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Exhibit 10.14
AMENDED AND RESTATED CREDIT AGREEMENT
among
XXXXXX'X
SPORTS AND OUTDOOR ADVENTURE
XXXXXX'X TRADING COMPANY, INC.,
as Borrower,
the lenders party hereto,
[GRAPHIC OMITTED] JPMorgan
JPMORGAN CHASE BANK
(formerly The Chase Manhattan Bank)
as the administrative agent, collateral agent,
co-lead arranger and exclusive book manager,
CONGRESS FINANCIAL CORPORATION (CENTRAL),
as co-lead arranger
NATIONAL CITY COMMERCIAL FINANCE, INC.,
FOOTHILL CAPITAL CORPORATION
as co-documentation agents,
CONGRESS FINANCIAL CORPORATION (Central),
FLEET RETAIL FINANCE INC.,
as co-syndication agents,
and
BANK OF AMERICA, N.A.,
THE CIT GROUP/BUSINESS CREDIT, INC.,
LASALLE BUSINESS CREDIT,
as co-agents
25 April 2003
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TABLE OF CONTENTS
ARTICLE I. DEFINITIONS......................................................1
Section 1.01. Defined Terms............................................1
Section 1.02. Classification of Loans and Borrowings..................23
Section 1.03. Terms Generally.........................................23
Section 1.04. Accounting Terms; GAAP..................................23
ARTICLE II. THE CREDITS.....................................................23
Section 2.01. Commitments.............................................23
Section 2.02. Loans and Borrowings....................................23
Section 2.03. Requests for Borrowings.................................24
Section 2.04. Swingline Loans.........................................25
Section 2.05. Letters of Credit.......................................27
Section 2.06. Funding of Borrowings...................................31
Section 2.07. Interest Elections......................................32
Section 2.08. Termination, Reduction and Increase of Commitments......33
Section 2.09. Repayment of Loans; Evidence of Debt....................35
Section 2.10. Prepayment of Loans.....................................35
Section 2.11. Fees....................................................37
Section 2.12. Interest................................................38
Section 2.13. Alternate Rate of Interest..............................38
Section 2.14. Increased Costs.........................................39
Section 2.15. Break Funding Payments..................................40
Section 2.16. Taxes...................................................40
Section 2.17. Payments Generally; Pro Rata Treatment; Sharing of
Set-offs; Distribution of Proceeds of Collateral........41
Section 2.18. Mitigation Obligations; Replacement of Lenders..........44
ARTICLE III. REPRESENTATIONS AND WARRANTIES..................................44
Section 3.01. Organization; Powers....................................44
Section 3.02. Authorization; Enforceability...........................44
Section 3.03. Governmental Approvals; No Conflicts....................45
Section 3.04. Financial Condition; No Material Adverse Change.........45
Section 3.05. Properties..............................................46
Section 3.06. Litigation and Environmental Matters....................46
Section 3.07. Compliance with Laws and Agreements.....................46
Section 3.08. Investment and Holding Company Status...................46
Section 3.09. Taxes...................................................46
Section 3.10. ERISA...................................................47
Section 3.11. Disclosure..............................................47
Section 3.12. Subsidiaries............................................47
Section 3.13. Insurance...............................................47
Section 3.14. Labor Matters...........................................47
Section 3.15. Solvency................................................48
Section 3.16. Security Documents......................................48
Section 3.17. Margin Securities.......................................48
ARTICLE IV. CONDITIONS......................................................49
Section 4.01. Effective Date..........................................49
Section 4.02. Each Credit Event.......................................50
Section 4.03. Effective Date Advances and Adjustments.................51
i
ARTICLE V. AFFIRMATIVE COVENANTS...........................................51
Section 5.01. Financial Statements and Other Information..............51
Section 5.02. Notices of Material Events..............................53
Section 5.03. Information Regarding Collateral........................53
Section 5.04. Existence; Conduct of Business..........................54
Section 5.05. Payment of Obligations..................................54
Section 5.06. Maintenance of Properties...............................54
Section 5.07. Insurance...............................................54
Section 5.08. Casualty and Condemnation...............................55
Section 5.09. Books and Records; Inspection and Audit Rights..........55
Section 5.10. Compliance with Laws....................................56
Section 5.11. Use of Proceeds and Letters of Credit...................56
Section 5.12. Additional Subsidiaries.................................56
Section 5.13. Further Assurances......................................57
Section 5.14. Leaseholds and other Contractual Obligations............57
Section 5.15. Mortgaged Property......................................57
ARTICLE VI. NEGATIVE COVENANTS..............................................59
Section 6.01. Indebtedness; Certain Equity Securities.................59
Section 6.02. Liens...................................................60
Section 6.03. Fundamental Changes.....................................61
Section 6.04. Investments, Loans, Advances, Guarantees and
Acquisitions............................................61
Section 6.05. Asset Sales.............................................63
Section 6.06. Hedging Agreements......................................63
Section 6.07. Restricted Payments; Certain Payments of Indebtedness...64
Section 6.08. Transactions with Affiliates............................64
Section 6.09. Restrictive Agreements..................................65
Section 6.10. Amendment of Material Documents.........................65
Section 6.11. Sale and Lease-Back Transactions........................65
Section 6.12. Consolidated EBITDA.....................................65
Section 6.13. Minimum Availability....................................66
Section 6.14. Change in Fiscal Year...................................66
ARTICLE VII. EVENTS OF DEFAULT...............................................66
Section 7.01. Events of Default and Remedies..........................66
Section 7.02. Performance by the Agent................................68
Section 7.03. Continuance of Default..................................69
ARTICLE VIII. THE ADMINISTRATIVE AGENT........................................69
ARTICLE IX. MISCELLANEOUS...................................................72
Section 9.01. Notices.................................................72
Section 9.02. Waivers; Amendments; Permitted Release of Liens.........73
Section 9.03. Expenses; Indemnity; Damage Waiver......................74
Section 9.04. Successors and Assigns..................................75
Section 9.05. Survival................................................78
Section 9.06. Counterparts; Integration; Effectiveness; Amendment
and Restatement.........................................78
Section 9.07. Severability............................................79
Section 9.08. Right of Setoff.........................................79
Section 9.09. Governing Law; Jurisdiction; Consent to Service of
Process.................................................79
Section 9.10. WAIVER OF JURY TRIAL....................................80
Section 9.11. Headings................................................80
ii
Section 9.12. Confidentiality.........................................80
Section 9.13. Interest Rate Limitation................................81
Section 9.14. No Fiduciary Relationship...............................81
Section 9.15. Construction............................................82
Section 9.16. Independence of Covenants...............................82
iii
LIST OF SCHEDULES AND EXHIBITS
SCHEDULES:
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Schedule 2.01 - Commitments
Schedule 3.06 - Disclosed Matters
Schedule 3.12 - Subsidiaries
Schedule 3.13 - Insurance
Schedule 5.15 - Consent and Non-Disturbance Provisions
Schedule 6.01 - Existing Indebtedness
Schedule 6.02 - Existing Liens
Schedule 6.04 - Existing Investments
Schedule 6.08 - Affiliate Transactions
Schedule 6.09 - Existing Restrictions
EXHIBITS:
--------
Exhibit A - Form of Assignment and Assumption
Exhibit B-1 - Form of Opinion (New York Counsel of Borrower)
Exhibit B-2 - Form of Opinion (Indiana Counsel to Borrower)
Exhibit B-3 - Form of Opinion (Counsel to Subsidiaries)
Exhibit C - Form of Borrowing Base Certificate
Exhibit D - Form of Amended and Restated Security Agreement
Exhibit E - Form of Increased Supplement Agreement
Exhibit F - Form of First Amendment to Pledge Agreement
Exhibit G - Form of Trademark Security Agreement
iv
AMENDED AND RESTATED CREDIT AGREEMENT
This AMENDED AND RESTATED CREDIT AGREEMENT (this "Agreement") dated as
of April 25, 2003, is among XXXXXX'X TRADING COMPANY, INC., an Indiana
corporation (the "Borrower"), the LENDERS party hereto, and JPMORGAN CHASE BANK
(formerly The Chase Manhattan Bank), as the administrative agent (the
"Administrative Agent").
RECITALS:
A. The Borrower, the lenders party thereto, The Chase Manhattan
Bank (now JPMorgan Chase Bank), as the administrative agent, entered into that
certain Credit Agreement dated as of May 3, 2001, (as such agreement was amended
and otherwise modified from time to time, the "Original Credit Agreement"). The
Original Credit Agreement amended and restated that certain Credit Agreement
dated as of August 31, 1999 among the Borrower, the lenders party thereto, and
The Chase Manhattan Bank (now JPMorgan Chase Bank), as the administrative agent.
B. Certain of the lenders party to the Original Credit Agreement
have assigned all of their right, title and interest in and to the Original
Credit Agreement to certain Lenders pursuant to the terms of that certain Master
Assignment and Acceptance dated April 25, 2003.
C. The parties hereto now desire to amend and restate the
Original Credit Agreement to, among other things,: (i) increase the commitments
of the lenders under the Original Credit Agreement; (ii) extend the maturity of
the credit facility, and (iii) modify certain of the negative and financial
covenants of the Original Credit Agreement as herein set forth.
NOW THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
ARTICLE I.
Definitions
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Section 1.01. Defined Terms. As used in this Agreement, the
following terms have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Alternate Base Rate.
"Adjusted LIBO Rate" means, with respect to any LIBOR Borrowing for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to
the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period
multiplied by (b) the Statutory Reserve Rate.
"Administrative Agent" means JPMorgan Chase Bank (formerly The Chase
Manhattan Bank), in its capacity as administrative agent for the Lenders
hereunder.
"Administrative Questionnaire" means an Administrative Questionnaire in
a form supplied by the Administrative Agent.
"Affiliate" means, with respect to a specified Person, another Person
that directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
"Alternate Base Rate" means, for any day, a rate per annum equal to the
greater of (a) the Prime Rate in effect on such day and (b) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1%. Any change in the Alternate
Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate
shall be effective from and including the effective date of such change in the
Prime Rate or the Federal Funds Effective Rate, respectively.
"Applicable Margin" means, for any day with respect to any ABR Loan or
LIBOR Loan, as the case may be, the applicable rate per annum determined
pursuant to either clause (a) or clause (b) below in this definition, whichever
results in the lowest rate per annum: (a) the applicable rate per annum set
forth in the Table A below under the caption "ABR Margin", or "LIBOR Margin", as
the case may be, opposite the Ebitda Target in Table A below which corresponds
with the actual Consolidated EBITDA level as of the most recent determination
date or (b) the applicable rate per annum set forth in Table B below under the
caption "ABR Margin" or "LIBOR Margin", as the case may be, opposite the
Availability Level in Table B below which corresponds with the actual Average
Availability as of the most recent determination date. Notwithstanding the
foregoing, (a) from and including the Effective Date until the first date the
Applicable Margin is determined and changes as set forth below in this
definition, the "Applicable Margin" shall be the applicable rate per annum set
forth below in Level II of Table A and (b) if, as of any date of determination,
the actual Consolidated EBITDA calculation as of such date corresponds with the
EBITDA Target in Level III under Table A and the actual Average Availability
calculation as of such date corresponds with the Availability Level in Table B
in Level I, then for that determination date, the "Applicable Margin" shall be
the applicable rate per annum set forth below in Level II of Table A.
Table A
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ABR
Level EBITDA Target LIBOR Margin Margin
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I Equal to or greater than 110% of 1.75% 0.00%
EBITDA Plan
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II Less than 110% of EBITDA Plan but 2.00% 0.00%
equal to or greater than 85% of
EBITDA Plan
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III Less than 85% of EBITDA Plan 2.25% 0.25%
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Table B
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ABR
Level Availability Level LIBOR Margin Margin
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I Greater than or equal to $60,000,000 1.75% 0.00%
---------------------------------------------------------------------------------------
II Less than $60,000,000 but greater 2.00% 0.00%
than or equal to $35,000,000
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III Less than $35,000,000 2.25% 0.25%
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For purposes of the foregoing: (i) the Average Availability shall be determined
as of the end of each fiscal quarter of the Borrower for the fiscal quarter then
ended beginning with the fiscal quarter ended on or about October 31, 2003; (ii)
Consolidated EBITDA shall be determined as of the end of each fiscal quarter of
the Borrower for the four fiscal quarters then ended based upon the Borrower's
consolidated financial statements delivered pursuant to Section 5.01(a) or (b),
beginning with the fiscal quarter ended on or about October 31, 2003, (iii) as
used in Table A above, the term "EBITDA Plan" shall mean, as of any date of
determination of the Applicable Margin, the product of $1,620,000 multiplied by
the Average Number of Stores as calculated as of the most recent fiscal quarter
ended prior to the date of determination; and (iv) each change in the Applicable
Margin resulting from a change in either Average Availability or Consolidated
EBITDA shall be effective during the period commencing on and including
2
the date which is the first day of the first month following the delivery to the
Administrative Agent of a certificate under Section 5.01(d) (and accompanying
financial statements) reflecting the calculations demonstrating such change and
ending on the date immediately preceding the effective date of the next such
change; provided that: (A) at any time that an Event of Default exists, the
Applicable Margin shall be determined based on Level III in Table A above and
(B) at the option of the Administrative Agent or at the request of the Required
Lenders, if the Borrower fails to deliver the consolidated financial statements
required to be delivered by it pursuant to Section 5.01(a) or (b) and the
accompanying certificate required by Section 5.01(d) within five Business Days
after the date due, then during the period from the expiration of the time for
delivery thereof until such consolidated financial statements and certificate
are delivered, the Applicable Margin shall be determined based on Level III in
Table A above
"Applicable Percentage" means, with respect to any Lender, the
percentage of the total Commitments represented by such Lender's Commitment. If
the Commitments have terminated or expired, the Applicable Percentages shall be
determined based upon the Commitments most recently in effect, giving effect to
any assignments.
"Assignment and Assumption" means an assignment and assumption entered
into by a Lender and an assignee (with the consent of any party whose consent is
required by Section 9.04), and accepted by the Administrative Agent, in the form
of Exhibit A or any other form approved by the Administrative Agent.
"Availability" means, at any date of determination, the sum of the
following, each calculated as of such date: (a) the lesser of: (i) the Borrowing
Base or (ii) the aggregate amount of the Lenders' Commitments minus (b) the
total Revolving Exposures.
"Availability Period" means the period from and including the Effective
Date to but excluding the earlier of the Maturity Date and the date of
termination of the Commitments.
"Availability Test" means, with respect to any transaction limited by
compliance with the test set forth in this definition, that: (A) no Event of
Default shall exist or result after giving effect to the transaction in
question; (B) as of the date no sooner than 10 days prior to the consummation of
the transaction in question, the Average Availability for the 30 day period
ending on such date must equal or exceed $35,000,000, calculated on a pro forma
basis after giving effect to the transaction in question, assuming that any
payments made in connection therewith had been made on the first day of such
period and, if the transaction in question is a Permitted Acquisition, including
in the Borrowing Base any Eligible Credit Card Receivables and Eligible
Inventory to be acquired in connection therewith if the Administrative Agent
shall have completed its examination and appraisal thereof; and (C) the
Administrative Agent shall have received a certificate signed by a Financial
Officer of Borrower certifying to the evidence demonstrating compliance with the
requirements of clause (A) and (B) preceding.
"Average Availability" means, for any period of calculation, an amount
equal to the average daily balances of the Availability for such period.
"Average Number of Stores" means, as of any fiscal quarter end (any
such fiscal quarter herein the "Test Quarter"), the average number of the
Borrower's retail store locations for such period calculated by: (i) determining
the number of retail store locations in operation as of each month end during
the four fiscal quarter period ended immediately prior to the start of the Test
Quarter; (ii) adding up the amounts determined under clause (i) of this
definition; and (iii) dividing the amount determined under clause (ii) of this
definition by 12.
3
"Board" means the Board of Governors of the Federal Reserve System of
the United States of America.
"Borrower" means Xxxxxx'x Trading Company, Inc., an Indiana
corporation.
"Borrowing" means (a) Revolving Loans of the same Type, made, converted
or continued on the same date and, in the case of LIBOR Loans, as to which a
single Interest Period is in effect or (b) a Swingline Loan.
"Borrowing Base" means, as of any date of determination, the sum of the
following:
(a) Eligible Credit Card Receivables. The product of the
Advance Percent (as defined below in this definition) multiplied by the
aggregate amount of all Eligible Credit Card Receivables; plus
(b) Inventory.
(i) Until the delivery of the first inventory
appraisal to the Administrative Agent after the Effective Date, the product of
the percentage set forth in either clause (A) or (B) below which is applicable
as of the date of determination multiplied by the Eligible Inventory:
(A) If the date of determination is
during the period beginning on December 16 of one year and ending on August 31
of the next year, sixty-eight percent (68%); and
(B) If the date of determination is
during the period beginning on September 1 of a year and ending on December 15
of the same year, seventy-five percent (75%);
(ii) Upon the delivery of the first inventory
appraisal to the Administrative Agent after the Effective Date and at all times
thereafter, the lesser of:
(A) the product of the percentage set
forth in either clause (1) or (2) below which is applicable as of the date of
determination multiplied by the Eligible Inventory:
(1) If the date of
determination is during the period beginning on December 16 of one year and
ending on August 31 of the next year, seventy percent (70%); and
(2) If the date of
determination is during the period beginning on September 1 of a year and ending
on December 15 of the same year, seventy-seven and one-half percent (77.5%); or
(B) eighty-five percent (85%) of the
Appraised Liquidation Percentage (as defined below in this definition)
multiplied by the aggregate amount of all Eligible Inventory; plus
(c) Mortgaged Property. The lesser of:
(i) fifty percent (50%) of the fair market value
of any Mortgaged Property (as determined by a credentialed appraiser reasonably
satisfactory to the Administrative Agent and including in such market value,
with respect to any leasehold estate, the appraised value of any improvements
owned by a Loan Party but excluding from such market value, the appraised value
attributable to the leasehold interest in the underlying land); or
4
(ii) twenty percent (20%) of the quotient
obtained by dividing the sum of the amounts calculated in accordance with
clauses (a), (b), (d) and (e) of this definition by .8; plus
(d) Cash Collateral. The amount, if any, of cash
collateral then on deposit with the Administrative Agent that constitutes part
of the Borrowing Base as provided in Section 2.05(j); plus
(e) Documentary Letters of Credit. An amount equal to the
following for each Documentary Letter of Credit outstanding at such time which
has been issued for the purpose of facilitating the purchase of Inventory by a
Loan Party (but only if the Collateral Agent is in possession of the documents
of title delivered thereunder or if such documents of title are issued to the
Collateral Agent or have been duly negotiated to the Collateral Agent): the sum
of: (A) product of (i) the Eligible Inventory advance rate then in effect under
the Borrowing Base multiplied by (ii) the face amount of the Documentary Letter
of Credit minus (B) an amount equal to the duty, freight and cost of transport
for such goods; minus
(f) Other Reserves. The aggregate amount of the reserves
established by the Administrative Agent in accordance with the provisions set
forth immediately below in this definition and, at any time after July 25, 2003,
any Reserves for Leasehold Obligations.
The Administrative Agent or the Supermajority Lenders may, in their
sole discretion, from time to time: (a) establish and revise reserves reducing
the amount of Eligible Credit Card Receivables and (b) impose additional
eligibility criteria to be applicable to Eligible Credit Card Receivables (any
such action referred to in clause (a) or (b) a "Borrowing Base Adjustment");
provided that (i) Borrowing Base Adjustments shall be made only in the event
that the Administrative Agent or the Supermajority Lenders determine (based upon
objectively determinable facts or circumstances) that: (A) Credit Card
Receivables or their respective value, or the security interests therein granted
under the Security Agreement, are adversely affected by any events, conditions,
contingencies or risks that are not already adequately reflected in the
calculation of the Borrowing Base or (B) the Borrower's calculation of the
Borrowing Base is inaccurate, (ii) each Borrowing Base Adjustment shall bear a
reasonable relationship to the event, condition or circumstance that is the
basis therefor and (iii) each Borrowing Base Adjustment shall not be effective
until the first fiscal month-end computation that occurs at least 10 days after
delivery of notice of such Borrowing Base Adjustment to the Borrower.
As used in this definition, the following terms shall have the
following meanings:
"Advance Percent" means eighty-five percent (85%) based on
continuing confirmation of a Dilution Percentage of no more than five
percent (5%) determined, as of any date, upon the Administrative
Agent's most recent field examination or if the Dilution Percentage is
more than five percent (5%) determined, as of any date, upon the
Administrative Agent's most recent field examination, such other
percent as the Administrative Agent may, at any time hereafter,
determine is necessary to protect the Lenders' interests, such
determination to be made in the Administrative Agent's reasonable sole
discretion.
"Dilution Percentage" means the Average Dilution Percentage
for the credit card receivables of the Borrower and the Subsidiary Loan
Parties for the period selected by the Administrative Agent based on
its most recent field examination.
"Average Dilution Percentage" shall be calculated by the
Administrative Agent for the period by dividing the dilution of Credit
Card Receivables occurring during such period by the gross credit card
sales for such period and multiplying the resulting quotient by 100.
For purposes of the foregoing, "dilution" means any reduction in the
value of Credit Card
5
Receivables caused by write-offs, discounts, credits, allowances,
and/or any other non-cash offsets asserted by account debtors having
the effect of reducing the value of the credit card receivable.
"Appraised Liquidation Percentage" means the percentage net
liquidation value of inventory determined on an orderly
going-out-of-business-sale basis, net of all commissions, associated
costs, fees and expenses associated with such liquidation, as
determined from the most recent appraisal thereof performed by a
credentialed appraiser reasonably satisfactory to the Administrative
Agent.
"Reserve for Leasehold Obligations" means, as of any date of
determination and with respect to each location leased by a Loan Party
on which Inventory is located that is not covered by a Lien Waiver
Agreement, the sum of (a) the aggregate amount of Leasehold Obligations
payable under the lease of each such location for the two months
following the date of determination plus (b) any amount of Leasehold
Obligations that are in arrears under such leases; provided that no
"Reserve for Leasehold Obligations" shall be taken with respect to any
location not covered by a Lien Waiver Agreement if the book value of
the inventory located at any time thereon does not exceed $250,000
except at no time after July 25, 2003 will inventory at leased
locations with a book value of more than $2,000,000 fail to either be
covered by a Lien Waiver Agreement or a Reserve for Leasehold
Obligations.
The Borrowing Base at any time in effect shall be determined by
reference to the Borrowing Base Certificate most recently delivered under
Section 5.01 (f), absent any error in such Borrowing Base Certificate; provided
that the Administrative Agent shall have the right to at any time calculate the
Borrowing Base in accordance with the terms hereof.
"Borrowing Base Adjustment" has the meaning assigned to such term in
the definition of "Borrowing Base".
"Borrowing Base Certificate" means a certificate in the form of Exhibit
C (revised to reflect any Borrowing Base Adjustments) or any other form approved
by the Borrower and the Administrative Agent, together with all attachments
contemplated thereby.
"Borrowing Request" means a request by the Borrower for a Borrowing in
accordance with Section 2.03.
"Business Day" means any day that is not a Saturday, Sunday or other
day on which commercial banks in New York City, Dallas, Texas or the State of
Indiana are authorized or required by law to remain closed; provided that, when
used in connection with a LIBOR Loan, the term "Business Day" shall also exclude
any day on which banks are not open for dealings in dollar deposits in the
London interbank market.
"Capital Lease Obligations" of any Person means the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such Person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.
"Change in Control" means at any time, the occurrence of the following
three events: (a) any Person or group (within the meaning of Rule 13d-5 of the
United States Securities and Exchange Act of 1934, as in effect on the Effective
Date) other than the Permitted Holders (as defined below in this
6
definition) shall beneficially own, directly or indirectly, shares of capital
stock of the Borrower representing more than 35% of the aggregate ordinary
voting power represented by the issued and outstanding capital stock of the
Borrower; (b) the Permitted Holders beneficially own, in the aggregate, a lesser
percentage of the total voting power of the Borrower's outstanding capital stock
than any such other Person; and (c) the Permitted Holders do not have the right
or ability by voting power, contract or otherwise to elect or designate for
election a majority of the board of directors of the Borrower. The term
"Permitted Holders" means any one or more of the Fund, FS&C, G Trademark, TLI
and their respective Affiliates.
"Change in Law" means: (a) the adoption of any law, rule or regulation
after the date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the date of this Agreement or (c) compliance by any Lender or any Issuing
Bank (or, for purposes of Section 2.14(b), by any lending office of such Lender
or by such Lender's or such Issuing Bank's holding company, if any) with any
request, guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Collateral" means any and all "Collateral", as defined in any
applicable Security Document and any and all other property in which Liens have
been granted to the Collateral Agent to secure the Obligations.
"Collateral Agent" means JPMorgan Chase Bank as the collateral agent
under the terms of any Security Document, and its successors and assigns.
"Commitment" means, with respect to each Lender, the commitment of such
Lender to make Revolving Loans and to acquire participations in Letters of
Credit and Swingline Loans hereunder, expressed as an amount representing the
maximum aggregate amount of such Lender's Revolving Exposure hereunder, as such
Commitment may be (a) reduced from time to time pursuant to Section 2.08; (b)
increased from time to time pursuant to Section 2.08(e); and (c) reduced or
increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 9.04. The initial amount of each Lender's Commitment is set
forth on Schedule 2.01, in the Assignment and Assumption pursuant to which such
Lender shall have assumed its Commitment or in its Increased Commitment
Supplement, as applicable. The initial aggregate amount of the Lenders'
Commitments is $250,000,000.
"Commitment Fee Rate" means, for any day with respect to the commitment
fees payable hereunder, the applicable rate per annum set forth in the table
below under the caption "Commitment Fee Rate" opposite the Utilization Level in
the table below which corresponds with the actual Utilization Level as of the
most recent determination date. Notwithstanding the foregoing, from and
including the Effective Date until the first date the Commitment Fee Rate is
determined and changes as set forth below in this definition, the "Commitment
Fee Rate" shall be the applicable rate per annum set forth in Level II of the
table below.
==========================================================================
Level Utilization Level Commitment Fee Rate
==========================================================================
I Less than or equal to 25% 0.50%
--------------------------------------------------------------------------
II Less than 50% but greater than 25% 0.425%
--------------------------------------------------------------------------
III Greater than or equal to 50% 0.375%
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For purposes of the foregoing: (i) the Utilization Level shall be determined as
of the end of each fiscal quarter of the Borrower for the fiscal quarter then
ended beginning with the fiscal quarter ended on or
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about April 30, 2004; and (ii) each change in the Commitment Fee Rate resulting
from a change in Utilization Level shall be effective during the period
commencing on and including the date which is the first day of the first month
following the delivery to the Administrative Agent of a certificate under
Section 5.01(d) reflecting the calculations demonstrating such change and ending
on the date immediately preceding the effective date of the next such change;
provided that: (A) at any time that an Event of Default exists, the Commitment
Fee Rate shall be determined based on Level I in the table above and (B) at the
option of the Administrative Agent or at the request of the Required Lenders, if
the Borrower fails to deliver the certificate required by Section 5.01(d) within
five Business Days after the date due, then during the period from the
expiration of the time for delivery thereof until such certificate is delivered,
the Commitment Fee Rate shall be determined based on Level I in the table above.
For purposes of this definition "Utilization Level" means the quotient,
expressed as a percentage, of (i) the average dollar amount of the Revolving
Exposure for the fiscal quarter then ended divided by (ii) the average dollar
amount of the Commitments for the fiscal quarter then ended.
"Consolidated EBITDA" means, for any period, Consolidated Net Income
for such period (adjusted to: (i) exclude any gains or losses realized during
such period that are attributable to sales or other dispositions of any material
assets outside the ordinary course of business and any other extraordinary,
non-operating or non-recurring gains or losses and (ii) include, to the extent
excluded from Consolidated Net Income, the proceeds of any business interruption
insurance actually received (but excluding therefrom the amount of any insurance
proceeds paid to compensate for the physical loss of property)), plus, without
duplication and to the extent deducted from revenues in determining Consolidated
Net Income for such period, the sum of (a) Consolidated Interest Expense for
such period, (b) the aggregate amount of letter of credit fees accrued during
such period, (c) the aggregate amount of income tax expense for such period, (d)
all depreciation and amortization expense for such period, (e) any non-cash
charges for such period, (f) all fees referred to in Section 2.11 payable to the
Administrative Agent and the Lenders accrued during such period and (g) all
non-recurring fees and expenses payable by the Borrower during such period that
are attributable to the Transactions, and minus, without duplication and to the
extent added to revenues in determining Consolidated Net Income for such period,
any non-cash gains for such period, all as determined on a consolidated basis
with respect to the Borrower and its Subsidiaries in accordance with GAAP.
"Consolidated Interest Expense" means, for any period, the interest
expense of the Borrower and its Subsidiaries for such period, determined on a
consolidated basis in accordance with GAAP, excluding (a) fees referred to in
Section 2.11 (other than fees referred to in Section 2.11(b), which shall be
included) payable to the Administrative Agent and the Lenders during such period
and (b) all non-recurring fees and expenses payable by the Borrower during such
period that are attributable to the Transactions.
"Consolidated Net Income" means, for any period, the net income or loss
of the Borrower and its Subsidiaries for such period determined on a
consolidated basis in accordance with GAAP; provided that there shall be
excluded (a) the income of any Person in which any other Person (other than the
Borrower or any of the Subsidiaries or any director holding qualifying shares in
compliance with applicable law) has a joint interest, except to the extent of
the amount of dividends or other distributions actually paid to the Borrower or
any of the Subsidiaries by such Person during such period, and (b) the income
(or loss) of any Person accrued prior to the date it becomes a Subsidiary or is
merged into or consolidated with the Borrower or any of the Subsidiaries or the
date that such Person's assets are acquired by the Borrower or any of the
Subsidiaries; and provided, further, that there shall be excluded any operating
losses attributable to investments pursuant to clause (k) of Section 6.04 in
Persons that are not Subsidiaries.
"Control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.
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"Credit Card Receivable" means amounts owed by an issuer of credit
cards to a Loan Party resulting from charges by a customer of a Loan Party on
credit cards issued by such issuer in connection with the sale of goods by a
Loan Party, or services performed by a Loan Party, in each case in the ordinary
course of its business. Amounts owed by any issuer of the Borrower's private
label credit cards shall be included in Credit Card Receivables if such issuer
is not the Borrower, a Subsidiary or an Affiliate of the Borrower.
"Default" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Disbursement Account" means an account of the Borrower maintained with
the Administrative Agent.
"Disclosed Matters" means the actions, suits and proceedings and the
environmental matters disclosed in Schedule 3.06.
"Documentary Letter of Credit" means a Letter of Credit issued to
secure the payment of the purchase price for goods that will become Inventory
which requires as a draw condition the delivery of the documents of title
evidencing ownership of the goods to be purchased.
"dollars" or "$" refers to lawful money of the United States of
America.
"Effective Date" means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 9.02).
"Eligible Credit Card Receivable" means the dollar amount of a Credit
Card Receivable (determined, without duplication, net of any credits, fees,
rebates, charges, charge backs, "contra accounts" and any other amounts owed by
a Loan Party to the issuer of the applicable credit card or any third party
engaged by a Loan Party to process the payment thereof (a "Payment Processor"),
net of any commissions payable by a Loan Party to third parties in respect of
Credit Card Receivables and net of unapplied cash and unapplied credits in
respect of Credit Card Receivables and subject to any Borrowing Base
Adjustments) and that the Administrative Agent, in its reasonable discretion
determines to meet all of the following requirements:
(a) such Credit Card Receivable is owned by a Loan Party
and represents a complete bona fide transaction that requires no further act
under any circumstances on the part of any Loan Party to make such Credit Card
Receivable payable by the issuer of the applicable credit card or the Payment
Processor thereof;
(b) such Credit Card Receivable has not been outstanding
for more than seven (7) Business Days;
(c) such Credit Card Receivable is not evidenced by
chattel paper or an instrument of any kind unless such chattel paper or
instrument is in the possession of the Collateral Agent, endorsed, if
applicable, payable to the order of the Collateral Agent;
(d) neither the issuer nor Payment Processor of the
applicable credit card with respect to such Credit Card Receivable is the
subject of any bankruptcy or insolvency proceedings of any kind or of any other
proceeding or action, threatened or pending, that might, in Administrative
Agent's reasonable judgment, have a material adverse effect on such issuer or
Payment Processor;
(e) such Credit Card Receivable is not owing by an issuer
or processed by a Payment Processor that is located outside of the U.S.;
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(f) such Credit Card Receivable is a valid, legally
enforceable obligation of the applicable issuer with respect thereto and such
Credit Card Receivable is not subject to any present or contingent (and no facts
exist that are the basis for any future) offset, deduction or counterclaim,
dispute or other defense on the part of the applicable issuer or in respect of
the applicable Payment Processor, unless any such offset, deduction or
counterclaim, dispute or other defense is noted in the Borrowing Base
Certificate and a reasonable amount satisfactory to the Administrative Agent has
been deducted from such Credit Card Receivable in respect thereof; provided that
such deducted amount shall not exceed the dollar amount (to the extent
determinable) of such offset, deduction or counterclaim, dispute or other
defense;
(g) such Credit Card Receivable is subject to a security
interest in favor of the Collateral Agent, which is perfected as to such Credit
Card Receivable in form and substance reasonably satisfactory to the
Administrative Agent, is subject to no other Lien whatsoever (other than Liens
described in clause (a) of the definition of "Permitted Encumbrances" securing
obligations that are not yet due) and is directed to be remitted to the Cash
Concentration Account (as defined in the Security Agreement);
(h) such Credit Card Receivable is evidenced or governed
by (i) that certain Bank Card Merchant Agreement dated October 27, 1999 between
the Borrower and Fifth Third Bank (as amended), (ii) that certain Credit Card
Program Agreement dated April 2, 2003 between the Borrower and Household Bank
(SB), N.A. (as amended) or (iii) any other documentation in form acceptable to
the Administrative Agent;
(i) the applicable Loan Party is not in breach in any
material respect of any express or implied representation, warranty, covenant or
other agreement with respect to the Credit Card Receivable or the payment
processing thereof nor in breach in any material respect of any representation
or warranty, covenant or other agreement contained in the Loan Documents with
respect to such Credit Card Receivable;
(j) the Payment Processor or credit card issuer with
respect to such Credit Card Receivable is not located in any state denying
creditors access to its courts in the absence of qualification to transact
business in such state or the filing of a notice of business activities report
or other similar filing, unless (i) the applicable Loan Party has either
qualified as a foreign corporation authorized to transact business in such state
or has filed any such notice or similar filing with the applicable Governmental
Authority for the then current year, or (ii) such Loan Party is not required to
be so qualified as a condition to allowing its creditors access to such courts;
(k) the Credit Card Receivable complies with all
applicable laws, including, without limitation, usury laws, the Federal Truth in
Lending Act, and Regulation Z of the Board of Governors of the Federal Reserve
System;
(l) the Credit Card Receivable has not been and is not
required to be charged or written off as uncollectible in accordance with GAAP;
(m) such Credit Card Receivable is payable in dollars;
(n) such Credit Card Receivable does not arise out of a
contract that, by its terms, prohibits or makes void or unenforceable the grant
of a security interest by a Loan Party in and to such Credit Card Receivable;
(o) such Credit Card Receivable is not owed by an
Affiliate of the Borrower; and
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(p) such Credit Card Receivable is not an Excluded
Account. The term "Excluded Account" means a Credit Card Receivable that has
been identified by the Administrative Agent or the Supermajority Lenders as
being unacceptable for inclusion in the Borrowing Base because they have
determined that the credit card issuer or the Payment Processor obligated
thereon is not creditworthy or that the Collateral Agent might not otherwise be
able to receive the full amount of the Credit Card Receivable within a
reasonable period of time and at a reasonable cost of collection if it sought to
realize on its security interest therein, such determination to be made in the
Administrative Agent's or the Supermajority Lenders' judgment, in good faith and
based on information which, in their respective judgment, supports such
determination. The Administrative Agent and the Supermajority Lenders will not
consider any Credit Card Receivable as an Excluded Account under this clause (p)
based on the creditworthiness of a credit card issuer if the credit card
issuer's short term unsecured debt credit rating is BBB- or better as determined
by Standard & Poors or Baa3 or better as determined by Xxxxx'x Investor Service.
No Credit Card Receivable acquired in a Permitted Acquisition or attributable to
a business acquired in a Permitted Acquisition shall be included as an Eligible
Credit Card Receivable unless the Administrative Agent shall have completed such
examinations and appraisals of the assets and business acquired in the Permitted
Acquisition as it deems reasonably necessary and the Administrative Agent shall
be reasonably satisfied with the results of such examinations and appraisals,
both in form and substance. The Administrative Agent agrees to conduct such
examinations and appraisals promptly upon the written request of the Borrower.
In accordance with the last sentence of each of Section 5.09(b) and Section
5.09(c), any examinations and appraisals conducted in respect of any assets
acquired in a Permitted Acquisition shall be at the Borrower's reasonable cost
and expense.
"Eligible Inventory" means, as of any date of determination, the value
determined at the lower of cost or market on a first-in, first-out basis (in
accordance with GAAP, consistently applied but before giving effect to any
reserves under GAAP) of all Inventory owned by any Loan Party which is located
in the United States of America and is subject to a valid and perfected, first
priority (except for Permitted Encumbrances of the type described in clauses (a)
or (b) of the definition of "Permitted Encumbrances" that have priority as a
matter of law) security interest pursuant to the Security Agreement, less
(without duplication, and only to the extent included in Inventory): (a) Reserve
for Slow-moving Inventory (as defined below in this definition) if, as of the
date of determination, the amount of slow moving inventory increases materially
as then reflected in the most recent field examination as compared to the most
recent appraisal of the inventory conducted by the Administrative Agent prior to
such date of determination; (b) reserves for outstanding gift certificate and
gift card liabilities and store merchandise credit liabilities (calculated as
the aggregate amount of all such liabilities which has been outstanding for less
than twenty-four months, with any such amounts which have remained outstanding
for twenty-four months or more excluded from the reserve); and (c) Shrink
Reserve (as defined below in this definition). Each of the above referenced
reserves or ineligibles shall, to the extent reflected therein, be taken from
the books and records of the Borrower determined in a manner consistent with the
Borrower's historical accounting and record keeping practices, subject to any
changes in such practices that are approved by the Borrower's independent
accountants (unless the Administrative Agent or the Supermajority Lenders notify
the Borrower of an objection to any such change, in which case such change shall
be disregarded for purposes of determining Eligible Inventory). As used in this
definition, the following terms have the following meanings:
"Reserve for Slow-moving Inventory" means an amount equal to
the following determined as of the last day of each fiscal month, 50%
of the positive remainder, if any, of (i) a dollar amount equal to the
trailing twelve month average of the value of inventory (determined at
the retail selling price) which has been held by the Loan Parties over
180
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days from the date of receipt minus (ii) the dollar amount equal to 16%
of all inventory owned by the Loan Parties as of such date
determination.
"Shrink Reserve" means, as a reserve to account for the
reduction in inventory due to physical loss calculated in accordance
with GAAP provided that in the event that such calculation is
materially inconsistent with the results of any actual physical
inventory, the results of the actual physical inventory shall control
and will be utilized to establish the reserve.
No Inventory acquired in a Permitted Acquisition or attributable to a business
acquired in a Permitted Acquisition shall be included as Eligible Inventory
unless the Administrative Agent shall have completed such examinations and
appraisals of the assets and business acquired in the Permitted Acquisition as
it deems reasonably necessary and the Administrative Agent shall be reasonably
satisfied with the results of such examinations and appraisals, both in form and
substance. The Administrative Agent agrees to conduct such examinations and
appraisals promptly upon the written request of the Borrower. In accordance with
the last sentence of each of Section 5.09(b) and Section 5.09(c), any
examinations and appraisals conducted in respect of any assets acquired in a
Permitted Acquisition shall be at the Borrower's reasonable cost and expense.
"Environmental Laws" means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by or with any Governmental
Authority, relating in any way to the environment, preservation or reclamation
of natural resources, the management, release or threatened release of any
Hazardous Material or to health and safety matters.
"Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower or any Subsidiary directly or
indirectly resulting from or based upon (a) violation of any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
"Equity Interests" means shares of capital stock, partnership
interests, membership interests in a limited liability companies, beneficial
interests in a trust or other equity ownership interests in a Person or any
warrants, options or other rights to acquire such interests.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with the Borrower, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in Section
4043 of ERISA or the regulations issued thereunder with respect to a Plan (other
than an event for which the 30-day notice period is waived); (b) the existence
with respect to any Plan of an "accumulated funding deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
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(e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the
Borrower or any of its ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the
receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by
any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.
"Event of Default" has the meaning assigned to such term in Article
VII.
"Excluded Taxes" means, with respect to the Administrative Agent, any
Lender, any Issuing Bank or any other recipient of any payment to be made by or
on account of any obligation of the Borrower hereunder, (a) income or franchise
taxes imposed on (or measured by) its net income, net profits or gross receipts
by the United States of America (or any State or other political subdivision
thereof or therein), or by the jurisdiction under the laws of which such
recipient is organized or in which its principal office is located or, in the
case of any Lender, in which its applicable lending office is located, (b) any
branch profits taxes imposed by the United States of America or any similar tax
imposed by any other jurisdiction described in clause (a) above and (c) in the
case of a Foreign Lender (other than an assignee pursuant to a request by the
Borrower under Section 2.18(b)), any withholding tax that (i) is in effect and
would apply to amounts payable to such Foreign Lender at the time such Foreign
Lender becomes a party to this Agreement (or designates a new lending office),
except to the extent that such Foreign Lender (or its assignor, if any) was
entitled, at the time of designation of a new lending office (or assignment), to
receive additional amounts from the Borrower with respect to such withholding
tax pursuant to Section 2.16(a), or (ii) is attributable to such Foreign
Lender's failure to comply with Section 2.16(e).
"Federal Funds Effective Rate" means, for any day, the weighted average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Financial Officer" means the chief financial officer, principal
accounting officer, treasurer or controller of the Borrower.
"Foreign Lender" means any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is located. For purposes of
this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
"Foreign Subsidiary" means any Subsidiary that is organized under the
laws of a jurisdiction other than the United States of America or any State
thereof or the District of Columbia.
"FS&C" means Xxxxxxx Xxxxxx & Co., LLC, a Delaware limited liability
company.
"Fund" means FS Equity Partners IV, L.P., a Delaware limited
partnership controlled by FS&C.
"GAAP" means generally accepted accounting principles in the United
States of America.
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"Governmental Authority" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"Guarantee" of or by any Person (the "guarantor") means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the "primary obligor") in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation; provided that the term "Guarantee" shall not include endorsements
for collection or deposit in the ordinary course of business.
"Guarantee Agreement" means any Subsidiary Guarantee Agreement.
"Hazardous Materials" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Hedging Agreement" means any interest rate protection agreement,
foreign currency exchange agreement, commodity price protection agreement,
security hedging agreement, or other interest or currency or security exchange
rate or commodity price hedging arrangement or any other derivative instrument.
"Increased Amount" has the meaning specified in Section 2.08(e).
"Increased Commitment Supplement" has the meaning specified in Section
2.08(e).
"Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid, (d) all obligations of such
Person under conditional sale or other title retention agreements relating to
property acquired by such Person, (e) all obligations of such Person in respect
of the deferred purchase price of property or services (excluding: (i) any such
obligations incurred under ERISA; (ii) current accounts payable incurred in the
ordinary course of business; and (iii) obligations under gift cards incurred in
the ordinary course of business), (f) all obligations of others secured by (or
for which the holder of such obligations has an existing right, contingent or
otherwise, to be secured by) any Lien on property owned or acquired by such
Person, whether or not the obligations secured thereby have been assumed, (g)
all Guarantees by such Person of Indebtedness of others, (h) all Capital Lease
Obligations of such Person, (i) all obligations, contingent or otherwise, of
such Person as an account party in respect of letters of credit and letters of
guaranty, (j) all obligations, contingent or otherwise, of such Person in
respect of bankers' acceptances, (k) all obligations of such Person under any
Hedging Agreement, (l) all obligations of such Person, contingent or otherwise,
for the payment of money under any arrangements providing for the deferred
payment of the purchase price for an acquisition permitted hereby or an
acquisition consummated prior to the date hereof, and (m) all obligations of
such Person to pay rent or other amounts under any Synthetic Lease. The
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Indebtedness of any Person shall include the Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person's ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor. The
amount of any Indebtedness described in clause (g) above shall be limited to the
maximum amount payable under the applicable Guarantee of such Person if such
Guarantee contains limitations on the amount payable thereunder. The amount of
the obligations of the Borrower or any Subsidiary in respect of any Hedging
Agreement shall, at any time of determination and for all purposes under this
Agreement, be the maximum aggregate amount (giving effect to any netting
agreements) that the Borrower or such Subsidiary would be required to pay if
such Hedging Agreement were terminated at such time giving effect to current
market conditions notwithstanding any contrary treatment in accordance with
GAAP.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Indemnity, Subrogation and Contribution Agreement" means the
Indemnity, Subrogation and Contribution Agreement dated May 3, 2001, among
Borrower, Xxxxxx'x Nevada, Inc. and the Administrative Agent, as supplemented
pursuant to Supplement No. 1 dated December 31, 2003 to add Xxxxxx'x of
Virginia, Inc. thereto.
"Information Memorandum" means the Confidential Information Memorandum
dated March 2003, relating to the Borrower and the Transactions.
"Interest Election Request" means a request by the Borrower to convert
or continue a Borrowing in accordance with Section 2.07.
"Interest Payment Date" means (a) with respect to any ABR Loan
(including each Swingline Loan), the last day of each month, commencing the
first such date after the Effective Date and (b) with respect to any LIBOR Loan,
the last day of the Interest Period applicable to the Borrowing of which such
Loan is a part and, in the case of a LIBOR Borrowing with an Interest Period of
more than three months' duration, each day prior to the last day of such
Interest Period that occurs at intervals of three months' duration after the
first day of such Interest Period.
"Interest Period" means with respect to any LIBOR Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
thereafter, as the Borrower may elect; provided that (a) if any Interest Period
would end on a day other than a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless such next succeeding
Business Day would fall in the next calendar month, in which case such Interest
Period shall end on the next preceding Business Day and (b) any Interest Period
that commences on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the last calendar month of
such Interest Period) shall end on the last Business Day of the last calendar
month of such Interest Period. For purposes hereof, the date of a Borrowing
initially shall be the date on which such Borrowing is made and thereafter shall
be the effective date of the most recent conversion or continuation of such
Borrowing.
"Inventory" means (a) as of any date of determination, "inventory", as
defined in the Uniform Commercial Code as in effect in the State of New York and
(b) all finished goods, wares and merchandise, finished or unfinished parts,
components, assemblies held for sale to third party customers based on stock
ledgers or perpetual inventory reports, defined and classified by the Borrower
and its Subsidiaries on a basis consistent with current and historical
accounting practice in accordance with GAAP.
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"Issuing Bank" means JPMorgan Chase Bank and each other Lender that
agrees in writing with the Company to issue Letters of Credit (provided that
notice of such agreement is given to the Administrative Agent), in each case in
its capacity as the issuer of Letters of Credit hereunder, and its successors in
such capacity as provided in Section 2.05(i). An Issuing Bank may, in its
discretion, arrange for one or more Letters of Credit to be issued by Affiliates
of such Issuing Bank reasonably acceptable to the Borrower, in which case the
term "Issuing Bank" shall include any such Affiliate with respect to Letters of
Credit issued by such Affiliate.
"LC Disbursement" means a payment made by an Issuing Bank pursuant to a
Letter of Credit.
"LC Exposure" means, at any time, the sum of the aggregate undrawn
amount of all outstanding Letters of Credit at such time; plus the aggregate
amount of all LC Disbursements that have not yet been reimbursed by or on behalf
of the Borrower at such time. The LC Exposure of any Lender at any time shall be
its Applicable Percentage of the total LC Exposure at such time.
"Leasehold Obligations" means all payments with respect to rent
(including fixed rent and percentage rent), common area maintenance charges and
other monetary obligations under any lease of real property (including any
distribution center or store) where any Inventory is stored or located.
"Lenders" means the Persons listed on Schedule 2.01 and any other
Person that shall have become a party hereto pursuant to: (i) an Assignment and
Assumption, (ii) Section 2.18(b) or Section 9.02(c), other than any such Person
that ceases to be a party hereto pursuant to such Sections or (iii) an Increased
Commitment Supplement pursuant to Section 2.08(e). Unless the context otherwise
requires, the term "Lenders" includes the Swingline Lender.
"Letter of Credit" means any letter of credit issued pursuant to this
Agreement or issued pursuant to the Original Credit Agreement and outstanding on
the Effective Date.
"LIBOR", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Adjusted LIBO Rate.
"LIBO Rate" means, with respect to any LIBOR Borrowing for any Interest
Period, the rate appearing on Page 3750 of the Telerate Service (or on any
successor or substitute page of such Service, or any successor to or substitute
for such Service, providing rate quotations comparable to those currently
provided on such page of such Service, as determined by the Administrative Agent
from time to time for purposes of providing quotations of interest rates
applicable to dollar deposits in the London interbank market) at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period, as the rate for dollar deposits with a maturity comparable to
such Interest Period. In the event that such rate is not available at such time
for any reason, then the "LIBO Rate" with respect to such LIBOR Borrowing for
such Interest Period shall be the rate at which dollar deposits of $5,000,000
and for a maturity comparable to such Interest Period are offered by the
principal London office of JPMorgan Chase Bank in immediately available funds in
the London interbank market at approximately 11:00 a.m., London time, two
Business Days prior to the commencement of such Interest Period.
"Lien" means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, hypothecation, encumbrance, charge or security interest in,
on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
16
"Lien Risk Inventory" means any Inventory that (a) is in the possession
or control of any warehouseman, bailee, agent or processor (other than Inventory
that is in the possession of a delivery service or similar agent providing
transportation services and is in transit) or (b) is stored or otherwise located
in any distribution center, store or other site that is not owned by a Loan
Party.
"Lien Waiver Agreement" has the meaning specified in Section 4.08 of
the Security Agreement.
"Loan Documents" means this Agreement, the Original Credit Agreement,
the promissory notes, if any, executed and delivered pursuant to Section
2.09(e), the Guarantee Agreements, the Indemnity, Subrogation and Contribution
Agreement, the Security Documents, and all other certificates, agreements and
other documents or instruments now or hereafter executed and/or delivered
pursuant to or in connection with the foregoing.
"Loans" means the loans made by the Lenders to the Borrower pursuant to
this Agreement and any loan made by the lenders under the Original Credit
Agreement which are outstanding on the Effective Date.
"Loan Party" means the Borrower or any Subsidiary Loan Party.
"Material Adverse Effect" means a material adverse effect on: (a) the
business, assets, operations, prospects or condition, financial or otherwise, of
the Borrower and the Subsidiaries taken as a whole, (b) the ability of any Loan
Party to perform any of its obligations under any Loan Document or (c) the
validity, enforceability or collectibility of the Loans or LC Disbursements or
the ability of the Administrative Agent and the Lenders to enforce a material
provision of any Loan Document.
"Material Indebtedness" means Indebtedness (other than the Loans and
Letters of Credit), or obligations in respect of one or more Hedging Agreements,
of any one or more of the Borrower and its Subsidiaries in an aggregate
principal amount exceeding $10,000,000.
"Maturity Date" means April 24, 2008.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Mortgage" means a mortgage, deed of trust, assignment of leases and
rents, leasehold mortgage or other security document granting a Lien on any
Mortgaged Property to secure the Obligations. Each Mortgage shall be
satisfactory in form and substance to the Collateral Agent.
"Mortgaged Property" means each parcel of real property and
improvements thereto with respect to which a Mortgage has been granted pursuant
to Section 5.15(a) and not released pursuant to Section 5.15(b); provided that
all conditions required under Section 5.15(a) for such property to become
"Mortgaged Property" shall have been satisfied.
"Multiemployer Plan" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA and in respect of which the Borrower or any ERISA Affiliate
is or within the previous six years has been obligated to make contributions.
"Net Cash Proceeds" means, with respect to any event (a) the cash
proceeds received in respect of such event including (i) any cash received in
respect of any non-cash proceeds, but only as and when received, (ii) in the
case of a casualty, insurance proceeds, and (iii) in the case of a condemnation
or similar event, condemnation awards and similar cash payments, net of (b) the
sum of (i) all commissions, fees and out-of-pocket expenses paid by the Borrower
and its Subsidiaries to third parties (including amount paid to Affiliates if
the obligation to pay such amounts was incurred in accordance with the
requirements of Section 6.08) in connection with such event, (ii) in the case of
a sale, transfer or other
17
disposition of an asset (including pursuant to a sale and leaseback transaction
or a casualty or condemnation or similar proceeding), the amount of all payments
required to be made by the Borrower and its Subsidiaries as a result of such
event to repay Indebtedness (other than Loans) secured by such asset or
otherwise subject to mandatory prepayment as a result of such event, and (iii)
the amount of all Taxes paid (or reasonably estimated to be payable) by the
Borrower and its Subsidiaries, and the amount of any reserves established by the
Borrower and its Subsidiaries to fund (A) retained liabilities relating to the
assets sold or (B) contingent liabilities reasonably estimated to be payable, in
each case during the year that such event occurred or the next succeeding year
and that are directly attributable to such event (as determined reasonably and
in good faith by the chief financial officer of the Borrower).
"New Lender" has the meaning specified in Section 2.08(e).
"Obligations" has the meaning assigned to such term in the Security
Agreement.
"Original Credit Agreement" has the meaning specified in the Recitals.
"Other Taxes" means any and all current or future recording, stamp,
documentary, excise, transfer, sales, property or similar taxes, charges or
levies arising from any payment made under any Loan Document or from the
execution, delivery or enforcement of any Loan Document.
"Outside Director" means any director on the Board of Directors of the
Borrower who is not a partner of FS&C or an employee or director of TLI or any
of its subsidiaries.
"Overadvance Loan" has the meaning specified in Section 2.04(b).
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA and any successor entity performing similar functions.
"Perfection Certificate" means a certificate in the form of Annex 2 to
the Security Agreement or any other form approved by the Collateral Agent,
completed and supplemented with the schedules and attachments contemplated
thereby, and duly executed by a Financial Officer of the Borrower.
"Permitted Acquisition" means any acquisition by the Borrower or a
Subsidiary of all or substantially all the assets of, or all the shares of
capital stock of or other Equity Interests in, a Person or division or line of
business of a Person if, immediately after giving effect thereto, (a) no Event
of Default has occurred and is continuing or would result therefrom, (b) all
transactions related thereto are consummated in accordance with applicable laws,
(c) each Subsidiary formed for the purpose of or resulting from such acquisition
shall be wholly owned directly or indirectly by the Borrower and all actions
required to be taken with respect to such acquired or newly formed Subsidiary
under Sections 5.12 have been taken, (d) the Borrower and its Subsidiaries are
in compliance with the covenant contained in Section 6.13 calculated after
giving effect to the acquisition and any payments made in connection therewith
but excluding from the Borrowing Base any Credit Card Receivables and Inventory
to be acquired in connection therewith unless the Administrative Agent shall
have completed its examination and appraisal thereof and (e) the Borrower has
delivered to the Administrative Agent an officers' certificate to the effect set
forth in clauses (a), (b), (c) and (d) above.
"Permitted Encumbrances" means:
(a) Liens imposed by law for taxes or government
assessments that are not yet due or are being contested in compliance with
Section 5.05;
(b) statutory Liens of landlords and licensors, statutory
Liens of banks and carriers', warehousemen's, mechanics', materialmen's,
repairmen's and other like Liens imposed by law, in each
18
case arising in the ordinary course of business and securing obligations that
are not overdue by more than 30 days or are being contested in compliance with
Section 5.05;
(c) pledges and deposits made in the ordinary course of
business in compliance with workers' compensation, unemployment insurance and
other social security laws or regulations;
(d) deposits to secure the performance of bids, trade
contracts, leases, statutory obligations, surety, indemnity and appeal bonds,
performance bonds and other obligations of a like nature, in each case in the
ordinary course of business;
(e) judgment liens in respect of judgments that do not
constitute an Event of Default under clause (k) of Article VII,
(f) easements, zoning restrictions, rights-of-way and
similar encumbrances on real property imposed by law or arising in the ordinary
course of business that do not secure any monetary obligations and do not
interfere with the ordinary conduct of business of the Borrower or any
Subsidiary;
(g) any (i) interest or title of a lessor or sublessor
under any lease not prohibited by this Agreement, (ii) restriction or
encumbrance that the interest or title of such lessor or sublessor may be
subject to, or (iii) subordination of the interest of the lessee or sublessee
under such lease to any restriction or encumbrance referred to in the preceding
clause (iii), so long as the holder of such restriction or encumbrance agrees to
recognize the rights of such lessee or sublessee under such lease;
(h) leases or subleases granted to third parties and not
interfering in any material respect with the ordinary conduct of the business of
the Borrower or any of its Subsidiaries;
(i) Liens arising from filing UCC financing statements
relating solely to leases not prohibited by this Agreement; provided that such
Liens encumber only that property subject to the respective leases;
(j) Liens in favor of customs and revenue authorities
arising as a matter of law to secure payment of customs duties in connection
with the importation of goods;
(k) licenses of patents, trademarks and other
intellectual property rights granted by the Borrower or any of its Subsidiaries
in the ordinary course of business and not interfering in any material respect
with the ordinary conduct of the business of the Borrower or such Subsidiary;
and
(l) Liens incurred by Borrower with the consent of
Required Lenders;
provided that the term "Permitted Encumbrances" shall not include any Lien
securing Indebtedness.
"Permitted Holders" has the meaning set forth in the definition of the
term "Change of Control".
"Permitted Investments" means:
(a) direct obligations of, or obligations the principal
of and interest on which are unconditionally guaranteed by, the United States of
America (or by any agency thereof to the extent such obligations are backed by
the full faith and credit of the United States of America), in each case
maturing within one year from the date of acquisition thereof;
(b) investments in commercial paper maturing within 270
days from the date of acquisition thereof and having, at such date of
acquisition, a credit rating of at least A2 from S&P or P2 from Moody's;
19
(c) investments in certificates of deposit, banker's
acceptances and time deposits maturing within 180 days from the date of
acquisition thereof issued or guaranteed by or placed with, and money market
deposit accounts issued or offered by, any domestic office of any commercial
bank organized under the laws of the United States of America or any State
thereof which has a combined capital and surplus and undivided profits of not
less than $500,000,000;
(d) fully collateralized repurchase agreements with a
term of not more than 30 days for securities described in clause (a) above and
entered into with a financial institution satisfying the criteria described in
clause (c) above; and
(e) investments in money market funds that (i) comply
with the criteria set forth in Securities and Exchange Commission Rule 2a- under
the Investment Company Act of 1940, (ii) are rated AAA by S&P and Aaa by Moody's
and (iii) have portfolio assets of at least $5,000,000,000.
"Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Pledge Agreement" means the Pledge Agreement dated May 3, 2001, among
the Borrower, Xxxxxx'x Nevada, Inc. and the Collateral Agent for the benefit of
the Secured Parties, as supplemented pursuant to that certain Supplement No. 1
dated December 30, 2002 pursuant to which Xxxxxx'x of Virginia, Inc. was added
as a "Subsidiary Pledgor" thereunder and as amended by that certain First
Amendment to Pledge Agreement attached hereto as Exhibit F hereto.
"Prime Rate" means the rate of interest per annum publicly announced
from time to time by JPMorgan Chase Bank as its prime rate in effect at its
principal office in New York City; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective.
"Register" has the meaning set forth in Section 9.04.
"Related Parties" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"Required Lenders" means, at any time, Lenders holding Loans and unused
Commitments representing more than 50% of the total Loans and unused Commitments
at such time.
"Reserve for Leasehold Obligations" has the meaning set forth in the
definition of Borrowing Base.
"Reserve for Slow-moving Inventory" has the meaning set forth in the
definition of Eligible Inventory.
"Restricted Payment" means: (a) any dividend or other distribution
(whether in cash, securities or other property) with respect to any Equity
Interests in the Borrower or any Subsidiary or (b) any payment (whether in cash,
securities or other property), including any sinking fund or similar deposit, on
account of the purchase, redemption, retirement, acquisition, cancellation or
termination of any Equity Interests in the Borrower or any Subsidiary or any
option, warrant or other right to acquire any such Equity Interests in the
Borrower or any Subsidiary.
20
"Revolving Exposure" means, with respect to any Lender at any date of
determination, the sum of the following: (a) the outstanding principal amount of
such Lender's Revolving Loans and its LC Exposure and Swingline Exposure on such
date; plus (b) all accrued and unpaid interest and fees due to such Lender under
this Agreement; plus (c) all cost and expenses owed to such Lender on such date
if as of the date of determination, such Lender or the Administrative Agent
shall have provided the Borrower at least 5 days prior written notice thereof;
plus (d) any amounts that are due to such Lender under Sections 2.14, 2.16 and
9.03 on such date, if as of the date of determination, such Lender or the
Administrative Agent shall have provided the Borrower at least 5 days prior
written notice thereof.
"Revolving Loan" means a Loan made pursuant to Section 2.01.
"S&P" means Standard & Poor's.
"Secured Parties" shall have the meaning assigned to such term in the
Security Agreement.
"Security Agreement" means the Amended and Restated Security Agreement
dated April 25, 2003, among the Borrower, the Subsidiary Loan Parties and the
Collateral Agent for the benefit of the Secured Parties.
"Security Documents" means the Security Agreement, the Pledge
Agreement, the Mortgages and each other security agreement or other instrument
or document executed and delivered pursuant to Section 5.12 or 5.13 to secure
any of the Obligations.
"Shrink Reserve" has the meaning set forth in the definition of
Eligible Inventory.
"Significant Event of Default" has the meaning set forth in Section
5.09(b).
"Statutory Reserve Rate" means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board). Such reserve percentages shall include those imposed
pursuant to such Regulation D. LIBOR Loans shall be deemed to constitute
eurocurrency funding and to be subject to such reserve requirements without
benefit of or credit for proration, exemptions or offsets that may be available
from time to time to any Lender under such Regulation D or any comparable
regulation. The Statutory Reserve Rate shall be adjusted automatically on and as
of the effective date of any change in any reserve percentage.
"subsidiary" means, with respect to any Person (the "parent") at any
date, any corporation, limited liability company, partnership, association or
other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, limited liability company, partnership, association or other
entity (a) of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or, in the
case of a partnership, more than 50% of the general partnership interests are,
as of such date, owned, controlled or held, or (b) that is, as of such date,
otherwise Controlled, by the parent or one or more subsidiaries of the parent or
by the parent and one or more subsidiaries of the parent.
"Subsidiary" means any subsidiary of the Borrower.
"Subsidiary Guarantee Agreement" means each Subsidiary Guarantee
Agreement, substantially in the form of Exhibit E to the Original Agreement,
made by a Subsidiary in favor of the Administrative
21
Agent for the benefit of the Secured Parties. As of the Effective Date, the
following Subsidiary Guaranties have been executed and delivered:
(a) That certain Subsidiary Guarantee Agreement, dated as
of May 3, 2001 executed by Xxxxxx'x Nevada, Inc.; and
(b) That certain Subsidiary Guarantee Agreement, dated as
of December 30, 2002 executed by Xxxxxx'x of Virginia, Inc.
"Subsidiary Loan Party" means any Subsidiary who is party to any of the
Loan Documents.
"Supermajority Lenders" means, at any time, Lenders having 75% or more
of the total Revolving Exposures and unused Commitments at such time.
"Swingline Exposure" means, at any time, the aggregate principal amount
of all Swingline Loans outstanding at such time. The Swingline Exposure of any
Lender at any time shall be its Applicable Percentage of the total Swingline
Exposure at such time.
"Swingline Lender" means JPMorgan Chase Bank, in its capacity as lender
of Swingline Loans hereunder.
"Swingline Loan" means a Loan made pursuant to Section 2.04 and the
loans made pursuant to Section 2.04 of the Original Credit Agreement which are
outstanding on the date hereof.
"Swingline Maturity" has the meaning set forth in Section 2.04(e)
"Synthetic Lease" means any lease of (or other arrangement conveying
the right to use) real or personal property, or a combination thereof, which
lease or other arrangement is required or is permitted to be classified and
accounted for as an operating lease under GAAP but which is intended by the
parties thereto for tax, bankruptcy, regulatory, commercial law, real estate law
and all other purposes as a financing arrangement.
"Taxes" means any and all present or future taxes, levies, duties,
imposts, deductions, charges or withholdings imposed by any Governmental
Authority.
"TLI" means The Limited Brands, Inc., a Delaware corporation.
"Transactions" means the execution, delivery and performance by each
Loan Party of the Loan Documents to which it is to be a party, the borrowing of
Loans, the use of the proceeds thereof and the issuance of Letters of Credit
hereunder.
"Type", when used in reference to any Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate
Base Rate.
"Utilization Level" has the meaning specified in the definition of the
term "Commitment Fee Rate".
"Withdrawal Liability" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
22
Section 1.02. Classification of Loans and Borrowings. For purposes
of this Agreement, Loans may be classified and referred to by Type (e.g., a
"LIBOR Revolving Loan"). Borrowings also may be classified and referred to by
Type (e.g., a "LIBOR Borrowing").
Section 1.03. Terms Generally. The definitions of terms herein
shall apply equally to the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
The word "will" shall be construed to have the same meaning and effect as the
word "shall". Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person's successors and assigns, (c) the words "herein", "hereof" and
"hereunder", and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words "asset" and "property" shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.
Section 1.04. Accounting Terms; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; provided
that, if the Borrower notifies the Administrative Agent that the Borrower
requests an amendment to any provision hereof to eliminate the effect of any
change occurring after the date hereof in GAAP or in the application thereof on
the operation of such provision (or if the Administrative Agent notifies the
Borrower that the Required Lenders request an amendment to any provision hereof
for such purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.
ARTICLE II.
The Credits
-----------
Section 2.01. Commitments. Subject to the terms and conditions set
forth herein, each Lender agrees to make advances to the Borrower from time to
time during the Availability Period in an aggregate principal amount that will
not result in (a) such Lender's Revolving Exposure exceeding such Lender's
Commitment or (b) the sum of the total Revolving Exposures exceeding the
Borrowing Base then in effect. Within the foregoing limits and subject to the
terms and conditions set forth herein, the Borrower may borrow, prepay and
reborrow Revolving Loans.
Section 2.02. Loans and Borrowings.
(a) Each Revolving Loan shall be made as part of a
Borrowing consisting of Revolving Loans made by the Lenders ratably in
accordance with their respective Commitments. The failure of any Lender to make
any Loan required to be made by it shall not relieve any other Lender of its
obligations hereunder; provided that the Commitments of the Lenders are several
and no Lender shall be responsible for any other Lender's failure to make Loans
as required.
(b) Subject to Section 2.13, each Borrowing shall be
comprised entirely of ABR Loans or LIBOR Loans as the Borrower may request in
accordance herewith provided that all Borrowings
23
made on the Effective Date must be made as ABR Loans unless the Borrower shall
have provided three Business Days prior notice thereof and shall have agreed on
or prior to the date of the request to protect the Lenders against the failure
to borrow a LIBOR Loan on the date requested on terms substantially similar to
those contained in Section 2.15. Each Swingline Loan shall be an ABR Loan. Each
Lender at its option may make any LIBOR Loan by causing any domestic or foreign
branch or Affiliate of such Lender to make such Loan; provided that any exercise
of such option shall not affect the obligation of the Borrower to repay such
Loan in accordance with the terms of this Agreement.
(c) At the commencement of each Interest Period for any
LIBOR Borrowing, such Borrowing shall be in an aggregate amount that is an
integral multiple of $1,000,000 and not less than $4,000,000. At the time that
each ABR Borrowing is made, such Borrowing shall be in an aggregate amount that
is an integral multiple of $1.00 and not less than $1,000,000; provided that an
ABR Borrowing may be in an aggregate amount that is equal to the entire unused
balance of the Commitments, that is in an amount required to finance the
reimbursement of an LC Disbursement as contemplated by Section 2.05(e), that is
in an amount required to pay any due and unpaid Obligations or fund the
Disbursement Account as contemplated by Section 2.03(b) or that is in an amount
required to finance maturing Swingline Loans in accordance with Section 2.04(e).
Each Swingline Loan shall be in an amount that is an integral multiple of $1.00.
Borrowings of more than one Type may be outstanding at the same time; provided
that there shall not at any time be more than a total of twelve LIBOR Borrowings
outstanding.
(d) Notwithstanding any other provision of this
Agreement, the Borrower shall not be entitled to request, or to elect to convert
or continue, any LIBOR Borrowing if the Interest Period requested with respect
thereto would end after the Maturity Date.
Section 2.03. Requests for Borrowings.
(a) Formal Request. To request a Borrowing, the Borrower
shall notify the Administrative Agent of such request by telephone (a) in the
case of a LIBOR Borrowing, not later than 11:00 a.m., New York City time, three
Business Days before the date of the proposed Borrowing or (b) in the case of an
ABR Borrowing, not later than 11:00 a.m., New York City time, one Business Day
before the date of the proposed Borrowing; provided that any such notice of an
ABR Borrowing to finance the reimbursement of an LC Disbursement as contemplated
by Section 2.05(e) may be given not later than 11:00 a.m., New York City time,
on the date of the proposed Borrowing and notice of Borrowings for Swingline
Loan shall be governed by Section 2.04(b). Each such telephonic Borrowing
Request shall be irrevocable and shall be confirmed promptly by hand delivery or
telecopy to the Administrative Agent of a written Borrowing Request in a form
approved by the Administrative Agent and signed by the Borrower. Each such
telephonic and written Borrowing Request shall specify the following information
in compliance with Section 2.02:
(i) the aggregate amount of the requested
Borrowing;
(ii) the date of such Borrowing, which shall be a
Business Day;
(iii) whether such Borrowing is to be an ABR
Borrowing or a LIBOR Borrowing;
(iv) in the case of a LIBOR Borrowing, the
initial Interest Period to be applicable thereto, which shall be a period
contemplated by the definition of the term "Interest Period"; and
24
(v) the location and number of the Borrower's
account to which funds are to be disbursed, which shall comply with the
requirements of Section 2.06.
If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to any requested LIBOR Borrowing, then the Borrower shall be deemed to
have selected an Interest Period of one month's duration. Promptly following
receipt of a Borrowing Request in accordance with this Section, the
Administrative Agent shall advise each Lender of the details thereof and of the
amount of such Lender's Loan to be made as part of the requested Borrowing.
(b) Automatic Borrowing. No Borrowing Request and no
notice under Section 2.04(c) shall be required to be presented by Borrower to
the Administrative Agent: (i) when any Obligation under the Loan Documents is
due or (ii) if no Default then exists, collected funds in the Cash Concentration
Account (as defined in the Security Agreement) are required to be deposited in
the Collateral Proceeds Account (as defined in the Security Agreement) and are
not required to be transferred to the General Funds Account and a check, checks
or other debit shall be presented for payment against the Disbursement Account
on a Business Day when funds are not otherwise available therein to honor such
debits. In either such event, the Administrative Agent shall without Borrower's
or any Lender's consent, promptly advise the Swingline Lender of the amount of
Swingline Loans (or if sufficient Swingline Loan availability does not exist,
promptly advise the Lenders of the amount of Revolving Loans), in each case as
is necessary (i) to be credited to the Disbursement Account on such day to
permit such debits to be honored provided no Default exists or (ii) to pay the
amount of such Obligation. Loans made pursuant to this Section 2.03(b) will be
made available to the Administrative Agent and the amounts so received by the
Administrative Agent, shall, subject to the terms and conditions of this
Agreement, be made available to the Borrower by crediting the same to the
Disbursement Account or by utilizing the same to pay the Obligation then due, as
applicable. Loans made under this Section 2.03(b) shall be made as ABR Loans.
Section 2.04. Swingline Loans.
(a) Swingline Advances. Subject to the terms and
conditions set forth herein, the Swingline Lender agrees to make advances to the
Borrower from time to time during the Availability Period, in an aggregate
principal amount at any time outstanding that will not result in (i) the
aggregate principal amount of outstanding Swingline Loans exceeding $25,000,000,
(ii) the total Revolving Exposures exceeding the total Commitments or (iii) the
sum of the total Revolving Exposures exceeding the Borrowing Base then in
effect; provided that the Swingline Lender shall not be required to make a
Swingline Loan to refinance an outstanding Swingline Loan. Within the foregoing
limits and subject to the terms and conditions set forth herein, the Borrower
may borrow, prepay and reborrow Swingline Loans.
(b) Permitted Overadvance. The Swingline Lender may
extend Swingline Loans even if after giving effect thereto the Revolving
Exposures exceed the Borrowing Base (each such Swingline Loan herein an
"Overadvance Loan") if it determines to do so in its discretion (the Swingline
Lender however having no obligation to do so) and the following conditions are
satisfied as of the date when the Overadvance Loan is made: (A) the aggregate
amount by which the Revolving Exposures exceed the Borrowing Base does not at
any time exceed five percent (5%) of the total amount of the Commitments of all
Lenders (such aggregate amount, herein the "Overadvance"); (B) the Revolving
Exposure shall at no time exceed the aggregate amount of the Commitments; (C)
the Revolving Exposures shall not exceed the Borrowing Base for more than
forty-five (45) consecutive days; (D) no other Overadvance Loan had been made
within the last one hundred and eighty days (180); and (E) the applicable
Overadvance results from the payment by the Swingline Lender of any amounts
required to maintain, protect or realize upon the Collateral or to prevent a
cessation of business by the Borrower or
25
any of the Subsidiaries. The fact that the Swingline Lender may make an
Overadvance Loan or an Overadvance may exist, shall not constitute a waiver of
any Default nor of the rights and remedies of the Administrative Agent and the
Lenders under this Agreement arising as a result thereof or otherwise. The
Administrative Agent or the Required Lenders, may at any time require the
Borrower's strict compliance with this Agreement, including without limitation,
the provisions of Section 2.10(b). The terms of this Section 2.04(b) are
provided to facilitate the administration of the facility contemplated hereby as
among the Lenders. This Section 2.04(b) shall not give the Borrower any
substantive rights against the Swingline Lender or any other Lender and is for
the sole benefit of the Administrative Agent and the Lenders. The Administrative
Agent shall advise the Lenders when it is aware that an Overadvance exists.
(c) Swingline Loan Request. To request a Swingline Loan,
the Borrower shall notify the Swingline Lender of such request by telephone
(confirmed by telecopy), not later than 12:00 noon, New York City time, on the
day of a proposed Swingline Loan. Each such notice shall be irrevocable and
shall specify the requested date (which shall be a Business Day) and amount of
the requested Swingline Loan. The Swingline Lender shall make each Swingline
Loan available to the Borrower by means of a credit to the general deposit
account of the Borrower with the Swingline Lender (or, in the case of a
Swingline Loan made to finance the reimbursement of an LC Disbursement as
provided in Section 2.05(e), by remittance to the relevant Issuing Bank) by 1:00
p.m., New York City time, on the requested date of such Swingline Loan.
(d) Lender Participation. On the date a Swingline Loan is
made by the Swingline Lender (including, without limitation, any Swingline Loan
that is an Overadvance Loan made in accordance with clause (b) immediately
above), the Swingline Lender shall be deemed without further action by any party
hereto, to have sold to each Lender, and each Lender shall be deemed, without
further action by any party hereto, to have purchased from the Swingline Lender
a risk participation to the extent of such Lender's Applicable Percentage in the
Swingline Loan so made, such participation to be funded in accordance with
clause (e) of this Section 2.04.
(e) Repayment of Swingline Loans; Funding of
Participation. The Borrower promises to pay to the order of the Swingline Lender
for its own account the outstanding principal amount of each Swingline Loan on
the earlier of (i) the Maturity Date, (ii) the date which is seven (7) days
after the Swingline Loan is made or (iii) the date after a Swingline Loan is
made when any other Loan is made pursuant to a formal Borrowing Request under
Section 2.03 (the earlier of such date with respect to a Swingline Loan herein
the "Swingline Maturity"). Subject to the other terms and conditions of this
Agreement, Borrower may repay a Swingline Loan on its Swingline Maturity under
clause (ii) above or at any time prior thereto by requesting another Loan in
accordance with the terms hereof and with the proceeds of such other Loan
payable to the Swingline Lender for its own account. The Swingline Lender, at
any time in its sole and absolute discretion and whether or not a Swingline
Maturity shall have occurred, may require that each Lender fund its
participation in the then outstanding principal amount of all Swingline Loans
(including, without limitation, any Swingline Loan made as an Overadvance Loan
in accordance with Section 2.04(b)) by giving each Lender notice thereof.
Additionally, if the Borrower shall not have repaid a Swingline Loan by 1:00
p.m. (New York City time) on the corresponding Swingline Maturity, the Swingline
Lender will notify each Lender of the aggregate principal amount of the
Swingline Loan which has not been repaid. Upon the giving of any notice by the
Swingline Lender under either of the preceding two sentences, each Lender shall
comply with its obligation under this paragraph by wire transfer of immediately
available funds, in the same manner as provided in Section 2.06 with respect to
Loans made by such Lender (and Section 2.06 shall apply, mutatis mutandis, to
the payment obligations of the Lenders), and the Administrative Agent shall
promptly pay to the Swingline Lender the amounts so received by it from the
Lenders. Amounts funded by a Lender under this Section 2.04(e) shall be
Revolving Loans and ABR Loans.
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(f) Participation Obligations Absolute; Failure to Fund
Participation. The obligations of a Lender to fund its participation in the
Swingline Loans in accordance with the terms hereof shall be absolute,
unconditional, and irrevocable and shall be performed strictly in accordance
with the terms of the Loan Documents under all circumstances whatsoever,
including without limitation, the following circumstances: (i) any lack of
validity of any Loan Document; (ii) the existence of any Default; (iii) the
existence of any claim, set-off, counterclaim, defenses, or other rights which
such Lender, any Loan Party, or any other Person may have; (iv) the occurrence
of any event that has or could reasonably be expected to have a Material Adverse
Effect; (v) the failure of any condition to a Loan under Article IV to be
satisfied; (vi) the fact that after giving effect to the funding of the
participation the Revolving Exposure may exceed the Borrowing Base; (vii) the
fact that the Swingline Loan is an Overadvance Loan made in accordance with
Section 2.04(b); or (viii) any other circumstance whatsoever, whether or not
similar to any of the foregoing. If a Lender fails to fund its participation in
a Swingline Loan as required hereby, such Lender shall remain obligated to pay
to the Swingline Lender the amount it failed to fund on demand together with
interest thereon in respect of the period commencing on the date such amount
should have been funded until the date the amount was actually funded at a rate
per annum equal to the Federal Funds Effective Rate for such period and the
Administrative Agent shall be entitled to offset against any and all sums to be
paid to such Lender hereunder the amount due under this sentence. The
Administrative Agent shall notify the Borrower of any participations in any
Swingline Loan acquired pursuant to this paragraph, and thereafter payments in
respect of such Swingline Loan shall be made to the Administrative Agent and not
to the Swingline Lender. Any amounts received by the Swingline Lender from the
Borrower (or other party on behalf of the Borrower) in respect of a Swingline
Loan after receipt by the Swingline Lender of the proceeds of a sale of
participations therein shall be promptly remitted to the Administrative Agent;
any such amounts received by the Administrative Agent shall be promptly remitted
by the Administrative Agent to the Lenders that shall have made their payments
pursuant to this paragraph and to the Swingline Lender, as their interests may
appear. The purchase of participations in a Swingline Loan pursuant to this
paragraph shall not relieve the Borrower of any default in the payment thereof.
The foregoing provisions of this clause (f) shall not be construed to excuse the
Swingline Lender from liability to the Lenders to the extent of any direct
damages (as opposed to consequential damages, claims in respect of which are
hereby waived by the Lenders to the extent permitted by applicable law) suffered
by the Lenders that are caused by such Swingline Lender's failure to exercise
care when determining whether to make a Swingline Loan. The Swingline Lender and
the Lenders expressly agree that, in the absence of gross negligence or willful
misconduct on the part of the Swingline Lender (as finally determined by a court
of competent jurisdiction), the Swingline Lender shall be deemed to have
exercised care in each such determination.
Section 2.05. Letters of Credit.
(a) General. Subject to the terms and conditions set
forth herein, the Borrower may request the issuance of letters of credit for its
own account or the account of one of its Subsidiaries, in a form reasonably
acceptable to the Administrative Agent and the relevant Issuing Bank, at any
time and from time to time during the Availability Period. In the event of any
inconsistency between the terms and conditions of this Agreement and the terms
and conditions of any form of letter of credit application or other agreement
submitted by the Borrower to, or entered into by the Borrower with, an Issuing
Bank relating to any Letter of Credit, the terms and conditions of this
Agreement shall control.
(b) Notice of Issuance, Amendment, Renewal, Extension;
Certain Conditions. To request the issuance of a Letter of Credit (or the
amendment, renewal or extension of an outstanding Letter of Credit), the
Borrower shall hand deliver or telecopy (or transmit by electronic
communication, if arrangements for doing so have been approved by the relevant
Issuing Bank) to the relevant Issuing Bank (if different than the Administrative
Agent) and the Administrative Agent (reasonably in advance of the requested date
of issuance, amendment, renewal or extension) a notice requesting the issuance
of a Letter
27
of Credit, or identifying the Letter of Credit to be amended, renewed or
extended, and specifying the date of issuance, amendment, renewal or extension
(which shall be a Business Day), the date on which such Letter of Credit is to
expire (which shall comply with paragraph (c) of this Section), the amount of
such Letter of Credit, the name and address of the beneficiary thereof and such
other information as shall be necessary to prepare, amend, renew or extend such
Letter of Credit. If requested by the relevant Issuing Bank, the Borrower also
shall submit a letter of credit application on such Issuing Bank's standard form
in connection with any request for a Letter of Credit. A Letter of Credit shall
be issued, amended, renewed or extended only if (and upon issuance, amendment,
renewal or extension of each Letter of Credit the Borrower shall be deemed to
represent and warrant that), after giving effect to such issuance, amendment,
renewal or extension, (i) the aggregate face amount of all outstanding Letters
of Credit shall not exceed $30,000,000, (ii) the total Revolving Exposures shall
not exceed the total Commitments and (iii) the sum of the total Revolving
Exposures shall not exceed the Borrowing Base then in effect.
(c) Expiration Date; Collateralization of Extended Term
Letters of Credit. Each Letter of Credit shall expire at or prior to the close
of business on the earlier of (i) the date one year after the date of the
issuance of such Letter of Credit (or, in the case of any renewal or extension
thereof, one year after such renewal or extension); provided this clause shall
not prohibit the issuance of a Letter of Credit that by its terms may be
automatically extended (unless an Issuing Bank elects not to extend) for
successive one-year periods (which in no event shall extend beyond the date
referred to in the following clause (ii)) or (ii) the one year anniversary of
the Maturity Date; provided, however, that with respect to each Letter of Credit
with an expiry date beyond the Maturity Date, the Borrower shall pledge cash
collateral pursuant to Section 2.05(j) in an amount not less than 102.5% of the
face value of such Letter of Credit on or before the date 60 days prior to the
Maturity Date.
(d) Participations. By the issuance of a Letter of Credit
(or an amendment to a Letter of Credit increasing the amount thereof) and
without any further action on the part of the relevant Issuing Bank or the
Lenders, an Issuing Bank hereby grants to each Lender, and each Lender hereby
acquires from such Issuing Bank, a participation in such Letter of Credit equal
to such Lender's Applicable Percentage of the aggregate amount available to be
drawn under such Letter of Credit. In consideration and in furtherance of the
foregoing, each Lender hereby absolutely and unconditionally agrees to pay to
the Administrative Agent, for the account of such Issuing Bank, such Lender's
Applicable Percentage of each LC Disbursement made by such Issuing Bank and not
reimbursed by the Borrower on the date due as provided in paragraph (e) of this
Section, or of any reimbursement payment required to be refunded to the Borrower
for any reason. The obligations of a Lender to fund its participation in a
Letter of Credit in accordance with the terms hereof shall be absolute,
unconditional, and irrevocable and shall be performed strictly in accordance
with the terms of the Loan Documents under all circumstances whatsoever,
including without limitation, the following circumstances: (i) any lack of
validity of any Loan Document; (ii) the existence of any Default; (iii) the
existence of any claim, set-off, counterclaim, defenses, or other rights which
such Lender, any Loan Party, or any other Person may have; (iv) the occurrence
of any event that has or could reasonably be expected to have a Material Adverse
Effect; (v) the failure of any condition to a Loan under Article IV to be
satisfied; (vi) the fact that after giving effect to the funding of the
participation the Revolving Exposure may exceed the Borrowing Base; or (vii) any
other circumstance whatsoever, whether or not similar to any of the foregoing.
If a Lender fails to fund its participation in a Letter of Credit as required
hereby, such Lender shall, subject to the foregoing proviso, remain obligated to
pay to the applicable Issuing Bank the amount it failed to fund on demand
together with interest thereon in respect of the period commencing on the date
such amount should have been funded until the date the amount was actually
funded at a rate per annum equal to the Federal Funds Effective Rate for such
period and the Administrative Agent shall be entitled to offset against any and
all sums to be paid to such Lender hereunder the amount due under this sentence.
Any amounts received by an Issuing Bank from the Borrower (or other party on
behalf of the Borrower) in respect of a LC Disbursement after receipt by the
Issuing Bank of the proceeds of a sale of participations therein shall be
promptly remitted to
28
the Administrative Agent; any such amounts received by the Administrative Agent
shall be promptly remitted by the Administrative Agent to the Lenders that shall
have made their payments pursuant to this paragraph and to the Issuing Bank, as
their interests may appear. The purchase of participations in a Letter of Credit
pursuant to this paragraph shall not relieve the Borrower of any default in the
payment of any reimbursement obligations in respect of any LC Disbursement. The
foregoing provisions of this clause (d) shall not be construed to excuse the
relevant Issuing Bank from liability to the Lenders to the extent of any direct
damages (as opposed to consequential damages, claims in respect of which are
hereby waived by the Lenders to the extent permitted by applicable law) suffered
by the Lenders that are caused by such Issuing Bank's failure to exercise care
when determining whether drafts and other documents presented under a Letter of
Credit comply with the terms thereof. The Issuing Banks and the Lenders
expressly agree that, in the absence of gross negligence or willful misconduct
on the part of the relevant Issuing Bank (as finally determined by a court of
competent jurisdiction), such Issuing Bank shall be deemed to have exercised
care in each such determination.
(e) Reimbursement. If an Issuing Bank shall make any LC
Disbursement in respect of a Letter of Credit, the Borrower shall reimburse such
LC Disbursement by paying to the Administrative Agent an amount equal to such LC
Disbursement not later than 2:00 p.m., New York City time, on the date that such
LC Disbursement is made, if the Borrower shall have received notice of such LC
Disbursement prior to 10:00 a.m., New York City time, on such date, or, if such
notice has not been received by the Borrower prior to such time on such date,
then not later than 2:00 p.m., New York City time, on (i) the Business Day that
the Borrower receives such notice, if such notice is received prior to 10:00
a.m., New York City time, on the day of the receipt, or (ii) the Business Day
immediately following the day that the Borrower receives such notice, if such
notice is not received prior to such time on the day of receipt; provided that,
if such LC Disbursement is not less than the applicable minimum Borrowing amount
set forth in Section 2.02(c), the Borrower may, subject to the conditions to
borrowing set forth herein, request in accordance with Section 2.03 or 2.04 that
such payment be financed with an ABR Borrowing or Swingline Loan in an
equivalent amount and, to the extent so financed, the Borrower's obligation to
make such payment shall be discharged and replaced by the resulting ABR
Borrowing or Swingline Loan. If the Borrower fails to make such payment when
due, the Administrative Agent shall notify each Lender of the applicable LC
Disbursement, the payment then due from the Borrower in respect thereof and such
Lender's Applicable Percentage thereof. Promptly following receipt of such
notice, each Lender shall pay to the Administrative Agent its Applicable
Percentage of the payment then due from the Borrower, in the same manner as
provided in Section 2.06 with respect to Loans made by such Lender (and Section
2.06 shall apply, mutatis mutandis, to the payment obligations of the Lenders),
and the Administrative Agent shall promptly pay to the relevant Issuing Bank the
amounts so received by it from the Lenders. Promptly following receipt by the
Administrative Agent of any payment from the Borrower pursuant to this
paragraph, the Administrative Agent shall distribute such payment to such
Issuing Bank or, to the extent that Lenders have made payments pursuant to this
paragraph to reimburse such Issuing Bank, then to such Lenders and such Issuing
Bank as their interests may appear. Any payment made by a Lender pursuant to
this paragraph to reimburse an Issuing Bank for any LC Disbursement (other than
the funding of ABR Revolving Loans or a Swingline Loan as contemplated above)
shall not constitute a Loan and shall not relieve the Borrower of its obligation
to reimburse such LC Disbursement.
(f) Obligations Absolute. The Borrower's obligation to
reimburse LC Disbursements as provided in paragraph (e) of this Section shall be
absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement under any and all circumstances
whatsoever and irrespective of (i) any lack of validity or enforceability of any
Letter of Credit or this Agreement, or any term or provision therein, (ii) any
draft or other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by an Issuing Bank under a Letter of
Credit
29
against presentation of a draft or other document that does not comply with the
terms of such Letter of Credit, or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against, the Borrower's obligations hereunder. The
Administrative Agent, the Lenders, any Issuing Bank, or any of their Related
Parties, shall not have any liability or responsibility by reason of or in
connection with the issuance or transfer of any Letter of Credit or any payment
or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error, omission,
interruption, loss or delay in transmission or delivery of any draft, notice or
other communication under or relating to any Letter of Credit (including any
document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of the
relevant Issuing Bank. The foregoing provisions of this clause (f) shall not be
construed to excuse the relevant Issuing Bank from liability to the Borrower to
the extent of any direct damages (as opposed to consequential damages, claims in
respect of which are hereby waived by the Borrower to the extent permitted by
applicable law) suffered by the Borrower that are caused by such Issuing Bank's
failure to exercise care when determining whether drafts and other documents
presented under a Letter of Credit comply with the terms thereof. The Issuing
Banks and the Borrower expressly agree that, in the absence of gross negligence
or willful misconduct on the part of the relevant Issuing Bank (as finally
determined by a court of competent jurisdiction), such Issuing Bank shall be
deemed to have exercised care in each such determination. In furtherance of the
foregoing and without limiting the generality thereof, the parties agree that,
with respect to documents presented which appear on their face to be in
substantial compliance with the terms of a Letter of Credit, the relevant
Issuing Bank may, in its sole discretion, either accept and make payment upon
such documents without responsibility for further investigation, regardless of
any notice or information to the contrary, or refuse to accept and make payment
upon such documents if such documents are not in strict compliance with the
terms of such Letter of Credit.
(g) Disbursement Procedures. The relevant Issuing Bank
shall, promptly following its receipt thereof, examine all documents purporting
to represent a demand for payment under a Letter of Credit. Such relevant
Issuing Bank shall promptly notify the Administrative Agent and the Borrower by
telephone (confirmed by telecopy) of such demand for payment and whether such
Issuing Bank has made or will make an LC Disbursement thereunder; provided that
any failure to give or delay in giving such notice shall not relieve the
Borrower of its obligation to reimburse such Issuing Bank and the Lenders with
respect to any such LC Disbursement.
(h) Interim Interest. If an Issuing Bank shall make any
LC Disbursement, then, unless the Borrower shall reimburse such LC Disbursement
in full on the date such LC Disbursement is made, the unpaid amount thereof
shall bear interest, for each day from and including the date such LC
Disbursement is made to but excluding the date that the Borrower reimburses such
LC Disbursement, at a rate per annum then applicable to ABR Loans; provided
that, if the Borrower fails to reimburse such LC Disbursement when due pursuant
to paragraph (e) of this Section, then Section 2.12(c) shall apply. Interest
accrued pursuant to this paragraph shall be for the account of the relevant
Issuing Bank, except that interest accrued on and after the date of payment by
any Lender pursuant to paragraph (e) of this Section to reimburse an Issuing
Bank shall be for the account of such Lender to the extent of such payment.
(i) Replacement of an Issuing Bank. An Issuing Bank may
be replaced at any time by written agreement among the Borrower, the
Administrative Agent, the replaced Issuing Bank and the successor Issuing Bank.
The Administrative Agent shall notify the Lenders of any such replacement of an
Issuing Bank. At the time any such replacement shall become effective, the
Borrower shall pay all unpaid fees accrued for the account of the replaced
Issuing Bank pursuant to Section 2.11(b). From and after the effective date of
any such replacement, (i) the successor Issuing Bank shall have all the rights
30
and obligations of an Issuing Bank under this Agreement with respect to Letters
of Credit to be issued thereafter and (ii) references herein to the term
"Issuing Bank" shall be deemed to refer to such successor or to any previous
Issuing Bank, or to such successor and all previous Issuing Banks, as the
context shall require. After the replacement of an Issuing Bank hereunder, the
replaced Issuing Bank shall remain a party hereto and shall continue to have all
the rights and obligations of an Issuing Bank under this Agreement with respect
to Letters of Credit issued by it prior to such replacement, but shall not be
required to issue additional Letters of Credit.
(j) Cash Collateralization. If any Event of Default shall
occur and be continuing, on the Business Day that the Borrower receives notice
from the Administrative Agent or the Required Lenders demanding the deposit of
cash collateral pursuant to this paragraph, the Borrower shall deposit in an
account with the Administrative Agent, in the name of the Administrative Agent
and for the benefit of the Lenders, an amount in cash equal to 105% of the LC
Exposure as of such date plus any accrued and unpaid interest thereon; provided
that the obligation to deposit such cash collateral shall become effective
immediately, and such deposit shall become immediately due and payable, without
demand or other notice of any kind, upon the occurrence of any Event of Default
with respect to the Borrower described in clause (h) or (i) of Article VII. The
Borrower also shall deposit cash collateral pursuant to this paragraph as and to
the extent required by: (i) Section 2.05(c) and (ii) Section 2.10(b), and any
such cash collateral so deposited under Section 2.05(c) or 2.10(b) and held by
the Administrative Agent hereunder shall constitute part of the Borrowing Base
for purposes of determining compliance with this Agreement. Each such deposit
shall be held by the Administrative Agent as collateral for the payment and
performance of the Obligations. The Administrative Agent shall have exclusive
dominion and control, including the exclusive right of withdrawal, over such
account. Other than any interest earned on the investment of such deposits,
which investments shall be made at the option and sole discretion of the
Administrative Agent but for the Borrower's account and at the Borrower's risk
and expense, such deposits shall not bear interest. Interest or profits, if any,
on such investments shall accumulate in such account. Moneys in such account
shall be applied by the Administrative Agent to reimburse an Issuing Bank for LC
Disbursements for which it has not been reimbursed and, to the extent not so
applied, shall be held for the satisfaction of the reimbursement obligations of
the Borrower for the LC Exposure at such time or, if the maturity of the Loans
has been accelerated (but subject to the consent of the Required Lenders), be
applied to satisfy other Obligations. If the Borrower is required to provide an
amount of cash collateral hereunder as a result of the occurrence of an Event of
Default, such amount (to the extent not applied as aforesaid) shall be returned
to the Borrower within three Business Days after all Events of Default have been
cured or waived. If the Borrower is required to provide an amount of cash
collateral hereunder pursuant to Section 2.05(c) with respect to a Letter of
Credit, such amount (to the extent not applied as aforesaid) shall be promptly
returned to the Borrower when the Letter of Credit has expired if no Default
then exists. If the Borrower is required to provide an amount of cash collateral
hereunder pursuant to Section 2.10(b), such amount (to the extent not applied as
aforesaid) shall be promptly returned to the Borrower as and to the extent that,
after giving effect to such return, the Borrower would remain in compliance with
Section 2.10(b) and no Default shall have occurred and be continuing.
Section 2.06. Funding of Borrowings.
(a) Each Lender shall make each Loan to be made by it
hereunder on the proposed date thereof by wire transfer of immediately available
funds by 12:00 noon, New York City time, to the account of the Administrative
Agent most recently designated by it for such purpose by notice to the Lenders;
provided that Swingline Loans shall be made as provided in Section 2.04. The
Administrative Agent will make such Loans available to the Borrower by promptly
(but in no event later than 1:00 p.m., New York City time) crediting the amounts
so received, in like funds, to an account of the Borrower designated by the
Borrower in the applicable Borrowing Request; provided that ABR Loans made: (i)
to finance the reimbursement of an LC Disbursement as provided in Section
2.05(e) shall be remitted by the
31
Administrative Agent to the applicable Issuing Bank and (ii) under Section
2.03(b) shall be used by the Administrative Agent to pay the Obligations and
other amounts then due.
(b) Unless the Administrative Agent shall have received
notice from a Lender prior to the proposed date of any Borrowing that such
Lender will not make available to the Administrative Agent such Lender's share
of such Borrowing, the Administrative Agent may assume that such Lender has made
such share available on such date in accordance with paragraph (a) of this
Section and may, in reliance upon such assumption, make available to the
Borrower a corresponding amount. In such event, if a Lender has not in fact made
its share of the applicable Borrowing available to the Administrative Agent,
then the applicable Lender and the Borrower severally agree to pay to the
Administrative Agent forthwith on demand such corresponding amount with interest
thereon, for each day from and including the date such amount is made available
to the Borrower to but excluding the date of payment to the Administrative
Agent, at (i) in the case of such Lender, the Federal Funds Effective Rate or
(ii) in the case of the Borrower, the interest rate applicable to ABR Loans. If
such Lender pays such amount to the Administrative Agent, then such amount shall
constitute such Lender's Loan included in such Borrowing.
Section 2.07. Interest Elections.
(a) Each Revolving Borrowing initially shall be of the
Type specified in the applicable Borrowing Request and, in the case of a LIBOR
Borrowing, shall have an initial Interest Period as specified in such Borrowing
Request. Thereafter, the Borrower may elect to convert such Borrowing to a
different Type or to continue such Borrowing and, in the case of a LIBOR
Borrowing, may elect Interest Periods therefor, all as provided in this Section.
The Borrower may elect different options with respect to different portions of
the affected Borrowing, in which case each such portion shall be allocated
ratably among the Lenders holding the Loans comprising such Borrowing, and the
Loans comprising each such portion shall be considered a separate Borrowing.
This Section shall not apply to Swingline Borrowings, which may not be converted
or continued.
(b) To make an election pursuant to this Section, the
Borrower shall notify the Administrative Agent of such election by telephone by
the time that a Borrowing Request would be required under Section 2.03 if the
Borrower were requesting a Borrowing of the Type resulting from such election to
be made on the effective date of such election. Each such telephonic Interest
Election Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Administrative Agent of a written Interest Election
Request in a form approved by the Administrative Agent and signed by the
Borrower.
(c) Each telephonic and written Interest Election Request
shall specify the following information in compliance with Section 2.02:
(i) the Borrowing to which such Interest
Election Request applies and, if different options are being elected with
respect to different portions thereof, the portions thereof to be allocated to
each resulting Borrowing (in which case the information to be specified pursuant
to clauses (iii) and (iv) below shall be specified for each resulting
Borrowing);
(ii) the effective date of the election made
pursuant to such Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an
ABR Borrowing or a LIBOR Borrowing; and
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(iv) if the resulting Borrowing is a LIBOR
Borrowing, the Interest Period to be applicable thereto after giving effect to
such election, which shall be a period contemplated by the definition of the
term "Interest Period".
If any such Interest Election Request requests a LIBOR Borrowing but does not
specify an Interest Period, then the Borrower shall be deemed to have selected
an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election
Request, the Administrative Agent shall advise each Lender of the details
thereof and of such Lender's portion of each resulting Borrowing.
(e) If the Borrower fails to deliver a timely Interest
Election Request with respect to a LIBOR Borrowing prior to the end of the
Interest Period applicable thereto, then, unless such Borrowing is repaid as
provided herein, at the end of such Interest Period such Borrowing shall be
converted to an ABR Borrowing. Notwithstanding any contrary provision hereof, if
an Event of Default has occurred and is continuing and the Administrative Agent,
at the request of the Required Lenders, so notifies the Borrower, then, so long
as an Event of Default is continuing (i) no outstanding Borrowing may be
converted to or continued as a LIBOR Borrowing and (ii) unless repaid, each
LIBOR Borrowing shall be converted to an ABR Borrowing at the end of the
Interest Period applicable thereto.
Section 2.08. Termination, Reduction and Increase of Commitments.
(a) Termination on Maturity Date. Unless previously
terminated, the Commitments shall terminate on the Maturity Date.
(b) Optional Termination or Reduction; Commitment
Reduction Fee. The Borrower may at any time terminate or from time to time
reduce, the Commitments; provided that (i) each reduction of the Commitments
shall be in an amount that is an integral multiple of $1,000,000 and not less
than $1,000,000; (ii) the Commitments may not be reduced below an aggregate
amount equal to $50,000,000 unless terminated in their entirety; and (iii) the
Borrower shall not terminate or reduce the Commitments if, after giving effect
to any concurrent prepayment of Loans in accordance with this Agreement, the sum
of the Revolving Exposures would exceed the total Commitments. If the Borrower
terminates or reduces the Commitments either in whole or in part prior to the
second anniversary of the Effective Date, for any reason other than refinancing
of the Loans with JPMorgan Chase Bank or any of its Affiliates and other than as
set forth in Section 2.08(d) below, the Borrower shall pay to the Administrative
Agent, for the ratable benefit of the Lenders, on the date of such termination
or reduction, as liquidated damages and compensation for the costs of making
funds available to the Borrower under this Agreement, and not as a penalty, an
amount equal to: (i) if the Commitments are reduced or terminated prior to or on
the first anniversary of the Effective Date, 0.50% of the amount of the
Commitments so reduced or terminated and (b) if the Commitments are reduced or
terminated after the first anniversary of the Effective Date but prior to or on
the second anniversary of the Effective Date, 0.25% of the amount of the
Commitments so reduced or terminated.
(c) Notice of Commitment Reduction or Termination. The
Borrower shall notify the Administrative Agent of any election to terminate or
reduce the Commitments under paragraph (b) of this Section at least three
Business Days prior to the effective date of such termination or reduction,
specifying such election and the effective date thereof. Promptly following
receipt of any notice, the Administrative Agent shall advise the Lenders of the
contents thereof. Each notice delivered by the Borrower pursuant to this Section
shall be irrevocable; provided that a notice of termination of the Commitments
delivered by the Borrower may state that such notice is conditioned upon the
effectiveness of other credit facilities, in which case such notice may be
revoked by the Borrower (by notice to the Administrative Agent on or prior to
the specified effective date) if such condition is not satisfied. Any
33
termination or reduction of the Commitments shall be permanent. Except as
provided in paragraph (d) below, each reduction of the Commitments shall be made
ratably among the Lenders in accordance with their respective Commitments.
(d) Termination of Non-Consenting Lender. In the event
the Borrower is entitled to replace a non-consenting Lender pursuant to Section
9.02(c), the Borrower shall have the right, upon five Business Days' written
notice to the Administrative Agent (which notice the Administrative Agent shall
promptly transmit to each of the Lenders), to terminate the entire Commitment of
such Lender, so long as (i) all Loans, together with accrued and unpaid
interest, fees and other amounts owing to such Lender are repaid pursuant to
Section 2.10(d) concurrently with the effectiveness of such termination and (ii)
the consents required by Section 9.02(c) in connection with the prepayment shall
have been obtained, and at such time, such Lender shall no longer constitute a
"Lender" for purposes of this Agreement, except with respect to Sections 2.14,
2.15, 2.16 and 9.03 (other than Section 9.03(c)) of this Agreement, which shall
survive as to such Lender.
(e) Increase of Commitments. By written notice sent to
the Administrative Agent (which the Administrative Agent shall promptly
distribute to the Lenders), the Borrower may request an increase of the
aggregate amount of the Commitments: (i) by an aggregate amount equal to any
integral multiple of $10,000,000 and (ii) by an aggregate amount not to exceed
$50,000,000; provided that (A) no Event of Default shall have occurred and be
continuing and (B) the aggregate amount of the Commitments shall not previously
have been increased more than once pursuant to this Section 2.08(e). Upon notice
to the Administrative Agent of the Borrower's election to exercise its option to
increase the Commitments under this Section 2.08(e), the Administrative Agent
shall endeavor to arrange, on a best efforts basis, and syndicate the proposed
increase in the Commitments to the Lenders or other financial institutions which
are acceptable to the Administrative Agent and consented to by the Borrower
(with the Borrower's consent not to be unreasonably withheld). The Borrower
agrees to assist the Administrative Agent in whatever reasonable manner is
necessary to successfully accomplish such syndication. Each Lender, in its sole
and absolute discretion, shall determine whether it will increase its
Commitment. If the Lenders increasing their respective Commitments are unable to
increase the Commitments by the full amount of the request, then, with notice to
the Administrative Agent and the other Lenders, another one or more financial
institutions, each as approved by the Borrower and the Administrative Agent (a
"New Lender"), may commit to provide an amount equal to the aggregate amount of
the requested increase that is not to be provided by the existing Lenders (the
"Increase Amount"); provided, that the Commitment of each New Lender shall be at
least $10,000,000. Upon receipt of notice from the Administrative Agent to the
Lenders and the Borrower that the Lenders, or sufficient Lenders and New
Lenders, have agreed to commit to an aggregate amount equal to the requested
increase (or such lesser amount as the Borrower shall agree, which shall be at
least $10,000,000 and an integral multiple of $10,000,000 in excess thereof),
then: provided that no Event of Default exists at such time or after giving
effect to the requested increase, the Borrower, the Administrative Agent and the
Lenders willing to increase their respective Commitments and the New Lenders (if
any) shall execute and deliver an Increased Commitment Supplement (herein so
called) in the form attached hereto as Exhibit E. If all existing Lenders shall
not have provided their pro rata portion of the requested increase, then after
giving effect to the requested increase the outstanding Loans may not be held
pro rata in accordance with the new Commitments. In order to remedy the
foregoing, on the effective date of the Increased Commitment Supplement, the
Lenders shall make advances among themselves so that after giving effect thereto
the Loans (which are not Swingline Loans) will be held by the Lenders, pro rata
in accordance with the Applicable Percentage hereunder. Notwithstanding the
provisions of Section 9.04, the advances so made by each Lender whose Applicable
Percentage has increased shall be deemed to be a purchase of a corresponding
amount of the Loans of the Lender or Lenders whose Applicable Percentage have
decreased. The Commitments of the Lenders who do not agree to increase their
Commitments cannot be reduced or otherwise changed pursuant to this Section
2.08(e).
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Section 2.09. Repayment of Loans; Evidence of Debt.
(a) The Borrower hereby unconditionally promises to pay
to the Administrative Agent for the account of each Lender the then unpaid
principal amount of each Revolving Loan of such Lender on the Maturity Date.
Swingline Loans shall be repaid as provided in Section 2.04.
(b) Each Lender shall maintain in accordance with its
usual practice an account or accounts evidencing the indebtedness of the
Borrower to such Lender resulting from each Loan made by such Lender, including
the amounts of principal and interest payable and paid to such Lender from time
to time hereunder.
(c) The Administrative Agent shall maintain accounts in
which it shall record (i) the amount of each Loan made hereunder, the Type
thereof and the Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder and (iii) the amount of any sum received by
the Administrative Agent hereunder for the account of the Lenders and each
Lender's share thereof.
(d) The entries made in the accounts maintained pursuant
to paragraph (b) or (c) of this Section shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided that the
failure of any Lender or the Administrative Agent to maintain such accounts or
any error therein shall not in any manner affect the obligation of the Borrower
to repay the Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that Loans made by it be
evidenced by a promissory note. In such event, the Borrower shall prepare,
execute and deliver to such Lender a promissory note payable to the order of
such Lender (or, if requested by such Lender, to such Lender and its registered
assigns) and in a form approved by the Administrative Agent. Thereafter, the
Loans evidenced by such promissory note and interest thereon shall at all times
(including after assignment pursuant to Section 9.04) be represented by one or
more promissory notes in such form payable to the order of the payee named
therein (or, if such promissory note is a registered note, to such payee and its
registered assigns).
Section 2.10. Prepayment of Loans.
(a) Optional Prepayment. The Borrower shall have the
right at any time and from time to time to prepay any Borrowing in whole or in
part, subject to the requirements of this Section and Section 2.15.
(b) Overadvance Prepayment. In the event and on each
occasion that the total Revolving Exposures exceeds the Borrowing Base then in
effect, the Borrower shall prepay Borrowings or Swingline Borrowings (or, if no
such Borrowings are outstanding, deposit cash collateral in an account with the
Administrative Agent pursuant to Section 2.05(j)) in an aggregate amount equal
to such excess. Notwithstanding the foregoing provisions of this paragraph, if
at any time the Borrower is required to make a prepayment under this paragraph
the Borrower would incur breakage costs under Section 2.15 as a result of LIBOR
Loans being prepaid other than on the last day of an Interest Period applicable
thereto (the "Affected LIBOR Loans"), and provided that no Default has occurred
and is continuing at the time, 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 Loans with the Administrative
Agent (which deposit must be equal in amount to the amount of the Affected LIBOR
Loans 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 reasonably satisfactory to the Administrative Agent and shall
provide for investments in Permitted Investments satisfactory to the
Administrative Agent and
35
the Borrower, 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 relevant Loans that are LIBOR Loans (or such earlier date or
dates as shall be requested by the Borrower), to repay an aggregate principal
amount of such Loans equal to the Affected LIBOR Loans not initially prepaid
pursuant to this sentence. Notwithstanding anything to the contrary contained in
the immediately preceding sentence, all amounts deposited as cash collateral
pursuant to the immediately preceding sentence shall be held for the sole
benefit of the Lenders whose Loans would otherwise have been immediately prepaid
with the amounts deposited and may be applied to the prepayment of such Loans
immediately if an Event of Default has occurred and is continuing.
(c) Notice of Prepayment. The Borrower shall notify the
Administrative Agent (and, in the case of prepayment of a Swingline Loan, the
Swingline Lender) by telephone (confirmed by telecopy) of any prepayment
hereunder (i) in the case of prepayment of a LIBOR Borrowing, not later than
11:00 a.m., New York City time, three Business Days before the date of
prepayment, (ii) in the case of prepayment of an ABR Borrowing, not later than
11:00 a.m., New York City time, one Business Day before the date of prepayment
or (iii) in the case of prepayment of a Swingline Loan, not later than 12:00
noon, New York City time, on the date of prepayment. Each such notice shall be
irrevocable and shall specify the prepayment date and the principal amount of
each Borrowing or portion thereof to be prepaid; provided that, if a notice of
optional prepayment is given in connection with a conditional notice of
termination of the Commitments as contemplated by Section 2.08, then such notice
of prepayment may be revoked if such notice of termination is revoked in
accordance with Section 2.08. Promptly following receipt of any such notice
(other than a notice relating solely to Swingline Loans), the Administrative
Agent shall advise the Lenders of the contents thereof. Each partial prepayment
of any Borrowing shall be in an amount that would be permitted in the case of an
advance of a Borrowing of the same Type as provided in Section 2.02 except as
necessary to apply fully the required amount of a mandatory prepayment. Each
prepayment of a Borrowing shall be applied ratably to the Loans included in the
prepaid Borrowing. Prepayments shall be accompanied by accrued interest to the
extent required by Section 2.12.
(d) Prepayment of a Non-consenting Bank. In the event the
Borrower is entitled to replace a non-consenting Lender pursuant to Section
9.02(c), the Borrower shall have the right, upon five Business Days' prior
written notice to the Administrative Agent (which notice the Administrative
Agent shall promptly transmit to each of the Lenders), to prepay all Loans,
together with accrued and unpaid interest, fees and other amounts, owing to such
Lender in accordance with Section 9.02(c) so long as (i) in the case of the
prepayment of the Loans of any Lender pursuant to this Section 2.10(d), the
Commitment of such Lender is terminated concurrently with such prepayment
pursuant to Section 2.08(d), and (ii) in the case of the prepayment of the Loans
of any Lender, the consents required by Section 9.02(c) in connection with the
prepayment pursuant to this Section 2.10(d) shall have been obtained, and at
such time, such Lender shall no longer constitute a "Lender" for purposes of
this Agreement, except with respect to Sections 2.14, 2.15, 2.16 and 9.03 (other
than Section 9.03(c)) of this Agreement, which shall survive as to such Lender.
(e) Control of Cash and Application to Obligations. When
collected funds in the Cash Concentration Account (as defined in the Security
Agreement) are required to be deposited in the Collateral Proceeds Account (as
defined in the Security Agreement) and are not required to be transferred to the
General Funds Account, the collected funds on deposit in the Collateral Proceeds
Account (the "Available Cash") shall be applied by the Administrative Agent for
the benefit of the Lenders as follows:
(i) first, as a payment of the outstanding
principal amount of the Swingline Loans, second, as a payment of accrued and
unpaid interest on Swingline Loans, third, as a payment of the outstanding
principal amount of the Revolving Loans, fourth, as a payment of accrued and
unpaid interest on the Revolving Loans, and fifth, to the repayment of any other
Obligations which are due and
36
outstanding, and if after the foregoing applications, Available Cash remains
available to be disbursed, the Administrative Agent shall deposit such remaining
amount to the General Funds Account or transfer such funds as Borrower shall
otherwise direct; or
(ii) if an Event of Default exists and the
Collateral Agent has determined to exercise its remedies in the Collateral as a
result thereof (other than the remedies provided for in Section 5.01 of the
Security Agreement), the Available Cash shall be applied by the Collateral Agent
for the benefit of the Secured Parties to the Obligations in accordance with
Section 2.17.
Section 2.11. Fees.
(a) The Borrower agrees to pay to the Administrative
Agent for the account of each Lender a commitment fee, which shall accrue at the
Commitment Fee Rate on the average daily unused amount of the Commitment of such
Lender during the period from and including the Effective Date to but excluding
the date on which such Commitment terminates. Accrued commitment fees shall be
payable in arrears on the date which is three Business Days following the last
day of each March, June, September and December of each year and on the date on
which the Commitments terminate, commencing on the first such date to occur
after the date hereof. All commitment fees shall be computed on the basis of a
year of 360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day). For purposes of computing
commitment fees, a Commitment of a Lender shall be deemed to be used to the
extent of the outstanding Revolving Loans and LC Exposure of such Lender (and
the Swingline Exposure of such Lender shall be disregarded for such purpose).
(b) The Borrower agrees to pay: (i) to the Administrative
Agent for the account of each Lender a participation fee with respect to its
participations in all the Documentary Letters of Credit, during the period from
and including the Effective Date to but excluding the later of the date on which
such Lender's Commitment terminates and the date on which such Lender ceases to
have any LC Exposure applicable to Documentary Letters of Credit, which fee
shall accrue at a rate per annum equal to the Applicable Margin for LIBOR
Borrowings minus 0.75% on the average daily amount of such Lender's LC Exposure
attributable to Documentary Letters of Credit (excluding any portion thereof
attributable to unreimbursed LC Disbursements); (ii) to the Administrative Agent
for the account of each Lender a participation fee with respect to its
participations in all the Letters of Credit (other than the Documentary Letters
of Credit), during the period from and including the Effective Date to but
excluding the later of the date on which such Lender's Commitment terminates and
the date on which such Lender ceases to have any LC Exposure, which fee shall
accrue at the same rate per annum as the Applicable Margin with respect to LIBOR
Borrowings on the average daily amount of such Lender's LC Exposure (excluding
any portion thereof attributable to unreimbursed LC Disbursements and
Documentary Letters of Credit); and (iii) to the Issuing Bank a fronting fee,
which shall accrue at the rate of 1/4 of 1% per annum on the average daily
aggregate face amount of all Letters of Credit during the period from and
including the Effective Date to but excluding the later of the date of
termination of the Commitments and the date on which there ceases to be any LC
Exposure, as well as the Issuing Bank's standard fees with respect to the
issuance, amendment, renewal or extension of any Letter of Credit or processing
of drawings thereunder. Participation fees and fronting fees accrued through and
including the last day of each month shall be payable on the third Business Day
following such last day, commencing on the first such date to occur after the
Effective Date. Any other fees payable to the Issuing Bank pursuant to this
paragraph shall be payable within 10 days after demand. All participation fees
and fronting fees shall be computed on the basis of a year of 360 days and shall
be payable for the actual number of days elapsed (including the first day but
excluding the last day).
(c) The Borrower agrees to pay to the Administrative
Agent, for its own account, fees payable in the amounts and at the times
separately agreed upon between the Borrower and the Administrative Agent.
37
(d) All fees payable hereunder shall be paid on the dates
due, in immediately available funds, to the Administrative Agent (or to the
Issuing Bank, in the case of fees payable to it) for distribution, in the case
of commitment fees and participation fees, to the Lenders entitled thereto.
Absent manifest error in the calculation thereof, fees paid shall not be
refundable under any circumstances.
Section 2.12. Interest.
(a) The Loans comprising each ABR Borrowing (including
each Swingline Loan) shall bear interest at the Alternate Base Rate plus the
Applicable Margin per annum.
(b) The Loans comprising each LIBOR Borrowing shall bear
interest at the Adjusted LIBO Rate for the Interest Period in effect for such
Borrowing plus the Applicable Margin per annum.
(c) Notwithstanding the foregoing, if any principal of or
interest on any Loan or any fee or other amount payable by the Borrower
hereunder is not paid when due, whether at stated maturity, upon acceleration or
otherwise, such overdue amount shall bear interest, after as well as before
judgment, at a rate per annum equal to (i) in the case of overdue principal of
any Loan, 2% plus the rate otherwise applicable to such Loan as provided in the
preceding paragraphs of this Section or (ii) in the case of any other amount, 2%
plus the rate applicable to ABR Loans as provided in paragraph (a) of this
Section.
(d) Accrued interest on each Loan shall be payable in
arrears on each Interest Payment Date for such Loan and upon termination of the
Commitments; provided that (i) interest accrued pursuant to paragraph (c) of
this Section shall be payable on demand, (ii) in the event of any repayment or
prepayment of any Loan (other than a prepayment of an ABR Loan prior to the end
of the Availability Period), accrued interest on the principal amount repaid or
prepaid shall be payable on the date of such repayment or prepayment and (iii)
in the event of any conversion of any LIBOR Loan prior to the end of the current
Interest Period therefor, accrued interest on such Loan shall be payable on the
effective date of such conversion.
(e) All interest hereunder shall be computed on the basis
of a year of 360 days, except that interest computed by reference to the
Alternate Base Rate at times when the Alternate Base Rate is based on the Prime
Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap
year), and in each case shall be payable for the actual number of days elapsed
(including the first day but excluding the last day). The applicable Alternate
Base Rate or Adjusted LIBO Rate shall be determined by the Administrative Agent,
and such determination shall be conclusive absent manifest error.
Section 2.13. Alternate Rate of Interest. If prior to the
commencement of any Interest Period for a LIBOR Borrowing:
(a) the Administrative Agent determines (which
determination shall be conclusive absent manifest error) that adequate and
reasonable means do not exist for ascertaining the Adjusted LIBO Rate for such
Interest Period; or
(b) the Administrative Agent is advised by the Required
Lenders that the Adjusted LIBO Rate for such Interest Period will not adequately
and fairly reflect the cost to such Lenders of making or maintaining their Loans
included in such Borrowing for such Interest Period;
then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a LIBOR
38
Borrowing shall be ineffective and (ii) if any Borrowing Request requests a
LIBOR Borrowing, such Borrowing shall be made as an ABR Borrowing.
Section 2.14. Increased Costs.
(a) If any Change in Law shall:
(i) impose, modify or deem applicable any
reserve, special deposit or similar requirement against assets of, deposits with
or for the account of, or credit extended by, any Lender (except any such
reserve requirement reflected in the Adjusted LIBO Rate) or any Issuing Bank; or
(ii) impose on any Lender or any Issuing Bank or
the London interbank market any other condition affecting this Agreement or
LIBOR Loans made by such Lender or any Letter of Credit or participation
therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any LIBOR Loan (or of maintaining its obligation
to make any such Loan) or to increase the cost to such Lender or such Issuing
Bank of participating in, issuing or maintaining any Letter of Credit or to
reduce the amount of any sum received or receivable by such Lender or such
Issuing Bank hereunder (whether of principal, interest or otherwise), then the
Borrower will pay to such Lender or such Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or such Issuing
Bank, as the case may be, for such additional costs incurred or reduction
suffered.
(b) If any Lender or any Issuing Bank determines that any
Change in Law regarding capital requirements has or would have the effect of
reducing the rate of return on such Lender's or such Issuing Bank's capital or
on the capital of such Lender's or such Issuing Bank's holding company, if any,
as a consequence of this Agreement or the Loans made by, or participations in
Letters of Credit held by, such Lender, or the Letters of Credit issued by such
Issuing Bank, to a level below that which such Lender or such Issuing Bank or
such Lender's or such Issuing Bank's holding company could have achieved but for
such Change in Law (taking into consideration such Lender's or such Issuing
Bank's policies and the policies of such Lender's or an Issuing Bank's holding
company with respect to capital adequacy), then from time to time the Borrower
will pay to such Lender or such Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or such Issuing Bank
or such Lender's or such Issuing Bank's holding company for any such reduction
suffered.
(c) A certificate of a Lender or an Issuing Bank setting
forth the amount or amounts necessary to compensate such Lender or such Issuing
Bank or its holding company, as the case may be, as specified in paragraph (a)
or (b) of this Section shall be delivered to the Borrower and shall be
conclusive absent manifest error. The Borrower shall pay such Lender or such
Issuing Bank, as the case may be, the amount shown as due on any such
certificate within 10 days after receipt thereof.
(d) Failure or delay on the part of any Lender or any
Issuing Bank to demand compensation pursuant to this Section shall not
constitute a waiver of such Lender's or such Issuing Bank's right to demand such
compensation; provided that the Borrower shall not be required to compensate a
Lender or an Issuing Bank pursuant to this Section for any increased costs or
reductions incurred more than 180 days prior to the date that such Lender or
such Issuing Bank, as the case may be, notifies the Borrower of the Change in
Law giving rise to such increased costs or reductions and of such Lender's or
such Issuing Bank's intention to claim compensation therefor; provided further
that, if the Change in Law giving rise to such increased costs or reductions is
retroactive, then the 180-day period referred to above shall be extended to
include the period of retroactive effect thereof.
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Section 2.15. Break Funding Payments. In the event of (a) the
payment of any principal of any LIBOR Loan other than on the last day of an
Interest Period applicable thereto (including as a result of an Event of Default
or as a result of the operation of Section 2.18), (b) the conversion of any
LIBOR Loan other than on the last day of the Interest Period applicable thereto,
(c) the failure to borrow, convert, continue or prepay any Revolving Loan on the
date specified in any notice delivered pursuant hereto (regardless of whether
such notice may be revoked under Section 2.10(c) and is revoked in accordance
therewith), or (d) the assignment of any LIBOR Loan other than on the last day
of the Interest Period applicable thereto as a result of a request by the
Borrower pursuant to Section 2.08(d) or Section 2.18(b), then, in any such
event, the Borrower shall compensate each Lender for the loss, cost and expense
attributable to such event. In the case of a LIBOR Loan, such loss, cost or
expense to any Lender shall be deemed to include an amount determined by such
Lender to be the excess, if any, of (i) the amount of interest which would have
accrued on the principal amount of such Loan had such event not occurred, at the
Adjusted LIBO Rate that would have been applicable to such Loan, for the period
from the date of such event to the last day of the then current Interest Period
therefor (or, in the case of a failure to borrow, convert or continue, for the
period that would have been the Interest Period for such Loan), over (ii) the
amount of interest which would accrue on such principal amount for such period
at the interest rate which such Lender would bid were it to bid, at the
commencement of such period, for dollar deposits of a comparable amount and
period from other banks in the LIBOR market. A certificate of any Lender setting
forth any amount or amounts that such Lender is entitled to receive pursuant to
this Section, shall be delivered to the Borrower and shall be conclusive absent
manifest error. The Borrower shall pay such Lender the amount shown as due on
any such certificate within 10 days after receipt thereof.
Section 2.16. Taxes.
(a) Any and all payments by or on account of any
obligation of the Borrower hereunder or under any other Loan Document shall be
made free and clear of and without deduction for any Indemnified Taxes or Other
Taxes; provided that if the Borrower shall be required to deduct any Indemnified
Taxes or Other Taxes from such payments, then (i) the sum payable shall be
increased as necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section) the
Administrative Agent, Lender or Issuing Bank (as the case may be) receives an
amount equal to the sum it would have received had no such deductions been made,
(ii) the Borrower shall make such deductions and (iii) the Borrower shall pay
the full amount deducted to the relevant Governmental Authority in accordance
with applicable law.
(b) In addition, the Borrower shall pay any Other Taxes
to the relevant Governmental Authority in accordance with applicable law.
(c) The Borrower shall indemnify the Administrative
Agent, each Lender and such Issuing Bank, within 10 days after written demand
therefor, for the full amount of any Indemnified Taxes or Other Taxes paid by
the Administrative Agent, such Lender or such Issuing Bank, as the case may be,
on or with respect to any payment by or on account of any obligation of the
Borrower hereunder or under any other Loan Document (including Indemnified Taxes
or Other Taxes imposed or asserted on or attributable to amounts payable under
this Section) and any penalties, interest and reasonable expenses arising
therefrom or with respect thereto, whether or not such Indemnified Taxes or
Other Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority. A certificate as to the amount of such payment or
liability delivered to the Borrower by a Lender or an Issuing Bank, or by the
Administrative Agent on its own behalf or on behalf of a Lender or an Issuing
Bank, shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority,
the Borrower shall deliver to the Administrative Agent the original or a
certified copy of a receipt issued by such Governmental Authority evidencing
such payment,
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a copy of the return reporting such payment or other evidence of such payment
reasonably satisfactory to the Administrative Agent.
(e) Any Lender that is entitled to an exemption from or
reduction of the deduction, withholding or payment of an Indemnified Tax or
Other Tax under the law of the United States or the jurisdiction in which the
Borrower is located (or any political subdivision thereof), or any treaty to
which such jurisdiction is a party, with respect to payments under this
Agreement shall deliver to the Borrower (with a copy to the Administrative
Agent), at the time or times prescribed by applicable law, such properly
completed and executed documentation prescribed by applicable law or reasonably
requested by the Borrower as will permit such payments to be made without
withholding or at a reduced rate.
(f) If the Administrative Agent or a Lender determines in
good faith, but in its sole discretion, that it has received a refund (or a
reduction in Taxes attributable to foreign tax credits) in respect of any
Indemnified Taxes or Other Taxes as to which it has been indemnified by the
Borrower or with respect to which the Borrower has paid additional amounts
pursuant to this Section 2.16, it shall pay over such refund to the Borrower
(but only to the extent of indemnity payments made, or additional amounts paid,
by the Borrower under this Section 2.16 with respect to the Indemnified Taxes or
Other Taxes giving rise to such refund), net of all out-of-pocket expenses of
the Administrative Agent or such Lender and without interest (other than any
interest paid by the relevant Governmental Authority with respect to such refund
or reduction in Taxes); provided, however, that the Borrower, upon the request
of the Administrative Agent or such Lender, agrees to repay the amount paid over
to the Borrower (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) to the Administrative Agent or such Lender in
the event the Administrative Agent or such Lender is required to repay such
refund to such Governmental Authority. Nothing contained in this Section 2.16(f)
shall require the Administrative Agent or any Lender to make available its tax
returns (or any other information relating to its taxes which it deems
confidential) to the Borrower or any other Person.
Section 2.17. Payments Generally; Pro Rata Treatment; Sharing of
Set-offs; Distribution of Proceeds of Collateral.
(a) The Borrower shall make each payment required to be
made by it hereunder or under any other Loan Document (whether of principal,
interest, fees or reimbursement of LC Disbursements, or of amounts payable under
Sections 2.14, 2.15 or 2.16, or otherwise) prior to 12:00 noon, New York City
time, on the date when due, in immediately available funds, without set-off or
counterclaim. Any amounts received after such time on any date may, in the
discretion of the Administrative Agent, be deemed to have been received on the
next succeeding Business Day for purposes of calculating interest thereon. All
such payments shall be made to the Administrative Agent at its offices at 000
Xxxxx Xxxxxxx Xxxx, 0xx Xxxxx, Xxxxxxxx, Xxx Xxxx, except payments to be made
directly to an Issuing Bank or Swingline Lender as expressly provided herein and
except that payments pursuant to Sections 2.14, 2.15, 2.16 and 9.03 shall be
made directly to the Persons entitled thereto and payments pursuant to other
Loan Documents shall be made to the Persons specified therein. The
Administrative Agent shall distribute any such payments received by it for the
account of any other Person to the appropriate recipient promptly following
receipt thereof. If any payment under any Loan Document shall be due on a day
that is not a Business Day, the date for payment shall be extended to the next
succeeding Business Day, and, in the case of any payment accruing interest,
interest thereon shall be payable for the period of such extension. All payments
under each Loan Document shall be made in dollars.
(b) If at any time insufficient funds are received by and
available to the Administrative Agent to pay fully all amounts of principal,
unreimbursed LC Disbursements, interest and fees then due hereunder, such funds
shall be applied (i) first, towards payment of interest and fees then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of interest and fees then due to such parties, and (ii) second, towards
payment of principal and unreimbursed LC
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Disbursements then due hereunder, ratably among the parties entitled thereto in
accordance with the amounts of principal and unreimbursed LC Disbursements then
due to such parties.
(c) If any Lender shall, by exercising any right of
set-off or counterclaim or otherwise, obtain payment in respect of any principal
of or interest on any of its Revolving Loans or participations in LC
Disbursements or Swingline Loans resulting in such Lender receiving payment of a
greater proportion of the aggregate amount of its Revolving Loans and
participations in LC Disbursements and Swingline Loans and accrued interest
thereon than the proportion received by any other Lender, then the Lender
receiving such greater proportion shall purchase (for cash at face value)
participations in the Revolving Loans and participations in LC Disbursements and
Swingline Loans of other Lenders to the extent necessary so that the benefit of
all such payments shall be shared by the Lenders ratably in accordance with the
aggregate amount of principal of and accrued interest on their respective
Revolving Loans and participations in LC Disbursements and Swingline Loans;
provided that (i) if any such participations are purchased and all or any
portion of the payment giving rise thereto is recovered, such participations
shall be rescinded and the purchase price restored to the extent of such
recovery, without interest, and (ii) the provisions of this paragraph shall not
be construed to apply to any payment made by the Borrower pursuant to and in
accordance with the express terms of this Agreement or any payment obtained by a
Lender as consideration for the assignment of or sale of a participation in any
of its Loans or participations in LC Disbursements to any assignee or
participant, other than to the Borrower or any Subsidiary or Affiliate thereof
(as to which the provisions of this paragraph shall apply). The Borrower
consents to the foregoing and agrees, to the extent it may effectively do so
under applicable law, that any Lender acquiring a participation pursuant to the
foregoing arrangements may exercise against the Borrower rights of set-off and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of the Borrower in the amount of such participation.
(d) Unless the Administrative Agent shall have received
notice from the Borrower prior to the date on which any payment is due to the
Administrative Agent for the account of the Lenders or an Issuing Bank hereunder
that the Borrower will not make such payment, the Administrative Agent may
assume that the Borrower has made such payment on such date in accordance
herewith and may, in reliance upon such assumption, distribute to the Lenders or
Issuing Bank, as the case may be, the amount due. In such event, if the Borrower
has not in fact made such payment, then each of the Lenders or such Issuing
Bank, as the case may be, severally agrees to repay to the Administrative Agent
forthwith on demand the amount so distributed to such Lender or such Issuing
Bank with interest thereon, for each day from and including the date such amount
is distributed to it to but excluding the date of payment to the Administrative
Agent, at the Federal Funds Effective Rate.
(e) If any Lender shall fail to make any payment required
to be made by it pursuant to Section 2.04, 2.05(d) or (e), 2.06(b), 2.17(d) or
9.03(c), then the Administrative Agent may, in its discretion (notwithstanding
any contrary provision hereof), apply any amounts thereafter received by the
Administrative Agent for the account of such Lender to satisfy such Lender's
obligations under such Sections until all such unsatisfied obligations are fully
paid.
(f) Proceeds from the sale of, or other realization upon,
all or any part of the Collateral (including, without limitation, any amounts
paid as adequate protection payments or any other distributions in any
bankruptcy or insolvency proceeding made on or in respect of any Collateral)
when an Event of Default exists and the Collateral Agent has determined to
exercise remedies in the Collateral as a result thereof (other than the remedies
provided for in Section 5.01 of the Security Agreement) shall, notwithstanding
anything in any Loan Document to the contrary, first be applied as payment of
the accrued and unpaid fees of the Administrative Agent and the Collateral Agent
under the Loan Documents and then to all other unpaid or unreimbursed
Obligations (including reasonable attorneys' fees and expenses) owing to either
the Administrative Agent or the Collateral Agent in its capacity as such only
42
and then any remaining amount of such proceeds together with any payments under
any other Loan Documents shall be distributed:
(i) first, to the Secured Parties, pro rata in
accordance with the respective unpaid amounts of all Obligations (other than the
Obligations of the type described in clauses (c) and (d) of the definition
thereof set forth in the Security Agreement), until all such Obligations have
been paid and satisfied in full or cash collateralized;
(ii) second, to the Secured Parties, pro rata in
accordance with the respective unpaid amounts of the Obligations of the type
described in clause (d) of the definition thereof set forth in the Security
Agreement (i.e., those arising in connection with the treasury, depositary and
cash management services), until all such Obligations have been paid and
satisfied in full or cash collateralized;
(iii) third, to the Secured Parties, pro rata in
accordance with the respective unpaid amounts of the Obligations of the type
described in clause (c) of the definition thereof set forth in the Security
Agreement (i.e., those arising in connection with Hedging Agreements), until all
such Obligations have been paid and satisfied in full or cash collateralized;
and
(iv) fourth, to the Secured Parties, pro rata in
accordance with the respective unpaid amounts of any remaining Obligations.
After all the Obligations (including without limitation, all contingent
Obligations) have been paid and satisfied in full, all Commitments terminated
and all other obligations of any Secured Party to any Loan Party otherwise
satisfied, any proceeds of Collateral shall be delivered to the Person entitled
thereto as directed by Borrower or as otherwise determined by applicable law or
applicable court order. Portions of the proceeds of the Collateral distributed
pursuant to the forgoing may thereafter be held by the Collateral Agent, the
Administrative Agent or a Secured Party as collateral for contingent
reimbursement Obligations relating to Letters of Credit or contingent settlement
Obligations relating to Hedging Agreements. In the event that such contingent
Obligations do not become liquidated and are no longer outstanding, the party
holding the proceeds securing such Obligations agrees to return them to the
Collateral Agent for distribution in accordance with this Section 2.17.
(g) Notwithstanding anything contained herein to the
contrary, if the Collateral Agent shall ever acquire any Collateral through
foreclosure or by a conveyance in lieu of foreclosure or by retaining any of the
Collateral in satisfaction of all or part of the Obligations or if any proceeds
of Collateral received by the Collateral Agent to be distributed and shared
pursuant to this Section 2.17 are in a form other than immediately available
funds, the Collateral Agent shall not be required to remit any share thereof
under the terms hereof and the Secured Parties shall only be entitled to their
undivided interests in the Collateral or noncash proceeds as determined by this
Section 2.17. The Secured Parties shall receive the applicable portions (in
accordance with the foregoing paragraph) of any immediately available funds
consisting of proceeds from such Collateral or proceeds of such noncash proceeds
so acquired only if and when received by the Collateral Agent in connection with
the subsequent disposition thereof. While any Collateral or other property to be
shared pursuant to this Section 2.17 is held by the Collateral Agent pursuant to
this paragraph, the Collateral Agent shall hold such Collateral or other
property for the benefit of the Secured Parties and all matters relating to the
management, operation, further disposition or any other aspect of such
Collateral or other property shall be resolved by the agreement of the Required
Lenders.
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Section 2.18. Mitigation Obligations; Replacement of Lenders.
(a) If any Lender requests compensation under Section
2.14, or if the Borrower is required to pay any additional amount to any Lender
or any Governmental Authority for the account of any Lender pursuant to Section
2.16, then such Lender shall use reasonable efforts to designate a different
lending office for funding or booking its Loans hereunder or to assign its
rights and obligations hereunder to another of its offices, branches or
Affiliates, if, in the reasonable judgment of such Lender, such designation or
assignment (i) would eliminate or reduce amounts payable pursuant to Section
2.14 or 2.16, as the case may be, in the future and (ii) would not subject such
Lender to any unreimbursed cost or expense and would not otherwise be
disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable
costs and expenses incurred by any Lender in connection with any such
designation or assignment.
(b) If any Lender requests compensation under Section
2.14, or if the Borrower is required to pay any additional amount to any Lender
or any Governmental Authority for the account of any Lender pursuant to Section
2.16, or if any Lender defaults in its obligation to fund Loans hereunder, then
the Borrower may, at its sole expense and effort, upon notice to such Lender and
the Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.04), all its interests, rights and obligations under this Agreement to
an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided that (i) the Borrower
shall have received the prior written consent of the Administrative Agent, which
consent shall not be unreasonably withheld, (ii) such Lender shall have received
payment of an amount equal to the outstanding principal of its Loans and
participations in LC Disbursements and Swingline Loans, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder, from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Borrower (in the case of all other amounts) and (iii) in the case
of any such assignment resulting from a claim for compensation under Section
2.14 or payments required to be made pursuant to Section 2.16, such assignment
will result in a material reduction in such compensation or payments. A Lender
shall not be required to make any such assignment and delegation if, prior
thereto, as a result of a waiver by such Lender or otherwise, the circumstances
entitling the Borrower to require such assignment and delegation cease to apply.
ARTICLE III.
Representations and Warranties
------------------------------
The Borrower represents and warrants to the Lenders that:
Section 3.01. Organization; Powers. Each of the Borrower and its
Subsidiaries is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, has all requisite power and
authority to carry on its business as now conducted and, except where the
failure to do so, individually or in the aggregate, would not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in,
and is in good standing in, every jurisdiction where such qualification is
required.
Section 3.02. Authorization; Enforceability. The Transactions to be
entered into by each Loan Party are within such Loan Party's corporate powers
and have been duly authorized by all necessary corporate and, if required,
stockholder action. This Agreement has been duly executed and delivered by the
Borrower and constitutes, and each other Loan Document to which any Loan Party
is to be a party, when executed and delivered by such Loan Party, will
constitute, a legal, valid and binding obligation of such Loan Party (as the
case may be), enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors' rights generally and
44
subject to general principles of equity, regardless of whether considered in a
proceeding in equity or at law.
Section 3.03. Governmental Approvals; No Conflicts. The
Transactions (a) do not require any consent or approval of, registration or
filing with, or any other action by, any Governmental Authority, except (i) such
as have been obtained or made and are in full force and effect, (ii) filings
necessary to perfect Liens created under the Loan Documents, and (iii) routine
corporate filings to maintain the good standing of the Borrower and its
Subsidiaries, (b) will not violate any applicable law or regulation or the
charter, by-laws or other organizational documents of the Borrower or any of its
Subsidiaries or any order of any Governmental Authority, (c) will not violate or
result in a default under any indenture, agreement or other instrument binding
upon the Borrower or any of its Subsidiaries or its assets, or give rise to a
right thereunder to require any payment (other than the payments required to be
made under the Loan Documents and the Original Credit Agreement) to be made by
the Borrower or any of its Subsidiaries, provided that the representation in
this clause (c) is subject to obtaining certain consents that are required under
certain of such agreements or other instruments, which either have been obtained
or the failure to obtain such consents would not reasonably be expected to have
a Material Adverse Effect and (d) will not result in the creation or imposition
of any Lien on any asset of the Borrower or any of its Subsidiaries, except
Liens created under the Loan Documents.
Section 3.04. Financial Condition; No Material Adverse Change.
(a) The Borrower has heretofore furnished to the Lenders:
(i) its consolidated balance sheet and statements of operations, stockholders'
equity and cash flows as of and for the fiscal year ended on February 1, 2003,
reported on by Deloitte & Touche LLP independent public accountants; and (ii)
its unaudited consolidated balance sheet and statements of operations,
stockholders' equity and cash flows as of and for the fiscal month ended on or
about March 31, 2003 and the portion of the fiscal year then ended. Such
financial statements present fairly, in all material respects, the financial
position and results of operations and cash flows of the Borrower as of such
dates and for such periods in accordance with GAAP, subject, in the case of the
fiscal month end statements, to normal year-end adjustments..
(b) The Borrower has heretofore furnished to the Lenders
its pro forma consolidated and consolidating statements of operation, balance
sheets and cash flow projections (including detailed capital expenditures) for
the fiscal year ending on or approximately January 31, 2004, and on an annual
basis for fiscal years 2004 through 2007. Such pro forma consolidated balance
sheet: (i) has been prepared in good faith, (ii) is based upon assumptions
believed by management of the Borrower to be reasonable at the time, it being
recognized that actual results during the period or periods covered by such
information may differ materially from the projected or estimated results set
forth therein, and (iii) accurately reflects all adjustments necessary to give
effect to the Transactions.
(c) Except: (i) as disclosed in the financial statements
referred to above or the notes thereto or in the Information Memorandum and (ii)
for the Disclosed Matters, none of the Borrower or its Subsidiaries has, as of
the Effective Date, any material contingent liabilities, unusual long-term
commitments or unrealized losses.
(d) Since February 1, 2003, there has been no material
adverse change in the business, assets, operations, prospects or condition,
financial or otherwise, of the Borrower and its Subsidiaries, taken as a whole.
45
Section 3.05. Properties.
(a) Each of the Borrower and its Subsidiaries has good
title to, or valid leasehold interests in, all its real and personal property
material to its business (including the Collateral), except for minor defects in
title that do not interfere with its ability to conduct its business as
currently conducted or to utilize such properties for their intended purposes
free and clear of Liens other than Permitted Encumbrances and Liens permitted by
Section 6.02.
(b) Each of the Borrower and its Subsidiaries owns, or is
licensed to use, all trademarks, trade names, copyrights, patents and other
intellectual property material to its business, and the use thereof by the
Borrower and its Subsidiaries does not infringe upon the rights of any other
Person, except for any such infringements that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
Section 3.06. Litigation and Environmental Matters.
(a) There are no actions, suits or proceedings by or
before any arbitrator or Governmental Authority pending against or, to the
knowledge of the Borrower, threatened against or affecting the Borrower or any
of its Subsidiaries (i) as to which there is a reasonable possibility of an
adverse determination and that, if adversely determined, could reasonably be
expected, individually or in the aggregate, to result in a Material Adverse
Effect or (ii) that involve any of the Loan Documents or the Transactions.
(b) Except with respect to any other matters that,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect, neither the Borrower nor any of its Subsidiaries (i)
has failed to comply with any Environmental Law or to obtain, maintain or comply
with any permit, license or other approval required under any Environmental Law,
(ii) has become subject to any Environmental Liability, (iii) has received
notice of any claim with respect to any Environmental Liability or (iv) knows of
any basis for any Environmental Liability.
(c) Since the date of this Agreement, there has been no
change in the status of the Disclosed Matters that, individually or in the
aggregate, has resulted in, or materially increased the likelihood of, a
Material Adverse Effect.
Section 3.07. Compliance with Laws and Agreements. Each of the
Borrower and its Subsidiaries is in compliance with all laws, regulations and
orders of any Governmental Authority applicable to it or its property and all
indentures, agreements and other instruments binding upon it or its property,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect. No Default has
occurred and is continuing.
Section 3.08. Investment and Holding Company Status. Neither the
Borrower nor any of its Subsidiaries is (a) an "investment company" as defined
in, or subject to regulation under, the Investment Company Act of 1940 or (b) a
"holding company" as defined in, or subject to regulation under, the Public
Utility Holding Company Act of 1935.
Section 3.09. Taxes. Each of the Borrower and its Subsidiaries has
timely filed or caused to be filed all income tax returns and other material Tax
returns and reports required to have been filed and has paid or caused to be
paid all Taxes required to have been paid by it, except (a) Taxes that are being
contested in good faith by appropriate proceedings and for which the Borrower or
such Subsidiary, as applicable, has set aside on its books adequate reserves or
(b) to the extent that the failure to do so would not reasonably be expected to
result in a Material Adverse Effect.
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Section 3.10. ERISA. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events for
which liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts, exceed by more
than $2,000,000 the fair market value of the assets of such Plan, and the
present value of all accumulated benefit obligations of all underfunded Plans
(based on the assumptions used for purposes of Statement of Financial Accounting
Standards No. 87) did not, as of the date of the most recent financial
statements reflecting such amounts, exceed by more than $5,000,000 of the fair
market value of the assets of all such underfunded Plans.
Section 3.11. Disclosure. The Borrower has disclosed to the Lenders
all agreements, instruments and corporate or other restrictions to which the
Borrower or any of its Subsidiaries is subject, and all other matters known to
any of them, that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect. Neither the Information
Memorandum nor any other reports, financial statements, certificates or other
information furnished by or on behalf of any Loan Party to the Administrative
Agent or any Lender in connection with the negotiation of this Agreement or any
other Loan Document or delivered hereunder or thereunder contained, as of the
date that such Information Memorandum, report, financial statement, certificate
or other information was so furnished, any material misstatement of fact or
omitted to state any material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not materially
misleading; provided that, with respect to projected financial information
contained in the materials referred to above, the Borrower represents only that
such information was prepared in good faith based upon assumptions believed by
management of the Borrower to be reasonable at the time, it being recognized
that actual results during the period or periods covered by such information may
differ from the projected or estimated results set forth therein.
Section 3.12. Subsidiaries. As of the Effective Date, the Borrower
has no Subsidiaries other than those listed on Schedule 3.12 hereto. As of the
Effective Date, Schedule 3.12 sets forth the jurisdiction of incorporation or
organization of each such Subsidiary, the percentage of the Borrower's ownership
of the outstanding Equity Interests of each Subsidiary directly owned by the
Borrower, the percentage of each Subsidiary's ownership of the outstanding
Equity Interests of each other Subsidiary and the authorized, issued and
outstanding Equity Interests of each Subsidiary. All of the outstanding Equity
Interests of each Subsidiary has been validly issued, are fully paid, and
nonassessable. Except as permitted to be issued or created pursuant to the terms
hereof or as reflected on Schedule 3.12, there are no outstanding subscriptions,
options, warrants, calls, or rights (including preemptive rights) to acquire,
and no outstanding securities or instruments convertible into any Equity
Interests of any Subsidiary.
Section 3.13. Insurance. Schedule 3.13 sets forth a description of
all insurance maintained by or on behalf of the Borrower and its Subsidiaries as
of the Effective Date. As of the Effective Date, all premiums in respect of such
insurance have been paid. The Borrower believes that the insurance maintained by
or on behalf of the Borrower and its Subsidiaries is adequate.
Section 3.14. Labor Matters. As of the Effective Date, there are no
strikes, lockouts or slowdowns against the Borrower or any Subsidiary pending
or, to the knowledge of the Borrower, threatened. Except for any violations and
failures to make payments that, in the aggregate, would not reasonably be
expected to have a Material Adverse Effect (a) the Borrower and the Subsidiaries
have not been in violation of the Fair Labor Standards Act or any other
applicable Federal, state, local or foreign law dealing with the hours worked by
or payments made to employees or any similar matters and (b) all payments due
from the Borrower or any Subsidiary, or for which any claim may be made against
the Borrower or any Subsidiary, on account of wages and employee health and
welfare insurance and other benefits, have been paid or accrued as a liability
on the books of the Borrower or such Subsidiary. The
47
consummation of the Transactions will not give rise to any right of termination
or right of renegotiation on the part of any union under any collective
bargaining agreement to which the Borrower or any Subsidiary is bound.
Section 3.15. Solvency. As of the Effective Date and immediately
following the making of each Loan made on the Effective Date and after giving
effect to the application of the proceeds of such Loans, (a) the fair value of
the assets of each Loan Party, at a fair valuation, will exceed its debts and
liabilities, subordinated, contingent or otherwise; (b) the present fair
saleable value of the property of each Loan Party will be greater than the
amount that will be required to pay the probable liability of its debts and
other liabilities, subordinated, contingent or otherwise, as such debts and
other liabilities become absolute and matured; (c) each Loan Party will be able
to pay its debts and liabilities, subordinated, contingent or otherwise, as such
debts and liabilities become absolute and matured; and (d) each Loan Party will
not have unreasonably small capital with which to conduct the business in which
it is engaged as such business is now conducted and is proposed to be conducted
following the Effective Date.
Section 3.16. Security Documents.
(a) The Pledge Agreement is effective to create in favor
of the Collateral Agent, for the ratable benefit of the Secured Parties, a
legal, valid and enforceable security interest in the Collateral (as defined in
the Pledge Agreement) and, when such Collateral is delivered to the Collateral
Agent, the Pledge Agreement shall constitute a fully perfected first priority
Lien on, and security interest in, all right, title and interest of each pledgor
thereunder in such Collateral, in each case prior and superior in right to any
other Person.
(b) The Security Agreement is effective to create in
favor of the Collateral Agent, for the ratable benefit of the Secured Parties, a
legal, valid and enforceable security interest in the Collateral (as defined in
the Security Agreement) and, when financing statements in appropriate form are
filed in the offices specified on Schedule 6 to the Perfection Certificate, the
Security Agreement shall constitute a fully perfected Lien on, and security
interest in, all right, title and interest of the grantors thereunder in such
Collateral, to the extent that a security interest can be perfected in such
Collateral by filing, recording or registering a financing statement or
analogous document in the United States of America (or any political subdivision
thereof) and its territories and possessions pursuant to the Uniform Commercial
Code or other applicable law in such jurisdiction, in each case prior and
superior in right to any other Person, other than with respect to Liens
expressly permitted by Section 6.02.
(c) When the Security Agreement or evidence thereof is
filed in the United States Patent and Trademark Office and the United States
Copyright Office, the Security Agreement shall constitute a fully perfected Lien
on, and security interest in, all right, title and interest of the Loan Parties
in the Intellectual Property (as defined in the Security Agreement) in which a
security interest may be perfected by filing, recording or registering a
security agreement, financing statement or analogous document in the United
States Patent and Trademark Office or the United States Copyright Office, as
applicable, in each case prior and superior in right to any other Person other
than Liens expressly permitted by Section 6.02 (it being understood that
subsequent recordings in the United States Patent and Trademark Office and the
United States Copyright Office may be necessary to perfect a Lien on registered
trademarks, trademark applications and copyrights acquired by the Loan Parties
after the date hereof).
Section 3.17. Margin Securities. Neither the Borrower nor any
Subsidiary is engaged principally, or as one of its important activities, in the
business of extending credit for the purpose of purchasing or carrying margin
stock (within the meaning of Regulations U or X of the Board of Governors of the
Federal Reserve System), and no part of the proceeds of any Loan will be used to
48
purchase or carry any margin stock or to extend credit to others for the purpose
of purchasing or carrying margin stock.
ARTICLE IV.
Conditions
----------
Section 4.01. Effective Date. The effectiveness of this Agreement
to amend and restate the Original Credit Agreement and the obligations of the
Lenders to make Loans and of the Issuing Banks to issue Letters of Credit
hereunder shall not become effective until the date on which each of the
following conditions is satisfied (or waived in accordance with Section 9.02):
(a) The Administrative Agent (or its counsel) shall have
received from each party hereto either (i) a counterpart of this Agreement
signed on behalf of such party or (ii) written evidence satisfactory to the
Administrative Agent (which may include telecopy transmission of a signed
signature page of this Agreement) that such party has signed a counterpart of
this Agreement.
(b) The Administrative Agent shall have received
favorable written opinions (addressed to the Administrative Agent and the
Lenders and dated the Effective Date) of counsel substantially in the forms of
Exhibit X-0, X-0, and B-3 (with the form of opinion attached as Exhibit B-3
being delivered for each Subsidiary) or in such other form as the Administrative
Agent shall approve. The Borrower hereby requests such counsel to deliver such
opinions.
(c) The Administrative Agent shall have received such
documents and certificates as the Administrative Agent or its counsel may
reasonably request relating to the organization, existence and good standing of
each Loan Party, the authorization of the Transactions and any other legal
matters relating to the Loan Parties, the Loan Documents or the Transactions,
all in form and substance satisfactory to the Administrative Agent and its
counsel.
(d) The Administrative Agent shall have received evidence
that the assignments contemplated by that certain Master Assignment and
Assumption Agreement dated as of April 25, 2003, among certain of the Lenders
and certain of the lenders party to the Original Credit Agreement (as agreed to
and acknowledged by the Borrower and the Administrative Agent) shall have been
consummated.
(e) The Administrative Agent shall have received evidence
of: (i) the termination of all Libor interest periods outstanding under the
Original Credit Agreement; and (ii) the payment of all unpaid interest and fees
accrued under the Original Credit Agreement to the Effective Date, together with
all other fees, expenses and other charges outstanding thereunder including
amounts due under Section 2.15 of the Original Credit Agreement as a result of
the termination of the interest periods thereunder on the Effective Date.
(f) The Administrative Agent shall have received a
certificate, dated the Effective Date and signed by the President, a Vice
President or a Financial Officer of the Borrower, confirming compliance with the
conditions set forth in paragraphs (a), (b) and (c) of Section 4.02.
(g) The Administrative Agent shall have received all fees
and other amounts due and payable on or prior to the Effective Date, including,
all upfront fees the Borrower has agreed to pay to the Administrative Agent and
the Lenders and, to the extent invoiced, all out-of-pocket expenses required to
be reimbursed or paid by any Loan Party hereunder or under any other Loan
Document.
(h) The Administrative Agent shall have received any
promissory note requested by a Lender pursuant to Section 2.09(e) payable to the
order of such requesting Lender and counterparts of
49
the Security Agreement and the First Amendment to Pledge Agreement in the form
attached hereto as Exhibit F, in each case, signed on behalf of the Borrower and
the Subsidiary Loan Parties, together with the following:
(i) all documents and instruments, including
Uniform Commercial Code financing statements, required by law or reasonably
requested by the Administrative Agent to be filed, registered or recorded to
create or perfect the Liens intended to be created under the Security Agreement,
including without limitation, the Trademark Security Agreement attached hereto
as Exhibit G signed on behalf of Xxxxxx'x Nevada, Inc.; and
(ii) a completed Perfection Certificate dated the
Effective Date and signed by an executive officer or Financial Officer of the
Borrower, together with all attachments contemplated thereby, including the
results of a search of the Uniform Commercial Code (or equivalent) filings made
with respect to the Loan Parties in the jurisdictions contemplated by the
Perfection Certificate and copies of the financing statements (or similar
documents) disclosed by such search and evidence reasonably satisfactory to the
Administrative Agent that the Liens indicated by such financing statements (or
similar documents) are permitted by Section 6.02 or have been released.
(i) The Administrative Agent shall have received evidence
satisfactory to it that the insurance required by Section 5.07 is in effect and
evidence that it has been named loss payee on all casualty insurance policies
covering Collateral and additional insured on all commercial liability policies.
(j) All consents and approvals required to be obtained
from any Governmental Authority or other Person in connection with the
Transactions shall have been obtained without the imposition of any burdensome
conditions.
(k) The Administrative Agent shall have received a
completed Borrowing Base Certificate dated as of March 31, 2003 and signed by a
Financial Officer of the Borrower.
(l) The Administrative Agent shall have received the
Borrower's audited consolidated financial statements for the fiscal year ended
on February 1, 2003.
The Administrative Agent shall notify the Borrower and the Lenders of
the Effective Date, and such notice shall be conclusive and binding.
Notwithstanding the foregoing, the obligations of the Lenders to make Loans and
of an Issuing Bank to issue Letters of Credit hereunder shall not become
effective unless each of the foregoing conditions is satisfied (or waived
pursuant to Section 9.02) at or prior to 5:00 p.m., New York City time, on June
30, 2003 (and, in the event such conditions are not so satisfied or waived, the
Commitments shall terminate at such time).
Section 4.02. Each Credit Event. The obligation of each Lender to
make a Loan on the occasion of any Borrowing, and of any Issuing Bank to issue,
amend, renew or extend any Letter of Credit, is subject to receipt of the
request therefor in accordance herewith and to the satisfaction of the following
conditions:
(a) The representations and warranties of each Loan Party
set forth in the Loan Documents shall be true and correct in all material
respects on and as of the date of such Borrowing or the date of issuance,
amendment, renewal or extension of such Letter of Credit, as applicable.
(b) At the time of and immediately after giving effect to
such Borrowing or the issuance, amendment, renewal or extension of such Letter
of Credit, as applicable, no Default shall have occurred and be continuing.
50
(c) At the time of and immediately after giving effect to
such Borrowing or the issuance, amendment, renewal or extension of such Letter
of Credit, as applicable, the total Revolving Exposures shall not exceed the
lesser of the Borrowing Base or the Commitments then in effect.
Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by the
Borrower on the date thereof as to the matters specified in paragraphs (a), (b)
and (c) of this Section.
Section 4.03. Effective Date Advances and Adjustments. On the
Effective Date, the aggregate amount of the commitments under the Original
Credit Agreement are being increased hereunder but not all Lenders are providing
their Applicable Percentage (determined under the Original Credit Agreement) of
the amount of the increase. As a result, the loans outstanding under the
Original Credit Agreement which are continued hereunder will not be held pro
rata by the Lenders in accordance with the Applicable Percentage determined
hereunder. To remedy the forgoing, on the Effective Date and upon fulfillment of
the conditions in Section 4.01, the Lenders shall make advances among themselves
so that after giving effect thereto the Loans (which are not Swingline Loans)
will be held by the Lenders, pro rata in accordance with the Applicable
Percentage hereunder. The advances made on the Effective Date under this Section
4.03 by each Lender whose Applicable Percentage has increased (as compared to
its "Applicable Percentage" under the Original Credit Agreement) shall be deemed
to be a purchase of a corresponding amount of the Loans of the Lender or Lenders
whose Applicable Percentage have decreased (as compared to the "Applicable
Percentage" under the Original Credit Agreement). The advances made under this
Section 4.03 shall be ABR Loans made under each Lender's Commitment. All
advances made under this Section 4.03 and to "Assignors" under the Master
Assignment and Acceptance dated as of the date hereof on the Effective Date
shall be made through the Administrative Agent.
ARTICLE V.
Affirmative Covenants
---------------------
Until the Commitments have expired or been terminated and the principal
of and interest on each Loan and all fees payable hereunder shall have been paid
in full and all Letters of Credit shall have expired or terminated and all LC
Disbursements shall have been reimbursed, the Borrower covenants and agrees with
the Lenders that:
Section 5.01. Financial Statements and Other Information. The
Borrower will furnish to the Administrative Agent for distribution to each
Lender:
(a) within 90 days after the end of each fiscal year of
the Borrower, the Borrower's audited consolidated and, to the extent there are
any Subsidiaries that are engaged in retail business, unaudited consolidating
balance sheets and related statements of operations, stockholders' equity and
cash flows as of the end of and for such year, setting forth in each case in
comparative form the figures for the previous fiscal year, all reported on by
Deloitte & Touche LLP or other independent public accountants of recognized
national standing (without a "going concern" or like qualification or exception
and without any qualification or exception as to the scope of such audit) to the
effect that such consolidated financial statements present fairly in all
material respects the financial condition and results of operations of the
Borrower and its consolidated Subsidiaries on a consolidated basis in accordance
with GAAP consistently applied;
(b) within 45 days after the end of each of the first
three fiscal quarters of each fiscal year of the Borrower, the Borrower's
consolidated and, to the extent there are any Subsidiaries that are engaged in
retail business, consolidating balance sheet and related statements of
operations, stockholders' equity and cash flows and cash flows as of the end of
and for such fiscal quarter and the then elapsed
51
portion of the fiscal year, setting forth in each case in comparative form the
figures for the corresponding period or periods of (or, in the case of the
balance sheet, as of the end of) the previous fiscal year, all certified by one
of its Financial Officers as presenting fairly in all material respects the
financial condition and results of operations of the Borrower and its
consolidated Subsidiaries on a consolidated and, if applicable, consolidating
basis in accordance with GAAP consistently applied, subject to normal year-end
audit adjustments and the absence of footnotes;
(c) within 21 days after the end of each month (other
than the last month) of each fiscal quarter of the Borrower, the Borrower's
consolidated balance sheet and related statements of operations, stockholders'
equity, and cash flows as of the end of and for such fiscal month and the then
elapsed portion of the fiscal year, all certified by one of its Financial
Officers as presenting in all material respects the financial condition and
results of operations of the Borrower and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied, subject to
normal year-end audit adjustments and the absence of footnotes;
(d) concurrently with any delivery of financial
statements under clause (a) or (b) above, a certificate of a Financial Officer
of the Borrower (i) certifying as to whether a Default has occurred and, if a
Default has occurred, specifying the details thereof and any action taken or
proposed to be taken with respect thereto, (ii) setting forth reasonably
detailed calculations demonstrating compliance with Section 6.13, (iii) setting
forth reasonably detailed calculations of the Borrower's Consolidated EBITDA for
the four fiscal quarters then ended and, if required, demonstrating compliance
with Section 6.12, (iv) setting forth reasonably detailed calculations
demonstrating the calculation of the Applicable Margin and the Commitment Fee
Rate for the upcoming fiscal quarter, and (iv) stating whether any change in
GAAP or in the application thereof has occurred since the date of the Borrower's
audited financial statements referred to in Section 3.04 and, if any such change
has occurred, specifying the effect of such change on the financial statements
accompanying such certificate;
(e) concurrently with any delivery of financial
statements under clause (a) above, a certificate of the accounting firm that
reported on such financial statements stating whether they obtained knowledge
during the course of their examination of such financial statements of any Event
of Default arising as a result of the violation of Section 6.12 (which
certificate may be limited to the extent required by accounting rules or
guidelines);
(f) within 15 days after the end of each month: (i) a
completed Borrowing Base Certificate calculating and certifying the Borrowing
Base as of the last day of such month, signed on behalf of the Borrower by a
Financial Officer; provided that:
(A) If at any time Availability is less
than or equal to $15,000,000, the Borrower shall furnish to the Administrative
Agent a weekly computation of the Borrowing Base, in which case such completed
and signed Borrowing Base Certificate shall be delivered within three Business
Days after the end of each week certifying and calculating the Borrowing Base as
of the last day of such week; provided that when the Borrower has notified the
Administrative Agent that Availability has been equal to or more than
$20,000,000 for 90 consecutive days, the Borrower shall not be subject to the
requirements of this subclause (A) unless and until Availability is less than or
equal to $15,000,000 on a subsequent occasion; and
(B) the Borrower may, at its option,
deliver a Borrowing Base Certificate at any time (but not more frequently than
once in any week) in order to establish a new Borrowing Base;
(ii) a detailed report of Credit Card Receivables for the relevant period, (iii)
a report showing all amounts payable by the Borrower and each Subsidiary Loan
Party to the issuers or Payment Processors who are
52
obligated in respect of the Credit Card Receivables included in the Borrowing
Base, (iv) a sales and collections report, and (v) inventory stock reports and
inventory designations, in each in form and substance reasonably acceptable to
the Administrative Agent and certified on behalf of the Borrower by a Financial
Officer;
(g) as soon as the same are available, but in no event
more than 90 days after the commencement of each fiscal year of the Borrower, a
detailed consolidated budget for such fiscal year (including a projected
consolidated balance sheet and related statements of projected operations and
cash flow prepared by the Borrower on a monthly basis for the current fiscal
year and setting forth the assumptions used for purposes of preparing such
budget) and, promptly when available, any significant revisions of such budget;
(h) promptly after the same become publicly available,
copies of all periodic and other reports, proxy statements and other materials
filed by the Borrower or any Subsidiary with the Securities and Exchange
Commission, or any Governmental Authority succeeding to any or all of the
functions of said Commission, or with any national securities exchange, or
distributed by the Borrower to its shareholders generally, as the case may be;
(i) promptly following any request therefor, such other
information regarding the operations, business affairs and financial condition
of the Borrower or any Subsidiary, or compliance with the terms of any Loan
Document, as the Administrative Agent or any Lender may reasonably request; and
(j) at the same time as it delivers the financial
statements required under the provisions of this Section 5.01(a), a copy of the
"management letter" (if any) delivered to the Borrower by its independent
certified public accountants in connection with the delivery of such financial
statements.
Section 5.02. Notices of Material Events. The Borrower will furnish
to the Administrative Agent and each Lender prompt written notice of the
following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or
proceeding by or before any arbitrator or Governmental Authority against or
affecting the Borrower or any of its Subsidiaries in which the amount claimed is
$2,500,000 or more and is not covered by insurance or in which injunctive or
similar relief is sought that, if adversely determined, could reasonably be
expected to result in a Material Adverse Effect;
(c) the occurrence of any ERISA Event that, alone or
together with any other ERISA Events that have occurred, could reasonably be
expected to result in liability of the Borrower and its Subsidiaries in an
aggregate amount exceeding $2,500,000; and
(d) any other development that results in, or could
reasonably be expected to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.
Section 5.03. Information Regarding Collateral.
(a) The Borrower will furnish to the Administrative Agent
thirty days prior written notice of any change: (a) in any Loan Party's
corporate name, (b) in the location of any Loan Party's chief
53
executive office, its principal place of business, any office in which it
maintains books or records relating to Collateral owned by it or any office or
facility at which Collateral owned by it is located (including the establishment
of any such new office or facility), other than changes in location of
collateral that is in transit to an office or facility of which the
Administrative Agent already has notice, (c) in any Loan Party's identity,
jurisdiction of organization or corporate structure or (d) in any Loan Party's
Federal Taxpayer Identification Number or state organizational number. The
Borrower agrees promptly to notify the Administrative Agent if any material
portion of the Collateral is damaged or destroyed.
(b) Each year, at the time of delivery of annual
financial statements with respect to the preceding fiscal year pursuant to
clause (a) of Section 5.01, the Borrower shall deliver to the Administrative
Agent a certificate of a Financial Officer of the Borrower: (i) setting forth
the information required pursuant to the Perfection Certificate or confirming
that there has been no change in such information since the date of the
Perfection Certificate delivered on the Effective Date or the date of the most
recent certificate delivered pursuant to this Section and (ii) certifying that
all Uniform Commercial Code financing statements or other appropriate filings,
recordings or registrations, including all refilings, rerecordings and
reregistrations, containing a description of the Collateral have been filed of
record in each governmental, municipal or other appropriate office in each
jurisdiction identified pursuant to clause (i) above to the extent necessary to
protect and perfect the security interests under the Security Agreement in such
jurisdictions for a period of not less than 18 months after the date of such
certificate (except as noted therein with respect to any continuation statements
to be filed within such period).
Section 5.04. Existence; Conduct of Business. The Borrower will,
and will cause each of the Subsidiaries to, do or cause to be done all things
necessary to preserve, renew and keep in full force and effect its legal
existence and the rights, licenses, permits, privileges, franchises, patents,
copyrights, trademarks and trade names material to the conduct of its business;
provided that the foregoing shall not prohibit any merger, consolidation,
liquidation or dissolution permitted under Section 6.03.
Section 5.05. Payment of Obligations. The Borrower will, and will
cause each of its Subsidiaries to, pay its Indebtedness and other obligations,
including Tax liabilities and Leasehold Obligations, before the same shall
become delinquent or in default, except where (a) the validity or amount thereof
is being contested in good faith by appropriate proceedings, (b) the Borrower or
such Subsidiary has set aside on its books adequate reserves with respect
thereto in accordance with GAAP, (c) such contest effectively suspends
collection of the contested obligation and the enforcement of any Lien securing
such obligation and (d) the failure to make payment pending such contest would
not reasonably be expected to result in a Material Adverse Effect.
Section 5.06. Maintenance of Properties. The Borrower will, and
will cause each of its Subsidiaries to, keep and maintain all property material
to the conduct of its business in good working order and condition, ordinary
wear and tear excepted.
Section 5.07. Insurance.
(a) The Borrower will, and will cause each of its
Subsidiaries to, maintain, with financially sound and reputable insurance
companies (i) adequate insurance for its insurable properties, all to such
extent and against such risks, including fire, casualty and other risks insured
against by extended coverage, as is customary with companies in the same or
similar businesses operating in the same or similar locations, (ii) such other
insurance as is required pursuant to the terms of any Security Document and
(iii) business interruption insurance, insuring against loss of gross earnings
for a period of not less than 12 months arising from any risks or occurrences
required to be covered by insurance pursuant to this Section 5.07.
54
(b) Fire and extended coverage policies maintained with
respect to any Collateral shall be endorsed or otherwise amended to include (i)
a non-contributing mortgage clause (regarding improvements to real property) and
lenders' loss payable clause (regarding personal property), in each case in
favor of the Collateral Agent and providing for losses thereunder to be payable
to the Collateral Agent or its designee, (ii) a provision to the effect that
neither the Collateral Agent nor any other party shall be a coinsurer and (iii)
such other provisions as the Administrative Agent may reasonably require from
time to time to protect the interests of the Lenders. Commercial general
liability policies shall be endorsed to name the Collateral Agent as an
additional insured. Business interruption policies shall name the Collateral
Agent as loss payee. Each such policy referred to in this paragraph also shall
provide that it shall not be canceled, modified or not renewed (i) by reason of
nonpayment of premium except upon not less than 10 days' prior written notice
thereof by the insurer to the Collateral Agent (giving the Collateral Agent the
right to cure defaults in the payment of premiums) or (ii) for any other reason
except upon not less than 30 days' prior written notice thereof by the insurer
to the Collateral Agent. The Borrower shall deliver to the Administrative Agent,
prior to the cancellation, modification or non-renewal of any such policy of
insurance, a copy of a renewal or replacement policy (or other evidence of
renewal of a policy previously delivered to the Administrative Agent) together
with evidence satisfactory to the Administrative Agent of payment of the premium
therefor.
Section 5.08. Casualty and Condemnation.
(a) The Borrower will furnish to the Administrative Agent
and the Lenders prompt written notice of any casualty or other insured damage to
any material portion of any Collateral or the commencement of any action or
proceeding for the taking of any Collateral or any part thereof or interest
therein under power of eminent domain or by condemnation or similar proceeding.
(b) If any event described in paragraph (a) of this
Section results in Net Cash Proceeds (whether in the form of insurance proceeds,
condemnation award or otherwise) payable with respect to any Collateral, the
Collateral Agent is authorized to collect such Net Cash Proceeds and, if
received by the Borrower or any Subsidiary, such Net Cash Proceeds shall be
treated as Daily Receipts (as defined in the Security Agreement) and paid over
to the Collateral Agent as required by Section 5.01 of the Security Agreement;
provided that notwithstanding anything in the Security Agreement to the
contrary, (i) if the aggregate Net Cash Proceeds in respect of such event (other
than proceeds of business income insurance) are less than $1,000,000, such Net
Cash Proceeds shall be paid over to the Borrower unless an Event of Default has
occurred and is continuing, and (ii) all proceeds of business income insurance
(including any remaining business interruption insurance proceeds payable in
connection with the casualty loss to the Borrower's Greenwood Indiana store)
shall be paid over to the Borrower unless an Event of Default has occurred and
is continuing.
Section 5.09. Books and Records; Inspection and Audit Rights.
(a) Books and Records; Inspection. The Borrower will, and
will cause each of its Subsidiaries to, keep proper books of record and account
in which full, true and correct entries are made of all dealings and
transactions in relation to its business and activities. The Borrower will, and
will cause each of its Subsidiaries to, permit any representatives designated by
the Administrative Agent or any Lender, upon reasonable prior notice, to visit
and inspect its properties, to examine and make extracts from its books and
records, and to discuss its affairs, finances and condition with its officers
and independent accountants, all at such reasonable times and as often as
reasonably requested; provided that the Borrower shall be given the opportunity
to be present at any discussion with its independent accountants.
(b) Field Examinations. The Borrower will, and will cause
each of its Subsidiaries to, permit the Administrative Agent or any
representatives designated by the Administrative Agent
55
(including any consultants, accountants, lawyers and appraisers) to conduct two
commercial field examinations of the assets included in the Borrowing Base prior
to the first anniversary of the Effective Date and one such field examination in
each twelve month period following the first anniversary of the Effective Date
(each twelve month period following the Effective Date, herein a "Loan Year").
Notwithstanding the foregoing, during the time that an Event of Default arising
as a result of the failure to comply with the obligations under Section 5.01(f),
under clause (c) of Section 7.01 with respect to any Borrowing Base Certificate
or any financial statement, or under clauses (a), (b), (d), (f) through (k), (m)
or (o) of Section 7.01 (collectively, the "Significant Events of Defaults")
exists, the Administrative Agent shall have the right to conduct at any time and
from time to time, and the Borrower shall have the obligation to pay the
reasonable fees and expenses relating to, any field examination that the
Administrative Agent shall reasonably request. If the Borrower requests that any
assets acquired in a Permitted Acquisition be included in the Borrowing Base,
the Borrower shall have the obligation to pay the reasonable fees and expenses
relating to any field examination required by the Administrative Agent relating
to such assets.
(c) Appraisal. The Borrower will, and will cause each of
its Subsidiaries to, permit any representatives designated by the Administrative
Agent (including any consultants, accountants, lawyers and appraisers) to
conduct appraisals of the Inventory and Mortgaged Property, all at such
reasonable times and as often as reasonably requested. The Borrower shall pay
the reasonable fees and expenses of any representatives retained by the
Administrative Agent to conduct such appraisals; provided that: (i) the Borrower
shall only be required to pay such fees and expenses relating to the appraisal
of Inventory conducted prior to the Effective Date and the fees and expenses
relating to the appraisals of Inventory conducted once each Loan Year after the
first Loan Year and (ii) the Borrower shall only be required to pay for the
first appraisal of each parcel of Mortgaged Property required by Section 5.15(d)
and one appraisal of such Mortgaged Property conducted in each twelve month
period following the date such property became "Mortgaged Property".
Notwithstanding the foregoing, (a) at any time that Availability is less than
$20,000,000, the Borrower will be obligated to pay for one additional inventory
appraisal during each Loan Year and (b) during the time that a Significant Event
of Default exists, the Borrower shall pay the reasonable fees and expenses
relating to any appraisal of the Inventory or the Mortgaged Property that the
Administrative Agent shall reasonably request. If the Borrower requests that any
assets acquired in a Permitted Acquisition be included in the Borrowing Base,
the Borrower shall have the obligation to pay the reasonable fees and expenses
relating to any appraisal of such assets required by the Administrative Agent.
Subject to the terms of this Section 5.09(c), the Administrative Agent shall
conduct such appraisals of the Inventory of the Loan Parties and Mortgaged
Property as the Required Lenders may reasonable request.
Section 5.10. Compliance with Laws. The Borrower will, and will
cause each of its Subsidiaries to, comply with all laws, rules, regulations and
orders of any Governmental Authority applicable to it or its property
(including, without limitation, Environmental Laws), except where the failure to
do so, individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect.
Section 5.11. Use of Proceeds and Letters of Credit. The proceeds
of the Loans will be used: (a) for the payment of fees and expenses incurred in
connection with the Transactions and (b) for the other general corporate
purposes, including capital expenditures, the payment of permitted Indebtedness
when due and working capital. No part of the proceeds of any Loan will be used,
whether directly or indirectly, for any purpose that entails a violation of any
of the Regulations of the Board, including Regulations T, U and X. Letters of
Credit will be issued only for general corporate purposes.
Section 5.12. Additional Subsidiaries. If any Subsidiary is formed
or acquired after the Effective Date, the Borrower will notify the
Administrative Agent and the Lenders thereof and (a) if such Subsidiary is
organized under the laws of the United States of America or any jurisdiction
therein, (i) the
56
Borrower will cause such Subsidiary to execute and deliver a Subsidiary
Guarantee Agreement, (ii) such Subsidiary will execute and deliver a supplement
to the Indemnity, Subrogation and Contribution Agreement to cause such
Subsidiary to become a party thereto and (iii) the Borrower will cause such
Subsidiary to become a party to each applicable Security Document in the manner
provided therein, in each case within three Business Days after such Subsidiary
is formed or acquired and promptly take such actions to create and perfect Liens
on such Subsidiary's assets to secure the Obligations as the Administrative
Agent or the Required Lenders shall reasonably request and (b) if any Equity
Interests or Indebtedness of such Subsidiary are owned by or on behalf of any
Loan Party, the Borrower will cause such Equity Interests and promissory notes
evidencing such Indebtedness to be pledged pursuant to the Pledge Agreement
within three Business Days after such Subsidiary is formed or acquired.
Section 5.13. Further Assurances. The Borrower will, and will cause
each Subsidiary Loan Party to, execute any and all further documents, agreements
and instruments, and take all such further actions (including the filing and
recording of financing statements, fixture filings, mortgages, deeds of trust
and other documents), which may be required under any applicable law, or which
either the Administrative Agent or the Required Lenders may reasonably request,
to effectuate the transactions contemplated by the Loan Documents or to grant,
preserve, protect or perfect the Liens created or intended to be created by the
Security Documents or the validity or priority of any such Lien, all at the
expense of the Loan Parties. The Borrower also agrees to provide to the
Administrative Agent, from time to time upon request, evidence reasonably
satisfactory to the Administrative Agent as to the perfection and priority of
the Liens created or intended to be created by the Security Documents.
Section 5.14. Leaseholds and other Contractual Obligations. The
Borrower will, and will cause each of its Subsidiaries to, pay all Leasehold
Obligations and perform in all material respects all other obligations under all
leases and other agreements pertaining to any premises where any Inventory which
is included in the Borrowing Base is stored or located, keep such leases and
agreements in full force and effect and not allow any termination or
cancellation thereof. The Borrower will notify the Administrative Agent promptly
in the event of any default or alleged default under any such lease or agreement
and will exercise diligent efforts to cure any such default. The Borrower will,
and will cause each Subsidiary to, comply with all agreements, contracts, and
instruments binding on it or affecting its properties or business other than
such noncompliance which is not reasonably expected to have a Material Adverse
Effect.
Section 5.15. Mortgaged Property.
(a) Mortgage of Mortgaged Property. Borrower shall have
the option of granting a Mortgage on real property and improvements that it or
any Loan Party owns in fee simple or that it or any Loan Party leases, so that
such real property shall become "Mortgaged Property" for purposes of the
Borrowing Base. The obligations of the Lenders to include a parcel of real
property as "Mortgaged Property" under the Borrowing Base are subject to the
condition precedent that the Administrative Agent shall have received all of the
following, in form and substance reasonably satisfactory to the Administrative
Agent:
(i) Mortgage and Related Documents. A Mortgage
executed by the Loan Party who owns the property with evidence of its recording
in the applicable real property records and, if the Loan Party's interest in the
real property is created pursuant to a lease, the following:
(A) A copy and, if available, a summary
of, the applicable lease agreement;
(B) Evidence that the lease agreement,
or a memorandum thereof, shall have been recorded in the applicable real
property records; and
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(C) A consent to the grant by the
applicable Loan Party of a Lien to the Collateral Agent in the Loan Party's
interest in the related leasehold estate, such consent to contain the consents
and non-disturbance provisions substantially similar to those set forth in
Schedule 5.15 or otherwise to be in form and substance reasonably satisfactory
to the Collateral Agent and to be accompanied with evidence of its recording in
the applicable real property records; and
(D) A landlord estoppel letter pursuant
to which the applicable landlord shall certify, represent or warrant as to the
then current status of the lease (e.g. current status of the Loan Party's
performance) and such other matters as the Collateral Agent may reasonably
request, such estoppel letter to otherwise be in form and substance reasonably
satisfactory to the Collateral Agent.
(ii) Mortgage Policies. A lender's title
insurance policy issued by title insurers reasonably satisfactory to
Administrative Agent (a "Mortgage Policy") in form and substance and in amounts
reasonably satisfactory to the Administrative Agent assuring that the Mortgage
which cover such property creates a valid and enforceable first priority
mortgage lien on the property, free and clear of all defects and encumbrances
except for minor defects in title that do not impair the value thereof and other
defects and encumbrances approved by the Administrative Agent. The Mortgage
Policy shall include an endorsement insuring against the effect of future
advances under this Agreement, for mechanics' liens and for any other matter
that the Administrative Agent may reasonably request, and shall provide for
affirmative insurance and such reinsurance as the Administrative Agent may
reasonably request.
(iii) Surveys. A current survey, certified by a
licensed surveyor meeting ALTA requirements, in a form sufficient to allow the
issuer of the Mortgage Policy to issue a lender's policy.
(iv) Appraisals. A current appraisal of the
property which appraisal shall, if it is applicable to any leasehold property,
appraise separately the market value of any improvements owned by a Loan Party
and the market value attributable to the leasehold interest in the underlying
land.
(v) Environmental Reports. An environmental
report for the parcel, prepared by a third party environmental engineer
acceptable to the Administrative Agent and such further analysis of the
environmental condition of the property as the Administrative Agent may
reasonably require.
(vi) Flood Insurance. Flood insurance or evidence
that the parcel is not located in a Special Flood Hazard Area as designated by
the National Flood Insurance Program.
If Agent at any time has reasonable basis to believe that there may be a
material violation of any Environmental Laws by, or any material liability
arising thereunder of, Borrower or any Subsidiary or related to any Mortgaged
Property or real property adjacent to any Mortgaged Property, then Borrower
agrees, upon the reasonable request of the Administrative Agent to either: (A)
provide the Administrative Agent with such environmental reports and
assessments, certificates, engineering studies or other written material or data
as the Administrative Agent may reasonably require relating thereto or (B)
request a release of the Collateral Agent's Lien in the Mortgage Property in
question in accordance with Section 5.15(b) and otherwise comply with the
requirements set forth in Section 5.15(b) in order to be entitled to such
release. In the event that the Administrative Agent determines from the
environmental reports or information delivered pursuant to this Section 5.15 or
pursuant to any other information, that remedial action to correct an
environmental condition is necessary with respect to any Mortgaged Property,
Borrower shall take such action or other action as the Administrative Agent may
reasonably require to cure, or protect against, any material violation or
potential violation of any Environmental Laws or any material actual or
potential environmental liability.
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(b) Release of Mortgaged Property. The Administrative
Agent and the Collateral Agent are authorized to release any Lien in any
Mortgaged Property at any time and from time to time at the Borrower's request
if, as of the date of the requested release: (i) no Default exists; (ii) the
Borrower complies with its obligations under Section 2.10(b) simultaneously with
each such release; and (iii) the Borrower provides the Administrative Agent
with: (A) an updated pro forma Borrowing Base Certificate prepared within three
days of the date of delivery and giving effect to such release and any payment
required by Section 2.10(b) and (B) a certificate stating that no Default then
exists.
ARTICLE VI.
Negative Covenants
------------------
Until the Commitments have expired or terminated and the principal of
and interest on each Loan and all fees payable hereunder have been paid in full
and all Letters of Credit have expired or terminated and all LC Disbursements
shall have been reimbursed, the Borrower covenants and agrees with the Lenders
that:
Section 6.01. Indebtedness; Certain Equity Securities.
(a) The Borrower will not, and will not permit any
Subsidiary to, create, incur, assume or permit to exist any Indebtedness,
except:
(i) Indebtedness created under the Loan
Documents;
(ii) Indebtedness set forth in Schedule 6.01, and
any extensions, renewals or replacements of any such Indebtedness that do not
increase the principal amount thereof (other than as a result of the financing
of the transaction costs associated therewith);
(iii) Indebtedness of the Borrower to any
Subsidiary and of any Subsidiary to the Borrower or any other Subsidiary;
provided that Indebtedness of any Subsidiary that is not a Loan Party to the
Borrower or any Subsidiary Loan Party shall be subject to Section 6.04;
(iv) Guarantees by the Borrower of Indebtedness
of any Subsidiary and by any Subsidiary of Indebtedness of the Borrower or any
other Subsidiary; provided that Guarantees by the Borrower or any Subsidiary
Loan Party of Indebtedness of any Subsidiary that is not a Loan Party shall be
subject to Section 6.04;
(v) Guarantees by the Borrower to third party
agents given to facilitate the relocation of certain of the Borrower's
employees; provided that the aggregate principal amount of all Guarantees
permitted by this clause (v) shall not exceed $5,000,000 at any time outstanding
unless the Administrative Agent consents to a greater amount;
(vi) If no Event of Default exists or would
result therefrom, Indebtedness of the Borrower or any Subsidiary incurred to
finance the acquisition, construction or improvement of any fixed or capital
assets (including the acquisition of store sites, distribution centers and the
construction of stores and distribution centers), including Capital Lease
Obligations and any Indebtedness assumed in connection with the acquisition of
any such assets or secured by a Lien on any such assets prior to the acquisition
thereof, and extensions, renewals and replacements of any such Indebtedness
(including replacements pursuant to sale-leaseback transactions permitted by
Section 6.11);
(vii) Indebtedness of (A) any Person that becomes
a Subsidiary after the date hereof pursuant to a Permitted Acquisition to the
extent that such Indebtedness exists at the time such
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Person becomes a Subsidiary and is not created in contemplation of or in
connection with such Person becoming a Subsidiary, (B) the Borrower or a
Subsidiary to the extent that such Indebtedness is assumed in connection with a
Permitted Acquisition made by the Borrower or such Subsidiary and is not created
in contemplation of such Permitted Acquisition and (C) the Borrower in respect
of unsecured promissory notes issued as consideration for Permitted
Acquisitions; provided that the aggregate principal amount of Indebtedness
permitted by this clause (vii) shall be subject to the limitations set forth in
clause (g) of Section 6.04;
(viii) Indebtedness in respect of (A) performance
bonds, surety bonds or customs bonds, (B) bonds required to be posted in order
to permit the Borrower and its Subsidiaries to sell firearms licenses or other
licenses on behalf of any Governmental Authority and (C) insurance premium
financing, in each case in the ordinary course of business;
(ix) Indebtedness for borrowed money (including
Capital Lease Obligations) secured by Liens on real property and the
improvements, fixtures and equipment located thereon permitted by Section
6.02(f); and
(x) other unsecured Indebtedness in an aggregate
principal amount not exceeding $10,000,000 at any time outstanding.
(b) The Borrower will not, nor will it permit any
Subsidiary to, issue any preferred stock or other preferred Equity Interests
(other than preferred stock or other preferred Equity Interests that are not
subject to any mandatory redemption or repayment requirement (contingent or
otherwise) prior to the date that is one year after the Maturity Date and are
not convertible into Indebtedness) or be or become liable in respect of any
obligation (contingent or otherwise) to purchase, redeem, retire, acquire or
make any other cash payment in respect of any Equity Interests in the Borrower
or any Subsidiary or any option, warrant or other right to acquire any such
Equity Interests, in each case which would occur during the period beginning on
the Effective Date and ending on the date that is one year after the Maturity
Date.
Section 6.02. Liens. The Borrower will not, and will not permit any
Subsidiary to, create, incur, assume or permit to exist any Lien on any property
or asset now owned or hereafter acquired by it, or assign or sell any income or
revenues (including accounts receivable) or rights in respect of any thereof,
except:
(a) Liens created under the Loan Documents;
(b) Permitted Encumbrances;
(c) any Lien on any property or asset of the Borrower or
any Subsidiary existing on the date hereof and set forth in Schedule 6.02;
provided that (i) such Lien shall not apply to any other property or asset of
the Borrower or any Subsidiary and (ii) such Lien shall secure only those
obligations which it secures on the date hereof and extensions, renewals and
replacements thereof that do not increase the outstanding principal amount
thereof;
(d) any Lien existing on any property or asset prior to
the acquisition thereof by the Borrower or any Subsidiary or existing on any
property or asset of any Person that becomes a Subsidiary after the date hereof
prior to the time such Person becomes a Subsidiary; provided that (A) such Lien
is not created in contemplation of or in connection with such acquisition or
such Person becoming a Subsidiary, as the case may be, (B) such Lien shall not
apply to any other property or assets of the Borrower or any Subsidiary and (C)
such Lien shall secure only those obligations which it secures on the date of
such acquisition or the date such Person becomes a Subsidiary, as the case may
be and extensions, renewals and replacements thereof that do not increase the
outstanding principal amount thereof;
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(e) Liens on fixed or capital assets acquired,
constructed or improved by the Borrower or any Subsidiary; provided that (A)
such Liens secure Indebtedness permitted by clause (vi) of Section 6.01(a), (B)
such Liens and the Indebtedness secured thereby are incurred prior to or within
90 days after such acquisition or the completion of such construction or
improvement, (C) the Indebtedness secured thereby does not exceed 100% of the
cost of acquiring, constructing or improving such fixed or capital assets and
(D) such Liens do not apply to any other property or assets of the Borrower or
any Subsidiary; and
(f) Liens on real property and the improvements, fixtures
and equipment located thereon; provided that (A) such Liens secure Indebtedness
permitted by clause (ix) of Section 6.01(a); (B) the Indebtedness secured
thereby does not as of the date incurred exceed 100% of the appraised value of
such property and (c) such Liens do not apply to any other property or assets of
the Borrower or any Subsidiary.
Section 6.03. Fundamental Changes.
(a) The Borrower will not, nor will it permit any
Subsidiary to, merge into or consolidate with any other Person, or permit any
other Person to merge into or consolidate with it, or liquidate or dissolve,
except that, if at the time thereof and immediately after giving effect thereto
no Default shall have occurred and be continuing: (i) any Subsidiary may merge
into the Borrower in a transaction in which the Borrower is the surviving
corporation, (ii) any Subsidiary may merge into any Subsidiary Loan Party in a
transaction in which the surviving entity is a Subsidiary Loan Party, (iii) any
Subsidiary may liquidate or dissolve if the Borrower determines in good faith
that such liquidation or dissolution is in the best interests of the Borrower
and is not materially disadvantageous to the Lenders and (iv) any Subsidiary may
merge with another entity to implement a Permitted Acquisition; provided that
any such merger involving a Person that is not a wholly owned Subsidiary
immediately prior to such merger shall not be permitted unless also permitted by
Section 6.04.
(b) The Borrower will not, and will not permit any of its
Subsidiaries to, engage to any material extent in any business other than
businesses of the type conducted by the Borrower and its Subsidiaries on the
date of execution of this Agreement and businesses reasonably related thereto.
Section 6.04. Investments, Loans, Advances, Guarantees and
Acquisitions. The Borrower will not, and will not permit any of its Subsidiaries
to, purchase, hold or acquire (including pursuant to any merger with any Person
that was not a wholly owned Subsidiary prior to such merger) any Equity
Interests in, evidences of indebtedness or other securities (including any
option, warrant or other right to acquire any of the foregoing) of, make or
permit to exist any loans or advances to, Guarantee any obligations of, or make
or permit to exist any investment or any other interest in, any other Person, or
purchase or otherwise acquire (in one transaction or a series of transactions)
any assets of any other Person constituting a business unit, except:
(a) Permitted Investments;
(b) investments existing on the date hereof and set forth
on Schedule 6.04, to the extent such investments would not be permitted under
any other clause of this Section;
(c) investments by the Borrower and its Subsidiaries in
Equity Interests in their respective Subsidiaries; provided that (i) any such
Equity Interests held by a Loan Party shall be pledged pursuant to the
applicable Security Document to the extent required hereby and (ii) the Borrower
shall not have any Foreign Subsidiaries without the prior written consent of the
Required Lenders and, if the Required Lenders permit any Foreign Subsidiaries,
then the aggregate amount of investments by Loan
61
Parties in, and loans and advances by Loan Parties to, and Guarantees by Loan
Parties of Indebtedness of, Subsidiaries that are not Loan Parties shall be
subject to limitations established by the Required Lenders;
(d) loans or advances made by the Borrower to any
Subsidiary and made by any Subsidiary to the Borrower or any other Subsidiary;
provided that (i) any such loans and advances made by a Loan Party shall be
evidenced by a promissory note pledged pursuant to the Pledge Agreement and (ii)
the amount of all such loans and advances by Loan Parties to Subsidiaries that
are not Loan Parties shall be subject to the limitation set forth in clause
(c)(ii) above;
(e) Guarantees constituting Indebtedness permitted by
Section 6.01; provided that the aggregate principal amount of Indebtedness of
Subsidiaries that are not Loan Parties Guaranteed by any Loan Party shall be
subject to the limitation set forth in clause (c)(ii) above;
(f) investments received in connection with the
bankruptcy or reorganization of, or settlement of delinquent accounts and
disputes with, customers and suppliers, in each case in the ordinary course of
business;
(g) Permitted Acquisitions; provided that:
(i) The consideration for each Permitted
Acquisition shall consist solely of cash, shares of common stock of the
Borrower, the assumption of Indebtedness of the acquired Person or encumbering
the acquired assets (including the Indebtedness referred to in clause (vii) of
Section 6.01(a)), or a combination thereof;
(ii) The sum of (A) consolidated gross revenues
of the company to be acquired or that is attributable to the assets to be
acquired, for the most recently completed 12 month period prior to the date of
the proposed acquisition plus (B) consolidated gross revenues of all companies,
or attributable to all assets, acquired in connection with Permitted
Acquisitions consummated in the same fiscal year shall not exceed, on a
cumulative basis for such fiscal year, an amount equal to 33% of the gross
consolidated revenues of the Borrower (determined in accordance with GAAP) for
the prior fiscal year; and
(iii) If the sum of the principal amount of all
Indebtedness assumed or otherwise resulting from any single Permitted
Acquisition (including any Indebtedness referred to in clause (vii) of Section
6.01(a)) plus the cash consideration paid in connection with such Permitted
Acquisition equals or exceeds $10,000,000, then as of the date no sooner than 10
days prior to the consummation of the acquisition, the Availability Test must be
satisfied;
(h) loans or advances to employees in the ordinary course
of business; provided that the aggregate principal amount of all such loans and
advances permitted by this clause (h) shall not exceed $2,500,000 at any time
outstanding;
(i) in addition to the loans and advances permitted under
clause (h) above, loans or advances to management of the Borrower and Outside
Directors the proceeds of which are applied to purchase Equity Interests of the
Borrower from the Borrower, provided that the aggregate principal amount of all
loans and advances pursuant to this paragraph (i) shall not exceed $5,000,000 at
any time outstanding;
(j) extensions of trade credit in the ordinary course of
business; and
(k) in addition to other investments permitted by this
Section, investments in an aggregate amount not exceeding $15,000,000 during the
entire term of this Agreement; provided that the
62
Availability Test must be satisfied as of the date no sooner than 10 days prior
to the date that any investment is to be made under the permissions of this
clause (k) if the amount to be paid in connection with such proposed investment
and (i) the amount to be paid in connection with any related series of
investments exceeds $500,000 or (ii) the amount to be paid in connection with
all other investments previously made under the provisions of this clause (k)
exceeds $10,000,000.
Section 6.05. Asset Sales. The Borrower will not, and will not
permit any of its Subsidiaries to, sell, transfer, lease or otherwise dispose of
any asset, including any Equity Interests owned by it, nor will the Borrower
permit any of its Subsidiaries to issue any additional Equity Interests in such
Subsidiary, except:
(a) sales of inventory, used, obsolete or surplus
equipment and Permitted Investments in the ordinary course of business;
(b) sales, transfers and dispositions to the Borrower or
a Subsidiary; provided that any such sales, transfers or dispositions involving
a Subsidiary that is not a Loan Party shall be made in compliance with Section
6.08;
(c) sales, transfers and dispositions of assets (other
than Equity Interests in a Subsidiary) that are not permitted by any other
clause of this Section; provided that the aggregate fair market value of all
assets sold, transferred or otherwise disposed of in reliance upon this clause
(c) shall not exceed $3,000,000 during any fiscal year of the Borrower;
provided, further upon prior written consent of the Administrative Agent the
Borrower may sell, transfer or dispose of a greater dollar amount of assets that
do not constitute Collateral;
(d) sales of fixed or capital assets made pursuant to
sale and lease-back transactions permitted under Section 6.11;
(e) sales, transfers and dispositions of the real
property on which any of the Borrower's retail stores are located with or
without the equipment, fixtures and inventory located thereon (collectively a
"store"); provided that no more than 2 stores may be disposed of under the
permissions of this clause (e) in any fiscal year, the Borrower shall comply
with any obligation under Section 2.10(b) simultaneously with any such
disposition and, as of the date of the disposition, no Event of Default has
occurred and is continuing or would result therefrom;
(f) leases and licenses (and subleases and sublicenses)
of real or personal property in the ordinary course of business;
provided that all sales, transfers, leases and other dispositions permitted
hereby (other than those permitted by clause (b) above) shall be made for fair
value and solely for cash consideration; and provided further that inventory may
be disposed of for promotional or marketing purposes or pursuant to similar
non-cash barter arrangements in the ordinary course of business if the aggregate
amount thereof so disposed of in a fiscal year does not exceed an amount equal
to 1% of the book value of the inventory of the Borrower as of the end of the
prior fiscal year, as such book value is reflected in the financial statements
delivered under Section 5.01(a).
Section 6.06. Hedging Agreements. The Borrower will not, and will
not permit any of its Subsidiaries to, enter into any Hedging Agreement, other
than Hedging Agreements entered into in the ordinary course of business to hedge
or mitigate risks to which the Borrower or any Subsidiary is exposed in the
conduct of its business or the management of its liabilities.
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Section 6.07. Restricted Payments; Certain Payments of
Indebtedness.
(a) The Borrower will not, nor will it permit any of its
Subsidiaries to, declare or make, or agree to pay or make, directly or
indirectly, any Restricted Payment which would occur during the period beginning
on the Effective Date and ending on the date that is one year after the Maturity
Date, except:
(i) the Borrower may declare and pay dividends
with respect to its capital stock payable solely in additional shares of its
common stock;
(ii) the Borrower may make Restricted Payments to
cancel, redeem, acquire or repurchase shares of common stock of the Borrower
held by, or stock options granted to, directors and employees of the Borrower in
the event of death, disability, termination of employment or retirement of any
such director or employee; provided that the aggregate amount of such Restricted
Payments shall not exceed $2,500,000 in any fiscal year;
(iii) the Borrower may make Restricted Payments to
cancel, redeem, acquire or repurchase shares of common stock of the Borrower, in
addition to those permitted by clause (ii) above; provided that: (A) the
aggregate amount of such Restricted Payments shall not exceed $10,000,000 in any
two fiscal year period; and (B) as of the date no sooner than 10 days prior to
the payment of each such Restricted Payment, the Availability Test must be
satisfied; and
(iv) Subsidiaries may make Restricted Payments to
the Borrower and to wholly owned Subsidiaries of the Borrower and may declare
and pay dividends ratably with respect to their capital stock.
(b) The Borrower will not, nor will it permit any
Subsidiary to, make or agree to pay or make, directly or indirectly, any payment
or other distribution (whether in cash securities or other property) of or in
respect of principal of or interest on any Indebtedness, or any payment or other
distribution (whether in cash, securities or other property), including any
sinking fund or similar deposit, on account of the purchase, redemption,
retirement, acquisition, cancellation or termination of any Indebtedness,
except:
(i) payment of Indebtedness created under the
Loan Documents;
(ii) payment of regularly scheduled interest and
principal payments as and when due in respect of any Indebtedness;
(iii) refinancing of Indebtedness to the extent
permitted by Section 6.01;
(iv) payment of secured Indebtedness that becomes
due as a result of the voluntary sale or transfer of the property or assets
securing such Indebtedness; and
(v) payment on other Indebtedness if as of the
date no sooner than 10 days prior to the payment thereof, the Availability Test
is satisfied.
Section 6.08. Transactions with Affiliates. The Borrower will not,
nor will it permit any Subsidiary to, sell, lease or otherwise transfer any
property or assets to, or purchase, lease or otherwise acquire any property or
assets from, or otherwise engage in any other transactions with, any of its
Affiliates, except (a) in the ordinary course of business at prices and on terms
and conditions not less favorable to the Borrower or such Subsidiary than could
be obtained on an arm's-length basis from unrelated third parties, (b)
transactions between or among the Borrower and its Subsidiaries that are
Subsidiary Loan Parties which do not involve any other Affiliate, (c) any
Restricted Payment permitted
64
by Section 6.07 and any issuance by the Borrower of shares of its capital stock,
or warrants or options to purchase shares of its capital stock, that is not
otherwise prohibited by this Agreement and (d) payments made under and in
accordance with agreements specified in Schedule 6.08 (without giving effect to
any amendment or modification thereof that has not been approved by the Required
Lenders).
Section 6.09. Restrictive Agreements. The Borrower will not, nor
will it permit any of its Subsidiaries to, directly or indirectly, enter into,
incur or permit to exist any agreement or other arrangement that prohibits,
restricts or imposes any condition upon: (a) the ability of the Borrower or any
of its Subsidiaries to create, incur or permit to exist any Lien upon any of its
property or assets, or (b) the ability of any Subsidiary to pay dividends or
other distributions with respect to any shares of its Equity Interests or to
make or repay loans or advances to the Borrower or any other Subsidiary or to
Guarantee Indebtedness of the Borrower or any other Subsidiary; provided that
(i) the foregoing shall not apply to restrictions and conditions imposed by law
or by any Loan Document, (ii) the foregoing shall not apply to restrictions and
conditions existing on the date hereof identified on Schedule 6.09 (but shall
apply to any extension or renewal of, or any amendment or modification expanding
the scope of, any such restriction or condition), (iii) the foregoing shall not
apply to customary restrictions and conditions contained in agreements relating
to the sale of a Subsidiary pending such sale, provided such restrictions and
conditions apply only to the Subsidiary that is to be sold and such sale is
permitted hereunder, (iv) clause (a) of the foregoing shall not apply to
restrictions or conditions imposed by any agreement relating to secured
Indebtedness permitted by this Agreement if such restrictions or conditions
apply only to the property or assets securing such Indebtedness, (v) clause (a)
of the foregoing shall not apply to customary provisions in leases or other
contracts restricting the assignment thereof, and (vi) clause (a) of the
foregoing shall not apply to provisions in leases of real property restricting
the mortgage thereof.
Section 6.10. Amendment of Material Documents. The Borrower will
not, nor will it permit any Subsidiary to, amend, modify or waive any of its
rights under (a) any agreement specified in Schedule 6.08 or (b) its certificate
of incorporation, by-laws or other organizational documents, except amendments
and modification to agreements and documents referred to in clause (a) or (b)
shall be permitted to the extent that the cumulative effect of all such
amendments and modifications do not adversely affect the interests of the
Lenders in any material respect (as determined by the Administrative Agent in
its reasonable discretion).
Section 6.11. Sale and Lease-Back Transactions. The Borrower will
not, nor will it permit any Subsidiary to, enter into any arrangement, directly
or indirectly, with any Person whereby it shall sell or transfer any property,
real or personal, used or useful in its business, whether now owned or hereafter
acquired, and thereafter rent or lease such property or other property which it
intends to use for substantially the same purpose or purposes as the property
being sold or transferred, unless in connection with any such sale and
leaseback, the cash consideration therefor is at least sufficient to prepay, and
is applied to prepay, all Indebtedness (excluding any of the Loans), if any,
incurred to finance the acquisition, construction or improvement of such
property subject to the sale and leaseback transaction.
Section 6.12. Consolidated EBITDA. As of the end of each Compliance
Quarter, the Borrower will not permit Consolidated EBITDA, calculated for such
fiscal quarter end and for the four fiscal quarters then ended, to be less than
an amount equal to: (i) as of the end of the first fiscal quarter in the
Borrower's fiscal year beginning in 2003 (the "2003 Fiscal Year"), $43,500,000;
(ii) as of the end of the second fiscal quarter in the 2003 Fiscal Year,
$45,000,000; and (iii) as of the end of the third fiscal quarter in the 2003
Fiscal Year, $46,500,000; (iv) as of the end of the fourth fiscal quarter in the
2003 Fiscal Year, $53,000,000; and (v) as of each fiscal quarter end thereafter,
the product of $1,380,000 multiplied by the Average Number of Stores as
calculated as of such fiscal quarter end. The term "Compliance Quarter" means as
of any date when Availability has been less than $35,000,000 for a period of at
least 5 consecutive Business Days (the "Start Date"), the immediately preceding
fiscal quarter for which financial statements have been delivered under Section
5.01(a) or (b) and each fiscal quarter
65
thereafter, in each case unless and until the Borrower has notified the
Administrative Agent that Availability has been equal to or more than
$35,000,000 for 30 consecutive days since the Start Date. More than one Start
Date may occur under this Section 6.12.
Section 6.13. Minimum Availability. The Borrower will at no time
permit Availability to be less than $10,000,000.
Section 6.14. Change in Fiscal Year. Borrower will not change the
manner in which either the last day of its fiscal year or the last days of the
first three fiscal quarters of its fiscal year is calculated.
ARTICLE VII.
Events of Default
-----------------
Section 7.01. Events of Default and Remedies. If any of the
following events ("Events of Default") shall occur:
(a) the Borrower shall fail to pay any principal of any
Loan or any reimbursement obligation in respect of any LC Disbursement when and
as the same shall become due and payable, whether at the due date thereof or at
a date fixed for prepayment thereof or otherwise;
(b) the Borrower shall fail to pay any interest on any
Loan or any fee or any other amount (other than an amount referred to in clause
(a) of this Article) payable under this Agreement or any other Loan Document,
when and as the same shall become due and payable, and such failure shall
continue unremedied for a period of three Business Days;
(c) any representation, warranty or certification made or
deemed made by or on behalf of the Borrower or any of its Subsidiaries in or in
connection with any Loan Document or any amendment or modification thereof or
waiver thereunder, or in any report, certificate, financial statement or other
document furnished pursuant to or in connection with any Loan Document or any
amendment or modification thereof or waiver thereunder, shall prove to have been
incorrect in any material respect when made or deemed made;
(d) the Borrower shall: (i) fail to observe or perform
any covenant, condition or agreement contained in Section 5.01(f) and such
failure shall continue unremedied for a period of 5 Business Days after notice
from the Administrative Agent to the Borrower; (ii) fail to maintain the
insurance required by Section 5.07 with respect to any material portion of the
Collateral; (iii) fail to observe or perform any covenant, condition or
agreement contained in Sections 5.02, 5.04 (with respect to the existence of the
Borrower), 5.09 or 5.11 or in Article VI, or (iv) fail to observe or perform any
covenant, condition or agreement contained in Section 4.04 or Article V of the
Security Agreement;
(e) any Loan Party shall fail to observe or perform any
covenant, condition or agreement contained in any Loan Document (other than
those specified in clause (a), (b) or (d) of this Article), and such failure
shall continue unremedied for a period of 30 days after notice thereof from the
Administrative Agent to the Borrower (which notice may be given by the
Administrative Agent at any time it has knowledge of any such failure and will
be given by the Administrative Agent at the request of any Lender);
(f) the Borrower or any Subsidiary shall fail to make any
payment (whether of principal or interest and regardless of amount) in respect
of any Material Indebtedness, within 5 days of the date when the same shall
become due and payable;
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(g) any event or condition occurs that: (i) results in
any Material Indebtedness becoming due prior to its scheduled maturity or (ii)
enables or permits the holder or holders of any Material Indebtedness or any
trustee or agent on its or their behalf to cause any Material Indebtedness to
become due, or to require the prepayment, repurchase, redemption or defeasance
thereof, prior to its scheduled maturity; provided that this clause (g) shall
not apply to: (A) secured Indebtedness that becomes due as a result of the
voluntary sale or transfer of the property or assets securing such Indebtedness
nor (B) any event or condition that enables or permits the holder or holders of
any Material Indebtedness or any trustee or agent on its or their behalf to
cause any Material Indebtedness to become due, or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled maturity if
the holders of such Material Indebtedness have waived such event or condition
and their right to cause such Material Indebtedness to become due, or to require
the prepayment, repurchase, redemption or defeasance thereof, prior to its
scheduled maturity;
(h) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed seeking (i) liquidation, reorganization or
other relief in respect of the Borrower, any Subsidiary or its debts, or of a
substantial part of its assets, under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect or (ii) the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for the Borrower or any Subsidiary or for a substantial part of
its assets, and, in any such case, either (A) there shall be a period of 60 days
during which such proceeding or petition shall not be dismissed, vacated or
stayed pending appeal or (B) an order or decree approving or ordering any of the
foregoing shall be entered;
(i) the Borrower or any Subsidiary shall (i) voluntarily
commence any proceeding or file any petition seeking liquidation, reorganization
or other relief under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect, (ii) consent to the
institution of, or fail to contest in a timely and appropriate manner, any
proceeding or petition described in clause (h) of this Article, (iii) apply for
or consent to the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Borrower or any Subsidiary or for a
substantial part of its assets, (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (v) make a
general assignment for the benefit of creditors or (vi) take any action for the
purpose of effecting any of the foregoing;
(j) the Borrower or any Subsidiary shall become unable,
admit in writing its inability or fail generally to pay its debts as they become
due;
(k) one or more judgments for the payment of money in an
aggregate amount (excluding amounts covered by insurance from financially sound
insurance companies that have acknowledged liability in respect thereof) in
excess of $10,000,000 shall be rendered against the Borrower, any Subsidiary or
any combination thereof and either (i) there shall be a period of 45 consecutive
days during which the same shall not be discharged, vacated or stayed pending
appeal or (ii) any action shall be legally taken by a judgment creditor to
attach or levy upon any assets of the Borrower or any Subsidiary to enforce any
such judgment;
(l) an ERISA Event shall have occurred that, in the
opinion of the Required Lenders, when taken together with all other ERISA Events
that have occurred, could reasonably be expected to result in liability of the
Borrower and its Subsidiaries in an aggregate amount exceeding (i) $5,000,000 in
any year or (ii) $7,500,000 for all periods;
(m) any Lien purported to be created under any Security
Document shall cease to be, or shall be asserted by any Loan Party not to be, a
valid and perfected Lien on any portion of the Collateral with an aggregate
value in excess of $5,000,000, with the priority required by the applicable
Security Document, except (i) as a result of the sale or other disposition of
the applicable Collateral in a
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transaction permitted under the Loan Documents or (ii) as a result of the
Collateral Agent's failure to maintain possession of any stock certificates,
promissory notes or other instruments delivered to it under the Pledge
Agreement; or
(n) a Change in Control shall occur; or
(o) any Security Document which encumbers property with a
value in excess of $5,000,000 shall for any reason cease to be in full force and
effect and valid, binding and enforceable in accordance with its terms after its
date of execution, or the Borrower or any Subsidiary shall so state in writing;
or
then, and in every such event (other than an event with respect to the Borrower
described in clause (h) or (i) of this Article), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the
request of the Required Lenders shall, by notice to the Borrower, take either or
both of the following actions, at the same or different times: (i) terminate the
Commitments, and thereupon the Commitments shall terminate immediately, and (ii)
declare the Loans then outstanding to be due and payable in whole (or in part,
in which case any principal not so declared to be due and payable may thereafter
be declared to be due and payable), and thereupon the principal of the Loans so
declared to be due and payable, together with accrued interest thereon and all
fees and other obligations of the Borrower accrued hereunder, shall become due
and payable immediately, without notice of intent to accelerate, notice of
acceleration, presentment, demand, protest or other notice of any kind, all of
which are hereby waived by the Borrower; and in case of any event with respect
to the Borrower described in clause (h) or (i) of this Article, the Commitments
shall automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and all fees and other obligations of the
Borrower accrued hereunder, shall automatically become due and payable, without
notice of intent to accelerate, notice of acceleration, presentment, demand,
protest or other notice of any kind, all of which are hereby waived by the
Borrower. In addition to the other rights and remedies that the Lenders may have
upon the occurrence of an Event of Default, the Required Lenders may direct the
Administrative Agent to exercise the rights and remedies available to the
Collateral Agent or the Administrative Agent under the Security Documents.
Section 7.02. Performance by the Agent. If any Loan Party shall
fail to perform any covenant or agreement in accordance with the terms of the
Loan Documents, the Administrative Agent may, at the direction of Required
Lenders, perform or attempt to perform such covenant or agreement on behalf of
the applicable Loan Party. In such event, the Borrower shall, at the request of
the Administrative Agent, promptly pay any amount expended by the Administrative
Agent or the Lenders in connection with such performance or attempted
performance to the Administrative Agent, together with interest thereon at the
applicable default rate 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 Administrative Agent nor any
Lender shall have any liability or responsibility for the performance of any
obligation of any Loan Party under any Loan Document. The Collateral Agent may
be obligated to pay certain amounts to the financial institutions party to the
cash management and control agreements executed pursuant to the Security
Agreement from time to time, including without limitations, fees owed to such
financial institutions arising from their lock box and other deposit account
services and amounts sufficient to reimburse such financial institutions for the
amount of any item deposited in the related account which is returned unpaid. In
the event either the Administrative Agent or Collateral Agent is required to pay
any such amounts, the applicable agent shall notify Borrower and Borrower shall
promptly pay any amount so expended by the applicable agent to the applicable
agent together with interest at the applicable default rate from and including
the date of such expenditure to but excluding the date that such expenditure is
paid in full. Amounts due and unpaid under this Section 7.2 may be funded as
Swingline Loans or Revolving Loans pursuant to the terms of Section 2.03(b).
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Section 7.03. Continuance of Default. For purposes of all Loan
Documents, any Default that is capable of being remedied shall be deemed to have
continued and exist until the Administrative Agent shall have actually received
evidence which it in good xxxxx xxxxx satisfactory that such Default shall have
been remedied.
ARTICLE VIII.
The Administrative Agent
------------------------
Each of the Lenders and an Issuing Bank hereby irrevocably appoints the
JPMorgan Chase Bank as its agent (and confirms and continues such appointment
under the Original Credit Agreement) and authorizes JPMorgan Chase Bank to take
such actions on its behalf and to exercise such powers as are delegated to the
Administrative Agent and the Collateral Agent by the terms of the Loan
Documents, together with such actions and powers as are reasonably incidental
thereto. Without limiting the generality of the forgoing, the Collateral Agent
is authorized by the Lenders to release the Liens created by the Prior Security
Agreement (as that term is defined in the Security Agreement) in the Equipment
and Fixtures (as those terms are defined in the Security Agreement) as
contemplated by Section 7.17 of the Security Agreement.
The bank serving as the Administrative Agent hereunder shall have the
same rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and such bank
and its Affiliates may accept deposits from, lend money to and generally engage
in any kind of business with the Borrower or any Subsidiary or other Affiliate
thereof as if it were not the Administrative Agent hereunder.
The Administrative Agent shall not have any duties or obligations
except those expressly set forth in the Loan Documents. Without limiting the
generality of the foregoing, (a) the Administrative Agent shall not be subject
to any fiduciary or other implied duties, regardless of whether a Default has
occurred and is continuing, (b) the Administrative Agent shall not have any duty
to take any discretionary action or exercise any discretionary powers, except
discretionary rights and powers expressly contemplated by the Loan Documents
that the Administrative Agent is required to exercise in writing by the Required
Lenders (or such other number or percentage of the Lenders as shall be necessary
under the circumstances as provided in Section 9.02), and (c) except as
expressly set forth in the Loan Documents, the Administrative Agent shall not
have any duty to disclose, and shall not be liable for the failure to disclose,
any information relating to the Borrower or any of its Subsidiaries that is
communicated to or obtained by the bank serving as Administrative Agent or any
of its Affiliates in any capacity. The Administrative Agent shall not be liable
for any action taken or not taken by it with the consent or at the request of
the Required Lenders (or such other number or percentage of the Lenders as shall
be necessary under the circumstances as provided in Section 9.02) or in the
absence of its own gross negligence or willful misconduct. The Administrative
Agent shall be deemed not to have knowledge of any Default unless and until
written notice thereof is given to the Administrative Agent by the Borrower or a
Lender, and the Administrative Agent shall not be responsible for or have any
duty to ascertain or inquire into (i) any statement, warranty or representation
made in or in connection with any Loan Document, (ii) the contents of any
certificate, report or other document delivered thereunder or in connection
therewith, (iii) the performance or observance of any of the covenants,
agreements or other terms or conditions set forth in any Loan Document, (iv) the
validity, enforceability, effectiveness or genuineness of any Loan Document or
any other agreement, instrument or document, or (v) the satisfaction of any
condition set forth in Article IV or elsewhere in any Loan Document, other than
to confirm receipt of items expressly required to be delivered to the
Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing
69
believed by it to be genuine and to have been signed or sent by the proper
Person. The Administrative Agent also may rely upon any statement made to it
orally or by telephone and believed by it to be made by the proper Person, and
shall not incur any liability for relying thereon. The Administrative Agent may
consult with legal counsel (who may be counsel for the Borrower), independent
accountants and other experts selected by it, and shall not be liable for any
action taken or not taken by it in accordance with the advice of any such
counsel, accountants or experts.
The Administrative Agent may perform any and all its duties and
exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any such
sub-agent may perform any and all its duties and exercise its rights and powers
through their respective Related Parties. The exculpatory provisions of the
preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of the Administrative Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.
Subject to the appointment and acceptance of a successor Administrative
Agent as provided in this paragraph, the Administrative Agent may resign at any
time by notifying the Lenders, the Issuing Banks and the Borrower. Upon any such
resignation, the Required Lenders shall have the right, in consultation with the
Borrower, to appoint a successor. If no successor shall have been so appointed
by the Required Lenders and shall have accepted such appointment within 30 days
after the retiring Administrative Agent gives notice of its resignation, then
the retiring Administrative Agent may, in consultation with the Borrower and on
behalf of the Lenders and the Issuing Banks, appoint a successor Administrative
Agent which shall be a bank with an office in New York, New York, or an
Affiliate of any such bank. Upon the acceptance of its appointment as
Administrative Agent hereunder by a successor, such successor shall succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder. The fees payable by the
Borrower to a successor Administrative Agent shall be the same as those payable
to its predecessor unless otherwise agreed between the Borrower and such
successor. After the Administrative Agent's resignation hereunder, the
provisions of this Article and Section 9.03 shall continue in effect for the
benefit of such retiring Administrative Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while it was acting as Administrative Agent.
Each Lender acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any other Loan Document or related agreement or any document furnished hereunder
or thereunder.
Congress Financial Corporation (Central) has been designated as co-lead
arranger, Congress Financial Corporation (Central) and Fleet Retail Finance Inc.
have been designated as "co-syndication agent", Foothill Capital Corporation and
National City Commercial Finance, Inc. have been designated as "co-documentation
agent", and Bank of America, N.A., The CIT Group/Business Credit, Inc., and
LaSalle Business Credit have been designated as "co-agents" hereunder in
recognition of the level of each of their respective Commitments. None of the
parties listed in the foregoing sentence is an agent for the Lenders and no such
Lender shall have any obligation hereunder other than those existing in its
capacity as a Lender. Without limiting the foregoing, no such Lender shall have
or be deemed to have any fiduciary relationship with or duty to any Lender.
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No Secured Party (other than the Lenders and the Issuing Bank) shall
have any right to give any direction to either the Administrative Agent or the
Collateral Agent in the exercise of such agent's rights and obligations under
the Loan Documents nor does any such Secured Party have any right to consent to,
or vote on, any matter hereunder or under the other Loan Documents. Neither the
Administrative Agent nor the Collateral Agent shall have any duties or
responsibilities to any Secured Party except those expressly set forth in the
Loan Documents.
Neither the Issuing Bank, the Swingline Lender nor any of their
respective Related Parties shall be liable for any action taken or omitted to be
taken by any of them hereunder or otherwise in connection with any Loan Document
except for its or their own gross negligence or willful misconduct. Without
limiting the generality of the preceding sentence, neither the Issuing Bank nor
the Swingline Lender: (i) shall have any duties or responsibilities except those
expressly set forth in the Loan Documents, and shall not by reason of any Loan
Document be a trustee or fiduciary for any Secured Party, (ii) shall be
responsible to any Secured Party for any recitals, statements, representations,
or warranties contained in any Loan Document, or any certificate or other
documentation referred to or provided for in, or received by any of them under,
any Loan Document, or for the value, validity, effectiveness, enforceability, or
sufficiency of any Loan Document or any other documentation referred to or
provided for therein or for any failure by any Person to perform any of its
obligations thereunder, (iii) may consult with legal counsel (including counsel
for any Borrower), independent public accountants, and other experts selected by
it and shall not be liable for any action taken or omitted to be taken in good
faith by it in accordance with the advice of such counsel, accountants, or
experts, and (iv) shall incur no liability under or in respect of any Loan
Document by acting upon any notice, consent, certificate, or other instrument or
writing believed by it to be genuine and signed or sent by the proper party or
parties. As to any matters not expressly provided for by any Loan Document, the
Issuing Bank and the Swingline Lender shall in all cases be fully protected in
acting, or in refraining from acting, hereunder in accordance with instructions
signed by the Required Lenders, and such instructions of the Required Lenders
and any action taken or failure to act pursuant thereto shall be binding on all
of the Secured Parties; provided, however, that neither the Issuing Bank nor the
Swingline Lender shall be required to take any action which exposes it to
personal liability or which is contrary to any Loan Document or applicable law.
The provisions of this Article applicable to the Administrative Agent
also shall apply to the Collateral Agent, mutatis mutandis.
The Collateral Agent hereby appoints each of the other Lenders to serve
as bailee to perfect the Collateral Agent's Liens in any Collateral in the
possession of any such other Lender. Each Lender possessing any Collateral
agrees to so act as bailee for the Collateral Agent in accordance with the terms
and provisions hereof. In furtherance of the forgoing, each Lender acknowledges
that the Borrower and certain of the Subsidiary Loan Parties may maintain
deposit accounts at one or more of the Lenders which are not covered by the
terms of the Cash Concentration Letter Agreement or one of the Collection
Deposit Letter Agreements (all such accounts not so covered, the "Loan Party
Accounts"). Each Lender agrees to hold its Loan Party Accounts as bailee for the
Collateral Agent to perfect the Collateral Agent's Liens in the proceeds of
Collateral held therein. Prior to the receipt by a Lender of a written notice of
an Event of Default from the Collateral Agent, the Borrower and the Subsidiary
Loan Party are entitled to make withdrawals from the Loan Party Accounts and
make deposits into all the Loan Party Accounts. When a Lender has received a
written notice of an Event of Default from the Collateral Agent, (a) the
Collateral Agent shall be the only party entitled to make withdrawals from or
otherwise give any direction with respect to the Loan Party Accounts, and (b)
each Lender shall transfer, in immediately available funds by wire transfer to
the Collateral Agent, the amount of the collected funds credited to the Loan
Party Accounts it holds and deliver to the Collateral Agent all moneys or
instruments relating thereto or held therein and any other Collateral at any
time the Collateral Agent demands payment or delivery thereof by such written
notice to such Lender. The Borrower and each Subsidiary Loan Party agrees that
each
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Lender is authorized to immediately deliver all the Collateral to the Collateral
Agent upon the Lender's receipt of such notice from the Collateral Agent. No
Lender (other than the Collateral Agent acting for the benefit of the Lenders)
shall exercise any right of set-off or banker's lien against any Loan Party
Account for any obligations other than the Obligations; provided that a Lender
shall be entitled to charge, or set-off against a Loan Party Account and retain
for its own account, any customary fees, costs, charges and expenses owed to it
in connection with the opening, operating and maintaining such Loan Party
Account and for the amount of any item credited to such Loan Party Account that
is subsequently returned for any reason.
No Lender who is also engaged by a Loan Party to process the payments
relating to credit cards shall exercise any right of set-off or banker's lien
against any Collateral for any obligations other than the Obligations and the
obligations under the applicable agreements relating to the Merchant Account (as
herein defined); provided that such Lender shall be entitled to charge, or
set-off against Collateral and retain for its own account, any customary fees,
costs, charges and expenses owed to it under the terms of the agreements
relating to the Merchant Account or arising in connection with the opening,
operating and maintaining such Merchant Account. For purposes of this Article
VIII, a "Merchant Account" means any account, agreement or arrangement between a
Loan Party and another Person pursuant to which such other Person gives or makes
available credit to such Loan Party in respect of credit card transactions
generated by such Loan Party or has agreed to process the payment of Credit Card
Receivables of such Loan Party. The restrictions on a Lender's set-off rights as
set forth in this Article VIII shall continue after such institution is no
longer a Lender hereunder. Each Lender hereby consents to the Borrower assigning
its rights under any agreement relating to a Merchant Account to which such
Lender is a party to the Collateral Agent. Furthermore, the Borrower and each
such Lender agree not to amend any such agreements in a manner that would
adversely affect the Collateral Agent's rights thereunder. This paragraph in no
way modifies the Loan Parties' obligation to execute and maintain Collection
Deposit Letter Agreements in accordance with Section 5.01 of the Security
Agreement.
ARTICLE IX.
Miscellaneous
-------------
Section 9.01. Notices. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to the Borrower, to it at 0000 Xxxx Xxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxx 00000, Attention of Executive Vice President and General
Counsel (Telecopy No. (000) 000-0000); with a copy to O'Melveny & Xxxxx LLP, 00
Xxxxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (Telecopy No. (000) 000-0000)
Attention of Xxxxx Xxxxxxx, Esq.;
(b) if to the Administrative Agent, the Swingline Lender
or to Chase Bank, as a Lender, or an Issuing Bank, 0000 Xxxx Xxxxxx, 0xx Xxxxx,
Xxxxxx, Xxxxx 00000, Attention of Xxxxxxxx Jeans, Telecopy No. (000) 000-0000,
with a copy to JPMorgan Chase Bank, 000 Xxxxx Xxxxxxx Xxxx, 0xx Xxxxx, Xxxxxxxx,
XX 00000-0000; Attention: Xxxxx Xxxxxx, Telecopy No. (000) 000-0000;
(c) if to a Lender or any other Issuing Bank, to it at
its address (or telecopy number) set forth in the Administrative Questionnaire
delivered to Administrative Agent by such Lender in connection with the Original
Credit Agreement or in connection with the Assignment and Assumption pursuant to
which such Lender became a party hereto.
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Notices and other communications to the Lenders hereunder may be delivered or
furnished by electronic communications pursuant to procedures approved by the
Administrative Agent; provided that the foregoing shall not apply to notices
pursuant to Article II unless otherwise agreed by the Administrative Agent and
the applicable Lender. The Administrative Agent or the Borrower may, in its
discretion, agree to accept notices and other communications to it hereunder by
electronic communications pursuant to procedures approved by it; provided that
approval of such procedures may be limited to particular notices or
communications. Any party hereto may change its address or telecopy number for
notices and other communications hereunder by notice to the other parties
hereto. All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to have been
given on the date of receipt.
Section 9.02. Waivers; Amendments; Permitted Release of Liens.
(a) No failure or delay by the Administrative Agent, the
Collateral Agent, any Issuing Bank or any Lender in exercising any right or
power hereunder or under any other Loan Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Administrative Agent, the
Collateral Agent, the Issuing Banks and the Lenders hereunder and under the
other Loan Documents are cumulative and are not exclusive of any rights or
remedies that they would otherwise have. No waiver of any provision of any Loan
Document or consent to any departure by any Loan Party therefrom shall in any
event be effective unless the same shall be permitted by paragraph (b) of this
Section, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. Without limiting the generality of
the foregoing, the making of a Loan or issuance of a Letter of Credit shall not
be construed as a waiver of any Default, regardless of whether the
Administrative Agent, the Collateral Agent, any Lender or any Issuing Bank may
have had notice or knowledge of such Default at the time.
(b) Neither this Agreement nor any other Loan Document
nor any provision hereof or thereof may be waived, amended or modified except
(x) pursuant to an Increased Commitment Supplement executed in accordance with
Section 2.08(e) which only needs to be signed by the Borrower, the
Administrative Agent and the Lenders increasing or providing new Commitments
thereunder if the Increased Commitment Supplement does not increase the
aggregate amount of the Commitments to an amount in excess of $300,000,000 and
(y) in the case of this Agreement and any circumstance other than as described
in clause (x), pursuant to an agreement or agreements in writing entered into by
the Borrower and the Required Lenders or, in the case of any other Loan
Document, pursuant to an agreement or agreements in writing entered into by the
Administrative Agent or the Collateral Agent, as applicable, and the Loan Party
or Loan Parties that are parties thereto, in each case with the consent of the
Required Lenders; provided that no such agreement shall (i) increase the
Commitment of any Lender without the written consent of such Lender, (ii) reduce
the principal amount of any Loan or LC Disbursement or reduce the rate of
interest thereon, or reduce any fees payable hereunder, without the written
consent of each Lender affected thereby, (iii) postpone the scheduled date of
payment of the principal amount of any Loan or LC Disbursement, or any interest
thereon, or any fees payable hereunder, or reduce the amount of, waive or excuse
any such payment, or postpone the scheduled date of expiration of any
Commitment, without the written consent of each Lender affected thereby, (iv)
change Section 2.17(b) or (c) in a manner that would alter the pro rata sharing
of payments required thereby, without the written consent of each Lender, (v)
change any of the provisions of this Section or the definitions of "Required
Lenders" or "Supermajority Lenders" or any other provision of any Loan Document
specifying the number or percentage of Lenders required to waive, amend or
modify any rights thereunder or make any determination or grant any consent
thereunder, without the written consent of each Lender, (vi) release any
Subsidiary Loan Party from its Guarantee under the Subsidiary Guarantee
Agreement (except as
73
expressly provided in the applicable Subsidiary Guarantee Agreement), or limit
its liability in respect of such Guarantee, without the written consent of each
Lender, (vii) release all or substantially all of the Collateral from the Liens
of the Security Documents (other than in connection with any disposition
expressly permitted hereby, including, any release of any parcel of the
Mortgaged Property in accordance with Section 5.15(b)), without the written
consent of each Lender, (viii) change any of the provisions of the definitions
of "Borrowing Base", "Eligible Inventory" or "Eligible Credit Card Receivable"
in a manner that adversely affects the interests of the Lenders without the
written consent of the Supermajority Lenders or (ix) amend or waive compliance
with the requirements of Section 6.13 (i.e., the Minimum Availability covenant),
without the written consent of the Supermajority Lenders; provided further that
no such agreement shall amend, modify or otherwise affect the rights or duties
of the Administrative Agent, the Collateral Agent, any Issuing Bank or the
Swingline Lender without the prior written consent of the Administrative Agent,
the Collateral Agent, such Issuing Bank or the Swingline Lender, as the case may
be. The Administrative Agent and the Collateral Agent are irrevocably authorized
by the Lenders, without the further consent or agreement of any Secured Party,
to release Collateral from the Liens of the Security Documents: (A) if such
release is in connection with any disposition expressly permitted hereby,
including, any release of any parcel of the Mortgaged Property in accordance
with Section 5.15(b) and (B) upon termination of the Commitments,
collateralization of all outstanding Letters of Credit and payment and
satisfaction of all other non-contingent Obligations under the Loan Documents.
(c) If, in connection with any proposed amendment,
modification, termination or waiver of or to any of the provisions of this
Agreement or the other Loan Documents contemplated by the first proviso to
Section 9.02(b) the consent of the Required Lenders is obtained but the consent
of one or more of such other Lenders whose consent is required is not obtained,
then the Borrower shall have the right to either (i) replace any such
non-consenting Lender or Lenders with one or more replacement Lenders in the
same manner as provided in Section 2.18(b) so long as at the time of such
replacement, each such replacement Lender consents to the proposed amendment,
modification, termination or waiver, or (ii) terminate any such non-consenting
Lender's Commitment and repay in full its outstanding Loans in accordance with
Sections 2.08(d) and 2.10(d); provided that unless the Commitments that are
terminated and the Loans that are repaid pursuant to the preceding clause (ii)
are immediately replaced in full at such time through the addition of new
Lenders or the increase of the Commitments and/or outstanding Loans of existing
Lenders (who in each case must specifically consent thereto), then in the case
of any action pursuant to the preceding clause (ii), each Lender (other than the
terminated Lender or Lenders) must consent to such termination.
Section 9.03. Expenses; Indemnity; Damage Waiver.
(a) The Borrower shall pay (i) all reasonable
out-of-pocket expenses incurred by JPMorgan Chase Bank and its respective
Affiliates, including the reasonable fees, charges and disbursements of counsel
for the Administrative Agent and the Collateral Agent, in connection with the
syndication of the credit facilities provided for herein, the preparation and
administration of the Loan Documents or any amendments, modifications or waivers
of the provisions thereof (whether or not the transactions contemplated hereby
or thereby shall be consummated), (ii) all reasonable out-of-pocket expenses
incurred by any Issuing Bank in connection with the issuance, amendment, renewal
or extension of any Letter of Credit or any demand for payment thereunder; (iii)
subject to the provisions of Section 5.09, all reasonable out-of-pocket expenses
incurred by JPMorgan Chase Bank and its respective Affiliates, including the
reasonable fees, charges and disbursements of counsel for the Administrative
Agent and the Collateral Agent, in connection with any filing, registration,
recording or perfection of any security interest or other Lien contemplated by
any Loan Document, or any audit, appraisal, inspection, environmental
assessment, survey or title insurance policy relating to any Collateral and (iv)
all reasonable out-of-pocket expenses incurred by the Administrative Agent, the
Collateral Agent, any Issuing Bank or any Lender, including the reasonable fees,
charges and disbursements of any counsel for
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the Administrative Agent, the Collateral Agent, any Issuing Bank or any Lender,
in connection with the enforcement or protection of its rights in connection
with the Loan Documents, including its rights under this Section, or in
connection with the Loans made or Letters of Credit issued hereunder, including
all such reasonable out-of-pocket expenses incurred during any workout,
restructuring or negotiations in respect of such Loans or Letters of Credit.
(b) The Borrower shall indemnify the Administrative
Agent, the Collateral Agent, each Issuing Bank and each Lender, and each Related
Party of any of the foregoing Persons (each such Person being called an
"Indemnitee") against, and hold each Indemnitee harmless from, any and all
losses, claims, damages, liabilities and related expenses, including the fees,
charges and disbursements of any counsel for any Indemnitee, incurred by or
asserted against any Indemnitee arising out of, in connection with, or as a
result of (i) the execution or delivery of any Loan Document or any other
agreement or instrument contemplated hereby, the performance by the parties to
the Loan Documents of their respective obligations thereunder or the
consummation of the Transactions or any other transactions contemplated hereby,
(ii) any Loan or Letter of Credit or the use of the proceeds therefrom
(including any refusal by any Issuing Bank to honor a demand for payment under a
Letter of Credit if the documents presented in connection with such demand do
not strictly comply with the terms of such Letter of Credit), (iii) any actual
or alleged presence or release of Hazardous Materials on or from any Mortgaged
Property or any other property currently or formerly owned or operated by the
Borrower or any of its Subsidiaries, or any Environmental Liability related in
any way to the Borrower or any of its Subsidiaries, or (iv) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses resulted from the gross
negligence or willful misconduct of such Indemnitee.
(c) To the extent that the Borrower fails to pay any
amount required to be paid by it to the Administrative Agent, the Collateral
Agent, any Issuing Bank or the Swingline Lender under paragraph (a) or (b) of
this Section, each Lender severally agrees to pay to the Administrative Agent,
the Collateral Agent, such Issuing Bank or the Swingline Lender, as the case may
be, such Lender's Applicable Percentage (determined as of the time that the
applicable unreimbursed expense or indemnity payment is sought) of such unpaid
amount; provided that the unreimbursed expense or indemnified loss, claim,
damage, liability or related expense, as the case may be, was incurred by or
asserted against the Administrative Agent, the Collateral Agent, such Issuing
Bank or the Swingline Lender in its capacity as such.
(d) To the extent permitted by applicable law, the
Borrower shall not assert, and hereby waives, any claim against any Indemnitee,
on any theory of liability, for special, indirect, consequential or punitive
damages (as opposed to direct or actual damages) arising out of, in connection
with, or as a result of, this Agreement or any agreement or instrument
contemplated hereby, the Transactions, any Loan or Letter of Credit or the use
of the proceeds thereof.
(e) All amounts due under this Section shall be payable
promptly after written demand therefor and may be funded as Swingline Loans or
Revolving Loans in accordance with Section 2.03(b).
Section 9.04. Successors and Assigns.
(a) The provisions of this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby (including any Affiliate of any Issuing
Bank that issues any Letter of Credit), except that (i) the Borrower may not
assign or otherwise transfer any of its rights or obligations hereunder without
the prior written consent of each
75
Lender (and any attempted assignment or transfer by the Borrower without such
consent shall be null and void) and (ii) no Lender may assign or otherwise
transfer its rights or obligations hereunder except in accordance with this
Section. Nothing in this Agreement, expressed or implied, shall be construed to
confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby (including any Affiliate of any Issuing
Bank that issues any Letter of Credit), Participants (to the extent provided in
clause (c) of this Section) and, to the extent expressly contemplated hereby,
the Related Parties of each of the Administrative Agent, the Collateral Agent,
the Issuing Banks and the Lenders) any legal or equitable right, remedy or claim
under or by reason of this Agreement.
(b) (i) Subject to the conditions set forth in
clause (b)(ii) below, any Lender may assign to one or more assignees all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans at the time owing to it) with the prior
written consent (such consent not to be unreasonably withheld or delayed) of:
(A) the Borrower, provided that no
consent of the Borrower shall be required for an assignment to a Lender, an
Affiliate of a Lender, an Approved Fund or, if an Event of Default has occurred
and is continuing, to any other assignee; and
(B) the Administrative Agent, provided
that no consent of the Administrative Agent shall be required for an assignment
of any Commitment to an assignee that is a Lender with a Commitment immediately
prior to giving effect to such assignment.
(ii) Assignments shall be subject to the
following additional conditions:
(A) except in the case of an assignment
to a Lender or an Affiliate of a Lender, an Approved Fund or an assignment of
the entire remaining amount of the assigning Lender's Commitment or Loans, the
amount of the Commitment or Loans of the assigning Lender subject to each such
assignment (determined as of the date the Assignment and Assumption with respect
to such assignment is delivered to the Administrative Agent) shall not be less
than $10,000,000 unless each of the Borrower and the Administrative Agent
otherwise consent, provided that no such consent of the Borrower shall be
required if an Event of Default has occurred and is continuing;
(B) each partial assignment shall be
made as an assignment of a proportionate part of all the assigning Lender's
rights and obligations under this Agreement;
(C) the parties to each assignment
shall execute and deliver to the Administrative Agent an Assignment and
Assumption, together with a processing and recordation fee of $3,500; and
(D) the assignee, if it shall not be a
Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire.
For the purposes of this Section 9.04(b), the term "Approved Fund"
means any Person (other than a natural person) that is engaged in making,
purchasing, holding or investing in bank loans and similar extensions of credit
in the ordinary course of its business and that is administered or managed by
(a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of
an entity that administers or manages a Lender.
(iii) Subject to acceptance and recording thereof
pursuant to clause (b)(iv) of this Section, from and after the effective date
specified in each Assignment and Assumption the assignee thereunder shall be a
party hereto and, to the extent of the interest assigned by such Assignment and
Assumption, have the rights and obligations of a Lender under this Agreement,
and the assigning Lender
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thereunder shall, to the extent of the interest assigned by such Assignment and
Assumption, be released from its obligations under this Agreement (and, in the
case of an Assignment and Assumption covering all of the assigning Lender's
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of Sections 2.14,
2.15, 2.16, 2.17 and 9.03). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this Section 9.04
shall be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (c) of
this Section.
(iv) The Administrative Agent, acting for this
purpose as an agent of the Borrower, shall maintain at one of its offices a copy
of each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount of the Loans and LC Disbursements owing to, each Lender
pursuant to the terms hereof from time to time (the "Register"). The entries in
the Register shall be conclusive, and the Borrower, the Administrative Agent,
the Collateral Agent, the Issuing Banks and the Lenders may treat each Person
whose name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary. The Register shall be available for inspection by the Borrower, any
Issuing Bank and any Lender, at any reasonable time and from time to time upon
reasonable prior notice.
(v) Upon its receipt of a duly completed
Assignment and Assumption executed by an assigning Lender and an assignee, the
assignee's completed Administrative Questionnaire (unless the assignee shall
already be a Lender hereunder), the processing and recordation fee referred to
in paragraph (b) of this Section and any written consent to such assignment
required by paragraph (b) of this Section, the Administrative Agent shall accept
such Assignment and Assumption and record the information contained therein in
the Register. No assignment shall be effective for purposes of this Agreement
unless it has been recorded in the Register as provided in this paragraph.
(c) (i) Any Lender may, without the consent of the
Borrower, the Administrative Agent, any Issuing Bank or the Swingline Lender,
sell participations to one or more banks or other entities (a "Participant") in
all or a portion of such Lender's rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans owing to it);
provided that (A) such Lender's obligations under this Agreement shall remain
unchanged, (B) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (C) the Borrower, the
Administrative Agent, the Issuing Bank and the other Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement. Any agreement or instrument
pursuant to which a Lender sells such a participation shall provide that such
Lender shall retain the sole right to enforce the Loan Documents and to approve
any amendment, modification or waiver of any provision of the Loan Documents;
provided that such agreement or instrument may provide that such Lender will
not, without the consent of the Participant, agree to any amendment,
modification or waiver described in clauses (i), (ii), (iii), (vi) or (vii) of
the first proviso to Section 9.02(b) that affects such Participant. Subject to
paragraph (c)(ii) of this Section, the Borrower agrees that each Participant
shall be entitled to the benefits of Sections 2.14, 2.15, 2.16 and 2.17 to the
same extent as if it were a Lender and had acquired its interest by assignment
pursuant to paragraph (b) of this Section. To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 9.08 as though it
were a Lender, provided such Participant agrees to be subject to Section 2.17(c)
as though it were a Lender.
(ii) A Participant shall not be entitled to
receive any greater payment under Section 2.14 or 2.16 than the applicable
Lender would have been entitled to receive with respect to the participation
sold to such Participant, unless the sale of the participation to such
Participant is made with the Borrower's prior written consent. A Participant
that would be a Foreign Lender if it were a Lender shall not be entitled to the
benefits of Section 2.16 unless the Borrower is notified of the participation
sold
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to such Participant and such Participant agrees, for the benefit of the
Borrower, to comply with Section 2.16(e) as though it were a Lender.
(d) Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement to
secure obligations of such Lender, including without limitation any pledge or
assignment to secure obligations to a Federal Reserve Bank, and this Section
shall not apply to any such pledge or assignment of a security interest;
provided that no such pledge or assignment of a security interest shall release
a Lender from any of its obligations hereunder or substitute any such pledgee or
assignee for such Lender as a party hereto.
Section 9.05. Survival. All covenants, agreements, representations
and warranties made by the Loan Parties in the Loan Documents and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement or any other Loan Document shall be considered to have been
relied upon by the other parties hereto and shall survive the execution and
delivery of the Loan Documents and the making of any Loans and issuance of any
Letters of Credit, regardless of any investigation made by any such other party
or on its behalf and notwithstanding that the Administrative Agent, the
Collateral Agent, any Issuing Bank or any Lender may have had notice or
knowledge of any Default or incorrect representation or warranty at the time any
credit is extended hereunder, and shall continue in full force and effect as
long as the principal of or any accrued interest on any Loan or any fee or any
other amount payable under this Agreement is outstanding and unpaid or any
Letter of Credit is outstanding and so long as the Commitments have not expired
or terminated. The provisions of Sections 2.14, 2.15, 2.16 and 9.03 and Article
VIII shall survive and remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the repayment of the
Loans, the expiration or termination of the Letters of Credit and the
Commitments or the termination of this Agreement or any provision hereof.
Section 9.06. Counterparts; Integration; Effectiveness; Amendment
and Restatement. This Agreement may be executed in counterparts (and by
different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. This Agreement, the other Loan Documents and any separate
letter agreements with respect to fees payable to the Administrative Agent
embody the final, entire agreement among the parties relating to the subject
matter hereof and supersede any and all previous commitments, agreements,
representations and understandings, whether oral or written, relating to the
subject matter hereof (including the Original Credit Agreement) and may not be
contradicted or varied by evidence of prior, contemporaneous or subsequent oral
agreements or discussions of the parties hereto. There are no unwritten oral
agreements among the parties hereto. Except as provided in Section 4.01, this
Agreement shall become effective when it shall have been executed by the
Administrative Agent and the Borrower and when the Administrative Agent shall
have received counterparts hereof which, when taken together, bear the
signatures of each of the other parties hereto, and thereafter shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Delivery of an executed counterpart of a signature page
of this Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Agreement. This Agreement amends and restates in
its entirety the Original Credit Agreement. The execution of this Agreement and
the other Loan Documents executed in connection herewith does not extinguish the
commitments under, the Liens created under or the indebtedness outstanding in
connection with the Original Credit Agreement and the other Loan Documents nor
does it constitute a novation with respect to such commitment, Liens or such
indebtedness. The Borrower, the Administrative Agent and the Lenders ratify and
confirm each of the Loan Documents entered into prior to the Effective Date (but
excluding the Original Credit Agreement) and agree that such Loan Documents
continue to be legal, valid, binding and enforceable in accordance with their
respective terms. The Borrower and each Subsidiary represents and warrants that
as of the Effective Date there are no claims or offsets against or defenses or
counterclaims to its obligations under the Original Credit Agreement or any of
the other Loan Documents. To induce the Lenders and the Administrative Agent to
enter into this
78
Agreement, the Borrower and each Subsidiary waives any and all such claims,
offsets, defenses or counterclaims, whether known or unknown, arising prior to
the Effective Date and relating to the Loan Documents or the transactions
contemplated hereby or thereby. Without limiting the generality of the foregoing
and notwithstanding any Loan Document to the contrary, the Borrower, the
Subsidiaries, the Administrative Agent and the Lenders agree and acknowledge
that:
(A) the term "Credit Agreement" as used
in each Loan Document means this Agreement;
(B) the term "Obligations" as used in
the Security Agreement, Subsidiary Guarantee Agreement and Pledge Agreement
includes all of the obligations, indebtedness and liability of the Borrower to
the Administrative Agent, any Issuing Bank and the Lenders, or any of them,
arising pursuant to this Agreement; and
(C) any reference to The Chase
Manhattan Bank in any Loan Document executed prior to the Effective Date shall
mean a reference to JPMorgan Chase Bank (formerly The Chase Manhattan Bank).
Section 9.07. Severability. Any provision of this Agreement held to
be invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
Section 9.08. Right of Setoff. Subject to the terms of any Cash
Concentration Letter Agreement or Collection Deposit Letter Agreement executed
pursuant to the terms of the Security Agreement, if an Event of Default shall
have occurred and be continuing, each Lender and each of its Affiliates is
hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other obligations at
any time owing by such Lender or Affiliate to or for the credit or the account
of the Borrower against any of and all the obligations of the Borrower now or
hereafter existing under this Agreement held by such Lender, irrespective of
whether or not such Lender shall have made any demand under this Agreement and
although such obligations may be unmatured. The rights of each Lender under this
Section are in addition to other rights and remedies (including other rights of
setoff) which such Lender may have.
Section 9.09. Governing Law; Jurisdiction; Consent to Service of
Process.
(a) This Agreement shall be construed in accordance with
and governed by the law of the State of New York (without regard to the
conflicts of law provisions thereof other than Section 5-1401 of New York's
General Obligations Law).
(b) The Borrower hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of the
Supreme Court of the State of New York sitting in New York County and of the
United States District Court of the Southern District of New York, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to any Loan Document, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in such New York State or, to the extent permitted by law, in
such Federal court. Each of the parties hereto agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement or any other Loan Document shall affect any right that
the
79
Administrative Agent, the Collateral Agent, any Issuing Bank or any Lender may
otherwise have to bring any action or proceeding relating to this Agreement or
any other Loan Document against the Borrower or its properties in the courts of
any jurisdiction.
(c) The Borrower hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or any other
Loan Document in any court referred to in paragraph (b) of this Section. Each of
the parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 9.01. Nothing
in this Agreement or any other Loan Document will affect the right of any party
to this Agreement to serve process in any other manner permitted by law.
Section 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
Section 9.11. Headings. Article and Section headings and the Table
of Contents used herein are for convenience of reference only, are not part of
this Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
Section 9.12. Confidentiality. Each of the Administrative Agent,
the Issuing Banks and the Lenders agrees to maintain the confidentiality of the
Information (as defined below) in accordance with their customary procedures,
except that Information may be disclosed: (a) to its and its Affiliates'
directors, officers, employees and agents, including accountants, legal counsel
and other advisors (it being understood that the Persons to whom such disclosure
is made will be informed of the confidential nature of such Information and
instructed to keep such Information confidential), (b) to the extent requested
by any regulatory authority, (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (d) to any other party
to this Agreement, (e) in connection with the exercise of any remedies hereunder
or any suit, action or proceeding relating to this Agreement or any other Loan
Document or the enforcement of rights hereunder or thereunder, (f) subject to an
agreement containing provisions substantially the same as those of this Section,
to any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights or obligations under this Agreement, (g) with
the consent of the Borrower, (h) to the extent such Information becomes publicly
available other than as a result of a breach of this Section or becomes
available to the Administrative Agent, an Issuing Bank or any Lender on a
non-confidential basis from a source other than the Borrower or any of its
Affiliates; provided such source is not known by the receiving party to be bound
by a confidentiality agreement with or other contractual, legal or fiduciary
obligation of confidentiality to Borrower, or (i) to any direct or indirect
contractual counterparty with a Lender or its Affiliates in a swap agreement or
such counterparty's professional advisor (so long as such contractual
counterparty or professional advisor to such contractual counterparty agrees to
be bound by the provisions of this Section 9.12); provided that,
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unless specifically prohibited by applicable law or court order, each Lender
shall notify the Borrower of any request by any regulatory authority or
representative thereof or pursuant to legal process (other than any such request
in connection with any examination of the financial condition of such Lender by
such regulatory authority) for disclosure of any such nonpublic information
prior to disclosure of such information. For the purposes of this Section,
"Information" means all information received from the Borrower or any of its
Affiliates relating to the Borrower or any of its Subsidiaries or their
respective businesses, other than any such information that is available to the
Administrative Agent, any Issuing Bank or any Lender on a non-confidential basis
prior to disclosure by the Borrower or any of its Affiliates; provided that, in
the case of information received from the Borrower after the date hereof, such
information is clearly identified at the time of delivery as confidential. Any
Person required to maintain the confidentiality of Information as provided in
this Section shall be considered to have complied with its obligation to do so
if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information. Notwithstanding anything in that commitment letter
dated March 27, 2003 between JPMorgan Chase Bank and the Borrower to the
contrary, the parties hereto may disclose to any Person, without limitation of
any kind, the "tax treatment" and "tax structure" (in each case, within the
meaning of Treasury Regulation Section 1.6011-4) of the Transactions and all
materials of any kind (including opinions or other tax analyses) that are
provided to the Borrower relating to such tax treatment and tax structure,
except that, with respect to any document or similar item that in either case
contains information concerning the tax treatment or tax structure of the
transaction as well as other information, this proviso shall only apply to such
portions of the document or similar item that relate to the tax treatment or tax
structure of the Transactions.
Section 9.13. Interest Rate Limitation. Notwithstanding anything
herein to the contrary, if at any time the interest rate applicable to any Loan,
together with all fees, charges and other amounts which are treated as interest
on such Loan under applicable law (collectively, the "Charges"), shall exceed
the maximum lawful rate (the "Maximum Rate") which may be contracted for,
charged, taken, received or reserved by the Lender holding such Loan in
accordance with applicable law, the rate of interest payable in respect of such
Loan hereunder, together with all Charges payable in respect thereof, shall be
limited to the Maximum Rate and, to the extent lawful, the interest and Charges
that would have been payable in respect of such Loan but were not payable as a
result of the operation of this Section shall be cumulated and the interest and
Charges payable to such Lender in respect of other Loans or periods shall be
increased (but not above the Maximum Rate therefor) until such cumulated amount,
together with interest thereon at the Federal Funds Effective Rate to the date
of repayment, shall have been received by such Lender.
Section 9.14. No Fiduciary Relationship. The relationship between
the Loan Parties on the one hand and the Administrative Agent and each Lender on
the other is solely that of debtor and creditor, and neither the Administrative
Agent nor any Lender has any fiduciary or other special relationship with any
Loan Party, and no term or condition of any of the Loan Documents shall be
construed so as to deem the relationship between the Loan Parties on the one
hand and the Administrative Agent and each Lender on the other to be other than
that of debtor and creditor.
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Section 9.15. Construction. The Borrower, each other Loan Party (by
its execution of the Loan Documents to which its is a party), the Administrative
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 9.16. 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 limitations of,
another covenant shall not avoid the occurrence of a Default if such action is
taken or such condition exists.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
Borrower:
--------
XXXXXX'X TRADING COMPANY, INC.
By: ________________________________________
Name: _________________________________
Title: _________________________________
Administrative Agent:
--------------------
JPMORGAN CHASE BANK (formerly The Chase
Manhattan Bank), as Administrative Agent,
Collateral Agent, Swingline Lender, Issuing
Bank, and a Lender
By: ________________________________________
Name: _________________________________
Title: _________________________________
Lenders:
-------
CONGRESS FINANCIAL CORPORATION
(CENTRAL)
By: ________________________________________
Name: _________________________________
Title: _________________________________
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FOOTHILL CAPITAL CORPORATION
By: ________________________________________
Name: _________________________________
Title: _________________________________
NATIONAL CITY COMMERCIAL FINANCE, INC.
By: ________________________________________
Name: _________________________________
Title: _________________________________
FLEET RETAIL FINANCE INC.
By: ________________________________________
Name: _________________________________
Title: _________________________________
BANK OF AMERICA, N.A.
By: ________________________________________
Name: _________________________________
Title: _________________________________
THE CIT GROUP/BUSINESS CREDIT, INC.
By: ________________________________________
Name: _________________________________
Title: _________________________________
LASALLE BUSINESS CREDIT
By: ________________________________________
Name: _________________________________
Title: _________________________________
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ORIX FINANCIAL SERVICES, INC.
f/k/a ORIX BUSINESS CREDIT, INC.
By: ________________________________________
Name: _________________________________
Title: _________________________________
TRANSAMERICA BUSINESS CAPITAL
CORPORATION
By: ________________________________________
Name: _________________________________
Title: _________________________________
FIFTH THIRD BANK
By: ________________________________________
Name: _________________________________
Title: _________________________________
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Consent of Subsidiaries and Reaffirmation of Loan Documents
-----------------------------------------------------------
Each of the undersigned Subsidiaries hereby: (a) agrees that the
Subsidiary Guarantee Agreement to which it is a party is and shall remain in
full force and effect; (b) agrees that the Pledge Agreement is and shall remain
in full force and effect; (c) ratifies and confirms all terms and provisions of
the Subsidiary Guarantee Agreement and Pledge Agreement and agrees that each
such Loan Document continues to be its legal, valid and binding obligation
enforceable in accordance with its respective terms, (d) acknowledges its
consent and agreement to this Agreement (including without limitation, the
provisions of Section 9.06 hereof) and agrees to be bound thereby, (e)
acknowledges and agrees that all Loans and Letters of Credit issued under this
Agreement constitute "Obligations" under the Subsidiary Guarantee Agreement, the
Security Agreement, and the Pledge Agreement and (f) agrees that all liens,
security interests and other encumbrances granted under any Security Document in
favor of the Administrative Agent or the Collateral Agent secure the credit
extended under this Agreement.
XXXXXX'X NEVADA, INC.
By: ________________________________________
Name: _________________________________
Title: _________________________________
XXXXXX'X OF VIRGINIA, INC.
By: ________________________________________
Name: _________________________________
Title: _________________________________
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