TOP OF DOCUMENT -- BEGIN FORMAT CODESEND OF FORMAT CODES -- DO
NOT ENTER TEXT ABOVE THIS POINT
SECOND AMENDED AND RESTATED
CREDIT AGREEMENT
$130,000,000
among
WICKES LUMBER COMPANY (the "Borrower")
as Borrower,
EACH OF THE FINANCIAL INSTITUTIONS
INITIALLY A SIGNATORY HERETO,
TOGETHER WITH THOSE ASSIGNEES
PURSUANT TO SECTION 11.6 HEREOF, ("Lenders"),
as Lenders,
BT COMMERCIAL CORPORATION, (the "Agent")
as Collateral and Administrative Agent,
NATIONSBANK OF GEORGIA, N.A. (the "Syndication Agent"),
as Syndication Agent,
and
BANKERS TRUST COMPANY,
as Issuing Bank
Dated as of April 11, 1997
TABLE OF CONTENTS
ATTENTION OPERATOR: IN THIS TABLE ONLY, PLEASE SEARCH AND REPLACE DOUBLE
HARD SPACES WITH A SINGLE INDENT; REPLACE DOUBLE TABS WITH NOTHING; REPLACE
MARGIN RELEASE WITH NOTHING; AND REPLACE BLOCK INDENT WITH NOTHING. THAT
WAY THE TABLE WILL LINE UP PROPERLY. THANKS.
Page
ARTICLE 1. Definitions 2
1.1 General Definitions 2
1.2 Accounting Terms and Determinations 25
1.3 Other Defined Terms 26
1.4 Interrelationship with 1996 Credit Agreement 26
ARTICLE 2. Revolving Loans 27
2.1 Commitments 27
2.2 Borrowing of Revolving Loans 27
2.3 Settlement of Lender Advances and Repayments 30
2.4 Periodic Settlement of Agent Advances and
Repayments 30
2.5 Defaulting Lenders 31
2.6 Mandatory Payment; Mandatory Reduction of
Commitments 32
2.7 Maintenance of Loan Account; Statements of
Account 32
2.8 Payment Procedures 33
2.9 Collection of Accounts 33
2.10 Application of Payments 34
ARTICLE 3. Letters of Credit 34
3.1 Issuance of Letters of Credit 34
3.2 Terms of Letters of Credit 35
3.3 Lenders' Participation 35
3.4 Notice of Issuance. 36
3.5 Payment of Amounts Drawn Under Letters
of Credit 36
3.6 Payment by Lenders 37
3.7 Nature of Issuing Bank's Duties 37
3.8 Obligations Absolute 38
ARTICLE 4. Interest, Fees and Expenses 39
4.1 Interest on Prime Rate Loans 39
4.2 Interest on Eurodollar Rate Loans 40
4.3 Interest After Event of Default 41
4.4 Reimbursement of Expenses 41
4.5 Unused Line Fee 41
4.6 Letter of Credit Fees 42
4.7 Early Termination Fee 43
4.8 Special Provisions Relating
to Eurodollar Rate Loans 43
4.9 Indemnification in Certain Events 46
4.10 Net Payments 47
4.11 Affected Lenders 48
4.12 Sharing of Payments 49
4.13 Calculations 50
ARTICLE 5. Conditions Precedent 50
5.1 Conditions Precedent to Effectiveness 50
5.2 Conditions Precedent to Effectiveness
and to Each Revolving Loan and Letter
of Credit 52
ARTICLE 6. Representations and Warranties 52
6.1 Organization and Qualification 52
6.2 Authority 53
6.3 Enforceability 53
6.4 No Conflict 53
6.5 Consents and Filings 53
6.6 Financial Data 53
6.7 Subsidiaries 53
6.8 No Judgments or Litigation 54
6.9 No Defaults 54
6.10 Labor Matters 54
6.11 Compliance with Law 55
6.12 ERISA 55
6.13 Compliance with Environmental Laws 56
6.14 Intellectual Property 56
6.15 Licenses and Permits 56
6.16 Title to Property 57
6.17 Investment Company 57
6.18 Taxes and Tax Returns 57
6.19 Material Contracts 58
6.20 Affiliate Transactions 58
6.21 Accuracy and Completeness of
Information 58
6.22 Recording Taxes 59
6.23 Solvency 59
6.24 No Change 59
ARTICLE 7. Affirmative Covenants 59
7.1 Financial Reporting 59
7.2 Collateral Reporting 61
7.3 Notification Requirements 62
7.4 Corporate Existence 65
7.5 ERISA 65
7.6 Environmental and Other Matters 65
7.7 Insurance; Casualty Loss 66
7.8 Taxes 67
7.9 Compliance With Laws 67
7.10 Use of Proceeds 67
7.11 Fiscal Year 68
7.12 Intellectual Property 68
7.13 Maintenance of Property 68
7.14 Books and Records; Inspections 68
7.15 Further Assurances 68
ARTICLE 8. Negative Covenants 69
8.1 Fixed Charge Coverage Ratio 69
8.2 Consolidated Net Worth 70
8.3 [Reserved] 70
8.4 [Reserved] 70
8.5 [Reserved] 70
8.6 Capital Expenditures 70
8.7 Additional Indebtedness 71
8.8 Liens 71
8.9 Sale of Assets 73
8.10 Corporate Changes 73
8.11 Guaranties 74
8.12 Restricted Payments 74
8.13 Investments 74
8.14 Affiliate Transactions 75
8.15 Prohibited Transactions Under ERISA 76
8.16 Additional Bank Accounts 76
8.17 Excess Cash 77
8.18 Material Amendments of Material
Contracts 77
8.19 Additional Negative Pledges 77
8.20 Additional Subsidiaries; Acquisitions 77
8.21 Hedging Transactions 78
8.22 Activities of Subsidiaries 78
ARTICLE 9. Events of Default and Remedies 79
9.1 Events of Default 79
9.2 Acceleration and Cash
Collateralization 80
9.3 Rescission of Acceleration 81
9.4 Remedies 81
9.5 Right of Setoff 81
9.6 License for Use of Software and Other
Intellectual Property 82
9.7 Deficiencies; Remedies Cumulative 82
ARTICLE 10. The Agent 82
10.1 Appointment of Agent 82
10.2 Nature of Duties of Agent 83
10.3 Lack of Reliance on Agent 83
10.4 Certain Rights of the Agent 84
10.5 Reliance by Agent 84
10.6 Indemnification of Agent 84
10.7 The Agent in its Individual Capacity 84
10.8 Holders of Notes 85
10.9 Successor Agent 85
10.10 Collateral Matters 86
10.11 Actions with Respect to Defaults 87
10.12 Delivery of Information 87
10.13 Syndication Agent 88
ARTICLE 11. Miscellaneous 88
11.1 SUBMISSION TO JURISDICTION; WAIVERS 88
11.2 JURY TRIAL 89
11.3 GOVERNING LAW 89
11.4 Delays; Partial Exercise of Remedies 89
11.5 Notices 89
11.6 Assignability 89
11.7 Confidentiality 92
11.8 Indemnification 93
11.9 Entire Agreement; Successors and
Assigns 94
11.10 Amendments and Waivers 94
11.11 Nonliability of Agent and Lenders 95
11.12 Independent Nature of Lenders' Rights 95
11.13 Counterparts 95
11.14 Effectiveness 95
11.15 Severability 95
11.16 Headings Descriptive 96
11.17 Maximum Rate 96
11.18 Release of Headquarters Lease Assignment 96
11.19 Existing Agreements Superseded 97
ANNEXES
Annex I - List of Lenders and Commitment Amounts
EXHIBITS
Exhibit A - Form of Revolving Note
Exhibit B - Form of Compliance Certificate
Exhibit C - Form of Borrowing Base Certificate
Exhibit D - Form of Collateral Access Agreement
Exhibit E - Form of Notice of Borrowing
Exhibit F - Form of Assignment and
Assumption Agreement
Exhibit G - Form of Notice of Continuation
Exhibit H - Form of Notice of Conversion
Exhibit I - Form of Bailee Notice
SCHEDULES
Schedule A - Closing Documents List
Schedule B - Disclosure Schedule
Schedule C - Qualified Account Debtors
SECOND AMENDED AND RESTATED CREDIT AGREEMENT is entered into as of
April 8, 1997 among WICKES LUMBER COMPANY, a Delaware corporation (and any
permitted successor or assign, the "Borrower"), and each of those financial
institutions identified as Lenders on Annex I hereto (together with each of
their successors and assigns, referred to individually as a "Lender" and
collectively as the "Lenders"), BT COMMERCIAL CORPORATION, acting in the
manner and to the extent described in Article 10 hereof (in such capacity,
the "Agent"), NATIONSBANK OF GEORGIA, N.A., as Syndication Agent (the
"Syndication Agent"), and Bankers Trust Company, as issuer of letters of
credit (in such capacity, the "Issuing Bank"), AMENDS AND RESTATES IN FULL
the Amended and Restated Credit Agreement, dated as of March 12, 1996 among
the Borrower, the lenders thereunder, the Agent and the Issuing Bank (the
"1996 Credit Agreement") (this amendment and restatement of the 1996 Credit
Agreement, the "Credit Agreement").
W I T N E S S E T H:
WHEREAS, the Borrower, the Lenders, the Agent and the Issuing Bank
are parties to the 1996 Credit Agreement pursuant to which the Borrower
obtained from the Lenders a credit facility for the purposes indicated
therein;
WHEREAS, the Borrower, the Lenders, the Agent and the Issuing Bank
desire to amend and restate the 1996 Credit Agreement in full as set forth
herein;
WHEREAS, the Borrower has requested that the Lenders, the Agent, the
Syndication Agent and the Issuing Bank enter into this Credit Agreement in
order to continue to make Revolving Loans to the Borrower in an aggregate
amount of up to $130,000,000 and to provide Letters of Credit to the
Borrower to provide for the Borrower's ongoing working capital, general
business and capital expenditure requirements;
WHEREAS, it is the intent of the Borrower, the Lenders, the Agent,
the Syndication Agent and the Issuing Bank that this Credit Agreement amend
and restate in its entirety the 1996 Credit Agreement and that, from and
after the Effective Date, the 1996 Credit Agreement shall be of no force
and effect except to evidence the terms and conditions under which the
Borrower heretofore has incurred obligations and liabilities to the Agent
and the Lenders as evidenced by the 1996 Credit Agreement and the Agent's
books and records; and
WHEREAS, this Credit Agreement is made in renewal, amendment,
restatement and modification of, but not in extinguishment of, the
obligations under the 1996 Credit Agreement.
NOW, THEREFORE, the Borrower, the Lenders, the Issuing Bank, the
Syndication Agent and the Agent hereby agree as follows:
ARTICLE 1. Definitions.
1.1 General Definitions. As used herein, the following terms
shall have the meanings herein specified (to be equally applicable to both
the singular and plural forms of the terms defined):
Accounts shall mean "Accounts" as defined in the Security Agreement.
Acquisition Basket shall mean, as of any date, the lesser of (i) the sum of
(a) the cumulative EBITDA of the Consolidated Entity for the period from
December 29, 1996 through the last day of the most recent fiscal month of
the Borrower ending prior to such date for which monthly financial
statements have been delivered to the Agent pursuant to Section 7.1(d)
(less the cumulative Fixed Charges of the Consolidated Entity for such
period) and (b) all Transferred Sale Proceeds and (ii) $10,000,000.
Adjusted EBITDA shall mean, for any fiscal period, the difference of (i)
EBITDA for such period minus (ii) the difference of (a) the Restructuring
Reserve as of the start of such period minus (b) the Restructuring Reserve
as of the end of such period; provided that, with respect to any fiscal
period ending on or prior to the last day of fiscal December 1997, the
Restructuring Reserve as of the start of such period shall be deemed to be
the lesser of (1) the actual Restructuring Reserve and (2) $6,000,000.
Adjusted Eurodollar Rate shall mean, with respect to each Interest Period
for any Eurodollar Rate Loan, the rate obtained by dividing (i) the
Eurodollar Rate for such Interest Period by (ii) a percentage equal to 1
minus the stated maximum rate (stated as a decimal) of all reserves, if
any, required to be maintained against "Eurocurrency liabilities" as
specified in Regulation D (or against any other category of liabilities
which includes deposits by reference to which the interest rate on
Eurodollar Rate Loans is determined or any category of extensions of credit
or other assets which includes loans by a non-United States office of any
Lender to United States residents).
Adjusted Interest Expense shall mean Interest Expense, excluding interest
which is paid in kind or is otherwise not paid or payable in cash.
Affiliate shall mean, with respect to any Person, any Person which directly
or indirectly controls, is controlled by, or is under common control with,
such Person or any Subsidiary of such Person or any Person who is a
director or officer of such Person or any Subsidiary of such Person. For
purposes of this definition, "control" shall mean the possession, directly
or indirectly, of the power to (i) vote ten percent (10%) or more of the
securities having ordinary voting power for the election of directors of
such Person or (ii) direct or cause the direction of management and
policies of a business, whether through the ownership of voting securities,
by contract or otherwise and either alone or in conjunction with others or
any group.
Affiliate Transaction shall have the meaning given to such term in Section
8.14 hereof.
Agent shall mean BTCC as provided in the preamble to this Credit Agreement
or any successor to BTCC.
Agent Advance shall mean a Revolving Loan made by the Agent to the Borrower
pursuant to Section 2.2 hereof.
Agent's Fee Letter shall mean that certain letter dated the date hereof
between the Agent and the Borrower providing for the payment of certain
fees in connection with the Credit Agreement.
Amendment and Restatement Fee Letter shall mean that certain letter dated
March 12, 1996 between the Agent and Wickes Lumber Company providing for
the payment of certain fees in connection with the 1996 Credit Agreement.
Applicable Lending Office shall mean, with respect to each Lender, such
Lender's Eurodollar Lending Office in the case of a Eurodollar Rate Loan,
and such Lender's Domestic Lending Office in the case of a Prime Rate Loan.
Assignment and Assumption Agreement shall mean an assignment and assumption
agreement entered into by an assigning Lender and an assignee Lender, and
accepted by the Agent, in accordance with Section 11.6, substantially in
the form of Exhibit F.
Auditors shall mean a nationally-recognized firm of independent public
accountants selected by the Borrower and satisfactory to the Agent in its
sole discretion. For purposes of this Credit Agreement, the Borrower's
current firm of independent public accountants, Coopers & Xxxxxxx, shall be
deemed to be satisfactory to the Agent.
Bailee Notice shall mean a notification to a bailee of the Borrower's
Inventory of the Agent's security interest in such Inventory, substantially
in the form of Exhibit I.
Benefit Plan shall mean a defined benefit plan as defined in Section 3(3)
of ERISA (other than a Multiemployer Plan) for which the Borrower, any
Subsidiary or any ERISA Affiliate is, or within the immediately preceding
six (6) years was, an "employer" as defined in Section 3(5) of ERISA.
Blocked Account shall have the meaning given to such term in Section 2.9
hereof.
Blocked Account Agreement shall have the meaning given to such term in
Section 2.9 hereof.
Blocked Account Bank shall have the meaning given to such term in
Section 2.9 hereof.
Borrower shall mean Wickes Lumber Company and any permitted successor or
assign.
Borrowing shall mean a borrowing of Revolving Loans of the same Type on the
same day.
Borrowing Base shall have the meaning given to such term in Section 2.1
hereof.
Borrowing Base Certificate shall have the meaning given to such term in
Section 7.2 hereof.
BT Account shall have the meaning given to such term in Section 2.9 hereof.
BTCC shall mean BT Commercial Corporation, in its individual capacity.
Building Materials shall mean that portion of Inventory comprising
"Building Materials," as listed on Schedule B, Part 1.1 hereto (as such
list may be supplemented or otherwise modified from time to time with the
consent of the Agent).
Business Day shall mean any day other than a Saturday, Sunday or legal
holiday on which commercial banks in New York, New York, are generally
closed. When used in connection with Eurodollar Rate Loans, this
definition will also exclude any day on which commercial banks are not open
for dealing in U.S. dollar deposits in the London (England, U.K.) interbank
market.
Capital Asset Sale Proceeds shall mean the aggregate Net Cash Proceeds
received by the Borrower in connection with the sale or other disposition
by the Borrower of the Real Estate and related capital assets listed on
Schedule 8.9 (as may be amended with the consent of the Agent and the
Syndication Agent).
Capital Expenditures shall mean, for any period, the sum of (a) all
expenditures capitalized for financial statement purposes plus, without
duplication, (b) the entire principal amount of any debt (including
obligations under capitalized leases) assumed or incurred in connection
with any such expenditures; provided that "Capital Expenditures" shall in
any event include the purchase price paid in connection with the
acquisition of any Person (including through the purchase of a majority of
the capital stock or other ownership interests of such Person or through
merger or consolidation) to the extent allocable to property, plant or
equipment. Notwithstanding the foregoing, "Capital Expenditures" shall not
include (i) insurance proceeds from a Casualty Loss applied to the repair
or replacement of the property affected by such Casualty Loss and (ii)
expenditures (other than Maintenance Capital Expenditures) of Capital Asset
Sale Proceeds otherwise permitted hereunder.
Cash Equivalents shall mean any of the following, so long as the Agent has
a perfected security interest therein: (i) securities issued, guarantied or
insured by the United States or any of its agencies with maturities of not
more than one year from the date acquired; (ii) certificates of deposit
with maturities of not more than one year from the date acquired issued by
a U.S. federal or state chartered commercial bank of recognized standing,
which has capital and unimpaired surplus in excess of $200,000,000 and
which bank or its holding company has a short-term commercial paper rating
of at least A-1 or the equivalent by Standard & Poor's Corporation and at
least P-1 or the equivalent by Xxxxx'x Investors Services, Inc.; (iii)
reverse repurchase agreements with terms of not more than seven days from
the date acquired, for securities of the type described in (i) above and
entered into only with commercial banks having the qualifications described
in (ii) above; (iv) commercial paper, other than commercial paper issued by
the Borrower or any of its Affiliates, issued by any Person incorporated
under the laws of the United States or any state thereof and rated at least
A-1 or the equivalent thereof by Standard & Poor's Corporation or at least
P-1 or the equivalent thereof by Xxxxx'x Investors Service, Inc., in each
case with maturities of not more than one year from the date acquired; and
(v) investments in money market funds registered under the Investment
Company Act of 1940, as amended, which have net assets of at least
$200,000,000 and at least eighty-five percent (85%) of whose assets consist
of securities and other obligations of the type described in clauses
(i) through (iv) above.
Casualty Loss shall have the meaning given to such term in Section 7.7
hereof.
Change of Control shall mean one or more of the following events:
(a) Within the meaning of Rule 13d-3 under the Securities Exchange
Act of 1934, as in effect on the Closing Date, J. Xxxxxx Xxxxxx ceases to
beneficially own (other than through death or incapacity or by virtue of
transfers to trusts for the benefit of his minor children), directly or
indirectly, shares representing at least 50% of the issued and outstanding
capital stock of the Borrower beneficially owned by him at the close of
business on October 22, 1993; or
(b) J. Xxxxxx Xxxxxx ceases to be the chief executive officer of the
Borrower or, in the event of his death or incapacity, he is not within 90
days replaced with a chief executive officer satisfactory to the Majority
Lenders in their sole discretion; or
(c) less than a majority of the members of the Borrower's board of
directors then in office shall be persons who either (i) were serving as
directors on the Closing Date or (ii) were nominated as directors and
approved by the vote of the majority of the directors who are directors
referred to in clause (i) above or this clause (ii); or
(d) the stockholders of the Borrower shall approve any plan or
proposal for the liquidation or dissolution of the Borrower; or
(e) a Person or group of Persons (within the meaning of Rule 13d-5
under the Securities Exchange Act of 1934, as amended from time to time)
(other than J. Xxxxxx Xxxxxx and his Affiliates) shall, as a result of a
tender or exchange offer, open market purchases, privately negotiated
purchases or otherwise, have become the direct or indirect beneficial owner
(within the meaning of Rule 13d-3 under the Securities Exchange Act of
1934, as amended from time to time) of securities of the Borrower
representing more than 25% of the combined voting power of the outstanding
voting securities for the election of directors or shall have the right to
elect a majority of the Board of directors of the Borrower.
Closing Date shall mean October 22, 1993.
Closing Documents List shall mean the Closing Documents List attached
hereto as Schedule A.
Collateral shall mean any and all assets and rights and interests in or to
property of the Borrower pledged from time to time as security for the
Obligations whether now owned or hereafter acquired, including, without
limitation, all of the Accounts, Inventory, Equipment and Intangibles of
the Borrower.
Collateral Access Agreements shall mean any landlord waivers, mortgagee
waivers, bailee letters or any similar acknowledgment agreements of any
warehouseman or processor in possession of Inventory, in each case similar
in substance to Exhibit D or as otherwise required by the Agent.
Collateral Documents shall mean all contracts, instruments and other
documents now or hereafter executed and delivered in connection with the
Original Credit Agreement, the 1996 Credit Agreement and/or this Credit
Agreement, pursuant to which mortgages, liens and/or security interests are
granted to the Agent in the Collateral for the benefit of the Lenders and
the Issuing Bank.
Collections shall mean all cash, funds, checks, notes, instruments and any
other form of remittance tendered by account debtors in payment of
Accounts.
Commitment of any Lender shall mean the amount set forth opposite such
Lender's name on Annex I, as such annex may be amended from time to time,
under the heading "Commitment," as such amount may be reduced from time to
time pursuant to the terms of this Credit Agreement.
Concentration Account Agreement shall have the meaning given to such term
in Section 2.9 hereof.
Consignment Agreement shall mean that certain Agreement, dated as of
October 7, 1994, among the Borrower, GLC and the Agent, as such agreement
may be amended or replaced from time to time with the consent of the Agent.
Consolidated Entity shall mean the Borrower and each of its Subsidiaries
which would be consolidated with the Borrower for purposes of financial
reporting.
Consolidated Net Income shall mean for any period the consolidated net
income of the Consolidated Entity for such period.
Consolidated Net Worth shall mean the excess of the consolidated assets of
the Consolidated Entity over the consolidated liabilities of the
Consolidated Entity.
Contingency Account shall have the meaning given to such term in Section
8.16 hereof.
Contingent Obligation of any Person shall mean any direct or indirect
guaranty or other contractual obligation, contingent or otherwise, of such
Person with respect to any Indebtedness or other obligation or liability of
another, including any such Indebtedness, obligation or liability directly
or indirectly guaranteed, endorsed (other than for collection or deposit in
the ordinary course of business), co-made or discounted or sold with
recourse by such Person, or in respect of which such Person is otherwise
directly or indirectly liable, including any contractual obligations
(contingent or otherwise) arising through any agreement to purchase,
repurchase, or otherwise acquire such Indebtedness, obligation or liability
or any security therefor, or to provide funds for the payment or discharge
thereof (whether in the form of loans, advances, stock purchases, capital
contributions or otherwise), or to maintain solvency, assets, level of
income, or other financial condition, or to make payment other than for
value received.
Covered Taxes shall have the meaning given to such term in Section 4.10
hereof.
Credit Agreement shall mean this second amended and restated credit
agreement, as the same may be modified, amended, extended, restated or
supplemented from time to time.
Credit Documents shall mean, collectively, this Credit Agreement, the
Revolving Notes, the Letters of Credit, each of the Collateral Documents
and all other documents, agreements, instruments, opinions and certificates
now or hereafter executed and delivered in connection herewith or
therewith, as the same may be modified, amended, extended, restated or
supplemented from time to time.
Credit Parties shall mean, collectively, the Borrower and any other parties
(other than the Lenders, the Agent, the Syndication Agent, the Issuing Bank
and Bankers Trust Company) to the Credit Documents (other than the
Collateral Access Agreements, the Blocked Account Agreements and the
opinions).
Current Assets shall mean all assets designated as "current" on a
consolidated balance sheet.
Current Liabilities shall mean all liabilities (other than the
Restructuring Reserve) designated as "current" on a consolidated balance
sheet.
Default shall mean an event, condition or default which with the giving of
notice, the passage of time or both would be an Event of Default.
Defaulting Lender shall have the meaning given to such term in Section 2.5
hereof.
Disbursement Account shall have the meaning given to such term in
Section 2.2(c) hereof.
DOL shall mean the United States Department of Labor and any successor
department or agency.
Dollars and the sign $ shall each mean freely transferable lawful money of
the United States.
Domestic Lending Office shall mean, with respect to any Lender, the office
of such Lender specified as its "Domestic Lending Office" opposite its name
on Annex I hereto, as such annex may be amended from time to time.
Early Termination Fee shall have the meaning given to such term in Section
4.7 hereof.
EBITDA shall mean, in any fiscal period, the Consolidated Net Income (other
than extraordinary items of the Borrower for such period), (i) plus the
amount of all Interest Expense, income tax expense, depreciation and amorti
zation, including amortization of any goodwill or other intangibles for
such period, (ii) plus losses and minus gains (to the extent not
duplicative) attributable to any fixed asset sales and (iii) plus or minus
(as the case may be) any other non-cash charges which have been subtracted
or added, as the case may be, in calculating Consolidated Net Income for
such period.
Effective Date shall mean the first date on which all of the conditions
precedent set forth in Article 5 hereof have been satisfied.
Eligible Accounts Receivable shall mean Accounts of the Borrower payable in
Dollars and deemed by the Agent in its Permitted Discretion to be eligible
for inclusion in the calculation of the Borrowing Base. In determining the
amount to be so included, the face amount of such Accounts shall be reduced
by the amount of all returns, discounts, claims, credits, charges, or other
allowances and by the aggregate amount of all reserves, limits and
deductions provided for in this definition and elsewhere in this Credit
Agreement. Unless otherwise approved in writing by the Agent, no Account
shall be deemed to be an Eligible Account Receivable if:
(a) the Account arises out of a sale made by the Borrower to an
Affiliate; or
(b) the Account is unpaid more than 30 days after the original payment
due date, with respect to Accounts the invoice for which provides that
payment is due in the month following the month of purchases relating to
such invoice; or
(c) the Account is unpaid more than 30 days after the original payment
due date, with respect to Accounts the invoice for which provides that
payment is due in the second or third month following the month of
purchases relating to such invoice; provided, however, that the aggregate
amount of all such invoices providing for payment in the second or third
month following the month of purchases relating to such invoices (other
than invoices also covered by subsection (d) of this definition) that may
constitute Eligible Accounts Receivable shall not exceed 10% of total
Eligible Accounts Receivable at any one time; provided, further, that any
Account the invoice for which provides that payment is due after the third
month following the month of purchases relating to such invoice shall in no
event be an Eligible Accounts Receivable; or
(d) the Account is unpaid more than 30 days after the original payment
due date, with respect to Accounts (i) the invoice for which provides that
payment is due in the second month following the date of purchases relating
to such invoice and (ii) the account debtors of which are Qualified Account
Debtors; provided, however, that the aggregate amount of all such invoices
that may constitute Eligible Accounts Receivable shall not exceed
$5,000,000.
(e) the Account is from the same account debtor (or any Affiliate
thereof) and fifty percent (50%) or more, in face amount, of all Accounts
from such account debtor (or any Affiliate thereof) are ineligible pursuant
to (b), (c) and/or (d) above; or
(f) the Account, when aggregated with all other Accounts of such account
debtor, exceeds two percent (2%) (or, with respect to any Qualified Account
Debtor, four percent (4%)) in face value of all Accounts of the Borrower
then outstanding, to the extent of such excess; provided, however, that
Accounts supported or secured by an irrevocable letter of credit in form
and substance satisfactory to the Agent, issued by a financial institution
satisfactory to the Agent, and, if requested by the Agent, duly transferred
to the Agent (together with sufficient documentation to permit direct draws
by the Agent) shall be excluded to the extent of the face amount of such
letter of credit for the purposes of such calculation; or
(g) the account debtor is also a creditor of the Borrower, (ii) the
account debtor has disputed its liability on, or the account debtor has
made any claim with respect to, such Account or any other Account due from
such account debtor to the Borrower, which has not been resolved or
(iii) the Account otherwise is or may become subject to any right of setoff
by the account debtor; provided, that any Account deemed ineligible
pursuant to this clause (f) shall only be ineligible to the extent of the
amount owed by the Borrower to the account debtor, the amount of such
dispute or claim, or the amount of such setoff, as applicable.
(h) the account debtor has commenced a voluntary case under the federal
bankruptcy laws, as now constituted or hereafter amended, or made an
assignment for the benefit of creditors, or if a decree or order for relief
has been entered by a court having jurisdiction over the account debtor in
an involuntary case under the federal bankruptcy laws, as now constituted
or hereafter amended, or if any other petition or other application for
relief under the federal bankruptcy laws has been filed by or against the
account debtor, or if the account debtor has filed a certificate of
dissolution under applicable state law or shall be liquidated, dissolved or
wound-up, or shall authorize or commence any action or proceeding for
dissolution, winding-up or liquidation, or if the account debtor has
failed, suspended business, declared itself to be insolvent, is generally
not paying its debts as they become due or has consented to or suffered a
receiver, trustee, liquidator or custodian to be appointed for it or for
all or a significant portion of its assets or affairs, unless the payment
of Accounts from such account debtor is secured in a manner satisfactory to
the Agent or, if the Account from such account debtor arises subsequent to
a decree or order for relief with respect to such account debtor under the
federal bankruptcy laws, as now or hereafter in effect, the Agent shall
have determined that the timely payment and collection of such Account will
not be impaired; or
(i) the sale is to an account debtor outside of the continental United
States, unless the account debtor thereon has supplied the Borrower with an
irrevocable letter of credit in form and substance satisfactory to the
Agent, issued by a financial institution satisfactory to the Agent and
which has been duly transferred to the Agent (together with sufficient
documentation to permit direct draws by the Agent); or
(j) the sale to the account debtor is on a xxxx-and-hold, guarantied
sale, sale-and-return, sale on approval or consignment basis or made
pursuant to any other written agreement providing for repurchase or return;
or
(k) the Agent determines in its Permitted Discretion that collection of
such Account is uncertain or that such Account may not be paid by reason of
the account debtor's financial inability to pay; or
(l) the account debtor is the United States of America or any department,
agency or instrumentality thereof, unless the Borrower duly assigns its
rights to payment of such Account to the Agent pursuant to the Assignment
of Claims Act of 1940, as amended (31 U.S.C. 3727 et seq.); or
(m) the goods giving rise to such Account have not been shipped and
delivered to and accepted by the account debtor or the services giving rise
to such Account have not been performed by the Borrower and accepted by the
account debtor or the Account otherwise does not represent a final sale; or
(n) the Account does not comply with all applicable legal requirements,
including, where applicable, the Federal Consumer Credit Protection Act,
the Federal Truth in Lending Act and Regulation Z of the Board of Governors
of the Federal Reserve System, in each case as amended; or
(o) the Agent does not have a valid and perfected first priority security
interest in such Account or the Account does not otherwise conform to the
representations and warranties contained in the Credit Agreement or the
other Credit Documents; or
(p) the Account is subject to any adverse security deposit, progress
payment or other similar advance made by or for the benefit of the
applicable account debtor.
Eligible Inventory shall mean items of Inventory of the Borrower held for
sale in the ordinary course (but not packing or shipping materials or
maintenance supplies) deemed by the Agent in its Permitted Discretion to be
eligible for inclusion in the calculation of the Borrowing Base. In
determining the amount to be so included, the amount of such Inventory
shall be valued at the lower of cost or market on a basis consistent with
the Borrower's current and historical accounting practice or as otherwise
acceptable to the Agent. Unless otherwise approved in writing by the
Agent, Inventory shall not be deemed Eligible Inventory if:
(a) it is not owned solely by the Borrower or the Borrower does not have
good, valid marketable title thereto; or
(b) it is not (i) subject to the Consignment Agreement or (ii) located on
(or in transit to) property owned or leased by the Borrower or in a
contract warehouse or other third party location, subject in each case to a
Collateral Access Agreement executed by the lessor, the contract
warehouseman or the other third party, as the case may be (and any related
filings or notices required by the Agent), and segregated or otherwise
separately identifiable from goods of others, if any, stored on the
premises; or
(c) it is not subject to a perfected first priority Lien in favor
of the Agent, except for Liens for unpaid rent or normal and customary
warehousing and common carrier charges; or
(d) it is not located in the United States; or
(e) it is goods returned or rejected by the Borrower's customers or
goods in transit to third parties (other than to warehouse sites covered by
Collateral Access Agreements); or
(f) with respect to Inventory in transit, (i) the carrier of such
Inventory has not been given notice of the Agent's interest therein
pursuant to a Bailee Notice (a copy of which shall be promptly delivered to
the Agent) or (ii) the aggregate amount of such Inventory in transit at any
time exceeds two and one-half percent (2.5%) of total Eligible Inventory at
such time, to the extent of such excess; or
(g) with respect to work in process, the aggregate amount of such
work in process at any time exceeds $2,000,000, to the extent of such
excess; or
(h) it is obsolete or slow moving, or does not otherwise conform to
the representations and warranties contained in the Credit Documents.
Equipment shall mean "Equipment" as defined in the Security Agreement.
ERISA shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute thereto and all final
or temporary regulations promulgated thereunder and published, generally
applicable rulings entitled to precedential effect.
ERISA Affiliate shall mean any entity required at any relevant time to be
aggregated with the Borrower or any Subsidiary under Sections 414(b), (c),
(m) or (o) of the Internal Revenue Code.
Eurodollar Lending Office shall mean, with respect to any Lender, the
office of such Lender specified as its "Eurodollar Lending Office" opposite
its name on Annex I, as such annex may be amended from time to time (or, if
no such office is specified, its Domestic Lending Office), or such other
office or Affiliate of such Lender as such Lender may from time to time
specify to the Borrower and the Agent.
Eurodollar Rate shall mean, with respect to the Interest Period for each
Eurodollar Rate Loan comprising part of the same Borrowing, an interest
rate per annum equal to the rate (rounded upward to the nearest whole
multiple of one-sixteenth (1/16) of one percent (1.00%) per annum, if such
rate is not such a multiple) of the offered quotation, if any, to first
class banks in the Eurodollar market by Bankers Trust Company for U.S.
dollar deposits of amounts in immediately available funds comparable to the
principal amount of the Eurodollar Rate Loan for which the Eurodollar Rate
is being determined with maturities comparable to the Interest Period for
which such Eurodollar Rate will apply as of approximately 10:00 A.M. New
York City time two (2) Business Days prior to the commencement of such
Interest Period.
Eurodollar Rate Calculation Date shall have the meaning given to such term
in Section 4.2 hereof.
Eurodollar Rate Loan shall mean a Revolving Loan that bears interest as
provided in Section 4.2 hereof.
Eurodollar Rate Spread shall have the meaning given to such term in Section
4.2 hereof.
Event(s) of Default shall have the meaning provided for in Article 9 of
this Credit Agreement.
Existing Advances shall mean the loans, investments and advances between
the Borrower and its Subsidiaries in existence as of the Effective Date and
described on Schedule B hereto.
Expenses shall mean all present and future expenses incurred by or on
behalf of the Agent in connection with the Credit Agreement, any other
Credit Document or otherwise related thereto, whether incurred heretofore
or hereafter, which expenses shall include, without being limited to, the
cost of record searches, the fees and expenses of attorneys (including the
allocated cost of internal counsel) and paralegals, all costs and expenses
incurred by the Agent in opening bank accounts and lockboxes, depositing
checks, receiving and transferring funds, and any charges imposed on the
Agent due to insufficient funds of deposited checks and the Agent's
standard fee relating thereto, collateral examination fees and expenses,
fees and expenses of accountants, appraisers or other consultants, experts
or advisors employed or retained by the Agent, fees and expenses incurred
by the Agent in connection with the assignments of or sales of
participations in the Revolving Loans, fees and taxes relative to the
filing of financing statements, costs of preparing and recording Collateral
Documents, all expenses, costs and fees set forth in Article 4 of this
Credit Agreement, all other fees and expenses required to be paid pursuant
to the Fee Letter and/or the Amendment and Restatement Fee Letter and all
fees and expenses incurred in connection with releasing Collateral and the
amendment or termination of any of the Credit Documents.
Expiration Date shall mean March 31, 2001.
Fairness Conditions shall have the meaning given to such term in Section
8.14 hereof.
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 that 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.
Fee Letter shall mean that certain letter dated July 16, 1993 between BT
Commercial Corporation and Wickes Lumber Company providing for the payment
of certain fees in connection with the Original Credit Agreement.
Fees shall mean, collectively, the Unused Line Fee, the Letter of Credit
Fees, the Issuing Bank Fees and the other fees provided for in the Fee
Letter, the Amendment and Restatement Fee Letter, the Second Amendment and
Restatement Fee Letter, the Syndication Agent's Fee Letter and/or the
Agent's Fee Letter or otherwise payable to the Agent, the Syndication
Agent, the Issuing Bank or the Lenders.
Financial Statements shall mean the consolidated (and, if requested,
consolidating) balance sheets, statements of operations, statements of cash
flows and statements of changes in stockholders' equity/deficit of the
Borrower for the period specified.
Fixed Charge Coverage Ratio shall have the meaning given to such term in
Section 8.1 hereof.
Fixed Charges shall mean, with respect to any Person for any period, the
sum of (a) Adjusted Interest Expense of such Person for such period, (b)
all income taxes (and other taxes of a similar nature or imposed in lieu
thereof) paid in cash by such Person during such period and (c) all Capital
Expenditures of such Person during such period.
Foreign Lender shall mean any Lender organized under the laws of a
jurisdiction outside of the United States.
Funding Bank shall have the meaning given to such term in Section 4.9
hereof.
GAAP shall mean generally accepted accounting principles in the United
States as in effect from time to time.
GLC shall mean GLC Division, Inc., a Delaware corporation and a wholly-
owned Subsidiary of the Borrower.
Governing Documents shall mean, as to any Person, the certificate or
articles of incorporation and by-laws or other organizational or governing
documents of such Person.
Governmental Authority shall mean any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government.
Hardlines shall mean that portion of Inventory comprising "Hardlines," as
listed on Schedule B, Part 1.1 hereto (as such list may be supplemented or
otherwise modified from time to time with the consent of the Agent).
Headquarters shall mean the Borrower's headquarters building located at 000
Xxxxx Xxxxxxxx Xxxxx, Xxxxxx Xxxxx, Xxxxxxxx.
Headquarters Lease shall mean that lease, dated as of April 1997, between
the Borrower and ERM North Central, Inc., with respect to approximately
22,000 square feet of space in the Borrower's Headquarters.
Headquarters Lease Assignment shall have the meaning given to such term in
Section 8.1 hereof.
Headquarters Lease Build-Out Expenditure shall mean not more than $950,000
spent by the Borrower to build-out a portion of the Headquarters pursuant
to the terms of the Headquarters Lease.
Highest Lawful Rate shall mean, at any given time during which any
Obligations shall be outstanding hereunder, the maximum nonusurious
interest rate, if any, that at any time or from time to time may be
contracted for, taken, reserved, charged or received on the Obligations
owing under this Credit Agreement, under the laws of the State of New York
(or the law of any other jurisdiction whose laws may be mandatorily
applicable notwithstanding other provisions of this Credit Agreement and
the other Credit Documents), or under applicable federal laws which may
presently or hereafter be in effect and which allow a higher maximum
nonusurious interest rate than under New York (or such other
jurisdiction's) law, in any case after taking into account, to the extent
permitted by applicable law, any and all relevant payments or charges under
this Credit Agreement and any other Credit Documents executed in connection
herewith, and any available exemptions, exceptions and exclusions.
Incremental Borrowing Base Amount shall have the meaning given to such term
in Section 8.20(c) hereof.
Indebtedness shall mean, with respect to any Person, (a) all indebtedness
of such Person for borrowed money or for the deferred purchase price of
property or services (other than trade liabilities incurred in the ordinary
course of business and payable in accordance with customary practices) or
which is evidenced by a note, bond, debenture or similar instrument,
(b) all obligations of such Person under capital leases, (c) all
obligations of such Person in respect of letters of credit, banker's
acceptances or similar obligations issued or created for the account of
such Person, (d) liabilities arising under Interest Rate Agreements and
Lumber Hedging Agreements of such Person, (e) all Contingent Obligations of
such person and (f) all liabilities secured by any Lien on any property
owned by such Person even though such Person has not assumed or otherwise
become liable for the payment thereof.
Indenture shall mean the Indenture with respect to the Senior Subordinated
Notes, dated as of October 15, 1993, between the Borrower and Marine
Midland Bank, N.A., as trustee, as amended, supplemented or otherwise
modified from time to time with the prior written consent of the Majority
Lenders.
Intangibles shall mean "Intangibles" as defined in the Security Agreement.
Interest Coverage Ratio shall mean, with respect to any period, the ratio
of EBITDA for such period to Adjusted Interest Expense for such period.
Interest Expense shall mean, with respect to any Person, the aggregate
consolidated interest expense of such Person in respect of Indebtedness
determined on a consolidated basis, including, without limitation,
amortization of original issue discount on any Indebtedness and of all fees
payable in connection with the incurrence of such Indebtedness (to the
extent included in interest expense), the interest portion of any deferred
payment obligation and the interest component of any capital lease
obligations.
Interest Period shall mean for any Eurodollar Rate Loan the period
commencing on the date of such Borrowing and ending on the last day of the
period selected by the Borrower pursuant to the provisions below. The
duration of each such Interest Period shall be one, two, three, four, five
or six months, in each case as the Borrower may, in an appropriate Notice
of Borrowing, Notice of Continuation or Notice of Conversion, select;
provided, however, that the Borrower may not select any Interest Period
that ends after the Expiration Date. Whenever the last day of any Interest
Period would otherwise occur on a day other than a Business Day, the last
day of such Interest Period shall be extended to occur on the next
succeeding Business Day, provided that if such extension would cause the
last day of such Interest Period to occur in the next following calendar
month, the last day of such Interest Period shall occur on the next
preceding Business Day.
Interest Rate Agreement shall mean any interest rate protection agreement,
interest rate future, interest rate option, interest rate swap, interest
rate cap or other interest rate hedge or arrangement under which the
Borrower or any Subsidiary is a party or beneficiary.
Internal Revenue Code shall mean the Internal Revenue Code of 1986, as
amended from time to time, and any successor statute thereto and all final
or temporary rules and regulations promulgated thereunder and published,
generally applicable rulings entitled to precedential effect to the extent
such rules, regulations or rulings are effective and applicable hereto.
Internal Revenue Service or IRS shall mean the United States Internal
Revenue Service and any successor agency.
Inventory shall mean "Inventory" as defined in the Security Agreement.
Investment shall mean all expenditures made and all liabilities incurred
(contingently or otherwise) for or in connection with the acquisition of
stock or Indebtedness of, or for loans, advances, capital contributions or
transfers of property to, or in respect of any guaranties (or other
commitments as described under Indebtedness) of obligations of, any Person.
In determining the aggregate amount of Investments outstanding at any
particular time, (i) the amount of any Investment represented by a guaranty
shall be taken at not less than the principal amount of the obligations
guarantied and still outstanding; (ii) there shall be deducted in respect
of each such Investment any amount received as a return of capital (but
only by repurchase, redemption, retirement, repayment, liquidating dividend
or liquidating distribution); (iii) there shall not be deducted in respect
of any Investment any amounts received as earnings on such Investment,
whether as dividends, interest or otherwise; and (iv) there shall not be
deducted from the aggregate amount of Investments any decrease in the
market value thereof.
Issuing Bank shall mean Bankers Trust Company or any Lender that is
acceptable to the Agent which has agreed to issue a Letter of Credit for
the account of the Borrower under this Credit Agreement.
Issuing Bank Fees shall have the meaning given to such term in Section 4.6
hereof.
Lender and Lenders shall have the respective meanings provided in the
preamble to this Credit Agreement.
Lender Advance shall mean a Revolving Loan made by the Lenders to the
Borrower pursuant to Section 2.2 hereof.
Letter of Credit Fee Percentage shall have the meaning given to such term
in Section 4.6 hereof.
Letter of Credit Fees shall mean the fees payable to the Agent for the
benefit of the Agent and the Lenders by the Borrower under and pursuant to
Section 4.6 hereof.
Letter of Credit Obligations shall mean, at any time, the sum of (i) the
aggregate undrawn amount of all Letters of Credit outstanding at such time,
plus (ii) the aggregate amount of all drawings under Letters of Credit for
which the Issuing Bank has not at such time been reimbursed, plus (iii) the
aggregate amount of all payments made by each Lender to the Issuing Bank
with respect to such Lender's participation in Letters of Credit as
provided in Section 3.3 hereof for which the Borrower has not at such time
reimbursed the Lenders, whether by way of a Revolving Loan or otherwise.
Letter of Credit Request shall have the meaning given to such term in
Section 3.4 hereof.
Letters of Credit shall mean all letters of credit (whether documentary or
stand-by and whether for the purchase of inventory, equipment or otherwise)
issued for the account of the Borrower pursuant to Article 3 hereof and all
amendments, renewals, extensions or replacements thereof.
Lien(s) shall mean any lien, claim, charge, pledge, security interest, deed
of trust, mortgage, other encumbrance or other arrangement having the
practical effect of the foregoing or other preferential arrangement of any
other kind and shall include the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title retention
agreement.
Loan Account shall have the meaning given to such term in Section 2.7
hereof.
LTC shall mean Lumber Trademark Company, an Illinois corporation and a
wholly-owned Subsidiary of the Borrower.
LTC Documents shall mean the LTC Sublicense Agreement and the LTC
Subordination Agreement.
LTC Sublicense Agreement shall mean that certain Amended and Restated
Trademark Sublicense Agreement, dated as of March 18, 1994, between the
Borrower and LTC, as such agreement may be amended from time to time with
the consent of the Agent.
LTC Subordination Agreement shall mean that certain Subordination
Agreement, dated as of March 18, 1994, among the Borrower, LTC and the
Agent, as such agreement may be amended from time to time with the consent
of the Agent.
Lumber Hedging Account shall mean an account maintained by the Borrower and
approved by the Agent at an appropriate financial institution in connection
with the purchase by the Borrower of Lumber Hedging Agreements.
Lumber Hedging Agreement shall mean any lumber futures contract or similar
agreement or arrangement entered into by the Borrower designed to protect
the Borrower against fluctuations in the price of lumber actually used in
the ordinary course of the Borrower's business.
Maintenance Capital Expenditures shall mean, for any period, the sum of all
Capital Expenditures made by the Borrower for (i) the maintenance and
repair of any property, facilities or equipment and (ii) the replacement of
any obsolete property, facilities or equipment.
Majority Lenders shall mean, at any time, those Lenders (i) then owed or
holding in the aggregate more than fifty percent (50%) of the Total
Commitments or (ii) if the Commitments are terminated, those Lenders then
owed or holding in the aggregate more than fifty percent (50%) of the
outstanding principal amount of Revolving Loans (or if the Commitments are
terminated and no Revolving Loans are outstanding, those Lenders then
holding more than fifty percent (50%) of the aggregate participation
interests in Letters of Credit then outstanding).
Material Adverse Effect shall mean a material adverse effect on (i) the
business, prospects, operations, results of operations, assets, liabilities
or condition (financial or otherwise) of any Credit Party, (ii) any Credit
Party's ability to perform its obligations under the Credit Documents to
which it is a party, or (iii) the rights and remedies of the Agent, the
Issuing Bank or the Lenders under any Credit Document.
Material Contract shall mean any contract (including, without limitation,
the Indenture, each of the LTC Documents and the Consignment Agreement) or
other arrangement (other than the Credit Documents), whether written or
oral, to which the Borrower or any of the Subsidiaries is a party as to
which the breach, nonperformance, cancellation or failure to renew by any
party thereto could have a Material Adverse Effect.
Mortgage shall mean each mortgage, deed of trust or similar document
executed by the Borrower for the benefit of the Agent and/or the Lenders,
each as amended, restated, supplemented, or otherwise modified from time to
time.
Multiemployer Plan shall mean a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA and (i) which is, or within the immediately preceding
six (6) years was, contributed to by the Borrower, any Subsidiary or any
ERISA Affiliate or (ii) with respect to which the Borrower or any
Subsidiary may incur any liability.
Net Cash Proceeds shall mean, with respect to any sale or other disposition
of assets, the total cash proceeds received in connection therewith less
all advisory fees, legal costs, closing costs, commissions and other out-of-
pocket expenses reasonably incurred in connection therewith.
Net Income shall mean, with respect to any Person during any period, the
net income (loss) of such Person during such period determined in
accordance with GAAP, less any reduction in respect of dividends or other
distributions (made by such Person) on any equity interests of such Person
during such period.
1996 Credit Agreement shall have the meaning set forth in the preamble to
this Credit Agreement.
Notice of Borrowing shall have the meaning given to such term in
Section 2.2 hereof.
Notice of Continuation shall have the meaning given to such term in
Section 4.8(a) hereof.
Notice of Conversion shall have the meaning given to such term in
Section 4.8(b) hereof.
Obligations shall mean the unpaid principal of and interest on (including
interest accruing on or after the filing of any petition in bankruptcy, or
the commencement of any insolvency, reorganization or like proceeding,
relating to the Borrower, whether or not a claim for post-filing or post-
petition interest is allowed in such proceeding) the Revolving Notes, any
reimbursement obligation or indemnity of the Borrower on account of Letters
of Credit (including obligations to Lenders as participants in the letter
of credit exposure of the Issuing Bank under Section 3.3 hereof) or any
accommodation extended with respect to applications for Letters of Credit,
the Fees, the Expenses and all other obligations and liabilities of the
Borrower to the Agent, the Syndication Agent, the Issuing Bank or to the
Lenders, whether direct or indirect, absolute or contingent, due or to
become due, or now existing or hereafter incurred, which may arise under,
out of, or in connection with, the Credit Agreement, the Notes, any other
Credit Document and any other document made, delivered or given in
connection herewith or therewith, and each other obligation and liability,
whether direct or indirect, absolute or contingent, due or to become due,
or now existing or hereafter incurred, whether on account of principal,
interest, fees, indemnities, costs or expenses (including, without
limitation, all fees and disbursements of counsel to the Agent, the
Syndication Agent, the Issuing Bank or to the Lenders) that are required to
be paid by the Borrower to the Lenders, the Agent, the Syndication Agent or
the Issuing Bank pursuant to the terms of the Credit Agreement or any of
the other Credit Documents.
Original Credit Agreement shall mean the Credit Agreement dated as of
October 22, 1993, among the Borrower, the lenders thereunder, the Agent and
the Issuing Bank, as previously amended by that certain Second Amendment,
dated as of August 1, 1994, that certain Third Amendment, Waiver and
Consent, dated as of October 7, 1994, that certain Fourth Amendment, dated
as of January 1, 1995, that certain Fifth Amendment, dated as of June 16,
1995, that certain Sixth Amendment, Waiver and Consent, dated as of June
13, 1995, that certain Seventh Amendment, dated as of June 30, 1995, that
certain Eighth Amendment, dated as of June 30, 1995, that certain Ninth
Amendment and Waiver, dated as of November 10, 1995, and that certain Tenth
Amendment, dated as of November 10, 1995, and as amended and restated in
full by the 1996 Credit Agreement.
PBGC shall mean the Pension Benefit Guaranty Corporation and any Person
succeeding to the functions thereof.
Permitted Acquisition shall mean the acquisition by the Borrower from any
Person of any assets (including, without limitation, stock or other
ownership interests) that constitute a stand-alone business entity engaged
in the same general lines of business as presently conducted by the
Borrower.
Permitted Discretion shall mean the Agent's judgment exercised in good
faith based upon its consideration of any factor which the Agent believes
in good faith: (i) will or could adversely affect the value of any
Collateral, the enforceability or priority of the Agent's Liens thereon or
the amount which the Agent and the Lenders would be likely to receive
(after giving consideration to delays in payment and costs of enforcement)
in the liquidation of such Collateral; (ii) suggests that any collateral
report or financial information delivered to the Agent by any Person on
behalf of the Borrower is incomplete, inaccurate or misleading in any
material respect; (iii) materially increases the likelihood of a
bankruptcy, reorganization or other insolvency proceeding involving the
Borrower or any of its Subsidiaries or any of the Collateral, or
(iv) creates or reasonably could be expected to create a Default or Event
of Default. In exercising such judgment, the Agent may consider such
factors already included in or tested by the definition of Eligible
Accounts Receivable or Eligible Inventory, as well as any of the
following: (i) the financial and business climate of the Borrower's
industry and general macroeconomic conditions, (ii) changes in collection
history and dilution with respect to the Accounts, (iii) changes in demand
for, and pricing of, Inventory, (iv) changes in any concentration of risk
with respect to Accounts and Inventory, (v) changes in turnover statistics
with respect to Inventory and/or Accounts, including actual versus
historical and projected, and (vi) any other factors that change the credit
risk of lending to the Borrower on the security of the Accounts and
Inventory. The burden of establishing lack of good faith hereunder shall
be on the Borrower.
Person shall mean any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association, corporation,
institution, entity, party or government (including any division, agency or
department thereof), and, as applicable, the successors, heirs and assigns
of each.
Plan shall mean any employee benefit plan, program or arrangement, whether
oral or written, maintained or contributed to by the Borrower or any
Subsidiary, or with respect to which the Borrower or any Subsidiary may
incur liability.
Pledge Agreements shall mean that certain Borrower Pledge Agreement, dated
as of October 7, 1994, pursuant to which the Borrower pledged to the Agent
all of the issued and outstanding shares of capital stock of GLC and (b)
that certain Borrower Pledge Agreement, dated as of February 20, 1996,
pursuant to which the Borrower pledged to the Agent all of the shares of
capital stock owned by it of Riverside International Holding Corporation,
in each case as security for the Obligations, as the same has been and may
be amended, restated, supplemented or otherwise modified from time to time.
Prime Lending Rate shall mean the rate which Bankers Trust Company
announces from time to time as its prime lending rate, as in effect from
time to time. The Prime Lending Rate is a reference rate and does not
necessarily represent the lowest or best rate actually charged to any
customer. Bankers Trust Company and each of the Lenders may make
commercial loans or other loans at rates of interest at, above or below the
Prime Lending Rate.
Prime Rate Loan shall mean a Revolving Loan that bears interest as provided
in Section 4.1 hereof.
Prime Rate Spread shall have the meaning given to such term in Section 4.1
hereof.
Proportionate Share shall mean, with respect to any Lender, (i) a fraction
(expressed as a percentage), the numerator of which shall be the amount of
such Lender's Commitment and the denominator of which shall be the Total
Commitments or, (ii) if the Commitments are terminated, a fraction the
numerator of which shall be the principal amount of such Lender's Revolving
Loans and the denominator of which shall be the aggregate principal amount
of all Revolving Loans of all Lenders then outstanding, or (iii) if the
Commitments are terminated and no Revolving Loans are outstanding, a
fraction the numerator of which shall be such Lender's aggregate
participation interests, pursuant to Section 3.3, in the Letters of Credit
then outstanding and the denominator of which shall be the Letter of Credit
Obligations.
Purchase Money Liens shall mean liens on any item of Equipment acquired
after the date of this Credit Agreement, provided that: (i) each such lien
shall attach only to the property to be acquired; (ii) a description is
furnished to the Agent for any property so acquired, the purchase price of
which is greater than $250,000; and (iii) the debt incurred in connection
with such acquisitions shall not exceed the amount of the purchase price of
such items of Equipment then being financed.
Qualified Account Debtors shall mean those account debtors of the Borrower
listed on Schedule C hereto (as amended from time to time by the Agent in
the exercise of its Permitted Discretion).
Real Estate shall mean all real property owned or leased by the Borrower,
together with all fixtures, improvements and other structures thereon.
Reduced Rate shall have the meaning given to such term in Section 4.10(b)
hereof, relating to backup withholding tax.
Regulation D shall mean Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor
thereto.
Reportable Event shall mean any of the events described in Section 4043 of
ERISA and the regulations thereunder.
Required Lenders shall mean, at any time, those Lenders (i) then owed or
holding in the aggregate more than seventy-five percent (75%) of the Total
Commitments or (ii) if the Commitments are terminated, those Lenders then
owed or holding in the aggregate more than seventy-five percent (75%) of
the outstanding principal amount of Revolving Loans (or if the Commitments
are terminated and no Revolving Loans are outstanding, those Lenders then
holding more than seventy-five percent (75%) of the aggregate participation
interests in Letters of Credit then outstanding).
Requirement of Law shall mean, as to any Person, the 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.
Restructuring Reserve shall mean the reserve established with respect to
the December 30, 1995, Financial Statements to cover costs associated with
the closing of certain of the Borrower's building centers and the related
reduction of administrative staff at the Borrower's corporate headquarters.
Retiree Health Plan shall mean an "employee welfare benefit plan" within
the meaning of Section 3(1) of ERISA that provides benefits to persons
after termination of employment, other than as required by Section 601 of
ERISA.
Revolving Loans shall have the meaning given to such term in Section 2.1
hereof, any of which Revolving Loans may be a Eurodollar Rate Loan or a
Prime Rate Loan.
Revolving Note shall mean a promissory note of the Borrower payable to the
order of any Lender, in the form of Exhibit A, evidencing the aggregate
Indebtedness of the Borrower to such Lender resulting from the Revolving
Loans made by such Lender or acquired by such Lender pursuant to
Section 11.6 hereof, as the same may from time to time be amended,
restated, supplemented or otherwise modified.
Second Amendment and Restatement Fee Letter shall mean that certain letter
dated the date hereof between the Agent and the Borrower providing for the
payment of certain fees in connection with the Credit Agreement.
Security Agreement shall mean the Security Agreement, dated the Closing
Date, between the Agent and the Borrower, as such agreement may be amended,
restated, supplemented or otherwise modified from time to time.
Senior Subordinated Notes shall mean the Borrower's 11-5/8% Senior
Subordinated Notes due 2003, issued pursuant to the Indenture, as amended,
supplemented or otherwise modified from time to time with the prior written
consent of the Majority Lenders.
Settlement Date shall have the meaning given to such term in Section 2.4
hereof.
Subsidiary shall mean as to any Person, a corporation, partnership or other
entity of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership interests
having such power only by reason of the happening of a contingency) to
elect a majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through
one or more intermediaries, or both, by such Person. Unless otherwise
qualified, all references to a "Subsidiary" or to "Subsidiaries" in this
Agreement shall refer to a Subsidiary or Subsidiaries of the Borrower.
Syndication Agent shall mean Nationsbank of Georgia, N.A., as provided in
the preamble to this Credit Agreement.
Syndication Agent's Fee Letter shall mean that certain letter agreement
dated as of even date herewith between the Borrower and the Syndication
Agent providing for the payment of certain fees to the Syndication Agent in
connection with this Credit Agreement.
Termination Event shall mean (i) a Reportable Event with respect to any
Benefit Plan or Multiemployer Plan; (ii) the withdrawal of the Borrower,
any Subsidiary or any ERISA Affiliate from a Benefit Plan during a plan
year in which such entity was a "substantial employer" as defined in
Section 4001(a)(2) of ERISA; (iii) the providing of notice of intent to
terminate a Benefit Plan in a distress termination described in
Section 4041(c) of ERISA; (iv) the institution by the PBGC of proceedings
to terminate a Benefit Plan or Multiemployer Plan; (v) any event or
condition (a) which might constitute grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any
Benefit Plan or Multiemployer Plan, or (b) that may result in termination
of a Multiemployer Plan pursuant to Section 4041A of ERISA; or (vi) the
partial or complete withdrawal within the meaning of Sections 4203 and 4205
of ERISA, of the Borrower, any Subsidiary or any ERISA Affiliate from a
Multiemployer Plan.
Transferred Sale Proceeds shall mean, on any date, the portion of Capital
Asset Sale Proceeds designated (without duplication) as "Transferred Sale
Proceeds" by the Borrower in a written notice delivered to the Agent.
Total Commitments shall mean the sum of the Commitments of all the Lenders,
which shall not exceed $130,000,000.
Type shall mean, in reference to a Revolving Loan, that it is a Eurodollar
Rate Loan or a Prime Rate Loan.
Unused Availability shall mean, on any date, the Revolving Credit
Commitment less the sum of (i) the aggregate face amount of outstanding
Letters of Credit on such date and (ii) the aggregate outstanding principal
balance of the Revolving Loans on such date.
Unused Line Fee shall have the meaning given to such term in Section 4.5
hereof.
Unused Line Fee Percentage shall have the meaning given to such term in
Section 4.5 hereof.
Woodproducts shall mean that portion of Inventory comprising
"Woodproducts," as listed on Schedule B, Part 1.1 hereto (as such list may
be supplemented or otherwise modified from time to time with the consent of
the Agent).
1.2 Accounting Terms and Determinations. Unless otherwise defined
or specified herein, all accounting terms used in this Credit Agreement
shall be construed in accordance with GAAP, applied on a basis consistent
in all material respects with the Financial Statements delivered to the
Agent on or before the Closing Date. All accounting determinations for
purposes of determining compliance with Sections 8.1, 8.2 and 8.6 hereof
shall be made in accordance with GAAP as in effect on the Closing Date and
applied on a basis consistent in all material respects with the audited
Financial Statements delivered to the Agent on or before the Closing Date.
The Financial Statements required to be delivered hereunder from and after
the Closing Date, and all financial records, shall be maintained in
accordance with GAAP. If GAAP shall change from the basis used in
preparing the audited Financial Statements delivered to the Agent on or
before the Closing Date, the certificates required to be delivered pursuant
to Section 7.1 demonstrating compliance with the covenants contained herein
shall, at the election of the Borrower or upon the request of the Majority
Lenders, include calculations setting forth the adjustments necessary to
demonstrate how the Borrower is in compliance with the financial covenants
based upon GAAP as in effect on the Closing Date.
1.3 Other Defined Terms. Terms not otherwise defined herein which
are defined in the Uniform Commercial Code as in effect in the State of New
York (the "Code") shall have the meanings given them in the Code. The
words "hereof," "herein" and "hereunder" and words of similar import when
used in this Credit Agreement shall refer to this Credit Agreement as a
whole and not to any particular provision of this Credit Agreement, and
references to Article, Section, Annex, Schedule, Exhibit and like
references are references to this Credit Agreement unless otherwise
specified.
1.4 Interrelationship with 1996 Credit Agreement. As stated in the
preamble hereof, this Credit Agreement is intended to amend and restate the
provisions of the 1996 Credit Agreement and, notwithstanding any
substitution of Revolving Notes as of the Effective Date, except as
expressly modified herein, (a) all of the terms and provisions of the 1996
Credit Agreement shall continue to apply for the period prior to the
Effective Date, including any determinations of payment dates, interest
rates, Events of Default or any amount that may be payable to the Agent,
and (b) the Obligations (as defined in the 1996 Credit Agreement) under the
1996 Credit Agreement shall continue to be paid or prepaid on or prior to
the Effective Date, and be secured by the Collateral, and shall from and
after the Effective Date continue to be owing and be subject to the terms
of this Credit Agreement. All references in the Revolving Notes and the
other Credit Documents to the Original Credit Agreement, the 1996 Credit
Agreement or the "Credit Agreement" shall be deemed to include references
to this Credit Agreement. As of the Effective Date all of the covenants
set forth in the 1996 Credit Agreement are of no further force and effect,
it being understood that all obligations of the Borrower with respect to
the Obligations (as defined in the 1996 Credit Agreement) shall be governed
by this Credit Agreement from and after the Effective Date.
ARTICLE 2. Revolving Loans
2.1 Commitments. Subject to the terms and conditions set forth in
this Credit Agreement, on and after the Effective Date and to and excluding
the Expiration Date, each Lender severally agrees to make loans and
advances to the Borrower ("Revolving Loans") in an amount not to exceed at
any time its Proportionate Share of the lesser of the Total Commitments and
the Borrowing Base minus, in each case, the then outstanding Letter of
Credit Obligations. "Borrowing Base" shall mean the sum of:
(A) eighty percent (80%) of Eligible Accounts Receivable
(increasing to eighty-five percent (85%) during the fiscal months of
January through May of each year), plus
(B) the sum of fifty-five percent (55%) of Eligible Inventory
that is Woodproducts (increasing to sixty percent (60%) during the
fiscal months of January through May of each year), fifty-two and one-
half percent (52.5%) of Eligible Inventory that is Hardlines and fifty
percent (50%) of Eligible Inventory that is Building Materials
(increasing to fifty-five percent (55%) during the fiscal months of
January through May of each year), minus
(C) the aggregate amount of reserves, if any, established by
the Agent;
provided that at no time may the sum of the aggregate outstanding principal
amount of Revolving Loans plus the face amount of the then outstanding
Letters of Credit drawn against Eligible Inventory exceed the product of
(x) .65 multiplied by (y) the sum of the then outstanding amount of
Revolving Loans plus the face amount of the then outstanding Letters of
Credit.
The Agent, in the exercise of its Permitted Discretion, may (i) establish
and increase or decrease reserves against Eligible Accounts Receivable and
Eligible Inventory, (ii) reduce the advance rates provided for in this
definition, or restore such advance rates to any level equal to or below
the advance rates in effect as of the date of this Credit Agreement, and
(iii) impose additional restrictions (or eliminate the same) to the
standards of eligibility set forth in the definitions of "Eligible Accounts
Receivable" and "Eligible Inventory."
2.2 Borrowing of Revolving Loans. It is contemplated that Revolving
Loans will be made available to the Borrower directly by the Lenders
("Lender Advances") and, in the circumstances described in Section 2.2(b),
from the Agent acting on behalf of the Lenders ("Agent Advances"). The
Borrower hereby agrees to execute and deliver to each Lender a Revolving
Note in the form of Exhibit A to evidence the Revolving Loans made to the
Borrower by such Lender.
(a) Lender Advances of Revolving Loans. Subject to the determination by
the Agent and the Lenders that the conditions for Borrowing contained in
Section 5.2 are satisfied, upon notice from the Borrower to the Agent
("Notice of Borrowing"), Lender Advances of Revolving Loans shall be made
to the extent of each Lender's Proportionate Share of the requested
Borrowing. The Notice of Borrowing shall specify whether the requested
Borrowing is of Prime Rate Loans or Eurodollar Rate Loans.
(b) Agent Advances of Revolving Loans. The Agent is authorized by the
Lenders, but is not obligated, to make Agent Advances consisting only of
Prime Rate Loans (i) upon a Notice of Borrowing received by the Agent, or
(ii) upon advice received by the Agent on a Business Day from the
Disbursement Account Bank of the face amount of checks drawn on the
Disbursement Account, which have been or will be presented for payment on
that day minus the amount of funds then available in the Disbursement
Account, pursuant to Section 2.2(c). Agent Advances (together with all
other Revolving Loans and all Letter of Credit Obligations outstanding) may
not at any time exceed the amount available for borrowing under Section
2.1. Agent Advances shall be subject to periodic settlement with the
Lenders under Section 2.4. Agent Advances of Prime Rate Loans may be made
only in the following circumstances:
(i) For administrative convenience, the Agent may, but is not
obligated to, make Agent Advances in reliance upon the Borrower's actual
or deemed representations under Section 5.2 that the conditions for
borrowing are satisfied.
(ii) If the conditions for borrowing under Section 5.2 cannot be
fulfilled, the Borrower shall in its Notice of Borrowing or otherwise
give immediate notice thereof to the Agent, with a copy to each of the
Lenders, and the Agent may, but is not obligated to, continue to make
Agent Advances for fifteen (15) Business Days from the date the Agent
first receives such notice, or until sooner instructed by the Majority
Lenders to cease; provided that the Agent provides the Lenders promptly
with a copy of such Notice of Borrowing or other notice delivered by the
Borrower to the Agent of the Borrower's failure to satisfy the
conditions for borrowing under Section 5.2.
(c) Disbursement of Revolving Loans. Revolving Loans, whether made as
Lender Advances or Agent Advances, subject to the terms and conditions of
this Credit Agreement, will be made as follows:
(i) The Borrower has informed the Agent that it has decided to open
an account (the "Disbursement Account") with Bankers Trust (Delaware)
(the "Disbursement Account Bank") for the purpose of paying trade
payables and other operating expenses. The Agent is authorized to
transmit proceeds of Revolving Loans upon advice received by the Agent
from the Disbursement Account Bank, as described in Section 2.2(b),
directly to the Disbursement Account. In the absence of contrary
instructions from the Borrower, such advice from the Disbursement
Account Bank will be deemed a sufficient Notice of Borrowing for an
Agent Advance of Prime Rate Loans.
(ii) It is contemplated that Revolving Loans be made available to
fund the Borrower's Letter of Credit Obligations, as described in
Section 3.5, and such Revolving Loans may be made available by the Agent
directly to the Issuing Bank upon notice from the Issuing Bank of
unfunded Letter of Credit Obligations.
(iii) The Agent will make requested Revolving Loans available as
instructed in a Notice of Borrowing, and in the absence of such
instructions, shall transmit the proceeds of such requested Revolving
Loans directly to the Disbursement Account.
(d) Notices of Borrowing; Minimum Amounts. Notice of Borrowing for (i)
Lender Advances of Prime Rate Loans shall be given not later than 1:00 P.M.
New York City time on the same Business Day of the proposed Borrowing and
(ii) Agent Advances of Prime Rate Loans shall be given not later than
3:00 P.M. New York City time on the same Business Day of the proposed
Borrowing. Notice of Borrowing for Eurodollar Rate Loans shall be given
not later than 5:00 P.M. on the third Business Day prior to the proposed
Borrowing.
(i) Notices of Borrowing may be given under this Section by
telephone or facsimile transmission, and, if by telephone, promptly
confirmed in writing substantially in the form of Exhibit E. Once
given, a Notice of Borrowing is irrevocable by and binding on the
Borrower.
(ii) The Borrower shall specify in each Notice of Borrowing whether
the conditions for the requested Borrowing are satisfied and whether the
requested Borrowing is of Prime Rate Loans or Eurodollar Rate Loans.
The Borrower may request one or more Borrowings on the same Business
Day. Each such Borrowing shall, unless otherwise specifically provided
herein, consist entirely of Revolving Loans of the same Type and, if
such Borrowing is to consist of Eurodollar Rate Loans, shall be in an
aggregate amount for all Lenders of not less than $1,000,000 or an
integral multiple of $100,000 in excess thereof. The right of the
Borrower to choose Eurodollar Rate Loans is subject to the provisions of
Section 4.8.
(iii) On or prior to the Closing Date, the Borrower provided to the
Agent a list, with specimen signatures, of officers authorized to
request Revolving Loans, substantially in the form attached as Exhibit O
to the Original Credit Agreement. The Agent is entitled to rely upon
such list until it is replaced by the Borrower. The Agent shall have no
duty to verify the authenticity of the signature appearing on any Notice
of Borrowing or other writing delivered hereunder and, with respect to
an oral request for Revolving Loans, the Agent shall have no duty to
verify the identity of any individual representing himself as one of the
officers authorized to make such request on behalf of the Borrower.
Neither the Agent nor any of the Lenders shall incur any liability to
the Borrower as a result of acting upon any telephonic notice the Agent
believes in good faith to have been given by a duly authorized officer
or other individual authorized to request Revolving Loans on behalf of
the Borrower or for otherwise acting in good faith.
2.3 Settlement of Lender Advances and Repayments. The Agent shall
give each Lender prompt notice by telephone or facsimile transmission of a
Notice of Borrowing that requests Lender Advances of Revolving Loans. No
later than 3:00 P.M. New York City time on the date designated for the
Borrowing, each Lender, for the account of its Applicable Lending Office,
shall make available to the Agent at the Agent's address its Proportionate
Share of such Borrowing in immediately available funds. Unless the Agent
receives contrary written notice prior to the date of any such Borrowing of
Revolving Loans, it is entitled to assume that each Lender will make
available its Proportionate Share of the Borrowing and in reliance upon
that assumption, but without any obligation to do so, may advance such
Proportionate Share on behalf of the Lender.
2.4 Periodic Settlement of Agent Advances and Repayments.
(a) The Settlement Date. The amount of Revolving Loans and the amount of
each Lender's Proportionate Share of Revolving Loans shall be computed
weekly (or more frequently in the Agent's discretion) and shall be adjusted
upward or downward based on all Revolving Loans (including Agent Advances)
and repayments of Revolving Loans received by the Agent as of 5:00 P.M. New
York City time on the last Business Day of the period specified by the
Agent (such date, the "Settlement Date").
(b) Summary Statements; Settlements. The Agent shall deliver to each of
the Lenders promptly after the Settlement Date a summary statement of the
amount of outstanding Revolving Loans (including Agent Advances) for the
period and the amount of repayments received for the period. As reflected
on the summary statement: (i) the Agent shall transfer to each Lender its
allocated share of interest and Unused Line Fee and its Proportionate Share
of repayments; and (ii) each Lender shall transfer to the Agent (as
provided below), or the Agent shall promptly transfer to each Lender, such
amounts as are necessary to insure that, after giving effect to all such
transfers, the amount of Revolving Loans made by each Lender shall be equal
to such Lender's Proportionate Share of the aggregate amount of Revolving
Loans outstanding as of such Settlement Date. If the summary statement
requires transfers to be made to the Agent by the Lenders and is received
prior to 12:00 Noon New York City time on a Business Day, such transfers
shall be made in immediately available funds no later than 3:00 P.M. New
York City time that day; and, if received after 12:00 Noon New York City
time, then no later than 3:00 P.M. New York City time on the next Business
Day. The obligation of each Lender to transfer such funds is irrevocable,
unconditional and without recourse to or warranty by the Agent.
(c) Distribution of Interest and Unused Line Fees. Interest on the
Revolving Loans (including Agent Advances) together with the amount of the
Unused Line Fee, shall be allocated by the Agent to each Lender in
accordance with the Proportionate Share of Revolving Loans actually funded
by and repaid to each Lender, and shall accrue from and including the date
such Revolving Loans are so advanced and to but excluding the date such
Revolving Loans are either repaid by the Borrower or actually settled under
this Section. Promptly after the end of each month (or, with respect to
interest on Eurodollar Rate Loans, promptly after such interest is received
by the Agent), the Agent shall distribute to each Lender its Proportionate
Share of the interest and Unused Line Fee accrued during that month.
2.5 Defaulting Lenders.
(a) A Lender who fails to pay the Agent its Proportionate Share of any
Revolving Loans (including Agent Advances) made available by the Agent on
such Lender's behalf, or who fails to pay any other amount owing by it to
the Agent, is a "Defaulting Lender." The Agent may recover all such
amounts owing by a Defaulting Lender on demand. If the Defaulting Lender
does not pay such amounts on the Agent's demand, the Agent shall promptly
notify the Borrower and the Borrower shall pay such amounts within five
Business Days. In addition, the Defaulting Lender or the Borrower shall
pay the Agent interest on such amount for each day from the date it was
made available by the Agent to the Borrower to the date it is recovered by
the Agent at a rate per annum equal to (x) the overnight Federal Funds
Rate, if paid by the Defaulting Lender, or (y) the then applicable rate of
interest calculated under Section 4.1, if paid by the Borrower; plus, in
each case, the Expenses and losses, if any, incurred as a result of the
Defaulting Lender's failure to perform its obligations.
(b) The failure of any Lender to fund its Proportionate Share of any
Revolving Loan (including Agent Advances) shall not relieve any other
Lender of its obligation to fund its Proportionate Share of such Revolving
Loan. Conversely, no Lender shall be responsible for the failure of
another Lender to fund its Proportionate Share of a Revolving Loan.
(c) The Agent shall not be obligated to transfer to a Defaulting Lender
any payments made by the Borrower to the Agent for the Defaulting Lender's
benefit; nor shall a Defaulting Lender be entitled to the sharing of any
payments hereunder. Amounts payable to a Defaulting Lender shall instead
be paid to or retained by the Agent. The Agent may hold and, in its
discretion, re-lend to the Borrower the amount of all such payments
received or retained by it for the account of such Defaulting Lender. For
purposes of voting or consenting to matters with respect to the Credit
Documents and determining Proportionate Shares, such Defaulting Lender
shall be deemed not to be a "Lender" and such Lender's Commitment shall be
deemed to be zero (-0-). This section shall remain effective with respect
to such Lender until (x) the Obligations under this Credit Agreement shall
have been declared or shall have become immediately due and payable or
(y) the Majority Lenders, the Agent and the Borrower shall have waived such
Lender's default in writing. The operation of this Section shall not be
construed to increase or otherwise affect the Commitment of any Lender, or
relieve or excuse the performance by the Borrower of its duties and
obligations hereunder.
2.6 Mandatory Payment; Mandatory Reduction of Commitments.
(a) The aggregate balance of Revolving Loans and all Letter of Credit
Obligations outstanding at any time in excess of the lesser of the Total
Commitments and the Borrowing Base shall be immediately due and payable
without the necessity of any demand.
(b) On the Expiration Date, the Commitment of each Lender shall
automatically reduce to zero and may not be reinstated. The Borrower may
reduce or terminate the Total Commitments at any time and from time to time
in whole or in part. Each such reduction of the Total Commitments must be
in an amount not less than $1,000,000 (and in increments of $1,000,000
thereafter). If the Borrower seeks to reduce the Total Commitments to an
amount less than $50,000,000, then the Total Commitments shall be reduced
to zero and this Credit Agreement shall be terminated. Once reduced, no
portion of the Total Commitments may be reinstated.
2.7 Maintenance of Loan Account; Statements of Account. The Agent
shall maintain an account on its books in the name of the Borrower (the
"Loan Account") in which the Borrower will be charged with all loans and
advances made by the Lenders to the Borrower or for the Borrower's account,
including the Revolving Loans and all Letter of Credit Obligations, the
Fees, the Expenses and any other Obligations. The Loan Account will be
credited with all amounts received by the Agent from the Borrower or from
others for the Borrower's account, including all amounts received in the BT
Account from the Blocked Account Banks. In no event shall prior recourse
to any Accounts or other Collateral be a prerequisite to the Agent's right
to demand payment of any Obligation upon its maturity. Further, the Agent
shall have no obligation whatsoever to perform in any respect any of the
Borrower's contracts or obligations relating to the Accounts. After the
end of each month, the Agent shall send the Borrower a statement accounting
for the charges, loans, advances and other transactions occurring among and
between the Agent, the Lenders and the Borrower during that month. The
monthly statements shall, absent manifest error, be an account stated,
which is final, conclusive and binding on the Borrower.
2.8 Payment Procedures. Payments of interest, Fees and Expenses
shall be made not later than 2:00 P.M. New York City time on the day when
due, in immediately available Dollars, to the Agent at its address set
forth in Section 11.5 hereof. The Borrower hereby authorizes the Agent to
charge the Loan Account with the amount of all payments to be made
hereunder and under the other Credit Documents, including all Fees and
Expenses, as and when such payments become due. The Borrower's obligations
to the Lenders with respect to such payments shall be discharged by making
such payments to the Agent pursuant to this Section or by charging the Loan
Account.
2.9 Collection of Accounts.
(a) All Collections and other amounts received by the Borrower from any
account debtor, in addition to all other cash received from any other
source (including, without limitation, upon sales of Collateral or other
property permitted hereunder (unless remitted directly to the Agent)),
shall upon receipt be deposited into an account (each, a "Blocked Account")
opened by the Borrower at a financial institution selected by the Borrower
and acceptable to the Agent (each, a "Blocked Account Bank"). The Borrower
shall use its best efforts to cause each Blocked Account Bank to enter into
an agreement with the Borrower and the Agent substantially in the form of
Exhibit B to the Original Credit Agreement (each, a "Blocked Account
Agreement"), provided that, with respect to any Blocked Account not subject
to a Blocked Account Agreement, the Agent may require the Borrower to close
such Blocked Account and have all funds therein transferred to the BT
Account and all future Collections which would otherwise be deposited in
such Blocked Account deposited in another Blocked Account which is subject
to a Blocked Account Agreement. Deposits in each Blocked Account shall be
transferred via the automatic clearing house system each Business Day into
an account (the "BT Account") maintained by the Agent at Bankers Trust
Company and established pursuant to a concentration account agreement
entered into among the Borrower, the Agent and Bankers Trust Company
substantially in the form of Exhibit C to the Original Credit Agreement
(the "Concentration Account Agreement"). Where applicable, such transfers
shall be subject to the terms and conditions of the relevant Blocked
Account Agreement. The Borrower shall accurately report all amounts
deposited in the Blocked Accounts to ensure the proper transfer of funds as
set forth above.
(b) The Borrower may request that the Agent close Blocked Accounts and/or
open new Blocked Accounts (or, in either case, permit the Borrower to do
so), subject to the execution and delivery to the Agent of appropriate
Blocked Account Agreements (unless expressly waived by the Agent)
consistent with the provisions of this Section 2.9 and otherwise
satisfactory to the Agent.
2.10 Application of Payments. All amounts received in the BT
Account from the Blocked Account Banks shall be credited to the Loan
Account. If an Event of Default has occurred and is continuing, all amounts
received by the Agent in the BT Account or otherwise shall be applied in
the following order: first, to the payment of any Fees, Expenses or other
Obligations due and payable to the Agent under any of the Credit Documents,
including amounts advanced by the Agent on behalf of the Lenders pursuant
to Section 2.4(b); second, to the payment of any Fees, expenses or other
Obligations due and payable to the Issuing Bank under any of the Credit
Documents; third, to the ratable payment of any Fees, expenses or other
Obligations due and payable to the Syndication Agent or the Lenders under
any of the Credit Documents other than those Obligations specifically
referred to in this Section 2.10; fourth, to the ratable payment of
interest due on the Revolving Loans; fifth, to the ratable payment of
principal due on the Revolving Loans. Any payment received hereunder as a
distribution in any proceeding referred to in Section 9.1(f) shall, unless
paid with respect to amounts specifically owing to the Agent, the
Syndication Agent or the Issuing Bank, be distributed and applied to the
payment of the amounts due hereunder and under the Revolving Notes ratably
in accordance with such amounts (or, if a court of competent jurisdiction
shall otherwise specify, as specified by such court).
ARTICLE 3. Letters of Credit
3.1 Issuance of Letters of Credit. Subject to the terms and
conditions of this Credit Agreement and in reliance upon the
representations and warranties of the Borrower set forth herein, the
Issuing Bank shall issue Letters of Credit hereunder at the request of the
Borrower and for its account, as more specifically described below. The
Issuing Bank shall not issue any Letter of Credit for the account of the
Borrower if at the time of such requested issuance:
(a) The face amount of such requested Letter of Credit, when added to the
Letter of Credit Obligations then outstanding, would cause the Letter of
Credit Obligations to exceed (i) $10,000,000 or, (ii) when added to the
aggregate amount of Revolving Loans and all Letter of Credit Obligations
then outstanding would cause the sum of the aggregate amount of Revolving
Loans and Letter of Credit Obligations then outstanding to exceed the
lesser of (x) the Total Commitments and (y) the Borrowing Base then in
effect;
(b) Any order, judgment or decree of any Governmental Authority or
arbitrator shall purport by its terms to enjoin or restrain the Issuing
Bank from issuing such Letter of Credit or any Requirement of Law
applicable to the Agent or the Issuing Bank or any request or directive
(whether or not having the force of law) from any Governmental Authority
with jurisdiction over the Agent or the Issuing Bank shall prohibit, or
request that the Agent or the Issuing Bank refrain from, the issuance of
letters of credit generally or such Letter of Credit in particular or shall
impose upon the Agent or the Issuing Bank with respect to such Letter of
Credit any restriction or reserve or capital requirement (for which the
Agent or the Issuing Bank is not otherwise compensated) not in effect as of
the Closing Date, or any unreimbursed loss, cost or expense which was not
applicable, in effect or known to the Agent or the Issuing Bank as of the
Closing Date and which the Agent or the Issuing Bank deems in good faith to
be material to it; or
(c) A default of any Lender's obligations to fund under Section 3.5
exists, or such Lender is a Defaulting Lender under Section 2.5, unless the
Agent and the Issuing Bank have entered into satisfactory arrangements with
the Borrower to eliminate the Agent's and the Issuing Bank's risk with
respect to such Lender, including cash collateralization of such Lender's
Proportionate Share of the Letter of Credit Obligations.
3.2 Terms of Letters of Credit. The Letters of Credit shall be in a
form customarily issued by the Issuing Bank or in such other form as has
been approved by the Issuing Bank. At the time of issuance, the amount and
the terms and conditions of each Letter of Credit, and of any drafts or
acceptances thereunder, shall be subject to approval by the Agent and the
Borrower. In no event may the term of any standby Letter of Credit issued
hereunder exceed 360 days (except that such Letters of Credit may provide
for annual renewal) nor the term of any documentary Letter of Credit exceed
120 days, and all Letters of Credit issued hereunder shall expire no later
than the date that is five (5) Business Days prior to the Expiration Date.
Any Letter of Credit containing an automatic renewal provision shall also
contain a provision pursuant to which, notwithstanding any other provisions
thereof, it shall expire no later than the date that is five (5) days prior
to the Expiration Date.
3.3 Lenders' Participation. Immediately upon issuance or amendment
by the Issuing Bank of any Letter of Credit in accordance with the
procedures set forth in Section 3.1, each Lender shall be deemed to have
irrevocably and unconditionally purchased and received from the Issuing
Bank, without recourse or warranty, an undivided interest and participation
to the extent of such Lender's Proportionate Share (based upon its
Commitment) in the liability with respect to such Letter of Credit
(including, without limitation, all obligations of the Borrower with
respect thereto, other than amounts owing to the Issuing Bank consisting of
Issuing Bank Fees) and any security therefor or guaranty pertaining
thereto.
3.4 Notice of Issuance. Whenever the Borrower desires the issuance
of a Letter of Credit, the Borrower shall deliver to the Agent a written
notice no later than 1:00 P.M. New York City time at least five (5)
Business Days (or such shorter period as may be agreed to by the Issuing
Bank) in advance of the proposed date of issuance, which written notice
shall be in such form as may be required from time to time by the Agent and
the Issuing Bank (a "Letter of Credit Request"). The transmittal by the
Borrower of each Letter of Credit Request shall be deemed to be a
representation and warranty by the Borrower that the Letter of Credit may
be issued in accordance with and will not violate any of the requirements
of Section 3.1. Prior to the date of issuance of each Letter of Credit,
the Borrower shall provide to the Agent a precise description of the
documents and the text of any certificate to be presented by the
beneficiary of such Letter of Credit which if presented by such beneficiary
on or prior to the expiration date of the Letter of Credit would require
the Issuing Bank to make payment under the Letter of Credit. The Issuing
Bank, in its reasonable judgment, may require changes in any such documents
and certificates. No Letter of Credit shall require payment against a
conforming draft to be made thereunder prior to the second Business Day
(under the laws of the jurisdiction of the Issuing Bank) after the date on
which such draft is presented, together with all documents and/or
certificates required to be presented in connection therewith under the
terms of the applicable Letter of Credit. A Letter of Credit Request may
be given in writing or electronically and, if requested by the Agent, with
prompt confirmation in writing. Any electronic Letter of Credit Request
shall be deemed to have been prepared by, or under the supervision of the
chief financial officer of the Borrower. The Agent shall promptly provide
the aforementioned Letter of Credit Request, document description and
proposed text of certification to the Issuing Bank.
3.5 Payment of Amounts Drawn Under Letters of Credit. In the event
of any drawing under any Letter of Credit by the beneficiary thereof, the
Issuing Bank shall notify the Agent, which shall notify the Borrower of
such draw, not later than 11:00 A.M. New York City time on the Business Day
immediately prior to the date on which the Issuing Bank intends to honor
such drawing. The Borrower will be deemed to have concurrently given a
Notice of Borrowing to the Agent for Revolving Loans in the amount of and
at the time of such drawing. Subject to satisfaction or waiver of the
conditions specified in Article 5 hereof and the other terms and conditions
of Borrowings contained herein, the Lenders shall be obligated to, on the
date of such drawing, make Revolving Loans in the amount of such drawing,
the proceeds of which shall be applied directly by the Agent to reimburse
the Issuing Bank for the amount of such drawing or payment. If for any
reason, proceeds of such Revolving Loans are not received by the Issuing
Bank on such date in an amount equal to the amount of such drawing, the
Borrower shall be obligated to and shall reimburse the Issuing Bank, on the
Business Day (under the laws of the jurisdiction of the Issuing Bank)
immediately following the date of such drawing, in an amount in immediately
available funds equal to the excess of the amount of such drawing over the
amount of such Revolving Loans, if any, which are so received, plus accrued
interest on such amount at the rate set forth in Section 4.1 hereof.
3.6 Payment by Lenders. If Revolving Loans are not made in an
amount sufficient to reimburse the Issuing Bank in full for the amount of
any draw, the Agent shall promptly notify each Lender of the unreimbursed
amount of such drawing and of such Lender's respective participation
therein. Each Lender shall make available to the Agent for the benefit of
the Issuing Bank an amount equal to such Lender's respective participation
in immediately available funds, not later than 1:00 P.M. New York City time
on the Business Day (under the laws of the jurisdiction of the Issuing
Bank) after the date notified by the Agent. In addition, in the event that
any Lender fails to make available to the Agent the amount of any such
Lender's participation in such Letter of Credit Obligations as provided in
this Section 3.6, the Agent may, but shall not be obligated to, fund the
amount of such Defaulting Lender's participation in such Letter of Credit
and recover such amount on demand from such Defaulting Lender in accordance
with Section 2.5 hereof. In the event that any Lender fails to make
available to the Agent the amount of such Lender's participation in such
Letter of Credit as provided in this Section 3.6, and the Agent does not
elect to fund to the Issuing Bank such Defaulting Lender's participation in
such letter of Credit, the Issuing Bank shall be entitled to recover such
amount on demand from such Lender together with interest at the Federal
Funds Rate for the first three Business Days while such amount remains
unpaid and thereafter at the Prime Lending Rate. The Agent shall
distribute to each other Lender which has paid all amounts payable by it
under this Section 3.6 with respect to any Letter of Credit issued by the
Issuing Bank such other Lender's Proportionate Share of all payments
subsequently received by the Agent from the Borrower in reimbursement of
drawings honored by the Issuing Bank under such Letter of Credit when such
payments are received.
3.7 Nature of Issuing Bank's Duties. In determining whether to pay
under any Letter of Credit, the Issuing Bank shall be responsible only to
determine that the documents and certificates required to be delivered
under that Letter of Credit have been delivered and that they comply on
their face with the requirements of that Letter of Credit. As between the
Borrower, the Issuing Bank and each other Lender, the Borrower assumes all
risks of the acts and omissions of the Issuing Bank (except to the extent
that it is finally judicially determined that such acts or omissions were
the result of the Issuing Bank's gross negligence or willful misconduct),
or misuse of the Letters of Credit by the respective beneficiaries of such
Letters of Credit. In furtherance and not in limitation of the foregoing,
neither the Issuing Bank, the Agent nor any of the other Lenders shall be
responsible (i) for the form, validity, sufficiency, accuracy, genuineness
or legal effects of any document submitted by any party in connection with
the application for and issuance of or any drawing honored under such
Letters of Credit even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged, (ii) for
the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit, or the rights
or benefits thereunder or proceeds thereof, in whole or in part, which may
prove to be invalid or ineffective for any reason, (iii) for failure of the
beneficiary of any such Letter of Credit to strictly comply with conditions
required in order to draw upon such Letter of Credit, (iv) for errors,
omissions, interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex, telecopy or otherwise, whether
or not they be in cipher, (v) for errors in interpretation of technical
terms, (vi) for any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under any such Letter of
Credit, or of the proceeds thereof, (vii) for the misapplication by the
beneficiary of any such Letter of Credit of the proceeds of any drawing
honored under such Letter of Credit, and (viii) for any consequences
arising from causes beyond the control of the Issuing Bank, the Agent or
the other Lenders. None of the above shall affect, impair, or prevent the
vesting of any of the Issuing Bank's rights or powers hereunder. Any
action taken or omitted to be taken by the Issuing Bank under or in
connection with any Letter of Credit, if taken or omitted in the absence of
gross negligence or willful misconduct, shall not create for the Issuing
Bank any liability to the Borrower, the Agent or any Lender.
3.8 Obligations Absolute. The obligations of the Borrower to
reimburse the Issuing Bank for drawings honored under the Letters of Credit
and the obligations of the Lenders under Section 3.6 hereof shall be
unconditional and irrevocable and shall be paid strictly in accordance with
the terms of this Credit Agreement under all circumstances including,
without limitation, the following circumstances:
(a) any lack of validity or enforceability of any Letter of Credit;
(b) the existence of any claim, set-off, defense or other right which the
Borrower or any Affiliate of the Borrower may have at any time against a
beneficiary or any transferee of any Letter of Credit (or any Persons or
entities for whom any such beneficiary or transferee may be acting), the
Issuing Bank, any Lender or any other Person, whether in connection with
this Credit Agreement, the transactions contemplated herein or any
unrelated transaction;
(c) any draft, demand, certificate or any other documents presented under
any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(d) the surrender or impairment of any security for the performance or
observance of any of the terms of any of the Credit Documents;
(e) payment by the Issuing Bank under 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;
(f) failure of any drawing under a Letter of Credit or any non-
application or misapplication by the beneficiary of the proceeds of any
drawing; or
(g) the fact that a Default or an Event of Default shall have occurred
and be continuing;
provided, however, that the Borrower shall have no obligation to reimburse
the Issuing Bank, and the Lenders shall have no obligation under
Section 3.6 hereof, in the event of the Issuing Bank's willful misconduct
or gross negligence in determining whether documents presented under the
Letter of Credit comply with the terms of such Letter of Credit.
ARTICLE 4. Interest, Fees and Expenses
4.1 Interest on Prime Rate Loans. Subject to the provisions of
Section 4.3 hereof, interest on Prime Rate Loans shall be payable monthly
as of the end of each month at an interest rate per annum equal to the
Prime Lending Rate plus the Prime Rate Spread. The "Prime Rate Spread"
shall be equal to the percentage per annum set forth below opposite the
Interest Coverage Ratio maintained by the Consolidated Entity for the
Consolidated Entity's most recently ended four full fiscal quarters for
which Financial Statements of the Consolidated Entity have been delivered
to the Agent pursuant to Section 7.1(a) or 7.1(c), as applicable:
Ratio: Prime Rate Spread
< 1.75 to 1.00 0.75%
< 2.00 to 1.00 and 0.50%
> 1.75 to 1.00
> 2.00 to 1.00 0.25%
In the event of any change in the Prime Lending Rate, the rate hereunder
shall change, effective as of the day the Prime Lending
Rate changes. In the event of any change in the Interest Coverage Ratio of
the Consolidated Entity for the most recently ended four full fiscal
quarters of the Consolidated Entity, the Prime Rate Spread shall change
effective as of the first calendar month beginning after the date on which
the most recent Financial Statements of the Consolidated Entity were
required to be delivered to the Agent pursuant to Section 7.1(a) or 7.1(c),
as applicable. Each determination by the Agent of an interest rate
hereunder shall be conclusive and binding for all purposes, absent manifest
error.
4.2 Interest on Eurodollar Rate Loans. Subject to the provisions of
Section 4.3 hereof, interest on Eurodollar Rate Loans shall be payable on
the last day of each Interest Period with respect to such Eurodollar Rate
Loan (and, with respect to Eurodollar Rate Loans having an Interest Period
in excess of three months, on the last day of each three month interval
during such Interest Period), at the date of conversion of such Eurodollar
Rate Loan (or a portion thereof) to a Prime Rate Loan and at maturity of
such Eurodollar Rate Loan at an interest rate per annum equal during the
Interest Period for such Eurodollar Rate Loan to the Adjusted Eurodollar
Rate for the Interest Period in effect for such Eurodollar Rate Loan plus
the Eurodollar Rate Spread. The "Eurodollar Rate Spread" shall be equal to
the percentage per annum set forth below opposite the Interest Coverage
Ratio maintained by the Consolidated Entity for the Consolidated Entity's
most recently ended four full fiscal quarters for which Financial
Statements of the Consolidated Entity have been delivered to the Agent
pursuant to Section 7.1(a) or 7.1(c), as applicable, as calculated on the
date two (2) Business Days prior to the applicable Interest Period:
Ratio: Eurodollar Rate Spread
< 1.75 to 1.00 2.25%
< 2.00 to 1.00 and 2.00%
> 1.75 to 1.00
> 2.00 to 1.00 1.75%
After maturity of any Eurodollar Rate Loan (whether by acceleration or
otherwise), interest with respect to such Eurodollar Rate Loan shall be
payable upon demand. In the event of any change in the Interest Coverage
Ratio of the Consolidated Entity for the most recently ended four full
fiscal quarters of the Consolidated Entity, the Eurodollar Rate Spread
shall change effective as of the first day of the first Interest Period
beginning after the date on which the most recent Financial Statements of
the Consolidated Entity were required to be delivered to the Agent pursuant
to Section 7.1(a) or 7.1(c), as applicable. The Agent upon determining the
Adjusted Eurodollar Rate for any Interest Period shall promptly notify the
Borrower
and the Lenders by telephone (confirmed promptly in writing) or
in writing thereof. Each determination by the Agent of an interest rate
hereunder shall be conclusive and binding for all purposes, absent manifest
error.
4.3 Interest After Event of Default. Interest on any amount of
matured principal under the Revolving Loans, and interest on the amount of
principal under the Revolving Loans outstanding as of the date an Event of
Default occurs, and at all times thereafter until the earlier of the date
upon which (i) all Obligations have been paid and satisfied in full or
(ii) such Event of Default shall no longer be continuing, shall be payable
on demand at a rate per annum equal to the rate at which the Revolving
Loans are bearing interest pursuant to Sections 4.1 and 4.2 above, plus two
percent (2.00%) per annum. In the event of any change in said applicable
interest rate, the rate hereunder shall change, effective as of the day the
applicable interest rate changes, so as to remain two percent (2.00%) per
annum above the then applicable interest rate.
4.4 Reimbursement of Expenses.
(a) From and after the Closing Date, the Borrower shall promptly
reimburse the Agent for all Expenses of the Agent as the same are incurred
by the Agent and upon receipt of invoices therefor and, if requested by the
Borrower, such reasonable backup materials and information as the Borrower
shall reasonably request.
(b) After the occurrence and during the continuance of a Default, the
Borrower shall promptly reimburse the Agent and the Lenders for all costs,
fees and expenses incurred by them in connection with any workout,
restructuring, renegotiation or refinancing of the Loans and the other
Obligations under the Credit Agreement and the other Credit Documents.
4.5 Unused Line Fee. Promptly following the last Business Day of
each month hereafter and on the Expiration Date, the Borrower shall pay to
the Agent for the pro rata benefit of each of the Lenders a non-refundable
fee equal to the Unused Line Fee Percentage of (a) the Revolving Credit
Commitment less (b) the sum of (i) the aggregate face amount of outstanding
Letters of Credit and (ii) the aggregate outstanding principal balance of
the Revolving Loans, which fee shall accrue from the date of the Original
Credit Agreement until the Expiration Date (the "Unused Line Fee"). The
"Unused Line Fee Percentage" shall be equal to the percentage set forth
below opposite the Interest Coverage Ratio maintained by the Consolidated
Entity for the Consolidated Entity's most recently ended four full fiscal
quarters for which Financial Statements of the Consolidated Entity have
been delivered to the Agent pursuant to Section 7.1(a) or 7.1(c), as
applicable:
Ratio: Unused Line Fee Percentage
< 1.75 to 1.00 0.50%
> 1.75 to 1.00 0.375%
In the event of any change in the Interest Coverage Ratio of the
Consolidated Entity for the most recently ended four full fiscal quarters
of the Consolidated Entity, the Unused Line Fee Percentage shall change
effective as of the first calendar month beginning after the date on which
the most recent Financial Statements of the Consolidated Entity were
required to be delivered to the Agent pursuant to Section 7.1(a) or 7.1(c),
as applicable.
4.6 Letter of Credit Fees.
(a) The Agent, for the ratable benefit of the Lenders, shall be entitled
to charge to the account of the Borrower (i) on the first Business Day of
each month, a fee (the "Letter of Credit Fee"), in an amount equal to the
Letter of Credit Fee Percentage of the daily weighted average amount of
outstanding Letter of Credit Obligations during the immediately preceding
month and (ii) as and when incurred by the Agent or any Lender, any
charges, fees, costs and expenses charged to the Agent or any Lender for
the Borrower's account by any Issuing Bank (other than any fees charged to
the Agent or any Lender which would be duplicative of the Letter of Credit
Fee paid to the Agent for the benefit of the Lenders) (the "Issuing Bank
Fees") in connection with the issuance of any Letters of Credit by the
Issuing Bank, and the Agent shall pay the charges owing to such Issuing
Bank upon receipt of such amounts from the Borrower. The "Letter of Credit
Fee Percentage" shall be equal to the percentage set forth below opposite
the Interest Coverage Ratio maintained by the Consolidated Entity for the
Consolidated Entity's most recently ended four full fiscal quarters for
which Financial Statements of the Consolidated Entity have been delivered
to the Agent pursuant to Section 7.1(a) or 7.1(c), as applicable:
Ratio: Letter of Credit Fee Percentage
< 1.75 to 1.00 2.25%
< 2.00 to 1.00 and 2.00%
> 1.75 to 1.00
> 2.00 to 1.00 1.75%
In the event of any change in the Interest Coverage Ratio of the
Consolidated Entity for the most recently ended four full fiscal quarters
of the Consolidated Entity, the Letter of Credit Fee Percentage shall
change effective for Letters of Credit issued on or after the first day of
the first calendar month beginning after the date on which the most recent
Financial Statements of the Consolidated Entity were required to be
delivered to the Agent pursuant to Section 7.1(a) or 7.1(c), as applicable.
For the avoidance of doubt, the Letter of Credit Fed Percentage shall not
change with respect to any Letters of Credit issued and outstanding prior
to the effective day of such change. Each determination by the Agent of
Letter of Credit Fees and Issuing Bank Fees hereunder shall be conclusive
and binding for all purposes, absent manifest error.
(b) Letter of Credit Fees on Letter of Credit Obligations outstanding as
of the date an Event of Default occurs, and at all times thereafter until
the earlier of the date upon which (i) all Obligations have been paid and
satisfied in full or (ii) such Event of Default shall no longer be
continuing, shall be payable on demand at a rate equal to the rate at which
the Letter of Credit Fees are charged pursuant to Section 4.6(a) above,
plus two percent (2.00%).
4.7 Early Termination Fee. In the event that the Total Commitments
shall be reduced to zero and the Credit Agreement terminated pursuant to
Section 2.6 hereof on or prior to the first anniversary of the date hereof,
the Borrower shall pay to the Agent for the account of the Lenders a
termination fee (the "Early Termination Fee") in an amount equal to one
percent (1.00%) of the amount of the Total Commitments as of the date
hereof.
4.8 Special Provisions Relating to Eurodollar Rate Loans.
(a) Continuation. With respect to any Borrowing consisting of Eurodollar
Rate Loans, the Borrower may (so long as no Default or Event of Default has
occurred and is continuing), subject to the provisions of Section 4.8(c),
elect to maintain such Borrowing or any portion thereof as consisting of
Eurodollar Rate Loans by selecting a new Interest Period for such
Borrowing, which new Interest Period shall commence on the last day of the
immediately preceding Interest Period. Each selection of a new Interest
Period shall be made by notice given not later than 12:00 P.M. New York
City time on the third Business Day prior to the date of any such
continuation relating to Eurodollar Rate Loans, by the Borrower to the
Agent. Such notice by the Borrower of a continuation (a "Notice of
Continuation") shall be by telephone or facsimile transmission, and if by
telephone, promptly confirmed in writing substantially in the form of
Exhibit G, in each case specifying (i) the date of such continuation,
(ii) the Type of Revolving Loans subject to such continuation, (iii) the
aggregate amount of Revolving Loans subject to such continuation and
(iv) the duration of the selected Interest Period. The Borrower may elect
to maintain more than one Borrowing consisting of Eurodollar Rate Loans by
combining such Borrowings into one Borrowing and selecting a new Interest
Period pursuant to this Section 4.8(a); provided, however, that each of the
Borrowings so combined shall consist of Revolving Loans having Interest
Periods ending on the same date. If the Borrower shall fail to select a new
Interest Period for any Borrowing consisting of Eurodollar Rate Loans in
accordance with this Section 4.8(a), such Revolving Loans will
automatically, on the last day of the then existing Interest Period
therefor, convert into Prime Rate Loans. The Agent shall give each Lender
prompt notice by telephone or facsimile transmission of each Notice of
Continuation.
(b) Conversion. The Borrower may on any Business Day (so long as no
Default or Event of Default has occurred and is continuing), upon notice
(each such notice, a "Notice of Conversion") given to the Agent, and
subject to the provisions of Section 4.8(c), convert the entire amount of
or a portion of all Revolving Loans of one Type comprising the same
Borrowing into Revolving Loans of another Type; provided, however, that any
conversion of any Eurodollar Rate Loans into Revolving Loans of another
Type shall be made on, and only on, the last day of an Interest Period for
such Eurodollar Rate Loans and, upon conversion of any Prime Rate Loans
into Revolving Loans of another Type, the Borrower shall pay accrued
interest to the date of conversions on the principal amount converted.
Each such Notice of Conversion shall be given not later than 12:00 P.M. New
York City time on the Business Day prior to the date of any proposed
conversion into Prime Rate Loans and on the third Business Day prior to the
date of any proposed conversion into Eurodollar Rate Loans. Subject to the
restrictions specified above, each Notice of Conversion shall be by
telephone or facsimile transmission, and if by telephone, promptly
confirmed in writing substantially in the form of Exhibit H, in each case
specifying (i) the requested date of such conversion, (ii) the Type of
Revolving Loans to be converted, (iii) the portion of such Type of
Revolving Loan to be converted, (iv) the Type of Revolving Loan such
Revolving Loans are to be converted into and (v) if such conversion is into
Eurodollar Rate Loans, the duration of the Interest Period of such
Revolving Loan. Each conversion shall be in an aggregate amount for the
Revolving Loans of all Lenders of not less than $5,000,000 or an integral
multiple of $100,000 in excess thereof. The Borrower may elect to convert
the entire amount of or a portion of all Revolving Loans of one Type
comprising more than one Borrowing into Revolving Loans of another Type by
combining such Borrowings into one Borrowing consisting of Revolving Loans
of another Type; provided, however, that if the Borrowings so combined
consist of Eurodollar Rate Loans, such Revolving Loans shall have Interest
Periods ending on the same date.
(c) Certain Limitations on Eurodollar Rate Loans. The right of the
Borrower to maintain, select, continue or convert Eurodollar Rate Loans
shall be limited as follows:
(i) If the Agent is advised by Bankers Trust Company that it is
not offering U.S. dollar deposits (in the applicable amounts) in the
London interbank market, or the Agent determines that adequate and fair
means do not otherwise exist for ascertaining the Eurodollar Rate for
Eurodollar Rate Loans comprising any requested Borrowing, continuation
or conversion, the right of the Borrower to select or maintain
Eurodollar Rate Loans for such Borrowing or any subsequent Borrowing
shall be suspended until the Agent shall notify the Borrower and the
Lenders that the circumstances causing such suspension no longer exists,
and each Revolving Loan comprising such Borrowing shall be made as a
Prime Rate Loan.
(ii) If the Majority Lenders shall, at least one Business Day
before the date of any requested Borrowing, continuation or conversion,
notify the Agent that the Eurodollar Rate for Revolving Loans comprising
such Borrowing will not adequately reflect the cost to such Lenders of
making or funding their respective Revolving Loans for such Borrowing,
the right of the Borrower to select Eurodollar Rate Loans for such
Borrowing shall be suspended until the Agent shall notify the Borrower
and the Lenders that the circumstances causing such suspension no longer
exist, and each Revolving Loan comprising such Borrowing shall be made
as a Prime Rate Loan.
(iii) If at any time any Lender determines (which determination
shall, absent manifest error, be conclusive and binding on all parties)
that the making, continuation or conversion of any Revolving Loan as a
Eurodollar Rate Loan has become unlawful or impermissible by reason of
compliance by that Lender with any law, governmental rule, regulation or
order of any Governmental Authority (whether or not having the force of
law or would result in costs or penalties), then, and in any such event,
such Lender may give notice of that determination in writing, to the
Borrower and the Agent and the Agent shall promptly transmit the notice
to each other Lender. Until such Lender gives notice otherwise, the
right of the Borrower to select Eurodollar Rate Loans from that Lender
shall be suspended and each Eurodollar Rate Loan outstanding from that
Lender shall automatically and immediately convert to a Prime Rate Loan.
(iv) There shall not be outstanding at any one time more than an
aggregate of eight (8) Revolving Loans which consist of Eurodollar Rate
Loans.
(d) Compensation. (i) Each Notice of Continuation and Notice of
Conversion shall be irrevocable by and binding on the Borrower. In the
case of any Borrowing, continuation or conversion that the related Notice
of Borrowing, Notice of Continuation or Notice of Conversion specifies is
to be comprised of Eurodollar Rate Loans, the Borrower shall indemnify each
Lender against any loss, cost or expense incurred by such Lender as a
result of any failure to fulfill, on or before the date for such Borrowing,
continuation or conversion specified in such Notice of Borrowing, Notice of
Continuation or Notice of Conversion, the applicable conditions set forth
in Article 5, including, without limitation, any loss (excluding loss of
anticipated profits), cost or expense incurred by reason of the liquidation
or re-employment of deposits or other funds acquired by such Lender to fund
the Revolving Loan to be made by such Lender as part of such Borrowing,
continuation or conversion.
(ii) If any payment of principal of, or conversion or continuation
of, any Eurodollar Rate Loan is made other than on the last day of the
Interest Period for such Loan as a result of a payment, prepayment,
conversion or continuation of such Loan or acceleration of the maturity of
the Revolving Notes pursuant to Article 9 hereof or for any other reason,
the Borrower shall, upon demand by any Lender (with a copy of such demand
to the Agent), pay to the Agent for the account of such Lender any amounts
required to compensate such Lender for any additional losses, costs or
expenses which it may reasonably incur as a result of such payment,
including, without limitation, any loss (including loss of anticipated
profits), cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by any Lender to fund or
maintain such Loan.
(iii) Calculation of all amounts payable to a Lender under this
Section 4.8(d) shall be made as though such Lender elected to fund all
Eurodollar Rate Loans by purchasing U.S. dollar deposits in its Eurodollar
Lending Office's interbank eurodollar market.
4.9 Indemnification in Certain Events. If after the Closing Date,
either (i) any change in or in the interpretation of any law or regulation
is introduced, including, without limitation, with respect to reserve
requirements, applicable to Bankers Trust Company, BT Delaware or any other
banking or financial institution from whom any of the Lenders borrows funds
or obtains credit (a "Funding Bank"), the Agent or any of the Lenders, or
(ii) the Agent, a Funding Bank or any of the Lenders complies with any
future guideline or request from any central bank or other Governmental
Authority or (iii) the Agent, a Funding Bank or any of the Lenders
determines that the adoption of any applicable law, rule or regulation
regarding capital adequacy, or any change therein, or any change in the
interpretation or administration thereof by any Governmental Authority,
central bank or comparable agency charged with the interpretation or
administration thereof has or would have the effect described below, or the
Agent, a Funding Bank or any of the Lenders complies 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, and in the
case of any event set forth in this clause (iii), such adoption, change or
compliance has or would have the direct or indirect effect of reducing the
rate of return on any of the Lenders' capital as a consequence of its
obligations hereunder to a level below that which such Lender could have
achieved but for such adoption, change or compliance (taking into
consideration the Agent's or such Funding Bank's or Lender's policies as
the case may be with respect to capital adequacy) by an amount deemed by
such Lender to be material, and any of the foregoing events described in
clauses (i), (ii) or (iii) increases the cost to the Agent, the Issuing
Bank or any of the Lenders of (A) funding or maintaining the Total
Commitments or (B) issuing, making or maintaining any Letter of Credit or
of purchasing or maintaining any participation therein, or reduces the
amount receivable in respect thereof by the Agent, the Issuing Bank or any
Lender, then the Borrower shall upon demand by the Agent, pay to the Agent,
for the account of each applicable Lender or, as applicable, the Issuing
Bank or a Funding Bank, additional amounts sufficient to indemnify the
Lenders against such increase in cost or reduction in amount receivable. A
certificate as to the amount of such increased cost and setting forth in
reasonable detail the calculation thereof shall be submitted to the
Borrower by the Agent, or the applicable Lender, Issuing Bank or Funding
Bank, and shall be conclusive absent manifest error.
4.10 Net Payments.
(a) All payments by the Borrower hereunder to or for the benefit of any
Lender, the Issuing Bank, the Syndication Agent or the Agent shall be made
without setoff, counterclaim or other defense. Except as provided in
Section 4.10(b), all such payments will be made free and clear of, and
without deduction or withholding for, any present or future taxes, levies,
imposts, duties, fees, assessments, or other charges of whatever nature now
or hereafter imposed by any jurisdiction or by any political subdivision or
taxing authority thereof or therein with respect to such payments (but
excluding any tax imposed on or measured by the net income or profits of
the Lender, the Issuing Bank, the Syndication Agent or the Agent, as the
case may be, pursuant to the laws of the jurisdiction in which it is
organized) together with all interest, penalties or similar liabilities
with respect thereto (collectively, "Covered Taxes"). If the Borrower
shall be required by law to deduct any Covered Taxes from any sum payable
hereunder to any Lender, the Issuing Bank, the Syndication Agent or the
Agent, (A) the sum payable shall be increased as may be necessary so that
after making all required deductions of Covered Taxes (including deductions
of Covered Taxes applicable to additional sums payable under this
Section 4.10) such Lender, the Issuing Bank, the Syndication Agent or the
Agent, as the case may be, receives an amount equal to the sum it would
have received had no such deductions been made, (B) the Borrower shall make
such deductions and (C) the Borrower shall pay the full amount so deducted
to the relevant taxation authority or other authority in accordance with
applicable law. The Borrower shall furnish to the Agent within 45 days
after the date the payment of any Covered Taxes is due certified copies of
tax receipts evidencing such payment by the Borrower. The Borrower agrees
to indemnify and hold harmless the Lender, the Issuing Bank, the
Syndication Agent and the Agent and reimburse each of them, as the case may
be, for the amount of any Covered Taxes so levied or imposed and paid by
them.
(b) Each Foreign Lender shall deliver to the Agent and the Borrower
(i) two valid, duly completed copies of IRS Form 1001 or 4224 or successor
applicable form, as the case may be, and any other required form,
certifying in each case that such Foreign Lender is entitled to receive
payments under this Credit Agreement or the Revolving Notes payable to it
without deduction or withholding of any United States federal income taxes
or with such withholding imposed at a reduced rate (the "Reduced Rate"),
and (ii) a valid, duly completed IRS Form W-8 or W-9 or successor
applicable form, as the case may be, to establish an exemption from United
States backup withholding tax. Each such Foreign Lender shall also deliver
to the Agent and the Borrower two further copies of said Form 1001 or 4224
and W-8 or W-9, or successor applicable forms, or other manner of required
certification, as the case may be, on or before the date that any such form
expires or becomes obsolete or otherwise is required to be resubmitted as a
condition to obtaining an exemption from a required withholding of United
States federal income tax or entitlement to having such withholding imposed
at the Reduced Rate or after the occurrence of any event requiring a change
in the most recent form previously delivered by it to the Borrower and the
Agent, and such extensions or renewals thereof as may reasonably be
requested by the Borrower and the Agent, certifying (i) in the case of a
Form 1001 or 4224 that such Foreign Lender is entitled to receive payments
under this Credit Agreement or the Revolving Notes payable to it without
deduction or withholding of any United States federal income taxes, unless
in any such case any change in a tax treaty to which the United States is a
party, or any change in law or regulation of the United States or official
interpretation thereof has occurred after the Initial Funding Date and
prior to the date on which any such delivery would otherwise be required
that renders all such forms inapplicable or that would prevent such Foreign
Lender from duly completing and delivering any such form with respect to
it, and such Foreign Lender advises the Borrower and the Agent that it is
not capable of receiving payments without any deduction or withholding at
the Reduced Rate, or (ii) in the case of a Form W-8 or W-9, establishing an
exemption from United States backup withholding tax.
4.11 Affected Lenders. If the Borrower is obligated to pay to any
Lender any amount under Sections 4.9 or 4.10 hereof or if any Lender is a
Defaulting Lender, the Borrower may, if no Default or Event of Default then
exists, replace such Lender with another lender acceptable to the Agent,
and such Lender hereby agrees to be so replaced subject to the following:
(a) The obligations of the Borrower hereunder to the Lender to be
replaced (including such increased or additional costs incurred from the
date of notice to the Borrower of such increase or additional costs through
the date such Lender is replaced hereunder) shall be paid in full to such
Lender concurrently with such replacement;
(b) If such replacement is a result of increased costs under Sections 4.9
or 4.10, the replacement Lender shall be a bank or other financial
institution that is not subject to such increased costs which caused the
Borrower's election to replace any Lender hereunder, and each such
replacement Lender shall execute and deliver to the Agent such
documentation satisfactory to the Agent pursuant to which such replacement
Lender is to become a party hereto, conforming to the provisions of
Section 11.6 hereof, with a Commitment equal to that of the Lender being
replaced and shall make Revolving Loans in the aggregate principal amount
equal to the aggregate outstanding principal amount of the Revolving Loans
of the Lender being replaced;
(c) Upon such execution of such documents referred to in clause (b) and
repayment of the amounts referred to in clause (a), the replacement lender
shall be a "Lender" with a Commitment as specified hereinabove and the
Lender being replaced shall cease to be a "Lender" hereunder, except with
respect to indemnification provisions under this Credit Agreement, which
shall survive as to such replaced Lender;
(d) The Agent shall reasonably cooperate in effectuating the replacement
of any Lender under this Section 4.11, but at no time shall the Agent be
obligated to initiate any such replacement; and
(e) Any Lender replaced under this Section 4.11 shall be replaced at the
Borrower's sole cost and expense and at no cost or expense to the Agent or
any of the Lenders.
(f) If Borrower proposes to replace any Lender pursuant to this
Section 4.11 because the Lender seeks reimbursement under either
Section 4.9 or 4.10, then it must also replace any other Lender who seeks
similar levels of reimbursement (as a percentage of such Lender's
Commitment) under such Sections.
4.12 Sharing of Payments. If any Lender shall obtain any payment
(whether voluntary, involuntary, through the exercise of any right of
set-off or otherwise) on account of the Revolving Loans made by it or its
participation in the Letter of Credit Obligations in excess of its
Proportionate Share of payments on account of the Revolving Loans or Letter
of Credit Obligations obtained by all the Lenders, such Lender shall
forthwith purchase from the other Lenders such participations in the
Revolving Loans made by them or in their participation in Letters of Credit
as shall be necessary to cause such purchasing Lender to share the excess
payment ratably with each of them; provided, however, that if all or any
portion of such excess payment is thereafter recovered from such purchasing
Lender, such purchase from each Lender shall be rescinded and each such
Lender shall repay to the purchasing Lender the purchase price to the
extent of such recovery together with an amount equal to such Lender's
ratable share (according to the proportion of (i) the amount of such
Lender's required repayment to (ii) the total amount so recovered from the
purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect to the total amount so recovered. The
Borrower agrees that any Lender so purchasing a participation from another
Lender pursuant to this Section 4.12 may, to the fullest extent permitted
by law, exercise all of its rights of payment (including the right of
set-off) with respect to such participation as fully as if such Lender were
the direct creditor of the Borrower in the amount of such participation.
4.13 Calculations. All calculations of (i) interest hereunder and
(ii) fees, including, without limitation, Unused Line Fees and Letter of
Credit Fees, shall be made by the Agent, on the basis of a year of 360
days, or, if such computation would cause the interest and fees chargeable
hereunder to exceed the Highest Lawful Rate, 365/366 days, in each case to
the extent applicable for the actual number of days elapsed (including the
first day but excluding the last day) occurring in the period for which
such interest or fees are payable. Each determination by the Agent of an
interest rate or payment hereunder shall be conclusive and binding for all
purposes, absent manifest error.
ARTICLE 5. Conditions Precedent
5.1 Conditions Precedent to Effectiveness. This amendment and
restatement of the 1996 Credit Agreement shall be effective upon the
satisfaction of the following conditions precedent:
(a) Closing Documents List. The Agent and the Lenders shall have
received duly executed originals of each of the agreements, opinions,
reports, approvals, consents, certificates and other documents set forth on
the Closing Documents List attached hereto as Schedule A.
(b) Material Adverse Change. (i) No change, occurrence, event or
development or event involving a prospective change that is reasonably
likely to have a Material Adverse Effect shall have occurred and be
continuing, (ii) there shall not have occurred a substantial impairment of
the financial markets generally that is reasonably likely to materially and
adversely affect the transactions contemplated hereby, in each case as
determined by the Agent and each Lender in its sole discretion, or (iii)
there shall not have occurred a change in any law or regulation (or the
implementation of any law or regulation) affecting any of the Lenders that
is reasonably likely to materially increase the cost and expense to such
Lender of acting as a Lender hereunder.
(c) Fees and Expenses. The Agent and each of the Lenders shall have
received payment in full of those Fees and Expenses referred to in the
Amendment and Restatement Fee Letter and in Article 4 hereof payable to
them on or before the Effective Date (or an irrevocable authorization to
pay such Fees or Expenses and other fees and expenses out of the proceeds
of the initial Revolving Loans).
(d) Consents and Approvals. Except for (i) the filing of Uniform
Commercial Code financing statements, (ii) consents or authorizations which
have been obtained or filings which have been made, and which in either
case are in full force and effect or (iii) consents or authorizations the
failure to obtain or filings the failure to make could not reasonably be
expected to have a Material Adverse Effect, no consent or authorization of,
permit from, filing with or other act by or in respect of, any Governmental
Authority or any other Person shall be required in connection with the
borrowings hereunder, the grant of the Liens pursuant to the Credit
Documents, or the continuing operations of the Borrower, the enforcement of
the Agent's or the Lenders' rights under the Credit Documents, or with the
execution, delivery, performance, validity or enforceability of this Credit
Agreement, the Revolving Notes, the other Credit Documents, the Indenture
or any other documents executed in connection herewith or therewith.
(e) Material Litigation. No material litigation shall have been
instituted against the Borrower, and no material litigation shall have been
instituted by any Person (including, but not limited to, the Borrower)
relating to the transactions contemplated by the Credit Agreement.
(f) Existing Indebtedness. The terms and conditions of any Indebtedness
(including, without limitation, maturities, interest rates, prepayment and
redemption requirements, covenants, defaults, remedies, security provisions
and subordination provisions) of the Borrower to remain outstanding after
the Closing Date shall be satisfactory to the Lenders in all respects, and
the Lenders shall be satisfied that the Borrower is not subject to any
material contractual obligations or other restrictions that would be
violated by the transactions contemplated by this Credit Agreement, the
other Credit Documents, the Indenture or any other documents executed in
connection with the Recapitalization.
(g) Additional Documents. The Borrower shall have executed and delivered
to the Agent and the Lenders all documents which the Agent or any Lender
determines are reasonably necessary to consummate the transactions
contemplated hereby.
5.2 Conditions Precedent to Effectiveness and to Each Revolving Loan
and Letter of Credit. On (i) the Effective Date and (ii) the date of the
making of any Revolving Loan or the issuance of any Letter of Credit, both
before and after giving effect thereto and to the application of the
proceeds therefrom, the following statements shall be true to the
satisfaction of the Agent (and each request for a borrowing of a Revolving
Loan and request for a Letter of Credit, and the acceptance by the Borrower
of the proceeds of such Revolving Loan or issuance of such Letter of
Credit, shall constitute a representation and warranty by the Borrower that
on the date of such Revolving Loan or issuance of such Letter of Credit
before and after giving effect thereto and to the application of the
proceeds therefrom such statements are true):
(a) All representations and warranties contained in this Credit Agreement
and the other Credit Documents shall be true and correct on and as of the
date of such Notice of Borrowing or Letter of Credit Request as if then
made, other than representations and warranties that relate solely to an
earlier date;
(b) No Default or Event of Default shall have occurred and be continuing,
or would result from the making of the requested Revolving Loan or the
issuance of the requested Letter of Credit; and
(c) No event has occurred which has had or could reasonably be expected
to have a Material Adverse Effect.
ARTICLE 6. Representations and Warranties
To induce the Agent, the Syndication Agent, the Lenders and the
Issuing Bank to enter into this Credit Agreement and to make available the
credit facilities contemplated hereby, the Borrower, with respect to itself
and each of its Subsidiaries, hereby represents and warrants to the Agent,
the Syndication Agent, the Lenders and the Issuing Bank as follows:
6.1 Organization and Qualification. The Borrower and each of its
Subsidiaries (i) is a corporation duly organized, validly existing and in
good standing under the laws of the state of its incorporation, (ii) has
the power and authority to own its properties and assets and to transact
the businesses in which it presently is, or proposes to be, engaged and
(iii) is duly qualified and is authorized to do business and is in good
standing in each jurisdiction where it presently is, or proposes to be,
engaged in business and where the failure to be so qualified and authorized
could have a Material Adverse Effect. Schedule B lists all jurisdictions
in which the Borrower and its Subsidiaries are qualified to do business as
foreign corporations as of the Effective Date.
6.2 Authority. The Borrower and each of its Subsidiaries has the
requisite corporate power and authority to execute, deliver and perform
each of the Credit Documents to which it is a party. All corporate action
necessary for the execution, delivery and performance of any of the Credit
Documents has been taken.
6.3 Enforceability. This Credit Agreement and each Credit Document
is the legal, valid and binding obligation of the Borrower or of any
Subsidiary of the Borrower which is a party thereto, enforceable in
accordance with its terms.
6.4 No Conflict. The execution, delivery and performance of each
Credit Document by the Borrower or any of its Subsidiaries are not in
contravention of any Requirement of Law or any indenture, contract, lease,
agreement, instrument or other commitment to which it is a party or by
which it or any of its properties are bound and will not, except as
contemplated herein, result in the imposition of any Liens upon any of its
properties.
6.5 Consents and Filings. No consent, authorization, permit or
filing is required in connection with the execution, delivery and
performance of this Credit Agreement or any Credit Document, or the
continuing operations of the Borrower and its Subsidiaries, except (i)
those that have been obtained or made and (ii) filings necessary to create,
perfect or retain the perfection of Liens against the Collateral.
6.6 Financial Data. The Borrower has furnished to the Lenders the
following Financial Statements, which have been prepared in accordance with
GAAP (except, in the case of (ii) below, with respect to footnotes)
consistently applied throughout the periods involved: (i) balance sheets
as of, and statements of operations, shareholder's equity and cash flows
for the fiscal year ended December 28, 1996 audited by independent
certified public accountants, and accompanied by an unqualified opinion
thereof and (ii) an unaudited balance sheet as of, and unaudited statements
of operations, shareholder's equity and cash flows for the period ending
fiscal February 1996. Since the date of these Financial Statements, there
have been no adverse changes in the condition, financial or otherwise, of
the Borrower as shown on the balance sheet of the Borrower described above,
other than changes in the ordinary course of business. In addition, the
Borrower has furnished to the Lenders certain financial data which include
projections. The assumptions upon which the projections were based were
reasonable at the time such projections were prepared and are reasonable as
of the Effective Date, and such projections were prepared by the Borrower
in good faith.
6.7 Subsidiaries. The only direct or indirect Subsidiaries of the
Borrower as of the Effective Date are those listed on Schedule B. The
Borrower is the record and beneficial owner of all of the shares of capital
stock of each of the Subsidiaries listed on Schedule B. There are no
proxies, irrevocable or otherwise, with respect to such shares, and no
equity securities of any of the Subsidiaries are or may become required to
be issued by reason of any options, warrants, scrip, rights to subscribe
to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into or exchangeable for, shares of any
capital stock of any Subsidiary, and there are no contracts, commitments,
understandings or arrangements by which any Subsidiary is or may become
bound to issue additional shares of its capital stock or securities
convertible into or exchangeable for such shares. All of such shares so
owned by the Borrower are owned by them free and clear of any Liens.
6.8 No Judgments or Litigation. Except as set forth on Schedule B,
no judgments, orders, writs or decrees are outstanding against the Borrower
or any of the Subsidiaries nor is there now pending or, to the best of the
Borrower's knowledge after diligent inquiry, threatened any litigation,
contested claim, investigation, arbitration, or governmental proceeding by
or against the Borrower or any of the Subsidiaries. No judgments, orders,
writs or decrees are outstanding against the Borrower or any of the
Subsidiaries nor is there now pending or, to the best of the Borrower's
knowledge after diligent inquiry, threatened any litigation, contested
claim, investigation, arbitration, or governmental proceeding by or against
the Borrower or any of the Subsidiaries, in any case which could have a
Material Adverse Effect.
6.9 No Defaults. Neither the Borrower nor any of the Subsidiaries
is in default under any term of any Material Contract. The Borrower knows
of no dispute regarding any Material Contract.
6.10 Labor Matters.
(a) There are no controversies pending or, to the best of the Borrower's
knowledge after diligent inquiry, threatened between the Borrower or any of
the Subsidiaries and any of their respective employees which, in any case,
could have a Material Adverse Effect.
(b) Neither the Borrower nor any of the Subsidiaries is engaged in any
unfair labor practice which could have a Material Adverse Effect. There is
(i) no unfair labor practice complaint pending against the Borrower or any
of the Subsidiaries or, to the best knowledge of the Borrower, threatened
against any of them, before the National Labor Relations Board, and no
grievance or significant arbitration proceeding arising out of or under
collective bargaining agreements is so pending against the Borrower or any
of the Subsidiaries or, to the best knowledge of the Borrower, threatened
against any of them, (ii) no strike, labor dispute, slowdown or stoppage
pending against either of the Borrower or any of the Subsidiaries or, to
the best knowledge of the Borrower, threatened against any of them and
(iii) no union representation question with respect to the employees of the
Borrower or any Subsidiaries and no union organizing activities.
6.11 Compliance with Law. Neither the Borrower nor any of the
Subsidiaries has violated or failed to comply with any Requirement of Law
or any requirement of any self regulatory organization which could have a
Material Adverse Effect.
6.12 ERISA. None of the Borrower, any Subsidiary and any ERISA
Affiliate maintains or contributes to any Plan other than those listed on
Schedule B. Each Plan has been and is being maintained and funded in
accordance with its terms and in compliance with all provisions of ERISA
and the Code applicable thereto. The Borrower, each of the Subsidiaries
and each ERISA Affiliate have fulfilled all obligations related to the
minimum funding standards of ERISA and the Internal Revenue Code for each
Plan, are in compliance with the currently applicable provisions of ERISA
and of the Internal Revenue Code and have not incurred any liability (other
than routine liability for premiums) under Title IV of ERISA. No
Termination Event has occurred nor has any other event occurred that may
result in a Termination Event. No event or events have occurred in
connection with which the Borrower, any of the Subsidiaries, any ERISA
Affiliate, any fiduciary of a Plan or any Plan, directly or indirectly,
could be subject to any liability, individually or in the aggregate, under
ERISA, the Internal Revenue Code or any other Requirement of Law or under
any agreement, instrument, statute, rule of law or regulation pursuant to
or under which any such entity has agreed to indemnify or is required to
indemnify any person against liability incurred under, or for a violation
or failure to satisfy the requirements of, any such statute, regulation or
order. The Borrower has delivered or caused to be delivered to the Agent:
(i) a copy of each Plan (or, where any such plan is not in writing, a
complete description thereof) (and, if applicable, related trust agreements
or other funding instruments) and all amendments thereto, all written
interpretations thereof and written descriptions thereof that have been
distributed to employees or former employees of the Borrower or the
Subsidiaries; (ii) the most recent determination letter issued by the
Internal Revenue Service with respect to each Plan; (iii) for the three
most recent plan years, Annual Reports on Form 5500 Series required to be
filed with any governmental agency for each Plan; (iv) all actuarial
reports prepared for the last three plan years for each Plan; (v) a listing
of all Multiemployer Plans, with the aggregate amount of the most recent
annual contributions required to be made by the Borrower or any ERISA
Affiliate to each such plan and copies of the collective bargaining
agreements requiring such contributions; (vi) any information that has been
provided to the Borrower or any ERISA Affiliate regarding withdrawal
liability under any Multiemployer Plan; and (vii) the aggregate amount of
the most recent annual payments made to former employees of the Borrower or
any ERISA Affiliate under any Retiree Health Plan.
6.13 Compliance with Environmental Laws. (i) The operations of the
Borrower and each of the Subsidiaries are not in violation of any
applicable federal, state or local environmental, health and safety
statutes, regulations, directions, ordinances, criteria and guidelines;
(ii) the Borrower has not received notice that any of the operations of the
Borrower or any of the Subsidiaries is the subject of any judicial or
administrative proceeding alleging the violation of any federal, state or
local environmental, health or safety statute, regulation, direction,
ordinance, criteria or guideline; (iii) none of the operations of the
Borrower or any of the Subsidiaries is the subject of any federal, state or
local investigation involving allegations or potential allegations that the
Borrower or any of the Subsidiaries disposed of any hazardous or toxic
waste, substance or constituent or other pollutant, contaminant or
substance (including, without limitation, petroleum) at any site that may
require remedial action, or any federal, state or local investigation
evaluating whether any remedial action is needed to respond to a release or
threatened release of any hazardous or toxic waste, substance or
constituent, or other pollutant, contaminant or substance (including,
without limitation, petroleum) into the environment; (iv) neither the
Borrower nor any of the Subsidiaries have filed any notice under any
federal, state or local law indicating past or present treatment, storage
or disposal of a hazardous waste or reporting a spill or release or
threatened release of a hazardous or toxic waste, substance or constituent,
or other pollutant, contaminant or substance (including, without
limitation, petroleum) into the environment; and (v) neither the Borrower
nor any of the Subsidiaries has any contingent liability of which the
Borrower has knowledge or reasonably should have knowledge in connection
with any release or threatened release of any hazardous or toxic waste,
substance or constituent, or other pollutant, contaminant or substance
(including, without limitation, petroleum) into the environment, nor has
the Borrower or any of the Subsidiaries received any notice, letter or
other indication of potential liability arising from the disposal of any
hazardous or toxic waste, substance or constituent or other pollutant,
contaminant or substance (including, without limitation, petroleum) into
the environment which, in any such case referred to in this Section 6.13 or
in the aggregate, could have a Material Adverse Effect.
6.14 Intellectual Property. The Borrower possesses or has the legal
right to use such assets, licenses, patents, patent applications,
copyrights, service marks, trademarks (including, without limitation, the
"'W' and design") and trade names as are necessary or advisable to continue
to conduct its present and proposed business activities and such assets,
licenses, patents, patent applications, copyrights, service marks,
trademarks and trade names are valid and in full force and effect.
6.15 Licenses and Permits. The Borrower and each of the
Subsidiaries have obtained and hold in full force and effect, all
franchises, licenses, leases, permits, certificates, authorizations,
qualifications, easements, rights of way and other rights and approvals
which are necessary or advisable for the operation of its businesses as
presently conducted and as proposed to be conducted, except those with
respect to which the failure to so obtain and hold would not have a
Material Adverse Effect. Neither of the Borrower nor any of the
Subsidiaries is in violation of the terms of any such franchise, license,
lease, permit, certificate, authorization, qualification, easement, right
of way, right or approval.
6.16 Title to Property. All Real Estate is identified on
Schedule B. The Borrower has good and marketable title in fee simple to,
or a valid leasehold interest in, all its Real Estate, and good title to
all its other property, and none of such property is subject to any Lien
except as permitted by Section 8.8.
6.17 Investment Company. Neither the Borrower nor any of the
Subsidiaries is (i) an investment company or a company controlled by an
investment company within the meaning of the Investment Company Act of
1940, as amended, (ii) a holding company or a Subsidiary company of a
holding company, or an Affiliate of a holding company or of a Subsidiary
company of a holding company, within the meaning of the Public Utility
Holding Company Act of 1935, as amended, or (iii) subject to any other law
which purports to regulate or restrict its ability to borrow money or to
consummate the transactions contemplated by this Credit Agreement or the
other Credit Documents or to perform its obligations hereunder or
thereunder.
6.18 Taxes and Tax Returns.
(a) Except as set forth on Schedule B, the Borrower and the Subsidiaries
(and any affiliated group of which the Borrower or any of the Subsidiaries
are now or have been members) has timely filed (inclusive of any permitted
extensions) with the appropriate taxing authorities all returns (including,
without limitation, information returns) in respect of taxes required to be
filed through the Effective Date and will timely file (inclusive of any
permitted extensions) any such returns required to be filed on and after
the Effective Date. The information filed is complete and accurate in all
material respects. All deductions taken by the Borrower as reflected in
such income tax returns have been taken in accordance with applicable laws
and regulations, except deductions that may have been disallowed but are
being challenged in good faith and for which adequate reserves have been
made in accordance with GAAP. Except as specified in Schedule B, neither
the Borrower nor any of the Subsidiaries, nor any group of which the
Borrower or any of the Subsidiaries are now or were members, have requested
any extension of time within which to file returns (including without
limitation information returns) in respect of any taxes.
(b) All taxes, assessments, fees and other governmental charges in
respect of periods beginning prior to the Effective Date, have been timely
paid, or will be timely paid, or an adequate reserve has been established
therefor, as set forth in Schedule B or in the Financial Statements, and
neither the Borrower nor any of the Subsidiaries has any liability for
taxes in excess of the amounts so paid or reserves so established.
(c) Except as set forth in Schedule B, no deficiencies for taxes have
been claimed, proposed or assessed by any taxing or other Governmental
Authority against the Borrower or any of their Subsidiaries and no tax
liens have been filed. Except as set forth in Schedule B, there are no
pending or, to the best of the Borrower's knowledge, threatened audits,
investigations or claims for or relating to any liability in respect of
taxes, and there are no matters under discussion with any governmental
authorities with respect to taxes which are likely to result in a material
additional liability for taxes. Either the federal income tax returns of
the Borrower have been audited by the Internal Revenue Service and such
audits have been closed, or the period during which any assessments may be
made by the Internal Revenue Service has expired without waiver or
extension, for all years up to and including the fiscal year ended 1991.
Except as set forth in Schedule B, no extension of a statute of limitations
relating to taxes, assessments, fees or other governmental charges is in
effect with respect to the Borrower or the Subsidiaries.
(d) Except as set forth on Schedule B, neither the Borrower nor any of
its Subsidiaries has any obligation under written tax sharing agreement or
agreement regarding payments in lieu of taxes.
6.19 Material Contracts. Schedule B contains a true, correct and
complete list of all the Material Contracts currently in effect on the
Effective Date. None of the Material Contracts contains any burdensome
restrictions on the Borrower or any of its Subsidiaries or any of their
respective properties. All of the Material Contracts are in full force and
effect, and no defaults currently exist thereunder.
6.20 Affiliate Transactions. Except as set forth on Schedule B,
neither the Borrower nor any Subsidiary is a party to or bound by any
agreement or arrangement (whether oral or written) to which any Affiliate
of the Borrower or any Subsidiary is a party except (i) in the ordinary
course of and pursuant to the reasonable requirements of the Borrower's or
such Subsidiary's business and (ii) upon fair and reasonable terms no less
favorable to the Borrower and such Subsidiary than it could obtain in a
comparable arm's-length transaction with an unaffiliated Person.
6.21 Accuracy and Completeness of Information. All factual
information furnished by or on behalf of the Borrower or any of the
Subsidiaries in writing to the Agent, any Lender or the Auditors for
purposes of or in connection with this Credit Agreement or any Credit
Documents, or any transaction contemplated hereby or thereby is or will be
true and accurate in all material respects on the date as of which such
information is dated or certified and not incomplete by omitting to state
any material fact necessary to make such information not misleading at such
time.
6.22 Recording Taxes. All mortgage recording taxes, recording fees
and other charges payable in connection with the filing and recording of
the Credit Documents have either been paid in full by the Borrower or
arrangements for the payment of such amounts satisfactory to the Agent
shall have been made.
6.23 Solvency. The fair saleable value of the assets of the
Borrower exceeds all its probable liabilities, including those to be
incurred pursuant to this Credit Agreement, the other Credit Documents, the
Senior Subordinated Notes and the Indenture. The Borrower (i) does not
have unreasonably small capital in relation to the business in which it is
or proposes to be engaged and (ii) has not incurred, and does not believe
that it will incur, after giving effect to the transactions contemplated by
this Credit Agreement, debts beyond its ability to pay as such debts become
due.
6.24 No Change. There has been no development or event nor any
prospective development or event, which has had or could reasonably be
expected to have a Material Adverse Effect.
ARTICLE 7. Affirmative Covenants
Until termination of this Credit Agreement and payment and
satisfaction of all Obligations due hereunder:
7.1 Financial Reporting. The Borrower shall timely deliver to each
Lender the following information:
(a) Annual Financial Statements. As soon as available, but not later
than 90 days after each fiscal year end: (i) the annual audited Financial
Statements of the Consolidated Entity; (ii) a comparison in reasonable
detail to the prior year audited Financial Statements; (iii) the Auditors'
unqualified opinion, "Management Letter" and statement indicating that the
Auditors have not obtained knowledge of the existence of any Default or
Event of Default during their audit; (iv) a narrative discussion of the
consolidated financial condition and results of operations and the
consolidated liquidity and capital resources of the Consolidated Entity for
such fiscal year, prepared by the chief financial officer of the Borrower;
and (v) a compliance certificate substantially in the form of Exhibit B
with an attached schedule of calculations (A) demonstrating compliance with
the financial covenants set forth in Sections 8.1, 8.2 and 8.6 and (B)
setting forth the Interest Coverage Ratio of the Consolidated Entity for
the most recently completed four full fiscal quarters of the Consolidated
Entity. To the extent that the Borrower's annual report on Form 10-K
contains any of the foregoing items, the Lenders will accept the Borrower's
Form 10-K in lieu of such items.
(b) Projections. Not later than 45 days after each fiscal year end,
monthly projections of Borrower's financial condition and results of
operations for the next succeeding fiscal year, together with annual
projections for the next two succeeding fiscal years, in each case
containing projected consolidating balance sheets, statements of
operations, statements of cash flows and statements of changes in
shareholders equity, together with a statement in reasonable detail setting
forth the assumptions upon which such projections are based.
(c) Quarterly Financial Statements. As soon as available, but not
later than 45 days after the end of each of the first three fiscal
quarters: (i) Financial Statements of the Consolidated Entity as of the
fiscal quarter then ended, and for the fiscal year to date;
(ii) a comparison in reasonable detail to the Financial Statements for the
corresponding periods of the prior fiscal year; (iii) the certification of
the chief executive officer or chief financial officer of the Borrower that
such Financial Statements have been prepared in accordance with GAAP (other
than with respect to footnotes and subject to year-end audit adjustments);
(iv) a narrative discussion of the consolidated financial condition and
results of operations and the consolidated liquidity and capital resources
of the Consolidated Entity for such fiscal quarter and fiscal year to date,
prepared by the chief financial officer of the Borrower; and
(v) a compliance certificate substantially in the form of Exhibit B with an
attached schedule of calculations (A) demonstrating compliance with the
financial covenants set forth in Sections 8.1, 8.2 and 8.6 and (B) setting
forth the Interest Coverage Ratio of the Consolidated Entity for the most
recently completed four full fiscal quarters of the Consolidated Entity.
To the extent that the Borrower's quarterly report on Form 10-Q contains
any of the foregoing items, the Lenders will accept the Borrower's Form 10-
Q in lieu of such items.
(d) Monthly Financial Statements. As soon as available, but not later
than 30 days after the end of each of the fiscal months of January,
February, April, May, July, August, October and November and within 45 days
after the end of each of the fiscal months of March, June, September and
December: (i) a balance sheet for the Consolidated Entity as at the end of
such month and for the fiscal year to date and statements of operations and
cash flows for such month and for the fiscal year to date;
(ii) a comparison to the balance sheet, statement of operations and
statement of cash flows for the same periods in the prior year; (iii) a
certification by the chief executive officer or chief financial officer of
the Borrower that such balance sheet, statement of operations and statement
of cash flows have been prepared in accordance with GAAP (other than with
respect to footnotes and subject to year-end audit adjustments); and (iv) a
compliance certificate substantially in the form of Exhibit B with an
attached schedule of calculations demonstrating compliance with the
financial covenants set forth in Section 8.1, 8.2 and 8.6 and calculations
evidencing (a) the Acquisition Basket as of the end of such fiscal month
and (b) the Capital Asset Sale Proceeds received by the Borrower and the
amount of Capital Asset Sale Proceeds designated as Transferred Sale
Proceeds, in each case during such fiscal month.
(e) Monthly Comparison to Prior Projections. As soon as available,
but not later than 30 days after the end of each of the fiscal months of
January, February, April, May, July, August, October and November and
within 45 days after the end of each of the fiscal months of March, June,
September and December, a comparison of actual results of operations, cash
flow and capital expenditures for the Borrower for such month and for the
period from the beginning of the current fiscal year through the end of
such month with amounts previously projected for those periods (see Section
7.1(b)) and with actual results for corresponding periods in the previous
fiscal year.
(f) Tax Returns. A copy of the state and federal income tax returns
of the Borrower and each of its Subsidiaries within thirty (30) days after
they are filed with the appropriate taxing authorities, if and when
requested by any Lender.
(g) Public Filings. Promptly upon the earlier of the mailing or
filing thereof, copies of all 00-Xx, 00-Xx, 0-Xx, proxy statements, annual
reports, quarterly reports, registration statements and any other filings
or other communications made by the Borrower to holders of its publicly
traded securities or the Securities Exchange Commission from time to time
pursuant to the Securities Exchange Act of 1934, as amended, or the
Securities Act of 1933, as amended.
7.2 Collateral Reporting. The Borrower shall timely deliver to the
Agent the following certificates and reports:
(a) Weekly Borrowing Base Certificates. (i) Weekly, before 12:00 noon
on the second Business Day of each week, and at any other time requested by
the Agent, (1) a borrowing base certificate (the "Borrowing Base
Certificate"), which shall be: (A) completed substantially in the form of
Exhibit C, detailing the Borrower's Eligible Accounts Receivable and
Eligible Inventory as of each Friday of the immediately preceding week (or
as of such other date as the Agent may request), (B) prepared by or under
the supervision of the Borrower's chief executive officer or chief
financial officer and certified by such officer subject only to adjustment
upon completion of the normal year-end audit of physical inventory and
(C) attached to such additional schedules and other information as the
Agent may request; and (2) (X) an Accounts Receivable reconciliation report
(beginning balance+sales-collections), (Y) a report detailing Inventory
balances by category and (Z) an accounts payable balance and book overdraft
report, in each case as of Saturday of the immediately preceding week. The
Agent may, but shall not be obligated to, rely on each Borrowing Base
Certificate and any other schedules or reports in determining the
eligibility of Accounts and Inventory.
(ii) Monthly, before 12:00 noon on the ninth Business Day of each
fiscal month, and at any other time requested by the Agent, (1) a Borrowing
Base Certificate which shall be: (A) completed substantially in the form
of Exhibit C, detailing (x) the Borrower's Eligible Accounts Receivable and
Eligible Inventory as of the last day of the immediately preceding fiscal
month (the "Monthly Report") and (y) the Borrower's Eligible Accounts
Receivable as of the previous Friday and the Borrower's Eligible Inventory
as of the last day of the immediately preceding fiscal month updated to
reflect the percentages set forth in the Monthly Report, (B) prepared by or
under the supervision of the Borrower's chief executive officer or chief
financial officer and certified by such officer subject only to adjustment
upon completion of the normal year-end audit of physical inventory, and
(C) attached to such additional schedules and other information as the
Agent may request (including, without limitation, an accounts receivable
agings report for the prior fiscal month); and (2) (W) an Accounts
Receivable summary agings report by location, (X) an Accounts Receivable
summary agings report for the Borrower's top twenty customer accounts, (Y)
a report of Inventory balances by location (including third-party
locations) and (Z) an accounts payable agings report (when available from
the Borrower's computerized recordkeeping system), in each case as of the
last day of the immediately preceding fiscal month. The Agent may, but
shall not be obligated to, rely on each Borrowing Base Certificate and any
other schedules or reports in determining the eligibility of Accounts and
Inventory.
(b) Further Assurances. When requested by the Agent (or by a Lender
through the Agent), any further information regarding the Collateral,
business affairs and financial condition of the Borrower or any of its
Subsidiaries.
7.3 Notification Requirements. The Borrower shall timely give the
Agent and each of the Lenders the following notices:
(a) Notice of Defaults. Promptly, and in any event within two (2)
Business Days after becoming aware of the occurrence of a Default or Event
of Default, a certificate of the chief executive officer or chief financial
officer of the Borrower specifying the nature thereof and the Borrower's
proposed response thereto, each in reasonable detail.
(b) Proceedings or Adverse Changes. Promptly, and in any event within
five (5) Business Days after the Borrower becomes aware of (i) any
proceeding being instituted or threatened to be instituted by or against
the Borrower or any of its Subsidiaries in any federal, state, local or
foreign court or before any commission or other regulatory body (federal,
state, local or foreign), (ii) any order, judgment or decree in excess of
$1,000,000 being entered against the Borrower or any of its Subsidiaries or
any of their respective properties or assets or (iii) any actual or
prospective change, development or event which, in any such case, has had
or could reasonably be expected to have a Material Adverse Effect, a
written statement describing such proceeding, order, judgment, decree,
change, development or event and any action being taken with respect
thereto by the Borrower or any such Subsidiary.
(c) ERISA Notices.
(i) within ten (10) days after the Borrower, any Subsidiary or
any ERISA Affiliate knows or has reason to know that a Termination Event
has occurred, a written statement of the chief financial officer of the
Borrower describing such Termination Event and the action, if any, which
the Borrower or other such entities have taken, are taking or propose to
take with respect thereto, and when known, any action taken or
threatened by the Internal Revenue Service, DOL or PBGC with respect
thereto;
(ii) within ten (10) days after the Borrower, any Subsidiary or
any ERISA Affiliate knows or has reason to know that a prohibited
transaction (as defined in Sections 406 of ERISA and 4975 of the
Internal Revenue Code) has occurred, a statement of the chief financial
officer of the Borrower describing such transaction and the action which
the Borrower or other such entities have taken, are taking or propose to
take with respect thereto;
(iii) within thirty (30) days after the filing thereof with the
DOL, Internal Revenue Service or PBGC, copies of each annual report
(form 5500 series), including Schedule B thereto, filed with respect to
each Benefit Plan;
(iv) within thirty (30) days after receipt by the Borrower, any
Subsidiary or any ERISA Affiliate of each actuarial report for any
Benefit Plan or Multiemployer Plan and each annual report for any
Multiemployer Plan, copies of each such report;
(v) within three (3) days after the filing thereof with the
Internal Revenue Service, a copy of each funding waiver request filed
with respect to any Benefit Plan and all communications received by the
Borrower, any Subsidiary or any ERISA Affiliate with respect to such
request;
(vi) within ten (10) days upon the occurrence thereof,
notification of any increase in the benefits of any existing Plan or the
establishment of any new Plan or the commencement of contributions to
any Plan to which the Borrower, any Subsidiary or any ERISA Affiliate
was not previously contributing;
(vii) within three (3) days after receipt by the Borrower, any
Subsidiary or any ERISA Affiliate of the PBGC's intention to terminate a
Benefit Plan or to have a trustee appointed to administer a Benefit
Plan, copies of each such notice;
(viii) within ten (10) days after receipt by the Borrower, any
Subsidiary or any ERISA Affiliate of any favorable or unfavorable
determination letter from the Internal Revenue Service regarding the
qualification of a Plan under Section 401(a) of the Internal Revenue
Code, copies of each such letter;
(ix) within ten (10) days after receipt by the Borrower, any
Subsidiary or any ERISA Affiliate of a notice regarding the imposition
of withdrawal liability, copies of each such notice;
(x) within ten (10) days after the Borrower, any Subsidiary or
any ERISA Affiliate fail to make a required installment or any other
required payment under Section 412 of the Internal Revenue Code on or
before the due date for such installment or payment, a notification of
such failure; and
(xi) within three (3) days after the Borrower, any Subsidiary or
any ERISA Affiliate knows (a) a Multiemployer Plan has been terminated,
(b) the administrator or plan sponsor of a Multiemployer Plan intends to
terminate a Multiemployer Plan, or (c) the PBGC has instituted or will
institute proceedings under Section 4042 of ERISA to terminate a
Multiemployer Plan, a written statement setting forth any such event or
information.
For purposes of this Section 7.3(c), the Borrower, any Subsidiary and
any ERISA Affiliate shall be deemed to know all facts known by the
administrator of any Plan of which such entity is the plan sponsor.
(d) Environmental and Health and Safety Notices; Violations of Law.
Promptly, and in any event within ten (10) Business Days after receipt by
the Borrower or any of its Subsidiaries of any formal or informal notice,
complaint or order alleging actual or prospective violation of any
environmental, health or safety Requirement of Law or any other Requirement
of Law which could have a Material Adverse Effect, or alleging
responsibility for a cleanup, together with a copy of such notice,
complaint, or order and a written statement describing any action being
taken with respect thereto by the Borrower or any such Subsidiary.
(e) Material Contracts. Promptly, and in any event within ten (10)
Business Days after any Material Contract of the Borrower or any of its
Subsidiaries is terminated or amended or any new Material Contract is
entered into, a written statement describing such event, with copies of
amendments or new contracts, and an explanation of any actions being taken
with respect thereto.
(f) Interest Rate Agreements and Lumber Hedging Agreements. The Borrower
shall provide the Agent, (i) promptly, and in any event within five (5)
Business Days after a default by any party under any Interest Rate
Agreement or Lumber Hedging Agreement, with a written statement describing
such default and an explanation of any actions being taken with respect
thereto, and (ii) with such other information regarding any Interest Rate
Agreements or Lumber Hedging Agreements as the Agent may reasonably
request.
7.4 Corporate Existence. The Borrower shall, and shall cause each
of the Subsidiaries to, (i) maintain its corporate existence (except that
Subsidiaries may merge with each other and with the Borrower (provided that
the Borrower is the surviving entity) with the prior written consent of the
Agent, maintain in full force and effect all licenses, bonds, franchises,
leases, trademarks and qualifications to do business, and all patents,
contracts and other rights necessary or advisable to the profitable conduct
of their businesses, (ii) continue in, and limit their operations to, the
same general lines of business as presently conducted by it and
(iii) comply with all Requirements of Law, except those Requirements of Law
the failure to so comply with would not have a Material Adverse Effect.
7.5 ERISA. The Borrower shall establish, maintain and operate all
Plans to comply in all material respects with the provisions of ERISA,
Internal Revenue Code, and all other Requirements of Law, other than to the
extent that Borrower is in good faith contesting by appropriate proceedings
the validity or application of any such provision, law, rule, regulation or
interpretation.
7.6 Environmental and Other Matters. The Borrower and its
Subsidiaries will conduct their businesses so as to comply in all material
respects with all applicable federal, state or local environmental laws,
regulations, directions, ordinances, criteria and guidelines, including,
without limitation, environmental, land use, occupational safety or health
laws, regulations, directions, ordinances, criteria, guidelines,
requirements or permits in all jurisdictions in which any of them is or may
at any time be doing business, except to the extent that the Borrower or
any of the Subsidiaries are contesting, in good faith by appropriate legal
proceedings, any such law, regulation, direction, ordinance, criteria,
guideline, or interpretation thereof or application thereof; provided,
further, that the Borrower and each of the Subsidiaries shall comply with
the order of any court or other Governmental Authority relating to such
laws unless the Borrower or the Subsidiaries shall currently be prosecuting
an appeal or proceedings for review and shall have secured a stay of
enforcement or execution postponing enforcement or execution pending such
appeal or proceedings for review. The Borrower shall promptly take all
actions necessary to prevent the imposition of any Liens on any of its
properties arising out of or related to any environmental matters. At the
request of the Agent, and at the sole cost and expense of the Borrower, the
Borrower shall provide the Agent with any additional information or reports
relating to environmental matters and any potential related liability
resulting therefrom as the Agent may reasonably request. In addition, the
Borrower shall provide the Agent, at the Borrower's sole cost and expense,
with copies of any environmental audits, surveys or reports conducted in
connection with the purchase or sale by the Borrower of any real property.
7.7 Insurance; Casualty Loss. The Borrower agrees to maintain, and
to cause each of the Subsidiaries to maintain, public liability insurance,
third party property damage insurance and casualty insurance on the
Collateral under such policies of insurance, with such insurance companies,
in such amounts and covering such risks as are at all times satisfactory to
the Agent in its commercially reasonable judgment. All liability policies
of the Borrower and its Subsidiaries are to name the Agent as an additional
insured and all casualty policies covering the Collateral are to name the
Agent as the loss payee in case of loss and are to contain such other
provisions as the Agent may reasonably require to fully protect the Agent's
interest in the Collateral and to any payments to be made under such
policies. The Borrower shall provide written notice to the Lenders of the
occurrence of any of the following events within five (5) Business Days
after the occurrence of such event: any asset or property owned or used by
the Borrower or any of the Subsidiaries is (i) damaged or destroyed, or
suffers any other loss, or (ii) condemned, confiscated or otherwise taken,
in whole or in part, or the use thereof is otherwise diminished so as to
render impracticable or unreasonable the use of such asset or property for
the purposes to which such asset or property were used immediately prior to
such condemnation, confiscation or taking, by exercise of the powers of
condemnation or eminent domain or otherwise, and in either case the amount
of the damage, destruction, loss or diminution in value which is in excess
of $1,000,000 (collectively, a "Casualty Loss"; provided, however, that for
purposes of the definition of Capital Expenditures only, "Casualty Loss"
shall mean any of the foregoing regardless of the amount of the damage,
destruction, loss or diminution in value). The Borrower shall diligently
file and prosecute its claim or claims for any award or payment in
connection with a Casualty Loss. In the event of a Casualty Loss, the
Borrower shall pay to the Agent, promptly upon receipt thereof, any and all
insurance proceeds and payments received by the Borrower or any of the
Subsidiaries on account of damage, destruction, loss, condemnation or
eminent domain proceedings. The Agent may, at its election and in its sole
discretion, either (a) apply the proceeds realized from Casualty Losses to
payment of accrued and unpaid interest or outstanding principal under the
Revolving Loans or (b) pay such proceeds to the Borrower to be used to
repair, replace or rebuild the asset or property or portion thereof that
was the subject of the Casualty Loss. After the occurrence and during the
continuance of an Event of Default, (i) no settlement on account of any
such Casualty Loss shall be made without the consent of the Lenders and
(ii) the Agent may participate in any such proceedings and the Borrower
shall deliver to the Agent such documents as may be requested by the Agent
to permit such participation and shall consult with the Agent, its
attorneys and agents in the making and prosecution of such claim or claims.
The Borrower hereby irrevocably authorizes and appoints the Agent its
attorney-in-fact, after the occurrence and continuance of an Event of
Default, to collect and receive for any such award or payment and to file
and prosecute such claim or claims, which power of attorney shall be
irrevocable and shall be deemed to be coupled with an interest, and the
Borrower shall, upon demand of the Agent, make, execute and deliver any and
all assignments and other instruments sufficient for the purpose of
assigning any such award or payment to the Agent for the benefit of the
Lenders, free and clear of any encumbrances of any kind or nature
whatsoever.
7.8 Taxes. The Borrower agrees to pay, when due, and to cause each
of the Subsidiaries to pay when due, all taxes lawfully levied or assessed
against the Borrower, any Subsidiary or any of the Collateral before any
penalty or interest accrues thereon; provided, however, that, unless such
taxes have become a federal tax or ERISA Lien on any of the assets of the
Borrower or any Subsidiary, no such tax need be paid if the same is being
contested, in good faith, by appropriate proceedings promptly instituted
and diligently conducted and if an adequate reserve or other appropriate
provision shall have been made therefor as required in order to be in
conformity with GAAP.
7.9 Compliance With Laws. The Borrower agrees to comply, and to
cause each of the Subsidiaries to comply, with all Requirements of Law
applicable to the Collateral or any part thereof, or to the operation of
its business, unless (a) the Borrower contests any such Requirements of Law
in a reasonable manner and in good faith or (b) any such non-compliance
would not have a Material Adverse Effect.
7.10 Use of Proceeds. The Revolving Loans made to the Borrower
hereunder shall be used by the Borrower solely (i) for working capital,
general business and capital expenditure requirements of the Borrower,
including, without limitation, payment of Letter of Credit Obligations and
(ii) to the limited extent contemplated by Section 8.20(c) hereof. The
Borrower shall not use any portion of the proceeds of any such Loans for
the purpose of purchasing or carrying any "margin stock" (as defined in
Regulations G and U of the Board of Governors of the Federal Reserve
System) in any manner which violates the provisions of Regulation G, U or X
of said Board of Governors or for any other purpose in violation of any
applicable statute or regulation, or of the terms and conditions of this
Credit Agreement.
7.11 Fiscal Year. The Borrower agrees to maintain its fiscal year
as a year ending on the last Saturday in December unless required by law,
in which case the Borrower will give the Agent at least thirty (30) days
prior written notice thereof.
7.12 Intellectual Property. The Borrower shall do and cause to be
done all things necessary to preserve and keep in full force and effect all
registrations of patents, copyrights, trademarks, service marks and other
marks, trade names or other trade rights that are necessary for the
operation of the business of the Borrower (including, without limitation,
the "'W' and design" and "Wickes" trademarks).
7.13 Maintenance of Property. The Borrower agrees to keep, and to
cause each of the Subsidiaries to keep, all property useful and necessary
to its respective businesses in good working order and condition (ordinary
wear and tear excepted) in accordance with their past operating practices
and not to commit or suffer any waste with respect to any of its
properties.
7.14 Books and Records; Inspections. The Borrower shall maintain
books and records pertaining to the Collateral in such detail, form and
scope as is consistent with good business practice, and agrees that such
books and records will reflect the Lenders' interest in its Accounts. The
Agent or its agents may (or, if requested by the Majority Lenders, shall)
enter upon the premises of the Borrower at any time and from time to time,
during normal business hours and upon reasonable notice under the
circumstances, and at any time at all on and after the occurrence of a
Default which continues beyond the expiration of any grace or cure period
applicable thereto, and which has not otherwise been waived by the Agent,
for the purposes of (i) inspecting and verifying the Collateral,
(ii) inspecting and/or copying (at the Borrower's expense) any and all
records pertaining thereto, and (iii) discussing the affairs, finances and
business of the Borrower with any officers, employees and directors of the
Borrower or with the Auditors.
7.15 Further Assurances. The Borrower shall take, and shall cause
each of the Subsidiaries to take, all such further actions and execute all
such further documents and instruments as the Agent may at any time
reasonably determine in its sole discretion to be necessary or desirable to
further carry out and consummate the transactions contemplated by the
Credit Documents, to cause the execution, delivery and performance of the
Credit Documents to be duly authorized and to perfect or protect the Liens
(and the priority status thereof) of the Agent on the Collateral.
ARTICLE 8. Negative Covenants
Until termination of the Credit Agreement and payment and
satisfaction of all Obligations due hereunder, the Borrower agrees that:
8.1 Fixed Charge Coverage Ratio. The Consolidated Entity shall
maintain during each of the following periods a ratio of Adjusted EBITDA to
Fixed Charges (the "Fixed Charge Coverage Ratio) of not less than the ratio
set forth below opposite such period:
Last Four Full Fiscal
Quarters ending: Ratio:
last day of fiscal March 1997 1.10 to 1.00
last day of fiscal June 1997 1.10 to 1.00
last day of fiscal September 1997 1.10 to 1.00
last day of fiscal December 1997 1.10 to 1.00
last day of fiscal March 1998 1.10 to 1.00
last day of fiscal June 1998 1.10 to 1.00
last day of fiscal September 1998 1.10 to 1.00
last day of fiscal December 1998 1.10 to 1.00
last day of fiscal March 1999 1.10 to 1.00
last day of fiscal June 1999 1.10 to 1.00
last day of fiscal September 1999 1.10 to 1.00
last day of fiscal December 1999 1.10 to 1.00
last day of fiscal March 2000 1.20 to 1.00
last day of fiscal June 2000 1.20 to 1.00
last day of fiscal September 2000 1.20 to 1.00
last day of fiscal December 2000 1.20 to 1.00
last day of fiscal March 2001 and 1.25 to 1.00
last day of each fiscal quarter
thereafter
; provided that, if the Consolidated Entity's Fixed Charge Coverage Ratio
for any one period set forth above ending on or prior to December 31, 1999,
is less than 1.10 to 1.00 but not less than 1.00 to 1.00, then no Default
or Event of Default shall be deemed to have occurred hereunder solely by
virtue of such ratio so long as (i) Unused Availability during the fiscal
quarter succeeding such period remains at all times no less than
$15,000,000 (measured on an average weekly basis) and (ii) the Consolidated
Entity's Fixed Charge Coverage Ratio for such subsequent fiscal quarter is
not less than 1.10 to 1.00; provided, further, that the Headquarters Lease
Build-Out Expenditure shall not be included in determining compliance with
this Section 8.1 so long as, if requested by the Agent, the Headquarters
Lease is collaterally assigned to the Agent as additional security for the
repayment of the Obligations (the "Headquarters Lease Assignment") and such
assignment is duly filed and recorded in the appropriate recording office.
8.2 Consolidated Net Worth. As of each of the following dates, the
Borrower shall have an Consolidated Net Worth of not less than the amount
set forth below opposite each such date:
As of last day of fiscal month: Amount
March 1997 $14,282,000
June 1997 $15,739,000
September 1997 $20,144,000
December 1997 $21,420,000
March 1998 $16,920,000
June 1998 $18,831,000
September 1998 and each The sum of (i) seventy-five
December, March, June and percent (75%) of the
September thereafter Borrower's cumulative Net
Income for the period from
December 29, 1997 to such
date and (ii) the Borrower's
Consolidated Net Worth as of
the last day of fiscal March
1997.
8.3 [Reserved]
8.4 [Reserved]
8.5 [Reserved]
8.6 Capital Expenditures. The Borrower shall not make payments for
Capital Expenditures during any fiscal year in excess of $6,000,000;
provided that (i) the aggregate amount of payments for Capital Expenditures
permitted under Sections 8.20(b)(ii) and 8.20(c) hereof shall not be
included in determining compliance with this Section 8.6 and (ii) the
Headquarters Lease Build-Out Expenditure shall not be included in
determining compliance with this Section 8.6 so long as, if requested by
the Agent, the Headquarters Lease is collaterally assigned to the Agent as
additional security for the repayment of the Obligations and such
assignment is duly filed and recorded in the appropriate recording office.
To the extent that the Borrower does not use all or any portion of the
amounts allowed for payments for Capital Expenditures under this Section
8.6 during any fiscal year, it may be carried forward to the immediately
following fiscal year and used for Capital Expenditures during such
immediately following fiscal year. The Borrower shall not make any Capital
Expenditures that are not directly related to the businesses conducted on
the Closing Date by the Borrower.
8.7 Additional Indebtedness. The Borrower shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, incur, create,
assume or suffer to exist any Indebtedness other than:
(a) Indebtedness arising under this Credit Agreement and the other Credit
Documents;
(b) Indebtedness under the Senior Subordinated Notes and the Indenture;
(c) Indebtedness under Interest Rate Agreements and Lumber Hedging
Agreements, in each case the terms and conditions of which are satisfactory
to the Agent, including, with respect to each Lumber Hedging Agreement, the
matching of term and notional amount thereof with an actual written
price/purchase commitment entered into between Borrower and one of its
customers; provided that the number of Lumber Hedging Agreements
outstanding at any one time shall not exceed 120;
(d) Indebtedness described on Schedule B and any refinancing of such
Indebtedness; provided that the aggregate principal amount of such
Indebtedness is not increased and such refinancing is on terms and
conditions no more restrictive than the terms and conditions of the
Indebtedness being refinanced; and
(e) other Indebtedness not to exceed $5,000,000 in the aggregate
outstanding at any one time, such Indebtedness to be from parties and to
have terms and conditions satisfactory to the Agent.
8.8 Liens. The Borrower shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, mortgage, assign, pledge,
transfer, create, incur, assume, suffer to exist or otherwise permit any
Lien or judgment (whether as a result of a purchase money or title
retention transaction, or other security interest, or otherwise) to exist
on any of its property, assets, revenues or goods, whether real, personal
or mixed, whether now owned or hereafter acquired, except for:
(a) Liens granted to the Lenders by the Borrower pursuant to any Credit
Document;
(b) Liens listed on Schedule B;
(c) Purchase Money Liens;
(d) Pre-existing Liens on assets acquired pursuant to Section 8.20
hereof, so long as such Liens attach only to the specific assets so
acquired;
(e) Liens of warehousemen, mechanics, materialmen, workers, repairmen,
common carriers, landlords and other similar Liens arising by operation of
law or otherwise, not waived in connection herewith, for amounts that are
not yet due and payable or which are being diligently contested in good
faith by the Borrower by appropriate proceedings;
(f) Attachment or judgment Liens individually or in the aggregate not in
excess of $1,000,000 (exclusive of (i) any amounts that are duly bonded to
the reasonable satisfaction of the Agent or (ii) any amount adequately
covered by insurance as to which the insurance company has not disclaimed
or disputed in writing its obligations for coverage);
(g) Liens for taxes, assessments or other governmental charges not yet
due and payable or which are being diligently contested in good faith by
the Borrower by appropriate proceedings, provided that in any such case an
adequate reserve is being maintained by the Borrower for the payment of
same;
(h) Deposits or pledges to secure obligations under workmen's
compensation, social security or similar laws, or under unemployment
insurance not to exceed an aggregate of $1,000,000 outstanding at any one
time;
(i) Deposits or pledges to secure bids, tenders, contracts (other than
contracts for the payment of money), leases, statutory obligations, surety
and appeal bonds, utility payments and other obligations of like nature
arising in the ordinary course of business not to exceed an aggregate of
$2,000,000 outstanding at any one time;
(j) Easements, rights-of-way, restrictions and other similar encumbrances
incurred in the ordinary course of business which, in the aggregate, are
not substantial in amount and which do not materially detract from the
value of the property subject thereto or materially interfere with the
ordinary conduct of the business of the Borrower or any Subsidiary; and
(k) Liens on cash or securities maintained in any Lumber Hedging Account
in favor of the financial institution at which such account is maintained;
provided that the amount of such cash and the market value of such
securities are acceptable to the Agent; and
(l) Extensions and renewals of the foregoing permitted Liens; provided
that the aggregate amount of such extended or renewed Liens is not
increased and such extended or renewed Liens are on terms and conditions no
more restrictive than the terms and conditions of the Liens being extended
or renewed.
8.9 Sale of Assets. The Borrower shall not, and shall not permit
any of its Subsidiaries to, without the prior consent of the Agent,
directly or indirectly, sell, lease, assign, transfer or otherwise dispose
of any assets other than (i) Accounts sold by the Borrower pursuant to that
certain Wickes Lumber Charge Plan Retail Accounts Merchant Agreement, dated
April 15, 1988, as amended through the date hereof, between the Borrower
and WCI Financial Corp. or any replacement agreement in form and substance
reasonably satisfactory to the Agent, (ii) Inventory in the ordinary course
of business, (iii) individual items of property with a fair market value of
less than $500,000 in the aggregate during any fiscal year and
(iv) obsolete or worn out property disposed of in the ordinary course of
business, so long as, with respect to subsections (i) through (iv) above,
(a) all such dispositions are for fair value, (b) all cash received for all
such dispositions is used to repay the Revolving Loans, and (c) the
aggregate consideration for such dispositions is paid in full in cash at
the time of disposition, provided that, with respect to any such
disposition of assets otherwise permitted hereunder (other than
dispositions pursuant to subsections (i) or (ii) above), the Borrower may
receive a promissory note from the purchaser thereof in an amount equal to
no greater than twenty percent (20%) of the aggregate consideration for
such disposition so long as (i) such promissory note has a final maturity
date no greater than two years from the date of such disposition, (ii) each
such promissory note is pledged to the Agent as additional security for the
repayment of the Obligations, and (iii) the outstanding aggregate principal
amount of all such promissory notes received by the Borrower pursuant to
this Section 8.9 does not at any time exceed $1,000,000. Notwithstanding
the foregoing, the Borrower may sell the Real Estate and other capital
assets listed on Schedule 8.9 (subject to clauses (a) and (c) above);
provided that, the Net Cash Proceeds thereof are used by the Borrower to
either (i) make Permitted Acquisitions as provided in Section 8.20(c), (ii)
acquire other capital assets to be used by the Borrower in the conduct of
the Borrower's business as presently conducted or (iii) repay the Revolving
Loans.
8.10 Corporate Changes. The Borrower shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, merge,
consolidate or otherwise alter or modify the Borrower's or any Subsidiary's
Governing Documents (unless such alteration or modification would not have
a Material Adverse Effect), corporate names, mailing addresses, principal
places of business, structure, status or existence, or enter into or engage
in any operation or activity materially different from that presently being
conducted by the Borrower or Subsidiary; provided that, with the consent of
the Agent (who shall notify each Lender), any Subsidiary may be merged or
consolidated with or into the Borrower (provided that the Borrower shall be
the continuing or surviving corporation) or any wholly-owned Subsidiary;
provided, further, that, upon 30 days prior written notice to the Agent and
the prior execution, filing and delivery to the Agent of any financing
statements or other instruments or documents required by the Agent to
evidence such change and to ensure the continued enforceability of the
Credit Documents and the continued perfection of the Agent's security
interest in the Collateral, the Borrower may change its corporate name from
"Wickes Lumber Company" to "Wickes Inc."
8.11 Guaranties. The Borrower shall not, and shall not permit any
of its Subsidiaries to, directly or indirectly, assume, guaranty, endorse,
or otherwise become liable upon the obligations of any other Person,
including, without limitation, any Subsidiary or Affiliate of the Borrower,
except (i) by the endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business,
(ii) by the giving of indemnities in connection with the sale of Inventory
or other asset dispositions permitted hereunder and (iii) in connection
with the incurrence of Indebtedness permitted to be incurred pursuant to
Section 8.7 hereof.
8.12 Restricted Payments. The Borrower shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, (a) declare or
pay any dividend (other than dividends payable solely in common stock of
the Borrower) on, or make any payment on account of, or set apart assets
for a sinking or other analogous fund for, the purchase, redemption,
defeasance, retirement or other acquisition of, any shares of any class of
capital stock of the Borrower or any warrants, options or rights to
purchase any such capital stock, whether now or hereafter outstanding, or
make any other distribution in respect thereof, either directly or
indirectly, whether in cash or property or in obligations of the Borrower
or any of its Subsidiaries except that any Subsidiary may declare and pay
dividends to the Borrower or any other subsidiary; or (b) make any optional
payment or prepayment on or redemption (including, without limitation, by
making payments to a sinking or analogous fund) or repurchase of any
Indebtedness (other than Indebtedness pursuant to this Credit Agreement);
provided that any Subsidiary may make payments on account of Indebtedness
owing to the Borrower or any other Subsidiary.
8.13 Investments. The Borrower shall not, and shall not permit any
of its Subsidiaries to, directly or indirectly, make any Investment in any
Person, whether in cash, securities, or other property of any kind
including, without limitation, any Subsidiary or Affiliate of the Borrower,
other than:
(a) Advances or loans made in the ordinary course of business to
employees of the Borrower or its Subsidiaries for travel, entertainment,
relocation and similar expenses not to exceed $750,000 in the aggregate
outstanding at any one time;
(b) Existing Advances;
(c) Cash Equivalents;
(d) Interest-bearing demand or time deposits (including certificates of
deposit) which are insured by the Federal Deposit Insurance Corporation
("FDIC") or a similar federal insurance program; provided, however, that
the Borrower may, in the ordinary course of its business, maintain in their
disbursement accounts from time to time amounts in excess of then
applicable FDIC or other program insurance limits;
(e) Promissory notes received by the Borrower as provided in Section 8.9;
(f) Such other Investments not to exceed $2,500,000 in the aggregate as
the Agent may approve in writing in its sole discretion; and
(g) to the extent permitted under Section 8.20(c) hereof.
8.14 Affiliate Transactions. (a) The Borrower shall not, and shall
not permit any of its Subsidiaries to, directly or indirectly, enter into
any transaction with (including, without limitation, the purchase, sale or
exchange of property or the rendering of any service to) any Subsidiary or
Affiliate of the Borrower ("Affiliate Transaction") except in the ordinary
course of and pursuant to the reasonable requirements of the Borrower's or
such Subsidiary's business, as the case may be, and upon fair and
reasonable terms no less favorable to the Borrower or such Subsidiary than
could be obtained in a comparable arm's-length transaction with an
unaffiliated Person (the "Fairness Conditions").
(b) Notwithstanding Section 8.14(a) above, the Borrower shall not, and
shall not permit any of its Subsidiaries to, enter into Affiliate
Transactions with aggregate consideration in excess of $250,000 in any
fiscal year after fiscal year 1993 unless a majority of the members of the
Board of Directors of the Borrower who are not officers, employees or
Affiliates of the Borrower or any of its Subsidiaries shall have
determined, prior to the time the Borrower or such Subsidiary, as the case
may be, enters into such Affiliate Transactions, that such Affiliate
Transactions satisfy the Fairness Conditions and such determination is
evidenced by a resolution of the Board of Directors; provided that, the
Borrower shall not, and shall not permit any of its Subsidiaries to, enter
into Affiliate Transactions with aggregate consideration in excess of
$500,000 in any fiscal year after fiscal year 1993 unless, in addition to
the requirements set forth above, the Borrower delivers to the Agent, at
least thirty (30) days prior to the time the Borrower or such Subsidiary
enters into such Affiliate Transactions, a detailed summary of all material
terms, provisions and conditions thereof.
8.15 Prohibited Transactions Under ERISA. The Borrower shall not,
and shall not permit any of its Subsidiaries to, directly or indirectly:
(a) Engage, or permit any ERISA Affiliate to engage, in any prohibited
transaction which could result in a civil penalty or excise tax described
in Sections 406 of ERISA or 4975 of the Internal Revenue Code for which a
statutory or class exemption is not available or a private exemption has
not been previously obtained from the DOL;
(b) permit to exist with respect to any Benefit Plan any accumulated
funding deficiency (as defined in Sections 302 of ERISA and 412 of the
Internal Revenue Code), whether or not waived;
(c) fail, or permit any ERISA Affiliate to fail, to pay timely required
contributions or annual installments due with respect to any waived funding
deficiency to any Benefit Plan;
(d) terminate, or permit any ERISA Affiliate to terminate, any Benefit
Plan where such event would result in any liability of the Borrower, any
Subsidiary or any ERISA Affiliate under Title IV of ERISA;
(e) fail, or permit any ERISA Affiliate to fail, to make any required
contribution or payment to any Multiemployer Plan;
(f) fail, or permit any ERISA Affiliate to fail, to pay any required
installment or any other payment required under Section 412 of the Internal
Revenue Code on or before the due date for such installment or other
payment;
(g) amend, or permit any ERISA Affiliate to amend, a Plan resulting in an
increase in current liability for the plan year such that either of the
Borrower, any Subsidiary or any ERISA Affiliate is required to provide
security to such Plan under Section 401(a)(29) of the Internal Revenue
Code;
(h) withdraw, or permit any ERISA Affiliate to withdraw, from any
Multiemployer Plan where such withdrawal may result in any liability of any
such entity under Title IV of ERISA; or
(i) allow any representation made in Section 6.15 to be untrue at any
time during the term of this Credit Agreement.
8.16 Additional Bank Accounts. The Borrower shall not, and shall
not permit any of its Subsidiaries to, directly or indirectly, open,
maintain or otherwise have any checking, savings or other accounts at any
bank or other financial institution, or any other account where money is or
may be deposited or maintained with any Person, other than the Disbursement
Account, Lumber Hedging Accounts and the Blocked Accounts and other
accounts set forth on Schedule B. Notwithstanding the foregoing, until
such time as the Agent otherwise directs, the Borrower may open and
maintain an additional bank account (the "Contingency Account") to be used
exclusively for funding the emergency cash needs of its facilities;
provided that (i) no single facility receive in excess of $1,000 from the
Contingency Account in any given month and (ii) no group of Facilities
receive in excess of $10,000 in the aggregate from the Contingency Account
in any given month.
8.17 Excess Cash. The Borrower shall not, and shall not permit any
of its Subsidiaries to, directly or indirectly, maintain in the aggregate
in all of the checking, savings or other accounts (other than the
Disbursement Account, the Blocked Accounts, the BT Account and the payroll
accounts) of the Borrower or elsewhere, total cash balances and investments
permitted by Section 8.14 hereof in excess of $150,000 at any time during
which any Revolving Loans are outstanding hereunder, of which amount no
more than $5,000 may be maintained in the Contingency Account at any time.
8.18 Material Amendments of Material Contracts. The Borrower shall
not, and shall not permit any of its Subsidiaries to, directly or
indirectly, without the prior written consent of the Agent, amend, modify,
cancel or terminate or permit the amendment, modification, cancellation or
termination of, any of the Material Contracts, unless such amendment,
modification, cancellation or termination would not have a Material Adverse
Effect.
8.19 Additional Negative Pledges. The Borrower shall not, and shall
not permit any of its Subsidiaries to, directly or indirectly, create or
otherwise cause or suffer to exist or become effective, or permit any of
the Subsidiaries to create or otherwise cause or suffer to exist or become
effective, directly or indirectly, (i) any prohibition or restriction
(including any agreement to provide equal and ratable security to any other
Person in the event a Lien is granted to or for the benefit of the Agent
and the Lenders) on the creation or existence of any Lien upon the assets
of the Borrower or the Subsidiaries or (ii) any contractual obligation
which may restrict or inhibit the Agent's rights or ability to sell or
otherwise dispose of the Collateral or any part thereof after the
occurrence of an Event of Default.
8.20 Additional Subsidiaries; Acquisitions. (a) The
Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, form or acquire any new Subsidiaries.
(b) The Borrower shall not, and shall not permit any of its Subsidiaries
to, acquire any assets of any Person except:
(i) The Borrower may acquire Inventory, Equipment, supplies and
related items in the ordinary course of business and may make Capital
Expenditures as permitted by Section 8.6 hereof; and
(ii) with the prior written consent of the Agent and the Required
Lenders, the Borrower may acquire building material centers; provided
that upon the consummation of any such acquisition, the Agent must have
a perfected security interest in any Accounts, Inventory and Equipment
so acquired.
(c) Notwithstanding Section 8.20(a) and 8.20(b) hereof, but subject to
all of the other provisions of this Credit Agreement and the other Credit
Documents (including, without limitation, Section 7.4 hereof), the Borrower
may from time to time make Permitted Acquisitions with an aggregate
purchase price not to exceed from the Effective Date through the Expiration
Date the amount of the Acquisition Basket; provided that any such assets
consisting of Accounts, Inventory, Equipment, Intangible or capital stock,
notes or other securities are not subject to any Liens and are pledged to
the Agent for the benefit of the Lenders and the Issuing Bank as additional
security for the repayment of the Obligations. At the option of the
Borrower, to the extent that assets acquired by the Borrower pursuant to
this Section 8.20(c) consist of or include Eligible Accounts or Eligible
Inventory (as determined by the Agent after completion of an audit
satisfactory to the Agent), the dollar amount of such Eligible Accounts and
Eligible Inventory (after application of applicable advance rates) may be
added to the Borrowing Base (up to a maximum Borrowing Base at any time of
no greater than the Total Commitments) (such added amount, the "Incremental
Borrowing Base Amount") and the Incremental Borrowing Base Amount shall be
subtracted from the purchase price of such assets in calculating the
Borrower's compliance with the Acquisition Basket.
8.21 Hedging Transactions. The Borrower shall not, and shall not
permit any of its Subsidiaries to, engage in any speculative hedging or
similar transactions (other than Interest Rate Agreements and Lumber
Hedging Agreements, to the extent otherwise permitted hereunder).
8.22 Activities of Subsidiaries.
(a) LTC. The Borrower shall not permit LTC to engage in any business or
activity (including, without limitation, the incurrence of Indebtedness or
trade liabilities) with any Person (other than the Borrower in connection
with the LTC Sublicense Agreement).
(b) GLC. The Borrower shall not permit GLC to engage in any business or
activity (including, without limitation, the incurrence of any Indebtedness
or the encumbrance of any of its assets) other than the operation of
building material supply centers (and activities reasonably related
thereto) and those activities contemplated by the Consignment Agreement.
ARTICLE 9. Events of Default and Remedies
9.1 Events of Default. The occurrence of any of the following
events shall constitute an Event of Default hereunder:
(a) failure of the Borrower to pay (i) any interest, Fees, Expenses or
other Obligations (other than principal) within three (3) Business Days of
when due, in each case whether at stated maturity, by acceleration, or
otherwise, or (ii) any principal when due, whether at stated maturity, by
acceleration or otherwise;
(b) failure of the Borrower to perform, comply with or observe any term,
covenant or agreement applicable to it contained in any Pledge Agreement,
the Security Agreement (other than in subsections 4(c), (f), (h), (j) and
(l) thereof) or in Sections 7.2(a), 7.3, 7.4 or 7.10 or Article 8 hereof;
(c) any representation or warranty made or deemed to be made by the
Borrower in this Credit Agreement or in any other Credit Document (and in
any statement or certificate given in writing under this Credit Agreement
or any other Credit Document), shall be false or misleading in any material
respect when made or deemed to be made;
(d) failure of the Borrower to comply with any provisions contained in
this Credit Agreement or any other Credit Document, other than as set forth
in Section 9.1(a), 9.1(b) and 9.1(c), and such failure shall continue
without cure for a period of thirty (30) consecutive days after notice
thereof is given to the Borrower by the Agent or the Majority Lenders;
(e) dissolution, liquidation, winding up or cessation of the Borrower's
businesses, or the failure of the Borrower to meet its debts as they
mature, or the calling of one or more meetings of the Borrower's major
creditors for purposes of obtaining a moratorium on payment or a compromise
of the Borrower's debts;
(f) the insolvency of any Credit Party or the commencement by or against
the Borrower of any bankruptcy, insolvency, arrangement, reorganization,
receivership or similar proceedings under any federal or state law and, in
the event any such proceeding is commenced against the Borrower, such
proceeding is not dismissed within thirty (30) days;
(g) the occurrence of a Change of Control;
(h) the occurrence of a default or event of default (in each case which
shall continue beyond the expiration of any applicable grace periods) which
permits, or could permit, the acceleration of the maturity of, any note,
agreement or instrument evidencing any other Indebtedness of the Borrower
or any of the Subsidiaries, and the aggregate principal amount of all such
Indebtedness with respect to which a default or an event of default has
occurred, or the maturity of which is permitted to be accelerated, exceeds
$2,500,000; or
(i) any material covenant, agreement or obligation of any party contained
in or evidenced by any of the Credit Documents shall cease to be
enforceable in accordance with its terms, or any party (other than the
Agent, the Syndication Agent or the Lenders) to any Credit Document shall
deny or disaffirm its obligations under any of the Credit Documents, or any
Credit Document shall be cancelled, terminated, revoked or rescinded
without the express prior written consent of the Agent, or any action or
proceeding shall have been commenced by any Person (other than the Agent,
the Syndication Agent or any Lender) seeking to cancel, revoke, rescind or
disaffirm the obligations of any party to any Credit Document, or any court
or other Governmental Authority shall issue a judgment, order, decree or
ruling to the effect that any of the obligations of any party to any Credit
Document are illegal, invalid or unenforceable.
9.2 Acceleration and Cash Collateralization. Upon the occurrence
and during the continuance of an Event of Default, the Agent may take any
or all of the following actions, without prejudice to the rights of the
Agent or any Lender to enforce its claims against the Borrower:
(a) Acceleration. Upon the written request of the Majority Lenders, and
by delivery of written notice to the Borrower from the Agent, all
Obligations shall be declared to be immediately due and payable (except
with respect to any Event of Default set forth in Section 9.1(f) hereof, in
which case all Obligations shall automatically become immediately due and
payable without the necessity of any request of the Majority Lenders or
notice or other demand to the Borrower) without presentment, demand,
protest or any other action or obligation of the Agent or any Lender.
(b) Termination of Commitments. Upon the written request of the Majority
Lenders, and by delivery of written notice to the Borrower from the Agent,
the Commitments of all the Lenders shall be immediately terminated and, at
all times thereafter, all Revolving Loans made by any Lender pursuant to
this Credit Agreement shall be at such Lender's sole discretion, unless
such Event of Default is waived in accordance with Section 11.10.
(c) Cash Collateralization. On demand of the Agent or the Majority
Lenders the Borrower shall immediately deposit with the Agent for each
Letter of Credit then outstanding, cash or Cash Equivalents in an amount
equal to 110% of the greatest amount drawable thereunder.
9.3 Rescission of Acceleration. After acceleration of the maturity
of the Revolving Loans, if the Borrower pays all accrued interest and all
principal due (other than by reason of the acceleration) and all Defaults
and Events of Default are otherwise waived in accordance with Section
11.10, the Majority Lenders may elect in their sole discretion, to rescind
the acceleration and return any cash collateral. (This Section is intended
only to bind all of the Lenders to a decision of the Majority Lenders and
not to confer any right on the Borrower, even if the described conditions
for the Majority Lenders' election may be met.)
9.4 Remedies. Upon the occurrence and during the continuance of an
Event of Default, the Agent may do any or all of the following:
(a) remove all documents, instruments, files and records (including the
copying of any computer records) relating to the Accounts or use (at the
expense of the Borrower) such supplies or space of the Borrower at the
Borrower's place of business necessary to properly administer and collect
the Accounts thereon;
(b) accelerate or extend the time of payment, compromise, issue credits,
or bring suit on the Accounts (in the name of the Borrower or the Lenders)
and otherwise administer and collect the Accounts;
(c) sell, assign and deliver the Accounts and any returned, reclaimed or
repossessed merchandise, with or without advertisement, at public or
private sale, for cash, on credit or otherwise; and
(d) foreclose the security interests created pursuant to the Credit
Documents by any available judicial procedure, or take possession of any or
all of the Collateral without judicial process and enter any premises where
any Collateral may be located for the purpose of taking possession of or
removing the same.
Any Lender may bid or become a purchaser at any sale, free from any right
of redemption, which right is expressly waived by the Borrower. If notice
of intended disposition of any Collateral is required by law, it is agreed
that five (5) Business Days notice shall constitute reasonable
notification. The Borrower will assemble the Collateral and make it
available to the Agent at such locations as the Agent may specify, whether
at the premises of the Borrower or elsewhere, and will make available to
the Agent the premises and facilities of the Borrower for the purpose of
the Agent's taking possession of, removing or putting the Collateral in
saleable form.
9.5 Right of Setoff. In addition to and not in limitation of all
rights of offset that any Lender or the Issuing Bank may have under
applicable law, upon the occurrence of any Event of Default, and whether or
not any Lender or the Issuing Bank has made any demand or the Obligations
of any Credit Party have matured, each Lender and the Issuing Bank shall
have the right to appropriate and apply to the payment of the Obligations
of such Credit Party all deposits and other obligations then or thereafter
owing by such Lender or the Issuing Bank to such Credit Party. Each Lender
or the Issuing Bank exercising such rights shall notify the Agent thereof
and any amount received as a result of the exercise of such rights shall be
shared in accordance with Section 4.12.
9.6 License for Use of Software and Other Intellectual Property.
Unless expressly prohibited by the licensor thereof, if any, the Agent is
hereby granted a license to use all computer software programs, data bases,
processes and materials used by the Borrower in connection with its
businesses or in connection with the Collateral. The Agent agrees not to
use any such license prior to the occurrence of an Event of Default without
giving the Borrower prior notice.
9.7 Deficiencies; Remedies Cumulative. The cash proceeds resulting
from the Agent's exercise of any of the foregoing rights shall be applied
by the Agent and the Lenders in accordance with Section 2.10. The Borrower
shall remain liable to the Agent and the Lenders for any deficiencies, and
the Agent and the Lenders in turn agree to remit to the Borrower or its
successors or assigns, any surplus resulting therefrom. The foregoing
remedies are not intended to be exhaustive and the full or partial exercise
of any of them shall not preclude the full or partial exercise of any other
available remedy under the Credit Agreement, under any other Credit
Document, at equity or at law.
ARTICLE 10. The Agent
10.1 Appointment of Agent.
(a) Each Lender hereby designates BTCC as Agent to act as herein
specified. Each Lender hereby irrevocably authorizes, and each holder of
any Revolving Note or participation in any Letter of Credit by the
acceptance of a Revolving Note or participation shall be deemed irrevocably
to authorize, the Agent to take such action on its behalf under the
provisions of this Credit Agreement and the Revolving Notes and any other
instruments and agreements referred to herein and to exercise such powers
and to perform such duties hereunder and thereunder as are specifically
delegated to or required of the Agent by the terms hereof and thereof and
such other powers as are reasonably incidental thereto. The Agent shall
hold all Collateral and all payments of principal, interest, Fees, charges
and Expenses received pursuant to this Credit Agreement or any other Credit
Document for the benefit of the Lenders to be distributed as provided
herein. The Agent may perform any of its duties hereunder by or through
its agents or employees.
(b) The provisions of this Article 10 are solely for the benefit of the
Agent and the Lenders, and none of the Credit Parties shall have any rights
as a third party beneficiary of any of the provisions hereof (other than
Section 10.9). In performing its functions and duties under this
Agreement, the Agent shall act solely as agent of the Lenders and does not
assume and shall not be deemed to have assumed any obligation toward or
relationship of agency or trust with or for any Credit Party.
10.2 Nature of Duties of Agent. The Agent shall have no duties or
responsibilities except those expressly set forth in this Credit Agreement
and the other Credit Documents. Neither the Agent nor any of its officers,
directors, employees or agents shall be liable for any action taken or
omitted by it as such hereunder or in connection herewith, unless caused by
its or their gross negligence or willful misconduct. The duties of the
Agent shall be mechanical and administrative in nature; the Agent shall not
have by reason of this Credit Agreement or the other Credit Documents a
fiduciary relationship in respect of any Lender; and nothing in this Credit
Agreement or the other Credit Documents, expressed or implied, is intended
to or shall be so construed as to impose upon the Agent any obligations in
respect of this Credit Agreement or the other Credit Documents except as
expressly set forth herein or therein.
10.3 Lack of Reliance on Agent.
(a) Independently and without reliance upon the Agent, each Lender, to
the extent it deems appropriate, has made and shall continue to make
(i) its own independent investigation of the financial or other condition
and affairs of each Credit Party in connection with the taking or not
taking of any action in connection herewith and (ii) its own appraisal of
the creditworthiness of each Credit Party, and, except as expressly
provided in this Agreement, the Agent shall have no duty or responsibility,
either initially or on a continuing basis, to provide any Lender with any
credit or other information with respect thereto, whether coming into its
possession before the making of the Revolving Loans or at any time or times
thereafter.
(b) The Agent shall not be responsible to any Lender for any recitals,
statements, information, representations or warranties herein or in any
document, certificate or other writing delivered in connection herewith or
for the execution, effectiveness, genuineness, validity, enforceability,
collectibility, priority or sufficiency of this Credit Agreement or the
Revolving Notes or the financial or other condition of any Credit Party.
The Agent shall not be required to make any inquiry concerning either the
performance or observance of any of the terms, provisions or conditions of
this Credit Agreement or the Revolving Notes, or the financial condition of
any Credit Party, or the existence or possible existence of any Default or
Event of Default, unless specifically requested to do so in writing by any
Lender.
10.4 Certain Rights of the Agent. The Agent shall have the right to
request instructions from the Majority Lenders at any time. If the Agent
shall request instructions from the Majority Lenders with respect to any
act or action (including the failure to act) in connection with this Credit
Agreement, the Agent shall be entitled to refrain from such act or taking
such action unless and until the Agent shall have received instructions
from the Majority Lenders, and the Agent shall not incur liability to any
Person by reason of so refraining. Without limiting the foregoing, no
Lender shall have any right of action whatsoever against the Agent as a
result of the Agent acting or refraining from acting hereunder in
accordance with the instructions of the Majority Lenders.
10.5 Reliance by Agent. The Agent shall be entitled to rely, and
shall be fully protected in relying, upon any note, writing, resolution,
notice, statement, certificate, telex, teletype or telecopier message,
cablegram, radiogram, order or other documentary, teletransmission or
telephone message believed by it to be genuine and correct and to have been
signed, sent or made by the proper person. The Agent may consult with
legal counsel (including counsel for the Borrower with respect to matters
concerning 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.
10.6 Indemnification of Agent. To the extent the Agent is not
reimbursed and indemnified by the Borrower, each Lender will reimburse and
indemnify the Agent, in proportion to its respective Commitment, for and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses (including counsel fees and
disbursements) or disbursements of any kind or nature whatsoever (including
all Expenses) which may be imposed on, incurred by or asserted against the
Agent in performing its duties hereunder, in any way relating to or arising
out of this Agreement, provided that no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from
the Agent's gross negligence or willful misconduct.
10.7 The Agent in its Individual Capacity. With respect to its
obligation to lend under this Credit Agreement, the Revolving Loans made by
it and the Revolving Notes issued to it, and its participation in Letters
of Credit issued hereunder, the Agent shall have the same rights and powers
hereunder as any other Lender or holder of a Revolving Note or
participation interests and may exercise the same as though it was not
performing the duties specified herein; and the terms "Lenders," "Majority
Lenders," "holders of Revolving Notes," or any similar terms shall, unless
the context clearly otherwise indicates, include the Agent in its
individual capacity. The Agent may accept deposits from, lend money to,
acquire equity interests in, and generally engage in any kind of banking,
trust, financial advisory or other business with the Borrower or any
Affiliate of the Borrower as if it were not performing the duties specified
herein, and may accept fees and other consideration from the Borrower for
services in connection with this Credit Agreement and otherwise without
having to account for the same to the Lenders.
10.8 Holders of Notes. The Agent may deem and treat the payee of
any Revolving Note as the owner thereof for all purposes hereof unless and
until a written notice of the assignment or transfer thereof shall have
been filed with the Agent. Any request, authority or consent of any Person
who, at the time of making such request or giving such authority or
consent, is the holder of any Revolving Note, shall be conclusive and
binding on any subsequent holder, transferee or assignee of such Revolving
Note or of any Revolving Note or Revolving Notes issued in exchange
therefor.
10.9 Successor Agent.
(a) The Agent may, upon five (5) Business Days' notice to the Lenders and
the Borrower, resign at any time (effective upon the appointment of a
successor Agent pursuant to the provisions of this Section 10.9) by giving
written notice thereof to the Lenders and the Borrower. Such resignation
of the Agent shall also operate as a resignation of Bankers Trust Company
as Issuing Bank. Upon any such resignation, the Majority Lenders shall
have the right, upon five (5) days' notice and approval by the Borrower
(which approval shall not be unreasonably withheld), to appoint a successor
Agent which shall also serve as successor Issuing Bank. If no successor
Agent (i) shall have been so appointed by the Majority Lenders, and
(ii) shall have accepted such appointment, within thirty (30) days after
the retiring Agent's giving of notice of resignation, then, upon five (5)
days' notice, the retiring Agent may, on behalf of the Lenders, appoint a
successor Agent, which shall also serve as successor Issuing Bank.
(b) 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 Credit Agreement. After any retiring Agent's
resignation hereunder as Agent, the provisions of this Article 10 shall
inure to its benefit as to any actions taken or omitted to be taken by it
while it was Agent under this Credit Agreement.
(c) In the event of a material breach by the Agent of its duties
hereunder, the Agent may be removed by the Majority Lenders (other than the
Agent in its individual capacity and without giving effect to any Revolving
Loans or Commitments made by the Agent in its individual capacity) for
cause and the provisions of this Section 10.9 shall apply to the
appointment of a successor Agent. Removal of BT Commercial Corporation as
Agent shall also operate as a removal of Bankers Trust Company as Issuing
Bank.
10.10 Collateral Matters.
(a) Each Lender authorizes and directs the Agent to enter into the
Collateral Documents for the benefit of the Lenders. Each Lender hereby
agrees, and each holder of any Revolving Note by the acceptance thereof
will be deemed to agree, that, except as otherwise set forth herein, any
action taken by the Majority Lenders in accordance with the provisions of
this Credit Agreement or the Collateral Documents, and the exercise by the
Majority Lenders of the powers set forth herein or therein, together with
such other powers as are reasonably incidental thereto, shall be authorized
and binding upon all of the Lenders. The Agent is hereby authorized on
behalf of all of the Lenders, without the necessity of any notice to or
further consent from any Lender, from time to time prior to an Event of
Default, to take any action with respect to any Collateral or Collateral
Documents which may be necessary to perfect and maintain perfected the
security interest in and liens upon the Collateral granted pursuant to the
Collateral Documents.
(b) The Lenders hereby authorize the Agent, at its option and in its
discretion, to release any Lien granted to or held by the Agent upon any
Collateral (i) upon termination of the Commitments of all Lenders and
payment and satisfaction of all of the Obligations at any time arising
under or in respect of this Credit Agreement or the Credit Documents or the
transactions contemplated hereby or thereby, (ii) constituting property
being sold or disposed of upon receipt of the proceeds of such sale by the
Agent if the Borrower certifies to the Agent that the sale or disposition
is made in compliance with Section 8.9 hereof (and the Agent may rely
conclusively on any such certificate, without further inquiry) or (iii) if
approved, authorized or ratified in writing by the Majority Lenders, unless
such release is required to be approved by all of the Lenders hereunder.
Upon request by the Agent at any time, the Lenders will confirm in writing
the Agent's authority to release particular types or items of Collateral
pursuant to this Section 10.10.
(c) Upon any sale and transfer of Collateral which is expressly permitted
pursuant to the terms of this Credit Agreement, or consented to in writing
by the Majority Lenders or all of the Lenders, as applicable, and upon at
least five (5) Business Days' prior written request by the Borrower, the
Agent shall (and is hereby irrevocably authorized by the Lenders to)
execute such documents as may be necessary to evidence the release of the
Liens granted to the Agent for the benefit of the Lenders herein or
pursuant hereto upon the Collateral that was sold or transferred; provided
that (i) the Agent shall not be required to execute any such document on
terms which, in the Agent's opinion, would expose the Agent to liability or
create any obligation or entail any consequence other than the release of
such Liens without recourse or warranty and (ii) such release shall not in
any manner discharge, affect or impair the Obligations or any Liens upon
(or obligations of the Borrower or any Subsidiary in respect of) all
interests retained by the Borrower or any Subsidiary, including (without
limitation) the proceeds of the sale, all of which shall continue to
constitute part of the Collateral. In the event of any sale or transfer of
Collateral, or any foreclosure with respect to any of the Collateral, the
Agent shall be authorized to deduct all of the Expenses reasonably incurred
by the Agent from the proceeds of any such sale, transfer or foreclosure.
(d) The Agent shall have no obligation whatsoever to the Lenders or to
any other Person to assure that the Collateral exists or is owned by the
Borrower or any Subsidiary or is cared for, protected or insured or that
the Liens granted to the Agent herein or pursuant hereto have been properly
or sufficiently or lawfully created, perfected, protected or enforced or
are entitled to any particular priority, or to exercise or to continue
exercising at all or in any manner or under any duty of care, disclosure or
fidelity any of the rights, authorities and powers granted or available to
the Agent in this Section 10.10 or in any of the Collateral Documents, it
being understood and agreed that in respect of the Collateral, or any act,
omission or event related thereto, the Agent may act in any manner it may
deem appropriate, in its sole discretion, given the Agent's own interest in
the Collateral as one of the Lenders and that the Agent shall have no duty
or liability whatsoever to the Lenders, except for its gross negligence or
willful misconduct.
10.11 Actions with Respect to Defaults. In addition to the Agent's
right to take actions on its own accord as permitted under this Credit
Agreement, the Agent shall take such action with respect to a Default or
Event of Default as shall be directed by the Majority Lenders; provided
that 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 or Event of Default as it shall
deem advisable and in the best interests of the Lenders.
10.12 Delivery of Information. The Agent shall not be required to
deliver to any Lender originals or copies of any documents, instruments,
notices, communications or other information received by the Agent from
the Borrower, any Subsidiary, the Majority Lenders, any Lender or any other
Person under or in connection with this Credit Agreement or any other
Credit Document except (i) as specifically provided in this
Credit Agreement or any other Credit Document and (ii) as specifically
requested from time to time in writing by any Lender with respect to a
specific document, instrument, notice or other written communication
received by and in the possession of the Agent at the time of receipt of
such request and then only in accordance with such specific request.
10.13 Syndication Agent. The Borrower, the Agent, the Issuing Bank
and each Lender acknowledge that, other than any rights expressly reserved
to the Syndication Agent under this Credit Agreement, the Syndication Agent
(in such capacity and not in its capacity as a Lender) has no obligations
hereunder and shall not be responsible or accountable to any other party
hereto for any action or failure to act hereunder.
ARTICLE 11. Miscellaneous
11.1 SUBMISSION TO JURISDICTION; WAIVERS. THE BORROWER HEREBY
IRREVOCABLY AND UNCONDITIONALLY:
(a) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS TO WHICH IT IS A
PARTY, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT
THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE
STATE OF NEW YORK, THE COURTS OF THE UNITED STATES OF AMERICA FOR THE
SOUTHERN DISTRICT OF NEW YORK AND APPELLATE COURTS FROM ANY THEREOF;
(b) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH
COURTS AND WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH
ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO
PLEAD OR CLAIM THE SAME;
(c) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY
BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR
ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO THE BORROWER
AT ITS ADDRESS SET FORTH IN SECTION 11.5 OR AT SUCH OTHER ADDRESS OF WHICH
THE AGENT SHALL HAVE BEEN NOTIFIED PURSUANT THERETO;
(d) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE
OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO
XXX IN ANY OTHER JURISDICTION;
(e) WAIVES THE RIGHT TO ASSERT ANY SETOFF, COUNTERCLAIM OR CROSS-CLAIM IN
RESPECT OF, AND ALL STATUTES OF LIMITATIONS WHICH MAY BE RELEVANT TO, SUCH
ACTION OR PROCEEDING; AND
(f) WAIVES DUE DILIGENCE, DEMAND, PRESENTMENT AND PROTEST AND ANY NOTICES
THEREOF AS WELL AS NOTICE OF NONPAYMENT.
11.2 JURY TRIAL. THE BORROWER, THE AGENT, THE SYNDICATION AGENT,
THE ISSUING BANK AND THE LENDERS EACH HEREBY WAIVE ANY RIGHT TO A TRIAL BY
JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF THIS CREDIT AGREEMENT, THE
CREDIT DOCUMENTS OR ANY OTHER AGREEMENTS OR TRANSACTIONS RELATED HERETO OR
THERETO.
11.3 GOVERNING LAW. THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF
THIS CREDIT AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
11.4 Delays; Partial Exercise of Remedies. No delay or omission of
the Agent, the Issuing Bank or the Lenders to exercise any right or remedy
hereunder, whether before or after the happening of any Event of Default,
shall impair any such right or shall operate as a waiver thereof or as a
waiver of any such Event of Default. No single or partial exercise by the
Agent, the Issuing Bank or the Lenders of any right or remedy shall
preclude any other or further exercise thereof, or preclude any other right
or remedy.
11.5 Notices. Except as otherwise provided herein, all notices and
correspondences hereunder shall be in writing and sent by certified or
registered mail, return receipt requested, or by overnight delivery
service, with all charges prepaid, if to the Agent, the Syndication Agent
or any of the Lenders, then to BT Commercial Corporation, 00 Xxxx Xxxxxx,
Xxx Xxxx, XX 00000, Attention: Credit Department, Xxxxx Xxxxxxx, if to the
Issuing Bank, then to Bankers Trust Company, 00 Xxxx Xxxxxx, Xxx Xxxx, XX
00000, Attention: Xxxxx Xxxxxxx, and if to the Borrower, then to the
Borrower at 000 X. Xxxxxxxx Xxxxx, Xxxxxx Xxxxx, Xxxxxxxx 00000,
Attention: Chief Financial Officer, with a copy to Xxxxxxxxx, Main,
Xxxxxx, Xxxxxx & Demont, Xxx Xxxxxxxxxxx Xxxxx, Xxxxx 0000, Xxxxxxxxxxxx,
Xxxxxxx 00000, Attention: Xxxxxxx X. Xxxxxxxxx, or by facsimile
transmission, promptly confirmed in writing sent by first class mail, if to
the Agent, the Syndication Agent or any of the Lenders, at (000) 000-0000,
and if to the Borrower at (000) 000-0000, with a copy to Xxxxxxxxx, Main,
Xxxxxx, Xxxxxx & Demont at (000) 000-0000, Attention: Xxxxxxx X.
Xxxxxxxxx, or, in any such case, to another location designated in
accordance with this Section 11.5. All such notices and correspondence
shall be deemed given (i) if sent by certified or registered mail or by
overnight delivery service, when received at the above stated addresses or
when delivery is refused and (ii) if sent by facsimile transmission, when
receipt of such transmission is acknowledged.
11.6 Assignability.
(a) The Borrower shall not have the right to assign this Credit Agreement
or any interest therein except with the prior written consent of the Agent
and each Lender.
(b) Any Lender may make, carry or transfer Revolving Loans at, to or for
the account of, any of its branch offices or the office of an Affiliate of
such Lender except to the extent such transfer would result in increased
costs to the Borrower.
(c) A Lender may, with the consent of the Agent and with the consent of
the Borrower (which may not be unreasonably withheld), assign to one or
more banks or other financial institutions all or a portion of its rights
and obligations under this Credit Agreement and the Revolving Notes;
provided that (i) for each such assignment, the parties thereto shall
execute and deliver to the Agent, for its acceptance and recording in the
Register (as defined below), an Assignment and Assumption Agreement,
together with any Revolving Note or Revolving Notes subject to such
assignment and a processing and recordation fee of $2,500 and (ii) no such
assignment shall be for less than $5,000,000 of a Lender's Commitment,
unless it is to a then-current holder of a Revolving Note. Upon execution
and delivery of the Assignment and Assumption Agreement to the Agent, from
and after the date specified as the effective date in the Assignment and
Assumption Agreement (the "Acceptance Date"), (x) the assignee thereunder
shall be a party hereto, and, to the extent that rights and obligations
hereunder have been assigned to it pursuant to such Assignment and
Assumption Agreement, such assignee shall have the rights and obligations
of a Lender hereunder and (y) the assignor thereunder shall, to the extent
that rights and obligations hereunder have been assigned by it pursuant to
such Assignment and Assumption Agreement, relinquish its rights (other than
any rights it may have pursuant to Section 11.8 hereof which will survive)
and be released from its obligations under this Credit Agreement (and, in
the case of an Assignment and Assumption Agreement covering all or the
remaining portion of an assigning Lender's rights and obligations under
this Credit Agreement, such Lender shall cease to be a party hereto).
(d) By executing and delivering an Assignment and Assumption Agreement,
the assignee thereunder confirms and agrees as follows: (i) other than as
provided in such Assignment and Assumption Agreement, the assigning Lender
makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with this Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Credit Agreement,
the Revolving Notes or any other instrument or document furnished pursuant
hereto, (ii) such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower or any other Credit Parties or the performance or observance by
the Borrower or any other Credit Parties of any of its obligations under
this Credit Agreement or any other instrument or document furnished
pursuant hereto, (iii) such assignee confirms that it has received a copy
of this Credit Agreement, together with copies of the Financial Statements
referred to in Section 7.1 hereof 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 Assumption Agreement, (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 Credit Agreement,
(v) such assignee appoints and authorizes the Agent to take such action as
agent on its behalf and to exercise such powers under this Credit Agreement
as are delegated to the Agent by the terms hereof, together with such
powers as are reasonably incidental thereto and (vi) such assignee agrees
that it will perform in accordance with their terms all of the obligations
which by the terms of this Credit Agreement are required to be performed by
it as a Lender.
(e) The Agent shall maintain at its address referred to in Section 11.5
hereof a copy of each Assignment and Assumption Agreement delivered to and
accepted by it and a register for the recordation of the names and
addresses of the Lenders and the Commitments of, and principal amount of
the Revolving Loans owing to, each Lender from time to time (the
"Register"). The entries in the Register shall be conclusive and binding
for all purposes, absent manifest error, and the Borrower, the Agent and
the Lenders may treat each Person whose name is recorded in the Register as
a Lender hereunder for all purposes of this Agreement. The Register and
copies of each Assignment and Assumption shall be available for inspection
by the Borrower or any Lender at any reasonable time and from time to time
upon reasonable prior notice.
(f) Upon its receipt of an Assignment and Assumption Agreement executed
by an assigning Lender, together with the Revolving Note or Revolving Notes
subject to such assignment, the Agent shall, if such Assignment and
Assumption Agreement has been completed and is in substantially the form of
Exhibit F hereto, (i) accept such Assignment and Assumption Agreement,
(ii) record the information contained therein in the Register and
(iii) give prompt notice thereof to the Borrower. Within five (5) Business
Days after its receipt of such notice, the Borrower shall execute and
deliver to the Agent in exchange for the surrendered Revolving Note or
Revolving Notes a new Revolving Note or Revolving Notes to the order of the
assignee in an amount equal to the Commitment or Commitments assumed by it
pursuant to such Assignment and Assumption Agreement and, if the assigning
Lender has retained a Commitment or Commitments hereunder, a new Revolving
Note or Revolving Notes to the order of the assigning Lender in an amount
equal to the Commitment or Commitments retained by it hereunder. Such new
Revolving Note or Revolving Notes shall re-evidence the Indebtedness
outstanding under the old Revolving Note or Revolving Notes and shall be in
an aggregate principal amount equal to the aggregate principal amount of
such surrendered Revolving Note or Revolving Notes, and shall otherwise be
in substantially the form of the Revolving Note or Revolving Notes subject
to such assignments.
(g) Each Lender may sell participations (without the consent of the
Agent, the Borrower or any other Lender) to one or more parties in or to
all or a portion of its rights and obligations under this Credit Agreement
(including, without limitation, all or a portion of its Commitment, the
Revolving Loans owing to it and the Revolving Note or Revolving Notes held
by it); provided that (i) such Lender's obligations under this Credit Agree
ment (including, without limitation, its Commitment to the Borrower
hereunder) shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such
obligations, (iii) such Lender shall remain the holder of any such
Revolving Note for all purposes of this Credit Agreement, (iv) the
Borrower, the Agent, and the other Lenders shall continue to deal solely
and directly with such Lender in connection with such Lender's rights and
obligations under this Credit Agreement and (v) such Lender shall not
transfer, grant, assign or sell any participation under which the
participant shall have rights to approve any amendment or waiver of this
Credit Agreement except to the extent such amendment or waiver would
(A) extend the final maturity date or the date for the payments of any
installment of fees or principal or interest of any Revolving Loans or
Letter of Credit reimbursement obligations in which such participant is
participating, (B) reduce the amount of any installment of principal of the
Revolving Loans or Letter of Credit reimbursement obligations in which such
participant is participating, (C) except as otherwise expressly provided in
this Credit Agreement, reduce the interest rate applicable to the Revolving
Loans or Letter of Credit reimbursement obligations in which such
participant is participating, or (D) except as otherwise expressly provided
in this Credit Agreement, reduce any Fees payable hereunder.
(h) Each Lender agrees that, without the prior written consent of the
Borrower and the Agent, it will not make any assignment hereunder in any
manner or under any circumstances that would require registration or
qualification of, or filings in respect of, any Revolving Loan, Revolving
Note or other Obligation under the securities laws of the United States of
America or of any jurisdiction.
(i) In connection with the efforts of any Lender to assign its rights or
obligations or to participate interests, such Lender may disclose any
information in its possession regarding the Borrower.
11.7 Confidentiality. Each Lender agrees that it will use its
reasonable best efforts not to disclose without the prior consent of the
Borrower (other than to its employees, auditors, or counsel, or to another
Lender if the disclosing Lender or such disclosing Lender's holding or
parent company in its sole discretion determines that any such party should
have access to such information) any information with respect to the
Borrower or any of its Subsidiaries, which is furnished pursuant to this
Credit Agreement and which is designated by the Borrower to the Lenders in
writing as confidential, provided, that any Lender may disclose any such
information (a) as has become generally available to the public, (b) as may
be required or appropriate in any report, statement or testimony submitted
to any Governmental Authority having or claiming to have jurisdiction over
such Lender, (c) as may be required or appropriate in response to any
summons or subpoena or in connection with any litigation, (d) in order to
comply with any Requirement of Law, and (e) to any prospective or actual
transferee or participant in connection with any contemplated transfer or
participation of any of the Revolving Notes or Commitment or any interest
therein by such Lender.
11.8 Indemnification. The Borrower shall and hereby agrees to
indemnify, defend and hold harmless the Agent, the Syndication Agent, the
Issuing Bank and each of the Lenders and their respective directors,
officers, agents, employees and counsel from and against (a) any and all
losses, claims, damages, liabilities, deficiencies, judgments or expenses
incurred by any of them (except to the extent that it is finally judicially
determined to have resulted from their own gross negligence or willful
misconduct) arising out of or by reason of any litigations, investigations,
claims or proceedings which arise out of or are in any way related to
(i) this Credit Agreement or the transactions contemplated thereby,
(ii) the issuance of the Letters of Credit, (iii) the failure of the
Issuing Bank to honor a drawing under any Letter of Credit, as a result of
any act or omission, whether rightful or wrongful, of any present or future
de jure or de facto government or Governmental Authority, (iv) any actual
or proposed use by the Borrower of the proceeds of the Revolving Loans or
(v) the Agent's, the Syndication Agent's, the Issuing Bank's or the
Lenders' entering into this Credit Agreement, the other Credit Documents or
any other agreements and documents relating hereto, including, without
limitation, amounts paid in settlement, court costs and the fees and
disbursements of counsel incurred in connection with any such litigation,
investigation, claim or proceeding or any advice rendered in connection
with any of the foregoing and (b) any such losses, claims, damages,
liabilities, deficiencies, judgments or expenses incurred in connection
with any remedial or other action taken by the Borrower or any of the
Lenders in connection with compliance by the Borrower or any of the
Subsidiaries, or any of their respective properties, with any federal,
state or local environmental laws, acts, rules, regulations, orders,
directions, ordinances, criteria or guidelines. If and to the extent that
the Obligations of the Borrower hereunder are unenforceable for any reason,
the Borrower hereby agrees to make the maximum contribution to the payment
and satisfaction of such Obligations which is permissible under applicable
law. The Borrower's Obligations hereunder shall survive any termination of
this Credit Agreement and the other Credit Documents and the payment in
full of the Obligations, and are in addition to, and not in substitution
of, any other of their Obligations set forth in this Credit Agreement. In
addition, the Borrower shall, upon demand, pay to the Agent and any Lender
all costs and expenses (including the reasonable fees and disbursements of
counsel and other professionals) paid or incurred by the Agent or such
Lender in (i) enforcing or defending its rights under or in respect of this
Credit Agreement, the other Credit Documents or any other document or
instrument now or hereafter executed and delivered in connection herewith,
(ii) in collecting the Revolving Loans, (iii) in foreclosing or otherwise
collecting upon the Collateral or any part thereof and (iv) obtaining any
legal, accounting or other advice in connection with any of the foregoing.
11.9 Entire Agreement; Successors and Assigns. This Credit
Agreement and the other Credit Documents constitute the entire agreement
among the Borrower, the Agent, the Syndication Agent and the Lenders,
supersedes any prior agreements among them, and shall bind and benefit the
Borrower and the Lenders and their respective successors and permitted
assigns.
11.10 Amendments and Waivers. No amendment or waiver of any
provision of this Credit Agreement, any part of Schedule
B or Schedule C, or any other Credit Document shall be effective unless in
writing and signed by the Majority Lenders (or by the Agent on their
behalf), except that:
(a) the consent of the Required Lenders is required to (i) increase the
advance rates for Eligible Accounts Receivable and Eligible Inventory above
the levels in effect on the Effective Date, or (ii) amend or waive Sections
8.9, 8.12 or 8.20 or amend Section 9.1 (other than Section 9.1(a) to the
extent covered by Section 11.10(b)(iii) below);
(b) the consent of all the Lenders is required to (i) increase the
Commitments, (ii) reduce the principal of, or interest on, the Revolving
Notes, any Letter of Credit reimbursement obligations or any Fees hereunder
(other than Fees that are exclusively for the account of the Agent or the
Issuing Bank), (iii) postpone any date fixed for any payment in respect of
principal of, or interest on, the Revolving Notes, any Letter of Credit
reimbursement obligations or any Fees hereunder, (iv) change the percentage
of the Commitments, or any minimum requirement necessary for the Lenders or
the Majority Lenders to take any action hereunder, (v) amend or waive
Sections 11.10(a) or 11.10(b), or change the definitions of Majority
Lenders or Required Lenders or (vi) except as otherwise expressly provided
in this Credit Agreement, and other than in connection with the financing,
refinancing, sale or other disposition of any asset of the Borrower
permitted under this Credit Agreement, release any Liens in favor of the
Lenders on a material portion of the Collateral;
(c) the consent of the Agent or the Issuing Bank, as the case may be,
shall be required for any amendment, waiver or consent affecting the rights
or duties of the Agent or the Issuing Bank under any Credit Document, in
addition to the consent of the Lenders otherwise required by this section;
and
(d) the Agent may, without the consent of any of the Lenders, amend
Schedule C as provided in the definition of "Qualified Account Debtors."
Notwithstanding any of the foregoing to the contrary, the consent of the
Borrower shall not be required for any amendment, modification or waiver of
the provisions of Article 10 (other than Section 10.9) or any amendment or
modification of Schedule C pursuant to Section 11.10(d) above. The
Borrower and the Lenders hereby authorize the Agent to modify (i) this
Credit Agreement by unilaterally amending or supplementing Annex I to
reflect assignments of the Commitments and (ii) any of the Collateral
Documents by unilaterally amending or supplementing any of the schedules
thereto to reflect any addition to, or change in the status of, any of the
Collateral expressly permitted thereunder.
11.11 Nonliability of Agent and Lenders. The relationship between
the Borrower and the Lenders, the Agent and the Syndication Agent shall be
solely that of borrower and lender. None of the Agent, the Syndication
Agent or any Lender shall have any fiduciary responsibilities to the
Borrower. None of the Agent, the Syndication Agent or any Lender
undertakes any responsibility to the Borrower to review or inform the
Borrower of any matter in connection with any phase of the Borrower's
business or operations.
11.12 Independent Nature of Lenders' Rights. The amounts payable at
any time hereunder to each Lender under such Lender's Revolving Note or
Notes shall be a separate and independent debt.
11.13 Counterparts. This Credit Agreement may be executed in any
number of counterparts and by the different parties hereto in separate
counterparts, each of which when so executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument.
11.14 Effectiveness. This Credit Agreement shall become effective
on the date on which all of the parties hereto shall have signed a copy
hereof (whether the same or different copies) and shall have delivered the
same to the Agent pursuant to Section 11.5 or, in the case of the Lenders,
shall have given to the Agent written, telecopied or telex notice (actually
received) at such office that the same has been signed and mailed to it.
11.15 Severability. In case any provision in or obligation under
this Credit Agreement or the Revolving Notes or the other Credit Documents
shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction,
shall not in any way be affected or impaired thereby.
11.16 Headings Descriptive. The headings of the several sections
and subsections of this Credit Agreement, and the Table of Contents, are
inserted for convenience only and shall not in any way affect the meaning
or construction of any provision of this Credit Agreement.
11.17 Maximum Rate. Notwithstanding anything to the contrary
contained elsewhere in this Credit Agreement or in any other Credit
Document, the Borrower, the Agent and the Lenders hereby agree that all
agreements among them under this Credit Agreement and the other Credit
Documents, whether now existing or hereafter arising and whether written or
oral, are expressly limited so that in no contingency or event whatsoever
shall the amount paid, or agreed to be paid, to the Agent or any Lender for
the use, forbearance, or detention of the money loaned to the Borrower and
evidenced hereby or thereby or for the performance or payment of any
covenant or obligation contained herein or therein, exceed the Highest
Lawful Rate. If due to any circumstance whatsoever, fulfillment of any
provisions of this Credit Agreement or any of the other Credit Documents at
the time performance of such provision shall be due shall exceed the
Highest Lawful Rate, then, automatically, the obligation to be fulfilled
shall be modified or reduced to the extent necessary to limit such interest
to the Highest Lawful Rate, and if from any such circumstance and Lender
should ever receive anything of value deemed interest by applicable law
which would exceed the Highest Lawful Rate, such excessive interest shall
be applied to the reduction of the principal amount then outstanding
hereunder or on account of any other then outstanding Obligations and not
to the payment of interest, or if such excessive interest exceeds the
principal unpaid balance then outstanding hereunder and such other then
outstanding Obligations, such excess shall be refunded to the Borrower.
All sums paid or agreed to be paid to the Agent or any Lender for the use,
forbearance, or detention of the Obligations and other Indebtedness of the
Borrower to the Agent or any Lender shall, to the extent permitted by
applicable law, be amortized, prorated, allocated and spread throughout the
full term of such Indebtedness until payment in full so that the actual
rate of interest on account of all such Indebtedness does not exceed the
Highest Lawful Rate throughout the entire term of such Indebtedness. The
terms and provisions of this Section shall control every other provision of
this Credit Agreement and all agreements among the Borrower, the Agent and
the Lenders.
11.18 Release of Headquarters Lease Assignment. Upon a sale of the
Borrower's Headquarters for Net Cash Proceeds of no less than $6,000,000
(which proceeds shall be applied as provided in Section 8.9 hereof), the
Agent shall release the Headquarters Lease Assignment. For the avoidance
of doubt, for purposes of determining the amount of Net Cash Proceeds
received by the Borrower from the sale of the Borrower's Headquarters, the
Headquarters Lease Build-Out Expenditure shall not be deemed an expense
incurred in connection with such sale.
11.19 Existing Agreements Superseded. As set forth in Section 1.4
hereof, the 1996 Credit Agreement is superseded by this Credit Agreement,
which has been executed in renewal, amendment, restatement and
modification, but not in extinguishment of, the obligations under the 1996
Credit Agreement.
[SIGNATURE PAGES FOLLOW]
IN WITNESS WHEREOF, the parties hereto have caused this Credit Agreement to
be executed and delivered by their proper and duly authorized officers as
of the date set forth above.
BORROWER:
WICKES LUMBER COMPANY,
a Delaware corporation
By:
Title:
AGENT:
BT COMMERCIAL CORPORATION,
As Agent
By:
Vice President
SYNDICATION AGENT:
NATIONSBANK OF GEORGIA, N.A.
As Syndication Agent
By:
Title:
ISSUING BANK:
BANKERS TRUST COMPANY
By:
Title:
LENDERS:
BT COMMERCIAL CORPORATION
By:
Vice President
NATIONSBANK OF GEORGIA, N.A.
By:
Title:
LASALLE NATIONAL BANK
By:
Title:
BANKAMERICA BUSINESS CREDIT, INC.
By:
Title:
THE FIRST NATIONAL BANK OF BOSTON
By:
Title:
BTM CAPITAL CORPORATION
By:
Title:
THE CIT GROUP/BUSINESS CREDIT, INC.
By:
Title:
ANNEX I
LENDERS AND COMMITMENT AMOUNTS
Name and Address of Lender Commitment
BT COMMERCIAL CORPORATION $20,000,000.00
Domestic Lending Office:
BT Commercial Corporation
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Eurodollar Lending Office:
BT Commercial Corporation
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Address for Notices:
BT Commercial Corporation
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx Xxxxxxx
Telecopy No: (000) 000-0000
[CONTINUED]
ANNEX I
LENDERS AND COMMITMENT AMOUNTS
Name and Address of Lender Commitment
LASALLE NATIONAL BANK $20,000,000.00
Domestic Lending Office:
LaSalle National Bank
000 X. XxXxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Eurodollar Lending Office:
LaSalle National Bank
000 X. XxXxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Address for Notices:
LaSalle National Bank
000 X. XxXxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxxx
Telecopy No.: (000) 000-0000
[CONTINUED]
ANNEX I
LENDERS AND COMMITMENT AMOUNTS
Name and Address of Lender Commitment
THE CIT GROUP/BUSINESS CREDIT, INC. $20,000,000.00
Domestic Lending Office:
The CIT Group/Business Credit, Inc.
000 Xxxxxxx Xxxxxxx
Xxxxxxx, XX 00000
Eurodollar Lending Office:
The CIT Group/Business Credit, Inc.
000 Xxxxxxx Xxxxxxx
Xxxxxxx, XX 00000
Address for Notices:
The CIT Group/Business Credit, Inc.
000 Xxxxxxx Xxxxxxx
Xxxxxxx, XX 00000
Attn: Xxx Xxxxx
Telecopy No.: (000) 000-0000
[CONTINUED]
ANNEX I
LENDERS AND COMMITMENT AMOUNTS
Name and Address of Lender Commitment
BANKAMERICA BUSINESS CREDIT, INC. $20,000,000.00
Domestic Lending Office:
BankAmerica Business Credit, Inc.
00 Xxxx 00xx Xxxxxx
Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Eurodollar Lending Office:
BankAmerica Business Credit, Inc.
00 Xxxx 00xx Xxxxxx
Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Address for Notices:
BankAmerica Business Credit, Inc.
00 Xxxx 00xx Xxxxxx
Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxx
Telecopy No.: (000) 000-0000
[CONTINUED]
ANNEX I
LENDERS AND COMMITMENT AMOUNTS
Name and Address of Lender Commitment
THE FIRST NATIONAL BANK OF BOSTON $20,000,000.00
Domestic Lending Office:
First National Bank of Boston
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Eurodollar Lending Office:
First National Bank of Boston
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Address for Notices:
First National Bank of Boston
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxx Xxxxx
Telecopy No.: (000) 000-0000
[CONTINUED]
ANNEX I
LENDERS AND COMMITMENT AMOUNTS
Name and Address of Lender Commitment
NATIONSBANK OF GEORGIA, N.A. $20,000,000.00
Domestic Lending Office:
NationsBank of Georgia, N.A.
X.X. Xxx 0000
Xxxxxxx, XX 00000
or
000 Xxxxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, XX 00000
Eurodollar Lending Office:
NationsBank of Georgia, N.A.
X.X. Xxx 0000
Xxxxxxx, XX 00000
or
000 Xxxxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, XX 00000
Address for Notices:
NationsBank of Georgia, N.A.
X.X. Xxx 0000
Xxxxxxx, XX 00000
or
000 Xxxxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxx Xxxxxx
Telecopy No.: (000) 000-0000
[CONTINUED]
ANNEX I
LENDERS AND COMMITMENT AMOUNTS
Name and Address of Lender Commitment
BTM CAPITAL CORPORATION $10,000,000.00
Domestic Lending Office:
BTM Capital Corporation
000 X. Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Eurodollar Lending Office:
BTM Capital Corporation
000 X. Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Address for Notices:
BTM Capital Corporation
000 X. Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxxxx
Telecopy No.: (000) 000-0000
Total Commitments: $130,000,000
EXHIBIT A
FORM OF AMENDED AND RESTATED REVOLVING NOTE
$_____________
FOR VALUE RECEIVED, the undersigned, WICKES LUMBER COMPANY, a Delaware
corporation ("Borrower"), promises to pay to the order of [Payee Lender]
(the "Lender") at c/o BT COMMERCIAL CORPORATION, as Agent for the Lenders,
00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, in lawful money of the United
States of America and in immediately available funds, the principal amount
of _________ Million Dollars ($___________), or such lesser amount as may
then constitute the unpaid aggregate principal amount of the Revolving
Loans on the Expiration Date.
Borrower further agrees to pay interest at said office, in like money, on
the unpaid principal amount owing hereunder from time to time from the date
hereof on the dates and at the rate specified in Article 4 of the Credit
Agreement (as defined below).
If any payment on this promissory note becomes due and payable on a day
other than a Business Day, the maturity thereof shall be extended to the
next succeeding Business Day, and with respect to payments of principal,
interest thereon shall be payable at the then applicable rate during such
extension.
This promissory note is one of the Revolving Notes referred to in the
Second Amended and Restated Credit Agreement, dated as of April 8, 1997 (as
amended, restated, supplemented or otherwise modified from time to time,
the "Credit Agreement"), among Borrower, the Lender, certain other
financial institutions parties thereto, Bankers Trust Company, as Issuing
Bank, Nationsbank of Georgia, N.A., as syndication agent and BT Commercial
Corporation, as agent ("Agent"), and is subject to, and entitled to, all
provisions and benefits thereof and is subject to optional and mandatory
prepayment in whole or in part as provided therein. This promissory note
is issued, together with other Revolving Notes, to amend and restate
without interruption or novation all indebtedness evidenced by certain
notes under the 1996 Credit Agreement. Capitalized terms used herein
without definition shall have the meanings given to such terms in the
Credit Agreement. The Credit Agreement, among other things, provides
[after giving effect to the Assignment and Assumption Agreement executed by
the Lender and [name of assigning Lender] as of date hereof]/1 for the
making of Revolving Loans by the Lender to Borrower from time to time in an
aggregate amount not to exceed at any time outstanding the U.S. dollar
amount first above mentioned.
Upon the occurrence of any one or more of the Events of Default specified
in the Credit Agreement which have not been waived in accordance with the
terms of the Credit Agreement, the Agent shall, upon the written,
telecopied or telex request of the Majority Lenders, and by delivery of
written notice to Borrower from the Agent, take any or all of the following
actions, without prejudice to the rights of the Agent, the Lender or any
holder of this Note to enforce its claims against Borrower: (a) declare
all Obligations due hereunder to be immediately due and payable (except
with respect to any Event of Default set forth in Section 9.1(f) of the
Credit Agreement, in which case all Obligations due hereunder shall
automatically become immediately due and payable without the necessity of
any notice or other demand) without presentment, demand, protest or any
other action or obligation of the Lender; (b) immediately terminate the
Credit Agreement and the Commitments thereunder; and at all times
thereafter, all loans and advances made by the Lender pursuant to the
Credit Agreement shall be at the Lender's sole discretion, unless such
Event of Default is waived.
This promissory note is secured by security agreements and other collateral
documents [and re-evidences the indebtedness outstanding on the date hereof
with respect to the Revolving Loans which indebtedness has been assigned to
the Lender pursuant to Section 11.6 of the Credit Agreement]./2
Borrower hereby waives presentment, demand, protest and notice of any kind.
No failure to exercise, and no delay in exercising any rights hereunder on
the part of the holder hereof shall operate as a waiver of such rights.
THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS PROMISSORY NOTE SHALL
BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO
THE CONFLICT OF LAWS PRINCIPLES THEREOF.
WICKES LUMBER COMPANY
By:
Title:
Attest:
EXHIBIT B
FORM OF COMPLIANCE CERTIFICATE
[Letterhead of Borrower]
____________________, 199_
BT Commercial Corporation, as Agent
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
I hereby certify to you as follows:
(a) I am the duly elected [Title] of Wickes Lumber Company, a
Delaware corporation ("Borrower"). Capitalized but undefined terms used in
this Certificate shall have the meanings assigned to them in the Second
Amended and Restated Credit Agreement (the "Credit Agreement") dated as of
April 8, 1997 among the Borrower, the financial institutions parties
thereto, Bankers Trust Company, as Issuing Bank, Nationsbank of Georgia,
N.A., as Syndication Agent, and you, as Agent.
(b) I have reviewed the terms of the Credit Agreement, and have
made, or have caused to be made under my supervision, a review in
reasonable detail of the transactions and the condition of the Borrower
during the immediately preceding [year/quarter/month].
(c) The review described in paragraph (b) above did not disclose
the existence during or at the end of such [year/quarter/month], and I have
no knowledge of the existence as of the date hereof, of any condition or
event which constitutes a Default or an Event of Default, except as set
forth on Attachment 1 to this Certificate/3.
I further certify that, based on the review described in
paragraph (b) above, neither the Borrower nor any of the Subsidiaries at
any time during or at the end of such [year/quarter/month], except as
specifically described in Attachment 2 to this Certificate/4, did any of
the following:
(d) Changed its respective corporate name, or transacted business
under any trade name, style, or fictitious name, other than those
previously described to you and set forth in the Credit Agreement.
(e) Changed the location of its chief executive office, or changed
the location of or disposed of any of its assets (other than pursuant to
the sale of inventory in the ordinary course of its business), or
established any new asset locations.
(f) Changed its capital structure.
(g) Materially changed the terms upon which it sells goods
(including sales on consignment) or provides services, nor has any vendor
or trade supplier to the Borrower during or at the end of such
[year/quarter/month] decreased the terms upon which it supplies goods to
the Borrower.
(h) Permitted or suffered to exist any Liens or encumbrances on any
of its properties, whether real or personal, other than as specifically
permitted in the Credit Agreement.
(i) Received any notices of any kind from any federal, state or
local agency, tribunal or other authority regulating or having
responsibility for any environmental matters.
(j) Became aware of, obtained knowledge of, or received
notification of, any breach or violation of any material covenant contained
in any instrument or agreement in respect of indebtedness for money
borrowed by the Borrower or any of the Subsidiaries.
THE FOREGOING CERTIFICATIONS are made and delivered this _________
day of _____________, 199_.
Very truly yours,
WICKES LUMBER COMPANY
By:
Title:
EXHIBIT C
FORM OF BORROWING BASE CERTIFICATE
OFFICER'S CERTIFICATE CERTIFYING BORROWING BASE CERTIFICATE
I, _____________________, in my capacity as _________________ of
Wickes Lumber Company, a Delaware corporation (the "Borrower"), hereby
certify in connection with the Second Amended and Restated Credit Agreement
(the "Credit Agreement"), dated as of April 8, 1997, among the Borrower, BT
Commercial Corporation (the "Agent"), Nationsbank of Georgia, N.A., as
syndication agent, the lenders party thereto and the Issuing Bank (as
defined therein) that I am the duly elected ________________ of the
Borrower and that the information and each calculation set forth in the
attached Borrowing Base Certificate are, to the best of my knowledge, true,
correct and complete (subject to year-end audit adjustments) as of the date
hereof and are calculated in accordance with the Credit Agreement. Unless
otherwise defined herein, all terms used herein shall have the meanings
ascribed to them in the Credit Agreement.
Executed this day of WICKES LUMBER COMPANY
, 199
By:
Title:
EXHIBIT D
FORM OF COLLATERAL ACCESS AGREEMENT
BT COMMERCIAL CORPORATION
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
To be delivered to the Landlord
signatory below
Re: Financing of Wickes Lumber Company
Ladies and Gentlemen:
We have been asked by Wickes Lumber Company (the "Company") to act as
agent for a syndicate of lenders under certain revolving credit facilities
provided to the Company. The revolving credit facilities are secured by
certain assets of the Company, including the Company's Inventory (as
defined below). We understand that the Company leases certain real
property (the "Facility") from you pursuant to a lease agreement (the
"Agreement").
In connection with loans made or to be made to the Company, the
lenders will be lending, in part, against the value of the Company's
inventory (the "Company's Inventory"), including that portion of the
Company's Inventory now or in the future located at the Facility.
Therefore, we will be making customary Uniform Commercial Code filings on
behalf of the lenders with respect to the Company's Inventory located at
the Facility. In addition, we request your acknowledgement, and
cooperation, for preserving and enforcing the lenders' security interests.
In order to expedite the consummation of the proposed credit facilities, we
would appreciate your signing and returning the enclosed copy of this
letter to us, care of the following address:
Xxxxxx & Xxxxxxx
000 Xxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attention: _______________
Telephone: _______________
By signing and returning the enclosed copy of this letter you confirm
and acknowledge the following matters to us:
1. You will allow us, or our auditors or our other designees, reasonable
access to the Facility in order to inspect the Company's Inventory and
verify the amount. In addition, if we elect to remove the Company's
Inventory from the Facility ourselves, you will grant us access to the
Facility at reasonable times to do so.
2. In the event that the Company defaults in its obligations under the
Agreement and/or you terminate the Agreement for any reason, including a
default by the Company, you will notify us in writing of this fact prior to
your retaking possession of the Facility and you will allow us to either
(i) undertake to cure any and all defaults under the Agreement and assume
the Company's obligations under the Agreement, or (ii) enter the facility
in order to remove the Company's Inventory, provided that we pay you
reasonable rent relating to the storage of the Company's Inventory at the
Facility for the period from when we enter the Facility until we remove the
Company's Inventory from the Facility. In any case, you confirm and
acknowledge to us that you do not have any claim to or lien upon any of the
Company's Inventory.
We would appreciate your confirming to us your agreement to the
foregoing provisions of this letter by signing and returning to us the
enclosed additional copy of this letter to the address shown above.
[THIS SPACE INTENTIONALLY BLANK]
Although the Company is not a party to this agreement, it has signed
below to indicate its acknowledgment of and agreement to the provisions of
this letter.
Very truly yours,
BT COMMERCIAL CORPORATION,
as Agent
By:
Name:
Title:
ACKNOWLEDGED AND AGREED:
[LANDLORD]
By:
Name:
Title:
Landlord Name:
Address:
ACKNOWLEDGED AND AGREED:
WICKES LUMBER COMPANY
By:
Name:
Title:
EXHIBIT E
FORM OF NOTICE OF BORROWING
__________ ___, 199__
BT Commercial Corporation, as Agent
00 Xxxx Xxxxxx - Xxxxx X
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxx
Ladies and Gentlemen:
The undersigned, Wickes Lumber Company, a Delaware corporation
("Borrower"), refers to the Second Amended and Restated Credit Agreement,
dated as of April 8, 1997, among Borrower, certain financial institutions
parties thereto, Bankers Trust Company, as Issuing Bank, Nationsbank of
Georgia, N.A., as syndication agent, and BT Commercial Corporation, as
agent (the "Credit Agreement"). Capitalized terms used herein shall have
the meanings given in the Credit Agreement.
The Borrower hereby gives you irrevocable notice of its request for a
borrowing under the Credit Agreement (the "Proposed Borrowing") as follows:
(i) The requested date of the Proposed Borrowing is
____________, 199__.
(ii) The Type of Loans comprising the Proposed Borrowing
are:
Prime Rate Loans in the amount of
$________________.
Eurodollar Rate Loans in the amount of
$________________.
(iii) The aggregate amount of the Proposed Borrowing is
$______________.
(iv) The account at which proceeds of the Proposed
Borrowing are to be made available is as follows:
The undersigned hereby certifies that, except as described in
Attachment 1 hereto in connection with a Proposed Borrowing of Agent
Advances under Section 2.2(b)(ii), the following statements are true on the
date hereof, and will be true on the date of the Proposed Borrowing:
(A) the representations and warranties contained in the Credit
Agreement and in each other document executed in connection
therewith are true and correct in all material respects before and
after giving effect to the Proposed Borrowing and to the
application of the proceeds therefrom, as though made on and as of
such date, except to the extent that such representations and
warranties expressly relate solely to an earlier date (in which
case such representations and warranties shall have been true and
accurate on and as of such earlier date);
(B) no event has occurred and is continuing, or would result
from such Proposed Borrowing or from the application of the
proceeds therefrom, which constitutes a Default or an Event of
Default;
(C) no event has occurred which has had or could reasonably be
expected to have a Material Adverse Effect;
(D) all of the other conditions to the Proposed Borrowing set
forth in Article 5 of the Credit Agreement have been fulfilled;
and
(E) the Proposed Borrowing satisfies all limitations set forth
in the Credit Agreement (including, without limitation,
availability under the Borrowing Base).
If notice of this Proposed Borrowing has been given previously by
telephone, this notice should be considered a written confirmation.
WICKES LUMBER COMPANY
By:
Name:
Title:
EXHIBIT F
FORM OF
ASSIGNMENT AND ASSUMPTION AGREEMENT
This ASSIGNMENT AND ASSUMPTION AGREEMENT (the "Assignment and
Assumption") is to be effectuated by the completion and execution of the
Assignment Execution Form attached hereto. A copy of the terms of the
Assignment and Assumption does not need to be physically attached to the
Assignment Execution Form, but rather these terms are incorporated therein
by reference. Terms defined in the Assignment Execution Form (or in the
Credit Agreement described therein) are used herein as therein defined.
The Assignor and the Assignee agree as follows:
1. Assignment; Effect of Certain Dates.
For value received, without recourse, representation or warranty
(except as expressly set forth herein) the Assignor sells and assigns to
the Assignee, and the Assignee purchases and assumes from the Assignor, all
of the Assignor's right, title and interest in and to, and all of the
Assignor's obligations with respect to, the Assigned Share under the Credit
Agreement. On the date the Agent has confirmed by telecopy to the Assignor
that the Agent has received a fully completed Assignment Execution Form
signed by the Assignor and the Assignee (the "Contract Date"), the
obligations of the Assignor and the Assignee hereunder shall be irrevocable
as between themselves unless and until a party whose consent hereto is
required by the Credit Agreement (a "Required Party") gives written notice
(as provided in this paragraph) to the Assignor that such Required Party's
consent will not be given. Upon its receipt of a fully completed
Assignment Execution Form signed by the Assignor and the Assignee, the
Agent will send a copy of such Assignment Execution Form to each Required
Party, and will request each Required Party either (i) to execute the
Assignment Execution Form and redeliver it to the Agent or (ii) to notify
the Agent in writing that it will not execute the Assignment Execution
Form, in either case prior to 12:00 noon (New York City time) on the
Business Day which is two Business Days prior to the Settlement Date (as
defined in Section 9 hereof). Any Required Party which has not delivered
to the Agent an executed Assignment Execution Form by such time will be
deemed not to have consented to the Assignment Execution Form and this
Assignment and Assumption will thereupon be null and void; in addition, the
Agent will promptly notify the Assignor and the Assignee if it has received
a notice from a Required Party that such Required Party's consent will not
be given, and this Assignment and Assumption will thereafter be null and
void. Once a Required Party has evidenced its consent by delivery to the
Agent of its executed Assignment Execution Form, such consent may not be
withdrawn, and upon execution and delivery by all Required Parties, it is
irrevocably agreed that this Assignment and Assumption will become
effective on the Settlement Date and the Agent will change its books and
records to reflect this Assignment and Assumption. No (i) failure of any
party to settle on the Settlement Date any amount owed hereunder,
(ii) dispute respecting settlement, or (iii) bankruptcy, insolvency or
other condition whatsoever respecting any person shall in any way impair,
reduce or otherwise affect the transfer of the Assigned Share to the
Assignee, and the release of the Assignor, as contemplated by this
Assignment and Assumption.
2. Rights and Obligations of Assignee; Release of Assignor.
From and after the Settlement Date, the Assignee shall be entitled to
all rights, powers and privileges of, and shall perform all of the duties
and obligations of, the Assignor under the Credit Agreement and all related
documents, to the extent of the Assigned Share, including without
limitation (i) the right to receive all payments in respect of the Assigned
Share which are unpaid on the Settlement Date or become payable from and
after the Settlement Date, whether on account of principal, interest, fees,
indemnities, increased costs, additional amounts or otherwise, (ii) the
right to vote and to instruct the Agent under the Credit Agreement to the
extent of the Assigned Share, (iii) the right to set off and to appropriate
and apply deposits of the Borrower (and any other obligor) as set forth in
the Credit Agreement or any related document, (iv) the right to receive
notices, requests, demands and other communications from the Agent, the
Borrower and/or any other party required to give notices, requests, demands
or other communications, (v) the obligation to fund all payments required
to be made by a lender holding the Assigned Share [and (vi) the obligation
to provide to the Agent any withholding tax forms and other information
prescribed by the Internal Revenue Service of the United States certifying
as to the Assignee's status for purposes of determining exemption from
United States withholding taxes with respect to all payments to be made to
the Assignee under the Credit Agreement or such other documents as are
necessary to indicate that all such payments are subject to such rates at a
rate reduced by an applicable tax treaty.]/5 The Assignor will deliver to
the Assignee any notice of borrowing received by the Assignor on or after
the Contract Date but before the Settlement Date if the borrowing date
specified in such notice is on or after the Settlement Date. From and
after the Settlement Date, the Assignor shall be released from all duties
and obligations under the Credit Agreement and all related documents to the
extent of the Assigned Share.
3. Representations and Warranties of Assignor.
The Assignor (a) represents and warrants that it is the legal and
beneficial owner of the Assigned Share, and that such Assigned Share is
free and clear of any adverse claim; and (b) except for the representations
and warranties in subclause (a) above and in Section 4 below, makes no
representation or warranty and assumes no responsibility whatsoever
regarding the assignment affected hereby, including, without limitation,
with respect to any statements, warranties or representations made in or in
connection with the Credit Agreement or any other instrument or document
furnished pursuant thereto or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit Agreement
or any other instrument or document furnished pursuant thereto, or the
financial condition of the Borrower, any guarantor or any other person, or
the performance or observance by the Borrower or any guarantor or any other
party of any of its obligations under the Credit Agreement or any other
instrument or document furnished pursuant thereto.
4. Mutual Representations and Warranties.
Each of the Assignor and the Assignee represents and warrants to the
other party as of the Contract Date and the Settlement Date as follows:
(a) it is duly organized and validly existing and has full
power and authority, and has taken or will take all action
necessary, to execute and deliver the Assignment Execution Form
and to fulfill its obligations under, and to consummate the
transactions contemplated by, this Assignment and Assumption;
(b) the making and performance by it of this Assignment
and Assumption do not and will not violate any law or
regulation of the jurisdiction of its incorporation or any
other law or regulation applicable to it; provided that neither
party makes any representation or warranty respecting the
Securities Act of 1933, as amended;
(c) the Assignment Execution Form has been duly executed
and delivered by it and constitutes its legal, valid and
binding obligation, enforceable in accordance with its terms,
except as limited by (i) bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally and
(ii) general equitable principles; and
(d) all approvals, authorizations or other actions by, or
filings with, any governmental authority, if any, necessary for
the validity or enforceability of its obligations under this
Assignment and Assumption have been obtained or taken, as the
case may be.
5. Representations and Warranties of Assignee.
(a) The Assignee (i) confirms that it has received a copy
of the Credit Agreement, any amendments or waivers thereto and
other instruments or documents furnished pursuant thereto, and
any related documents, which have in each case been requested
by it, together with copies of any financial statements
requested by it, and that it has, independently and without
reliance on the Assignor, the Agent or any other lender and
based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter
into this Assignment and Assumption; (ii) agrees that it will,
independently and without reliance upon the Assignor, the Agent
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 the
Credit Agreement and any other instruments or documents
furnished pursuant thereto, and any related documents;
(iii) represents that it is eligible to become an assignee of
the Assigned Share pursuant to the terms, if any, of the Credit
Agreement which limit assignees to persons having specified
characteristics or falling within certain classes; and
(iv) appoints the Agent to act in the capacity set forth in the
Credit Agreement.
(b) If the Assignee is a person subject to the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"),
the Assignee represents and warrants that the execution,
delivery and performance of this Assignment and Assumption, and
the purchase of the Assigned Share, will not involve any
prohibited transaction within the meaning of Section 406 of
ERISA or Section 4975 of the Internal Revenue Code of 1986, as
amended (the "Code"), other than a prohibited transaction which
is covered by a currently effective class exemption granted by
the U.S. Department of Labor pursuant to Section 408(a) of
ERISA and Section 4975(c)(2) of the Code.
6. Single Net Payment.
Unless the Assignor and Assignee agree otherwise, on the Settlement
Date a single, net, final payment shall be made, which shall be in an
amount mutually agreed upon by the Assignor and the Assignee, taking into
account the then outstanding principal amount, if any, of the Assigned
Share, any fees payable to or by the Assignee, and all accrued fees,
interest and other amounts payable under the Credit Agreement or any
related documents.
7. Governing Law.
THIS ASSIGNMENT AND ASSUMPTION SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
8. Counterparts; Amendments; Binding Effect.
The Assignment Execution Form may be executed in any number of
counterparts and by different parties in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which
taken together shall constitute but one and the same instrument. The terms
hereof may not be amended or modified except in a writing executed by the
Assignor, the Assignee and, in the case of any change other than a change
in the Settlement Date, all Required Parties. Any change in the Settlement
Date to an earlier date than that specified on the Assignment Execution
Form shall require the consent of the Agent and any Required Party which
has not previously consented to the Assignment Execution Form. The terms
hereof shall bind and inure to the benefit of and be enforceable by the
parties executing (or deemed to have consented to) the Assignment Execution
Form and their respective successors and permitted assigns.
9. Schedule of Dates.
Unless otherwise agreed to by the parties and specified on the
Assignment Execution Form, the following schedule will apply, as
appropriate:
Consent of Borrower
and/or Other Parties Consent of Agent
Required Only Required
Contract Date Date Agent Date Agent
acknowledges receipt acknowledges receipt
(by facsimile (by facsimile
transmission) of transmission) of
executed Assignment executed Assignment
Execution Form by Execution Form by
both Assignor and both Assignor and
Assignee Assignee
Settlement Date 5 Business Days 3 Business Days
after Contract Date after Contract Date
The Settlement Date specified in the Assignment Execution Form may not be
earlier than the Settlement Date set forth in the Schedule above unless the
Required Parties and the Agent consent in writing to such earlier date.
10. Waiver of Jury Trial.
THE ASSIGNOR AND THE ASSIGNEE EACH HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER
BASED UPON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS
ASSIGNMENT AND ASSUMPTION, OR THE ACTIONS OF EITHER OF THEM IN THE
PERFORMANCE OR ENFORCEMENT THEREOF.
11. Effectiveness of Notices.
Notices required to be given and other documents required to be
delivered pursuant to the terms hereof shall be deemed given or delivered
when actually received unless sent by facsimile transmission, in which case
such notice or other document shall be deemed given or delivered when sent
(as established by sender's facsimile transmission machine print-out or
similar mechanical record).
[ASSIGNMENT EXECUTION FORM FOLLOWS]
ASSIGNMENT EXECUTION FORM
This Assignment Execution Form incorporates by reference all of the
terms and conditions of the Assignment and Assumption Agreement which is
attached as an Exhibit to the Credit Agreement described below. By
executing this Assignment Execution Form, and pursuant to the terms of such
Assignment and Assumption Agreement, the Assignor sells and assigns to the
Assignee, and the Assignee purchases and assumes from the Assignor, in each
case without recourse, representation or warranty (except as set forth in
the Assignment and Assumption Agreement), all of the Assignor's right,
title and interest in and to, and all of the Assignor's obligations with
respect to, the Assigned Share (as calculated herein), and the Assignor is
released from such obligations. The terms of the Assignment and Assumption
Agreement do not need to be physically attached to this Assignment
Execution Form.
1. Credit Agreement:
Title:
Date:
Name of Borrower(s):
Name of Agent:
(If more than one Agent, use name of Administrative Agent.)
2. Name of Assignor:
3. Name of Assignee:
4. Contract Date: __________, 199__. ____________ Agent's Confirmation
of Receipt.
(The Agent must enter the date of delivery to it of this
Assignment Execution Form, executed by Assignor and Assignee, and
MUST INITIAL AND RETURN A COPY OF THIS PAGE TO ASSIGNOR.)
5. Settlement Date: __________, 199__.
(Select the date payment is to be made; unless a different date
is written here, the Settlement Date will be 3 Business Days (5
Business Days if Borrower and/or other parties' consent is
required) after the Contract Date.) The Settlement Date may not
be earlier than the date specified in the preceding sentence
unless the Required Parties and the Agent consent in writing to
such earlier date.)
6. Assigned Share:
a. Total Credit
Agreement
Commitment for
All Lenders as of
Contract Date
$
b. Assigned Share
(9 decimal
places) %
c. Amount of
Assigned Share of
Total Commitments
(a ' b = c)
$
d. Total Credit
Agreement Amounts
Outstanding for
All Lenders as of
Contract Date
$
e. Outstanding
Amount of
Assigned
Revolving Loans $
(d ' b = e)
8. Sales Price of Assigned Share: See Schedule I (Schedule I may be
omitted when form is sent to the Agent and the Required Parties.)
Consent to/Acknowledged by
as of _______________, 19__: NAME OF ASSIGNOR
BT COMMERCIAL CORPORATION By:
as Agent Name:
Title:
Address for Notices:
By:
Name:
Title:
Telephone No:
Address for Notices: Fax No:
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000 Payment Instructions:
Attention:
Telephone No: (212) ________
Fax No: (212) ________
Consent to/Acknowledged by
as of _______________, 19__: NAME OF ASSIGNEE
WICKES LUMBER COMPANY, By:
as Borrower Name:
Title:
Address for Notices:
By:
Name:
Title: Telephone No:
Fax No:
Address for Notices:
000 X. Xxxxxxxx Xxxxx Lending Office:
Xxxxxx Xxxxx, Xxxxxxxx 00000
Telephone No: (000) 000-0000
Fax No: (000) 000-0000
Payment Instructions:
Schedule I
Attached to Assignment
Execution Form executed
by _______________________, as Assignor
and _______________________, as Assignee
Principal Amount to be paid for Assigned Share $_______________
Portion of Interest to be retained by Assignor _____ of 1%
per annum
Portion of _______________ Fee to be retained
by Assignor _____ of 1%
per annum
Upfront Fee to be paid to Assignee $_______________
Recordation Fee to be paid by Assignee $_______________
Any portion of interest or fees retained by the Assignor will be payable by
the Assignee to the Assignor on the day on which the applicable interest
and fees are paid under the Credit Agreement. The Assignee shall not be
relieved of its obligation to pay such amounts if the Assignee transfers
the Assigned Share to another party unless the Assignor executes an
agreement specifically releasing the Assignee from its obligations
hereunder.
EXHIBIT G
FORM OF NOTICE OF CONTINUATION
__________ ___, 199__
BT Commercial Corporation, as Agent
00 Xxxx Xxxxxx - Xxxxx X
Xxx Xxxx, Xxx Xxxx 00000
Attention:
Ladies and Gentlemen:
The undersigned, Wickes Lumber Company, a Delaware corporation
("Borrower"), refers to the Second Amended and Restated Credit Agreement,
dated as of April 8, 1997, among Borrower, certain financial institutions
parties thereto, Bankers Trust Company, as Issuing Bank, Nationsbank of
Georgia, N.A., as syndication agent, and BT Commercial Corporation, as
agent (the "Credit Agreement"). Capitalized terms used herein shall have
the meanings given in the Credit Agreement.
The Borrower hereby gives you irrevocable notice that it requests a
Continuation of Eurodollar Rate Loans under the Credit Agreement (the
"Proposed Continuation") as follows:
(i) The amount of Eurodollar Rate Loans, the last day of each
current Interest Period and proposed new Interest Period for each
Eurodollar Rate Loan covered by this request are as follows:
Date of Proposed Proposed New
Amount of Loan Conversion Interest Period
-------------- ---------------- ---------------
(ii) The aggregate amount of Eurodollar Rate Loans subject to such
Continuation is $_________________.
The undersigned hereby certifies that the following statements are
true on the date hereof, and will be true on the date of the Proposed
Continuation:
(A) the representations and warranties contained in the Credit
Agreement and in each other document executed in connection therewith
are true and correct in all material respects before and after giving
effect to the Proposed Continuation, as though made on and as of such
date, except to the extent that such representations and warranties
expressly relate solely to an earlier date (in which case such
representations and warranties shall have been true and accurate on
and as of such earlier date);
(B) no event has occurred and is continuing, or would result from
such Proposed Continuation, which constitutes a Default or an Event
of Default;
(C) no event has occurred which has had or could reasonably be
expected to have a Material Adverse Effect; and
(D) the Proposed Continuation satisfies all conditions and
limitations set forth in the Credit Agreement (including, without
limitation, availability under the Borrowing Base).
If notice of this Proposed Continuation has been given previously by
telephone, then this notice should be considered a written confirmation.
WICKES LUMBER COMPANY
By:
Name:
Title:
EXHIBIT H
FORM OF NOTICE OF CONVERSION
__________ ___, 199__
BT Commercial Corporation, as Agent
00 Xxxx Xxxxxx - Xxxxx X
Xxx Xxxx, Xxx Xxxx 00000
Attention:
Ladies and Gentlemen:
The undersigned, Wickes Lumber Company, a Delaware corporation
("Borrower"), refers to the Second Amended and Restated Credit Agreement,
dated as of April 8, 1997, among Borrower, certain financial institutions
parties thereto, Bankers Trust Company, as Issuing Bank, Nationsbank of
Georgia, N.A., as syndication agent, and BT Commercial Corporation, as
agent (the "Credit Agreement"). Capitalized terms used herein shall have
the meanings given such terms in the Credit Agreement.
The Borrower hereby gives you irrevocable notice that it requests a
Conversion of Revolving Loans of one Type into Revolving Loans of another
Type under the Credit Agreement (a "Proposed Conversion") as follows:
Conversion of Eurodollar Rate Loans to Prime Rate Loans
The amount of Revolving Loans and the last day of the current Interest
Period for Eurodollar Rate Loans for which Borrower requests Conversion
to Prime Rate Loans are as follows:
Amount of Loan End of Current Interest Period
Conversion of Prime Rate Loans to Eurodollar Rate Loans
The amount of Revolving Loans, the date of the Proposed Conversion, and
the proposed Interest Period for each Prime Rate Loan for which the
Borrower requests Conversion to a Eurodollar Rate Loan are as follows:
Date of Proposed Proposed New
Amount of Loan Conversion Interest Period
-------------- ---------------- ---------------
The undersigned hereby certifies that the following statements are
true on the date hereof, and will be true on the date of the Proposed
Borrowing:
(A) the representations and warranties contained in the Credit
Agreement and in each other document executed in connection therewith
are true and correct in all material respects before and after giving
effect to the Proposed Conversion, as though made on and as of such
date, except to the extent that such representations and warranties
expressly relate solely to an earlier date (in which case such
representations and warranties shall have been true and accurate on
and as of such earlier date);
(B) no event has occurred and is continuing, or would result from
such Proposed Conversion, which constitutes a Default or an Event of
Default; and
(C) no event has occurred which has had or could reasonably be
expected to have a Material Adverse Effect;
(D) the Proposed Conversion satisfies all conditions and
limitations set forth in the Credit Agreement.
If notice of this Proposed Conversion has been given previously by
telephone, then this notice should be considered a written confirmation.
WICKES LUMBER COMPANY
By:
Name:
Title:
EXHIBIT I
FORM OF BAILEE NOTICE
__________ __, 199_
[name of bailee]
[address]
RE; Notification of Security Interest in Bailed Goods
Dear ____________:
This notice is made with reference to bailed goods in your possession
subject to a xxxx of lading between __________________ and
_________________ dated _______________ and covering the following goods:
_________________________________________________________ (the
"Agreement"). A copy of the Agreement is attached hereto.
Please be advised that a security interest in the goods covered by
the Agreement was granted by the undersigned to BT Commercial Corporation,
as agent, 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, as secured party, who
now enjoys a security interest in these goods and all the rights, remedies,
and obligations of a secured party.
Notification is hereby given pursuant to Section 9-304(3) of the
Uniform Commercial Code of the above-named party's security interest in
these goods, and, in accordance with Section 9-305 of the Uniform
Commercial Code, you are to hold these goods for the benefit of the named
secured party, who shall henceforth be deemed to be in possession and
control of these goods which may not be released {except on the direction
and consent of the above-named secured party [with respect to deliveries of
goods in a jurisdiction in which the above-named secured party does not
have a perfected security interest in such goods by virtue of the filing of
a financing statement in such jurisdiction]} {upon delivery of the goods to
the undersigned as provided in the Agreement [with respect to deliveries of
goods in a jurisdiction in which the above-named secured party has a
perfected security interest in such goods by virtue of the filing of a
financing statement in such jurisdiction]}.
All charges and expenses incident to the transport, storage and care
of these goods remain in full force and effect and continue to be the
obligation of the undersigned. They will continue to be paid in a timely
manner as provided in the Agreement.
Sincerely,
WICKES LUMBER COMPANY
By:
Title:
Address: 000 X. Xxxxxxxx Xxxxx
Xxxxxx Xxxxx, Xxxxxxxx 00000
SCHEDULE C
Qualified Builders
SCHEDULE 8.9
Permitted Real Estate and Related Asset Sales
_______________________________
1. To be used for replacement Revolving Notes.
2. To be used for replacement Revolving Notes.
3. Attachment 1 must describe in detail the nature of the condition or
event, the period during which it has existed and the action the
Borrower proposes to take or has taken with respect thereto.
4. Attachment 2 must describe in detail the exceptions, if any, to the
statements contained in paragraphs (d) through (j) of the Certificate.
5. If the Assignee is organized under the laws of a jurisdiction outside
the United States.
