Exhibit 10.1
CREDIT AGREEMENT
dated as of
June 27, 2003
among
CIRCUIT CITY STORES, INC.
as Lead Borrower for:
said CIRCUIT CITY STORES, INC.
and
CIRCUIT CITY STORES WEST COAST, INC.
The LENDERS Party Hereto,
FLEET NATIONAL BANK
as Issuing Bank
FLEET RETAIL FINANCE INC.
as Administrative Agent and Collateral Agent
and
FLEET SECURITIES INC.
as Arranger
and
BANK OF AMERICA, N.A
CONGRESS FINANCIAL CORPORATION (CENTRAL)
as Syndication Agents
and
GENERAL ELECTRIC CAPITAL CORPORATION
BANK ONE, NA
as Documentation Agents
and
JPMORGAN CHASE BANK
NATIONAL CITY COMMERCIAL FINANCE, INC.
THE CIT GROUP/BUSINESS CREDIT, INC.
XXXXX FARGO FOOTHILL, LLC
As Co-Agents
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TABLE OF CONTENTS
Page
ARTICLE I.....................................................................10
Definitions...................................................................10
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SECTION 1.1...............................................Defined Terms
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SECTION 1.2.............................................Terms Generally
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SECTION 1.3......................................Accounting Terms; GAAP
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ARTICLE II....................................................................33
Amount and Terms of Credit....................................................33
--------------------------
SECTION 2.1...................................Commitment of the Lenders
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SECTION 2.2......................................Intentionally Omitted.
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SECTION 2.3...............................Reserves; Changes to Reserves
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SECTION 2.4.............................................Making of Loans
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SECTION 2.5................................................Overadvances
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SECTION 2.6.............................................Swingline Loans
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SECTION 2.7...........................................Letters of Credit
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SECTION 2.8.................................Settlements Amongst Lenders
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SECTION 2.9...................................Notes; Repayment of Loans
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SECTION 2.10.................................Extension of Maturity Date
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SECTION 2.11..........................................Interest on Loans
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SECTION 2.12...........................................Default Interest
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SECTION 2.13...............................................Certain Fees
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SECTION 2.14......................................Unused Commitment Fee
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SECTION 2.15......................................Letter of Credit Fees
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SECTION 2.16.............................................Nature of Fees
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SECTION 2.17....................Termination or Reduction of Commitments
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SECTION 2.18.................................Alternate Rate of Interest
--------------------------
SECTION 2.19.......................Conversion and Continuation of Loans
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(iii)
SECTION 2.20.................... Mandatory Prepayment; Cash Collateral;
Commitment Termination
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SECTION 2.21.....Optional Prepayment of Loans; Reimbursement of Lenders
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SECTION 2.22.........Maintenance of Loan Account; Statements of Account
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SECTION 2.23..............................................Cash Receipts
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SECTION 2.24....................................Application of Payments
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SECTION 2.25............................................Increased Costs
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SECTION 2.26.........................................Change in Legality
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SECTION 2.27................................Payments; Sharing of Setoff
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SECTION 2.28......................................................Taxes
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SECTION 2.29...........................Security Interests in Collateral
--------------------------------
SECTION 2.30............Mitigation Obligations; Replacement of Lenders.
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ARTICLE III...................................................................60
Representations and Warranties................................................60
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SECTION 3.1........................................Organization; Powers
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SECTION 3.2...............................Authorization; Enforceability
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SECTION 3.3........................Governmental Approvals; No Conflicts
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SECTION 3.4.........................................Financial Condition
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SECTION 3.5..................................................Properties
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SECTION 3.6........................Litigation and Environmental Matters
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SECTION 3.7.........................Compliance with Laws and Agreements
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SECTION 3.8.......................Investment and Holding Company Status
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SECTION 3.9.......................................................Taxes
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SECTION 3.10......................................................ERISA
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SECTION 3.11................................................Disclosure.
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SECTION 3.12...............................................Subsidiaries
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SECTION 3.13..................................................Insurance
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SECTION 3.14..............................................Labor Matters
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SECTION 3.15.........................................Security Documents
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SECTION 3.16................................Federal Reserve Regulations
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SECTION 3.17...................................................Solvency
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(iv)
ARTICLE IV....................................................................64
Conditions....................................................................65
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SECTION 4.1................................................Closing Date
------------
SECTION 4.2..................Conditions Precedent to Each Loan and Each
Letter of Credit
----------------
ARTICLE V.....................................................................68
Affirmative Covenants.........................................................68
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SECTION 5.1..................Financial Statements and Other Information
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SECTION 5.2..................................Notices of Material Events
--------------------------
SECTION 5.3............................Information Regarding Collateral
--------------------------------
SECTION 5.4..............................Existence; Conduct of Business
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SECTION 5.5......................................Payment of Obligations
----------------------
SECTION 5.6...................................Maintenance of Properties
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SECTION 5.7...................................................Insurance
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SECTION 5.8...................................Casualty and Condemnation
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SECTION 5.9..............Books and Records; Inspection and Audit Rights
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SECTION 5.10.......................................Compliance with Laws
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SECTION 5.11......................Use of Proceeds and Letters of Credit
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SECTION 5.13.........................................Further Assurances
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ARTICLE VI....................................................................75
Negative Covenants............................................................75
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SECTION 6.1..........................Indebtedness and Other Obligations
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SECTION 6.2.......................................................Liens
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SECTION 6.3.........................................Fundamental Changes
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SECTION 6.4................Investments, Loans, Advances, Guarantees and
Acquisitions
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SECTION 6.5.................................................Asset Sales
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SECTION 6.6.......Restricted Payments; Certain Payments of Indebtedness
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SECTION 6.7................................Transactions with Affiliates
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(v)
SECTION 6.8.............................Amendment of Material Documents
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SECTION 6.9.................................................Fiscal Year
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ARTICLE VII...................................................................80
Events of Default.............................................................80
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SECTION 7.1...........................................Events of Default
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SECTION 7.2.............................................When Continuing
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SECTION 7.3.........................................Remedies on Default
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SECTION 7.4.....................................Application of Proceeds
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ARTICLE VIII..................................................................84
The Agents....................................................................84
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SECTION 8.1......................Administration by Administrative Agent
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SECTION 8.2........................................The Collateral Agent
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SECTION 8.3..................................Sharing of Excess Payments
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SECTION 8.4...............................Agreement of Required Lenders
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SECTION 8.5.........................................Liability of Agents
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SECTION 8.6...........................................Notice of Default
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SECTION 8.7...................................Lenders' Credit Decisions
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SECTION 8.8...........................Reimbursement and Indemnification
---------------------------------
SECTION 8.9............................................Rights of Agents
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SECTION 8.10.........................................Notice of Transfer
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SECTION 8.11............................................Successor Agent
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SECTION 8.12...........................Reports and Financial Statements
--------------------------------
SECTION 8.13..........................................Delinquent Lender
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SECTION 8.14.....Syndication Agent,s Documentation Agents, and Arranger
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ARTICLE IX....................................................................90
Miscellaneous.................................................................90
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(vi)
SECTION 9.1.....................................................Notices
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SECTION 9.2.........................................Waivers; Amendments
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SECTION 9.3..........................Expenses; Indemnity; Damage Waiver
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SECTION 9.4............Designation of Lead Borrower as Borrowers' Agent
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SECTION 9.5......................................Successors and Assigns
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SECTION 9.6....................................................Survival
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SECTION 9.7....................Counterparts; Integration; Effectiveness
----------------------------------------
SECTION 9.8................................................Severability
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SECTION 9.9.............................................Right of Setoff
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SECTION 9.10.........Governing Law; Jurisdiction; Consent to Service of
Process
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SECTION 9.11.......................................WAIVER OF JURY TRIAL
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SECTION 9.12...................................................Headings
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SECTION 9.13...................................Interest Rate Limitation
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SECTION 9.14.........................................Additional Waivers
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(vii)
EXHIBITS
A. Assignment and Acceptance
B-1. Revolving Notes
B-2 Swingline Note
C Opinion of Counsel to Borrowers
D. Borrowing Base Certificate
E. Form of Blocked Account Agreement
These non-material exhibits have been omitted from the agreement as filed. The
Company agrees to furnish supplementally to the Commission upon request a copy
of such exhibits.
(viii)
SCHEDULES
1.1 Lenders and Commitments
2.23(a) DDAs
2.23(b) Credit Card Arrangements
2.23(c) Blocked Account Information
3.05(c)(i) Title to Properties; Real Estate Owned
3.05(c)(ii) Leased Properties
3.06 Disclosed Matters
3.10 Plans
3.12 Subsidiaries
3.13 Insurance
5.01(b)(ii) Financial Reporting Requirements
6.01 Indebtedness
6.02 Liens
6.04 Investments
These non-material schedules have been omitted from the agreement as filed. The
Company agrees to furnish supplementally to the Commission upon request a copy
of such schedules.
CREDIT AGREEMENT dated as of June 27, 2003 (this "Agreement") among
CIRCUIT CITY STORES, INC., a corporation organized under the laws of
the State of Virginia having a place of business at 0000 Xxxxxxx Xxxxx,
Xxxxxxxx, Xxxxxxxx, as Lead Borrower for the Borrowers, being
said CIRCUIT CITY STORES, INC., and
CIRCUIT CITY STORES WEST COAST, INC., a corporation organized
under the laws of the State of California having a place of
business at 000 X. Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxx 00000;
the LENDERS party hereto; and
FLEET NATIONAL BANK, as Issuing Bank, a national banking association
having a place of business at 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx
00000; and
FLEET RETAIL FINANCE INC., as Administrative Agent and Collateral Agent
for the Lenders and the Issuing Bank, a Delaware corporation, having
its principal place of business at 00 Xxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000; and
BANK OF AMERICA, N.A. AND CONGRESS FINANCIAL CORPORATION (CENTRAL), as
Syndication Agents; and
GENERAL ELECTRIC CAPITAL CORPORATION and BANK ONE, NA, as Documentation
Agents; and
JPMORGAN CHASE BANK, NATIONAL CITY COMMERCIAL FINANCE, INC., THE CIT
GROUP/BUSINESS CREDIT, INC., and XXXXX FARGO FOOTHILL, LLC, as
Co-Agents
in consideration of the mutual covenants herein contained and benefits to be
derived herefrom.
ARTICLE I
Definitions
SECTION 1.1 Defined Terms. As used in this Agreement, the following
terms have the meanings specified below:
"ACH" shall mean automated clearing house transfers.
"Account" shall mean all accounts, accounts receivable, receivables,
and rights to payment (whether or not earned by performance) for: Inventory that
has been or is to be sold, leased, licensed, assigned, or otherwise disposed of;
and/or arising out of the use of a credit or charge card or information
contained on or used with that card.
10
"Adjusted LIBO Rate" means, with respect to any LIBO Borrowing for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to
the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period
multiplied by (b) the Statutory Reserve Rate.
"Administrative Agent" means FRF, in its capacity as administrative
agent for the Lenders and the Issuing Bank hereunder.
"Affiliate" means, with respect to a specified Person, another Person
that directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
"Agents" shall mean collectively, the Administrative Agent and the
Collateral Agent.
"Agreement" means this Credit Agreement, as modified, amended,
supplemented or restated, and in effect from time to time.
"Applicable Law" means as to any Person: (i) all statutes, rules,
regulations, orders, or other requirements having the force of law and (ii) all
court orders and injunctions, and/or similar rulings, in each instance ((i) and
(ii)) of or by any Governmental Authority, or court, or tribunal which has
jurisdiction over such Person, or any property of such Person, or of any other
Person for whose conduct such Person would be responsible.
"Applicable Margin" means initially, the rates for Prime Rate Loans and
LIBO Loans set forth in Level II, below:
---------- ----------------------------- -------------------- -----------------------------
Level Consolidated EBITDA Prime Rate Loans LIBO Loans
---------- ----------------------------- -------------------- -----------------------------
---------- ----------------------------- -------------------- -----------------------------
I Consolidated EBITDA greater 0% [CONFIDENTIAL]*%
than [CONFIDENTIAL]*
---------- ----------------------------- -------------------- -----------------------------
---------- ----------------------------- -------------------- -----------------------------
II Consolidated EBITDA less 0% [CONFIDENTIAL]*%
than or equal to
[CONFIDENTIAL]* but greater
than or equal to
[CONFIDENTIAL]*
---------- ----------------------------- -------------------- -----------------------------
---------- ----------------------------- -------------------- -----------------------------
III Consolidated EBITDA less 0% [CONFIDENTIAL] * %
than [CONFIDENTIAL]*
---------- ----------------------------- -------------------- -----------------------------
The Applicable Margin shall be adjusted quarterly based upon the
Borrowers' Consolidated EBITDA for the period ending on the last day of the most
recent fiscal quarter; provided, however, that in no event shall the Applicable
Margin be established at Level I ,
*Confidential Treatment has been requested for the redacted portion pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended. The confidential,
redacted portions have been filed separately with the United States Securities
and Exchange Commission.
11
(notwithstanding that the performance measures for Level I may have been
satisfied) unless and until the Administrative Agent has received a compliance
certificate, in the form required by Section 5.01(a)(iii) hereof for the
Borrowers' fiscal year ending February 28, 2004. Any adjustments to the
Applicable Margin shall be implemented prospectively on the fifth Business Day
after delivery of the financial statements required by Sections 5.01 (a)(i) or
(ii) hereof and the compliance certificate required by Section 5.01(a)(iii)
hereof. Upon the failure of the Borrowers to timely deliver the financial
statements required by Sections 5.01(a)(i) or (ii) hereof or the compliance
certificate required pursuant to Section 5.01(a)(iii), and until such financial
statements and compliance certificate is so delivered, the Applicable Margin
shall be established at Level III. Upon the occurrence of an Event of Default,
interest shall be determined in the manner set forth in Section 2.12.
"Appraisal Percentage" shall mean [CONFIDENTIAL]*%.
"Appraised Value" means the net cost liquidation value of the
Borrowers' Inventory as set forth in the Borrowers' stock ledger (expressed as a
percentage of the Cost of such Inventory) as determined from time to time by
Xxxxxx Xxxxxxxx or by another independent appraiser reasonably satisfactory to
the Administrative Agent, with such appraisal conducted in accordance with
Section 5.09(b) hereof. Appraised Value shall be determined based upon the most
recent appraisal undertaken by Xxxxxx Xxxxxxxx or such other appraiser
(regardless of who bears the expense thereof under Section 5.09(b)).
"Arranger" means FSI.
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender and an assignee (with the consent of any party whose consent is
required by Section 9.05), and accepted by the Administrative Agent, in the form
of Exhibit A or any other form approved by the Administrative Agent.
"Availability Reserves" means such reserves as the Administrative Agent
from time to time determines in the Administrative Agent's reasonable discretion
(after consultation with the Lead Borrower (whose consent to any Availability
Reserve shall not be required)) as being appropriate to reflect the impediments
to the Agents' ability to realize upon the Collateral. Availability Reserves
shall be established and calculated in a manner and methodology consistent with
the Administrative Agent's practices as of the Closing Date with other similarly
situated borrowers.
"Blocked Account Agreements" shall mean agency agreements with the
banks maintaining deposit accounts of the Borrower where funds from one or more
DDAs are concentrated, which agreements shall be substantially in the form
attached hereto as Exhibit E or otherwise in form and substance reasonably
satisfactory to the Administrative Agent.
"Blocked Account Banks" shall mean the banks with whom the Borrowers
have entered into Blocked Account Agreements.
*Confidential Treatment has been requested for the redacted portion pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended. The confidential,
redacted portions have been filed separately with the United States Securities
and Exchange Commission.
12
"Blocked Accounts" shall mean each deposit account of the Borrowers
which is the subject of a Blocked Account Agreement.
"Board" means the Board of Governors of the Federal Reserve System of
the United States of America.
"Borrowers" means collectively, Circuit City Stores, Inc. and Circuit
City Stores West Coast, Inc.
"Borrowing" shall mean (a) the incurrence of Loans of a single Type, on
a single date and having, in the case of LIBO Loans, a single Interest Period,
or (b) a Swingline Loan.
"Borrowing Base" means, at any time of calculation, an amount equal to
(a) the Receivables Advance Rate multiplied by the face amount of
Eligible Credit Card Receivables, plus
(b) the lesser of (i) (A) the Appraisal Percentage multiplied by (B)(1)
the Appraised Value of Eligible Inventory, minus (2) Inventory
Reserves, or (ii) (A) the Inventory Advance Rate multiplied by (B)(1)
the Cost of Eligible Inventory, minus (2) Inventory Reserves; minus
(c) the then amount of all Availability Reserves.
"Borrowing Base Certificate" has the meaning assigned to such term in
Section 5.01(b)(i).
"Borrowing Request" means a request by the Lead Borrower on behalf of
the Borrowers for a Borrowing in accordance with Section 2.04.
"Breakage Costs" shall have the meaning set forth in Section 2.21(b).
"Business Day" means any day that is not a Saturday, Sunday or other
day on which commercial banks in Boston, Massachusetts are authorized or
required by law to remain closed, provided that, when used in connection with a
LIBO Loan, the term "Business Day" shall also exclude any day on which banks are
not open for dealings in dollar deposits in the London interbank market. Except
as otherwise provided herein, if any day on which a payment is due is not a
Business Day, then the payment shall be due on the next day following which is a
Business Day and such extension of time shall be included in computing interest
and fees in connection with such payment.
"Capital Expenditures" means, for any period, (a) the additions to
property, plant and equipment and other capital expenditures of the Borrowers
that are (or would be) set forth in a consolidated statement of cash flows of
the Borrowers for such period prepared in accordance with GAAP and (b) Capital
Lease Obligations incurred by the Borrowers during such period.
"Capital Lease Obligations" of any Person means the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and
13
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"Capped Availability" means, as of any date of determination, the
excess, if any, of (a) the lesser of (i) the Total Commitments, or (ii) the
Borrowing Base, over (b) the outstanding Credit Extensions.
"Cash Collateral Account" shall mean an interest-bearing account
established by the Borrowers with the Collateral Agent at Fleet under the sole
and exclusive dominion and control of the Collateral Agent designated as the
"Circuit City Cash Collateral Account".
"Cash Dominion Event" means either (i) the occurrence and continuance
of any Specified Event of Default, or (ii) the failure of the Borrowers to
maintain Excess Availability of at least $50,000,000 for a period of five (5)
consecutive Business Days. For purposes of this Agreement, the occurrence of a
Cash Dominion Event shall be deemed continuing (i) so long as such Specified
Event of Default has not been waived, and/or (ii) if the Cash Dominion Event
arises as a result of the Borrowers' failure to achieve Excess Availability
required hereunder, until Excess Availability has exceeded $50,000,000.00 for
thirty (30) consecutive Business Days, in which case a Cash Dominion Event shall
no longer be deemed to be continuing for purposes of this Agreement, provided
that a Cash Dominion Event shall be deemed continuing (even if the Specified
Event of Default is no longer continuing and/or Excess Availability exceeds the
required amounts for thirty (30) consecutive Business Days) at all times after a
Cash Dominion Event has occurred and been discontinued on three (3) occasions in
any twelve month period after the Closing Date.
"Cash Receipts" has the meaning provided therefor in Section 2.23(d).
"CERCLA" means the Comprehensive Environmental Response, Compensation,
and Liability Act, 42 U.S.C. ss. 9601 et seq.
"Change in Control" means, at any time, (a) occupation of a majority of
the seats (other than vacant seats) on the board of directors of the Lead
Borrower by Persons who were neither (i) nominated by the board of directors of
the Lead Borrower nor (ii) appointed by directors so nominated; or (b) any
person (within the meaning of the Securities and Exchange Act of 1934, as
amended) is or becomes the beneficial owner (within the meaning of Rule 13d-3
and 13d-5 of the Securities and Exchange Act of 1934, as amended), directly or
indirectly, of forty percent (40%) or more of the aggregate voting power
represented by the outstanding capital stock of the Lead Borrower on a fully
diluted basis, whether as a result of the issuance of securities of the Lead
Borrower, any merger, consolidation, or otherwise, or (c) the failure of the
Lead Borrower to own, directly or indirectly, 100% of the capital stock of all
of the Subsidiary Borrowers unless pursuant to a transaction otherwise permitted
hereunder.
"Change in Law" means (a) the adoption of any law, rule or regulation
after the date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the date of this Agreement or (c) compliance by any Lender or the Issuing
Bank (or, for purposes of Section 2.25(b), by any lending office of such Lender
or by such Lender's or the Issuing Bank's holding company, if any)
14
with any request, guideline or directive (whether or not having the force of
law) of any Governmental Authority made, issued or changed after the date of
this Agreement.
"Charges" has the meaning provided therefor in Section 9.13.
"Closing Date" means the date on which the conditions specified in
Section 4.01 are satisfied (or waived by the Agents).
"Code" means the Internal Revenue Code of 1986 and the rules and
regulations promulgated thereunder, as amended from time to ---- time.
"Collateral" means any and all "Collateral" as defined in any
applicable Security Document.
"Collateral Agent" means FRF, in its capacity as collateral agent under
the Security Documents.
"Commercial Letter of Credit" means any Letter of Credit issued for the
purpose of providing the primary payment mechanism in connection with the
purchase of any materials, goods or services by a Borrower in the ordinary
course of business of such Borrower.
"Commitment" shall mean, with respect to each Lender, the commitment of
such Lender hereunder in the amount set forth opposite its name on Schedule 1.1
hereto or as may subsequently be set forth in the Register from time to time, as
the same may be reduced from time to time pursuant to Section 2.17 hereof.
"Commitment Fee" has the meaning provided therefor in Section 2.14.
"Commitment Percentage" shall mean, with respect to each Lender, that
percentage of the Commitments of all Lenders hereunder in the amount set forth
opposite its name on Schedule 1.1 hereto or as may subsequently be set forth in
the Register from time to time, as the same may be reduced from time to time
pursuant to Section 2.17 hereof.
"Consolidated" means, when used to modify a financial term, test,
statement, or report of a Person, refers to the application or preparation of
such term, test, statement or report (as applicable) based upon the
consolidation, in accordance with GAAP, of the financial condition or operating
results of such Person and its Subsidiaries.
"Consolidated EBITDA" means for any twelve month period, the result for
such period of (i) Consolidated Net Income, plus (ii) depreciation, amortization
and all other non-cash charges that were deducted in the calculation of
Consolidated Net Income for such period plus (iii) provisions for income taxes
that were deducted in the calculation of Consolidated Net Income for such
period, plus (iv) Consolidated Interest Expense, plus (v) losses on sales of
assets (excluding sales in the ordinary course of business) and other
extraordinary losses that were deducted in the calculation of Consolidated Net
Income for such period, less (vi) the amount for such period of gains on sales
of assets (excluding sales in the ordinary course of business ) and other
extraordinary gains that were included in the calculation of Consolidated Net
Income for such period, all as determined on a Consolidated basis in accordance
with GAAP. Each calculation of Consolidated EBITDA under this Agreement shall be
made for the twelve month period ending on the date of such calculation.
15
"Consolidated Interest Expense" means, for any period for any Person,
total interest expense (including that attributable to Capital Lease Obligations
in accordance with GAAP) of such Person and its Subsidiaries on a Consolidated
basis with respect to all outstanding Indebtedness of such Person and its
Subsidiaries.
"Consolidated Net Income" means, for any period with respect to any
Person, the net income (or loss) of such Person and its Subsidiaries on a
Consolidated basis for such period taken as a single accounting period
determined in conformity with GAAP, provided that there shall be excluded (i)
the income (or loss) of any Person (other than Subsidiaries of the Lead
Borrower) in which any other Person (other than the Lead Borrower or any of its
Subsidiaries) has a joint interest, except to the extent of the amount of
dividends or other distributions actually paid to the Lead Borrower or any of
its Subsidiaries by such Person during such period, and (ii) the income (or
loss) of any Person accrued prior to the date it becomes a Subsidiary of the
Lead Borrower or any of its Subsidiaries or is merged into or consolidated with
the Lead Borrower or any of its Subsidiaries or that Person's assets are
acquired by the Lead Borrower or any of its Subsidiaries.
"Control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise. The
terms "Controlling" and "Controlled" have meanings correlative thereto.
"Cost" means the cost value of Inventory as reported on the Borrowers'
financial stock ledger using the cost method of accounting based on practices
which are in effect on the date of this Agreement.
"Credit Card Agreements" has the meaning provided therefor in Section
2.23(c).
"Credit Extensions" as of any day, shall be equal to the sum of (a) the
principal balance of all Loans then outstanding, and (b) the then amount of the
Letter of Credit Outstandings.
"Customer Credit Liabilities" means, at any time, the aggregate face
value at such time of (a) outstanding gift certificates and gift cards of the
Borrowers entitling the holder thereof to use all or a portion of the
certificate to pay all or a portion of the purchase price for any Inventory, and
(b) outstanding merchandise credits of the Borrowers.
"DDAs" means any checking or other demand deposit account maintained by
any Borrower into which proceeds of Collateral are deposited. All funds in such
DDAs shall be conclusively presumed to be Collateral and proceeds of Collateral
and the Agent and the Lenders shall have no duty to inquire as to the source of
the amounts on deposit in the DDAs.
"DDA Notification" has the meaning provided therefor in Section
2.23(c).
"Default" means any event or condition that constitutes an Event of
Default or that upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Delinquent Lender" has the meaning given that term in Section 8.13.
16
"Delinquent Lender's Future Commitment" has the meaning provided
therefor in Section 8.13.
"dollars" or "$" refers to lawful money of the United States of
America.
"Eligible Credit Card Receivables" means Accounts due to a Borrower on
a non-recourse basis from Visa, Mastercard, American Express Co., Discovercard
and other major credit card processors reasonably acceptable to the
Administrative Agent, as arise in the ordinary course of business and which have
been earned by performance. Without limiting the foregoing, none of the
following shall be deemed to be Eligible Credit Card Receivables:
(a) Accounts that have been outstanding for more than five (5)
Business Days from the date of sale;
(b) Accounts with respect to which a Borrower does not have
good, valid and marketable title thereto, free and clear
of any Encumbrance (other than Liens granted to the
Collateral Agent, for its benefit and the ratable benefit
of the Secured Parties, pursuant to the Security
Documents);
(c) Accounts that are not subject to a first priority security
interest in favor of the Collateral Agent, for the benefit
of itself and the Secured Parties;
(d) Accounts which are disputed, are with recourse, or with
respect to which a claim, counterclaim, offset or
chargeback has been asserted (to the extent of such claim,
counterclaim, offset or chargeback); or
(e) Accounts which are due from FNANB.
"Eligible Inventory" shall mean, as of the date of determination
thereof, (a) Eligible L/C Inventory, and (b) items of Inventory of the Borrowers
that are finished goods, merchantable and readily saleable to the public in the
ordinary course of business. Without limiting the foregoing, none of the
following shall be deemed to be Eligible Inventory:
(a) Inventory that is not owned solely by a Borrower, or is
leased or on consignment, or such Borrower does not have good and valid
title thereto;
(b) Inventory (including any portion thereof in transit from
vendors, other than Eligible L/C Inventory) that is not located at a
warehouse facility or store that is owned or leased by a Borrower;
(c) Inventory that represents (i) goods damaged, defective or
otherwise unmerchantable, (ii) goods that do not conform in all
material respects to the representations and warranties contained in
this Agreement or any of the Security Documents, (iii) goods to be
returned to the vendor, or (iv) goods in the following stock ledger
locations: (A) Product Return Center, (B) Service Inventory, (C) Damage
Return Center, (D) Corporate Office, (E) MAC Inventory, and (F) Road
Support Merchandise;
(d) Inventory that is not located in the United States of
America (excluding territories and possessions thereof) other than
Eligible L/C Inventory;
17
(e) Inventory that is not subject to a perfected
first-priority security interest in favor of the Collateral Agent for
the benefit of the Secured Parties;
(f) Inventory which consists of samples, labels, bags,
packaging, and other similar non-merchandise categories.
(g) Inventory as to which insurance in material compliance
with the provisions of Section 5.07 hereof is not in effect.
(h) Inventory which has been sold but not yet delivered or as
to which any Borrower has accepted a deposit.
(i) Any Inventory acquired in a Permitted Acquisition, unless
and until the Agents shall have received (i) the results of appraisals
of the Inventory acquired in such acquisition, and (ii) such other due
diligence as the Agent may reasonably require, all of the results of
the foregoing to be reasonably satisfactory to the Agents.
"Eligible L/C Inventory" shall mean, as of the date of determination
thereof, without duplication of other Eligible Inventory, Inventory (a) not yet
delivered to the Borrowers, (b) the purchase of which is supported by a
Commercial Letter of Credit having an expiry within sixty (60) days of date of
issuance, (c) either (i) which has been consigned to a Borrower or to the
Issuing Bank (along with delivery to a Borrower or the Issuing Bank, as
applicable, of the documents of title with respect thereto), or (ii) as to which
the Collateral Agent has control over the documents of title which evidence
ownership of the subject Inventory (such as by the delivery of a customs broker
agency agreement, satisfactory to the Collateral Agent), and (d) which otherwise
would constitute Eligible Inventory.
"Environmental Laws" means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by or with any Governmental
Authority, relating in any way to the environment, preservation or reclamation
of natural resources, handling, treatment, storage, disposal, Release or
threatened Release of any Hazardous Material or to health and safety matters.
"Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, natural resource damage, costs of
environmental remediation, administrative oversight costs, fines, penalties or
indemnities), of any Person directly or indirectly resulting from or based upon
(a) violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials, (c)
exposure to any Hazardous Materials, (d) the release or threatened release of
any Hazardous Materials into the environment or (e) any contract, agreement or
other consensual arrangement pursuant to which liability is assumed or imposed
with respect to any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with the Lead Borrower, is treated as a single
employer under Section 414(b) or (c) of
18
the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the
Code, is treated as a single employer under Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in Section
4043 of ERISA or the regulations issued thereunder with respect to a Plan (other
than an event for which the 30-day notice period is waived); (b) the existence
with respect to any Plan of an "accumulated funding deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Lead Borrower or any of its ERISA Affiliates of
any liability under Title IV of ERISA with respect to the termination of any
Plan; (e) the receipt by the Lead Borrower or any ERISA Affiliate from the PBGC
or a plan administrator of any notice relating to an intention to terminate any
Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence
by the Lead Borrower or any of its ERISA Affiliates of any liability with
respect to the withdrawal or partial withdrawal from any Plan or Multiemployer
Plan; or (g) the receipt by the Lead Borrower or any ERISA Affiliate of any
notice, or the receipt by any Multiemployer Plan from te Lead Borrower or any
ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability
or a determination that a Multiemployer Plan is, or is expected to be, insolvent
or in reorganization, within the meaning of Title IV of ERISA.
"Event of Default" has the meaning assigned to such term in Section
7.01.
"Excess Availability" means, as of any date of determination, the
excess, if any, of (a) the Borrowing Base, over (b) the outstanding Credit
Extensions.
"Excluded Taxes" means, with respect to the Agents, any Lender, the
Issuing Bank or any other recipient of any payment to be made by or on account
of any obligation of the Borrowers hereunder, (a) income or franchise taxes
imposed on (or measured by) its gross or net income, (b) any branch profits
taxes, and (c) in the case of a Foreign Lender (other than an assignee pursuant
to a request by a Borrower under Section 2.30(b)), any withholding tax that is
imposed on amounts payable to such Foreign Lender at the time such Foreign
Lender becomes a party to this Agreement (or designates a new lending office) or
is attributable to such Foreign Lender's failure to comply with Section 2.28(e),
except to the extent that such Foreign Lender (or its assignor, if any) was
entitled, at the time of designation of a new lending office (or assignment), to
receive additional amounts from the Borrowers with respect to such withholding
tax pursuant to Section 2.28(a).
"Extended Maturity Date" means June 27, 2008.
"Extension Request" shall have the meaning set forth in Section
2.10(a).
"Extension Request Response" shall have the meaning set forth in
Section 2.10(b).
"Facility Guaranty" means the Guaranty executed by the Borrowers in
favor of the Agents, the Issuing Bank and the Lenders.
"Federal Funds Effective Rate" means, for any day, the weighted average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as
19
published on the next succeeding Business Day by the Federal Reserve Bank of New
York, or, if such rate is not so published for any day that is a Business Day,
the average (rounded upwards, if necessary, to the next 1/100 of 1%) of the
quotations for such day for such transactions received by Fleet from three
Federal funds brokers of recognized standing selected by it.
"Fee Letter" means the letter entitled "Fee Letter" among the Borrowers
and the Administrative Agent of even date herewith, as such letter may from time
to time be amended.
"Financial Officer" means, with respect to any Borrower, the chief
financial officer, treasurer, assistant treasurer, controller or assistant
controller of such Borrower.
"Fifth Third" means Fifth Third Bank Processing Solutions.
"FNANB" means First North American National Bank.
"FNANB Merchant Agreement" means Amended and Restated Merchant
Agreement dated as of January 27, 2003 by and among the Lead Borrower and FNANB
in effect as of the Closing Date, and as amended from time to time thereafter.
"Fleet" means Fleet National Bank, a national banking association.
"Foreign Lender" means any Lender that is organized under the laws of a
jurisdiction other than the United States of America or any State thereof or the
District of Columbia.
"Foreign Subsidiary" means any Subsidiary that is organized under the
laws of a jurisdiction other than the United States of America or any State
thereof or the District of Columbia.
"FRF" means Fleet Retail Finance Inc., a Delaware corporation. ---
"FRF Concentration Account" has the meaning provided therefor in
Section 2.23(d).
"FSI" means Fleet Securities, Inc., a Massachusetts corporation. ---
"GAAP"means accounting principles which are consistent with those
promulgated or adopted by the Financial Accounting Standards Board and its
predecessors (or successors) in effect and applicable to that accounting period
in respect of which reference to GAAP is being made.
"Xxxxxx Xxxxxxxx" means GB Asset Advisors, LLC or any Affiliate
thereof.
"Governmental Authority" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"Guarantee" of or by any Person (the "guarantor") means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any
20
Indebtedness or other obligation of any other Person (the "primary obligor") in
any manner, whether directly or indirectly, and including any obligation of the
guarantor, direct or indirect, (a) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Indebtedness or other obligation or
to purchase (or to advance or supply funds for the purchase of) any security for
the payment thereof, (b) to purchase or lease property, securities or services
for the purpose of assuring the owner of such Indebtedness or other obligation
of the payment thereof, (c) to maintain working capital, equity capital or any
other financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness or other obligation or (d)
as an account party in respect of any letter of credit or letter of guaranty
issued to support such Indebtedness or obligation, provided that the term
"Guarantee" shall not include endorsements for collection or deposit in the
ordinary course of business.
"Hazardous Materials" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes,
mold, and all other substances or wastes of any nature regulated pursuant to any
Environmental Law, including any material listed as a hazardous substance under
Section 101(14) of CERCLA.
"Hedging Agreement" means any interest rate protection agreement,
interest rate swap agreement, interest rate cap agreement, interest rate collar
agreement, foreign currency exchange agreement, commodity price protection
agreement, or other interest or currency exchange rate or commodity price
hedging arrangement designed to hedge against fluctuations in interest rates or
foreign exchange rates, excluding any such agreement entered into in connection
with Permitted Securitization Transactions and any offsetting hedging agreements
related thereto (a "Securitization Hedging Agreement").
"Indebtedness" of any Person means, without duplication, (a) all
payment obligations of such Person for borrowed money (including any obligations
which are without recourse to the credit of such Person but which are secured by
a Lien on the property of such Person), (b) all payment obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, (c) all
payment obligations of such Person upon which interest charges are customarily
paid, (d) all payment obligations of such Person under conditional sale or other
title retention agreements relating to property acquired by such Person, (e) all
payment obligations of such Person in respect of the deferred purchase price of
property or services (excluding current accounts payable incurred in the
ordinary course of business), (f) all Indebtedness of others secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on property owned or acquired by such
Person, whether or not the Indebtedness secured thereby has been assumed, (g)
all Guarantees by such Person of Indebtedness of others, (h) all Capital Lease
Obligations of such Person, (i) all payment obligations, contingent or
otherwise, of such Person as an account party in respect of letters of credit
and letters of guaranty (j) all payment obligations, contingent or otherwise, of
such Person in respect of bankers' acceptances, (k) all Hedging Agreements (it
being understood that Securitization Hedging Agreements shall not constitute
Indebtedness), and (l) the principal and interest portions of all rental
obligations of such Person under any Synthetic Lease or similar off-balance
sheet financing where such transaction is considered borrowed money indebtedness
for tax purposes but is classified as an operating lease in accordance with
GAAP. The Indebtedness of any Person shall include the Indebtedness of any other
entity (including any partnership in which such Person is a general partner) to
the extent such Person is liable therefor as a result of
21
such Person's ownership interest in or other relationship with such entity,
except to the extent the terms of such Indebtedness provide that such Person is
not liable therefor.
"Indemnified Taxes" means Taxes arising from any payment made hereunder
or otherwise with respect to this Agreement, other than Excluded Taxes.
"Indemnitee" has the meaning provided therefor in Section 9.03(b).
"Initial Maturity Date" means June 27, 2007.
"Interest Payment Date" means (a) with respect to any Prime Rate Loan
(including a Swingline Loan), the last day of each calendar quarter, and (b)
with respect to any LIBO Loan, the last day of each calendar quarter, and the
last day of the Interest Period applicable to the Borrowing of which such Loan
is a part.
"Interest Period" means, with respect to any LIBO Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
thereafter, as the Lead Borrower may elect by notice to the Administrative Agent
in accordance with the provisions of this Agreement, provided that (a) if any
Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless such next
succeeding Business Day would fall in the next calendar month, in which case
such Interest Period shall end on the next preceding Business Day, and (b) any
Interest Period that commences 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 during which such Interest Period ends) shall end on the last Business Day
of the last calendar month of such Interest Period, (c) any Interest Period
which would otherwise end after the Termination Date shall end on the
Termination Date, and (d) notwithstanding the provisions of clause (c), no
Interest Period shall have a duration of less than one month, and if any
Interest Period applicable to a LIBO Borrowing would be for a shorter period,
such Interest Period shall not be available hereunder. For purposes hereof, the
date of a Borrowing initially shall be the date on which such Borrowing is made
and thereafter shall be the effective date of the most recent conversion or
continuation of such Borrowing.
"Inventory" has the meaning assigned to such term in the Security
Agreement.
"Inventory Advance Rate" means [CONFIDENTIAL]*%).
"Inventory Reserves" means such reserves as may be established from
time to time by the Administrative Agent in the Administrative Agent's
reasonable discretion (after consultation with the Lead Borrower (whose consent
to any Inventory Reserve shall not be required)) with respect to the
determination of the saleability, at retail, of Eligible Inventory or which
reflect such other factors as affect the appraised value of Eligible Inventory.
Inventory Reserves shall be established and calculated in a manner and
methodology consistent with the Administrative Agent's practices as of the
Closing Date with other similarly situated borrowers.
*Confidential Treatment has been requested for the redacted portion pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended. The confidential,
redacted portions have been filed separately with the United States Securities
and Exchange Commission.
22
"Investment" has the meaning provided therefor in Section 6.04.
"Issuing Bank" means Fleet, in its capacity as the issuer of Letters of
Credit hereunder, and any other Lender as the Administrative Agent and the Lead
Borrower may agree, such agreement not to be unreasonably withheld. The Issuing
Bank may, in its discretion, arrange for one or more Letters of Credit to be
issued by Affiliates of the Issuing Bank, in which case the term "Issuing Bank"
shall include any such Affiliate with respect to Letters of Credit issued by
such Affiliate.
"L/C Disbursement" means a payment made by the Issuing Bank pursuant to
a Letter of Credit.
"Lead Borrower" means Circuit City Stores, Inc.
"Lenders" shall mean the Persons identified on Schedule 1.1 and each
assignee that becomes a party to this Agreement as set forth in Section 9.05(b).
"Letter of Credit" shall mean a letter of credit that is issued
pursuant to this Agreement for the account of any Borrower.
"Letter of Credit Fees" shall mean the fees payable in respect of
Letters of Credit pursuant to Section 2.15.
"Letter of Credit Outstandings" shall mean, at any time, the sum of (a)
with respect to Letters of Credit outstanding at such time, the aggregate
maximum amount that then is or at any time thereafter may become available for
drawing or payment thereunder plus (b) all amounts theretofore drawn or paid
under Letters of Credit for which the Issuing Bank has not then been reimbursed.
"LIBO Borrowing" shall mean a Borrowing comprised of LIBO Loans.
"LIBO Loan" shall mean any Loan bearing interest at a rate determined
by reference to the Adjusted LIBO Rate in accordance with the provisions of
Article II.
"LIBO Rate"means, with respect to any LIBO Borrowing for any Interest
Period, the rate of interest (rounded upwards, if necessary, to the next 1/16 of
1%) per annum at which deposits in dollars are offered by banks in the London
interbank market, appearing on Reuters Screen FRBD as of 11:00 a.m. (London
time) two Business Days before the first day of the Interest Period for the
subject LIBO Borrowing, for a deposit approximately in the amount of the subject
Borrowing and for a period of time approximately equal to such Interest Period;
provided, however, if the rate described above does not appear on the Reuters
System on any applicable interest determination date, the LIBO Rate shall be the
rate (rounded upward, if necessary, to the nearest 1/16 of 1%), 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 to the Administrative Agent
by major banks in the London interbank market as selected by Administrative
Agent at approximately 11:00 a.m. London time, on the day that is two (2)
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 a LIBO Rate pursuant to a LIBO Borrowing cannot be
obtained.
23
"Lien" means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, hypothecation, encumbrance, charge or security interest in,
on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
"Loan Account" has the meaning assigned to such term in Section
2.22(a).
"Loan Documents"means this Agreement, the Notes, the Letters of Credit,
the Fee Letter, all Borrowing Base Certificates, the Blocked Account Agreements,
the DDA Notifications, the Credit Card Notifications, the Security Documents,
the Facility Guaranty, and any other instrument or agreement now or hereafter
executed and delivered in connection herewith or therewith.
"Loans" shall mean all loans (including, without limitation, Revolving
Loans and Swingline Loans) at any time made to the Borrowers or for account of
the Borrowers pursuant to this Agreement.
"Margin Stock" has the meaning assigned to such term in Regulation U.
"Material Adverse Effect" means a material adverse effect on (a) the
business, operations, property, assets, or condition, financial or otherwise, of
the Lead Borrower and its Subsidiaries taken as a whole, (b) the ability of the
Borrowers to perform any material obligation or to pay any Obligations under
this Agreement or any of the other Loan Documents, or (c) the validity or
enforceability of this Agreement or any of the other Loan Documents or any of
the material rights or remedies of the Administrative Agent, the Collateral
Agent or the Lenders hereunder or thereunder, including, without limitation,
with respect to the Collateral. "Material Indebtedness" means Indebtedness
(other than the Loans and Letters of Credit) (including obligations in respect
of one or more Hedging Agreements) of any one or more of the Borrowers in an
aggregate principal amount exceeding $50,000,000.
"Maturity Date" means the Initial Maturity Date, or if extended in
accordance with Section 2.10, the Extended Maturity Date, as the case may be.
"Maximum Rate" has the meaning provided therefor in Section 9.13.
"Minority Lenders" has the meaning provided therefor in Section
9.02(d).
"Moody's" means Xxxxx'x Investors Service, Inc.
"Multiemployer Plan"means a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
"Noncompliance Notice" has the meaning provided therefor in Section
2.06(b).
"Non-Consenting Lender" has the meaning provided therefor in Section
2.10(b).
24
"Notes" shall mean (i) the promissory notes of the Borrowers
substantially in the form of Exhibit B-1, each payable to the order of a Lender,
evidencing the Revolving Loans, and (ii) the promissory note of the Borrowers
substantially in the form of Exhibit B-2, payable to the Swingline Lender,
evidencing the Swingline Loans.
"Obligations" means (a) the payment by the Borrowers of (i) the
principal of, and interest on the Loans, when and as due, whether at maturity,
by acceleration, upon one or more dates set for prepayment or otherwise, (ii)
each payment required to be made by the Borrowers under the Credit Agreement in
respect of any Letter of Credit, when and as due, including payments in respect
of reimbursement of disbursements, interest thereon and obligations to provide
cash collateral and (iii) all other monetary obligations, including fees, costs,
expenses and indemnities, whether primary, secondary, direct, contingent, fixed
or otherwise, of the Borrowers to the Secured Parties under the Credit Agreement
and the other Loan Documents, and (b) the performance of all covenants,
agreements, obligations and liabilities of the Borrowers under or pursuant to
this Agreement and the other Loan Documents.
"Online Services Agreement" has the meaning assigned to such term in
Section 2.07(d).
"Other Liabilities" means (a) the payment and performance of any
Hedging Agreements which are permitted pursuant to Section 6.01 hereof, and (b)
the payment and performance of any transaction with FRF as Collateral Agent or
Administrative Agent, or Fleet, or any of their respective Affiliates, which
arises out of any cash management, depository, investment, letter of credit,
equipment leasing, Hedging Agreement, Securitization Hedging Agreement, or other
banking or financial services provided by any such Person, in each case, in
connection with this Agreement or the other Loan Documents, as each may be
amended from time to time.
"Other Taxes" means any and all current or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made under any Loan Document or from the execution, delivery or
enforcement of, or otherwise with respect to, any Loan Document. "Overadvance"
means, at any time of calculation, a circumstance in which the Credit Extensions
exceed the lesser of (a) the Total Commitments or (b) the Borrowing Base.
"Participant" has the meaning provided therefor in Section 9.05(e).
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA and any successor entity performing similar functions.
"Perfection Certificate" means a certificate in the form of Annex 1 to
the Security Agreement or any other form approved by the Collateral Agent.
"Permitted Acquisition" means an Investment in, the purchase of the
capital stock in or all or a substantial part of the assets or properties of any
Person, the entering into any exchange of securities with any Person, or the
entering into any transaction, merger or consolidation of any Person, in each
case in which each of the following conditions are satisfied:
(i) Any assets acquired shall be utilized in, and if the
acquisition involves a merger, consolidation or stock acquisition,
the Person which is the
25
subject of such acquisition shall be engaged in, only a business
permitted to be conducted by the Borrowers pursuant to this
Agreement; and
(ii) No Default or Event of Default exists or would arise
after giving effect to the consummation of the acquisition; and
(iii) The Person making the acquisition must be a Borrower
or a Subsidiary complying with the requirements of clause (vi) of
this definition; and
(iv) The Lead Borrower shall have furnished the Agents with
ten (10) Business Days prior notice of such intended acquisition and
shall have furnished the Collateral Agent with (A) a current draft
of the acquisition agreement and other acquisition documents, (B) a
summary of any due diligence undertaken by the Borrowers in
connection with such acquisition, (C) appropriate financial
statements of the Person which is the subject of such acquisition,
(D) pro forma projected financial statements, if any, and (E) such
other information as the Agents may reasonably require, provided
that the Person making the acquisition shall not be required to
delay the consummation thereof if the additional information
requested by the Agents under this clause E is not readily
obtainable (but such Person shall furnish the Agent with such
additional information thereafter as soon as reasonably
practicable).
(v) If an acquisition of capital stock or other equity
interests, after consummation of such acquisition, a Borrower shall
own directly or indirectly a majority of the equity interests in the
Person being acquired and shall control a majority of any voting
interests, and/or shall otherwise Control the Person being acquired.
(vi) If the Person effecting the acquisition is a
Subsidiary or if the Person which is the subject of such acquisition
will be maintained as a Subsidiary of a Borrower, such Subsidiary
shall have executed such documents as may be necessary to be joined
as a "Borrower" or guarantor hereunder, as determined by the Agents,
and the Collateral Agent shall have received a first priority
security interest in such Subsidiary's inventory, accounts, and
other property of the same nature as constitutes Collateral under
this Agreement in order to secure the Obligations and the Other
Liabilities.
(vii) The aggregate consideration (exclusive of the value of
any common equity of the Lead Borrower issued or delivered in
connection with Permitted Acquisitions) furnished in connection with
Permitted Acquisitions, howsoever classified (whether as
Indebtedness, Investment or otherwise) for all acquisitions after
the Closing Date (including those described in Section 6.04(f))
shall not exceed $100,000,000; and
(viii) Such acquisition shall have been approved by a
majority of the board of directors (or the equivalent governing
body) of the Person which is the
26
subject of such acquisition and such Person shall not have announced
that it will oppose such acquisition or shall not have commenced any
action which alleges that such acquisition will violate applicable
law.
"Permitted Encumbrances" means:
(a) Liens imposed by law for taxes that are not yet due or are
being contested in compliance with Section 5.05;
(b) carriers', warehousemen's, mechanics', landlord's,
materialmen's, repairmen's and other like Liens imposed by law, arising
in the ordinary course of business and securing obligations that are
not overdue by more than 60 days or are being contested in compliance
with Section 5.05;
(c) pledges and deposits made in the ordinary course of
business in compliance with workers' compensation, unemployment
insurance, old-age pension and other social security laws or
regulations;
(d) deposits to secure the performance of bids, trade
contracts, leases, contracts (other than for the repayment of borrowed
money), statutory obligations, surety and appeal bonds, performance
bonds and other obligations of a like nature, in each case in the
ordinary course of business;
(e) judgment liens in respect of judgments that do not
constitute an Event of Default under Section 7.01(k); and
(f) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary
course of business that do not secure any monetary obligations and do
not materially detract from the value of the affected property or
interfere with the ordinary conduct of business of the Borrowers or any
Subsidiary of the Borrowers.
provided that, except as provided in any one or more of clauses (a) through (f)
above, the term "Permitted Encumbrances" shall not include any Lien securing
Indebtedness.
"Permitted Investments" means each of the following:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States
of America (or by any agency thereof to the extent such obligations are
backed by the full faith and credit of the United States of America),
in each case maturing within one year from the date of acquisition
thereof;
(b) Investments in commercial paper maturing within 270 days
from the date of acquisition thereof and having, at such date of
acquisition, a credit rating of at least A-1 or P-1 from S&P or from
Moody's;
27
(c) Investments in certificates of deposit, banker's
acceptances and time deposits maturing within 180 days from the date of
acquisition thereof issued or guaranteed by or placed with, and demand
deposit and money market deposit accounts issued or offered by, any
domestic office of any commercial bank organized under the laws of the
United States of America or any State thereof that has a combined
capital and surplus and undivided profits of not less than
$500,000,000;
(d) fully collateralized repurchase agreements with a term of
not more than 30 days for securities described in clause (a) above
(without regard to the limitation on maturity contained in such clause)
and entered into with a financial institution satisfying the criteria
described in clause (c) above or with any primary dealer;
(e) Investments required to be made in FNANB by the Lead
Borrower to enable FNANB to comply with applicable regulatory
requirements; and
(f) Investments made by FNANB under the Community Reinvestment
Act in an amount not to exceed $5,000,000 in the aggregate.
provided that, notwithstanding the foregoing, after the occurrence and during
the continuance of a Cash Dominion Event, no such Investments shall be made by a
Borrower (and no Investments then existing shall be extended past the then
maturity date thereof) pursuant to clauses (a) through (d) above unless (i)
either (A) no Loans are then outstanding, or (B) the Investment is a temporary
Investment pending expiration of an Interest Period for a LIBO Loan, the
proceeds of which Investment will be applied to the Obligations after the
expiration of such Interest Period, and (ii) such Investments are pledged by the
applicable Borrower to the Collateral Agent as additional collateral for the
Obligations and Other Liabilities pursuant to such agreements as may be
reasonably required by the Agents.
"Permitted Overadvance" means an Overadvance determined by the
Administrative Agent, in its reasonable discretion, (a) which is made to
maintain, protect or preserve the Collateral and/or the Lenders' rights under
the Loan Documents, or (b) which is otherwise in the Lenders' interests;
provided that Permitted Overadvances shall not (i) exceed five percent (5%) of
the then Borrowing Base in the aggregate outstanding at any time or (ii) remain
outstanding for more than forty-five (45) consecutive Business Days, unless in
case of clause (ii), the Required Supermajority Lenders otherwise agree; and
provided further that the foregoing shall not (1) modify or abrogate any of the
provisions of Section 2.07(f) regarding the Lender's obligations with respect to
L/C Disbursements, or (2) result in any claim or liability against the
Administrative Agent (regardless of the amount of any Overadvance) for
"inadvertent Overadvances" (i.e. where an Overadvance results from changed
circumstances beyond the control of the Administrative Agent (such as a
reduction in the collateral value)), and further provided that in no event shall
the Administrative Agent make an Overadvance, if after giving effect thereto,
the principal amount of the Credit Extensions would exceed the Total Commitments
(as in effect prior to any termination of the Commitments pursuant to Section
7.01 hereof).
"Permitted Securitization Transaction" means a transaction in which (i)
credit card receivables or other financial assets originated or acquired by a
Borrower or any Subsidiary of a Borrower are transferred to one or more
bankruptcy remote, special purpose entities in a manner that legally isolates
the transferred assets from such Borrower or Subsidiary (such that the
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transferred assets would not be included in the estate of such Borrower or such
Subsidiary in a bankruptcy, receivership or insolvency proceeding), and (ii)
asset backed certificates or other securities evidencing an interest in, or
otherwise backed by, the transferred assets are sold to investors, and (iii)
such Borrower or such Subsidiary receives fair value in the form of cash and
other consideration for such transferred assets.
"Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Lead
Borrower or any ERISA Affiliate is (or, if such plan were terminated, would
under Section 4069 of ERISA be deemed to be) an "employer" as defined in Section
3(5) of ERISA.
"Prime Rate" shall mean, for any day, the higher of (a) the annual rate
of interest then most recently announced by Fleet at its head office in Boston,
Massachusetts as its "Prime Rate" and (b) the Federal Funds Effective Rate in
effect on such day plus 1/2 of 1% (0.50%) per annum. The Prime Rate is a
reference rate and does not necessarily represent the lowest or best rate being
charged to any customer. If for any reason the Administrative Agent shall have
determined (which determination shall be conclusive absent manifest error) that
it is unable to ascertain the Federal Funds Effective Rate for any reason,
including the inability or failure of the Administrative Agent to obtain
sufficient quotations thereof in accordance with the terms hereof, the Prime
Rate shall be determined without regard to clause (b) of the first sentence of
this definition, until the circumstances giving rise to such inability no longer
exist. Any change in the Prime Rate due to a change in Fleet's Prime Rate or the
Federal Funds Effective Rate shall be effective on the effective date of such
change in Fleet's Prime Rate or the Federal Funds Effective Rate, respectively.
"Prime Rate Loan" shall mean any Loan bearing interest at a rate
determined by reference to the Prime Rate in accordance with the provisions of
Article II.
"Real Estate"means all land, together with the buildings, structures,
parking areas, and other improvements thereon, now or hereafter owned by any
Borrower, including all easements, rights-of-way, and similar rights relating
thereto and all leases, tenancies, and occupancies thereof.
"Receivables Advance Rate" means 80%.
"Register" has the meaning set forth in Section 9.05(c).
"Regulation U" means Regulation U of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
"Regulation X" means Regulation X of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
29
"Related Parties" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"Release" has the meaning set forth in Section 101(22) of CERCLA.
"Required Lenders" shall mean, at any time, Lenders having Commitments
at least equal to 51% of the Total Commitments, or if the Commitments have been
terminated, Lenders whose percentage of the outstanding Credit Extensions (after
settlement and repayment of all Swingline Loans by the Lenders) aggregate not
less than 51% of all such Credit Extensions.
"Required Supermajority Lenders" shall mean, at any time, Lenders
having Commitments outstanding representing at least 66 2/3% of the Total
Commitments outstanding or if the Commitments have been terminated, Lenders
whose percentage of the outstanding Credit Extensions (after settlement and
repayment of all Swingline Loans by the Lenders) aggregate not less than 66 2/3%
of all such Credit Extensions.
"Reserves" means the Inventory Reserves and Availability Reserves.
"Restricted Payment" means any dividend or other distribution (whether
in cash, securities or other property) with respect to any shares of any class
of capital stock of any Borrower, or any payment (whether in cash, securities or
other property), including any sinking fund or similar deposit, on account of
the purchase, redemption, retirement, acquisition, cancellation or termination
of any such shares of capital stock of any Borrower or any option, warrant or
other right to acquire any such shares of capital stock of any Borrower.
"Restricted Subsidiary" means any Subsidiary of any Borrower other than
any such Subsidiary (i) that had, as of the end of the most recent fiscal
quarter, tangible net assets (as determined in accordance with GAAP) of less
than $5,000,000, (ii) that is a Special Purpose Entity (including, without
limitation, Tyler International Funding, Inc. and DC Funding International,
Inc.), or (iii) that is designated by the Lead Borrower and the Administrative
Agent as an unrestricted subsidiary for purposes of the Loan Documents.
"Revolving Loans" means all Loans at any time made by a Lender pursuant
to Section 2.01.
"S&P" means Standard & Poor's Rating Services, a division of the
XxXxxx-Xxxx Companies, Inc.
"Secured Parties" has the meaning assigned to such term in the Security
Agreement.
"Securitization Hedging Agreement" has the meaning assigned to such
term in the definition of Hedging Agreement.
"Securitization Revolver" means collectively, the revolving lines of
credit established by the Lead Borrower in favor of DC Funding International,
Inc. and Tyler International Funding, Inc., respectively under the revolving
credit agreements which constitute a part of a Permitted Securitization
Transaction.
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"Security Agreement" means the Security Agreement dated as of June 27,
2003 among the Borrowers and the Collateral Agent for the benefit of the Secured
Parties, as amended and in effect from time to time.
"Security Documents" means the Security Agreement and each other
security agreement, guaranty, or other instrument or document executed and
delivered pursuant to Sections 2.23, 5.12 or any other provision hereof or any
other Loan Document, to secure any of the Obligations and Other Liabilities.
"Settlement Date" has the meaning provided in Section 2.08(b).
"Shrink" means Inventory which has been lost, misplaced, stolen, or is
otherwise unaccounted for.
"Solvent" means, with respect to any Person on a particular date, that
on such date (a) at fair valuations, all of the properties and assets of such
Person are greater than the sum of the debts, including contingent liabilities,
of such Person, (b) the present fair saleable value of the properties and assets
of such Person is not less than the amount that would be required to pay the
probable liability of such Person on its debts as they become absolute and
matured, (c) such Person is able to realize upon its properties and assets and
pay its debts and other liabilities, contingent obligations and other
commitments as they mature in the normal course of business, (d) such Person
does not intend to, and does not believe that it will, incur debts beyond such
Person's ability to pay as such debts mature, and (e) such Person is not engaged
in a business or a transaction, and is not about to engage in a business or
transaction, for which such Person's properties and assets would constitute
unreasonably small capital after giving due consideration to the prevailing
practices in the industry in which such Person is engaged.
"Special Purpose Entity" means a bankruptcy remote, special purpose
entity that (i) satisfied, as of the date of its formation, the special purpose
entity criteria published by Standard & Poors and in effect as of such date, and
(ii) was created to facilitate one or more Permitted Securitization
Transactions.
"Specified Event of Default" means the occurrence of any Event of
Default described in any of Sections 7.01(a), 7.01(b), 7.01(c), 7.01(d) (but as
it relates to Sections 2.23 and 5.01(b)(i) only), 7.01(h), 7.01(i), 7.01(j) or
7.01(r).
"Standby Letter of Credit" means any Letter of Credit other than a
Commercial Letter of Credit.
"Statutory Reserve Rate" means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject with
respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred
to as "Eurocurrency Liabilities" in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D. LIBO
Loans shall be deemed to constitute eurocurrency funding and to be subject to
such reserve requirements without benefit of or credit for proration, exemptions
or offsets that may be available from time to time to any Lender under
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such Regulation D or any comparable regulation. The Statutory Reserve Rate shall
be adjusted automatically on and as of the effective date of any change in any
reserve percentage.
"Subsidiary" means, with respect to any Person (the "parent") at any
date, any corporation, limited liability company, partnership, association or
other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, limited liability company, partnership, association or other
entity (a) of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or, in the
case of a partnership, more than 50% of the general partnership interests are,
as of such date, owned, controlled or held, or (b) that is, as of such date,
otherwise Controlled, by the parent and/or one or more subsidiaries of the
parent.
"Subsidiary Borrowers" means all Borrowers other than the Lead
Borrower.
"Swingline Lender" means FRF, in its capacity as lender of Swingline
Loans hereunder.
"Swingline Loan" shall mean a Loan made by the Swingline Lender to the
Borrowers pursuant to Section 2.06 hereof.
"Synthetic Lease" means any lease or other agreement for the use or
possession of property creating obligations which does not appear as
Indebtedness on the balance sheet of the lessee thereunder but which, upon the
insolvency or bankruptcy of such Person, would be characterized as Indebtedness
of such lessee without regard to the accounting treatment.
"Taxes" means any and all current or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Termination Date" shall mean the earliest to occur of (i) the Maturity
Date, (ii) the date on which the maturity of the Loans are accelerated and the
Commitments are terminated in accordance with Section 7.01, or (iii) the date of
the occurrence of any Event of Default pursuant to Section 7.01(h) or 7.01(i).
"Total Commitments" shall mean, at any time, the sum of the Commitments
at such time.
"Type", when used in reference to any Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBO Rate or the Prime
Rate.
"Unused Commitment" shall mean, on any day, (a) the then Total
Commitments minus (b) the sum of (i) the principal amount of Loans then
outstanding, and (ii) the then Letter of Credit Outstandings.
"Wachovia" means Wachovia Bank, National Association.
"Wachovia Blocked Account Agreement" shall have the meaning set forth
in Section 2.23(c).
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"Wachovia Concentration Account" shall have the meaning set forth in
Section 2.23(c).
"Withdrawal Liability" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.2 Terms Generally. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.
SECTION 1.3 Accounting Terms; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time, provided
that, if the Lead Borrower notifies the Administrative Agent that the Borrowers
request an amendment to any provision hereof to eliminate the effect of any
change occurring after the date hereof in GAAP or in the application thereof on
the operation of such provision (or if the Administrative Agent notifies the
Borrowers that the Required Lenders request an amendment to any provision hereof
for such purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such provision shall have
been amended in accordance herewith.
ARTICLE II
Amount and Terms of Credit
SECTION 2.1 Commitment of the Lenders.
(a) Each Lender severally and not jointly with any other Lender,
agrees, upon the terms and subject to the conditions herein set forth, to extend
credit to the Borrowers on a
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revolving basis, in the form of Revolving Loans and Letters of Credit and in an
amount not to exceed the lesser of such Lender's Commitment or such Lender's
Commitment Percentage of the Borrowing Base, subject to the following
limitations:
(i) The aggregate outstanding amount of the Credit
Extensions shall not at any time exceed the lower of (i) (x)
$500,000,000, or (y) such lesser amount to which the Total
Commitments have then been decreased by the Borrowers pursuant
to Section 2.17 hereof, or (ii) the then amount of the Borrowing
Base.
(ii) No Lender shall be obligated to issue any Letter of
Credit, and Letters of Credit shall be available from the
Issuing Bank, subject to the ratable participation of all
Lenders, as set forth in Section 2.07. The Borrowers will not at
any time permit the aggregate Letter of Credit Outstandings to
exceed $250,000,000.
(iii) Subject to all of the other provisions of this
Agreement, Revolving Loans that are repaid may be reborrowed
prior to the Termination Date. No new Credit Extension, however,
shall be made to the Borrowers after the Termination Date.
(b) Each Borrowing of Revolving Loans (other than Swingline Loans)
shall be made by the Lenders pro rata in accordance with their respective
Commitments. The failure of any Lender to make any Loan shall neither relieve
any other Lender of its obligation to fund its Loan in accordance with the
provisions of this Agreement nor increase the obligation of any such other
Lender.
SECTION 2.2 Intentionally Omitted.
SECTION 2.3 Reserves; Changes to Reserves.
(a) The initial Inventory Reserves and Availability Reserves as of
the date of this Agreement are the following:
(i) Shrink (an Inventory Reserve): An amount equal to
one-half of one percent (0.50%) of the gross sales of the
Borrowers for the fiscal year to date or determined based on
such other methodology as the Lead Borrower and the
Administrative Agent may agree. The percentage of gross sales to
be reserved hereunder may be adjusted by the Administrative
Agent based upon the results of any physical inventory
undertaken by the Borrowers in accordance with the provisions of
Section 2.03(b) hereof.
(ii) Rent (an Availability Reserve): An amount equal to
two months rent for all of the Borrowers' leased locations in
the states of Virginia,
34
Pennsylvania, Washington and other states in which Applicable
Law provides a landlord with a Lien for unpaid rent having
priority over the Lien of the Collateral Agent, other than
leased locations with respect to which the Collateral Agent has
received a landlord's waiver of lien in form reasonably
satisfactory to the Collateral Agent or the applicable lease
contains such a waiver in form reasonably satisfactory to the
Collateral Agent.
(iii) Layaways (an Availability Reserve): An amount equal
to 100% of the customer deposits made for layaway goods.
(iv) Customer Credit Liabilities (an Availability
Reserve): An amount equal to 50% of the Borrowers' Customer
Credit Liabilities as reflected in the Borrowers' books and
records.
(b) The Administrative Agent may hereafter establish additional
Reserves or change any of the foregoing Reserves, in the exercise of the
reasonable judgment of the Administrative Agent after furnishing ten (10) days
prior notice to the Lead Borrower , provided that the Administrative Agent shall
not modify the methodology in which Reserves described in Section 2.03(a) hereof
are determined from time to time, and further provided that in no event shall
the Administrative Agent establish new Reserves in any fiscal quarter in an
aggregate amount in excess of ten percent (10%) of the Borrowing Base (as set
forth in the most recent Borrowing Base Certificate delivered to the
Administrative Agent under Section 5.01(f) of this Agreement).
SECTION 2.4 Making of Loans.
(a) Except as set forth in Sections 2.18 and 2.26, Loans (other than
Swingline Loans) by the Lenders shall be either Prime Rate Loans or LIBO Loans
as the Lead Borrower on behalf of the Borrowers may request subject to and in
accordance with this Section 2.04, provided that all Swingline Loans shall be
only Prime Rate Loans. All Loans made pursuant to the same Borrowing shall,
unless otherwise specifically provided herein, be Loans of the same Type. Each
Lender may fulfill its Commitment with respect to any Loan by causing any
lending office of such Lender to make such Loan; but any such use of a lending
office shall not affect the obligation of the Borrowers to repay such Loan in
accordance with the terms of the applicable Note. Each Lender shall, subject to
its overall policy considerations, use reasonable efforts (but shall not be
obligated) to select a lending office which will not result in the payment of
increased costs by the Borrowers pursuant to Section 2.25. Subject to the other
provisions of this Section 2.04 and the provisions of Section 2.26, Borrowings
of Loans of more than one Type may be incurred at the same time, but no more
than ten (10) Borrowings of LIBO Loans may be outstanding at any time.
(b) The Lead Borrower shall give the Administrative Agent three (3)
Business Days' prior telephonic notice (thereafter confirmed in writing) of each
LIBO Borrowing and one (1) Business Day's prior notice of each Borrowing of
Prime Rate Loans. Any such notice, to be effective, must be received by the
Administrative Agent not later than 11:00 a.m., Boston time,
35
on the third Business Day in the case of LIBO Loans prior to, and on the first
Business Day in the case of Prime Rate Loans prior to, the date on which such
Borrowing is to be made. Such notice shall be irrevocable and shall specify the
amount of the proposed Borrowing (which shall be in an integral multiple of
$1,000,000, but not less than $5,000,000 in the case of LIBO Loans) and the date
thereof (which shall be a Business Day) and shall contain disbursement
instructions. Such notice shall specify whether the Borrowing then being
requested is to be a Borrowing of Prime Rate Loans or LIBO Loans and, if LIBO
Loans, the Interest Period with respect thereto. If no election of Interest
Period is specified in any such notice for a Borrowing of LIBO Loans, such
notice shall be deemed a request for an Interest Period of one month. If no
election is made as to the Type of Loan, such notice shall be deemed a request
for a Borrowing of Prime Rate Loans. The Administrative Agent shall promptly
notify each Lender of its proportionate share of such Borrowing, the date of
such Borrowing, the Type of Borrowing being requested and the Interest Period or
Interest Periods applicable thereto, as appropriate. On the borrowing date
specified in such notice, each Lender shall make its share of the Borrowing
available at the office of the Administrative Agent at 00 Xxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000, no later than 12:00 noon, Boston time, in immediately
available funds. Unless the Administrative Agent shall have received notice from
a Lender prior to the proposed date of any Borrowing that such Lender will not
make available to the Administrative Agent such Lender's share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with this Section and may, in
reliance upon such assumption, make available to the Borrowers a corresponding
amount. In such event, if a Lender has not in fact made its share of the
applicable Borrowing available to the Administrative Agent, then the applicable
Lender and the Borrowers severally agree to pay to the Administrative Agent
forthwith on demand such corresponding amount with interest thereon, for each
day from and including the date such amount is made available to the Borrowers
to but excluding the date of payment to the Administrative Agent, at (i) in the
case of such Lender, at the Federal Funds Effective Rate, or (ii) in the case of
the Borrowers, the interest rate applicable to Prime Rate Loans. If such Lender
pays such amount to the Administrative Agent, then such amount shall constitute
such Lender's Loan included in such Borrowing. Upon receipt of the funds made
available by the Lenders to fund any Borrowing hereunder, the Administrative
Agent shall disburse such funds in the manner specified in the notice of
borrowing delivered by the Lead Borrower and shall use reasonable efforts to
make the funds so received from the Lenders available to the Borrowers no later
than 1:00 p.m., Boston time.
(c) The Agent, without the request of the Lead Borrower, may advance
any interest, fee, service charge, or other payment to which any Agent or their
Affiliates or any Lender is entitled from any Borrower pursuant hereto or any
other Loan Document and may charge the same to the Loan Account notwithstanding
that an Overadvance may result thereby. The Administrative Agent shall advise
the Lead Borrower of any such advance or charge promptly after the making
thereof. Such action on the part of the Administrative Agent shall not
constitute a waiver of the Administrative Agent's rights and each Borrower's
obligations under Section 2.20(a). Any amount which is added to the principal
balance of the Loan Account as provided in this Section 2.04(c) shall bear
interest at the interest rate then and thereafter applicable to Prime Rate
Loans.
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SECTION 2.5 Overadvances.
The Agents and the Lenders have no obligation to make any Loan or to provide any
Letter of Credit if an Overadvance would result. The Administrative Agent may,
in its discretion, make Permitted Overadvances without the consent of the
Lenders and each Lender shall be bound thereby. Any Permitted Overadvances may
constitute Swingline Loans. The making of any Permitted Overadvance is for the
benefit of the Borrowers; such Permitted Overadvances constitute Revolving Loans
and Obligations. The making of any such Permitted Overadvances on any one
occasion shall not obligate the Administrative Agent or any Lender to make or
permit any Permitted Overadvances on any other occasion or to permit such
Permitted Overadvances to remain outstanding.
SECTION 2.6 Swingline Loans
(a) The Swingline Lender is authorized by the Lenders and shall,
subject to the provisions of this Section, make Swingline Loans up to
$60,000,000 in the aggregate outstanding at any time (which requests for
Borrowings of Swingline Loans shall be in minimum integrals of $250,000)
consisting only of Prime Rate Loans, upon a notice of Borrowing received by the
Administrative Agent and the Swingline Lender (which notice may be submitted
prior to 1:00 p.m., Boston time, on the Business Day on which such Swingline
Loan is requested). Swingline Loans shall be subject to periodic settlement with
the Lenders under Section 2.08 below.
(b) Swingline Loans may be made only in the following circumstances:
(A) for administrative convenience, the Swingline Lender shall, at the Lead
Borrower's request, make Swingline Loans in reliance upon the Borrowers' actual
or deemed representations under Section 4.02, that the applicable conditions for
borrowing are satisfied or (B) for Permitted Overadvances. If the conditions for
borrowing under Section 4.02 cannot be fulfilled, the Lead Borrower shall give
immediate notice thereof to the Administrative Agent and the Swingline Lender (a
"Noncompliance Notice"), and the Administrative Agent shall promptly provide
each Lender with a copy of the Noncompliance Notice. If the conditions for
borrowing under Section 4.02 cannot be fulfilled, the Required Lenders may
direct the Swingline Lender to, and the Swingline Lender thereupon shall, cease
making Swingline Loans (other than Permitted Overadvances) until such conditions
can be satisfied or are waived in accordance with Section 9.02. Unless the
Required Lenders so direct the Swingline Lender, the Swingline Lender may, but
is not obligated to, continue to make Swingline Loans beginning one Business Day
after the Non-Compliance Notice is furnished to the Lenders. Notwithstanding the
foregoing, no Swingline Loans shall be made pursuant to this subsection (b)
(other than Permitted Overadvances) if the aggregate outstanding amount of the
Credit Extensions would exceed the lower of (i)(x) $500,000,000, or (y) such
lesser amount to which the Total Commitments have then been decreased by the
Borrowers pursuant to Section 2.17 hereof, or (ii) the then amount of the
Borrowing Base.
SECTION 2.7 Letters of Credit.
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(a) Upon the terms and subject to the conditions herein set forth,
the Lead Borrower on behalf of the Borrowers, may request the Issuing Bank, at
any time and from time to time after the date hereof and prior to the
Termination Date, to issue, and subject to the terms and conditions contained
herein, the Issuing Bank shall issue, for the account of the relevant Borrower
one or more Letters of Credit; provided that no Letter of Credit shall be issued
if after giving effect to such issuance (i) the aggregate Letter of Credit
Outstandings shall exceed $250,000,000, or (ii) the aggregate Credit Extensions
would exceed the limitation set forth in Section 2.01(a)(i); and provided,
further, that no Letter of Credit shall be issued if the Issuing Bank shall have
received notice from the Administrative Agent or the Required Lenders that the
conditions to such issuance have not been met.
(b) Each Standby Letter of Credit shall expire at or prior to the
close of business on the earlier of (i) the date one year after the date of the
issuance of such Letter of Credit (or, in the case of any renewal or extension
thereof, one year after such renewal or extension) and (ii) the date that is
five (5) Business Days prior to then effective Maturity Date, provided that each
Standby Letter of Credit may, upon the request of the Lead Borrower, include a
provision whereby such Letter of Credit shall be renewed automatically for
additional consecutive periods of twelve (12) months or less (but not beyond the
date that is five (5) Business Days prior to the then effective Maturity Date)
unless the Issuing Bank notifies the beneficiary thereof at least thirty (30)
days prior to the then-applicable expiration date that such Letter of Credit
will not be renewed.
(c) Each Commercial Letter of Credit shall expire at or prior to the
close of business on the earlier of (i) the date 120 days after the date of the
issuance of such Commercial Letter of Credit and (ii) the date that is five (5)
Business Days prior to the then effective Maturity Date.
(d) Drafts drawn under any Letter of Credit shall be reimbursed by
the Borrowers in dollars no later than the Business Day following the date of
any such payment thereof by the Issuing Bank by paying to the Administrative
Agent an amount equal to such drawing (together with interest as provided in
Section 2.07(e)) not later than 3:00 p.m., Boston time, on such date, provided
that the Lead Borrower may, subject to the conditions to borrowing set forth
herein, request in accordance with Section 2.04 or Section 2.06 that such
payment be financed with a Revolving Loan consisting of a Prime Rate Loan, or a
Swingline Loan in an equivalent amount and, to the extent so financed, the
Borrowers' obligation to make such payment shall be discharged and replaced by
the resulting Prime Rate Loan or Swingline Loan. The Issuing Bank shall,
promptly following its receipt thereof, examine all documents purporting to
represent a demand for payment under a Letter of Credit. The Issuing Bank shall
promptly notify the Administrative Agent and the Lead Borrower by electronic
transmission pursuant to the online services agreement then in effect between
the Lead Borrower and the Issuing Bank (the "Online Services Agreement") or if
the Online Services Agreement is not then in effect, by telephone (confirmed by
telecopy) of such demand for payment and whether the Issuing Bank has made or
will make payment thereunder (which payment shall not be made until two (2)
Business Days after such notice from the Issuing Bank to the Lead Borrower),
provided that any failure to give
38
or delay in giving such notice shall not relieve the Borrowers of their
obligation to reimburse the Issuing Bank and the Lenders with respect to any
such payment.
(e) If the Issuing Bank shall make any L/C Disbursement, then,
unless the Borrowers shall reimburse the Issuing Bank in full on the date such
payment is made, the unpaid amount thereof shall bear interest, for each day
from and including the date such payment is made to but excluding the date that
the Borrowers reimburse the Issuing Bank therefor, at the rate per annum then
applicable to Prime Rate Loans, provided that if the Borrowers fail to reimburse
such Issuing Bank when due pursuant to paragraph (d) of this Section, then
Section 2.12 shall apply. Interest accrued pursuant to this paragraph shall be
for the account of the Issuing Bank, except that interest accrued on and after
the date of payment by any Lender pursuant to paragraph (g) of this Section to
reimburse the Issuing Bank shall be for the account of such Lender to the extent
of such payment.
(f) Immediately upon the issuance of any Letter of Credit by the
Issuing Bank (or the amendment of a Letter of Credit increasing the amount
thereof), and without any further action on the part of the Issuing Bank, the
Issuing Bank shall be deemed to have sold to each Lender, and each such Lender
shall be deemed unconditionally and irrevocably to have purchased from the
Issuing Bank, without recourse or warranty, an undivided interest and
participation, to the extent of such Lender's Commitment Percentage, in such
Letter of Credit, each drawing thereunder and the obligations of the Borrowers
under this Agreement and the other Loan Documents with respect thereto. Upon any
change in the Commitments pursuant to Section 2.17, it is hereby agreed that
with respect to all Letter of Credit Outstandings, there shall be an automatic
adjustment to the participations hereby created to reflect the new Commitment
Percentages of the assigning and assignee Lenders and any Additional Commitment
Lender. Any action taken or omitted by the Issuing Bank under or in connection
with a Letter of Credit, if taken or omitted in the absence of gross negligence,
bad faith or willful misconduct, shall not create for the Issuing Bank any
resulting liability to any Lender.
(g) In the event that the Issuing Bank makes any L/C Disbursement
and the Borrowers shall not have reimbursed such amount in full to the Issuing
Bank pursuant to Section 2.07(d), the Issuing Bank shall promptly notify the
Administrative Agent, which shall promptly notify each Lender of such failure,
and each Lender shall promptly and unconditionally pay to the Administrative
Agent for the account of the Issuing Bank the amount of such Lender's Commitment
Percentage of such unreimbursed payment in dollars and in same day funds. If the
Issuing Bank so notifies the Administrative Agent, and the Administrative Agent
so notifies the Lenders prior to 11:00 a.m., Boston time, on any Business Day,
each such Lender shall make available to the Issuing Bank such Lender's
Commitment Percentage of the amount of such payment on such Business Day in same
day funds (or if such notice is received by the Lenders after 11:00 a.m., Boston
time on the day of receipt, payment shall be made on the immediately following
Business Day). If and to the extent such Lender shall not have so made its
Commitment Percentage of the amount of such payment available to the Issuing
Bank, such Lender agrees to pay to the Issuing Bank, forthwith on demand such
amount, together with interest thereon, for each day from such date until the
date such amount is paid to the Administrative Agent for the account of the
Issuing Bank at the Federal Funds Effective Rate.
39
Each Lender agrees to fund its Commitment Percentage of such unreimbursed
payment notwithstanding a failure to satisfy any applicable lending conditions
or the provisions of Sections 2.01 or 2.07, or the occurrence of the Termination
Date. The failure of any Lender to make available to the Issuing Bank its
Commitment Percentage of any payment under any Letter of Credit shall neither
relieve any Lender of its obligation hereunder to make available to the Issuing
Bank its Commitment Percentage of any payment under any Letter of Credit on the
date required, as specified above, nor increase the obligation of such other
Lender. Whenever any Lender has made payments to the Issuing Bank in respect of
any reimbursement obligation for any Letter of Credit, such Lender shall be
entitled to share ratably, based on its Commitment Percentage, in all payments
and collections thereafter received on account of such reimbursement obligation.
(h) Whenever the Borrowers desire that the Issuing Bank issue a
Letter of Credit (or the amendment, renewal or extension of an outstanding
Letter of Credit), the Lead Borrower shall submit a letter of credit application
or otherwise provide notice to the Issuing Bank by electronic transmission
pursuant to the Online Services Agreement or, if the Online Services Agreement
is not then in effect, by written (including telegraphic, telex, facsimile or
cable communication) notice specifying the date on which the proposed Letter of
Credit is to be issued, amended, renewed or extended (which shall be a Business
Day), the stated amount of the Letter of Credit so requested, the expiration
date of such Letter of Credit, the name and address of the beneficiary thereof,
and the provisions thereof. If requested by the Issuing Bank, the Borrowers
shall also submit a letter of credit application (confirming any application
submitted pursuant to the first sentence of this clause (h)) on the Issuing
Bank's standard form in connection with any request for the issuance, amendment,
renewal or extension of a Letter of Credit.
(i) The obligations of the Borrowers to reimburse the Issuing Bank
for any L/C Disbursement shall be unconditional and irrevocable and shall be
paid strictly in accordance with the terms of this Agreement under all
circumstances, including, without limitation: (i) any lack of validity or
enforceability of any Letter of Credit; (ii) the existence of any claim, setoff,
defense or other right which the Borrowers may have at any time against a
beneficiary of any Letter of Credit or against the Issuing Bank or any of the
Lenders, whether in connection with this Agreement, the transactions
contemplated herein or any unrelated transaction; (iii) any draft, demand,
certificate or other document presented under any Letter of Credit proving to be
forged, fraudulent, invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect; (iv) payment by the Issuing
Bank of any Letter of Credit against presentation of a demand, draft or
certificate or other document which does not comply with the terms of such
Letter of Credit; (v) any other circumstance or happening whatsoever, whether or
not similar to any of the foregoing, that might, but for the provisions of this
Section, constitute a legal or equitable discharge of, or provide a right of
setoff against, the Borrowers' obligations hereunder; or (vi) the fact that any
Event of Default shall have occurred and be continuing. None of the
Administrative Agent, the Lenders, the Issuing Bank or any of their Affiliates
shall have any liability or responsibility by reason of or in connection with
the issuance or transfer of any Letter of Credit or any payment or failure to
make any payment thereunder (irrespective of any of the circumstances referred
to in the preceding sentence), or any error, omission, interruption, loss or
delay in transmission or delivery of any draft, notice or other communication
under or
40
relating to any Letter of Credit (including any document required to make a
drawing thereunder), any error in interpretation of technical terms or any
consequence arising from causes beyond the control of the Issuing Bank, provided
that the foregoing shall not be construed to excuse the Issuing Bank from
liability to the Borrowers to the extent of any direct damages (as opposed to
consequential damages, claims in respect of which are hereby waived by the
Borrowers to the extent permitted by Applicable Law) suffered by the Borrowers
that are caused by the Issuing Bank's failure to exercise care when determining
whether drafts and other documents presented under a Letter of Credit comply
with the terms thereof. The parties hereto expressly agree that, in the absence
of gross negligence, bad faith or willful misconduct on the part of the Issuing
Bank (as finally determined by a court of competent jurisdiction), the Issuing
Bank shall be deemed to have exercised care in each such determination. In
furtherance of the foregoing and without limiting the generality thereof, the
parties agree that, with respect to documents presented that appear on their
face to be in compliance with the terms of a Letter of Credit, the Issuing Bank
may, in its sole discretion, either accept and make payment upon such documents
without responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit.
(j) If any Event of Default shall occur and be continuing, on the
Business Day that the Borrowers receive notice from the Administrative Agent or
the Required Lenders demanding the deposit of cash collateral pursuant to this
paragraph, the Borrowers shall deposit in the Cash Collateral Account an amount
in cash equal to 103% of the Letter of Credit Outstandings as of such date plus
any accrued and unpaid interest thereon. Each such deposit shall be held by the
Collateral Agent as collateral for the payment and performance of the
Obligations and the Other Liabilities as long as such Event of Default is
continuing; at such time as the Event of Default is no longer continuing, and as
long as no Cash Dominion Event then exists, the Administrative Agent shall
release the cash collateral (to the extent not previously utilized to reimburse
any drawing under a Letter of Credit) to the Borrowers. The Collateral Agent
shall have exclusive dominion and control, including the exclusive right of
withdrawal, over such Cash Collateral Account. Other than any interest earned on
the investment of such deposits, which investments shall be made at the option
and sole discretion of the Collateral Agent at the request of the Lead Borrower
and at the Borrowers' risk and expense, such deposits shall not bear interest.
Interest or profits, if any, on such investments shall accumulate in such
account. Moneys in such Cash Collateral Account shall be applied by the
Collateral Agent to reimburse the Issuing Bank for payments on account of
drawings under Letters of Credit for which it has not been reimbursed and, to
the extent not so applied, shall be held for the satisfaction of the
reimbursement obligations of the Borrowers for the Letter of Credit Outstandings
at such time or, if the Loans have matured or the maturity of the Loans has been
accelerated, be applied to satisfy other Obligations and the Other Liabilities.
SECTION 2.8 Settlements Amongst Lenders
(a) The Swingline Lender may (but shall not be obligated to), at any
time, on behalf of the Borrowers (which hereby authorize the Swingline Lender to
act in their behalf in that
41
regard) request the Administrative Agent to cause the Lenders to make a
Revolving Loan (which shall be a Prime Rate Loan) in an amount equal to such
Lender's Commitment Percentage of the outstanding amount of Swingline Loans made
in accordance with Section 2.06, which request may be made regardless of whether
the conditions set forth in Article IV have been satisfied. Upon such request,
each Lender shall make available to the Administrative Agent the proceeds of
such Revolving Loan for the account of the Swingline Lender. If the Swingline
Lender requires a Revolving Loan to be made by the Lenders and the request
therefor is received prior to 12:00 Noon, Boston time, on a Business Day, such
transfers shall be made in immediately available funds no later than 3:00 p.m.,
Boston time, that day; and, if the request therefor is received after 12:00
Noon, Boston time, then no later than 3:00 p.m., Boston time, on the next
Business Day. The obligation of each Lender to transfer such funds is
irrevocable, unconditional and without recourse to or warranty by the
Administrative Agent or the Swingline Lender. If and to the extent any Lender
shall not have so made its transfer to the Administrative Agent, such Lender
agrees to pay to the Administrative Agent, forthwith on demand such amount,
together with interest thereon, for each day from such date until the date such
amount is paid to the Administrative Agent at the Federal Funds Effective Rate.
(b) The amount of each Lender's Commitment Percentage of outstanding
Revolving Loans shall be computed weekly (or more frequently in the
Administrative Agent's discretion) and shall be adjusted upward or downward
based on all Revolving Loans and repayments of Revolving Loans received by the
Administrative Agent as of 3:00 p.m., Boston time, on the first Business Day
following the end of the period specified by the Administrative Agent (such
date, the "Settlement Date").
(c) The Administrative Agent shall deliver to each of the Lenders
promptly after the Settlement Date a summary statement of the amount of
outstanding Revolving Loans for the period and the amount of repayments received
for the period. As reflected on the summary statement: (x) the Administrative
Agent shall transfer to each Lender its applicable Commitment Percentage of
repayments, and (y) each Lender shall transfer to the Administrative Agent (as
provided below), or the Administrative Agent shall transfer to each Lender, such
amounts as are necessary to insure that, after giving effect to all such
transfers, the amount of Revolving Loans made by each Lender with respect to
Revolving Loans shall be equal to such Lender's applicable Commitment Percentage
of Revolving Loans outstanding as of such Settlement Date. If the summary
statement requires transfers to be made to the Administrative Agent by the
Lenders and is received prior to 12:00 Noon, Boston time, on a Business Day,
such transfers shall be made in immediately available funds no later than 3:00
p.m., Boston time, that day; and, if received after 12:00 Noon, Boston time,
then no later than 3:00 p.m., Boston time, on the next Business Day. The
obligation of each Lender to transfer such funds is irrevocable, unconditional
and without recourse to or warranty by the Administrative Agent. If and to the
extent any Lender shall not have so made its transfer to the Administrative
Agent, such Lender agrees to pay to the Administrative Agent, forthwith on
demand such amount, together with interest thereon, for each day from such date
until the date such amount is paid to the Administrative Agent at the Federal
Funds Effective Rate.
SECTION 2.9 Notes; Repayment of Loans.
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(a) The Loans made by each Lender (and to the Swingline Lender, with
respect to Swingline Loans) shall be evidenced by a Note duly executed on behalf
of the Borrowers, dated the Closing Date, in substantially the form attached
hereto as Exhibit B-1 or B-2, as applicable, payable to the order of each such
Lender (or the Swingline Lender, as applicable) in an aggregate principal amount
equal to such Lender's Commitment (or, in the case of the Note evidencing the
Swingline Loans, $60,000,000).
(b) The outstanding principal balance of all Swingline Loans shall
be repaid on the earlier of the Termination Date or, on the date otherwise
requested by the Swingline Lender in accordance with the provisions of Section
2.08(a). The outstanding principal balance of all other Obligations shall be
payable on the Termination Date (subject to earlier repayment as provided
below). Each Note shall bear interest from the date thereof on the outstanding
principal balance thereof as set forth in this Article II. Each Lender is hereby
authorized by the Borrowers to endorse on a schedule attached to each Note
delivered to such Lender (or on a continuation of such schedule attached to such
Note and made a part thereof), or otherwise to record in such Lender's internal
records, an appropriate notation evidencing the date and amount of each Loan
from such Lender, each payment and prepayment of principal of any such Loan,
each payment of interest on any such Loan and the other information provided for
on such schedule; provided, however, that the failure of any Lender to make such
a notation or any error therein shall not affect the obligation of the Borrowers
to repay the Loans made by such Lender in accordance with the terms of this
Agreement and the applicable Notes.
(c) Upon receipt of an affidavit of a Lender as to the loss, theft,
destruction or mutilation of such Lender's Note and upon cancellation of such
Note, the Borrowers will issue, in lieu thereof, a replacement Note in favor of
such Lender, in the same principal amount thereof and otherwise of like tenor.
SECTION 2.10 Extension of Maturity Date.
(a) The Lead Borrower may elect to extend the Maturity Date from the
Initial Maturity Date to the Extended Maturity Date, subject to satisfaction of
the following terms and conditions as determined by the Administrative Agent in
its sole discretion, and, subject further to provisions of paragraph (b) below,
the consent of all of the Lenders:
(i) The Lead Borrower notifies the Administrative Agent
in writing no earlier than ninety (90) days and no later than
forty-five (45) days before the second anniversary of the
Closing Date of the Lead Borrower's election to request the
extension (the "Extension Request");
(ii) On the date of each of the Extension Request and on
the Initial Maturity Date, no Default or Event of Default then
exists;
43
(iii) The Borrowers shall have executed and delivered to
the Administrative Agent such agreements and documents as the
Administrative Agent may reasonably require incident to the
extension; and
(iv) The Borrowers shall have reimbursed the
Administrative Agent and the Lenders for all reasonable costs
and expenses incurred by the Administrative Agent and the
Lenders in connection with such Extension Request.
(b) Within forty-five (45) Business Days following receipt by the
Administrative Agent of the Lead Borrower's Extension Request, the
Administrative Agent shall notify the Lead Borrower (the "Extension Request
Response") as to which Lenders have consented to the Extension Request. If not
all of the Lenders have consented to the Extension Request (each such Lender, a
"Non-Consenting Lender"), the Borrowers may exercise any of the following
options, by notifying the Administrative Agent within ten (10) days from the
date of the Extension Request Response:
(A) The Borrowers may extend the Maturity Date,
provided, however, the Total Commitments in effect as of
the Initial Maturity Date shall be reduced by the amount
of the Commitments of the Non-Consenting Lenders and the
Borrowers shall pay each Non-Consenting Lender on the
Initial Maturity Date an amount equal to the outstanding
principal of its Loans and participations in unreimbursed
drawings under Letters of Credit and Swingline Loans,
accrued interest thereon, accrued fees and all other
amounts payable to it hereunder, provided further,
however, the Initial Maturity Date may not be so extended
if, as a result of such reduction the Total Commitments
are less than $400,000,000; or
(B) The Borrowers may, at their sole expense and
effort, upon notice to such Non-Consenting Lenders and the
Administrative Agent, require any such Non-Consenting
Lender to assign and delegate, without recourse (in
accordance with and subject to the restrictions contained
in Section 9.05), all its interests, rights and
obligations under this Agreement to an assignee that shall
assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment) and which
shall consent to the Extension Request, provided that
except in the case of an assignment to another Lender, the
Borrowers shall have received the prior written consent of
the Administrative Agent, the Issuing Bank and Swingline
Lender, which consent shall not unreasonably be withheld;
or
(C) The Borrowers may withdraw such Extension
Request by written notice to the Administrative Agent, and
thereupon all Obligations shall become due and payable in
full on the Initial Maturity Date.
44
(c) If the conditions to the Extension Request have been satisfied
and all of the Lenders have consented to the Extension Request, the Initial
Maturity Date shall be extended until the Extended Maturity Date; provided that
the Initial Maturity Date shall not be extended pursuant to the provisions
above, unless and until the Administrative Agent shall have notified the Lead
Borrower in writing that all of the conditions set forth herein have been
satisfied and that the Extended Maturity Date is in effect.
(d) Nothing contained in this Section 2.10 shall be deemed to modify
or abrogate the Commitments and any other obligations of any Non-Consenting
Lender under this Agreement through the Initial Maturity Date. Without limiting
the foregoing, each such Lender shall remain obligated to make Revolving Loans
and to purchase participations in Swingline Loans and Letter of Credit
Outstandings through the Initial Maturity Date in accordance with the terms of
this Agreement.
SECTION 2.11 Interest on Loans.
(a) Subject to Section 2.12, each Prime Rate Loan shall bear
interest (computed on the basis of the actual number of days elapsed over a year
of 365 or 366 days, as applicable) at a rate per annum that shall be equal to
the then Prime Rate, plus the Applicable Margin for Prime Rate Loans.
(b) Subject to Section 2.12, each LIBO Loan shall bear interest
(computed on the basis of the actual number of days elapsed over a year of 360
days) at a rate per annum equal, during each Interest Period applicable thereto,
to the Adjusted LIBO Rate for such Interest Period, plus the Applicable Margin
for LIBO Loans.
(c) Accrued interest on all Loans shall be payable in arrears on
each Interest Payment Date applicable thereto, on the Termination Date, after
the Termination Date on demand and (with respect to LIBO Loans) upon any
repayment or prepayment thereof (on the amount prepaid).
SECTION 2.12 Default Interest.
Effective upon the occurrence of any Event of Default and at all times
thereafter while such Event of Default is continuing, at the option of the
Administrative Agent or upon the direction of the Required Lenders, interest
shall accrue on all outstanding Loans (including Swingline Loans) (after as well
as before judgment, as and to the extent permitted by law) at a rate per annum
(computed on the basis of the actual number of days elapsed over a year of 360
days) equal to the rate (including the Applicable Margin for Loans) in effect
from time to time plus 2.00% per annum, and such interest shall be payable on
demand.
SECTION 2.13 Certain Fees.
45
The Borrowers shall pay to the Administrative Agent, for the account of
the Administrative Agent, the fees set forth in the Fee Letter as and when
payment of such fees is due as therein set forth.
SECTION 2.14 Unused Commitment Fee.
The Borrowers shall pay to the Administrative Agent for the account of
the Lenders, a commitment fee (the "Commitment Fee") equal to *% per annum (on
the basis of actual days elapsed in a year of 365 or 366 days, as applicable) of
the average daily balance of the Unused Commitment for each day commencing on
and including the Closing Date and ending on but excluding the Termination Date.
The Commitment Fee so accrued in any calendar quarter shall be payable on the
first Business Day of the immediately succeeding calendar quarter, except that
all Commitment Fees so accrued as of the Termination Date shall be payable on
the Termination Date.
SECTION 2.15 Letter of Credit Fees.
(a) The Borrowers shall pay the Administrative Agent, for the
account of the Lenders, on the last day of each calendar quarter, in arrears, a
fee (each, a "Letter of Credit Fee") equal to the following per annum
percentages of the average face amount of the following categories of Letters of
Credit outstanding during the subject quarter:
(i) Standby Letters of Credit: At the then Applicable
Margin per annum for LIBO Loans.
(ii) Commercial Letters of Credit: Fifty percent (50%)
of the Applicable Margin per annum for LIBO Loans.
(iii) After the occurrence and during the continuance of
an Event of Default, at the option of the Administrative Agent
or upon the direction of the Required Lenders, the Letter of
Credit Fee set forth in clauses (i) and (ii) above, shall be
increased by an amount equal to two percent (2%) per annum.
(b) The Borrowers shall pay to the Issuing Bank, in addition to all
Letter of Credit Fees otherwise provided for hereunder, other charges in
connection with the issuance, negotiation, settlement, amendment and processing
of each Letter of Credit issued by the Issuing Bank as are customarily imposed
by the Issuing Bank except as the Issuing Bank and the Lead Borrower may from
time to time otherwise agree.
*Confidential Treatment has been requested for the redacted portion pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended. The confidential,
redacted portions have been filed separately with the United States Securities
and Exchange Commission.
46
(c) All Letter of Credit Fees shall be calculated on the basis of a
365 or 366 day year, as applicable, and actual days elapsed.
SECTION 2.16 Nature of Fees.
All fees shall be paid on the dates due, in immediately available
funds, to the Administrative Agent, for the respective accounts of the
Administrative Agent, the Issuing Bank, and the Lenders, as provided herein. All
fees shall be fully earned on the date when due and shall not be refundable
under any circumstances, absent manifest error.
SECTION 2.17 Termination or Reduction of Commitments.
Upon at least two (2) Business Days' prior written notice to the
Administrative Agent, the Lead Borrower may at any time in whole permanently
terminate, or from time to time in part permanently reduce, the Commitments.
Each such reduction shall be in the principal amount of $10,000,000 or any
integral multiple thereof. Each such reduction or termination shall (i) be
applied ratably to the Commitments of each Lender and (ii) be irrevocable when
given. At the effective time of each such reduction or termination, the
Borrowers shall pay to the Administrative Agent for application as provided
herein (i) all Commitment Fees accrued on the amount of the Commitments so
terminated or reduced through the date thereof, and (ii) any amount by which the
Credit Extensions outstanding on such date exceed the amount to which the
Commitments are to be reduced effective on such date (and, if, after giving
effect to the prepayment in full of all outstanding Loans such Credit Extensions
have not been so reduced, deposit cash into the Cash Collateral Account in an
amount equal to 103% of the Letters of Credit Outstanding to the extent
necessary in order that the Credit Extensions do not exceed the Commitments as
so reduced), in each case pro rata based on the amount prepaid.
SECTION 2.18 Alternate Rate of Interest.
If prior to the commencement of any Interest Period for a LIBO
Borrowing:
(a) the Administrative Agent determines (which determination shall
be presumptively correct absent manifest error) that adequate and reasonable
means do not exist for ascertaining the Adjusted LIBO Rate for such Interest
Period; or
(b) the Administrative Agent is advised by the Required Lenders that
the Adjusted LIBO Rate for such Interest Period will not adequately and fairly
reflect the cost to such Lenders of making or maintaining their Loans included
in such Borrowing for such Interest Period;
then the Administrative Agent shall give notice thereof to the Borrowers and the
Lenders by telephone or telecopy as promptly as practicable thereafter (but in
any event, within two (2) Business Days) and, until the Administrative Agent
notifies the Borrowers and the Lenders that the circumstances giving rise to
such notice no longer exist, (i) any Borrowing Request that requests the
conversion of any Borrowing to, or continuation of any Borrowing as, a LIBO
Borrowing shall be ineffective and (ii) if any Borrowing Request requests a LIBO
Borrowing, such Borrowing shall be made as a Borrowing of Prime Rate Loans.
47
SECTION 2.19 Conversion and Continuation of Loans.
(a) The Lead Borrower on behalf of the Borrowers shall have the
right at any time,
(i) on three (3) Business Days' prior irrevocable
notice to the Administrative Agent (which notice, to be
effective, must be received by the Administrative Agent not
later than 11:00 a.m., Boston time, on the third Business Day
preceding the date of any conversion), (x) to convert any
outstanding Borrowings of Prime Rate Loans (but in no event
Swingline Loans) to Borrowings of LIBO Loans, or (y) to continue
an outstanding Borrowing of LIBO Loans for an additional
Interest Period,
(ii) on one Business Day's prior irrevocable notice to
the Administrative Agent (which notice, to be effective, must be
received by the Administrative Agent not later than 11:00 a.m.,
Boston time, on the first Business Day preceding the date of any
conversion), to convert any outstanding Borrowings of LIBO Loans
to a Borrowing of Prime Rate Loans,
subject to the following:
(b) no Borrowing of Loans may be converted into, or continued as,
LIBO Loans at any time when an Event of Default has occurred and is continuing;
(c) if less than a full Borrowing of Loans is converted, such
conversion shall be made pro rata among the Lenders, as applicable, in
accordance with the respective principal amounts of the Loans comprising such
Borrowing held by such Lenders immediately prior to such refinancing;
(d) the aggregate principal amount of Loans being converted into or
continued as LIBO Loans shall be in an integral of $1,000,000 and at least
$5,000,000;
(e) each Lender shall effect each conversion by applying the
proceeds of its new LIBO Loan or Prime Rate Loan, as the case may be, to its
Loan being so converted;
(f) the Interest Period with respect to a Borrowing of LIBO Loans
effected by a conversion or in respect to the Borrowing of LIBO Loans being
continued as LIBO Loans shall commence on the date of conversion or the
expiration of the current Interest Period applicable to such continuing
Borrowing, as the case may be;
(g) a Borrowing of LIBO Loans may be converted only on the last day
of an Interest Period applicable thereto;
48
(h) each request for a conversion or continuation of a Borrowing of
LIBO Loans which fails to state an applicable Interest Period shall be deemed to
be a request for an Interest Period of one month; and
(i) no more than ten (10) Borrowings of LIBO Loans may be
outstanding at any time.
If the Lead Borrower does not give notice to convert any Borrowing of Prime Rate
Loans, or does not give notice to continue, or does not have the right to
continue, any Borrowing as LIBO Loans, in each case as provided above, such
Borrowing shall automatically be converted to, or continued as, as applicable, a
Borrowing of Prime Rate Loans at the expiration of the then current Interest
Period. The Administrative Agent shall, after it receives notice from the Lead
Borrower, promptly give each Lender notice of any conversion, in whole or part,
of any Loan made by such Lender.
SECTION 2.20 Mandatory Prepayment; Cash Collateral; Commitment
Termination.
The outstanding Obligations shall be subject to mandatory prepayment as
follows:
(a) If at any time the amount of the Credit Extensions exceeds the
lower of (i) the then amount of the Total Commitments, and (ii) the then amount
of the Borrowing Base, the Borrowers will immediately upon notice from the
Administrative Agent (A) prepay the Loans in an amount necessary to eliminate
such excess, and (B) if, after giving effect to the prepayment in full of all
outstanding Loans such excess has not been eliminated, deposit cash into the
Cash Collateral Account in an amount equal to 103% of the Letters of Credit
Outstanding (which shall be released to the Borrowers from the Cash Collateral
Account, to the extent not previously utilized to reimburse any drawing under a
Letter of Credit, at such time that the amount of the Credit Extensions, without
giving effect to amounts deposited in the Cash Collateral Account, do not exceed
the lower of the then amount of the Total Commitments, and the then amount of
the Borrowing Base, but only if no Cash Dominion Event then exists).
(b) To the extent required pursuant to Sections 2.23 and/or 2.24,
the Revolving Loans shall be repaid daily in accordance with the provisions of
said Sections 2.23 and 2.24.
(c) Subject to the foregoing, outstanding Prime Rate Loans shall be
prepaid before outstanding LIBO Loans are prepaid. Each partial prepayment of
LIBO Loans shall be in an integral multiple of $5,000,000. No prepayment of LIBO
Loans shall be permitted pursuant to this Section 2.20 other than on the last
day of an Interest Period applicable thereto, unless the Borrowers
simultaneously reimburse the Lenders for all Breakage Costs associated
therewith. In order to avoid such Breakage Costs, as long as no Event of Default
has occurred and is continuing, at the request of the Lead Borrower, the
Administrative Agent shall hold all amounts required to be applied to LIBO Loans
in the Cash Collateral Account and will apply such funds to the applicable LIBO
Loans at the end of the then pending Interest Period therefor (provided that the
foregoing shall in no way limit or restrict the Agents' rights upon the
subsequent
49
occurrence of an Event of Default). No partial prepayment of a Borrowing of LIBO
Loans shall result in the aggregate principal amount of the LIBO Loans remaining
outstanding pursuant to such Borrowing being less than $5,000,000 (unless all
such outstanding LIBO Loans are being prepaid in full). Any prepayment of the
Revolving Loans shall not permanently reduce the Commitments.
(d) All amounts required to be applied to all Loans hereunder (other
than Swingline Loans) shall be applied ratably in accordance with each Lender's
Commitment Percentage.
(e) Upon the Termination Date, the Commitments and the credit
facility provided hereunder shall be terminated in full and the Borrowers shall
pay, in full and in cash, all outstanding Loans and all other outstanding
Obligations.
SECTION 2.21 Optional Prepayment of Loans; Reimbursement of Lenders.
(a) The Borrowers shall have the right at any time and from time to
time to prepay outstanding Loans in whole or in part, (x) with respect to LIBO
Loans, upon at least two Business Days' prior written, telex or facsimile notice
to the Administrative Agent prior to 11:00 a.m., Boston time, and (y) with
respect to Prime Rate Loans, on the same Business Day if written, telex or
facsimile notice is received by the Administrative Agent prior to 1:00 p.m.,
Boston time, subject to the following limitations:
(i) Subject to Section 2.20, all prepayments shall be
paid to the Administrative Agent for application, first, to the
prepayment of outstanding Swingline Loans, second, to the
prepayment of other outstanding Loans ratably in accordance with
each Lender's Commitment Percentage, and third, to the funding
of a cash collateral deposit in the Cash Collateral Account in
an amount equal to 103% of all Letter of Credit Outstandings.
(ii) Subject to the foregoing, outstanding Prime Rate
Loans shall be prepaid before outstanding LIBO Loans are
prepaid. Each partial prepayment of LIBO Loans shall be in an
integral multiple of $5,000,000. No prepayment of LIBO Loans
shall be permitted pursuant to this Section 2.21 other than on
the last day of an Interest Period applicable thereto, unless
the Borrowers simultaneously reimburse the Lenders for all
"Breakage Costs" (as defined below) associated therewith. No
partial prepayment of a Borrowing of LIBO Loans shall result in
the aggregate principal amount of the LIBO Loans remaining
outstanding pursuant to such Borrowing being less than
$5,000,000 (unless all such outstanding LIBO Loans are being
prepaid in full).
(iii) Each notice of prepayment shall specify the
prepayment date, the principal amount and Type of the Loans to
be prepaid and, in the case of LIBO Loans, the Borrowing or
Borrowings pursuant to which such Loans were made. Each notice
of prepayment shall be irrevocable and shall commit the
Borrowers to prepay such Loan by the amount and on the date
stated therein. The
50
Administrative Agent shall, promptly after receiving notice from
the Borrowers hereunder, notify each Lender of the principal
amount and Type of the Loans held by such Lender which are to be
prepaid, the prepayment date and the manner of application of
the prepayment.
(b) The Borrowers shall reimburse each Lender on demand for any loss
incurred or to be incurred by it in the reemployment of the funds released (i)
resulting from any prepayment (for any reason whatsoever, including, without
limitation, conversion to Prime Rate Loans or acceleration by virtue of, and
after, the occurrence of an Event of Default) of any LIBO Loan required or
permitted under this Agreement, if such Loan is prepaid other than on the last
day of the Interest Period for such Loan or (ii) in the event that after the
Lead Borrower delivers a notice of borrowing under Section 2.04 in respect of
LIBO Loans, such Loans are not borrowed on the first day of the Interest Period
specified in such notice of borrowing for any reason. Such loss shall be the
amount as reasonably determined by such Lender as the excess, if any, of (A) the
amount of interest which would have accrued to such Lender on the amount so paid
or not borrowed at a rate of interest equal to the Adjusted LIBO Rate for such
Loan, for the period from the date of such payment or failure to borrow to the
last day (x) in the case of a payment or refinancing of a LIBO Loan other than
on the last day of the Interest Period for such Loan, of the then current
Interest Period for such Loan or (y) in the case of such failure to borrow, of
the Interest Period for such LIBO Loan which would have commenced on the date of
such failure to borrow, over (B) the amount of interest which would have accrued
to such Lender on such amount by placing such amount on deposit for a comparable
period with leading banks in the London interbank market (collectively,
"Breakage Costs"). Any Lender demanding reimbursement for such loss shall
deliver to the Borrowers from time to time one or more certificates setting
forth the amount of such loss as determined by such Lender and setting forth in
reasonable detail the manner in which such amount was determined.
(c) In the event the Borrowers fail to prepay any Loan on the date
specified in any prepayment notice delivered pursuant to Section 2.21(a), the
Borrowers on demand by any Lender shall pay to the Administrative Agent for the
account of such Lender any amounts required to compensate such Lender for any
actual loss incurred by such Lender as a result of such failure to prepay,
including, without limitation, any loss, cost or expenses incurred by reason of
the acquisition of deposits or other funds by such Lender to fulfill deposit
obligations incurred in anticipation of such prepayment. Any Lender demanding
such payment shall deliver to the Borrowers from time to time one or more
certificates setting forth the amount of such loss as determined by such Lender
and setting forth in reasonable detail the manner in which such amount was
determined.
(d) Whenever any partial prepayment of Loans are to be applied to
LIBO Loans, such LIBO Loans shall be prepaid in the chronological order of their
Interest Payment Dates.
SECTION 2.22 Maintenance of Loan Account; Statements of Account.
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(a) The Administrative Agent shall maintain an account on its books
in the name of the Borrowers (the "Loan Account") which will reflect (i) all
Loans and other advances made by the Lenders to the Borrowers or for the
Borrowers' account, (ii) all L/C Disbursements, fees and interest that have
become payable as herein set forth, and (iii) any and all other monetary
Obligations that have become payable.
(b) The Loan Account will be credited with all amounts received by
the Administrative Agent from the Borrowers, including all amounts received in
the FRF Concentration Account from the Blocked Account Banks, and the amounts so
credited shall be applied as set forth in Sections 2.24(a) and (b). Within ten
(10) Business Days after the end of each month, the Administrative Agent shall
send to the Borrowers a statement accounting for the charges, loans, advances
and other transactions occurring among and between the Administrative Agent, the
Lenders and the Borrowers during that month. The monthly statements shall,
absent manifest error, be presumptively correct.
SECTION 2.23 Cash Receipts.
(a) Annexed hereto as Schedule 2.23(a) is a list of all present DDAs
maintained by the Borrowers, which Schedule includes, with respect to each
depository (i) the name and address of that depository; (ii) the account
number(s) maintained with such depository; and (iii) to the extent known, a
contact person at such depository.
(b) Annexed hereto as Schedule 2.23(b) is a list describing all
arrangements to which any Borrower is a party with respect to the payment to any
Borrower of the proceeds of all credit card charges for sales by any Borrower.
(c) On or prior to the Closing Date, the Borrowers shall:
(i) deliver to the Administrative Agent notifications
executed on behalf of the Borrowers to each depository
institution identified on Schedule 2.23(a) in form and substance
reasonably satisfactory to the Administrative Agent, of the
Administrative Agent's interest in such DDA (each, a "DDA
Notification"). The DDA Notifications shall be held in escrow by
the Administrative Agent until the occurrence of a Cash Dominion
Event, at which time the Administrative Agent may, in its
discretion, forward such DDA Notifications to the applicable
institutions,
(ii) have entered into a Blocked Account Agreement with
Wachovia with respect to the Wachovia Concentration Account
(Account No.2055275431509) (the "Wachovia Concentration
Account") in form and substance reasonably satisfactory to the
Administrative Agent (the "Wachovia Blocked Account Agreement"),
and
(iii) deliver to the Administrative Agent an agreement
(the "Credit Card Agreements") executed on behalf of the
Borrowers with Fifth Third and
52
each of the Borrowers' other major credit card processors (other
than FNANB) in form and substance reasonably satisfactory to the
Administrative Agent.
(d) The DDA Notifications and the Credit Card Agreements shall
require, after the occurrence and during the continuance of a Cash Dominion
Event, the sweep on each Business Day of all available cash receipts and other
proceeds from the sale or disposition of any Collateral, including, without
limitation, the proceeds of all credit card charges (all such cash receipts and
proceeds, "Cash Receipts"), (and with respect to institutions which maintain a
DDA, net of a minimum balance not to exceed $10,000) to (x) a concentration
account maintained by the Collateral Agent at Fleet (the "FRF Concentration
Account"), (y) the Wachovia Concentration Account, or (z) a Blocked Account, as
the Administrative Agent may direct.
(e) The Borrowers shall cause FNANB to forward all proceeds of all
credit card charges owed to the Borrowers and other proceeds of Collateral to
the Wachovia Concentration Account. Prior to the occurrence of a Cash Dominion
Event, FNANB may deduct from such proceeds any amounts due to FNANB by the
Borrowers and remit the net amount to the Wachovia Concentration Account. After
the occurrence of a Cash Dominion Event, the Borrowers shall cause FNANB to
remit the gross amounts due the Borrowers to the Wachovia Concentration Account,
without deduction or offset, except as provided in Section 6.01 and the first
sentence of Section 7.02 of the FNANB Merchant Agreement. If at any time
subsequent to the Closing Date, FNANB ceases to be a Subsidiary of the Lead
Borrower or ceases to be Controlled by the Lead Borrower, prior to the
consummation of the transaction which results in FNANB ceasing to be a
Subsidiary of the Borrower or the Change in Control, the Lead Borrower shall
cause FNANB to execute and deliver to the Administrative Agent a Credit Card
Agreement, pursuant to which, among other things, FNANB agrees to forward all
proceeds of all credit card charges and other proceeds of Collateral to either
(x) the Wachovia Concentration Account, or (y) to a Blocked Account, as the
Administrative Agent may direct.
(f) The Blocked Account Agreements shall require, after the
occurrence and during the continuance of a Cash Dominion Event, the sweep on
each Business Day of all Cash Receipts (net of a minimum balance not to exceed
$10,000) to the FRF Concentration Account or to such other account as the
Administrative Agent may direct.
(g) If at any time after the occurrence and during the continuance
of a Cash Dominion Event, any cash or cash equivalents owned by the Borrowers
and constituting proceeds of Collateral are deposited to any account (other than
a DDA for which a DDA Notification has been delivered), or held or invested in
any manner, otherwise than in a Blocked Account that is subject to a Blocked
Account Agreement as required herein, the Administrative Agent shall require the
Borrowers to close such account and have all funds therein transferred to the
FRF Concentration Account, the Wachovia Concentration Account, or such other
Blocked Account as the Administrative Agent may direct.
(h) The Borrowers may close DDAs or Blocked Accounts and/or open new
DDAs or Blocked Accounts, subject to the execution and delivery to the
Administrative Agent of appropriate DDA Notifications or Blocked Account
Agreements consistent with the provisions
53
of this Section 2.23. Unless consented to in writing by the Administrative
Agent, the Borrowers may not enter into any agreements with additional credit
card processors unless contemporaneously therewith, a Credit Card Agreement, is
executed and delivered to the Administrative Agent.
(i) The FRF Concentration Account is and shall remain, under the
sole dominion and control of the Collateral Agent. Each Borrower acknowledges
and agrees that, subject to the provisions of subparagraph (j) below and the
next to last sentence of Section 2.24(a), (i) such Borrower has no right of
withdrawal from the FRF Concentration Account, (ii) the funds on deposit in the
FRF Concentration Account shall continue to be collateral security for all of
the Obligations and Other Liabilities, and (iii) the funds on deposit in the FRF
Concentration Account shall be applied as provided in Section 2.24(a).
(j) So long as no Cash Dominion Event has occurred and is
continuing, the Borrowers may direct, and shall have sole control over, the
manner of disposition of its funds in the DDA Accounts, the Blocked Accounts,
and the Wachovia Concentration Account.
(i) After the occurrence and during the continuation of
a Cash Dominion Event, whether or not any Obligations are then
outstanding, the Borrowers shall cause the ACH or wire transfer
to, upon the Administrative Agent's instruction, the Wachovia
Concentration Account or another Blocked Account, no less
frequently than daily (and whether or not there is then an
outstanding balance in the Loan Account, unless the Commitments
have been terminated hereunder and the Obligations have
indefeasibly been paid in full) of the then contents of each
DDA, each such transfer to be net of any minimum balance, not to
exceed $10,000, as may be required to be maintained in the
subject DDA by the bank at which such DDA is maintained.
(ii) After the occurrence and during the continuation of
a Cash Dominion Event, whether or not any Obligations are then
outstanding, the Borrowers shall cause the ACH or wire transfer,
upon the Administrative Agent's instruction, to the FRF
Concentration Account of the then entire ledger balance of each
Blocked Account (including the Wachovia Concentration Account),
net of such minimum balance, not to exceed $10,000, as may be
required to be maintained in the subject Blocked Account by the
bank at which such Blocked Account is maintained.
(k) In the event that, notwithstanding the provisions of this
Section 2.23, after the occurrence and during the continuance of a Cash Dominion
Event, the Borrowers receive or otherwise have dominion and control of any such
proceeds or collections of Collateral, such proceeds and collections shall be
held in trust by the Borrowers for the Administrative Agent and shall not be
commingled with any of the Borrowers' other funds or deposited in any account of
any Borrower other than as instructed by the Administrative Agent.
SECTION 2.24 Application of Payments.
54
(a) As long as no Cash Dominion Event has occurred and is
continuing, all amounts received by the Agents from any source shall be applied
to the Obligations and the Other Liabilities as the Administrative Agent and the
Lead Borrower may agree. Subject to the provisions of Section 2.23, if a Cash
Dominion Event has occurred and is continuing, as long as neither (i) an Event
of Default has occurred and the time for payment of the Obligations has been
accelerated, nor (ii) a Default or an Event of Default has occurred under
Sections 7.01(h), 7.01(i) or 7.01(q) hereof, all amounts received in the FRF
Concentration Account from any source, including the Blocked Account Banks,
shall be applied, on the day of receipt, in the following order: first, to pay
fees and expense reimbursements and indemnification then due and payable to the
Administrative Agent, FSI, the Issuing Bank, and the Collateral Agent (other
than fees, expense reimbursements and indemnification payable in connection with
Other Liabilities); second to pay interest due and payable on Credit Extensions,
third to repay outstanding Swingline Loans; fourth, to repay other outstanding
Revolving Loans that are Prime Rate Loans and all outstanding reimbursement
obligations under Letters of Credit; fifth, to repay outstanding Revolving Loans
that are LIBO Loans and all Breakage Costs due in respect of such repayment
pursuant to Section 2.21(b) or, at the Lead Borrower's option, to fund a cash
collateral deposit to the Cash Collateral Account sufficient to pay, and with
direction to pay, all such outstanding LIBO Loans on the last day of the
then-pending Interest Period therefor; sixth to fund a cash collateral deposit
in the Cash Collateral Account in an amount equal to 103% of all Letter of
Credit Outstandings; seventh, to pay all other Obligations and all Other
Liabilities that are then outstanding and then due and payable. If all amounts
set forth in clauses first through and including seventh above are paid, any
excess amounts shall promptly be released to the Borrowers. Any other amounts
received by the Administrative Agent, the Issuing Bank, the Collateral Agent, or
any Lender as contemplated by Section 2.23 shall also be applied in the order
set forth above in this Section 2.24.
(b) All credits against the Obligations shall be effective on the
day of receipt thereof, and shall be conditioned upon final payment to the
Administrative Agent of the items giving rise to such credits. If any item
deposited to the FRF Concentration Account and credited to the Loan Account is
dishonored or returned unpaid for any reason, whether or not such return is
rightful or timely, the Administrative Agent shall have the right to reverse
such credit and charge the amount of such item to the Loan Account and the
Borrowers shall indemnify the Administrative Agent, the Collateral Agent, the
Issuing Bank and the Lenders against all claims and losses resulting from such
dishonor or return.
SECTION 2.25 Increased Costs.
(a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve,
special deposit or similar requirement against assets of,
deposits with or for the account of, or credit
55
extended by, any Lender or any holding company of any Lender
(except any such reserve requirement reflected in the Adjusted
LIBO Rate) or the Issuing Bank; or
(ii) impose on any Lender or the Issuing Bank or the
London interbank market any other condition affecting this
Agreement or LIBO Loans made by such Lender or any Letter of
Credit or participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any LIBO Loan (or of maintaining its obligation
to make any such Loan) or to increase the cost to such Lender or the Issuing
Bank of participating in, issuing or maintaining any Letter of Credit or to
reduce the amount of any sum received or receivable by such Lender or the
Issuing Bank hereunder (whether of principal, interest or otherwise) other than
Taxes, which shall be governed by Section 2.28 hereof , then the Borrowers will
pay to such Lender or the Issuing Bank, as the case may be, such additional
amount or amounts as will compensate such Lender or the Issuing Bank, as the
case may be, for such additional costs incurred or reduction suffered.
(b) If any Lender or the Issuing Bank determines that any Change in
Law regarding capital requirements has or would have the effect of reducing the
rate of return on such Lender's or the Issuing Bank's capital or on the capital
of such Lender's or the Issuing Bank's holding company, if any, as a consequence
of this Agreement or the Loans made by, or participations in Letters of Credit
held by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a
level below that which such Lender or the Issuing Bank or such Lender's or the
Issuing Bank's holding company could have achieved but for such Change in Law
(taking into consideration such Lender's or the Issuing Bank's policies and the
policies of such Lender's or the Issuing Bank's holding company with respect to
capital adequacy), then from time to time the Borrowers will pay to such Lender
or the Issuing Bank, as the case may be, such additional amount or amounts as
will compensate such Lender or the Issuing Bank or such Lender's or the Issuing
Bank's holding company for any such reduction suffered.
(c) A certificate of a Lender or the Issuing Bank setting forth the
amount or amounts necessary to compensate such Lender or the Issuing Bank or its
holding company, as the case may be, as specified in paragraph (a) or (b) of
this Section and setting forth in reasonable detail the manner in which such
amount or amounts were determined shall be delivered to the Lead Borrower and
shall be presumptively correct absent manifest error. The Borrowers shall pay
such Lender or the Issuing Bank, as the case may be, the amount shown as due on
any such certificate within ten (10) Business Days after receipt thereof.
(d) Failure or delay on the part of any Lender or the Issuing Bank
to demand compensation pursuant to this Section within three (3) months of the
increased cost or reduction in return shall constitute a waiver of such Lender's
or the Issuing Bank's right to demand such compensation.
SECTION 2.26 Change in Legality.
(a) Notwithstanding anything to the contrary contained elsewhere in
this Agreement, if (x) any Change in Law shall make it unlawful for a Lender to
make or maintain a
56
LIBO Loan or to give effect to its obligations as contemplated hereby with
respect to a LIBO Loan or (y) at any time any Lender determines that the making
or continuance of any of its LIBO Loans has become impracticable as a result of
a contingency occurring after the date hereof which adversely affects the London
interbank market or the position of such Lender in the London interbank market,
then, by written notice to the Lead Borrower, such Lender may (i) declare that
LIBO Loans will not thereafter be made by such Lender hereunder, whereupon any
request by the Borrowers for a LIBO Borrowing shall, as to such Lender only, be
deemed a request for a Prime Rate Loan unless such declaration shall be
subsequently withdrawn; and (ii) require that all outstanding LIBO Loans made by
it be converted to Prime Rate Loans, in which event all such LIBO Loans shall be
automatically converted to Prime Rate Loans as of the effective date of such
notice as provided in paragraph (b) below. In the event any Lender shall
exercise its rights under clause (i) or (ii) of this paragraph (a), all payments
and prepayments of principal which would otherwise have been applied to repay
the LIBO Loans that would have been made by such Lender or the converted LIBO
Loans of such Lender shall instead be applied to repay the Prime Rate Loans made
by such Lender in lieu of, or resulting from the conversion of, such LIBO Loans.
(b) For purposes of this Section 2.26, a notice to the Borrowers by
any Lender pursuant to paragraph (a) above shall be effective, if lawful, and if
any LIBO Loans shall then be outstanding, on the last day of the then-current
Interest Period; and otherwise such notice shall be effective on the date of
receipt by the Borrowers.
SECTION 2.27 Payments; Sharing of Setoff.
(a) The Borrowers shall make each payment required to be made by it
hereunder or under any other Loan Document (whether of principal, interest, fees
or reimbursement of drawings under Letters of Credit, or of amounts payable
under Sections 2.21(b), 2.25 or 2.28, or otherwise) prior to 2:00 p.m., Boston
time, on the date when due, in immediately available funds, without setoff or
counterclaim. Any amounts received after such time on any date may, in the
discretion of the Administrative Agent, be deemed to have been received on the
next succeeding Business Day for purposes of calculating interest thereon. All
such payments shall be made to the Administrative Agent at its offices at 00
Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx, except payments to be made directly to the
Issuing Bank or Swingline Lender as expressly provided herein and except that
payments pursuant to Sections 2.21(b), 2.25, 2.28 and 9.03 shall be made
directly to the Persons entitled thereto and payments pursuant to other Loan
Documents shall be made to the Persons specified therein. The Administrative
Agent shall distribute any such payments received by it for the account of any
other Person to the appropriate recipient promptly following receipt thereof. If
any payment under any Loan Document (other than payments with respect to LIBO
Borrowings) shall be due on a day that is not a Business Day, the date for
payment shall be extended to the next succeeding Business Day, and, if any
payment due with respect to LIBO Borrowings shall be due on a day that is not a
Business Day, the date for payment shall be extended to the next succeeding
Business Day, unless that succeeding Business Day is in the next calendar month,
in which event, the date of such payment shall be on the last Business Day of
subject calendar month, and, in the case of any payment accruing interest,
interest thereon shall be payable for the period of such extension. All payments
under each Loan Document shall be made in dollars.
57
(b) If at any time insufficient funds are received by and available
to the Administrative Agent to pay fully all amounts of principal, unreimbursed
drawings under Letters of Credit, interest and fees then due hereunder, such
funds shall be applied (i) first, towards payment of interest and fees then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of interest and fees then due to such parties, and (ii) second, towards
payment of principal and unreimbursed drawings under Letters of Credit then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of principal and unreimbursed drawings under Letters of Credit then due
to such parties.
(c) If any Lender shall, by exercising any right of setoff or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Loans or participations in drawings under Letters of
Credit or Swingline Loans resulting in such Lender's receiving payment of a
greater proportion of the aggregate amount of its Loans and participations in
drawings under Letters of Credit and Swingline Loans and accrued interest
thereon than the proportion received by any other Lender, then the Lender
receiving such greater proportion shall purchase (for cash at face value)
participations in the Loans and participations in drawings under Letters of
Credit and Swingline Loans of other Lenders to the extent necessary so that the
benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Loans and participations in drawings under Letters of Credit
and Swingline Loans, provided that (i) if any such participations are purchased
and all or any portion of the payment giving rise thereto is recovered, such
participations shall be rescinded and the purchase price restored to the extent
of such recovery, without interest, and (ii) the provisions of this paragraph
shall not be construed to apply to any payment made by the Borrowers pursuant to
and in accordance with the express terms of this Agreement or any payment
obtained by a Lender as consideration for the assignment of or sale of a
participation in any of its Loans or participations in drawings under Letters of
Credit to any assignee or participant, other than to the Borrowers or any
Affiliate thereof (as to which the provisions of this paragraph shall apply).
The Borrowers consent to the foregoing and agree, to the extent they may
effectively do so under Applicable Law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against the
Borrowers rights of setoff and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of the Borrowers in the amount
of such participation.
(d) Unless the Administrative Agent shall have received notice from
the Borrowers prior to the date on which any payment is due to the
Administrative Agent for the account of the Lenders or the Issuing Bank
hereunder that the Borrowers will not make such payment, the Administrative
Agent may assume that the Borrowers have made such payment on such date in
accordance herewith and may, in reliance upon such assumption, distribute to the
Lenders or the Issuing Bank, as the case may be, the amount due. In such event,
if the Borrowers have not in fact made such payment, then each of the Lenders or
the Issuing Bank, as the case may be, severally agrees to repay to the
Administrative Agent forthwith on demand the amount so distributed to such
Lender or Issuing Bank with interest thereon, for each day from and including
the date such amount is distributed to it to but excluding the date of payment
to the Administrative Agent, at the Federal Funds Effective Rate.
(e) If any Lender shall fail to make any payment required to be made
by it pursuant to this Agreement, then the Administrative Agent may, in its
discretion (notwithstanding any contrary provision hereof), apply any amounts
thereafter received by the
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Administrative Agent for the account of such Lender to satisfy such Lender's
obligations under this Agreement until all such unsatisfied obligations are
fully paid.
SECTION 2.28 Taxes.
(a) Any and all payments by or on account of any obligation of the
Borrowers hereunder or under any other Loan Document shall be made free and
clear of and without deduction for any Indemnified Taxes or Other Taxes,
provided that if the Borrowers shall be required to deduct any Indemnified Taxes
or Other Taxes from such payments, then (i) the sum payable shall be increased
as necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section) the Agents, any Lender
or the Issuing Bank (as the case may be) receives an amount equal to the sum it
would have received had no such deductions been made, (ii) the Borrowers shall
make such deductions, and (iii) the Borrowers shall pay the full amount deducted
to the relevant Governmental Authority in accordance with Applicable Law.
(b) In addition, the Borrowers shall pay any Other Taxes to the
relevant Governmental Authority in accordance with Applicable Law.
(c) The Borrowers shall indemnify the Agents, each Lender and the
Issuing Bank, within ten (10) Business Days after written demand therefor, for
the full amount of any Indemnified Taxes or Other Taxes paid by such Agent, such
Lender or the Issuing Bank, as the case may be, on or with respect to any
payment by or on account of any obligation of the Borrowers hereunder or under
any other Loan Document (including Indemnified Taxes or Other Taxes imposed or
asserted on or attributable to amounts payable under this Section) and any
penalties, interest and reasonable expenses arising therefrom or with respect
thereto, to the extent that such penalties, interest and expenses shall not
result from any action or inaction on the part of the Agent, the Lender or the
Issuing Bank, as the case may be, whether or not such Indemnified Taxes or Other
Taxes were correctly or legally imposed or asserted by the relevant Governmental
Authority. A certificate as to the amount of such payment or liability delivered
to the Borrowers by a Lender or the Issuing Bank, or by any Agent on its own
behalf or on behalf of a Lender or the Issuing Bank setting forth in reasonable
detail the manner in which such amount was determined, shall be presumptively
correct absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by the Borrowers to a Governmental Authority, the Borrowers shall
deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from or
reduction in withholding tax shall deliver to the Borrowers and the
Administrative Agent two copies of either United States Internal Revenue Service
Form 1001 or Form 4224, or, in the case of a Foreign Lender's claiming exemption
from or reduction in U.S. Federal withholding tax under Section 871(h) or 881(c)
of the Code with respect to payments of "portfolio interest", a Form W-8, or any
subsequent versions thereof or successors thereto (and, if such Foreign Lender
delivers a Form W-8BEN, a certificate representing that such Foreign Lender is
not a bank for purposes of Section 881(c) of the Code, is not a 10-percent
shareholder (within the meaning of Section
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871(h)(3)(B) of the Code) of the Borrowers and is not a controlled foreign
corporation related to the Borrowers (within the meaning of Section 864(d)(4) of
the Code)), properly completed and duly executed by such Foreign Lender claiming
complete exemption from or reduced rate of, United States federal withholding
tax on payments by the Borrowers under this Agreement and the other Loan
Documents. Such forms shall be delivered by each Foreign Lender on or before the
date it becomes a party to this Agreement (or, in the case of a transferee that
is a participation holder, on or before the date such participation holder
becomes a transferee hereunder) and on or before the date, if any, such Foreign
Lender changes its applicable lending office by designating a different lending
office (a "New Lending Office"). In addition, each Foreign Lender shall deliver
such forms promptly upon the obsolescence or invalidity of any form previously
delivered by such Foreign Lender. Notwithstanding any other provision of this
Section 2.28(e), a Foreign Lender shall not be required to deliver any form
pursuant to this 2.28(e) that such Foreign Lender is not legally able to
deliver.
(f) The Borrowers shall not be required to indemnify any Foreign
Lender or to pay any additional amounts to any Foreign Lender in respect of U.S.
Federal withholding tax pursuant to paragraph (a) or (c) above to the extent
that the obligation to pay such additional amounts would not have arisen but for
a failure by such Foreign Lender to comply with the provisions of paragraph (e)
above. Should a Lender become subject to Taxes because of its failure to deliver
a form required hereunder, the Borrowers shall, at such Lender's expense, take
such steps as such Lender shall reasonably request to assist such Lender to
recover such Taxes.
(g) If the Lead Borrower determines in good faith that a reasonable
basis exists for contesting a Tax, the relevant Lender or the Administrative
Agent, as applicable, shall cooperate with the Lead Borrower in challenging such
Tax at the Lead Borrower's expense, if requested by the Lead Borrower. If any
Lender or the Administrative Agent, as applicable, obtains a credit against or
receives a refund or reduction (whether by way of direct payment or by offset)
of any Tax for which payment has been made pursuant to this Section, which
credit, refund or reduction in the good faith judgment of such Lender or the
Administrative Agent, as the case may be, (and without any obligation to
disclose its tax records) is allocable to such payment made under this Section,
the amount of such credit, refund or reduction (together with any interest
received thereon) promptly shall be paid to the Lead Borrower to the extent that
payment has been made by the Lead Borrower in full pursuant to this Section.
SECTION 2.29 Security Interests in Collateral.
To secure their Obligations under this Agreement and the other Loan
Documents and the Other Liabilities, the Borrowers shall grant to the Collateral
Agent, for its benefit and the ratable benefit of the other Secured Parties, a
first-priority security interest in all of the Collateral pursuant hereto and to
the Security Documents, subject to Permitted Encumbrances having priority over
the Lien of the Agents.
SECTION 2.30 Mitigation Obligations; Replacement of Lenders.
(a) If any Lender requests compensation under Section 2.25, or if
the Borrowers are required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.28,
then such Lender shall use
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reasonable efforts to designate a different lending office for funding or
booking its Loans hereunder or to assign its rights and obligations hereunder to
another of its offices, branches or affiliates, if, in the reasonable judgment
of such Lender, such designation or assignment (i) would eliminate or reduce
amounts payable pursuant to Section 2.25 or 2.28, as the case may be, in the
future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender. The Borrowers
hereby agree to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment; provided, however, that the
Borrowers shall not be liable for such costs and expenses of a Lender requesting
compensation if (i) such Lender becomes a party to this Agreement on a date
after the Closing Date and (ii) the relevant Change in Law occurs on a date
prior to the date such Lender becomes a party hereto.
(b) If any Lender requests compensation under Section 2.25, or if
the Borrowers are required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.28,
or if any Lender defaults in its obligation to fund Loans hereunder, then the
Borrowers may, at their sole expense and effort, upon notice to such Lender and
the Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.05), all its interests, rights and obligations under this Agreement to
an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment), provided that (i) except in the
case of an assignment to another Lender, the Borrowers shall have received the
prior written consent of the Administrative Agent, the Issuing Bank and
Swingline Lender, which consent shall not unreasonably be withheld, (ii) such
Lender shall have received payment of an amount equal to the outstanding
principal of its Loans and participations in unreimbursed drawings under Letters
of Credit and Swingline Loans, accrued interest thereon, accrued fees and all
other amounts payable to it hereunder, from the assignee (to the extent of such
outstanding principal and accrued interest and fees) or the Borrowers (in the
case of all other amounts) and (iii) in the case of any such assignment
resulting from a claim for compensation under Section 2.25 or payments required
to be made pursuant to Section 2.28, such assignment will result in a reduction
in such compensation or payments. A Lender shall not be required to make any
such assignment and delegation if, prior thereto, as a result of a waiver by
such Lender or otherwise, the circumstances entitling the Borrowers to require
such assignment and delegation cease to apply.
ARTICLE III
Representations and Warranties
Each Borrower, for itself and on behalf of such Borrower's Subsidiaries
represents and warrants to the Agents and the Lenders that:
SECTION 3.1 Organization; Powers.
Each Borrower is, and each of its Subsidiaries is, duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect, and each such Person has all requisite power and authority to carry on
its business as now conducted and, except where the failure to do so,
individually or in the
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aggregate, could not reasonably be expected to result in a Material Adverse
Effect, is qualified to do business in, and is in good standing in, every
jurisdiction where such qualification is required.
SECTION 3.2 Authorization; Enforceability.
The transactions contemplated hereby and by the other Loan Documents to be
entered into by each Borrower are within such Borrower's corporate powers and
have been duly authorized by all necessary corporate, and, if required,
stockholder action. This Agreement has been duly executed and delivered by each
Borrower that is a party hereto and constitutes, and each other Loan Document to
which any Borrower is a party, when executed and delivered by such Borrower will
constitute, a legal, valid and binding obligation of such Borrower (as the case
may be), enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors' rights generally and subject to general principles of equity,
regardless of whether considered in a proceeding in equity or at law.
SECTION 3.3 Governmental Approvals; No Conflicts.
The transactions to be entered into contemplated by the Loan Documents (a) do
not require any consent or approval of, registration or filing with, or any
other action by, any Governmental Authority, except (i) for such as have been
obtained or made and are in full force and effect, (ii) for those for which the
failure to obtain could not be reasonably be expected to have a Material Adverse
Effect, and (iii) for filings and recordings necessary to perfect Liens created
under the Loan Documents, (b) will not violate any Applicable Law or regulation
or the charter, by-laws or other organizational documents of any Borrower or any
order of any Governmental Authority, except for such violation which could not
reasonably be expected to have a Material Adverse Effect, (c) will not violate
or result in a default under any indenture, agreement or other instrument
binding upon any Borrower or any of its Subsidiaries or their respective assets,
except for such violation or default which could not reasonably be expected to
have a Material Adverse Effect, or give rise to a right thereunder to require
any payment of a material amount to be made by any Borrower or any of its
Subsidiaries, and (d) will not result in the creation or imposition of any Lien
on any asset of any Borrower or any of its Subsidiaries, except Liens created
under the Loan Documents or otherwise permitted hereby or thereby.
SECTION 3.4 Financial Condition.
The Lead Borrower has heretofore furnished to the Lenders the consolidated
balance sheet, and statements of income, stockholders' equity, and cash flows
for the Lead Borrower and its Subsidiaries as of and for the fiscal year ending
February 28, 2003. Such financial statements present fairly, in all material
respects, the financial position, results of operations and cash flows of the
Lead Borrower and its Subsidiaries, as of such dates and for such periods in
accordance with GAAP.
SECTION 3.5 Properties.
(a) Each Borrower, and each of its Restricted Subsidiaries, has good title to,
or valid leasehold interests in, all its real and personal property material to
its business, except for defects which could not reasonably be expected to have
a Material Adverse Effect.
(b) Each Borrower, and each of its Restricted Subsidiaries owns, or
is licensed to use, all trademarks, trade names, copyrights, patents and other
intellectual property material to
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its business, and the use thereof by such Person does not infringe upon the
rights of any other Person, except for any such infringements that, individually
or in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect.
(c) Schedule 3.05(c)(i) sets forth the address of all Real Estate
that is owned by each Borrower and each of their respective Subsidiaries as of
the Closing Date, together with a list of the holders of any mortgage or other
Lien thereon. Schedule 3.05(c)(ii) sets forth the address of all Real Estate
that is leased by each Borrower and each of their respective Subsidiaries as of
the Closing Date, together with a list of the landlords and holders of any
mortgage or other Lien thereon.
SECTION 3.6 Litigation and Environmental Matters.
(a) There are no actions, suits or proceedings by or before any arbitrator or
Governmental Authority pending against or, to the knowledge of any Borrower or
any of its Subsidiaries, threatened against or affecting any such Person or
involving any of the Loan Documents, which could reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect (other
than those set forth on Schedule 3.06).
(b) Except for the matters set forth on Schedule 3.06, and except as
could not reasonably be expected to have a Material Adverse Effect, no Borrower
and no Subsidiary of any Borrower (i) has failed to comply with any
Environmental Law or to obtain, maintain or comply with any permit, license or
other approval required under any Environmental Law, (ii) has become subject to
any Environmental Liability, (iii) has received notice of any claim with respect
to any Environmental Liability or (iv) knows of any basis for any Environmental
Liability.
(c) Since the date of this Agreement, there has been no change in
the status of the matters set forth on Schedule 3.06 that, individually or in
the aggregate, has resulted in, or could reasonably be expected to result in, a
Material Adverse Effect.
SECTION 3.7 Compliance with Laws and Agreements.
Each Borrower, and each of its Subsidiaries, is in compliance with all laws,
regulations and orders of any Governmental Authority applicable to it or its
property and all indentures, material agreements and other instruments binding
upon it or its property, except where the failure to do so, individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse
Effect. No Default has occurred and is continuing.
SECTION 3.8 Investment and Holding Company Status.
No Borrower nor any Subsidiary of any Borrower is (a) an "investment company" as
defined in, or subject to regulation under, the Investment Company Act of 1940
or (b) a "holding company" as defined in, or subject to regulation under, the
Public Utility Holding Company Act of 1935.
SECTION 3.9 Taxes.
Each Borrower, and each of its Subsidiaries, has timely filed or caused to be
filed all tax returns and reports required to have been filed and has paid or
caused to be paid all taxes required to have been paid by it, except (a) taxes
that are being contested in good faith by
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appropriate proceedings, for which such Person has set aside on its books
adequate reserves, and as to which no Lien has arisen, or (b) to the extent that
the failure to do so could not reasonably be expected to result in a Material
Adverse Effect.
SECTION 3.10 ERISA.
Except as set forth on Schedule 3.10, as of the Closing Date, none of the
Borrowers is party to a Plan. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events for
which liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts, exceed the fair
market value of the assets of such Plan, and the present value of all
accumulated benefit obligations of all underfunded Plans (based on the
assumptions used for purposes of Statement of Financial Accounting Standards No.
87) did not, as of the date of the most recent financial statements reflecting
such amounts, exceed the fair market value of the assets of all such underfunded
Plans.
SECTION 3.11 Disclosure.
None of the reports, financial statements, certificates or other information
furnished by or on behalf of any Borrower or any of its Subsidiaries to the
Administrative Agent or any Lender in connection with the negotiation of this
Agreement or any other Loan Document or delivered hereunder or thereunder (as
modified or supplemented by other information so furnished) contains any
material misstatement of fact or omits to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, provided that with respect to projected or pro forma
financial information, the Borrowers represent only that such information was
prepared in good faith.
SECTION 3.12 Subsidiaries.
Schedule 3.12 sets forth the name of, and the ownership interest of each
Borrower in each of its Subsidiaries as of the Closing Date. There is no other
capital stock or ownership interest of any class outstanding as of the Closing
Date. Except as set forth on Schedule 3.12, as of the Closing Date, the
Borrowers are not and each of their respective Subsidiaries is not party to any
joint venture, general or limited partnership, or limited liability company,
agreements or any other business ventures or entities.
SECTION 3.13 Insurance.
Schedule 3.13 sets forth a description of all insurance maintained by or on
behalf of the Borrowers and their respective Subsidiaries as of the Closing
Date. As of the Closing Date, each of such policies is in full force and effect.
As of the Closing Date, all premiums in respect of such insurance that are due
and payable have been paid.
SECTION 3.14 Labor Matters.
There are no strikes, lockouts or slowdowns against any Borrower or any of its
Subsidiaries pending or, to the knowledge of the Borrowers, threatened to the
extent that any such action could reasonably be expected to have a Material
Adverse Effect. The hours worked by and
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payments made to employees of the Borrowers and their respective Subsidiaries
have not been in violation of the Fair Labor Standards Act or any other
applicable federal, state, local or foreign law dealing with such matters to the
extent that any such violation could reasonably be expected to have a Material
Adverse Effect. All payments due from any Borrower or any of its Subsidiaries,
or for which any claim may be made against any such Person, on account of wages
and employee health and welfare insurance and other benefits, have been paid or
accrued as a liability on the books of such member, except for such payments or
claims as could not reasonably be expected to have a Material Adverse Effect.
The consummation of the transactions contemplated by the Loan Documents will not
give rise to any right of termination or right of renegotiation on the part of
any union under any collective bargaining agreement to which any Borrower or any
of its Subsidiaries is bound.
SECTION 3.15 Security Documents.
The Security Documents create in favor of the Collateral Agent, for the ratable
benefit of the Secured Parties, a legal, valid and enforceable security interest
in the Collateral, and the Security Documents constitute, or will upon the
filing of financing statements and the obtaining of "control", in each case with
respect to the relevant Collateral as required under the applicable Uniform
Commercial Code, the creation of a fully perfected first priority Lien on, and
security interest in, all right, title and interest of the Borrowers thereunder
in such Collateral, in each case prior and superior in right to any other
Person, except as permitted hereunder or under any other Loan Document.
SECTION 3.16 Federal Reserve Regulations.
(a) Neither the Borrowers nor any of their respective Subsidiaries is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of buying or carrying Margin Stock.
(b) No part of the proceeds of any Loan or any Letter of Credit will
be used, whether directly or indirectly, and whether immediately, incidentally
or ultimately, (i) to buy or carry Margin Stock or to extend credit to others
for the purpose of buying or carrying Margin Stock or to refund indebtedness
originally incurred for such purpose or (ii) for any purpose that entails a
violation of, or that is inconsistent with, the provisions of the Regulations of
the Board, including Regulation U or X.
SECTION 3.17 Solvency.
Each of the Borrowers is Solvent. No transfer of property is being made by any
Borrower and no obligation is being incurred by any Borrower in connection with
the transactions contemplated by this Agreement or the other Loan Documents with
the intent to hinder, delay, or defraud either present or future creditors of
any Borrower.
SECTION 3.18 Inventory.
All Inventory of the Lead Borrower and its Subsidiaries (other than an amount
not to exceed one percent (1%) of the total Inventory at any time) shall be
owned only by a Borrower or a Subsidiary which has complied with the provisions
of Section 5.12 hereof.
ARTICLE IV
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Conditions
SECTION 4.1 Closing Date.
This Agreement shall not become effective until the date on which each of the
following conditions precedent have been satisfied or waived by the
Administrative Agent:
(a) The Agents (or their counsel) shall have received from each
party hereto either (i) a counterpart of this Agreement and all other Loan
Documents (including, without limitation, the Security Documents) signed on
behalf of such party or (ii) written evidence satisfactory to the Agents (which
may include telecopy transmission of a signed signature page of this Agreement)
that such party has signed a counterpart of this Agreement and all other Loan
Documents.
(b) The Agents shall have received a favorable written opinion
(addressed to each Agent and the Lenders on the Closing Date and dated the
Closing Date) of McGuireWoods LLP, counsel for the Borrowers substantially in
the form of Exhibit C, covering such matters relating to the Borrowers, the Loan
Documents or the transactions contemplated thereby as the Required Lenders shall
reasonably request. The Borrowers hereby request such counsel to deliver such
opinion.
(c) The Agents shall have received such documents and certificates
as the Agents or their counsel may reasonably request relating to the
organization, existence and good standing of each Borrower, the authorization of
the transactions contemplated by the Loan Documents and any other legal matters
relating to the Borrowers, the Loan Documents or the transactions contemplated
thereby, all in form and substance reasonably satisfactory to the Agents and
their counsel.
(d) After giving effect to the first funding under the Loans; any
charges to the Loan Account made in connection with the establishment of the
credit facility contemplated hereby; and all Letters of Credit to be issued at,
or immediately subsequent to, such establishment, Capped Availability shall be
not less than $300,000,000. The Agents shall have received a Borrowing Base
Certificate dated the Closing Date, relating to the month ended on May 31, 2003,
and executed by a Financial Officer of the Lead Borrower.
(e) The Agents shall have received a certificate, reasonably
satisfactory in form and substance to the Agents, (i) with respect to the
solvency of (A) the Lead Borrower and its Subsidiaries on a consolidated basis,
and (B) each Borrower, individually, as of the Closing Date, and (ii) certifying
that, as of the Closing Date, the representations and warranties made by the
Borrowers in the Loan Documents are true and complete in all material respects
and that no event has occurred (or failed to occur) which is or which, solely
with the giving of notice or passage of time(or both) would be a Default or an
Event of Default.
(f) All necessary consents and approvals to the transactions
contemplated hereby shall have been obtained and shall be reasonably
satisfactory to the Agents.
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(g) The Collateral Agent shall have received (i) appraisals of the
Collateral consisting of Inventory by a third party appraiser reasonably
acceptable to the Collateral Agent; and (ii) a commercial finance examination of
the Borrowers' books and records reasonably acceptable to the Agents.
(h) The Agents shall have reviewed, and be reasonably satisfied
with, the Borrowers' securitization program for its private credit card
receivables.
(i) The Agents shall be reasonably satisfied that any financial
statements delivered to them fairly present the business and financial condition
of the Lead Borrower and its Subsidiaries, and that there has been no material
adverse change in the assets, business, financial condition, income, or
prospects of the Lead Borrower and its Subsidiaries since the date of the most
recent financial information delivered to the Agents.
(j) There shall not have occurred any default, nor shall any event
exist which is, or solely with the passage of time, the giving of notice or
both, would be a default under any Material Indebtedness of any Borrower.
(k) The Collateral Agent shall have received results of searches or
other evidence reasonably satisfactory to the Collateral Agent (in each case
dated as of a date reasonably satisfactory to the Collateral Agent) indicating
the absence of Liens on the Borrowers' Inventory and proceeds thereof, including
without limitation, receivables from credit card processors, except for Liens
for which termination statements and releases reasonably satisfactory to the
Collateral Agent are being tendered concurrently with such extension of credit.
(l) The Collateral Agent shall have received all documents and
instruments, including Uniform Commercial Code financing statements, required by
law or reasonably requested by the Collateral Agent to be filed, registered or
recorded to create or perfect the first priority Liens intended to be created
under the Loan Documents and all such documents and instruments shall have been
so filed, registered or recorded to the satisfaction of the Collateral Agent.
(m) The Collateral Agent shall have received the DDA Notifications,
the Wachovia Blocked Account Agreement, and Credit Card Agreements required to
be delivered hereunder on or before the Closing Date.
(n) All fees due at or immediately after the Closing Date and all
reasonable costs and expenses incurred by the Agents in connection with the
establishment of the credit facility contemplated hereby (including the
reasonable fees and expenses of counsel to the Agents) shall have been paid in
full.
(o) The consummation of the transactions contemplated hereby shall
not (a) violate any Applicable Law, or (b) conflict with, or result in a default
or event of default under, any material agreement of any Borrower.
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(p) No material changes in governmental regulations or policies
affecting the Borrowers, the Agents, the Arranger or any Lender involved in this
transaction shall have occurred prior to the Closing Date which could,
individually or in the aggregate, materially adversely effect the transaction
contemplated by this Agreement.
(q) There shall be no Default or Event of Default on the Closing
Date.
(r) The Collateral Agent shall have received, and be satisfied with,
evidence of the Borrowers' insurance, together with such endorsements as are
required by the Loan Documents.
(s) The Agents shall have received a payoff letter or evidence
otherwise reasonably satisfactory in form and substance to the Agents from the
Borrower's existing lenders confirming the termination of such credit facility
upon receipt of payment of the amounts due, if any, thereunder. All obligations
to such existing lenders, if any, shall be repaid with the proceeds of the
initial Loans hereunder, and all Liens with respect to the foregoing financing
arrangements on any of the Borrowers' assets, if any, shall have been terminated
(or provision therefor satisfactory to the Collateral Agent, made).
(t) There shall have been delivered to the Administrative Agent such
additional instruments and documents as the Agents or counsel to the Agents
reasonably may require or request.
The Administrative Agent shall notify the Borrowers and the Lenders of the
Closing Date, and such notice shall be conclusive and binding. Notwithstanding
the foregoing, the obligations of the Lenders to make Loans and of the Issuing
Bank to issue Letters of Credit hereunder shall not become effective unless each
of the foregoing conditions is satisfied (or waived by the Administrative Agent)
and the Closing Date occurs at or prior to 5:00 p.m., Boston time, on June 27,
2003, (and, in the event such conditions are not so satisfied or waived, this
Agreement shall terminate at such time).
SECTION 4.2 Conditions Precedent to Each Loan and Each Letter of
Credit.
The obligation of the Lenders to make each Revolving Loan and of the
Issuing Bank to issue each Letter of Credit, is subject to the following
conditions precedent:
(a) Notice. The Administrative Agent shall have received a notice
with respect to such Borrowing or issuance, as the case may be, as required by
Article II.
(b) Representations and Warranties. All representations and
warranties contained in this Agreement and any Borrowing Base Certificate shall
be true and correct in all material respects on and as of the date of each
Borrowing or the issuance of each Letter of Credit hereunder with the same
effect as if made on and as of such date, other than representations and
warranties that relate solely to an earlier date.
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(c) No Default. On the date of each Borrowing hereunder and the
issuance of each Letter of Credit, no Default or Event of Default shall have
occurred and be continuing.
(d) Borrowing Base Certificate. The Administrative Agent shall have
received the most recently required Borrowing Base Certificate, with each such
Borrowing Base Certificate including schedules as required by this Agreement.
The request by the Borrowers for, and the acceptance by the Borrowers of, each
extension of credit hereunder shall be deemed to be a representation and
warranty by the Borrowers that the conditions specified in this Section 4.02(b)
and (c) have been satisfied at that time and that after giving effect to such
extension of credit the Borrowers shall continue to be in compliance with the
Borrowing Base. The conditions set forth in this Section 4.02 are for the sole
benefit of the Administrative Agent and each Lender and may be waived by the
Administrative Agent in whole or in part without prejudice to the Administrative
Agent or any Lender.
ARTICLE V
Affirmative Covenants
Until the Commitments have expired or been terminated and the principal
of and interest on each Loan and all fees payable hereunder shall have been paid
in full and all Letters of Credit shall have expired or terminated and all L/C
Disbursements shall have been reimbursed, each Borrower covenants and agrees
with the Agents and the Lenders that:
SECTION 5.1 Financial Statements and Other Information.
(a) The Borrowers will furnish to the Agents and the Lenders:
(i) within ninety (90) days after the end of each
fiscal year of the Lead Borrower, its consolidated balance sheet
and related statements of operations, stockholders' equity and
cash flows as of the end of and for such year, setting forth in
each case in comparative form the figures for the previous
fiscal year, all audited and reported on by independent public
accountants of recognized national standing (without a "going
concern" or like qualification or exception and without a
qualification or exception as to the scope of such audit) to the
effect that such consolidated financial statements present
fairly in all material respects the financial condition and
results of operations of the Lead Borrower and its Subsidiaries
on a consolidated basis in accordance with GAAP; and
(ii) within forty-five (45) days after the end of each
fiscal quarter of the Lead Borrower, its consolidated balance
sheet and related statements of operations, stockholders' equity
and cash flows, as of the end of and for such fiscal quarter and
the elapsed portion of the fiscal year, with comparative results
to the same fiscal periods of the prior fiscal year, all
certified by one of its Financial Officers as presenting in all
material respects the financial condition and
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results of operations of the Lead Borrower and its Subsidiaries
on a consolidated basis in accordance with GAAP, subject to
normal year end audit adjustments and the absence of footnotes,
and
(iii) concurrently with any delivery of financial
statements under clause (i) or (ii) above, a certificate of a
Financial Officer of the Lead Borrower (i) certifying, to the
best knowledge of such Financial Officer, as to whether a
Default has occurred and, if a Default has occurred, specifying
the details thereof and any action taken or proposed to be taken
with respect thereto, (ii) setting forth reasonably detailed
calculations with respect to the Consolidated EBITDA for such
period, and (iii) stating whether any change in GAAP or in the
application thereof has occurred since the date of the Lead
Borrower's audited financial statements referred to in Section
3.04 and, if any such change has occurred, specifying the effect
of such change on the financial statements accompanying such
certificate; and
(iv) within forty-five (45) days subsequent to the
commencement of each fiscal year of the Lead Borrower, a
detailed consolidated budget by quarter for such fiscal year
(including a projected consolidated balance sheet and related
statements of projected operations and cash flow as of the end
of and for such fiscal year) and, promptly when available, any
significant revisions of such budget; and
(v) promptly after the same become publicly available,
copies of all reports on Forms 10-K and 10-Q and proxy
statements filed by the Lead Borrower with the Securities and
Exchange Commission, or any Governmental Authority succeeding to
any or all of the functions of said Commission, or with any
national securities exchange, as the case may be.
(b) The Borrowers will furnish to the Agents
(i) within ten (10) Business Days after the end of each
month, a certificate in the form of Exhibit D (a "Borrowing Base
Certificate") showing the Borrowing Base as of the close of
business on the last day of the immediately preceding month,
each such Certificate to be certified as complete and correct on
behalf of the Borrowers by a Financial Officer of the Lead
Borrower, provided that in addition to the foregoing, within
five (5) Business Days after the end of December of each year,
the Lead Borrower shall furnish a preliminary Borrowing Base
Certificate as of the close of business on the last day of
December, provided, further however, if and so long as an Event
of Default exists, at the option of the Administrative Agent,
such Borrowing Base Certificate (showing the Borrowing Base as
of the close of business on the last day of the immediately
preceding week) shall be furnished weekly on Wednesday of each
week; and
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(ii) the financial and collateral reports described on
Schedule 5.01(b)(ii), at the times set forth in such Schedule;
and
(iii) after the occurrence and during the continuance of
an Event of Default, promptly upon receipt thereof, copies of
all reports submitted to the Lead Borrower by independent
certified public accountants in connection with each annual,
interim or special audit of the books of the Lead Borrower and
its Subsidiaries made by such accountants, including any
management letter submitted by such accountants to management in
connection with their annual audit, but excluding any accountant
"agreed upon procedures" report.
(iv) promptly following any request therefor, such other
information regarding the operations, business affairs and
financial condition of any Borrower, or compliance with the
terms of any Loan Document, as the Agents or any Lender may
reasonably request.
SECTION 5.2 Notices of Material Events.
The Borrowers will furnish to the Administrative Agent prompt written notice of
the following:
(a) within three Business Days after a Financial Officer obtains
knowledge thereof, the occurrence of any Default or Event of Default;
(b) within three Business Days after a Financial Officer obtains
knowledge thereof, the filing or commencement of any action, suit or proceeding
by or before any arbitrator or Governmental Authority against or affecting any
Borrower or any Subsidiary or any Affiliate thereof that, if adversely
determined, could reasonably be expected to result in a Material Adverse Effect;
(c) within three Business Days after a Financial Officer obtains
knowledge thereof, the occurrence of any ERISA Event that, alone or together
with any other ERISA Events that have occurred, could reasonably be expected to
result in a Material Adverse Effect;
(d) within three Business Days after a Financial Officer obtains
knowledge thereof, any other development that results in, or could reasonably be
expected to result in, a Material Adverse Effect;
(e) any change in any the Lead Borrower's executive officers;
(f) within three Business Days after a Financial Officer obtains
knowledge thereof, the filing of any Lien for unpaid taxes against any Borrower
in an amount in excess of $2,000,000;
(g) the discharge by any Borrower of their present independent
accountants or any withdrawal or resignation by such independent accountants;
and
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(h) within three Business Days after a Financial Officer obtains
knowledge thereof, the occurrence of any early amortization event or event of
default by the Lead Borrower or any of its Subsidiaries under any Permitted
Securitization Transaction.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Lead Borrower setting
forth the details of the event or development requiring such notice and, if
applicable, any action taken or proposed to be taken with respect thereto.
SECTION 5.3 Information Regarding Collateral.
(a) The Lead Borrower will furnish to the Agents prompt written notice of any
change of the following (except that with respect to the events described in
clauses (i), (iii) and (iv), the Lead Borrower shall provide the Agents with at
least ten (10) days prior written notice of the date that any such event shall
occur): (i) in any Borrower's corporate name or in any trade name used to
identify it in the conduct of its business or in the ownership of its
properties, (ii) in the location of any Borrower's chief executive office or its
principal place of business, (iii) in any Borrower's identity or corporate
structure or (iv) in any Borrower's jurisdiction of incorporation, Federal
Taxpayer Identification Number or organizational identification number assigned
to it by its state of organization. Notwithstanding the foregoing, if any
Borrower's Federal Taxpayer Identification Number or organizational
identification number assigned to it by its state of organization is changed by
the applicable Governmental Authority, Lead Borrower will furnish to the Agents
prompt written notice of any such change not later than ten (10) days from the
date such Borrower has been notified by such Governmental Authority of such
change. The Lead Borrower also agrees promptly to notify the Agents if any
material portion of the Collateral is damaged or destroyed. In addition, the
Lead Borrower will furnish to the Agents written notice at the end of each
fiscal quarter of any change in any office or store in which it maintains books
or records relating to Collateral owned by it or any office, store or facility
at which Collateral owned by it is located (including the establishment of any
such new office or facility).
(b) Each year, at the time of delivery of annual financial
statements with respect to the preceding fiscal year pursuant to clause (a)(i)
of Section 5.01, the Lead Borrower shall deliver to the Agents a certificate of
a Financial Officer of the Lead Borrower setting forth the information required
pursuant to Section 2 of the Perfection Certificate or confirming that there has
been no change in such information since the date of the Perfection Certificate
delivered on the Closing Date or the date of the most recent Perfection
Certificate delivered pursuant to this Section.
(c) Should any of the information on any of the Schedules hereto
become misleading in any material respect as a result of changes after the
Closing Date, the Lead Borrower shall advise the Administrative Agent in writing
of such revisions or updates as may be necessary or appropriate to update or
correct the same; provided however that no update to any such Schedule shall
result in the modification or expansion of any permissible transactions set
forth in Article 6 hereof from those in existence immediately prior to the
delivery of such updated schedules.
SECTION 5.4 Existence; Conduct of Business.
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Each Borrower will, and will cause each of its Restricted Subsidiaries to, do or
cause to be done all things necessary to comply with its respective charter,
certificate of incorporation, articles of organization, and/or other
organizational documents, as applicable; and by-laws and/or other instruments
which deal with corporate governance, and to preserve, renew and keep in full
force and effect its legal existence and the rights, licenses, permits,
privileges, franchises, patents, copyrights, trademarks and trade names material
to the conduct of its business, provided that the foregoing shall not prohibit
any transaction permitted under Sections 6.03 or 6.05 or prohibit any such
Person from discontinuing any business or forfeiting any right, license, permit,
privilege, franchise, patent, copyright, trademark or trade name it reasonably
deems appropriate in the ordinary course of business.
SECTION 5.5 Payment of Obligations.
Each Borrower will, and will cause each of its Restricted Subsidiaries to, pay
its Indebtedness and other obligations, including tax liabilities, before the
same shall become delinquent or in default, except where (a) (i) the validity or
amount thereof is being contested in good faith by appropriate proceedings, (ii)
such Borrower or such Subsidiary has set aside on its books adequate reserves
with respect thereto in accordance with GAAP, (iii) such contest effectively
suspends collection of the contested obligation, and (iv) no Lien secures such
obligation or (b) the failure to make payment could not reasonably be expected
to result in a Material Adverse Effect. Nothing contained herein shall be deemed
to limit the rights of the Administrative Agent under Section 2.03(b).
SECTION 5.6 Maintenance of Properties.
Each Borrower will, and will cause each of its Restricted Subsidiaries to, keep
and maintain all property material to the conduct of its business in good
working order and condition, ordinary wear and tear excepted and with the
exception of asset dispositions permitted hereunder.
SECTION 5.7 Insurance.
(a) Each Borrower will, and will cause each of its Restricted Subsidiaries to,
(i) maintain insurance with financially sound and reputable insurers having a
rating of at least A- or better by A.M. Best Rating Guide (or, to the extent
consistent with prudent business practice, a program of self-insurance) on such
of its property and in at least such amounts and against at least such risks as
is customary with companies in the same or similar businesses operating in the
same or similar locations, including commercial general liability insurance
against claims for personal injury or death occurring upon, in or about or in
connection with the use of any properties owned, occupied or controlled by it
(including the insurance required pursuant to the Security Documents); (ii)
maintain such other insurance as may be required by law, except where the
failure to do so would not have a Material Adverse Effect; and (iii) furnish to
the Administrative Agent, upon written request, information as to the insurance
carried. The Administrative Agent acknowledges that the current insurers of the
Borrowers are reasonably acceptable to the Administrative Agent.
(b) Commercial property insurance policies maintained with respect
to any Collateral shall be endorsed or otherwise amended to include (i) a
lenders' loss payable clause, in form and substance reasonably satisfactory to
the Collateral Agent, which endorsements or amendments shall provide that the
insurer shall pay all proceeds otherwise payable to the
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Borrowers under the policies with respect to the Collateral directly to the
Collateral Agent, and (ii) a provision to the effect that none of the Borrowers,
the Administrative Agent, the Collateral Agent, or any other party shall be a
coinsurer (it being understood that the inclusion of a deductible shall not be
deemed to cause the Borrowers to be a co-insurer). Commercial general liability
policies shall be endorsed to name the Collateral Agent as an additional
insured. Each such policy referred to in this paragraph also shall provide that
it shall not be canceled, modified or not renewed (i) by reason of nonpayment of
premium except upon not less than 10 days' prior written notice thereof by the
insurer to the Collateral Agent (giving the Collateral Agent the right to cure
defaults in the payment of premiums) or (ii) for any other reason except upon
not less than 30 days' prior written notice thereof by the insurer to the
Collateral Agent. The Borrowers shall deliver to the Collateral Agent, prior to
the cancellation, modification or nonrenewal of any such policy of insurance,
evidence of a replacement policy or renewal of a policy previously delivered to
the Collateral Agent together with evidence satisfactory to the Collateral Agent
of payment of the premium therefor.
SECTION 5.8 Casualty and Condemnation.
Each Borrower will furnish to the Agents and the Lenders prompt written notice
of any property or other insured damage to any material portion of the
Collateral or the commencement of any action or proceeding for the taking of any
material portion of the Collateral under power of eminent domain or by
condemnation or similar proceeding.
SECTION 5.9 Books and Records; Inspection and Audit Rights; Appraisals;
Accountants; Physical Inventories.
(a) Each Borrower will, and will cause each of its Restricted
Subsidiaries (other than FNANB) to, keep proper books of record and account in
which full, true and correct entries are made of all dealings and transactions
in relation to its business and activities. Each Borrower will permit any
representatives designated by any Agent, upon reasonable prior notice (unless an
Event of Default then exists and is continuing), to visit and inspect its
properties and to discuss its affairs, finances and condition with its officers
and independent accountants, all at such reasonable times and as often as
reasonably requested, provided that the business of the Borrowers shall not be
unreasonably disrupted.
(b) Each Borrower will, and will cause each of its Restricted
Subsidiaries (other than FNANB) to, from time to time upon the reasonable
request of the Collateral Agent or the Required Lenders through the
Administrative Agent, permit any Agent or professionals (including investment
bankers, consultants, accountants, lawyers and appraisers) retained by the
Agents to conduct appraisals, commercial finance examinations and other
evaluations, including, without limitation, of (i) the Borrowers' practices in
the computation of the Borrowing Base and (ii) the assets included in the
Borrowing Base and related financial information such as, but not limited to,
sales, gross margins, payables, accruals and reserves, and pay the reasonable
fees and expenses of the Agents or such professionals with respect to such
evaluations and appraisals. Notwithstanding the foregoing, the Agents and the
Borrowers acknowledge and agree that so long as no Default or Event of Default
has occurred and is continuing (during the continuation of which the Borrowers
shall pay the costs of all appraisals and commercial finance examinations
undertaken by the Agents), the Borrowers shall only be obligated to reimburse
the Agents for
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one (1) inventory appraisal and one (1) commercial finance examination during
each fiscal year of the Borrowers, provided that nothing contained in this
sentence shall limit the right of the Agents to undertake additional appraisals
and commercial finance examinations at their expense if no Default or Event of
Default then exists. Any appraisal of the Collateral shall be conducted using a
methodology consistent with the methodology used in the immediately preceding
appraisal unless otherwise agreed by the Administrative Agent and the Lead
Borrower.
(c) The Borrowers shall, at all times, retain independent certified
public accountants who are nationally recognized or are otherwise reasonably
satisfactory to the Administrative Agent and instruct such accountants to
cooperate with, and be available to, the Administrative Agent or its
representatives to discuss the Borrowers' financial performance, financial
condition, operating results, controls, and such other matters, within the scope
of the retention of such accountants, as may be raised by the Administrative
Agent.
(d) The Borrowers, at their own expense, shall cause not less than
one (1) physical inventory to be undertaken in each twelve (12) month period
during which this Agreement is in effect conducted by such inventory takers as
are reasonably satisfactory to the Collateral Agent and the Lead Borrower and
following such methodology as is consistent with the methodology used in the
immediately preceding inventory or as otherwise may be reasonably satisfactory
to the Collateral Agent and the Lead Borrower. The Collateral Agent, at the
expense of the Borrowers, may participate in and/or observe each scheduled
physical count of Inventory which is undertaken on behalf of any Borrower. The
Lead Borrower, within seventy-five (75) days following the completion of such
inventory, shall provide the Collateral Agent with a reconciliation of the
results of each such inventory (as well as of any other physical inventory
undertaken by any Borrower) and shall post such results to the Borrowers' stock
ledger and, as applicable to the Borrowers' other financial books and records .
SECTION 5.10 Compliance with Laws.
Each Borrower will, and will cause each of its Subsidiaries to, comply with all
laws, rules, regulations and orders of any Governmental Authority applicable to
it or its property, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
SECTION 5.11 Use of Proceeds and Letters of Credit.
The proceeds of Loans made hereunder and Letters of Credit issued hereunder will
be used only (a) to refinance Indebtedness due to the existing lenders, (b) to
finance the acquisition of working capital assets of the Borrowers, including
the purchase of inventory and equipment, in each case in the ordinary course of
business, (c) to finance Capital Expenditures of the Borrowers, and (d) for
general corporate purposes, including in connection with transactions not
otherwise prohibited by this Agreement. No part of the proceeds of any Loan will
be used, whether directly or indirectly, for any purpose that entails a
violation of any of the Regulations of the Board, including Regulations U and X.
SECTION 5.12 Future Subsidiaries.
Upon the formation or acquisition, after the Closing Date, of any Restricted
Subsidiary of any Borrower (which Restricted Subsidiary owns
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or has an interest in any Inventory or proceeds thereof) or upon the transfer
after the Closing Date by any Borrower of any interest in any Inventory or the
proceeds thereof to a Subsidiary of a Borrower (other than FNANB) or if a
Subsidiary acquires any Inventory after the Closing Date, such Subsidiary shall,
at the request of the Administrative Agent, execute and deliver a joinder to
this Agreement and the other Loan Documents as an additional "borrower" or a
Guaranty of the Obligations and the Other Liabilities and a security agreement
granting a Lien in such of its assets of the same nature and type as constitute
Collateral, all such documents to be in form and substance satisfactory to the
Agents. Nothing contained in this Section shall permit any Borrower to form or
acquire any Subsidiary which is otherwise prohibited by this Agreement.
SECTION 5.13 Further Assurances.
Each Borrower and its Subsidiaries will execute any and all further documents,
financing statements, agreements and instruments, and take all such further
actions (including the filing and recording of financing statements and other
documents), that may be required under any Applicable Law, or which any Agent or
the Required Lenders may reasonably request, to effectuate the transactions
contemplated by the Loan Documents or to grant, preserve, protect or perfect the
Liens created or intended to be created by the Security Documents or the
validity or priority of any such Lien, all at the expense of the Borrowers. The
Borrowers also agree to provide to the Agents, from time to time upon request,
evidence reasonably satisfactory to the Agents as to the perfection and priority
of the Liens created or intended to be created by the Security Documents.
ARTICLE VI
Negative Covenants
Until the Commitments have expired or terminated and the principal of
and interest on each Loan and all fees payable hereunder have been paid in full
and all Letters of Credit have expired or terminated and all L/C Disbursements
shall have been reimbursed, each Borrower covenants and agrees with the Agents
and the Lenders that:
SECTION 6.1 Indebtedness and Other Obligations.
The Borrowers will not, and will not permit any of their respective Restricted
Subsidiaries (other than FNANB) to, create, incur, assume or permit to exist any
Indebtedness, except:
(i) Indebtedness created under the Loan Documents;
(ii) Indebtedness set forth in Schedule 6.01 and
extensions, renewals and replacements of any such Indebtedness
that do not increase the outstanding principal amount thereof or
result in an earlier maturity date or decreased weighted average
life thereof;
(iii) Indebtedness of any Borrower to any other Borrower
otherwise permitted hereunder;
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(iv) Indebtedness of any Borrower or Restricted
Subsidiary to finance the acquisition of any fixed or capital
assets, including Capital Lease Obligations, Synthetic Leases,
any such Indebtedness assumed in connection with the acquisition
of any such assets or assumed in connection with any other
acquisition permitted under Section 6.04 or secured by a Lien on
any such assets prior to the acquisition thereof, and
extensions, renewals and replacements of any such Indebtedness
that do not increase the outstanding principal amount thereof or
result in an earlier maturity date or decreased weighted average
life thereof, provided that the aggregate principal amount of
Indebtedness permitted by this clause (iv) shall not exceed
$150,000,000 at any time outstanding;
(v) Indebtedness under Hedging Agreements with any
Lender or an Affiliate of a Lender;
(vi) Indebtedness arising from any sale and leaseback of
Real Estate;
(vii) Indebtedness in connection with Permitted
Securitization Transactions; and
(viii) other unsecured Indebtedness in an aggregate
principal amount not exceeding $300,000,000 at any time
outstanding, provided that if any such Indebtedness exceeds
$25,000,000 in the aggregate at any time outstanding, the terms
of such Indebtedness in excess of such amount shall be
reasonably acceptable to the Administrative Agent.
SECTION 6.2 Liens.
The Borrowers will not create, incur, or assume any Lien on any property or
asset now owned or hereafter acquired by it, or assign or sell any income or
revenues (including accounts receivable) or rights in respect of any thereof,
except:
(a) Liens created under the Loan Documents;
(b) Permitted Encumbrances;
(c) any Lien on any property or asset of any Borrower set forth in
Schedule 6.02, provided that (i) such Lien shall not apply to any other property
or asset of any Borrower and (ii) such Lien shall secure only those obligations
that it secures as of the Closing Date, and extensions, renewals and
replacements thereof that do not increase the outstanding principal amount
thereof;
(d) Liens on fixed or capital assets acquired by any Borrower,
provided that (i) such Liens secure Indebtedness permitted by clause (iv) of
Section 6.01, (ii) such Liens and the Indebtedness secured thereby are incurred
prior to or within 90 days after such acquisition or the completion of such
construction or improvement, (iii) the Indebtedness secured thereby does not
exceed 100% of the cost of acquiring such fixed or capital assets and (iv) such
Liens shall not apply to any other property or assets of the Borrowers;
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(e) Liens on Real Estate to secure Indebtedness permitted. pursuant
to Section 6.01(vi) hereof; and
(f) Other Liens on assets (other than Inventory, Accounts and the
proceeds thereof) or tax Liens securing obligations not exceeding $5,000,000 at
any time outstanding.
After any Borrower obtains knowledge of an Lien which has been involuntarily
attached to its assets or properties, the Borrowers shall use their best efforts
to, and shall promptly seek, to cause the release or termination thereof.
SECTION 6.3 Fundamental Changes.
(a) The Borrowers and their respective Restricted Subsidiaries will not merge
into or consolidate with any other Person, or permit any other Person to merge
into or consolidate with it, or liquidate or dissolve, except that, if at the
time thereof and immediately after giving effect thereto, no Default shall have
occurred and be continuing, (i) any Subsidiary may merge into a Borrower in a
transaction in which a Borrower is the surviving corporation, (ii) the Lead
Borrower may merge with any other Person as long as the Lead Borrower is the
surviving corporation, and (iii) any Subsidiary that is not a Borrower may merge
into any other Subsidiary that is not a Borrower, provided that any such merger
involving a Person that is not a wholly owned Subsidiary immediately prior to
such merger shall not be permitted unless also permitted by Section 6.04, and
(iv) the Borrowers and their Restricted Subsidiaries may consummate through
mergers or consolidations any acquisition permitted under Sections 6.04(e) or
(f) or any disposition of assets permitted under Section 6.05.
(b) The Borrowers and their respective Restricted Subsidiaries will
not engage to any material extent in any business other than businesses of the
type conducted by the Borrowers and their Restricted Subsidiaries on the date of
execution of this Agreement and businesses reasonably related, ancillary or
complementary thereto.
SECTION 6.4 Investments, Loans, Advances, Guarantees and Acquisitions.
The Borrowers and their respective Restricted Subsidiaries will not purchase,
hold or acquire (including pursuant to any merger with any Person that was not a
wholly owned Subsidiary prior to such merger) any capital stock, evidences of
indebtedness or other securities (including any option, warrant or other right
to acquire any of the foregoing) of, make or permit to exist any loans or
advances to, guarantee any obligations of, or make or permit to exist any
investment or any other interest in, any other Person, or purchase or otherwise
acquire (in one transaction or a series of transactions) any assets of any other
Person constituting a business unit (each of the foregoing, an "Investment"),
except for:
(a) Permitted Investments;
(b) Investments existing on the Closing Date, and set forth on
Schedule 6.04, to the extent such investments would not be permitted under any
other clause of this Section;
(c) Loans, advances or capital contributions by any Borrower to any
other Borrower;
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(d) Loans, advances or capital contributions under the
Securitization Revolver or otherwise made in connection with a Permitted
Securitization Transaction or in accordance with any existing obligations or
agreements as of the Closing Date;
(e) Permitted Acquisitions;
(f) Investments consisting of the purchase or other acquisition (in
one transaction or a series of transactions) of any assets or capital stock of
any other Person constituting a business unit, the aggregate consideration for
which purchase or acquisition does not exceed $5,000,000 for any single
acquisition or $25,000,000 in the aggregate for all such acquisitions after the
Closing Date, provided that no Default or Event of Default then exists or would
arise therefrom;
(g) Investments in joint ventures in an amount not to exceed
$25,000,000 at any time outstanding;
(h) Investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes with,
customers and suppliers, in each case in the ordinary course of business;
(i) Purchases, redemptions or acquisitions of capital stock
involving a Restricted Payment permitted pursuant to Section 6.06;
(j) loans or advances to employees for the purpose of travel,
entertainment or relocation in the ordinary course of business; and
(k) Other Investments (excluding Investments consisting of the
purchase or other acquisition (in one transaction or a series of transactions)
any assets or capital stock of any other Person constituting a business unit)
not to exceed $50,000,000 in the aggregate during any fiscal year.
SECTION 6.5 Asset Sales.
(a) The Borrowers and their respective Restricted Subsidiaries (other than
FNANB) will not sell, transfer, lease or otherwise dispose of any asset,
including any capital stock (other than capital stock of the Lead Borrower), nor
will the Borrowers (other than the Lead Borrower) issue any additional shares of
its capital stock or other ownership interest in such Borrower, except:
(i) (A) sales of Inventory and other assets in the
ordinary course of business; and
(ii) sales, transfers and dispositions among the
Borrowers and their respective Subsidiaries (excluding, however, any sales,
transfers and dispositions of Inventory or proceeds thereof, from any Borrower
except to another Borrower), provided that any such sales, transfers or
dispositions involving a Subsidiary that is not a Borrower shall be made in
compliance with Section 6.07; and
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(iii) sales and disposition of Subsidiaries of the Lead
Borrower which are not Subsidiary Borrowers, provided that no Default or Event
of Default then exists or would arise therefrom; and
(iv) sales and transfers made pursuant in connection
with Permitted Securitization Transactions; and
(v) other sales, transfers, or dispositions of assets
not in the ordinary course of business in connection with any store closings
provided that (x) no Default or Event of Default then exists or would arise
therefrom, and (y) no such sale, transfer or disposition shall be made if, after
giving effect thereto, the aggregate number of remaining stores (including new
or relocated stores) of the Borrowers operating in the ordinary course of
business would be less than seventy-five percent (75%) of the number of stores
of the Borrowers in existence as of the Closing Date, and (z) if Capped
Availability immediately prior, or after giving effect, to such sale would be
less than $100,000,000, the purchase price for any Inventory and Accounts so
sold, transferred or disposed of shall be at least equal to the amounts
available to be advanced thereon under the Borrowing Base; and
(vi) other sales, transfers, or dispositions of assets
not constituting Collateral, provided that (x) no Default or Event of Default
then exists or would arise therefrom, and (y) such sales, transfers or
dispositions shall not exceed $50,000,000 in the aggregate in any fiscal year of
the Borrowers.
provided that all sales, transfers, leases and other dispositions permitted
hereby (other than sales, transfers and other disposition permitted under clause
(ii)) shall be made at arm's length and for fair value and with respect to
Inventory and Accounts, solely for cash consideration (which term shall include
credit card sales).
SECTION 6.6 Restricted Payments; Certain Payments of Indebtedness.
(a) The Borrowers will not, and will not permit any Restricted
Subsidiaries to, declare or make, or agree to pay or make, directly or
indirectly, any Restricted Payment, except as long as no Default or Event of
Default exists or would arise therefrom (i) the Borrowers may declare and pay
dividends with respect to their capital stock payable solely in additional
shares of their common stock, (ii) the Restricted Subsidiaries of the Borrowers
may declare and pay cash dividends with respect to their capital stock, (iii)
the Borrowers may make Restricted Payments in an amount not to exceed
$75,000,000 in any fiscal year, and (iv) the Borrowers may make other Restricted
Payments as long as, after giving effect thereto, Capped Availability is at
least $100,000,000.
(b) The Borrowers will not at any time, and will not permit any of
their Restricted Subsidiaries to make or agree to pay or make, directly or
indirectly, any payment or other distribution (whether in cash securities or
other property) of or in respect of principal of or interest on any
Indebtedness, or any payment or other distribution (whether in cash, securities
or other property), including any sinking fund or similar deposit, on account of
the purchase, redemption, retirement, acquisition, cancellation or termination
of any Indebtedness, except:
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(i) payment of regularly scheduled interest and
principal payments as and when due in respect of any
Indebtedness permitted under Section 6.01; and
(ii) refinancings of Indebtedness described in clause
(i), above, to the extent permitted by Section 6.01; and
(iii) other payments in respect of Indebtedness not to
exceed $15,000,000 in the aggregate in any fiscal year of the
Borrowers, provided that no Default or Event of Default then
exists or would arise therefrom.
SECTION 6.7 Transactions with Affiliates.
The Borrowers will not at any time sell, lease or otherwise transfer any
property or assets to, or purchase, lease or otherwise acquire any property or
assets from, or otherwise engage in any other transactions with, any of its
Affiliates (other than FNANB or any Special Purpose Entity), except (a)
transactions in the ordinary course of business that are at prices and on terms
and conditions not less favorable to the Borrowers than could be obtained on an
arm's-length basis from unrelated third parties, (b) transactions between or
among the Borrowers not involving any other Affiliate, which would not otherwise
violate the provisions of the Loan Documents, and (c) transactions otherwise
permitted hereunder.
SECTION 6.8 Amendment of Material Documents.
The Borrowers will not, and will not permit any Subsidiary to, amend, modify or
waive any of its rights under (a) its certificate of incorporation, by-laws or
other organizational documents, or (b) the provisions of Articles VI or VII of
the FNANB Merchant Agreement, in each case to the extent that such amendment,
modification or waiver would be materially adverse to the interests of the
Lenders.
SECTION 6.9 Fiscal Year.
The Borrowers shall not change their fiscal year without the prior written
consent of the Administrative Agent, which consent shall not be unreasonably
withheld.
ARTICLE VII
Events of Default
SECTION 7.1 Events of Default.
If any of the following events ("Events of Default") shall occur:
(a) the Borrowers shall fail to pay any principal of any Loan or any
reimbursement obligation in respect of any L/C Disbursement when and as the same
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment thereof or otherwise;
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(b) the Borrowers shall fail to pay any interest on any Loan or any
fee or any other amount (other than an amount referred to in clause (a) of this
Article) payable under this Agreement or any other Loan Document, within five
(5) Business Days when the same shall become due and payable;
(c) any representation or warranty made or deemed made by or on
behalf of any Borrower in or in connection with any Loan Document or any
amendment or modification thereof or waiver thereunder, or in any report,
certificate, financial statement or other document furnished pursuant to or in
connection with any Loan Document or any amendment or modification thereof or
waiver thereunder, shall prove to have been incorrect in any material respect
when made or deemed made;
(d) the Borrowers shall fail to observe or perform any covenant,
condition or agreement contained:
(i) in Sections 2.23(e), 2.23(g), 2.23(j), 2.23(k), 5.02(a),
5.07, 5.09, or 5.11, or in Article VI; and
(ii) in Section 5.01(b)(i), and such failure shall continue
unremedied for a period of 5 days after notice thereof from the Administrative
Agent to the Lead Borrower;
(e) any Borrower shall fail to observe or perform any covenant,
condition or agreement contained in any Loan Document (other than those
specified in clause (a), (b), (c), or (d) of this Article), and such failure
shall continue unremedied for a period of 30 days after notice thereof from the
Administrative Agent to the Lead Borrower (which notice will be given at the
request of any Lender);
(f) any Borrower shall fail to make any payment (whether of
principal or interest and regardless of amount) in respect of any Material
Indebtedness when and as the same shall become due and payable (after giving
effect to the expiration of any grace or cure period set forth therein) and the
holder of such Material Indebtedness shall have accelerated the time for, or
demanded, payment thereof;
(g) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that enables or
permits (with or without the giving of notice, the lapse of time or both) the
holder or holders of any such Material Indebtedness or any trustee or agent on
its or their behalf to cause any such Material Indebtedness to become due, or to
require the prepayment, repurchase, redemption or defeasance thereof, prior to
its scheduled maturity (other than on account of the sale of assets otherwise
permitted under this Agreement which secure such Material Indebtedness);
(h) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other relief
in respect of any Borrower or its debts, or of a substantial part of its assets,
under any federal or state bankruptcy, insolvency, receivership or similar law
now or hereafter in effect or (ii) the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for any Borrower or for
a
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substantial part of its assets, and, in any such case, such proceeding or
petition shall continue undismissed for 60 days or an order or decree approving
or ordering any of the foregoing shall be entered and continues unstayed and in
effect for 30 days;
(i) any Borrower shall (i) voluntarily commence any proceeding or
file any petition seeking liquidation, reorganization or other relief under any
federal or state bankruptcy, insolvency, receivership or similar law now or
hereafter in effect, (ii) consent to the institution of, or fail to contest in a
timely and appropriate manner, any proceeding or petition described in clause
(h) of this Article, (iii) apply for or consent to the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar official for
any Borrower or for a substantial part of its assets, (iv) file an answer
admitting the material allegations of a petition filed against it in any such
proceeding, (v) make a general assignment for the benefit of creditors or (vi)
take any action for the purpose of effecting any of the foregoing;
(j) any Borrower shall become unable, admit in writing its inability
or fail generally to pay its debts as they become due;
(k) one or more uninsured judgments for the payment of money in an
aggregate amount in excess of $50,000,000 shall be rendered against any Borrower
or any combination thereof and the same shall remain undischarged for a period
of 60 consecutive days during which execution shall not be effectively stayed,
or any action shall be legally taken by a judgment creditor to attach or levy
upon any material assets of any Borrower to enforce any such judgment;
(l) (i) any challenge in any legal proceeding by or on behalf of
any Borrower to the validity of any Loan Document or the applicability or
enforceability of any Loan Document strictly in accordance with the subject Loan
Document's terms or which seeks to void, avoid, limit, or otherwise adversely
affect any security interest created by or in any Loan Document or any payment
made pursuant thereto.
(ii) any challenge in any legal proceeding by or on behalf of
any other Person to the validity of any Loan Document or the applicability or
enforceability of any Loan Document strictly in accordance with the subject Loan
Document's terms or which seeks to void, avoid, limit, or otherwise adversely
affect any security interest created by or in any Loan Document or any payment
made pursuant thereto, in each case, as to which an order or judgment has been
entered adverse to the Agents and the Lenders.
(iii) any Lien purported to be created under any Security
Document shall cease to be, or shall be asserted by any Borrower not to be, a
valid and perfected Lien on any Collateral, with the priority required by the
applicable Security Document, except as a result of the sale or other
disposition of the applicable Collateral in a transaction permitted under the
Loan Documents;
(m) a Change in Control shall occur;
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(n) an ERISA Event shall have occurred that when taken together with
all other ERISA Events that have occurred, could reasonably be expected to
result in liability of the Borrowers in an aggregate amount exceeding
$50,000,000;
(o) the occurrence of any uninsured loss to any material portion of
the Collateral;
(p) the indictment of, or institution of any legal process or
proceeding against, any Borrower, under any federal, state, municipal, and other
civil or criminal statute, rule, regulation, order, or other requirement having
the force of law where the relief, penalties, or remedies sought or available
include the forfeiture of any material property of any Borrower and/or the
imposition of any stay or other order, the effect of which could reasonably be
to restrain in any material way the conduct by the Borrowers, taken as a whole,
of their business in the ordinary course, and in each case where such indictment
or institution of legal process could reasonably be expected to have a Material
Adverse Effect;
(q) except as otherwise permitted hereunder, the determination by
any Borrower, whether by vote of such Borrower's board of directors or otherwise
to: suspend the operation of such Borrower's business in the ordinary course,
liquidate all or a substantial portion of such Borrower's assets or store
locations, or employ an agent or other third party to conduct any so-called
store closing, store liquidation or "Going-Out-Of-Business" sales relating to
all or a substantial portion of such Borrower's assets or store locations;
(r) the failure of FNANB to make any payment to any Borrower when
due under the FNANB Merchant Agreement, which failure continues for ten (10)
Business Days, or, after the occurrence of a Cash Dominion Event, the offset or
deduction by FNANB of any amounts (other than those set forth in Section 6.01
and the first sentence of Section 7.02 of the FNANB Merchant Agreement) from the
payments due to any Borrower;
then, and in every such event (other than an event with respect to any Borrower
described in clause (h) or (i) of this Article), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the
request of the Required Lenders shall, by notice to the Lead Borrower, take
either or both of the following actions, at the same or different times: (i)
terminate the Commitments, and thereupon the Commitments shall terminate
immediately, and (ii) declare the Loans then outstanding to be due and payable
in whole (or in part, in which case any principal not so declared to be due and
payable may thereafter be declared to be due and payable), and thereupon the
principal of the Loans so declared to be due and payable, together with accrued
interest thereon and all fees and other obligations of the Borrowers accrued
hereunder, shall become due and payable immediately, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Borrowers; and (iii) require the Borrowers to furnish cash collateral in an
amount equal to 103% of the Letter of Credit Outstandings, and in case of any
event with respect to any Borrower described in clause (h) or (i) of this
Article, the Commitments shall automatically terminate and the principal of the
Loans then outstanding, together with accrued interest thereon and all fees and
other obligations of the Borrowers accrued hereunder, shall automatically become
due and payable, without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Borrowers.
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SECTION 7.2 When Continuing.
For all purposes under this Agreement, each Default and Event of
Default that has occurred shall be deemed to be continuing at all times
thereafter unless it either (a) is cured or corrected, or (b) is waived in
writing by the Lenders in accordance with Section 9.02.
SECTION 7.3 Remedies on Default
In case any one or more of the Events of Default shall have occurred
and be continuing, and whether or not the maturity of the Loans shall have been
accelerated pursuant hereto, the Administrative Agent may proceed to protect and
enforce its rights and remedies under this Agreement, the Notes or any of the
other Loan Documents by suit in equity, action at law or other appropriate
proceeding, whether for the specific performance of any covenant or agreement
contained in this Agreement and the other Loan Documents or any instrument
pursuant to which the Obligations are evidenced, and, if such amount shall have
become due, by declaration or otherwise, proceed to enforce the payment thereof
or any other legal or equitable right of the Agents or the Lenders. No remedy
herein is intended to be exclusive of any other remedy and each and every remedy
shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute or any
other provision of law.
SECTION 7.4 Application of Proceeds
After the earlier of (a) the occurrence of an Event of Default and
acceleration of the Obligations, or (b) the occurrence of an Event of Default
under Sections 7.01(h), 7.01(i) or 7.01(q) hereof, all proceeds realized from
any Borrower or on account of any Collateral shall be applied in the manner set
forth in Section 6.03 of the Security Agreement. All amounts required to be
applied to Loans hereunder (other than Swingline Loans) shall be applied ratably
in accordance with each Lender's Commitment Percentage.
ARTICLE VIII
The Agents
SECTION 8.1 Administration by Administrative Agent.
Each Lender, the Collateral Agent and the Issuing Bank hereby
irrevocably designate FRF as Administrative Agent under this Agreement and the
other Loan Documents. The general administration of the Loan Documents shall be
by the Administrative Agent. The Lenders, the Collateral Agent and the Issuing
Bank each hereby irrevocably authorizes the Administrative Agent (i) to enter
into the Loan Documents to which it is a party and (ii) at its discretion, to
take or refrain from taking such actions as agent on its behalf and to exercise
or refrain from exercising such powers under the Loan Documents and the Notes as
are delegated by the terms
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hereof or thereof, as appropriate, together with all powers reasonably
incidental thereto. The Administrative Agent shall have no duties or
responsibilities except as set forth in this Agreement and the remaining Loan
Documents, nor shall it have any fiduciary relationship with any Lender, and no
implied covenants, responsibilities, duties, obligations, or liabilities shall
be read into the Loan Documents or otherwise exist against the Administrative
Agent.
SECTION 8.2 The Collateral Agent.
Each Lender, the Administrative Agent and the Issuing Bank hereby
irrevocably (i) designate FRF as Collateral Agent under this Agreement and the
other Loan Documents, (ii) authorize the Collateral Agent to enter into the
Collateral Documents and the other Loan Documents to which it is a party and to
perform its duties and obligations thereunder, together with all powers
reasonably incidental thereto, and (iii) agree and consent to all of the
provisions of the Security Documents. All Collateral shall be held or
administered by the Collateral Agent (or its duly-appointed agent) for its
benefit and for the ratable benefit of the other Secured Parties. Any proceeds
received by the Collateral Agent from the foreclosure, sale, lease or other
disposition of any of the Collateral and any other proceeds received pursuant to
the terms of the Security Documents or the other Loan Documents shall be paid
over to the Administrative Agent for application as provided in Sections 2.20,
2.24, or 7.04, as applicable. The Collateral Agent shall have no duties or
responsibilities except as set forth in this Agreement and the remaining Loan
Documents, nor shall it have any fiduciary relationship with any Lender, and no
implied covenants, responsibilities, duties, obligations, or liabilities shall
be read into the Loan Documents or otherwise exist against the Collateral Agent.
SECTION 8.3 Sharing of Excess Payments.
Each of the Lenders, the Agents and the Issuing Bank agrees that if it
shall, through the exercise of a right of banker's lien, setoff or counterclaim
against the Borrowers, including, but not limited to, a secured claim under
Section 506 of the Bankruptcy Code or other security or interest arising from,
or in lieu of, such secured claim and received by such Lender, any Agent or the
Issuing Bank under any applicable bankruptcy, insolvency or other similar law,
or otherwise, obtain payment in respect of the Obligations owed it (an "excess
payment") as a result of which such Lender, such Agent or the Issuing Bank has
received payment of any Loans or other Obligations outstanding to it in excess
of the amount that it would have received if all payments at any time applied to
the Loans and other Obligations had been applied in the order of priority set
forth in Section 7.04, then such Lender, Agent or the Issuing Bank shall
promptly purchase at par (and shall be deemed to have thereupon purchased) from
the other Lenders, such Agent and the Issuing Bank, as applicable, a
participation in the Loans and Obligations outstanding to such other Persons, in
an amount determined by the Administrative Agent in good faith as the amount
necessary to ensure that the economic benefit of such excess payment is
reallocated in such manner as to cause such excess payment and all other
payments at any time applied to the Loans and other Obligations to be
effectively applied in the order of priority set forth in Section 7.04 pro rata
in proportion to its Commitment Percentages; provided, that if any such excess
payment is thereafter recovered or otherwise set aside such purchase of
participations shall be correspondingly rescinded (without interest). The
Borrowers expressly consent to the foregoing arrangements and agree that any
Lender, any Agent or the Issuing Bank holding (or deemed to
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be holding) a participation in any Loan or other Obligation may exercise any and
all rights of banker's lien, setoff or counterclaim with respect to any and all
moneys owing by such Borrower to such Lender, such Agent or the Issuing Bank as
fully as if such Lender, Agent or the Issuing Bank held a Note and was the
original obligee thereon, in the amount of such participation.
SECTION 8.4 Agreement of Required Lenders.
(i) Upon any occasion requiring or permitting an approval, consent,
waiver, election or other action on the part of only the Required Lenders,
action shall be taken by the Agents for and on behalf or for the benefit of all
Lenders upon the direction of the Required Lenders, and any such action shall be
binding on all Lenders, and (ii) upon any occasion requiring or permitting an
approval, consent, waiver, election or other action on the part of the Required
Supermajority Lenders, action shall be taken by the Agents for and on behalf or
for the benefit of all Lenders upon the direction of the Required Supermajority
Lenders and any such action shall be binding on all Lenders. No amendment,
modification, consent, or waiver shall be effective except in accordance with
the provisions of Section 9.02.
(ii) Upon the occurrence of an Event of Default, the Agents shall
(subject to the provisions of Section 9.02) take such action with respect
thereto as may be reasonably directed by the Required Lenders; provided that
unless and until the Agents shall have received such directions, the Agents may
(but shall not be obligated to) take such action as they shall deem advisable in
the best interests of the Lenders. In no event shall the Agents be required to
comply with any such directions to the extent that the Agents believe that the
Agents' compliance with such directions would be unlawful.
SECTION 8.5 Liability of Agents.
(i) Each of the Agents, when acting on behalf of the Lenders and the
Issuing Bank, may execute any of its respective duties under this Agreement by
or through any of its respective officers, agents and employees, and none of the
Agents nor their respective directors, officers, agents or employees shall be
liable to the Lenders or the Issuing Bank or any of them for any action taken or
omitted to be taken in good faith, or be responsible to the Lenders or the
Issuing Bank or to any of them for the consequences of any oversight or error of
judgment, or for any loss, except to the extent of any liability imposed by law
by reason of such Agent's own gross negligence or willful misconduct. The Agents
and their respective directors, officers, agents and employees shall in no event
be liable to the Lenders or the Issuing Bank or to any of them for any action
taken or omitted to be taken by them pursuant to instructions received by them
from the Required Lenders, or Required Supermajority Lenders, as applicable, or
in reliance upon the advice of counsel selected by it. Without limiting the
foregoing, none of the Agents, nor any of their respective directors, officers,
employees, or agents (A) shall be responsible to any Lender or the Issuing Bank
for the due execution, validity, genuineness, effectiveness, sufficiency, or
enforceability of, or for any recital, statement, warranty or representation in,
this Agreement, any Loan Document or any related agreement, document or order,
or (B) shall be required to ascertain or to make any inquiry concerning the
performance or observance by any Borrower of
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any of the terms, conditions, covenants, or agreements of this Agreement or any
of the Loan Documents, or (C) shall be responsible to any Lender or the Issuing
Bank for the state or condition of any properties of the Borrowers or any other
obligor hereunder constituting Collateral for the Obligations of the Borrowers
hereunder or with respect to the Other Liabilities, or any information contained
in the books or records of the Borrowers; or (D) shall be responsible to any
Lender or the Issuing Bank for the validity, enforceability, collectibility,
effectiveness or genuineness of this Agreement or any other Loan Document or any
other certificate, document or instrument furnished in connection therewith; or
(E) shall be responsible to any Lender or the Issuing Bank for the validity,
priority or perfection of any lien securing or purporting to secure the
Obligations or the Other Liabilities or the value or sufficiency of any of the
Collateral.
(ii) The Agents may execute any of their duties under this Agreement
or any other Loan Document by or through their agents or attorneys-in-fact, and
shall be entitled to the advice of counsel concerning all matters pertaining to
its rights and duties hereunder or under the Loan Documents. The Agents shall
not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by them with reasonable care.
(iii) None of the Agents nor any of their respective directors,
officers, employees, or agents shall have any responsibility to the Borrowers on
account of the failure or delay in performance or breach by any Lender (other
than by the Agent in its capacity as a Lender) or the Issuing Bank of any of
their respective obligations under this Agreement or the Notes or any of the
Loan Documents or in connection herewith or therewith.
(iv) The Agents shall be entitled to rely, and shall be fully
protected in relying, upon any notice, consent, certificate, affidavit, or other
document or writing believed by it to be genuine and correct and to have been
signed, sent or made by the proper person or persons, and upon the advice and
statements of legal counsel (including, without, limitation, counsel to the
Borrowers), independent accountants and other experts selected by the Agents.
The Agents shall be fully justified in failing or refusing to take any action
under this Agreement or any other Loan Document unless they shall first receive
such advice or concurrence of the Required Lenders as they deem appropriate or
they shall first be indemnified to their satisfaction by the Lenders against any
and all liability and expense which may be incurred by them by reason of the
taking or failing to take any such action.
SECTION 8.6 Notice of Default.
The Agents shall not be deemed to have knowledge or notice of the occurrence of
any Default or Event of Default unless the Agents have actual knowledge of the
same or have received notice from a Lender or the Borrowers 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 Agents obtain such actual
knowledge or receives such a notice, the Agents shall give prompt notice thereof
to each of the Lenders. The Agents shall take such action with respect to such
Default or Event of Default as shall be reasonably directed by the Required
Lenders. Unless and until the Agents shall have received such direction, the
Agents may (but shall not be obligated
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to) take such action, or refrain from taking such action, with respect to any
such Default or Event of Default as they shall deem advisable in the best
interest of the Lenders.
SECTION 8.7 Lenders' Credit Decisions.
Each Lender acknowledges that it has, independently and without reliance upon
the Agents or any other Lender, and based on the financial statements prepared
by the Borrowers and such other documents and information as it has deemed
appropriate, made its own credit analysis and investigation into the business,
assets, operations, property, and financial and other condition of the Borrowers
and has made its own decision to enter into this Agreement and the other Loan
Documents. Each Lender also acknowledges that it will, independently and without
reliance upon the Agents or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in determining whether or not conditions precedent to closing
any Loan hereunder have been satisfied and in taking or not taking any action
under this Agreement and the other Loan Documents.
SECTION 8.8 Reimbursement and Indemnification.
Each Lender agrees (i) to reimburse (x) each Agent for such Lender's
Commitment Percentage of any expenses and fees incurred by such Agent for the
benefit of the Lenders or the Issuing Bank under this Agreement, the Notes and
any of the Loan Documents, including, without limitation, counsel fees and
compensation of agents and employees paid for services rendered on behalf of the
Lenders or the Issuing Bank, and any other expense incurred in connection with
the operations or enforcement thereof not reimbursed by the Borrowers and (y)
each Agent for such Lender's Commitment Percentage of any expenses of such Agent
incurred for the benefit of the Lenders or the Issuing Bank that the Borrowers
have agreed to reimburse pursuant to Section 9.03 and has failed to so reimburse
and (ii) to indemnify and hold harmless the Agents and any of their directors,
officers, employees, or agents, on demand, in the amount of such Lender's
Commitment Percentage, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses, or
disbursements of any kind or nature whatsoever which may be imposed on, incurred
by, or asserted against it or any of them in any way relating to or arising out
of this Agreement, the Notes or any of the Loan Documents or any action taken or
omitted by it or any of them under this Agreement, the Notes or any of the Loan
Documents to the extent not reimbursed by the Borrowers (except such as shall
result from their respective gross negligence or willful misconduct). The
provisions of this Section 8.08 shall survive the repayment of the Obligations
and the Other Liabilities and the termination of the Commitments.
SECTION 8.9 Rights of Agents.
It is understood and agreed that FRF shall have the same rights and
powers hereunder (including the right to give such instructions) as the other
Lenders and may exercise such rights and powers, as well as its rights and
powers under other agreements and instruments to which it is or may be party,
and engage in other transactions with the Borrowers, as though it were not the
Administrative Agent or the Collateral Agent, respectively, of the Lenders under
this Agreement.
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Without limiting the foregoing, the Agents and their Affiliates may accept
deposits from, lend money to, and generally engage in any kind of commercial or
investment banking, trust, advisory or other business with the Borrowers and
their Subsidiaries and Affiliates as if it were not the Agent hereunder.
SECTION 8.10 Notice of Transfer.
The Agents may deem and treat a Lender party to this Agreement as the
owner of such Lender's portion of the Loans for all purposes, unless and until,
and except to the extent, an Assignment and Acceptance shall have become
effective as set forth in Section 9.05(b).
SECTION 8.11 Successor Agent
Any Agent may resign at any time by giving fifteen (15) Business Days'
written notice thereof to the Lenders, the Issuing Bank, the other Agents and
the Lead Borrower. Upon any such resignation of any Agent, the Required Lenders
shall have the right to appoint a successor Agent, which so long as there is no
Default or Event of Default shall be reasonably satisfactory to the Lead
Borrower (whose consent shall not be unreasonably withheld or delayed). If no
successor Agent shall have been so appointed by the Required Lenders and shall
have accepted such appointment, within 30 days after the retiring Agent's giving
of notice of resignation, the retiring Agent may, on behalf of the Lenders, the
other Agents and the Issuing Bank, appoint a successor Agent which shall be (i)
a commercial bank (or affiliate thereof) organized under the laws of the United
States of America or of any State thereof and having a combined capital and
surplus of a least $100,000,000, (ii) or a Person capable of complying with all
of the duties of such Agent (and the Issuing Bank), hereunder (in the opinion of
the retiring Agent and as certified to the Lenders in writing by such successor
Agent) which, in the case of (i) and (ii) above, so long as there is no Default
or Event of Default shall be reasonably satisfactory to the Lead Borrower (whose
consent shall not be unreasonably withheld or delayed). Upon the acceptance of
any appointment as Agent by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent and the retiring Agent shall be discharged from
its duties and obligations under this Agreement. After any retiring Agent's
resignation hereunder as such Agent, the provisions of this Article VIII shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was such Agent under this Agreement.
SECTION 8.12 Reports and Financial Statements.
Promptly after receipt thereof from the Borrowers, the Administrative
Agent shall remit to each Lender and the Collateral Agent copies of all
financial statements required to be delivered by the Borrowers hereunder and all
commercial finance examinations and appraisals of the Collateral received by the
Administrative Agent.
SECTION 8.13 Delinquent Lender.
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If for any reason any Lender shall fail or refuse to abide by its obligations
under this Agreement, including without limitation its obligation to make
available to Administrative Agent its pro rata share of any Revolving Loans,
expenses or setoff or purchase its pro rata share of a participation interest in
the Swingline Loans (a "Delinquent Lender") and such failure is not cured within
ten (10) days of receipt from the Administrative Agent of written notice
thereof, then, in addition to the rights and remedies that may be available to
Agents, other Lenders, the Borrowers or any other party at law or in equity, and
not at limitation thereof, (i) such Delinquent Lender's right to participate in
the administration of, or decision-making rights related to, the Loans, this
Agreement or the other Loan Documents shall be suspended during the pendency of
such failure or refusal, and (ii) a Delinquent Lender shall be deemed to have
assigned any and all payments due to it from the Borrowers, whether on account
of outstanding Loans, interest, fees or otherwise, to the remaining
non-delinquent Lenders for application to, and reduction of, their proportionate
shares of all outstanding Loans until, as a result of application of such
assigned payments the Lenders' respective pro rata shares of all outstanding
Loans shall have returned to those in effect immediately prior to such
delinquency and without giving effect to the nonpayment causing such
delinquency. The Delinquent Lender's decision-making and participation rights
and rights to payments as set forth in clauses (i) and (ii) hereinabove shall be
restored only upon the payment by the Delinquent Lender of its pro rata share of
any Loans, any participation obligation, or expenses as to which it is
delinquent, together with interest thereon at the rate set forth in Section 2.12
hereof from the date when originally due until the date upon which any such
amounts are actually paid.
The non-delinquent Lenders shall also have the right, but not the
obligation, in their respective, sole and absolute discretion, to acquire for no
cash consideration, (pro rata, based on the respective Commitments of those
Lenders electing to exercise such right) the Delinquent Lender's Commitment to
fund future Loans (the "Delinquent Lender's Future Commitment"). Upon any such
purchase of the pro rata share of any Delinquent Lender's Future Commitment, the
Delinquent Lender's share in future Loans and its rights under the Loan
Documents with respect thereto shall terminate on the date of purchase, and the
Delinquent Lender shall promptly execute all documents reasonably requested to
surrender and transfer such interest, including, if so requested, an Assignment
and Acceptance. Each Delinquent Lender shall indemnify the Agents and each
non-delinquent Lender from and against any and all loss, damage or expenses,
including but not limited to reasonable attorneys' fees and funds advanced by
any Agent or by any non-delinquent Lender, on account of a Delinquent Lender's
failure to timely fund its pro rata share of a Loan or to otherwise perform its
obligations under the Loan Documents.
SECTION 8.14 Syndication Agent,s Documentation Agents, and Arranger.
Notwithstanding the provisions of this Agreement or any of the other Loan
Documents, the Syndication Agents, the Documentation Agents, and, except as
provided in the commitment letter for this transaction, the Arranger shall have
no powers, rights, duties, responsibilities or liabilities with respect to this
Agreement and the other Loan Documents.
ARTICLE IX
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Miscellaneous
SECTION 9.1 Notices.
Except in the case of notices and other communications expressly permitted to be
given by telephone, all notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by telecopy, as follows:
(a) if to any Borrower, to it at Circuit City Stores, Inc., 0000
Xxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxx X. Xxxx, Senior Vice
President, Treasurer, and Controller, (Telecopy No. (000) 000-0000), with a copy
to McGuireWoods LLP, One Xxxxx Center, 000 Xxxx Xxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx
00000, Attention: J. Xxxxxxxxxxx Xxxxxxxxx, Esquire (Telecopy No. (804)
775-1061);
(b) if to the Administrative Agent or the Collateral Agent, or the
Swingline Lender to Fleet Retail Finance Inc., 00 Xxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000, Attention: Xxxxxxxx Xxxxxx (Telecopy No. (000) 000-0000),
with a copy to Xxxxxx & Xxxxxxxxxx LLP, Xxxxx Xxxxxx Xxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000, Attention: Xxxxx X. Xxxxxx, Esquire (Telecopy No. (617)
880-3456);
(c) if to any other Lender, to it at its address (or telecopy
number) set forth on the signature pages hereto or on any Assignment and
Acceptance for such Lender.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
SECTION 9.2 Waivers; Amendments.
(a) No failure or delay by the Agents, the Issuing Bank or any Lender in
exercising any right or power hereunder or under any other Loan Document shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right or power, or any abandonment or discontinuance of steps to enforce
such a right or power, preclude any other or further exercise thereof or the
exercise of any other right or power. The rights and remedies of the Agents, the
Issuing Bank and the Lenders hereunder and under the other Loan Documents are
cumulative and are not exclusive of any rights or remedies that they would
otherwise have. No waiver of any provision of any Loan Document or consent to
any departure by any Borrower therefrom shall in any event be effective unless
the same shall be permitted by paragraph (b) of this Section, and then such
waiver or consent shall be effective only in the specific instance and for the
purpose for which given. Without limiting the generality of the foregoing, the
making of a Loan or issuance of a Letter of Credit shall not be construed as a
waiver of any Default, regardless of whether the Agents, any Lender or the
Issuing Bank may have had notice or knowledge of such Default at the time.
(b) Neither this Agreement nor any other Loan Document nor any
provision hereof or
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thereof may be waived, amended or modified except, in the case of this
Agreement, pursuant to an agreement or agreements in writing entered into by the
Borrowers and the Required Lenders or, in the case of any other Loan Document,
pursuant to an agreement or agreements in writing entered into by the Agents and
the Borrowers that are parties thereto, in each case with the consent of the
Required Lenders, provided that no such agreement shall (i) increase the Total
Commitments without the written consent of each Lender or increase the
Commitment of any Lender without the written consent of such Lender, (ii) reduce
the principal amount of any Loan or L/C Disbursement or reduce the rate of
interest thereon, or reduce any fees payable hereunder, without the written
consent of each Lender affected thereby, (iii) postpone the scheduled date of
payment of the principal amount of any Loan or L/C Disbursement, or any interest
thereon, or any fees payable hereunder, or reduce the amount of, waive or excuse
any such payment, or postpone the scheduled date of expiration of the
Commitments or the Maturity Date (except as provided in Section 2.10 hereof),
without the written consent of each Lender affected thereby, (iv) change
Sections 2.20, 2.23, or 2.24 or Section 6.03 of the Security Agreement, without
the written consent of each Lender, (v) change any of the provisions of this
Section 9.02 or the definition of the term "Required Lenders" or "Required
Supermajority Lenders" or any other provision of any Loan Document specifying
the number or percentage of Lenders required to waive, amend or modify any
rights thereunder or make any determination or grant any consent thereunder,
without the written consent of each Lender, (vi) release any Borrower from its
obligations under any Loan Document, or limit its liability in respect of such
Loan Document, without the written consent of each Lender, (vii) except for
sales described in Section 6.05, release any material portion of the Collateral
from the Liens of the Security Documents, without the written consent of each
Lender, (viii) change the definition of the term "Borrowing Base" or any
component definition thereof if as a result thereof the amounts available to be
borrowed by the Borrowers would be increased, without the written consent of
each Lender, provided that the foregoing shall not limit the discretion of the
Administrative Agent to change, establish or eliminate any Reserves, (ix) modify
the definition of Permitted Overadvance so as to increase the amount thereof or,
except as provided in such definition, the time period for a Permitted
Overadvance, without the written consent of each Lender, (x) subordinate the
Obligations hereunder, the Other Liabilities, or the Liens granted hereunder or
under the other Loan Documents, to any other Indebtedness or Lien, as the case
may be without the prior written consent of each Lender, and provided further
that no such agreement shall amend, modify or otherwise affect the rights or
duties of the Agents or the Issuing Bank without the prior written consent of
the Agents or the Issuing Bank, as the case may be.
(c) Notwithstanding anything to the contrary contained herein, no
modification, amendment or waiver which changes the definition of "Cash Dominion
Event" or increases the maximum amount of the Swingline Loans to an amount in
excess of $60,000,000 (or such greater amount to which such limit has been
previously increased in accordance with the provisions of this Section 9.02(c))
shall be made without the written consent of the Required Supermajority Lenders.
(d) Notwithstanding anything to the contrary contained in this
Section 9.02, in the event that the Borrowers request that this Agreement or any
other Loan Document be modified, amended or waived in a manner which would
require the consent of the Lenders pursuant to Sections 9.02(b) or 9.02(c) and
such amendment is approved by the Required Lenders, but not by the requisite
percentage of the Lenders, the Borrowers, and the Required Lenders shall be
permitted, within ninety (90) days thereafter, to amend this Agreement without
the consent of the Lender or Lenders which did not agree to the modification or
amendment requested by the
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Borrowers (such Lender or Lenders, collectively the "Minority Lenders") to
provide for (w) the termination of the Commitment of each of the Minority
Lenders, (x) the addition to this Agreement of one or more other financial
institutions, or an increase in the Commitment of one or more of the Required
Lenders, so that the aggregate Commitments after giving effect to such amendment
shall be in the same amount as the aggregate Commitments immediately before
giving effect to such amendment, (y) if any Loans are outstanding at the time of
such amendment, the making of such additional Loans by such new or increasing
Lender or Lenders, as the case may be, as may be necessary to repay in full the
outstanding Loans (including principal, interest, and fees) of the Minority
Lenders immediately before giving effect to such amendment and (z) such other
modifications to this Agreement or the Loan Documents as may be appropriate and
incidental to the foregoing.
(e) No notice to or demand on any Borrower shall entitle any
Borrower to any other or further notice or demand in the same, similar or other
circumstances. Each holder of a Note shall be bound by any amendment,
modification, waiver or consent authorized as provided herein, whether or not a
Note shall have been marked to indicate such amendment, modification, waiver or
consent and any consent by a Lender, or any holder of a Note, shall bind any
Person subsequently acquiring a Note, whether or not a Note is so marked. No
amendment to this Agreement shall be effective against the Borrowers unless
signed by the Borrowers.
SECTION 9.3 Expenses; Indemnity; Damage Waiver.
(a) The Borrowers shall jointly and severally pay (i) all reasonable
out-of-pocket expenses incurred by the Agents and their Affiliates, including
the reasonable fees, charges and disbursements of counsel for the Agents,
outside consultants for the Agents, appraisers, and for commercial finance
examinations, in connection with the arrangement of the credit facilities
provided for herein, the preparation and administration of the Loan Documents or
any amendments, modifications or waivers of the provisions thereof (whether or
not the transactions contemplated hereby or thereby shall be consummated), (ii)
all reasonable out-of-pocket expenses incurred by the Issuing Bank in connection
with the issuance, amendment, renewal or extension of any Letter of Credit or
any demand for payment thereunder, and (iii) subject to the limitations set
forth in Section 5.09(b), all reasonable out-of-pocket expenses incurred by the
Agents, the Issuing Bank or any Lender, including the reasonable fees, charges
and disbursements of any counsel and any outside consultants for the Agents, the
Issuing Bank or any Lender, for appraisers, commercial finance examinations, and
environmental site assessments, in connection with the enforcement or protection
of its rights in connection with the Loan Documents, including its rights under
this Section, or in connection with the Loans made or Letters of Credit issued
hereunder, including all such out-of-pocket expenses incurred during any
workout, restructuring or negotiations in respect of such Loans or Letters of
Credit; provided that the Lenders who are not the Agents or the Issuing Bank
shall be entitled to reimbursement for no more than one counsel representing all
such Lenders.
(b) The Borrowers shall, jointly and severally, indemnify the
Agents, the Issuing Bank and each Lender, and each Related Party of any of the
foregoing Persons (each such Person being called an "Indemnitee") against, and
hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses, including the reasonable and documented fees,
charges and disbursements of any counsel for any Indemnitee, incurred by or
asserted against any Indemnitee arising out of, in connection with, or as a
result of (i) the
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execution or delivery of any Loan Document or any other agreement or instrument
contemplated hereby, the performance by the parties to the Loan Documents of
their respective obligations thereunder or the consummation of the transactions
contemplated by the Loan Documents or any other transactions contemplated
hereby, (ii) any Loan or Letter of Credit or the use of the proceeds therefrom
(including any refusal by the Issuing Bank to honor a demand for payment under a
Letter of Credit if the documents presented in connection with such demand do
not strictly comply with the terms of such Letter of Credit), (iii) any actual
or alleged presence or release of Hazardous Materials on or from any property
currently or formerly owned or operated by any Borrower or any of the
Subsidiaries, or any Environmental Liability related in any way to any Borrower
or any of the Subsidiaries, or (iv) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory and regardless of whether any Indemnitee is a
party thereto, provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or
related expenses resulted from the gross negligence, bad faith, or breach of the
contractual obligations of such Indemnitee or any Affiliate of such Indemnitee
(or of any officer, director, employee, advisor or agent of such Indemnitee or
any such Indemnitee's Affiliates), or with respect to a claim by one Indemnified
Person against another Indemnified Person.
(c) To the extent that any Borrower fails to pay any amount required
to be paid by it to the Agents or the Issuing Bank under paragraph (a) or (b) of
this Section, each Lender severally agrees to pay to the Agents or the Issuing
Bank, as the case may be, such Lender's Commitment Percentage of such unpaid
amount, provided that the unreimbursed expense or indemnified loss, claim,
damage, liability or related expense, as the case may be, was incurred by or
asserted against the Agents or the Issuing Bank.
(d) To the extent permitted by Applicable Law, no Borrower shall
assert, and each hereby waives, any claim against any Indemnitee, on any theory
of liability, for special, indirect, consequential or punitive damages (as
opposed to direct or actual damages) arising out of, in connection with, or as a
result of, this Agreement or any agreement or instrument contemplated hereby,
the transactions contemplated by the Loan Documents, any Loan or Letter of
Credit or the use of the proceeds thereof.
(e) All amounts due under this Section shall be payable promptly
after written demand therefor.
SECTION 9.4 Designation of Lead Borrower as Borrowers' Agent.
(a) Each Borrower hereby irrevocably designates and appoints the
Lead Borrower as that Borrower's agent to obtain Loans and Letters of Credit
hereunder, the proceeds of which shall be available to each Borrower for those
uses as those set forth herein. As the disclosed principal for its agent, each
Borrower shall be obligated to the Agents and each Lender on account of Loans so
made and Letters of Credit so issued hereunder as if made directly by the
Lenders to that Borrower, notwithstanding the manner by which such Loans and
Letters of Credit are recorded on the books and records of the Lead Borrower and
of any Borrower.
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(b) Each Borrower recognizes that credit available to it hereunder
is in excess of and on better terms than it otherwise could obtain on and for
its own account and that one of the reasons therefor is its joining in the
credit facility contemplated herein with all other Borrowers. Consequently, each
Borrower hereby assumes, guarantees, and agrees to discharge all Obligations and
Other Liabilities of all other Borrowers as if the Borrower so assuming and
guarantying were each other Borrower.
(c) The Lead Borrower shall act as a conduit for each Borrower
(including itself, as a "Borrower") on whose behalf the Lead Borrower has
requested a Loan.
(i) The Lead Borrower shall cause the transfer of the
proceeds of each Loan to the (those) Borrower(s) on whose behalf
such Loan was obtained. Neither the Agents nor any Lender shall
have any obligation to see to the application of such proceeds.
(ii) If, for any reason, and at any time during the term
of this Agreement,
(A) any Borrower, including the Lead Borrower,
as agent for the Borrowers, shall be unable to, or
prohibited from carrying out the terms and conditions of
this Agreement (as determined by the Administrative Agent
in its reasonable judgment); or
(B) the Administrative Agent, in its reasonable
judgment, deems it inexpedient to continue making Loans
and cause Letters of Credit to be issued to or for the
account of any particular Borrower, or to channel such
Loans and Letters of Credit through the Lead Borrower,
then the Lenders may make Loans directly to, and cause the
issuance of Letters of Credit directly for the account of such
of the Borrowers as the Administrative Agent determines to be
expedient, which Loans may be made without regard to the
procedures otherwise included in this Section 9.04.
(d) In the event that the Administrative Agent determines under
Section 9.04(c)(ii) to forgo the procedures included herein pursuant to which
Loans and Letters of Credit are to be channeled through the Lead Borrower, then
the Administrative Agent may designate one or more of the Borrowers to fulfill
the financial and other reporting requirements otherwise imposed herein upon the
Lead Borrower.
(e) Each of the Borrowers shall remain jointly and severally liable
to the Agents and the Lenders for the payment and performance of all Obligations
and all Other Liabilities (which payment and performance shall continue to be
secured by all Collateral granted by each of the Borrowers) notwithstanding any
determination by the Administrative Agent under Section 9.04(c)(ii) to cease
making Loans or causing Letters of Credit to be issued to or for the benefit of
any Borrower.
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(f) The authority of the Lead Borrower to request Loans on behalf
of, and to bind, the Borrowers, shall continue unless and until the
Administrative Agent acts as provided in subparagraph (c), above, or the
Administrative Agent actually receives
(i) written notice of: (i) the termination of such
authority, and (ii) the subsequent appointment of a successor
Lead Borrower, which notice is signed by the respective
Presidents of each Borrower (other than the President of the
Lead Borrower being replaced) then eligible for borrowing under
this Agreement; and
(ii) written notice from such successive Lead Borrower
(i) accepting such appointment; (ii) acknowledging that such
removal and appointment has been effected by the respective
Presidents of such Borrowers eligible for borrowing under this
Agreement; and (iii) acknowledging that from and after the date
of such appointment, the newly appointed Lead Borrower shall be
bound by the terms hereof, and that as used herein, the term
"Lead Borrower" shall mean and include the newly appointed Lead
Borrower.
SECTION 9.5 Successors and Assigns.
(a) The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby (including any Affiliate of the Issuing Bank that issues any
Letter of Credit), except that no Borrower may assign or otherwise transfer any
of its rights or obligations hereunder without the prior written consent of each
Lender (and any such attempted assignment or transfer without such consent shall
be null and void). Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby (including any Affiliate of
the Issuing Bank that issues any Letter of Credit) and, to the extent expressly
contemplated hereby, the Related Parties of each of the Agents, the Issuing Bank
and the Lenders) any legal or equitable right, remedy or claim under or by
reason of this Agreement.
(b) Any Lender may assign to one or more assignees all or a portion
of its rights and obligations under this Agreement (including all or a portion
of its Commitment and the Loans at the time owing to it), provided that (i)
except in the case of an assignment to a Lender or an Affiliate of a Lender,
each of the Lead Borrower (but only if no Event of Default then exists), the
Agents and the Issuing Bank must give their prior written consent to such
assignment (which consent shall not be unreasonably withheld or delayed), (ii)
except in the case of an assignment to a Lender or an Affiliate of a Lender or
an assignment of the entire remaining amount of the assigning Lender's
Commitment or Loans, the amount of the Commitment or Loans of the assigning
Lender subject to each such assignment (determined as of the date the Assignment
and Acceptance with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $10,000,000 unless the
Administrative Agent otherwise consents, (iii) each partial assignment shall be
made as an assignment of a proportionate part of all the assigning Lender's
rights and obligations, (iv) the parties to each assignment shall execute and
deliver to the Administrative Agent an Assignment and Acceptance, and, after
completion of the syndication of the Loans, together with a processing and
recordation fee of $3,500. Subject to acceptance and recording thereof pursuant
to paragraph (d) of this Section, from and after the
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effective date specified in each Assignment and Acceptance the assignee
thereunder shall be a party hereto and, to the extent of the interest assigned
by such Assignment and Acceptance, have the rights and obligations of a Lender
under this Agreement, and the assigning Lender thereunder shall, to the extent
of the interest assigned by such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Section 9.03). Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with
this paragraph shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
paragraph (e) of this Section.
(c) The Administrative Agent, acting for this purpose as an agent of
the Borrowers, shall maintain at one of its offices in Boston, Massachusetts a
copy of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount of the Loans and L/C Disbursements owing to, each Lender
pursuant to the terms hereof from time to time (the "Register"). The entries in
the Register shall be presumptively correct absent manifest error and the
Borrowers, the Administrative Agent, the Issuing Bank and the Lenders may treat
each Person whose name is recorded in the Register pursuant to the terms hereof
as a Lender hereunder for all purposes of this Agreement, notwithstanding notice
to the contrary. The Register shall be available for inspection by the Lead
Borrower, the Issuing Bank and any Lender, at any reasonable time and from time
to time upon reasonable prior notice.
(d) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, the processing and recordation
fee referred to in paragraph (b) of this Section and any written consent to such
assignment required by paragraph (b) of this Section, the Administrative Agent
shall accept such Assignment and Acceptance and record the information contained
therein in the Register. No assignment shall be effective for purposes of this
Agreement unless it has been recorded in the Register as provided in this
paragraph.
(e) Any Lender may, without the consent of the Borrowers, the
Agents, and the Issuing Bank, sell participations to one or more banks or other
entities (a "Participant") in all or a portion of such Lender's rights and
obligations under this Agreement (including all or a portion of its Commitment
and the Loans owing to it), provided that (i) such Lender's obligations under
this Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (iii) the Borrowers, the Agents, the Issuing Bank and the other Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement. Any agreement or
instrument pursuant to which a Lender sells such a participation in the
Commitments, the Loans and the Letters of Credit Outstandings shall provide that
such Lender shall retain the sole right to enforce the Loan Documents and to
approve any amendment, modification or waiver of any provision of the Loan
Documents, provided that such agreement or instrument may provide that such
Lender will not, without the consent of the Participant, agree to any amendment,
modification or waiver described in the first proviso to Section 9.02(b) that
affects such Participant. Subject to paragraph (f) of this Section, the
Borrowers agree that each Participant shall be entitled to the benefits of
Sections 2.25, 2.27 and 2.28 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to
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paragraph (b) of this Section. To the extent permitted by law, each Participant
also shall be entitled to the benefits of Section 9.09 as though it were a
Lender, provided such Participant agrees to be subject to Section 2.27(c) as
though it were a Lender.
(f) A Participant shall not be entitled to receive any greater
payment under Section 2.25 or 2.28 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the Lead
Borrower's prior written consent. A Participant that would be a Foreign Lender
if it were a Lender shall not be entitled to the benefits of Section 2.28 unless
(i) the Lead Borrower is notified of the participation sold to such Participant
and such Participant agrees, for the benefit of the Borrowers, to comply with
Section 2.28(e) as though it were a Lender and (ii) such Participant is eligible
for exemption from the withholding tax referred to therein, following compliance
with Section 2.28(e).
(g) Any Lender may at any time pledge or assign a security interest
in all or any portion of its rights under this Agreement to secure obligations
of such Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank, and this Section shall not apply to any such pledge or
assignment of a security interest, provided that no such pledge or assignment of
a security interest shall release a Lender from any of its obligations hereunder
or substitute any such pledgee or assignee for such Lender as a party hereto.
SECTION 9.6 Survival.
All covenants, agreements, representations and warranties made by the Borrowers
in the Loan Documents and in the certificates or other instruments delivered in
connection with or pursuant to this Agreement or any other Loan Document shall
be considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of the Loan Documents and the making of any
Loans and issuance of any Letters of Credit, regardless of any investigation
made by any such other party or on its behalf and notwithstanding that the
Agents, the Issuing Bank or any Lender may have had notice or knowledge of any
Default or incorrect representation or warranty at the time any credit is
extended hereunder, and shall continue in full force and effect as long as the
principal of or any accrued interest on any Loan or any fee or any other amount
payable under this Agreement is outstanding and unpaid or any Letter of Credit
is outstanding and so long as the Commitments have not expired or terminated,
except as otherwise provided in the Security Agreement. The provisions of
Sections 2.25, 2.28 and 9.03 and Article VIII shall survive and remain in full
force and effect regardless of the consummation of the transactions contemplated
hereby, the repayment of the Loans, the expiration or termination of the Letters
of Credit and the Commitments or the termination of this Agreement or any
provision hereof.
SECTION 9.7 Counterparts; Integration; Effectiveness.
This Agreement may be executed in counterparts (and by different parties hereto
on different counterparts), each of which shall constitute an original, but all
of which when taken together shall constitute a single contract. This Agreement,
the other Loan Documents and any separate letter agreements with respect to fees
payable to the Agents constitute the entire contract among the parties relating
to the subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. Except
as provided in Section 4.01, this Agreement shall become effective when it shall
have been executed by the
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Agents and the Lenders and when the Administrative Agent shall have received
counterparts hereof that, when taken together, bear the signatures of each of
the other parties hereto, and thereafter shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
Delivery of an executed counterpart of a signature page of this Agreement by
telecopy shall be effective as delivery of a manually executed counterpart of
this Agreement.
SECTION 9.8 Severability.
Any provision of this Agreement held to be invalid, illegal or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such invalidity, illegality or unenforceability without affecting the validity,
legality and enforceability of the remaining provisions hereof; and the
invalidity of a particular provision in a particular jurisdiction shall not
invalidate such provision in any other jurisdiction.
SECTION 9.9 Right of Setoff.
If an Event of Default shall have occurred and be continuing, each Lender and
each of its Affiliates is hereby authorized at any time and from time to time,
to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other obligations at any time owing by such Lender or Affiliate to or
for the credit or the account of the Borrowers against any of and all the
obligations of the Borrowers now or hereafter existing under this Agreement held
by such Lender, irrespective of whether or not such Lender shall have made any
demand under this Agreement and although such obligations may be unmatured. The
rights of each Lender under this Section are in addition to other rights and
remedies (including other rights of setoff) that such Lender may have.
SECTION 9.10 Governing Law; Jurisdiction; Consent to Service of
Process.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE COMMONWEALTH OF MASSACHUSETTS.
(b) Each Borrower agrees that any suit for the enforcement of this
Agreement or any other Loan Document may be brought in the courts of the
Commonwealth of Massachusetts or any federal court sitting therein and consent
to the non-exclusive jurisdiction of such courts. Each Borrower hereby waives
any objection which it may now or hereafter have to the venue of any such suit
or any such court or that such suit is brought in an inconvenient forum.
(c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 9.01. Nothing in this
Agreement or any other Loan Document will affect the right of any party to this
Agreement to serve process in any other manner permitted by law.
SECTION 9.11 WAIVER OF JURY TRIAL.
EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY
100
LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY
(WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A)
CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.
SECTION 9.12 Headings.
Article and Section headings and the Table of Contents used herein are for
convenience of reference only, are not part of this Agreement and shall not
affect the construction of, or be taken into consideration in interpreting, this
Agreement.
SECTION 9.13 Interest Rate Limitation.
Notwithstanding anything herein to the contrary, if at any time the interest
rate applicable to any Loan, together with all fees, charges and other amounts
that are treated as interest on such Loan under Applicable Law (collectively the
"Charges"), shall exceed the maximum lawful rate (the "Maximum Rate") that may
be contracted for, charged, taken, received or reserved by the Lender holding
such Loan in accordance with Applicable Law, the rate of interest payable in
respect of such Loan hereunder, together with all Charges payable in respect
thereof, shall be limited to the Maximum Rate and, to the extent lawful, the
interest and Charges that would have been payable in respect of such Loan but
were not payable as a result of the operation of this Section shall be cumulated
and the interest and Charges payable to such Lender in respect of other Loans or
periods shall be increased (but not above the Maximum Rate therefor) until such
cumulated amount, together with interest thereon at the Federal Funds Effective
Rate to the date of repayment, shall have been received by such Lender.
SECTION 9.14 Additional Waivers.
(a) The Obligations are the joint and several obligations of each
Borrower. To the fullest extent permitted by Applicable Law, the obligations of
each Borrower hereunder shall not be affected by (i) the failure of any Agent or
any other Secured Party to assert any claim or demand or to enforce or exercise
any right or remedy against any other Borrower under the provisions of this
Agreement, any other Loan Document or otherwise, (ii) any rescission, waiver,
amendment or modification of, or any release from any of the terms or provisions
of, this Agreement, any other Loan Document, or any other agreement, or (iii)
the failure to perfect any security interest in, or the release of, any of the
security held by or on behalf of the Collateral Agent or any other Secured
Party.
(b) The obligations of each Borrower to pay the Obligations in full
hereunder shall not be subject to any reduction, limitation, impairment or
termination for any reason (other than
101
the indefeasible payment in full in cash of the Obligations), including any
claim of waiver, release, surrender, alteration or compromise of any of the
Obligations, and shall not be subject to any defense or set-off, counterclaim,
recoupment or termination whatsoever by reason of the invalidity, illegality or
unenforceability of the Obligations or otherwise. Without limiting the
generality of the foregoing, the obligations of each Borrower hereunder shall
not be discharged or impaired or otherwise affected by the failure of any Agent
or any other Secured Party to assert any claim or demand or to enforce any
remedy under this Agreement, any other Loan Document or any other agreement, by
any waiver or modification of any provision of any thereof, by any default,
failure or delay, wilful or otherwise, in the performance of the Obligations, or
by any other act or omission that may or might in any manner or to any extent
vary the risk of any Borrower or that would otherwise operate as a discharge of
any Borrower as a matter of law or equity (other than the indefeasible payment
in full in cash of all the Obligations).
(c) To the fullest extent permitted by Applicable Law, each Borrower
waives any defense based on or arising out of any defense of any other Borrower
or the unenforceability of the Obligations or any part thereof from any cause,
or the cessation from any cause of the liability of any other Borrower, other
than the indefeasible payment in full in cash of all the Obligations. The
Collateral Agent and the other Secured Parties may, at their election, foreclose
on any security held by one or more of them by one or more judicial or
nonjudicial sales, accept an assignment of any such security in lieu of
foreclosure, compromise or adjust any part of the Obligations, make any other
accommodation with any other Borrower, or exercise any other right or remedy
available to them against any other Borrower, without affecting or impairing in
any way the liability of any Borrower hereunder except to the extent that all
the Obligations have been indefeasibly paid in full in cash. Pursuant to
Applicable Law, each Borrower waives any defense arising out of any such
election even though such election operates, pursuant to Applicable Law, to
impair or to extinguish any right of reimbursement or subrogation or other right
or remedy of such Borrower against any other Borrower, as the case may be, or
any security.
(d) Upon payment by any Borrower of any Obligations, all rights of
such Borrower against any other Borrower arising as a result thereof by way of
right of subrogation, contribution, reimbursement, indemnity or otherwise shall
in all respects be subordinate and junior in right of payment to the prior
indefeasible payment in full in cash of all the Obligations. In addition, any
indebtedness of any Borrower now or hereafter held by any other Borrower is
hereby subordinated in right of payment to the prior payment in full of the
Obligations. None of the Borrowers will demand, xxx for, or otherwise attempt to
collect any such indebtedness. If any amount shall erroneously be paid to any
Borrower on account of (a) such subrogation, contribution, reimbursement,
indemnity or similar right or (b) any such indebtedness of any Borrower, such
amount shall be held in trust for the benefit of the Secured Parties and shall
forthwith be paid to the Collateral Agent to be credited against the payment of
the Obligations, whether matured or unmatured, in accordance with the terms of
the Loan Documents.
(e) Without limiting the generality of the foregoing, or of any
other waiver or other provision set forth in this Agreement, each Borrower
hereby absolutely, knowingly, unconditionally, and expressly waives any and all
claim, defense or benefit arising directly or
102
indirectly under any one or more of Sections 2787 to 2855 inclusive of the
California Civil Code or any similar law of California.
SECTION 9.15 Confidentiality
Each of the Lenders agrees that it will use its best efforts not to
disclose without the prior consent of the Lead Borrower (other than to its
employees, auditors, counsel or other professional advisors, to affiliates or to
another Lender if the Lender or such Lender's holding or parent company in its
sole discretion determines that any such party should have access to such
information, provided that such party is bound by the confidentiality provisions
of this Section 9.15) any information with respect to Lead Borrower or any of
its Subsidiaries which is furnished pursuant to this Agreement and which is
designated by Lead Borrower to the Lenders in writing as confidential provided
that any Lender may disclose any such information (a) as has become generally
available to the public, (b) as may be required in any report, statement or
testimony submitted to any municipal, state or federal regulatory body having or
claiming to have jurisdiction over such Lender or to the Federal Reserve Board
or the Federal Deposit Insurance Corporation or similar organizations (whether
in the United States or elsewhere) or their successors, (c) as may be required
in response to any summons or subpoena or in connection with any litigation, (d)
in order to comply with any law, order, regulation or ruling applicable to such
Lender, (e) in connection with the enforcement of remedies under this Agreement
and the other Loan Documents, and (f) to any prospective transferee in
connection with any contemplated transfer of any of the Loans or Notes or any
interest therein by such Lender provided that such prospective transferee agrees
to be bound by the provisions of this Section. The Borrower hereby agrees that
the failure of a Lender to comply with the provisions of this Section 9.15 shall
not relieve the Borrower of any of its obligations to such Lender under this
Agreement and the other Loan Documents. Notwithstanding the foregoing, the
information subject to this Section 9.15 shall not include, and the Agents, the
Issuing Bank and each Lender may disclose without limitation of any kind, any
information with respect to the "tax treatment" and "tax structure" (in each
case, within the meaning of Treasury Regulation Section 1.6011-4) of the
transactions contemplated hereby and all materials of any kind (including
opinions or other tax analyses) that are provided to the Agents, the Issuing
Bank or any Lender relating to such tax treatment and tax structure; provided
that with respect to any document or similar item that in either case contains
information concerning the tax treatment or tax structure of the transactions as
well as other information, this sentence shall only apply to such portions of
the document or similar item that relate to the tax treatment or tax structure
of the Loans, Letters of Credit and transactions contemplated hereby.
[balance of page left intentionally blank; signature pages follow]
103
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as a sealed instrument as
of the day and year first above written.
CIRCUIT CITY STORES, INC.
as Lead Borrower and Borrower
By: /s/Xxxxxx X. Xxxx
----------------------
Name: Xxxxxx X. Xxxx
Title: Senior Vice President, Treasurer
and Controller
CIRCUIT CITY STORES WEST COAST, INC.
as Borrower
By: /s/Xxxxxx X. Xxxx
----------------------
Name: Xxxxxx X. Xxxx
Title: Vice President and Treasurer
FLEET RETAIL FINANCE INC.,
as Administrative Agent, as Collateral Agent,
as Swingline Lender, and as Lender
By:/s/Xxxxx Xxxxx
-----------------
Name: Xxxxx Xxxxx
Title: Managing Director
Address:
00 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xx. Xxxxxxxx Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
FLEET NATIONAL BANK,
as Issuing Bank
By:/s/Xxxxx Xxxxx
----------------
Name: Xxxxx Xxxxx
Title: Managing Director
Address:
00 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xx. Xxxxxxxx Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
BANK OF AMERICA, N.A.,
as Syndication Agent and as Lender
By:/s/Xxxxxx X. Xxxx
--------------------
Name:Xxxxxx X. Xxxx
Title:Vice President
Address:
000 Xxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxx
Telephone: (000)000-0000
Telecopy: (000) 000-0000
GENERAL ELECTRIC CAPITAL CORPORATION,
as Documentation Agent and as Lender
By:/s/Xxxx X. Xxxxxxx
-------------------
Name:Xxxx X. Xxxxxxx
Title:Duly Authorized Signatory
Address:
0000 Xxxxxxx Xxx, Xxxxx 000
Xxxxxxx, XX 00000
Attn: Xxxx Xxxxxxx
Telephone: 000-000-0000
Telecopy: 000-000-0000
BANK ONE, NA,
as Documentation Agent and as Lender
By:/s/Xxxxxx X. Xxxx
-------------------
Name:Xxxxxx X. Xxxx
Title:Director
Address:
000 Xxxxx XxXxxxx Xx.
Mail Code IL1-1458
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
CONGRESS FINANCIAL CORPORATION (CENTRAL),
as Syndication Agent and as Lender
By:/s/Xxxxxxxxxxx X. Xxxxx
------------------------
Name:Xxxxxxxxxxx X. Xxxxx
Title:1st Vice President
Address:
000 Xxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, XX 00000-0000
Attn: Xxxxx Xxxxxxxx
Telephone: 000-000-0000
Telecopy: 000-000-0000
XXXXX FARGO FOOTHILL, LLC, as Co-Agent and Lender
By:/s/Xxxxx X. Xxxxxx
-------------------
Name:Xxxxx X. Xxxxxx
Title:Vice President
Address:
0000 Xxxxxxxx Xxx., 0000 Xxxx
Xxxxx Xxxxxx, XX 00000
Attn: Xxx Xxxx/Xxxxxx Xxxxxxxx
Telephone: 000-000-0000/7325
Telecopy: 000-000-0000
THE CIT GROUP/BUSINESS CREDIT, INC., as Co-Agent
and Lender
By:/s/Xxxxx Xxxxxxxx
-------------------
Name:Xxxxx Xxxxxxxx
Title:AVP
Address:
0000 Xxxxxx xx Xxxxxxxx
Xxx Xxxx, XX 00000
Attn: Xxx Xxxxxx
Telephone: 000-000-0000
Telecopy: 000-000-0000
NATIONAL CITY COMMERCIAL FINANCE, INC., as Co-Agent
and Lender
By:/s/Xxxxx X. Xxxxxx
----------------
Name:Xxxxx X. Xxxxxx
Title:Senior Vice President
Address:
0000 X. Xxxxx Xx;Xxxxx 000
Xxxxxxxxx, XX 00000
Attn: Xxxx Xxxxx
Telephone: 000-000-0000
Telecopy: 000-000-0000
JPMORGAN CHASE BANK, as Co-Agent and Lender
By:/s/Xxxxx X. Xxxxxxx
--------------------
Name:Xxxxx X. Xxxxxxx
Title:Vice President
Address:
Xxx Xxxxx Xxxxxx XX - 0
Xxxxxxxxx, Xxx Xxxx 00000
Attn: Circuit City Client Mgr.
Telephone: 000-000-0000
Telecopy: 000-000-0000
FIFTH THIRD BANK, as Lender
By:/s/Xxxxx X. Xxxxx
--------------------
Name:Xxxxx X. Xxxxx
Title:Vice President
Address:
00 Xxxxxxx Xxxxxx Xxxxx
XX 000000 Xxxxxxxxxx, XX 00000
Attn: Commercial Banking
Telephone: 000-000-0000
Telecopy: 000-000-0000
SIEMENS FINANCIAL SERVICES, INC., as Lender
By:/s/Xxxxx Xxxxxx
-----------------
Name:Xxxxx Xxxxxx
Title:Vice President-Credit
Address:
=======================
Attn: __________________
Telephone: _____________
Telecopy: _______________
