1
AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of December 2, 1997
HEADING
AMENDED AND RESTATED CREDIT AGREEMENT, dated as of December 2, 1997, among
PAYLESS CASHWAYS, INC., a Delaware corporation, as successor by merger to the
Debtor referred to below (the "Borrower"), each of the financial institutions
from time to time party hereto as lenders (together with their successors and
assigns, the "Lenders"), the Underwriters (as hereinafter defined), CANADIAN
IMPERIAL BANK OF COMMERCE (acting through one or more of its agencies, branches,
or affiliates, "CIBC"), as the issuer of standby letters of credit, U.S. BANK
NATIONAL ASSOCIATION, in its capacity as the issuer of documentary letters of
credit and CIBC, as coordinating and collateral agent (in such capacity, the
"Agent") for the Lenders, the Fronting Banks (as hereinafter defined), the
Underwriters and the other Secured Parties (as hereinafter defined).
INTRODUCTORY STATEMENT
On July 21, 1997, Payless Cashways, Inc., an Iowa corporation, as debtor
and debtor-in-possession (the "Debtor"), filed a voluntary petition with the
Bankruptcy Court initiating the Case (as hereinafter defined) and has continued
in the possession of its assets and in the management of its business pursuant
to Sections 1107 and 1108 of the Bankruptcy Code (as hereinafter defined).
On September 5, 1997, the Debtor filed its First Amended Plan of
Reorganization with the Bankruptcy Court (as hereinafter defined), which First
Amended Plan of Reorganization was modified on October 9, 1997 and further
modified in the Confirmation Order (as hereinafter defined) entered by the
Bankruptcy Court on November 19, 1997 and on the record at the hearing with
respect to the Confirmation Order. The Plan of Reorganization (as hereinafter
defined) contemplates, inter alia, that the Debtor will merge into the Borrower
on or before the Effective Date (as hereinafter defined) and that the Borrower
will obtain post-Effective Date financing in the maximum amount of $150,000,000
as more fully described below.
Immediately prior to the Effective Date, the Debtor was obligated to (i)
certain of the Lenders (the "Pre-Petition Revolving Lenders") with respect to
pre-petition revolving credit loans in the aggregate principal amount of
$109,386,210.16 (the "Pre-Petition Revolving Loans") extended by the
Pre-Petition Revolving Lenders and with respect to undrawn pre-petition letters
of credit in the aggregate principal amount of $22,326,553.20 (the "Pre-Petition
Letters of Credit") issued for the account of the Debtor pursuant to the
Pre-Petition Credit Agreement (as hereinafter defined), (ii) certain of the
Lenders (the "Pre-Petition Term Lenders" and, together with the Pre-Petition
Revolving Lenders, the "Pre-Petition Lenders") with respect to pre-petition
"Tranche A" term loans
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in the aggregate principal amount of $155,509,892.94 (the "Pre-Petition Tranche
A Term Loans") and pre-petition "Tranche B" term loans in the aggregate
principal amount of $95,432,533.18 (the "Pre-Petition Tranche B Term Loans" and,
together with the Pre-Petition Tranche A Term Loans, the "Pre-Petition Term
Loans"; the Pre-Petition Term Loans, together with the Pre-Petition Revolving
Loans, the "Pre-Petition Loans") extended by the Pre-Petition Term Lenders
pursuant to the Pre-Petition Credit Agreement, (iii) the Pre-Petition Lenders in
respect of interest, fees and all other obligations of the Debtor under the
Pre-Petition Credit Agreement and the other documentation relating thereto and
(iv) certain of the Lenders (the "DIP Lenders") with respect to post-petition
revolving credit loans in the aggregate principal amount of $34,000,000.00 (the
"DIP Revolving Credit Loans"), post-petition standby letters of credit in the
aggregate principal amount of $2,625,000.00 (the "DIP Standby Letters of
Credit") extended to or issued for the account of the Debtor and post-petition
documentary letters of credit in the aggregate principal amount of $6,593,546.78
issued for the account of the Debtor (the "DIP Documentary Letters of Credit"
and together with the DIP Standby Letters of Credit, the "DIP Letters of
Credit") pursuant to the DIP Credit Agreement (as hereinafter defined).
The DIP Lenders were granted superpriority administrative claims and
superpriority Liens (as hereinafter defined) on all of the Debtor's assets with
respect to the Debtor's obligations in respect of the DIP Obligations, subject
only to valid and perfected prior Liens existing on the Filing Date (as
hereinafter defined) other than the Liens of the Pre-Petition Lenders. On the
Filing Date, the Pre-Petition Loans and Pre-Petition Letters of Credit were
secured by substantially all of the Debtor's assets (other than the UBS
Collateral (as hereinafter defined)), including, without limitation, all
inventory, vehicles and other personal property, together with certain real
property, buildings and improvements and fixtures, owned or leased by the
Debtor, notes and capital stock owned by the Debtor and proceeds thereof
(collectively, the "Pre-Petition Collateral"), subject only to certain valid and
perfected prior Liens existing as of the Filing Date. In addition, as part of
the adequate protection ordered by the Bankruptcy Court, the Pre-Petition
Lenders were granted Liens on the UBS Collateral and on all other collateral
granted to the DIP Lenders, subject only to the superpriority administrative
claims and Liens granted to the DIP Lenders and to other valid and perfected
prior Liens existing on the Filing Date.
The Borrower has a commitment from the New Revolving Lenders (as
hereinafter defined), subject to the terms and conditions hereof, for revolving
credit and letter of credit facilities in an aggregate principal amount not to
exceed $150,000,000 (subject to the limitation set forth in Sections 2.1(d) and
(e) and to mandatory and optional reductions in accordance with Sections 2.9 and
2.12).
The proceeds of the New Revolving Loans will be used to provide working
capital for the Borrower, and for other general corporate purposes of the
Borrower, including for Capital Expenditures (as hereinafter defined).
The New Revolving Lenders have consented to make the financing contemplated
hereby available on the terms and conditions contained herein. The DIP Revolving
Credit Loans and the DIP Letters of Credit, together with a portion of the
Pre-Petition Revolving Loans and the Pre-Petition
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Term Loans, are being restructured as provided hereby, the Pre-Petition Credit
Agreement and the DIP Credit Agreement are being amended and restated in their
entirety as herein set forth and the Pre-Petition Letters of Credit are being
treated as provided in Section 9.14(c) hereof.
To provide security for the repayment of the Loans, the reimbursement of
any draft drawn under a Letter of Credit and the payment of the other
obligations of the Borrower hereunder and under the other Loan Documents, the
Agent will receive, for its benefit and for the benefit of the Lenders, the
Fronting Banks and the Underwriters, the following interests in the following
collateral (as more fully described in the Security Documents, collectively, the
"Collateral"):
(a) a first perfected Lien on all Pre-Petition Collateral;
(b) a first perfected Lien on all property which was unencumbered on the
Filing Date or was acquired by the Debtor during the Case and a first perfected
Lien on substantially all property to be acquired by the Borrower after the
Effective Date; and
(c) a perfected Lien on all UBS Collateral and on the collateral securing
the Synthetic Lease Obligations (subject to the prior liens of UBS and the
Synthetic Lease Banks with respect thereto).
Accordingly, in consideration of the mutual agreements herein set forth,
the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS.
Section 1.1. Defined Terms
As used in this Agreement, the following terms shall have the meanings
specified below:
"ABR Loan" shall mean any Loan bearing interest at a rate determined by
reference to the Alternate Base Rate in accordance with the provisions of
Section 2.4(a) and Section 2.8.
"Adjusted LIBOR Rate" shall mean, with respect to any Eurodollar Borrowing
for any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/100 of 1%) equal to the quotient of (a) the LIBOR Rate
in effect for such Interest Period divided by (b) a percentage (expressed as a
decimal) equal to 100% minus Statutory Reserves. For purposes hereof, the term
"LIBOR Rate" shall mean the rate (rounded upwards, if necessary, to the next
1/100 of 1%) at which dollar deposits approximately equal in principal amount to
such Eurodollar Borrowing and for a maturity comparable to such Interest Period
are offered to the principal London office of the Agent in immediately available
funds in the London interbank market at approximately 11:00 a.m., London time,
two Business Days prior to the commencement of such Interest Period.
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"Affiliate" shall mean, as to any Person, any other Person which, directly
or indirectly, is in control of, is controlled by, or is under common control
with such Person. For purposes of this definition, a Person (a "Controlled
Person") shall be deemed to be "controlled by" another Person (a "Controlling
Person") if the Controlling Person possesses, directly or indirectly, power to
direct or cause the direction of the management and policies of the Controlled
Person whether by contract or otherwise.
"After-Acquired Property" shall have the meaning set forth in Section 5.11.
"Agent" shall have the meaning set forth in the Heading.
"Agreement" shall mean this Amended and Restated Credit Agreement, as the
same may be amended, amended and restated, supplemented or otherwise modified
from time to time.
"Alternate Base Rate" shall mean, for any day, a rate per annum equal to
the higher of (a) the rate of interest most recently announced by CIBC at its
Domestic Lending Office as its base rate; and (b) the Federal Funds Rate in
effect on such day plus 1/2 of 1%. If for any reason the Agent shall have
determined (which determination shall be conclusive absent manifest error) that
it is unable to ascertain the Federal Funds Rate for any reason, including the
inability or failure of the Agent to obtain sufficient quotations in accordance
with the terms hereof, the Alternate Base 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
Alternate Base Rate due to a change in CIBC's base rate or the Federal Funds
Rate shall be effective on the effective date of such change in CIBC's base rate
or the Federal Funds Rate, respectively.
"Annual Budget" shall have the meaning set forth in Section 5.1(f).
"Application" shall mean an application, in such form as the relevant
Fronting Bank may specify from time to time (a current form of the Standby
Letter of Credit Application is attached hereto as Exhibit J-1 or, in the case
of the Unsupported Trade Standby Letter of Credit, Exhibit J-2), requesting such
Fronting Bank to open a Letter of Credit, as such application may be amended,
modified or supplemented from time to time.
"Approved Purposes" shall mean, in the case of Documentary Letters of
Credit, Inventory purchases or such other purposes as are reasonably acceptable
to the Agent and the relevant Fronting Bank, it being understood that issuance
of a Documentary Letter of Credit in favor of a single beneficiary acting as
agent for other trade creditors is not an Approved Purpose.
"Assignment and Acceptance" shall mean an assignment and acceptance by a
Lender and an Eligible Assignee, accepted by the Agent and agreed to by the
Borrower to the extent required by Section 9.3(b), substantially in the form of
Exhibit P.
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"Available Property" shall mean all real property, buildings, improvements
and fixtures owned or leased by the Borrower or any Subsidiary which are not
subject to a Lien as of the Effective Date, after recordation of the Mortgages
delivered on such date. To the extent that any real property, buildings,
improvements and fixtures owned or leased by the Borrower or any Subsidiary,
which do not constitute Available Property as of the Effective Date, become,
after the Effective Date, unencumbered by the Lien of the Colorado Mortgages or
such other Lien as the case may be, such real property, buildings, improvements
and fixtures shall, on the date such Lien is released, become Available Property
unless such property becomes encumbered by a Lien securing Permitted Refinancing
Debt concurrently with the release of such Lien or within 60 days of such
release; provided, that on or prior to the date such Lien is released, the
Borrower shall have given written notice to the Agent of its intention to
refinance the Debt secured by such Lien with Permitted Refinancing Debt. Any
real property, buildings, fixtures or improvements which are leased by the
Borrower after the Effective Date shall be considered Available Property if the
subject lease does not prohibit the granting to the Agent of a Mortgage.
"Bankruptcy Code" shall mean The Bankruptcy Reform Act of 1978, as
heretofore and hereafter amended, and codified as 11 U.S.C. Section 101 et seq.
"Bankruptcy Court" shall mean the United States Bankruptcy Court for the
Western District of Missouri or any other court having jurisdiction over the
Case from time to time.
"Beneficial Ownership" by a Person when used with respect to any Voting
Shares shall mean beneficial ownership by such Person of such Voting Shares as
defined in Rule 13d-3 of the Exchange Act.
"Board" shall mean the Board of Governors of the Federal Reserve System of
the United States.
"Borrower" shall have the meaning set forth in the Heading.
"Borrowing" shall mean the incurrence or refinancing of Loans of a single
Type made from all the New Revolving Lenders or the New Term Lenders, as the
case may be, on a single date and having, in the case of Eurodollar Loans, a
single Interest Period (with any ABR Loan made pursuant to Section 2.15 being
considered a part of the related Borrowing of Eurodollar Loans).
"Business Day" shall mean any day other than a Saturday, Sunday or other
day on which banks in New York City are required or permitted to close (and, for
a Letter of Credit, other than a day on which the relevant Fronting Bank issuing
such Letter of Credit is required or permitted to close); provided, however,
that when used in connection with a Eurodollar Loan, the term "Business Day"
shall also exclude any day on which banks are not open for dealings in dollar
deposits in the London interbank market.
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"Business Plan" shall mean the revised financial projections of the
Borrower, dated on or about June 27, 1997.
"Capital Expenditures" shall have the meaning set forth in Section 6.4.
"Capco Subleases" shall mean those twelve certain Sublease Agreements, each
dated as of September 1, 1982, as amended, supplemented or otherwise modified
prior to and in effect on the Filing Date, between the Borrower and Capco Realty
Corp., a Delaware corporation ("Capco"), pursuant to which the Borrower
subleases from Capco twelve stores located at the respective sites identified on
Schedule A to such Sublease Agreements, which Capco in turn leases from Paycap
pursuant to twelve Master Lease Agreements between Paycap and Capco, each dated
as of September 1, 1982.
"Capitalized Lease" shall mean, as applied to any Person, any lease of
property by such Person as lessee which would be capitalized on a balance sheet
of such Person prepared in accordance with GAAP.
"Case" shall mean the Chapter 11 Case of the Debtor commenced on July 21,
1997 in the Bankruptcy Court.
"Cash Management Agreements" shall mean the documentation evidencing the
cash management arrangements between the Cash Management Banks and the Borrower,
as in effect on and immediately prior to the Effective Date.
"Cash Management Banks" shall mean Bank of America National Trust and
Savings Association, NationsBank of Texas, N.A., Nationsbank N.A. and First
Bank, and their respective Affiliates, if applicable, each in its capacity as
the holder of Cash Management Obligations for so long as it shall continue to
hold such Obligations and any other Lender which provides additional or
replacement cash management services to the Borrower on terms and conditions
satisfactory to the Agent in its judgment reasonably exercised.
"Cash Management Obligations" shall mean the obligations of the Borrower to
reimburse each of the Cash Management Banks in respect of overdrafts,
uncollected funds, returned items and reasonable related expenses arising
pursuant to cash management arrangements as in effect on the Effective Date,
with such changes in such arrangements subsequent to the Effective Date as may
be acceptable to the relevant Cash Management Bank in its judgment reasonably
exercised.
"Change of Control" shall mean the occurrence of either of the following
events: (x) any Person or any Persons acting together which would constitute a
Group, together with any Affiliates thereof, after the Effective Date, shall
acquire or hold Voting Shares of the Borrower such that such Person or Group,
together with such Affiliates, have Beneficial Ownership of Voting Shares of the
Borrower entitling such Person or Group, together with such Affiliates, to
exercise at least 40% of the total voting power of all Voting Shares of the
Borrower; or (y) any Person or any Group,
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together with any Affiliates thereof, shall succeed in having a sufficient
number of its or their nominees elected to the Board of Directors of the
Borrower (other than nominees elected to the Board of Directors of the Borrower
pursuant to the Plan of Reorganization) such that such nominees so elected
(whether new or continuing as directors) shall constitute a majority of the
Board of Directors of the Borrower.
"CIBC" shall have the meaning set forth in the Heading.
"CIBC Xxxxxxxxxxx" shall mean CIBC Xxxxxxxxxxx Corp., formerly known as
Wood Gundy Securities Corp.
"Closing Certificate" shall have the meaning set forth in Section
4.1(a)(iv).
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Collateral" shall have the meaning set forth in the Introductory
Statement.
"Colorado Mortgages" shall mean, collectively, that certain Mortgage, dated
as of August 8, 1979, between Xxxxxxxxx'x, Inc. and Southwestern Life Insurance
Company (as assumed by the Debtor on July 28, 1982) and that certain Mortgage,
dated as of August 31, 1982, between the Debtor and Xxxxxxxxx'x, Inc., each as
amended, supplemented or otherwise modified from time to time prior to, and in
effect on, the Filing Date.
"Commitment" shall mean, with respect to each New Revolving Lender, its
commitment to make New Revolving Loans and purchase Participating Interests in
Letters of Credit in the aggregate amount set forth opposite its name on
Schedule 1.1(a) 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 Sections
2.9 and 2.12.
"Commitment Fee" shall have the meaning set forth in Section 2.19.
"Commitment Letter" shall mean that certain Commitment Letter, dated July
17, 1997, among the Agent, the Underwriters and the Debtor.
"Commitment Percentage" shall mean at any time, with respect to each New
Revolving Lender, the percentage obtained by dividing its Commitment at such
time by the Total Commitments at such time.
"Confirmation Order" shall have the meaning set forth in Section 4.1(c).
"Consolidated Subsidiary" shall mean, at any date, any Subsidiary or other
entity, the accounts of which would be consolidated with those of the Borrower
in its consolidated financial statements in accordance with GAAP as of such
date.
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"Credit Card Banks" shall mean General Electric Capital Corporation and
Monogram Credit Card Bank of Georgia.
"Debt" of any Person shall mean, at any date, without duplication, (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person to pay the deferred purchase price of property or
services, except trade accounts payable arising in the ordinary course of
business, (iv) all obligations of such Person as lessee under Capitalized
Leases, (v) all Debt of others secured by (or for which the holder of such Debt
has an existing right, contingent or otherwise, to be secured by) a Lien on any
asset owned, used or operated by such Person, whether or not such Debt is
assumed by such Person, (vi) all Debt of others Guaranteed by such Person,
directly or indirectly, or by an instrument having the effect of assuring
another's payment or performance of any Debt, (vii) indebtedness and other
obligations arising under acceptance facilities and the face amount of all
letters of credit issued for the account of such Person and, without
duplication, all drafts drawn thereunder or payment requests honored with
respect thereto, (viii) all obligations of such Person in respect of interest
rate protection agreements, foreign currency exchange agreements or other
interest or exchange rate hedging arrangements (other than fully paid interest
rate cap arrangements), (ix) all obligations of such Person under conditional
sale or other title retention agreements relating to property or assets
purchased by such Person, and (x) any withdrawal or other liability incurred
under ERISA by such Person (or, if such Person is the Borrower, the Borrower and
its ERISA Affiliates) to a Multiemployer Plan.
"Debt for Borrowed Money" of any Person shall mean Debt of such Person of
the type described in clauses (i) and (ii) of the definition of "Debt" in this
Section and Debt of such type of another Person which is Guaranteed by such
Person.
"Debt to EBITDA Ratio" shall mean, at any time, the ratio of (i) the
aggregate amount of then outstanding Debt of the Borrower and its Subsidiaries
described in clauses (i) through (vi) of the definition of "Debt" in this
Section to (ii) EBITDA for the four consecutive fiscal quarters most recently
ended.
"Default" shall mean any condition or event which would, with the giving of
notice or lapse of time or both, become an Event of Default.
"Defaulting Lender" shall mean, at any time, any Lender which shall not
have theretofore made available to (i) the Agent its pro rata share of a given
Borrowing in accordance with Section 2.2(b), (ii) the Agent its pro rata portion
of any amounts payable pursuant to Section 8.6 for which payment has been
requested more than forty-five days prior thereto, (iii) CIBC its pro rata share
of a given obligation to reimburse CIBC pursuant to Section 9.14(c) or (iv) any
Fronting Bank or the Agent, as the case may be, its pro rata share of a given
obligation to reimburse such Fronting Bank or the Agent pursuant to Section
2.2(c) or 2.5(f).
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"Designated Collateral" shall mean (i) any Inventory at any time located at
the 29 stores closed pursuant to the Business Plan on or after the Effective
Date, (ii) the real estate interests at 9 of such closed stores (and the 7 other
properties currently held for sale) and any related fixtures, equipment and
vehicles (except items having an aggregate book value of not more than $600,000
which are transferred by the Borrower to other stores for use in its business),
(iii) any tax refunds, including, without limitation, those resulting from the
Small Business Job Retention Act of 1996 and filed for by the Debtor on October
9, 1996 and those resulting from carrybacks of net operating losses for fiscal
year 1997 and (iv) any other assets which the Borrower determines are no longer
useful in its business, including, without limitation, the real estate interests
with respect to any additional stores which the Borrower determines to close,
together with the Inventory located in such stores and any related fixtures,
equipment and vehicles.
"DIP Agent" shall mean CIBC, as coordinating and collateral agent under the
DIP Credit Agreement.
"DIP Credit Agreement" shall mean that certain Revolving Credit Agreement,
dated as of July 21, 1997, among the Borrower, the DIP Lenders, the
Underwriters, the Fronting Banks and CIBC, as coordinating and collateral agent
for the DIP Lenders, the Fronting Banks and the Underwriters, as amended,
modified and supplemented from time to time.
"DIP Documentary Letters of Credit" shall have the meaning set forth in the
Introductory Statement.
"DIP Financing Order" shall mean the orders of the Bankruptcy Court
authorizing the Debtor to enter into the DIP Credit Agreement, including orders
filed on July 21, 1997 and August 20, 1997.
"DIP Fronting Banks" shall mean CIBC and First Bank in their capacities as
"Fronting Banks", under the DIP Credit Agreement.
"DIP Lenders" shall have the meaning set forth in the Introductory
Statement.
"DIP Letters of Credit" shall have the meaning set forth in the
Introductory Statement.
"DIP Obligations" shall mean (a) the due and punctual payment of principal
of and interest on DIP Revolving Credit Loans and the reimbursement of all
amounts drawn under the DIP Letters of Credit, and (b) the due and punctual
payment of all other present and future, fixed or contingent, monetary and
performance obligations of the Borrower to the DIP Lenders, the DIP Fronting
Banks, the Underwriters and the DIP Agent under the DIP Credit Agreement.
"DIP Revolving Credit Loans" shall have the meaning set forth in the
Introductory Statement.
"DIP Standby Letters of Credit" shall have the meaning set forth in the
Introductory Statement.
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"Disclosure Statement" shall mean the Borrower's First Amended Disclosure
Statement, filed by the Debtor in the Case on September 5, 1997, as modified on
October 9, 1997.
"Documentary Letter of Credit" shall mean a documentary letter of credit in
form and substance customarily issued by the relevant Fronting Bank from time to
time.
"Documentary Letter of Credit Fronting Bank" shall mean any Fronting Bank
which has issued or has committed to issue Documentary Letters of Credit
hereunder.
"Documentary Letter of Credit Outstandings" shall mean, at any time, the
sum of (i) the aggregate undrawn stated amount of all Documentary Letters of
Credit then outstanding plus (ii) all amounts theretofore drawn under
Documentary Letters of Credit and not then reimbursed.
"Documentary Reserve" shall have the meaning set forth in Section 2.5(a).
"Dollars" and "$" shall mean lawful money of the United States of America.
"Domestic Lending Office" shall mean initially, as to each Lender, its
office designated on the signature pages to this Agreement, and thereafter, upon
notice to the Borrower and the Agent, such other office of such Lender, if any,
which shall be making or maintaining ABR Loans.
"Dual Path Capital Expenditures" shall mean capital expenditures made or
accrued in connection with the Business Plan (or in connection with any other
strategic initiatives undertaken by the Borrower with the approval of the board
of directors of the Borrower) and identified as such in Section 6.4 (as such
amounts may be reduced from time to time).
"EBITDA" shall mean, for any period, the consolidated net income (or net
loss) of the Borrower and its Consolidated Subsidiaries for such period before
deduction of "Chapter 11 expenses" (or "administrative costs" reflecting Chapter
11 expenses) (excluding extraordinary, unusual or non-recurring gains and losses
or (without duplication) special charges), plus without duplication in
accordance with GAAP the sum of (i) interest and tax expense of the Borrower and
its Consolidated Subsidiaries for such period to the extent deducted in
determining such consolidated net income plus (ii) depreciation and amortization
expense of the Borrower and its Consolidated Subsidiaries for such period to the
extent deducted in determining such consolidated net income, all as shown on the
consolidated statement of income for the Borrower and its Consolidated
Subsidiaries for such period.
"Effective Date" shall mean the first Business Day after which the
Confirmation Order shall have become a Final Order and on which each of the
conditions set forth in Section 4.1 shall have been satisfied or waived in
accordance with the terms hereof, which Effective Date shall be as soon as
practicable, but in no event later than December 31, 1997, unless such date
shall have been extended in writing by the Agent, the Required Pre-Petition
Lenders and all of the DIP Lenders.
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"Eligible Assignee" shall mean (i) a commercial bank having total assets in
excess of $1,500,000,000 and (ii) a finance company, insurance company or other
financial institution or fund, in each case acceptable to the Agent, which in
the ordinary course of business extends credit of the type evidenced by the
Notes and has total assets in excess of $250,000,000 and whose becoming an
assignee would not constitute a prohibited transaction under Section 4975 of
ERISA.
"Environmental Law" shall have the meaning set forth in Section 6.15(d).
"Environmental Lien" shall mean a Lien in favor of any Governmental
Authority for (i) any liability under any Environmental Law, or (ii) damages
arising from or costs incurred by such Governmental Authority in response to a
release or threatened release of a Hazardous Substance into the environment.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"ERISA Affiliate" shall mean any trade or business (whether or not
incorporated) which is a member of a group of which the Borrower or any
Subsidiary is a member and which is under common control within the meaning of
Section 414(b) or (c) of the Code and the regulations promulgated and rulings
issued thereunder.
"ERISA Event" shall mean (a) a "reportable event" as such term is described
in Section 4043 of ERISA (other than a "reportable event" not subject to the
provision for 30-day notice to the PBGC under 29 C.F.R. 2615), or (b) the
withdrawal of the Borrower, any Subsidiary or any ERISA Affiliate of either of
them from a Multiple Employer Plan or a Single Employer Plan during a Plan year
in which it was a "substantial employer", as such term is defined in Section
4001(a)(2) of ERISA, which would result in any liability to the Borrower, any
Subsidiary or any ERISA Affiliate of either of them, or the incurrence of
liability by the Borrower, any Subsidiary or any ERISA Affiliate of either of
them under Section 4064 of ERISA upon the termination of a Multiple Employer
Plan or a Single Employer Plan, or (c) an event described in Section 4068(f) of
ERISA, or (d) the distribution of a notice of intent to terminate a Plan
pursuant to Section 4041(a)(2) of ERISA or the treatment of a Plan amendment as
a termination under Section 4041 of ERISA where, in either case, such
termination would result in any liability to the Borrower, a Subsidiary or any
ERISA Affiliate of either of them, or (e) the failure by the Borrower, a
Subsidiary or any ERISA Affiliate of either of them to make a payment to a Plan
pursuant to Section 302(f)(1) of ERISA or (f) the adoption of any amendment to a
Plan requiring the provision of security to such Plan pursuant to Section 307 of
ERISA, or (g) the institution of proceedings to terminate a Plan by the PBGC
under Section 4042 of ERISA, or (h) any other event or condition which might
constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan.
"Eurocurrency Liabilities" shall have the meaning assigned thereto in
Regulation D issued by the Board, as in effect from time to time.
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"Eurodollar Borrowing" shall mean a Borrowing comprised of Eurodollar
Loans.
"Eurodollar Loan" shall mean any Loan bearing interest at a rate determined
by reference to the Adjusted LIBOR Rate in accordance with the provisions of
Section 2.4(b) and Section 2.8.
"Eurodollar Lending Office" shall mean, initially as to each Lender, its
office, designated on the signature pages to this Agreement or such other
office, branch or Affiliate of such Lender as it may hereafter designate as its
Eurodollar Lending Office by notice to the Borrower and the Agent.
"Event of Default" shall have the meaning set forth in Section 7.1.
"Excess Cash Flow" shall mean, for any fiscal year, the sum for such fiscal
year (without duplication) of (i) EBITDA of the Borrower and its Consolidated
Subsidiaries for such fiscal year, plus (ii) non-cash charges deducted in
arriving at such EBITDA for such fiscal year, plus (iii) the aggregate Net Cash
Proceeds of the sale, lease, transfer or other disposition of assets by the
Borrower or by its Consolidated Subsidiaries during such fiscal year (other than
sales of Inventory in the ordinary course of business) to the extent not applied
to the mandatory prepayment or payment of the Loans and to the extent not
resulting in any mandatory permanent Commitment reduction plus (iv) an amount
equal to the increase (or less an amount equal to the decrease) in consolidated
current liabilities of the Borrower and its Consolidated Subsidiaries during
such fiscal year (other than Debt described in clauses (i) through (iv) of the
definition of "Debt" contained in this Section), less (v) an amount equal to the
increase (or plus an amount equal to the decrease) in consolidated non-cash
current assets of the Borrower and its Consolidated Subsidiaries for such fiscal
year, less (vi) the aggregate amount of taxes paid in cash by the Borrower or by
its Consolidated Subsidiaries during such fiscal year, less (vii) the aggregate
amount of Capital Expenditures of the Borrower and of its Consolidated
Subsidiaries made during such fiscal year or permitted to be carried forward
into the next fiscal year pursuant to Section 6.4 (less any amounts carried
forward from prior years to the extent not expended in the current year), less
(viii) an amount equal to the sum of all regularly scheduled payments and any
mandatory or permitted optional prepayments of principal on all Debt of the type
described in clauses (i) through (iv) of the definition of "Debt" contained in
this Section of the Borrower and of its Consolidated Subsidiaries (other than
prepayments on the New Revolving Loans to the extent not accompanied by
commensurate permanent Commitment reductions hereunder) actually made during
such fiscal year to the extent permitted hereunder, less (ix) interest paid by
the Borrower or by its Consolidated Subsidiaries during such fiscal year, less
(x) any gains (or plus any losses) arising from the sale, lease, transfer or
other disposition of assets by the Borrower or by its Consolidated Subsidiaries
during such fiscal year to the extent included in EBITDA for such fiscal year.
Excess Cash Flow shall be calculated by reference to the audited financial
statements referred to in Section 5.1(a), and such calculation shall be set
forth in the Excess Cash Flow Certificate.
"Excess Cash Flow Certificate" shall have the meaning set forth in Section
2.12(d).
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
13
"Existing Agreements" shall mean the Pre-Petition Credit Agreement, the DIP
Credit Agreement, each of the other agreements listed on Schedule 1.1(b) hereto,
the notes delivered pursuant thereto, and all of the agreements and the DIP
Financing Order granting Liens on Property and other assets of the Borrower to
the Lenders, including without limitation, the security agreements, mortgages,
deeds of trust and leasehold mortgages listed on Schedule 1.1(b) hereto, as each
may have been amended, amended and restated, modified or supplemented from time
to time.
"Federal Funds Rate" shall mean, for any period, a fluctuating interest
rate per annum equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it.
"Fees" shall mean, collectively, the Commitment Fees and the Letter of
Credit Fees, together with the other fees referred to in Section 2.18.
"Fee Letter" shall mean the fee letter, dated July 17, 1997, among the
Debtor, the Agent, the Underwriters and the New Revolving Lenders with respect
to certain fees, as the same may be amended, modified or supplemented from time
to time by a written instrument executed by the relevant parties thereto.
"FIFO Value" shall mean, as to any Inventory, the value (determined as the
lower of cost or fair market value) of such Inventory calculated on a first in,
first out basis.
"Filing Date" shall mean July 21, 1997.
"Final Order" shall mean an order or judgment of the Bankruptcy Court as
entered on the docket as to which the time to appeal or petition for certiorari
has expired and as to which no appeal or petition for certiorari has been timely
filed, or as to which any appeal or petition for certiorari that has been filed
has been resolved by the highest court to which such order or judgment was
timely appealed or from which certiorari was sought.
"Financial Officer" shall mean the Chief Financial Officer, Vice President
Finance or the Treasurer of the Borrower.
"First Bank" shall mean U.S. Bank National Association, successor by merger
to First Bank National Association.
"Fronting Banks" shall mean (i) with respect to Standby Letters of Credit,
CIBC and (ii) with respect to Documentary Letters of Credit, First Bank; or, in
each case, such other Lender or Lenders or financial institutions or
institutions (which other financial institution or institutions shall have been
14
chosen by the Borrower with the approval of the Agent and the Majority Revolving
Lenders) as may agree to act as such.
"GAAP" shall mean generally accepted accounting principles applied on a
basis consistent with those used in preparing the financial statements referred
to in Section 3.4.
"GE Credit Program Documents" shall mean (a) the Monogram Credit Card Bank
of Georgia Program Agreement, dated as of July 20, 1997, between the Borrower
and Monogram Credit Card Bank of Georgia, as such agreement has been or may
hereafter be amended, amended and restated, supplemented or otherwise modified
from time to time to the extent permitted by this Agreement, together with any
agreements entered into by the Borrower and Monogram Credit Card Bank of
Georgia, or any affiliate, in replacement of such agreement to the extent
permitted by this Agreement (including, without limitation, Section 5.9); and
(b) the Commercial Credit Account Purchase and Service Program Agreement, dated
as of July 20, 1997, between the Borrower and General Electric Capital
Corporation, as such agreement may hereafter be further amended, amended and
restated, supplemented or otherwise modified from time to time to the extent
permitted by this Agreement, together with any agreement entered into by the
Borrower and General Electric Capital Corporation, or any affiliate, in
replacement of such agreement to the extent permitted by this Agreement.
"Governmental Authority" shall mean any Federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality or
any court, in each case whether of the United States or foreign.
"Group" shall mean a "group" for purposes of Section 13(d) of the Exchange
Act.
"Guarantee" by any Person means any obligation, contingent or otherwise, of
such Person directly or indirectly guaranteeing any Debt or other obligation of
any other Person and, without limiting the generality of the foregoing, any
obligation (i) to purchase or pay (or advance or supply funds for the purchase
or payment of) such Debt or other obligation (whether arising by virtue of
partnership arrangements, by agreement to keep-well, to purchase assets, goods,
securities or services, to take-or-pay, or to maintain financial statement
conditions or otherwise) or (ii) entered into for the purpose of assuring in any
other manner the obligee of such Debt or other obligation of the payment thereof
or to protect such obligee against loss in respect thereof (in whole or in
part); provided, that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
"Hazardous Substances" shall have the meaning set forth in Section 6.15(d).
"Hedging Agreement" shall mean that certain ISDA Master Agreement, dated as
of May 22, 1995, between CIBC and the Debtor, together with all Schedules
executed in connection therewith, as assumed by the Debtor pursuant to the DIP
Credit Agreement and by the Borrower upon the merger of the Debtor with and into
the Borrower as in effect on the Effective Date, as amended, amended and
restated, supplemented or otherwise modified from time to time.
15
"Hedging Bank" shall mean CIBC in its capacity as Party A under the Hedging
Agreement and any other Lender or other counterparty reasonably acceptable to
the Agent and the Majority Revolving Lenders which enters into interest rate
protection or hedging arrangements with the Borrower which are permitted by this
Agreement.
"Hedging Obligations" shall mean the obligations of the Borrower to the
Hedging Bank under the Hedging Agreement.
"Indemnified Party" shall have the meaning set forth in Section 9.6.
"Insufficiency" shall mean, with respect to any Plan, the amount, if any,
of its unfunded benefit liabilities within the meaning of Section 4001(a)(18) of
ERISA.
"Interest Payment Date" shall mean (i) as to any Eurodollar Loan, the last
calendar day of each month during each Interest Period with respect to such
Eurodollar Loan and the last day of each such Interest Period, and (ii) as to
all ABR Loans, the last calendar day of each month and the date on which any ABR
Loans are refinanced with Eurodollar Loans pursuant to Section 2.11.
"Interest Period" shall mean, as to any Borrowing of Eurodollar Loans, the
period commencing on the date of such Borrowing (including as a result of a
refinancing of ABR Loans) or on the last day of the preceding Interest Period
applicable to such Borrowing and ending on the numerically corresponding day (or
if there is no corresponding day, the last day) in the calendar month that is 1,
2, 3 or 6 months thereafter, as the Borrower may elect in the related notice
delivered pursuant to Sections 2.2(b) or 2.11; provided, however, that (i) if
any Interest Period would end on a day which shall not be 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
(ii) no Interest Period shall end later than the Maturity Date for the Loans to
which such Interest Period relates.
"Inventory" shall mean all goods and merchandise now owned or hereafter
acquired by the Borrower or any of its Subsidiaries (wherever located, whether
in the possession of the Borrower or any of its Subsidiaries or of a bailee or
other person for sale, storage, transit, processing, use or otherwise and
whether consisting of whole goods, components, supplies, materials, returned or
repossessed goods or goods consigned by the Borrower or any of its Subsidiaries
to a third party) which are held for sale or lease or to be furnished (or have
been furnished) under any contract of service or which are raw materials,
work-in-process, finished goods or materials used or consumed in the business of
the Borrower or any of its Subsidiaries or processed by or on behalf of the
Borrower or any of its Subsidiaries, but expressly excluding inventory consigned
to the Borrower or its Subsidiaries by third parties.
"Inventory Compliance Certificate" shall have the meaning set forth in
Section 5.1(t).
"Investments" shall have the meaning set forth in Section 6.10.
16
"Lender Obligations" shall mean the Revolving Obligations and the Term
Obligations.
"Lenders" shall have the meaning set forth in the Heading.
"Lending Office" shall mean, as to each Lender, its Domestic Lending Office
or its Eurodollar Lending Office, as the context may require.
"Letter of Credit" shall mean any irrevocable letter of credit issued or
outstanding under the DIP Credit Agreement and deemed issued pursuant to Section
2.5, which letter of credit shall be (i) a Standby Letter of Credit or a
Documentary Letter of Credit and (ii) denominated in Dollars except as otherwise
permitted pursuant to Section 2.5(a).
"Letter of Credit Accounts" shall mean (i) with respect to Standby Letters
of Credit, the account established by the Borrower under the sole and exclusive
control of the Agent maintained at the office of the Agent at 000 Xxxxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 designated as the "Payless Cashways, Inc.
Standby Letter of Credit Account" and (ii) with respect to Documentary Letters
of Credit, the account established by the Borrower under the sole and exclusive
control of U.S. Bank National Association, maintained at the office of First
Bank at 000 0xx Xxxxxx Xxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, designated the
"Payless Cashways, Inc. Documentary Letter of Credit Account," each of which
shall be used solely for the purposes set forth in Sections 2.5(a), 2.12(h), 7.1
and 7.2.
"Letter of Credit Fees" shall mean the fees payable in respect of Letters
of Credit pursuant to Section 2.20.
"Letter of Credit Outstandings" shall mean, at any time, the aggregate
amount of all Documentary Letter of Credit Outstandings and all Standby Letter
of Credit Outstandings.
"Lien" shall mean, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind whatsoever in respect of
such asset. For the purposes of this Agreement, the Borrower or any Subsidiary
shall be deemed to own subject to a Lien any asset which it has acquired or
holds subject to the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement relating to such
asset.
"Loan" shall have the meaning set forth in Section 2.1(d).
"Loan Documents" shall mean this Agreement, the Notes, the Letters of
Credit, the Security Documents, the Hedging Agreement, the Cash Management
Agreements, and any other instrument or agreement executed and delivered in
connection herewith, including (without limitation) documentation between the
respective Fronting Banks and the Borrower with respect to Letters of Credit.
"Lumberjack" shall mean Lumberjack Stores, Inc.
17
"Majority Lenders" shall mean the Majority Term Lenders plus the Majority
Revolving Lenders; provided, that for purposes of this definition, the relevant
Commitments, Loans or Participating Interests of a Lender shall be disregarded
if and for so long as such Lender shall be a Defaulting Lender.
"Majority Revolving Lenders" shall mean New Revolving Lenders holding New
Revolving Loans or Participating Interests representing at least 51% of the sum
of the aggregate principal amount of such Loans and Participating Interests
outstanding (or, if no New Revolving Loans or Letters of Credit are outstanding,
New Revolving Lenders having Commitments representing at least 51% of the Total
Commitments); provided, that for purposes of this definition, the relevant
Commitments, Loans or Participating Interests of a Lender shall be disregarded
if and for so long as such Lender shall be a Defaulting Lender.
"Majority Term Lenders" shall mean, at any time, New Term Lenders holding
New Term Loans representing at least 51% of the aggregate principal amount of
such Loans outstanding; provided, that for purposes of this definition, the
Loans of a New Term Lender shall be disregarded if and for so long as such
Lender shall be a Defaulting Lender.
"Material Adverse Effect" shall mean (i) with respect to the Borrower and
its Subsidiaries, any materially adverse change in the business, operations,
condition (financial or otherwise), properties, assets or prospects of the
Borrower and its Subsidiaries taken as a whole, or (ii) any fact or circumstance
which, singly or in the aggregate, could reasonably be expected to result in (a)
a materially adverse change described in clause (i) or (b) the inability of the
Borrower or any of its Subsidiaries to perform in any material respect its
obligations hereunder or under the other Loan Documents.
"Maturity Date" shall mean (i) with respect to the New Revolving Loans, May
31, 2002 or such earlier date on which the Commitments shall terminate or such
Loans shall become due in accordance with Section 7 and (ii) with respect to the
New Term Loans, November 30, 2002, or such earlier date on which such Loans
shall become due in accordance with Section 7.
"Maximum Rate" shall have the meaning set forth in Section 2.8(b).
"Minority Investment" shall mean any Investment consisting of the
acquisition of non-majority ownership interests in any Person.
"Moody's" shall mean Xxxxx'x Investors Service, Inc. or if such company
shall cease to issue ratings, another nationally recognized statistical rating
company selected in good faith by mutual agreement of the Agent and the
Borrower.
"Mortgages" shall have the meaning set forth in Section 4.1(l).
"Multiemployer Plan" shall mean a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA to which the Borrower, any Subsidiary or any ERISA
Affiliate is making or accruing an
18
obligation to make contributions, or has within any of the preceding five plan
years made or accrued an obligation to make contributions.
"Multiple Employer Plan" shall mean an employee benefit plan, other than a
Multiemployer Plan, subject to Title IV of ERISA to which the Borrower, any
Subsidiary or any ERISA Affiliate of the Borrower or any Subsidiary, and more
than one employer other than the Borrower, any Subsidiary or an ERISA Affiliate
of the Borrower or any Subsidiary, is making or accruing an obligation to make
contributions or, in the event that any such plan has terminated, to which the
Borrower, any Subsidiary or any ERISA Affiliate of the Borrower or any
Subsidiary made or accrued an obligation to make contributions during any of the
five plan years preceding the date of termination of such plan.
"Net Cash Proceeds" shall mean, with respect to any sale, lease, transfer
or other disposition of property or other assets: (a) the cash proceeds received
by the Borrower or any Subsidiary (including, without limitation, all cash
proceeds received by way of (i) deferred payment of principal pursuant to a note
or installment receivable or otherwise, but only as and when received and (ii)
receivables and other assets retained by the Borrower as part of the sales
consideration), minus (b) reasonable and customary brokerage commissions and
other reasonable and customary fees and expenses (including reasonable and
customary fees and expenses of counsel and investment bankers and reasonable and
customary inventory liquidation costs actually paid by the Borrower or such
Subsidiary) related to such financing, sale, lease or other disposition or
issuance, minus (c) payments made to retire Debt (other than the Loans) secured
by such assets being sold or otherwise disposed of where payment of such Debt is
required in connection with such sale or disposition.
"New Common Stock" shall have the meaning set forth in Section 4.1(u).
"New Revolving Lender" and "New Revolving Lenders" shall have the meanings
set forth in Section 2.1(d).
"New Revolving Loans" shall have the meaning set forth in Section 2.1(d).
"New Revolving Notes" shall mean the promissory notes of the Borrower,
substantially in the form of Exhibit A-2 hereto, each payable to the order of a
New Revolving Lender, evidencing New Revolving Loans.
"New Term Lender" and "New Term Lenders" shall have the meanings set forth
in Section 2.1(a).
"New Term Loans" shall have the meaning set forth in Section 2.1(a).
"New Term Notes" shall mean the promissory notes of the Borrower,
substantially in the form of Exhibit A-1 hereto, each payable to the order of a
New Term Lender, evidencing New Term Loans.
"Notes" shall mean the New Revolving Notes and the New Term Notes.
19
"Notice of Borrowing" shall have the meaning set forth in Section 2.2(b).
"Other Amounts" shall have the meaning set forth in Section 2.8(b).
"Other Taxes" shall have the meaning set forth in Section 2.17(b).
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or any
successor agency or entity performing substantially the same functions.
"Pad Site" shall have the meaning set forth in the definition of "Permitted
Pad Sale."
"Participating Interest" shall mean with respect to each Letter of Credit
(i) in the case of a Fronting Bank, its interest, if any, in such Letter of
Credit and any Application or draft or payment request relating thereto after
giving effect to the granting of all Participating Interests therein pursuant
hereto and (ii) in the case of each New Revolving Lender, its undivided interest
in such Letter of Credit and any Application or draft or payment request
relating thereto.
"Paycap" shall mean Paycap Associates Limited Partnership, a Connecticut
limited partnership.
"Permitted Liens" shall mean (i) Liens imposed by law (other than
Environmental Liens and any Lien imposed by ERISA) for taxes, assessments or
charges of any Governmental Authority for claims not yet due or which are being
contested in good faith by appropriate proceedings and with respect to which
adequate reserves or other appropriate provisions are being maintained in
accordance with GAAP; (ii) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other Liens (other than Environmental
Liens and any Lien imposed by ERISA) imposed by law created in the ordinary
course of business for amounts not yet due or which are being contested in good
faith by appropriate proceedings and with respect to which adequate reserves or
other appropriate provisions are being maintained in accordance with GAAP; (iii)
Liens (other than any Lien imposed by ERISA) incurred or deposits made in the
ordinary course of business (including, without limitation, surety bonds and
appeal bonds) in connection with workers' compensation, unemployment insurance
and other types of social security benefits or to secure the performance of
tenders, bids, leases, contracts (other than for the repayment of Debt),
statutory obligations and other similar obligations or arising as a result of
progress payments under government contracts; (iv) easements (including, without
limitation, reciprocal easement agreements and utility agreements),
rights-of-way, covenants, consents, reservations, encroachments, variations and
zoning and other restrictions, charges or encumbrances (whether or not
recorded), which do not interfere materially with the ordinary conduct of the
business of the Borrower and which do not materially detract from the value of
the property to which they attach or materially impair the use thereof to the
Borrower; (v) purchase money Liens granted by the Borrower or its Subsidiaries
upon Inventory of the Borrower and its Subsidiaries securing the purchase price
therefor not to exceed $1,000,000 in unpaid purchase price in the aggregate for
the Borrower and its Subsidiaries at any one time and purchase money Liens upon
or in any other property acquired or held in the ordinary course of business to
secure the purchase price of such property or to secure Debt permitted by
Section 6.2(v) solely for the purpose
20
of financing the acquisition of such property and Capitalized Leases permitted
by Section 6.4 and true leases on account of which financing statements have
been filed; provided, that the aggregate Debt secured by all such purchase money
Liens (other than Capitalized Leases) shall not exceed in the aggregate for the
Borrower and its Subsidiaries $2,000,000 outstanding at any time; (vi) judgment
Liens, but only to the extent that the related judgment does not constitute an
Event of Default under Section 7.1(j); and; (vii) extensions, renewals or
replacements of any Lien referred to in paragraphs (i) through (v) above,
including in connection with the incurrence of Permitted Refinancing Debt;
provided, that the principal amount of the obligation secured thereby is not
increased and that any such extension, renewal or replacement Lien is limited to
the property originally encumbered thereby.
"Permitted Pad Sale" shall mean any sale of that portion (any such portion,
a "Pad Site") of any real property acquired by the Borrower in excess of the
portion thereof needed for the operation of the facility located on or to be
constructed on such real property, as reasonably determined by the Borrower;
provided, that (i) the acquisition of such real property was not prohibited by
any provision of this Agreement, (ii) the aggregate acreage of all Pad Sites on
any such real property does not exceed 50% of the total acreage of such real
property and (iii) such sale is completed within twelve months of the
acquisition of such real property.
"Permitted Refinancing Debt" shall mean Debt incurred by the Borrower to
refinance the Real Estate Financing or Synthetic Lease Obligations (or a portion
thereof) in a principal amount not less than the principal amount of the
obligations (or the portion thereof) being refinanced; provided, that (i) the
principal amount of such Debt is not increased and such Debt is not secured by
any assets of the Borrower other than the assets securing the Debt being
refinanced and, in the case of a refinancing of less than the entire principal
amount of the Real Estate Financing or the Synthetic Lease Obligations, such
Debt is not secured by any assets of the Borrower not specifically allocated to
the portion of the Real Estate Financing or the Synthetic Lease Obligations
being refinanced and, in all cases, any Liens on such assets in favor of the
Agent, for its benefit and the benefit of the other Secured Parties, remain in
full force and effect and (ii) such Debt is incurred on terms and conditions
(including financial and other covenants and events of defaults) and with a
weighted average tenor which, taken as a whole, would be no less favorable to
the Borrower than the terms, conditions and tenor of the Debt being refinanced
as in effect on the date hereof.
"Person" shall mean any natural person, corporation, division of a
corporation, limited liability company, limited liability partnership,
partnership, trust, joint venture, association, company, estate, unincorporated
organization or government or any agency or political subdivision thereof.
"Plan" shall mean an employee benefit plan (other than a Multiemployer
Plan), including any Multiple Employer Plan, which is or, in the event that any
such plan has been terminated within five years after the occurrence of a
transaction described in Section 4069 of ERISA, was maintained for employees of
the Borrower, any Subsidiary or any ERISA Affiliate of the Borrower or any
Subsidiary and is subject to Title IV of ERISA.
21
"Plan of Reorganization" shall mean that certain First Amended Plan of
Reorganization, filed by the Debtor in the Case on September 5, 1997, as
modified on October 9, 1997 and as further modified in the Confirmation Order
and on the record at the hearing with respect thereto, as the same may be
amended, supplemented or otherwise modified from time to time in accordance with
the terms thereof as in effect on the date hereof.
"Pre-Petition Agent" shall mean CIBC, as administrative and collateral
agent for the Pre-Petition Lenders, the letter of credit bank and the co-agents
party to the Pre-Petition Credit Agreement.
"Pre-Petition Collateral" shall have the meaning set forth in the
Introductory Statement.
"Pre-Petition Credit Agreement" shall mean that certain Amended and
Restated Credit Agreement, dated as of October 3, 1996, among Payless Cashways,
Inc., the Pre-Petition Lenders, the Pre-Petition Agent, the letter of credit
bank and the co-agents named therein, as amended, amended and restated,
supplemented or otherwise modified prior to the Effective Date.
"Pre-Petition L/C Obligations" shall have the meaning set forth in Section
9.3(a)(iii).
"Pre-Petition L/C Participant" shall have the meaning set forth in Section
9.14(c).
"Pre-Petition Lenders" shall have the meaning set forth in the Introductory
Statement.
"Pre-Petition Letters of Credit" shall have the meaning set forth in the
Introductory Statement.
"Pre-Petition Loans" shall have the meaning set forth in the Introductory
Statement.
"Pre-Petition Obligations" shall mean the Pre-Petition Loans, the
reimbursement obligations with respect to the Pre-Petition Letters of Credit and
all other obligations of the Debtor to the Pre-Petition Agent and the
Pre-Petition Lenders pursuant to the Pre-Petition Credit Agreement and all
documents and agreements executed in connection therewith.
"Pre-Petition Revolving Lenders" shall have the meaning set forth in the
Introductory Statement.
"Pre-Petition Revolving Loans" shall have the meaning set forth in the
Introductory Statement.
"Pre-Petition Term Lenders" shall have the meaning set forth in the
Introductory Statement.
"Pre-Petition Term Loans" shall have the meaning set forth in the
Introductory Statement.
"Pre-Petition Tranche A Term Loans" shall have the meaning set forth in
the Introductory Statement.
22
"Pre-Petition Tranche B Term Loans" shall have the meaning set forth in the
Introductory Statement.
"Property" shall have the meaning set forth in Section 6.15(a).
"Ratable Proportion" shall mean, as to each Lender, at any time, the
proportion that such Lender's share of the aggregate outstanding principal
amount of Loans and Letter of Credit Outstandings, together with such Lender's
share (if any) of the Unused Total Commitments at the time, bears to the sum of
aggregate outstanding principal amount of all Loans and Letter of Credit
Outstandings plus the Unused Total Commitments at the time, expressed as a
percentage. Each Lender's Ratable Proportion on and as of the Effective Date is
set forth on Annex A.
"Real Estate Financing" shall mean the financing by UBS provided for by the
UBS Loan Agreement and the other UBS Loan Documents.
"Register" shall have the meaning set forth in Section 9.3(d).
"Remedial Work" shall have the meaning set forth in Section 6.15(c).
"Required Inventory" shall mean Inventory in the Borrower's possession and
not subject to any Liens (except Liens in favor of the Agent and other Liens
permitted by Section 6.1) which shall have a minimum aggregate FIFO Value, at
least equal to $300 million after deduction of all amounts secured by such other
Liens permitted by Section 6.1; provided, that no Inventory subject to Liens
created pursuant to the GE Credit Program Documents or Liens on Inventory
subject to a purchase money security interest of the type described in clause
(v) of the definition of Permitted Liens shall have any value ascribed to it for
purposes of calculating Required Inventory.
"Required Lenders" shall mean (i) except as provided in clause (iii)
hereof, so long as any Commitments remain in effect or any New Revolving Loans
or Letters of Credit remain outstanding, the Majority Revolving Lenders, (ii) if
no Commitments remain in effect and no New Revolving Loans or Letters of Credit
are outstanding, the Majority Term Lenders and (iii) for purposes of amending
the definition of Required Inventory or the form of the Inventory Compliance
Certificate or amending or waiving the provisions of Sections 4.2(f), 5.1(t) or
9.10(iv), the Majority Revolving Lenders and the Majority Term Lenders;
provided, that for purposes of this definition, the relevant Commitments, Loans
or Participating Interests of a Lender shall be disregarded if and for so long
as such Lender shall be a Defaulting Lender.
"Required Pre-Petition Lenders" shall mean, at any time Pre-Petition
Lenders holding Pre-Petition Obligations representing in excess of sixty-six and
two-thirds percent (66-2/3%) of the aggregate principal amount of such
Pre-Petition Obligations outstanding and constituting more than fifty percent
(50%) in number of such Pre-Petition Lenders.
23
"Required Revolving Lenders" shall mean, at any time, New Revolving Lenders
holding New Revolving Loans or Participating Interests representing in excess of
66-2/3% of the sum of the aggregate principal amount of such Loans and
Participating Interests outstanding or, if no New Revolving Loans or Letters of
Credit are outstanding, New Revolving Lenders having Commitments representing in
excess of 66-2/3% of the Total Commitments; provided, that for purposes of this
definition, the relevant Commitments, New Revolving Loans or Participating
Interests of a New Revolving Lender shall be disregarded if and for so long as
such New Revolving Lender shall be a Defaulting Lender.
"Required Term Lenders" shall mean, at any time, New Term Lenders holding
New Term Loans representing in excess of 66-2/3% of the aggregate principal
amount of such Loans outstanding; provided, that for purposes of this
definition, the New Term Loans of a New Term Lender shall be disregarded if and
for so long as such New Term Lender shall be a Defaulting Lender.
"Requirement of Law" shall mean, as to any Person, the articles or
certificate of incorporation and by-laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental Authority, in
each case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
"Restricted Payments" shall mean (i) any dividend or other distribution in
cash or in kind on any shares of the Borrower's capital stock, (ii) any payment
in cash or in kind (including, without limitation, the setting aside of assets
or the deposit of funds therefor) on account of the purchase, redemption,
retirement or acquisition of (a) any shares of the Borrower's capital stock or
(b) any option, warrant or other right to acquire shares of the Borrower's
capital stock, (iii) any issuance of any capital stock (or any options,
warrants, rights or other equity securities relating to any capital stock)
except pursuant to the Plan of Reorganization or as contemplated by Section 9.2
thereof, (iv) any payment or prepayment of principal or interest on account of
Debt for Borrowed Money (other than the Loans) or the Synthetic Lease
Obligations or any purchase, defeasance, redemption, retirement or acquisition
of any principal or interest on such Debt or Obligations (including, without
limitation, the setting aside of assets or the deposit of funds therefor) or (v)
any payment of management or consulting fees to an Affiliate of the Borrower.
"Restructured Obligations" shall mean all of the Borrower's Term
Obligations, Cash Management Obligations and Hedging Obligations.
"Revolving Credit Commitment" shall mean the commitment of each Lender to
make New Revolving Loans and to purchase a Participating Interest in Documentary
Letters of Credit and Standby Letters of Credit issued, as set forth in Section
2.1 and Section 2.2, as the same may be reduced from time to time pursuant to
Sections 2.9 and 2.12.
"Revolving Obligations" shall mean (a) the due and punctual payment of
principal of and interest on the New Revolving Loans and the New Revolving Notes
and the reimbursement of all
24
amounts drawn under the Letters of Credit, and (b) the due and punctual payment
of the Fees and all other present and future, fixed or contingent, monetary and
performance obligations of the Borrower to the New Revolving Lenders, the
Fronting Banks, the Underwriters and the Agent under the Loan Documents (other
than the Term Obligations).
"S&P" shall mean Standard & Poor's Ratings Group (a division of
XxXxxx-Xxxx, Inc.) or, if such company shall cease to issue ratings, another
nationally recognized statistical rating company selected in good faith by
mutual agreement of the Agent and the Borrower.
"Secured Obligations" shall mean the Lender Obligations, the Cash
Management Obligations and the Hedging Obligations and all other obligations
owing to the Secured Parties (or any of them) in their capacities as such.
"Secured Parties" shall mean the Agent, the Lenders, the Underwriters, the
Fronting Banks, the Pre-Petition Lenders, the DIP Lenders, the DIP Agent, the
DIP Fronting Banks, CIBC, as issuer of the Pre-Petition Letters of Credit, the
Hedging Bank and the Cash Management Banks.
"Security and Pledge Agreement"shall have the meaning set forth in Section
4.1(k).
"Security Documents" shall mean the Security and Pledge Agreement, all
Subsidiary Security Agreements, all Subsidiary Guarantees, the Mortgages and all
other security agreements, mortgages, pledges and assignments at any time
delivered by the Borrower or any of the Subsidiaries to the Agent pursuant to
the terms of this Agreement, each as amended, amended and restated, supplemented
or otherwise modified from time to time.
"Single Employer Plan" shall mean a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (i) is maintained for employees of the
Borrower or an ERISA Affiliate or (ii) was also maintained and in respect of
which the Borrower could have liability under Section 4069 of ERISA in the event
such Plan has been or were to be terminated.
"Special Required Lenders" shall mean the Required Term Lenders plus New
Revolving Lenders holding New Revolving Loans or Participating Interests
representing in excess of 33-1/3% of the sum of the aggregate principal amount
of New Revolving Loans and Participating Interests outstanding (or, if no New
Revolving Loans or Letters of Credit are outstanding, New Revolving Lenders
having Commitments representing in excess of 33-1/3% of the Total Commitments);
provided, that the Ratable Proportion of such Lenders, taken together, at least
equals 51%; provided further, that for purposes of this definition, the relevant
Commitments, Loans or Participating Interests of a Lender shall be disregarded
if and for so long as such Lender shall be a Defaulting Lender.
"Standby Letter of Credit" shall mean a standby letter of credit in form
and substance customarily issued by the relevant Fronting Bank from time to time
and in form and substance acceptable to the Agent and the relevant Fronting Bank
and issued for such purposes for which the
25
Borrower has historically obtained standby letters of credit, or for such other
purposes as are reasonably acceptable to the Agent and the relevant Fronting
Bank.
"Standby Letter of Credit Fronting Bank" shall mean the Fronting Bank which
has committed to issue Standby Letters of Credit hereunder.
"Standby Letter of Credit Outstandings" shall mean, at any time, the sum of
(i) the aggregate undrawn stated amount of all Standby Letters of Credit then
outstanding plus (ii) all amounts theretofore drawn under Standby Letters of
Credit and not then reimbursed.
"Statutory Reserves" shall mean on any date the percentage (expressed as a
decimal) established by the Board and any other banking authority which is the
then stated maximum rate for all reserves (including, but not limited to, any
emergency, supplemental or other marginal reserve requirements) applicable to
any member bank of the Federal Reserve System in respect of Eurocurrency
Liabilities (or any successor category of liabilities under Regulation D issued
by the Board, as in effect from time to time). Such reserve percentages shall
include, without limitation, those imposed pursuant to said Regulation. The
Statutory Reserves shall be adjusted automatically on and as of the effective
date of any change in such percentage.
"Subsidiary" shall mean, with respect to any Person (herein referred to as
the "parent"), any corporation, association or other business entity (whether
now existing or hereafter organized) of which at least a majority of the
securities or other ownership interests having ordinary voting power for the
election of directors is, at the time as of which any determination is being
made, owned or controlled by the parent or one or more subsidiaries of the
parent or by the parent and one or more subsidiaries of the parent.
"Subsidiary Guarantee" shall mean the guarantee, substantially in the form
of Exhibit E hereto, to be entered into between each Subsidiary (whether now
existing or hereafter formed, purchased or otherwise acquired) and the Agent for
the benefit of the Secured Parties, as the same may be amended, amended and
restated, supplemented or otherwise modified from time to time.
"Subsidiary Security Agreement" shall mean the security agreement,
substantially in the form of Exhibit F hereto, to be made by each Subsidiary
(whether now existing or hereafter formed, purchased or otherwise acquired) in
favor of the Agent, for the benefit of the Secured Parties, as the same may be
amended, amended and restated, supplemented or otherwise modified from time to
time.
"Substantial Consummation" shall have the meaning set forth in Section 1101
of the Bankruptcy Code.
"Survey" shall mean a current survey of the real property covered by any
Mortgage certified to the Agent and the title insurance company insuring the
Mortgage and in form and
26
substance satisfactory to the Agent and the title insurance company, or in lieu
thereof, a copy of the existing survey and, if required by the title insurance
company insuring such Mortgage, an affidavit in form and substance satisfactory
to such title company to remove any exceptions in the Title Policy with respect
to the absence of a current certified survey.
"Synthetic Lease Banks" shall mean the banks and financial institutions
party to the Synthetic Lease Loan Documents and their successors and assigns.
"Synthetic Lease Loan Agreement" shall mean that certain Loan Agreement,
dated on or about the Effective Date, among the Borrower, the Synthetic Lease
Banks and BA Leasing & Capital Corporation, as agent for the Synthetic Lease
Banks, as the same may be amended, amended and restated, supplemented or
otherwise modified to the extent permitted by this Agreement.
"Synthetic Lease Loan Documents" shall mean the Synthetic Lease Loan
Agreement, the Mortgage, Assignment of Rents and Leases, Security Agreement and
Fixture Filing Statement from the Borrower in favor of the agent for the
Synthetic Lease Banks for the Borrower's property located in Bloomington,
Indiana and in Overland Park, Kansas and the Deed of Trust, Assignment of Rents
and Leases, Security Agreement and Fixture Filing Statement from the Borrower in
favor of the agent for the Synthetic Lease Banks for the Borrower's property
located in Las Vegas, Nevada and any and all documents, agreements and
instruments related thereto, each as amended, amended and restated, supplemented
or otherwise modified to the extent permitted by this Agreement.
"Synthetic Lease Obligations" shall mean the obligations of the Borrower
under the Synthetic Lease Loan Documents.
"Taxes" shall have the meaning set forth in Section 2.17.
"Temporary Cash Investments" shall mean any Investment in (i) direct
obligations of the United States or any agency thereof, or obligations
guaranteed by the United States or any agency thereof, in each case maturing
within one year from the date of the acquisition thereof by the Borrower or a
Subsidiary, or (ii) (x) commercial paper rated in the highest grade (A1+/P1 or
its equivalent) by S&P or Xxxxx'x or (y) time deposits with, including
certificates of deposit issued by, any office located in the United States of
any bank or trust company that has capital, surplus and undivided profits
aggregating at least U.S. $500,000,000, and whose long term Debt is rated A or
higher by S&P and A2 or higher by Xxxxx'x, in each case maturing within 180 days
from the date of acquisition thereof by the Borrower or a Subsidiary.
"Term Obligations" shall mean the due and punctual payment of principal of
and interest on the New Term Loans and all other present and future, fixed or
contingent, monetary and performance obligations owed to the New Term Lenders
and the Agent under the Loan Documents with respect to the New Term Loans.
"Title Policy" shall mean a mortgage policy of title insurance (ALTA or the
equivalent) insuring the first or second priority Lien of a Mortgage (as the
case may be) in favor of the Agent, in form and substance and issued by title
insurers satisfactory to the Agent and containing no
27
exceptions to coverage other than matters satisfactory to the Agent in its
judgment reasonably exercised.
"Total Commitments" shall mean, at any time, the sum of the Commitments at
such time.
"Trade Payables" shall mean accounts payable in respect of Inventory
purchases by the Borrower or any Subsidiary.
"Trademarks" shall mean (a) all trademarks, trade names, corporate names,
company names, business names, fictitious business names, service names, trade
styles, service marks, logos and other source or business identifiers owned by
the Borrower or any Subsidiary, and the goodwill associated therewith, now
existing or hereafter adopted or acquired, all registrations and recordings
thereof, and all applications in connection therewith, whether in the United
States Patent and Trademark Office or in any similar office or agency of the
United States, any State thereof or any other country or any political
subdivision thereof, or otherwise and (b) all renewals thereof.
"Transferee" shall have the meaning set forth in Section 2.17.
"Type" when used in respect of any Loan or Borrowing shall refer to the
rate of interest by reference to which interest on such Loan or on the Loans
comprising such Borrowing is determined. For purposes hereof, "rate" shall mean
the Adjusted LIBOR Rate and the Alternate Base Rate.
"UBS" shall mean UBS Mortgage Finance, Inc. (as the successor-in-interest
to The Prudential Insurance Company of America) and UBS' successors and assigns.
"UBS Collateral" shall mean the real property listed on Schedule 1.1(c)
annexed hereto, together with the improvements, fixtures and appurtenances
relating thereto, which is collateral for the Real Estate Financing.
"UBS Loan Agreement" shall mean that certain Amended and Restated Loan
Agreement, dated on or about the Effective Date, between the Borrower and UBS,
as the same may be amended, amended and restated, supplemented or otherwise
modified to the extent permitted by this Agreement.
"UBS Loan Documents" shall mean the UBS Loan Agreement, each of the
mortgages and deeds of trust heretofore delivered with respect to the UBS
Collateral, as modified as of the Effective Date, and any and all documents,
agreements and instruments related thereto, each as amended, amended and
restated, supplemented or otherwise modified to the extent permitted by this
Agreement.
"UCC" shall mean the Uniform Commercial Code as in effect at the relevant
time in the relevant jurisdiction.
"Underwriters" shall mean CIBC Xxxxxxxxxxx, NationsBank, N.A., Xxxxxxx
Sachs Credit Partners, L.P. and Xxxxxx Commercial Paper Inc.
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"Uniform Customs" shall mean the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500, or any successor publication, as the same may be amended,
amended and restated, supplemented or otherwise modified from time to time.
"Unsupported Trade Payables" shall mean Trade Payables (i) which are
unsecured (whether by way of cash deposits, purchase money security interests or
otherwise), (ii) the payment of which is not backed by any letters of credit,
guarantees or other forms of credit support or enhancement and (iii) which are
not claims as to which the obligee is entitled to reclamation rights pursuant to
the UCC or Section 546(c) of the Bankruptcy Code.
"Unsupported Trade Standby Letter of Credit" shall have the meaning set
forth in Section 2.5.
"Unused Total Commitment" shall mean, at any time, (i) the Total
Commitments less (ii) the sum of (x) the aggregate outstanding principal amount
of all New Revolving Loans and (y) the aggregate Letter of Credit Outstandings.
"Vehicles" shall mean all cars, trucks, trailers, construction and earth
moving equipment and other vehicles covered by a certificate of title law of any
state or other jurisdiction and, in any event, shall include, without
limitation, the vehicles listed on Schedule 7 to the Security and Pledge
Agreement and any Subsidiary Security Agreements and all tires and other
appurtenances to any of the foregoing.
"Voting Shares" shall mean, with respect to any Person, shares of capital
stock of any class or classes (however designated) having general voting power
for the election of the board of directors, managers or trustees of such Person
(irrespective of whether or not at the time capital stock of any other class or
classes shall have or might have voting power by reason of the happening of any
contingency).
"Withdrawal Liability" shall have the meaning specified under Part I of
Subtitle E of Title IV of ERISA.
"ZR&G" shall have the meaning set forth in Section 9.5.
Section 1.2 Terms Generally. The definitions in Section 1.1 shall apply
equally to both the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. All references herein to Sections, Exhibits and
Schedules shall be deemed references to Sections of, and Exhibits and Schedules
to, this Agreement unless the context shall otherwise require. Except as
otherwise expressly provided herein, all accounting or financial terms used
herein shall be construed in accordance with GAAP, as in effect from time to
time; provided, however, that for purposes of determining compliance with any
covenant set forth in Section 6, such terms shall be construed in accordance
with GAAP as in effect on the date
29
of this Agreement applied on a basis consistent with the application used in the
Borrower's audited financial statements referred to in Section 3.4.
SECTION 2. AMOUNT AND TERMS OF CREDIT.
Section 2.1. Assumption and Restructuring of Secured Obligations (other
than Letters of Credit); Amortization of New Term Loans; Commitment to Lend.
(a) Subject to the terms and conditions and relying upon the
representations, warranties and covenants set forth herein, each of the parties
agrees that, as of the Effective Date, the Pre-Petition Credit Agreement is
hereby amended and restated and a portion of the Pre-Petition Term Loans and the
Pre-Petition Revolving Loans extended by the Pre-Petition Lenders pursuant to
the Pre-Petition Credit Agreement are hereby assumed by the Borrower and
restructured on the terms and conditions contained herein (such portion of the
Pre-Petition Term Loans and Pre-Petition Revolving Credit Loans, as
restructured, being hereinafter referred to as the "New Term Loans"). The
principal amount of the Pre-Petition Loans restructured by each Pre-Petition
Lender (such Pre-Petition Lender, after the Effective Date, being hereinafter
referred to as a "New Term Lender" and, collectively, the "New Term Lenders") as
New Term Loans shall be determined in accordance with the definition of "New
Term Notes" contained in the Plan of Reorganization and shall be in such amount
as is set forth opposite its name on Schedule 1.1(a) annexed hereto. The
Borrower confirms and agrees that it is truly and justly indebted to the
Pre-Petition Lenders (which are the New Term Lenders) in the aggregate amount of
the Pre-Petition Loans and the Pre-Petition Letters of Credit, without defense,
offset or counterclaim of any kind whatsoever. Pursuant to the Plan of
Reorganization, principal amounts outstanding on the Effective Date with respect
to the portion of the Pre-Petition Obligations equal to the aggregate principal
amount of the New Term Loans shall be deemed to be principal amounts outstanding
with respect to the New Term Loans, as of the Effective Date.
(b) The outstanding principal amount of the New Term Loans shall be
payable in annual installments of $3,000,000 on September 15 of each year,
commencing September 15, 1998. To the extent not previously paid, all New Term
Loans shall be due and payable on the Maturity Date. Each principal payment on
the New Term Loans pursuant to this Section shall be accompanied by accrued
interest on the principal amount paid to but excluding the date of payment.
Without limiting its obligations under the first sentence of this Section or
Section 2.12, the Borrower unconditionally promises to pay the unpaid principal
amount of the New Term Loans on the Maturity Date.
(c) Subject to the terms and conditions and relying upon the
representations, warranties and covenants set forth herein, each of the parties
agrees that, as of the Effective Date, the DIP Credit Agreement is hereby
amended and restated and the DIP Revolving Credit Loans and the DIP Letters of
Credit are hereby assumed by the Borrower and restructured as provided in
Section 2.5(b). The Borrower confirms and agrees that it is truly and justly
indebted to the DIP Lenders (which are the New Revolving Lenders) in the
aggregate amount of the DIP Revolving Loans without defense, offset or
counterclaim of any kind whatsoever. Principal amounts outstanding on the
30
Effective Date with respect to the DIP Revolving Loans shall be deemed to be
principal amounts outstanding with respect to the New Revolving Loans, as of the
Effective Date. (1)
(d) Subject to the terms and conditions and relying upon the
representations, warranties and covenants set forth herein, each DIP Lender
(such DIP Lender, after the Effective Date, hereinafter referred to as a "New
Revolving Lender" and collectively, the "New Revolving Lenders") agrees
severally and not jointly with the other New Revolving Lenders to make revolving
credit loans (each a "New Revolving Loan" and, collectively, the "New Revolving
Loans" and, together with the New Term Loans, the "Loans") to the Borrower and
to participate in Letters of Credit issued by the relevant Fronting Bank at any
time and from time to time during the period commencing on the Effective Date
and ending on the Maturity Date of the New Revolving Loans in an aggregate
principal amount not to exceed the Commitment of such Lender. Without limiting
its obligations under Section 2.12, the Borrower unconditionally promises to pay
the unpaid principal amount of the New Revolving Loans on the Maturity Date. At
no time shall the sum of the then outstanding aggregate principal amount of the
New Revolving Loans plus the then aggregate Letter of Credit Outstandings exceed
the Total Commitments of $150,000,000, as the same may be reduced from time to
time pursuant to Sections 2.9 or 2.12, as the case may be. In addition, at no
time shall the sum of the then outstanding aggregate principal amount of New
Revolving Loans plus the then aggregate Standby Letter of Credit Outstandings
exceed an amount equal to the Total Commitments minus the Documentary Reserve.
(e) Each Borrowing of New Revolving Loans shall be made by the New
Revolving Lenders pro rata in accordance with their respective Commitments;
provided, that the failure of any New Revolving Lender to make any New Revolving
Loan shall not in itself relieve the other New Revolving Lenders of their
obligations to lend.
(f) Subject to the terms and conditions and relying upon the
representations, warranties and covenants set forth herein, each of the Cash
Management Banks and the Borrower agree that their respective Cash Management
Agreements, as in effect immediately prior to the Effective Date, shall continue
in effect from and after the Effective Date in accordance with their respective
terms and the Hedging Bank and the Borrower agree that the Hedging Agreement, as
in effect immediately prior to the Effective Date, shall continue in effect from
and after the Effective Date in accordance with its terms.
Section 2.2. Making of Loans.
(a) Except as contemplated by Section 2.8, Loans shall be either ABR
Loans or Eurodollar Loans as the Borrower may request subject to and in
accordance with this Section; provided, that all Loans made pursuant to the same
Borrowing shall, unless otherwise specifically provided herein, be Loans of the
same Type. Each New Revolving Lender may fulfill its Commitment (and with
respect to the conversion of any New Term Loans, each New Term Lender may
convert such Loans) with respect to any Eurodollar Loan or ABR Loan by causing
any Lending Office of such Lender to make (or convert, as the case may be) such
Loan; provided, that any such use of a Lending
31
Office shall not affect the obligation of the Borrower 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 Borrower pursuant to Section 2.14. Subject to the other
provisions of this Section and the provisions of Section 2.11, Borrowings of
Loans of more than one Type may be incurred at the same time; provided, that no
more than five (5) Borrowings of Eurodollar Loans may be outstanding at any
time.
(b) The Borrower shall give the Agent prior notice of each Borrowing
hereunder of at least three Business Days for Eurodollar Loans and one Business
Day for ABR Loans (except as provided in the last sentence of this Section) by
delivering a notice of borrowing in substantially the form of Exhibit I hereto
(a "Notice of Borrowing"), including with respect to the New Term Loans deemed
made on the Effective Date. Such Notice of Borrowing shall be irrevocable and
shall specify the amount of the proposed Borrowing (which shall not be less than
$5,000,000 in the case of Eurodollar Loans and $1,000,000 in the case of ABR
Loans) and the date thereof (which shall be a Business Day) and shall contain
disbursement instructions. Such Notice of Borrowing, to be effective, must be
received by the Agent not later than 12:00 noon, New York City time, on the
third Business Day in the case of Eurodollar Loans and the first Business Day in
the case of ABR Loans, preceding the date on which such Borrowing is to be made
except as provided in the last sentence of this Section. Such Notice of
Borrowing shall specify whether the Borrowing then being requested is to be a
Borrowing of ABR Loans or Eurodollar Loans and, in the case of Eurodollar Loans,
the length of the applicable Interest Period. If no election is made as to the
Type of Loan, such Notice of Borrowing shall be deemed a request for Borrowing
of ABR Loans. The Agent shall promptly notify each Lender of its proportionate
share of such Borrowing, the date of such Borrowing, the Type of Borrowing or
Loans being requested and the Interest Period or Interest Periods applicable
thereto, as appropriate. On the borrowing date specified in such Notice of
Borrowing, each Lender shall make its share of the Borrowing available at the
office of the Agent at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, no later
than 12:00 noon, New York City time, in immediately available funds. Upon
receipt of the funds made available by the Lenders to fund any Borrowing
hereunder, the Agent shall disburse such funds in the manner specified in the
Notice of Borrowing delivered by the Borrower and shall use reasonable efforts
to make the funds so received from the Lenders available to the Borrower no
later than 2:00 p.m. New York City time (other than as provided in the following
sentence). With respect to ABR Loans of $10,000,000 or less, the Lenders shall
make such Borrowings available to the Agent for the account of the Borrower by
4:00 p.m., New York City time, on the same Business Day that the Borrower gives
notice to the Agent of such Borrowing if the Agent receives such notice from the
Borrower by 12:00 noon, New York City time.
(c) On the date of each New Revolving Loan, the Agent shall be
authorized (but not obligated except pursuant to Section 2.5(h)) to advance, for
the account of each of the New Revolving Lenders, the amount of the New
Revolving Loan to be made by it in accordance with its Commitment hereunder.
Should the Agent do so, each of the New Revolving Lenders agrees forthwith to
reimburse the Agent in immediately available funds for the amount so advanced on
its
32
behalf by the Agent, together with interest at the Federal Funds Rate if not so
reimbursed on the date due from and including such date but not including the
date of reimbursement.
(d) Any amounts received by the Agent in connection with this
Agreement or the Notes (other than amounts to which the Agent is entitled
pursuant to Sections 2.18, 8.6, 9.5 and 9.6) shall be credited to the relevant
Lenders, as promptly as practicable after collection by the Agent, in
immediately available funds either by wire transfer or deposit in that Lender's
correspondent account with the Agent, as such Lender and the Agent shall from
time to time agree.
Section 2.3. Notes; Repayment of Loans. The New Term Loans and the New
Revolving Loans made by each Lender shall be evidenced by a New Term Note or a
New Revolving Note, as the case may be, duly executed on behalf of the Borrower,
dated the Effective Date or the date of the effectiveness of the applicable
Assignment and Acceptance, as the case may be, substantially in the form of
Exhibits A-1 or A-2 hereto, respectively, payable to the order of such Lender in
an aggregate principal amount equal to the relevant New Term Lender's New Term
Loans, in the case of its New Term Note, and in an aggregate principal amount
equal to the relevant New Revolving Lender's Commitment, in the case of its New
Revolving Note. The outstanding principal balance of the New Term Loans, as
evidenced by the New Term Notes, shall be payable as provided in Sections 2.1
and 2.12 and on the Maturity Date. New Revolving Loans may be repaid and
reborrowed in accordance with the provisions of this Agreement; provided, that
the outstanding principal balance of all of the New Revolving Loans, as
evidenced by the New Revolving Notes, shall be payable on the Maturity Date.
Each Note shall bear interest from the date thereof on the outstanding principal
balance thereof as set forth in Section 2.4. Each Lender shall, and is hereby
authorized by the Borrower to, endorse on the 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, that the failure of any Lender to make such a
notation or any error therein shall not affect the obligation of the Borrower to
repay the Loans made by such Lender and such other amounts in accordance with
the terms of this Agreement and the applicable Notes.
Section 2.4. Interest on Loans.
(a) Subject to the provisions of Section 2.8, each ABR 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 to the Alternate Base Rate plus 1-1/2%.
(b) Subject to the provisions of Section 2.8, each Eurodollar 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 LIBOR Rate for such Interest Period in
effect for such Borrowing plus 2-1/2%.
33
(c) Accrued interest on all Loans shall be payable in arrears on each
Interest Payment Date applicable thereto, on the Maturity Date for the affected
Loans, after the Maturity Date for the affected Loans on demand, upon the
Borrower's optional termination of the Total Commitments and (with respect to
Eurodollar Loans) upon any repayment or prepayment thereof (on the amount
prepaid).
Section 2.5. Letters of Credit.
(a) Subject to the terms and conditions and relying upon the
representations, warranties and covenants set forth herein, each of the undrawn
DIP Documentary Letters of Credit is hereby deemed to be issued as and shall be
a Documentary Letter of Credit as of the Effective Date in the principal amount
of such Documentary Letter of Credit immediately prior to the Effective Date.
Upon the terms and subject to the conditions herein set forth, the Borrower may
request the Documentary Letter of Credit Fronting Bank, at any time and from
time to time after the Effective Date hereof and prior to the Maturity Date for
the New Revolving Loans, to issue for Approved Purposes, and subject to the
terms and conditions contained herein, such Fronting Bank shall issue, for the
account of the Borrower one or more Documentary Letters of Credit; provided,
that no Documentary Letter of Credit shall be issued if, after giving effect to
such issuance, the aggregate Documentary Letter of Credit Outstandings would
exceed the lesser of $15,000,000 (or, if less, the Total Commitments as then in
effect) or the Documentary Reserve and provided further, that unless the
Documentary Letter of Credit Fronting Bank shall have received written notice
from the Agent at least one Business Day prior to the date with respect to which
the Borrower has requested issuance of a Documentary Letter of Credit that not
all of the conditions to issuance of Documentary Letters of Credit have been
satisfied, the Documentary Letter of Credit Fronting Bank may assume that all
such conditions have been satisfied and may issue the requested Documentary
Letter of Credit for the account of the Borrower. The Borrower hereby designates
$10,000,000 as the initial reserve for the issuance of Documentary Letters of
Credit (the "Documentary Reserve"). The Borrower may increase or decrease the
amount of the Documentary Reserve in an amount equal to $1,000,000 or any
integral multiple thereof upon ten (10) Business Days prior written notice to
the Agent and the Documentary Letter of Credit Fronting Bank; provided, that in
no event shall the Documentary Reserve exceed $15,000,000 or be less than the
Documentary Letter of Credit Outstandings and provided further, that (i) if any
requested increase in the Documentary Reserve would cause the then outstanding
aggregate principal amount of the New Revolving Loans to be in excess of the
amount permitted pursuant to the last sentence of Section 2.1(d) or (ii) any
requested decrease would cause the Documentary Reserve to be less than the
Documentary Letter of Credit Outstandings, then the Agent shall notify the
Documentary Letter of Credit Bank of either such result and such increase or
decrease (as the case may be) shall not be effective until the then outstanding
aggregate principal amount of the New Revolving Loans, or of the Documentary
Letter of Credit Outstandings (as the case may be) has been repaid to the extent
necessary and the Documentary Letter of Credit Fronting Bank has been notified
in writing by the Agent that such increase or decrease (as the case may be) is
effective. Each Documentary Letter of Credit shall (i) be denominated in Dollars
or in a foreign currency acceptable to the Documentary Letter of Credit Fronting
Bank and (ii) expire no later than the earlier of the date that is 180 days
after the date of issuance thereof and the date that is fourteen days prior to
the
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scheduled Maturity Date for the New Revolving Loans. The Borrower shall at all
times maintain a minimum balance of at least $25,000 in the Letter of Credit
Account of the Documentary Letter of Credit Fronting Bank, and the Borrower
hereby authorizes the Documentary Letter of Credit Fronting Bank to debit such
Letter of Credit Account to reimburse itself with respect to drafts drawn under
Documentary Letters of Credit and unpaid fees, costs and expenses incurred by
the Documentary Letter of Credit Fronting Bank in connection therewith
(whereupon the Borrower shall forthwith deposit such additional funds in such
Letter of Credit Account, if any, as shall be necessary to achieve such minimum
balance).
(b) (i) Subject to the terms and conditions and relying upon the
representations, warranties and covenants set forth herein, each of the undrawn
DIP Standby Letters of Credit is hereby deemed to be issued and shall be a
Standby Letter of Credit as of the Effective Date in the principal amount of
such Letter of Credit immediately prior to the Effective Date (and any increase
in the principal amount thereof pursuant to the provisions of such Letters of
Credit as in effect on the Effective Date shall also constitute Standby Letter
of Credit Outstandings for purposes of this Agreement). Upon the terms and
subject to the conditions herein set forth, the Borrower may request the Standby
Letter of Credit Fronting Bank, at any time and from time to time after the date
hereof and prior to the Maturity Date for the New Revolving Loans, to issue, and
subject to the terms and conditions contained herein, such Fronting Bank shall
issue, for the account of the Borrower one or more Standby Letters of Credit;
provided, that no Standby Letter of Credit shall be issued if after giving
effect to such issuance the aggregate Standby Letter of Credit Outstandings
would exceed $25,000,000 (or, if less, the Total Commitments as then in effect)
and provided further, that no Standby Letter of Credit shall be issued if the
Standby Letter of Credit Fronting Bank shall have received notice from the Agent
or the Majority Revolving Lenders that the conditions to such issuance have not
been met;
(ii) Notwithstanding the foregoing, no Standby Letters of Credit
may be issued to support Trade Payables except as follows: (x) not more than
$5,000,000 of Standby Letters of Credit in the aggregate at any one time
outstanding may be issued to individuals or entities supplying Inventory to the
Borrower or any Subsidiary to support or otherwise assure their payment
obligations in respect of Trade Payables owing to such suppliers (and all such
Standby Letters of Credit shall require the beneficiary thereof to certify, as a
condition to drawing under such Standby Letter of Credit, that such beneficiary
is drawing thereunder in respect of Trade Payables of the Borrower or any
Subsidiary which are past due) and (y) a single Standby Letter of Credit in an
amount not to exceed $10,000,000 may be issued to an agent or trustee for the
benefit of the holders of the Borrower's Unsupported Trade Payables (the
"Unsupported Trade Standby Letter of Credit");
(iii) If issued, the Unsupported Trade Standby Letter of Credit
shall (x) expire no later than the first anniversary of the Effective Date
(unless prior to such first anniversary (A) the Borrower commences a Chapter 11
Case under the Bankruptcy Code, in which case the expiry date of the Unsupported
Trade Standby Letter of Credit shall be the earliest to occur of (1) 60 days
after the conversion of such Chapter 11 Case to a Chapter 7 Case, (2) 60 days
after the confirmation of a plan of reorganization in such Chapter 11 Case
providing for the sale of all or substantially all of
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the assets of the Borrower and (3) the date of the consummation of any other
plan of reorganization in such Chapter 11 Case) or (B) the board of directors of
the Borrower has adopted by formal resolution a plan of liquidation which
provides for the sale of all or substantially all of the assets of the Borrower,
in which case the Unsupported Trade Standby Letter of Credit shall expire 60
days after the date the board of directors of the Borrower adopts such a
resolution;
(iv) The Unsupported Trade Standby Letter of Credit shall also
require that the beneficiary thereof certify, as a condition to drawing
thereunder, that (x) the Borrower has commenced or is subject to a Chapter 7
Case under the Bankruptcy Code (or the Borrower has commenced or is subject to a
Chapter 11 Case under the Bankruptcy Code which has been converted to a Chapter
7 Case) or a plan of reorganization in a Chapter 11 Case of the Borrower has
been confirmed which provides for the sale of all or substantially all of the
assets of the Borrower; or the board of directors of the Borrower has adopted by
formal resolution a plan of liquidation which provides for the sale of all or
substantially all of the assets of the Borrower; or all or substantially all of
the assets of the Borrower (or the proceeds thereof) have been transferred to
some or all of the Secured Parties pursuant to judicial or non-judicial
foreclosure proceedings, a deed or deed in lieu of foreclosure or execution or
levy and (y) the amount of such drawing does not exceed 25% of the Borrower's
Unsupported Trade Payables on the date of such drawing; and
(v) Except as set forth in clause (iii) above with respect to the
Unsupported Trade Standby Letters of Credit, each Standby Letter of Credit shall
(x) be denominated in Dollars and (y) expire no later than the earlier of the
date which is one year after the date of issuance thereof and the scheduled
Maturity Date for the New Revolving Loans (provided, that such Letter of Credit
(other than the Unsupported Trade Standby Letter of Credit) may provide that it
may be extended with the consent of the Standby Letter of Credit Fronting Bank
for a period of no more than one year (but in no event beyond the scheduled
Maturity Date for the New Revolving Loans)).
(c) Each Letter of Credit shall be subject to (i) the Uniform Customs
and (ii) as to matters not addressed by the Uniform Customs, the law of the
State of New York (or, if a Fronting Bank so elects, the law of the jurisdiction
in which the office from which it issues its Letters of Credit is located).
(d) No Fronting Bank shall at any time be obligated to issue any
Letter of Credit hereunder if such issuance would conflict with, or cause such
Fronting Bank or any New Revolving Lender to exceed any limits imposed by, any
applicable Requirement of Law.
(e) The Borrower shall pay to each Fronting Bank, in addition to such
other fees and charges as are specifically provided for in Section 2.20 hereof,
such fees and charges in connection with the issuance and processing of the
Letters of Credit issued by such Fronting Bank as are customarily imposed by
such Fronting Bank from time to time in connection with letter of credit
transactions in the amounts, at the times and in such manner as shall be
specified by such Fronting Bank in accordance with its judgment reasonably
exercised.
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(f) Drafts drawn under each Letter of Credit shall be reimbursed by
the Borrower in Dollars (i) on the same day if the relevant Fronting Bank shall
have notified the Borrower prior to 11:00 a.m. (New York City time) and (ii) in
all other cases, not later than the first Business Day following the date of
drawing. Drafts drawn under each Letter of Credit shall bear interest from the
date of drawing until the first Business Day following the date of draw at a
rate per annum equal to the Alternate Base Rate plus 1-1/2% and thereafter until
reimbursed in full at a rate per annum equal to the Alternate Base Rate plus
3-1/2% (computed on the basis of the actual number of days elapsed over any year
of 360 days). The Borrower shall effect such reimbursement (x) if such draw
occurs prior to the Maturity Date for the New Revolving Loans (or the earlier
date of termination of the Total Commitments), in cash or through a Borrowing
(or deemed Borrowing) of New Revolving Loans without regard to whether or not
the Borrower is able to satisfy the conditions precedent set forth in Section
4.2 unless the making of such Loans is stayed by a court of competent
jurisdiction or otherwise not permitted by, or the obligation of the Borrower to
repay the same is not enforceable under, applicable law (provided, that if such
drawing relates to a Documentary Letter of Credit, such a Borrowing of New
Revolving Loans shall only be made if the Documentary Letter of Credit Bank
notifies the Agent that it has not otherwise been reimbursed by the Borrower in
respect of such drawing) or (y) if such drawing occurs on or after the Maturity
Date for the New Revolving Loans, in cash. Each New Revolving Lender agrees to
make the Loans described in clause (x) of the preceding sentence notwithstanding
a failure to satisfy the applicable lending conditions thereto or the provisions
of Section 2.1 or the occurrence of the Maturity Date for the New Revolving
Loans.
(g) Immediately upon the issuance of any Letter of Credit by any
Fronting Bank, such Fronting Bank shall be deemed to have sold to each New
Revolving Lender other than such Fronting Bank and each such other New Revolving
Lender shall be deemed unconditionally and irrevocably to have purchased from
such Fronting Bank, without recourse or warranty, an undivided Participating
Interest, to the extent of such Lender's Commitment Percentage, in such Letter
of Credit, each drawing thereunder and the obligations of the Borrower under
this Agreement with respect thereto. Upon any change in the Commitments pursuant
to Section 9.3, 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 New Revolving Lenders. Any action taken or omitted by a Fronting Bank
under or in connection with a Letter of Credit, if taken or omitted in the
absence of gross negligence or willful misconduct, shall not create for such
Fronting Bank any resulting liability to any other New Revolving Lender.
(h) In the event that a Fronting Bank makes any payment under any
Letter of Credit and the Borrower shall not have reimbursed such amount in full
to such Fronting Bank pursuant to this Section, such Fronting Bank shall
promptly notify the Agent (and, if the drawing resulting in such payment was
made after the stated expiry date of such Letter of Credit, shall certify that
such Fronting Bank obtained the consent of the Borrower to such payment),
whereupon the Agent shall promptly notify each New Revolving Lender of such
failure. In such case, each New Revolving Lender is authorized (and the Borrower
does hereby so authorize each New Revolving Lender) to and shall promptly make
an ABR Loan to the Borrower by making the proceeds thereof available to the
Agent in the amount of such New Revolving Lender's Commitment Percentage of such
unreimbursed amount
37
without regard to whether or not the Borrower is able to satisfy the conditions
precedent set forth in Section 4.2 unless the making of such Loans is stayed by
a court of competent jurisdiction or otherwise not permitted by, or the
obligation of the Borrower to repay the same is not enforceable under,
applicable law. If such Fronting Bank so notifies the Agent, and the Agent so
notifies the New Revolving Lenders, prior to 11:00 a.m. (New York City time) on
any Business Day, each New Revolving Lender shall make available to the Agent
the amounts required hereby, and the Agent shall make available to the relevant
Fronting Bank the total unreimbursed amount, in each case on such Business Day
and in same day funds. Notwithstanding the failure of any New Revolving Lender
to make available to the Agent such New Revolving Lender's Commitment Percentage
of the total Loan to be made to the Borrower, the Agent shall promptly remit to
the Fronting Bank the proceeds of such Loan in the amount of the unreimbursed
draw, in each case in Dollars and in the same day funds.
In the event that the making of any New Revolving Loan is stayed by a court
of competent jurisdiction, or the Majority Revolving Lenders and the Agent
reasonably determine that the making of a New Revolving Loan is not permitted
by, or the obligation of the Borrower to repay the same is not enforceable
under, applicable law, each New Revolving Lender shall promptly and
unconditionally pay to the Agent for the account of the Fronting Bank the amount
of such New Revolving Lender's Commitment Percentage of the unreimbursed payment
and the Agent shall promptly and unconditionally pay to the Fronting Bank the
amount of such unreimbursed payment in each case in Dollars and in the same day
funds. If such Fronting Bank so notifies the Agent, and the Agent so notifies
the New Revolving Lenders, prior to 11:00 a.m. (New York City time) on any
Business Day, each New Revolving Lender shall make available to the Agent, and
the Agent shall make available to the relevant Fronting Bank the total
unreimbursed amount in each case on such Business Day and in same day funds.
If and to the extent such Lender shall not have so made its Commitment
Percentage of the amount of any New Revolving Loan or payment available to the
Agent, or the Agent shall not have made the amount of such payment available to
the relevant Fronting Bank, such New Revolving Lender agrees to pay to the
Agent, and the Agent agrees to pay to such Fronting 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 party entitled thereto at the Federal Funds
Rate. The failure of any New Revolving Lender to make available to the Agent its
Commitment Percentage of any New Revolving Loan required to be made pursuant to
this Section or any payment under any Letter of Credit shall not relieve any
other New Revolving Lender of its obligation hereunder to make available to the
Agent its Commitment Percentage of such New Revolving Loan or payment under any
Letter of Credit, nor shall it relieve the Agent of its obligation hereunder to
make the amount of such payment available to the relevant Fronting Bank, in each
case on the date required, as specified above, but no New Revolving Lender shall
be responsible for the failure of any other New Revolving Lender to make
available to the Agent such other New Revolving Lender's Commitment Percentage
of any such New Revolving Loan or such payment. Whenever a Fronting Bank
receives a payment of a reimbursement obligation as to which it has received any
payments from the New Revolving Lenders pursuant to this Section, such Fronting
Bank shall pay to each Lender which has paid its Commitment Percentage
38
thereof, in Dollars and in same day funds, an amount equal to such New Revolving
Lender's Commitment Percentage thereof.
(i) First Bank in its capacity as the Documentary Letter of Credit
Fronting Bank, may terminate its obligation to issue Documentary Letters of
Credit upon sixty days' written notice to the Agent of such termination. If CIBC
resigns as Agent, First Bank shall be deemed to have terminated its obligation
to issue Documentary Letters of Credit, effective as of the effective date of
CIBC's resignation as Agent, unless it otherwise notifies the Borrower and the
successor Agent in writing of its decision to remain as Documentary Letter of
Credit Fronting Bank.
Section 2.6. Procedure for Issuance of Letters of Credit. (a) The Borrower
may from time to time request that a Fronting Bank issue a Letter of Credit by
delivering to such Fronting Bank, at its address for notices referred to in
Section 9.1, an Application therefor, completed to the satisfaction of such
Fronting Bank (which completion may occur by means of any electronic system
operated by such Fronting Bank), and such other certificates, documents and
other papers and information as such Fronting Bank may request. Each Application
for a Documentary Letter of Credit shall specify the documents, certificates and
any other items required to be presented as a condition for acceptance of a
draft drawn on, or other payment request made with respect to, the Documentary
Letter of Credit Fronting Bank pursuant to such Documentary Letter of Credit.
Upon receipt of any Application, the relevant Fronting Bank will process such
Application and the certificates, documents and other papers and information
delivered to it in connection therewith in accordance with its customary
procedures, subject to the terms and conditions hereof, and shall, subject to
the terms and conditions hereof, promptly issue the Letter of Credit requested
thereby (but in no event shall a Fronting Bank (unless it otherwise agrees) be
required to issue any Letter of Credit earlier than two Domestic Business Days
after its receipt of the Application therefor and all such other certificates,
documents and other papers and information relating thereto) by issuing the
original of such Letter of Credit to the beneficiary thereof or as otherwise may
be agreed by such Fronting Bank and the Borrower. Such Fronting Bank shall
furnish a copy of such Letter of Credit to the Borrower promptly following the
issuance thereof. Each Fronting Bank will periodically (but in any event on the
last Business Day of each month) report to the Agent regarding Letter of Credit
issuance activity, and the Agent will periodically (but in any event on the last
Business Day of each month) report to the Lenders regarding Letter of Credit
issuance activity. Unless the Documentary Letter of Credit Fronting Bank shall
have received written notice from the Agent at least one Business Day prior to
the date with respect to which the Borrower has requested issuance of a
Documentary Letter of Credit that not all of the conditions to issuance of
Documentary Letters of Credit have been satisfied, the Documentary Letter of
Credit Fronting Bank may assume that all such conditions have been satisfied.
(b) To the extent that any provision of any Application related to any
Letter of Credit is inconsistent with the provisions of this Agreement, the
provisions of this Agreement shall control.
Section 2.7. Nature of Letter of Credit Obligations Absolute. The
obligations of the Borrower to reimburse the Fronting Banks and the New
Revolving Lenders for drawings made under
39
any Letter of Credit 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 Borrower may have at any time against a beneficiary of any
Letter of Credit or against the relevant Fronting Bank or any of the New
Revolving Lenders, whether in connection with this Agreement, the transactions
contemplated herein or any unrelated transaction; (iii) payment by the relevant
Fronting Bank against any draft, demand, certificate or other document presented
under any Letter of Credit which proves 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 relevant Fronting 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 (including,
without limitation, payment by the Fronting Bank in accordance with its usual
practices and procedures, subsequent to the expiry date of a Letter of Credit,
as long as the Fronting Bank has obtained the consent of the Borrower thereto
and has not been notified in writing by the Agent or a New Revolving Lender of
the occurrence of the Maturity Date); (v) any other circumstance or happening
whatsoever, which is similar to any of the foregoing; or (vi) the fact that any
Event of Default shall have occurred and be continuing (it being understood that
any such payment by the Borrower shall be without prejudice to, and shall not
constitute a waiver of, any rights the Borrower might have or might acquire
against any party as a result of the payment by the relevant Fronting Bank of
any draft or the reimbursement by the Borrower thereof).
Section 2.8. (Default Interest. (a) If the Borrower shall default in the
payment of the principal of or interest on any Loan or in the payment of any
other amount becoming due hereunder (including, without limitation, the
reimbursement pursuant to Section 2.5(f) of any draft drawn under a Letter of
Credit), whether at stated maturity, by acceleration or otherwise or, if any
such amount shall be outstanding at the time of the occurrence of any Event of
Default specified in Section 7.1(e) or (f), the Borrower shall pay interest, to
the extent permitted by law, on such defaulted amount up to (but not including)
the date of actual payment (after as well as before judgment) at a rate per
annum (computed on the basis of the actual number of days elapsed over a year of
360 days) equal to (x) in the case of Borrowings consisting of Eurodollar Loans,
the Adjusted LIBOR Rate in effect for such Borrowing plus 4-1/2% and (y) in the
case of ABR Loans, Letter of Credit Outstandings and all other amounts, the
Alternate Base Rate plus 3-1/2%. All such interest shall be payable on demand.
(b) Notwithstanding anything herein or in the Notes to the contrary,
if at any time the applicable interest rate, together with all fees and charges
which are treated as interest under applicable law (collectively, the "Other
Amounts"), as provided for herein or in any other document executed in
connection herewith, or otherwise contracted for, charged, received, taken or
reserved by any Lender, shall exceed the maximum lawful rate (the "Maximum
Rate") which may be contracted for, charged, taken, received or reserved by such
Lender in accordance with applicable law, the rate of interest payable under the
Note(s) held by such Lender, together with all Other Amounts payable to such
Lender, shall be limited to the Maximum Rate.
40
Section 2.9. Optional Termination or Reduction of Commitment. Upon at least
two Business Days' prior written notice to the Agent, the Borrower may at any
time in whole permanently terminate, or from time to time in part permanently
reduce, the Total Commitments in an amount equal to or less than the Unused
Total Commitment. Each such reduction of the Total Commitments, shall be in the
principal amount of $5,000,000 or any integral multiple thereof. Simultaneously
with each reduction or termination of the Total Commitments, the Borrower shall
pay to the Agent for the account of each New Revolving Lender the Commitment Fee
accrued on the amount of the respective Commitment of such New Revolving Lender
so terminated or reduced through the date thereof. Any reduction of the Total
Commitments pursuant to this Section shall be applied pro rata to reduce the
Commitment of each New Revolving Lender. If, at any time, the Borrower elects to
reduce the Total Commitments to an amount less than the Documentary Reserve,
such reduction shall not take effect until the Agent shall have notified the
Documentary Letter of Credit Fronting Bank thereof (whereupon the Documentary
Reserve shall be reduced by the amount necessary so that it does not exceed the
Total Commitments as so reduced).
Section 2.10. Alternate Rate of Interest. In the event, and on each
occasion, that on or prior to the first day of any Interest Period for a
Eurodollar Loan, the Agent shall have determined (which determination shall be
conclusive and binding upon the Borrower absent manifest error) that reasonable
means do not exist for ascertaining the applicable Adjusted LIBOR Rate, the
Agent shall, as soon as practicable thereafter, give written or telegraphic
notice of such determination to the Borrower and the Lenders, and any request by
the Borrower for a Borrowing of Eurodollar Loans (including pursuant to a
refinancing with Eurodollar Loans) pursuant to Section 2.2 or 2.11 shall be
deemed a request for a Borrowing of ABR Loans. After such notice shall have been
given and until the circumstances giving rise to such notice no longer exist,
each request for a Borrowing of Eurodollar Loans shall be deemed to be a request
for a Borrowing of ABR Loans.
Section 2.11. Refinancing of Loans. The Borrower shall have the right, at
any time, on three Business Days prior irrevocable notice to the Agent,
substantially in the form of Exhibit K hereto (which notice, to be effective,
must be completed and received by the Agent not later than 12:00 noon, New York
City time, on the third Business Day preceding the date of any refinancing), (x)
to refinance (without the satisfaction of the conditions set forth in Section 4
as a condition to such refinancing) any outstanding Borrowing or Borrowings of
Loans of one Type (or a portion thereof) with a Borrowing of Loans of the other
Type or (y) to continue an outstanding Borrowing of Eurodollar Loans for an
additional Interest Period, subject to the following:
(a) as a condition to the refinancing of ABR Loans with Eurodollar
Loans and to the continuation of Eurodollar Loans for an additional Interest
Period, no Default or Event of Default shall have occurred and be continuing at
the time of such refinancing;
(b) if less than a full Borrowing of Loans shall be refinanced, such
refinancing shall be made pro rata among the relevant Lenders in accordance with
the respective principal amounts of the Loans comprising such Borrowing held by
such Lenders immediately prior to such refinancing;
41
(c) the aggregate principal amount of Loans being refinanced shall be
at least $1,000,000; provided, that no partial refinancing of a Borrowing of
Eurodollar Loans shall result in the Eurodollar Loans remaining outstanding
pursuant to such Borrowing being less than $5,000,000 in aggregate principal
amount;
(d) each relevant Lender shall effect each refinancing by applying the
proceeds of its new Eurodollar Loan or ABR Loan, as the case may be, to its Loan
being refinanced;
(e) the Interest Period with respect to a Borrowing of Eurodollar
Loans effected by a refinancing or in respect to the Borrowing of Eurodollar
Loans being continued as Eurodollar Loans shall commence on the date of
refinancing or the expiration of the current Interest Period applicable to such
continuing Borrowing, as the case may be; and
(f) a Borrowing of Eurodollar Loans may be refinanced only on the last
day of an Interest Period applicable thereto.
In the event that the Borrower shall not give notice to refinance any Borrowing
of Eurodollar Loans, or to continue such Borrowing as Eurodollar Loans, or shall
not be entitled to refinance or continue such Borrowing as Eurodollar Loans, in
each case as provided above, such Borrowing shall automatically be refinanced
with a Borrowing of ABR Loans at the expiration of the then-current Interest
Period. The Agent shall, after it receives notice from the Borrower, promptly
give each affected Lender notice of any refinancing, in whole or part, of any
Loan made by such Lender.
Section 2.12. Commitment Termination; Mandatory Prepayments; Mandatory
Commitment Reduction; Cash Collateral.
(a) Upon the Maturity Date, the Total Commitments shall be terminated
in full and the Borrower shall pay the New Revolving Loans in full.
(b) Unless otherwise provided herein, upon receipt by the Borrower of
any Net Cash Proceeds from the sale, lease or other disposition of Designated
Collateral (including, without limitation, any payments of principal on any
Pledged Notes (as defined in the Security and Pledge Agreement)) or any of its
other assets permitted under Section 6.3 (other than (x) the sale of Inventory
in the ordinary course of business, (y) the sale or lease of assets subject to
the Lien granted to UBS pursuant to the documentation relating to the Real
Estate Financing or to the Liens granted to the Synthetic Lease Banks under the
Synthetic Lease Loan Documents solely to the extent that the Net Cash Proceeds
thereof are applied to repay the Real Estate Financing or the Synthetic Lease
Obligations, as the case may be and (z) transfers or sales of accounts pursuant
to any customer sales charge program of the type described in Section 5.9), then
100% of such Net Cash Proceeds shall be immediately paid to the Agent for the
account of the Lenders, and applied as provided in Section 2.12(g); provided,
that in the case of any fiscal year, the provisions of this subsection (b) shall
be applicable to the Net Cash Proceeds of assets other than Designated
Collateral only if and to the extent that the aggregate amount of such Net Cash
Proceeds received in such fiscal year exceeds $1,000,000.
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(c) The Borrower shall, from time to time until payment in full of the
Loans and the termination of this Agreement, within 10 days following the
receipt by the Borrower (or by the Agent as loss payee) of any payment of
proceeds of any insurance (other than business interruption insurance) required
to be maintained pursuant to this Agreement on account of each separate loss,
damage or injury in excess of $1,000,000 to any tangible property of the
Borrower or any of its Subsidiaries (unless no Default or Event of Default shall
have occurred and be continuing and such proceeds (or any portion thereof) shall
have been expended or irrevocably committed by the Borrower to repair or replace
such property within 24 months of such loss, damage or injury and the Borrower
shall have furnished to the Agent evidence satisfactory to the Agent of such
expenditure or commitment and shall have certified to the Agent that such
proceeds (or such proceeds together with other funds available to the Borrower)
are sufficient to repair or replace such property, pending which the Agent shall
hold such proceeds), apply or, to the extent the Agent is loss payee under any
insurance policy, irrevocably direct the Agent to apply, an amount equal to 100%
(or such lesser percentage which represents that portion of such proceeds not
expended or committed pursuant to the immediately preceding parenthetical
phrase) of such insurance proceeds as provided in Section 2.12(g); provided,
that if an Event of Default shall have occurred and be continuing, all proceeds
of insurance required to be maintained pursuant to this Agreement which would
otherwise be payable to the Borrower shall be paid to the Agent and held or
applied pursuant to Section 7.2; provided, however, that with respect to
tangible property subject to any Lien permitted under this Agreement, no such
prepayment or reduction shall be required to the extent that this Section would
require an application of insurance proceeds that would violate or breach any of
the provisions of the instruments or documents under which such Lien arises.
(d) If the Borrower has Excess Cash Flow for any fiscal year,
commencing with the fiscal year ending on or about November 30, 1998, then on
the earlier of the date of delivery by the Borrower to the Lenders of the
financial statements required to be delivered pursuant to Section 5.1(a)
covering such fiscal year and 90 days after the end of such fiscal year of the
Borrower, 65% of such Excess Cash Flow shall be paid to the Agent and applied in
accordance with Section 2.12(g). Concurrently with the making of each such
prepayment, the Borrower shall deliver to the Agent a certificate substantially
in the form of Exhibit H (an "Excess Cash Flow Certificate") of the chief
financial officer of the Borrower setting forth in reasonable detail the
calculation of Excess Cash Flow for the fiscal year as to which such prepayment
was computed. The remaining 35% of such Excess Cash Flow may be retained by the
Borrower.
(e) If the Borrower incurs any Permitted Refinancing Debt, the
Borrower shall, not later than the second Business Day after the incurrence
thereof, pay to the Agent an amount equal to the excess, if any, of the Net Cash
Proceeds of such Permitted Refinancing Debt over the aggregate amount of the
Debt so refinanced, which excess Net Cash Proceeds shall be applied as provided
in Section 2.12(g).
(f) If the Borrower shall undertake any sale of equity securities of
the Borrower, not later than the second Business Day after receipt of the
proceeds of such sale, 65% of the Net Cash Proceeds thereof shall be paid to the
Agent for the account of the Lenders and applied as provided in
43
Section 2.12(g). Concurrently with the making of such prepayment, the Borrower
shall deliver to the Agent a statement detailing the calculation of the
prepayment due hereunder. The remaining 35% of such Net Cash Proceeds may be
retained by the Borrower.
(g) If, contemporaneously with the payment of any amounts required
under Sections 2.12(b), 2.12(c), 2.12(d), 2.12(e) or 2.12(f), the Borrower shall
have Required Inventory and no Default or Event of Default shall have occurred
and be continuing, the Borrower shall certify to that effect in an Inventory
Compliance Certificate concurrently delivered by the Borrower to the Agent
substantially in the form of Exhibit M hereto, and the amounts paid under such
Sections shall be applied, first, to the prepayment of the principal of the New
Term Loans in the inverse order of maturity and second, to the permanent
prepayment of the principal of the New Revolving Loans (together with an
automatic and irrevocable reduction of the Total Commitments in an equal
amount).
If the Borrower shall not have Required Inventory or a Default or
Event of Default shall have occurred and be continuing, then the amounts paid
under Section 2.12(b), 2.12(c), 2.12(d), 2.12(e) or 2.12(f) shall be applied in
accordance with Section 7.2.
(h) If at any time the sum of the aggregate outstanding New Revolving
Loans plus the aggregate Standby Letter of Credit Outstandings plus the
Documentary Reserve exceed the Total Commitments then in effect, the Borrower
shall immediately first prepay the New Revolving Loans in an aggregate amount
equal to such excess and second cash collateralize the Letters of Credit by
depositing into the Letter of Credit Accounts (pro rata on the basis of the
Letter of Credit Outstandings of the respective Fronting Banks), an amount equal
to 105% of the amount by which the Letters of Credit (including any subsequent
increases in the principal amounts thereof pursuant to provisions of such
Letters of Credit as then in effect) exceed the Total Commitments and, if at any
time while any New Revolving Loans are outstanding, the Inventory Compliance
Certificate delivered pursuant to Section 2.12(g) does not show that the
Borrower has Required Inventory, the Borrower shall prepay all outstanding New
Revolving Loans on the next Business Day.
(i) Each prepayment of the Loans pursuant to this Section shall be
accompanied by payment of accrued and unpaid interest on the amount prepaid to
the date of prepayment and any amounts payable pursuant to Section 2.13. (1)
Section 2.13. Optional Prepayment of Loans; Reimbursement of Lenders.
(a) Subject to the prior payment in full of any New Revolving Loans at
the time outstanding, the Borrower shall have the right at any time and from
time to time to prepay any New Term Loans, in whole or in part, (x) with respect
to Eurodollar Loans, upon at least three Business Days' prior written, telex or
facsimile notice to the Agent and (y) with respect to ABR Loans on the same
Business Day if written, telex or facsimile notice is received by the Agent
prior to 12:00 noon, New York City time, and thereafter upon at least one
Business Days prior written, telex or facsimile notice to the Agent; provided,
that (i) with respect to Eurodollar Loans, each such partial prepayment shall be
in integral multiples of $5,000,000, (ii) with respect to ABR Loans, each such
partial
44
prepayment shall be in integral multiples of $1,000,000, (iii) no prepayment of
Eurodollar Loans shall be permitted pursuant to this Section other than on the
last day of an Interest Period applicable thereto unless the Borrower pays
breakage costs as provided in Section 2.13(b)(i), and (iv) no partial prepayment
of a Borrowing of Eurodollar Loans shall result in the aggregate principal
amount of the Eurodollar Loans remaining outstanding pursuant to such Borrowing
being less than $5,000,000. Each notice of prepayment shall specify the
prepayment date, the principal amount of the Loans to be prepaid (and, in the
case of Eurodollar Loans, the Borrowing or Borrowings pursuant to which made),
shall be irrevocable and shall commit the Borrower to prepay such Loan by the
amount and on the date stated therein. The Agent shall, promptly after receiving
notice from the Borrower hereunder, notify each New Term Lender of the principal
amount of the New Term Loans held by such New Term Lender which are to be
prepaid, the prepayment date and the manner of application of the prepayment.
(b) The Borrower 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, refinancing with ABR Loans) of any Eurodollar 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
Borrower delivers a Notice of Borrowing under Section 2.2(b) in respect of
Eurodollar Loans, such Loans are not made on the first day of the Interest
Period specified in such Notice of Borrowing for any reason other than a breach
by such Lender of its obligations hereunder. 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 LIBOR 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 with ABR Loans 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 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. Each Lender shall
deliver to the Borrower from time to time one or more certificates setting forth
the amount of such loss as determined by such Lender (which shall be conclusive
absent manifest error).
(c) In the event the Borrower fails to prepay any Loan on the date
specified in any prepayment notice delivered pursuant to Section 2.13(a), the
Borrower on demand by any Lender shall pay to the Agent for the account of such
Lender any amounts required to compensate such Lender for any 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, but without duplication of any amounts paid
under Section 2.13(b). Each Lender shall deliver to the Borrower from time to
time one or more certificates setting forth the amount of such loss as
determined by such Lender (which shall be conclusive absent manifest error).
45
(d) Any partial prepayment of the New Term Loans by the Borrower
pursuant to this Section shall be applied to prepayment of the principal of the
New Term Loans in the inverse order of maturity.
Section 2.14. Reserve Requirements; Change in Circumstances.
(a) Notwithstanding any other provision herein, if after the date of
this Agreement any change in applicable law or regulation or in the
interpretation or administration thereof by any Governmental Authority charged
with the interpretation or administration thereof (whether or not having the
force of law) shall change the basis of taxation of payments to any Lender of
the principal of or interest on any Eurodollar Loan made by such Lender or any
fees or other amounts payable hereunder (other than changes in respect of Taxes,
Other Taxes and taxes imposed on, or measured by, the net income or overall
gross receipts or franchise taxes of such Lender by the jurisdiction in which
such Lender has its principal office or in which the applicable Eurodollar
Lending Office for such Eurodollar Loan is located or by any political
subdivision or taxing authority therein, or by any other jurisdiction or by any
political subdivision or taxing authority therein other than a jurisdiction in
which such Lender would not be subject to tax but for the execution and
performance of this Agreement), or shall impose, modify or deem applicable any
reserve, special deposit or similar requirement against assets of, deposits with
or for the account of or credit extended by such Lender (except any such reserve
requirement which is reflected in the Adjusted LIBOR Rate) or shall impose on
such Lender or the London interbank market any other condition affecting this
Agreement or the Eurodollar Loans made by such Lender, and the result of any of
the foregoing shall be to increase the cost to such Lender of making or
maintaining any Eurodollar Loan or to reduce the amount of any sum received or
receivable by such Lender hereunder or under the Notes (whether of principal,
interest or otherwise) by an amount deemed by such Lender to be material, then
the Borrower will pay to such Lender in accordance with paragraph (c) below such
additional amount or amounts as will compensate such Lender for such additional
costs incurred or reduction suffered.
(b) If any Lender shall have determined that the applicability of any
change in any law, rule, regulation or guideline adopted pursuant to or arising
out of the July 1988 report of the Basel Committee on Banking Regulations and
Supervisory Practices entitled "International Convergence of Capital Measurement
and Capital Standards", or the adoption or effectiveness after the date hereof
of any law, rule, regulation or guideline regarding capital adequacy, or any
change in any of the foregoing or in the interpretation or administration of any
of the foregoing by any Governmental Authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Lender (or any Lending Office of such Lender) or any Lender's holding
company with any request or directive regarding capital adequacy (whether or not
having the force of law) of any such authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on such
Lender's capital or on the capital of such Lender's holding company, if any, as
a consequence of this Agreement, the Loans made by such Lender pursuant hereto,
such Lender's Commitment hereunder or the issuance of, or participation in, any
Letter of Credit by such Lender to a level below that which such Lender or such
Lender's holding company could have achieved but for such adoption, change or
compliance (taking into account such
46
Lender's policies and the policies of such Lender's holding company with respect
to capital adequacy) by an amount deemed by such Lender to be material, then
from time to time the Borrower shall pay to such Lender such additional amount
or amounts as will compensate such Lender or such Lender's holding company for
any such reduction suffered.
(c) A certificate of each Lender setting forth such amount or amounts
as shall be necessary to compensate such Lender or its holding company as
specified in paragraph (a) or (b) above, as the case may be, shall be delivered
to the Borrower and shall be conclusive absent manifest error. The Borrower
shall pay each Lender the amount shown as due on any such certificate delivered
to it within 10 days after its receipt of the same. Any Lender receiving any
such payment shall promptly make a refund thereof to the Borrower if the law,
regulation, guideline or change in circumstances giving rise to such payment is
subsequently deemed or held to be invalid or inapplicable.
(d) Failure on the part of any Lender to demand compensation for any
increased costs or reduction in amounts received or receivable or any reduction
in return on capital with respect to any period shall not constitute a waiver of
such Lender's right to demand compensation with respect to such period or any
other period. The protection of this Section shall be available to each Lender
regardless of any possible contention of the invalidity or inapplicability of
the law, rule, regulation, guideline or other change or condition which shall
have occurred or been imposed.
Section 2.15. Change in Legality.
(a) Notwithstanding anything to the contrary contained elsewhere in
this Agreement, if (x) any change in any law or regulation or in the
interpretation thereof by any Governmental Authority charged with the
administration thereof shall make it unlawful for a Lender to make or maintain a
Eurodollar Loan or to give effect to its obligations as contemplated hereby with
respect to a Eurodollar Loan or (y) at any time any Lender determines that the
making or continuance of any of its Eurodollar 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 such
market, then, by written notice to the Borrower, such Lender may (i) declare
that Eurodollar Loans will not thereafter be made by such Lender hereunder,
whereupon any request by the Borrower for a Eurodollar Borrowing shall, as to
such Lender only, be deemed a request for an ABR Loan unless such declaration
shall be subsequently withdrawn; and (ii) require that all outstanding
Eurodollar Loans made by it be converted to ABR Loans, in which event all such
Eurodollar Loans shall be automatically converted to ABR Loans as of the
effective date of such notice as provided in paragraph (b) below. In the event
any Lender shall exercise its rights under clause (i) or (ii) of this paragraph
(a), all payments and prepayments of principal which would otherwise have been
applied to repay the Eurodollar Loans that would have been made by such Lender
or the converted Eurodollar Loans of such Lender shall instead be applied to
repay the ABR Loans made by such Lender in lieu of, or resulting from the
conversion of, such Eurodollar Loans.
(b) For purposes of this Section, a notice to the Borrower by any
Lender pursuant to paragraph (a) above shall be effective, if any Eurodollar
Loans shall then be outstanding, on the last
47
day of the then-current Interest Period
for such Eurodollar Loans (if lawful); otherwise, such notice shall be effective
on the date of receipt by the Borrower.
Section 2.16. Pro Rata Treatment, etc. All payments and repayments of
principal and interest in respect of the Loans (except as provided in Sections
2.14 and 2.15) shall be made pro rata among the relevant Lenders in accordance
with the then outstanding principal amount of the relevant Loans held by such
Lenders hereunder and all payments of Commitment Fees and Letter of Credit Fees
(other than those payable to a Fronting Bank) shall be made pro rata among the
New Revolving Lenders in accordance with their Commitments. All payments by the
Borrower hereunder and under the Notes shall be (i) net of any tax applicable to
the Borrower and (ii) made in Dollars in immediately available funds at the
office of the Agent by 12:00 noon, New York City time, on the date on which such
payment shall be due. Interest in respect of any Loan hereunder shall accrue
from and including the date of such Loan to but excluding the date on which such
Loan is paid in full or converted to a Loan of a different Type.
Section 2.17. Taxes.
(a) Any and all payments by the Borrower hereunder and under the Notes
shall be made free and clear of and without deduction for any and all current or
future taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding (i) taxes imposed on or measured by
the net income or overall gross receipts of the Agent or any Lender (or any
transferee or assignee thereof, including a participation holder (any such
entity being called a "Transferee")) and franchise taxes imposed on the Agent or
any Lender (or Transferee) by the United States or any jurisdiction under the
laws of which the Agent or any such Lender (or Transferee) is organized or in
which the applicable Lending Office of any such Lender (or Transferee) is
located or any political subdivision thereof or by any other jurisdiction or by
any political subdivision or taxing authority therein other than a jurisdiction
in which the Agent or such Lender would not be subject to tax but for the
execution and performance of this Agreement and (ii) taxes, levies, imposts,
deductions, charges or withholdings ("Amounts") with respect to payments
hereunder or under the Notes to a Lender (or Transferee) in accordance with laws
in effect on the later of the date of this Agreement and the date such Lender
(or Transferee) becomes a Lender (or Transferee, as the case may be), but not
excluding, with respect to such Lender (or Transferee), any increase in such
Amounts solely as a result of any change in such laws occurring after such later
date or any Amounts that would not have been imposed but for actions (other than
actions contemplated by this Agreement or the Notes) taken by the Borrower after
such later date (all such nonexcluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities being hereinafter referred to as "Taxes").
If the Borrower shall be required by law to deduct any Taxes from or in respect
of any sum payable hereunder to the Lenders (or any Transferee) or the Agent,
(i) the sum payable shall be increased by the amount necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section) such Lender (or Transferee) or the Agent (as
the case may be) shall receive an amount equal to the sum it would have received
had no such deductions been made, (ii) the Borrower shall make such deductions
and (iii) the Borrower shall pay the full amount deducted to the relevant taxing
authority or other Governmental Authority in accordance with applicable law.
48
(b) In addition, the Borrower agrees to pay any current or future
stamp or documentary taxes or any other excise or property taxes, charges,
assessments or similar levies that arise from any payment made hereunder or from
the execution, delivery or registration of, or otherwise with respect to, this
Agreement or any other Loan Document (hereinafter referred to as "Other Taxes").
(c) The Borrower will indemnify each Lender (or Transferee) and the
Agent for the full amount of Taxes and Other Taxes paid by such Lender (or
Transferee) or the Agent, as the case may be, and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted by
the relevant taxing authority or other Governmental Authority. Such
indemnification shall be made within 30 days after the date any Lender (or
Transferee) or the Agent, as the case may be, makes written demand therefor. If
a Lender (or Transferee) or the Agent shall become aware that it is entitled to
receive a refund in respect of Taxes or Other Taxes as to which it has been
indemnified by the Borrower pursuant to this Section, it shall promptly notify
the Borrower of the availability of such refund and shall, within 30 days after
receipt of a request by the Borrower, apply for such refund at the Borrower's
expense. If any Lender (or Transferee) or the Agent receives a refund in respect
of any Taxes or Other Taxes as to which it has been indemnified by the Borrower
pursuant to this Section, it shall promptly notify the Borrower of such refund
and shall, within 30 days after receipt of a request by the Borrower (or
promptly upon receipt, if the Borrower has requested application for such refund
pursuant hereto), repay such refund to the Borrower (to the extent of amounts
that have been paid by the Borrower under this Section with respect to such
refund plus interest that is received by the Lender (or Transferee) or the Agent
as part of the refund), net of all out-of-pocket expenses of such Lender (or
Transferee) or the Agent and without additional interest thereon; provided, that
the Borrower, upon the request of such Lender (or Transferee) or the Agent,
agrees to return such refund (plus penalties, interest or other charges) to such
Lender (or Transferee) or the Agent in the event such Lender (or Transferee) or
the Agent is required to repay such refund. Nothing contained in this subsection
(c) shall require any Lender (or Transferee) or the Agent to make available any
of its tax returns (or any other information relating to its taxes that it deems
to be confidential).
(d) Within 30 days after the date of any payment of Taxes or Other
Taxes withheld by the Borrower in respect of any payment to any Lender (or
Transferee) or the Agent, the Borrower will furnish to the Agent, at its address
referred to on the signature pages hereof, the original or a certified copy of a
receipt evidencing payment thereof.
(e) Without prejudice to the survival of any other agreement contained
herein, the agreements and obligations contained in this Section shall survive
the payment in full of the principal of and interest on all Loans made hereunder
and all other amounts due hereunder and the termination of the Total
Commitments.
(f) Each Lender (or Transferee) that is organized under the laws of a
jurisdiction outside the United States shall, if legally able to do so, prior to
the immediately following due date of any payment by the Borrower hereunder,
deliver to the Borrower such certificates, documents or other
49
evidence, as required by the Code or Treasury Regulations issued pursuant
thereto, including (A) Internal Revenue Service Form W-8 or W-9 and (B) Internal
Revenue Service Form 1001 or Form 4224 and any other certificate or statement of
exemption required by Treasury Regulation Section 1.1441-1, 1.1441-4 or
1.1441-6(c) or any subsequent version thereof or successors thereto, properly
completed and duly executed by such Lender (or Transferee) establishing that
such payment is (i) not subject to United States Federal withholding tax under
the Code because such payment is effectively connected with the conduct by such
Lender (or Transferee) of a trade or business in the United States or (ii)
totally exempt from United States Federal withholding tax or subject to a
reduced rate of such tax under a provision of an applicable tax treaty. Unless
the Borrower and the Agent have received forms or other documents satisfactory
to them indicating that such payments hereunder or under the Notes are not
subject to United States Federal withholding tax or are subject to such tax at a
rate reduced by an applicable tax treaty, the Borrower or the Agent shall
withhold taxes from such payments at the applicable statutory rate.
(g) The Borrower shall not be required to pay any additional amounts
to any Lender (or Transferee) in respect of United States Federal withholding
tax pursuant to subsection (a) above if the obligation to pay such additional
amounts would not have arisen but for a failure by such Lender (or Transferee)
to comply with the provisions of subsection (f) above.
(h) Any Lender (or Transferee) claiming any additional amounts payable
pursuant to this Section shall use reasonable efforts (consistent with legal and
regulatory restrictions) to file any certificate or document requested by the
Borrower or to change the jurisdiction of its applicable Lending Office if the
making of such a filing or change would avoid the need for or reduce the amount
of any such additional amounts that may thereafter accrue and would not, in the
sole determination of such Lender, be otherwise materially disadvantageous to
such Lender (or Transferee).
Section 2.18. Certain Fees. The Borrower shall pay to the Agent, for the
respective accounts of the Agent, the Underwriters and the New Revolving
Lenders, the fees set forth in the Fee Letter.
Section 2.19. Commitment Fee. The Borrower shall pay to the New Revolving
Lenders a commitment fee (the "Commitment Fee") for the period commencing on the
Effective Date and ending on the Maturity Date for the New Revolving Loans or
the earlier date of the termination in full of the Commitment, computed (on the
basis of the actual number of days elapsed over a year of 360 days) at the rate
of one-half of one percent (1/2%) per annum on the average daily Unused Total
Commitment. Such Commitment Fee, to the extent then accrued, shall be payable
(x) monthly, in arrears, on the last calendar day of each month, (y) on the
Maturity Date for the New Revolving Loans and (z) as provided in Section 2.9,
upon any reduction or termination in whole or in part of the Total Commitments.
Section 2.20. Letter of Credit Fees. The Borrower shall pay with respect to
each Letter of Credit (i) to the Agent on behalf of the New Revolving Lenders a
fee calculated (on the basis of the actual number of days elapsed over a year of
360 days) at the rate of (x) two and one-half percent (2-1/2%) per annum on the
daily average Standby Letter of Credit Outstandings and (y) one-half of one
50
percent (1/2%) per annum on the daily average Documentary Letter of Credit
Outstandings, (ii) to each Fronting Bank, such Fronting Bank's fees for Letter
of Credit issuance, amendment and processing referred to in Section 2.5(e). In
addition, the Borrower agrees (i) to pay the Standby Letter of Credit Fronting
Bank for its account a fronting fee in respect of each Letter of Credit issued
by the Standby Letter of Credit Fronting Bank, for the period from and including
the date of issuance of such Letter of Credit to and including the date of
termination of such Letter of Credit, computed at a rate of 0.125% per annum on
the daily average Standby Letter of Credit Outstandings and (ii) if the
Documentary Letter of Credit Bank so elects, to pay the Documentary Letter of
Credit Fronting Bank a fronting fee in respect of Documentary Letters of Credit,
computed at a rate to be determined by such Fronting Bank from time to time in
its judgment reasonably exercised. Accrued fees described in clause (i) of the
first sentence of this paragraph in respect of each Letter of Credit shall be
due and payable monthly in arrears on the last calendar day of each month and on
the Maturity Date of the New Revolving Loans, or such earlier date as the Total
Commitments are terminated and, on each such payment date, the respective
Fronting Banks shall advise the Agent of their daily average Letter of Credit
Outstandings since the previous payment date. Accrued fees described in the
second sentence or in clause (ii) of the first sentence of this Section in
respect of each Letter of Credit shall be payable to the Fronting Banks at times
to be determined by the relevant Fronting Bank in its judgment reasonably
exercised.
Section 2.21. Nature of Fees. All Fees shall be paid on the dates due in
immediately available funds. Other than Fees payable to the Fronting Banks
pursuant to Section 2.20, all fees shall be paid to the Agent for the respective
accounts of the Agent and the New Revolving Lenders, as provided herein and in
the letter described in Section 2.18. Once paid, none of the Fees shall be
refundable under any circumstances.
Section 2.22. Right of Set-Off. Upon the occurrence and during the
continuance of any Event of Default, the Agent and each of the other Secured
Parties 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 any and all
other indebtedness at any time owing by such Secured Party to or for the credit
or the account of the Borrower against any and all of the obligations of the
Borrower now or hereafter existing under the Loan Documents, irrespective of
whether or not such Secured Party shall have made any demand under any Loan
Document and although such obligations may be unmatured. Each Secured Party
agrees promptly to notify the Borrower after any such set-off and application
made by such Secured Party; provided, that the failure to give such notice shall
not affect the validity of such set-off and application. Subject to Section
2.23, the rights of each Secured Party under this Section are in addition to
other rights and remedies which such Secured Party may have upon the occurrence
and during the continuance of any Event of Default.
Section 2.23. Sharing of Setoffs. Each Secured Party agrees that if it
shall, through the exercise of a right of banker's lien, setoff or counterclaim
against the Borrower or any Subsidiary, 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 Secured
Party
51
under any applicable bankruptcy, insolvency or other similar law, or otherwise,
obtain payment in respect of its Secured Obligations, such payment shall be
applied as follows: (a) if such Secured Party is a New Revolving Lender and
there are Revolving Obligations outstanding, and the payment received is of a
proportion of the aggregate amount of the Revolving Obligations held by it which
is greater than that received by any other New Revolving Lender in respect of
the aggregate amount of Revolving Obligations held by such other New Revolving
Lender, the New Revolving Lender receiving such proportionately greater payment
shall purchase such participations in the Revolving Obligations held by the
other New Revolving Lenders and such other adjustments shall be made, as may be
required so that all such payments with respect to the Revolving Obligations
held by the New Revolving Lenders owing to them shall be shared by the New
Revolving Lenders pro rata; (b) if such Secured Party is not a New Revolving
Lender and there are Revolving Obligations outstanding (other than Revolving
Obligations in which participations have been purchased pursuant to this
Section), such Secured Party shall purchase a subordinated participation in the
Revolving Obligations in the amount of such payment (provided, that such Secured
Party shall not be entitled to receive any payments in respect of such
participation until all Revolving Obligations in which participations have not
been purchased pursuant to this Section shall have been paid in full) and shall
pay over the amount received to the Agent for distribution to the New Revolving
Lenders pro rata until all amounts owing in respect of the Revolving Obligations
shall have been paid or purchased in full (and payments received in respect of
such participation shall be subject to sharing pursuant to clause (c) of this
sentence); and (c) if no Revolving Obligations are outstanding (other than
Revolving Obligations in which participations have been purchased pursuant to
this Section), and the payment received is of a proportion of the aggregate
amount of principal and interest due with respect to the New Term Loans held by
it or other Secured Obligations owing to it which is greater than the proportion
received by any other such Secured Party in respect of the New Term Loans held
by such other Secured Party and the other Secured Obligations owing to it, the
Secured Party receiving such proportionately greater payment shall purchase such
participations in the New Term Loans held by the other Secured Parties and/or
the other Secured Obligations owing to them, and such other adjustments shall be
made, as may be required so that all such payments of principal and interest
with respect to the New Term Loans held by the New Term Lenders or the other
Secured Obligations owing to the Secured Parties shall be shared by the Secured
Parties pro rata; provided, that except as provided in clauses (a) and (b) of
this Section, nothing in this Section shall impair the right of any Secured
Party to exercise any right of set-off or counterclaim it may have and to apply
the amount subject to such exercise to the payment of indebtedness of the
Borrower other than its indebtedness under the Notes or the other Secured
Obligations owing to it; provided, that if any such non-pro rata payment is
thereafter recovered or otherwise set aside such purchase of participations
shall be rescinded (without interest); provided further, that notwithstanding
anything to the contrary contained in this Section, (x) each Cash Management
Bank shall be entitled to retain any payments it receives in respect of its Cash
Management Obligations as a result of exercising any right of set-off, (y) each
Fronting Bank shall be entitled to retain any payments it receives in respect of
unreimbursed amounts drawn under its Letters of Credit as a result of exercising
any right of set-off against its Letter of Credit Account and (z) the Hedging
Bank shall be entitled to retain any payments it receives in respect of the
Hedging Obligations as a result of exercising any right of set-off; and provided
further, that all references to "Secured Obligations" in this Section shall mean
all Secured Obligations other than pursuant to Sections 2.14,
52
2.17, 2.18, 8.6, 9.5 and 9.6 and any incremental Secured Obligations arising
pursuant to Section 2.15. The Borrower expressly consents to the foregoing
arrangements and agrees that any Lender holding (or deemed to be holding) a
participation in the unpaid amount of a Secured Obligation may exercise any and
all rights of banker's lien, setoff (subject, in each case, to the same notice
requirements as pertain to clause (iv) of the remedial provisions of Section
7.1) or counterclaim with respect to any and all moneys owing by the Borrower to
such Lender, as fully as if such Lender held a Note and was the original obligee
thereon, in the amount of such participation.
Section 2.24. Security Interest in Letter of Credit Accounts. The Borrower
hereby assigns and pledges to the Agent, for its benefit and for the ratable
benefit of the Secured Parties, and hereby grants to the Agent and the Fronting
Banks, for their respective benefits and for the ratable benefit of the Secured
Parties, a first priority security interest, senior to all other Liens, if any,
in all of the Borrower's right, title and interest in and to the Letter of
Credit Accounts and any direct investment of the funds contained therein. A
Fronting Bank's security interest in the Letter of Credit Account maintained by
it shall be prior to the security interest in favor of the Agent and the other
Secured Parties, and shall not be subject to the rights of any Person other than
the Agent, the other Secured Parties and the Borrower so long as there are any
Letter of Credit Outstandings or such Fronting Bank is obligated to issue
Letters of Credit.
Section 2.25. Release of Secured Parties. For the benefit of the Secured
Parties, the Borrower hereby expressly releases and discharges the Secured
Parties and the Secured Parties' direct and indirect Subsidiaries and
Affiliates, together with each of their present and former shareholders, present
and former officers, directors, agents and employees and each of their present
and former attorneys, advisors, consultants, attorneys-in-fact, experts and
other professional persons and representatives whether presently or formerly
retained by attorneys for the Secured Parties or by the Secured Parties
themselves, and the predecessors, successors and assigns of all or any of them
(collectively, the "Releasees") from any and all manner of actions, claims,
causes of action, suits, proceedings, debts, dues, sums of money, accounts,
accountings, reckonings, demands, liabilities, losses, damages, acts, omissions,
misfeasances, malfeasances, promises, breaches of contract, breaches of duty,
breaches of relationship, and all other controversies of every type, kind,
nature, description or character (all of the foregoing, collectively, the
"Claims") whatsoever, whether known or unknown, foreseen or unforeseen,
liquidated or unliquidated, and whether based upon facts now known or unknown,
direct or derivative, in law, admiralty, equity or bankruptcy, against the
Releasees, or any of them, which the Borrower, its Subsidiaries or their
Affiliates and the predecessors, successors or assigns of any or all of them,
ever jointly or individually had, now have or hereafter can, shall or may have
for, upon, or by reason of any matter, cause or thing whatsoever from the
beginning of the world to and including the Effective Date, directly or
indirectly arising from or relating in any way to any and all transactions,
relationships, or dealings relating in any way, directly or indirectly, to the
Pre-Petition Credit Agreement, the DIP Credit Agreement and any of the other
Existing Agreements, the documents and agreements setting forth the
53
cash management arrangements with the Cash Management Banks and the Hedging
Agreement, as well as any agreements entered into, or notes, or other documents
executed, in connection with the Pre-Petition Credit Agreement, the DIP Credit
Agreement, any of the other Existing Agreements, the documents and agreements
setting forth the cash management arrangements with the Cash Management Banks
and the Hedging Agreement or as an adjunct or supplement thereto, and any prior
agreements pursuant to which the Secured Parties (or any of them or their
respective predecessors or successors) made (or did not make) loans or
extensions of credit or any services or accommodations of any type or kind
whatsoever available to or on behalf of the Borrower or the Debtor.
SECTION 3. REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to each of the Agent, the
Underwriters, the Fronting Banks, the Lenders and the other Secured Parties as
follows:
Section 3.1. Organization and Authority. The Borrower (i) as of the
Effective Date, is a corporation duly organized and validly existing under the
laws of the State of Delaware and is duly qualified as a foreign corporation and
is in good standing in each jurisdiction in which the failure to so qualify
would have a Material Adverse Effect, (ii) has the requisite corporate power and
authority to effect the transactions contemplated hereby and by the other Loan
Documents to which it is a party, and (iii) has all requisite corporate power
and authority and the legal right to own, pledge, mortgage and operate its
properties, and to conduct its business as now or currently proposed to be
conducted.
Section 3.2. Due Execution. The execution, delivery and performance by the
Borrower of each of the Loan Documents to which it is a party (i) are within the
Borrower's corporate powers, have been duly authorized by all necessary
corporate action and do not (A) contravene the charter or by-laws of the
Borrower, (B) violate any law (including, without limitation, the Securities
Exchange Act of 1934) or regulation (including, without limitation, Regulations
G, T, U or X of the Board, or any order or decree of any court or governmental
instrumentality, (C) violate or result in a breach of, or constitute a default
under, any material indenture, mortgage or deed of trust entered into as of the
Effective Date or any material lease, agreement or other instrument entered into
as of the Effective Date binding on the Borrower, any of its Subsidiaries or any
of its properties, or (D) result in or require the creation or imposition of any
Lien upon any of the property of the Borrower or any of its Subsidiaries other
than the Liens granted pursuant to this Agreement and the other Loan Documents;
and do not require the consent, authorization by or approval of or notice to or
filing or registration with any Governmental Authority other than the entry of
the Confirmation Order. This Agreement has been duly executed and delivered by
the Borrower. This Agreement and each of the other Loan Documents to which the
Borrower is a party, on and after the Effective Date, will be legal, valid and
binding obligations of the Borrower, enforceable against the Borrower, in
accordance with their respective terms.
Section 3.3. Statements Made. The information that has been delivered in
writing by the Borrower to any of the Secured Parties or to the Bankruptcy Court
in connection with any Loan Document, and any financial statement delivered
pursuant hereto or thereto (other than to the extent that any such statements
constitute projections), contains no untrue statement of a material fact and
does not omit to state a material fact necessary to make such statements not
misleading; and, to the extent that any such information constitutes
projections, such projections were prepared in good faith
54
on the basis of assumptions, methods, data, tests and information believed by
the Borrower to be reasonable at the time such projections were furnished.
Section 3.4. Financial Statements. The Borrower has furnished the Lenders
with copies of (i) the audited consolidated financial statements of the Borrower
and its Consolidated Subsidiaries for the fiscal year ended November 30, 1996,
accompanied by an unqualified opinion of KPMG Peat Marwick LLP and (ii) the
unaudited consolidated financial statements of the Borrower and its Consolidated
Subsidiaries for the nine month period ended August 30, 1997. Such financial
statements present fairly the financial condition, the results of operations and
cash flows of the Borrower and its Consolidated Subsidiaries on a consolidated
basis as of such dates and for such periods; such balance sheets and the notes
thereto disclose all liabilities, direct or contingent, of the Borrower and its
Consolidated Subsidiaries as of the dates thereof required to be disclosed by
GAAP, and such financial statements were prepared in a manner consistent with
GAAP, subject (in the case of such nine month statements) to normal year end
adjustments. No Material Adverse Effect has occurred since August 30, 1997.
Section 3.5. Ownership. As of the date hereof, Lumberjack, which is
wholly-owned by the Borrower, is the only direct or indirect Subsidiary of the
Borrower, is inactive and has no significant assets.
Section 3.6. Liens. Except for Liens existing on the Effective Date as
reflected on Schedule 3.6, there are no Liens of any nature whatsoever on any
assets of the Borrower other than: (i) Liens granted pursuant to the Existing
Agreements and the DIP Financing Order; (ii) Permitted Liens; and (iii) Liens
granted under the Loan Documents in favor of the Secured Parties. Neither the
Borrower nor its Subsidiaries is a party to any contract, agreement, lease or
instrument the performance of which, either unconditionally or upon the
happening of an event, will result in or require the creation of a Lien on any
assets of the Borrower or its Subsidiaries or otherwise result in a violation of
this Agreement other than the Liens granted to the Secured Parties as provided
for in this Agreement and the other Loan Documents.
Section 3.7. Compliance with Law. Neither the Borrower nor its Subsidiaries
is, to the best of the Borrower's knowledge, in violation of any Requirement of
Law, or in default with respect to any judgment, writ, injunction or decree of
any Governmental Authority the violation of which, or a default with respect to
which, would have a Material Adverse Effect.
Section 3.8. Insurance. All policies of insurance of any kind or nature
owned by or issued to the Borrower, including, without limitation, insurance
policies with respect to life, fire, theft, product liability, business
interruption, public liability, property damage, other casualty, employee
fidelity, workers' compensation, employee health and welfare, title, property
and liability insurance, are in full force and effect and are of a nature and
provide such coverage as is sufficient and as is customarily carried by
companies of the size and character of the Borrower.
55
Section 3.9. Use of Proceeds. The proceeds of the Loans shall be used (i)
to finance the Plan of Reorganization, (ii) for general working capital purposes
of the Borrower and (ii) for other general corporate purposes of the Borrower
(including, among such general corporate purposes, the making of Capital
Expenditures, subject to the limitations provided for in Section 6.4).
Section 3.10. Litigation. Except as set forth on Schedule 3.10, there are
no unstayed actions, suits or proceedings pending or, to the knowledge of the
Borrower, threatened against or affecting the Borrower, its Subsidiaries or any
of its properties, before any court or governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, which is
reasonably likely to be determined adversely to the Borrower and, if so
determined adversely to the Borrower, would have a Material Adverse Effect.
Section 3.11. Investment Company Act; etc. Neither the Borrower nor any of
its Subsidiaries will be after giving effect to the transactions contemplated
hereby or any Borrowing to be made or any Letter of Credit to be issued
hereunder (x) an "investment company" or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of 1940,
as amended or (y) subject to regulation under the Public Utility Holding Company
Act of 1935, the Federal Power Act or any foreign, federal or local statute or
regulation limiting its ability to incur indebtedness for money borrowed or
guarantee such indebtedness as contemplated hereby or by any of the other Loan
Documents.
Section 3.12. Tax Returns and Payments. The Borrower and each of its
Subsidiaries have filed all federal income tax returns and all other material
tax returns and reports, domestic and foreign, required to be filed by it and
have paid all material taxes, assessments, fees and other governmental charges
payable by it which have become due, other than those not yet delinquent. The
Borrower and each of its Subsidiaries have paid, or have provided adequate
reserves for the payment of, all material federal, state and foreign income
taxes applicable for all prior fiscal years and for the current fiscal year to
the date hereof. There is no proposed tax assessment against the Borrower or any
of its Subsidiaries which could, if the assessment were made, reasonably be
expected to have a Material Adverse Effect. The last closed tax year of the
Borrower and its Consolidated Subsidiaries is the fiscal year ended November 27,
1993.
Section 3.13. ERISA. (a) No ERISA Event has occurred or is expected to
occur with respect to any Plan in any fiscal year of the Borrower that would
result in any liability of the Borrower or any Subsidiary in excess, together
with the amount of all other liabilities of the Borrower and its Subsidiaries
which would result from all other ERISA Events that have occurred or are
expected to occur with respect to Plans during such fiscal year, of $3,000,000.
(b) Schedule B (Actuarial Information to the annual report (Form 5500
series)) most recently completed with respect to each Plan, copies of which have
been filed with the Internal Revenue Service and delivered to the Agent, is
complete and accurate in all material respects and to the best knowledge of the
Borrower represents a reasonable estimate of the funding status and financial
condition of such Plan as of the date of such report, and, since the date of
such Schedule B,
56
to the best knowledge of the Borrower there has been no change in such funding
status or financial condition that could reasonably be expected to have a
Material Adverse Effect.
(c) Neither the Borrower, nor any Subsidiary nor any ERISA Affiliate
of either of them has incurred, or is expected to incur, any Withdrawal
Liability to Multiemployer Plans in excess in any fiscal year of the Borrower,
of $3,000,000 in the aggregate for the Borrower, its Subsidiaries and the ERISA
Affiliates of any of them.
(d) Neither the Borrower, nor any Subsidiary nor any ERISA Affiliate
of either of them has received any notification that any Multiemployer Plan is
in reorganization or has been terminated, within the meaning of Title IV of
ERISA, and to the best knowledge of the Borrower, no Multiemployer Plan is
expected to be in reorganization or to be terminated within the meaning of Title
IV of ERISA, in either case where all such reorganization or terminations would
result in any liability in any fiscal year of the Borrower in excess of
$3,000,000 in the aggregate for the Borrower, its Subsidiaries and the ERISA
Affiliates of any of them.
(e) With respect to each Plan which is an "employee pension benefit
plan" within the meaning of Section 3(2) of ERISA and which is intended to
qualify under Section 401 of the Code, a favorable determination letter has been
received from the Internal Revenue Service stating that such Plan so qualifies,
and nothing has occurred since the date of the issuance of such determination
letter which would cause such Plan to cease to qualify under Section 401 of the
Code.
(f) None of the transactions contemplated by the Loan Documents or by
any Plan constitutes a prohibited transaction as such term is defined in Section
406 of ERISA or Section 4975 of the Code.
(g) Neither the Borrower, nor any Subsidiary, nor any ERISA Affiliate
of any of them, nor any fiduciary of any Plan, has engaged in any transaction in
violation of Section 404 of ERISA, which has resulted or could reasonably be
expected to result in any liability in excess of $3,000,000 in the aggregate for
the Borrower, its Subsidiaries and the ERISA Affiliates of any of them.
(h) Neither the Borrower, nor any Subsidiary, nor any ERISA Affiliate
of any of them, nor any Plan or fiduciary thereof, is a party to any litigation
relating to or seeking benefits from any such Plan, nor does there exist one or
more facts or events which could form the basis for any such litigation, where
such litigation could reasonably be expected to result in any liability in
excess of $3,000,000 in the aggregate for the Borrower, its Subsidiaries and the
ERISA Affiliates of any of them.
(i) No event has occurred, in connection with which the Borrower, any
Subsidiary or any ERISA Affiliate of any of them, could be subject to any
material liability under any statute, regulation or governmental order relating
to any Plan or pursuant to any obligation of the Borrower, any Subsidiary or any
ERISA Affiliate to indemnify any Person against any liability incurred under any
57
such statute, regulation or order as they relate to any such Plan, which could
reasonably be expected to result in any liability in excess of $3,000,000 in the
aggregate for the Borrower, its Subsidiaries and the ERISA Affiliates of any of
them.
(j) Except as set forth in Schedule 3.13 or as disclosed in the
Debtor's 1996 Annual Report, neither the Borrower, nor any Subsidiary, nor any
ERISA Affiliate of any of them, nor any welfare benefit plan maintained by the
Borrower, any Subsidiary or any ERISA Affiliate of any of them has any present
or future obligation to make any payment to or with respect to any present or
former employee, officer, director or agent of the Borrower, any Subsidiary, or
any ERISA Affiliate of any of them pursuant to any retiree medical benefit plan,
or other retiree welfare benefit plan (and the aggregate liability of the
Borrower, its Subsidiaries and the ERISA Affiliates of any of them in respect of
all obligations disclosed on Schedule 3.13 or in the Debtor's 1996 Annual Report
does not exceed $22,000,000), and no condition exists which would prevent the
Borrower, any Subsidiary or any ERISA Affiliate of any of them from amending or
terminating any such benefit plan or welfare benefit plan.
(k) Each welfare benefit plan which covers or has covered present or
former employees, officers, directors or agents of the Borrower, any Subsidiary,
or any ERISA Affiliate of any of them and which is a "group health plan" as
defined in Section 607(1) of ERISA, has been operated at all times in compliance
with provisions of Part 6 of Title I of ERISA and Sections 162(k) and 4980B of
the Code.
Section 3.14. Good Title to Properties. Each of the Borrower and its
Subsidiaries has good and marketable title to substantially all its properties
and assets, including, without limitation, the Collateral, subject to no Liens,
except such as would be permitted under Section 6.1.
Section 3.15. Trademarks, Patents, etc. Each of the Borrower and its
Subsidiaries possesses all the Trademarks, copyrights, patents, licenses, or
rights in any thereof, adequate in all material respects for the conduct of its
business as now conducted and presently proposed to be conducted, without
conflict with the rights or, to the best knowledge of the Borrower, any
presently claimed rights of others.
Section 3.16. Labor Matters. Neither the Borrower nor any Subsidiary has
experienced any strike, labor dispute, slowdown or work stoppage due to labor
disagreements which could reasonably be expected to have a Material Adverse
Effect, and to the best knowledge of the Borrower, there is no such strike,
dispute, slowdown or work stoppage threatened against the Borrower or any
Subsidiary.
Section 3.17. Evnvironmewntal Matters. To the best of the Borrower's
knowledge after due inquiry, except as set forth on Schedule 3.17:
(a) the Property does not contain any Hazardous Substance in amounts
or concentrations which (i) constitute a violation of, or (ii) could reasonably
give rise to liability under,
58
any Environmental Law except in either case insofar as such violation or
liability, or any aggregation thereof, could not reasonably be expected to
result in a Material Adverse Effect;
(b) the Property and all operations at the Property are in compliance,
and have in the last three years been in compliance, in all material respects
with all applicable Environmental Laws, and there is no contamination at or
under the Property, or violation of any Environmental Law with respect to the
Property or the operations at the Property, which could reasonably be expected
to result in a Material Adverse Effect;
(c) neither the Borrower nor any of its Subsidiaries has received any
notice of violation, alleged violation, noncompliance, liability or potential
liability regarding environmental matters or compliance with any Environmental
Law with regard to any of the Property or the operations at the Property, nor
does the Borrower or such Subsidiary have knowledge or reason to believe that
any such notice will be received or is being threatened except insofar as such
notice or threatened notice, or any aggregation thereof, does not involve a
matter or matters that could reasonably be expected to result in a Material
Adverse Effect;
(d) Hazardous Substances have not been transported or disposed of from
any of the Property in violation of, or in a manner or to a location which could
reasonably give rise to liability under, any Environmental Law, nor have any
Hazardous Substances been generated, treated, stored (other than materials
stored in the normal course of its retail business in accordance with all
applicable laws) or disposed of at, on or under any of the Property in violation
of, or in a manner that could reasonably give rise to liability under, any
applicable Environmental Law except insofar as any such violation or liability
referred to above, or any aggregation thereof, could not reasonably be expected
to result in a Material Adverse Effect;
(e) no judicial proceedings or governmental or administrative action
is pending or, to the knowledge of the Borrower after due inquiry, threatened,
under any Environmental Law to which the Borrower is or will be named as a party
with respect to the Property or the operations at the Property, nor are there
any consent decrees or other decrees, consent orders, administrative orders or
other orders, or other administrative or judicial requirements outstanding under
any Environmental Law with respect to the Property or such operations except
insofar as such proceeding, action, decree, order or other requirement, or any
aggregation thereof, could not reasonably be expected to result in a Material
Adverse Effect; and
(f) there has been no release or threat of release of any Hazardous
Substance at or from the Property, or arising from or related to the operations
of the Property in connection with the Property or otherwise in connection with
such operations in violation of or in amounts or in a manner that could
reasonably give rise to liability under any Environmental Law, except insofar as
any such violation or liability referred to above, or any aggregation thereof,
could not reasonably be expected to result in a Material Adverse Effect.
59
Section 3.18. Location and Divisions of the Borrower. As of the Effective
Date, all of the Borrower's stores, warehouses, distribution centers, offices,
headquarters and any other operating and organizational facilities and premises
are listed on Schedule 3.18. The Borrower uses each of the division names set
forth on Schedule 3.18 only in the states listed below each such name, and the
Borrower does not do business under any names other than its own and the names
of such divisions.
Section 3.19. Solvency. On and as of the Effective Date, after giving
effect to the restructuring of the Pre-Petition Term Loans, the Pre-Petition
Revolving Credit Loans, the DIP Revolving Credit Loans and the DIP Letters of
Credit and to all other debt of the Borrower pursuant to the Plan of
Reorganization (including the Loans incurred or to be incurred by the Borrower
and the Liens created, or to be created, in connection therewith): (a) the
Borrower has no reason to believe that any final judgments against the Borrower
or any affected Subsidiary in actions for money damages with respect to pending
or threatened litigation will be rendered at a time when, or in an amount such
that, the Borrower or such affected Subsidiary will be unable to satisfy any
such judgments promptly in accordance with their terms (taking into account the
maximum reasonable amount of such judgments in any such actions and the earliest
reasonable time at which such judgments might be rendered) and the cash
available to the Borrower and its Subsidiaries, after taking into account all
other anticipated uses of the cash of the Borrower and its Subsidiaries
(including the payments on or in respect of debt referred to in clause (c) of
this Section), is anticipated to be sufficient to pay all such judgments
promptly in accordance with their terms; (b) the sum of the present fair
saleable value of the assets of the Borrower and its Subsidiaries will exceed
the probable liability of the Borrower and its Subsidiaries on their respective
debts; (c) neither the Borrower nor any of its Subsidiaries will have incurred
or intends to, or believes that it will, incur debts beyond its ability to pay
such debts as such debts mature (taking into account the timing and amounts of
cash to be received by the Borrower and its Subsidiaries from any source, and of
amounts to be payable on or in respect of debts of the Borrower and its
Subsidiaries and the amounts referred to in clause (a) of this Section) and the
cash available to the Borrower and its Subsidiaries, after taking into account
all other anticipated uses of the cash of the Borrower and its Subsidiaries, is
anticipated to be sufficient to pay all such amounts on or in respect of debts
of the Borrower and its Subsidiaries, when such amounts are required to be paid;
and (d) the Borrower and each of its Subsidiaries will have sufficient capital
with which to conduct its present and proposed business and the property of the
Borrower and each of its Subsidiaries does not constitute unreasonably small
capital with which to conduct its present or proposed business. For purposes of
this Section, "debt" means any liability on a claim, and "claim" means (i) any
right to payment whether or not such right is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,
legal, equitable, secured or unsecured, or (ii) any right to an equitable remedy
for breach of performance if such breach gives rise to a payment, whether or not
such right is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed, undisputed, legal, equitable, secured or
unsecured. On the date of each Loan and the issuance of each Letter of Credit
(and after giving effect to all Loans and Letters of Credit outstanding as of
such date), the representations set forth in this Section shall be true and
correct. With respect to clauses (b) and (d) of this Section, with respect to
the Borrower, such representations and warranties are made to the best of the
knowledge of the Borrower, except that
60
such representations and warranties are made without qualification to the extent
that the untruth or inaccuracy of any such representation or warranty would
result in a Material Adverse Effect.
SECTION 4. CONDITIONS TO EFFECTIVENESS OF REORGANIZATION AND
EXTENSIONS OF CREDIT
Section 4.1. Conditions Precedent to Effectiveness of Reorganization,
Initial Loans and Initial Letters of Credit The effectiveness of (i) the
restructuring of the Borrower's obligations arising under the Pre-Petition
Credit Agreement and the DIP Credit Agreement and (ii) the obligations of the
Lenders to finance the Plan of Reorganization through the restructuring of such
obligations under the Pre-Petition Credit Agreement and the DIP Credit Agreement
and of the New Revolving Lenders to make the initial New Revolving Loans and of
the relevant Fronting Bank to issue the initial Letter of Credit, in which the
New Revolving Lenders shall participate, is subject to the following conditions
precedent, each of which shall have been satisfied or waived (except as
otherwise provided in this Section) by the Required Revolving Lenders and, in
the case of the conditions contained in Sections 4.1(b)(i) and (ii), (c), (e),
(f), (g), (h), (i) and (j), the Required Pre-Petition Lenders and all of the DIP
Lenders, and all of which shall have been satisfied or waived on or prior to
December 31, 1997, unless the Required Pre-Petition Lenders and all of the DIP
Lenders shall have agreed to extend such date:
(a) Supporting Documents. The Agent shall have received:
(i) a copy of the Borrower's certificate of incorporation,
certified as of a recent date by the Secretary of State of
Delaware;
(ii) a certificate of the Secretary of State of Delaware, dated
as of a recent date, as to the good standing of the Borrower
and as to the charter documents on file in the office of the
Secretary of State;
(iii)a certificate of the Secretary or an Assistant Secretary of
the Borrower, dated the date of the initial Loans or the
initial Letters of Credit hereunder, delivered as part of
the Closing Certificate referred to in clause (iv) below and
certifying (A) that attached thereto is a true and complete
copy of the by-laws of the Borrower as in effect on the date
of such certification, (B) that attached thereto is a true
and complete copy of resolutions adopted by the Board of
Directors of the Borrower authorizing the restructuring, the
Borrowings of New Revolving Loans and the issuance of
Letters of Credit hereunder, the execution, delivery and
performance in accordance with their respective terms of
this Agreement, the Notes, the other Loan Documents and any
other documents required or contemplated hereunder or
thereunder and the granting of the security interest in the
Letter of Credit Accounts contemplated hereby, (C) that the
certificate of incorporation of the
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Borrower has not been amended since the date of the
certificate of the Secretary of State furnished pursuant to
clause (i) above (other than by the filing of the
Certificate of Ownership and Merger with respect to the
Borrower by the Debtor on December 2, 1997) and (D) as to
the incumbency and specimen signature of each officer of the
Borrower executing this Agreement, the Notes and the other
Loan Documents or any other document delivered by it in
connection herewith or therewith (such certificate to
contain a certification by another officer of the Borrower
as to the incumbency and signature of the officer signing
the certificate referred to in this clause (iii)); (1)
(iv) receipt by the Agent of a closing certificate signed by an
executive officer of the Borrower, substantially in the form
of Exhibit L (the "Closing Certificate"), with appropriate
insertions and attachments satisfactory in form and
substance to the Agent; and
(v) receipt by the Agent of a Notice of Borrowing with respect
to the New Term Loans and any New Revolving Loans to be made
on the Effective Date, and, if applicable, receipt by the
Agent and the relevant Fronting Bank of an Application for
the issuance of any Letters of Credit to be issued on the
Effective Date.
(b) Agreement; Notes. On or before the Effective Date, the Agent shall
have received (i) executed counterparts of this Agreement from each of the
parties hereto, (ii) New Term Notes executed on behalf of the Borrower, dated
the Effective Date, payable to the order of each of the New Term Lenders,
substantially in the form of Exhibit A-1 hereto, in an aggregate principal
amount equal to such New Term Lender's New Term Loans as determined in
accordance with Section 1.55 of the Plan of Reorganization and in an amount at
least equal to $265 million and (iii) New Revolving Notes executed on behalf of
the Borrower payable to the order of each of the New Revolving Lenders,
substantially in the form of Exhibit A-2 hereto and in amount equal to its
Commitment.
(c) Confirmation Order. The Agent shall have received a certified copy
of an order (the "Confirmation Order") of the Bankruptcy Court, in substantially
the form of Exhibit B, which shall contain provisions providing for, inter alia,
(i) confirmation of the Plan of Reorganization, (ii) the release of all claims
or causes of action by or on behalf of the Borrower or any of its Subsidiaries
against the Secured Parties, (iii) an injunction against the prosecution of any
such claim or cause of action, (iv) the nondischargeability of the Secured
Obligations to the extent set forth in the DIP Financing Order and the waiver by
the Borrower of any such discharge pursuant to Section 1141(d)(4) of the
Bankruptcy Code, and (v) the continuation of superpriority administrative
expense claims until the Effective Date and the continuation of the security
interests granted to the respective Secured Parties pursuant to the DIP
Financing Orders, which Confirmation Order shall have become a Final Order,
shall not have been amended or modified without the prior written consent of the
Agent, the
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Required Pre-Petition Lenders and the Required Revolving Lenders and shall not
have been stayed, reversed, vacated or rescinded in any respect.
(d) Plan of Reorganization and Disclosure Statement. The Plan of
Reorganization and Disclosure Statement shall be in the form filed with the
Bankruptcy Court, and any amendments, modifications and each of the exhibits to
the Plan of Reorganization and/or Disclosure Statement shall be satisfactory to
the Agent, the Required Pre-Petition Lenders and the Required Revolving Lenders
in their reasonable discretion.
(e) Reclamation Claims. The Debtor shall not have paid during the Case
and the Borrower shall not have paid or reasonably anticipate being obligated to
pay, on or after the Effective Date, more than $30 million in the aggregate for
all reclamation claims with legal priority.
(f) Required Inventory. The Borrower shall have delivered an Inventory
Compliance Certificate, dated the Effective Date, demonstrating that it has at
least $300 million in Required Inventory.
(g) Trade Payables. The Debtor shall have post-petition trade payables
which are not backed by letters of credit, deposits or any other form of credit
support of not less than $30.6 million in the aggregate outstanding on the
Effective Date and shall reasonably expect to have access to at least such
amount of such trade credit from and after the Effective Date.
(h) Minimum EBITDA. The Debtor shall have EBITDA during the first four
completed fiscal months of the Case of not less than $12.9 million or, in the
event that the Effective Date occurs on or prior to December 10, 1997, shall
have EBITDA during the first three and three-quarter completed fiscal months of
the Case of not less than $12.4 million, together with reasonably estimated or
projected EBITDA for the last week of the fourth fiscal month of the Case of
$0.5 million.
(i) Debt to EBITDA Ratio. As of the Effective Date, the Borrower shall
have a Debt to EBITDA ratio of not more than 7.9 to 1 on the basis of EBITDA for
the period consisting of the twelve completed fiscal months immediately
preceding the Effective Date for which definitive financial information is
available.
(j) Projected EBITDA. The Debtor, after consultation with Xxxxxxxx
Xxxxx Xxxxxx & Xxxxx or any successor financial advisor to the Debtor, shall
have delivered financial projections to the Agent, setting forth on a reasonable
basis in good faith, aggregate EBITDA for the Borrower for the period consisting
of the two fiscal years immediately following the Effective Date of at least
$196 million subject to adjustments for non-material changes to the Business
Plan implemented during the Case and approved by the Required Pre-Petition
Lenders and all of the DIP Lenders.
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(k) Security and Pledge Agreement. The Borrower shall have duly
executed and delivered to the Agent, for its benefit and the benefit of the
other Secured Parties, an Amended and Restated Security and Pledge Agreement in
substantially the form of Exhibit C (as amended, amended and restated,
supplemented or otherwise modified from time to time, the "Security and Pledge
Agreement").
(l) Mortgages. The Borrower shall have (x) duly executed and delivered
to the Agent, for its benefit and the benefit of the other Secured Parties,
mortgages and deeds of trust, substantially in the form of Exhibits D-1 and D-2
hereto, respectively, on the real properties constituting UBS Collateral and on
the real properties securing the Synthetic Lease Obligations, together with
Title Commitments or Policies as the Agent may require and Surveys relating
thereto, (y) duly executed and delivered to the Agent, for its benefit and the
benefit of the other Secured Parties, amended and restated mortgages and deeds
of trust on the Properties included as part of Pre-Petition Collateral,
substantially in the form of Exhibits D-3 and D-4 hereto (all of such mortgages
and deeds of trust delivered pursuant to this subsection (l), collectively,
together with any mortgages and deeds of trust executed and delivered after the
Effective Date in respect of Available Property or After-Acquired Property, as
amended, amended and restated, supplemented or otherwise modified from time to
time, the "Mortgages"), in each case for the Agent's benefit and the benefit of
the other Secured Parties, together with updated Title Policies with respect to
such Properties and (z) provided evidence to the Agent of the filing of such
Mortgages in the appropriate filing or recording offices and the payment of all
taxes and recording fees relating thereto.
(m) Financing Statements. The Agent shall have received (i) UCC-1
and/or UCC-3 Financing Statements executed on behalf of the Borrower for filing
in all jurisdictions in which it would be necessary or desirable to make a
filing in order to provide the Agent (for its benefit and the benefit of the
other Secured Parties) with a perfected security interest in the Collateral and
evidence of the filing of such UCC-1 and/or UCC-3 Financing Statements in all
jurisdictions in which it would be necessary or desirable to provide the Agent
(for its benefit and the benefit of the other Secured Parties) with a perfected
security interest in the Collateral; and (ii) such UCC-11 searches as the Agent
may require reflecting that no filings relating to Liens on the Collateral are
of record in such jurisdictions except those permitted under the Loan Documents.
(n) Vehicles. To the extent not previously provided, the Agent shall
have received original certificates of title for Vehicles pledged to the Agent
for its benefit and the benefit of the other Secured Parties with the Lien of
the Agent noted thereon or accompanied by documentation required to effect the
same.
(o) Opinion of Counsel to the Borrower. The Secured Parties shall have
received the favorable written opinion of counsel to the Borrower reasonably
acceptable to the Agent, dated the Effective Date, substantially in the form of
Exhibits G-1 and G-2.
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(p) Payment of Fees. The Borrower shall have paid to the Agent, the
Underwriters and the Fronting Banks the then unpaid balance of all accrued and
unpaid Fees owed under and pursuant to this Agreement and the letter referred to
in Section 2.18.
(q) Payment of Other Amounts. The Borrower shall have paid all
accrued and unpaid interest, fees and other amounts (other than principal
amounts outstanding on the Effective Date under the Pre-Petition Credit
Agreement which are being exchanged for New Common Stock) owing pursuant to or
in connection with the Pre-Petition Credit Agreement and the DIP Credit
Agreement.
(r) [Intentionally Omitted].
(s) Corporate and Judicial Proceedings. All corporate and judicial
proceedings and all instruments and agreements in connection with the
transactions among the Borrower, the Agent, the Fronting Banks, the Underwriters
and the Lenders contemplated by this Agreement shall be reasonably satisfactory
in form and substance to the Agent, and the Agent shall have received all
information and copies of all documents and papers, including records of
corporate and judicial proceedings, which the Agent may have reasonably
requested in connection therewith, such documents and papers where appropriate
to be certified by proper corporate, governmental or judicial authorities.
(t) Compliance with Laws. The Borrower shall have granted the Agent
access to and the right to inspect all reports, audits and other internal
information of the Borrower relating to environmental matters, and any third
party verification of certain matters relating to compliance with Environmental
Laws requested by the Agent, and the Agent shall be reasonably satisfied that
the Borrower and its Subsidiaries are in compliance in all material respects
with all applicable Environmental Laws and be satisfied with the costs of
maintaining such compliance.
(u) Designated Equity. The Borrower shall have twenty million shares
of common stock issued and outstanding or authorized and reserved for issuance
pursuant to the Plan of Reorganization (the "New Common Stock"), of which the
New Revolving Lenders shall be entitled to receive 460,000 shares in
consideration for their Commitments, and the New Term Lenders shall be entitled
to receive the number of shares of New Common Stock determined in accordance
with Section 3.4(a) of the Plan of Reorganization.
(v) Post-Effective Date Board of Directors. The size and composition
of the new Board of Directors of the Borrower as of the Effective Date (and the
term of each director) shall be acceptable to the Agent and a majority of the
Pre-Petition Lenders.
(w) No Material Adverse Change. There shall not have occurred since
September 1, 1997, a material adverse change, or development or event involving
a prospective change, which, in the reasonable judgment of the Required
Revolving Lenders, could have a Material Adverse Effect or could materially
adversely affect the rights and remedies of the Agent or any of the other
Secured Parties under the Loan Documents, and none of the Agent or any of the
other Secured Parties shall
65
have become aware of any theretofore previously undisclosed materially adverse
information with respect to the matters described in this clause (w);
(x) Absence of Litigation. There shall be no actions, suits or
proceedings by any Governmental Authority or other Person or investigation by
any Governmental Authority or other Person pending or known by the Borrower to
be threatened with respect to the Borrower or any of its Subsidiaries or
(relating to the transactions contemplated hereunder) the Agent or any of the
other Secured Parties which could reasonably be expected to have a Material
Adverse Effect; there shall be no judgment, order, injunction or other restraint
prohibiting any of the transactions contemplated by any of the Loan Documents;
(y) Effectiveness of Synthetic Lease Loan Agreement and UBS Loan
Agreement. All of the UBS Loan Documents and the Synthetic Lease Loan Documents
shall have been executed and delivered in form and substance satisfactory to the
Agent, and the Effective Date (as defined in each of the Synthetic Lease Loan
Agreement and the UBS Loan Agreement) shall have occurred.
(z) Information. The Agent shall have received such information
(financial or otherwise) as may be reasonably requested by the Agent or the
Underwriters.
(aa) Closing Documents. The Agent shall have received all documents
(including security documents granting the liens in favor of the Agent
contemplated hereby) required by this Agreement reasonably satisfactory in form
and substance to the Agent and, in the case of the issuance of a Letter of
Credit, the relevant Fronting Bank shall have received all documents it requires
in connection with its agreement to issue Letters of Credit hereunder in form
and substance reasonably satisfactory to such Fronting Bank.
Section 4.2. Conditions Precedent to Each Loan and Each Letter of Credit
after the Effective Date. After the Effective Date, the obligation of the New
Revolving Lenders to make each New Revolving Loan and of the relevant Fronting
Bank to issue each Letter of Credit is subject to the following conditions
precedent:
(a) Notice. The Agent shall have received a Notice of Borrowing with
respect to such New Revolving Loans or the Agent and the relevant Fronting Bank
shall have received an Application for the issuance of such Letter of Credit as
required by Sections 2.2(b) or 2.6, as the case may be, which Notice of
Borrowing or Application shall be accompanied by an Inventory Compliance
Certificate.
(b) Representations and Warranties. All representations and warranties
contained in this Agreement and the other Loan Documents or otherwise made in
writing in connection herewith or therewith shall be true and correct in all
material respects on and as of the date of each Borrowing of New Revolving Loans
or the issuance of each Letter of Credit hereunder with the same effect as if
made on and as of such date except to the extent such representations and
warranties expressly relate to an earlier date.
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(c) Compliance; No Default. On the date of each Borrowing of New
Revolving Loans hereunder or the issuance of each Letter of Credit, the Borrower
shall be in compliance with all of the terms and provisions set forth herein to
be observed or performed, and no Default or Event of Default shall have occurred
and be continuing.
(d) Confirmation Order. The Confirmation Order shall be in full force
and effect and shall not have been amended or modified without the prior written
consent of the Agent, the Majority Term Lenders and the Required Revolving
Lenders and shall not have been stayed, reversed, vacated or rescinded in any
respect.
(e) Payment of Fees. The Borrower shall have paid to the Agent, the
Fronting Banks, the Underwriters and the New Revolving Lenders, the then unpaid
balance of all accrued and unpaid Fees then payable under or pursuant to this
Agreement.
(f) Required Inventory. The Borrower shall have Required Inventory on
the date of each Borrowing or the issuance of each Letter of Credit hereunder.
The request by the Borrower for, and the acceptance by the Borrower of,
each extension of credit hereunder shall be deemed to be a representation and
warranty by the Borrower that the conditions specified in this Section have been
satisfied at that time.
SECTION 5. AFFIRMATIVE COVENANTS
From the date hereof and for so long as any Commitment shall be in effect
or any Letter of Credit shall remain outstanding (in a face amount in excess of
the amount of cash then held in the relevant Letter of Credit Account pursuant
to Section 2.12(h)), or any amount shall remain outstanding under any Note or
unpaid under this Agreement, the Borrower agrees that it will, and it will cause
each Subsidiary to:
Section 5.1. Financial Statements, Reports, etc. Deliver to the Agent and
each of the Fronting Banks and the Lenders (or, in the case of the weekly report
delivered pursuant to Section 5.1(l), deliver to the Agent for distribution to
the Fronting Banks and the Lenders):
(a) as soon as available and in any event within 90 days after the end
of each fiscal year, the consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of the end of such fiscal year and related
consolidated statements of income and cash flows for such fiscal year, setting
forth in each case in comparative form the figures for the previous year
(unless, in accordance with GAAP, such comparative financial statements are not
prepared), the consolidated statement of the Borrower and its Consolidated
Subsidiaries to be audited for the Borrower by independent public accountants of
recognized national standing acceptable to the Required Lenders and accompanied
by an opinion of such accountants (which shall not be qualified in any material
respect);
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(b) as soon as available and in any event within 45 days after the end
of each of the first three fiscal quarters and within 90 days after the end of
the fourth fiscal quarter of each fiscal year of the Borrower, the consolidated
balance sheet of the Borrower and its Consolidated Subsidiaries as of the end of
such quarter and related consolidated statements of income and cash flows for
such fiscal quarter, setting forth in each case in comparative form the figures
for the corresponding quarter and the corresponding portion of the previous
fiscal year, together with a comparison of such results to the relevant portion
of the Annual Budget, each certified by a Financial Officer as fairly presenting
the financial condition and results of operations of the Borrower and its
Consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied, subject to normal year-end audit adjustments (it being
understood that the Borrower shall also deliver copies of the financial
statements delivered pursuant to this clause (b) with respect to the first two
quarters of its 1998 fiscal year, together with copies of the related
certificates delivered pursuant to clause (c) below, to Xxxxxx Xxxxxxxx LLP,
financial advisors to the Debtor's Unsecured Creditors' Committee);
(c) concurrently with any delivery of financial statements under
clauses (a) or (b) above, (i) a certificate of a Financial Officer,
substantially in the form of Exhibit N hereto, certifying such statements (A)
stating that no Default or Event of Default has occurred, or, if such Default or
Event of Default has occurred, specifying the nature, the period of existence
and extent thereof and any corrective action taken or proposed to be taken with
respect thereto and (B) setting forth computations in reasonable detail
satisfactory to the Agent demonstrating whether the Borrower was in compliance
with the provisions of Sections 6.4, 6.7 and 6.16 on the date of such financial
statements and (ii) a certificate of such accountants accompanying the audited
consolidated financial statements delivered under (a) above certifying that, in
the course of the regular audit of the business of the Borrower, such
accountants have obtained no knowledge that an Event of Default has occurred and
is continuing, or if, in the opinion of such accountants, an Event of Default
has occurred and is continuing, specifying the nature thereof and all relevant
facts with respect thereto;
(d) within 15 Business Days of the end of each fiscal month (or, in
the case of the last fiscal month of the Borrower in each fiscal year, within 45
days), commencing with the fiscal month in which the Effective Date has
occurred, a consolidated balance sheet of the Borrower and its Consolidated
Subsidiaries, related statement of income and cash flows showing the financial
condition of the Borrower and its Consolidated Subsidiaries and the results of
operations as of the close of such fiscal month and the then elapsed portion of
the fiscal year, setting forth in each case in comparative form the figures for
the corresponding month and the corresponding portion of the Borrower's previous
fiscal year, together with a comparison of such results to the relevant portion
of the Annual Budget.
(e) as soon as practicable, and in any event within 45 days of the
Effective Date, a pro forma statement of the Borrower's financial condition as
of the Effective Date in form, scope and detail reasonably satisfactory to the
Agent;
(f) within 45 days after the commencement of each fiscal year, a
forecast of the financial condition and results of operations of the Borrower
and its Consolidated Subsidiaries, by
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month, for the twelve fiscal months commencing with the first month of such
fiscal year (the "Annual Budget"), and not later than 45 days after the end of
each of the first three quarters of each fiscal year of the Borrower, a
narrative discussion by management of the Borrower of the financial condition
and results of operations of the Borrower and its Consolidated Subsidiaries for
such period, together with a reforecast for the balance of such fiscal year, in
all instances in form, scope and detail satisfactory to the Agent;
(g) on the earlier of the date of delivery by the Borrower to the
Agent, the Fronting Banks and the Lenders of the financial statements required
to be delivered pursuant to Section 5.1(a) covering such fiscal year and 90 days
after such fiscal year, an Excess Cash Flow Certificate setting forth the
calculation of Excess Cash Flow based upon such fiscal year's audited financial
statements then delivered;
(h) promptly upon request therefor by the Agent, copies of all reports
submitted by independent public accountants to the Borrower in connection with
each annual, interim or special audit of the financial statements of the
Borrower and its Consolidated Subsidiaries, including, without limitation, any
comment letters submitted by such accountants to management in connection with
their annual audit;
(i) simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a certificate of the chief
financial officer of the Borrower, in form and substance reasonably satisfactory
to the Agent, describing all gains and losses by the Borrower and its
Consolidated Subsidiaries for such fiscal quarter just ended from the sale or
other disposition of their assets which do not constitute extraordinary gains or
losses under GAAP and for which the sale price or book value for such capital
asset at time of sale is greater than $3,000,000;
(j) forthwith upon becoming aware of (i) any litigation or other
proceeding which could reasonably be expected to have a Material Adverse Effect
or (ii) any default with respect to any obligation of the Borrower under any
agreement, instrument, or other undertaking to which the Borrower or any of its
Subsidiaries is a party or by which it or any of its properties is bound or any
event or condition which could reasonably be expected to have such a material
adverse effect, notice thereof;
(k) promptly upon becoming aware of any Material Adverse Effect since
the Effective Date, notice thereof;
(l) within six Business Days of the end of each week, a flash report
reflecting sales and gross margins for such week in form, scope and detail
reasonably satisfactory to the Agent;
(m) (i) promptly and in any event within 30 days after the filing
thereof with the Internal Revenue Service, copies of each Schedule B
(Actuarial Information) to the annual report (Form 5500 Series) with
respect to each Plan;
69
(ii) promptly and in any event within fifteen (15) days after the
Borrower knows or has reason to know that any ERISA Event has occurred, a
statement of the chief financial officer of the Borrower describing such
ERISA Event and the action, if any, which the Borrower, any Subsidiary or
any ERISA Affiliate of either of them proposes to take with respect
thereto;
(iii) promptly and in any event within ten (10) Business Days
after receipt thereof by the Borrower or any Subsidiary or any ERISA
Affiliate of either of them, copies of each notice from the PBGC stating
its intention to terminate any Plan or to have a trustee appointed to
administer any Plan; and
(iv) promptly and in any event within ten (10) Business Days
after receipt thereof by the Borrower or any Subsidiary or any ERISA
Affiliate of either of them from the sponsor of a Multiemployer Plan, a
copy of each notice concerning (1) the imposition of Withdrawal Liability
by a Multiemployer Plan, (2) the reorganization or termination, within the
meaning of Title IV of ERISA, of any Multiemployer Plan or (3) the amount
of liability incurred, or which may be incurred, by the Borrower or any
Subsidiary or any ERISA Affiliate of either of them in connection with any
event described in clause (1) or (2) above;
(n) promptly upon the formation of any Subsidiary, notice thereof;
(o) promptly upon the release of any Liens or the satisfaction or
discharge of all or a portion of the Liens securing the Real Estate Financing or
the Liens granted under the Synthetic Lease Loan Documents or Liens granted to
any other lenders, notice thereof;
(p) promptly upon the merger of any Subsidiary into the Borrower,
notice thereof;
(q) promptly upon the opening of any store or other retail location,
notice thereof and, to the extent such store or other retail location is in a
jurisdiction in which UCC-1 Financing Statements have not been delivered to the
Agent, promptly deliver executed UCC-1 Financing Statements on forms then
provided by the Agent to the Borrower;
(r) within three (3) Business Days after any amendment, modification,
supplement to or waiver of any provisions of the UBS Loan Documents, the
Synthetic Lease Loan Documents, the GE Credit Program Documents, or any other
material credit arrangements, notice thereof, together with a copy of each such
fully executed amendment, modification, supplement or waiver;
(s) without limiting any of the Borrower's other obligations to give
notice under the Loan Documents, within fifteen (15) days of the end of each
fiscal quarter, furnish to the Agent lists of (i) all After-Acquired Property
and Vehicles acquired by the Borrower or any Subsidiary during such quarter,
(ii) all Trademarks for which the Borrower or any Subsidiary has filed a
registration application during such quarter and (iii) all property which became
Available Property during such
70
quarter, setting forth in each case the date of acquisition or filing thereof
and otherwise substantially in the form of Exhibit O hereto, all certified by
the chief financial officer of the Borrower;
(t) on the second Business Day of the first and third full weeks of
each fiscal month of the Borrower, deliver to the Agent and each Lender an
Inventory Compliance Certificate, substantially in the form of Exhibit M hereto
(an "Inventory Compliance Certificate"), certifying that the Borrower continues
to maintain Required Inventory;
(u) promptly, upon the mailing thereof to the shareholders of the
Borrower generally, copies of all financial statements, reports and proxy
statements so mailed;
(v) promptly, and in any event within ten (10) Business Days prior to
the proposed closing of any purchase or refinancing by the Borrower of any notes
payable to one or more of the Synthetic Lease Banks, written notice as to the
identity of the purchaser, the applicable purchase price and the proposed
payment date, together with a copy of the proposed purchase and release
documents; and
(w) promptly, from time to time, such other information regarding the
operations, business affairs and financial condition of the Borrower or its
Subsidiaries, or compliance with the terms of any material loan or financing
agreements as the Agent, any Fronting Bank or any Lender may reasonably request.
Section 5.2. Conduct of Business; Maintenance of Existence. Continue to
engage in business of the same general type as now conducted by the Borrower and
its Subsidiaries, and will preserve, renew and keep in full force and effect,
and, except as permitted by Section 6.3(f), will cause each Subsidiary to
preserve, renew and keep in full force and effect, its respective corporate
existence and its respective rights, privileges and franchises except for such
rights, privileges and franchises when the failure of which to preserve, renew
and keep in full force and effect could not reasonably be expected to have a
Material Adverse Effect.
Section 5.3. Maintenance of Property; Insurance. (a) Keep all material
property useful and necessary in its business in good working order and
condition, ordinary wear and tear excepted.
(b) Keep its material properties (including without limitation all
Property) insured at all times with financially sound and reputable insurance
companies, against such risks as is customary for companies of the same or
similar size in the same or similar businesses; provided, that such insurance
shall (i) insure the property (including without limitation all Property) of the
Borrower and its Subsidiaries (other than motor vehicles) against all risk of
loss or damage including, without limitation, loss by fire, explosion, theft and
such other casualties as may be reasonably satisfactory to the Agent, but in no
event in an amount less than the replacement cost value thereof, and (ii) insure
the Borrower and its Subsidiaries, and the Agent and the other Secured Parties
against comprehensive general and automobile liability in an amount not less
than $1,000,000 per occurrence under primary insurance policies, with not less
than $45,000,000 per occurrence coverage under umbrella insurance policies
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for personal injury, bodily injury and property damage relating to the property
and operations of the Borrower and its Subsidiaries, such policies to be in such
form and amounts and having such coverage as may be reasonably satisfactory to
the Agent. All such insurance shall, within twenty days after the Effective Date
(i) contain a breach of warranty clause in favor of the Agent and the other
Secured Parties in all loss or damage insurance policies and have a severability
of interest clause in all liability insurance policies, (ii) provide that no
cancellation, material reduction in amount or material change in coverage
thereof shall be effective until at least 30 days after written notice to the
Agent thereof, (iii) name the Agent for the benefit of the Secured Parties as
loss payee for physical damage insurance with respect to property as to which a
Lien has been granted to the Agent, with the right to adjust the same (provided,
that with respect to property to which a Lien permitted hereunder has been
granted to another creditor, such other creditor may also be named as loss
payee, with payment to be made as their interests may appear) and name the Agent
and the other Secured Parties as additional insureds for liability insurance,
with the Agent having the right to adjust the same, (iv) state that neither the
Agent nor any of the other Secured Parties shall be responsible for premiums,
commissions, club calls, assessments or advances, (v) contain a waiver of all
rights of set-off, counterclaim, deduction or subrogation against the Agent and
the other Secured Parties and (vi) be reasonably satisfactory in all other
respects (including deductibles) to the Agent.
(c) Furnish to the Agent, on or prior to the Effective Date, a schedule, a
copy of which is annexed as Schedule 5.3, describing all insurance maintained by
the Borrower, which schedule shall set forth, for each insurance policy, the
policy number, the scope of coverage, the policy limits and deductibles, the
insurer (and reinsurers, if applicable) and the expiration date.
(d) Furnish to the Agent, original certificates of insurance complying with
the requirements of this Section set forth above and containing signatures of
duly authorized representatives of the insurer, on or prior to the date which is
twenty days after the Effective Date and at all times prior to policy
termination, cessation or cancellation.
(e) Maintain such other insurance or self insurance as may be required by
law or as the Agent may reasonably request.
Section 5.4. Compliance with Laws. Comply in all material respects with all
applicable laws, ordinances, rules, regulations, and requirements of
Governmental Authorities (including, without limitation, ERISA) except where the
necessity of compliance therewith is contested in good faith by appropriate
proceedings, and the Borrower or such Subsidiary have set aside on its books
adequate reserves (determined in accordance with GAAP) with respect thereto or
where the failure to comply therewith could not reasonably be expected to have a
Material Adverse Effect.
Section 5.5. Obligations and Taxes. Pay all its material obligations
promptly and in accordance with their terms and pay and discharge promptly all
material taxes, assessments and governmental charges or levies imposed upon it
or upon its income or profits or in respect of its property before the same
shall become in default, as well as all material lawful claims for labor,
materials and supplies or otherwise which, if unpaid, might become a Lien or
charge upon such
72
properties or any part thereof; provided, that the Borrower and its Subsidiaries
shall not be required to pay and discharge or to cause to be paid and discharged
any such tax, assessment, charge, levy or claim so long as the validity or
amount thereof shall be contested in good faith by appropriate proceedings (if
the Borrower or such Subsidiary shall have established on its books adequate
reserves therefor). For purposes of this Section, the term "obligation" shall
not include those obligations discharged under the Plan of Reorganization.
Section 5.6. Notice of Event of Default, etc. Promptly give to the Agent
notice in writing of any Default or Event of Default hereunder or under any of
the other Loan Documents.
Section 5.7. Access to Books and Records. Maintain or cause to be
maintained at all times true and complete books and records of the financial
operations of the Borrower and its Subsidiaries; and provide the Agent and its
representatives access to all such books and records during regular business
hours, in order that the Agent may examine and make abstracts from such books,
accounts, records and other papers for the purpose of verifying the accuracy of
the various reports delivered by the Borrower to the Agent, the Fronting Banks
or the Lenders pursuant to this Agreement or for otherwise ascertaining
compliance with this Agreement; and at any reasonable time and from time to time
during regular business hours, upon reasonable notice, permit the Agent and any
agents or representatives (including, without limitation, appraisers) thereof to
visit the properties of the Borrower and its Subsidiaries and to conduct
examinations of and to monitor the Collateral.
Section 5.8. Modifications to Business Plan. As soon as practicable,
furnish to the Agent, the Lenders and the Fronting Banks all material
modifications to the Business Plan, and make its senior officers and advisors
available to discuss the same with the Agent and its advisors upon the Agent's
reasonable request.
Section 5.9. Customer Charge Sales. Continue to maintain a "Project Card"
and commercial credit receivables sales and administration program with the
Credit Card Banks pursuant to the GE Credit Program Documents or a similar
program (it being understood that a program shall not be deemed to be dissimilar
solely by virtue of the fact that the Borrower shall act as the administrator or
"servicer" of the receivables thereunder) with another Person, in each case on
terms and conditions which are, in the aggregate, not materially less favorable
to the Borrower nor materially more restrictive than those provided for in the
GE Credit Program Documents as in effect on the Effective Date (except for
changes in such terms and conditions which are acceptable to the Agent and the
Required Lenders in their judgment reasonably exercised) .
Section 5.10. Lender Meetings.From time to time as requested by the Agent,
the Majority Term Lenders or the Majority Revolving Lenders, participate, and
cause the chief financial officer to be available for and to participate in, a
meeting of the Agent and the Lenders to be held, at reasonable intervals, at
locations and at times requested by the Agent (and if applicable, the Majority
Term Lenders or the Majority Revolving Lenders, as the case may be), and
reasonably satisfactory to the Borrower.
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Section 5.11. Available and After-Acquired Properties. If any real
property, buildings, fixtures, equipment or improvements owned or leased by the
Borrower or any Subsidiary become Available Property, or the Borrower or any
Subsidiary acquires any interest in any real property including without
limitation a leasehold interest and any related buildings, fixtures, equipment
or improvements (each such property or interest, an "After-Acquired Property"),
promptly, but in any event within 30 days, provide written notice thereof to the
Agent, setting forth with specificity a description of such property or interest
acquired, the location of the property interest, any structures or improvements
thereon and an appraisal or its good faith estimate of the current fair market
value of such property or interest. If the Agent so requests, the Borrower or
the relevant Subsidiary shall promptly execute and deliver to the Agent a
mortgage or deed of trust, substantially in the form of Exhibits D-3 and D-4
hereto, respectively (with such changes as may be deemed appropriate by the
Agent's local real estate counsel for the state in question), together with such
other documents or instruments as the Agent shall reasonably require, including
(without limitation) a Title Policy, a Survey, a Phase I environmental report,
UCC Financing Statements and an opinion of the Agent's local real estate
counsel. The Borrower shall pay all reasonable fees and expenses, including
attorneys' fees and expenses or the allocated charges and premiums, in
connection with its obligation under this Section. If at any time after the date
hereof, any existing Lien or sale-leaseback arrangement which prevents the
further mortgaging of any real property of the Borrower or any Subsidiary, shall
for any reason no longer prevent such further mortgaging, then such property
shall also be deemed an After-Acquired Property for purposes of this Section.
Section 5.12. Subsidiaries; Subsidiary Guarantees and Security Agreements.
Use its best efforts to conduct all of its business, to the extent feasible,
through a single corporate entity (i.e., the Borrower) and to avoid the
formation or acquisition of Subsidiaries. Notwithstanding the foregoing, in the
event that the Borrower determines that it is in its best interest to form or
acquire a Subsidiary, the Borrower will, in addition to complying with the
requirements of Section 6.10(iv), cause such Subsidiary to be wholly-owned, to
have aggregate net payables owing to the Borrower of less than $10,000,000 at
all times and to execute and deliver to the Agent for the benefit of the Secured
Parties a guarantee, substantially in the form of Exhibit E hereto, a security
agreement granting collateral security for the guaranteed obligations,
substantially in the form of Exhibit F hereto, and such other documents and
opinions in connection therewith as the Agent shall reasonably request, all in
form and substance satisfactory to the Agent. Such guarantee, security agreement
and such other documents shall be delivered to the Agent no later than 30 days
after the date on which such Subsidiary has been formed or otherwise acquired by
the Borrower.
Section 5.13. Further Assurances. At the Borrower's cost and expense, upon
request of the Agent, duly execute and deliver, or cause to be duly executed and
delivered, such further instruments and do and cause to be done such further
acts as may be necessary or desirable in the opinion of the Agent or its counsel
to give effect to the provisions and purposes of this Agreement and the other
Loan Documents.
Section 5.14. Maintenance of Cash Management System. Maintain and, to the
extent practicable, cause each of its Subsidiaries to maintain, all of its
significant operating accounts and
74
demand deposit accounts used for paying and receiving purposes in the ordinary
course of its business with the Cash Management Banks, any of the Lenders which
is a commercial bank or any Affiliate of any Lender which is a commercial bank
or any other commercial bank acceptable to the Agent and the Required Lenders,
in each case, which commercial bank agrees, if requested by the Agent, to be
bound by the terms of this Agreement in writing. In connection with the
foregoing, the Borrower will, to the extent practicable, cause substantially all
of its available operating funds to be concentrated, on a daily basis, in a
concentration account which shall at all times be maintained with one of the
Cash Management Banks.
Section 5.15. Environmental Undertaking. In the event the Agent determines
that any representation hereunder may be incorrect or that the Borrower or any
Subsidiary has failed to comply with any covenant contained in Section 6.15 in
any material respect, promptly undertake such investigations, studies, samplings
and testings relative to any Hazardous Substance at the Property in question as
the Agent may request.
Section 5.16. Post-Closing Matters
(a) To the extent any Mortgages, Surveys or Title Policies were not
delivered to the Agent on the Effective Date pursuant to Section 4.1(l), cause
such Mortgages to be executed and delivered in recordable form for filing in the
appropriate filing or recording offices within fifteen days of the Effective
Date and cause any outstanding Surveys and Title Policies to be delivered to the
Agent within 60 days of the Effective Date or such longer period not to exceed
an additional 30 days to which the Agent may consent. All Title Policies and
Surveys must be reasonably acceptable to the Agent in all respects.
(b) To the extent that the Borrower shall not have delivered a Phase I
environmental report with respect to the real properties constituting UBS
Collateral as to which Mortgages are to be delivered pursuant to Section 4.1(l)
as of the Effective Date, upon the Agent's reasonable request, at the Borrower's
expense, cause such a report to be prepared and deliver the same to the Agent
within 30 days of such request. All such Phase I environmental reports must be
reasonably acceptable to the Agent in all respects.
(c) To the extent that the Borrower shall not have delivered all of
the documentation required by Section 5.3 to the Agent on the Effective Date,
deliver the same within the time period provided therein.
(d) To the extent that the Borrower shall not have delivered all of
the original certificates of title for vehicles pledged to the Agent for its
benefit and the benefit of the other Secured Parties as required pursuant to
Section 4.1(n) as of the Effective Date, deliver the same within sixty (60) days
of the Effective Date.
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SECTION 6. NEGATIVE COVENANTS
From the date hereof and for so long as any Commitment shall be in effect
or any Letter of Credit shall remain outstanding (in a face amount in excess of
the amount of cash then held in the relevant Letter of Credit Account, pursuant
to Section 2.12(h)) or any amount shall remain outstanding under any Note or
unpaid under this Agreement, the Borrower will not, and will not permit any
Subsidiary to:
Section 6.1. Liens. Incur, create, assume or suffer to exist any Lien on
any asset now owned or hereafter acquired by the Borrower, other than (i) Liens
which were existing on the Effective Date as reflected on Schedule 3.6 hereto,
(ii) Liens of the same type as (and no more extensive than) those granted
pursuant to the GE Credit Program Documents in favor of another Person replacing
the Credit Card Banks in providing the Borrower's "Project Card" and commercial
credit receivables sales and administration program in accordance with Section
5.9, (iii) Liens granted pursuant to the Security Documents; (iv) Liens granted
on the UBS Collateral pursuant to the Real Estate Financing and Liens granted
pursuant to the Synthetic Lease Loan Documents and (v) Permitted Liens.
Section 6.2. Debt. Contract, create, incur, assume or suffer to exist any
Debt, except for (i) the Loans and the Letters of Credit, (ii) Debt of the type
described in clause (viii) of the definition of "Debt," to the extent that the
aggregate notional or face amount of all such Debt, when taken together with all
outstanding Hedging Obligations, does not exceed $36,000,000, (iii) Debt
outstanding under the UBS Loan Documents and the Synthetic Lease Loan Documents,
each as in effect on the Effective Date, and any Permitted Refinancing Debt, but
not the increase or refunding of such Debt in whole or in part, except to the
extent the same constitutes Permitted Refinancing Debt, (iv) Debt of the
Borrower and its Subsidiaries outstanding under Capitalized Leases as in effect
on the Effective Date, (v) Debt not in excess of $2,000,000 in the aggregate
secured by Permitted Liens of the type described in clause (v) of the definition
thereof, (vi) Debt of the Borrower and its Subsidiaries outstanding under
Capitalized Leases entered into after the Effective Date to the extent permitted
by Section 6.4, (vii) Debt arising from Investments that are permitted
hereunder, and (viii) Debt incurred under the GE Credit Program Documents and
any other agreements permitted under Section 5.9.
Section 6.3. Consolidations, Mergers and Sales of Assets. (i) Consolidate
or merge with or into any other Person, (ii) enter into a partnership or joint
venture with another Person (other than by the acquisition of Minority
Investments to the extent permitted by Section 6.10), or (iii) sell, lease,
assign or otherwise transfer (whether voluntarily or involuntarily) all or any
part of its assets except:
(a) sales of Inventory in the ordinary course of business and
customer receivable sales pursuant to the GE Credit Program Documents or any
similar program entered into in accordance with Section 5.9;
(b) sales or transfers of assets described in clauses (i), (ii) or
(iv) of the definition of "Designated Collateral" and sales or transfers of any
other assets of the Borrower (not permitted by any other provision of this
Section); provided, that (1) the sale price of each such asset (whether
76
or not part of Designated Collateral) shall not be less than the fair market
value of such asset at the time of sale thereof (and, if the sale price thereof
is equal to or greater than $5,000,000, then the fair market value of such asset
shall be determined in good faith and approved by the Board of Directors of the
Borrower), (2) prior to or concurrently with each such sale for which the sale
price is equal to or greater than $5,000,000, the Borrower shall deliver
evidence to the Agent satisfactory to it of the fair market value at the time of
sale of the asset being sold as determined by the Board of Directors of the
Borrower, (3) not less than 65% of the sale price for each asset sold pursuant
to this clause (b) shall be payable in cash on the date of such sale, (4) the
non-cash portion of the sale price therefor, if any, shall be evidenced by one
or more promissory notes maturing no later than three years after the date of
such sale which shall be pledged to the Agent as provided in Section 6.10(v) or
(vii), (5) no such sale shall be permitted unless (x) the asset so sold shall
constitute Designated Collateral or shall be sold pursuant to a Permitted Pad
Sale or (y) the sale price of the asset so sold, together with the sale price of
all assets (excluding assets described in subclause (x) immediately above)
previously sold under this clause (b) in the same fiscal year of the Borrower in
which such asset is being sold, shall not exceed $2,000,000 and (6) if such sale
is to an Affiliate, it is made in compliance with Section 6.9;
(c) the replacement in the ordinary course of business of rolling
stock and equipment of the Borrower and its Subsidiaries;
(d) the sale or other disposition, subject to the Lien of the Agent,
by the Borrower to any of its Subsidiaries in the ordinary course of business of
machinery and equipment of the Borrower no longer necessary for the proper
conduct of the Borrower's business having a value, together with the value of
all other property of the Borrower so sold or disposed of in the same fiscal
year of the Borrower, of not greater than $5,000,000 and the sale or other
disposition, subject to the Lien of the Agent, by the Subsidiaries to the
Borrower in the ordinary course of business of machinery and equipment of such
Subsidiaries no longer necessary for the proper conduct of such Subsidiaries'
respective businesses having a value, together with the value of all other
property of such Subsidiaries so sold or disposed of in the same fiscal year of
the Borrower, of not greater than $5,000,000;
(e) the lease by the Borrower, as lessor, of those stores and real
estate described on Schedule 6.3 and other real property of the Borrower not
necessary for the operations of the Borrower or any of its Subsidiaries, in each
instance under this clause (e) having a fair market value of not greater than
$5,000,000 individually, or $10,000,000 in the aggregate at any one time for all
real property leased under this clause (e); provided, that such leases shall be
entered into with a Person who is not an Affiliate of the Borrower on an arms'
length basis for fair consideration and such leases shall not be capital leases;
(f) the merger of any wholly owned Subsidiary into the Borrower or the
consolidation of any wholly owned Subsidiary with the Borrower in which the
Borrower shall be the surviving corporation;
(g) the transfer of a Property acceptable to the Majority Lenders in
their judgment reasonably exercised to Paycap in substitution for a property
subject to the terms of any of the Capco
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Subleases; provided, that (i) at least fifteen (15) days prior to the proposed
transfer, the Borrower shall furnish current independent appraisals satisfactory
to the Agent which demonstrate that the value of the Property subject to a
Mortgage proposed to be transferred is reasonably equivalent to the value of the
property subject to such Capco Sublease and (ii) simultaneously with the
transfer of such Property subject to a Mortgage, such Mortgage shall be released
and such substituted property shall become an Available Property and shall be
subjected to a mortgage or deed of trust, substantially in the form of Exhibits
D-1 and D-2, respectively (with such changes as may be deemed appropriate by the
Agent's local real estate counsel for the state in question), and the Borrower
shall otherwise comply with its obligations under Section 5.11 with respect to
such substituted Available Property; and
(h) sales of assets securing the Real Estate Financing or the
Synthetic Lease Obligations for fair market value; provided, that the Net Cash
Proceeds thereof are applied to the repayment or prepayment of the Real Estate
Financing or the Synthetic Lease Obligations (as the case may be).
The Borrower shall deliver to the Agent, no less than three (3) Business
Days prior to the date of any expected sale or other disposition permitted under
clause (b) (but only if any such sale or disposition under such clause (b) has a
sale price of $1,000,000 or more) or clause (e) of this Section 6.3, written
notice of the expected date of the closing of such sale or other disposition and
the expected date of receipt by the Borrower of the Net Cash Proceeds with
respect thereto; provided, that with respect to any expected sale or other
disposition of any Property subject to Liens in favor of the Agent, the Borrower
shall deliver to the Agent, no less than thirty (30) Business Days prior to the
closing thereof, (x) written notice of the identity of the purchaser or
transferee, the expected date of the closing of such sale or other disposition
and the principal terms of the sale or other disposition and (y) the form of the
purchase agreement to be delivered at the closing thereof.
Directly or indirectly, make any expenditures or incur any obligations for
fixed or capital assets or in respect of Capitalized Leases, including, but not
limited to (x) payments on account of any Debt permitted pursuant to Section 6.2
(v), and (y) goodwill associated with any permitted Capital Expenditure that
constitutes an Investment (collectively, "Capital Expenditures"), in excess, in
the aggregate for the Borrower and its Subsidiaries for all such Capital
Expenditures (and for all such Dual Path Capital Expenditures and all such other
permitted Capital Expenditures), of the respective amounts set forth below
opposite each of the fiscal years set forth below:
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Fiscal Year Total Amount Dual Path Other
1998 $59,600,000 $35,700,000 $23,900,000
1999 $52,100,000 $31,100,000 $21,000,000
2000 $41,200,000 $20,200,000 $21,000,000
2001 $51,300,000 $ 5,000,000 $46,300,000
2002 $52,300,000 $ 5,000,000 $47,300,000;
provided, that if, during any fiscal year of the Borrower set forth above:
(i) the aggregate amount of all Dual Path Capital Expenditures shall
be less than the amount set forth in the table above for such
fiscal year (after the application of all Dual Path Capital
Expenditures during such fiscal year, first to amounts available
for such purpose for such fiscal year pursuant to the operation
of this proviso), then the amount of the Dual Path Capital
Expenditures for the next fiscal year shall be increased by an
amount equal to the unutilized portion of Dual Path Capital
Expenditures for such fiscal year; and
(ii) the aggregate amount of all other permitted Capital Expenditures
shall be less than the amount set forth in the table above for
such fiscal year (after the application of all other permitted
Capital Expenditures during such fiscal year, first to amounts
available for such purpose for such fiscal year pursuant to the
operation of this proviso), then the amount of the other
permitted Capital Expenditures for the next fiscal year shall be
increased by an amount equal to the lesser of (x) an amount equal
to the unutilized portion of other permitted Capital Expenditures
and (y) 50% of the amount of other permitted Capital Expenditures
for such fiscal year;
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provided further, that commencing with the Borrower's 1999 fiscal year, to the
extent that the sum of (x) the interest expense of the Borrower and its
Consolidated Subsidiaries during such fiscal year plus (y) the Capital
Expenditures made during such fiscal year pursuant to this Section is in excess
of EBITDA for such fiscal year, the amount of Capital Expenditures permitted
pursuant to this Section in the next fiscal year shall be reduced by the amount
of such excess on a dollar-for-dollar basis.
In the event that the Borrower or any of its Subsidiaries shall sell (or
has sold), or shall receive (or has received) insurance proceeds in connection
with the destruction of, a fixed or capital asset owned by it (other than a
fixed or capital asset constituting Designated Collateral) and shall, within six
months after the sale or 24 months after the destruction of such fixed or
capital asset, purchase or enter into a Capitalized Lease with respect to a
substantially similar fixed or capital asset as a replacement for such sold or
destroyed fixed or capital asset, then for purposes of determining compliance
with this Section, only that portion of the purchase price or Capitalized Lease
obligation paid, incurred or accrued by the Borrower or such Subsidiary for such
replacement fixed or capital asset in excess of the sale price or insurance
proceeds, as the case may be, of the sold or destroyed similar fixed or capital
asset shall be used in determining such compliance with this Section.
Notwithstanding anything to the contrary contained in this Section, (x)
until the first anniversary of the Effective Date, each Capital Expenditure
permitted pursuant to this Section which involves aggregate expenses in excess
of $1,000,000 or which involves the acquisition (whether by purchase, lease,
exchange or otherwise) of any interest in real estate or any manufacturing or
other business or operations shall be approved by the board of directors of the
Borrower by the affirmative vote of a majority of the directors then in office
(it being understood that after the first anniversary of the Effective Date the
Borrower shall comply with any then applicable requirements of the board of
directors concerning the approval of Capital Expenditures) and (y) there shall
be excluded from the determination of the amount of Capital Expenditures made in
any fiscal year, Capital Expenditures made during any such fiscal year to the
extent of an amount equal to the Net Cash Proceeds received during such fiscal
year from any Permitted Pad Sales of real property acquired by the Borrower.
For purposes of this Section, (i) all obligations incurred under a
Capitalized Lease shall be deemed to have been incurred on the date of execution
of such lease and (ii) the amount of obligations incurred with respect to a
Capitalized Lease on such date of execution of the lease shall be the
capitalized amount thereof determined in accordance with GAAP.
Section 6.5. No Negative Pledges. Enter into any agreements (a) prohibiting
(or resulting in a default as a result of) the creation or assumption of any
Lien upon the properties or assets of the Borrower or any of its Subsidiaries in
favor of the Agent for the benefit of the Secured Parties (or any of them),
except for restrictions contained in any lease prohibiting the mortgaging of
such lease or of the property leased thereunder if either (i) such lease has a
fair market value on the date of execution thereof of less than $100,000 or (ii)
the Borrower or such Subsidiary shall have in good faith used reasonable efforts
to obtain the agreement of the lessor that is a party thereto to exclude such
restrictions from such lease and such lessor shall have refused so to agree, (b)
requiring that the
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Borrower or any Subsidiary also secure another obligation (other than any of the
Secured Obligations) if any of the Secured Obligations are further secured or
(c) restricting the ability of any Subsidiary to (i) pay dividends or make
capital distributions to the Borrower or another Subsidiary, (ii) make
Investments in the Borrower or any Subsidiary or (iii) repay Investments by the
Borrower or another Subsidiary in such Subsidiary.
Section 6.6. Termination of Plans. Take any action to terminate any of its
Plans which could result in a material liability of the Borrower or any
Subsidiary to any Person.
Section 6.7. EBITDA; Debt to EBITDA Ratio. (a) Permit cumulative EBITDA for
the four consecutive fiscal quarters ending nearest to the last day of the
months listed below to be less than the amount specified opposite such month
(increased, in the case of the first three periods set forth below, by the
amount, if any, by which EBITDA for the fourth quarter of the Borrower's 1997
fiscal year exceeds $11.5 million):
Fiscal Quarter Ending EBITDA
February 1998 $ 43,200,000
May 1998 $ 33,600,000
August 1998 $ 39,200,000
November 1998 $ 59,300,000
February 1999 $ 62,400,000
May 1999 $ 66,500,000
August 1999 $ 70,600,000
November 1999 $ 74,500,000
February 2000 $ 78,800,000
May 2000 $ 87,000,000
August 2000 $ 95,700,000
November 2000 $101,000,000
February 2001 $103,000,000
May 2001 $106,200,000
August 2001 $109,100,000
November 2001 $113,400,000
February 2002 $113,700,000
May 2002 $113,100,000
August 2002 $115,800,000.
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(b) Permit the Debt to EBITDA Ratio to be more, on the last day of any
fiscal quarter of the Borrower ending during any month set forth below, than the
ratio set forth opposite the applicable month below:
Month Ratio
February 1998 11.9 to 1
May 1998 15.0 to 1
August 1998 11.9 to 1
November 1998 7.2 to 1
February 1999 7.3 to 1
May 1999 6.9 to 1
August 1999 6.1 to 1
November 1999 5.6 to 1
February 2000 5.6 to 1
May 2000 4.9 to 1
August 2000 4.2 to 1
November 2000 3.7 to 1
February 2001 4.0 to 1
May 2001 3.9 to 1
August 2001 3.6 to 1
November 2001 3.3 to 1
February 2002 3.7 to 1
May 2002 3.7 to 1
August 2002 3.4 to 1
Section 6.8. Restricted Payments. Declare or make, any Restricted Payment,
except:
(i) (x) regular, scheduled or mandatory payments or mandatory
prepayments of principal and interest on Debt for Borrowed Money and
(y) optional prepayments of principal and interest on the Real Estate
Financing and the Synthetic Lease Obligations (but only to the extent
of the net proceeds of any Permitted Refinancing Debt incurred
82
for such purpose or the Net Cash Proceeds of the sale of any Property
or other assets subject to the Real Estate Financing or the Synthetic
Lease Loan Documents);
(ii) transactions with Affiliates as expressly permitted under Section
6.9; and
(iii) payments to the Borrower by a Subsidiary.
Without limiting the foregoing, any exercise of a call with respect to the
Real Estate Financing which entails the payment of a premium (whether or not
with the net proceeds of Permitted Refinancing Debt or the sale of Property or
other assets subject to the Real Estate Financing) shall require the prior
written consent of the Majority Term Lenders and the Majority Revolving Lenders,
acting together (or, failing that, Lenders whose Ratable Proportion, taken
together, at least equals 66-2/3%).
Section 6.9. Transactions with Affiliates. Sell or transfer any Property or
other assets to, or otherwise engage in any other transactions with, any of its
Affiliates other than in the ordinary course of business at prices and on terms
and conditions not less favorable to the Borrower, or the affected Subsidiary,
than could be obtained on an arm's-length basis from unrelated third parties.
Section 6.10. Investments, Loans and Advances. Purchase, hold or acquire
any capital stock, evidences of Debt or other securities of, make or permit to
exist any loans or advances to, or make or permit to exist any investment in,
any other Person by the Borrower or any Subsidiary (all of the foregoing,
"Investments"), except, in the case of the Borrower, for (i) the ownership by
the Borrower of capital stock of any Subsidiary existing on the date hereof,
(ii) Temporary Cash Investments; provided however that while any Loans or
Letters of Credit are outstanding or any Commitments are in effect such
Investments shall not exceed $15,000,000 in the aggregate at any one time
outstanding and shall be maintained at all times in an investment account
located in the United States with a Lender pursuant to arrangements which are
consistent with the provisions of this Agreement, (iii) existing Investments set
forth on Schedule 6.10, but not any increase in the amount thereof, (iv)
Investments in Subsidiaries created or acquired after the Effective Date which
constitute Dual Path Capital Expenditures in an aggregate amount not to exceed
$10 million for all such Subsidiaries at any one time outstanding; provided,
that the related shares of capital stock or other equity securities are pledged
by the Borrower for the benefit of the Secured Parties pursuant to a Supplement,
substantially in the form of Annex B to the Security and Pledge Agreement, and
the Borrower causes each such Subsidiary to comply with the requirements of
Section 5.11 (it being agreed that an Investment in a Subsidiary will no longer
be deemed to be outstanding if such Subsidiary is merged into the Borrower) and
provided further, that all such Subsidiaries are incorporated in a jurisdiction
in the United States and substantially all of their assets are at all times
located in the United States, (v) Investments in promissory notes representing
the non-cash purchase price for the sales of assets permitted under Section
6.3(b); provided, that such promissory notes are pledged by the Borrower to the
Agent for the benefit of the Secured Parties pursuant to a Supplement,
substantially in the form of Annex A to the Security and Pledge Agreement; (vi)
Minority Investments, in addition to those permitted under any other clause of
this Section, in Persons organized or
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incorporated in a jurisdiction in the United States, substantially all of whose
assets are located in the United States; provided, that such Minority
Investments constitute Dual Path Capital Expenditures and the aggregate amount
of all such Minority Investments shall not exceed $2,000,000; and (vii)
Investments (not permitted by any of clauses (i) through (vi) of this Section)
in an amount not exceeding $1,000,000 in the aggregate outstanding at any one
time; provided, that any shares of capital stock or other equity securities or
promissory notes or other instruments comprising such Investments are pledged by
the Borrower to the Agent for the benefit of the Secured Parties pursuant to a
Supplement, substantially in the form of Annex B to the Security and Pledge
Agreement.
Section 6.11. Business Segments. (i) Suspend the operation of a segment
material to the operation of its business as presently conducted, which
suspension could materially impair the operations of the Borrower and its
Subsidiaries taken as a whole; or (ii) engage at any time in any business or
business activity other than the business currently conducted by it and business
activities reasonably incidental thereto.
Section 6.12. Accounting Changes. Make any significant change in its
accounting treatment or financial reporting practices except as required by GAAP
or change its fiscal year or the method of determining its fiscal quarter ends.
Section 6.13. Amendment and Modification of Certain Documents. (a) Directly
or indirectly, amend, modify, supplement, waive compliance with, or assent to
noncompliance with any term, provision or condition of the Certificate of
Incorporation of the Borrower as in effect on the Effective Date which the Agent
or the Majority Revolving Lenders deem material.
(b) Directly or indirectly, amend, modify, supplement, waive
compliance with, or assent to noncompliance with, any term, provision or
condition of the UBS Loan Agreement or any of the other UBS Loan Documents as in
effect on the Effective Date hereof (A) which the Agent or the Majority
Revolving Lenders deem material (including, without limitation, terms,
provisions or conditions relating to events of default, acceleration rights or
other remedies, tenor, interest rates, substitution of collateral, the
non-recourse nature of such financing, covenants and prohibitions against
amending any of the Loan Documents) or (B) which the Agent reasonably determines
would place any further material restrictions on the Borrower or its
Subsidiaries or materially increase the obligations of the Borrower or any of
its Subsidiaries thereunder or confer on the holders thereof any material
additional rights; and
(c) Directly or indirectly, amend, modify, supplement, waive
compliance with or assent to noncompliance with any term, provision or condition
of the Synthetic Lease Loan Documents as in effect on the Effective Date (A)
which the Agent or the Majority Revolving Lenders deem material (including,
without limitation, terms, provisions or conditions relating to covenants,
events of default, acceleration rights or other remedies, substitution of
collateral, interest rates, tenor, prohibitions against amending any of the Loan
Documents or requiring prepayments with respect to store closings) or (B) which
the Agent reasonably determines would place any further material
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restrictions on the Borrower or its Subsidiaries or increase the obligations of
the Borrower or its Subsidiaries thereunder or confer on the holders thereof any
material additional rights.
Section 6.14. Sale/Lease-Backs. Enter into any arrangements, directly or
indirectly, with any Person, whereby the Borrower or any such Subsidiary shall
sell or transfer any property, whether now owned or hereafter acquired, used or
useful in its business, in connection with the rental or lease of the property
so sold or transferred.
Section 6.15. Environmental Matters. (a) Use, generate, manufacture,
produce, store, release, discharge or dispose of on, under or about any real
property owned or leased (other than any such leased property which constitutes
a minor part of a larger piece of property over which the Borrower or any such
Subsidiary has any control (such as a lease of a small number of parking places
in a large parking lot)) by the Borrower or any such Subsidiary (all such owned
or leased real property, being hereinafter called the "Property"), or transport
to or from the Property, any Hazardous Substance, or (to the extent within the
Borrower's or any such Subsidiary's control) permit any other Person to do so,
where such could reasonably be expected to have a Material Adverse Effect.
(b) Fail to keep and maintain the Property in compliance with any
Environmental Law where the failure to do so could reasonably be expected to
have a Material Adverse Effect.
(c) In the event that any investigation, site monitoring, containment,
cleanup, removal, restoration or other remedial work of any kind or nature (the
"Remedial Work") with respect to any portion of the Property is required to be
performed by the Borrower or any of its Subsidiaries under any applicable
Requirement of Law, or by any Governmental Authority or any other Person because
of, or in connection with, any current or future presence, suspected presence,
release or suspected release of a Hazardous Substance in or into the air, soil,
groundwater or surface water at, on, under or within the Property (or any
portion thereof), which could reasonably be expected to have a Material Adverse
Effect (i) fail to notify the Agent promptly in writing, (ii) fail to commence,
as soon as practicable, and thereafter diligently prosecute to completion, all
such Remedial Work or (iii) fail to provide the Agent with the results of such
investigations, studies and samplings as may be requested by the Agent.
(d) As used herein, (i) "Environmental Law" means any federal, state or
local law, statute, ordinance, or regulation now or hereafter in effect
pertaining to health, safety, industrial hygiene, or environmental conditions,
including, without limitation, regulations promulgated under the Resource
Conservation and Recovery Act (42 U.S.C. xx.xx. 6901 et seq.) and (ii) the term
"Hazardous Substance" means those substances included within the definitions of
"hazardous substances", "hazardous materials", "toxic substances" or "solid
waste" under the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, 42 U.S.C. ss.9601 et seq., the Resource
Conservation and Recovery Act of 1976, 42 U.S.C. ss.6901 et seq. and the
Hazardous Materials Transportation Act, 49 U.S.C. ss.5101 et seq., the Toxic
Substance Control Act, 15 U.S.C. ss.2601 et seq., the Clean Water Act, 33 U.S.C.
ss.1251 et seq., and the Clean Air Act, 42 U.S.C. ss.7401 et seq. and in the
regulations promulgated pursuant to said laws, and such other substances,
materials and
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wastes which are or become regulated under applicable local, state or federal
law, or which are classified as hazardous or toxic under federal, state, or
local laws or regulations or any other substance which may give rise to
liability under any Environmental Laws.
Section 6.16. Rent Obligations. Create or permit any obligations for the
payment of rent or occupancy of premises with respect to operating leases in the
aggregate for the Borrower and its Subsidiaries, in any fiscal year of the
Borrower set forth below in an amount in excess of the amount set forth opposite
such year:
Fiscal Year Rent
1998 $26,000,000
1999 $28,000,000
2000 $30,000,000
2001 $32,000,000
2002 $34,000,000.
SECTION 7. EVENTS OF DEFAULT
Section 7.1. Events of Default. In the case of the happening of any of the
following events and the continuance thereof beyond the applicable period of
grace, if any (each, an "Event of Default"):
(a) any material representation or warranty made by the Borrower in
this Agreement or in any other Loan Document or in connection with this
Agreement or any other Loan Document or in connection with the execution and
delivery of this Agreement or any of the other Loan Documents or the credit
extensions hereunder or any material statement or representation made in any
report, financial statement, certificate or other document furnished by the
Borrower to the Agent, the Underwriters, the Lenders or the Fronting Banks under
or in connection with this Agreement or any of the other Loan Documents, shall
prove to have been false or misleading in any material respect when made or
delivered; or
(b) default shall be made in the payment of any principal of or
interest on the Loans or any other amounts payable by the Borrower hereunder
(including, without limitation, any Fees or reimbursement or cash
collateralization obligations in respect of Letters of Credit), when and as the
same shall become due and payable, whether at the due date thereof (including,
without limitation, the relevant Maturity Date) or at a date fixed for
prepayment thereof or by acceleration thereof or otherwise; or
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(c) default shall be made by the Borrower in the due observance or
performance of any covenant, condition or agreement contained in Section 6 (and
such default shall continue unremedied after notice to the Borrower in the case
of Section 6.9) or in Section 5.11; or
(d) default shall be made by the Borrower or any Subsidiary in the due
observance or performance of any other covenant, condition or agreement to be
observed or performed pursuant to the terms of this Agreement or any of the
other Loan Documents and such default shall continue unremedied (w) in the case
of Section 5 (other than Sections 5.1(a), (b) and (t), 5.2, 5.3(a), 5.5, 5.7,
5.9, 5.10, 5.14 and 5.16), after notice to the Borrower, (x) in the case of
Sections 5.1(a), (b) and (t) and 5.14, for more than five (5) days after notice
to the Borrower, (y) in the case of Sections 5.2 and 5.5, for more than thirty
(30) days after notice to the Borrower and (z) in all other cases, for more than
ten (10) days after notice to the Borrower; or
(e) the Borrower or any Subsidiary shall commence a voluntary case or
other proceeding seeking liquidation, reorganization or other relief with
respect to itself or its debts under any bankruptcy, insolvency or other similar
law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it, or shall make a general assignment for
the benefit of creditors, or shall become unable, admit in writing its inability
or fail generally to pay its debts as they become due, or shall take any
corporate action to authorize any of the foregoing; or
(f) an involuntary case or other proceeding shall be commenced against
the Borrower or any Subsidiary seeking liquidation, reorganization or other
relief with respect to it or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of 60 days; or an order for
relief shall be entered against the Borrower or any Subsidiary under the federal
bankruptcy laws as now or hereafter in effect; or
(g) other than as provided in the Plan of Reorganization and upon the
Substantial Consummation thereof, a Change of Control shall have occurred; or
(h) any material provision of any Loan Document shall, for any reason,
cease to be valid and binding on the Borrower or any Subsidiary, or the Borrower
or such Subsidiary shall so assert in any pleading filed in any court; or
(i) the Confirmation Order shall be reversed, revoked or vacated in
whole or in part by a court of competent jurisdiction, or modified in a manner
or subjected to a stay that adversely affects the Borrower's or any Subsidiary's
ability to perform any of the Secured Obligations as determined by the Special
Required Lenders or the Required Revolving Lenders, as the case may be, in their
sole discretion; or
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(j) any judgment or order as to a liability or Debt for the payment of
money in excess of $5,000,000 shall be rendered against the Borrower or any
Subsidiary and the enforcement thereof shall not be subject to any applicable
stay; or
(k) any non-monetary judgment or order shall be rendered against the
Borrower or any Subsidiary which does or would reasonably be expected to (i)
cause a Material Adverse Effect, or (ii) have a material adverse effect on the
rights and remedies of the Agent, the Underwriters, the Fronting Banks or any
Lender under any Loan Document, and there shall be any period of 10 consecutive
days during which a stay of enforcement of such judgment or order, by reason of
a pending appeal or otherwise, shall not be in effect; or
(l) (i) any Event of Default occurs under the Synthetic Lease Loan
Documents or the UBS Loan Documents or (ii) the Borrower or any Subsidiary shall
fail to make any payment in respect of any other Debt aggregating $3,000,000 or
more, in each case when due or within any applicable grace period or any event
or condition shall occur which (x) results in the acceleration of the maturity
of such other Debt or the termination of any commitment to lend any such other
Debt or (y) enables (or, with the giving of notice or lapse of time or both,
would enable) the holder of such other Debt or any Person acting on such
holder's behalf to accelerate the maturity thereof or terminate any commitment
to lend such other Debt; or
(m) any ERISA Event shall have occurred with respect to a Plan and, 30
days after notice of such occurrence shall have been given to the Borrower by
the Agent (i) such ERISA Event shall still exist and (ii) the sum (determined as
of the date of occurrence of such ERISA Event) of the Insufficiency of such Plan
and the Insufficiency of any and all other Plans with respect to which an ERISA
Event shall have occurred and then exist (or, in the case of a Plan with respect
to which an ERISA Event described in clauses (b), (c), (e) and (f) of the
definition of ERISA Event shall have occurred and then exist, the liability
related thereto) is equal to or greater than $3,000,000;
(n) the Borrower, any Subsidiary or any ERISA Affiliate of any of them
shall have been notified by the sponsor of a Multiemployer Plan that it has
incurred Withdrawal Liability to such Multiemployer Plan in an amount which,
when aggregated with all other amounts required to be paid to Multiemployer
Plans by the Borrower, any Subsidiary or any ERISA Affiliate of any of them as
Withdrawal Liability (determined as of the date of such notification), exceeds
$5,000,000 or requires payments exceeding $2,000,000 per annum;
(o) the Borrower, any Subsidiary or any ERISA Affiliate of any of them
shall have been notified by the sponsor of a Multiemployer Plan that such
Multiemployer Plan is in reorganization or is being terminated within the
meaning of Title IV of ERISA if, as a result of such reorganization or
termination, the aggregate annual contributions of the Borrower, the
Subsidiaries and their ERISA Affiliates to all Multiemployer Plans which are
then in reorganization or being terminated have been or will be increased over
the aggregate amounts contributed to such Multiemployer Plans for the respective
plan year of each such Multiemployer Plan immediately preceding the plan year in
which the reorganization or termination occurs by an amount exceeding
$2,000,000; or
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(p) it shall be determined (whether by the Bankruptcy Court or by any
other judicial or administrative forum) that the Borrower or any Subsidiary is
liable for the payment of claims arising out of any failure to comply (or to
have complied) with applicable Environmental Laws, the payment of which will
have a Material Adverse Effect;
then, and in every such event and at any time thereafter during the continuance
of such event, the Agent may, and at the request of the Special Required Lenders
or the Required Revolving Lenders (as the case may be) shall, by notice to the
Borrower, take one or more of the following actions, at the same or different
times: (i) terminate forthwith the Total Commitments; (ii) declare the Loans
then outstanding to be forthwith due and payable, whereupon the principal of the
Loans, together with accrued interest thereon and any unpaid accrued Fees and
all other liabilities of the Borrower accrued hereunder and under any other Loan
Document (including, without limitation, all amounts due in respect of Letter of
Credit Outstandings, whether or not the beneficiaries of the then outstanding
Letters of Credit shall have presented the documents required thereunder), shall
become forthwith due and payable, without presentment, demand, protest or any
other notice of any kind, all of which are hereby expressly waived by the
Borrower, anything contained herein or in any other Loan Document to the
contrary notwithstanding; (iii) require the Borrower upon demand to forthwith
deposit in the respective Letter of Credit Accounts cash in the respective
amounts equal to the sum of 105% of the then outstanding Standby and Documentary
Letters of Credit (including any subsequent increases in the principal amounts
thereof pursuant to provisions of such Letters of Credit as then in effect) and,
to the extent the Borrower shall fail to furnish such funds as demanded by the
Agent, the Agent shall be authorized to debit or cause to be debited the account
of the Borrower maintained with the Agent or any other Secured Party in such
amount; (iv) set-off or cause to be set-off amounts in the Letter of Credit
Accounts or any other accounts maintained with the Agent or any other Secured
Party and apply or cause such amounts to be applied to the obligations of the
Borrower hereunder and under the other Loan Documents; and (v) exercise and
enforce any and all remedies under the Loan Documents and under applicable law
available to the Agent, the Fronting Banks and the Lenders; provided, that
without any notice to the Borrower or any other act by the Agent or the Lenders,
in the case of the occurrence of (x) any of the Events of Default specified in
clauses (e) or (f) above with respect to the Borrower or any Subsidiary or (y)
any of the Events of Default specified in clause (l) above with respect to the
Real Estate Financing as to which UBS either accelerates the maturity of any of
the Debt owing by the Borrower or any of its Subsidiaries to UBS with respect
thereto or otherwise exercises any of its rights or remedies to liquidate,
realize or foreclose upon any collateral securing such Debt, the Commitments
shall thereupon terminate and the Notes (together with accrued interest thereon)
and all other Secured Obligations and liabilities of the Borrower hereunder and
under the other Loan Documents (including, without limitation, all amounts due
in respect of Letters of Credit Outstanding, whether or not the beneficiaries of
the then outstanding Letters of Credit shall have presented the documents
required thereunder) shall become immediately due and payable as if the Letters
of Credit had been drawn in full without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Borrower. In the case
of any exercise of the right of set-off with respect to Letter of Credit
Accounts, such right may be exercised only to pay unreimbursed draws under, and
unpaid fees, costs and expenses incurred in connection with, any Letters of
Credit issued by the Fronting Bank in the name of which Fronting Bank such
Letter of Credit Account is maintained,
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except to the extent that the balance of a Letter of Credit Account exceeds 105%
of the Letter of Credit Outstandings (including any subsequent increases in the
principal amounts thereof pursuant to provisions of such Letters of Credit as
then in effect) that pertain to such Letter of Credit Account. Any such excess
amount may be applied to other Secured Obligations.
Section 7.2. Application of Proceeds. If a Default or an Event of Default
shall have occurred and be continuing, all proceeds of the Collateral and all
other payments received under this Agreement or the other Loan Documents
(including as a result of or in connection with a proceeding under the
Bankruptcy Code or any other similar state law proceeding involving the
Borrower) which constitute identifiable proceeds of Collateral shall be applied
by the Agent to payment of the Secured Obligations in the following order:
(i) FIRST, to payment of all unreimbursed costs and expenses of
the Agent which are payable by the Borrower pursuant to any of
the Loan Documents and all unreimbursed costs and expenses of
the Lenders which are payable pursuant to Section 9.5;
(ii) SECOND, to payment first of the accrued and unpaid interest
on, next the principal of and then all other amounts due under
the Loan Documents in respect of the New Revolving Loans, any
other Revolving Obligations (including any obligation of the
Borrower to reimburse the Fronting Banks for unreimbursed
drawings made under Letters of Credit and the cash
collateralization of any undrawn Letters of Credit in an
amount equal to 105% of the then undrawn amount thereof
(including any subsequent increases in the principal amounts
thereof pursuant to provisions of such Letters of Credit as
then in effect)), any Hedging Obligations and any Cash
Management Obligations remaining unpaid after the exercise of
any set-off rights available to the Fronting Banks, the
Hedging Bank or the Cash Management Banks pursuant to Section
2.23, such payment to be made ratably amongst the New
Revolving Lenders, the Hedging Bank and the Cash Management
Banks in accordance with the proportion which the aggregate
principal amount of the outstanding New Revolving Loans owing
to the New Revolving Lenders, or the aggregate amount of any
of such other Secured Obligations (other than Term
Obligations), at the time bears to the principal amount of all
of such Revolving Obligations, Hedging Obligations and Cash
Management Obligations, until such interest, principal and
other amounts shall be paid in full (and, if the Total
Commitments have not already been terminated at the time of
any application of proceeds to the payment of the principal of
the New Revolving Loans or Letter of Credit Outstandings, or
to cash collateralize Letters of Credit, the Total Commitments
shall be automatically and irrevocably reduced by the amount
of such principal payment or the amount of the Letters of
Credit cash collateralized, as the case may be);
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(iii) THIRD, to payment first of the accrued and unpaid interest on,
next the principal of and then all other amounts due under the
Loan Documents in respect of the New Term Loans and any other
Term Obligations, ratably amongst the New Term Lenders in
accordance with the proportion which the aggregate principal
amount of the outstanding Term Obligations owing to the New
Term Lenders at the time bears to the aggregate principal
amount of such Term Obligations until the interest on and
principal of the Term Obligations shall be paid or provided
for in full;
(iv) FOURTH, to the payment of any remaining unpaid Secured
Obligations ratably amongst the Secured Parties in accordance
with the proportion which the amount of such other Secured
Obligations owing to each such Secured Party bears to the
aggregate principal amount of such other Secured Obligations
owing to all of the Secured Parties until such other Secured
Obligations shall be paid in full; and
(v) FIFTH, the balance, if any, after all of the Secured
Obligations have been satisfied, shall be returned to the
Borrower or paid over to such other Person as may be required
by law.
The Borrower acknowledges and agrees that it shall remain liable to the
extent of any deficiency between (x) the amount of the proceeds of the
Collateral and all other payments received under this Agreement and applied
pursuant to this Section to the sums referred to in the FIRST through FOURTH
clauses above and (y) the aggregate amount of the sums referred to in the FIRST
through FOURTH clauses above.
SECTION 8. THE AGENT; THE ADMINISTRATIVE AGENT
Section 8.1. Appointment and Authorization. Each Secured Party irrevocably
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers, under this Agreement and the Notes and the other Loan
Documents as are delegated to the Agent, as the case may be, by the terms hereof
or thereof, together with all such powers as are reasonably incidental thereto.
Section 8.2. Agent and Affiliates. The Agent shall have the same rights and
powers under this Agreement as any other Lender and may exercise or refrain from
exercising the same, as though it were not the Agent, and the Agent and its
Affiliates may accept deposits from, lend money to, and generally engage in any
kind of business with the Borrower or any Subsidiary or Affiliate of the
Borrower as if it were not the Agent.
Section 8.3. Action by Agent. The obligations of the Agent hereunder and
under the other Loan Documents are only those expressly set forth herein and
therein. Without limiting the generality of the foregoing, Agent shall not be
required to take any action with respect to any Default, except
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as expressly provided in Section 7 and in the Security Documents and except that
the Agent shall take such action with respect to such Default as shall be
reasonably directed by the Special Required Lenders or the Required Revolving
Lenders, as the case may be; provided, that unless and until the Agent shall
have received such directions, the Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
Default as it shall deem advisable.
Section 8.4. Consultation with Expoerts. The Agent may consult with legal
counsel (who may be counsel for the Borrower), independent public accountants
and other experts selected by it and shall not be liable for any action taken or
omitted to be taken by it in good faith in accordance with the advice of such
counsel, accountants or experts.
Section 8.5. Liability of Agent. Notwithstanding any other provision,
express or implied, to the contrary in this Agreement or any other Loan
Document, neither the Agent nor any of its directors, officers, agents,
employees, attorneys-in-fact or Affiliates shall be liable for any action taken
or not taken by them in connection herewith or in connection with any other Loan
Document (i) with the consent or at the request of the applicable Lenders, or
(ii) in the absence of their own gross negligence or willful misconduct, as
determined by a final order or judgment of a court of competent jurisdiction.
Neither the Agent nor any of its directors, officers, agents, employees,
attorneys-in-fact or Affiliates shall be responsible for or have any duty to
ascertain, inquire into or verify (i) any statement, warranty or representation
made in connection with this Agreement, any other Loan Document or any Borrowing
hereunder; (ii) the performance or observance of any of the covenants or
agreements of the Borrower; (iii) the satisfaction of any condition specified in
Section 4 (except where the satisfaction of the Agent is specifically required);
or (iv) the validity, effectiveness or genuineness of this Agreement, the Notes,
any Letter of Credit, any other Loan Document or any other instrument or writing
furnished in connection herewith or therewith. The Agent shall not incur any
liability by acting in reliance upon any notice, consent, certificate,
statement, or other writing (which may be a bank wire or similar writing)
believed by it in good faith to be genuine or to be signed by the proper party
or parties.
Section 8.6. Reimbursement and Indemnification; Set-Off. (a) Each Lender
agrees (i) to reimburse (x) the Agent and the Fronting Banks, on demand, in
Ratable Proportion, for any expenses and fees incurred by the Agent or the
Fronting Banks (as the case may be) for the benefit of the Lenders under or in
connection with 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, and any other
expense incurred in connection with the operations or enforcement hereof or
thereof not required to be reimbursed by the Borrower and (y) the Agent and the
Fronting Banks in Ratable Proportion for any expenses, costs, fees or
disbursements of the Agent or the Fronting Banks (as the case may be) incurred
for the benefit of the Lenders that the Borrower has agreed to reimburse
pursuant to Section 9.5 and has failed so to reimburse and (ii) to indemnify and
hold harmless the Agent and the Fronting Banks and any of their respective
directors, officers, employees, agents, advisors, consultants,
attorneys-in-fact, experts, other professional persons and representatives and
Affiliates, on demand, in Ratable Proportion from and against any and all
penalties, fines, expenses, losses, settlements, costs, claims, causes of
action, debts, dues, sums of
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money, accounts, accountings, reckonings, acts, omissions, demands, liabilities,
obligations, damages, actions, judgments, suits, proceedings, or disbursements
of any kind or nature whatsoever, known or unknown, contingent or otherwise,
which may be imposed on, incurred by, or asserted against any of them in any way
relating to or arising out of this Agreement, the Notes or any of the other Loan
Documents or any action taken or omitted by it or any of them under this
Agreement, the Notes or any of the other Loan Documents to the extent not
reimbursed by the Borrower (except such as shall result from their respective
gross negligence or willful misconduct as determined by a final order or
judgment of a court of competent jurisdiction). Without limiting the foregoing,
the agreements contained in Section 10.6 of the Pre-Petition Credit Agreement
shall continue in full force and effect as to the matters covered thereby.
(b) The Agent 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 amounts
received by the Agent for the account of a Defaulting Lender to the satisfaction
of the unpaid obligations owing by such Defaulting Lender to the Agent, a
Fronting Bank or CIBC, as the issuer of the Pre-Petition Letters of Credit and
the rights of such Defaulting Lender with respect to all such amounts shall be
subject and subordinate to the rights of the Agent, the relevant Fronting Bank,
and CIBC, as the issuer of the Pre-Petition Letters of Credit, as the case may
be, to be paid the amounts owing to it by such Defaulting Lender.
Section 8.7. Credit Decision. Each Secured Party expressly acknowledges
that neither the Agent nor any of its directors, officers, employees, agents,
advisors, attorneys-in-fact or Affiliates has made any representations or
warranties to it and that no act by the Agent hereinafter taken, including any
review of the affairs of the Borrower, shall be deemed to constitute any
representation or warranty by the Agent to any Secured Party. Each Secured Party
acknowledges that it has independently and without reliance upon the Agent or
any other Secured Party, and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Secured Party also acknowledges that it will independently and
without reliance upon the Agent or any other Secured Party, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking any action under this
Agreement. Except for notices, reports and other documents expressly required to
be furnished to the Secured Parties by the Agent hereunder, the Agent shall not
have any duty or responsibility to provide any Secured Party with any credit or
other information concerning the business, operations, property, condition
(financial or otherwise), prospects or creditworthiness of the Borrower or any
Subsidiary which may come into the possession of the Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates.
Section 8.8. Notice of Transfer. The Agent 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 a written notice of the assignment or transfer
thereof executed by such Lender and its assignee in accordance with Section 9.3
shall have been accepted by the Agent.
Section 8.9. Successor Agent. The Agent may resign at any time by giving
written notice thereof to the other Secured Parties and the Borrower. Upon any
such resignation, the Majority Term
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Lenders and the Majority Revolving Lenders, acting together (or, failing that,
Lenders whose Ratable Proportion, taken together, at least equals 66-2/3%) shall
have the right to appoint a successor Agent, which shall be reasonably
satisfactory to the Borrower. If no successor Agent shall have been so appointed
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, appoint a successor Agent, which shall be a commercial bank
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, which shall
be reasonably satisfactory to the Borrower. Upon the acceptance of any
appointment as Agent hereunder 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, except that CIBC shall
remain obligated to First Bank in its capacity as Documentary Letter of Credit
Bank with respect to Documentary Letters of Credit issued during the period that
CIBC was the Agent. After any retiring Agent's resignation hereunder as Agent,
the provisions of this Section shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Agreement.
Section 8.10. Concerning the Administrative Agent. Notwithstanding any
other provision of this Agreement, it is understood and agreed that the
Administrative Agent shall have no obligations or duties under this Agreement
and the other Loan Documents except such as are expressly set forth in this
Agreement or the other Loan Documents.
SECTION 9. MISCELLANEOUS
Section 9.1. Notices. Notices and other communications provided for herein
shall be in writing (including telegraphic, telex, facsimile or cable
communication) and shall be mailed, telegraphed, telexed, transmitted, cabled or
delivered to the Borrower at 0000 Xxxx Xxxxxx, 0 Xxxxxxxx Xxxxxx, 0xx Xxxxx,
Xxxxxx Xxxx, XX 00000, Attention: Chief Financial Officer, to First Bank, so
long as it shall be the Documentary Letter of Credit Bank, at 000 0xx Xxxxxx
Xxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, Attention: Xxxx Xxxxxxxxx (Fax No.
000-000-0000) and Xxxxxxx Xxxxx, Letter of Credit Department (Fax No.
000-000-0000), and to any Lender, any other Fronting Bank or the Agent it at its
address set forth on the signature pages of this Agreement, or such other
address as such party may from time to time designate by giving written notice
to the other parties hereunder. 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 fifth Business Day after the date when sent by
registered or certified mail, postage prepaid, return receipt requested, if by
mail; or when delivered to the telegraph company, charges prepaid, if by
telegram; or when receipt is acknowledged, if by any telegraphic communications
or facsimile equipment of the sender; in each case addressed to such party as
provided in this Section or in accordance with the latest unrevoked written
direction from such party; provided, that in the case of notices to the Agent,
notices pursuant to the preceding sentence and pursuant to Section 2 shall be
effective only when received by the Agent.
Section 9.2. Survival of Agreement, Representations and Warranties, etc.
All warranties, representations and covenants made by the Borrower herein or in
any certificate or other instrument
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delivered by it or on its behalf in connection with this Agreement shall be
considered to have been relied upon by the Secured Parties and shall survive the
making of the Loans herein contemplated, the issuance of the Letters of Credit
and the issuance and delivery to the Lenders of the Notes, regardless of any
investigation made by any Lender or Fronting Bank or on its behalf and shall
continue in full force and effect so long as any amount due or to become due
hereunder is outstanding and unpaid and so long as the Total Commitments have
not expired or been terminated.
Section 9.3. Successors and Assigns.
(a) (i) This Agreement shall be binding upon and inure to the benefit
of the Borrower, the Agent, the Fronting Banks, the Lenders, the Underwriters
and the other Secured Parties and their respective successors and assigns. The
Borrower may not assign or transfer any of its rights or obligations hereunder
without the prior written consent of all of the Lenders and, in the case of its
rights and obligations with respect to Letters of Credit, the relevant Fronting
Bank.
(ii) Each Lender may sell participations to any Person in all or
part of any Loan, or all or part of its Notes or Commitment, in which event,
without limiting the foregoing, the provisions of Sections 2.13, 2.14 and 2.17
shall inure to the benefit of each purchaser of a participation (provided, that
such participant shall look solely to the seller of such participation for such
benefits, and the Borrower's liability, if any, under Sections 2.13, 2.14 and
2.17 shall not be increased as a result of the sale of any such participation)
and the pro rata treatment of payments, as described in Section 2.16, shall be
determined as if such Lender had not sold such participation. In the event any
Lender shall sell any participation, such Lender shall retain the sole right and
responsibility to enforce the obligations of the Borrower relating to the Loans
including, without limitation, the right to approve any amendment, modification
or waiver of any provision of this Agreement (provided, that such Lender may
grant its participant the right to consent to such Lender's execution of
amendments, modifications or waivers which (i) reduce any Fees payable hereunder
to the Lenders, (ii) reduce the amount of any scheduled principal payment on any
Loan or reduce the principal amount of any Loan or the rate of interest payable
hereunder or (iii) extend the maturity of the Borrower's obligations hereunder).
The sale of any such participation shall not alter the rights and obligations of
the Lender selling such participation hereunder with respect to the Borrower.
(iii) Each Pre-Petition L/C Participant may sell participations
to any Person in all or a portion of its rights and obligations under Section
9.14(c) of this Agreement, together with its obligations under the Pre-Petition
Credit Agreement referred to therein (collectively, its "Pre-Petition L/C
Obligations"); provided, that (x) such Pre-Petition L/C Participant shall retain
the sole right to receive payments and to approve any amendment, modification or
waiver with respect to Section 9.14(c), if any, (provided, that such
Pre-Petition L/C Participant may grant its participant the right to consent to
such Pre-Petition L/C Participant's execution of any amendments, modifications
or waivers) and (y) the sale of any such participation shall not alter the
rights and obligations of the Pre-Petition L/C Participant selling such
participation hereunder with respect to CIBC.
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(b) (i) Each Lender may assign to one or more Lenders or Eligible
Assignees all or a portion of its interests, rights and obligations under this
Agreement (including, without limitation, all or a portion of its Commitment and
the same portion of the related New Revolving Loans at the time owing to it and
the related Note held by it); provided, that (w) other than in the case of an
assignment to a Person at least 50% owned by the assignor Lender, or by a common
parent of both, or to another Lender, the Agent must give its prior written
consent, which consent will not be unreasonably withheld, (x) the aggregate
amount of the Commitment and/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 Agent) shall, unless otherwise
agreed to in writing by the Borrower and the Agent, in no event be less than
$5,000,000 (or $1,000,000 in the case of an assignment between Lenders) unless
the Commitment and New Revolving Loans or the New Term Loans (as the case may
be) so assigned constitute 100% of such Commitment and New Revolving Loans or
New Term Loans of the assigning Lender, (y) each assignment shall be of a
constant, not a varying, percentage of all of the assigning Lender's rights and
obligations under this Agreement in respect of (A) its Commitment and New
Revolving Loans, (B) its New Term Loans or (C) its Commitment and New Revolving
Loans and its New Term Loans and (z) it shall not be necessary for any Lender to
sell the same percentage of its Commitment and New Revolving Loans and its New
Term Loans (as the case may be) (although each such percentage of its Commitment
and New Revolving Loans and its New Term Loans must be a constant, not a varying
percentage). The Agent shall advise the Fronting Banks that it has received such
Assignment and Acceptance and shall provide a copy thereof to each of the
Fronting Banks.
(ii) Each Pre-Petition L/C Participant may assign to one or more
Lenders or Eligible Assignees all or a portion of its Pre-Petition L/C
Obligations; provided, that (w) other than in the case of an assignment to a
Person at least 50% owned by the assignor Pre-Petition L/C Participant, or by a
common parent of both, or to another Lender, the Agent must give its prior
written consent, which consent will not be unreasonably withheld, (x) the
aggregate amount of such Pre-Petition L/C Participant's Pre-Petition L/C
Obligations subject to each such assignment (determined as of the date the
Assignment and Acceptance with respect to such assignment is delivered to the
Agent) shall, unless otherwise agreed to in writing by the Borrower and the
Agent, in no event be less than $1,000,000 unless the Pre-Petition L/C
Participant's Pre-Petition L/C Obligations so assigned constitute 100% of such
Pre-Petition L/C Participant's Pre-Petition L/C Obligations, (y) each assignment
shall be of a constant, not a varying, percentage of all of the assigning
Pre-Petition L/C Participant's Pre-Petition L/C Obligations and (z) it shall not
be necessary for any Pre-Petition L/C Participant to sell the same percentage of
its Pre-Petition L/C Obligations as of its Commitments and New Revolving Loans
and/or its New Term Loans (as the case may be).
(iii) The parties to each such assignment entered into pursuant
to paragraphs (b)(i) and/or (b)(ii) above shall execute and deliver to the
Agent, for its acceptance and recording in the Register (as defined below), an
Assignment and Acceptance with blanks appropriately completed, together with any
Note subject to such assignment and a processing and recordation fee of $3,500
(for which the Borrower shall have no liability). Upon such execution, delivery,
acceptance and recording, from and after the effective date specified in each
Assignment and Acceptance, which effective date
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shall be within ten Business Days after the execution thereof (unless otherwise
agreed to in writing by the Agent in its sole discretion), (A) the assignee
thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender hereunder
and (B) the Lender thereunder shall, to the extent provided in such Assignment
and Acceptance, be released from its obligations under this Agreement (and, in
the case of an Assignment and Acceptance covering all or the remaining portion
of an assigning Lender's rights and obligations under this Agreement, such
Lender shall cease to be a party hereto).
(c) By executing and delivering an Assignment and Acceptance, the
assigning Lender thereunder and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than the
representation and warranty that it is the legal and beneficial owner of the
interest being assigned thereby free and clear of any adverse claim, such
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement or any of the other Loan Documents
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of this Agreement or any of the other Loan Documents; (ii) such
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or the
performance or observance by the Borrower of any of its obligations under this
Agreement or any of the other Loan Documents or any other instrument or document
furnished pursuant hereto; (iii) such assignee confirms that it has received a
copy of this Agreement and the other Loan Documents, together with copies of the
financial statements referred to in Section 3.4 and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (iv) such assignee will,
independently and without reliance upon the Agent, such assigning Lender or any
other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement, any of the other Loan Documents and any
other instrument or document furnished pursuant thereto; (v) such assignee
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers under this Agreement, any of the other Loan Documents
and any other instrument or document furnished pursuant thereto, as are
delegated to the Agent by the terms hereof or thereof, together with such powers
as are reasonably incidental thereto; and (vi) such assignee agrees that it will
perform in accordance with their terms all obligations that by the terms of this
Agreement are required to be performed by it as a Lender.
(d) The Agent shall maintain at its office 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 Commitments of, and principal amount of the
Loans owing to, each Lender from time to time (the "Register"). The entries in
the Register shall be conclusive, in the absence of manifest error, and the
Borrower, the Agent and the Lenders shall treat each Person the name of which is
recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrower or any
Lender at any reasonable time and from time to time upon reasonable prior
notice.
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(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and the assignee thereunder, together with any Note subject to
such assignment and the fee payable in respect thereof, the Agent shall, if such
Assignment and Acceptance has been completed with blanks appropriately filled:
(i) accept such Assignment and Acceptance, (ii) record the information contained
therein in the Register and (iii) give prompt written notice thereof to the
Borrower (together with a copy thereof). Within five Business Days after receipt
of notice, the Borrower, at its own expense, shall execute and deliver to the
Agent, in exchange for the surrendered Note, a new Note to the order of such
assignee in an amount equal to the Commitment and/or Loans assumed by it
pursuant to such Assignment and Acceptance and, if the assigning Lender has
retained Commitments and/or Loans hereunder, a new Note or Notes to the order of
the assigning Lender in an amount equal to the Commitment and/or Loans retained
by it hereunder. Such new Note or Notes shall be in an aggregate principal
amount equal to the aggregate principal amount of such surrendered Note or
Notes, shall be dated the effective date of such Assignment and Acceptance and
shall otherwise be in substantially the form of the surrendered Note or Notes.
Thereafter, such surrendered Note or Notes shall be marked canceled and returned
to the Borrower.
(f) Any Lender may, in connection with any assignment or participation
or proposed assignment or participation pursuant to this Section, disclose to
the assignee or participant or proposed assignee or participant, any information
relating to the Borrower furnished to such Lender by or on behalf of the
Borrower; provided, that prior to any such disclosure, each such assignee or
participant or proposed assignee or participant shall agree in writing to be
bound by the provisions of Section 9.4. (1)
(g) For purposes of this Section 9.3 (and for no other purpose), in
connection with any assignment by any Pre-Petition L/C Participant of all or a
portion of its Pre-Petition L/C Obligations, references in this Section 9.3 to a
"Lender" and to "Lenders" shall be deemed to include such Pre-Petition L/C
Participant to the extent the context of the relevant provision shall so
require.
Section 9.4. Confidentiality. The Agent and each Lender agree to keep any
information delivered or made available by the Borrower to it confidential from
anyone other than persons employed or retained by the Agent or such Lender who
are or are expected to become engaged in evaluating, approving, structuring or
administering the Loans; provided, that nothing herein shall prevent the Agent
or any Lender from disclosing such information (i) to any other Lender, (ii) to
any other person if reasonably incidental to the administration of the Loans,
(iii) upon the order of any court or administrative agency, (iv) upon the
request or demand of any regulatory agency or authority, (v) which has been
publicly disclosed other than as a result of a disclosure by the Agent or any
Lender which is not permitted by this Agreement, (vi) in connection with any
litigation to which the Agent, any Lender, or their respective Affiliates may be
a party to the extent reasonably required, (vii) to the extent reasonably
required in connection with the exercise of any remedy hereunder, (viii) to the
Agent's and such Lender's legal counsel, financial advisors and independent
auditors, and (ix) to any actual or proposed participant or assignee of all or
part of its rights hereunder subject to the proviso in Section 9.3(f).
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Section 9.5. Expenses. Whether or not the transactions hereby contemplated
shall be consummated, the Borrower agrees to pay all reasonable out-of-pocket
expenses incurred by the Agent (including, but not limited to, the reasonable
fees and disbursements of Xxxxxx, Xxxxx & Xxxxxxx LLP, special counsel for the
Agent ("ZR&G"), Shook Hardy & Bacon L.L.P., special local and special real
estate counsel for the Agent, any other counsel that the Agent shall retain and
any third-party consultants, accountants and auditors advising the Agent or
ZR&G, including (without limitation) Ernst & Young LLP, financial advisors to
ZR&G), any Fronting Bank (including, but not limited to, the reasonable fees and
disbursements of Xxxxxx & Xxxxxxx LLP, special counsel for First Bank) and any
Lender or any Underwriter in connection with the preparation, execution,
delivery and administration of this Agreement, the Notes and the other Loan
Documents, the making of the Loans and the issuance of the Letters of Credit,
the perfection of the Liens contemplated hereby, the syndication of the
transactions contemplated hereby, any consent or waiver hereunder or thereunder,
and any amendment or modification hereof or thereof, the reasonable and
customary costs, fees and expenses of the Agent in connection with its monthly
and other periodic field audits and monitoring of assets and, following the
occurrence of an Event of Default, all reasonable out-of-pocket expenses
incurred by the Underwriters, the Lenders, the Fronting Banks and the Agent in
the enforcement or protection of the rights of any one or more of the
Underwriters, the Lenders, the Fronting Banks or the Agent in connection with
this Agreement, the Notes or the other Loan Documents including, but not limited
to, the reasonable fees and disbursements of any counsel for the Underwriters,
Lenders, the Fronting Banks or the Agent (including, without limitation, the
allocated costs of in-house counsel). Such payments shall be made on demand upon
delivery of a statement setting forth such costs and expenses. Whether or not
the transactions hereby contemplated shall be consummated, the Borrower agrees
to reimburse the Agent and the Underwriters for the expenses set forth in the
Commitment Letter, and the reimbursement provisions thereof are hereby
incorporated herein by reference. The obligations of the Borrower under this
Section shall survive the termination of this Agreement and/or the payment and
performance of the Secured Obligations.
Section 9.6. Indemnities. (a) The Borrower agrees to defend, indemnify and
hold harmless the Agent, the Lenders and the other Secured Parties and their
respective directors, officers, employees, agents, advisors, consultants,
attorneys-in-fact, experts, other professional persons and representatives and
Affiliates (each, an "Indemnified Party"), on demand, from and against any and
all penalties, fines, expenses, losses, settlements, costs, claims, causes of
action, debts, dues, sums of money, accounts, accountings, reckonings, acts,
omissions, demands, liabilities, obligations, damages, actions, judgments,
suits, proceedings or disbursements incurred by such Indemnified Party, of any
kind or nature whatsoever, known or unknown, contingent or otherwise, arising
out of claims made by any Person in any way relating to the transactions
contemplated hereby, including, without limitation, attorneys' and consultants'
fees, investigation and laboratory fees, response costs, court costs and
litigation expenses, except to the extent that any of the foregoing arise solely
out of or result from the gross negligence or willful misconduct of such
Indemnified Party, as determined by a final order or judgment of a court of
competent jurisdiction.
(b) Without limiting the foregoing, the Borrower agrees to defend,
indemnify and hold harmless each Indemnified Party, on demand, from and against
any and all penalties, fines,
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expenses, losses, settlements, costs, claims, causes of action, demands,
liabilities, obligations, damages, actions, judgments, suits or disbursements
incurred by such Indemnified Party, of any kind or nature whatsoever, known or
unknown, contingent or otherwise, arising out of, or in any way relating to the
violation of, noncompliance with or liability under any Environmental Law
applicable to the operations of the Borrower or any Subsidiary or the Property,
or any orders, requirements or demands of Governmental Authorities or any other
Person related thereto, including, without limitation, attorneys' and
consultants' fees, investigation and laboratory fees, response costs, court
costs and litigation expenses, except to the extent that any of the foregoing
arise solely out of or result from the gross negligence or willful misconduct of
such Indemnified Party, as determined by a final order or judgment of a court of
competent jurisdiction.
(c) The indemnities set forth in this Section shall continue in full
force and effect regardless of the termination of this Agreement and the payment
and performance of the Secured Obligations.
Section 9.7. CHOICE OF LAW. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF
NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES AND BY FEDERAL LAW TO
THE EXTENT APPLICABLE; PROVIDED, HOWEVER, THAT WITH RESPECT TO ANY MORTGAGE
FILED IN JURISDICTIONS OUTSIDE OF THE STATE OF NEW YORK, THE LAWS OF SUCH
JURISDICTION WHERE SUCH MORTGAGE WAS FILED SHALL APPLY.
Section 9.8. No Waiver. No failure on the part of the Agent or any of the
other Secured Parties to exercise, and no delay in exercising, any right, power
or remedy hereunder or under the Notes or any of the other Loan Documents shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right, power or remedy preclude any other or further exercise thereof or
the exercise of any other right, power or remedy. All remedies hereunder are
cumulative and are not exclusive of any other remedies provided by law.
Section 9.9. Extension of Maturity. Should any payment of principal of or
interest on the Notes or any other amount due hereunder become due and payable
on a day other than a Business Day, the maturity thereof shall be extended to
the next succeeding Business Day and, in the case of principal, interest shall
be payable thereon at the rate herein specified during such extension.
Section 9.10. Amendments, etc. Unless otherwise specifically provided
herein or in any other Loan Document, no amendment, modification or waiver of
any provision of this Agreement, the Notes, the Security and Pledge Agreement or
the other Loan Documents, and no consent to any departure by the Borrower
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the Majority Lenders, and any such amendment, waiver or consent
shall be effective only in the specific instance and for the purpose for which
given; provided, that no such amendment, modification or waiver shall without
the written consent of (i) all of the New Revolving Lenders and the Required
Term Lenders, increase the Total Commitments; (ii) all of the New Revolving
Lenders, (x) reduce the principal amount of any New Revolving Loan or the rate
of interest payable thereon, or reduce any Fees payable hereunder in respect of
the New Revolving Loans, (y) postpone the date
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for any Commitment reduction or for any scheduled payment or any mandatory
prepayment of principal, interest or Fees in respect of any New Revolving Loans
or (z) amend, modify or waive any provision of this proviso (ii) or the
definitions of Majority Revolving Lenders or Required Revolving Lenders; (iii)
all of the New Term Lenders (x) reduce the principal amount of any New Term Loan
or the rate of interest payable thereon, (y) postpone the date for any scheduled
payment or any mandatory prepayment of principal or interest in respect of any
New Term Loans or (z) amend, modify or waive any provision of this proviso (iii)
or the definitions of Majority Term Lenders or Required Term Lenders; (iv) the
Required Lenders, change the definition of Required Inventory or modify the
substance of Sections 4.2(f) and 5.1(t) or the form of the Inventory Compliance
Certificate; (v) the Required Pre-Petition Lenders, change the definition of
Required Pre-Petition Lenders; and (vi) all of the Lenders, (w) amend, modify or
waive any provision of this Agreement which provides for the unanimous consent
or approval of the Lenders, (x) amend, modify or waive any provision of this
Section (other than provisos (ii), (iii), (iv) and (v) above) or the definitions
of Majority Lenders, Ratable Proportion, Required Lenders or Special Required
Lenders, (y) substitute, discharge, surrender or release all or substantially
all of the Collateral except as permitted by the Loan Documents or (z) change
the percentage of Lenders holding Secured Obligations which may direct the Agent
to take action pursuant to Section 7.1; and (vii) CIBC, as issuer of the
Pre-Petition Letters of Credit, and all of the Pre-Petition L/C Participants,
amend, modify or waive any provision of Section 9.14(c) or any provision of the
Pre-Petition Credit Agreement referred to therein. No such amendment,
modification or waiver may adversely affect the rights and obligations of the
Agent or any Fronting Bank hereunder without its prior written consent. No
notice to or demand on the Borrower shall entitle the 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 or any other Secured Obligation,
shall bind any Person subsequently acquiring a Note (whether or not such Note is
so marked) or such other Secured Obligations. No amendment to this Agreement
shall be effective against the Borrower unless signed by the Borrower.
Section 9.11. Invalidity; Severability. Whenever possible, each provision
of this Agreement shall be interpreted in such manner as to be effective and
valid under all applicable laws and regulations. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
Section 9.12. Headings. Section headings used herein are for convenience
only and are not to affect the construction of or be taken into consideration in
interpreting this Agreement.
Section 9.13. Execution in Counterparts; Effectiveness. This Agreement may
be executed in any number of counterparts, each of which shall constitute an
original, but all of which taken together shall constitute one and the same
instrument. This Agreement shall become effective when the Agent shall have
received counterparts hereof signed by all of the parties hereto and when the
conditions contained or referred to in Section 4.1 shall have been satisfied or
waived.
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Section 9.14. Prior Agreements. (a) Subject to the provisions of Sections
9.14(b) and 9.14(c), this Agreement and the other Loan Documents represent the
entire agreement of the parties with regard to the subject matter hereof and the
terms of any letters and other documentation entered into between the Borrower
and any Lender or the Agent prior to the execution of this Agreement which
relate to Loans to be made hereunder shall be replaced by the terms of this
Agreement; provided, that the obligations of the Borrower under the Commitment
Letter and the Fee Letter shall survive the execution and delivery of this
Agreement, except to the extent that such obligations are satisfied pursuant to
or in connection with this Agreement.
(b) The obligations of the Borrower under Sections 2.13, 2.14, 2.17, 5.11,
6.14, 9.5 and 9.6 of the DIP Credit Agreement and Sections 5.3, 5.4, 5.5, 5.9,
7.13, 8.28. 11.3 and 11.10 of the Pre-Petition Credit Agreement shall remain in
full force and effect.
(c) For the benefit of CIBC, as issuer of the Pre-Petition Letters of
Credit, each New Term Lender which is also an L/C Participant (as defined in the
Pre-Petition Credit Agreement) (each, a "Pre-Petition L/C Participant"), hereby
(i) confirms its acceptance and purchase, pursuant to Section 3.4 of the
Pre-Petition Credit Agreement, of an undivided interest in the Pre-Petition
Letters of Credit in the amount set forth opposite its name on Annex B, (ii)
acknowledges its understanding that, upon the occurrence of the Effective Date,
the Borrower's reimbursement obligations under Sections 3.5 and 3.6 of the
Pre-Petition Credit Agreement shall be discharged pursuant to the Plan of
Reorganization and (iii) agrees that, upon any payment by CIBC under any
Pre-Petition Letter of Credit, such Pre-Petition L/C Participant will pay to
CIBC such Pre-Petition L/C Participant's share of such payment as determined in
accordance with the provisions of the Pre-Petition Credit Agreement. Without
limiting the foregoing, each Pre-Petition L/C Participant confirms that its
agreements contained in Section 3.9 of the Pre-Petition Credit Agreement shall
continue in full force and effect as to the matters covered thereby.
In connection with the foregoing, (i) the Borrower acknowledges that CIBC
is holding cash collateral pursuant to Section 9.2 of the Pre-Petition Credit
Agreement with respect to the Pre-Petition Letters of Credit and hereby confirms
its grant, assignment and pledge to CIBC, for its benefit and the ratable
benefit of the Pre-Petition L/C Participants, of a first priority security
senior in all of the Borrower's right, title and interest in and to such cash
collateral and all proceeds thereof, senior to all other Liens (including,
without limitation, the Liens securing the Secured Obligations), (ii) CIBC
agrees to apply such cash collateral to reimburse itself in respect of any
payment it makes under any Pre-Petition Letter of Credit prior to requesting
that the Pre-Petition L/C Participants pay to CIBC their respective shares of
any such payment and (iii) the Borrower acknowledges that the Borrower has no
ownership or other interest of any kind whatsoever in any amounts paid by CIBC
under any Pre-Petition Letter of Credit and that in the event a beneficiary of a
Pre-Petition Letter of Credit returns any such amounts to the Borrower at any
time, the Borrower will receive and hold the same in trust for, and will
promptly pay the same to CIBC for the benefit of, CIBC and the Pre-Petition L/C
Participants.
(d) In the event of a conflict between the provisions of any of the
Loan Documents and the Plan of Reorganization, such conflict shall be governed
by the terms of the Loan Documents.
102
Section 9.15. Independence of Covenants. All covenants hereunder shall be
given independent effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by an
exception to, or be otherwise within the limitations of, another covenant shall
not avoid the occurrence of a Default or Event of Default if such action is
taken or condition exists.
Section 9.16. WAIVER OF JURY TRIAL; CONSENT TO JURISDICTION. EACH OF THE
BORROWER, THE AGENT, THE FRONTING BANKS, THE LENDERS AND EACH OTHER SECURED
PARTY HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, TRIAL BY JURY IN
ANY LITIGATION IN ANY COURT WITH RESPECT TO, IN CONNECTION WITH, OR ARISING OUT
OF THE LOAN DOCUMENTS OR THE COLLATERAL, OR THE VALIDITY, PROTECTION,
INTERPRETATION, COLLECTION OR ENFORCEMENT HEREOF OR THEREOF, OR ANY OTHER CLAIM
OR DISPUTE HOWSOEVER ARISING BETWEEN THE BORROWER, ON THE ONE HAND, AND THE
AGENT, THE FRONTING BANKS AND/OR ANY ONE OR MORE OF THE LENDERS OR OTHER SECURED
PARTIES, ON THE OTHER HAND. THE BORROWER HEREBY IRREVOCABLY CONSENTS TO THE
NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND, TO THE
EXTENT PERMITTED BY APPLICABLE LAW, OF ANY FEDERAL COURT, IN EACH CASE LOCATED
IN NEW YORK COUNTY AND ANY APPELLATE COURT THEREFROM, IN CONNECTION WITH ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY ONE OR MORE OF THE LOAN
DOCUMENTS OR ANY DOCUMENT OR INSTRUMENT DELIVERED PURSUANT TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT OR THE COLLATERAL AND EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT,
OR TO THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES
HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR
IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT SHALL AFFECT ANY
RIGHT THAT THE AGENT, ANY FRONTING BANK, ANY LENDER OR ANY OTHER SECURED PARTY
MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT
OR ANY OF THE OTHER LOAN DOCUMENTS OR THE COLLATERAL AGAINST THE BORROWER, ANY
SUBSIDIARY OR THEIR PROPERTIES OR ASSETS IN THE COURTS OF ANY JURISDICTION. THE
BORROWER HEREBY WAIVES THE DEFENSES OF FORUM NON CONVENIENS AND IMPROPER VENUE.
Section 9.17. Effect of Amendment and Restatement of the Pre-Petition
Credit Agreement and the DIP Credit Agreement; Confirmation of Security
Documents. On the Effective Date, the Pre-Petition Credit Agreement and the DIP
Credit Agreement shall be amended and restated to read as set forth herein. The
Borrower acknowledges and agrees that (i) the Liens securing payment of the
Pre-Petition Obligations and the DIP Obligations are in all respects continuing
and in full force and effect and secure the payment of the Secured Obligations
and that the Notes outstanding under the Pre-Petition Credit Agreement and the
DIP Credit Agreement are replaced by
103
the Notes issued hereunder and (ii) upon the effectiveness of this Agreement,
all outstanding DIP Letters of Credit will be converted into Letters of
Credit hereunder, in each case upon the terms and conditions set forth in
this Agreement.
Section 9.18. Reproduction of Documents. This Agreement, all documents
constituting Annexes, Schedules or Exhibits hereto, and all documents relating
hereto received by a party hereto, including, without limitation: (a) consents,
waivers and modifications that may hereafter be executed; (b) the Security
Documents and the other Loan Documents; and (c) financial statements,
certificates, and other information previously or hereafter furnished to the
Agent, any Lender or any other Secured Party may be reproduced by the party
receiving the same by any photographic, photostatic, microfilm, micro-card,
miniature photographic or other similar process. Each of the parties hereto
agrees and stipulates that, to the extent permitted by law, any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by such party in the
regular course of business) and that, to the extent permitted by law, any
enlargement, facsimile, or further reproduction of such reproduction shall
likewise be admissible in evidence.
104
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and the year first written.
PAYLESS CASHWAYS, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxx
----------------------------------------
Title: Senior Vice President
Two Pershing Square
0000 Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
CANADIAN IMPERIAL BANK OF COMMERCE,
as Coordinating and Collateral Agent and as the
Standby Letter of Credit Fronting Bank
By: /s/ Xxxxxx X. Xxxxx
----------------------------------------
Title: Assistant General Manager
By: /s/ Xxxxx Xxxxxxxxxxxx
----------------------------------------
Title: Assistant General Manager
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Agency Services
Telephone: (000) 000-0000
Fax: (000) 000-0000
CANADIAN IMPERIAL BANK OF COMMERCE,
as Hedging Bank
By: /s/ Xxxxxx X. Xxxxx
----------------------------------------
Title: Assistant General Manager
By: /s/ Xxxxx Xxxxxxxxxxxx
----------------------------------------
Title: Assistant General Manager
000 Xxx Xxxxxx, 0xx Xxxxx
X.X. Xxx 000
Xxxxxxx, Xxxxxxx M5725A
Attention: Xxxxx Xxxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
105
CIBC XXXXXXXXXXX CORP., formerly known as
CIBC Wood Gundy Securities Corp., as an
Underwriter and as Co-arranger
By: /s/ X.X. Xxxxx
----------------------------------------
Title: Managing Director
000 Xxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
CIBC INC., as a Pre-Petition Lender, a
DIP Lender, a New Term Lender and a
New Revolving Lender
By: /s/ Xxxxxx X. Xxxxx
----------------------------------------
Title: Executive Director
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
NATIONSBANK, N.A., as a Pre-Petition Lender,
a DIP Lender, a New Term Lender, a New Revolving
Lender, an Underwriter, as Syndication Agent and
Co-arranger and as a Cash Management Bank
By: /s/ Xxx X. Xxxxxxx
----------------------------------------
Title: Senior Vice President
Domestic and Eurodollar Lending Offices:
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx Xxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
106
All other notices:
Attention: Xxx X. Xxxxxxx
Senior Vice President
Telephone: (000) 000-0000
Fax: (000) 000-0000
XXXXXX COMMERCIAL PAPER INC. , as a
Pre-Petition Lender, a DIP Lender,
a New Term Lender, a New Revolving
Lender, an Underwriter and as
Documentation Agent
By: /s/ Xxxxxx X. Xxx
----------------------------------------
Title: Vice President
3 World Financial Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
XXXXXXX XXXXX CREDIT PARTNERS L.P.,
as a Pre-Petition Lender, a DIP Lender, a New Term
Lender, a New Revolving Lender, an Underwriter and
as Administrative Agent
By: /s/ Xxxx X. Xxxxx
----------------------------------------
Title: Authorized Signer
Domestic and Eurodollar Lending Offices:
00 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
Other Notices:
00 Xxxxx Xxxxxx, 00xx Xxxxx Xxx Xxxx,
Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
107
and
00 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx Xxxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
CARGILL FINANCIAL SERVICES CORPORATION,
as a Pre-Petition Term Lender, a DIP Lender,
a New Term Lender and a New Revolving Lender
By: /s/ Xxxxxxx X. Xxxxxxxx
----------------------------------------
Title: Vice President
0000 Xxxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxx Xxxxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
XXX XXXXXX AMERICAN CAPITAL
PRIME RATE INCOME TRUST, as a
Pre-Petition Lender, a DIP Lender, a New
Term Lender and a New Revolving Lender
By: /s/ Xxxxxxxx X. Xxxx
----------------------------------------
Title: Vice President
Xxx Xxxxxxxx Xxxxx, 0xx Xxxxx
Xxx Xxxxx Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
108
U.S. BANK NATIONAL ASSOCIATION,
as a Pre-Petition Lender and a New Term
Lender , as the Documentary Letter of Credit
Fronting Bank and as a Cash Management
Bank
By: /s/ Xxxx X. Xxxxxxxxx
----------------------------------------
Title: Vice President
Domestic and Eurodollar Lending Offices:
U.S. Bank National Association
000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Xxxxxxx Xxxxxxxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
All other notices:
Xxxxx Xxxx Xxxxx, XXXX0000
000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Xxxx X. Xxxxxxxxx
Fax: (000) 000-0000
with a copy to:
Xxx Xxxxxxxx
U.S. Bancorp
First Bank Place, MPFP2802
000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Fax: (000) 000-0000
ABN AMRO BANK N.V., as a
Pre-Petition Lender and a New Term Lender
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------------------------
Title: Senior Vice President
By: /s/ Xxxxxx Xxxxxx
----------------------------------------
Title: Senior Vice President
Domestic and Eurodollar Lending Offices:
North America Special Credits
00 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx x0000
Attention: Xxxxx Xxxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
109
All other notices:
00 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx x0000
Attention: Xxxxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as a
Pre-Petition Lender, a New Term Lender
and as a Cash Management Bank
By: /s/ Xxxx X. Xxxxxxx
----------------------------------------
Title: Vice President
000 Xxxxx XxXxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
Domestic and Eurodollar Lending Offices:
X.X. Xxx 00000
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
000 Xxxxx XxXxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxx
Fax: (000) 000-0000
000
XXX XXXX XX XXXX XXXXXX, as
a Pre-Petition Lender and a New Term Lender
By: /s/ A.T.D. Xxxxxx
----------------------------------------
Title: Senior Manager
Domestic and Eurodollar Lending Offices:
Xxxxx 0000
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxx Xxxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
All other notices:
l Xxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
BEAR, XXXXXXX & CO. INC., as
a Pre-Petition Lender and a New Term Lender
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------------
Title: Senior Managing Director
Administrative Notices and Other Funding Information:
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx Xxxxxxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
All other notices:
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
111
and
Attention: Xxxxx X. Xxxxxxx, Esq.
Telephone: (000) 000-0000
Fax: (000) 000-0000
NATIONAL CITY BANK, INDIANA, as
a Pre-Petition Lender and a New Term Lender
By: /s/ F. Xxxxxxx Xxxxxxxxxxx III
----------------------------------------
Title: Vice President
000 Xxxx Xxxxxxxxxx Xxxxxx
Xxxxx 0000X
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
MORGENS WATERFALL DOMESTIC
PARTNERS II, L.L.C., as a Pre-Petition
Lender and a New Term Lender
By: /s/ Xxxxxx Xxxxx
----------------------------------------
Title: Authorized Agent
00 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxx Xxxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
000
XXXXXXXXXXX XX XXXXX, N.A., as a
Pre-Petition Lender and a New Term Lender
By: /s/ Xxx X. Xxxxxxx
----------------------------------------
Title: Senior Vice President
Domestic and Eurodollar Lending Offices:
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx Xxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
All other notices:
Attention: Xxx X. Xxxxxxx
Senior Vice President
Telephone: (000) 000-0000
Fax: (000) 000-0000
OAKTREE CAPITAL MANAGEMENT, LLC, as agent for
certain funds and accounts, as a Pre-Petition
Lender and a New Term Lender
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------------------
Title: Managing Director
By: /s/ Xxxxxxx Xxxxx
----------------------------------------
Title: Managing Director & General Counsel
000 Xxxxx Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention:
Telephone:
Fax: (000) 000-0000
THE SUMITOMO BANK, LIMITED, as
a Pre-Petition Lender and a New Term Lender
By: Xxxx Xxxxxx
----------------------------------------
Title: Senior Vice President
Domestic and Eurodollar Lending Offices:
000 Xxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Loan Administration
Telephone: (000) 000-0000
Fax: (000) 000-0000
113
All other notices:
Attention: Xx. Xxxxx X. Prims
Telephone: (000) 000-0000
Fax: (000) 000-0000
NOMURA HOLDING AMERICA INC., as
a Pre-Petition Lender and a New Term Lender
By: /s/ Xxxxxx Xxxxx
----------------------------------------
Title: Managing Director
2 World Financial Center, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxxx X. Xxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
i
AMENDED AND RESTATED CREDIT AGREEMENT
TABLE OF CONTENTS
Page No.
INTRODUCTORY STATEMENT........................................................1
SECTION 1. DEFINITIONS.......................................................3
Section 1.1. Defined Terms..............................................3
Section 1.2 Terms Generally...........................................28
SECTION 2. AMOUNT AND TERMS OF CREDIT.......................................29
Section 2.1. Assumption and Restructuring of Secured Obligations
(other than Letters of Credit); Amortization of
New Term Loans; Commitment to Lend........................29
Section 2.2. Making of Loans...........................................30
Section 2.3. Notes; Repayment of Loans.................................32
Section 2.4. Interest on Loans.........................................32
Section 2.5. Letters of Credit ........................................33
Section 2.6. Procedure for Issuance of Letters of Credit...............38
Section 2.7. Nature of Letter of Credit Obligations Absolute...........38
Section 2.8. Default Interest..........................................39
Section 2.9. Optional Termination or Reduction of Commitment...........40
Section 2.10. Alternate Rate of Interest................................40
Section 2.11. Refinancing of Loans......................................40
Section 2.12. Commitment Termination; Mandatory Prepayments;
Mandatory Commitment Reduction; Cash Collateral...........41
Section 2.13. Optional Prepayment of Loans; Reimbursement of Lenders....43
Section 2.14. Reserve Requirements; Change in Circumstances.............45
Section 2.15. Change in Legality........................................46
Section 2.16. Pro Rata Treatment, etc...................................47
Section 2.17. Taxes.....................................................47
Section 2.18. Certain Fees..............................................49
Section 2.19. Commitment Fee............................................49
Section 2.20. Letter of Credit Fees.....................................49
Section 2.21. Nature of Fees............................................50
Section 2.22. Right of Set-Off. .......................................50
Section 2.23. Sharing of Setoffs........................................50
Section 2.24. Security Interest in Letter of Credit Accounts............52
Section 2.25. Release of Secured Parties................................52
SECTION 3. REPRESENTATIONS AND WARRANTIES ...................................53
Section 3.1. Organization and Authority................................53
Section 3.2. Due Execution.............................................53
Section 3.3. Statements Made...........................................53
Section 3.4. Financial Statements......................................54
Section 3.5. Ownership.................................................54
Section 3.6. Liens.....................................................54
ii
Section 3.7. Compliance with Law.......................................54
Section 3.8. Insurance.................................................54
Section 3.9. Use of Proceeds...........................................55
Section 3.10. Litigation................................................55
Section 3.11. Investment Company Act; etc...............................55
Section 3.12. Tax Returns and Payments..................................55
Section 3.13. ERISA.....................................................55
Section 3.14. Good Title to Properties..................................57
Section 3.15. Trademarks, Patents, etc..................................57
Section 3.16. Labor Matters.............................................57
Section 3.17. Environmental Matters.....................................57
Section 3.18. Location and Divisions of the Borrower....................59
Section 3.19. Solvency..................................................59
SECTION 4. CONDITIONS TO EFFECTIVENESS OF REORGANIZATION AND
EXTENSIONS OF CREDIT.............................................60
Section 4.1. Conditions Precedent to Effectiveness of Reorganization,
Initial Loans and Initial Letters of Credit...............60
Section 4.2. Conditions Precedent to Each Loan and Each Letter
of Credit after the Effective Date........................65
SECTION 5. AFFIRMATIVE COVENANTS............................................66
Section 5.1. Financial Statements, Reports, etc........................66
Section 5.2. Conduct of Business; Maintenance of Existence.............70
Section 5.3. Maintenance of Property; Insurance........................70
Section 5.4. Compliance with Laws......................................71
Section 5.5. Obligations and Taxes.....................................71
Section 5.6. Notice of Event of Default, etc...........................72
Section 5.7. Access to Books and Records...............................72
Section 5.8. Modifications to Business Plan............................72
Section 5.9. Customer Charge Sales.....................................72
Section 5.10. Lender Meetings...........................................72
Section 5.11. Available and After-Acquired Properties...................73
Section 5.12. Subsidiaries; Subsidiary Guarantees and
Security Agreements.......................................73
Section 5.13. Further Assurances........................................73
Section 5.14. Maintenance of Cash Management System.....................73
Section 5.15. Environmental Undertaking.................................74
Section 5.16. Post-Closing Matters......................................74
SECTION 6. NEGATIVE COVENANTS...............................................75
Section 6.1. Liens.....................................................75
Section 6.2. Debt......................................................75
Section 6.3. Consolidations, Mergers and Sales of Assets...............75
Section 6.4. Capital Expenditures......................................77
Section 6.5. No Negative Pledges.......................................79
Section 6.6. Termination of Plans......................................80
Section 6.7. EBITDA; Debt to EBITDA Ratio..............................80
iii
Section 6.8. Restricted Payments.......................................81
Section 6.9. Transactions with Affiliates..............................82
Section 6.10. Investments, Loans and Advances...........................82
Section 6.11. Business Segments.........................................83
Section 6.12. Accounting Changes........................................83
Section 6.13. Amendment and Modification of Certain Documents...........83
Section 6.14. Sale/Lease-Backs..........................................84
Section 6.15. Environmental Matters.....................................84
Section 6.16. Rent Obligations..........................................85
SECTION 7. EVENTS OF DEFAULT................................................85
Section 7.1. Events of Default.........................................85
Section 7.2. Application of Proceeds...................................89
SECTION 8. THE AGENT; THE ADMINISTRATIVE AGENT..............................90
Section 8.1. Appointment and Authorization.............................90
Section 8.2. Agent and Affiliates......................................90
Section 8.3. Action by Agent...........................................90
Section 8.4. Consultation with Experts.................................91
Section 8.5. Liability of Agent........................................91
Section 8.6. Reimbursement and Indemnification; Set-Off................91
Section 8.7. Credit Decision...........................................92
Section 8.8. Notice of Transfer........................................92
Section 8.9. Successor Agent...........................................92
Section 8.10. Concerning the Administrative Agent.......................93
SECTION 9. MISCELLANEOUS....................................................93
Section 9.1. Notices...................................................93
Section 9.2. Survival of Agreement, Representations and
Warranties, etc...........................................93
Section 9.3. Successors and Assigns....................................94
Section 9.4. Confidentiality...........................................97
Section 9.5. Expenses..................................................98
Section 9.6. Indemnities...............................................98
Section 9.7. CHOICE OF LAW. ...........................................99
Section 9.8. No Waiver.................................................99
Section 9.9. Extension of Maturity.....................................99
Section 9.10. Amendments, etc. .........................................99
Section 9.11. Invalidity; Severability.................................100
Section 9.12. Headings.................................................100
Section 9.13. Execution in Counterparts; Effectiveness.................100
Section 9.14. Prior Agreements.........................................101
Section 9.15. Independence of Covenants................................102
Section 9.16. WAIVER OF JURY TRIAL; CONSENT TO JURISDICTION............102
Section 9.17. Effect of Amendment and Restatement of the
Pre-Petition Credit Agreement and the DIP Credit
Agreement; Confirmation of Security Documents............102
Section 9.18. Reproduction of Documents................................103
iv
Annex A Ratable Proportion
Annex B Pre-Petition Letters of Credit
Exhibit A-1 New Term Notes
Exhibit A-2 New Revolving Notes
Exhibit B Confirmation Order
Exhibit C Security and Pledge Agreement
Exhibit D-1 Form of Mortgage
Exhibit D-2 Form of Deed and Trust
Exhibit D-3 Form of Amended and Restated Mortgage
Exhibit D-4 Form of Amended and Restated Deed of Trust
Exhibit E Subsidiary Guarantee
Exhibit F Subsidiary Security Agreement
Exhibit G-1 Opinion/Xxxxxxxxx
Exhibit G-2 Opinion/Wachtell
Exhibit H Excess Cash Flow Certificate
Exhibit I Notice of Borrowing
Exhibit J-1 Application (Standby Letter of Credit Generally)
Exhibit J-2 Application (Unsupported Trade Standby Letter of Credit)
Exhibit K Notice of Refinancing of Loans
Exhibit L Closing Certificate
Exhibit M Inventory Compliance Certificate
Exhibit N Covenant Compliance Certificate
Exhibit O Quarterly Certificate
Exhibit P Assignment and Acceptance
Schedule 1.1(a) Commitments/Loans
Schedule 1.1(b) Existing Agreements
Schedule 1.1(c) UBS Collateral
Schedule 3.6 Pre-Petition Liens
Schedule 3.10 Litigation
Schedule 3.13 ERISA
Schedule 3.17 Environmental Matters
Schedule 3.18 Locations and Divisions of the Borrower
Schedule 5.3 Insurance
Schedule 6.3 Disposition of Assets
Schedule 6.10 Existing Investments
COVER
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
AMENDED AND RESTATED
CREDIT AGREEMENT
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Among
PAYLESS CASHWAYS, INC.,
as Borrower,
THE LENDERS, THE UNDERWRITERS
AND THE FRONTING BANKS PARTY HERETO,
and
CANADIAN IMPERIAL BANK OF COMMERCE,
as Coordinating and Collateral Agent
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Dated as of December 2, 1997
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
