Entire Agreement...........................................................
9.17 Replacement of Loan Documents, etc.........................................
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EXHIBITS AND SCHEDULES
EXHIBIT A- Form of Revolving Credit Note
EXHIBIT B - Form of Notice of Borrowing or Conversion
EXHIBIT C - Indebtedness; Encumbrances
EXHIBIT D - Disclosure
EXHIBIT E - Form of Opinion of Counsel to the Borrower Affiliated Group
EXHIBIT F - Form of Report of Chief Financial Officer
EXHIBIT G - Form of Borrowing Base Report
EXHIBIT H - Form of Assignment and Assumption
EXHIBIT I - Form of Subsidiary Guaranty
EXHIBIT J - Form of Pledge Agreement
SCHEDULES
SCHEDULE 1 - Commitments and Commitment Percentages
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REVOLVING CREDIT AGREEMENT
Dated as of __________ __, 2002
THIS REVOLVING CREDIT AGREEMENT is made as of ____________ __, 2002, by
and among GameStop Corp., a Delaware corporation having its principal place of
business and chief executive office at 0000 Xxxxxxx X. Xxxx Xxxxxx, Xxxxxxxxx,
Xxxxx 00000 (the "Borrower"), the lending institutions listed on Schedule 1 to
this Agreement, and the other lending institutions which may become parties
hereto pursuant to Section 9.10 (individually, a "Bank" and collectively, the
"Banks"), Fleet National Bank, as administrative agent for itself and each other
Bank (in such capacity, the "Administrative Agent"), and Fleet Securities, Inc.,
as arranger (the "Arranger").
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto hereby agree as follows:
SECTION I
DEFINITIONS
1.1. Definitions.
All capitalized terms used in this Agreement or in any other Loan
Document (as such terms are defined below), or in any certificate, report or
other document made or delivered pursuant to this Agreement (unless otherwise
defined therein), shall have the respective meanings assigned to them below:
Account and/or Accounts Receivable. As defined in Section 9-102(a)(2)
of the Uniform Commercial Code as in effect from time to time in the State of
New York.
Acquisition. See Section 6.4(c).
Adjusted LIBOR Rate. For any Interest Period, a rate per annum as
determined on the basis of the offered rates for deposits in Dollars, for a
period of time comparable to such Interest Period which appears on the Telerate
page 3750 as of 11:00 a.m. (London time) on the day that is two Business Days
preceding the first day of such Interest Period; provided, however, if the rate
described above does not appear on the Telerate System on any applicable
interest determination date, LIBOR shall be the rate (rounded upwards, if
necessary, to the nearest one hundred thousandth of a percentage point)
determined on the basis of the offered rates for deposits in Dollars for a
period of time comparable to such Interest Period which are offered by four
major banks in the London interbank market at approximately 11:00 a.m. (London
time), on the day that is two Business Days preceding the first day of such
Interest Period as selected by the Administrative Agent. The principal London
office of each of the four major London banks will be requested to provide a
quotation of its Dollar deposit offered rate. If at least two such quotations
are
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provided, the rate for that date will be the arithmetic mean of the quotations.
If fewer than two quotations are provided as requested, the rate for that date
will be determined on the basis of the rates quoted for loans in Dollars to
leading European banks for a period of time comparable to such Interest Period
offered by major banks in New York City at approximately 11:00 a.m. (New York
City time), on the day that is two Business Days preceding the first day of such
Interest Period. In the event that the Administrative Agent is unable to obtain
any such quotation as provided above, it will be deemed that the Adjusted LIBOR
Rate cannot be determined. In the event that the Board of Governors of the
Federal Reserve System shall impose a Reserve Percentage with respect to LIBOR
deposits of the Administrative Agent, then for any period during which such
Reserve Percentage shall apply, the Adjusted LIBOR Rate shall be equal to the
amount determined above divided by an amount equal to one minus the Reserve
Percentage.
Administrative Agent. Fleet National Bank, in its capacity as
Administrative Agent for the Banks under this Agreement and the other Loan
Documents, including (where the context so admits) any other Person or Persons
succeeding to the functions of the Administrative Agent pursuant to this
Agreement and the other Loan Documents.
Affected Bank. Any Bank that has suffered a loss or otherwise has a
claim for compensation from the Borrower or a right to be excused from
performing an obligation under any of Sections 2.11.2, 2.11.3, 2.12 or 2.14.
Affiliate. With reference to any Person, (i) any director or officer of
that Person, (ii) any other Person controlling, controlled by or under direct or
indirect common control with that Person (and if that Person is an individual,
any member of the immediate family (including parents, siblings, spouse,
children, stepchildren, nephews, nieces and grandchildren) of such individual
and any trust whose principal beneficiary is such individual or one or more
members of such immediate family and any Person who is controlled by any such
member or trust), (iii) any other Person directly or indirectly holding 10% or
more of any class of the capital stock or other equity interests (including
options, warrants, convertible securities and similar rights) of that Person,
(iv) any other Person 10% or more of any class of whose capital stock or other
equity interests (including options, warrants, convertible securities and
similar rights) is held directly or indirectly by that Person, and (v) any other
Person that possesses, directly or indirectly, power to direct or cause the
direction of management or policies (whether through ownership of securities or
partnership or other ownership interests, by contract or otherwise) of that
Person.
Agreement. This Revolving Credit Agreement, as the same may be renewed,
extended, modified, supplemented or amended from time to time.
Applicable Authority. Any competent court or any governmental or other
regulatory body or official charged with the administration or the
interpretation of any law, treaty, statute, rule or regulation.
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Applicable Base Rate Margin. The Applicable Base Rate Margin is set
forth in Section 2.10(c).
Applicable LIBOR Margin. The Applicable LIBOR Margin is set forth in
Section 2.10(c).
Arranger. See preamble.
Assignment and Assumption. See Section 9.10(ii).
Availability. As at the date of determination, an amount equal to (a)
the lesser of the Total Commitment then in effect and the Borrowing Base, minus
(b) the aggregate principal amount of all Revolving Credit Loans then
outstanding, minus (c) the aggregate Stated Amount of Letters of Credit
outstanding, minus (d) the aggregate amount of all unreimbursed draws under
outstanding Letters of Credit (unless included as Revolving Credit Loans under
clause (b) above).
Banks. Collectively, (i) Fleet National Bank, and (ii) each of the
other Persons which may provide additional commitments and become a party to
this Agreement as a Bank hereunder, as shown on Schedule 1 as it may be updated
by the Administrative Agent from time to time.
Xxxxxx & Noble. Xxxxxx & Xxxxx, Inc., a Delaware corporation.
Base Rate. The greater of (a) the rate of interest publicly announced
from time to time by the Administrative Agent at its head office as its Base
Rate, and (b) the Federal Funds Effective Rate plus -1/2 of 1% per annum
(rounded upwards, if necessary, to the next 1/16 of 1%)
Borrower. See preamble.
Borrower Affiliated Group. Collectively, (i) the Borrower and (ii) each
of the Subsidiaries of the Borrower in existence from time to time.
Borrowing Base. At any date, an amount equal to 50% of the value of
Eligible Inventory.
Business Day. (i) For all purposes other than as covered by clause (ii)
below, any day other than a Saturday, Sunday or legal holiday on which banks in
Boston, Massachusetts and in New York, New York are open for the conduct of a
substantial part of their commercial banking business; and (ii) with respect to
all notices and determinations in connection with, and payments of principal and
interest on, LIBOR Loans, any day that is a Business Day described in clause (i)
and that is also a day on which trading takes place between banks in United
States dollar deposits in the London interbank market.
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Capital Expenditures. To the extent capitalized in accordance with
GAAP, any expenditure for fixed assets (both tangible and intangible), including
assets being constructed (whether or not completed), leasehold improvements,
capital leases under GAAP, installment purchases of machinery and equipment,
acquisitions of real estate and other similar expenditures including (i) in the
case of a purchase, the entire purchase price, whether or not paid during the
fiscal period in question, (ii) in the case of a Capitalized Lease, the
capitalized amount thereof (determined in accordance with GAAP) and (iii)
without duplication, expenditures in or from any construction-in-progress
account of any member of the Borrower Affiliated Group.
Capitalized Lease. Any lease of real property by a member of the
Borrower Affiliated Group as lessee which is shown as a liability on the
Consolidated balance sheet of the Borrower in accordance with GAAP.
Cash Flow Leverage Ratio. As of any date of calculation, for the
twelve-month period then ended, the ratio of (a) Consolidated Total Funded Debt
for such period to (b) Consolidated EBITDA for such period; provided that for
any period prior to the Borrower's initial public offering, such period shall be
included on a pro forma basis to give effect to the results of such offering
CERCLA. The Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as the same may from time to time be supplemented or
amended and remain in effect.
Change in Law. Any future applicable law or any change to any present
applicable law (which, in each case, includes treaties, statutes, rules and
regulations thereunder and the interpretation and application thereof by any
Applicable Authority), or any change in the interpretation or application of any
present applicable law by any Applicable Authority, and requests, directives,
instructions and notices at any time or from time to time hereafter made upon or
otherwise issued to any Bank or the Administrative Agent by any central bank or
other fiscal, monetary or other authority (whether or not having the force of
law).
Change of Control. The occurrence of any of the following: (i) Xxxxxx &
Noble shall cease to own voting securities constituting a majority of the voting
power of the voting securities of the Borrower, (ii) Xxxxxx & Xxxxx shall cease,
in any other respect, to have effective control of the Borrower, or (iii) any
change in equity ownership of any Subsidiary of the Borrower, except as may be
expressly permitted by Section 6.4.
Closing Date. ___________ __, 2002 or such other mutually agreeable
date on which all of the conditions set forth in Section 3.1 have been satisfied
and any Loans are to be made hereunder.
Code. The Internal Revenue Code of 1986 and the rules and regulations
thereunder, collectively, as the same may from time to time be supplemented or
amended and remain in effect.
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Collateral. Collectively, all of the agreements, instruments,
contracts, property (real and personal, tangible and intangible), assets,
accounts, Accounts Receivable, Inventory, equipment, investment property,
patents, trademarks, copyrights, other intellectual property and monies, and all
of the income, proceeds and products of any thereof, under or in respect of
which the Administrative Agent or any Bank or any of the nominees, agents or
legal representatives of the Administrative Agent or any Bank shall have at the
relevant time of reference to the term "Collateral," any rights or interest as
security for the payment or performance of all or any part of the Obligations.
Commitment. At any time and with respect to any Bank, the amount set
forth for such Bank on Schedule 1 under the heading "Commitments," which amount
includes the aggregate of (a) the maximum amount of Revolving Credit Loans that
such Bank shall be committed to make to the Borrower plus (b) the maximum Stated
Amount of Letters of Credit which such Bank shall be committed to issue to, or
to participate in, in favor of the Borrower. Schedule 1 shall be updated by the
Administrative Agent from time to time to reflect any (i) Increase or (ii) any
Commitment or portion thereof which a Bank shall assume or relinquish upon an
assignment pursuant to Section 9.10(ii).
Commitment Fee. See Section 2.5.
Commitment Percentage. With respect to each Bank, the percentage set
forth on Schedule 1 hereto as such Bank's percentage of the aggregate Total
Commitment. Schedule 1 shall be updated by the Administrative Agent from time to
time to reflect any changes to the Commitment Percentages.
Consolidated. The term "Consolidated" shall have the meaning ascribed
to such term under GAAP.
Consolidated Cumulative Net Equity Raises. The aggregate net proceeds
received by the Borrower Affiliated Group, on a Consolidated basis, from all
sales of any equity securities (whether through a public offering, private
placement or otherwise) of any member of the Borrower Affiliated Group, on a
cumulative basis for the period beginning as of the Closing Date and ending as
of the date of determination, but excluding (i) the proceeds of the Borrower's
initial public offering required by Section 3.1.16, and (ii) any equity
contribution made by Xxxxxx &Noble in connection with the closing of the initial
public offering.
Consolidated Cumulative Net Income. The Consolidated net income (or
loss) of the Borrower Affiliated Group determined in accordance with GAAP and
determined on a cumulative basis for the period (a) beginning on the first day
of the first full fiscal quarter that begins after the Closing Date, and (b)
ending on the last day of the most recently completed fiscal quarter; and
provided, however, that there shall be excluded from such amount (i) the income
(or loss) of any Subsidiary that is not, directly or indirectly, a wholly-owned
Subsidiary of the Borrower except to the extent of the amount of dividends or
other distributions actually paid during such period by such Subsidiary to
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the Borrower or its directly or indirectly wholly-owned Subsidiaries, and (ii)
the income (or loss) of any Person prior to the date it becomes a Subsidiary of
the Borrower.
Consolidated Debt Amortization. For any period, the aggregate amount of
scheduled principal payments paid or required to be paid by the Borrower
Affiliated Group during such period with respect to any Indebtedness, but
excluding payments in respect of the Loans.
Consolidated Rent Expense. For any period, the aggregate rental
expenses payable by the Borrower on a Consolidated basis for such period
(including percentage rent) under any operating Lease classified as such under
GAAP but not including any amount included in the definition of "Consolidated
Total Interest Expense."
Consolidated Tangible Net Worth. As at any date of determination,
Stockholders' Equity less any intangible assets, with intangible assets defined
as goodwill, patents, trademarks, tradenames, lease rights, capitalized
pre-opening costs, franchises, organization costs and property rights.
Consolidated Total Funded Debt. As at any date of determination, on a
Consolidated basis for the Borrower Affiliated Group, and without duplication,
the sum of (i) the aggregate amount of Indebtedness for borrowed money
outstanding on such date (including, without limitation, the Loans outstanding
on such date), plus (ii) the Stated Amount of all outstanding Letters of Credit,
plus (iii) all Guaranties of Indebtedness for borrowed money or Capitalized
Leases of the Borrower Affiliated Group outstanding on such date.
Consolidated Total Interest Expense. For any period, all interest and
all amortization of debt discount and expense (including commitment fees, letter
of credit fees, balance deficiency fees and similar expenses) on all
Indebtedness of the Borrower on a Consolidated basis (including outstanding
letters of credit), paid or required to be paid, all as determined in accordance
with GAAP, together with all interest expense of the Borrower on a Consolidated
basis under Synthetic Leases. Computations of interest on a pro forma basis for
Indebtedness having a variable interest rate shall be calculated at the rate in
effect on the date of any determination.
Controlled Group. All trades or businesses (whether or not
incorporated) under common control that, together with the Borrower, are treated
as a single employer under Section 414(b) or 414(c) of the Code or Section 400l
of ERISA.
Covered Taxes. See Section 2.14(a)
Default. An event or condition that, but for the requirement that time
elapse or notice be given, or both, would constitute an Event of Default.
Delinquent Bank. See Section 8.4.
Dollar or $. Dollars in lawful currency of the United States of
America.
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Domestic Subsidiary. Any Subsidiary of the Borrower organized under the
laws of any jurisdiction of the United States of America.
EBITDA. In relation to the Borrower on a Consolidated basis for any
period, an amount equal to (a) the net income of the Borrower on a Consolidated
basis after deduction of all expenses, taxes and other proper charges,
determined in accordance with GAAP for such period, but, in determining such
Consolidated net income, any GAAP extraordinary gains shall be excluded from
such calculation, plus (b) the following to the extent deducted in computing
such Consolidated net income for such period: (i) Consolidated Total Interest
Expense for such period, (ii) Consolidated taxes on income for such period,
(iii) Consolidated depreciation for such period, (iv) Consolidated amortization
for such period, and (v) extraordinary non-cash losses to the extent such losses
have not been and will not become cash losses in a later fiscal period.
EBITDAR. In relation to the Borrower for any period, an amount equal to
EBITDA for such period, plus Consolidated Rent Expense for such period.
Eligible Assignee. Any of:
(a) a commercial bank or finance company organized under the
laws of the United States, or any state thereof or the District of Columbia, and
having total assets in excess of $500,000,000;
(b) a savings and loan association or savings bank organized
under the laws of the United States, or any state thereof or the District of
Columbia, and having a net worth of at least $100,000,000, calculated in
accordance with GAAP;
(c) a commercial bank organized under the laws of any other
country which is a member of the Organization for Economic Cooperation and
Development (the "OECD"), or a political subdivision of any such country, and
having total assets in excess of $500,000,000, or the central bank of any
country which is a member of the OECD;
provided, in each case, that such bank (i) is acting through a branch or agency
located in the United States and (ii) has delivered to the Administrative Agent,
on the date on which the Assignment and Assumption to which such Eligible
Assignee is a party becomes effective, the forms referred to in Section 2.14(b)
hereof;
and
(d) if, but only if, any Event of Default has occurred and is
continuing, any other bank, insurance company, commercial finance company or
other financial institution or other Person approved by the Administrative
Agent, such approval not to be unreasonably withheld.
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Eligible Inventory. The Borrower's Inventory (other than raw materials
and work in progress) wherever located, in each case held for sale in the
ordinary course of business, valued at the lower of cost or market; provided,
however, that no such Inventory shall be deemed eligible if (a) it is under
consignment to or from any Person, or (b) it is not owned by the Borrower free
and clear of all liens.
Encumbrances. See Section 6.3.
Environmental Claims. All claims, however asserted, alleging potential
liability or responsibility for violation of any Environmental Laws or for
release of Hazardous Materials or injury to the environment.
Environmental Laws. Any and all applicable foreign, federal, state and
local environmental, health or safety statutes, laws, regulations, ordinances,
policies and or common law (whether now existing or hereafter enacted or
promulgated), of all federal, state, local or other governmental authorities,
agencies, commissions, boards, bureaus or departments which may now or hereafter
have jurisdiction over the Borrower, any other member of the Borrower Affiliated
Group or any landlord under any real estate Lease under which the Borrower or
such other member of the Borrower Affiliated Group is a tenant, and all
applicable judicial and administrative and regulatory decrees, judgments and
orders, including common law rulings and determinations, relating to injury to,
or the protection of human health or the environment, including, without
limitation, all requirements pertaining to reporting, licensing, permitting,
investigation, remediation and removal of emissions, discharges, releases or
threatened releases of Hazardous Materials, chemical substances, pollutants or
contaminants whether solid, liquid or gaseous in nature, into the environment or
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of such Hazardous Materials, chemical
substances, pollutants or contaminants.
ERISA. The Employee Retirement Income Security Act of 1974 and the
rules and regulations thereunder, collectively, as the same may from time to
time be supplemented or amended and remain in effect.
Event of Default. Any event described in Section 7.1.
Federal Funds Effective Rate. For any day, a fluctuating interest rate
per annum equal to the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by federal
funds brokers, as published for such day (or, if such day is not a Business Day,
for the next preceding Business Day) by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day that is a Business Day, the
average of the quotations for such day on such transactions received by the
Administrative Agent from three federal funds brokers of recognized standing
selected by the Administrative Agent.
Fee Letter. The letter agreement dated as of the date hereof among
Fleet National Bank, the Arranger, and the Borrower.
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Fixed Charge Coverage Ratio. As of any date of calculation, for the
twelve-month period then ended, the ratio of (a) an amount equal to EBITDAR less
Capital Expenditures for such period, to (b) the sum of Consolidated Total
Interest Expense plus Consolidated Debt Amortization plus Consolidated Rent
Expense for such period; provided that for any period prior to the Borrower's
initial public offering, such period shall be included on a pro forma basis to
give effect to the results of such offering.
Foreign Bank. See Section 2.14(b).
Foreign Subsidiary. Any Subsidiary of the Borrower organized under the
laws of a jurisdiction outside the United States of America.
GAAP. Generally accepted accounting principles in the United States of
America, consistently applied.
Xxxxxx Xxxxxxxx. Xxxxxx Xxxxxxxx Asset Advisors, LLC, or an affiliate
thereof or successor thereto.
Guaranties. As applied to any Person, without duplication, all
guarantees, endorsements or other contingent or surety obligations with respect
to obligations of others whether or not reflected on such Person's Consolidated
balance sheet, including any obligation to furnish funds, directly or indirectly
(whether by virtue of partnership arrangements, by agreement to keep-well or
otherwise), through the purchase of goods, supplies or services, or by way of
stock purchase, capital contribution, advance or loan, or to enter into a
contract for any of the foregoing, for the purpose of payment of obligations of
any other Person, but excluding endorsements for collection or deposit in the
ordinary course of business.
Hazardous Material. Any substance (i) the presence of which requires or
may hereafter require notification, investigation or remediation under any
Environmental Law; (ii) which is or becomes defined as a "hazardous waste" or
"hazardous material" or "hazardous substance" or "controlled industrial waste"
or "pollutant" or "contaminant" under any present or future Environmental Law or
amendments thereto including, without limitation, CERCLA, and any applicable
local statutes and the regulations promulgated thereunder; (iii) which is toxic,
explosive, corrosive, infectious, radioactive, carcinogenic, mutagenic or
otherwise hazardous and is or becomes regulated by any governmental authority,
agency, department, commission, board or instrumentality of any foreign country,
the United States, any state of the United States, or any political subdivision
thereof to the extent any of the foregoing has or had jurisdiction over the
Borrower or any other member of the Borrower Affiliated Group or any Real
Property leased by the Borrower or any other member of the Borrower Affiliated
Group; or (iv) without limitation, which contains gasoline, diesel fuel or other
petroleum products, asbestos, asbestos containing materials ("ACM"),
polychlorinated biphenyls ("PCB's") or radioactive material.
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Income Taxes. Any franchise taxes, net income taxes or any other taxes
imposed on the net income of any Bank or the Administrative Agent, including
branch profits tax, minimum tax and other taxes imposed in lieu of net income
tax.
Increase. See Section 2.8.
Increase Conditions. The satisfaction of each of the following:
(a) Either (i) the Borrower shall have offered the applicable
Increase to existing Banks, with each Bank having the right, but not the
obligation, to commit to at least its pro rata percentage of the proposed
Increase and one or more such Bank(s) shall have signed an instrument agreeing
to such increased Commitment(s), and/or (ii) the Borrower shall have offered
such Increase to a third party financial institution or institutions acceptable
to the Administrative Agent and each such institution shall have signed a
counterpart signature page becoming a party to this Agreement and a "Bank"
hereunder;
(b) no Default or Event of Default shall have occurred and be
continuing; and
(c) the Administrative Agent shall have received such
modifications to the Loan Documents reflecting the Increase, and such certified
resolutions, legal opinions and other documents as the Administrative Agent may
in its discretion require, all in form and substance satisfactory to the
Administrative Agent.
Indebtedness. As applied to any Person (but without duplication), (i)
all obligations for borrowed money or other extensions of credit whether secured
or unsecured, absolute or contingent, including, without limitation, unmatured
reimbursement obligations with respect to letters of credit or Guaranties issued
for the account of or on behalf of such Person, and all obligations representing
the deferred purchase price of property, other than accounts payable arising,
and accrued expenses incurred, in the ordinary course of business, (ii) all
obligations evidenced by bonds, notes, debentures or other similar instruments,
(iii) all obligations secured by any mortgage, pledge, security interest or
other lien on property owned or acquired by such Person, whether or not the
obligations secured thereby shall have been assumed, (iv) all obligations
arising under Capitalized Leases and Synthetic Leases, (v) all Guaranties, and
(vi) all obligations that are immediately due and payable out of the proceeds of
or production from property now or hereafter owned or acquired by such Person.
Initial Financial Statements. See Section 4.7.
Insolvent or Insolvency. The occurrence of one or more of the following
events with respect to a Person: death; dissolution; termination of existence;
insolvency within the meaning of the United States Bankruptcy Code or other
foreign or domestic applicable statutes; such Person's inability to pay its
debts as they come due; appointment of a receiver of any part of the property
of, execution of a trust mortgage or an assignment for the benefit of creditors
by, or the entry of an order for relief or the filing
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of a petition in bankruptcy or the commencement of any proceedings under any
bankruptcy or insolvency laws, or any laws relating to the relief of debtors,
readjustment of indebtedness or reorganization of debtors, or the offering as
debtor of a plan to creditors for composition or extension, except for an
involuntary proceeding as debtor commenced against such Person which is
dismissed within 60 days after the commencement thereof without the entry or an
order for relief or the appointment of a trustee.
Interest Period. With respect to each LIBOR Loan, the period commencing
on the date of the making or continuation of or conversion to such LIBOR Loan
and ending one, two, three or six months thereafter, subject to availability, as
the Borrower may elect in the applicable Notice of Borrowing or Conversion;
provided that:
(a) any Interest Period (other than an Interest Period
determined pursuant to clause (c) below) that would otherwise end on a day that
is not a Business Day shall be extended to the next succeeding Business Day
unless such Business Day falls in the next calendar month, in which case such
Interest Period shall end on the immediately preceding Business Day;
(b) any Interest Period that begins on the last Business Day
of a calendar month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period) shall, subject to
clause (c) below, end on the last Business Day in the appropriate subsequent
calendar month;
(c) any Interest Period applicable to Revolving Credit Loans
that would otherwise end after the Revolving Credit Maturity Date shall end on
said Revolving Credit Maturity Date; and
(d) notwithstanding clause (c) above, no Interest Period shall
have a duration of less than one month; and if any Interest Period would be for
a shorter period, such Loan shall not be available hereunder for such period.
Inventory. Goods, merchandise and other personal property, now owned or
hereafter acquired by a Person, which are held for sale or lease or are
furnished or to be furnished under a contract of service.
Investment. As applied to any Person, (i) the purchase or acquisition
of any share of capital stock, partnership interest, limited liability company
membership interest, evidence of indebtedness or other equity security of any
other Person, (ii) any loan, advance or extension of credit to, or contribution
to the capital of, any other Person, (iii) any real estate held for sale or
investment, (iv) any commodities futures contracts held other than in connection
with bona fide hedging transactions, (v) any other investment in any other
Person, and (vi) the making of any commitment or acquisition of any option to
perform any of the acts specified in clauses (i) through (v) of this definition.
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Issuing Bank. Fleet National Bank in its capacity as the issuer of
Letters of Credit hereunder, together with any such other Bank as may, with the
written consent of the Borrower and the Administrative Agent, become an Issuing
Bank hereunder.
L/C Availability. As of any date, an amount equal to (a), (b) or (c)
below, whichever is least:
(a) the Maximum L/C Sublimit minus the Stated Amount of all
Letters of Credit outstanding (including any requested Letters of Credit), minus
the aggregate amount of all unreimbursed draws under outstanding Letters of
Credit, or
(b) the Total Commitment minus the outstanding principal
amount of the Revolving Credit Loans then outstanding, minus the Stated Amount
of all Letters of Credit outstanding (including any requested Letters of
Credit), minus the aggregate amount of all unreimbursed draws under outstanding
Letters of Credit; or
(c) the Borrowing Base as of such date minus the outstanding
principal amount of the Revolving Credit Loans then outstanding, minus the
Stated Amount of all Letters of Credit outstanding (including any requested
Letters of Credit), minus the aggregate amount of all unreimbursed draws under
outstanding Letters of Credit.
Leases or Lease. See Section 4.23.
Letters of Credit. Letters of credit in the form customarily issued by
the Issuing Bank as standby Letters of Credit or documentary Letters of Credit,
as the case may be, issued or to be issued for the account of the Borrower by
the Issuing Bank, under the joint responsibilities of the Banks, upon the terms
and subject to the conditions contained in this Agreement.
LIBOR Loan. Any Revolving Credit Loan bearing interest at a rate
determined with reference to the Adjusted LIBOR Rate.
Loan. A Revolving Credit Loan made to the Borrower by any Bank pursuant
to Section II of this Agreement, and "Loans" means all such Revolving Credit
Loans collectively.
Loan Account. The account or accounts on the books of the
Administrative Agent in which will be recorded Loans and advances (including
issued and outstanding Letters of Credit) made by the Banks to the Borrower
pursuant to this Agreement, payments made on such Loans and other appropriate
debits and credits as provided by this Agreement.
Loan Documents. Collectively, this Agreement (including, without
limitation, the agreements and other instruments listed or described in Section
III), the Notes, the Letters of Credit (and related documentation and
agreements, including any letter of credit application), the Security Agreement,
the Patent and Trademark Security Agreement, the
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Xxxxxx Xxxxxxxxxx, the Subsidiary Guaranty, the Subsidiary Security Documents,
all other Security Documents, the Fee Letter and the Solvency Certificates,
together with all agreements and other instruments contemplated thereby, all
certificates delivered in connection therewith from time to time and all
schedules, exhibits and annexes thereto, as any of the foregoing may from time
to time be amended and in effect.
Material Adverse Effect. Any (a) material adverse change in the
business, operations, results of operations, assets, liabilities or condition
(financial or otherwise) of the Borrower Affiliated Group taken as a whole, (b)
material impairment of the ability of the Borrower Affiliated Group, taken as a
whole, to perform their obligations under the Loan Documents, or (c) material
impairment of the Administrative Agent's or the Banks' ability to enforce the
Obligations.
Maximum L/C Sublimit. $5,000,000.
Notes. Collectively, the Revolving Credit Notes, if any, delivered by
the Borrower upon the request of any Banks pursuant to Section 2.2(d).
Notice of Borrowing or Conversion. See Section 2.4(a).
Obligations. Any and all obligations of the Borrower Affiliated Group
to the Administrative Agent, any Bank, or the Arranger under the Loan Documents
of every kind and description (including obligations in respect of Letters of
Credit, the Fee Letter and fees under each thereof), direct or indirect,
absolute or contingent, primary or secondary, due or to become due, now existing
or hereafter arising, regardless of how they arise or by what agreement or
instrument, if any, and including obligations to perform acts and refrain from
taking action as well as obligations to pay money.
Participant. See Section 9.10(i).
Patent and Trademark Security Agreement. The Patent and Trademark
Security Agreement dated as of the date hereof and executed and delivered by the
Borrower to the Administrative Agent for the ratable benefit of the Banks.
PBGC. The Pension Benefit Guaranty Corporation or any entity succeeding
to any or all of its functions under ERISA.
PCB. See definition of Hazardous Material.
Permitted Acquisition. Any Acquisition by the Borrower or any other
member of the Borrower Affiliated Group that meets each of the following
criteria: (i) the capital stock (or other equity interests) or assets acquired
in such Acquisition relates to a line of business similar to the business in
which the Borrower Affiliated Group is engaged on the Closing Date, (ii) if
required by applicable law, the board of directors and the shareholders or the
equivalent of such other Person has approved such Acquisition, (iii) in the case
of an Acquisition of the capital stock (or other equity interests) of another
Person, such Person
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shall become a wholly-owned direct or indirect Subsidiary of the Borrower or, in
the case of a merger between the Borrower and another Person, the Borrower shall
be the surviving entity, or in the case of a merger between another Person and a
member of the Borrower Affiliated Group (other than the Borrower), upon
consummation of such merger, the surviving entity shall be a direct or indirect
wholly-owned Subsidiary of the Borrower and, if the surviving entity is a
Domestic Subsidiary, a party to the Subsidiary Security Documents, (iv) the
Borrower shall provide the Administrative Agent with at least 14 days' prior
written notice of each such Acquisition and such information relating thereto as
the Administrative Agent may reasonably request, (v) no Default or Event of
Default shall exist, in each case both before and after giving effect to such
Acquisition, (vi) the properties and assets acquired by the Borrower or other
member of the Borrower Affiliated Group in connection with such proposed
Acquisition shall be free from all liens, charges and encumbrances whatsoever,
other than Permitted Encumbrances, (vii) upon consummation of the Acquisition,
the Administrative Agent shall have a valid, perfected, first-priority security
interest in all of the properties and assets being acquired by the Borrower or
other member of the Borrower Affiliated Group subject to Permitted Encumbrances,
and (viii) the aggregate consideration (including all cash and non-cash
consideration and any assumption of Indebtedness) for all Acquisitions occurring
after the Closing Date shall not exceed 15% of the Borrower's Consolidated
Tangible Net Worth, determined as of the end of the most recently completed
fiscal quarter of the Borrower.
Permitted Encumbrances. See Section 6.3.
Person or person. An individual, a company, a corporation, an
association, a partnership, a joint venture, a limited liability company or
partnership, an unincorporated trade or business enterprise, a trust, an estate,
or a government (national, regional or local) or an agency, instrumentality or
official thereof.
Plan. At any time, an employee pension or other benefit plan that is
subject to Title IV of ERISA or subject to the minimum funding standards under
Section 412 of the Code and is either (i) maintained by the Borrower, any member
of the Borrower Affiliated Group or any member of the Controlled Group for
employees of the Borrower or any member of the Controlled Group or (ii) if such
Plan is established or maintained pursuant to a collective bargaining agreement
or any other arrangement under which more than one employer makes contributions
and to which the Borrower or any member of the Controlled Group is then making
or accruing an obligation to make contributions or has within the preceding five
Plan years made contributions.
Pledge Agreements. (a) The Pledge Agreement dated as of the date hereof
and executed and delivered by the Borrower to the Administrative Agent, for the
ratable benefit of the Banks and the Administrative Agent, pursuant to which,
without limitation, all of the issued and outstanding capital stock of all
Domestic Subsidiaries is pledged to the Administrative Agent, and (b) all Pledge
Agreements to be delivered by the Borrower from time to time in accordance with
Section 5.2(d).
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Prohibited Transaction. A transaction prohibited by Section 4975 of the
Code or Section 406 of ERISA, for which no statutory or administrative exemption
applies.
Qualified Investments. As applied to any member of the Borrower
Affiliated Group, investments in (i) notes, bonds or other obligations of the
United States of America or any agency thereof that as to principal and interest
constitute direct obligations of or are guaranteed by the United States of
America, (ii) certificates of deposit or other deposit instruments or accounts
of banks or trust companies organized under the laws of the United States or any
state thereof that have capital and surplus of at least $100,000,000, (iii)
commercial paper that is rated not less than prime-one or A-1 or their
equivalents by Xxxxx'x Investors Service, Inc. or Standard & Poor's Corporation,
respectively, or their successors, (iv) any repurchase agreement secured by any
one or more of the foregoing, and (v) Investment in wholly-owned Subsidiaries;
provided, however, that the aggregate amount of Investments in Foreign
Subsidiaries may not at any time exceed 15% of the Borrower's Consolidated
Tangible Net Worth determined as of the end of the most recently completed
fiscal quarter of the Borrower.
Rate Period. The period beginning on the third Business Day following
delivery to the Administrative Agent of the annual or quarterly financial
statements required to be delivered pursuant to Section 5.1(a) or Section 5.1(b)
and ending on the second Business Day after the day on which the next such
quarterly (or annual, as applicable) financial statements are delivered to the
Administrative Agent.
Real Property or Real Properties. Collectively, (i) the several parcels
of land together with the improvements now or hereafter located thereon, which
are owned by any member of the Borrower Affiliated Group, as more fully set
forth on Exhibit D hereto, and (ii) the several parcels of land together with
the improvements now or hereafter located thereon, which are leased by any
member of the Borrower Affiliated Group pursuant to a real property Lease.
Registration Statement. The registration statement of the Borrower
under the Securities Act of 1933, as amended, which has been declared effective
by the Securities and Exchange Commission in connection with the initial public
offering of the Borrower described in Section 3.1.16.
Reportable Event. With respect to any Plan, a reportable event as
described in Section 4043(c) of ERISA for which notice to the PBGC has not been
waived.
Required Banks. Any two or more Banks whose aggregate Commitment
Percentages constitute at least 66.67% at the relevant time of reference, or if
the Commitments have been terminated, any two or more Banks whose aggregate
Loans and Letters of Credit outstanding constitute at least 66.67% of the
aggregate Loans and Letters of Credit outstanding at the relevant time of
reference.
Reserve Percentage. For any Interest Period, the rate (expressed as a
decimal) applicable to the Administrative Agent during such Interest Period
under regulations
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issued from time to time by the Board of Governors of the Federal Reserve System
for determining the maximum reserve requirement (including, without limitation,
any basic, supplemental, emergency or marginal reserve requirement) of the
Administrative Agent with respect to "Eurocurrency liabilities" as that term is
defined under such regulations.
Restricted Payment. (i) Any cash or property dividend, distribution or
payment, direct or indirect, by the Borrower or any of its Subsidiaries in
respect of its capital stock or other equity interests, to any Person who now
holds, or who in the future holds, an equity interest in the Borrower or any of
its Subsidiaries, whether evidenced by a security or not, other than regular
compensation and bonuses paid to employees of the Borrower and its Subsidiaries
in the ordinary course of business and consistent with past practices, and other
than dividends payable solely in shares of any class of capital stock (or other
equity), (ii) any payment on account of the purchase, redemption, retirement or
other acquisition for value of any capital stock of the Borrower or its
Subsidiaries, or any other payment or distribution made in respect thereof,
either directly or indirectly, and (iii) any management or similar fees paid or
payable by the Borrower or any of its Subsidiaries to any Person who now holds,
or in the future holds, directly or indirectly, an equity interest in the
Borrower or any of its Subsidiaries.
Revolving Credit Loans. Collectively, the loans in the maximum
aggregate principal amount of the Total Commitment in effect from time to time
made or to be made to the Borrower by the Banks pursuant to this Agreement
(including Section 2.1(a) hereof) and subject to the limitations contained
herein.
Revolving Credit Maturity Date. __________ _, 2005, or such earlier
date on which the Loans become due and payable pursuant to Section 7.2.
Security Agreement. The Security Agreement dated as of the date hereof
and executed and delivered by the Borrower to the Administrative Agent, for the
ratable benefit of the Banks and the Administrative Agent.
Security Documents. Collectively, (i) the Security Agreement, the
Patent and Trademark Security Agreement, the Pledge Agreements, the Subsidiary
Guaranties and all other Subsidiary Security Documents, and (ii) all other
agreements, instruments or contracts by which any of the Obligations shall be
evidenced or under or in respect of which the Administrative Agent, any Bank or
any of their respective nominees, agents, or representatives shall have, at such
time, any rights or interests as security for the payment or performance of all
or any part of the Obligations.
Solvency Certificates. Collectively, the separate solvency certificates
dated as of the date hereof and executed and delivered by the chief financial
officer of each member of the Borrower Affiliated Group to the Administrative
Agent, for the ratable benefit of the Banks and the Administrative Agent.
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Stated Amount. With respect to each Letter of Credit outstanding at any
time, the maximum amount then available to be drawn thereunder (without regard
to whether any conditions to drawing could then be met).
Stockholders' Equity. The amount reported as "stockholders' equity" on
the Borrower's Consolidated balance sheet and determined in accordance with
GAAP.
Subsidiary. With respect to the Borrower, any corporation, association,
joint stock company, business trust or other similar organization of which more
than 50% of the ordinary voting power for the election of a majority of the
members of the board of directors or other governing body of such entity is held
or controlled by the Borrower or a Subsidiary of the Borrower; or any other such
organization the management of which is directly or indirectly controlled by the
Borrower or a Subsidiary of the Borrower through the exercise of voting power or
otherwise; or any joint venture, whether incorporated or not, in which the
Borrower has more than a 50% ownership interest.
Subsidiary Guaranty. The Subsidiary Guaranty Agreement dated as of the
date hereof and executed and delivered by all Domestic Subsidiaries to the
Administrative Agent, for the ratable benefit of the Banks and the
Administrative Agent, which shall be in the form of Exhibit I hereto.
Subsidiary Security Documents. Collectively, (a) with respect to each
Domestic Subsidiary in existence as of the date hereof, the Subsidiary Guaranty,
the Security Agreement, and the Patent and Trademark Security Agreement,
executed and delivered by such Domestic Subsidiaries in connection with the
Closing or pursuant to Section 5.11, and (b) with respect to each Domestic
Subsidiary formed after the date hereof, a Subsidiary Guaranty, a Security
Agreement, a Patent and Trademark Security Agreement, and an agreement in a form
reasonably acceptable to the Administrative Agent constituting a collateral
assignment of material contracts (if such Subsidiary is a party to any
contracts, agreements or licenses which are material to its operations or
business), each to be executed and delivered by such new Domestic Subsidiary and
each to be in substantially the form of the respective documents delivered by
existing Domestic Subsidiaries under the foregoing clause (a).
Synthetic Lease. Any synthetic lease, tax retention operating lease,
off-balance sheet loan or similar off-balance sheet financing product where such
transaction is considered borrowed money Indebtedness for tax purposes but is
classified as an operating lease under GAAP.
Total Commitment. As of any date, the sum of the then-current
Commitments of the Banks. As of the date of this Agreement, the Total Commitment
is $[50],000,000. After the date of this Agreement, the aggregate amount of the
Total Commitment may be increased to an amount not exceeding $75,000,000 in
accordance with the provisions of Section 2.8.
Uniform Commercial Code. The Uniform Commercial Code as in effect from
time to time in any applicable jurisdiction.
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United States Bankruptcy Code. 11 U.S.C.SectionSection101-1330.
1.2. Terms of General Application. For all purposes of this Agreement
and the other Loan Documents, except as otherwise expressly provided herein or
therein or unless the context otherwise requires:
(a) references to any Person defined in this Agreement refer
to such Person and its successor in title and permitted assigns or, for natural
persons, such Person's successors, heirs, executors, administrators and other
legal representatives;
(b) references to any agreement, instrument or document
defined in this Agreement refer to such document as originally executed, or if
subsequently varied, extended, renewed, modified, amended, restated or
supplemented from time to time, as so varied, extended, renewed, modified,
amended, restated or supplemented and in effect at the relevant time of
reference thereto;
(c) words importing the singular only shall include the plural
and vice versa, and the words importing the masculine gender shall include the
feminine gender and vice versa, and all references to dollars, $, U.S. Dollars
or United States Dollars, shall be to Dollars;
(d) accounting terms not otherwise defined in this Agreement
or any of the other Loan Documents have the meanings assigned to them in
accordance with GAAP, on a basis consistent with the financial statements
referred to in Section 4.7 of this Agreement;
(e) all financial statements and other financial information
provided by the Borrower and each other member of the Borrower Affiliated Group
to the Administrative Agent or any Bank shall be provided with reference to
Dollars;
(f) this Agreement and the other Loan Documents are the result
of negotiation among, and have been reviewed by counsel to, among others, the
Borrower Affiliated Group and the Administrative Agent and are the product of
discussions and negotiations among all parties. Accordingly, this Agreement and
the other Loan Documents are not intended to be construed against the
Administrative Agent or any of the Banks merely on account of the Administrative
Agent's or any Bank's involvement in the preparation of such documents; and
(g) all references to a time of day shall mean the time then
prevailing in New York, New York, unless otherwise indicated.
SECTION II
DESCRIPTION OF CREDIT
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2. The Credit Facilities.
2.1. The Loans.
(a) Revolving Credit Loans. Subject to the terms and
conditions set forth in this Agreement, each of the Banks severally agrees to
lend to the Borrower and the Borrower may borrow (and may repay and reborrow)
from time to time between the Closing Date and the Revolving Credit Maturity
Date, such amounts as are requested by the Borrower up to a maximum aggregate
principal amount outstanding (after giving effect to all amounts requested) at
any one time equal to such Bank's Commitment; provided, however, that the
maximum aggregate principal amount of all Revolving Credit Loans outstanding
(after giving effect to the amounts requested), plus the aggregate Stated Amount
of Letters of Credit outstanding at such time, plus the aggregate amount of all
unreimbursed draws under outstanding Letters of Credit, shall not at any time
exceed the lesser of (i) the Borrowing Base in effect at such time and (ii) the
Total Commitment in effect at such time, and provided, further, that at the time
the Borrower requests a Revolving Credit Loan and after giving effect to the
making thereof, no Default or Event of Default has occurred and is continuing.
The Revolving Credit Loans shall be made pro rata among the Banks in
accordance with the Commitment Percentage of each Bank having a Commitment. If
the aggregate principal amount of Revolving Credit Loans outstanding at any
time, plus the aggregate Stated Amount of Letters of Credit outstanding at such
time, plus the aggregate amount of any unreimbursed draws under outstanding
Letters of Credit shall at any time exceed the lesser of (i) the Borrowing Base
in effect at such time and (ii) the Total Commitment in effect at such time, the
Borrower shall immediately pay to the Administrative Agent for the respective
accounts of the Banks the amount of such excess. Failure to make such payment on
demand shall be an Event of Default hereunder.
(b) Loan Account. The Administrative Agent shall enter Loans
and advances made by the Banks to the Borrower pursuant to this Agreement
(including, without limitation, on account of any Letters of Credit) as debits
in the Loan Account. The Administrative Agent shall also record in the Loan
Account all payments made by the Borrower on account of the Loans and may also
record therein, in accordance with customary accounting practices, other debits
and credits, including customary banking charges and all interest, fees, charges
and expenses chargeable to the Borrower under this Agreement. The debit balance
of the Loan Account shall reflect the amount of the Borrower's Obligations
hereunder and shall be considered correct absent manifest error.
(c) Clean-Down Period. The Borrower covenants that, during the
term of this Agreement, in each 3-month period consisting of the calendar months
of December, January and February, the Borrower will maintain a period of at
least 30 consecutive days during which the aggregate principal amount of the
Loans outstanding shall be zero ($0) Dollars. In determining compliance with
this provision, the following shall be excluded: (i) the aggregate Stated Amount
of Letters of Credit outstanding, and (ii) the aggregate amount of all
unreimbursed draws under outstanding Letters of Credit
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that have not yet been added to the Loan Account as Revolving Credit Loans
pursuant to Section 2.18(a)(i).
2.2 Records; Notes.
(a) Banks' Records. Each Bank will note (manually or
electronically) on its records with respect to each Loan made by it (i) the date
and amount of such Loan, (ii) the interest rate and Interest Period, if any,
applicable to such Loan, and (iii) each payment and prepayment of the principal
thereof.
(b) Administrative Agent's Records. The Administrative Agent
shall keep records regarding the Loans, the Letters of Credit and this Agreement
in accordance with its customary procedures for agented credits.
(c) Prima Facie Evidence. The entries made in the records
maintained pursuant to subsections (a) and (b) above shall, to the extent not
prohibited by applicable law, be prima facie evidence of the existence and
amount of the obligations of the Banks and Borrower recorded therein; provided,
however, that the failure of the Administrative Agent or any Bank, as the case
may be, to make any notation on its records shall not affect the Borrower's
obligations in respect of the Loans, the Letters of Credit or this Agreement.
(d) Notes. Upon the request of any Bank to the Administrative
Agent and the Borrower, the Borrower agrees, at its expense, to execute and
deliver to the Administrative Agent for the account of such Bank one or more
promissory notes evidencing the Loan or Loans of such Bank to the Borrower, in
substantially the form of Exhibit A attached hereto.
2.3. Conversion. Provided that no Default or Event of Default shall
have occurred and be continuing, and subject to and in accordance with the
provisions of Section 2.4(a), the Borrower may convert all or any part (in an
amount equal to at least $1,000,000 and additional increments of $100,000) of
any outstanding Loan into a Loan of the other type provided for in this
Agreement in the same aggregate principal amount, on any Business Day (which, in
the case of a conversion of a LIBOR Loan, shall be the last day of the Interest
Period applicable to such LIBOR Loan). The Borrower shall give the
Administrative Agent and the Banks prior notice of each such conversion (which
notice shall be effective upon receipt) in accordance with Section 2.4. All such
conversions shall be made pro rata in accordance with each Bank's Commitment
Percentage applicable to the type of Loan being converted.
2.4. Notice and Manner of Borrowing or Conversion of Loans.
(a) Whenever the Borrower desires to obtain or continue a Loan
hereunder or convert an outstanding Loan into a Loan of the other type provided
for in this Agreement, the Borrower shall notify the Administrative Agent (which
notice shall be irrevocable) by telecopy or telephone (i) with respect to Base
Rate Loans, received no
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later than 11:00 a.m. on the date on which the requested Loan is to be made or
continued as or converted to a Base Rate Loan, and (ii) with respect to LIBOR
Loans, received no later than 11:00 a.m. on the date that is three (3) Business
Days before the day on which the requested Loan is to be made or continued as or
converted to a LIBOR Loan, provided that no more than 10 LIBOR Loans may be
outstanding at any one time. Such notice by the Borrower shall specify (i) the
effective date and amount of each Loan to be obtained, continued or converted
(or portion thereof to be continued or converted, as the case may be), subject
to the limitations set forth in Section 2.1, (ii) the interest rate option to be
applicable thereto, and (iii) the duration of the applicable Interest Period, if
any (subject to the provisions of the definition of Interest Period and Section
2.9). Each LIBOR Loan must be for an amount equal to at least $1,000,000 and in
additional increments of $100,000. Each such notification by telephone pursuant
to Section 2.3 or this Section 2.4(a) (a "Notice of Borrowing or Conversion")
shall be immediately followed by a written confirmation thereof by the Borrower
in substantially the form of Exhibit B hereto, provided that if such written
confirmation differs in any material respect from the action taken by the
Administrative Agent, the records of the Administrative Agent shall be
conclusive absent manifest error.
(b) Subject to the terms and conditions hereof, each Bank
shall make available to the Administrative Agent, in immediately available
funds, no later than 2:00 p.m. on the date upon which any Base Rate Loan or
LIBOR Loan is to be made, such Bank's Commitment Percentage of the requested
Loan. The Administrative Agent shall, in turn, make each Loan on the effective
date specified therefor by crediting the amount of such Loan to the Borrower's
demand deposit account with the Administrative Agent. In no event shall the
Administrative Agent (in its capacity as Administrative Agent) have any
obligation to make any funding or shall any Bank be obligated to fund more than
its Commitment Percentage of the requested Base Rate Loan or LIBOR Loan.
2.5. Commitment Fee. The Borrower shall pay to the Administrative Agent
for the accounts of the Banks in accordance with their respective Commitment
Percentages a commitment fee (the "Commitment Fee") computed at a rate per annum
on the average daily aggregate amount, during each calendar quarter or portion
thereof, of the unborrowed portion of the Total Commitment in effect at such
time, which rate shall be equal to (A) 0.375% from the Closing Date through the
second Business Day after the date on which the Compliance Certificate required
to be delivered pursuant to Section 5.1(d) for the second fiscal quarter of
fiscal 2002 of the Borrower Affiliated Group is delivered to the Administrative
Agent, and (B) thereafter, for each Rate Period, the percentage determined by
reference to the Fixed Charge Coverage Ratio for the most recent twelve-month
period of the Borrower Affiliated Group, as set forth in the table below:
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Fixed Charge Coverage Ratio Commitment Fee
--------------------------- --------------
I. less than 1.60 to 1.00 0.500%
II. equal to or greater than 0.375%
1.60 to 1.00 and less than
3.25 to 1.00
III. equal to or greater than 0.300%
3.25 to 1.00
Commitment fees shall be payable quarterly in arrears on the last Business Day
of each fiscal quarter beginning on the Saturday closest to January 31, 2002 and
on the Revolving Credit Maturity Date. For purposes of calculating the
Commitment Fee, outstanding Letters of Credit shall be included in determining
the borrowed portion of the Total Commitment.
2.6. Fee Letter. The Borrower shall pay to the Administrative Agent
fees in the amounts and at the times outlined in the Fee Letter.
2.7. Reduction of Total Commitment. The Borrower may from time to time
by written notice delivered to the Administrative Agent at least three Business
Days prior to the date of the requested reduction, reduce by a minimum amount of
$2,500,000, and in additional increments of $1,000,000, any unborrowed portion
of the Total Commitment. No reduction of the Total Commitment shall be subject
to reinstatement.
2.8. Increases in Total Commitment. The Borrower, with the consent of
the Administrative Agent and each Bank whose Commitment will be increasing,
shall have the right to cause the Total Commitment to increase to an amount not
at any time exceeding $75,000,000 (the "Increase"), and to have the Arranger, at
the Borrower's request, use its reasonable best efforts to obtain, with the
cooperation of the Borrower, commitments from third party financial institutions
acceptable to the Borrower for the full amount of the Increase. In the event of
an Increase, the Administrative Agent will amend Schedule 1 to reflect the
increased Commitment of each Bank that has agreed in writing to an increase and
to add any third party financial institution(s) that may have become a party to,
and a "Bank" under, this Agreement; provided, however, that it shall be a
condition precedent to the effectiveness of the Increase that the Increase
Conditions shall have been satisfied in a manner reasonably satisfactory to the
Administrative Agent. In the event that the Increase results in any change to
the Commitment Percentages of any Banks, then on the effective date of such
Increase in the Total Commitment (i) any new Bank, and any existing Bank whose
Commitment has increased, shall pay to the Administrative Agent such amounts as
are necessary to fund its new or increased Commitment Percentages of all
existing Loans, (ii) the Administrative Agent will use the proceeds thereof to
pay to all Banks whose Commitment Percentage is decreasing such amounts as are
necessary so that each such Bank's participation in existing Revolving Credit
Loans will be equal to its adjusted Commitment Percentage, and (iii) if the
effective date of such Increase in the Total Commitment occurs on a date other
than the
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last day of an Interest Period applicable to any outstanding LIBOR Loan, the
Borrower will be responsible for any amounts payable pursuant to Section 2.16 on
account of the payments made pursuant to clause (ii) above.
2.9. Duration of Interest Periods.
(a) Subject to the provisions of the definition of "Interest
Period," the duration of each Interest Period applicable to a LIBOR Loan shall
be as specified in the applicable Notice of Borrowing or Conversion. The
Borrower shall have the option to elect a subsequent Interest Period to be
applicable to such Loan by giving notice of such election to the Bank received
no later than 10:00 a.m. on the date that is 3 Business Days before the end of
the then applicable Interest Period if such Loan is to be continued as or
converted to a LIBOR Loan.
(b) If the Administrative Agent does not receive a notice of
election of duration of an Interest Period for a LIBOR Loan pursuant to
subsection (a) above within the applicable time limits specified therein, or if,
when such notice must be given, an Event of Default exists, the Borrower shall
be deemed to have elected to convert such Loan in whole into a Base Rate Loan on
the last day of the then current Interest Period with respect thereto.
(c) Notwithstanding the foregoing, the Borrower may not select
an Interest Period that would end, but for the provisions of the definition of
Interest Period, after the Revolving Credit Maturity Date.
2.10. Interest Rates and Payments of Interest.
(a) Each Revolving Credit Loan which is a Base Rate Loan shall
bear interest on the outstanding principal amount thereof at a rate per annum
equal to the Base Rate plus the Applicable Base Rate Margin, which rate shall
change contemporaneously with any change in the Base Rate. Such interest shall
be payable on the last Business Day of any fiscal quarter in which a Base Rate
Loan is outstanding hereunder, and when such Loan is due (whether at maturity,
by reason of acceleration or otherwise).
(b) Each Revolving Credit Loan which is a LIBOR Loan shall
bear interest on the outstanding principal amount thereof, for each Interest
Period applicable thereto, at a rate per annum equal to the Adjusted LIBOR Rate
plus the Applicable LIBOR Margin. Such interest (including any adjustments made
in the Administrative Agent's discretion consistent with the definition of
Adjusted LIBOR Rate to take into consideration any change in the Reserve
Percentage) shall be payable for such Interest Period (i) on the earlier of the
last day of such Interest Period and, if such Interest Period is longer than
three months, at quarterly intervals after the first day of such Interest Period
and (ii) when such LIBOR Loan is due (whether at maturity, by reason of
acceleration or otherwise).
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(c) For purposes of this Section 2.10, with reference to
Revolving Credit Loans, (i) the "Applicable Base Rate Margin" shall be equal to
(A) 0.25% from the Closing Date through the second Business Day after the date
of the Administrative Agent's receipt and satisfactory review of the financial
statements and compliance certificate required to be delivered pursuant to
Sections 5.1(b) and 5.1(d), respectively, for the second fiscal quarter of
fiscal 2002 of the Borrower Affiliated Group, and (B) thereafter, for each Rate
Period, the percentage determined by reference to the Fixed Charge Coverage
Ratio for the most recent twelve-month period of the Borrower Affiliated Group,
as set forth in the table below, and (ii) the "Applicable LIBOR Margin" shall be
equal to (A) 1.75% from the Closing Date through the second Business Day after
the date of the Administrative Agent's receipt and satisfactory review of the
financial statements and compliance certificate required to be delivered
pursuant to Sections 5.1(b) and 5.1(d), respectively, for the second fiscal
quarter of fiscal 2002 of the Borrower Affiliated Group, and (B) thereafter, for
each Rate Period, the percentage determined by reference to the Fixed Charge
Coverage Ratio for the most recent twelve-month period of the Borrower
Affiliated Group, as set forth in the table below:
Revolving Credit Loans
Applicable
Applicable Base LIBOR
Fixed Charge Coverage Ratio Rate Margin Margin
--------------------------- ----------- -----
I. less than 1.60 to 1.00 0.50% 2.00%
II. equal to or greater than 1.60 0.25% 1.75%
to 1.00 and less than 2.50 to
1.00
III. equal to or greater than 2.50 0.00% 1.50%
to 1 and less than 3.25 to
1.00
IV. equal to or greater than 3.25 0.00% 1.25%
to 1.00
For purposes of determining the Applicable Base Rate Margin and the Applicable
LIBOR Margin, the Fixed Charge Coverage Ratio will be tested quarterly,
commencing with the second full fiscal quarter of the Borrower Affiliated Group
in fiscal 2002, based on the financial statements and compliance certificate
required to be delivered pursuant to Sections 5.1(b) and 5.1(d), respectively.
For purposes of determining the interest rate for any Rate Period hereunder, any
interest rate change shall be effective two Business Days after the date on
which the financial statements and compliance certificate required to be
delivered pursuant to Sections 5.1(b) and 5.1(d), respectively, is delivered to
the Administrative Agent, together with a notice to the Administrative Agent
(which shall be
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verified by the Administrative Agent) specifying any change in the Applicable
Base Rate Margin and the Applicable LIBOR Margin, and if the Borrower has failed
to deliver the compliance certificate required to be delivered pursuant to
Sections 5.1(b) and 5.1(d), respectively, the Applicable Base Rate Margin and
the Applicable LIBOR Margin that would otherwise be in effect shall
automatically be increased by .25% until such compliance certificate is
delivered.
2.11. Protective Provisions.
2.11.1. Inability to Determine Adjusted LIBOR Rate. In the event, prior
to the commencement of any Interest Period relating to any LIBOR Loan, the
Administrative Agent shall determine in its good faith judgment or be notified
by the Required Banks that adequate and reasonable methods do not exist for
ascertaining the Adjusted LIBOR Rate that would otherwise determine the rate of
interest to be applicable to any LIBOR Loan during such Interest Period, the
Administrative Agent shall forthwith give notice of such determination (which
shall be conclusive and binding on the Borrower and the Banks) to the Borrower
and the Banks. In such event (a) any Notice of Borrowing or Conversion with
respect to LIBOR Loans shall be automatically withdrawn and shall be deemed a
request for Base Rate Loans, (b) each LIBOR Loan will automatically, on the last
day of the then current Interest Period relating thereto, become a Base Rate
Loan, and (c) the obligations of the Banks to make LIBOR Loans shall be
suspended until the Administrative Agent or the Required Banks, as applicable,
determine that the circumstances giving rise to such suspension no longer exist,
whereupon the Administrative Agent or, as the case may be, the Administrative
Agent upon the instruction of the Required Banks, shall so notify the Borrower
and the Banks.
2.11.2. Illegality. Notwithstanding any other provisions herein, if any
Change in Law shall make it unlawful for any Bank to make or maintain LIBOR
Loans, such Bank shall forthwith give notice of such circumstances to the
Borrower and the other Banks and thereupon the commitment of such Bank to make
LIBOR Loans or convert Base Rate Loans to LIBOR Loans shall forthwith be
suspended and such Bank's LIBOR Loans then outstanding as LIBOR Loans, if any,
shall be converted automatically to Base Rate Loans on the last day of each
Interest Period applicable to such LIBOR Loans or within such earlier period as
may be required by law. The Borrower hereby agrees promptly to pay the
Administrative Agent for the account of such Bank, upon demand by such Bank, any
additional amounts as such Bank may in good faith determine to be necessary to
compensate such Bank for any costs incurred by such Bank in making any
conversion in accordance with this Section 2.11.2, including any interest or
fees payable by such Bank to lenders of funds obtained by it in order to make or
maintain its LIBOR Loans hereunder.
2.11.3. Additional Costs, etc. After the Closing Date, if any Change in
Law shall:
(a) subject any Bank or the Administrative Agent to any tax,
levy, impost, duty, charge, fee, deduction or withholding of any nature with
respect to this
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Agreement, the other Loan Documents, such Bank's Commitment or Loans (other than
Covered Taxes and Income Taxes); or
(b) materially change the basis of taxation (except for
changes in Income Taxes of such Bank or the Administrative Agent) of payments to
any Bank of the principal of or the interest on any Loans or any other amounts
payable to any Bank or the Administrative Agent under this Agreement or any of
the other Loan Documents; or
(c) without duplication of any amount required to be paid
pursuant to Section 2.12, impose or increase or render applicable (other than to
the extent specifically provided for elsewhere in this Agreement) any special
deposit, reserve, assessment, liquidity or other similar requirements (whether
or not having the force of law) against assets held by, or deposits in or for
the account of, or loans by, or letters of credit issued by, or commitments of
an office of any Bank; or
(d) impose on any Bank or the Administrative Agent any other
conditions or requirements with respect to this Agreement, the other Loan
Documents, the Loans, such Bank's Commitment, or any class of Loans or
commitments of which any of the Loans or such Bank's Commitment forms a part;
and the result of any of the foregoing is:
(i) in the good faith determination of an Affected
Bank, to materially increase the cost to such Bank of making, funding,
issuing, renewing, extending or maintaining any of the LIBOR Loans or
such Bank's Commitment; or
(ii) to reduce the amount of principal, interest, or
other amount payable to such Bank or the Administrative Agent hereunder
on account of such Bank's Commitment or any of the LIBOR Loans; or
(iii) to require such Bank or the Administrative
Agent to make any payment or to forego any interest or other sum
payable hereunder in relation to LIBOR Loans, the amount of which
payment or foregone interest or other sum is calculated by reference to
the gross amount of any sum receivable or deemed received by such Bank
or the Administrative Agent from the Borrower hereunder,
then, in each such case and to the extent that the amount of such additional
cost, reduction, payment, foregone interest or other sum is not reflected in the
Adjusted LIBOR Rate, the Borrower will, upon demand made by such Bank (with a
copy to the Administrative Agent) or (as the case may be) the Administrative
Agent at any time and from time to time and as often as the occasion therefor
may arise, pay to such Bank or the Administrative Agent such additional amounts
as will be sufficient to compensate such Bank or the Administrative Agent for
such additional cost, reduction, payment or foregone interest or other sum
(without duplication for recovery of such amounts under any other provision
hereof), provided, however, that the Borrower shall not be liable to
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any Bank or the Administrative Agent for costs incurred more than 90 days prior
to the receipt by the Borrower of such demand for payment from such Bank or (as
the case may be) the Administrative Agent unless such costs were incurred prior
to such 90-day period as a result of such Change in Law being retroactive to a
date which occurred prior to such 90-day period, and provided further that the
Borrower is treated no differently than such Bank's other customers.
2.11.4. Claims by Affected Banks; Borrower's Right to Replace Banks.
Before giving any notice to the Borrower and the other Banks of a claim (whether
for compensation or to be excused from an otherwise applicable obligation) under
Section 2.11.2, 2.11.3, 2.12 or 2.14, the Affected Bank shall designate a
different lending office with respect to its LIBOR Loans or other Loans if such
designation would avoid the need for giving such notice and would not, in the
judgment of such Affected Bank, be illegal or otherwise disadvantageous to the
Affected Bank. Any claim under any of Sections 2.11.2, 2.11.3, 2.12 or 2.14
shall be delivered to the Borrower promptly after the Affected Bank has
determined that it is entitled to such claim. Upon the Borrower's receipt of any
such claim, the Borrower may: (i) request one or more of the other Banks to
acquire and assume all or part of such Affected Bank's Loans and Commitment; or
(ii) designate a replacement bank or financial institution satisfactory to the
Administrative Agent in its reasonable discretion. If one or more of the other
Banks in its sole discretion agrees to acquire all or part of such Affected
Bank's Loans and Commitment or if such a satisfactory replacement bank or
financial institution is designated, the Affected Bank shall promptly assign all
or such part of its Loans and Commitment in accordance with Section 9.10(ii).
2.12. Capital Requirements. If after the date hereof the Administrative
Agent or any Bank in good faith determines that (i) any Change in Law or any new
or changed guideline regarding capital requirements for banks or bank holding
companies, or any change in the interpretation or application thereof by any
governmental authority charged with the administration thereof, or (ii)
compliance by the Administrative Agent or any Bank or its parent bank holding
company with any guideline, request or directive adopted after the date hereof
of any such authority regarding capital adequacy (whether or not having the
force of law), has the effect of reducing the return on the Administrative
Agent's or such Bank's or such holding company's capital as a consequence of the
Administrative Agent's or such Bank's commitment to make Loans hereunder and
other commitments of the type hereunder to a level below that which the
Administrative Agent or such Bank or such holding company could have achieved
but for such adoption, change or compliance (taking into consideration the
Administrative Agent's or such Bank's or such holding company's then existing
policies with respect to capital adequacy and assuming the full utilization of
such entity's capital) by any amount deemed by the Administrative Agent or such
Bank to be material, then the Administrative Agent shall promptly notify the
Borrower thereof. The Borrower agrees to pay to the Administrative Agent or such
Bank the amount of such reduction of capital as and when such reduction is in
good faith determined, upon presentation by the Administrative Agent or such
Bank of a written statement in the amount and setting forth in reasonable detail
the Administrative Agent's or such Bank's calculation thereof, which statement
shall be
-27-
deemed true and correct absent manifest error. In determining such amount, the
Administrative Agent or such Bank may use any reasonable averaging and
attribution methods. Notwithstanding the foregoing, the Borrower shall not be
liable to any Bank or the Administrative Agent for such reductions with respect
to events that occurred more than 90 days prior to the receipt by the Borrower
of such demand for payment from such Bank or (as the case may be) the
Administrative Agent unless such reductions were with respect to events that
occurred prior to such 90-day period.
2.13. Payments and Prepayments of the Loans.
(a) The Borrower hereby absolutely and unconditionally
promises to pay the entire principal amount of the Loans, and the entire
principal amount of the Loans shall be absolutely due and payable by the
Borrower to the Banks, on the Revolving Credit Maturity Date. All of the other
Indebtedness evidenced by the Loan Documents shall, if not sooner paid, also be
absolutely due and payable by the Borrower to the Banks on the Revolving Credit
Maturity Date.
(b) Revolving Credit Loans that are Base Rate Loans may be
voluntarily prepaid at any time, without premium or penalty, upon not less than
one Business Day's prior written notice to the Administrative Agent and each
Bank. Subject to the provisions of Section 2.16, Revolving Credit Loans that are
LIBOR Loans may be voluntarily prepaid at any time, without premium or penalty,
upon not less than two Business Days' prior written notice to the Administrative
Agent and each Bank. Any interest accrued on the amounts so prepaid to the date
of such payment must be paid at the time of any such payment. No prepayment of
the Revolving Credit Loans prior to the Revolving Credit Maturity Date shall
affect the Total Commitment or impair the Borrower's right to borrow as set
forth in Section 2.l. Partial prepayments of the Revolving Credit Loans shall be
in an amount equal to $2,500,000 or additional increments of $1,000,000. In the
case of any partial payment of the Revolving Credit Loans, the total amount of
such partial payment shall be allocable among the Revolving Credit Loans subject
to adjustment as provided in Section 8.5, pro rata in accordance with the
Commitment Percentage of each Bank.
2.14. Method of Payment; Withholding Tax Exemption.
(a) All payments and prepayments of principal and all payments
of interest and other amounts due in respect of Loans shall be made by the
Borrower to the Administrative Agent, for the respective accounts of the Banks
or (as the case may be) the Administrative Agent, at 000 Xxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000, in immediately available funds, free and clear of, and
without any deduction or withholding for, any taxes (other than Income Taxes)
(all such taxes (other than Income Taxes) imposed by withholding or deduction,
"Covered Taxes") or other payments unless required by law, and without set-off,
recoupment or counterclaim. All payments and collections received after 2:00
p.m. will be deemed applied to the outstanding Loans one day after the
Administrative Agent's receipt of such payments in immediately available funds.
If Covered Taxes are required to be withheld or deducted by law, the Borrower
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shall pay additional amounts so that after the required withholding or deduction
the Banks and the Administrative Agent receive the amount they would have
received had no such deduction or withholding been required; provided, however,
that the Borrower shall not be required to pay any additional amounts with
respect to (i) Income Taxes, or (ii) amounts owing to a Bank that (x) is not
incorporated under the laws of the United Sates of America or a state thereof,
and (y) has not delivered to the Administrative Agent the forms required by
Section 2.14(b) below (other than pursuant to the proviso at the end of such
Section 2.14(b)).
(b) At least five Business Days prior to the first date on
which interest or fees are payable hereunder for the account of any Bank, each
Bank that is not incorporated under the laws of the United States of America or
a state thereof (herein, a "Foreign Bank") agrees that it will deliver to each
of the Borrower and the Administrative Agent (or, in the case of a Participant
or an Assignee, to the Bank from which the Commitment was transferred) two duly
completed and executed copies of either U.S. Internal Revenue Service Form
W-8BEN (relating to an exemption under an applicable treaty) or Form W-8ECI (or
any subsequent versions thereof or successors thereof), certifying in either
case that such Foreign Bank is entitled to receive payments under this Agreement
and the other Loan Documents without deduction or withholding of any United
States federal income taxes. Each Foreign Bank which so delivers a Form W-8BEN
(relating to an exemption under an applicable treaty) or Form W-8ECI further
undertakes to deliver to each of the Borrower and the Administrative Agent two
additional copies of such form (or a successor form) on or before the date that
such form expires or becomes obsolete or after the occurrence of any event
requiring a change in the most recent form so delivered by it, and such
amendments thereto or extensions or renewals thereof as may be reasonably
requested by the Borrower or the Administrative Agent, in each case certifying
that such Foreign Bank is entitled to receive payments under this Agreement and
the Notes (if any) without deduction or withholding of any United States federal
income taxes; provided, however, that such requirement will not apply to a
Foreign Bank if any Change in Law has occurred prior to the date on which any
such delivery would otherwise be required which renders all such forms
inapplicable or which would prevent such Foreign Bank from duly completing and
delivering any such form with respect to it and such Foreign Bank advises the
Borrower and the Administrative Agent in writing that it is no longer capable of
receiving payments without any deduction or withholding of United States federal
income taxes.
(c) If there is any Change in Law after the Closing Date, and
the result thereof is that any Bank or the Administrative Agent becomes subject
to Covered Taxes, the Borrower shall pay additional amounts so that after the
required withholding or deduction the Banks and the Administrative Agent receive
the amount they would have received had no such deduction or withholding been
required, provided, however, that the relevant Bank shall timely file the
appropriate forms to reduce the amount of required withholding or deduction to
the lowest applicable rate to which such Bank is entitled.
(d) For any period with respect to which a Bank has failed to
provide the Borrower with the appropriate form described in (i) Section 2.14(b)
above (other than
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pursuant to the proviso thereto) or (ii) the proviso to Section 2.14(c) above,
such Bank shall not be entitled to any additional payments under Section 2.11 or
this Section 2.14 with respect to Covered Taxes imposed by reason of such
failure; provided, however, that in the event of a failure described in the
proviso to Section 2.14(c), such Bank shall be entitled to such an additional
payment to the extent of the amount of Covered Taxes to which such Bank would be
subject even if it delivered the appropriate form required by the proviso to
Section 2.14(c); and provided, further, however, that should a Bank become
subject to Covered Taxes because of its failure to deliver a form required
hereunder, the Borrower shall take such steps as the Bank reasonably shall
request to assist the Bank to recover such Covered Taxes.
(e) If a Bank or the Administrative Agent receives a refund or
credit in respect of any Covered Taxes as to which it has been indemnified by
the Borrower or with respect to which the Borrower has paid additional amounts
pursuant to Section 2.11 or this Section 2.14, it shall, reasonably promptly
after the date of such receipt, pay over the amount of such refund or credit to
the Borrower, net of all reasonable out-of-pocket expenses of such Bank or the
Administrative Agent in obtaining such refund (it being agreed that if such
expenses are expected by such Bank or the Administrative Agent to be material,
such Bank or the Administrative Agent will attempt in good faith to consult with
the Borrower prior to incurring such expenses) and without interest (other than
interest paid by the relevant taxation authority with respect to such refund);
provided that the Borrower, upon the written request of such Bank or the
Administrative Agent, agrees to repay the amount paid over to the Borrower (plus
penalties, interest or other reasonable charges) to such Bank or the
Administrative Agent in the event such Bank or the Administrative Agent is
required to repay such refund or credit to such taxation authority.
(f) If the Borrower is required to pay additional amounts to
any Bank or the Administrative Agent pursuant to this Section 2.14, then such
Bank shall designate a different lending office with respect to its LIBOR Loans
if such designation would avoid such additional payment and would not, in the
good faith judgment of such Bank, be illegal or otherwise disadvantageous to the
Bank.
(g) The Borrower authorizes the Administrative Agent to charge
to any deposit account which the Borrower may maintain with the Administrative
Agent, at maturity or otherwise when due, the principal, interest, fees,
charges, and expenses provided for in this Agreement or any other document
executed and delivered in connection herewith, or to advance to the Borrower and
to charge to it as a Revolving Credit Loan a sum sufficient to pay such
principal, interest, fees, charges, expenses or additional amounts, with advice
thereafter sent to the Borrower's chief financial officer in accordance with the
Administrative Agent's customary practice.
2.15. Default Rate Interest, Etc.
(a) After and during the continuance of any Event of Default,
at the option of the Administrative Agent or the Required Banks, all amounts
outstanding hereunder or under any other Loan Document (including, without
limitation, all principal,
-30-
interest and fees outstanding) shall bear interest from and including the due
date thereof until paid, compounded daily and payable on demand, at a rate per
annum equal to (i) if such due date occurs prior to the end of an Interest
Period, 2.0% above the interest rate applicable to such Loan for such Interest
Period until the expiration of such Interest Period, and thereafter, 2.0% above
the rate then applicable to Base Rate Loans; and (ii) in all other cases, 2.0%
above the rate then applicable to Base Rate Loans.
(b) After and during the continuance of any Event of Default,
at the option of the Administrative Agent and the Required Banks, the Letter of
Credit fees payable under Section 2.19 shall be increased to a rate per annum
equal to 2.0% above the rate applicable thereto prior to the occurrence thereof.
2.16. Payments Not at End of Interest Period. If the Borrower for any
reason makes any payment of principal with respect to any LIBOR Loan on any day
other than the last day of an Interest Period applicable to such LIBOR Loan, or
fails to borrow or continue or convert to a LIBOR Loan after giving a Notice of
Borrowing or Conversion pursuant to Section 2.4, the Borrower shall pay to the
Administrative Agent for the respective accounts of the Banks an amount computed
pursuant to the following formula:
L = (R - T) x P x D
-----------------------
360
L = amount payable to the Administrative Agent for the accounts of
the Banks
R = interest rate on such Loan
T = yield to maturity of any readily marketable bond or other
obligation of the United States, selected at the
Administrative Agent's sole discretion, maturing on or near
the last day of the then applicable Interest Period of such
Loan and in approximately the same amount as such Loan
P = the amount of principal prepaid or the amount of the requested
Loan
D = the number of days remaining in the Interest Period as of the
date of such payment or the number of days of the requested
Interest Period
The Borrower shall pay such amount upon presentation by the Administrative Agent
of a statement setting forth the amount and the Administrative Agent's
calculation thereof (in reasonable detail) pursuant hereto, which statement
shall be deemed prima facia evidence of the amount owed.
2.17. Computation of Interest and Fees; Maximum Interest. Interest and
all fees payable hereunder on account of Base Rate Loans shall be computed daily
on the basis of a year of 365/366 days and paid for the actual number of days
for which due. Interest and all fees payable hereunder on account of LIBOR Rate
Loans shall be computed daily on the basis of 360 days and paid for the actual
number of days for which due. If the due date for any payment of principal is
extended by operation of law, interest shall be payable for such extended time.
If any payment required by this Agreement becomes due on a day that is not a
Business Day such payment may be made on the next succeeding Business Day
(subject to clause (i) of the definition of Interest Period), and such
-31-
extension shall be included in computing interest in connection with such
payment. Notwithstanding any other term of this Agreement, the other Loan
Documents or any other document referred to herein or therein, the maximum
amount of interest which may be charged to or collected from any person liable
hereunder or under other Loan Documents by any Bank shall be absolutely limited
to, and shall in no event exceed, the maximum amount of interest which could
lawfully be charged or collected under applicable law (including, to the extent
applicable, the provisions of Section 5197 of the Revised Statutes of the United
States of America, as amended, 12 U.S.C. Section 85, as amended), so that the
maximum of all amounts constituting interest under applicable law, howsoever
computed, shall never exceed as to any Person liable therefor such lawful
maximum, and any term of this Agreement, the Letter of Credit applications, the
other Loan Documents or any other document referred to herein or therein which
could be construed as providing for interest in excess of such lawful maximum
shall be and hereby is made expressly subject to and modified by the provisions
of this paragraph.
2.18. Letters of Credit.
(a) Upon the terms and subject to the conditions of this Agreement, and
in reliance upon the representations, warranties and covenants of the Borrower
made herein, each Issuing Bank agrees to issue, under the joint responsibilities
of the Banks having Commitments, to the extent permitted by law and subject to
the Uniform Custom Practices of the International Chamber of Commerce governing
Letters of Credit (Publication No. 500 or any successor thereto), one or more
Letters of Credit on the application of and for the account of the Borrower,
during the period from the Closing Date to 30 days prior to the Revolving Credit
Maturity Date; provided that the Stated Amount of Letters of Credit outstanding
at any time, plus the aggregate amount of all unreimbursed draws under such
outstanding Letters of Credit, shall not at any time exceed the L/C Availability
in effect at such time; and provided, further that at the time the Borrower
requests the issuance of a Letter of Credit and after giving effect to the
issuance thereof, there has not occurred and is not continuing a Default or an
Event of Default. It is understood and agreed by the parties hereto that amounts
drawn under such Letters of Credit shall become immediately due and payable by
the Borrower to the Issuing Bank, for the ratable accounts of the Administrative
Agent and the Banks, and shall bear interest at the rate then applicable to
Revolving Credit Loans that are Base Rate Loans, and, if not paid forthwith,
shall, (i) if there is Availability, be added to the Loan Account as Revolving
Credit Loans and shall be immediately due and payable upon the Revolving Credit
Maturity Date (or, if earlier, upon acceleration of the Loans), and (ii) if
there is insufficient Availability, be immediately due and payable, bearing
interest until paid at the rate set forth in Section 2.15.
(b) To minimize the risk of issuance of any Letter of Credit
that would exceed the then-current L/C Availability, each Issuing Bank that is
not the Administrative Agent shall, prior to becoming an Issuing Bank, agree
with the Administrative Agent and the Borrower as to reporting and other
procedures to be followed by such Issuing Bank prior to and following the
issuance of each Letter of Credit, so as to minimize the risk of issuance of any
Letter of Credit that might exceed the then-current L/C Availability and
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to permit the Administrative Agent to accurately xxxx the Borrower and account
to the Banks for Letter of Credit fees payable for the account of the Banks.
Notwithstanding the foregoing, the Borrower acknowledges that it is the
unconditional obligation of the Borrower to ensure that at no time shall any
Letter of Credit be drawn or outstanding that exceeds the then-current L/C
Availability.
(c) Upon the issuance of each Letter of Credit by the Issuing Bank,
each Bank shall be deemed to automatically have purchased a participation in
such Letter of Credit in accordance with its Commitment Percentage, and each
Bank severally agrees that it shall be absolutely liable, without regard to the
occurrence of any Default or Event of Default or any other condition precedent
whatsoever, to the extent of such Bank's Commitment Percentage thereof, to
reimburse the Issuing Bank on demand for the amount of each draft paid by such
Issuing Bank under each Letter of Credit to the extent that such amount is not
reimbursed by the Borrower pursuant hereto. In addition, all Letters of Credit
shall, unless the Administrative Agent and the Banks otherwise agree in writing,
have a stated expiration date not to exceed one year and shall, in any event,
expire not later than five (5) days prior to the Revolving Credit Maturity Date.
(d) To evidence such Letters of Credit, the Borrower shall enter into,
with the Issuing Bank, the Administrative Agent and the Banks, such agreements
and execute such customary instruments and documents as the Issuing Bank, the
Administrative Agent and the Banks reasonably require, including, but not
limited to, a letter of credit application and agreement.
2.19. Letter of Credit Fees. A per annum Letter of Credit fee shall be
payable to the Administrative Agent, for the ratable accounts of the Banks, (a)
on each standby Letter of Credit at a rate per annum equal to the Applicable
LIBOR Margin applicable to Revolving Credit Loans then in effect multiplied by
the face amount of such Letter of Credit, and (b) on each documentary Letter of
Credit at a rate per annum equal to one-half of the Applicable LIBOR Margin
applicable to Revolving Credit Loans then in effect multiplied by the face
amount of such Letter of Credit. Such Letter of Credit fees for each Letter of
Credit shall be payable quarterly in arrears on the last Business Day of each
fiscal quarter. In addition, the Borrower shall pay to the Issuing Bank, solely
for the account of the Issuing Bank, such documentary issuing, processing,
amendment, negotiation fees for document examination, and other administrative
fees as are customarily charged by the Issuing Bank on Letters of Credit
(including, without limitation, a fronting fee equal to 0.125% multiplied by the
face amount of such Letter of Credit payable on the issuance thereof), which
fees and charges shall be payable when required by such Issuing Bank.
2.20. Interdependence of Borrower Affiliated Group. In order to induce
each of the Banks to enter into this Agreement and the other Loan Documents to
which it is a party, and grant the Loans hereunder and issue the Letters of
Credit, the Borrower, on behalf of itself and each other member of the Borrower
Affiliated Group, and severally represents and warrants that:
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(a) the business of each member of the Borrower Affiliated
Group shall benefit from the successful performance of the business of each
other member of the Borrower Affiliated Group, and the Borrower Affiliated Group
as a whole;
(b) each member of the Borrower Affiliated Group has
cooperated to the extent necessary and shall continue to cooperate with each
other member of the Borrower Affiliated Group to the extent necessary in the
development and conduct of each other member of the Borrower Affiliated Group's
business, and shall to the extent necessary share and participate in the
formulation of methods of operation, distribution, leasing, inventory control,
and other similar business matters essential to each member of the Borrower
Affiliated Group's business;
(c) the failure of any member of the Borrower Affiliated Group
to cooperate with all other members of the Borrower Affiliated Group in the
conduct of their respective businesses shall have an adverse impact on the
business of each other member of the Borrower Affiliated Group, and the failure
of any member of the Borrower Affiliated Group to associate or cooperate with
all other members of the Borrower Affiliated Group is reasonably likely to
impair the goodwill of such other members of Borrower Affiliated Group and the
Borrower Affiliated Group as a whole; and
(d) each member of the Borrower Affiliated Group is accepting
joint and several liability for the Obligations on the terms and conditions set
forth in the Subsidiary Guaranty and represents and warrants that the financial
accommodations being provided hereby are for the mutual benefit, directly and
indirectly, of each member of the Borrower Affiliated Group.
SECTION III
CONDITIONS OF LOANS
3.1. Conditions Precedent to Initial Revolving Credit Loan. The
obligation of the Banks to make the initial Revolving Credit Loan and to issue
any Letter of Credit on the Closing Date, is subject to the fulfillment on the
Closing Date of each of the following conditions precedent:
3.1.1. Loan Documents.
(i) Each of the Loan Documents shall have been duly and
properly authorized, executed and delivered by the respective parties thereto
and shall be in full force and effect on and as of the Closing Date.
(ii) Executed original counterparts of each of the Loan
Documents shall have been furnished to the Administrative Agent.
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3.1.2. Legality of Transactions. No change in applicable law or
regulation shall have occurred as a consequence of which it shall have become
and continue to be unlawful for the Borrower, any other member of the Borrower
Affiliated Group, the Administrative Agent or any of the Banks to perform any of
their agreements or obligations under any of the Loan Documents to which they
are a party on the Closing Date.
3.1.3. Representations and Warranties. Each of the representations and
warranties made by or on behalf of the Borrower and each other member of the
Borrower Affiliated Group to the Administrative Agent and the Banks in this
Agreement or the other Loan Documents (a) shall be true and correct when made,
(b) shall, for all purposes of this Agreement, be deemed to be repeated on and
as of the Closing Date, and (c) shall be true and correct on and as of such
date.
3.1.4. Performance, Consents, No Defaults, Litigation, Etc. The
Borrower and each other member of the Borrower Affiliated Group shall have duly
and properly performed, complied with and observed each of its covenants,
agreements and obligations contained in any of the Loan Documents to which it is
a party or by which it is bound which are required to be performed, complied
with or observed on the Closing Date. All necessary consents and/or waivers in
connection with the consummation of the transactions contemplated by the Loan
Documents shall have been obtained by the Borrower and the other members of the
Borrower Affiliated Group and copies thereof shall have been delivered to the
Administrative Agent and the Banks. No event shall have occurred on or prior to
the Closing Date and be continuing on such Closing Date, and no condition shall
exist on such Closing Date, which constitutes a Default or an Event of Default.
No litigation or other proceeding, and no tax matter, ERISA matter or
Environmental Claim shall be continuing, or pending or threatened in writing,
which individually or in the aggregate could reasonably be expected to have a
Material Adverse Effect.
3.1.5. Certified Copies of Charter Documents. The Administrative Agent
shall have received from each of the Borrower and the other members of the
Borrower Affiliated Group a copy, certified by a duly authorized officer of each
of the Borrower and such other members of the Borrower Affiliated Group to be
true and complete on the Closing Date, of (i) its charter or other formation
documents, as in effect on such date of certification, certified as of a recent
date by the Secretary of State of its jurisdiction of incorporation or
formation, and (ii) where applicable, its by-laws or limited liability company
agreement as in effect on such date.
3.1.6. Proof of Entity Action. The Administrative Agent shall have
received from each of the Borrower and each other member of the Borrower
Affiliated Group a copy, certified by a duly authorized officer of each of the
Borrower and such other member of the Borrower Affiliated Group to be true and
complete on the Closing Date, of records of all corporate and other entity
action taken by each of the Borrower and such member of the Borrower Affiliated
Group to authorize, as applicable (i) its execution and delivery of the Loan
Documents to which it is or is to become a party, (ii) its performance
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of all of its agreements and obligations under each of such documents, and (iii)
any borrowings and other transactions contemplated by this Agreement.
3.1.7. Incumbency Certificate. The Administrative Agent shall have
received from each of the Borrower and each other member of the Borrower
Affiliated Group an incumbency certificate, dated the Closing Date and signed by
the appropriate duly authorized officers of each of the Borrower and such other
member of the Borrower Affiliated Group, and giving the name and bearing a
specimen signature of each individual who shall be authorized, as applicable:
(i) to sign, in the name and on behalf of each of the Borrower and such other
member of the Borrower Affiliated Group, each of the Loan Documents to which it
is or is to become a party; (ii) to make application for the Loans or conversion
thereof; and (iii) to give notices or to take other action on its behalf under
the Loan Documents.
3.1.8. Proceedings and Documents. All corporate, company, governmental
and other proceedings in connection with the transactions contemplated by the
Loan Documents and all instruments and documents incidental thereto, shall be in
form and substance reasonably satisfactory to the Administrative Agent, and the
Administrative Agent shall have received all such counterpart originals or
certified or other copies of all such instruments and documents as the
Administrative Agent shall have reasonably requested.
3.1.9. Good Standing, Etc. The Administrative Agent shall have received
a long-form certificate of the Secretary of State of the respective
jurisdictions of formation of each of the Borrower and each other member of the
Borrower Affiliated Group as to each of the Borrower's and such other member of
the Borrower Affiliated Group's legal existence and good standing in such state
and listing all documents on file in the office of said Secretary of State. The
Administrative Agent shall also have received copies of certificates of
qualification to do business from any jurisdictions in which any of the Borrower
or any other member of the Borrower Affiliated Group is required to be
qualified, except in such jurisdictions where the failure to be so qualified
could not reasonably be expected to have a Material Adverse Effect.
3.1.10. Fees. The Borrower shall have complied with its obligations
under Section 2.6 to pay the fees described in the Fee Letter, and the Borrower
shall have paid all reasonable legal fees and expenses and collateral
examination fees and other reasonable fees and expenses incurred by the
Administrative Agent in connection with the consummation of the transactions
contemplated by this Agreement.
3.1.11. Legal Opinion. The Administrative Agent shall have received a
written legal opinion, addressed to the Administrative Agent and the Banks,
dated the Closing Date, from Xxxxxxxx Xxxxxxxxx Xxxxxx Xxxxxxxx & Xxxxxx LLP,
counsel to the Borrower Affiliated Group, in or substantially in the form of
Exhibit E hereto.
3.1.12. Financial Condition. The Administrative Agent and the Banks
shall be satisfied that there has been no material adverse change in the
business, operations,
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results of operations, assets, liabilities or condition (financial or otherwise)
of the Borrower Affiliated Group taken as a whole since the most recent
financial statements referred to in Section 4.7.
3.1.13. Security Documents; U.C.C. Search Reports; Insurance; Patents,
Trademarks and Copyrights. The Security Documents and the appropriate financing
statements (in the name of the Borrower and each other member of the Borrower
Affiliated Group) and other documents in respect thereto and necessary to enable
the Administrative Agent to perfect a legal, valid and enforceable
first-priority security interest thereunder for the benefit of the Banks, shall
have been duly executed by each of the Borrower and such other members of the
Borrower Affiliated Group, and filed or recorded, as applicable, in all
appropriate filing offices or other locations necessary for the perfection of
such first-priority interests, and all other actions necessary for the
perfection of such interests shall have been completed; provided, however, that,
except for (a) filings and recordings to be made with the Secretaries of State
of the respective states of formation of the Borrower and the other members of
the Borrower Affiliated Group, and (b) fixture filings to be made with respect
to the principal executive offices and distribution center of the Borrower
located in Grapevine, Texas, no filings or recordings shall be made to perfect
the security interest of the Administrative Agent and the Banks in fixtures of
the Borrower and the other members of the Borrower Affiliated Group. The
Administrative Agent shall have received reports concerning the results of
searches of the Patent and Trademark Office and Uniform Commercial Code filing
offices for the Borrower and each other member of the Borrower Affiliated Group
in each jurisdiction where Collateral or other assets are located made no more
than 30 days prior to the Closing Date. The Administrative Agent shall have
received the original stock certificates, together with stock powers endorsed in
blank, for all of the issued and outstanding capital stock of each member of the
Borrower Affiliated Group except the Borrower. The Administrative Agent shall
have received satisfactory evidence that liability insurance and casualty
insurance, including any insurance as is required by the Security Documents to
be in effect in respect of all real and personal property and fixtures, of each
of the Borrower and each other member of the Borrower Affiliated Group is in
effect and the interest of the Administrative Agent as loss payee and additional
insured has been duly endorsed upon all instruments of insurance issued in
respect of such property and in respect of liability. All such insurance shall
provide for 30 days' advance written notice to the Administrative Agent of any
cancellation thereof.
3.1.14. Solvency. The Administrative Agent and the Banks shall have
received reasonably satisfactory evidence that the Borrower and each other
member of the Borrower Affiliated Group is solvent, and will be solvent after
giving effect to the Loans to be made hereunder on the Closing Date.
3.1.15. Payoff and Release Letter. The Administrative Agent shall have
received a payoff and release letter and, if applicable, related UCC-3 financing
statements or other discharges, in form and substance satisfactory to the
Administrative Agent and the Banks from Xxxxxx & Xxxxx, and the Borrower shall
either have repaid all outstanding Indebtedness to Xxxxxx & Noble or such
Indebtedness shall have been converted into
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equity in the Borrower, and neither the Borrower nor any other member of the
Borrower Affiliated Group shall have any outstanding Indebtedness, other than as
permitted by Section 6.1.
3.1.16. Initial Public Offering. The Borrower shall have closed (or
shall be closing concurrently with the initial Loan) an underwritten public
offering pursuant to the Registration Statement covering the offer and sale of
Common Stock for the account of the Borrower in which the aggregate gross
proceeds to the Borrower are not less than $300,000,000.
3.2. Conditions Precedent to all Loans and Letters of Credit. The
obligation of each Bank to make each Loan and issue each Letter of Credit,
including the initial Loans, or continue or convert Loans to Loans of the other
type, is further subject to the following conditions:
(a) timely receipt by the Administrative Agent and the Banks
of the Notice of Borrowing or Conversion as provided in Section 2.4(a);
(b) the representations and warranties contained in Section IV
shall be true and accurate in all material respects on and as of the date of
such Notice of Borrowing or Conversion and on the effective date of the making,
continuation or conversion of each Loan as though made at and as of each such
date (except to the extent that such representations and warranties expressly
relate to an earlier date), and no Default or Event of Default shall have
occurred and be continuing, or would result from such Loan;
(c) the resolutions referred to in Section 3.1.6 shall remain
in full force and effect; and
(d) no change shall have occurred in any law or regulation or
interpretation thereof that, in the opinion of counsel for the Administrative
Agent or any Bank, would make it illegal or against the policy of any
governmental agency or authority for such Bank to make Loans hereunder.
The making of each Loan shall be deemed to be a representation and
warranty by the Borrower on the date of the making, continuation or conversion
of such Loan as to the accuracy of the facts referred to in subsection (b) of
this Section 3.2.
SECTION IV
REPRESENTATIONS AND WARRANTIES
In order to induce the Administrative Agent and the Banks to enter into
this Agreement and to make Loans and issue Letters of Credit hereunder, the
Borrower, on
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behalf of itself and each other member of the Borrower Affiliated Group,
represents and warrants to the Administrative Agent and each Bank that:
4.1. Organization and Qualification. The Borrower and each other member
of the Borrower Affiliated Group (a) is an entity duly incorporated, organized
or formed, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or other formation as indicated on Exhibit D
hereto, (b) has all requisite corporate, partnership, limited liability company
or other power to own its property and conduct its business as now conducted and
as presently contemplated, and (c) is duly qualified and in good standing as a
foreign corporation, foreign limited liability company, foreign limited
partnership or other entity and is duly authorized to do business in each
jurisdiction where the nature of its properties or business requires such
qualification, except where the failure to be so qualified could not reasonably
be expected to have a Material Adverse Effect.
4.2. Entity Authority. The execution, delivery and performance of each
of the Loan Documents to which the Borrower or any other member of the Borrower
Affiliated Group is a party and the transactions contemplated hereby and thereby
are within the corporate, limited liability company, partnership or other power
and authority of the Borrower or such member of the Borrower Affiliated Group
and have been authorized by all necessary corporate or other entity proceedings,
and do not and will not (a) require any consent or approval of any creditors,
trustees for creditors, shareholders, members or partners of the Borrower or
such member of the Borrower Affiliated Group (other than any such consent that
has been obtained prior to the Closing Date and delivered to the Administrative
Agent), (b) contravene any provision of the charter documents, by-laws or other
organizational documents of the Borrower or such member of the Borrower
Affiliated Group or any law, rule or regulation applicable to the Borrower or
such member of the Borrower Affiliated Group, (c) contravene any provision of,
or constitute an event of default or event that, but for the requirement that
time elapse or notice be given, or both, would constitute an event of default
under, any other agreement, instrument, order or undertaking binding on the
Borrower or such member of the Borrower Affiliated Group other than those that
could not reasonably be expected to have a Material Adverse Effect, or (d)
result in or require the imposition of any Encumbrance on any of the properties,
assets or rights of the Borrower or such member of the Borrower Affiliated
Group.
4.3. Valid Obligations. Each of the Loan Documents to which the
Borrower or any other member of the Borrower Affiliated Group is a party and all
of their respective terms and provisions are the legal, valid and binding
obligations of the Borrower or such member of the Borrower Affiliated Group
enforceable in accordance with their respective terms, except as limited by
bankruptcy, insolvency, reorganization, moratorium or other laws affecting the
enforcement of creditors' rights generally, and general principles of equity.
4.4. Consents or Approvals. The execution, delivery and performance of
each of the Loan Documents to which the Borrower or any other member of the
Borrower
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Affiliated Group is a party and the transactions contemplated herein and therein
do not require any approval or consent of, or filing or registration with, any
governmental or other agency or authority, or any other party, except filings
under the Uniform Commercial Code and with the Patent and Trademark Office in
connection with the Collateral.
4.5. Title to Properties; Absence of Encumbrances. Each of the Borrower
and each other member of the Borrower Affiliated Group has good title to all of
the properties, assets and rights of every name and nature now purported to be
owned by it, including, without limitation, such properties, assets and rights
as are reflected in the most recent of the Initial Financial Statements (except
such properties, assets or rights as have been disposed of in the ordinary
course of business since the date thereof), free from all Encumbrances except
Permitted Encumbrances, and, except as so disclosed, free from all defects of
title that might have a Material Adverse Effect. All such properties and assets
and all properties which are leaseholds are free and clear of all title defects
or objections, liens, claims, charges, security interests and other Encumbrances
of any nature whatsoever except Permitted Encumbrances, and are not, in the case
of real property, subject to any rights of way, building, use or other
restrictions, easements, exceptions, variances, reservations or limitations of
any nature whatsoever except, with respect to all such properties and assets,
(i) provisions of existing building and zoning laws, provided that such
provisions would not materially interfere with the Borrower's or any other
member of the Borrower Affiliated Group's use of such properties, (ii) liens for
current taxes not yet due, (iii) as otherwise disclosed on Exhibit D hereto, and
(iv) other Permitted Encumbrances. The rights, properties and other assets
presently owned, leased or licensed by each of the Borrower and each other
member of the Borrower Affiliated Group and described elsewhere in this
Agreement include all rights, properties and other assets necessary to permit
the Borrower and such member of the Borrower Affiliated Group to conduct its
businesses in all material respects in the same manner as its businesses have
been conducted prior to the date hereof. At the time the Borrower or any other
member of the Borrower Affiliated Group pledges, sells, assigns or transfers to
the Administrative Agent any instrument, document of title, security, chattel
paper or other property (including Inventory, contract rights and Accounts) or
any proceeds or products thereof, or any interest therein, the Borrower or such
member of the Borrower Affiliated Group shall be the lawful owner thereof and
shall have good right to pledge, sell, assign or transfer the same; none of such
properties shall have been pledged, sold, assigned or transferred to any Person
other than the Administrative Agent or in any way encumbered; and the Borrower
or such member of the Borrower Affiliated Group shall defend the same against
the claims and demands of all Persons.
4.6. Material Contracts. Neither the Borrower nor any other member of
the Borrower Affiliated Group is a party to any contract, agreement or license
which is material to the operations or business of the Borrower or any other
member of the Borrower Affiliated Group.
4.7. Financial Statements. The Borrower has furnished to the
Administrative Agent and the Banks (a) the Consolidated balance sheet of the
Borrower as of February 3,
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2001 and the related Consolidated statements of income, changes in stockholders'
equity and cash flow of the Borrower for the fiscal year ended February 3, 2001,
and related footnotes, audited and certified by BDO Xxxxxxx without
qualification and prepared in accordance with GAAP, and (b) the unaudited
Consolidated balance sheet of the Borrower as of November 3, 2001 and the
related unaudited Consolidated statements of income, changes in stockholders'
equity and cash flow of the Borrower for the three fiscal quarters then ended
and certified by the chief financial officer of the Borrower (clauses (a) and
(b), collectively, the "Initial Financial Statements"). All the Initial
Financial Statements were prepared in accordance with GAAP (except that the
unaudited financial statements are without footnotes) and present fairly the
Consolidated financial position of the Borrower as of such dates and the
Consolidated results of the operations of the Borrower for such periods,
subject, in the case of the unaudited financial statements, to normal, recurring
year-end adjustments that shall not in the aggregate be materially adverse.
There are no liabilities, contingent or otherwise, not disclosed in any of the
Initial Financial Statements that involve a material amount, except, with
respect to the unaudited financial statements, for normal, recurring year-end
adjustments that shall not in the aggregate be materially adverse.
4.8. Changes. Since the respective dates of the Initial Financial
Statements, no Material Adverse Effect has occurred.
4.9. Defaults. As of the date of this Agreement, no Default or Event of
Default exists.
4.10. Taxes. Each of the Borrower and each other member of the Borrower
Affiliated Group has filed all federal, state and other tax returns required to
be filed, and all taxes, assessments and other governmental charges due from the
Borrower or such other member of the Borrower Affiliated Group have been fully
paid (other than any amount the validity of which is currently being contested
in good faith and with respect to which adequate reserves have been established
therefor). Neither the Borrower nor any other member of the Borrower Affiliated
Group has executed any waiver of limitations in respect of tax liabilities. Each
member of the Borrower Affiliated Group has established on its books reserves
adequate for the payment of all federal, state and other tax liabilities.
4.11. Litigation. Except as set forth on Exhibit D hereto, there is no
litigation, arbitration, claim, proceeding or investigation pending or, to the
Borrower's knowledge, threatened against the Borrower or any other member of the
Borrower Affiliated Group that, individually or in the aggregate, if adversely
determined could reasonably be expected to have a Material Adverse Effect.
4.12. Subsidiaries. As of the date of this Agreement, no member of the
Borrower Affiliated Group has any Subsidiaries except as set forth on Exhibit D
hereto with respect to each such member of the Borrower Affiliated Group.
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4.13. Investment Company Act. Neither the Borrower nor any other member
of the Borrower Affiliated Group is subject to regulation under the Investment
Company Act of l940, as amended.
4.14. Compliance with ERISA. Each of the Borrower, each other member of
the Borrower Affiliated Group, and each member of the Controlled Group, have
fulfilled their obligations under the minimum funding standards of ERISA and the
Code with respect to each Plan and are in compliance in all material respects
with the applicable provisions of ERISA and the Code, and have not incurred any
liability to the PBGC or a Plan under Title IV of ERISA; and no Prohibited
Transaction or Reportable Event has occurred with respect to any Plan.
4.15. Environmental Matters. Except as specifically disclosed in
Exhibit C hereto, there are (a) no violations by any member of the Borrower
Affiliated Group of any Environmental Law, and (b) no Environmental Claims, in
either case, that could, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
4.16. Disclosure. No representations and warranties made by each member
of the Borrower Affiliated Group in this Agreement, any other Loan Document or
in any other agreement, instrument, document, certificate, statement or letter
furnished to the Administrative Agent, the Arranger, or the Banks by or on
behalf of any member of the Borrower Affiliated Group, and no other factual
information heretofore or contemporaneously furnished by or on behalf of any
member of the Borrower Affiliated Group to the Administrative Agent, the
Arranger or the Banks, in connection with any of the transactions contemplated
by any of the Loan Documents contains any untrue statement of material fact or
omits to state a material fact necessary in order to make the statements
contained therein not materially misleading in light of the circumstances in
which they are made. Except as disclosed herein or therein, there is no fact
currently known to the Borrower which could reasonably be expected to cause a
Material Adverse Effect.
4.17. Solvency. Both before and after giving effect to all Indebtedness
incurred by the Borrower on the Closing Date, neither the Borrower nor any other
member of the Borrower Affiliated Group (i) is Insolvent, or will be rendered
Insolvent by the Indebtedness incurred in connection therewith, (ii) will be
left with unreasonably small capital with which to engage in its business, even
allowing for a reasonable margin of error in the projections of the future
performance of the Borrower and such other members of the Borrower Affiliated
Group, (iii) will have incurred Indebtedness beyond its ability to pay such
Indebtedness as it matures, or (iv) will fail to have assets (both tangible and
intangible) having a present fair salable value in excess of the amount required
to pay the probable liability on its then existing debts (whether matured or
unmatured, liquidated or unliquidated, absolute, fixed or contingent).
4.18. Compliance with Statutes, etc. Each of the Borrower and each
other member of the Borrower Affiliated Group is in compliance with all
applicable statutes,
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regulations and orders of, and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property, except for such non-compliances as
could not individually or in the aggregate reasonably be expected to have a
Material Adverse Effect.
4.19. Capitalization. On and as of the Closing Date, the authorized
capital stock or other equity, and the number of issued and outstanding shares
of capital stock or other equity, of the Borrower and each other member of the
Borrower Affiliated Group is as described in the Registration Statement. All
such outstanding shares of capital stock or other equity of the Borrower and
each other member of the Borrower Affiliated Group have been duly and validly
issued, in compliance with all legal requirements relating to the authorization
and issuance of shares of capital stock or other equity, and are fully paid and
non-assessable.
4.20. Labor Relations. Neither the Borrower nor any other member of the
Borrower Affiliated Group is engaged in any unfair labor practice in violation
of any applicable law or order of any court or governmental authority. Except as
disclosed on Exhibit D, there is (i) no unfair labor practice complaint pending
or, to the Borrower's knowledge, threatened against the Borrower or any other
member of the Borrower Affiliated Group before the National Labor Relations
Board, and no grievance or arbitration proceeding arising out of or under any
collective bargaining agreement is so pending against the Borrower or any other
member of the Borrower Affiliated Group or, to the knowledge of the Borrower
Affiliated Group, threatened against it, and (ii) no labor dispute, slowdown or
stoppage pending against the Borrower or any other member of the Borrower
Affiliated Group or, to the knowledge of the Borrower Affiliated Group,
threatened against the Borrower or any other member of the Borrower Affiliated
Group that individually or in the aggregate could reasonably be expected to
result in a Material Adverse Effect. To the knowledge of the Borrower, no union
representation question exists with respect to the employees of the Borrower or
any other member of the Borrower Affiliated Group and no union organizing
activities are taking place.
4.21. Certain Transactions. Except as set forth on Exhibit D, none of
the officers, partners, directors, or employees of any member of the Borrower
Affiliated Group is presently a party to any transaction with any other member
of the Borrower Affiliated Group (other than for services as employees, officers
and directors), including any contract, agreement or other arrangement providing
for the furnishing of services to or by, providing for rental of real or
personal property to or from, or otherwise requiring payments to or from any
officer, partner, director or such employee or, to the knowledge of the Borrower
Affiliated Group, any corporation, partnership, trust or other entity in which
any officer, partner, director, or any such employee or natural person related
to such officer, partner, director or employee or other Person in which such
officer, partner, director or employee has a direct or indirect beneficial
interest, has a substantial direct or indirect beneficial interest or is an
officer, director, trustee or partner.
4.22. Restrictions on the Borrower Affiliated Group. No member of the
Borrower Affiliated Group is a party to or bound by any contract, agreement or
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instrument, or subject to any charter or other corporate restriction, that has
or could reasonably be expected to have a Material Adverse Effect.
4.23. Leases. The descriptions contained in the Registration Statement
regarding the Borrower's leases, occupancy agreements and all amendments thereto
and all other documents affecting rights and obligations thereunder, including
without limitation, assignments and subleases pursuant to which the Borrower or
any other member of the Borrower Affiliated Group leases real property, and
license agreements pursuant to which a third party would have the right to enter
upon the leased premises (herein individually referred to as a "Lease" and
collectively referred to as the "Leases"), are true and correct in all material
respects. Neither the tenant (or lessee) nor, to the knowledge of the Borrower,
the landlord (or lessor), under any Lease is in default under the applicable
Lease or has given or received any notice of cancellation or termination of such
Lease or condemnation of the leased premises that, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
4.24. Franchises, Patents, Copyrights, Etc. Except as otherwise set
forth on Exhibit D hereto, each of the Borrower and each other member of the
Borrower Affiliated Group possesses all franchises, patents, copyrights,
trademarks, tradenames, service marks, licenses and permits, and rights in
respect of the foregoing, adequate for the conduct of its business as
substantially now conducted without known conflict with any rights of others
and, in each case, free of any Encumbrance that is not a Permitted Encumbrance.
4.25. Collateral. All of the Obligations of the Borrower Affiliated
Group to the Administrative Agent and the Banks under or in respect of the Loan
Documents will, at all times from and after the execution and delivery of each
of the Security Documents, be entitled to the benefits of and be secured by each
of such Security Documents to the extent provided therein. No Collateral is or
will at any time be located at any public warehouse or any location other than
real estate owned by a member of the Borrower Affiliated Group or subject to a
Lease.
SECTION V
AFFIRMATIVE COVENANTS
So long as any Bank has any commitment to make Loans or issue Letters
of Credit hereunder or any Loan or other Obligation hereunder remains
outstanding, the Borrower covenants as follows on behalf of itself and each
other member of the Borrower Affiliated Group:
5.1. Financial Statements and other Reporting Requirements. The
Borrower shall furnish to the Administrative Agent and each Bank:
(a) as soon as available, but in any event within 90 days
after the end of each fiscal year of the Borrower Affiliated Group, a
Consolidated balance sheet as of
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the end of, and a related Consolidated statement of income, changes in
stockholders' equity and cash flow for, such year, prepared in accordance with
GAAP and audited and certified without qualification by BDO Xxxxxxx, or a "Big
Five" accounting firm, or another accounting firm reasonably acceptable to the
Administrative Agent; and, concurrently with such financial statements, a copy
of said certified public accountants' management letter and a written statement
by such accountants that, in the making of the audit necessary for their report
and opinion upon such financial statements they have obtained no knowledge of
any Default or Event of Default or, if in the opinion of such accountants any
such Default or Event of Default exists, they shall disclose in such written
statement the nature and status thereof;
(b) as soon as available, but in any event within 45 days
after the end of each fiscal quarter of the Borrower Affiliated Group, a
Consolidated balance sheet as of the end of, and a related Consolidated
statement of income, changes in stockholders' equity and cash flow for, the
portion of the fiscal year then ended and for the fiscal quarter then ended,
prepared in accordance with GAAP (without footnotes) and certified by the chief
financial officer of the Borrower, but subject, however, to normal, recurring
year-end adjustments that shall not in the aggregate be materially adverse;
(c) no more than 30 days after the first day of each fiscal
year of the Borrower Affiliated Group (starting with the fiscal year beginning
February 1, 2003), Consolidated projections of the Borrower Affiliated Group for
such succeeding fiscal year in form acceptable to the Administrative Agent and
the Banks (it being recognized by the Administrative Agent and the Banks that
projections as to future results are not to be viewed as facts and that the
actual results for the period or periods covered by the projections may differ
from the projected results);
(d) concurrently with the delivery of each financial statement
pursuant to subsections (a) and (b) of this Section 5.l, a report in
substantially the form of Exhibit F hereto signed on behalf of the Borrower
Affiliated Group by the chief financial officer of the Borrower, and including,
without limitation, computations in reasonable detail evidencing compliance with
the covenants contained in Sections 6.5 through 6.8 hereof, inclusive, and a
representation by such officer that no Default or Event of Default has occurred
or is continuing;
(e) within five Business Days after the end of each fiscal
month, a Borrowing Base Report in substantially the form of Exhibit G hereto
signed on behalf of the Borrower Affiliated Group by the chief financial officer
of the Borrower;
(f) promptly upon the filing thereof, copies of all
registration statements, proxy statements and annual, quarterly, monthly or
other reports which the Borrower or any other member of the Borrower Affiliated
Group files with the Securities and Exchange Commission (including without
limitation, copies of all reports on Form 8-K that the Borrower files with the
Securities and Exchange Commission);
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(g) if and when the Borrower or any other member of the
Borrower Affiliated Group gives or is required to give notice to the PBGC of any
Reportable Event with respect to any Plan that might constitute grounds for a
termination of such Plan under Title IV of ERISA, or knows that any member of
the Controlled Group or the plan administrator of any Plan has given or is
required to give notice of any such Reportable Event, a copy of the notice of
such Reportable Event given or required to be given to the PBGC or, if such
notice is not given to the PBGC, a description of the content of the notice that
would be required to be given;
(h) immediately upon becoming aware of the existence of any
condition or event (i) that constitutes a Default or Event of Default, or (ii)
affecting the Borrower or any other member of the Borrower Affiliated Group
which could reasonably be expected to have a Material Adverse Effect, written
notice thereof specifying the nature thereof and the action being or proposed to
be taken with respect thereto; and immediately upon receipt thereof, copies of
any notice (whether formal or informal) of any cancellation, termination or
material change in any insurance maintained by any member of the Borrower
Affiliated Group;
(i) promptly upon becoming aware of any litigation or of any
investigative proceedings by any Person, including, without limitation, any
governmental agency or authority commenced or threatened against the Borrower or
any other member of the Borrower Affiliated Group of which it has notice, or of
a material change in any such existing litigation or proceedings, the outcome of
which would or might have a Material Adverse Effect, written notice thereof and
the action being or proposed to be taken with respect thereto;
(k) promptly upon becoming aware of any investigative
proceedings by a governmental agency or authority commenced or threatened
against the Borrower or any other member of the Borrower Affiliated Group
regarding any potential violation of Environmental Laws or any spill, release,
discharge or disposal of any Hazardous Material, in either case, the outcome of
which could have a Material Adverse Effect, written notice thereof, copies of
all correspondence, reports and other materials furnished to or prepared by any
member of the Borrower Affiliated Group (or its representatives) in connection
therewith and the action being or proposed to be taken with respect thereto;
(l) at least 30 days' prior written notice of any change in
its name or corporate form or any change in the name or names under which the
Borrower's or any other member of the Borrower Affiliated Group's business is
transacted; and
(m) from time to time, with reasonable promptness, such other
financial data and other information or documents (financial or non-financial)
about the Borrower and each other member of the Borrower Affiliated Group
(including accountants' management letters) as the Administrative Agent or any
Bank (through the Administrative Agent) may reasonably request.
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5.2. Conduct of Business. The Borrower shall, and shall cause each other
member of the Borrower Affiliated Group to:
(a) duly observe and comply in all material respects with all
applicable laws and requirements of any governmental authorities relative to its
corporate existence, rights and franchises, to the conduct of its business and
to its property and assets (including without limitation all Environmental Laws
and ERISA), and shall maintain and keep in full force and effect all licenses
and permits necessary in any material respect to the proper conduct of its
business;
(b) maintain its corporate existence, except as permitted under
Section 6.4(b);
(c) remain engaged in substantially the same lines of business as
those in which it is now engaged, except that the Borrower or any other member
of the Borrower Affiliated Group may withdraw from any business activity which
its Board of Directors reasonably deems unprofitable or unsound, provided that
promptly after such withdrawal, the Borrower shall provide the Administrative
Agent with written notice thereof; and
(d) at least five Business Days prior to forming any Domestic
Subsidiary, deliver to the Administrative Agent the Borrower's agreement, and
immediately upon formation, such Subsidiary's agreement, in each case reasonably
satisfactory to counsel for the Administrative Agent, that the Subsidiary shall
be a member of the Borrower Affiliated Group, and shall be bound by the terms of
this Agreement, the other Security Documents and the related documents, opinions
and instruments as a guarantor or otherwise as the Administrative Agent may
determine in its sole discretion. Without limiting the foregoing, each such
Domestic Subsidiary shall deliver to the Administrative Agent a Subsidiary
Guaranty in the form of Exhibit I, and the Borrower or other stockholders of
such Domestic Subsidiary shall deliver to the Administrative Agent a Pledge
Agreement in the form of Exhibit J.
5.3. Maintenance of Properties and Insurance. The Borrower shall, and
shall cause each other member of the Borrower Affiliated Group to, maintain its
properties in good repair, working order and condition (normal wear and tear
excepted) as required for the normal conduct of its business and from time to
time the Borrower will make or cause to be made, and cause each other member of
the Borrower Affiliated Group to make or cause to be made, all necessary and
proper repairs, renewals, replacements, additions and improvements thereto so
that the Borrower and such other members of the Borrower Affiliated Group may
conduct their business substantially as conducted on the Closing Date and shall
maintain or cause to be maintained all material Leases as may be required for
the conduct of the Borrower's and each other member of the Borrower Affiliated
Group's business. The Borrower shall and shall cause each other member of the
Borrower Affiliated Group to at all times maintain liability and casualty
insurance with financially sound and reputable insurers in such amounts as the
officers of the Borrower and such other member of the Borrower Affiliated Group
in the exercise of their
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reasonable judgment deem to be adequate. The Administrative Agent shall be named
as loss payee and additional insured and shall be given 30 days' prior written
notice of any cancellation or modification of such insurance. If the Borrower or
any other member of the Borrower Affiliated Group fails to provide such
insurance, the Administrative Agent, in its sole discretion, may provide such
insurance and charge the cost thereof to the Loan Account or to the Borrower's
or any such other member of the Borrower Affiliated Group's deposit account with
the Administrative Agent. Any payment not recovered from the Borrower or any
other member of the Borrower Affiliated Group shall bear interest at the Base
Rate plus the Applicable Base Rate Margin then in effect applicable to Revolving
Credit Loans. The Administrative Agent shall not, by the fact of approving,
disapproving, accepting, obtaining or failing to obtain any such insurance,
incur liability for the form or legal sufficiency of insurance contracts,
solvency of insurance companies or payment of lawsuits, and the Borrower and
each other member of the Borrower Affiliated Group hereby expressly assumes full
responsibility therefor and liability, if any, thereunder. The Borrower shall,
and shall cause each other member of the Borrower Affiliated Group to, furnish
to the Administrative Agent certificates or other evidence satisfactory to the
Administrative Agent of compliance with the foregoing insurance provisions. The
provisions of this Section 5.3 shall be deemed to be supplemental to, but not
duplicative of, the provisions of any of the Security Documents that require the
maintenance of insurance.
5.4. Taxes. The Borrower shall, and shall cause each other member of the
Borrower Affiliated Group to, pay or cause to be paid all taxes, assessments or
governmental charges on or against it or its properties on or prior to the time
when they become due; provided that this covenant shall not apply to any tax,
assessment or charge that is being contested in good faith by appropriate
proceedings and with respect to which adequate reserves have been established
and are being maintained in accordance with GAAP if no lien shall have been
filed to secure such tax, assessment or charge.
5.5. Inspection by the Administrative Agent. The Borrower shall, and shall
cause each other member of the Borrower Affiliated Group to, permit the Banks,
through the Administrative Agent or the Administrative Agent's designee, at any
time and from time to time in the Administrative Agent's reasonable discretion
during regular business hours upon reasonable advance notice, to (i) visit and
inspect the properties (including the Real Properties) of the Borrower and such
other members of the Borrower Affiliated Group, and (ii) discuss the affairs,
finances and accounts of the Borrower and such other members of the Borrower
Affiliated Group with its appropriate officers, employees and accountants. In
handling such information the Administrative Agent and the Banks shall exercise
the same degree of care that each exercises with respect to its own proprietary
information of the same types to maintain the confidentiality of any non-public
information thereby received, except that disclosure of such information may be
made (w) to the subsidiaries or affiliates of the Arranger, the Administrative
Agent and each Bank in connection with their present or prospective business
relations with the Borrower Affiliated Group, (x) to prospective transferees or
purchasers of an interest in the Loans, (y) as required by law, regulation, rule
or order, subpoena, judicial order or similar order and (z) as may be required
in connection with the examination, audit or similar
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investigation of the Arranger, the Administrative Agent or any Bank, and
provided, however, that in the case of any disclosure made under clauses (w) or
(x), the Person to whom such disclosure is made shall agree to be subject to the
same degree of care and confidentiality required of the Administrative Agent,
the Banks and their representatives hereunder.
5.6. Maintenance of Books and Records. The Borrower shall, and shall cause
each other member of the Borrower Affiliated Group to, keep adequate books and
records of account, in which true and complete entries will be made reflecting
all of its business and financial transactions, and such entries will be made in
accordance with GAAP and applicable law.
5.7. Use of Proceeds. The proceeds of the Revolving Credit Loans will be
used by the Borrower to finance ongoing working capital needs of the Borrower
Affiliated Group and for general corporate purposes for the Borrower Affiliated
Group. No portion of any Loans shall be used for the purpose of purchasing or
carrying any "margin security" or "margin stock" as such terms are used in
Regulations U or X of the Board of Governors of the Federal Reserve System.
5.8. Pension Plans. With respect to any Plan, the benefits under which are
guaranteed, in whole or in part, by the PBGC or any governmental authority
succeeding to any or all of the functions of the PBGC, the Borrower will, and
will cause each other member of the Borrower Affiliated Group to, (i) fund each
Plan as required by the provisions of Section 412 of the Code; (ii) cause each
Plan to pay all benefits when due; and (iii) furnish the Administrative Agent
(a) promptly with a copy of any notice of each Plan's termination sent to the
PBGC and (b) no later than the date of submission to the Department of Labor or
to the Internal Revenue Service, as the case may be, a copy of any request for
waiver from the funding standards or extension of the amortization periods
required by Section 412 of the Code.
5.9. Fiscal Year. Each of the Borrower and each other member of the
Borrower Affiliated Group shall have a fiscal year ending on the Saturday
closest to January 31 of each year and shall notify the Administrative Agent of
any change in such fiscal year (whereupon, notwithstanding the provisions of
Section 9.8, the Administrative Agent and the Banks shall have the right to
modify the timing of the financial covenants hereunder accordingly in order to
correspond to any such change in fiscal year).
5.10. Further Assurances. At any time and from time to time the Borrower
shall, and shall cause each other member of the Borrower Affiliated Group to,
execute and deliver such further instruments and take such further action as may
reasonably be requested by the Administrative Agent or any Bank (through the
Administrative Agent) to effect the purposes of the Loan Documents and the
Security Documents.
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SECTION VI
NEGATIVE COVENANTS
So long as any Bank has any commitment to make Loans and issue Letters of
Credit hereunder or any Loan or other Obligation hereunder remains outstanding,
the Borrower covenants as follows on behalf of itself and each other member of
the Borrower Affiliated Group:
6.1. Indebtedness. The Borrower shall not, and shall not permit any other
member of the Borrower Affiliated Group to, create, incur, assume, guaranty or
be or remain liable with respect to any Indebtedness other than the following:
(a) Indebtedness of the Borrower to the Administrative Agent or
the Banks under any Loan Document and Guaranties of other members of the
Borrower Affiliated Group in favor of the Administrative Agent or the Banks
under any Loan Document;
(b) Indebtedness in respect of current liabilities, other than for
borrowed money, of the Borrower Affiliated Group incurred in the ordinary course
of business;
(c) Indebtedness in respect of Capitalized Leases and purchase
money security interests of the Borrower Affiliated Group representing
obligations permitted to be incurred by the terms of this Agreement and incurred
in the ordinary course of business and consistent with past practices; provided,
that the aggregate principal amount of Indebtedness permitted by this clause (c)
shall not exceed $5,000,000 at any one time outstanding;
(d) Indebtedness existing on the date of this Agreement and
disclosed on Exhibit C hereto and any refinancings, refundings, renewals or
extensions thereof (provided the principal amount of any such Indebtedness is
not thereby increased);
(e) Indebtedness secured by Encumbrances permitted by Section
6.3(b);
(f) Indebtedness of Domestic Subsidiaries to the Borrower or to
other Domestic Subsidiaries of the Borrower; and
(g) Other Indebtedness (including Guaranties of Indebtedness of
Foreign Subsidiaries) not secured by any Encumbrances and in an aggregate
principal amount not exceeding $10,000,000.
6.2. Sale and Leaseback. The Borrower shall not, nor shall it permit any
other member of the Borrower Affiliated Group to, enter into any arrangement,
directly or indirectly, whereby it shall sell or transfer any property owned by
it in order to lease such
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property or lease other property that the Borrower or such other member of the
Borrower Affiliated Group intends to use for substantially the same purpose as
the property being sold or transferred.
6.3. Encumbrances. The Borrower shall not, and shall not permit any other
member of the Borrower Affiliated Group to, create, incur, assume or suffer to
exist any mortgage, pledge, security interest, lien or other charge or
encumbrance, including the lien or retained security title of a conditional
vendor upon or with respect to any of its property or assets ("Encumbrances"),
or assign or otherwise convey any right to receive income, including the sale or
discount of Accounts Receivable with or without recourse, except the following
("Permitted Encumbrances"):
(a) Encumbrances in favor of the Administrative Agent or the Banks
under any Security Document;
(b) Encumbrances existing on the date of this Agreement and
disclosed in Exhibit C hereto;
(c) Liens for taxes, fees, assessments and other governmental
charges to the extent that payment of the same may be postponed or is not
required in accordance with the provisions of Section 5.4;
(d) Possessory liens in favor of brokers and dealers arising in
connection with the acquisition or disposition of Investments owned as of the
date hereof and Qualified Investments, provided that such liens (a) attach only
to such Investments and (b) secure only obligations incurred in the ordinary
course and arising in connection with the acquisition or disposition of such
Investments and not any obligation in connection with margin financing;
(e) Landlords' and lessors' liens in respect of rent not in
default, or liens in respect of pledges or deposits under worker's compensation,
unemployment insurance, social security laws, or similar legislation (other than
ERISA) or in connection with appeal and similar bonds incidental to litigation;
mechanics', laborers', carriers', warehousemans', materialmen's and similar
liens, if the obligations secured by such liens are not then delinquent; liens
securing the performance of bids, tenders, contracts (other than for the payment
of money); and statutory obligations, surety and appeal bonds, performance bonds
and other obligations of a like nature incidental to the conduct of its business
and that do not in the aggregate materially detract from the value of its
property or materially impair the use thereof in the operation of its business;
(f) Judgment liens that shall not have been in existence for a
period longer than 30 days after the creation thereof or, if a stay of execution
shall have been obtained, for a period longer than 30 days after the expiration
of such stay;
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(g) Easements, rights of way, zoning restrictions, licenses,
restrictions on the use of property or minor imperfections in title thereto
which, in the aggregate, do not interfere in a material way with the ordinary
conduct of its business;
(h) Security interests and liens securing charges or obligations
of the Borrower Affiliated Group in amounts not to exceed $5,000,000 in the
aggregate outstanding at any time in addition to those Encumbrances permitted
under subsection (a) through (f) of this Section, provided, however, that with
respect to purchase money liens securing the purchase price of capital assets
(including rights of lessors under Capitalized Leases), (A) each such
Encumbrance is given solely to secure the purchase price of, or the lease
obligations relating to, such asset, does not extend to any other property, and
is given at the time or within 30 days of the acquisition of such asset, and (B)
the Indebtedness secured thereby does not exceed the lesser of the cost of such
asset or its fair market value at the time such security interest attaches;
(i) Security interests in favor of the issuer of any documentary
letters of credit for the account of the Borrower covering only the following:
(i) any documentation presented in connection with a drawing under such letter
of credit, (ii) all goods which are described in such documents or any such
letter of credit, and (iii) the proceeds thereof;
(j) Any extension, renewal or replacement of the foregoing;
provided that the Encumbrances permitted by this paragraph (j) shall not extend
to or cover any additional Indebtedness or property (other than a substitution
of like property); and
(k) Encumbrances upon real property or other fixed assets acquired
after the date hereof (by purchase, construction or otherwise) by the Borrower
or any other member of the Borrower Affiliated Group, each of which Encumbrance
was created solely for the purpose of securing Indebtedness permitted under
Section 6.1 and representing, or incurred to finance, refinance or refund, the
cost (including the cost of construction) of such property or asset; provided
that (i) no such Encumbrance shall extend to cover any property or asset of the
Borrower or such member of the Borrower Affiliated Group other than the property
or asset so acquired and improvements thereon, (ii) the principal amount of
Indebtedness secured by any such Encumbrance shall not exceed 100% of the lesser
of the cost of such asset or its fair market value (as determined in good faith
by a senior financial officer of the Borrower) of such property or asset at the
time it was acquired (by purchase, construction or otherwise), and (iii) the
security interest is given at the time or within 60 days of the construction or
acquisition of such property or asset.
In addition, the Borrower shall not, nor shall the Borrower permit any
other member of the Borrower Affiliated Group or any of its other Subsidiaries
to, enter into or permit to exist any arrangement or agreement which directly or
indirectly prohibits the Borrower or any such other member of the Borrower
Affiliated Group or Subsidiary from creating or incurring any Encumbrance in
favor of the Administrative Agent for the benefit of the Banks and the
Administrative Agent under the Loan Documents.
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6.4. Merger; Consolidation; Sale or Lease of Assets; Acquisitions. The
Borrower shall not, nor shall permit any other member of the Borrower Affiliated
Group to,
(a) sell, lease or otherwise dispose of assets or properties
(valued at the lower of cost or fair market value), other than (i) sales of
inventory in the ordinary course of business, and (ii) sales of assets not in
the ordinary course of business including, without limitation, sales or
dispositions of obsolete or worn out property, tools or equipment no longer used
or useful in its business in an aggregate amount not to exceed $2,000,000 in any
fiscal year of the Borrower Affiliated Group, and (iii) sales of any Qualified
Investments; or
(b) liquidate, merge or consolidate into or with any other Person
or enter into or undertake any plan or agreement of liquidation, merger or
consolidation with any other Person, provided that (i) the Borrower may merge
with another company in connection with a Permitted Acquisition if the Borrower
is the surviving company, (ii) any wholly-owned Subsidiary of the Borrower may
merge or consolidate into or with the Borrower or any other wholly-owned
Subsidiary of the Borrower if no Default or Event of Default has occurred and is
continuing or would result from such merger and if the Borrower or such
Subsidiary is the surviving company, and (iii) a Subsidiary of the Borrower may
merge into another entity in connection with a Permitted Acquisition if, upon
consummation of such merger, the surviving entity shall be a direct or indirect
wholly-owned Subsidiary of the Borrower and, if the surviving entity is a
Domestic Subsidiary, a party to the Subsidiary Security Documents; or
(c) make any acquisition of all or substantially all of the
capital stock (or other equity interests) or all or substantially all of the
assets of another Person, or of a division or business unit of a Person, whether
or not involving a merger or consolidation with such Person (an "Acquisition"),
except in connection with a Permitted Acquisition.
6.5. Minimum Fixed Charge Coverage Ratio. The Borrower shall not permit
the Fixed Charge Coverage Ratio of the Borrower Affiliated Group, determined as
at the last day of any fiscal quarter for the twelve-month period then ended, to
be less than (a) for the period through and including the second fiscal quarter
of 2003, the ratio of 1.5 to 1.0, and (b) thereafter, the ratio of 1.75 to 1.0.
6.6. Maximum Cash Flow Leverage Ratio. The Borrower shall not permit the
Cash Flow Leverage Ratio of the Borrower Affiliated Group, determined as at the
last day of each fiscal quarter, to be greater than the ratio of 1.0 to 1.0 for
the twelve-month period then ended.
6.7. Minimum Tangible Net Worth. The Borrower shall not permit the
Consolidated Tangible Net Worth of the Borrower Affiliated Group, determined as
at the last day of any fiscal quarter, to be less than the sum of (i)
$110,000,000 plus (ii) 50% of Consolidated Cumulative Net Income plus (iii) 100%
of Consolidated Cumulative Net Equity Raises.
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6.8. Maximum Capital Expenditures. The Borrower Affiliated Group shall not
make Capital Expenditures in an aggregate amount in any fiscal year exceeding
the sum of $40,000,000; provided, however, that up to $5,000,000 of Capital
Expenditures permitted to be expended in any one fiscal year that are not
expended in such fiscal year may be carried over for expenditure in the
following fiscal year.
6.9. Restricted Payments. The Borrower shall not, and shall not permit any
other member of the Borrower Affiliated Group to, pay, make or declare any
Restricted Payment. Notwithstanding the foregoing, (a) the Borrower's
Subsidiaries may from time to time make distributions to the Borrower, and (b)
the Borrower may effect redemptions and repurchases of its stock and pay
dividends to its stockholders, provided that, with respect to this clause (b),
(i) no Default or Event of Default has occurred or is continuing, both before
and after giving effect to any such distributions, dividends, redemptions and
repurchases, and (ii) the cumulative aggregate amount of redemptions and
repurchases made from and after the Closing Date shall not at any time exceed
10% of the Borrower's Consolidated Cumulative Net Income, determined as of the
date of the Borrower's most recently completed fiscal quarter. Neither the
Borrower nor any other member of the Borrower Affiliated Group will enter into
any agreement, contract or arrangement (other than the Loan Documents)
restricting the ability of any Subsidiary of the Borrower or any other member of
the Borrower Affiliated Group (other than the Borrower) to pay or make dividends
or distributions in cash or kind, to make loans, advances or other payments of
any nature or to make transfers or distributions of all or any part of its
assets to the Borrower or any other member of the Borrower Affiliated Group.
6.10. Investments. The Borrower shall not, nor shall permit any other
member of the Borrower Affiliated Group to, make or maintain any Investments
other than Qualified Investments.
6.11. ERISA. Neither the Borrower nor any member of the Controlled Group
shall permit any Plan maintained by it to (i) engage in any Prohibited
Transaction, (ii) incur any "accumulated funding deficiency" (as defined in
Section 302 of ERISA) whether or not waived, or (iii) terminate any Plan in a
manner that could result in the imposition of a lien or encumbrance on the
assets of the Borrower or any other member of the Borrower Affiliated Group
pursuant to Section 4068 of ERISA.
6.12. Transactions with Affiliates. Other than those set forth in the
Registration Statement, the Borrower shall not, nor shall permit any other
member of the Borrower Affiliated Group to, enter into or participate in any
agreements or transactions of any kind with any Affiliate, except (i) agreements
or transactions contemplated, required or allowed by any Loan Document as in
effect on the date of this Agreement, provided that such agreements or
transactions are not otherwise prohibited by this Agreement or any of the Loan
Documents; (ii) agreements or transactions (in each case) in the ordinary course
of business and on an arms-length basis which (A) include only terms which are
fair and equitable to the Borrower or such other member of the Borrower
Affiliated Group, (B) do not violate or otherwise conflict with any of the terms
of any of the Loan Documents, and
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(C) involve terms no less favorable to the Borrower or such other member of the
Borrower Affiliated Group than would be the terms of a similar agreement or
transaction with any Person other than an Affiliate; and (iii) the loans
permitted by Section 6.13.
6.13. Loans. The Borrower shall not, and shall not permit any other member
of the Borrower Affiliated Group to, make to any Person any loan, advance or
other transfer with the anticipation of repayment, except for loans and advances
to employees of the Borrower or such other member of the Borrower Affiliated
Group, made in the ordinary course of business and consistent with past
practices, not exceeding $500,000 in the aggregate at any time outstanding;
provided, that no such advances to any single employee shall exceed $250,000 in
the aggregate.
6.14. Borrowing Base and Total Commitment. The Borrower shall not cause or
permit the aggregate principal amount of all Revolving Credit Loans outstanding
at any time, plus the aggregate Stated Amount of Letters of Credit outstanding
at such time, plus the aggregate amount of any unreimbursed draws under
outstanding Letters of Credit, to exceed the lesser of (i) the Borrowing Base in
effect at such time and (ii) the Total Commitment in effect at such time.
6.15. No Amendments to Certain Documents; No New Agreements Requiring
Breach of Loan Documents. The Borrower shall not, and shall not permit any other
member of the Borrower Affiliated Group to, at any time cause or permit any of
the charter or other incorporation or organizational documents of the Borrower
or such other member of the Borrower Affiliated Group to be modified, amended or
supplemented in any material respect whatever adverse to the Banks or the
Administrative Agent, without (in each case) the express prior written
agreement, consent or approval of the Administrative Agent. Neither the Borrower
nor any other member of the Borrower Affiliated Group will enter into any
agreement containing any provision which would be violated or breached by the
performance by the Borrower or such other member of the Borrower Affiliated
Group of its obligations hereunder or under any of the other Loan Documents.
SECTION VII
DEFAULTS
7.1. Events of Default. There shall be an Event of Default hereunder if
any of the following events occurs:
(a) the Borrower shall fail to pay (i) any amount of principal of
any Loans when due or (ii) any amount of interest thereon or any fees or
expenses payable hereunder or under any Loan Document within three Business Days
after the due date therefor; or
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(b) the Borrower or any other member of the Borrower Affiliated
Group shall fail to perform, comply with or observe or shall otherwise breach
any one or more of the terms, obligations, covenants or agreements contained in
Section 5.1(a), (b), (c), (d), (e), (h), (i) or (l), or Sections 5.2(b), 5.2(d),
5.3 (with respect to maintenance of insurance), 5.5 or 5.7 or Section 6; or
(c) the Borrower or any other member of the Borrower Affiliated
Group shall fail to perform, comply with or observe or shall otherwise breach
any one or more of the terms, covenants, obligations or agreements (other than
in respect of subsections 7.1(a) and (b)) contained in this Agreement or in any
other Loan Document and such failure shall continue unremedied for a period of
30 days; or
(d) any representation or warranty of the Borrower or any other
member of the Borrower Affiliated Group made in any Loan Document or any other
documents or agreements executed in connection with the transactions
contemplated by this Agreement or in any certificate delivered hereunder shall
prove to have been false in any material respect upon the date when made or
deemed to have been made; or
(e) the Borrower or any other member of the Borrower Affiliated
Group shall fail to pay at maturity, or within any applicable period of grace
(not to exceed 30 days), any obligations in excess of $5,000,000 in the
aggregate for borrowed monies or advances, or for the lease or other use of real
or personal property, or fail to observe or perform any term, covenant or
agreement evidencing or securing such obligations for borrowed monies or
advances, or relating to such lease or use of real or personal property, the
result of which failure is to permit the holder or holders of such Indebtedness
to cause such Indebtedness to become due prior to its stated maturity upon
delivery of required notice, if any, or to permit any party to any agreement
evidencing such obligations to terminate or cancel such agreement; or
(f) the Borrower or any other member of the Borrower Affiliated
Group shall (i) apply for or consent to the appointment of, or the taking of
possession by, a receiver, custodian, trustee, liquidator or similar official of
itself or of all or a substantial part of its property, (ii) be generally not
paying its debts as such debts become due, (iii) make a general assignment for
the benefit of its creditors, (iv) commence a voluntary case as debtor under the
Federal Bankruptcy Code (as now or hereafter in effect), (v) take any action or
commence any case or proceeding as debtor under any law relating to bankruptcy,
insolvency, reorganization, winding-up or composition or adjustment of debts, or
any other law providing for the relief of debtors, (vi) fail to contest in a
timely or appropriate manner, or acquiesce in writing to, any petition filed
against it as debtor in an involuntary case under the Federal Bankruptcy Code
(as now or hereafter in effect) or other law, (vii) take any action under the
laws of its jurisdiction of incorporation or organization similar to any of the
foregoing, (viii) be Insolvent, or (ix) pass any board resolution or take any
corporate action for the purpose of effecting any of the foregoing; or
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(g) a proceeding or case shall be commenced, without the
application or consent of the Borrower or other applicable member of the
Borrower Affiliated Group in any court of competent jurisdiction, seeking (i)
the liquidation, reorganization, dissolution, winding up, or composition or
readjustment of its debts, (ii) the appointment of a trustee, receiver,
custodian, liquidator or the like of it or of all or any substantial part of its
assets, or (iii) similar relief in respect of it, under any law relating to
bankruptcy, insolvency, reorganization, winding-up or composition or adjustment
of debts or any other law providing for the relief of debtors, and such
proceeding or case shall continue undismissed, or unstayed and in effect, for a
period of 60 days; or an order for relief shall be entered in an involuntary
case under the Federal Bankruptcy Code (as now or hereafter in effect), against
the Borrower or any other member of the Borrower Affiliated Group as debtor; or
action under the laws of the jurisdiction of incorporation or organization of
the Borrower or any other member of the Borrower Affiliated Group similar to any
of the foregoing shall be taken with respect to the Borrower or any such member
of the Borrower Affiliated Group and shall continue unstayed and in effect for
any period of 60 days; or
(h) judgments or orders for the payment of money shall be entered
against the Borrower or any other member of the Borrower Affiliated Group by any
court, or a warrant of attachment or execution or similar process shall be
issued or levied against property of the Borrower or any other member of the
Borrower Affiliated Group, that in the aggregate exceed $5,000,000 in value (to
the extent not covered by independent third party insurance as to which the
insurer does not dispute coverage) and such judgments, orders, warrants or
process shall continue undischarged or unstayed for 45 days; or
(i) the Borrower, any other member of the Borrower Affiliated
Group or any member of the Controlled Group shall fail to pay when due an
aggregate amount in excess of $5,000,000 which it shall have become liable to
pay to the PBGC or to a Plan under Title IV of ERISA; or notice of intent to
terminate a Plan or Plans in a distress termination under Section 4062 of ERISA
shall be filed by the Borrower, any other member of the Borrower Affiliated
Group or any member of the Controlled Group, any plan administrator or any
combination of the foregoing; or the PBGC shall institute or have grounds to
institute proceedings under Title IV of ERISA to terminate or to cause a trustee
to be appointed to administer any such Plan or Plans or a proceeding shall be
instituted by a fiduciary of any such Plan or Plans against the Borrower or any
other member of the Borrower Affiliated Group and such proceedings shall not
have been dismissed within 30 days thereafter; or a condition shall exist by
reason of which the PBGC would be entitled to obtain a decree adjudicating that
any such Plan or Plans must be terminated; or
(j) a Change of Control shall have occurred without the express
prior written consent of the Required Banks; or
(k) the Borrower or any other member of the Borrower Affiliated
Group shall be enjoined, restrained or in any way prevented by the order of any
court or
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any administrative or regulatory agency from conducting any material part of its
business and such order shall continue in effect for more than 45 days, or the
Borrower or any other member of the Borrower Affiliated Group shall be indicted
for a state or federal crime, or any civil or criminal action shall otherwise
have been brought or threatened against the Borrower or any other member of the
Borrower Affiliated Group, a punishment for which in any such case could include
forfeiture of any assets of the Borrower Affiliated Group having a fair market
value in excess of $5,000,000; or
(l) there shall occur any material damage to, or loss, theft or
destruction of, any Collateral, whether insured or not insured, or any strike,
lockout, labor dispute, embargo, condemnation, act of God or public enemy, or
other casualty, which in any such case causes, for more than 30 consecutive
days, the cessation or substantial curtailment of revenue producing activities
at any facility of the Borrower or any other member of the Borrower Affiliated
Group if such event or circumstance is not covered by business interruption
insurance and in any such case described above, such event or condition,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect; or
(m) there shall occur the loss, suspension or revocation of, or
failure to renew, any license or permit now held or hereafter acquired if such
loss, suspension, revocation or failure to renew could reasonably be expected to
have a Material Adverse Effect; or
(n) any covenant, agreement or obligation of the Borrower or any
other member of the Borrower Affiliated Group contained in or evidenced by any
Loan Document to which the Borrower or such member of the Borrower Affiliated
Group is a party shall, prior to the date on which such document shall terminate
with the express prior written agreement, consent or approval of the
Administrative Agent and the Banks, cease in any material respect to be legal,
valid, binding or enforceable in accordance with the terms thereof; or
(o) any Loan Document shall be canceled, terminated, revoked or
rescinded (or any notice of such cancellation, termination, revocation or
rescission given) otherwise than with the express prior written agreement,
consent or approval of the Administrative Agent and the Banks; or any action at
law, suit in equity or other legal proceeding to cancel, revoke, or rescind any
Loan Document shall be commenced by or on behalf of the Borrower or any other
member of the Borrower Affiliated Group, or by any court or any other
governmental or regulatory authority or agency of competent jurisdiction; or any
court or any other governmental or regulatory authority or agency of competent
jurisdiction shall make a determination that, or shall issue a judgment, order,
decree or ruling to the effect that, any one or more of the Loan Documents or
any one or more of the obligations of the Borrower or any other member of the
Borrower Affiliated Group under any one or more of the Loan Documents are
illegal, invalid or unenforceable in accordance with the terms thereof.
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7.2. Remedies. (1) Upon the occurrence of an Event of Default described in
subsections 7.1(f) and (g), immediately and automatically, and (2) upon the
occurrence of any other Event of Default, at any time thereafter while such
Event of Default is continuing, at the option of the Required Banks and upon the
Administrative Agent's declaration:
(a) each Bank's commitment to make any further Loans or issue
additional Letters of Credit hereunder shall terminate;
(b) the unpaid principal amount of the Loans together with accrued
interest, all other Obligations, and all other obligations of the Borrower to
the Administrative Agent and each Bank of any kind shall become immediately due
and payable without presentment, demand, protest or further notice of any kind,
all of which are hereby expressly waived;
(c) with respect to existing Letters of Credit, the Borrower shall
provide to the Administrative Agent cash collateral in an amount equal to 105%
of the aggregate Stated Amount of Letters of Credit outstanding, which cash
collateral shall be held by the Administrative Agent subject to and in
accordance with the Security Agreement; and
(d) the Administrative Agent may exercise (on behalf of itself and
the Banks) any and all rights the Administrative Agent and the Banks have under
this Agreement, the other Loan Documents, or any other documents or agreements
executed in connection herewith, or at law or in equity, and proceed to protect
and enforce the Administrative Agent's and the Banks' rights by any action at
law, in equity or other appropriate proceeding.
SECTION VIII
CONCERNING THE ADMINISTRATIVE AGENT AND THE BANKS
8.1. Appointment and Authorization. Each of the Banks hereby appoints
Fleet National Bank to serve as Administrative Agent under this Agreement and
irrevocably authorizes the Administrative Agent to take such action on such
Bank's behalf under this Agreement and to exercise such powers and to perform
such duties under this Agreement and the other documents and instruments
executed and delivered in connection with the consummation of the transactions
contemplated hereby (including, without limitation, all Loan Documents) as are
delegated to the Administrative Agent by the terms hereof or thereof, together
with all such powers as are reasonably incidental thereto.
8.2. Administrative Agent and Affiliates. Fleet National Bank shall also
have the same rights and powers under this Agreement of a Bank and may exercise
or refrain from exercising the same as though it were not the Administrative
Agent, and Fleet National Bank and its Affiliates may accept deposits from, lend
money to, and generally engage in any kind of business with the Borrower or any
other member of the Borrower Affiliated
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Group or any Affiliate of any member of the Borrower Affiliated Group as if it
were not the Administrative Agent hereunder. Except as otherwise provided by the
terms of this Agreement, nothing herein shall prohibit any Bank from accepting
deposits from, lending money to or generally engaging in any kind of business
with the Borrower or any other member of the Borrower Affiliated Group or any
Affiliate of any member of the Borrower Affiliated Group.
8.3. Future Advances.
(a) In order to more conveniently administer the Loans, the
Administrative Agent may, unless notified to the contrary by any Bank prior to
the date upon which any Revolving Credit Loan is to be made, assume that such
Bank has made available to the Administrative Agent on such date the amount of
such Bank's share of such Revolving Credit Loan to be made on such date as
provided in this Agreement, and the Administrative Agent may (but it shall not
be required to), in reliance upon such assumption, make available to the
Borrower a corresponding amount. If any Bank makes available to the
Administrative Agent such amount on a date after the date upon which the
Revolving Credit Loan is made, such Bank shall pay to the Administrative Agent
on demand an amount equal to the product of (i) the average computed for the
period referred to in clause (iii) below, of the weighted average interest rate
paid by the Administrative Agent for federal funds acquired by the
Administrative Agent during each day included in such period, multiplied by (ii)
the amount of such Bank's share of such Revolving Credit Loan, multiplied by
(iii) a fraction, the numerator of which is the number of days that elapsed from
and including such date to the date on which the amount of such Bank's share of
such Revolving Credit Loan shall become immediately available to the
Administrative Agent, and the denominator of which is 360 or 365, as applicable.
A statement of the Administrative Agent submitted to such Bank with respect to
any amounts owing under this subsection shall be prima facie evidence of the
amount due and owing to the Administrative Agent by such Bank.
(b) The Administrative Agent may at any time, in its sole
discretion, upon notice to any Bank, refuse to make any Revolving Credit Loan to
the Borrower on behalf of such Bank unless such Bank shall have provided to the
Administrative Agent immediately available federal funds equal to such Bank's
share of such Revolving Credit Loan in accordance with this Agreement.
(c) Anything in this Agreement to the contrary notwithstanding,
the obligations to make Loans under the terms of this Agreement shall be the
several and not joint obligation of each of the Banks and any advances made by
the Administrative Agent on behalf of any Bank are strictly for the
administrative convenience of the parties and shall in no way diminish any
Bank's liability to repay the Administrative Agent for such Loans and advances.
If the amount of any Bank's share of any Revolving Credit Loan which the
Administrative Agent has advanced to the Borrower is not made available to the
Administrative Agent by such Bank within 1 Business Day following the date upon
which such Revolving Credit Loan is made, the Administrative Agent shall be
entitled to
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recover such amount from the Borrower on demand, with interest thereon at the
rate per annum applicable to the Revolving Credit Loans made on such date.
8.4. Delinquent Bank. Notwithstanding anything to the contrary contained
in this Agreement, any Bank that fails to make available to the Administrative
Agent its share of any Revolving Credit Loan when and to the full extent
required by the provisions of this Agreement shall be deemed delinquent (a
"Delinquent Bank") and shall be deemed a Delinquent Bank until such time as such
delinquency is satisfied. A Delinquent Bank shall be deemed to have assigned any
and all payments due to it from the Borrower, whether on account of outstanding
Loans, interest, fees or otherwise, to the remaining non-delinquent Banks for
application to, and reduction of, their respective pro rata shares of all
outstanding Revolving Credit Loans. The Delinquent Bank hereby authorizes the
Administrative Agent to distribute such payments to the non-delinquent Banks in
proportion to their respective pro rata shares of all outstanding Revolving
Credit Loans. A Delinquent Bank shall be deemed to have satisfied in full a
delinquency when and if, as a result of application of the assigned payments to
all outstanding Revolving Credit Loans of the non-delinquent Banks, the Banks'
respective pro rata shares of all outstanding Loans have returned to those in
effect immediately prior to such delinquency and without giving effect to the
nonpayment causing such delinquency. No Delinquent Bank shall have a right to
participate in any vote taken by the Banks hereunder, which shall be calculated
as if the Commitments of the Delinquent Bank did not exist.
8.5. Payments.
(a) All payments and prepayments of principal of and interest on
Revolving Credit Loans received by the Administrative Agent shall be paid to
each of the Banks pro rata in accordance with their respective interests in such
Loans subject to Section 8.4 above; and any other payments received by the
Administrative Agent hereunder shall be paid to the Banks or the Administrative
Agent or both pro rata as their respective interests appear. All such payments
received by the Administrative Agent hereunder for the accounts of the Banks
prior to 1:00 p.m. on any Business Day shall be paid to the Banks on such
Business Day and all such payments received by the Administrative Agent
hereunder for the accounts of the Banks at or after 1:00 p.m. shall be paid to
the Banks on the next Business Day.
(b) Each of the Banks and the Administrative Agent hereby agrees
that if it should receive any amount (whether by voluntary payment, by the
exercise of the right of set-off or banker's lien, by counterclaim or cross
action, by the enforcement of any right hereunder or otherwise) in respect of
principal of, or interest on, the Loans or any fees which are to be shared among
the Banks, which, as compared to the amounts theretofore received by the other
Banks with respect to such principal, interest or fees, is in excess of such
Bank's pro rata share of such principal, interest or fees as provided in this
Agreement, such Bank shall share such excess, less the costs and expenses
(including, reasonable attorneys' fees and disbursements) incurred by such Bank
in connection with such realization, exercise, claim or action, pro rata with
all other Banks in proportion to their respective interests therein, and such
sharing shall be deemed a
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purchase (without recourse) by such sharing party of participation interests in
the Loans or such fees, as the case may be, owed to the recipients of such
shared payments to the extent of such shared payments; provided, however, that
if all or any portion of such excess amount is thereafter recovered from such
Bank, such purchase shall be rescinded and the purchase price restored to the
extent of such recovery, but without interest.
8.6. Action by Administrative Agent.
(a) The obligations of the Administrative Agent hereunder are only
those expressly set forth herein. The Administrative Agent shall have no duty to
exercise any right or power or remedy hereunder or under any other document or
instrument executed and delivered in connection with or as contemplated by this
Agreement or to take any affirmative action hereunder or thereunder.
(b) The Administrative Agent shall keep all records of the Loans
and payments hereunder, and shall give and receive notices and other
communications to be given or received by the Administrative Agent hereunder on
behalf of the Banks.
(c) Upon the occurrence and during the continuance of an Event of
Default the Administrative Agent may, and upon the direction of the Required
Banks pursuant to Section 7.2 the Administrative Agent shall, exercise the
option of the Banks pursuant to Section 7.2 to declare all Loans and other
Obligations immediately due and payable and may take such action as may appear
necessary or desirable to collect the Obligations and enforce the rights and
remedies of the Administrative Agent or the Banks.
8.7. Notification of Defaults and Events of Default. The Administrative
Agent shall not be deemed to have knowledge or notice of the occurrence of any
Default or Event of Default, except with respect to defaults in the payment of
principal, interest and fees required to be paid to the Administrative Agent for
the account of the Banks, unless the Agent shall have received written notice
from a Bank or the Borrower referring to this Agreement, describing such Default
or Event of Default and stating that such notice is a "notice of default". In
the event that the Administrative Agent receives such a notice, the
Administrative Agent shall give notice thereof to the Banks.
8.8. Consultation with Experts. The Administrative Agent shall be entitled
to retain and consult with legal counsel, independent public accountants and
other experts selected by it and shall not be liable to the Banks for any action
taken, omitted to be taken or suffered in good faith by it in accordance with
the advice of such counsel, accountants or experts. The Administrative Agent may
employ administrative agents and attorneys-in-fact and shall not be liable to
the Banks for the default or misconduct of any such administrative agents or
attorneys.
8.9. Liability of Administrative Agent. The Administrative Agent shall
exercise the same care to protect the interests of each Bank as it does to
protect its own interests, so that so long as the Administrative Agent exercises
such care it shall not be under any
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liability to any of the Banks, except for the Administrative Agent's gross
negligence or willful misconduct with respect to anything it may do or refrain
from doing. Subject to the immediately preceding sentence, neither the
Administrative Agent nor any of its directors, officers, administrative agents
or employees shall be liable for any action taken or not taken by it in
connection herewith in its capacity as Administrative Agent. Without limiting
the generality of the foregoing, neither the Administrative Agent nor any of its
directors, officers, administrative agents or employees shall be responsible for
or have any duty to ascertain, inquire into or verify: (i) any statement,
warranty or representation made in connection with this Agreement, any Loan
Document, or any borrowing hereunder; (ii) the performance or observance of any
of the covenants or agreements of the Borrower; (iii) the satisfaction of any
condition specified in Sections 3.1 or 3.2, except receipt of items required to
be delivered to the Administrative Agent; (iv) the validity, effectiveness,
enforceability or genuineness of this Agreement, the Notes, any other Loan
Document or any other document or instrument executed and delivered in
connection with or as contemplated by this Agreement; (v) the existence, value,
collectibility or adequacy of the Collateral or any part thereof or the
validity, effectiveness, perfection or relative priority of the liens and
security interests of the Banks (through the Administrative Agent) therein; or
(vi) the filing, recording, refiling, continuing or re-recording of any
financing statement or other document or instrument evidencing or relating to
the security interests or liens of the Banks (through the Administrative Agent)
in the Collateral. The Administrative Agent shall not incur any liability by
acting in reliance upon any notice, consent, certificate, statement or other
writing (which may be a bank wire, telecopy or similar writing) believed by it
to be genuine or to be signed or sent by the proper party or parties.
8.10. Indemnification. Each Bank agrees to indemnify the Administrative
Agent (to the extent the Administrative Agent is not reimbursed by the
Borrower), ratably in accordance with its Commitment Percentage, from and
against any cost, expense (including attorneys' fees and disbursements), claim,
demand, action, loss or liability which the Administrative Agent may suffer or
incur in connection with this Agreement, or any action taken or omitted by the
Administrative Agent hereunder, or the Administrative Agent's relationship with
the Borrower hereunder, including, without limitation, the costs and expenses of
defending itself against any claim or liability in connection with the exercise
or performance of any of its powers and duties hereunder and of taking or
refraining from taking any action hereunder, but excluding any costs, expenses
or losses directly arising from the Administrative Agent's gross negligence or
willful misconduct. No payment by any Bank under this Section shall in any way
relieve the Borrower of its obligations under this Agreement with respect to the
amounts so paid by any Bank, and the Banks shall be subrogated to the rights of
the Administrative Agent, if any, in respect thereto.
8.11. Independent Credit Decision. Each of the Banks represents and
warrants to the Administrative Agent that it has, independently and without
reliance upon the Administrative Agent or any other Bank and based on the
financial statements referred to in Section 4.7 and such other documents and
information as it has deemed appropriate, made its own independent credit
analysis and decision to enter into this Agreement. Each
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of the Banks acknowledges that it has not relied upon any representation by the
Administrative Agent and that the Administrative Agent shall not be responsible
for any statements in or omissions from any documents or information concerning
the Borrower, this Agreement, the Notes, any other Loan Document or any other
document or instrument executed and delivered in connection with or as
contemplated by this Agreement. Each of the Banks acknowledges that it will,
independently and without reliance upon the Administrative Agent or other Banks
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement.
8.12. Successor Administrative Agent. Fleet National Bank, or any
successor Administrative Agent, may resign as Administrative Agent at any time
by giving 30 days' prior written notice thereof to the Banks and to the
Borrower. Upon any such resignation, the Banks shall have the right to appoint a
successor Administrative Agent, which successor Administrative Agent shall be
reasonably acceptable to the Borrower. If no successor Administrative Agent
shall have been so appointed by the Banks, and shall have accepted such
appointment, within 30 days after the retiring Administrative Agent's giving of
notice of resignation, then the retiring Administrative Agent may, on behalf of
the Banks, appoint a successor Administrative Agent, which shall be a commercial
bank (or Affiliate thereof) or savings and loan association organized under the
laws of the United States of America or any State thereof or under the laws of
another country which is doing business in the United States of America or any
State thereof and having a combined capital, surplus and undivided profits of at
least $100,000,000 and shall be reasonably acceptable to the Borrower. Upon the
acceptance of any appointment as Administrative Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Administrative Agent, and the retiring Administrative Agent
shall be discharged from all further duties and obligations under this
Agreement. After any retiring Administrative Agent's resignation or removal
hereunder as Administrative Agent, the provisions of this Section VIII shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Administrative Agent under this Agreement.
SECTION IX
MISCELLANEOUS
9.1. Notices. Unless otherwise specified herein, all notices hereunder to
any party hereto shall be in writing and shall be deemed to have been given (i)
when delivered by hand, (ii) when sent by electronic facsimile transmission with
confirmation of receipt if sent prior to 5:00 p.m. of the recipient's prevailing
time, and otherwise deemed to have been given on the next Business Day, (iii)
three Business Days after being sent by certified mail, return receipt
requested, and properly deposited in the mails, postage prepaid, or (iv) one
Business Day after being delivered to an overnight courier, addressed to such
party at its address indicated below:
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If to the Borrower, at
GameStop Corp.
0000 Xxxxxxx X. Xxxx Xxxxxx
Xxxxxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxxxx, Chief Financial Officer
Telecopy: (000) 000-0000
with a copy to
Xxxxxxxx Xxxxxxxxx Xxxxxx Xxxxxxxx & Xxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxx Xxxxxx, Esq.
Telecopy: (000) 000-0000
If to the Administrative Agent or Fleet National Bank, at
Fleet National Bank
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Director
Telecopy: (000) 000-0000
with a copy to
Goulston & Storrs, P.C.
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Telecopy: (000) 000-0000
If to any Bank, at the address for such Bank set forth on Schedule 1
or at any other address specified by such party in writing to the other parties
listed in this Section 9.1. Notwithstanding the foregoing, the Administrative
Agent and the Banks shall have been deemed for all purposes to have delivered
any notice required to be delivered to the Borrower Affiliated Group by this
Agreement or otherwise, by sending such notification to the address set forth
above for the "Borrower."
9.2. Expenses. The Borrower will pay on demand all reasonable expenses of
(a) the Arranger and the Administrative Agent in connection with the
preparation, syndication, waiver and/or amendment of this Agreement, the Loan
Documents or other documents executed in connection therewith, and (b) the
Arranger, the Administrative Agent or any Bank in connection with the
administration, default or collection of the Loans or other Obligations or
administration, default, collection in connection with the
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Arranger's, the Administrative Agent's or any Bank's exercise, preservation or
enforcement of any of its rights, remedies or options hereunder or thereunder,
including without limitation,
(i) under clauses (a) and (b), reasonable fees of outside
legal counsel and all accounting, consulting, brokerage or other similar
professional fees or expenses, and any fees or expenses associated with
any travel or other costs relating to any appraisals, field examinations,
or other examinations conducted in connection with the Obligations or any
Collateral therefor, plus
(ii) under clause (b) only, the allocated costs of in-house
legal counsel,
and the amount of all such expenses shall, until paid, bear interest at the rate
applicable to principal hereunder (including any default rate).
9.3. Indemnification. The Borrower absolutely and unconditionally
indemnifies and holds harmless the Administrative Agent, the Arranger and each
of the Banks against any and all claims, demands, suits, actions, causes of
action, damages, losses, settlement payments, obligations, costs, expenses
(including, without limitation, reasonable fees and disbursements of counsel)
and all other liabilities whatsoever which shall at any time or times be
incurred or sustained by the Administrative Agent, the Arranger or any of the
Banks or by any of their shareholders, directors, officers, employees,
subsidiaries, affiliates or administrative agents (other than as a result of the
gross negligence or willful misconduct of the Administrative Agent, the Arranger
or any of the Banks) arising out of or in connection with, any of the
transactions contemplated by, associated with or ancillary to this Agreement or
any of the other Loan Documents, whether or not all or any of the transactions
contemplated by, associated with or ancillary to this Agreement or any of such
Loan Documents, are ultimately consummated. Without prejudice to the survival of
any other covenant of the Borrower hereunder, the covenants of this Section 9.3
shall survive the termination of this Agreement and the payment or satisfaction
of payment of amounts owing with respect to the Notes or any other Loan
Document.
9.4. Set-Off. Regardless of the adequacy of any Collateral or other means
of obtaining repayment of the Obligations, any deposits, balances or other sums
credited by or due from any Bank or any of its branch or affiliate offices to
the Borrower or any other member of the Borrower Affiliated Group may, at any
time and from time to time upon the occurrence and during the continuance of an
Event of Default, without notice to the Borrower or such member of the Borrower
Affiliated Group or compliance with any other condition precedent now or
hereafter imposed by statute, rule of law, or otherwise (all of which are hereby
expressly waived) be set off, appropriated, and applied by any Bank against any
and all obligations of the Borrower or such member of the Borrower Affiliated
Group to such Bank or any of its affiliates in such manner as the head office of
the Bank or any of its branch offices in their sole discretion may determine
(with notice to be given to the Borrower promptly thereafter), and the Borrower
and each other member of the Borrower Affiliated Group hereby grants such Bank a
continuing security
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interest in such deposits, balances or other sums for the payment and
performance of all such obligations.
9.5. Term of Agreement. This Agreement shall continue in force and effect
so long as any Bank has any commitment to make Loans hereunder or any Loan or
any Obligation shall be outstanding.
9.6. No Waivers. No failure or delay by the Administrative Agent or any
Bank in exercising any right, power or privilege hereunder or under any Note or
under any other documents or agreements executed in connection herewith shall
operate as a waiver thereof; nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies herein and in the Notes
provided are cumulative and not exclusive of any rights or remedies otherwise
provided by agreement or law.
9.7. Governing Law. This Agreement and the other Loan Documents shall be
deemed to be contracts made under seal and shall be construed in accordance with
and governed by the laws of the State of New York (without giving effect to any
conflicts of laws provisions contained therein). Any legal action or proceeding
arising out of or relating to this Agreement, any other Loan Document or any
Obligation may be instituted, in the Administrative Agent's sole discretion, in
the courts of the State of New York or the United States of America for the
Southern District of New York, and the Borrower and each other member of the
Borrower Affiliated Group hereby irrevocably submits to the jurisdiction of each
such court in any such action or proceeding; provided, however, that the
foregoing shall not limit the Administrative Agent's rights to bring any legal
action or proceeding in any other appropriate jurisdiction.
9.8. Amendments, Waivers, Etc. Except as otherwise expressly provided in
this Agreement or any of the other Loan Documents: (i) each of the Loan
Documents may be modified, amended or supplemented in any respect whatever only
with the prior written consent or approval of the Required Banks and the
Borrower; and (ii) the performance or observance by the Borrower of any of its
covenants, agreements or obligations under any of the Loan Documents may be
waived only with the written consent of the Required Banks; provided, however,
that the following changes shall require the written consent, agreement or
approval of all of the Banks directly affected thereby (with respect to clauses
(A), (B), (C), (D), (E) and (F)) and of all the Banks (with respect to clause
(G)): (A) any decrease in the amount of or postponement of the regularly
scheduled or otherwise required payment date for any of the Obligations
(including, without limitation, principal, interest and fees); (B) any decrease
in the interest rates prescribed in any of the Notes; (C) any increase in the
Commitment or Commitment Percentage of any of the Banks, except as permitted by
Section 9.10; (D) any release of all or any substantial part of the Collateral
(except for any such releases of Collateral permitted or provided for in the
Loan Documents); (E) any change in the definition of Required Banks; (F) the
release or termination of any Subsidiary Guaranty; and (G) any change in the
terms of this Section 9.8. Any change to Section IX or any other provision of
this Agreement
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affecting the rights or obligations of the Administrative Agent shall not be
amended or modified without the prior written consent of the Administrative
Agent.
9.9. Binding Effect of Agreement. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns; provided that (i) the Borrower may not assign or transfer its rights or
obligations hereunder, except by merger permitted hereunder, and (ii) no Bank
may assign or transfer its rights or obligations hereunder to any Person except
in accordance with the provisions of Section 9.10.
9.10. Successors and Assigns.
(i) Any Bank may at any time grant to one or more banks or other
financial institutions (each, a "Participant") participating interests in any of
its Commitments or any or all of its Loans in an amount and on such terms as
such Bank may deem appropriate. In the event of any such grant by a Bank of a
participating interest to a Participant, whether or not upon notice to the
Borrower and the Administrative Agent, such Bank shall remain responsible for
the performance of its obligations hereunder, and the Borrower and the
Administrative Agent shall continue to deal solely and directly with such Bank
in connection with such Bank's rights and obligations under this Agreement. Any
agreement pursuant to which any Bank may grant such a participating interest
shall provide that such Bank shall retain the sole right and responsibility to
enforce the obligations of the Borrower hereunder including, without limitation,
the right to approve any amendment, modification or waiver of any provision of
this Agreement; provided, however, that such participation agreement may provide
that such Bank will not agree, without the consent of the Participant, to any
modification, amendment or waiver of this Agreement requiring the consent,
agreement or approval of all of the Banks, as described in Section 9.8. The
Borrower agrees that each Participant shall be entitled to the benefits of
Sections 2.11, 2.12 and 2.16 with respect to its participating interest. An
assignment or other transfer which is not permitted by subsection (ii) below
shall be given effect for purposes of this Agreement only to the extent of a
participating interest granted in accordance with this subsection (i).
(ii) Any Bank may at any time assign to one or more banks or other
financial institutions (each, an "Eligible Assignee") all, or a part of all, of
its rights, interests and obligations under this Agreement and the Notes (or any
one of its Notes) on such terms, as between such Bank and each of its Eligible
Assignees, as such Bank may deem appropriate, and such Eligible Assignee shall
assume such rights, interests and obligations, pursuant to an instrument
executed by such Eligible Assignee and such transferor Bank substantially in the
form of Exhibit G hereto (an "Assignment and Assumption"); provided, however,
that (A) prior to assigning any interest to any Eligible Assignee hereunder,
such Bank will (x) notify the Borrower and the Administrative Agent in writing
identifying the proposed Eligible Assignee and stating the aggregate principal
amount of the proposed interest to be assigned, and (y) receive the prior
written consent of the Administrative Agent and, prior to the occurrence (which
is continuing) of an Event of Default, the Borrower, which consent may not be
unreasonably withheld by
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either the Borrower or the Administrative Agent, and (B) no Bank will assign to
any Eligible Assignee less than an aggregate amount equal to the lesser of (x)
$5,000,000 of such Bank's Commitments and interest in the Loans (as such
interest may be reduced pursuant to the terms hereof) or (y) the remaining
amount of such Bank's Commitments. It is understood and agreed that the proviso
contained in the immediately preceding sentence shall not be applicable in the
case of, and this subsection (ii) shall not restrict, an assignment or other
transfer by any Bank to an Affiliate of such Bank or to any other Bank or a
collateral assignment or other similar transfer to a Federal Reserve Bank or an
assignment required under applicable law. Upon execution and delivery of such an
Assignment and Assumption and payment by such Eligible Assignee to such
transferor Bank of an amount equal to the purchase price agreed between such
transferor Bank and such Eligible Assignee, such Eligible Assignee shall be a
Bank party to this Agreement and shall have all the rights, interests and
obligations of a Bank with the Commitments as set forth in such instrument of
assumption, and the transferor Bank shall be released from its obligations
hereunder to a corresponding extent, and no further consent or action by any
party shall be required. Upon the consummation of any assignment pursuant to
this subsection (ii), the transferor Bank, the Administrative Agent and the
Borrower shall make appropriate arrangements so that, if required, new Notes are
issued to the Eligible Assignee and the transferor Bank, as applicable.
(iii) No Eligible Assignee, Participant or other transferee of any
Bank's rights shall be entitled to receive any greater payment under Sections
2.10, 2.11, 2.14 and 2.16 than such Bank would have been entitled to receive
with respect to the rights transferred, unless such transfer is made with the
Borrower's prior written consent or at a time when the circumstances giving rise
to such greater payment did not exist.
(iv) Assignments require a fee payable to the Administrative Agent
by the transferor Bank, solely for the account of the Administrative Agent, in
the amount of $3,500.
9.11. Counterparts. This Agreement may be signed in any number of
counterparts with the same effect as if the signatures hereto and thereto were
upon the same instrument, and each counterpart will be deemed an original.
9.12. Partial Invalidity. The invalidity or unenforceability of any one or
more phrases, clauses or sections of this Agreement shall not affect the
validity or enforceability of the remaining portions of it.
9.13. Captions. The captions and headings of the various sections and
subsections of this Agreement are provided for convenience only and shall not be
construed to modify the meaning of such sections or subsections.
9.14. WAIVER OF JURY TRIAL. THE BORROWER, THE BANKS AND THE ADMINISTRATIVE
AGENT MUTUALLY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT
TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM, COUNTERCLAIM OR DEFENSE
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BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH OR ANY
COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF ANY PARTY. THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR THE
ADMINISTRATIVE AGENT AND THE BANKS TO ENTER INTO THIS AGREEMENT AND TO MAKE
LOANS AND EXTEND CREDIT TO THE BORROWER. THE BORROWER (I) CERTIFIES THAT NEITHER
THE ADMINISTRATIVE AGENT, NOR ANY BANK NOR ANY REPRESENTATIVE, ADMINISTRATIVE
AGENT OR ATTORNEY OF THE ADMINISTRATIVE AGENT OR ANY BANK HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT THE ADMINISTRATIVE AGENT OR ANY BANK WOULD NOT, IN
THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (II)
ACKNOWLEDGES THAT, IN ENTERING INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
TO WHICH THE BORROWER IS A PARTY, THE ADMINISTRATIVE AGENT AND THE BANKS ARE
RELYING UPON, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS CONTAINED IN
THIS SECTION 9.14.
9.15. WAIVER OF SPECIAL DAMAGES. EXCEPT AS PROHIBITED BY LAW, THE
BORROWER, THE ADMINISTRATIVE AGENT AND THE BANKS EACH HEREBY WAIVES ANY RIGHTS
WHICH IT MAY HAVE TO CLAIM OR RECOVER, IN ANY LITIGATION WITH RESPECT TO ANY
ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THE LOAN DOCUMENTS
(INCLUDING WITHOUT LIMITATION THIS AGREEMENT AND THE NOTES AND ANY AMENDMENTS
THEREOF), ANY SPECIAL EXEMPLARY OR PUNITIVE DAMAGES. THE BORROWER (A) CERTIFIES
THAT NO BANK, ADMINISTRATIVE AGENT OR REPRESENTATIVE, AGENT OR ATTORNEY THEREOF
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH ENTITY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (B) ACKNOWLEDGES
THAT, IN ENTERING INTO THIS AGREEMENT, THE BANKS AND THE ADMINISTRATIVE AGENT
ARE RELYING UPON, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS CONTAINED
IN THIS SECTION 9.15.
9.16. Entire Agreement. This Agreement, the other Loan Documents and the
other documents and agreements executed in connection herewith constitute the
final agreement of the parties hereto and supersede any prior agreement or
understanding, written or oral, with respect to the matters contained herein and
therein.
9.17. Replacement of Loan Documents, Etc. Upon receipt of an affidavit of
an officer of any Bank as to the loss, theft, destruction or mutilation of one
or more of the Loan Documents which is not of public record, and, in the case of
any such loss, theft, destruction or mutilation, upon cancellation of such Loan
Document and, with respect to any instrument, the customary indemnification of
the Borrower by such Bank, the Borrower will issue, in lieu thereof, a
replacement Loan Document containing the same terms and conditions.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers as of the day and year first above
written.
The Borrower:
GAMESTOP CORP.
By:_____________________________________
Name:
Title:
The Administrative Agent:
FLEET NATIONAL BANK
By:_____________________________________
Name:
Title:
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The Banks:
FLEET NATIONAL BANK
By:_____________________________________
Name:
Title:
[Insert other Banks]
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SCHEDULE 1
Commitments and Commitment Percentages
Bank Commitment Percentage
---- ---------- ----------
Fleet National Bank $35,000,000 ___%
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
[Other Banks]
TOTAL [$50,000,000] 100%
I-1
