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EXHIBIT 10.1
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AMENDED AND RESTATED CREDIT AGREEMENT
among
XXXXXXXX-SONOMA, INC.,
as the Borrower,
BANK OF AMERICA, NATIONAL ASSOCIATION,
as administrative agent,
FLEET NATIONAL BANK,
as syndication agent,
THE BANK OF NEW YORK,
as documentation agent,
FIRST UNION NATIONAL BANK,
XXXXX FARGO BANK, N.A.,
and
BNP PARIBAS,
as co-agents,
and
the Lenders party hereto
dated as of
August 23, 2000
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BANC OF AMERICA SECURITIES LLC
Sole Lead Arranger and Sole Book Manager
[BANK OF AMERICA LOGO]
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TABLE OF CONTENTS
ARTICLE 1 - Definitions......................................................................1
Section 1.1 Definitions............................................................1
Section 1.2 Other Interpretive Provisions.........................................19
Section 1.3 Accounting Terms and Determinations...................................19
Section 1.4 Time of Day...........................................................20
ARTICLE 2 - Credit Facility.................................................................20
Section 2.1 Commitments...........................................................20
Section 2.2 Notes.................................................................21
Section 2.3 Repayment of Loan.....................................................22
Section 2.4 Use of Proceeds.......................................................22
Section 2.5 Termination or Reduction of Commitments...............................22
Section 2.6 Increase of Commitments...............................................22
ARTICLE 3 - Interest and Fees...............................................................23
Section 3.1 Interest Rate.........................................................23
Section 3.2 Determinations of Margins and Commitment Fee Rate.....................23
Section 3.3 Payment Dates.........................................................24
Section 3.4 Default Interest......................................................24
Section 3.5 Conversions and Continuations of Balances.............................25
Section 3.6 Commitment Fee........................................................25
Section 3.7 Administrative Fee....................................................25
Section 3.8 Computations..........................................................25
ARTICLE 4 - Administrative Matters..........................................................26
Section 4.1 Borrowing Procedure...................................................26
Section 4.2 Minimum Amounts.......................................................26
Section 4.3 Certain Notices.......................................................26
Section 4.4 Prepayments...........................................................28
Section 4.5 Method of Payment.....................................................29
Section 4.6 Pro Rata Treatment....................................................29
Section 4.7 Sharing of Payments...................................................30
Section 4.8 Non Receipt of Funds by the Agent.....................................30
ARTICLE 5 - Change in Circumstances.........................................................31
Section 5.1 Increased Cost and Reduced Return.....................................31
Section 5.2 Limitation on Libor Balances and IBOR Balances........................32
Section 5.3 Illegality............................................................33
Section 5.4 Treatment of Affected Balances........................................33
Section 5.5 Compensation..........................................................34
Section 5.6 Taxes.................................................................35
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ARTICLE 6 - Guaranties......................................................................36
Section 6.1 Guaranties............................................................36
Section 6.2 New Guarantors........................................................36
ARTICLE 7 - Conditions Precedent............................................................36
Section 7.1 Initial Advance.......................................................36
Section 7.2 All Advances..........................................................40
ARTICLE 8 - Representations and Warranties..................................................40
Section 8.1 Existence, Power and Authority........................................40
Section 8.2 Financial Condition...................................................41
Section 8.3 Corporate and Similar Action; No Breach...............................41
Section 8.4 Operation of Business.................................................42
Section 8.5 Litigation and Judgments..............................................42
Section 8.6 Rights in Properties; Liens...........................................42
Section 8.7 Enforceability........................................................42
Section 8.8 Approvals.............................................................42
Section 8.9 Debt..................................................................42
Section 8.10 Taxes.................................................................42
Section 8.11 Margin Securities.....................................................43
Section 8.12 ERISA.................................................................43
Section 8.13 Disclosure............................................................43
Section 8.14 Subsidiaries; Capitalization..........................................43
Section 8.15 Material Agreements...................................................44
Section 8.16 Compliance with Laws..................................................44
Section 8.17 Investment Company Act................................................44
Section 8.18 Public Utility Holding Company Act....................................44
Section 8.19 Environmental Matters.................................................44
Section 8.20 Broker's Fees.........................................................45
Section 8.21 Employee Matters......................................................45
Section 8.22 Solvency..............................................................46
ARTICLE 9 - Affirmative Covenants...........................................................46
Section 9.1 Reporting Requirements................................................46
Section 9.2 Maintenance of Existence; Conduct of Business.........................48
Section 9.3 Maintenance of Properties.............................................48
Section 9.4 Taxes and Claims......................................................48
Section 9.5 Insurance.............................................................49
Section 9.6 Inspection Rights.....................................................50
Section 9.7 Keeping Books and Records.............................................50
Section 9.8 Compliance with Laws..................................................50
Section 9.9 Compliance with Agreements............................................50
Section 9.10 Further Assurances....................................................51
Section 9.11 ERISA.................................................................51
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ARTICLE 10 - Negative Covenants.............................................................51
Section 10.1 Debt..................................................................51
Section 10.2 Limitation on Liens and Restrictions on Subsidiaries..................53
Section 10.3 Mergers, Etc..........................................................54
Section 10.4 Restricted Payments...................................................55
Section 10.5 Investments...........................................................55
Section 10.6 Limitation on Issuance of Capital Stock of Subsidiaries...............57
Section 10.7 Transactions with Affiliates..........................................57
Section 10.8 Disposition of Assets.................................................57
Section 10.9 Lines of Business.....................................................57
Section 10.10 Limitations on Restrictions Affecting the Borrower and its
Subsidiaries..........................................................57
Section 10.11 Environmental Protection..............................................58
Section 10.12 ERISA.................................................................58
ARTICLE 11 - Financial Covenants............................................................58
Section 11.1 Leverage Ratio........................................................58
Section 11.2 Fixed Charge Coverage Ratio...........................................59
Section 11.3 Minimum Tangible Net Worth............................................59
Section 11.4 Capital Expenditures..................................................59
ARTICLE 12 - Default........................................................................60
Section 12.1 Events of Default.....................................................60
Section 12.2 Remedies..............................................................62
Section 12.3 Performance by the Agent..............................................63
Section 12.4 Set-off...............................................................63
Section 12.5 Continuance of Default................................................63
ARTICLE 13 - The Agent......................................................................64
Section 13.1 Appointment and Authorization of the Agent............................64
Section 13.2 Delegation of Duties..................................................64
Section 13.3 Liability of the Agent................................................64
Section 13.4 Reliance by the Agent.................................................65
Section 13.5 Notice of Default.....................................................65
Section 13.6 Credit Decision; Disclosure of Information by the Agent...............65
Section 13.7 Indemnification of the Agent..........................................66
Section 13.8 The Agent in Individual Capacity......................................66
Section 13.9 Resignation of the Agent..............................................67
Section 13.10 Co-Agents; Lead Managers..............................................67
ARTICLE 14 - Miscellaneous..................................................................67
Section 14.1 Expenses..............................................................67
Section 14.2 Indemnity by the Borrower.............................................68
Section 14.3 Limitation of Liability...............................................68
Section 14.4 No Duty...............................................................68
Section 14.5 No Fiduciary Relationship.............................................69
Section 14.6 Equitable Relief......................................................69
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Section 14.7 No Waiver; Cumulative Remedies........................................69
Section 14.8 Binding Effect; Successors; Assignment................................69
Section 14.9 Survival..............................................................72
Section 14.10 Entire Agreement......................................................72
Section 14.11 Amendments and Waivers................................................72
Section 14.12 Maximum Interest Rate.................................................73
Section 14.13 Notices...............................................................73
Section 14.14 Governing Law; Venue; Service of Process..............................74
Section 14.15 Counterparts..........................................................75
Section 14.16 Severability..........................................................75
Section 14.17 Headings..............................................................75
Section 14.18 Construction..........................................................75
Section 14.19 Independence of Covenants.............................................75
Section 14.20 Waiver of Jury Trial..................................................75
Section 14.21 Confidentiality.......................................................75
Section 14.22 Foreign Lenders.......................................................76
Section 14.23 Amendment and Restatement.............................................77
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INDEX TO EXHIBITS
EXHIBIT A Form of Revolving Note
EXHIBIT B Form of Swingline Note
EXHIBIT C Form of Assignment and Acceptance
EXHIBIT D Form of Compliance Certificate
EXHIBIT E Form of Subsidiary Guaranty
EXHIBIT F Form of Notice of Borrowings, Conversions, Continuations,
or Prepayments
EXHIBIT G Form of Joinder Agreement
EXHIBIT H Form of Acknowledgment of Intercreditor Agreement
INDEX TO SCHEDULES
Schedule 7.1 Governmental Certificates
Schedule 8.4 Operation of Business
Schedule 8.5 Litigation and Judgments
Schedule 8.9 Debt
Schedule 8.10 Taxes
Schedule 8.12 ERISA Matters
Schedule 8.14 Subsidiaries; Capitalization
Schedule 8.15 Material Agreements
Schedule 8.19 Environmental Matters
Schedule 8.20 Broker's Fees
Schedule 8.21 Employee Matters
Schedule 10.2 Permitted Liens
Schedule 10.5 Investments
Schedule 14.13 Addresses for Notices
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AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT ("Agreement"), dated as of
August 23, 2000, is among XXXXXXXX-SONOMA, INC., a corporation duly organized
and validly existing under the laws of the State of California (the "Borrower"),
each of the banks or other lending institutions which is (or which may from time
to time become) a party hereto or any successor or assignee thereof pursuant to
Section 14.8(b) (individually, a "Lender" and, collectively, the "Lenders"), and
BANK OF AMERICA, NATIONAL ASSOCIATION, a national banking association, as
administrative agent for the Lenders (in its capacity as administrative agent,
together with its successors in such capacity, the "Agent").
R E C I T A L S:
A. The Borrower has requested that the Lenders extend a $200,000,000
unsecured credit facility to the Borrower in the form of a revolving credit
facility to refinance existing debt of the Borrower, finance capital
expenditures, provide working capital to the Borrower and its Subsidiaries, and
for other general corporate purposes.
B. The Lenders are willing to extend such credit to the Borrower upon
the terms and conditions set forth in this Agreement and the other Loan
Documents.
NOW THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree as follows:
ARTICLE 1
Definitions
Section 1.1 Definitions. Wherever used in this Agreement, the following
terms have the following meanings:
"Acknowledgment of Intercreditor Agreement" means an agreement, in
substantially the form of Exhibit H, entered into by a Lender pursuant to
Section 7.1(a)(vii) or an Eligible Assignee pursuant to Section 14.8(b).
"Affected Balances" has the meaning specified in Section 5.4.
"Affected Libor/IBOR Balances" has the meaning specified in Section 5.5.
"Affiliate" means, with respect to any Person, any other Person (a) that
directly or indirectly, through one or more intermediaries, controls or is
controlled by, or is under common control with, such Person; (b) that directly
or indirectly beneficially owns or holds ten percent (10.0%) or more of any
class of Capital Stock of such Person; or (c) ten percent (10.0%) or more of the
Capital Stock of which is directly or indirectly beneficially owned or held by
the Person in question. As used in this definition, the term "control" means the
possession, directly or indirectly, of the power to direct
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or cause direction of the management and policies of a Person, whether through
the ownership of Capital Stock, by contract, or otherwise; provided, however, in
no event shall the Agent or any Lender be deemed an Affiliate of the Borrower or
any Subsidiary of the Borrower.
"Agent" has the meaning specified in the introductory paragraph of this
Agreement.
"Agent-Related Persons" means the Agent (including any successor
administrative agent), each of the Agent's Affiliates (including, in the case of
Bank of America in its capacity as the Agent, the Arranger), and the officers,
directors, employees, agents, and attorneys-in-fact of such Persons and
Affiliates.
"Agent's Letter" means the certain letter agreement dated as of the
Closing Date among the Borrower, the Arranger, and Bank of America.
"Agreement" has the meaning specified in the introductory paragraph of
this Agreement, as the same may be amended, restated, or otherwise modified.
"Applicable Lending Office" means, for each Lender and for each Type of
Balance, the "Lending Office" of such Lender (or of an Affiliate of such Lender)
designated for such Type of Balance in Schedule 14.13 (or, with respect to a
Lender that becomes a party to this Agreement pursuant to an assignment made in
accordance with Section 14.8(b), in the Assignment and Acceptance executed by
it) or such other office of such Lender (or an Affiliate of such Lender) as such
Lender may from time to time specify to the Agent and the Borrower by written
notice in accordance with the terms hereof as the office by which advances of
such Type of Balance are to be made and maintained.
"Applicable Rate" has the meaning specified in Section 3.1.
"Arranger" means Banc of America Securities LLC, in its capacity as sole
lead arranger and sole book manager.
"Asset Disposition" means, with respect to any Person, the disposition,
whether a sale (including, without limitation, any sale/lease-back arrangement),
lease, assignment, transfer, or other voluntary disposition of any asset of such
Person (including, without limitation, the sale or other disposition of any
Capital Stock of any Subsidiary of such Person, but excluding any transaction
among any of the Borrower and any Guarantor or any Subsidiary that concurrently
therewith becomes a Guarantor) other than (a) sales of inventory in the ordinary
course of business, (b) asset dispositions which constitute an Investment
permitted by Section 10.5, (c) Permitted Sale-Leasebacks, and (d) sales of
equipment that is obsolete or no longer useful in the business of such Person
for an amount not in excess of $10,000,000.
"Assignment and Acceptance" means an assignment and acceptance, in
substantially the form of Exhibit C, entered into by a Lender and an Eligible
Assignee pursuant to Section 14.8(b) and accepted by the Borrower (if required)
and the Agent.
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"Attorney Costs" means and includes all reasonable fees and
disbursements of any law firm or other external counsel and the allocated cost
of internal legal services and all disbursements of internal counsel.
"Balance" means the any of the Base Rate Balance, a Libor Balance, or an
IBOR Balance.
"Bank of America" means Bank of America, National Association, and its
successors and assigns.
"Bankruptcy Code" has the meaning specified in Section 12.1(e).
"Base Rate" means for any day a fluctuating rate per annum equal to the
higher of (a) the Federal Funds Rate plus one-half of one percent (0.50%) and
(b) the rate of interest in effect for such day as publicly announced from time
to time by Bank of America as its "prime rate." Such rate is a rate set by Bank
of America based upon various factors including Bank of America's costs and
desired return, general economic conditions, and other factors, and is used as a
reference point for pricing some loans, which may be priced at, above, or below
such announced rate. Any change in such rate announced by Bank of America shall
take effect at the opening of business on the day specified in the public
announcement of such change.
"Base Rate Balance" means the portion of the Loan that bears interest at
a rate based upon the Base Rate.
"Base Rate Margin" has the meaning specified in Section 3.2.
"Borrower" has the meaning specified in the introductory paragraph of
this Agreement.
"Business Day" means any day other than a Saturday, Sunday, or other day
on which commercial banks are authorized to close under the Laws of, or are in
fact closed in, the state of Washington and, if such day relates to any Libor
Balance or IBOR Balance, means any such day on which dealings in Dollar deposits
are conducted by and between banks in the offshore Dollar interbank market.
"Capital Expenditures" means, for any period, all expenditures of the
Borrower and its Subsidiaries which are classified as capital expenditures in
accordance with GAAP, including, without limitation, the aggregate amount of all
such expenditures incurred during such period which constitute Capital Lease
Obligations.
"Capital Lease Obligations" means, as to any Person, the obligations of
such Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) real and/or personal Property, which obligations are
classified and accounted for as a capital lease on a balance sheet of such
Person in accordance with GAAP. For purposes of this Agreement, the amount of
such Capital Lease Obligations shall be the capitalized amount thereof,
determined in accordance with GAAP.
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"Capital Stock" means corporate stock and any and all shares,
partnership interests, limited liability company interests, membership
interests, equity interests, participations, rights, securities (excluding debt
securities), or other equivalent evidences (however designated) of ownership, or
any options, warrants, voting trust certificates, or other instruments
evidencing an ownership interest or a right to acquire an ownership interest in
a Person (however designated) issued by any entity (whether a corporation,
partnership, limited liability company, or other type of entity).
"Change of Control" means, with respect to any Person, an event or
series of events by which: (a) any "person" or "group" (as such terms are used
in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but
excluding any employee benefit plan of such Person or its Subsidiaries, or any
Person acting in its capacity as trustee, agent or other fiduciary, or
administrator of any such plan), becomes the "beneficial owner" (as defined in
Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a
Person shall be deemed to have "beneficial ownership" of all securities that
such Person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of fifty
percent (50.0%) or more of the membership interests of such Person; or (b)
during any period of twelve (12) consecutive months, a majority of the members
of the board of directors or other equivalent governing body of such Person
cease to be composed of individuals (i) who were members of that board or
equivalent governing body on the first day of such period, (ii) whose election
or nomination to that board or equivalent governing body was approved by
individuals referred to in clause (i) preceding constituting at the time of such
election or nomination at least a majority of that board or equivalent governing
body, or (iii) whose election or nomination to that board or other equivalent
governing body was approved by individuals referred to in clause (i) and clause
(ii) preceding constituting at the time of such election or nomination at least
a majority of that board or equivalent governing body.
"Closing Date" means the date of this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended, and the
regulations promulgated and rulings issued thereunder.
"Commitment" means, as to each Lender, the obligation of such Lender to
make advances of funds in an aggregate principal amount at any one time
outstanding up to but not exceeding the amount set forth opposite the name of
such Lender on the signature pages hereto (or if applicable, the most recent
Assignment and Acceptance executed by such Lender) under the heading
"Commitment", as the same may be reduced or terminated pursuant to Section 2.5
or Section 12.2. The aggregate amount of the Commitments as of the Closing Date
equals two hundred million Dollars ($200,000,000).
"Commitment Fee Rate" has the meaning specified in Section 3.2.
"Commitment Percentage" means, with respect to each Lender, the
percentage equivalent (carried to nine (9) decimal places) of a fraction, the
numerator of which is the aggregate amount of the Commitment of such Lender (or
if such Commitment has terminated or expired, the outstanding principal amount
of the Revolving Loan of such Lender with respect thereto), and the denominator
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of which is the aggregate amount of the Commitments of all of the Lenders (or if
such Commitments have terminated or expired, the outstanding principal amount of
the Revolving Loans of all of the Lenders with respect thereto).
"Compliance Certificate" means a certificate in substantially the form
of Exhibit D, properly completed and executed by the chief financial officer or
Vice President, Finance of the Borrower.
"Continue", "Continuation", and "Continued" shall refer to the
continuation pursuant to Section 3.5, from one Interest Period to the next
Interest Period, of a Libor Balance as a Libor Balance or of an IBOR Balance as
an IBOR Balance.
"Convert", "Conversion", and "Converted" shall refer to a conversion
pursuant to Section 3.5 or Article 5 of (a) Balances of one Type under the
Revolving Loan into Balances of the other Type under the Revolving Loan and (b)
Balances of one Type under the Swingline Advances into Balances of the other
Type under the Swingline Advances.
"Debt" means, with respect to any Person at any time (without
duplication): (a) all obligations of such Person for borrowed money; (b) all
obligations of such Person evidenced by bonds, notes, debentures, or other
similar instruments; (c) all obligations of such Person to pay the deferred
purchase price of property or services, except trade accounts payable of such
Person arising in the ordinary course of business that are not past due by more
than ninety (90) days or that are being contested in good faith by appropriate
proceedings diligently pursued and for which adequate reserves have been
established in accordance with GAAP; (d) all Capital Lease Obligations of such
Person; (e) Guarantees by such Person of indebtedness, liabilities, or
obligations of the kinds described in the clauses (a), (b), (c), (d), (f), (g),
(h), (i), (j), (k), and (l) of this definition; (f) all indebtedness,
liabilities, and obligations of the types described in the foregoing clauses (a)
through (e) secured by a Lien existing on Property owned by such Person, whether
or not the indebtedness, liabilities, and obligations secured thereby have been
assumed by such Person or are non-recourse to such Person; provided, however,
that the amount of such Debt of any Person described in this clause (f) shall,
for purposes of this Agreement, be deemed to be equal to the lesser of (i) the
aggregate unpaid amount of such Debt or (ii) the fair market value of the
Property encumbered, as determined by the Agent in its discretion; (g) all
reimbursement obligations of such Person (whether contingent or otherwise) in
respect of letters of credit, bankers' acceptances, surety or other bonds, and
similar instruments; (h) all liabilities of such Person in respect of unfunded
vested benefits under any Plan (excluding obligations to deliver stock in
respect of stock options or stock ownership plans); (i) all vested obligations
of such Person for the payment of money under any earn-out, noncompete,
consulting, or similar arrangements providing for the deferred payment of the
purchase price for any property to the extent that any such obligations are,
according to GAAP, reflected as a capitalized liability on a balance sheet of
such Person; (j) all obligations of such Person to redeem or retire shares of
Capital Stock of such Person; (k) all indebtedness, liabilities, and obligations
of such Person under any Hedge Agreement; and (l) the principal balance
outstanding under any synthetic lease, tax retention operating lease, off
balance sheet loan, or similar off balance sheet financing product to which such
Person is a party, where such transaction is considered borrowed money
indebtedness for tax purposes but is classified as an operating lease in
accordance with GAAP. The Debt of any Person shall include the Debt of any
partnership or joint venture in which
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such Person is a general partner or a joint venturer, but only to the extent to
which there is recourse to such Person for payment of such Debt.
"Default" means an Event of Default or the occurrence of an event or
condition which with notice or lapse of time or both would become an Event of
Default.
"Default Rate" means, in respect of any principal of the Loan or any
other amount payable by the Borrower under any Loan Document, a rate per annum
equal to the sum of two percent (2.00%), plus the Applicable Rate for the Base
Rate Balance as in effect from time to time (provided that for amounts
outstanding as Libor Balances or IBOR Balances, the "Default Rate" for such
principal shall be two percent (2.00%), plus the Applicable Rate for each Libor
Balance or IBOR Balance, as applicable, for the remainder of the applicable
Interest Period as provided in Section 3.1, and, thereafter, the rate provided
for above in this definition).
"Dollars" and "$" mean lawful money of the U.S.
"EBITDAR" means, for any period, the total of the following calculated
for the Borrower, without duplication, on a consolidated basis for such period:
(a) Net Income; plus (b) any provision for (or less any benefit from) income or
franchise taxes to the extent included in the determination of Net Income; plus
(c) Interest Expense to the extent included in the determination of Net Income;
plus (d) amortization and depreciation expense to the extent included in the
determination of Net Income; plus (e) other non-cash, non-recurring charges to
the extent included in the determination of Net Income; minus (f) other
non-recurring gains to the extent included in the determination of Net Income;
plus (g) all lease and rent expense for any real Property or personal Property
to the extent included in the determination of Net Income.
"Eligible Assignee" means (a) a financial institution organized under
the laws of the U.S., or any state thereof, and having a combined capital and
surplus of at least $100,000,000, (b) a commercial bank organized under the laws
of any other country which is a member of the Organization for Economic
Cooperation and Development, or a political subdivision of any such country, and
having a combined capital and surplus of at least $100,000,000; provided that
such bank is acting through a branch or agency located in the U.S., (c) a Person
that is primarily engaged in the business of commercial banking and that is (i)
a Subsidiary of a Lender, (ii) a Subsidiary of a Person of which a Lender is a
Subsidiary, or (iii) a Person of which a Lender is a Subsidiary, (d) another
Lender, (e) any other entity which is an "accredited investor" (as defined in
Regulation D under the Securities Act of 1933, as amended) which extends credit
or buys loans as one of its businesses, including, but not limited to, insurance
companies, mutual funds, and lease financing companies, or (f) other lenders or
institutional investors consented to in writing in advance by the Agent and the
Borrower. Neither the Borrower nor any Affiliate of the Borrower shall be an
Eligible Assignee. Without the Borrower's written consent, no Person whose
non-lending businesses compete with those of the Borrower and its Subsidiaries
shall be an Eligible Assignee.
"Environmental Laws" means any and all federal, state, and local laws,
regulations, and requirements regulating health, safety, or the environment, as
such laws, regulations, and requirements may be amended or supplemented from
time to time.
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"Environmental Liabilities" means, as to any Person, all indebtedness,
liabilities, obligations, responsibilities, Remedial Actions, losses, damages,
punitive damages, consequential damages, treble damages, costs, and expenses
(including, without limitation, all reasonable fees, disbursements, and expenses
of counsel, expert and consulting fees, and costs of investigation and
feasibility studies), fines, penalties, sanctions, and interest incurred as a
result of any claim or demand, by any Person, whether based in contract, tort,
implied or express warranty, strict liability, or criminal or civil statute,
including, without limitation, any Environmental Law, Permit, order, or
agreement with any Governmental Authority or other Person, arising from
environmental, health, or safety conditions, or the Release or threatened
Release of a Hazardous Material into the environment.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations and published interpretations
thereunder.
"ERISA Affiliate" means any corporation or trade or business which is a
member of the same controlled group of corporations (within the meaning of
Section 414(b) of the Code) as the Borrower or any Subsidiary of the Borrower or
is under common control (within the meaning of Section 414(c) of the Code) with
the Borrower or any Subsidiary of the Borrower.
"Eurodollar Reserve Percentage" means, for any day during any Interest
Period, the reserve percentage (expressed as a decimal, rounded upward to the
next 1/100th of 1%) in effect on such day, whether or not applicable to any
Lender, under regulations issued from time to time by the Board of Governors of
the Federal Reserve System for determining the maximum reserve requirement
(including any emergency, supplemental, or other marginal reserve requirement)
with respect to Eurocurrency funding (currently referred to as "Eurocurrency
liabilities"). The Libor Rate for each outstanding Libor Balance and the IBOR
Rate for each outstanding IBOR Balance shall be adjusted automatically as of the
effective date of any change in the Eurodollar Reserve Percentage. The
determination of the Eurodollar Reserve Percentage by the Agent with respect to
the Libor Rate and by Bank of America with respect to the IBOR Rate shall be
conclusive in the absence of manifest error.
"Event of Default" has the meaning specified in Section 12.1.
"Federal Funds Rate"means, for any day, the rate per annum (rounded
upwards to the nearest 1/100 of 1%) equal to the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers on such day, as published by the
Federal Reserve Bank on the Business Day next succeeding such day; provided that
(a) if such day is not a Business Day, the Federal Funds Rate for such day shall
be such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, (b) if no such rate is so
published on such next succeeding Business Day, the Federal Funds Rate for such
day shall be the average rate charged to Bank of America on such day on such
transactions as determined by the Agent, and (c) with respect to determination
of the IBOR Rate as of any day and for any Interest Period, the rate for Federal
funds transactions of a duration of such Interest Period as determined in
accordance with clause (a) and clause (b) preceding by Bank of America.
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"Fiscal Period" means one of the three fiscal periods in a Fiscal
Quarter each of which is approximately one calendar month in duration. There are
twelve (12) Fiscal Periods in a Fiscal Year.
"Fiscal Quarters" means one of four thirteen (13) week or, if
applicable, fourteen (14) week quarters in a Fiscal Year, with the first of such
quarters beginning on the first day of a Fiscal Year and ending on the Sunday of
the thirteenth (or fourteenth, if applicable) week in such quarter.
"Fiscal Year" means the Borrower's fiscal year for financial accounting
purposes beginning on the Monday following the Sunday nearest January 31 of each
year and ending on the Sunday nearest January 31 of the following year. The
current Fiscal Year of the Borrower will end on January 28, 2001.
"Fixed Charge Coverage Ratio" means, for any period and determined on a
consolidated basis for the Borrower and its Subsidiaries, the ratio of (a)
EBITDAR for such period to (b) the sum of each of the following for such period
(i) Interest Expense to the extent included in the determination of Net Income,
plus (ii) lease and rent expense for any real Property or personal Property,
plus (iii) scheduled principal payments on long term Debt (including Capital
Leases) arising during such period.
"Foreign Lender" means any Lender that is a "foreign corporation,
partnership, or trust" within the meaning of the Code.
"Funded Debt" means, with respect to any Person (the "subject Person")
at any time (without duplication): (a) Debt described in clauses (a), (b), (c),
(d), (f), (g) other than Debt consisting of Undrawn Letters of Credit, and (j)
of the definition of Debt; and (b) Guarantees by the subject Person of Funded
Debt (as described in clause (a) preceding) of any other Person.
"GAAP" means generally accepted accounting principles, applied on a
"consistent basis" (as such phrase is interpreted in accordance with Section
1.3), as set forth in Opinions of the Accounting Principles Board of the
American Institute of Certified Public Accountants and/or in statements of the
Financial Accounting Standards Board and/or their respective successors and
which are applicable in the circumstances as of the date in question.
"Governmental Authority" means any nation or government, any federal,
state, county, municipal, parish, provincial, township, or other political
subdivision thereof, and any department, commission, board, court, agency, or
other instrumentality or entity exercising executive, legislative, judicial,
regulatory, or administrative functions of or pertaining to government.
"Guarantee" means any indebtedness, liability, or obligation, contingent
or otherwise, of any Person directly or indirectly guaranteeing any Debt or
other obligation of any other Person or indemnifying such other Person for any
Debt or other obligation and, without limiting the generality of the foregoing,
any obligation, direct or indirect, contingent or otherwise, of such Person (a)
to purchase or pay (or advance or supply funds for the purchase or payment of)
such Debt or other obligation (whether arising by virtue of partnership
arrangements, by agreement to keep-well, to purchase assets, goods, securities
or services, to take-or-pay, or to maintain financial statement
Page 8
15
conditions or otherwise) or (b) entered into for the purpose of assuring in any
other manner the obligee of such Debt or other obligation of the payment thereof
or to protect the obligee against loss in respect thereof (in whole or in part),
provided that the term Guarantee shall not include endorsements for collection
or deposit in the ordinary course of business. The amount of any Guarantee shall
be deemed to be equal to the lesser of (y) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such Guarantee
is made or (z) the maximum amount for which such guaranteeing Person may be
liable pursuant to the terms of the instrument embodying such Guarantee, unless
such primary obligation and the maximum amount for which such guaranteeing
Person may be liable are not stated or determinable, in which case the amount of
such Guarantee shall be such guaranteeing Person's maximum reasonably
anticipated liability in respect thereof as mutually determined by the Borrower
and the Agent in good faith. The term "Guarantee" used as a verb has a
corresponding meaning.
"Guarantor" means any Person who is or becomes a party to any Guaranty
of the Obligations or any part thereof, including each Subsidiary of the
Borrower who is a party to the Subsidiary Guaranty pursuant to the terms of
Article 6.
"Guaranty" means the Subsidiary Guaranty or any other guaranty agreement
executed and delivered by a Person in favor of the Agent, for the benefit of the
Agent and the Lenders, and any and all amendments, restatements, or other
modifications thereof, and "Guaranties" means all of such agreements,
collectively.
"Hazardous Material" means any substance, product, waste, pollutant,
chemical, contaminant, insecticide, pesticide, constituent, or material which is
or becomes listed, regulated, or addressed under any Environmental Law as a
result of its hazardous or toxic nature.
"Hedge Agreement" means any agreement, device, or arrangement designed
to protect a Person from the fluctuations of interest rates, exchange rates, or
forward rates applicable to its assets, liabilities, or exchange transactions,
including, but not limited to, dollar-denominated or cross-currency interest
rate exchange agreements, forward currency exchange agreements, interest rate
cap, swap, or collar protection agreements, and forward rate currency or
interest rate options, as the same may be amended or modified and in effect from
time to time, and any cancellation, buy-back, reversal, termination, or
assignment of any of the foregoing.
"IBOR Balance" means any portion of the Swingline Advances that bears
interest at a rate based upon the IBOR Rate.
"IBOR Base Rate" means the interest rate at which Bank of America's
Grand Cayman Banking Center, Grand Cayman, British West Indies, would offer
Dollar deposits for the applicable Interest Period to other major banks in the
offshore Dollar interbank market.
"IBOR Interest Period" means with respect to any IBOR Balance, each
period commencing on the date such Balance is established or Continued, or
Converted from the Base Rate Balance under the Swingline Advances to an IBOR
Balance, or the last day of the next preceding Interest Period with respect to
such IBOR Balance, and ending one, two, three, four, five, six, or seven days
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16
thereafter, as the Borrower may select as provided in Section 3.5 or Section
4.3. Notwithstanding the foregoing: (a) each IBOR Interest Period shall end on a
Business Day; (b) no Interest Period may extend beyond the Maturity Date; and
(c) no more than three (3) IBOR Interest Periods shall be in effect at the same
time.
"IBOR Rate"means, with respect to any IBOR Balance for the relevant
Interest Period, a rate per annum determined by Bank of America pursuant to the
following formula:
IBOR Rate = IBOR Base Rate
------------------------------------
1.00 - Eurodollar Reserve Percentage
"IBOR Rate Margin" has the meaning specified in Section 3.2.
"Indemnified Liabilities" has the meaning specified in Section 14.2.
"Intellectual Property" means any U.S. or foreign patents, patent
applications, trademarks, trade names, service marks, brand names, logos and
other trade designations (including, without limitation, unregistered names and
marks), trademark and service xxxx registrations and applications, copyrights
and copyright registrations and applications, inventions, invention disclosures,
protected formulae, formulations, processes, methods, trade secrets, computer
software, computer programs and source codes, manufacturing research and similar
technical information, engineering know-how, customer and supplier information,
assembly and test data drawings, or royalty rights.
"Interest Expense" means, for any period and for any Person, the sum of
(a) interest expense of such Person calculated without duplication on a
consolidated basis for such period in accordance with GAAP, plus (b) interest
expenses paid under Hedge Agreements during such period, minus (c) interest
payments received under Hedge Agreements during such period.
"Interest Period" means a Libor Interest Period or an IBOR Interest
Period, as applicable.
"Investments" has the meaning specified in Section 10.5.
"Joinder Agreement" means an agreement to be executed by a Person
pursuant to the terms of Section 6.2, in substantially the form of Exhibit G.
"Lender" has the meaning specified in the introductory paragraph of this
Agreement.
"Leverage Ratio" means, as of any period end and determined on a
consolidated basis for the Borrower and its Subsidiaries, the ratio of (a) Total
Adjusted Funded Debt to (b) EBITDAR.
"Libor Balance" means any portion of the Revolving Loan that bears
interest at a rate based upon the Libor Rate.
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"Libor Base Rate" means, for such Interest Period (a) the rate per annum
equal to the rate determined by the Agent to be the offered rate that appears on
page 3750 of the Telerate screen or such other page that displays an average
British Bankers Association Interest Settlement Rate for deposits in Dollars
(for delivery on the first day of such Interest Period) with a term equivalent
to such Interest Period, determined as of approximately 11:00 a.m. (London time)
two (2) Business Days prior to the first day of such Interest Period, (b) in the
event the rate referenced in the preceding clause (a) does not appear on such
page or service or such page or service shall cease to be available, the rate
per annum equal to the rate determined by the Agent to be the offered rate on
such other page or other service that displays an average British Bankers
Association Interest Settlement Rate for deposits in Dollars (for delivery on
the first day of such Interest Period) with a term equivalent to such Interest
Period, determined as of approximately 11:00 a.m. (London time) two (2) Business
Days prior to the first day of such Interest Period, or (c) in the event the
rates referenced in clause (a) or clause (b) preceding are not available, the
rate per annum determined by the Agent as the rate of interest (rounded upward
to the next 1/100th of 1%) at which deposits in Dollars for delivery on the
first day of such Interest Period in same day funds in the approximate amount of
the Libor Balance being advanced, Continued, or Converted by the Agent (or its
Affiliate) in its capacity as a Lender and with a term equivalent to such
Interest Period would be offered by Bank of America's London Branch to major
banks in the offshore Dollar market at their request at approximately 11:00 a.m.
(London time) two (2) Business Days prior to the first day of such Interest
Period. The determination of the Libor Base Rate by the Agent shall be
conclusive in the absence of manifest error.
"Libor Interest Period" means with respect to any Libor Balance, each
period commencing on the date such Balance is established or Continued, or
Converted from the Base Rate Balance to a Libor Balance, or the last day of the
next preceding Libor Interest Period with respect to such Libor Balance, and
ending one week thereafter or on the numerically corresponding day in the first,
second, third, or sixth calendar month thereafter, as the Borrower may select as
provided in Section 3.5 or Section 4.3, except that each such Libor Interest
Period which commences on the last Business Day of a calendar month (or on any
day for which there is no numerically corresponding day in the appropriate
subsequent calendar month) shall end on the last Business Day of the appropriate
subsequent calendar month. Notwithstanding the foregoing: (a) each Libor
Interest Period which would otherwise end on a day which is not a Business Day
shall end on the next succeeding Business Day (or if such succeeding Business
Day falls in the next succeeding calendar month, on the next preceding Business
Day); (b) any Libor Interest Period which would otherwise extend beyond the
Maturity Date shall end on the Maturity Date; (c) no more than ten (10) Libor
Interest Periods shall be in effect at the same time; and (d) no Libor Interest
Period for any Libor Balance shall have a duration of less than one (1) week
and, if the Libor Interest Period would otherwise be a shorter period, the
related Libor Balance shall not be available hereunder.
"Libor Rate"means, with respect to any Libor Balance for the relevant
Interest Period, a rate per annum determined by the Agent pursuant to the
following formula:
Libor Rate = Libor Base Rate
------------------------------------
1.00 - Eurodollar Reserve Percentage
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"Libor Rate Margin" has the meaning specified in Section 3.2.
"Lien" means any lien, mortgage, security interest, tax lien, pledge,
charge, hypothecation, assignment, preference, priority, or other encumbrance of
any kind or nature whatsoever (including, without limitation, any conditional
sale or title retention agreement), whether arising by contract, operation of
law, or otherwise.
"Loan" means the Revolving Loan and the Swingline Advances.
"Loan Documents" means this Agreement, the Notes, the Subsidiary
Guaranty, any Joinder Agreement, any Hedge Agreement between the Borrower and
any Lender with respect to the Loan, and all other agreements, documents, and
instruments now or hereafter executed and/or delivered pursuant to or in
connection with any of the foregoing, and any and all amendments, modifications,
supplements, renewals, extensions, or restatements thereof (excluding any
commitment letter, term sheet, or other agreement entered into prior to the
Closing Date).
"Margin Adjustment Date" has the meaning specified in Section 3.2.
"Material Adverse Effect" means any material adverse effect, or the
occurrence of any event or the existence of any condition that could reasonably
be expected to have a material adverse effect, on (a) the business or financial
condition, prospects, performance, or operations of the Borrower individually or
the Borrower and its Subsidiaries taken as a whole, (b) the ability of the
Borrower individually or the Borrower and its Subsidiaries taken as a whole to
pay and perform the obligations for which it or they, as applicable, are
responsible when due, or (c) the validity or enforceability of (i) any of the
Loan Documents or (ii) the rights and remedies of the Agent or the Lenders under
any of the Loan Documents.
"Maturity Date" means the day which is the third anniversary of the
Closing Date.
"Maximum Rate" has the meaning specified in Section 14.12.
"Multiemployer Plan" means a multiemployer plan defined as such in
Section 3(37) of ERISA to which contributions have been made by the Borrower or
any ERISA Affiliate at any time within the six (6) year period preceding the
date hereof or hereafter and which is covered by Title IV of ERISA.
"Net Income" means, for any period and any Person, such Person's
consolidated net income (or loss) determined in accordance with GAAP, but
excluding the income of any other Person (other than Subsidiaries) in which such
Person or any Subsidiary of such Person has an ownership interest, unless
received by such Person or a Subsidiary of such Person in a cash distribution.
"Net Proceeds" means (a) in connection with any disposition of Property
of the Borrower or any of its Subsidiaries, the cash proceeds received by such
Person from such disposition (including, without limitation, payments under
notes or other debt Securities received in connection with any such disposition,
but only as and when received) net of (i) the costs of such disposition
(including
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reasonable, out-of-pocket professional fees and expenses, investment banking
fees, financial advisory fees, taxes, notarial fees, survey costs, title
insurance premiums, required escrow deposits, and purchase price adjustments and
other customary fees and expenses, in each case attributable to and actually
paid in connection with such disposition), and (ii) amounts applied to repayment
of Debt (other than the Obligations) secured by a Lien on the Property disposed
of and (b) in connection with issuance of any Securities, the cash proceeds
received from such issuance, net of all costs of such issuance (including,
without limitation, reasonable, out-of-pocket professional fees and expenses,
notarial fees, underwriting discounts and commissions, placement, underwriting,
or arrangement fees, and other customary fees and expenses) actually paid.
"Note Agreement" means that certain Note Agreement Re: $40,000,000 7.20%
Senior Notes Due August 8, 2005, dated as of August 1, 1995, entered into by the
Borrower and the "Purchasers" party thereto and each other agreement, document,
or instrument entered into or delivered in connection therewith, as such
agreements, documents, and instruments may be amended, restated, or otherwise
modified from time to time.
"Notes" means the Revolving Notes and the Swingline Note.
"Obligations" means any and all (a) obligations, indebtedness, and
liabilities of the Borrower to the Agent and the Lenders, or any of them,
arising pursuant to this Agreement or any other Loan Document, whether now
existing or hereafter arising, whether direct, indirect, fixed, contingent,
liquidated, unliquidated, joint, several, or joint and several, including,
without limitation, the obligation of the Borrower to repay the Loan, interest
on the Loan, and all fees, costs, and expenses (including, without limitation,
Attorney Costs) provided for in the Loan Documents, and (b) indebtedness,
liabilities, and obligations of the Borrower under any Hedge Agreement that the
Borrower may enter into with the Agent, any Lender, or any of their respective
Affiliates if and to the extent that such Hedge Agreement is permitted in
accordance with Section 10.1(i).
"Offering Memorandum" means the certain Confidential Offering Memorandum
dated July 2000, prepared and distributed by the Arranger with respect to the
syndication of the Commitments and the Loan evidenced by this Agreement.
"Original Agreement" means that certain Credit Agreement, dated as of
June 1, 1997, among the Borrower, Bank of America National Trust and Savings
Association (now known as Bank of America, National Association), as agent, and
the "Banks" party thereto which originally provided for credit facilities in an
aggregate principal amount of $90,000,000 and each of the other agreements,
documents, or instruments executed or delivered in connection therewith.
"Other Taxes" has the meaning specified in Section 5.6(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to all or any of its functions under ERISA.
"Permit" means any permit, certificate, approval, order, license, or
other authorization.
Page 13
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"Permitted Acquisition" means any acquisition of the Capital Stock of a
Person or any acquisition of Property which constitutes a significant or
material portion of an existing business of a Person, in each case, in a
transaction that satisfies each of the following requirements:
(a) No Default; Certificate of Compliance. Both before and after
giving effect to such acquisition and any advance of the Loan requested
to be made in connection therewith, no Default exists or will exist or
would result therefrom, and, not less than five (5) Business Days prior
to the date of such acquisition, the Borrower shall provide the Agent
and the Lenders with a certificate duly executed by the chief financial
officer or Vice President, Finance of the Borrower which represents and
warrants pro forma compliance with each of the terms and covenants of
this Agreement as of the date of and after giving effect to such
acquisition;
(b) Consideration. The purchase price to be paid by the Borrower
or its applicable Subsidiary in connection with any such acquisition
shall not (i) with respect to cash consideration paid (whether
classified as purchase price, noncompete payments, or otherwise and
without regard to whether such amount is paid at closing or paid over
time and the Dollar value of all other assets, including Capital Stock
of the Borrower, to be transferred by the purchaser in connection with
such acquisition to the seller or sellers, all valued in accordance with
the applicable agreement entered into between the Target and/or the
seller and the purchaser) and the amount of any Debt incurred, assumed,
or acquired by the Borrower or a Subsidiary of the Borrower in
connection with such acquisition, exceed fifteen percent (15.0%) of the
Borrower's Tangible Net Worth at the time of such acquisition, (ii) with
respect to consideration paid in Capital Stock of the Borrower or any
Subsidiary of the Borrower, exceed twenty percent (20.0%) of the
Borrower's Tangible Net Worth at the time of such acquisition, or (iii)
with respect to acquisitions for a combination of cash and non-cash
consideration exceed the limits set forth in clause (i) and clause (ii),
preceding respectively, and the purchase price to be paid by the
Borrower or its applicable Subsidiary in connection with all such
acquisitions shall not exceed $100,000,000 in the aggregate whether paid
in cash, constituting Debt incurred, assumed, or acquired, or paid in
Capital Stock of the Borrower or any Subsidiary of the Borrower;
(c) Diligence. The Borrower has completed due diligence to its
satisfaction on the Target or the Property to be acquired and has
provided the Agent and the Lenders with copies of all agreements and
information (including, without limitation, due diligence materials)
entered into or received by the Borrower or requested by the Agent or
any Lender, as the Agent or any Lender may reasonably request;
(d) Structure. If the proposed acquisition is an acquisition of
the Capital Stock of a Target, the acquisition will be structured so
that the Target will become a Wholly-Owned Subsidiary; and, if the
proposed acquisition is an acquisition of assets, the acquisition will
be structured so that the Borrower or a Wholly-Owned Subsidiary shall
acquire such assets;
Page 14
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(e) Material Adverse Effect. Neither the Borrower nor any of its
Subsidiaries shall, as a result of or in connection with any such
acquisition, assume or incur any contingent liabilities (whether
relating to environmental, tax, litigation or other matters) that could
reasonably be expected, as of the date of such acquisition, to result in
the existence or occurrence of a Material Adverse Effect; and
(f) Lines of Business. The Target shall be engaged in
substantially the same line or lines of business, or a business
reasonably related or complementary thereto, as the Borrower and its
Subsidiaries.
"Permitted Liens" means the Liens permitted by Section 10.2.
"Permitted Sale-Leaseback" means a transaction designed to reduce state
tax liability whereby the Borrower or one of its Subsidiaries sells Property to
another Person which finances the purchase price of such Property by selling
notes to, or otherwise borrowing from, the Borrower or one of its Subsidiaries
and leases such Property to the seller in an operating lease transaction.
"Person" means any individual, corporation, limited liability company,
business trust, association, company, partnership, joint venture, Governmental
Authority, or other entity.
"Plan" means any employee benefit plan established or maintained by the
Borrower or any ERISA Affiliate and which is subject to Title IV of ERISA.
"Principal Office" means the office of the Agent, located at 000 Xxxxx
Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000.
"Prohibited Transaction" means any transaction described in Section 406
or 407 of ERISA or Section 4975(c)(1) of the Code for which no statutory or
administrative exemption applies.
"Projections" means the Borrower's forecasted consolidated (a) balance
sheets, (b) profit and loss statements, (c) cash flow statements, and (d)
capitalization statements, all materially consistent with the Borrower's
historical financial statements, together with appropriate supporting details
and a statement of underlying assumptions.
"Property" means, for any Person, property or assets of all kinds, real,
personal, or mixed, tangible or intangible (including, without limitation, all
rights relating thereto), whether owned or acquired on or after the Closing
Date.
"Quarterly Payment Date" means the last Business Day of each March,
June, September, and December of each year, the first of which shall be
September 29, 2000.
"Register" has the meaning specified in Section 14.8(f).
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22
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as the same may be amended, modified, or supplemented
from time to time or any successor regulation therefor.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System as the same may be amended, modified, or supplemented
from time to time or any successor regulation therefor.
"Regulatory Change" means, with respect to any Lender, any change after
the date of this Agreement (other than with respect to taxes excluded by the
first sentence of Section 5.6(a)) in U.S. federal, state, or foreign laws or
regulations (including, without limitation, Regulation D) or the adoption or
making after such date of any interpretations, directives, or requests (other
than with respect to taxes excluded by the first sentence of Section 5.6(a))
applying to a class of lenders including such Lender of or under any U.S.
federal or state, or any foreign, laws or regulations (whether or not having the
force of law) by any Governmental Authority or monetary authority charged with
the interpretation or administration thereof.
"Release" means, as to any Person, any release, spill, emission,
leaking, pumping, injection, deposit, disposal, disbursement, leaching, or
migration of Hazardous Materials into the indoor or outdoor environment or into
or from Property owned or leased by such Person, including, without limitation,
the migration of Hazardous Materials through or in the air, soil, surface water,
ground water, or property, in violation of Environmental Laws.
"Remedial Action" means all actions required under applicable
Environmental Laws to (a) cleanup, remove, treat, or otherwise address Hazardous
Materials in the indoor or outdoor environment, (b) prevent the Release or
threat of Release or minimize the further Release of Hazardous Materials, or (c)
perform pre-remedial studies and investigations and post-remedial monitoring and
care; provided that "Remedial Action" shall not include such actions taken in
the normal course of business and in material compliance with Environmental
Laws.
"Reportable Event" means any of the events set forth in Section 4043 of
ERISA for which the 30-day notice requirement has not been waived by the PBGC.
"Required Lenders" means any combination of Lenders having more than
fifty percent (50.0%) of the sum of the Commitments or, if the Commitments have
terminated, the outstanding principal amount of the Revolving Loan.
"Revolving Loan" means, as to any Lender, the advances made by such
Lender pursuant to Section 2.1 (other than Swingline Advances), and, as to all
Lenders, all such advances made or held by the Lenders pursuant to Section 2.1.
"Revolving Notes" means the promissory notes provided for by Section 2.2
(other than the Swingline Note) and all amendments, restatements, or other
modifications thereof.
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"Securities" means any stock, shares, options, warrants, voting trust
certificates, or other instruments evidencing an ownership interest or a right
to acquire an ownership interest in a Person or any bonds, debentures, notes, or
other evidences of indebtedness for borrowed money, secured or unsecured.
"Solvent" means, with respect to any Person as of the date of any
determination, that on such date (a) the fair value of the Property of such
Person (both at fair valuation and at present fair saleable value) is greater
than the total liabilities, including, without limitation, contingent
liabilities, of such Person, (b) the present fair saleable value of the assets
of such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured, (c) such Person is able to realize upon its assets and pay its debts
and other liabilities, contingent obligations, and other commitments as they
mature in the normal course of business, (d) such Person does not intend to, and
does not believe that it will, incur debts or liabilities beyond such Person's
ability to pay as such debts and liabilities mature, and (e) such Person is not
engaged in business or a transaction, and is not about to engage in business or
a transaction, for which such Person's property would constitute unreasonably
small capital after giving due consideration to current and anticipated future
capital requirements and current and anticipated future business conduct and the
prevailing practice in the industry in which such Person is engaged. In
computing the amount of contingent liabilities at any time, such liabilities
shall be computed at the amount which, in light of the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.
"Subsidiary" means, (a) when used to determine the relationship of a
Person (the "parent") to another Person, a Person (the "subsidiary") of which an
aggregate of more than fifty percent (50.0%) or more of the Capital Stock is
owned of record or beneficially by the parent, or by one or more Subsidiaries of
the parent, or by the parent and one or more Subsidiaries of the parent, (i) if
the holders of such Capital Stock (A) are ordinarily, in the absence of
contingencies, entitled to vote for the election of a majority of the directors
(or other individuals performing similar functions) of the subsidiary, even
though the right so to vote has been suspended by the happening of such a
contingency, or (B) are entitled, as such holders, to vote for the election of a
majority of the directors (or individuals performing similar functions) of the
subsidiary, whether or not the right so to vote exists by reason of the
happening of a contingency, or (ii) in the case of Capital Stock which is not
issued by a corporation, if such ownership interests constitute a majority
voting interest, and (b) when used with respect to a Plan, ERISA, or a provision
of the Code pertaining to employee benefit plans, means, with respect to the
parent, any corporation, trade, or business (whether or not incorporated) which
is under common control with the parent and is treated as a single employer with
the parent under Section 414(b) or Section 414(c) of the Code and the
regulations thereunder.
"Subsidiary Guarantor" means a Subsidiary of the Borrower which is a
Guarantor hereunder.
"Subsidiary Guaranty" means a guaranty agreement executed and delivered
by a Subsidiary of the Borrower in favor of the Agent, for the benefit of the
Agent and the Lenders, in substantially the form of Exhibit E, as such guaranty
agreement may be amended, restated, or otherwise modified from time to time.
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"Swingline Advance" has the meaning specified in Section 2.1.
"Swingline Note" means the swingline promissory note provided for by
Section 2.2 and all amendments, restatements, or other modifications thereof.
"Tangible Net Worth" means the Borrower's (a) shareholder's equity
(including, without limitation, Capital Stock, additional paid-in capital, and
retained earnings) minus (b) all intangible assets, each as determined in
accordance with GAAP.
"Target" means the Person who is to be acquired or whose assets are to
be acquired by the Borrower or a Wholly-Owned Subsidiary in connection with a
Permitted Acquisition.
"Taxes" has the meaning specified in Section 5.6.
"Termination Event" means (a) a Reportable Event, or (b) the filing of a
notice of intent to terminate a Plan or the treatment of a Plan amendment as a
termination under Section 4041 of ERISA, or (c) the institution of proceedings
to terminate a Plan by the PBGC under Section 4042 of ERISA, or the appointment
of a trustee to administer any Plan.
"Total Adjusted Funded Debt" means, as of any date of determination,
with respect to the Borrower and its Subsidiaries, (a) the average outstanding
principal balance of all Funded Debt of such Persons as of the end of each of
the immediately preceding twelve (12) Fiscal Periods, plus (b) without
duplication, all lease and rent expense for any real Property for the preceding
four (4) Fiscal Quarters multiplied by eight (8), plus (c) without duplication,
all lease and rent expense for any personal Property for the preceding four (4)
Fiscal Quarters multiplied by three (3).
"Type" means any type of Balance (i.e., a Base Rate Balance, a Libor
Balance, or an IBOR Balance).
"UCC" means the Uniform Commercial Code as in effect from time to time
in the State of California.
"Undrawn Letter of Credit" means any outstanding standby, commercial, or
documentary letter of credit issued for the account of the Borrower or any
Subsidiary of the Borrower under which (a) a drawing for payment has not been
made by the beneficiary, (b) a drawing for payment has been made by the
beneficiary and was timely paid by the Borrower or such Subsidiary in accordance
with the terms thereof and a balance remains undrawn pursuant to the terms
thereof, or (c) a drawing has been made and remains unpaid by the Borrower or
such Subsidiary and such drawing has been outstanding for a period not in excess
of three (3) Business Days.
"Unfunded Vested Accrued Benefits" means with respect to any Plan at any
time, the amount (if any) by which (a) the present value of all vested
nonforfeitable benefits under such Plan exceeds, (b) the fair market value of
all Plan assets allocable to such benefits, all determined as of the then most
recent valuation date for such Plan.
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"U.S." means the United States of America.
"Voting Stock" means Capital Stock of a Person having by the terms
thereof ordinary voting power to elect a majority of the board of directors (or
similar governing body) of such Person (irrespective of whether or not at the
time Capital Stock of any other class or classes of such Person shall have or
might have voting power by reason of the happening of any contingency).
"Wholly-Owned Subsidiary" means any Subsidiary of the Borrower that is
owned 100% by the Borrower and/or a Subsidiary of the Borrower.
Section 1.2 Other Interpretive Provisions.
(a) The meanings of defined terms are equally applicable to the
singular and plural forms of the defined terms.
(b) (i) The words "hereof", "herein", "hereunder" and words of
similar import referring to this Agreement refer to this
Agreement as a whole and not to any particular provision of this
Agreement. Unless otherwise specified, all Article, Exhibit,
Section, and Schedule references pertain to Articles, Exhibits,
Sections, and Schedules of this Agreement.
(ii) The term "including" is not limiting and means
"including without limitation."
(iii) In the computation of periods of time from a
specified date to a later specified date, the word "from" means
"from and including"; the words "to" and "until" each mean "to
but excluding", and the word "through" means "to and including."
(c) Unless otherwise expressly provided herein, (i) references to
agreements (including this Agreement) and other contractual instruments
shall be deemed to include all subsequent amendments and other
modifications thereto, but only to the extent such amendments and other
modifications are not prohibited by the terms of any Loan Document, and
(ii) references to any statute or regulation are to be construed as
including all statutory and regulatory provisions consolidating,
amending, replacing, supplementing, or interpreting the statute or
regulation.
(d) This Agreement and other Loan Documents may use several
different limitations, tests, or measurements to regulate the same or
similar matters. All such limitations, tests, and measurements are
cumulative and shall each be performed in accordance with their terms.
Unless otherwise expressly provided, any reference to any action of the
Agent or any Lender by way of consent, approval, or waiver shall be
deemed modified by the phrase "in its/their sole discretion."
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(e) Terms used herein that are defined in the UCC, unless
otherwise defined herein, shall have the meanings specified in the UCC.
Section 1.3 Accounting Terms and Determinations. Except as otherwise
expressly provided herein, all accounting terms used herein shall be
interpreted, and all financial statements and certificates and reports as to
financial matters required to be delivered to the Agent and the Lenders
hereunder shall be prepared, in accordance with GAAP, on a "consistent basis"
with those used in the preparation of the financial statements referred to in
Section 8.2. All calculations made for the purposes of determining compliance
with the provisions of this Agreement shall be made by application of GAAP, on a
"consistent basis" with those used in the preparation of the financial
statements referred to in Section 8.2. Accounting principles are applied on a
"consistent basis" when the accounting principles applied in a current period
are comparable in all material respects to those accounting principles applied
in a preceding period. Changes in the application of accounting principles which
do not have a material impact on calculating the financial covenants herein
shall be deemed comparable in all material respects to accounting principles
applied in a preceding period. To enable the ready and consistent determination
of compliance by the Borrower with its obligations under this Agreement, the
Borrower will not, nor will it permit any of its Subsidiaries to, change the
manner in which either the last day of its Fiscal Year or the last day of each
of the first three Fiscal Quarters of its Fiscal Year is determined without the
prior written consent of the Required Lenders. In the event any changes in
accounting principles required by GAAP, recommended by the Borrower's or any of
its Subsidiaries's certified public accountants, or requested by the Borrower
(or that the Borrower otherwise requests and the Agent and the Required Lenders
agree to accept, such agreement not unreasonably to be denied) and implemented
by the Borrower or any of its Subsidiaries occur and such changes result in a
change in the method of the calculation of financial covenants under this
Agreement, then the Borrower, the Agent, and the Required Lenders agree to enter
into negotiations in order to amend such provisions of this Agreement so as to
equitably reflect such changes with the desired result that the criteria for
evaluating such covenants shall be the same after such changes as if such
changes had not been made. Until such time as such an amendment shall have been
executed and delivered by the Borrower, the Agent, and the Required Lenders, all
financial covenants, standards, and terms in this Agreement shall continue to be
calculated or construed as if such changes had not occurred.
Section 1.4 Time of Day. Unless otherwise indicated, all references in
this Agreement to times of day shall be references to San Francisco, California
time.
ARTICLE 2
Credit Facility
Section 2.1 Commitments. Subject to the terms and conditions of this
Agreement, each Lender severally agrees to make advances to the Borrower from
time to time, subject to the provisions of Section 2.4, from and including the
Closing Date to but excluding the Maturity Date in an aggregate principal amount
at any time outstanding up to but not exceeding the amount of such Lender's
Commitment as then in effect; provided, however, (a) the aggregate principal
amount of (i) the Revolving Loan outstanding applicable to a Lender shall not at
any time exceed such Lender's
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Commitment and (ii) the Loan (inclusive of such Lender's obligation to make
advances under the Revolving Loan to pay Swingline Advances) outstanding
applicable to a Lender shall not at any time exceed such Lender's Commitment,
and (b) the aggregate principal amount of the Revolving Loan outstanding
applicable to all of the Lenders shall not at any time exceed the aggregate
Commitments. Subject to the foregoing limitations, and the other terms and
provisions of this Agreement, the Borrower may borrow, prepay, and reborrow
hereunder the amount of the Commitments and may establish a Base Rate Balance
and Libor Balances thereunder and, until the Maturity Date, the Borrower may
Continue Libor Balances established under the Revolving Loan or Convert Balances
established under the Revolving Loan as either Libor Balances or Base Rate
Balances into Base Rate Balances or Libor Balances, as applicable.
Notwithstanding anything to the contrary contained in this Agreement, the
Borrower may from time to time request, and Bank of America may in its
discretion from time to time advance (but shall in no event be obligated to
advance), revolving loans which are to be funded solely by Bank of America (the
"Swingline Advances"); provided, however, that (i) the aggregate principal
amount of the Swingline Advances outstanding at any time shall not exceed ten
million Dollars ($10,000,000) and the aggregate principal amount of the Loan
outstanding at any time (inclusive of the Swingline Advances) shall not exceed
the aggregate principal amount of the Commitments and (ii) Bank of America shall
give the Agent and each Lender written notice of the aggregate outstanding
principal amount of the Swingline Advances upon the written request of the Agent
or any Lender (but no more often than once every calendar quarter). Furthermore,
upon one (1) Business Day prior written notice given by Bank of America to the
Agent and the other Lenders at any time and from time to time (including,
without limitation, at any time following the occurrence of a Default or an
Event of Default) and, in any event, without notice on the Business Day
immediately preceding the Maturity Date, each Lender (including, without
limitation, Bank of America) severally agrees, irrevocably and unconditionally,
as provided in the first sentence of this Section 2.1, and notwithstanding
anything to the contrary contained in this Agreement, any Default or Event of
Default, or the inability or failure of the Borrower or any of its Subsidiaries
to satisfy any condition precedent to funding any advance under the Loan
contained in Article 7 (which conditions precedent shall not apply to this
sentence), to make an advance under the Revolving Loan, in the form of a Base
Rate Balance, in an amount equal to its Commitment Percentage of the aggregate
principal amount of the Swingline Advances then outstanding, and the proceeds of
such advance under the Revolving Loan shall be promptly paid by the Agent to
Bank of America and applied as a repayment of the aggregate principal amount of
the Swingline Advances then outstanding. Subject to the other terms and
provisions of this Agreement, the Borrower may borrow, prepay, and reborrow
hereunder the Swingline Advances and may establish a Base Rate Balance and IBOR
Balances thereunder and, until the Maturity Date, the Borrower may Continue IBOR
Balances established under the Swingline Advances or Convert Balances
established under the Swingline Advances as either IBOR Balances or Base Rate
Balances into Base Rate Balances or IBOR Balances, as applicable. Each Type of
Balance under the Loan advanced by each Lender shall be established and
maintained at such Lender's Applicable Lending Office for such Type of Balance.
Section 2.2 Notes. The portion of the Revolving Loan made by each Lender
shall be evidenced by a single promissory note of the Borrower, in substantially
the form of Exhibit A (a "Revolving Note"), payable to the order of such Lender,
in the maximum principal amount equal to such Lender's Commitment as originally
in effect (or, if greater, its Commitment as thereafter
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increased) and otherwise duly completed, and the Swingline Advances made by Bank
of America shall be evidenced by a single promissory note of the Borrower in the
maximum original principal amount of ten million Dollars ($10,000,000) payable
to the order of Bank of America in substantially the form of Exhibit B (the
"Swingline Note"), dated the Closing Date.
Section 2.3 Repayment of Loan. The Borrower shall pay to the Agent, for
the account of the Lenders, (a) the prepayments of the Loan required pursuant to
Section 4.4(a) and (b) the outstanding principal amount of the Loan on the
Maturity Date.
Section 2.4 Use of Proceeds. Subject to the terms of this Agreement, the
proceeds of the Loan shall be used by the Borrower (a) to renew the Borrower's
existing indebtedness due under the Original Agreement, (b) to finance Capital
Expenditures by the Borrower, and (c) for general corporate purposes, including,
without limitation, to finance working capital requirements of the Borrower and
its Subsidiaries, arising in the ordinary course of business.
Section 2.5 Termination or Reduction of Commitments. The Borrower shall
have the right to terminate fully or to reduce in part the unused portion of the
Commitments at any time and from time to time, provided that: (a) the Borrower
shall not have the right to terminate or reduce in part any unused portion of
the Commitments that could or may be required to be advanced by the Lenders to
refinance Swingline Advances then outstanding; (b) the Borrower shall give the
Agent at least three (3) Business Days notice of each such termination or
reduction as provided in Section 4.3; and (c) each partial reduction shall be in
an aggregate amount at least equal to $10,000,000 or any multiple $5,000,000 in
excess thereof. The Commitments may not be reinstated after they have been
terminated or reduced.
Section 2.6 Increase of Commitments.
(a) Upon notice to the Agent (who shall promptly notify the
Lenders), the Borrower may, from time to time prior to the day which is
the second anniversary of the Closing Date, request an increase in the
combined Commitments up to an aggregate of $250,000,000; provided that
in the event the Borrower has reduced the Commitments pursuant to
Section 2.5, the amount of any increase in the Commitments pursuant to
this Section 2.6 shall not exceed $50,000,000. At the time of sending
such notice, the Borrower (in consultation with the Agent) shall specify
the time period within which each Lender is requested to respond to such
request. Each Lender shall respond within such time period to the Agent
by whether or not it agrees to increase its Commitment and, if so,
whether by an amount equal to or less than its Commitment Percentage of
such requested increase. Any Lender not responding within such time
period shall be deemed to have declined to increase its Commitment. The
Agent shall notify the Borrower and each Lender of the Lenders'
responses to each request made hereunder. To achieve the full amount of
a requested increase, the Borrower may also (i) request that one or more
other Lenders, in their sole and absolute discretion, nonratably
increase their Commitment(s), (ii) and/or invite additional Eligible
Assignees to become Lenders under the terms of this Agreement.
Page 22
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(b) If any Commitments are increased in accordance with this
Section, the Agent and the Borrower shall determine the effective date
of such increase (the "Increase Effective Date"). The Agent and the
Borrower shall promptly confirm in writing to the Lenders the final
allocation of such increase and the Increase Effective Date. As a
condition precedent to such increase, the Borrower shall deliver to the
Agent a certificate dated as of the Increase Effective Date (in
sufficient copies for each Lender) signed by a responsible officer of
the Borrower (i) certifying and attaching the resolutions adopted by the
Borrower and each Guarantor approving or consenting to such increase,
(ii) including a Compliance Certificate demonstrating pro forma
compliance with Section 11.1 after giving effect to such increase, and
(iii) certifying that before and after giving effect to such increase,
the representations and warranties contained in Article 8 are true and
correct on and as of the Increase Effective Date and no Default exists.
The Borrower shall deliver new or amended Notes reflecting the new or
increased Commitment of each new or affected Lender as of the Increase
Effective Date. The Borrower shall prepay any Libor Balances outstanding
on the Increase Effective Date (and pay any costs incurred in connection
with such prepayment pursuant to Section 5.5) to the extent necessary to
keep outstanding Balances ratable with any revised Commitment
Percentages arising from any nonratable increase in the Commitments
under this Section.
(c) This section shall supercede any provisions in Section 14.11
to the contrary.
ARTICLE 3
Interest and Fees
Section 3.1 Interest Rate. The Borrower shall pay to the Agent, for the
account of each Lender (including Bank of America with respect to the Swingline
Advances), interest on the unpaid principal amount of the Loan made by such
Lender for the period commencing on the date of the initial advance under the
Loan to but excluding the date the Loan is due, at a fluctuating rate per annum
equal to the Applicable Rate. The term "Applicable Rate" means:
(a) during the period that the Loan or any portion thereof is
outstanding as a Base Rate Balance, the Base Rate, plus the Base Rate
Margin;
(b) during the period that the Revolving Loan or any portion
thereof is outstanding as a Libor Balance or as Libor Balances, the
Libor Rate, plus the Libor Rate Margin; and
(c) during the period that the Swingline Advances or any portion
thereof is outstanding as an IBOR Balance or as IBOR Balances, the IBOR
Rate, plus the IBOR Rate Margin.
Section 3.2 Determinations of Margins and Commitment Fee Rate. From the
Closing Date until the first Margin Adjustment Date, the margins identified in
Section 3.1 shall be as follows: (a) the margin of interest payable with respect
to the Base Rate Balance (the "Base Rate Margin") shall be zero percent (0.00%);
(b) the margin of interest payable with respect to the Libor Balance
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(the "Libor Rate Margin") shall be one percent (1.00%); and (c) the margin of
interest payable with respect to the IBOR Balance (the "IBOR Rate Margin") shall
be one percent (1.00%). From the Closing Date until the first Margin Adjustment
Date, the percentage used to determine fees payable under Section 3.6 (the
"Commitment Fee Rate") shall be two tenths of one percent (0.20%). Upon delivery
of the certificate required pursuant to Section 9.1(c) after the end of each
Fiscal Quarter commencing with such certificate delivered for the Fiscal Quarter
ending January 28, 2001, the Commitment Fee Rate, the Base Rate Margin, the
Libor Rate Margin, and the IBOR Rate Margin shall automatically be adjusted to
the fee or rate, as applicable, corresponding to the Leverage Ratio (determined
for the preceding twelve (12) Fiscal Periods then ending) of the Borrower set
forth in the following table, such automatic adjustment to take effect as of the
first day of the calendar month following the date on which such certificate is
delivered (the "Margin Adjustment Date").
=============================================================================================
LIBOR
BASE RATE RATE IBOR RATE COMMITMENT
LEVERAGE RATIO MARGIN MARGIN MARGIN FEE RATE
=============================================================================================
Greater than or equal to 0.00% 1.50% 1.50% 0.225%
3.75 to 1.00
---------------------------------------------------------------------------------------------
Greater than or equal to 0.00% 1.25% 1.25% 0.20%
3.25 to 1.00 but less than
3.75 to 1.00
---------------------------------------------------------------------------------------------
Greater than or equal to 0.00% 1.00% 1.00% 0.20%
2.75 to 1.00 but less than
3.25 to 1.00
---------------------------------------------------------------------------------------------
Greater than or equal to 0.00% 0.875% 0.875% 0.175%
2.25 to 1.00 but less than
2.75 to 1.00
---------------------------------------------------------------------------------------------
Less than 2.25 to 1.00 0.00% 0.75% 0.75% 0.15%
=============================================================================================
If the Borrower fails to deliver such certificate with respect to any Fiscal
Quarter which sets forth the Leverage Ratio within the period of time required
by Section 9.1(c): (y) each of the Libor Rate Margin and the IBOR Rate Margin
(each for Interest Periods commencing after the applicable Margin Adjustment
Date) shall automatically be adjusted to one and one-half of one percent (1.50%)
per annum and (z) the Commitment Fee Rate shall automatically be adjusted to
nine-fortieths of one percent (0.225%) per annum. The automatic adjustments
provided for in the preceding sentence shall take effect as of the date on which
the referenced certificate is due and shall remain in effect until otherwise
adjusted on the date such certificate is actually received in accordance
herewith.
Section 3.3 Payment Dates. Accrued interest on the Loan shall be due and
payable as follows: (a) in the case of the Base Rate Balance, on each Quarterly
Payment Date and on the Maturity Date; and (b) in the case of each Libor Balance
and each IBOR Balance, on (i) the last day of the Interest Period with respect
thereto, (ii) in the case of an Interest Period greater than three (3)
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months, at three (3) month intervals after the first day of such Interest
Period, and (iii) on the Maturity Date.
Section 3.4 Default Interest. Notwithstanding anything to the contrary
contained in this Agreement, during the existence of an Event of Default, the
Borrower will pay to the Agent for the account of each Lender interest at the
applicable Default Rate on any principal of the Loan made by such Lender and (to
the fullest extent permitted by law) any other amount payable by the Borrower
under any Loan Document to or for the account of the Agent or such Lender.
Section 3.5 Conversions and Continuations of Balances. Subject to
Section 4.2,
(a) with respect to Balances under the Revolving Loan, the
Borrower shall have the right from time to time to Convert all or part
of either the Base Rate Balance or the Libor Balance into a Balance of
the other Type or to Continue Libor Balances in existence as Libor
Balances, provided that: (i) the Borrower shall give the Agent notice of
each such Conversion or Continuation as provided in Section 4.3; (ii)
subject to Article 5, a Libor Balance may only be Converted on the last
day of the Interest Period therefor; and (iii) except for Conversions
into the Base Rate Balance, no Conversions or Continuations shall be
made without the consent of the Agent and the Required Lenders at any
time during the existence of a Default and
(b) with respect to Balances under the Swingline Advances, the
Borrower shall have the right from time to time to Convert all or part
of either the Base Rate Balance or the IBOR Balance into a Balance of
the other Type or to Continue IBOR Balances in existence as IBOR
Balances, provided that: (i) the Borrower shall give the Agent notice of
each such Conversion or Continuation as provided in Section 4.3; (ii)
subject to Article 5, an IBOR Balance may only be Converted on the last
day of the Interest Period therefor; and (iii) except for Conversions
into the Base Rate Balance, no Conversions or Continuations shall be
made without the consent of the Agent and Bank of America at any time
during the existence of a Default.
Section 3.6 Commitment Fee. For the period from and including the
Closing Date to and including the Maturity Date, the Borrower agrees to pay to
the Agent for the account of each Lender, pro rata according to its Commitment
Percentage, a commitment fee equal to the Commitment Fee Rate (determined
according to the provisions of Section 3.2) multiplied by the actual daily
amount by which the Commitments exceed the outstanding principal amount of the
Revolving Loan. Accrued commitment fees under this Section shall be payable in
arrears on each Quarterly Payment Date and on the Maturity Date. Notwithstanding
anything to the contrary contained in this Agreement, any and all Swingline
Advances outstanding from time to time shall be wholly excluded, and shall not
count as used or funded amounts, for purposes of determining the unused or
unfunded amount of each Lender's Commitment in accordance with this Section.
Section 3.7 Administrative Fee. The Borrower agrees to pay to the Agent
on the Closing Date and on each anniversary thereof the administrative fee
described in the Agent's Letter.
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Section 3.8 Computations. Interest and fees payable by the Borrower
hereunder and under the other Loan Documents shall be computed on the basis of a
year of 360 days and the actual number of days elapsed (including the first day
but excluding the last day) in the period for which interest is payable unless
such calculation would result in a rate that exceeds the Maximum Rate, in which
case interest shall be calculated on the basis of a year of 365 or 366 days, as
the case may be. Notwithstanding anything to the contrary contained in this
Section, interest payable by the Borrower hereunder and under the other Loan
Documents with respect to the Base Rate Balance shall be computed on the basis
of a year of 365 or 366 days, as the case may be, and the actual number of days
elapsed (including the first day but excluding the last day) in the period for
which interest is payable. Each determination of an interest rate by the Agent
shall be conclusive and binding on the Borrower and the Lenders in the absence
of manifest error. The Agent will, at the request of the Borrower or any Lender,
deliver to the Borrower or such Lender, as the case may be, a statement showing
the quotations used by the Agent in determining any interest rate and the
resulting interest rate.
ARTICLE 4
Administrative Matters
Section 4.1 Borrowing Procedure. The Borrower shall give the Agent, and
the Agent will give the Lenders, notice of each borrowing under the Commitments
in accordance with Section 4.3. Not later than 10:00 a.m. on the date specified
for each borrowing under the Commitment, each Lender will make available the
amount of the Loan to be advanced by it on such date to the Agent, at the
Principal Office, in immediately available funds, for the account of the
Borrower. The amounts received by the Agent shall, subject to the terms and
conditions of this Agreement, be made available to the Borrower by 1:00 p.m. at
the Borrower's direction by transferring the same, in immediately available
funds by wire transfer, automated clearinghouse transfer, or interbank transfer
to (a) a bank account of the Borrower designated by the Borrower in writing or
(b) a Person or Persons designated by the Borrower in writing.
Section 4.2 Minimum Amounts. Each borrowing under the Commitment shall
be in an amount equal to $5,000,000 or an integral multiple of $1,000,000 in
excess thereof except that in the case of a Swingline Advance such borrowing may
be in an amount equal to $250,000 or any integral multiple of $250,000 in excess
thereof. Except for Conversions and prepayments pursuant to Section 4.4(a) and
Article 5, each Conversion and prepayment of principal of the Loan shall be in
an amount equal to the minimum amounts set forth in the preceding sentence.
Notwithstanding the foregoing, each borrowing or Continuation under the
Commitments as a Libor Balance or an IBOR Balance (as applicable) and each
Conversion of amounts outstanding as all or a portion the Base Rate Balance to a
Libor Balance or an IBOR Balance (as applicable) shall be in an amount equal to
the minimum amounts set forth for borrowings in this Section.
Section 4.3 Certain Notices.
(a) Notices by the Borrower to the Agent of terminations or
reductions of Commitments, of borrowings, Conversions, Continuations,
and prepayments of the Loan,
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and of the duration of Interest Periods shall be irrevocable and shall
be effective only if received by the Agent not later than 10:00 a.m. on
the Business Day prior to the date of the relevant termination,
reduction, borrowing, Conversion, Continuation, or prepayment as
specified below:
================================================================================
Number of
Business Days
Notice Prior
================================================================================
Borrowing, Conversions, Continuations, and prepayment of 0
Swingline Advances
--------------------------------------------------------------------------------
Borrowing of the Revolving Loan as all or a portion of the 1
Base Rate Balance
--------------------------------------------------------------------------------
Borrowing of the Revolving Loan as a Libor Balance 3
--------------------------------------------------------------------------------
Conversions or Continuations of Balances under the 3
Revolving Loan and termination or reduction of Commitments
--------------------------------------------------------------------------------
Prepayment of the Revolving Loan which is all or a portion of 1
the Base Rate Balance
--------------------------------------------------------------------------------
Prepayment of the Revolving Loan which is a Libor Balance 3
================================================================================
Any notices of the type described in this Section which are received by
the Agent after the applicable time set forth above on a Business Day
shall be deemed to be received and shall be effective on the next
Business Day. Each such notice of termination or reduction shall specify
the amount of the Commitments to be terminated or reduced. Each such
notice of borrowing, Conversion, Continuation, or prepayment shall be in
the form of Exhibit F, appropriately completed by an authorized
representative of the Borrower, and shall specify (i) the amount of the
Loan to be borrowed or prepaid or the Balances to be Converted or
Continued; (ii) the amount (subject to Section 4.2) to be borrowed (and
whether any of such borrowing will be a Swingline Advance), Converted,
Continued, or prepaid; (iii) in the case of a Conversion, the Type of
Balance to result from such Conversion; (iv) in the case of a borrowing,
the Type of Balance or Balances to be applicable to such borrowing and
the amounts thereof; (v) in the event a Libor Balance or an IBOR Balance
is selected, the duration of the Interest Period therefor; and (vi) the
date of borrowing, Conversion, Continuation, or prepayment (which shall
be a Business Day).
(b) Any notices by the Borrower of the type described in this
Section may be made orally or in writing and, if made orally, must be
confirmed immediately in writing (which may be by telecopy, provided
that such telecopy is promptly followed by delivery of an original
signed notice) on the same Business Day on which such oral notice is
given; provided that any such oral notice shall be deemed to be
controlling and proper notice in the
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event of a discrepancy with or failure to receive a confirming written
notice. The Agent shall notify the affected Lenders of the contents of
each such notice on the date of its receipt of the same or, if received
after the applicable time set forth above on a Business Day, on the next
Business Day. In the event the Borrower fails to select the Type of
Balance applicable to a borrowing of the Loan, or the duration of any
Interest Period for any Libor Balance or IBOR Balance, within the time
period and otherwise as provided in this Section, such Balance (if
outstanding as a Libor Balance or an IBOR Balance) will be automatically
Converted into the Base Rate Balance on the last day of the Interest
Period for such Libor Balance or IBOR Balance or (if outstanding as a
portion of the Base Rate Balance) will remain as, or (if not then
outstanding) will be made as, a portion of the Base Rate Balance. The
Borrower may not borrow under the Loan as a Libor Balance or an IBOR
Balance, Convert any portion of the Base Rate Balance into Libor
Balances or IBOR Balances, Continue any Libor Balance as a Libor
Balance, or Continue any IBOR Balance as an IBOR Balance if the
Applicable Rate for such Libor Balance or IBOR Balance (as applicable)
would exceed the Maximum Rate.
Section 4.4 Prepayments.
(a) Mandatory.
(i) Overadvance. If at any time the principal amount of
the Loan outstanding exceeds the aggregate Commitments, the
Borrower shall, within one (1) Business Day after the occurrence
thereof, prepay the Loan by the amount of such excess.
(ii) Prepayments from Asset Dispositions. Immediately upon
receipt by the Borrower or any of its Subsidiaries of the Net
Proceeds of any Asset Disposition, the Borrower shall make a
prepayment in respect of the Obligations equal to the amount of
such Net Proceeds of such Asset Disposition.
(iii) Prepayments from Debt Offerings. In the event that
the Borrower or any Subsidiary of the Borrower incurs any Funded
Debt (other than Debt permitted by Section 10.1), no later than
the third Business Day following the incurrence of such Debt, the
Borrower shall make a prepayment in respect of the Obligations
equal to the amount of the Net Proceeds of such Debt.
(iv) Swingline Advances. Within one (1) Business Day after
any demand therefor by the Agent or Bank of America, the Borrower
shall prepay in full the outstanding principal amount of the
Swingline Advances.
(v) Annual "Clean-up" Period. For a period of not less
than thirty (30) consecutive days during each calendar year
between January 1st and June 30th of such calendar year, the
Borrower shall make prepayments of the Loan to the extent that
the outstanding principal of the Loan shall be equal to or less
than $75,000,000 at all times during such thirty (30) day period.
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(b) Optional. Subject to Section 4.2 and the provisions of this
clause (b), the Borrower may, at any time and from time to time without
premium or penalty upon prior notice to the Agent as specified in
Section 4.3, prepay or repay the Loan in full or in part. Libor Balances
and IBOR Balances may be prepaid or repaid only on the last day of the
Interest Period applicable thereto unless the Borrower pays to the
Agent, for the account of the applicable Lenders or Lender, any amounts
due under Section 5.5 as a result of such prepayment or repayment.
Section 4.5 Method of Payment. Except as otherwise expressly provided
herein, all payments of principal, interest, and other amounts to be made by the
Borrower under the Loan Documents shall be made to the Agent at the Principal
Office for the account of each Lender's Applicable Lending Office in Dollars and
in immediately available funds, without condition or deduction for any
counterclaim, defense, recoupment, or set-off, not later than 12:00 noon on the
date on which such payment shall become due (each such payment made after such
time on such due date to be deemed to have been made on the next succeeding
Business Day). Unless Bank of America expressly agrees otherwise and subject to
Section 4.4(a)(iv), all payments shall be applied as follows: first, with
respect to the Base Rate Balance outstanding under the Swingline Advances until
such portion of the Loan is repaid in full, second, with respect to the Base
Rate Balance outstanding under the Revolving Loan until such portion of the Loan
is repaid in full, and third, with respect to the IBOR Balance outstanding under
the Swingline Advances until such portion of the Loan is paid in full. Subject
to the preceding sentence, the Borrower shall, at the time of making each such
payment, specify to the Agent the sums payable under the Loan Documents to which
such payment is to be applied (and in the event that the Borrower fails to so
specify, or if an Event of Default is in existence, the Agent may apply such
payment to the Obligations in such order and manner as it may elect (subject to
the preceding sentence) in its sole discretion, subject to Section 4.6 and
provided that when applying any such amounts to any Balances, the portion of the
Loan outstanding as the Base Rate Balance shall be prepaid in full prior to any
application to any portion of the Loan outstanding as a Libor Balance or an IBOR
Balance). Each payment received by the Agent under any Loan Document for the
account of a Lender shall be paid to such Lender by 1:00 p.m. on the date the
payment is deemed made to the Agent in immediately available funds, for the
account of such Lender's Applicable Lending Office. Whenever any payment under
any Loan Document shall be stated to be due on a day that is not a Business Day,
such payment may be made on the next succeeding Business Day, and such extension
of time shall in such case be included in the computation of the payment of
interest and commitment fee, as the case may be.
Section 4.6 Pro Rata Treatment. Except to the extent otherwise provided
herein: (a) each advance of the Revolving Loan shall be made by the Lenders,
each payment of commitment fees under Section 3.6, and each termination or
reduction of the Commitments shall be made, paid, or applied (as applicable) pro
rata according to the Lenders' respective Commitment Percentages; (b) the
making, Conversion, and Continuation of Balances of a particular Type (other
than Conversions provided for by Section 5.4) shall be made pro rata among the
Lenders holding Balances of such Type according to their respective Commitment
Percentages; and (c) each payment and prepayment of principal of or interest on
the Revolving Loan by the Borrower shall be made to the Agent for the account of
the Lenders pro rata in accordance with the respective unpaid principal
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amounts of the Revolving Loan held by each Lender; provided that as long as no
default in the payment of interest exists, payments of interest made when
Lenders are holding different types of Balances applicable to the Revolving Loan
as a result of the application of Section 5.4, shall be made to the Lenders in
accordance with the amount of interest owed to each. If at any time payment, in
whole or in part, of any amount distributed by the Agent hereunder is rescinded
or must otherwise be restored or returned by the Agent as a preference,
fraudulent conveyance, or otherwise under any bankruptcy, insolvency, or similar
law, then each Person receiving any portion of such amount agrees, upon demand,
to return the portion of such amount it has received to the Agent.
Section 4.7 Sharing of Payments. If a Lender shall obtain payment of any
principal of or interest on any of the Obligations due to such Lender hereunder
directly (and not through the Agent) through the exercise of any right of
set-off, banker's lien, counterclaim, or similar right, or otherwise, it shall
promptly purchase from the other Lenders participations in the Obligations held
by the other Lenders in such amounts, and make such other adjustments from time
to time as shall be equitable to the end that all the Lenders shall share the
benefit of such payment pro rata in accordance with the unpaid principal of and
interest on the Obligations then due to each of them. To such end, all of the
Lenders shall make appropriate adjustments among themselves (by the resale of
participations sold or otherwise) if all or any portion of such excess payment
is thereafter rescinded or must otherwise be restored. The Borrower agrees, to
the fullest extent it may effectively do so under applicable law, that any
Lender so purchasing a participation in the Obligations held by the other
Lenders may exercise all rights of set-off, banker's lien, counterclaim, or
similar rights with respect to such participation as fully as if such Lender
were a direct holder of Obligations in the amount of such participation. Nothing
contained herein shall require any Lender to exercise any such right or shall
affect the right of any Lender to exercise, and retain the benefits of
exercising, any such right with respect to any other indebtedness, liability, or
obligation of the Borrower.
Section 4.8 Non Receipt of Funds by the Agent.
(a) Unless the Borrower or any Lender (as used in this Section,
the "Payor") has notified the Agent prior to the date any payment to be
made by the Payor is due, that the Payor does not intend to remit such
payment, the Agent may, in its sole and absolute discretion, assume that
the Payor has timely remitted such payment and the Agent may, in its
sole and absolute discretion and in reliance thereon, make available
such payment to the Person entitled thereto. If such payment was not in
fact remitted to the Agent in immediately available funds, then:
(i) if the Borrower failed to make such payment, each
Lender shall forthwith on demand repay to the Agent the amount of
such assumed payment made available to such Lender, together with
interest thereon in respect of each day from and including the
date such amount was made available by the Agent to such Lender
to the date such amount is repaid to the Agent at the Federal
Funds Rate; and
(ii) if any Lender failed to make such payment, the Agent
shall be entitled to recover such corresponding amount on demand
from such Lender. If such Lender does not pay such corresponding
amount forthwith upon the Agent's demand
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therefor, the Agent promptly shall notify the Borrower, and the
Borrower shall pay such corresponding amount to the Agent. The
Agent also shall be entitled to recover from such Lender interest
on such corresponding amount in respect of each day from the date
such corresponding amount was made available by the Agent to the
Borrower to the date such corresponding amount is recovered by
the Agent, (A) from such Lender at a rate per annum equal to the
daily Federal Funds Rate and (B) from the Borrower, at a rate per
annum equal to the interest rate applicable to such borrowing.
Nothing herein shall be deemed to relieve any Lender from its
obligation to fulfill its Commitment or to prejudice any rights
which the Agent or the Borrower may have against any Lender as a
result of any default by such Lender hereunder.
(b) The Commitments and other obligations of the Lenders under
any Loan Document are several. The default by any Lender in making an
advance under the Revolving Loan in accordance with its Commitment shall
not relieve the other Lenders of their obligations under any Loan
Document. In the event of any default by any Lender in making any
advance under the Revolving Loan, each nondefaulting Lender shall be
obligated to make its advance under the Revolving Loan but shall not be
obligated to advance the amount which the defaulting Lender was required
to advance hereunder. No Lender shall be responsible for any act or
omission of any other Lender.
ARTICLE 5
Change in Circumstances
Section 5.1 Increased Cost and Reduced Return.
(a) Increased Cost. If, after the Closing Date, any Regulatory
Change or compliance by any Lender (or its Applicable Lending Office)
with any request or directive (whether or not having the force of law)
of any Governmental Authority, central bank, or comparable agency:
(i) shall subject such Lender (or its Applicable Lending
Office) to any tax, duty, or other charge with respect to any
Libor Balances or IBOR Balances, its Note, or its obligation to
make Libor Balances or IBOR Balances available to the Borrower,
or change the basis of taxation of any amounts payable to such
Lender (or its Applicable Lending Office) under this Agreement or
its Note in respect of any Libor Balances or IBOR Balances (other
than franchise taxes or taxes imposed on or measured by the net
income of such Lender by the jurisdiction in which such Lender is
organized, has its principal office or such Applicable Lending
Office, or is doing business);
(ii) shall impose, modify, or deem applicable any reserve,
special deposit, assessment, or similar requirement (other than
the Eurodollar Reserve Percentage utilized in the determination
of the Libor Rate or the IBOR Rate) relating to any extensions of
credit or other assets of, or any deposits with or other
liabilities or
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commitments of, such Lender (or its Applicable Lending Office),
including the Commitment of such Lender hereunder; or
(iii) shall impose on such Lender (or its Applicable
Lending Office), the London interbank market, or the offshore
interbank market (with respect to the IBOR Rate) any other
condition affecting this Agreement or its Note or any of such
extensions of credit or liabilities or commitments;
and the result of any of the foregoing is to increase the cost to such
Lender (or its Applicable Lending Office) of making, Converting into,
Continuing, or maintaining any Libor Balances or IBOR Balances or to
reduce any sum received or receivable by such Lender (or its Applicable
Lending Office) under this Agreement or its Note with respect to any
Libor Balances or IBOR Balances, then the Borrower shall pay to such
Lender on demand such amount or amounts as will compensate such Lender
for such increased cost or reduction. If any Lender requests
compensation by the Borrower under this Section 5.1(a), the Borrower
may, by notice to such Lender (with a copy to the Agent), suspend the
obligation of such Lender to make or maintain Libor Balances or IBOR
Balances, or to Convert any portion of the Base Rate Balances into Libor
Balances or IBOR Balances, until the event or condition giving rise to
such request ceases to be in effect (in which case the provisions of
Section 5.4 shall be applicable); provided that such suspension shall
not affect the right of such Lender to receive the compensation so
requested.
(b) Capital Adequacy. If, after the date hereof, any Lender shall
have determined that any Regulatory Change has or would have the effect
of reducing the rate of return on the capital of such Lender or any
corporation controlling such Lender as a consequence of such Lender's
obligations hereunder to a level below that which such Lender or such
corporation could have achieved but for such adoption, change, request,
or directive (taking into consideration its policies with respect to
capital adequacy) by an amount deemed by such Lender to be material,
then from time to time upon demand, the Borrower shall pay to such
Lender such additional amount or amounts as will compensate such Lender
for such reduction.
(c) Claims Under this Section 5.1. Each Lender shall promptly
notify the Borrower and the Agent of any event of which it has
knowledge, occurring after the date hereof, which will entitle such
Lender to compensation pursuant to this Section 5.1 and will designate a
different Applicable Lending Office if such designation will avoid the
need for, or reduce the amount of, such compensation and will not, in
the judgment of such Lender, be otherwise disadvantageous to it. Any
Lender claiming compensation under this Section 5.1 shall furnish to the
Borrower and the Agent a statement setting forth the additional amount
or amounts to be paid to it hereunder which shall be conclusive in the
absence of manifest error. In determining such amount, such Lender may
use any reasonable averaging and attribution methods.
Section 5.2 Limitation on Libor Balances and IBOR Balances. If on or
prior to the first day of any Interest Period for any Libor Balance or IBOR
Balance:
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(a) the Agent (with respect to the Libor Rate) or Bank of America
(with respect to the IBOR Rate) determines (which determination shall be
conclusive) that by reason of circumstances affecting the relevant
market, adequate and reasonable means do not exist for ascertaining the
Libor Rate or the IBOR Rate, as applicable, for such Interest Period;
(b) the Required Lenders determine (which determination shall be
conclusive) and notify the Agent that the Libor Rate will not adequately
and fairly reflect the cost to the Lenders of funding Libor Balances for
such Interest Period; or
(c) Bank of America determines (which determination shall be
conclusive) and notifies the Agent that the IBOR Rate will not
adequately and fairly reflect the cost to Bank of America of funding
IBOR Balances for such Interest Period;
then the Agent shall give the Borrower prompt notice thereof specifying the
amounts or periods, and so long as such condition remains in effect, the Lenders
shall be under no obligation to make additional Libor Balances or IBOR Balances
(as applicable) available to the Borrower, Continue Libor Balances or IBOR
Balances (as applicable), or to Convert any portion of the Base Rate Balance
into Libor Balances or IBOR Balances (as applicable) and the Borrower shall, on
the last day(s) of the then current Interest Period(s) for the outstanding Libor
Balances or IBOR Balances (as applicable), either prepay such Libor Balances or
IBOR Balances (as applicable) or Convert such Libor Balances or IBOR Balances
(as applicable) into the Base Rate Balance in accordance with the terms of this
Agreement.
Section 5.3 Illegality. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Lender or its
Applicable Lending Office to make, maintain, or fund Libor Balances or IBOR
Balances (as applicable) hereunder, then such Lender shall promptly notify the
Borrower and the Agent thereof and such Lender's obligation to make or Continue
Libor Balances or IBOR Balances (as applicable) and to Convert any portion of
the Base Rate Balance into Libor Balances or IBOR Balances (as applicable) shall
be suspended until such time as such Lender may again make, maintain, and fund
Libor Balances or IBOR Balances (as applicable) (in which case the provisions of
Section 5.4 shall be applicable).
Section 5.4 Treatment of Affected Balances. If the obligation of any
Lender to make a particular Libor Balance or IBOR Balance (as applicable)
available to the Borrower or to Continue, or to Convert any portion of the Base
Rate Balance into, Libor Balances or IBOR Balances (as applicable) shall be
suspended pursuant to Section 5.1 or Section 5.3 (Balances of such Type being
herein called "Affected Balances"), such Lender's Affected Balances shall be
automatically Converted into the Base Rate Balances on the last day(s) of the
then current Interest Period(s) for the Affected Balances (or, in the case of a
Conversion required by Section 5.3, on such earlier date as such Lender may
specify to the Borrower with a copy to the Agent) and, unless and until such
Lender gives notice as provided below that the circumstances specified in
Section 5.1 or Section 5.3 that gave rise to such Conversion no longer exist:
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(a) to the extent that such Lender's Affected Balances have been
so Converted, all payments and prepayments of principal that would
otherwise be applied to such Lender's Affected Balances shall be applied
instead to its Base Rate Balance; and
(b) all advances under the Loan that would otherwise be made or
Continued by such Lender as Libor Balances or IBOR Balances (as
applicable) shall be made or Continued instead as part of the Base Rate
Balance, and all portions of the Base Rate Balance of such Lender that
would otherwise be Converted into Libor Balances or IBOR Balances (as
applicable) shall remain as all or a portion of the Base Rate Balance.
With respect to amounts outstanding under the Revolving Loan, if such Lender
gives notice to the Borrower (with a copy to the Agent) that the circumstances
specified in Section 5.1 or Section 5.3 that gave rise to the Conversion of such
Lender's Affected Balances no longer exist (which such Lender agrees to do
promptly upon such circumstances ceasing to exist) at a time when Libor Balances
made by other Lenders are outstanding, such Lender's Base Rate Balance shall be
automatically Converted, on the first day(s) of the next succeeding Interest
Period(s) for such outstanding Libor Balances, to the extent necessary so that,
after giving effect thereto, all Balances held by the Lenders holding Libor
Balances and by such Lender are held pro rata (as to principal amounts, Types,
and Interest Periods) in accordance with their respective Commitment
Percentages.
Section 5.5 Compensation. Upon the request of any Lender, the Borrower
shall pay to such Lender such amount or amounts as shall be sufficient (in the
reasonable opinion of such Lender) to compensate it for any loss, cost, or
expense (including, without limitation, loss of anticipated profits,
reemployment of funds obtained to maintain any Balance, from fees payable to
terminate the deposits from which such funds were obtained, any customary
administrative fees charged by the Lender in connection with the foregoing, and
any such amounts incurred in connection with syndication of the Loan) incurred
by it as a result of:
(a) any payment, prepayment, or Conversion by the Borrower of a
Libor Balance or an IBOR Balance for any reason (including, without
limitation, the acceleration of the Loan pursuant to Section 12.2) on a
date other than the last day of the Interest Period for such Libor
Balance or IBOR Balance; or
(b) any failure by the Borrower for any reason (including,
without limitation, the failure of any condition precedent specified in
Article 7 to be satisfied) to borrow, Convert, Continue, or prepay a
Libor Balance or an IBOR Balance on the date for such borrowing,
Conversion, Continuation, or prepayment specified in the relevant notice
of borrowing, prepayment, Continuation, or Conversion under this
Agreement.
Notwithstanding the foregoing provisions of this Section 5.5, if at any time the
mandatory prepayment of the Loan pursuant to Section 4.4(a) would result in the
Borrower incurring breakage costs under this Section 5.5 as a result of Libor
Balances or IBOR Balances being prepaid other than on the last day of an
Interest Period applicable thereto (collectively, the "Affected Libor/IBOR
Balances"), then the Borrower may in its sole discretion initially deposit a
portion (up to 100%) of the amounts that otherwise would have been paid in
respect of the Affected Libor/IBOR Balances
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with the Agent (which deposit, after giving effect to interest to be earned on
such deposit prior to the last day of the relevant Interest Periods, must be
equal in amount to the amount of Affected Libor/IBOR Balances not immediately
prepaid) to be held as security for the obligations of the Borrower hereunder
pursuant to a cash collateral agreement to be entered into in form and substance
satisfactory to the Agent, with such cash collateral to be directly applied upon
the first occurrence (or occurrences) thereafter of the last day of an Interest
Period applicable to the Affected Libor/IBOR Balances (or such earlier date or
dates as shall be requested by the Borrower), to repay an aggregate principal
amount of the Loan equal to the Affected Libor/IBOR Balances not initially
repaid pursuant to this sentence.
Section 5.6 Taxes.
(a) Withholding Taxes. Except as otherwise provided in this
Agreement, any and all payments by the Borrower or any Guarantor to or
for the account of any Lender or the Agent hereunder or under any other
Loan Document shall be made free and clear of and without deduction for
any and all present or future taxes, duties, levies, imposts,
deductions, charges, or withholdings, and all liabilities with respect
thereto, excluding, in the case of each Lender or the Agent (as
applicable), taxes imposed on or measured by its income, and franchise
taxes imposed on it, by the jurisdiction under the laws of which such
Lender (or its Applicable Lending Office) or the Agent (as the case may
be) is organized, located, or doing business or any political
subdivision thereof, and excluding in the case of any Foreign Lender
taxes arising as a result of such Lender's failure to comply with
Section 14.22, (all such non-excluded taxes, duties, levies, imposts,
deductions, charges, withholdings, and liabilities being hereinafter
referred to as "Taxes"). If the Borrower or any Guarantor shall be
required by law to deduct any Taxes from or in respect of any sum
payable under any Loan Document to any Lender or the Agent (as
applicable), (i) the sum payable shall be increased as necessary so that
after making all required deductions (including, without limitation,
deductions applicable to additional sums payable under this Section 5.6)
such Lender or the Agent (as applicable) receives an amount equal to the
sum it would have received had no such deductions been made, (ii) the
Borrower or any Guarantor, as applicable, shall make such deductions,
(iii) the Borrower or any Guarantor, as applicable, shall pay the full
amount deducted to the relevant taxing authority or other authority in
accordance with applicable law, and (iv) the Borrower or any Guarantor,
as applicable, shall furnish to the Agent the original or a certified
copy of a receipt evidencing payment thereof.
(b) Stamp Taxes, Etc. In addition, the Borrower agrees to pay any
and all present or future stamp or documentary taxes and any other
excise or property taxes or charges or similar levies which arise from
any payment made under this Agreement or any other Loan Document or from
the execution or delivery of, or otherwise with respect to, this
Agreement or any other Loan Document ("Other Taxes").
(c) Tax Indemnification. THE BORROWER AGREES TO INDEMNIFY EACH
LENDER AND THE AGENT-RELATED PERSONS FOR THE FULL AMOUNT OF TAXES AND
OTHER TAXES (INCLUDING, WITHOUT LIMITATION, ANY "TAXES" OR "OTHER TAXES"
IMPOSED OR ASSERTED BY ANY JURISDICTION ON
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AMOUNTS PAYABLE UNDER THIS SECTION 5.6) PAID BY SUCH LENDER OR ANY
AGENT-RELATED PERSON (AS THE CASE MAY BE) AND ANY LIABILITY (INCLUDING,
WITHOUT LIMITATION, PENALTIES, INTEREST, AND EXPENSES) ARISING THEREFROM
OR WITH RESPECT THERETO, OTHER THAN PENALTIES, ADDITIONS TO TAX,
INTEREST, AND EXPENSES ARISING AS A RESULT OF GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT ON THE PART OF SUCH LENDER OR AGENT-RELATED PERSON
AND ANY TAXES ARISING AS A RESULT OF THE FAILURE OF ANY FOREIGN LENDER
TO COMPLY WITH THE TERMS OF SECTION 14.22.
ARTICLE 6
Guaranties
Section 6.1 Guaranties. Each Subsidiary of the Borrower in existence as
of the Closing Date, each Subsidiary of the Borrower which after the Closing
Date executes a Joinder Agreement, and any other Subsidiary of the Borrower
which at any time Guarantees the indebtedness, liabilities, and obligations of
the Borrower under the Note Agreement shall guarantee payment and performance of
the Obligations pursuant to the Subsidiary Guaranty. Additionally, the Borrower
shall cause one or more of its other domestic Subsidiaries (if any) to Guarantee
payment and performance of the Obligations pursuant to the Subsidiary Guaranty
as follows: (a) in the event that any domestic Subsidiary of the Borrower which
is not a Guarantor has assets of a net book value in excess of $10,000,000 or
gross revenue for the most recently completed four (4) Fiscal Quarters,
beginning with the four (4) Fiscal Quarters ending October 29, 2000, in excess
of $10,000,000 the Borrower shall cause such domestic Subsidiary to become a
Guarantor as provided by Section 6.2 and (b) in the event that the Borrower's
domestic Subsidiaries which are not previously Guarantors hereunder have assets,
in the aggregate for all such domestic Subsidiaries, of a net book value in
excess of $75,000,000 or gross revenue for the most recently completed four (4)
Fiscal Quarters, beginning with the four (4) Fiscal Quarters ending October 29,
2000, in excess of $75,000,000, the Borrower shall cause one or more of such
Subsidiaries to become Guarantors as provided by Section 6.2 with the effect
that the assets and gross revenue of the remaining domestic Subsidiaries of the
Borrower which are not Guarantors hereunder do not exceed $75,000,000 as of such
date.
Section 6.2 New Guarantors. In the event that the Borrower is required
to cause one or more of its Subsidiaries to become Guarantors as set forth in
Section 6.1, such new Guarantor or Guarantors (as the case may be) shall,
contemporaneously with the delivery of the financial statements required by
Section 9.1(a) and Section 9.1(b), execute and deliver to the Agent a Joinder
Agreement pursuant to which each such Subsidiary of the Borrower becomes a
Guarantor under this Agreement and such other certificates and documentation,
including the items otherwise required pursuant to Section 7.1, as the Agent may
reasonably request.
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ARTICLE 7
Conditions Precedent
Section 7.1 Initial Advance. The obligation of each Lender to make its
initial advance of the Loan is subject to the following conditions precedent:
(a) Deliveries. The Agent shall have received on or before the
Closing Date and on or before the day of such advance all of the
following, each dated (unless otherwise indicated) the Closing Date, in
form and substance satisfactory to the Agent and the Lenders:
(i) Resolutions; Authority. For each of the Borrower and
the Guarantors, resolutions of its board of directors (or similar
governing body) certified by its Secretary or an Assistant
Secretary which authorize its execution, delivery, and
performance of the Loan Documents to which it is or is to be a
party;
(ii) Incumbency Certificate. For each of the Borrower and
the Guarantors, a certificate of incumbency certified by the
Secretary or an Assistant Secretary certifying the names of its
officers (A) who are authorized to sign the Loan Documents to
which it is or is to be a party (including, without limitation,
the certificates contemplated herein) together with specimen
signatures of each such officer and (B) who will, until replaced
by other officers duly authorized for that purpose, act as its
representatives for the purposes of signing documentation and
giving notices and other communications in connection with this
Agreement and the transactions contemplated hereby;
(iii) Organizational Documents. For each of the Borrower
and the Guarantors, the certificate of incorporation, certificate
of formation, certificate of limited partnership, or other
similar document certified by the Secretary of State of the state
of its incorporation, formation, or organization and dated a
current date;
(iv) Bylaws. For each of the Borrower and the Guarantors,
the bylaws, operating agreement, partnership agreement, or
similar agreement certified by its Secretary or an Assistant
Secretary;
(v) Governmental Certificates. For each of the Borrower
and the Guarantors, (A) certificates (dated within thirty (30)
days of the Closing Date) of the appropriate Governmental
Authorities of the state of incorporation, formation, or
organization as to its existence and, to the extent applicable,
good standing and (B) certificates (dated within forty-five (45)
days of the Closing Date) of the appropriate Governmental
Authorities of each of the states set forth on Schedule 7.1 and
of each other state in which such Person conducts business, other
than the state of organization of such Person, as to such
Person's qualification to do business and good standing in such
state where failure to be so qualified could reasonably be
expected to have a Material Adverse Effect, provided that the
Borrower may defer
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delivery of such certificates included in this clause (B) for a
period of forty-five (45) days after the Closing Date;
(vi) Credit Agreement. This Agreement, together with all
Schedules, Exhibits, and other attachments (if any), duly
executed by the Borrower, the Agent, and the Lenders;
(vii) Acknowledgment of Intercreditor Agreement. An
Acknowledgment of Intercreditor Agreement duly executed by each
Lender;
(viii) Notes. The Revolving Notes and the Swingline Note
executed by the Borrower;
(ix) Subsidiary Guaranty. The Subsidiary Guaranty executed
by each of the Guarantors;
(x) Termination of Liens. Duly executed UCC-3 termination
statements, mortgage releases, and such other documentation as
shall be necessary to terminate or release all Liens other than
those permitted by Section 10.2;
(xi) Certificate of Compliance. A certificate of the chief
financial officer or the Vice President, Finance of the Borrower
setting forth a calculation of the financial covenants in Section
11.1, Section 11.2, and Section 11.3 as of the Borrower's Fiscal
Quarter ended April 30, 2000;
(xii) Consents. Copies of all material consents or waivers
necessary for the execution, delivery, and performance by the
Borrower and each Guarantor of the Loan Documents to which it is
a party, as the Agent may require, which consents shall be
certified by an authorized representative of the Borrower or such
Guarantor, as applicable, as true and correct copies of such
consents as of the Closing Date;
(xiii) Opinions of Counsel. Satisfactory opinions of legal
counsel to the Borrower and the Guarantors as to such matters as
the Agent may request;
(xiv) Fees. Payment of all fees payable to the Lenders
including, without limitation, those fees set forth in the
Agent's Letter;
(xv) Letter of Direction. A letter of direction from the
Borrower addressed to the Agent with respect to the disbursement
of the proceeds of the initial advance under the Loan; and
(xvi) Termination of Line of Credit. The Borrower shall,
with the proceeds of the initial advance hereunder, repay the
outstanding line of credit provided pursuant to that certain
Letter of Credit Agreement, as amended, dated as of June 1, 1997,
between the Borrower and Bank of America National Trust and
Savings
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45
Association (now known as Bank of America, National Association)
and terminate its rights to reborrow under such line of credit
(provided that the Borrower shall not be required to terminate
its rights to request letters of credit under such letter of
credit agreement);
(b) Attorney Costs. The Attorney Costs referred to in Section
14.1 for which statements have been presented shall have been paid in
full (or shall be paid with the proceeds of the initial advance under
the Loan made on the Closing Date);
(c) Compliance with Laws. As of the Closing Date, each Person
that is a party to this Agreement or any of the other Loan Documents
shall have complied with all requirements of any Governmental Authority
necessary to consummate the transactions contemplated by this Agreement
and the other Loan Documents;
(d) No Prohibitions. No requirement of any Governmental Authority
shall prohibit the consummation of the transactions contemplated by this
Agreement or any other Loan Document, and no order, judgment, ruling,
injunction, or decree of any Governmental Authority or arbitrator shall,
and no litigation or other proceeding shall be pending or threatened
which would, enjoin, prohibit, restrain, or otherwise adversely affect
in any material manner the consummation of the transactions contemplated
by this Agreement or the other Loan Documents or otherwise have a
Material Adverse Effect;
(e) No Material Adverse Change. As of the Closing Date, no
material adverse change shall have occurred with respect to (i) the
business, assets, liabilities (actual or contingent), operations,
condition (financial or otherwise), or prospects of the Borrower
(individually) or the Borrower and its Subsidiaries (taken as a whole)
since January 30, 2000 or (ii) in the facts and information regarding
such Persons disclosed to the Agent and the Lenders prior to the Closing
Date;
(f) No Material Litigation. Except as set forth in Schedule 8.5,
as of the Closing Date, no action, suit, investigation, or proceeding
shall be pending or threatened before any Governmental Authority that
purports to affect the Borrower or any of its Subsidiaries that could
reasonably be expected to result in a Material Adverse Effect;
(g) Compliance With Financial and Other Obligations. As of the
Closing Date, the Borrower and each of its Subsidiaries shall be in
compliance with all of its respective existing financial obligations,
and no default or event of default shall be in existence (either before
or after giving effect to this Agreement) under any Capital Stock or
Debt of the Borrower or any Subsidiary of the Borrower;
(h) Capital Structure. The corporate capital and ownership
structure (including, without limitation, articles of incorporation and
bylaws), shareholders agreements, and management of the Borrower and its
Subsidiaries shall be reasonably satisfactory to the Agent;
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(i) No Material Market Changes. The absence of any material
disruption of or material adverse change in conditions in the financial,
banking, or capital markets which the Agent and the Arranger in their
sole discretion, deem material in connection with the syndication of the
Commitment and the Loan provided to the Borrower pursuant to the terms
of this Agreement; and
(j) Additional Documentation. The Agent and the Lenders shall
have received such additional approvals, opinions, or other
documentation as the Agent or any Lender may reasonably request.
Section 7.2 All Advances. The obligation of each Lender to make any
advance under the Loan (including, without limitation, the initial advance) is
subject to the following additional conditions precedent:
(a) No Default. No Default shall have occurred and be continuing,
or would result from such Loan;
(b) Representations and Warranties. All of the representations
and warranties contained in Article 8 and in the other Loan Documents
shall be true and correct in all material respects on and as of the date
of such Loan with the same force and effect as if such representations
and warranties had been made on and as of such date except to the extent
that such representations and warranties relate specifically to another
date;
(c) Governmental Restrictions. There shall be no governmental
inquiries, injunctions, or restraining orders instituted or pending, or
any statute or rule enacted, promulgated, entered, or enforced which
would have a Material Adverse Effect upon the Borrower (individually) or
the Borrower and its Subsidiaries (taken as a whole); and
(d) No Material Adverse Change. No material adverse change shall
have occurred with respect to the business, assets, liabilities (actual
or contingent), operations, condition (financial or otherwise), or
prospects of the Borrower (individually) or the Borrower and its
Subsidiaries (taken as a whole) since January 30, 2000.
Each notice of borrowing by the Borrower hereunder shall constitute a
representation and warranty by the Borrower that the conditions precedent set
forth in this Section 7.2 have been satisfied (both as of the date of such
notice and, unless the Borrower otherwise notifies the Agent prior to the date
of such borrowing, as of the date of such borrowing).
ARTICLE 8
Representations and Warranties
To induce the Agent and the Lenders to enter into this Agreement, the
Borrower represents and warrants that the following statements are and, after
giving effect to the transactions contemplated hereby will be, true, correct,
and complete:
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Section 8.1 Existence, Power and Authority.
(a) The Borrower and each of its Subsidiaries is (i) duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its organization; (ii) has all requisite power and
authority to own its assets and carry on its business as now being or as
proposed to be conducted; and (iii) is qualified to do business in all
jurisdictions in which the nature of its business makes such
qualification necessary and where failure to so qualify would have a
Material Adverse Effect;
(b) The Borrower and each of its Subsidiaries has the power and
authority to execute, deliver, and perform its respective obligations
under the Loan Documents to which it is or may become a party.
Section 8.2 Financial Condition.
(a) Financial Statements. The Borrower has delivered to the Agent
and each Lender the audited financial statements of the Borrower and its
Subsidiaries as of and for the (i) Fiscal Years ended February 1, 1998,
January 31, 1999, and January 30, 2000 and (ii) the three (3) Fiscal
Periods ended April 30, 2000. Such financial statements have been
prepared in accordance with GAAP (subject to year-end audit adjustments
and the inclusion of footnotes in the case of the financial statements
described in clause (ii) preceding), and present fairly, the financial
condition of the Borrower and its Subsidiaries as of the respective
dates indicated therein and the results of operations for the respective
periods indicated therein. Neither the Borrower nor any of its
Subsidiaries has any material contingent liabilities, liabilities for
taxes, unusual forward or long-term commitments, or unrealized or
anticipated losses from any unfavorable commitments except as referred
to or reflected in the financial statements referred to in clause (ii)
preceding. Since the date of the financial statements referred to in
clause (ii) preceding, no material adverse change has occurred with
respect to the business, assets, liabilities (actual or contingent),
operations, condition (financial or otherwise), or prospects of the
Borrower (individually) or of the Borrower and its Subsidiaries (taken
as a whole).
(b) Projections. The Projections delivered and to be delivered by
the Borrower to the Agent and included in the Offering Memorandum and
the Projections to be delivered by the Borrower pursuant to Section
9.1(a) have been and will be prepared by the Borrower in light of the
past operation of the business of the Borrower and its Subsidiaries. All
such Projections represent, as of the date thereof, a good faith
estimate by the Borrower and its senior management of the financial
conditions and performance of the Borrower and its Subsidiaries based on
assumptions believed to be reasonable at the time made (provided that
the performance of the Borrower and its Subsidiaries may vary from such
Projections).
Section 8.3 Corporate and Similar Action; No Breach. The execution,
delivery, and performance by the Borrower and each of its Subsidiaries of the
Loan Documents to which it is or may become a party and compliance with the
terms and provisions thereof have been duly authorized by all requisite action
on the part of the Borrower and each of its Subsidiaries, respectively, and do
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not and will not (a) violate or conflict with, or result in a breach of, or
require any consent under (i) the articles of incorporation, bylaws, or other
organizational documents (as applicable) of such Person, (ii) any applicable
law, rule, or regulation or any order, writ, injunction, or decree of any
Governmental Authority or arbitrator, or (iii) any agreement or instrument to
which such Person is a party or by which any of them or any of their property is
bound or subject, or (b) constitute a default under any such agreement or
instrument, or result in the creation or imposition of any Lien upon any of the
revenues or assets of such Person.
Section 8.4 Operation of Business. Each of the Borrower and its
Subsidiaries possesses all material licenses, Permits, franchises, patents,
copyrights, trademarks, and tradenames, or rights thereto, necessary to conduct
its business substantially as now conducted and as presently proposed to be
conducted, and neither the Borrower nor any of its Subsidiaries is in violation
of any valid rights of others with respect to any of the foregoing where such
violation could be expected to have a Material Adverse Effect. Except as set
forth in Schedule 8.4, since April 30, 2000, the Borrower and its Subsidiaries
have conducted their respective businesses only in the ordinary and usual
course.
Section 8.5 Litigation and Judgments. Except as set forth in Schedule
8.5, there is no action, suit, investigation, or proceeding before or by any
Governmental Authority or arbitrator pending or threatened against or affecting
the Borrower or any of its Subsidiaries which could reasonably be expected to
have a Material Adverse Effect. As of the Closing Date, except as set forth in
Schedule 8.5, there are no outstanding judgments against the Borrower or any of
its Subsidiaries.
Section 8.6 Rights in Properties; Liens. The Borrower and each of its
Subsidiaries has good title to or valid leasehold interests in its respective
Properties, real and personal and none of such Properties or leasehold interests
of the Borrower or any of its Subsidiaries is subject to any Lien, except as
permitted by Section 10.2.
Section 8.7 Enforceability. The Loan Documents to which the Borrower or
any Subsidiary of the Borrower is a party, when executed and delivered, shall
constitute the legal, valid, and binding obligations of the Borrower or such
Subsidiary, as applicable, enforceable against such Person in accordance with
their respective terms, except as limited by bankruptcy, insolvency, or other
laws of general application relating to the enforcement of creditors' rights and
general principles of equity.
Section 8.8 Approvals. No authorization, approval, or consent of, and no
filing or registration with, any Governmental Authority or other third party is
or will be necessary for the execution, delivery, or performance by the Borrower
or any Subsidiary of the Borrower of the Loan Documents to which it is or may
become a party, except where the failure to obtain any such authorization,
approval or consent could not reasonably be expected to have a Material Adverse
Effect, or for the validity or enforceability thereof.
Section 8.9 Debt. Neither the Borrower nor any of its Subsidiaries has
any Debt, except as set forth in Schedule 8.9 or as otherwise permitted by
Section 10.1.
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Section 8.10 Taxes. Except as set forth in Schedule 8.10 or, after the
Closing Date, matters which do not violate Section 9.4, the Borrower and each
Subsidiary of the Borrower have filed all tax returns (federal, state, and
local) required to be filed, including all income, franchise, employment,
property, and sales tax returns, and have paid all of their respective
liabilities for taxes, assessments, governmental charges, and other levies that
are due and payable other than those being contested in good faith by
appropriate proceedings diligently pursued for which adequate reserves have been
established in accordance with GAAP. Except as set forth in Schedule 8.10 or,
after the Closing Date, matters which do not violate Section 9.4, there is no
pending investigation of the Borrower or any Subsidiary of the Borrower by any
taxing authority with respect to any liability for tax or of any pending but
unassessed tax liability of the Borrower or any Subsidiary of the Borrower.
Section 8.11 Margin Securities. Neither the Borrower nor any of its
Subsidiaries is engaged principally, or as one of its important activities, in
the business of extending credit for the purpose of buying or carrying margin
stock (within the meaning of Regulation U or Regulations T or X of the Board of
Governors of the Federal Reserve System), and no part of the proceeds of the
Loan will be used to buy or carry any margin stock or to extend credit to others
for the purpose of buying or carrying margin stock.
Section 8.12 ERISA. With respect to each Plan, the Borrower and each
Subsidiary of the Borrower is in compliance with all applicable provisions of
ERISA. Neither a Reportable Event nor a Prohibited Transaction has occurred and
is continuing with respect to any Plan. No notice of intent to terminate a Plan
has been filed, nor has any Plan been terminated. As of the Closing Date, no
circumstances exist which constitute grounds entitling the PBGC to institute
proceedings to terminate, or appoint a trustee to administer, a Plan, nor has
the PBGC instituted any such proceedings. Neither the Borrower nor any of its
Subsidiaries nor any ERISA Affiliate has completely or partially withdrawn from
a Multiemployer Plan. The Borrower each Subsidiary of the Borrower, and each
ERISA Affiliate have met their minimum funding requirements under ERISA with
respect to each Plan. Except as set forth in Schedule 8.12, the present value of
all vested benefits under each Plan do not exceed the fair market value of all
Plan assets allocable to such benefits, as determined on the most recent
valuation date of the Plan and in accordance with ERISA. Neither the Borrower,
any of its Subsidiaries, nor any ERISA Affiliate has any outstanding liability
to the PBGC under ERISA (other than liability for the payment of PBGC premiums
in the ordinary course of business).
Section 8.13 Disclosure. All factual information furnished by or on
behalf of the Borrower or any Subsidiary of the Borrower to the Agent or any
Lender for purposes of or in connection with this Agreement, the other Loan
Documents, or any transaction contemplated herein or therein is, and all other
such factual information hereafter furnished by or on behalf of the Borrower or
any Subsidiary of the Borrower to the Agent or any Lender, 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 fact necessary to
make such information not misleading in any material respect at such time in
light of the circumstances under which such information was provided.
Section 8.14 Subsidiaries; Capitalization. As of the Closing Date, the
Borrower has no other Subsidiaries other than those listed in Schedule 8.14. As
of the Closing Date, Schedule 8.14
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sets forth the jurisdiction of incorporation or organization of the Borrower and
its Subsidiaries, the percentage of the Borrower's ownership of the outstanding
Voting Stock of each Subsidiary of the Borrower, and the authorized, issued, and
outstanding Capital Stock of the Borrower and each Subsidiary of the Borrower.
All of the outstanding Capital Stock of the Borrower and its Subsidiaries has
been validly issued, is fully paid, is nonassessable, and has not been issued in
violation of any preemptive or similar rights. As of the Closing Date, except as
disclosed in Schedule 8.14, there are (a) no outstanding subscriptions, options,
warrants, calls, or rights (including, without limitation, preemptive rights) to
acquire, and no outstanding securities or instruments convertible into, Capital
Stock of the Borrower or any of its Subsidiaries, and (b) no shareholder
agreements, voting trusts, or similar agreements in effect and binding on any
shareholder of (i) to the Borrower's knowledge, the Borrower or any of its
Capital Stock or (ii) any Subsidiary of the Borrower or any of their respective
Capital Stock. All shares of Capital Stock of the Borrower and its Subsidiaries
were issued in compliance with all applicable state and federal securities laws.
Section 8.15 Material Agreements. Except as set forth in Schedule 8.15,
neither the Borrower nor any of its Subsidiaries is a party to any indenture,
loan, or credit agreement, or to any lease or other agreement or instrument, or
subject to any charter or corporate restriction that could reasonably be
expected to have a Material Adverse Effect. Neither the Borrower nor any of its
Subsidiaries is in default, or has knowledge of facts or circumstances that with
the giving of notice or passage of time or both could be expected to result in a
default, in any respect in the performance, observance, or fulfillment of any of
the obligations, covenants, or conditions contained in any agreement or
instrument (including, without limitation, any indenture, loan, or credit
agreement, or any lease or other similar agreement or instrument) to which it is
a party where such default could be expected to cause a Material Adverse Effect.
Section 8.16 Compliance with Laws. Neither the Borrower nor any of its
Subsidiaries is in violation of any law, rule, regulation, order, or decree of
any Governmental Authority or arbitrator except for violations which could not
be expected to have a Material Adverse Effect.
Section 8.17 Investment Company Act. Neither the Borrower nor any of its
Subsidiaries is an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
Section 8.18 Public Utility Holding Company Act. Neither the Borrower
nor any of its Subsidiaries is a "holding company" or a "subsidiary company" of
a "holding company" or an "affiliate" of a "holding company" or a "public
utility" within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
Section 8.19 Environmental Matters.
Except as disclosed on Schedule 8.19:
(a) to the Borrower's knowledge, the Borrower, each Subsidiary of
the Borrower, and all of their respective properties, assets, and
operations are in compliance with all Environmental Laws; neither the
Borrower nor any of its Subsidiaries has knowledge of, nor
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has the Borrower or any Subsidiary of the Borrower received notice of,
any past, present, or future conditions, events, activities, practices,
or incidents which interfere with or prevent the compliance or continued
compliance of the Borrower or its Subsidiaries with all Environmental
Laws;
(b) the Borrower and its Subsidiaries have obtained and
maintained, and are in material compliance with, all material Permits,
licenses, and authorizations that are required under applicable
Environmental Laws;
(c) except in compliance in all material respects with applicable
Environmental Laws, during the course of the Borrower's or any of its
Subsidiaries' ownership of or operations on any real Property, there has
been no generation, treatment, recycling, storage, or disposal of
hazardous waste, as that term is defined in 40 CFR Part 261 or any state
equivalent, use of underground storage tanks or surface impoundments,
use of asbestos containing materials, or use of polychlorinated
biphenyls (PCB) used in hydraulic oils, electrical transformers, or
other equipment that could reasonably be expected to have a Material
Adverse Effect, and the use which the Borrower and its Subsidiaries make
and intend to make of their respective properties and assets will not
result in the use, generation, storage, transportation, accumulation,
disposal, or Release of any Hazardous Material on, in, or from any of
their properties or assets that could reasonably be expected to have a
Material Adverse Effect;
(d) neither the Borrower, any of its Subsidiaries, nor any of
their respective currently or previously owned or leased Properties or
operations is subject to any outstanding or, to their knowledge,
threatened order from or agreement with any Governmental Authority or
other Person or subject to any judicial or administrative proceeding
with respect to (i) failure to comply with Environmental Laws, (ii)
Remedial Action, or (iii) any Environmental Liabilities arising from a
Release or threatened Release;
(e) there are no conditions or circumstances associated with the
currently or previously owned or leased Properties or operations of the
Borrower or any Subsidiary of the Borrower that could reasonably be
expected to result in any Environmental Liabilities or to have a
Material Adverse Effect;
(f) neither the Borrower nor any of its Subsidiaries is or
operates a treatment, storage, or disposal facility requiring a permit
under the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901
et seq., the regulations thereunder, or any comparable provision of
state law, and except as would not reasonably be expected to have a
Material Adverse Effect, the Borrower and each Subsidiary of the
Borrower is in compliance with all applicable financial responsibility
requirements of all applicable Environmental Laws;
(g) neither the Borrower nor any of its Subsidiaries has filed or
failed to file any notice required under applicable Environmental Law
reporting an unauthorized Release; and
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(h) no Lien arising under any Environmental Law has attached to
any property or revenues of the Borrower or any Subsidiary of the
Borrower.
Section 8.20 Broker's Fees. Except as disclosed on Schedule 8.20, no
broker's or finder's fee, commission, or similar compensation will be payable by
the Borrower or any Subsidiary of the Borrower with respect to the transactions
contemplated by this Agreement.
Section 8.21 Employee Matters. Except as set forth on Schedule 8.21, as
of the Closing Date (a) neither the Borrower nor any of its Subsidiaries, nor
any of their respective employees, is subject to any collective bargaining
agreement, (b) no petition for certification or union election is pending with
respect to the employees of the Borrower or any Subsidiary of the Borrower and
no union or collective bargaining unit has sought such certification or
recognition with respect to the employees of the Borrower or any Subsidiary of
the Borrower, and (c) there are no strikes, slowdowns, work stoppages, or
controversies pending or, to the best knowledge of the Borrower and the
Subsidiaries of the Borrower after due inquiry, threatened between the Borrower
or any Subsidiary of the Borrower and its respective employees.
Section 8.22 Solvency. Each of the Borrower and the Subsidiary
Guarantors, individually and on a consolidated basis is Solvent.
ARTICLE 9
Affirmative Covenants
The Borrower covenants and agrees that, as long as the Obligations or
any part thereof are outstanding or any Lender has any Commitment hereunder, it
will perform and observe the following covenants:
Section 9.1 Reporting Requirements. The Borrower will furnish to the
Agent and each Lender:
(a) Annual Financial Statements and Projections. As soon as
available, and in any event within ninety (90) days after the end of
each Fiscal Year of the Borrower, beginning with the Fiscal Year ending
January 28, 2001, (i) a copy of the annual audit report of the Borrower
for such Fiscal Year containing, on a consolidated basis, a balance
sheet and statements of income, retained earnings, and cash flow as at
the end of such Fiscal Year and for the Fiscal Year then ended, in each
case setting forth in comparative form the figures for the preceding
Fiscal Year, all in reasonable detail and audited and certified on an
unqualified basis by a "Big Five" firm of independent certified public
accountants or other independent certified public accountants of
recognized standing selected by the Borrower and reasonably acceptable
to the Agent, to the effect that such report has been prepared in
accordance with GAAP; (ii) a copy of the annual unaudited report of the
Borrower and its Subsidiaries for such Fiscal Year containing, on a
consolidating basis balance sheets and statements of income, retained
earnings, and cash flow as at the end of such Fiscal Year and for the
Fiscal Year then ended, in each case setting forth in comparative form
the figures for the preceding
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Fiscal Year, and in reasonable detail certified by the chief financial
officer or Vice President, Finance of the Borrower to have been prepared
in accordance with GAAP and to fairly present the financial condition
and results of operation of the Borrower and its Subsidiaries, on a
consolidating basis at the date and for the Fiscal Year then ended; and
(iii) a copy of Projections for the Borrower's Fiscal Year immediately
following the Fiscal Year which is the subject of the financial
statements delivered pursuant to clause (i) preceding;
(b) Quarterly Financial Statements. As soon as available, and in
any event within forty-five (45) days after the end of each Fiscal
Quarter of the Borrower, beginning with the Fiscal Quarter ending July
30, 2000, a copy of an unaudited financial report of the Borrower and
its Subsidiaries as of the end of such Fiscal Quarter and for the
portion of the Fiscal Year then ended containing, on a consolidated
basis, a balance sheet and statements of income, retained earnings, and
cash flow, in each case setting forth in comparative form the figures
for the corresponding period of the preceding Fiscal Year, all in
reasonable detail certified by the chief financial officer or Vice
President, Finance of the Borrower to have been prepared in accordance
with GAAP and to fairly present the financial condition and results of
operations of the Borrower and its Subsidiaries on a consolidated basis,
at the date and for the periods indicated therein, subject to year-end
audit adjustments and the inclusion of footnotes;
(c) Compliance Certificate. As soon as available, and in any
event accompanying the financial statements delivered in accordance with
Section 9.1(a) and Section 9.1(b), a Compliance Certificate, together
with schedules setting forth the calculations supporting the
computations therein;
(d) Applicable Rate Certificate. Concurrently with the delivery
of each of the financial statements referred to in Section 9.1(b) and
within forty-five (45) days after the end of each Fiscal Year of the
Borrower, a certificate of the chief financial officer or Vice
President, Finance of the Borrower showing in reasonable detail the
calculation required for the Agent to determine the Applicable Rate;
(e) Notice of Litigation, Etc. Promptly after receipt by the
Borrower or any Subsidiary of the Borrower of notice of the commencement
thereof, notice of all actions, suits, and proceedings by or before any
Governmental Authority or arbitrator affecting the Borrower or any
Subsidiary of the Borrower which, if determined adversely to the
Borrower or such Subsidiary of the Borrower, could reasonably be
expected to have a Material Adverse Effect;
(f) Notice of Default. As soon as possible and in any event
within two (2) Business Days after the chief executive officer,
president, chief financial officer, any vice president, secretary,
assistant secretary, treasurer, or any assistant treasurer of the
Borrower has knowledge of the occurrence of a Default, a written notice
setting forth the details of such Default and the action that the
Borrower has taken and proposes to take with respect thereto;
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(g) ERISA. As soon as possible and in any event within thirty
(30) days after the Borrower or any Subsidiary of the Borrower knows, or
has reason to know, that
(i) any Termination Event with respect to a Plan has
occurred or will occur,
(ii) the aggregate present value of the Unfunded Vested
Accrued Benefits under all Plans is equal to an amount in excess
of $0, or
(iii) the Borrower or any Subsidiary of the Borrower is in
"default" (as defined in Section 4219(c)(5) of ERISA) with
respect to payments to a Multiemployer Plan required by reason of
the Borrower's or any of its Subsidiaries' complete or partial
withdrawal (as described in Section 4203 or 4205 of ERISA) from
such Multiemployer Plan,
the Borrower will provide the Agent and the Lenders with a certificate
of its chief financial officer or Vice President, Finance setting forth
the details of such event and the action which is proposed to be taken
with respect thereto, together with any notice or filing which may be
required by the PBGC or any other Governmental Authority with respect to
such event;
(h) Notice of Material Adverse Effect. As soon as possible and in
any event within two (2) Business Days of the discovery of any event or
condition that could reasonably be expected to have a Material Adverse
Effect;
(i) Proxy Statements, Periodic Reporting, Etc. As soon as
available, one copy of each financial statement, report, notice, or
proxy statement sent by the Borrower or any Subsidiary of the Borrower
to its stockholders generally and one copy of each regular, periodic, or
special report, registration statement, or prospectus filed by the
Borrower or any Subsidiary of the Borrower with any securities exchange
or the Securities and Exchange Commission or any successor agency;
(j) Intercompany Contracts. Promptly upon entering into any such
arrangement or contract (to the extent permitted by Section 10.7),
copies or detailed descriptions of all tax sharing, cost allocation,
overhead attribution, and any similar contracts or arrangements between
the Borrower and any of its Affiliates at any time existing; and
(k) General Information. Promptly, such other information
concerning the Borrower or any Subsidiary of the Borrower as the Agent
or any Lender may from time to time reasonably request.
Section 9.2 Maintenance of Existence; Conduct of Business. Except as
permitted by Section 10.3, the Borrower will, and will cause each Subsidiary of
the Borrower to, preserve and maintain (a) its corporate existence and (b) all
of its leases, privileges, Permits, franchises, qualifications, and rights that
are necessary in the ordinary conduct of its business. The Borrower
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will, and will cause each Subsidiary of the Borrower to, conduct its business in
an orderly and efficient manner in accordance with good business practices.
Section 9.3 Maintenance of Properties. Except as permitted by Section
10.3, the Borrower will, and will cause each Subsidiary of the Borrower to,
maintain, keep, and preserve all of its material Properties necessary in the
conduct of its business in good working order and condition, ordinary wear and
tear excepted.
Section 9.4 Taxes and Claims. The Borrower will, and will cause each
Subsidiary of the Borrower to, pay or discharge at or before maturity or before
becoming delinquent (a) all taxes, levies, assessments, and governmental charges
imposed on it or its income or profits or any of its property, and (b) all
lawful claims for labor, material, and supplies, which, if unpaid, might become
a Lien upon any of its property; provided that neither the Borrower nor any
Subsidiary of the Borrower shall be required to pay or discharge any tax, levy,
assessment, or governmental charge or charge for labor, material, and supplies
(i) which is being contested in good faith by appropriate proceedings diligently
pursued, and for which adequate reserves in accordance with GAAP have been
established and (ii) if the failure to pay the same would not result in a Lien
on the Property of the Borrower or a Subsidiary of the Borrower other than a
Permitted Lien.
Section 9.5 Insurance.
(a) The Borrower will, and will cause each of its Subsidiaries
to, keep insured by financially sound and reputable insurers all
Property of a character usually insured by responsible businesses
engaged in the same or a similar business similarly situated against
loss or damage of the kinds and in the amounts customarily insured
against by such corporations or entities and carry such other insurance
as is usually carried by such businesses, provided that in any event the
Borrower and each of its Subsidiaries (as appropriate) will maintain:
(i) Property Insurance. Insurance against loss or damage
covering substantially all of the tangible real and personal
Property and improvements of the Borrower and each of its
Subsidiaries by reason of any Peril (as defined below) in such
amounts (subject to any deductibles as shall be reasonably
satisfactory to the Agent) as shall be reasonable and customary
and sufficient to avoid the insured named therein from becoming a
co-insurer of any loss under such policy, but in any event in
such amounts reasonably acceptable to the Agent and as are
reasonably available as determined by the independent insurance
broker of the Borrower or its applicable Subsidiary;
(ii) Automobile Liability Insurance for Bodily Injury and
Property Damage. Insurance in respect of all vehicles (whether
owned, hired, or rented by the Borrower or any of its
Subsidiaries) at any time located at, or used in connection with,
their respective Properties or operations against liabilities for
bodily injury and Property damage in such amounts as are then
customary for vehicles used in
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connection with similar Properties and businesses, but in any
event to the extent required by applicable law;
(iii) Comprehensive General Liability Insurance. Insurance
against claims for bodily injury, death, or Property damage
occurring on, in or about the Property (and adjoining streets,
sidewalks, and waterways) of the Borrower or any of its
Subsidiaries, in such amounts as are then customary for Property
similar in use in the jurisdictions where such Properties are
located; and
(iv) Worker's Compensation Insurance. Worker's
compensation insurance (including, without limitation, employers'
liability insurance) to the extent required by applicable law,
which may be self-insurance to the extent permitted by applicable
law.
Such insurance shall be written by financially responsible companies
selected by the applicable Person and having an A.M. Best Rating of "A-"
or better and being in a financial size category of "VI" or larger, or
by other companies reasonably acceptable to the Agent. For purposes
hereof, the term "Peril" shall mean, collectively, fire, lightning,
flood (to the extent required by applicable law), windstorm, hail,
explosion, riot and civil commotion, vandalism and malicious mischief,
damage from aircraft, vehicles and smoke, and other perils covered by
the "all-risk" endorsement then in use in the jurisdictions where the
Properties of the Borrower and its Subsidiaries are located.
(b) If a Default shall have occurred and be continuing, the
Borrower will, and will cause each of its Subsidiaries to, cause all
proceeds of insurance paid on account of the loss of or damage to any
Property of the Borrower or any of its Subsidiaries and all awards of
compensation for any Property of the Borrower or any of its Subsidiaries
taken by condemnation or eminent domain to be paid directly to the Agent
to be applied against the Obligations.
Section 9.6 Inspection Rights. The Borrower will, and will cause each of
its Subsidiaries to, permit representatives and agents of the Agent and each
Lender, during normal business hours and upon reasonable notice to the Borrower,
to examine, copy, and make extracts from the Borrower's or any of such
Subsidiaries' books and records, to visit and inspect the Borrower's or any of
such Subsidiaries' Properties and to discuss the Borrower's or any of such
Subsidiaries's business, operations, and financial condition with its officers
and independent certified public accountants. The Borrower will, and will cause
each of its Subsidiaries to, authorize its accountants in writing (with a copy
to the Agent) to comply with this Section. The Agent or its representatives may,
at any time and from time to time at the Borrower's expense, conduct field exams
for such purposes as the Agent or the Required Lenders may reasonably request.
Section 9.7 Keeping Books and Records. The Borrower will, and will cause
each of its Subsidiaries to, maintain proper books of record and account in
which full, true, and correct entries in conformity with GAAP shall be made of
all dealings and transactions in relation to its business and activities.
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Section 9.8 Compliance with Laws. The Borrower will, and will cause each
of its Subsidiaries to, comply in all material respects with all applicable laws
(including, without limitation, all Environmental Laws, ERISA, the Code,
Regulation U, and Regulations T and X of the Board of Governors of the Federal
Reserve System), rules, regulations, orders, and decrees of a material nature of
any Governmental Authority or arbitrator other than any such laws, rules,
regulations, orders, and decrees contested by appropriate actions or proceedings
diligently pursued, if adequate reserves in conformity with GAAP and
satisfactory to the Agent are established with respect thereto and except for
violations which could not be expected to have a Material Adverse Effect.
Section 9.9 Compliance with Agreements. The Borrower will, and will
cause each of its Subsidiaries to, comply with all agreements, contracts, and
instruments binding on it or affecting its properties or business other than
such noncompliance which could not reasonably be expected to have a Material
Adverse Effect.
Section 9.10 Further Assurances.
(a) Further Assurance. The Borrower will, and will cause each of
its Subsidiaries to, execute and/or deliver pursuant to this clause (a)
such further documentation and take such further action as may be
reasonably requested by the Required Lenders to carry out the provisions
and purposes of the Loan Documents.
(b) Subsidiary Joinder. The Borrower shall, and shall cause each
domestic Subsidiary of the Borrower to, execute and deliver to the Agent
such documentation, including, without limitation, a Joinder Agreement,
as the Agent may require to cause each such domestic Subsidiary to
become a party to the Subsidiary Guaranty as required by Article 6.
Section 9.11 ERISA. With respect to each Plan, the Borrower will, and
will cause each of its Subsidiaries to, comply with all minimum funding
requirements and all other material requirements of ERISA so as not to give rise
to any liability in excess of $1,000,000.
ARTICLE 10
Negative Covenants
The Borrower covenants and agrees that, as long as the Obligations or
any part thereof are outstanding or any Lender has any Commitment hereunder, the
Borrower will perform and observe the following covenants:
Section 10.1 Debt. The Borrower will not, nor will it permit any
Subsidiary of the Borrower to, incur, create, assume, or permit to exist any
Debt, except:
(a) Debt to the Lenders pursuant to the Loan Documents;
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(b) Debt described on Schedule 8.9, and any extensions, renewals,
or refinancings of such existing Debt so long as (i) the principal
amount of such Debt after such renewal, extension, or refinancing shall
not exceed the principal amount of such Debt which was outstanding
immediately prior to such renewal, extension, or refinancing and (ii)
such Debt shall not be secured by any assets other than assets securing
such Debt, if any, prior to such renewal, extension, or refinancing;
(c) Debt of a Subsidiary Guarantor owed to the Borrower or
another Subsidiary Guarantor; provided that such Debt must according to
its terms be fully subordinate in all respects to any of such Subsidiary
Guarantor's indebtedness, liabilities, or obligations to the Agent and
the Lenders pursuant to any Loan Document;
(d) Guaranties and other Debt incurred in the ordinary course of
business with respect to surety and appeal bonds, performance and
return-of-money bonds, banker's acceptances, and other similar
obligations including those of the type otherwise described in Section
10.2(f);
(e) Debt of the Borrower or any Subsidiary of the Borrower
constituting purchase money Debt (including, without limitation, Capital
Lease Obligations) and secured by purchase money Liens permitted by
Section 10.2(g), such Debt, in the aggregate, not to exceed at any time
an amount equal to five percent (5.0%) of the Borrower's Tangible Net
Worth;
(f) Debt of the Borrower or any Subsidiary of the Borrower of the
type described in clause (l) of the definition of Debt, such Debt, in
aggregate principal or principal equivalent amount, not to exceed at any
time an amount equal to twenty percent (20.0%) of the Borrower's
Tangible Net Worth.
(g) Debt constituting obligations to reimburse worker's
compensation insurance companies for claims paid by such companies on
behalf of the Borrower or any Subsidiary of the Borrower in accordance
with the policies issued to the Borrower or any such Subsidiary;
(h) Debt secured by the Liens permitted by Section 10.2(d) and
Section 10.2(e);
(i) unsecured Debt arising under, created by, and consisting of
Hedge Agreements; provided, (i) such Hedge Agreements shall have been
entered into for the purpose of hedging actual risk and not for
speculative purposes and (ii) that each counterparty to such Hedge
Agreement shall be a Lender or shall be rated at least AA- by Standard
and Poor's Rating Service or Aa3 by Xxxxx'x Investors Service, Inc.;
(j) Debt arising from endorsement of negotiable instruments for
deposit or collection or similar transactions in the ordinary course of
business of the Borrower or a Subsidiary of the Borrower;
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(k) Debt of a Subsidiary of the Borrower acquired after the
Closing Date and Debt of a Person merged or consolidated with or into
the Borrower or a Subsidiary of the Borrower after the Closing Date, (i)
which Debt in each case exists at the time of such acquisition, merger,
or consolidation, (ii) which Debt was not created or incurred in
contemplation of such acquisition, merger, or consolidation, (iii) where
such acquisition, merger, or consolidation is not prohibited under this
Agreement, (iv) where the aggregate principal of all such Debt at any
time outstanding does not exceed an amount equal to ten percent (10.0%)
of the Borrower's Tangible Net Worth, and (v) Guarantees of Debt
permitted under this Section 10.1;
(l) In addition to the Debt described in the foregoing clauses
(a) through (k), Debt which when combined with the Debt described in
clause (k) preceding does not exceed twelve and one-half percent (12.5%)
of the Borrower's Tangible Net Worth in aggregate principal amount at
any time outstanding; and
(m) Debt consisting of letters of credit and reimbursement
obligations therefor where the aggregate face amount of such letters of
credit do not at any time exceed the sum of (i) the aggregate amount of
the Commitments then in effect plus (ii) $20,000,000; provided that Debt
permitted hereunder which consists of standby letters of credit and
reimbursement obligations therefor shall not at any time exceed an
aggregate face amount of $20,000,000.
Section 10.2 Limitation on Liens and Restrictions on Subsidiaries. The
Borrower will not, nor will it permit any Subsidiary of the Borrower to, incur,
create, assume, or permit to exist any Lien upon any of its property, assets, or
revenues, whether now owned or hereafter acquired, except the following:
(a) existing Liens described on Schedule 10.2, and any
extensions, renewals, or refinancings of the Debt secured by such Liens
as permitted under Section 10.1(b); provided that (i) no such Lien is
expanded to cover any additional Property (other than after acquired
title in or on such Property and proceeds of the existing collateral)
after the Closing Date and (ii) no such Lien is spread to secure any
additional Debt after the Closing Date;
(b) Liens in favor of the Agent, for the benefit of the Agent and
the Lenders;
(c) encumbrances consisting of easements, zoning restrictions, or
other restrictions on the use of real Property that do not (individually
or in the aggregate) materially detract from the value of the real
Property encumbered thereby or materially impair the ability of the
Borrower or such Subsidiary to use such real Property in its business;
(d) Liens for taxes, assessments, or other governmental charges
(but excluding Environmental Liens or Liens under ERISA) that are not
delinquent or which are being contested in good faith and for which
adequate reserves have been established in accordance with GAAP;
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(e) contractual or statutory Liens of mechanics, materialmen,
warehousemen, carriers, landlords, or other similar Liens securing
obligations that are not overdue or are being contested in good faith by
appropriate proceedings diligently pursued and for which adequate
reserves have been established in accordance with GAAP and are incurred
in the ordinary course of business;
(f) Liens resulting from deposits to secure payments of worker's
compensation, unemployment insurance, or other social security programs
or to secure the performance of tenders, statutory obligations, leases,
insurance contracts, surety and appeal bonds, bids, and other contracts
incurred in the ordinary course of business (other than for payment of
Debt);
(g) Liens for purchase money obligations and Liens securing
Capital Lease Obligations; provided that (i) the Debt secured by any
such Lien is permitted under Section 10.1(e) and (ii) any such Lien
encumbers only the Property so purchased or leased and the products,
proceeds (including insurance proceeds), accessions, replacements,
substitutions, and improvements thereto;
(h) any attachment or judgment Lien not constituting an Event of
Default;
(i) any interest or title of a licensor, lessor, or sublessor
under any license or lease and any interest or title of a licensee,
lessee, or sublessee under any license, cross-license, or lease in any
event entered into in the ordinary course of business and not otherwise
prohibited by the terms of this Agreement;
(j) Liens against equipment arising from precautionary UCC
financing statement filings regarding operating leases entered into by
such Person in the ordinary course of business;
(k) nonconsensual Liens in favor of banking institutions arising
as a matter of law and encumbering the deposits (including the right of
set-off) held by such banking institutions in the ordinary course of
business; and
(l) Liens (including statutory and common law liens) in or
against goods, documents, or instruments, including proceeds (including
insurance proceeds), products, accessions, substitutions, and
replacements related thereto, related to or arising out of commercial or
documentary letter of credit transactions, to the extent that such
letter of credit transactions constitute permitted Debt under Section
10.1(m).
Section 10.3 Mergers, Etc. The Borrower will not, nor will it permit any
Subsidiary of the Borrower to, become a party to a merger or consolidation or
purchase or otherwise acquire all or a substantial part of the business or
Property of any Person or all or a substantial part of the business or Property
of a division or branch of a Person or a majority interest in the Capital Stock
of any Person, or wind-up, dissolve, or liquidate itself; provided that
notwithstanding the foregoing or any
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other provision of this Agreement as long as no Default exists or would result
therefrom and provided the Borrower gives the Agent and the Lenders prior
written notice:
(a) a Subsidiary of the Borrower may wind-up, dissolve, or
liquidate if its Property is transferred to the Borrower or a
Wholly-Owned Subsidiary;
(b) any Subsidiary of the Borrower, may merge or consolidate with
the Borrower (provided the Borrower is the surviving entity) or a
Wholly-Owned Subsidiary (provided the Wholly-Owned Subsidiary is the
surviving entity);
(c) the Borrower or any Wholly-Owned Subsidiary may make
Permitted Acquisitions; and
(d) to the extent the Required Lenders agree in writing, the
Borrower or any Wholly- Owned Subsidiary may make additional
acquisitions not included in Permitted Acquisitions.
Section 10.4 Restricted Payments. The Borrower will not, nor will it
permit any Subsidiary of the Borrower to, (a) make any prepayment of any Debt
other than (i) the Obligations, (ii) any Debt owed to the Borrower or a
Subsidiary of the Borrower, or (iii) regularly scheduled payments of principal
and interest under the Note Agreement or (b) directly or indirectly declare,
order, pay, make, or set apart any sum for (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of
Capital Stock of such Person now or hereafter outstanding, (ii) any redemption,
conversion, exchange, retirement, sinking fund, or similar payment, purchase, or
other acquisition for value, direct or indirect, of any shares of any class of
Capital Stock of any such Person now or hereafter outstanding, or (iii) any
payment made to retire, or to obtain the surrender of, any outstanding warrants,
options, or other rights to acquire shares of any class of Capital Stock of any
such Person now or hereafter outstanding except:
(w) Subsidiaries of the Borrower may make, declare, and pay
dividends and make other distributions with respect to their Capital
Stock to the Borrower or Wholly-Owned Subsidiaries;
(x) the Borrower may declare and pay dividends on any class of
its Capital Stock payable solely in shares of Capital Stock of the
Borrower;
(y) the Borrower may repurchase its Capital Stock; provided that
(A) the amount of all such repurchases shall not at any time exceed an
amount equal to the sum of $20,000,000, plus an amount equal to ten
percent (10.0%) of the Borrower's Net Income during the period from and
including August 1, 2000 through and including the end of the Fiscal
Quarter ending immediately prior to the date of such repurchase, (B) no
Default shall be in existence at the time of such repurchase, and (C)
proceeds of the Loan shall not be used in connection with such
repurchase; and
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(z) the Borrower may acquire or redeem Capital Stock of the
Borrower held by any former officer, director, or employee of the
Borrower or beneficiaries of any such Person's estate or trusts created
by or for the benefit of any such Person or their beneficiaries.
Section 10.5 Investments. The Borrower will not, nor will it permit any
Subsidiary of the Borrower to, make or permit to remain outstanding any advance,
loan, extension of credit, or capital contribution to or investment in any
Person, or purchase or own any stocks, bonds, notes, debentures, or other
Securities of any Person, or be or become a joint venturer with or partner of
any Person (all the foregoing, herein "Investments"), except:
(a) Permitted Acquisitions;
(b) the Borrower or any Wholly-Owned Subsidiary may make
Investments in domestic Subsidiaries;
(c) the Borrower may make Investments in foreign Subsidiaries,
(subject to the requirements of Section 10.1 and Section 10.3); provided
that (i) the aggregate amount of all Investments in foreign Subsidiaries
shall not exceed an amount equal to ten percent (10.0%) of the
Borrower's assets at the time of making any such Investment and (ii)
such Investments in foreign Subsidiaries which constitute advances,
loans, extensions of credit, bonds, notes, or debentures owed to the
Borrower shall at all times be subordinate in all respects to the
Obligations or any indebtedness, liability, or obligation of such
foreign Subsidiary to the Agent and the Lenders (if any) under any Loan
Document and must otherwise be in compliance with Section 10.1 and
Section 10.3;
(d) the Borrower may, up to an aggregate amount at any time
outstanding of not more than $10,000,000, make equity investments in
Affiliates and other Persons and related businesses, excluding
Subsidiaries of the Borrower;
(e) readily marketable direct obligations of the U.S. or any
agency thereof with maturities of one year or less from the date of
acquisition;
(f) fully insured certificates of deposit with maturities of one
year or less from the date of acquisition issued by any commercial bank
operating in the U.S. having capital and surplus in excess of
$250,000,000 and repurchase and reverse repurchase obligations entered
into with any such commercial bank;
(g) commercial paper of a domestic issuer and equity or debt
Securities of a domestic issuer if at the time of purchase such paper or
debt Securities of such issuer is rated in one of the two highest rating
categories of Standard and Poor's Rating Service or Xxxxx'x Investors
Service, Inc. or any successor thereto and shares of any mutual fund
company substantially all the assets of which consist of cash and the
Investments of the type described in clause (d), clause (e), and this
clause (g);
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(h) Investments received in connection with the settlement of
delinquent obligations of, and disputes with, customers and suppliers,
and other trade debtors arising in the ordinary course of business;
(i) extensions of trade credit in the ordinary course of
business;
(j) the Borrower and any Wholly-Owned Subsidiary may make loans
and advances to officers, directors, and employees in the ordinary
course of business and consistent with past practices up to an aggregate
amount at any time outstanding of not more than $2,500,000;
(k) Investments existing on the Closing Date and listed on
Schedule 10.5; and
(l) Investments consisting of purchases of debt Securities or
other extensions of credit by the Borrower or any Subsidiary of the
Borrower to the lessor/purchaser in connection with Permitted
Sale-Leasebacks.
The amount of Investments pursuant to clause (c) preceding shall be the amount
of all cash or other Property invested, loaned, advanced, or otherwise
contributed to all foreign Subsidiaries of the Borrower whether such Investments
are made as a single transaction or as one of a series of transactions, and such
amount shall be determined at the time of making of each Investment, or portion
thereof if in connection with a series of transactions.
Section 10.6 Limitation on Issuance of Capital Stock of Subsidiaries.
The Borrower will not permit any Subsidiary of the Borrower to, at any time
issue, sell, assign, or otherwise dispose of, except to the Borrower or a
Wholly-Owned Subsidiary or in connection with a Permitted Acquisition, (a) any
Capital Stock of a Subsidiary of the Borrower, (b) any Securities exchangeable
for or convertible into or carrying any rights to acquire any Capital Stock of a
Subsidiary of the Borrower, or (c) any option, warrant, or other right to
acquire any Capital Stock of a Subsidiary of the Borrower.
Section 10.7 Transactions with Affiliates. The Borrower will not, nor
will it permit any Subsidiary of the Borrower to, enter into any transaction,
including, without limitation, the purchase, sale, or exchange of property or
the rendering of any service, with any Affiliate (as used in this Section 10.7
the term "Affiliate" shall exclude any Subsidiary of the Borrower) of the
Borrower or such Subsidiary of the Borrower, except in the ordinary course of
and pursuant to the reasonable requirements of the Borrower's or such
Subsidiary's business and upon fair and reasonable terms no less favorable to
the Borrower or such Subsidiary than would be obtained in a comparable
arms-length transaction with a Person not an Affiliate of the Borrower or such
Subsidiary.
Section 10.8 Disposition of Assets. The Borrower will not, nor will it
permit any Subsidiary of the Borrower to, sell, lease, assign, transfer, or
otherwise voluntarily dispose of any of its Property other than (a) sales of
inventory in the ordinary course of business, (b) Asset Dispositions in
connection with the closing of any retail location of the Borrower or any
Subsidiary of the Borrower; provided that with respect to this Section 10.8,
such closings may not in any Fiscal
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Year exceed eight percent (8.0%) of the Borrower's and its Subsidiaries' retail
locations at the beginning of such Fiscal Year, and (c) other Asset Dispositions
not in excess of $25,000,000 in any Fiscal Year.
Section 10.9 Lines of Business. The Borrower will not, nor will it
permit any Subsidiary of the Borrower to, engage in any line or lines of
business activity other than the business activities in which they are engaged
on the Closing Date or a business reasonably related or complementary thereto.
Section 10.10 Limitations on Restrictions Affecting the Borrower and its
Subsidiaries. Neither the Borrower nor any Subsidiary of the Borrower shall
enter into or assume any agreement (other than the Loan Documents) prohibiting
the creation or assumption of any Lien upon its Properties, whether now owned or
hereafter acquired, other than pursuant to non-assignment provisions of a
Permitted Lien, operating lease, or of Debt of the type described in clause (l)
of the definition of Debt and which are restricted solely to the Property which
is the subject of such Permitted Lien or such lease transaction and which does
not prohibit the Borrower or any Subsidiary of the Borrower from granting Liens
to the Agent or any Lender as collateral for the Obligations. Except as provided
herein, the Borrower will not, nor will it permit any Subsidiary of the Borrower
to, directly or indirectly create or otherwise cause or suffer to exist or
become effective any consensual encumbrance or restriction of any kind on the
ability of the Borrower or any Subsidiary of the Borrower to (a) pay dividends
or make any other distribution on any of its Capital Stock, (b) pay any Debt
owed to the Borrower or any Subsidiary of the Borrower, (c) make loans or
advances to the Borrower or any Subsidiary of the Borrower, (d) transfer any
Property of the Borrower or any Subsidiary of the Borrower to any other Person,
except pursuant to non-assignment provisions of Permitted Liens, leases, and
licenses entered into in the ordinary course of business, or (e) make any
prepayment of any of the Obligations.
Section 10.11 Environmental Protection. The Borrower will not, nor will
it permit any Subsidiary of the Borrower to, (a) use (or permit any tenant to
use) any of its Properties for the handling, processing, storage,
transportation, or disposal of any Hazardous Material except in compliance with
applicable Environmental Laws, (b) generate any Hazardous Material except in
compliance with applicable Environmental Laws, (c) conduct any activity that is
likely to cause a Release or threatened Release of any Hazardous Material in
violation of any Environmental Law, or (d) otherwise conduct any activity or use
any of its Properties in any manner, that in any material respect violates or is
likely to violate any Environmental Law or create any Environmental Liabilities
for which the Borrower or any Subsidiary of the Borrower would be responsible
that could be expected to have a Material Adverse Effect.
Section 10.12 ERISA. The Borrower will not, nor will it permit any
Subsidiary of the Borrower to:
(a) allow, or take (or permit any ERISA Affiliate to take) any
action which would cause, any unfunded or unreserved liability for
benefits under any Plan (exclusive of any Multiemployer Plan) in excess
of $1,000,000 to exist or to be created; or
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(b) with respect to any Multiemployer Plan, allow or take (or
permit any ERISA Affiliate to take) any action which would cause any
unfunded or unpaid liability by the Borrower or any ERISA Affiliate to
any Multiemployer Plan in excess of $1,000,000 to exist or to be
created, either individually as to any such Plan or in the aggregate as
to all such Plans.
ARTICLE 11
Financial Covenants
The Borrower covenants and agrees that, as long as the Obligations or
any part thereof are outstanding or any Lender has any Commitment hereunder, it
will perform and observe the following financial covenants:
Section 11.1 Leverage Ratio. As of the end of each Fiscal Quarter, the
Borrower shall not permit the Leverage Ratio, calculated as of the Fiscal
Quarter ending July 30, 2000, and as of the end of each Fiscal Quarter
thereafter, for the preceding twelve (12) Fiscal Periods then ending, to exceed
the ratio set forth in the table following corresponding to such date.
=======================================================================
Period Maximum Leverage Ratio
=======================================================================
From July 30, 2000 through and including 4.00 to 1.00
October 28, 2001
-----------------------------------------------------------------------
From February 3, 2002 through and 3.75 to 1.00
including November 3, 2002
-----------------------------------------------------------------------
From February 2, 2003 and thereafter 3.50 to 1.00
=======================================================================
Section 11.2 Fixed Charge Coverage Ratio. As of the end of each Fiscal
Quarter, the Borrower shall not permit the Fixed Charge Coverage Ratio,
calculated as of the Fiscal Quarter ending July 30, 2000, and as of the end of
each Fiscal Quarter thereafter, for the preceding four (4) Fiscal Quarter period
then ending, to be less than the ratio set forth in the table following
corresponding to such date.
=======================================================================
Minimum Fixed Charge
Period Coverage Ratio
=======================================================================
From July 30, 2000 through and including 2.00 to 1.00
October 28, 2001
-----------------------------------------------------------------------
From February 3, 2002 through and 2.10 to 1.00
including November 3, 2002
-----------------------------------------------------------------------
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=======================================================================
Minimum Fixed Charge
Period Coverage Ratio
=======================================================================
From February 2, 2003 through and 2.25 to 1.00
including May 3, 2003
-----------------------------------------------------------------------
From August 3, 2003 and thereafter 2.50 to 1.00
=======================================================================
Section 11.3 Minimum Tangible Net Worth. As of the end of each Fiscal
Quarter, the Borrower shall not permit its Tangible Net Worth to be less than
(a) $335,000,000, plus (b) seventy-five percent (75.0%) of the Borrower's
positive Net Income for each Fiscal Quarter completed after April 30, 2000, plus
(c) one hundred percent (100%) of any increase in Tangible Net Worth
attributable to issuance of equity Securities of the Borrower or any Subsidiary
of the Borrower after April 30, 2000.
Section 11.4 Capital Expenditures. Beginning with the Fiscal Year ending
February 3, 2002, as of the end of each Fiscal Year, the aggregate amount of all
Capital Expenditures of the Borrower and its Subsidiaries for such Fiscal Year
shall not exceed eight and one-half percent (8.5%) of gross revenue of the
Borrower for such Fiscal Year, plus fifty percent (50.0%) of the amount by which
eight and one-half percent (8.5%) of gross revenue of the Borrower for the prior
Fiscal Year (provided that Capital Expenditures were subject to the terms of
this Section 11.4 during such prior Fiscal Year) exceeded Capital Expenditures
during such prior Fiscal Year.
ARTICLE 12
Default
Section 12.1 Events of Default. Each of the following shall be deemed an
"Event of Default":
(a) the Borrower shall fail to pay (i) when due any principal
owing with respect to the Loan payable under any Loan Document or any
part thereof; (ii) within three (3) Business Days of the date due any
interest or fees payable under the Loan Documents or any part thereof;
or (iii) within three (3) Business Days after the date the Borrower
receives written notice of the failure to pay when due, any other
Obligation or any part thereof, or any indebtedness, liability, or
obligation due to any Lender under any Hedge Agreement;
(b) any representation, warranty, or certification made or deemed
made by the Borrower or any Subsidiary of the Borrower (or any of their
respective officers) in any Loan Document or in any certificate, report,
notice, or financial statement furnished at any time in connection with
any Loan Document shall be false, misleading, or erroneous in any
material respect when made or deemed to have been made;
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(c) the Borrower or any Subsidiary of the Borrower shall fail to
perform, observe, or comply with any covenant, agreement, or term
contained in Section 2.4, Section 4.4(a), Section 9.1, Section 9.2,
Section 9.6, Section 9.10, Article 10 (other than related to
non-consensual Liens under Section 10.2), or Article 11;
(d) the Borrower or any Subsidiary of the Borrower shall fail to
perform, observe, or comply with any other agreement or term contained
in any Loan Document (other than as described in Section 12.1(a),
Section 12.1(b), or Section 12.1(c)) and (i) such failure shall continue
for a period of thirty (30) days after the earlier of (A) the date the
Agent provides the Borrower with notice thereof or (B) the date the
Borrower should have notified the Agent thereof in accordance with
Section 9.1(f) or (ii) as otherwise specifically provided by any other
Loan Document;
(e) the Borrower or any Subsidiary of the Borrower shall (i)
apply for or consent to the appointment of, or the taking of possession
by, a receiver, custodian, trustee, examiner, liquidator, or the like of
itself or of all or a substantial part of its Property, (ii) make a
general assignment for the benefit of its creditors, (iii) commence a
voluntary case under the United States Bankruptcy Code (as now or
hereafter in effect, the "Bankruptcy Code"), (iv) institute any
proceeding or file a petition seeking to take advantage of any other law
relating to bankruptcy, insolvency, reorganization, liquidation,
dissolution, winding-up, or composition or readjustment of debts, (v)
fail to controvert in a timely and appropriate manner, or acquiesce in
writing to, any petition filed against it in an involuntary case under
the Bankruptcy Code, (vi) admit in writing its inability to, or be
generally unable to pay its debts as such debts become due, or (vii)
take any corporate action for the purpose of effecting any of the
foregoing;
(f) (i) a proceeding or case shall be commenced, without the
application, approval, or consent of the Borrower or any Subsidiary of
the Borrower in any court of competent jurisdiction, seeking (A) its
reorganization, liquidation, dissolution, arrangement, or winding-up, or
the composition or readjustment of its debts, (B) the appointment of a
receiver, custodian, trustee, examiner, liquidator, or the like of the
Borrower or such Subsidiary or of all or any substantial part of its
Property, or (C) similar relief in respect of the Borrower or such
Subsidiary under any law relating to bankruptcy, insolvency,
reorganization, winding-up, or composition or readjustment of debts, and
such proceeding or case shall continue undismissed, or an order,
judgment, or decree approving or ordering any of the foregoing shall be
entered and continue unstayed and in effect, for a period of sixty (60)
or more days or (ii) an order for relief against the Borrower or any
Subsidiary shall be entered in an involuntary case under the Bankruptcy
Code;
(g) the Borrower or any Subsidiary of the Borrower shall fail
within a period of thirty (30) days after the commencement thereof to
discharge or obtain a stay of any attachment, sequestration, forfeiture,
or similar proceeding or proceedings involving an aggregate amount in
excess of $10,000,000 against any of its assets or Properties;
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(h) A final judgment or judgments for the payment of money in
excess of $10,000,000 in the aggregate (to the extent not paid or fully
covered by insurance acknowledged by a carrier reasonably acceptable to
the Agent) shall be rendered by a court or courts against the Borrower
or any Subsidiary of the Borrower and the same shall not be satisfied,
discharged, or dismissed (or provision shall not be made for such
satisfaction, discharge, or dismissal), or a stay of execution or other
stay of enforcement thereof shall not be procured, within sixty (60)
days from the date of entry thereof and the Borrower or any Subsidiary
of the Borrower, as applicable, shall not, within said period of sixty
(60) days, or such longer period during which execution of the same
shall have been stayed, appeal therefrom and cause the execution thereof
to be stayed during such appeal;
(i) (i) the Borrower or any Subsidiary of the Borrower shall fail
to pay when due any principal of or interest on any Debt (other than the
Obligations) beyond the period of grace (if any) if the aggregate
principal amount of the affected Debt equals or exceeds $10,000,000, or
the maturity of any such Debt shall have been accelerated or shall have
been required to be prepaid prior to the stated maturity thereof, (ii)
any event shall have occurred with respect to any Debt in the aggregate
principal amount equal to or in excess of $10,000,000 that permits the
holder or holders of such Debt or any Person acting on behalf of such
holder or holders to accelerate the maturity thereof or require any
prepayment thereof, (iii) any event of default shall have occurred under
that certain Letter of Credit Agreement, as amended and as such
agreement may be further amended, restated, or otherwise modified, dated
as of June 1, 1997, between the Borrower and Bank of America National
Trust and Savings Association (now known as Bank of America, National
Association), or (iv) any event of default shall have occurred under the
Note Agreement;
(j) this Agreement or any other Loan Document shall cease to be
in full force and effect or shall be declared null and void or the
validity or enforceability thereof shall be contested or challenged by
the Borrower or any Subsidiary, or the Borrower or any Subsidiary shall
deny that it has any further liability or obligation under any of the
Loan Documents;
(k) Any of the following events shall occur or exist with respect
to the Borrower, any Subsidiary of the Borrower, or any ERISA Affiliate
and in each case, such event or condition, together with all other such
events or conditions, if any, have subjected or could in the reasonable
opinion of the Agent or the Required Lenders subject the Borrower or any
Subsidiary of the Borrower (or any combination thereof) to any tax,
penalty, or other liability to a Plan, a Multiemployer Plan, the PBGC,
or otherwise (or any combination thereof) which in the aggregate could
reasonably be expected to exceed $1,000,000: (i) any Prohibited
Transaction involving any Plan; (ii) any Reportable Event with respect
to any Plan; (iii) the filing under Section 4041 of ERISA of a notice of
intent to terminate any Plan or the termination of any Plan; (iv) any
event or circumstance that could reasonably be expected to constitute
grounds entitling the PBGC to institute proceedings under Section 4042
of ERISA for the termination of, or for the appointment of a trustee to
administer, any Plan, or the institution by the PBGC of any such
proceedings; or (v) complete or partial withdrawal
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under Section 4201 or 4204 of ERISA from a Multiemployer Plan or the
reorganization, insolvency, or termination of any Multiemployer Plan;
(l) The occurrence of any event or condition which constitutes a
Material Adverse Effect and thirty (30) days shall have passed since
written notification thereof to the Borrower by the Agent (therein
identifying such event or condition) without such event or condition
having been remedied, cured, or waived; or
(m) The occurrence of a Change of Control.
Section 12.2 Remedies. If any Event of Default shall occur and be
continuing, the Agent may (and if directed by the Required Lenders, shall) do
any one or more of the following:
(a) Acceleration. By notice to the Borrower, declare all
outstanding principal of and accrued and unpaid interest on the Notes
and all other amounts payable by the Borrower under the Loan Documents
immediately due and payable, and the same shall thereupon become
immediately due and payable, without further notice, demand,
presentment, notice of dishonor, notice of acceleration, notice of
intent to accelerate, protest, or other formalities of any kind, all of
which are hereby expressly waived by the Borrower except as where
required by the specific terms of this Agreement or the other Loan
Documents;
(b) Termination of Commitments. Terminate the Commitments without
notice to the Borrower or any other Person;
(c) Judgment. Reduce any claim to judgment; and
(d) Rights. Exercise any and all rights and remedies afforded by
the laws of the State of California, or any other jurisdiction governing
any of the Loan Documents, by equity, or otherwise;
provided, however, that, upon the occurrence of an Event of Default under
Section 12.1(e) or Section 12.1(f) with respect to the Borrower or any
Guarantor, the Commitments of all of the Lenders shall automatically terminate
and the outstanding principal of and accrued and unpaid interest on the Notes
and all other amounts payable by the Borrower or any other party under the Loan
Documents shall thereupon become immediately due and payable without notice,
demand, presentment, notice of dishonor, notice of acceleration, notice of
intent to accelerate, protest, or other formalities of any kind, all of which
are hereby expressly waived by the Borrower.
Section 12.3 Performance by the Agent. Upon the occurrence of a Default,
if the Borrower or any Guarantor shall fail to perform any agreement in
accordance with the terms of the Loan Documents, the Agent may, and at the
direction of the Required Lenders shall, perform or attempt to perform such
agreement on behalf of the Borrower or such Guarantor, as applicable. In such
event, at the request of the Agent, the Borrower shall promptly pay any amount
expended by the Agent or the Lenders in connection with such performance or
attempted performance, to the Agent at the Principal Office together with
interest thereon at the Default Rate applicable to the Base Rate
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Balance from and including the date of such expenditure to but excluding the
date such expenditure is paid in full. Notwithstanding the foregoing, it is
expressly agreed that neither the Agent, the Arranger, nor any Lender shall have
any liability or responsibility for the performance of any obligation of the
Borrower or any Guarantor under any Loan Document.
Section 12.4 Set-off. If an Event of Default shall have occurred and be
continuing, each Lender is hereby authorized at any time and from time to time,
without notice to the Borrower or any other Person (any such notice being hereby
expressly waived), to set-off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by such Lender to or for the credit or the
account of the Borrower against any and all of the Obligations now or hereafter
existing under any Loan Document, irrespective of whether or not the Agent or
such Lender shall have made any demand under such Loan Documents and although
the Obligations may be unmatured. Each Lender agrees promptly to notify the
Borrower (with a copy to the Agent) after any such set-off and application,
provided that the failure to give such notice shall not affect the validity of
such set-off and application. The rights and remedies of each Lender hereunder
are in addition to other rights and remedies (including, without limitation,
other rights of set-off) which such Lender may have.
Section 12.5 Continuance of Default. For purposes of all Loan Documents,
a Default shall be deemed to have continued and exist until the Agent shall have
actually received evidence satisfactory to the Agent that such Default shall
have been remedied.
ARTICLE 13
The Agent
Section 13.1 Appointment and Authorization of the Agent. Each Lender
hereby irrevocably (subject to Section 13.9) appoints, designates and authorizes
the Agent to take such action on its behalf under the provisions of this
Agreement and each other Loan Document and to exercise such powers and perform
such duties as are expressly delegated to it by the terms of this Agreement or
any other Loan Document, together with such powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary contained elsewhere in
this Agreement or in any other Loan Document, the Agent shall not have any
duties or responsibilities, except those expressly set forth herein, nor shall
the Agent have or be deemed to have any fiduciary relationship with any Lender
or participant, and no implied covenants, functions, responsibilities, duties,
obligations, or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against the Agent. Without limiting the generality
of the foregoing sentence, the use of the term "agent" in this Agreement with
reference to the Agent is not intended to connote any fiduciary or other implied
(or express) obligations arising under agency doctrine of any applicable law.
Instead, such term is used merely as a matter of market custom, and is intended
to create or reflect only an administrative relationship between independent
contracting parties.
Section 13.2 Delegation of Duties. The Agent may execute any of its
duties under this Agreement or any other Loan Document by or through agents,
employees, or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Agent
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shall not be responsible for the negligence or misconduct of any agent or
attorney-in-fact that it selects in the absence of gross negligence or willful
misconduct.
Section 13.3 Liability of the Agent. No Agent-Related Person shall (a)
be liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct
in connection with its duties expressly set forth herein) or (b) be responsible
in any manner to any Lender or participant for any recital, statement,
representation, or warranty made by the Borrower or any other party to any Loan
Document, or any officer thereof, contained in this Agreement or in any other
Loan Document, or in any certificate, report, statement, or other document
referred to or provided for in, or received by the Agent under or in connection
with, this Agreement or any other Loan Document, or the validity, effectiveness,
genuineness, enforceability, or sufficiency of this Agreement or any other Loan
Document, or for any failure of the Borrower or any other party to any Loan
Document to perform its obligations hereunder or thereunder. No Agent-Related
Person shall be under any obligation to any Lender or participant to ascertain
or to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement or any other Loan Document, or to
inspect the properties, books, or records of the Borrower or any Subsidiary or
Affiliate thereof.
Section 13.4 Reliance by the Agent.
(a) The Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, communication, signature,
resolution, representation, notice, consent, certificate, affidavit,
letter, telegram, facsimile, telex, or telephone message, statement, or
other document or conversation believed by it to be genuine and correct
and to have been signed, sent, or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel to
the Borrower or any other Person party to any Loan Document),
independent accountants, and other experts selected by the Agent. The
Agent shall be fully justified in failing or refusing to take any action
under any Loan Document unless it shall first receive such advice or
concurrence of the Required Lenders as the Agent deems appropriate and,
if the Agent so requests, it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense
which may be incurred by the Agent by reason of taking or continuing to
take any such action. The Agent shall in all cases be fully protected in
acting, or in refraining from acting, under this Agreement or any other
Loan Document in accordance with a request or consent of the Required
Lenders or all Lenders, if required hereunder, and such request and any
action taken or failure to act pursuant thereto shall be binding upon
all of the Lenders and participants. Where this Agreement expressly
permits or prohibits an action unless the Required Lenders otherwise
determine, the Agent shall, and in all other instances, the Agent may,
but shall not be required to, initiate any solicitation for the consent
or a vote of the Lenders.
(b) For purposes of determining compliance with the conditions
specified in Article 7, each Lender and participant shall be deemed to
have consented to, approved or accepted, or to be satisfied with, each
document or other matter either sent by the Agent to
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each Lender for consent, approval, acceptance, or satisfaction, or
required thereunder to be consented to or approved by or acceptable or
satisfactory to a Lender.
Section 13.5 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default, except
with respect to defaults in the payment of principal, interest, and fees
required to be paid to the Agent for the account of the Lenders, unless the
Agent shall have received written notice from a Lender or the Borrower referring
to this Agreement, describing such Default or Event of Default and stating that
such notice is a "notice of default". The Agent will notify the Lenders of its
receipt of any such notice. The Agent shall take such action with respect to
such Default or Event of Default as may be directed by the Required Lenders;
provided, however, that unless and until the Agent has received any such
direction, 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 or in the best interest of the Lenders.
Section 13.6 Credit Decision; Disclosure of Information by the Agent.
Each Lender and participant acknowledges that no Agent-Related Person has made
any representation or warranty to such Lender or participant, and that no act by
the Agent hereinafter taken, including any consent to and acceptance of any
assignment or review of the affairs of the Borrower or any of its Subsidiaries
or Affiliates, shall be deemed to constitute any representation or warranty by
any Agent-Related Person to any Lender or participant as to any matter,
including whether any Agent-Related Person has disclosed material information in
its possession. Each Lender, including any Lender by assignment, and each
participant represents to the Agent that it has, independently and without
reliance upon any Agent-Related Person and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, property, financial and
other condition, and creditworthiness of the Borrower and its Subsidiaries and
Affiliates, and all applicable bank regulatory laws relating to the transactions
contemplated hereby, and each such Lender or participant has made its own
decision to enter into this Agreement and to extend credit to the Borrower
hereunder. Each Lender and participant also represents that it will,
independently and without reliance upon any Agent-Related Person and based on
such documents and information as such Lender or participant shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Agreement and the other
Loan Documents, and to make such investigations as it deems necessary to inform
itself as to the business, prospects, operations, property, financial and other
condition, and creditworthiness of the Borrower and its Subsidiaries and
Affiliates. Except for notices, reports, and other documents expressly required
to be furnished to the Lenders by the Agent herein, the Agent shall not have any
duty or responsibility to provide any Lender or participant with any credit or
other information concerning the business, prospects, operations, property,
financial and other condition, or creditworthiness of the Borrower or any of its
Subsidiaries or Affiliates which may come into the possession of any Agent-
Related Person.
Section 13.7 Indemnification of the Agent. Whether or not the
transactions contemplated hereby are consummated, the Lenders shall indemnify
upon demand each Agent-Related Person (to the extent not reimbursed by or on
behalf of the Borrower and without limiting the obligation of the Borrower to do
so), pro rata, and hold harmless each Agent-Related Person from and against any
and
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all Indemnified Liabilities incurred by it; provided, however, that no Lender
shall be liable for the payment to any Agent-Related Person of any portion of
such Indemnified Liabilities resulting from such Person's gross negligence or
willful misconduct; provided, however, that no action taken in accordance with
the directions of the Required Lenders shall be deemed to constitute gross
negligence or willful misconduct for purposes of this Section. Without
limitation of the foregoing, each Lender shall reimburse the Agent upon demand
for such Lender's ratable share of any costs or out-of-pocket expenses
(including Attorney Costs) incurred by the Agent in connection with the
preparation, execution, delivery, administration, modification, amendment, or
enforcement (whether through negotiations, legal proceedings, or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement,
any other Loan Document, or any document contemplated by or referred to herein,
to the extent that the Agent is not reimbursed for such expenses by or on behalf
of the Borrower. The undertaking in this Section shall survive the payment of
all Obligations hereunder and the resignation or replacement of the Agent.
Section 13.8 The Agent in Individual Capacity. Bank of America and its
Affiliates may make loans to, issue letters of credit for the account of, accept
deposits from, acquire equity interests in and generally engage in any kind of
banking, trust, financial advisory, underwriting, or other business with the
Borrower and its Affiliates as though Bank of America were not the Agent
hereunder and without notice to or consent of the Lenders. The Lenders and
participants acknowledge that, pursuant to such activities, Bank of America or
its Affiliates may receive information regarding the Borrower and its Affiliates
(including information that may be subject to confidentiality obligations in
favor of the Borrower or such Affiliate) and acknowledge that the Agent shall be
under no obligation to provide such information to them. With respect to its
Balances, Bank of America shall have the same rights and powers under this
Agreement as any other Lender and may exercise the same as though it were not
the Agent.
Section 13.9 Resignation of the Agent. The Agent may, and at the request
of the Required Lenders shall, resign as the Agent upon thirty (30) days notice
to the Lenders. If the Agent resigns under this Agreement, the Required Lenders
shall appoint from among the Lenders a successor administrative agent for the
Lenders which successor administrative agent shall be consented to by the
Borrower at all times other than during the existence of an Event of Default
(which approval of the Borrower shall not be unreasonably withheld or delayed).
If no successor administrative agent is appointed prior to the effective date of
the resignation of the Agent, the Agent may appoint, after consulting with the
Lenders and the Borrower, a successor administrative agent from among the
Lenders. Upon the acceptance of its appointment as successor administrative
agent hereunder, such successor administrative agent shall succeed to all the
rights, powers, and duties of the retiring Agent and the term "Agent" shall mean
such successor administrative agent and the retiring Agent's appointment,
powers, and duties as the Agent shall be terminated. After any retiring Agent's
resignation hereunder as the Agent, the provisions of this Article 13, Section
14.1, and Section 14.2 shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was the Agent under this Agreement. If no
successor administrative agent has accepted appointment as the Agent by the date
which is thirty (30) days following a retiring Agent's notice of resignation,
the retiring Agent's resignation shall nevertheless thereupon become effective
and the Lenders shall perform all of the duties of the Agent hereunder until
such time, if any, as the Required Lenders appoint a successor agent as provided
for above.
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Section 13.10 Co-Agents; Lead Managers. None of the Lenders identified
on the facing page or signature pages of this Agreement as a "co-agent" or other
similar title shall have any right, power, obligation, liability,
responsibility, or duty under this Agreement other than those applicable to all
Lenders as such. Without limiting the foregoing, none of the Lenders so
identified as a "co-agent" or other similar title shall have or be deemed to
have any fiduciary relationship with any Lender. Each Lender acknowledges that
it has not relied, and will not rely, on any of the Lenders so identified in
deciding to enter into this Agreement or in taking or not taking action
hereunder.
ARTICLE 14
Miscellaneous
Section 14.1 Expenses. The Borrower hereby agrees to pay promptly after
presentation of supporting documentation, without duplication: (a) all
reasonable costs and expenses of the Agent arising in connection with the
preparation, negotiation, execution, delivery, syndication, and administration
of the Loan Documents and all amendments, waivers, or other modifications to the
Loan Documents, including, without limitation, Attorney Costs of the Agent; (b)
all costs and expenses of the Agent in connection with any Default and the
enforcement of any Loan Document or collection of the Obligations, including,
without limitation, Attorney Costs of the Agent; (c) all fees, costs, and
expenses of any Lender arising in connection with an Event of Default and the
enforcement of any Loan Document or collection of the Obligations during the
existence of an Event of Default; (d) all transfer, stamp, documentary, or other
similar taxes, assessments, or charges (including, without limitation, the Taxes
and any penalties or interest) levied by any Governmental Authority in respect
of any Loan Document or the transactions contemplated thereby; (e) all
reasonable costs, expenses, assessments, and other charges incurred in
connection with any filing, registration, recording, or perfection of any
security interest or other Lien contemplated by any Loan Document; and (f) all
other reasonable costs and expenses incurred by the Agent in connection with any
Loan Document. The Attorney Costs of the Agent that the Borrower has agreed to
pay hereunder include, without limitation, the Attorney Costs of the Agent
arising in connection with advice given to the Agent as to its rights and
responsibilities hereunder.
Section 14.2 Indemnity by the Borrower. Whether or not the transactions
contemplated hereby are consummated, the Borrower agrees to indemnify, save and
hold harmless each Agent-Related Person and each Lender and their respective
Affiliates, directors, officers, agents, attorneys, and employees (collectively
the "Indemnitees") from and against: (a) any and all claims, demands, actions,
or causes of action that are asserted against any Indemnitee by any Person
(other than the Agent or any Lender) relating directly or indirectly to a claim,
demand, action, or cause of action that such Person asserts or may assert
against the Borrower, any of its Affiliates, or any of their respective officers
or directors; (b) any and all claims, demands, actions, or causes of action
arising out of or relating to, the Loan Documents, any predecessor loan
documents, the Commitments, the use or contemplated use of the proceeds of any
Loan, or the relationship of the Borrower, the Agent and the Lenders under this
Agreement; (c) any administrative or investigative proceeding by any
Governmental Authority arising out of or related to a claim, demand, action, or
cause of action described in clause (a) or clause (b) preceding; and (d) any and
all liabilities (including liabilities
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under indemnities), losses, costs, or expenses (including Attorney Costs) that
any Indemnitee suffers or incurs as a result of the assertion of any foregoing
claim, demand, action, cause of action, or proceeding, or as a result of the
preparation of any defense in connection with any foregoing claim, demand,
action, cause of action, or proceeding, in all cases, whether or not arising out
of the negligence of an Indemnitee, whether or not an Indemnitee is a party to
such claim, demand, action, cause of action, or proceeding (all the foregoing,
collectively, the "Indemnified Liabilities"); provided that no Indemnitee shall
be entitled to indemnification for any loss caused by its own gross negligence
or willful misconduct or for any loss asserted against it by another Indemnitee.
The agreements in this Section shall survive repayment of all Obligations.
Section 14.3 Limitation of Liability. No Agent-Related Person, Lender,
or any Affiliate, officer, director, employee, attorney, or agent thereof shall
have any liability with respect to the Borrower for and, by the execution of the
Loan Documents to which it is a party, each other party to any Loan Document,
hereby waives, releases, and agrees not to xxx any of them upon, any claim for,
any special, indirect, incidental, consequential, or punitive damages suffered
or incurred by any such Person in connection with, arising out of, or in any way
related to any of the Loan Documents, or any of the transactions contemplated by
any of the Loan Documents.
Section 14.4 No Duty. All attorneys, accountants, appraisers, and other
professional Persons and consultants retained by any of the Agent, the Arranger,
or any Lender shall have the right to act exclusively in the interest of Agent,
the Arranger, and the Lenders and shall have no duty of disclosure, duty of
loyalty, duty of care, or other duty or obligation of any type or nature
whatsoever to the Borrower or any Guarantor, any shareholders of the Borrower or
any Guarantor, or any other Person.
Section 14.5 No Fiduciary Relationship. The relationship between the
Borrower and the Guarantors on the one hand and the Agent, the Arranger, and the
Lenders on the other is solely that of debtor and creditor, and neither any of
the Agent, the Arranger, nor any Lender has any fiduciary or other special
relationship with the Borrower or any Guarantor, and no term or condition of any
of the Loan Documents shall be construed so as to deem the relationship between
the Borrower and the Guarantors on the one hand and any of the Agent, the
Arranger, and each Lender on the other to be other than that of debtor and
creditor.
Section 14.6 Equitable Relief. The Borrower recognizes that in the event
the Borrower or any Guarantor fails to pay, perform, observe, or discharge any
or all of the Obligations under the Loan Documents, any remedy at law may prove
to be inadequate relief to the Agent and the Lenders. The Borrower therefore
agrees that the Agent and the Lenders, if the Agent or the Required Lenders so
request, shall be entitled to temporary and permanent injunctive relief in any
such case without the necessity of proving actual damages.
Section 14.7 No Waiver; Cumulative Remedies. No failure on the part of
the Agent or any Lender to exercise and no delay in exercising, and no course of
dealing with respect to, any right, power, or privilege under any Loan Document
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, power, or privilege under any Loan Document preclude any other or
further exercise thereof or the exercise of any other right, power, or
privilege. The rights and
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76
remedies provided for in the Loan Documents are cumulative and not
exclusive of any rights and remedies provided by law.
Section 14.8 Binding Effect; Successors; Assignment.
(a) This Agreement and the other Loan Documents to which the
Borrower is a party will be binding upon and inure to the benefit of the
Borrower, the Agent, the Lenders, and their respective successors and
assigns, except that, the Borrower may not assign its rights hereunder
or thereunder or any interest herein or therein without the prior
written consent of all of the Lenders and any such attempted assignment
shall be void. Any Lender may at any time pledge its Note (or, with
respect to Bank of America, its Notes) or any other instrument
evidencing its rights as a Lender under this Agreement to a Federal
Reserve Bank, but no such pledge shall release such Lender from its
obligations hereunder or grant to such Federal Reserve Bank the rights
of a Lender hereunder absent foreclosure of such pledge.
(b) From time to time following the Closing Date, each Lender may
assign to one or more Eligible Assignees all or any portion of its
Commitment; provided that (i) such assignment, if not to a Lender or an
Affiliate of the assigning Lender, shall be consented to by the Borrower
at all times other than during the existence of a Default or Event of
Default (which approval shall not be unreasonably withheld or delayed)
and by the Agent, (ii) a copy of a duly signed and completed Assignment
and Acceptance and a copy of a duly signed and completed Acknowledgment
of Intercreditor Agreement shall be delivered to the Agent, (iii) except
in the case of an assignment (A) to an Affiliate of the assigning Lender
or to another Lender or (B) of the entire remaining Commitment of the
assigning Lender, the portion of the Commitment assigned shall not be
less than $10,000,000, and (iv) the effective date of any such
assignment shall be as specified in the Assignment and Acceptance, but
not earlier than the date which is five (5) Business Days after the date
the Agent has received the Assignment and Acceptance. Upon obtaining any
consent required as set forth in the prior sentence, any forms required
by Section 14.22 and payment of the requisite fee described below, the
assignee named therein shall be a Lender for all purposes of this
Agreement to the extent of the Assigned Interest (as defined in such
Assignment and Acceptance), and the assigning Lender shall be released
from any further obligations under this Agreement to the extent of such
Assigned Interest. Upon request, the Borrower shall execute and deliver
new or replacement Revolving Notes to the assigning Lender and the
assignee Lender to evidence the portion of the Revolving Loan made by
them. The Agent's consent to any assignment shall not be deemed to
constitute any representation or warranty by any Agent-Related Person as
to any matter. The Agent shall record the information contained in the
Assignment and Acceptance in the Register. For purposes hereof, each
mutual fund that is an Affiliate of a Lender shall be deemed to be a
single Eligible Assignee, whether or not such fund is managed by the
same fund manager as other mutual funds that are Affiliates of the same
Lender.
(c) After receipt of a completed Assignment and Acceptance, and
receipt of an assignment fee of $3,500 from such Eligible Assignee
and/or such assigning Lender (including in the case of assignments to
Affiliates of assigning Lenders or assignments from
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one Lender to another Lender), the Agent shall, promptly following the
effective date thereof, provide to the Borrower and the Lenders a
revised Schedule 14.13 giving effect thereto.
(d) Each Lender may from time to time, without the consent of any
other Person, grant participations to one or more other Persons
(including another Lender) of all or any portion of its Commitment;
provided, however, that (i) such Lender's obligations under this
Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such
obligations, (iii) the participating banks or other financial
institutions shall not be a Lender hereunder for any purpose except, if
the participation agreement so provides, for the purposes of Article 5
(but only to the extent that the cost of such benefits to the Borrower
does not exceed the cost which the Borrower would have incurred in
respect of such Lender absent the participation) and subject to Section
4.7 and Section 12.4, (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
Agreement, (v) the participation agreement shall not restrict an
increase in the combined Commitments or in the granting Lender's
Commitment or Commitment Percentage, so long as the amount of the
participation interest is not increased, and (vi) the consent of the
holder of such participation interest shall not be required for
amendments or waivers of provisions of the Loan Documents; provided,
however, that the assigning Lender may, in any agreement with a
participant, give such participant the right to consent to any matter
which (A) extends the Maturity Date as to such participant or any other
date upon which any payment of money is due to such participant, (B)
reduces the rate of interest owing to such participant, any fee or any
other monetary amount owing to such participant, (C) reduces the amount
of any installment of principal owing to such participant, or (D)
releases all or substantially all of the Guarantors of their obligations
under the Subsidiary Guaranty. Any Lender that sells a participation to
any Person that is a "foreign corporation, partnership, or trust" within
the meaning of the Code shall include in its participation agreement
with such Person a covenant by such Person that such Person will comply
with the provisions of Section 14.22 as if such Person were a Lender and
provide that the Agent and the Borrower shall be third party
beneficiaries of such covenant.
(e) Amendment of Commitments. Upon execution, delivery, and
acceptance of an Assignment and Acceptance, the signature pages of the
Lenders shall be deemed to be automatically amended to reflect the
resulting Commitments of the Lenders after giving effect to such
Assignment and Acceptance; provided that the Commitments of the Lenders
not a party to such Assignment and Acceptance shall not be affected as a
result of such amendment.
(f) Register.
(i) The Agent shall maintain, at the Agent's Office, a
register for the recordation of the names and addresses of the
Lenders and the Commitments and Balances of each Lender from time
to time (the "Register"). The Register shall be available for
inspection by the Borrower or any Lender at any reasonable time
and from time to time upon reasonable prior notice. The Agent
shall maintain the
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Register as agent for the Borrower (it being acknowledged and
agreed that the Agent and each Agent-Related Person, in such
capacity, shall constitute Indemnitees under Section 14.2).
(ii) The Agent shall record in the Register the Commitment
and Balances from time to time of each Lender, and each repayment
or prepayment in respect thereof. Any recordation shall be
conclusive and binding on the Borrower and each Lender, absent
manifest error; provided, however, that the failure to make any
such recordation, or any error in such recordation, shall not
affect any Lender's Commitments or Balances.
(iii) Each Lender shall record on its internal records
(including, without limitation, the Note (or with respect to Bank
of America, the Notes) held by such Lender) the amount of each
Balance held by it and each payment in respect thereof. Any
recordation shall be conclusive and binding on the Borrower,
absent manifest error; provided, however, that the failure to
make any such recordation, or any error in such recordation,
shall not affect any Lender's Commitment or Balances; provided,
further, that in the event of any inconsistency between the
Register and any Lender's records, the recordations in the
Register shall govern.
(iv) The Borrower, the Agent and the Lenders shall deem
and treat the Persons listed as Lenders in the Register as the
holders and owners of the corresponding Commitments and Balances
listed therein for all purposes hereof, and no assignment or
transfer of any such Commitment or Balances shall be effective,
in each case, unless and until an Assignment and Acceptance
effecting the assignment or transfer thereof shall have been
accepted by the Agent and recorded in the Register. Prior to such
recordation, all amounts owed with respect to the applicable
Commitment or Obligations shall be owed to the Lender listed in
the Register as the owner thereof, and any request, authority or
consent of any Person who, at the time of making such request or
giving such authority or consent, is listed in the Register as
the Lender shall be conclusive and binding on any subsequent
holder, assignee, or transferee of the corresponding Commitments
or Obligations.
(g) Delivery of Information. Any Lender may furnish any
information concerning the Borrower or any Affiliate of the Borrower in
the possession of such Lender from time to time to assignees and
participants (including, without limitation, prospective assignees and
participants) subject to such Persons agreeing to being bound by the
provisions of Section 14.21.
Section 14.9 Survival. All representations and warranties made by the
Borrower or any Guarantor in any Loan Document or in any document, statement, or
certificate furnished in connection with any Loan Document shall survive the
execution and delivery of the Loan Documents and no investigation by the Agent
or any Lender or any closing shall affect the representations and warranties or
the right of the Agent and the Lenders to rely upon them. Without prejudice to
the survival of any other obligation of the Borrower hereunder, the obligations
under Article 5,
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Section 13.7, Section 14.1, and Section 14.2 shall survive repayment of the
Notes and termination of the Commitments.
Section 14.10 Entire Agreement. This Agreement, together with the other
Loan Documents and any letter agreements referred to herein, comprises the
complete and integrated agreement of the parties on the subject matter hereof
and supersedes all prior agreements, written or oral, on the subject matter
hereof. In the event of any conflict between the provisions of this Agreement
and those of any other Loan Document, the provisions of this Agreement shall
control and govern; provided that the inclusion of supplemental rights or
remedies in favor of the Agent or the Lenders in any other Loan Document shall
not be deemed a conflict with this Agreement. Each Loan Document was drafted
with the joint participation of the respective parties thereto and shall be
construed neither against nor in favor of any party, but rather in accordance
with the fair meaning thereof.
Section 14.11 Amendments and Waivers. Any provision of any Loan Document
may be amended or waived and any consent to any departure by the Borrower
therefrom may be granted if, but only if, such amendment, waiver, or consent is
in writing and is signed by the Borrower, and the Required Lenders (and, if
Article 13 or the rights or duties of the Agent are affected thereby, by the
Agent); provided that no such amendment, waiver, or consent applicable to:
(a) a Balance or Commitment which has the effect of
(i) increasing such Commitment (but not the aggregate
Commitments as provided by Section 2.6),
(ii) reducing the principal of or rate of interest on such
Balance or any fees or other amounts payable hereunder with
respect to such Balance or Commitment,
(iii) postponing any date fixed for the payment of any
principal of or interest on such Balance or any fees or other
amounts payable hereunder with respect to such Balance or
Commitment or changing any optional or mandatory prepayment
provision applicable to such Balance, or
(iv) postponing any date fixed for termination of such
Commitment,
shall be effective unless also signed by each Lender holding the Balance
or Commitment of the type being modified; and
(b) any change (including a waiver):
(i) in the definition of Required Lenders or the
provisions of this Section 14.11;
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(ii) which has the effect of releasing the Borrower, any
Subsidiary of the Borrower, or any Guarantor in a transaction
which is not otherwise permitted hereby; or
(iii) which releases all or substantially all of the
Guarantors of their obligations under the Subsidiary Guaranty;
shall not be effective unless signed by all Lenders.
Section 14.12 Maximum Interest Rate. Notwithstanding anything to the
contrary contained in any Loan Document, the interest paid or agreed to be paid
under the Loan Documents shall not exceed the maximum rate of non-usurious
interest permitted by applicable law (the "Maximum Rate"). If the Agent or any
Lender shall receive interest in an amount that exceeds the Maximum Rate, the
excessive interest shall be applied to the principal of the Obligations or, if
it exceeds the unpaid principal, refunded to the Borrower. In determining
whether the interest contracted for, charged, or received by the Agent or a
Lender exceeds the Maximum Rate, such Person may, to the extent permitted by
applicable law, (a) characterize any payment that is not principal as an
expense, fee, or premium rather than interest, (b) exclude voluntary prepayments
and the effects thereof, and (c) amortize, prorate, allocate, and spread in
equal or unequal parts the total amount of interest throughout the contemplated
term of the Obligations.
Section 14.13 Notices. All notices and other communications provided for
in any Loan Document to which the Borrower is a party shall be given or made in
writing (except as otherwise permitted by Section 4.3) and telecopied, mailed by
certified mail return receipt requested, or delivered to the intended recipient
at the "Address for Notices" specified in Schedule 14.13, or with respect to a
Lender not a party to this Agreement on the Closing Date, in its Assignment and
Acceptance, or, as to any party at such other address as shall be designated by
such party in a notice to each other party given in accordance with this
Section. Except as otherwise provided in any Loan Document, all such
communications shall be deemed to have been duly given when transmitted by
telecopy, subject to telephone confirmation of receipt, or when personally
delivered or, in the case of a mailed notice, three (3) Business Days after
being duly deposited in the mails, in each case given or addressed as aforesaid;
provided, however, notices to the Agent pursuant to Section 4.3 shall not be
effective until received by the Agent. Any agreement of the Agent and the
Lenders herein to receive certain notices by telephone or telecopy is solely for
the convenience and at the request of the Borrower. The Agent and the Lenders
shall be entitled to rely on the authority of any Person purporting to be a
Person authorized by the Borrower to give such notice and neither the Agent nor
any Lender shall have any liability to the Borrower or any other Person on
account of any action taken or not taken by the Agent or any Lender in reliance
upon such telephonic or telecopy notice. The obligation of the Borrower to repay
the Loan shall not be affected in any way or to any extent by any failure of the
Agent or any Lender to receive written confirmation of any telephonic or
telecopy notice or the receipt by the Agent or any Lender of a confirmation
which is at variance with the terms understood by the Agent or such Lender to be
contained in such telephonic or telecopy notice.
Section 14.14 Governing Law; Venue; Service of Process.
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81
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED
THAT THE AGENT AND EACH LENDER SHALL RETAIN ALL RIGHTS ARISING UNDER
FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF
CALIFORNIA OR OF THE UNITED STATES FOR SUCH STATE, AND BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, THE BORROWER, THE AGENT AND EACH LENDER
CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE
NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. THE BORROWER, THE AGENT, AND
EACH LENDER IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO
THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS,
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR
PROCEEDING IN SUCH JURISDICTION IN RESPECT OF ANY LOAN DOCUMENT OR OTHER
DOCUMENT RELATED THERETO. THE BORROWER, THE AGENT, AND EACH LENDER
WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT, OR OTHER PROCESS,
WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAWS OF SUCH
STATE.
Section 14.15 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.
Section 14.16 Severability. Any provision of any Loan Document held by a
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of such Loan Document and the effect thereof shall
be confined to the provision held to be invalid or illegal.
Section 14.17 Headings. The headings, captions, and arrangements used in
this Agreement are for convenience of reference only and shall not affect the
interpretation of this Agreement.
Section 14.18 Construction. The Borrower, each Guarantor (by its
execution of the Loan Documents to which it is a party), the Agent and each
Lender acknowledges that each of them has had the benefit of legal counsel of
its own choice and has been afforded an opportunity to review the Loan Documents
with its legal counsel and that the Loan Documents shall be construed as if
jointly drafted by the parties thereto.
Section 14.19 Independence of Covenants. All covenants under the Loan
Documents shall be given independent effect so that if a particular action or
condition is not permitted by any of such covenants, the fact that it would be
permitted by an exception to, or be otherwise within the
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82
limitations of, another covenant shall not avoid the occurrence of a Default if
such action is taken or such condition exists.
Section 14.20 Waiver of Jury Trial. EACH PARTY TO THIS AGREEMENT HEREBY
EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION, OR
CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH
RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR
TORT OR OTHERWISE, AND EACH PARTY HERETO HEREBY AGREES AND CONSENTS THAT ANY
SUCH CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL
WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE
CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
Section 14.21 Confidentiality. The Agent, each Lender and each
participant shall use any confidential non-public information concerning the
Borrower and its Subsidiaries that is furnished to the Agent or such Lender by
or on behalf of the Borrower and its Subsidiaries in connection with the Loan
Documents (collectively, "Confidential Information") solely for the purpose of
evaluating and providing products and services to them and administering and
enforcing the Loan Documents, and it will hold the Confidential Information in
confidence. Notwithstanding the foregoing, the Agent and each Lender may
disclose Confidential Information (a) to their Affiliates or any of their or
their Affiliates' directors, officers, employees, auditors, counsel, advisors,
or representatives (collectively, the "Representatives") whom it determines need
to know such information for the purposes set forth in this Section, (b) to any
bank or financial institution or other entity to which such Lender has assigned
or desires to assign an interest or participation in the Loan Documents or the
Obligations, provided that any such foregoing recipient of such Confidential
Information agrees to keep such Confidential Information confidential as
specified herein, (c) to any Governmental Authority having or claiming to have
authority to regulate or oversee any aspect of the Agent's or such Lender's
business or that of their Representatives in connection with the exercise of
such authority or claimed authority, (d) to the extent necessary or appropriate
to effect or preserve the Agent's or such Lender's or any of their Affiliates'
security (if any) for any Obligation or to enforce any right or remedy or in
connection with any claims asserted by or against the Agent or such Lender or
any of their Representatives; and (e) pursuant to any subpoena or any similar
legal process. For purposes hereof, the term "Confidential Information" shall
not include information that (x) is in the Agent's or a Lender's possession
prior to its being provided by or on behalf of the Borrower or any of its
Subsidiaries, provided that such information is not known by the Agent or such
Lender to be subject to another confidentiality agreement with, or other legal
or contractual obligation of confidentiality to, the Borrower or any of its
Subsidiaries, (y) is or becomes publicly available (other than through a breach
hereof by the Agent or such Lender), or (z) becomes available to the Agent or
such Lender on a nonconfidential basis, provided that the source of such
information was not known by the Agent or such Lender to be bound by a
confidentiality agreement or other legal or contractual obligation of
confidentiality with respect to such information.
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83
Section 14.22 Foreign Lenders. Each Foreign Lender shall deliver to the
Agent, prior to receipt of any payment subject to withholding under the Code (or
after accepting an assignment of an interest herein), two (2) duly signed
completed copies of either IRS Form W-8BEN or any successor thereto (relating to
such Foreign Lender and entitling it to an exemption from, or reduction of,
withholding tax on all payments to be made to such Foreign Lender by the
Borrower pursuant to this Agreement) or IRS Form W-8ECI or any successor thereto
(relating to all payments to be made to such Foreign Lender by the Borrower
pursuant to this Agreement) or such other evidence satisfactory to the Borrower
and the Agent that such Foreign Lender is entitled to an exemption from, or
reduction of, U.S. withholding tax. Thereafter and from time to time, each such
Foreign Lender shall (a) promptly submit to the Agent such additional duly
completed and signed copies of one of such forms (or such successor forms as
shall be adopted from time to time by the relevant U.S. taxing authorities) as
may then be available under then current U.S. laws and regulations to avoid, or
such evidence as is satisfactory to the Borrower and the Agent of any available
exemption from or reduction of, U.S. withholding taxes in respect of all
payments to be made to such Foreign Lender by the Borrower pursuant to this
Agreement, (b) promptly notify the Agent of any change in circumstances which
would modify or render invalid any claimed exemption or reduction, and (c) take
such steps as shall not be materially disadvantageous to it, in the reasonable
judgment of such Foreign Lender, and as may be reasonably necessary (including
the re-designation of its Applicable Lending Office) to avoid any requirement of
applicable laws that the Borrower make any deduction or withholding for taxes
from amounts payable to such Foreign Lender. If such Foreign Lender fails to
deliver the above forms or other documentation, then the Agent may withhold from
any interest payment to such Foreign Lender an amount equivalent to the
applicable withholding tax imposed by Sections 1441 and 1442 of the Code,
without reduction. If any Governmental Authority asserts that the Agent did not
properly withhold any tax or other amount from payments made in respect of such
Foreign Lender, such Foreign Lender shall indemnify the Agent therefor,
including all penalties and interest, any taxes imposed by any jurisdiction on
the amounts payable to the Agent under this Section, and costs and expenses
(including Attorney Costs) of the Agent. The obligation of the Lenders under
this Section shall survive the payment of all Obligations and the resignation or
replacement of the Agent.
Section 14.23 Amendment and Restatement. This Agreement and the other
Loan Documents amends, restates, and replaces in its entirety the Original
Agreement. All rights, benefits, indebtedness, interest, liabilities, and
obligations of the parties to the Original Agreement are hereby amended,
restated, replaced, and superseded in their entirety according to the terms and
provisions set forth herein and in the other Loan Documents. All indebtedness,
liabilities, and obligations under the Original Agreement, including, without
limitation, all promissory notes executed by the Borrower pursuant thereto, are
hereby renewed by this Agreement, the Notes, and the other Loan Documents
executed by the Borrower pursuant to this Agreement and shall, from and after
the Closing Date, be governed by this Agreement and the other Loan Documents.
The Borrower represents and warrants that as of the date hereof there are no
claims or offsets against, or defenses or counterclaims to, its obligations
under this Agreement, the Original Agreement, or any of the other agreements,
documents, or instruments executed in connection herewith or therewith. To
induce the Agent and the Lenders to enter into this Agreement, the Borrower
waives any and all such
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84
claims, offsets, defenses, or counterclaims, whether known or unknown, arising
prior to the Closing Date and relating to the Original Agreement or this
Agreement.
[Remainder of page intentionally left blank]
Page 78
85
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first above written.
BORROWER:
XXXXXXXX-SONOMA, INC.
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
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86
AGENT:
BANK OF AMERICA, NATIONAL
ASSOCIATION, as the Agent
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
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87
LENDERS:
BANK OF AMERICA, NATIONAL
ASSOCIATION
Commitment:
$45,000,000
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
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88
FLEET NATIONAL BANK
Commitment:
$28,000,000
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
Page 82
00
XXX XXXX XX XXX XXXX
Commitment:
$22,500,000
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
Page 83
90
FIRST UNION NATIONAL BANK
Commitment:
$17,500,000
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
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91
XXXXX FARGO BANK, N.A.
Commitment:
$17,500,000
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
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92
BNP PARIBAS
Commitment:
$17,500,000
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
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93
THE CHASE MANHATTAN BANK
Commitment:
$13,000,000
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
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94
NATIONAL CITY BANK
Commitment:
$13,000,000
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
Page 88
00
XXXXX XXXX XX XXXXXXXXXX, N.A.
Commitment:
$13,000,000
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
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96
FIRSTAR BANK NA
Commitment:
$13,000,000
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
Page 90
97
EXHIBIT A
Form of Revolving Note
Exhibit A, Cover Page
98
EXHIBIT B
Form of Swingline Note
Exhibit B, Cover Page
99
EXHIBIT C
Form of Assignment and Acceptance
Exhibit C, Cover Page
100
EXHIBIT D
Form of Compliance Certificate
Exhibit D, Cover Page
101
EXHIBIT E
Form of Subsidiary Guaranty
Exhibit E, Cover Page
102
EXHIBIT F
Form of Notice of Borrowings, Conversions, Continuations, or Prepayments
EXHIBIT F, Cover Page
103
EXHIBIT G
Form of Joinder Agreement
Exhibit G, Cover Page
104
EXHIBIT H
Form of Acknowledgment of Intercreditor Agreement
Exhibit H, Cover Page
105
Schedule 7.1
to
Xxxxxxxx-Sonoma, Inc.
Credit Agreement
Governmental Certificates
New York
Texas
Florida
New Jersey
Illinois
Massachusetts
Connecticut
Pennsylvania
Ohio
Xxxxxxxx
Xxxxxxxxxx
Georgia
Michigan
Colorado
North Carolina
Schedule 7.1, Solo Page
106
Schedule 8.4
to
Xxxxxxxx-Sonoma, Inc.
Credit Agreement
Operation of Business
1. In July 2000, Xxxxxxxx-Sonoma Direct, Inc. entered into a 10-year lease
with C.A. Hempt Estate, Inc. for property in Camp Hill, Pennsylvania,
outside of Harrisburg, to be used as a mail-order call center. The lease
has two five-year renewal options. Base rent for the first five years is
fixed; in years six through ten the rent increases 2% each year and in
years 11 through 20 increases by the greater of 2% or Consumer Price
Index-US City Average. Assuming Xxxxxxxx-Sonoma Direct, Inc. exercises
both renewal options, the total rent payments over the 20 year lease are
expected to be approximately $10,935,000.
2. In February 2000, the Letter of Credit Agreement between the Borrower
and Bank of America, dated as of June 1, 1997, as amended (the "Letter
of Credit Agreement"), was amended to provide for a revolving line of
credit equal to $75,000,000. This revolving line of credit under the
Letter of Credit Agreement will be terminated as of the Closing Date and
a portion of the proceeds from the initial Loan will be used to repay
the $73,000,000 outstanding under the revolving line; only the letter of
credit portion of the agreement will remain in effect.
3. The Borrower's documentary letter of credit facility under the Letter of
Credit Agreement was recently increased from $75,000,000 to $90,000,000.
Schedule 8.4, Solo Page
107
Schedule 8.5
to
Xxxxxxxx-Sonoma, Inc.
Credit Agreement
Litigation and Judgments
Xxxxxx Xxxxxxxxx, Xxxx Xxxxxxxxxx, et. xx x. Xxxxxxxx-Sonoma, Inc., The Ruffoni
Family, et. al., Case No. 301-563 (filed March 8, 2000), Superior Court of
California (San Francisco). The class action lawsuit filed against the Borrower
alleges physical injuries and emotional distress suffered and is seeking
approximately $22,500,000 in damages. The Company believes that the matter is
covered by insurance and has referred the matter to its insurance carrier.
Although the Borrower believes it has strong defenses, litigation is inherently
unpredictable and there is no guarantee the Borrower will prevail and that the
outcome of the case would not have a Material Adverse Effect.
Schedule 8.5 Solo Page
108
Schedule 8.9
to
Xxxxxxxx-Sonoma, Inc.
Credit Agreement
Debt
1. $40,000,000 7.20% Senior Notes Due August 8, 2005 issued by the Borrower
pursuant to that certain Note Agreement dated as of August 1, 1995. The
outstanding principal balance as of July 30, 2000 was $34,256,000.
2. $7,000,000 initial principal amount pursuant to the Amended and Restated
Standing Loan Agreement, dated as of June 1, 1997 between the Borrower
and Bank of America evidenced by the promissory note dated as of March
9, 1995 and secured by a Deed of Trust relating to the property located
at 0000 Xxx Xxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx. (See Schedule 10.2
regarding UCC-1 Financing Statement and Deed of Trust). The remaining
principal balance as of July 30, 2000 was $6,216,250.
3. $6,216,250 under a floating/fixed rate swap agreement with Bank of
America that expires on April 2, 2001 related to the Amended and
Restated Standing Loan Agreement described in Item 2 above.
4. $14,000,000 aggregate initial principal amount pursuant to that certain
Lease Intended as Security dated as of January 25, 2000, between the
Borrower and Banc of America Leasing & Capital, LLC. (See Schedule 10.2
regarding the lien filed with the Federal Aviation Administration). The
remaining principal balance on the synthetic lease. as of July 30, 2000,
was approximately $13,750,000.
5. Approximately $542,000 outstanding as of July 30, 2000 under capital
leases (excluding the capital lease described in Item 4 above).
6. Other Debt outstanding on the Closing Date in a principal amount not to
exceed in the aggregate, together with all other Debt listed on this
Schedule 8.9 and the amount shown on the Borrower's most recent
financial statement delivered pursuant to Section 8.2 of the Credit
Agreement, plus $100,000.
7. $90,000,000 letter credit facility pursuant to that certain Letter of
Credit Agreement, between the Borrower and Bank of America, dated as of
June 1, 1997, as amended. As of July 30, 2000 there was approximately
$59,406,000 outstanding under the letter of credit portion of the Letter
of Credit Agreement. Under the same Letter of Credit of Agreement there
is a $75,000,000 revolving line that will be terminated as of the
Closing Date. As of July 30, 2000 there was $73,000,000 outstanding
under the revolving line that will be repaid in full with the proceeds
of the initial Loan hereunder.
Schedule 8.9, Solo Page
109
Schedule 8.10
to
Xxxxxxxx-Sonoma, Inc.
Credit Agreement
Taxes
INCOME AND FRANCHISE TAXES
Texas:
The Borrower filed its final franchise tax report on August 11, 2000.
The additional tax due with the filing was approximately $25,000.
SALES AND USE TAX
Missouri:
Use Tax on Fixed Assets - Approximately $10,000.
Sales Tax on Expenses for Xxxxxxxx-Sonoma Stores, Inc. - Approximately
$30,000 (Issue is still open. Preliminary audit workpapers are being reviewed.
The Borrower expects the assessment to be reduced.)
Texas:
Use Tax on Fixed Assets - Approximately $520,000 - The Borrower is
working with a sales tax consultant in Texas to reduce this amount.
Additional Tax - Exempt Transactions - Approximately $865,000 (Issue is
currently being protested. The Borrower is working with a sales tax consultant
in Texas. This amount should be reduced significantly or eliminated from audit.)
Baton Rouge Department of Revenue:
Sales Tax Audit - Approximately $6,400. (Assessment is being protested.
The Borrower should be able to have the assessment either significantly reduced
or eliminated.
California:
Currently being audited. No assessment or proposed assessment has been
issued. Auditor has not yet scheduled his return to complete audit.
NOTE: Although the audit has not been completed, the Borrower has been
able to determine that there is an outstanding liability due to the
sales tax on shipping income for the period of January 1, 1998 through
June 30, 2000 of approximately $600,000.
Tennessee:
Currently being audited. No assessment or proposed assessment has been
issued. Auditor is scheduled to return to complete audit and provide preliminary
assessment in September.
Schedule 8.10, Solo Page
110
Schedule 8.12
to
Xxxxxxxx-Sonoma, Inc.
Credit Agreement
ERISA Matters
None.
Schedule 8.12, Solo Page
111
Schedule 8.14
to
Xxxxxxxx-Sonoma, Inc.
Credit Agreement
Subsidiaries; Capitalization
1. SUBSIDIARIES: Xxxxxxxx-Sonoma Stores, Inc.
Xxxxxxxx-Sonoma Direct, Inc.
Xxxxxxxx-Sonoma Retail Services, Inc.
Pottery Barn, Inc.
Pottery Barn Kids, Inc.
Xxxxxxxx Catalog Company, Inc.
Hold Everything, Inc.
Xxxxxxxx-Sonoma Stores, LLC
2. CAPITALIZATION:
CORPORATIONS
======================================================================================================
State of Percentage
Issuer Incorporation Authorized Stock Issued Stock Shareholder Interest
======================================================================================================
Xxxxxxxx-Sonoma, California 126,562,500 shares of 56,702,030
Inc. Common Stock and shares of
7,500,000 shares of Common N/A N/A
Preferred Stock Stock(1)
------------------------------------------------------------------------------------------------------
Xxxxxxxx-Sonoma California 100 shares of 100 shares of Xxxxxxxx-
Stores, Inc. Common Stock Common Stock Sonoma, Inc. 100%
------------------------------------------------------------------------------------------------------
Xxxxxxxx-Sonoma California 1,000 shares of 100 shares of Xxxxxxxx-
Direct, Inc. Common Stock Common Stock Sonoma, Inc. 100%
------------------------------------------------------------------------------------------------------
Xxxxxxxx-Sonoma California 1,000 shares of 1,000 shares Xxxxxxxx-
Retail Services, Common Stock of Common Sonoma, Inc. 100%
Inc. Stock
------------------------------------------------------------------------------------------------------
Pottery Barn, Inc. California 1,000 shares of 100 shares of Xxxxxxxx-
Common Stock Common Stock Sonoma, Inc. 100%
------------------------------------------------------------------------------------------------------
--------
(1) As of August 14, 2000
Schedule 8.14, Page 1 of 2
112
======================================================================================================
State of Percentage
Issuer Incorporation Authorized Stock Issued Stock Shareholder Interest
======================================================================================================
Pottery Barn California 1,000 shares of 1,000 shares Xxxxxxxx-
Kids, Inc. Common Stock of Common Sonoma, Inc. 100%
Stock
------------------------------------------------------------------------------------------------------
Xxxxxxxx Catalog California 100 shares of 100 shares of Xxxxxxxx-
Company, Inc. Common Stock Common Stock Sonoma, Inc. 100%
------------------------------------------------------------------------------------------------------
Hold Everything, California 1,000 shares of 100 shares of Xxxxxxxx- 100%
Inc. Common Stock Common Stock Sonoma, Inc.
======================================================================================================
LIMITED LIABILITY COMPANIES
================================================================================
State of
Issuer Formation Members Units Percentage
================================================================================
Xxxxxxxx-Sonoma Delaware Xxxxxxxx-Sonoma 100 100%
Stores, LLC Stores, Inc.
================================================================================
3. OPTIONS, WARRANTS, VOTING AGREEMENTS:
As of August 14, 2000 there were options outstanding covering 6,598,503
shares of Common Stock of the Borrower.
Schedule 8.14, Page 2 of 2
113
Schedule 8.15
to
Xxxxxxxx-Sonoma, Inc.
Credit Agreement
Material Agreements
None.
Schedule 8.15, Solo Page
114
Schedule 8.19
to
Xxxxxxxx-Sonoma, Inc.
Credit Agreement
Environmental Matters
None.
Schedule 8.19, Solo Page
115
Schedule 8.20
to
Xxxxxxxx-Sonoma, Inc.
Credit Agreement
Broker's Fees
Arrangement Fee payable to the Arranger as set forth in the Agent's Letter.
Schedule 8.20, Solo Page
116
Schedule 8.21
to
Xxxxxxxx-Sonoma, Inc.
Credit Agreement
Employee Matters
None.
Schedule 8.21, Solo Page
117
Schedule 10.2
to
Xxxxxxxx-Sonoma, Inc.
Credit Agreement
Permitted Liens
1. Deed of Trust, Assignment of Rents and Fixture Filings covering the real
property at 0000 Xxx Xxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx, dated as of
March 9, 1994 made by the Borrower, in favor of Equitable Deed Company,
as trustee for the benefit of Bank of America, and the related
California UCC-1 Financing Statement (State of California; File No.
94070510).
2. Lease Intended as Security described in Item 4 of Schedule 8.9 and the
related Certificate of Acceptance filed with the Federal Aviation
Administration on January 28, 2000 (Conveyance No. RR020554), perfecting
the security interest in the Canadair model CL-600-2BI6 aircraft and two
General Electric model CF34-3AI aircraft engines.
3. UCC-1 Financing Statement filed pursuant to that certain Aircraft Lease
Agreement dated as of December 28, 1994 between the Company and General
Electric Capital Corporation covering the Canadair model CL-600-2BI6
aircraft and the two General Electric model CF34-3AI aircraft engines.
(State of California; File No. 95-01960116).
4. Liens securing debt described in Schedule 8.9, Item 6, incurred to
finance the acquisition, construction or improvement of equipment,
including vehicles, attaching only to the assets acquired, constructed
or improved, and directly-related assets such as proceeds (including
insurance proceeds), products, accessions, substitutions and
replacements.
Schedule 10.2, Solo Page
118
Schedule 10.5
to
Xxxxxxxx-Sonoma, Inc.
Credit Agreement
Investments
1. 9,200 shares of capital Il Fornaio "America" Corporation. The total
investment as of July 30, 2000 was approximately $309,115.
2. 937,234 shares of Series J Preferred Stock of Wedcom, Inc., a Delaware
corporation. the total investment as of July 30, 2000 was approximately
$2,000,002.
3. See Schedule 8.14, Section 1, regarding Subsidiaries of the Borrower.
Schedule 10.5, Solo Page
119
Schedule 14.13
to
Xxxxxxxx-Sonoma, Inc.
Credit Agreement
Addresses for Notices
XXXXXXXX - SONOMA, INC.:
Xxxxxxxx-Sonoma, Inc.
000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx XxXxxxxx, Vice President, Finance
Telecopy No.: 000-000-0000
Schedule 14.13, Page 1 of 12
120
Schedule 14.13
(cont.)
BANK OF AMERICA, NATIONAL ASSOCIATION (as the Agent)
Funding Notices:
0000 Xxxxxxx Xxxxxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxxx Xxxxxxxx
Telecopy No.: 000-000-0000
Other Notices:
Commercial Agency Management
WA1-102-16-20
000 0xx Xxxxxx, Xxxxx 00
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxxx
Telecopy No.: 000-000-0000
Agent's Payment Instructions:
Bank of America, National Association
ABA #11100012
Dallas, Texas
Acct. # Corporate FTA 3750836479
Attention: Xxxxxxxx Xxxxxxxx
Reference: Xxxxxxxx-Sonoma
Schedule 14.13, Page 2 of 12
121
Schedule 14.13
(cont.)
BANK OF AMERICA, NATIONAL ASSOCIATION (as a Lender)
Domestic and Libor Lending Office:
0000 Xxxxxxx Xxxxxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxxx Xxxxxxxx
Notices (other than Funding notices):
CA5-102-LL-13
000 Xxxxxxxxxx Xx.
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxxx
Telecopy No.: 000-000-0000
Schedule 14.13, Page 3 of 12
122
Schedule 14.13
(cont.)
FLEET NATIONAL BANK
Applicable Lending Office for Base Rate Balances and Libor Rate Balances:
000 Xxxxxxx Xxxxxx
Mail Code: MA DE 10008F
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxx
Credit Contact:
000 Xxxxxxx Xxxxxx
Mail Code: MA DE 10008F
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxxx
Telecopy No.: 000-000-0000
Operations Contact:
000 Xxxxxxx Xxxxxx
Mail Code: MA DE 10008F
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxx
Telecopy No.: 000-000-0000
Schedule 14.13, Page 4 of 12
123
Schedule 14.13
(cont.)
THE BANK OF NEW YORK
Applicable Lending office for Base Rate Balances:
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Commercial Loan Servicing Department
Applicable Lending Office for Libor Rate Balances:
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Eurodollar/Cayman Funding Area
Credit Contact:
Xxx Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxx Xxxx Fuiks
Telecopy No.: 000-000-0000
Operations Contact:
Xxx Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxx
Telecopy No.: 000-000-0000
Schedule 14.13, Page 5 of 12
124
Schedule 14.13
(cont.)
FIRST UNION NATIONAL BANK
Applicable Lending Office for Base Rate Balances and Libor Rate Balances:
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxx Xxxxxxx-Keys
Credit Contact:
Xxxxxxx Building, 12th Floor
0 Xxxxx Xxxx Xxxxxx XX0000
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxx Xxx
Telecopy No.: 000-000-0000
Operations Contact:
FUNB PA4848
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxx Xxxxxxx-Keys
Telecopy No.: 000-000-0000
Schedule 14.13, Page 6 of 12
125
Schedule 14.13
(cont.)
XXXXX FARGO BANK, N.A.
Applicable Lending Office for Base Rate Balances and Libor Rate Balances:
000 Xxxxxxxxxx, 0xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxxx
Credit Contact:
000 Xxxxxxxxxx, 0xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx Xxxxxx
Telecopy No.: 000-000-0000
Operations Contact:
000 0xx Xxxxxx, XXX X0000-000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxxx
Telecopy No.: 000-000-0000
Schedule 14.13, Page 7 of 12
126
Schedule 14.13
(cont.)
BNP PARIBAS
Applicable Lending Office for Base Rate Balances and Libor Rate Balances:
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx Xxxx
Credit Contact:
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxx
Telecopy No.: 000-000-0000
Operations Contact:
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx XxXxxx
Telecopy No.: 000-000-0000
Schedule 14.13, Page 8 of 12
127
Schedule 14.13
(cont.)
THE CHASE MANHATTAN BANK
Applicable Lending Office for Base Rate Balances and Libor Rate Balances:
0 Xxxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxx
Telecopy No.: 000-000-0000
Credit Contact:
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxxx
Telecopy No.: 000-000-0000
Operations Contact:
0 Xxxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxx
Telecopy No.: 000-000-0000
Schedule 14.13, Page 9 of 12
128
Schedule 14.13
(cont.)
NATIONAL CITY BANK
Applicable Lending Office for Base Rate Balances and Libor Rate Balances:
0000 X. 0xx Xxxxxx, Xxx. 0000
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxxxx Xxxxxxxxxxx
Credit Contact:
0 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxx X. XxXxxxxxx
Telecopy No.: 000-000-0000
Operations Contact:
0000 X. 0xx Xxxxxx, Xxx. 0000
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxxxx Xxxxxxxxxxx
Telecopy No.: 000-000-0000
Schedule 14.13, Page 10 of 12
129
Schedule 14.13
(cont.)
UNION BANK OF CALIFORNIA, N.A.
Applicable Lending Office for Base Rate Balances and Libor Rate Balances:
Commercial Customer Service Unit
0000 Xxxxxx Xxxxxx
Xxxxxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxx Xxxxxxxx
Credit Contact:
000 Xxxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxx
Telecopy No.: 000-000-0000
Operations Contact:
Commercial Customer Service Unit
0000 Xxxxxx Xxxxxx
Xxxxxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxx Xxxxxxxx
Schedule 14.13, Page 11 of 12
130
Schedule 14.13
(cont.)
FIRSTAR BANK NA
Applicable Lending Office for Base Rate Balances and Libor Rate Balances:
Xxx Xxxxxxx Xxxxx
Xxxx 00-0
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxx
Credit Contact:
Xxx Xxxxxxx Xxxxx
Xxxx 00-0
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxx
Telecopy No.: 000-000-0000
Operations Contact:
Xxx Xxxxxxx Xxxxx
Xxxx 00-0
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxxxx
Telecopy No.: 000-000-0000
Schedule 14.13, Page 12 of 12
