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EXECUTION COPY Exhibit 10(b)(i)
U.S. $125,000,000
CREDIT AGREEMENT
Dated as of December 30, 1997
Among
THE XXXXX-XXXXXXX STORES CORP.
AS BORROWER
and
THE LENDERS PARTY HERETO
CITIBANK, N.A.
AS ISSUER
and
CITICORP USA, INC.
AS AGENT AND SWING LOAN BANK
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TABLE OF CONTENTS
SECTION PAGE
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS...................................................................... 2
1.1. Defined Terms......................................................................................... 2
1.2. Computation of Time Periods........................................................................... 32
1.3. Accounting Terms; Changes in GAAP..................................................................... 32
1.4. Certain Pre-Reorganization Matters.................................................................... 33
1.5. Certain Terms......................................................................................... 33
ARTICLE II
AMOUNTS AND TERMS OF THE LOANS........................................................................ 33
2.1. The Revolving Credit Loans............................................................................ 33
2.2. Making the Loans...................................................................................... 33
2.3. Fees ................................................................................................ 35
2.4. Reduction and Termination of the Commitments.......................................................... 36
2.5. Repayment............................................................................................. 36
2.6. Prepayments........................................................................................... 37
2.7. Conversion/Continuation Option........................................................................ 38
2.8. Interest.............................................................................................. 39
2.9. Interest Rate Determination and Protection............................................................ 40
2.10. Increased Costs....................................................................................... 41
2.11. Illegality............................................................................................ 41
2.12. Capital Adequacy...................................................................................... 42
2.13. Payments and Computations............................................................................. 42
2.14. Taxes ................................................................................................ 44
2.15. Sharing of Payments, Etc.............................................................................. 47
2.16. Letter of Credit Facility............................................................................. 48
2.17. Swing Loans........................................................................................... 54
2.18. Cash Collateral Account and Cash Management System.................................................... 55
2.19. Substitution of Lenders............................................................................... 56
ARTICLE III
CONDITIONS OF LENDING................................................................................. 57
3.1. Conditions Precedent to Initial Loans and Letters of
Credit.......................................................................................... 57
3.2. Additional Conditions to The Initial Loans and Letters
of Credit....................................................................................... 60
3.3. Conditions Precedent to Each Loan and Letter of Credit................................................ 63
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SECTION PAGE
ARTICLE IV
REPRESENTATIONS AND WARRANTIES........................................................................ 64
4.1. Corporate Existence; Compliance with Law.............................................................. 64
4.2. Corporate Power; Authorization; Enforceable Obligations............................................... 65
4.3. Taxes ................................................................................................ 66
4.4. Full Disclosure....................................................................................... 67
4.5. Financial Matters..................................................................................... 68
4.6. Litigation............................................................................................ 69
4.7. Margin Regulations.................................................................................... 69
4.8. ERISA ................................................................................................ 69
4.9. Liens ................................................................................................ 70
4.10. No Burdensome Restrictions; No Defaults............................................................... 70
4.11. No Other Ventures..................................................................................... 71
4.12. Securitization Documents; Interest Rate Contracts..................................................... 71
4.13. Investment Company Act................................................................................ 71
4.14. Public Utility Holding Company Act.................................................................... 72
4.15. Security Interests.................................................................................... 72
4.16. Insurance............................................................................................. 72
4.17. Use of Proceeds....................................................................................... 72
4.18. Environmental Protection.............................................................................. 72
4.19. Intellectual Property................................................................................. 74
4.20. Leased Property....................................................................................... 75
4.21. Certain Indebtedness.................................................................................. 75
4.22. Real Property......................................................................................... 75
4.23. Restricted Payments................................................................................... 75
4.24. Obligations with Respect of Gift Certificates......................................................... 76
4.25. Allowed and Disputed Claims........................................................................... 76
ARTICLE V
FINANCIAL COVENANTS................................................................................... 76
5.1. Fixed Charge Coverage Ratio........................................................................... 76
5.2. Total Indebtedness.................................................................................... 77
5.3. Interest Coverage Ratio............................................................................... 77
5.4. Capital Expenditures.................................................................................. 77
ARTICLE VI
. AFFIRMATIVE COVENANTS................................................................................. 77
6.1. Compliance with Laws, Etc............................................................................. 77
6.2. Conduct of Business................................................................................... 77
6.3. Payment of Taxes, Etc................................................................................. 78
6.4. Maintenance of Insurance.............................................................................. 78
6.5. Preservation of Corporate Existence, Etc.............................................................. 79
6.6. Access................................................................................................ 79
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SECTION PAGE
6.7. Keeping of Books...................................................................................... 79
6.8. Maintenance of Properties, Etc........................................................................ 79
6.9. Application of Proceeds............................................................................... 80
6.10. Financial Statements.................................................................................. 80
6.11. Reporting Requirements................................................................................ 82
6.12. Employee Plans........................................................................................ 85
6.13. Fiscal Year........................................................................................... 85
6.14. Borrowing Base Determination.......................................................................... 86
6.15. Certain Covenants Regarding the Receivables
Securitization.................................................................................. 86
6.16. Environmental Matters................................................................................. 87
6.17. Termination of Receivables Securitization............................................................. 87
ARTICLE VII
NEGATIVE COVENANTS.................................................................................... 88
7.1. Liens, Etc............................................................................................ 88
7.2. Indebtedness.......................................................................................... 90
7.3. Restricted Payments................................................................................... 91
7.4. Mergers, Stock Issuances, Sale of Assets, Etc......................................................... 92
7.5. Investments in Other Persons.......................................................................... 93
7.6. Change in Nature of Business.......................................................................... 94
7.7. Modification of Securitization Documents, Etc......................................................... 94
7.8. Modification of Material Agreements................................................................... 94
7.9. Compliance with ERISA................................................................................. 95
7.10. Accounting Changes.................................................................................... 96
7.11. Transactions with Affiliates.......................................................................... 96
7.12. Adverse Transactions.................................................................................. 96
7.13. Cancellation of Indebtedness Owed to It............................................................... 96
7.14. No Negative Pledge.................................................................................... 96
7.15. Capital Structure..................................................................................... 97
7.16. No Speculative Transactions........................................................................... 97
7.17. Environmental Matters................................................................................. 97
7.18. Change in Ownership Under Section 382 of the Code..................................................... 97
ARTICLE VIII
EVENTS OF DEFAULT..................................................................................... 98
8.1. Events of Default..................................................................................... 98
8.2. Remedies..............................................................................................101
8.3 Actions in Respect of Letters of Credit...............................................................102
ARTICLE IX
. THE AGENT.............................................................................................103
9.1. Authorization and Action..............................................................................103
9.2. Agent's Reliance, Etc.................................................................................103
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SECTION PAGE
9.3. CUSA and Affiliates...................................................................................104
9.4. Lender Credit Decision................................................................................105
9.5. Indemnification.......................................................................................105
9.6. Successor Agent.......................................................................................106
ARTICLE X
MISCELLANEOUS........................................................................................106
10.1. Amendments, Etc......................................................................................106
10.2. Notices, Etc.........................................................................................107
10.3. No Waiver; Remedies..................................................................................108
10.4. Costs; Expenses; Indemnities.........................................................................108
10.5. Right of Set-off.....................................................................................111
10.6. Binding Effect.......................................................................................112
10.7. Assignments and Participations.......................................................................112
10.8. Governing Law........................................................................................116
10.9. Submission to Jurisdiction; Service of Process.......................................................116
10.10. Section Titles.......................................................................................117
10.11. Execution in Counterparts............................................................................117
10.12. Entire Agreement.....................................................................................117
10.13. Confidentiality......................................................................................117
10.14. Acknowledgments......................................................................................117
10.15. Waiver of Trial by Jury..............................................................................118
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SCHEDULES
---------
Schedule I - Commitment
Schedule II - Applicable Lending Offices
and Addresses for Notices
Schedule III - Addresses for Notices to the Issuers
Schedule IV - Advance Rates
Schedule V - Securitization Documents
Schedule 2.16(b) - Letters of Credit Outstanding
Schedule 3.2(a) - Other Secured Lenders
Schedule 4.3(b) - Tax Returns
Schedule 4.3(d) - Open Tax Matters
Schedule 4.6 - Disclosed Litigation
Schedule 4.8(b) - Contribution Failures
Schedule 4.8(d) - ERISA Actions
Schedule 4.11 - Other Ventures
Schedule 4.12(b) - Swap Agreements
Schedule 4.18 - Environmental Protection
Schedule 4.20 - Leased Property
Schedule 4.21 - Certain Indebtedness
Schedule 4.22 - Real Property
Schedule 6.11(p) - Ownership of Stock
Schedule 6.19 - Collection Account Banks
Schedule 7.5 - Existing Investments
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EXHIBITS
--------
Exhibit A - Form of Revolving Credit Note
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Notice of Conversion or Continuation
Exhibit D - Form of Letter of Credit Request
Exhibit E - Form of Borrowing Base Certificate
Exhibit F - Form of Bee-Gee Guaranty
Exhibit G - Form of Chargit Guaranty
Exhibit H - Form of Security Agreement
Exhibit I - Form of Opinion of Counsel for the
Loan Parties
Exhibit J - Form of Assignment and Acceptance
Exhibit K - Form of Store Account Letter
Exhibit L - Letter of Credit Reimbursement Agreement
Exhibit M - Form of Intercreditor Agreement
Exhibit N - Form of Borrower Pledge Agreement
Exhibit O - Form of Chargit Pledge Agreement
Exhibit P - Third Amended Joint Plan of Reorganization
Exhibit Q - Form of Local Bank Blocked Account Letter
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CREDIT AGREEMENT, dated as of December 30, 1997, among THE
XXXXX-XXXXXXX STORES CORP., an Ohio corporation (the "BORROWER"), the financial
institutions listed on the signature pages hereof as lenders hereunder (each
individually a "LENDER" and collectively the "LENDERS"), Citibank, N.A., as
issuer ("CITIBANK"), and CITICORP USA, INC. ("CUSA"), as agent for the Lenders,
the Issuer (as defined herein) and the Swing Loan Bank (in such capacity, the
"AGENT") and as Swing Loan Bank (as defined herein).
W I T N E S E T H:
WHEREAS, on October 16, 1995, the Borrower and certain of its
Subsidiaries each filed a voluntary petition for relief commencing a
reorganization case under chapter 11 of the Bankruptcy Code with the United
States Bankruptcy Court for the Southern District of Ohio, Western Division (the
"Bankruptcy Court"), Case No. 95-33643; and
WHEREAS, the Borrower and such Subsidiaries have
filed with the Bankruptcy Court the Plan of Reorganization;
and
WHEREAS, in connection with the consummation of the Plan of
Reorganization, the Borrower has requested that the Lenders make revolving
credit advances to the Borrower of up to $125,000,000 in aggregate principal
amount outstanding at any one time for the purposes hereinafter specified; and
WHEREAS, the Lenders are willing to make funds available for
such purposes upon the terms and subject to the conditions set forth herein; and
WHEREAS, the Borrower has also requested that Citibank provide
the Borrower with letters of credit and Citibank is willing to issue letters of
credit upon the terms and subject to the conditions contained herein;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants hereinafter contained, the parties hereto agree as follows:
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ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.1. DEFINED TERMS. As used in this Agreement, the following
terms have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"ACCOUNT" means any "account," as such term is defined in
Section 9-106 of the UCC, now owned or hereafter acquired by any Loan Party.
"ACCOUNT DEBTOR" means any "account debtor," as such term is
defined in Section 9-105(1)(a) of the UCC.
"ADVANCE RATE" means, at any time, the rates set forth on
Schedule IV as such rates may be increased or decreased from time to time by the
Agent in its sole discretion, exercised reasonably; PROVIDED, HOWEVER, that the
Agent shall not increase such rates above the rates set forth on Schedule IV as
of the Closing Date without the consent of all of the Lenders.
"AFFILIATE" means, as to any Person, any other Person which,
directly or indirectly, controls, is controlled by or is under common control
with such Person and includes each officer or director or general partner of
such Person, and each Person who is the beneficial owner of 10% or more of any
class of voting Stock of such Person. For the purposes of this definition,
"control" means the possession of the power to direct or cause the direction of
management and policies of such Person, whether through the ownership of voting
securities, by contract or otherwise.
"AGREEMENT" means this Credit Agreement, together with all
Exhibits and Schedules hereto, as the same may be amended, supplemented or
otherwise modified from time to time.
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"APPLICABLE BASE RATE MARGIN" means, through January 31, 1999,
37.5 bps per annum and, thereafter, subject to Section 2.9(d), the Applicable
Base Rate Margin as set forth below:
Average Total
Debt/EBITDA (previous Applicable Base Rate
12 Mos.) Margin (Bps)
--------------------- ---------------------
more than or equal to 4.00 75.0
more than or equal to 3.50 less than 4.00 37.5
more than or equal to 3.00 less than 3.50 12.5
more than or equal to 2.50 less than 3.00 0
more than or equal to 2.00 less than 2.50 0
more than or equal to 1.75 less than 2.00 0
"APPLICABLE EURODOLLAR RATE MARGIN" means, through January 31,
1999, 137.5 bps per annum and, thereafter, subject to Section 2.9(d), the
Applicable Eurodollar Rate Margin as set forth below:
Average Total
Debt/EBITDA (previous Applicable Eurodollar
12 Mos.) Margin (Bps)
---------------------- --------------------
more than or equal to 4.00 175.0
more than or equal to 3.50 less than 4.00 137.5
more than or equal to 3.00 less than 3.50 112.5
more than or equal to 2.50 less than 3.00 87.5
more than or equal to 2.00 less than 2.50 75.0
more than or equal to 1.75 less than 2.00 62.5
"APPLICABLE LENDING OFFICE" means, with respect to each
Lender, its Domestic Lending Office in the case of a Base Rate Loan and its
Eurodollar Lending Office in the case of a Eurodollar Rate Loan.
"APPLICABLE MARGIN" means the Applicable Base Rate
Margin and the Applicable Eurodollar Rate Margin.
"ASSET SALE" means any sale or other disposition, or series of
sales or other dispositions (including, without limitation, by merger or
consolidation, and whether by operation of law or otherwise) made on or after
the Closing Date by the Borrower or any of its Subsidiaries to any Person,
except: (i) sales by the Borrower to Chargit and sales by Chargit to El-Bee of
Chargit Receivables and (ii)
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sales by the Borrower and its Subsidiaries of Inventory or obsolete or used
Equipment in the ordinary course of business.
"ASSET SALE PROCEEDS" means, with respect to any Asset Sale,
the aggregate amount of cash received from time to time by or on behalf of such
Person in connection therewith after deducting therefrom only (a) reasonable
expenses incurred directly in connection with such transaction, including,
without limitation, reasonable and customary brokerage commissions, underwriting
fees and discounts, legal and accounting fees and expenses, finder's fees and
other similar fees and commissions, (b) the amount of taxes payable in
connection with or as a result of such transaction, (c) the amount of any
Indebtedness secured by a Lien on such asset that, by the terms of such
Indebtedness, is required to be repaid upon such disposition and (d) amounts
received with respect to the sublease of any asset to the extent such amounts
received are paid to the lessor of such asset, in each case to the extent, but
only to the extent, that the amounts so deducted are, at the time of receipt of
such cash, actually paid to a Person that is not an Affiliate of the Borrower
and are properly attributable to such transaction or to the asset that is the
subject thereof; PROVIDED, HOWEVER, that Asset Sale Proceeds shall not include
any proceeds received from a Sale/Leaseback Transaction where the property was
owned by the Borrower or a Subsidiary of the Borrower for less than one year.
"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance
entered into by a Lender and an Eligible Assignee, and accepted by the Agent, in
substantially the form of EXHIBIT J.
"ATTRIBUTED VALUE" means, at any time, the value of all
Eligible Inventory computed at the lower of market or cost on a first in first
out basis. Unless disputed by the Agent, the most recent Borrowing Base
Certificate delivered to the Agent pursuant to Section 6.10(e) shall be prima
facie evidence of such value.
"AVAILABLE CREDIT" means, at any time, an amount equal to (a)
the lower of (i) the then effective Commitments of the Lenders and (ii) the
Borrowing Base at such time, MINUS (b) the sum of (i) the principal amount of
the Loans outstanding at such time, and (ii) the Letter of Credit Obligations
outstanding at such time.
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"AVERAGE TOTAL DEBT" means, for any period of four consecutive
Fiscal Quarters, the average of the month-end balances of Debt of the Borrower
outstanding during such four Fiscal Quarters.
"BANKRUPTCY CODE" means title 11, United States Code, as
amended from time to time.
"BANKRUPTCY COURT" has the meaning specified in
the recitals hereto.
"BASE RATE" means, for any period, a fluctuating interest rate
per annum as shall be in effect from time to time, which rate per annum shall be
equal at all times to the highest of:
(a) the rate of interest announced publicly by Citibank in New
York, New York, from time to time, as Citibank's base rate; and
(b) the sum (adjusted to the nearest 1/4 of one percent or, if
there is no nearest 1/4 of one percent, to the next higher 1/4 of one percent)
of (i) 1/2 of one percent per annum, PLUS (ii) the rate per annum obtained by
dividing (A) the latest three-week moving average of secondary market morning
offering rates in the United States for three-month certificates of deposit of
major United States money market banks, such three-week moving average being
determined weekly on each Monday (or, if any such day is not a Business Day, on
the next succeeding Business Day) for the three-week period ending on the
previous Friday by Citibank on the basis of such rates reported by certificate
of deposit dealers to and published by the Federal Reserve Bank of New York or,
if such publication shall be suspended or terminated, on the basis of quotations
for such rates received by Citibank from three New York certificate of deposit
dealers of recognized standing selected by Citibank, by (B) a percentage equal
to 100% MINUS the average of the daily percentages specified during such
three-week period by the Board of Governors of the Federal Reserve System (or
any successor) for determining the maximum reserve requirement (including,
without limitation, any emergency, supplemental or other marginal reserve
requirement) for Citibank in respect of liabilities consisting of or including
(among other liabilities) three-month U.S. dollar non-personal time deposits in
the United States, PLUS (iii) the average during such three-week period of the
maximum annual assessment rates payable to the Federal Deposit Insurance
Corporation
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(or any successor) by banks which are members of the Bank Insurance Fund for
insuring U.S. dollar deposits in the United States; and
(c) the sum (adjusted to the nearest 1/4 of one percent or, if
there is no nearest 1/4 of one percent, to the next higher 1/4 of one percent)
of (i) 1/2 of one percent per annum PLUS (ii) the Federal Funds Rate.
"BASE RATE LOAN" means any outstanding principal amount of the
Loans of any Lender that bears interest with reference to the Base Rate.
"BEE-GEE" means The Bee-Gee Shoe Corp., an Ohio
corporation and wholly-owned Subsidiary of the Borrower.
"BLOCKED ACCOUNT LETTER" means a letter agreement, in
substantially the form of EXHIBIT Q (with such changes as may be agreed to by
the Agent), executed by the Borrower and/or any Subsidiary and acknowledged and
agreed to by a depository bank.
"BORROWER PLEDGE AGREEMENT" means an agreement substantially
in the form of EXHIBIT N, executed by the Borrower, as such agreement may be
amended, supplemented or modified from time to time.
"BORROWING" means, collectively, a Revolving Credit Borrowing
and a Swing Loan Borrowing.
"BORROWING BASE" means, at any time, (a) the sum of (i) 95% of
the cash on deposit at such time in the Cash Collateral Account and (ii) the
product of the applicable Advance Rate at such time multiplied by the Attributed
Value of Eligible Inventory at such time LESS (b) such reserves as the Agent, in
its sole discretion in accordance with its customary practice, exercised
reasonably, deems appropriate.
"BORROWING BASE CERTIFICATE" means a certificate of the
Borrower substantially in the form of EXHIBIT E.
"BORROWING BASE DEFICIENCY" means, at any time, the failure of
the Borrowing Base to exceed the sum of (i) the then outstanding Loans PLUS (ii)
the then outstanding Letter of Credit Obligations.
"BPS" means basis points, i.e., one-hundredth of
one percent (.01%).
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"BUSINESS DAY" means a day of the year on which banks are not
required or authorized to close in New York City and, if the applicable Business
Day relates to a Eurodollar Rate Loan, a day on which dealings are also carried
on in the London interbank market.
"CAPITAL EXPENDITURES" means, for any Person for any period,
without duplication, the aggregate of (i) all expenditures by such Person and
its consolidated Subsidiaries, except interest capitalized during construction,
during such period for property, plant or equipment, including, without
limitation, renewals, improvements, replacements and capitalized repairs, that
would be reflected as additions to property, plant or equipment on a
consolidated balance sheet of such Person and its Subsidiaries prepared in
conformity with GAAP and (ii) the principal amount of all Indebtedness incurred
or assumed in connection with any such additions to property, plant and
equipment. For the purpose of this definition, the purchase price of equipment
which is acquired simultaneously with the trade-in of existing equipment owned
by such Person or any of its Subsidiaries or with insurance proceeds shall be
included in Capital Expenditures only to the extent of the gross amount of such
purchase price less the credit granted by the seller of such equipment being
traded in at such time or the amount of such proceeds, as the case may be.
"CAPITALIZED LEASE" means, as to any Person, any lease of
property by such Person as lessee which would be capitalized on a balance sheet
of such Person prepared in conformity with GAAP.
"CAPITALIZED LEASE OBLIGATIONS" means, as to any Person, the
capitalized amount of all obligations of such Person or any of its Subsidiaries
under Capitalized Leases, as determined on a consolidated basis in conformity
with GAAP.
"CASH COLLATERAL ACCOUNT" has the meaning
specified in Section 2.18.
"CASH EQUIVALENTS" means any of the following, to the extent
owned by any Loan Party free and clear of all Liens and having a maturity of not
greater than 90 days from the date of acquisition thereof: (a) readily
marketable direct obligations of the Government of the United States or any
agency or instrumentality thereof or obligations unconditionally guaranteed by
the full faith and credit of
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the Government of the United States, (b) insured certificates of deposit of or
time deposits with any commercial bank that is a Lender or a member of the
Federal Reserve System, issues (or the parent of which issues) commercial paper
rated as described in clause (c), is organized under the laws of the United
States or any State thereof and has combined capital and surplus of at least
$250,000,000, or (c) commercial paper in an aggregate amount of no more than
$5,000,000 per issuer outstanding at any time, issued by any corporation
organized under the laws of any State of the United States and rated at least
"Prime-1" (or the then equivalent grade) by Xxxxx'x Investors Service, Inc. or
"A-1" (or the then equivalent grade) by Standard & Poor's Corporation.
"CHANGE OF CONTROL" means any one of the following
events:
(i) the merger or consolidation of the Borrower with or into
another Person or the merger of another Person with or into the Borrower, or the
sale of all or substantially all the assets of the Borrower to another Person,
and, in the case of any such merger or consolidation, the securities of the
Borrower that are outstanding immediately prior to such transaction and which
represent 100% of the aggregate voting power of the Borrower are changed into or
exchanged for cash, securities or property, unless pursuant to such transaction
such securities are changed into or exchanged for, in addition to any other
consideration, securities of the surviving corporation that represent
immediately after such transaction, at least a majority of the aggregate voting
power of the surviving corporation;
(ii) any "person" (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934) is or becomes the "beneficial
owner" (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of
1934) directly or indirectly, of securities representing more than 40% of the
total voting power of the Company, except that such person shall be deemed to
have "beneficial ownership" of all shares that such person has the right to
acquire, whether such right is exercisable immediately or only after the passage
of time;
(iii) individuals who, on the completion of the Borrower's
chapter 11 reorganization under the Bankruptcy Code, constitute the Board of
Directors of the Borrower (the
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"Incumbent Directors") cease for any reason to constitute at least a majority of
the Board of Directors of the Borrower, provided that any person becoming a
director subsequent to such completion whose election or nomination for election
was approved by a vote of at least two-thirds of the Incumbent Directors then in
office (either by a specific vote or by approval of the proxy statement of the
Borrower in which such individual is named as a nominee for director, without
objection to such nomination) shall be an Incumbent Director; PROVIDED, HOWEVER,
that no individual elected or nominated as a director of the Borrower initially
as a result of an actual or threatened election contest with respect to
directors or any other actual or threatened solicitation of proxies or consents
by or on behalf of any person other than the Board of Directors of the Borrower
shall be deemed to be an Incumbent Director.
In no event may "Change of Control" be construed to include any change
of control of the Borrower or any Subsidiary that occurs solely as a result of
any exchange or distribution of equity securities of the Borrower or any
Subsidiary of the Borrower upon consummation of a plan of reorganization for the
Borrower or any Subsidiary in its chapter 11 case.
"CHARGIT" means The El-Bee Chargit Corp., an Ohio corporation
and a wholly-owned Subsidiary of the Borrower.
"CHARGIT PLEDGE AGREEMENT" means an agreement substantially in
the form of EXHIBIT O, executed by Chargit, as such agreement may be amended,
supplemented or modified from time to time.
"CHARGIT RECEIVABLES" means the private-label credit card
Receivables sold or otherwise conveyed by the Borrower to Chargit and by Chargit
to El-Bee pursuant to the Securitization Documents.
"CHATTEL PAPER" means any "chattel paper," as such term is
defined in Section 9-105(1)(b) of the UCC, now owned or hereafter acquired by
any Loan Party.
"CITIBANK" has the meaning specified in the
preamble hereto.
"CLOSING DATE" means the first date on which any Loan is made
or Letter of Credit is issued, which date shall
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not be earlier than the date of consummation of the Plan of Reorganization.
"CODE" means the Internal Revenue Code of 1986 (or any
successor legislation thereto), as amended from time to time.
"COLLATERAL" means all property and interests in property and
proceeds thereof now owned or hereafter acquired by any Loan Party in or upon
which a Lien is granted under any of the Collateral Documents.
"COLLATERAL DOCUMENTS" means the Security Agreement and any
other document executed and delivered by a Loan Party granting a Lien on any of
its property to secure payment of the Obligations.
"COMMITMENT" means, as to each Lender, the commitment of such
Lender to make Revolving Credit Loans to the Borrower pursuant to Section 2.1 in
the aggregate principal amount outstanding not to exceed the amount set forth
opposite such Lender's name on Schedule I hereto under the caption "COMMITMENT,"
as such amount may be reduced or modified pursuant to this Agreement.
"COMMITMENT FEE" has the meaning specified in
Section 2.3(a).
"CONFIRMATION DATE" means the date on which the Confirmation
Order is entered by the Bankruptcy Court.
"CONFIRMATION ORDER" means that certain order, dated December
15, 1997, by the Bankruptcy Court, confirming the Plan of Reorganization.
"CONTINGENT OBLIGATION" means, as applied to any Person, any
direct or indirect liability, contingent or otherwise, of such Person with
respect to any Indebtedness or Contractual Obligation of another Person, if the
purpose or intent of such Person in incurring the Contingent Obligation is to
provide assurance to the obligee of such Indebtedness or Contractual Obligation
that such Indebtedness or Contractual Obligation will be paid or discharged, or
that any agreement relating thereto will be complied with, or that any holder of
such Indebtedness or Contractual Obligation will be protected (in whole or in
part) against loss in respect thereof. Contingent Obligations of a Person
include, without limitation, (a) the
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direct or indirect guarantee, endorsement (other than for collection or deposit
in the ordinary course of business), co-making, discounting with recourse or
sale with recourse by such Person of an obligation of another Person, and (b)
any liability of such Person for an obligation of another Person through any
agreement (contingent or otherwise) (i) to purchase, repurchase or otherwise
acquire such obligation or any security therefor, or to provide funds for the
payment or discharge of such obligation (whether in the form of a loan, advance,
stock purchase, capital contribution or otherwise), (ii) to maintain the
solvency or any balance sheet item, level of income or financial condition of
another Person, (iii) to make take-or-pay or similar payments, if required,
regardless of non-performance by any other party or parties to an agreement,
(iv) to purchase, sell or lease (as lessor or lessee) property, or to purchase
or sell services, primarily for the purpose of enabling the debtor to make
payment of such obligation or to assure the holder of such obligation against
loss, or (v) to supply funds to or in any other manner invest in such other
Person (including, without limitation, to pay for property or services
irrespective of whether such property is received or such services are
rendered), if in the case of any agreement described under subclause (i), (ii),
(iii), (iv) or (v) of this sentence the primary purpose or intent thereof is as
described in the preceding sentence. The amount of any Contingent Obligation
shall be equal to the amount of the obligation so guaranteed or otherwise
supported.
"CONTRACTUAL OBLIGATION" of any Person means any obligation,
agreement, undertaking or similar provision of any security issued by such
Person or of any agreement, undertaking, contract, lease, indenture, mortgage,
deed of trust or other instrument (excluding a Loan Document) to which such
Person is a party or by which it or any of its property is bound or to which any
of its properties is subject.
"CUSA" shall have the meaning provided in the
preamble hereto.
"DEBT" means the sum of all (A) obligations of the type set
forth in clauses (i) through (vii) of the definition of Indebtedness, including,
without limitation, the principal amount of all outstanding Loans and the amount
of all outstanding Letter of Credit Obligations, but in no event shall Debt
include obligations of the type permitted
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by Section 7.2(ii) and (B) Receivables Securitization Attributed Indebtedness.
"DEFAULT" means any event which with the passing of time or
the giving of notice or both would become an Event of Default.
"DIP FACILITY" means the Post-Petition Loan and Security
Agreement dated as of October 16, 1995, as amended, among the Borrower, Chargit,
the Subsidiaries of the Borrower, the Lenders named therein, Citibank, N.A., as
Issuer and Citicorp USA, Inc. as Agent and Swing Loan Bank.
"DISCLOSURE STATEMENT" means the Disclosure Statement pursuant
to Section 1125 of the Bankruptcy Code for the Joint Plan of Reorganization of
The Xxxxx-Xxxxxxx Stores Corp. and Its Subsidiaries, dated October 16, 1997,
filed by the Borrower and certain of its Subsidiaries with the Bankruptcy Court,
as the same may be amended, supplemented or modified from time to time to the
date hereof.
"DOL" means the United States Department of Labor,
or any successor thereto.
"DOLLARS" and the sign "$" each mean the lawful money of the
United States of America.
"DOMESTIC LENDING OFFICE" means, with respect to any Lender,
the office of such Lender specified as its "Domestic Lending Office" opposite
its name on Schedule II or such other office of such Lender as such Lender may
from time to time specify to the Borrower and the Agent.
"EBITDA" means, for any Person for any period, the Net Income
(Loss) of such Person for such period taken as a single accounting period, PLUS
(a) the sum of the following amounts of such Person and its Subsidiaries for
such period determined on a consolidated basis in conformity with GAAP to the
extent included in the determination of such Net Income (Loss): (i) depreciation
expense, (ii) amortization expense, (iii) Net Interest Expense, (iv)
Reorganization Expenses, (v) income tax expense, (vi) losses that are
extraordinary items under GAAP (and other losses on Asset Sales not otherwise
included in extraordinary losses determined on a consolidated basis in
conformity with GAAP), (vii) non-recurring and non-cash writeoffs of deferred
and unamortized assets and (ix) non-cash and recurring charges
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related to changes in the market value of any interest rate contract (to the
extent not included in Net Interest Expense); LESS (b) the sum of the following
amounts of such Person and its Subsidiaries determined on a consolidated basis
in conformity with GAAP to the extent included in the determination of such Net
Income (Loss): (i) gains that are extraordinary items under GAAP (and in the
case of the Borrower and its Subsidiaries, other gains on Asset Sales not
otherwise included in extraordinary gains determined on a consolidated basis in
conformity with GAAP), (ii) the Net Income (Loss) of any other Person that is
accounted for by the equity method of accounting except to the extent of the
amount of dividends or distributions paid to such Person, (iii) the Net Income
(Loss) of any other Person acquired by such Person or a Subsidiary of such
Person in a transaction accounted for as a pooling of interests for any period
prior to the date of such acquisition and (iv) income tax benefit.
"EL-BEE" means The El-Bee Receivables Corporation, a Delaware
corporation and wholly-owned Subsidiary of Chargit.
"ELIGIBLE ASSIGNEE" means (i) a commercial bank organized
under the laws of the United States, or any State thereof, and having total
assets in excess of $5,000,000,000; (ii) a commercial bank organized under the
laws of any other country which is a member of the OECD, or a political
subdivision of any such country, and having total assets in excess of
$5,000,000,000, provided that such bank is acting through a branch or agency
located in the country in which it is organized or another country which is also
a member of the OECD or the Cayman Islands; (iii) the central bank of any
country which is a member of the OECD; (iv) a corporation organized under the
laws of the United States, or any State thereof, and having total assets in
excess of $3,000,000,000; (v) an insurance company organized under the laws of
the United States, or any State thereof, and having total assets in excess of
$5,000,000,000; (vi) a finance company, insurance company or other financial
institution or fund (whether a corporation, partnership, trust or other entity)
that is engaged in making, purchasing or otherwise investing in commercial loans
in the ordinary course of its business and having total assets in excess of
$3,000,000,000; (vii) any Lender; (viii) any Affiliate of any Lender; and (ix)
if an Event of Default has occurred and is continuing, "ELIGIBLE ASSIGNEE" shall
also mean any Person other than a Person a substantial portion of whose
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business competes with the Borrower or any Subsidiary or Affiliate of such
Person.
"ELIGIBLE INVENTORY" means such of the Inventory of the
Borrower and Bee-Gee as constitutes Collateral in which the Agent has a fully
perfected first priority security interest and, as the Agent, in its sole
discretion exercised reasonably, deems eligible.
"ENVIRONMENTAL LAWS" means all federal, state and local laws
(including common law), statutes, ordinances, rules, regulations and other
legally binding requirements, now or hereafter in effect, and in each case as
amended or supplemented from time to time, and any judicial or administrative
interpretation thereof, including, without limitation, any judicial or
administrative order, consent decree or judgment relating to the regulation and
protection of human health, safety, the environment or natural resources
(including, without limitation, ambient air, surface water, groundwater,
wetlands, land surface or subsurface strata, wildlife, aquatic species and
vegetation). Environmental Laws include but are not limited to the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended (42 U.S.C. Section 9601 ET SEQ.) ("CERCLA"); the Hazardous Material
Transportation Act, as amended (49 U.S.C. Section 180 ET SEQ.); the Federal
Insecticide, Fungicide, and Rodenticide Act, as amended (7 U.S.C. Section 136
ET SEQ.); the Resource Conservation and Recovery Act, as amended (42 U.S.C.
Section 6901 ET SEQ.) ("RCRA"); the Toxic Substance Control Act, as amended (42
U.S.C. Section 7401 ET SEQ.); the Clean Air Act, as amended (42 U.S.C. Section
740 ET SEQ.); the Federal Water Pollution Control Act, as amended (33 U.S.C.
Section 1251 ET SEQ.); the Occupational Safety and Health Act, as amended (29
U.S.C. Section 651 ET SEQ.); and the Safe Drinking Water Act, as amended (42
U.S.C. Section 300f ET SEQ.), and their state and local counterparts or
equivalents and any transfer of ownership notification or approval statute,
including, without limitation, the New Jersey Industrial Site Recovery Act
(N.J. Stat. Xxx. Section 13:1K-6 ET SEQ.) ("ISRA").
"ENVIRONMENTAL LIABILITIES AND COSTS" means, as to any Person,
all liabilities, obligations, responsibilities, Remedial Actions, losses,
damages, punitive damages, consequential damages, treble damages, costs and
expenses (including, without limitation, all fees, disbursements and expenses of
counsel, experts and consultants and costs of investigation and feasibility
studies), fines, penalties,
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sanctions and interest incurred as a result of any claim or demand by any other
Person, whether based in contract, tort, implied or express warranty, strict
liability, criminal or civil statute, including, without limitation, any thereof
arising under any Environmental Law, Permit, order or agreement with any
Governmental Authority or other Person, and which relate to any environmental,
health or safety condition, or a Release or threatened Release, and result from
the past, present or future operations of, or ownership of property by, such
Person or any of its Subsidiaries.
"ENVIRONMENTAL LIEN" means any Lien in favor of any
Governmental Authority for Environmental Liabilities and Costs.
"EQUIPMENT" means any "equipment," as such term is defined in
Section 9-109(2) of the UCC, now owned or hereafter acquired by any Loan Party
and, in any event, includes, without limitation, all machinery, equipment,
furnishings, fixtures, vehicles, computers and other electronic data-processing
and office equipment now owned or hereafter acquired by any Loan Party and any
and all additions, substitutions and replacements of any of the foregoing,
wherever located, together with all attachments, components, parts, equipment
and accessories installed thereon or affixed thereto.
"ERISA" means the Employee Retirement Income Security Act of
1974 (or any successor legislation thereto), as amended from time to time.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) under common control with any Loan Party or any of its
Subsidiaries within the meaning of Section 414 (b), (c), (m) or (o) of the Code.
"ERISA EVENT" means (i) a Reportable Event with respect to a
Title IV Plan or a Multiemployer Plan; (ii) the withdrawal of any Loan Party,
any of its Subsidiaries or any ERISA Affiliate from a Title IV Plan subject to
Section 4063 of ERISA during a plan year in which it was a substantial employer,
as defined in Section 4001(a)(2) of ERISA; (iii) the complete or partial
withdrawal of any Loan Party, any of its Subsidiaries or any ERISA Affiliate
from any Multiemployer Plan; (iv) the filing of a notice of intent to terminate
a Title IV Plan having any Unfunded Pension Liability or the treatment of a plan
amendment as a termination under Section 4041 of ERISA; (v) the institution
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of proceedings to terminate a Title IV Plan or Multiemployer Plan by the PBGC;
(vi) the failure to make any required contribution to a Qualified Plan; or (vii)
any other event or condition which might reasonably be expected to constitute
grounds under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Title IV Plan or Multiemployer Plan or the
imposition of any liability under Title IV of ERISA, other than for PBGC
premiums due but not delinquent under Section 4007 of ERISA.
"EUROCURRENCY LIABILITIES" has the meaning assigned to that
term in Regulation D of the Board of Governors of the Federal Reserve System, as
in effect from time to time.
"EURODOLLAR LENDING OFFICE" means, with respect to any Lender,
the office of such Lender specified as its "Eurodollar Lending Office" below its
name on Schedule II (or, if no such office is specified, its Domestic Lending
Office) or such other office of such Lender as such Lender may from time to time
specify to the Borrower and the Agent.
"EURODOLLAR RATE" means, for any Interest Period, an interest
rate per annum equal to the rate per annum obtained by dividing (a) the rate of
interest determined by the Agent to be the average (rounded upward to the
nearest whole multiple of 1/16 of 1% per annum, if such average is not such a
multiple) of the rate per annum at which deposits in U.S. dollars are offered by
the principal office of Citibank in London, England to prime banks in the London
interbank market at 11:00 A.M. (London time) two Business Days before the first
day of such Interest Period in an amount substantially equal to the Eurodollar
Rate Loan of Citibank during such Interest Period and for a period equal to such
Interest Period by (b) a percentage equal to 100% MINUS the Eurodollar Rate
Reserve Percentage for such Interest Period.
"EURODOLLAR RATE LOAN" means any outstanding principal amount
of the Loans of any Lender that, for an Interest Period, bears interest at a
rate determined with reference to the Eurodollar Rate.
"EURODOLLAR RATE RESERVE PERCENTAGE" for any Interest Period
means the reserve percentage applicable two Business Days before the first day
of such Interest Period under regulations issued from time to time by the Board
of
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Governors of the Federal Reserve System for determining the maximum reserve
requirement (including, without limitation, any emergency, supplemental or other
marginal reserve requirement) for a member bank of the Federal Reserve System in
New York City with respect to liabilities or assets consisting of or including
Eurocurrency Liabilities (or with respect to any other category of liabilities
which includes deposits by reference to which the Eurodollar Rate is determined)
having a term equal to such Interest Period.
"EVENT OF DEFAULT" has the meaning specified in Section 8.1.
"FACILITY" means the aggregate of all of the Commitments.
"FEDERAL FUNDS RATE" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such day
on such transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it.
"FINAL ORDER" means an order or judgment of the Bankruptcy
Court, or other court of competent jurisdiction, as entered on the docket in any
pending chapter 11 case or the docket of any other court of competent
jurisdiction, which has not been reversed, stayed, modified, or amended, and as
to which the time to appeal or seek certiorari has expired and no appeal or
petition for certiorari has been timely taken, or as to which any appeal that
has been taken or any petition for certiorari that has been timely filed has
been resolved by the highest court to which the order or judgment was appealed
or from which certiorari was sought.
"FISCAL QUARTER" means a fiscal quarter of the Borrower and
its consolidated Subsidiaries for financial accounting purposes.
"FISCAL YEAR" means the period of 52 or 53 weeks, as the case
may be, ending on the Saturday nearest to January 31 of each calendar year.
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"FIXED CHARGES" means, for any Person for any period, the sum
of (i) the Net Interest Expense of such Person for such period, (ii) all
principal amounts of Debt having a scheduled due date during such period payable
by such Person and each of its Subsidiaries, (iii) all cash dividends payable by
such Person on preferred stock in respect of such period or payable by any
Subsidiaries of such Person other than to such Person or any of its
Subsidiaries, and (iv) the total federal income tax liability actually currently
payable by such Person in respect of such period.
"GAAP" means generally accepted accounting principles in the
United States of America as in effect from time to time set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and the statements and pronouncements
of the Financial Accounting Standards Board, or in such other statements by such
other entity as may be in general use by significant segments of the accounting
profession, which are applicable to the circumstances as of the date of
determination except that, for purposes of Article V, GAAP shall be determined
on the basis of such principles in effect on the date hereof and consistent with
those used in the preparation of the audited financial statements referred to in
Section 4.5.
"GENERAL INTANGIBLES" means any "general intangibles," as such
term is defined in Section 9-106 of the UCC, now owned or hereafter acquired by
any Loan Party and, in any event, includes, without limitation, all customer
lists, trademarks, patents, rights in intellectual property, licenses, permits,
copyrights, trade secrets, proprietary or confidential information, inventions
(whether patented or patentable or not) and technical information, procedures,
designs, knowledge, know-how, software, data bases, data, skill, expertise,
experience, processes, models, drawings, materials and records, goodwill, rights
of indemnification and all right, title and interest which any Loan Party may
now or hereafter have in or under any Contract (as defined in the UCC), now
owned or hereafter acquired by any Loan Party.
"GOVERNMENTAL AUTHORITY" means any nation or government, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
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"GUARANTORS" means Bee-Gee and Chargit.
"HAZARDOUS MATERIALS" means any substance, material or waste
regulated or forming the basis of liability under any Environmental Law,
including, without limitation, any waste, pollutant, hazardous substance, toxic
substance, hazardous waste, special waste, petroleum or petroleum-derived
substance or waste, asbestos, asbestos containing materials, polychlorinated
biphenyls, radon or any constituent or byproduct of any such substance or waste.
"INDEBTEDNESS" of any Person means, without duplication, (i)
all indebtedness of such Person for borrowed money (including, without
limitation, reimbursement and all other obligations with respect to surety
bonds, letters of credit and bankers' acceptances, whether or not matured) or
for the deferred purchase price of property or services, (ii) all obligations of
such Person evidenced by notes, bonds, debentures or similar instruments, (iii)
all indebtedness of such Person created or arising under any conditional sale or
other title retention agreement with respect to property acquired by such Person
(even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such
property), (iv) Capitalized Lease Obligations, (v) all obligations of such
Person to purchase, redeem, retire, defease or otherwise acquire for value any
Stock of such Person, valued, in the case of redeemable preferred stock, at the
greater of its voluntary or involuntary liquidation preference plus related
accrued and unpaid dividends, (vi) all obligations of such Person under Interest
Rate Contracts, and (vii) all Indebtedness referred to in clause (i), (ii),
(iii), (iv), (v) or (vi) above secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien upon or in property (including, without limitation, and general
intangibles) owned by such Person, even though such Person has not assumed or
become liable for the payment of such Indebtedness provided that the amount of
any such Indebtedness shall not exceed the value of any property so secured,
(viii) in the case of the Borrower, the Obligations, (ix) all liabilities of
such Person for the return of deposits or payments on account, (x) all
liabilities of such Person under Title IV of ERISA, and (xi) all liabilities of
such Person that would be shown on a balance sheet of such Person prepared in
conformity with GAAP including, without limitation, in the case of the
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Borrower, the Receivables Securitization Attributable Indebtedness.
"INDEMNITEE" has the meaning specified in
Section 10.4(b).
"INSTRUMENT" means any "instrument," as such term is defined
in Section 9-105(1)(i) of the UCC, now owned or hereafter acquired by any Loan
Party other than instruments that constitute, or are a part of a group of
writings that constitute, Chattel Paper.
"INTERCREDITOR AGREEMENT" means an agreement, substantially in
the form of EXHIBIT M, executed by the Agent, the Borrower, Chargit and the
trustee, as such agreement may be amended, supplemented or modified from time to
time.
"INTEREST PERIOD" means in the case of any Eurodollar Rate
Loan, (i) initially, the period commencing on the date such Eurodollar Rate Loan
is made or on the date of conversion of a Base Rate Loan to a Eurodollar Rate
Loan and ending one, two or three months thereafter, as selected by the Borrower
in its Notice of Borrowing or Notice of Conversion or Continuation given to the
Agent pursuant to Section 2.2 or 2.7, and (ii) thereafter, if such Loan is
continued, in whole or in part, as a Eurodollar Rate Loan pursuant to Section
2.7, a period commencing on the last day of the immediately preceding Interest
Period therefor and ending one, two or three months thereafter, as selected by
the Borrower in its Notice of Conversion or Continuation given to the Agent
pursuant to Section 2.7; PROVIDED, HOWEVER, that all of the foregoing provisions
relating to Interest Periods in respect of Eurodollar Rate Loans are subject to
the following:
(A) if any Interest Period would otherwise end on a
day that is not a Business Day, such Interest Period shall be
extended to the next succeeding Business Day, unless, in the
case of Eurodollar Rate Loans only, the result of such
extension would be to extend such Interest Period into another
calendar month, in which event such Interest Period shall end
on the immediately preceding Business Day;
(B) any Interest Period of one month or more that
begins on the last Business Day of a calendar
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month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Business Day of a
calendar month;
(C) the Borrower may not select any Interest Period
which ends after the Termination Date;
(D) the Borrower may not select any Interest Period
in respect of Loans having an aggregate principal amount of
less than $5,000,000; and
(E) there shall be outstanding at any one time no
more than six Interest Periods in the aggregate.
"INTEREST RATE CONTRACTS" means interest rate swap agreements,
interest rate cap agreements, interest rate collar agreements, interest rate
insurance, and other agreements or arrangements designed to provide protection
against fluctuations in interest rates.
"INVENTORY" means any "inventory," as such term is defined in
Section 9-109(4) of the UCC, now owned or here after acquired by the Borrower or
any of its Subsidiaries, and wherever located, and, in any event, includes,
without limitation, all inventory, merchandise, goods and other personal
property now owned or hereafter acquired by the Borrower or any of its
Subsidiaries which are held for sale or lease or are furnished or are to be
furnished under a contract of service or which constitute raw materials, work in
process or materials used or consumed or to be used or consumed in the business
of the Borrower or any of its Subsidiaries, or the processing, packaging,
delivery or shipping of the same, and all finished goods.
"INVESTMENT" has the meaning specified in Section 7.5.
"IRS" means the Internal Revenue Service, or any
successor thereto.
"ISSUER" means Citibank or any successor thereto and any other
Lender approved by the Majority Lenders who agrees to issue one or more Letters
of Credit.
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"LETTER OF CREDIT" means any letter of credit issued for the
account of the Borrower by an Issuer pursuant to Article II.
"LETTER OF CREDIT OBLIGATIONS" means, at any time, all
liabilities at such time of the Borrower to all Issuers with respect to Letters
of Credit, whether or not any such liability is contingent, and includes the sum
of (i) the Reimbursement Obligations at such time and (ii) the Letter of Credit
Undrawn Amounts at such time.
"LETTER OF CREDIT REIMBURSEMENT AGREEMENT" has the
meaning specified in Section 2.16(d).
"LETTER OF CREDIT REQUEST" has the meaning
specified in Section 2.16(e).
"LETTER OF CREDIT UNDRAWN AMOUNTS" means, at any time, the
aggregate undrawn face amount of all Letters of Credit outstanding at such time.
"LIEN" means any mortgage, deed of trust, pledge,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
other), security interest or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever intended to assure
payment of any Indebtedness or other obligation, including, without limitation,
any conditional sale or other title retention agreement, the interest of a
lessor under a Capitalized Lease Obligation, any financing lease having
substantially the same economic effect as any of the foregoing, and the filing,
under the UCC or comparable law of any jurisdiction, of any financing statement
naming the owner of the asset to which such Lien relates as debtor.
"LOAN" means a Revolving Credit Loan or Swing Loan.
"LOAN DOCUMENTS" means, collectively, this Agreement, the
Notes, the Subsidiary Guarantees, the Collateral Documents, each Letter of
Credit Reimbursement Agreement and each certificate, agreement or document
executed by a Loan Party and delivered to the Agent or any Lender in connection
with or pursuant to any of the foregoing.
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"LOAN PARTY" means the Borrower or any of its Subsidiaries
which executes and delivers a Loan Document and "LOAN PARTIES" means all of
them.
"MAJORITY LENDERS" means, at any time, Lenders holding at
least 51% of the then aggregate unpaid principal amount of the Loans and Letter
of Credit Obligations or, if no Loans or Letter of Credit Obligations are then
outstanding, Lenders having at least 51% of the Commitments.
"MATERIAL ADVERSE CHANGE" means a material adverse change in
any of (i) the condition (financial or otherwise), business, performance,
prospects, operations or properties of the Borrower and its Subsidiaries taken
as a whole, (ii) the legality, validity or enforceability of any Loan Document,
(iii) the perfection or priority of the Liens granted or purported to be granted
by or pursuant to the Loan Documents, (iv) the ability of the Borrower to repay
the Obligations or of any Loan Party to perform its obligations under any Loan
Document or (v) the rights and remedies of the Lenders or the Agent under the
Loan Documents.
"MATERIAL ADVERSE EFFECT" means an effect that results in or
causes, or has a reasonable likelihood of resulting in or causing, a Material
Adverse Change.
"MIDDLETOWN BONDS" means the Industrial Development First
Mortgage Revenue Bonds in the original aggregate principal amount of $4 million,
issued by the County of Warren, Ohio on May 1, 1976, the proceeds of which were
used to finance the acquisition and construction of the Borrower's Towne Mall
Store located in Franklin, Ohio.
"MIDDLETOWN LEASE PAYMENTS" means the lease payments required
to made by the Borrower to the trustee for holders of the Middletown Bonds
pursuant to that certain Lease, dated May 1, 1976 between the Borrower, as
lessee and the County of Warren, Ohio, as lessor, which lease payments are used
by the trustee of the holders of the Middletown Bonds to pay the scheduled
principal and interest on the Middletown Bonds.
"MORAINE MORTGAGE" means that certain mortgage dated March 26,
1990 by and between the Borrower as mortgagor and Principal Mutual Life
Insurance Company as mortgagee.
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"MULTIEMPLOYER PLAN" means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, and to which any Loan Party, any of its
Subsidiaries or any ERISA Affiliate is making, is obligated to make, has made or
been obligated to make, contributions on behalf of participants who are or were
employed by any of them.
"NET INCOME (LOSS)" means, for any Person for any period, the
aggregate net income (or loss) from continuing operations of such Person and its
Subsidiaries for such period, determined on a consolidated basis in conformity
with GAAP.
"NET INTEREST EXPENSE" means, for any Person for any period,
gross interest expense of such Person and its Subsidiaries for such period
determined on a consolidated basis in conformity with GAAP LESS the following
for such Person and its Subsidiaries determined on a consolidated basis in
conformity with GAAP: (a) the sum of (i) interest capitalized during
construction for such period, (ii) interest income (other than in respect of
Chargit Receivables) for such period and (iii) gains for such period on Interest
Rate Contracts (to the extent not included in interest income above and to the
extent not deducted in the calculation of such gross interest expense) PLUS the
following for such Person and its Subsidiaries determined on a consolidated
basis in conformity with GAAP: (b) the sum of (i) losses for such period on
Interest Rate Contracts (to the extent not included in such gross interest
expense) and (ii) the amortization of upfront costs or fees for such period
associated with any interest rate contract (to the extent not otherwise included
in gross interest expense).
"NON-FUNDING LENDER" has the meaning specified in
Section 2.13(f).
"NOTES" means the Revolving Credit Notes.
"NOTICE OF BORROWING" has the meaning specified in
Section 2.2(a).
"NOTICE OF CONVERSION OR CONTINUATION" means a
notice in the form of EXHIBIT C hereto.
"OBLIGATIONS" means the Loans, the Letter of Credit
Obligations and all other advances, debts, liabilities, obligations, covenants
and duties owing by the Borrower to the Agent, any Lender, any Issuer, the Swing
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Loan Bank, any Affiliate of any of them or any Indemnitee, of every type and
description, present or future, whether or not evidenced by any note, guaranty
or other instrument, arising under this Agreement or under any other Loan
Document, whether or not for the payment of money, whether arising by reason of
an extension of credit, opening or amendment of a Letter of Credit or payment of
any draft drawn thereunder, loan, guaranty, indemnification, foreign exchange
transaction or in any other manner, whether direct or indirect (including,
without limitation, those acquired by assignment), absolute or contingent, due
or to become due, now existing or hereafter arising and however acquired and all
obligations of the Borrower to Citibank under Interest Rate Contracts. The term
"Obligations" includes, without limitation, all interest, charges, expenses,
fees, attorneys' fees and disbursements and any other sum chargeable to the
Borrower under this Agreement or any other Loan Document and all obligations of
the Borrower to cash collateralize Letter of Credit Obligations.
"OTHER TAXES" has the meaning specified in Section 2.14(b).
"PBGC" means the Pension Benefit Guaranty Corporation, or
any successor thereto.
"PENSION PLAN" means an employee pension benefit plan, as
defined in Section 3(2) of ERISA (other than a Multiemployer Plan), which is not
an individual account plan, as defined in Section 3(34) of ERISA, and which any
Loan Party, any of its Subsidiaries or, if subject to Title IV of ERISA, any
ERISA Affiliate maintains, contributes to or has an obligation to contribute to
on behalf of participants who are or were employed by any of them.
"PERMIT" means any permit, approval, authorization, license,
variance or permission required from a Governmental Authority under an
applicable Requirement of Law.
"PERMITTED LIENS" has the meaning specified in Section 7.1.
"PERSON" means an individual, partnership, limited liability
company, corporation (including, without limitation, a business trust), joint
stock company, trust, unincorporated association, joint venture or other entity,
or a Governmental Authority.
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"PLAN" means an employee benefit plan, as defined in Section
3(3) of ERISA, which any Loan Party, or any of its Subsidiaries maintains,
contributes to or has an obligation to contribute to on behalf of participants
who are or were employed by any of them.
"PLAN OF REORGANIZATION" means the Third Amended Joint Plan of
Reorganization of the Borrower and certain of its Subsidiaries attached hereto
as EXHIBIT P, as the same may be amended, supplemented or modified from time to
time to the date hereof.
"POOLING AND SERVICING AGREEMENT" means that certain Pooling
and Servicing Agreement, dated as of December 30, 1997, among El-Bee, Chargit,
as Servicer, and Bankers Trust Company, as trustee.
"PROCEEDS" means "proceeds," as such term is defined in
Section 9-306(1) of the UCC.
"QUALIFIED PLAN" means an employee pension benefit plan, as
defined in Section 3(2) of ERISA (other than a Multiemployer Plan), which is
intended to be tax-qualified under Section 401(a) of the Code, and which any
Loan Party, any of its Subsidiaries or any ERISA Affiliate maintains,
contributes to or has an obligation to contribute to on behalf of participants
who are or were employed by any of them.
"RATABLE PORTION" or "RATABLY" means, with respect to any
Lender, the quotient obtained by dividing the Commitment of such Lender by the
Commitments of all Lenders, or, if the Commitments have been terminated, by
dividing the aggregate amount of outstanding Loans and Letter of Credit
Obligations owed to such Lender by the aggregate amount of outstanding Loans and
Letter of Credit Obligations.
"REAL PROPERTY" means all of those plots, pieces or parcels of
land now owned or hereafter acquired by the Borrower or any of its Subsidiaries
("Land"), together with the right, title and interest of the Borrower or such
Subsidiary, if any, in and to the streets, the land lying in the bed of any
streets, roads or avenues, opened or proposed, in front of, the air space and
development rights pertaining to any such Land and the right to use such air
space and development rights, all rights of way, privileges, liberties,
tenements, hereditaments and appurtenances belonging or in any way appertaining
thereto, all fixtures,
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all easements now or hereafter benefiting any such Land and all royalties and
rights appertaining to the use and enjoyment of any such Land, including,
without limitation, all alley, vault, drainage, mineral, water, oil and gas
rights, together with all of the buildings and other improvements now or
hereafter erected on any such Land, and any fixtures appurtenant thereto.
"RECEIVABLES" has the meaning set forth in the
Pooling and Servicing Agreement.
"RECEIVABLES SECURITIZATION" means the transactions described
in and contemplated by the Pooling and Servicing Agreement or any successor
arrangement approved by the Agent.
"RECEIVABLES SECURITIZATION ATTRIBUTED INDEBTEDNESS" at any
time shall mean the aggregate amount theretofore paid to El-Bee in respect of
the Receivables sold by Chargit to El-Bee pursuant to the Receivables
Securitization, in each case to the extent the respective underlying Receivables
have not yet been repaid or deemed repaid by the respective account debtor or
repurchased by the Borrower or Chargit (it being the intent of the parties that
the amount of Receivables Securitization Attributed Indebtedness at any time
outstanding approximate as closely as possible the principal amount of
Indebtedness that would be outstanding at such time under the Receivables
Securitization if the same were structured as a secured lending agreement rather
than a purchase agreement).
"REGISTER" has the meaning specified in Section 10.7(c).
"REIMBURSEMENT OBLIGATIONS" means all matured reimbursement or
repayment obligations of the Borrower to any Issuer with respect to Letters of
Credit pursuant to Letter of Credit Reimbursement Agreements.
"RELEASE" means, as to any Person, any release, spill,
emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal,
leaching or migration, in each case of any Hazardous Material, into the indoor
or outdoor environment or into or out of any property owned by such Person,
including, without limitation, the movement of contaminants through or in the
air, soil, surface water, ground water or property.
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"REMEDIAL ACTION" means all actions required to (i) clean up,
remove, treat or in any other way address contaminants in the indoor or outdoor
environment, (ii) prevent the Release or threat of Release or minimize the
further Release of contaminants so they do not migrate or endanger or threaten
to endanger public health or welfare or the indoor or outdoor environment, or
(iii) perform pre-remedial studies and investigations and post-remedial
monitoring and care.
"REORGANIZATION CASES" means the cases of the Borrowers and
its Subsidiaries pursuant to chapter 11 of the Bankruptcy Code pending in the
Bankruptcy Court.
"REORGANIZATION EXPENSES" means fees or expenses paid by (or
other amounts exceeding ordinary course operating expenditures of) the Borrower
and its Subsidiaries (other than El-Bee) constituting (i) allowances of
compensation for services rendered or reimbursement of expenses awarded by the
Bankruptcy Court under sections 330 or 331 of the Bankruptcy Code, to
accountants, attorneys and other professionals retained in the Reorganization
Cases by the Borrowers or the Guarantors in accordance with section 327 of the
Bankruptcy Code (collectively, the "Borrowers' Professionals"), (ii) allowances
of compensation for services rendered or reimbursement of expenses awarded by
the Bankruptcy Court under sections 330 or 331 of the Bankruptcy Code, to
accountants, attorneys and other professionals retained in the Reorganization
Cases by any unsecured creditors' committee appointed in accordance with section
1102 of the Bankruptcy Code or any examiner appointed in accordance with section
1104 of the Bankruptcy Code other than an examiner of the type referred to in
Section 8.1(m) hereof, (iii) allowances of compensation for services rendered or
reimbursement of expenses awarded by the Bankruptcy Court under section 503 of
the Bankruptcy Code, to accountants, attorneys and other professionals retained
in the Reorganization Cases by the Xxxxx-Xxxxxxx Stores Corp. Profit Sharing and
Stock Ownership Plan Administrative Committee, (iv) fees required to be paid to
the Office of the United States Trustee under section 1930(a), title 28, United
States Code, (v) the actual, necessary expenses, other than compensation, and
reimbursements pursuant to section 503(b)(4) of the Bankruptcy Code, incurred by
a member of a committee appointed under section 1102 of the Bankruptcy Code, if
such expenses are incurred in the performance of the duties of such committee
and are allowed by the Bankruptcy Court and
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(vi) claims for reclamation allowed in accordance with Section 546(c)(2) of the
Bankruptcy Code and the corresponding Bankruptcy Court order, to the extent not
previously paid, and (vii) claims of The First National Bank of Chicago in
connection with an interest rate swap and related guaranty that were accorded
administrative priority by the Bankruptcy Court on October 17, 1995.
"REPORTABLE EVENT" means any of the events described in
Sections 4043(c)(1), (2), (3), (5), (6) or (9) of ERISA.
"REQUIREMENT OF LAW" means, as to any Person, the certificate
of incorporation and by-laws or other organizational or governing documents of
such Person, and all federal, state and local laws, rules and regulations, and
all orders, judgments, decrees or other determinations of any Governmental
Authority or arbitrator, applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject.
"RESPONSIBLE OFFICER" means, with respect to any Person, any
of the principal executive officers of such Person.
"REVOLVING CREDIT BORROWING" means a borrowing consisting of
Revolving Credit Loans made on the same day by the Lenders ratably accordingly
to their respective Commitments.
"REVOLVING CREDIT LOAN" means a Loan made by a Lender to the
Borrower pursuant to Section 2.1.
"REVOLVING CREDIT NOTE" means a promissory note of the
Borrower payable to the order of any Lender in a principal amount equal to the
amount of such Lender's Commitment as originally in effect, in substantially the
form of EXHIBIT A, evidencing the aggregate Indebtedness of the Borrower to such
Lender resulting from the Revolving Credit Loans made by such Lender.
"SALE/LEASEBACK TRANSACTION" means an arrangement relating to
property now owned or hereafter acquired whereby the Borrower or a Subsidiary of
the Borrower transfers such property to a Person and the Borrower or a
Subsidiary of the Borrower leases it from such Person.
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"SECURED PARTIES" means the Lenders, the Swing Loan Bank, the
Issuer and the Agent, and Citibank as obligee of the Borrower under Interest
Rate Contracts.
"SECURITIZATION DOCUMENTS" means each agreement, document and
instrument entered into by the Borrower or any Subsidiary of the Borrower in
connection with the Receivables Securitization, including, without limitation,
the documents listed on Schedule V, any promissory note of El-Bee in favor of
Chargit and any of Chargit in favor of the Borrower in each case made in
connection therewith.
"SECURITY AGREEMENT" means an agreement, substantially in the
form of EXHIBIT H, executed by the Borrower and the Guarantors, as such
agreement may be amended, supplemented or modified from time to time.
"SOLVENT" means, with respect to any Person, that the value of
the assets of such Person (both at fair value and present fair saleable value)
is, on the date of determination, greater than the total amount of liabilities
(including, without limitation, contingent and unliquidated liabilities) of such
Person as of such date and that, as of such date, such Person is able to pay all
liabilities of such Person as such liabilities mature and does not have
unreasonably small capital. In computing the amount of contingent or
unliquidated liabilities at any time, such liabilities will be computed at the
amount which, in light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability.
"STOCK" means shares of capital stock, beneficial or
partnership interests, participations or other equivalents (regardless of how
designated) of or in a corporation or equivalent entity, whether voting or
non-voting, and includes, without limitation, common stock and preferred stock.
"STOCK EQUIVALENTS" means all securities convertible into or
exchangeable for Stock and all warrants, options or other rights to purchase or
subscribe for any stock, whether or not presently convertible, exchangeable or
exercisable.
"STORE ACCOUNT LETTER" means a letter agreement, in
substantially the form of EXHIBIT K (with such changes as may be agreed to by
the Agent), executed by the Borrower
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and/or any Subsidiary and acknowledged and agreed to by a depository bank.
"SUBSIDIARY" means, with respect to any Person, any
corporation, partnership or other business entity of which an aggregate of 50%
or more of the outstanding Stock having ordinary voting power to elect a
majority of the board of directors, managers, trustees or other controlling
persons, is, at the time, directly or indirectly, owned or controlled by such
Person and/or one or more Subsidiaries of such Person (irrespective of whether,
at the time, Stock of any other class or classes of such entity shall have or
might have voting power by reason of the happening of any contingency).
"SUBSIDIARY GUARANTY" means a guaranty, in substantially the
form of EXHIBITS F and G, executed by the Guarantors, as such guaranty may be
amended, supplemented or otherwise modified from time to time.
"SWING LOAN" has the meaning set forth in
Section 2.17(a).
"SWING LOAN AVAILABLE CREDIT" means the Ratable Portion of the
Available Credit of the Lender that is the Swing Loan Bank.
"SWING LOAN BANK" means CUSA or such other Lender who shall
also be the Agent or who, with the agreement of the Agent, shall agree to act
hereunder as Swing Loan Bank.
"SWING LOAN BORROWING" means a borrowing consisting of a Swing
Loan.
"TAX AFFILIATE" means, as to any Person, (i) any Subsidiary of
such Person, and (ii) any Affiliate of such Person with which such Person files
or is eligible to file consolidated, combined or unitary tax returns.
"TAXES" has the meaning specified in Section 2.14(a).
"TERMINATION DATE" means the earliest of (i) December 20,
2000, (ii) the third anniversary of the Closing Date and (iii) the date of
termination in whole of the Commitments pursuant to Section 2.4 or 8.2.
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"TITLE IV PLAN" means a Pension Plan which is covered by Title
IV of ERISA.
"UCC" means the Uniform Commercial Code as the same may, from
time to time, be in effect in the State of New York; PROVIDED, HOWEVER, in the
event that, by reason of mandatory provisions of law, any or all of the
attachment, perfection or priority of the Agent's and the Secured Parties'
security interest in any Collateral is governed by the Uniform Commercial Code
as in effect in a jurisdiction other than the State of New York, the term "UCC"
shall mean the Uniform Commercial Code as in effect in such other jurisdiction
for purposes of the provisions hereof relating to such attachment, perfection or
priority and for purposes of definitions related to such provisions.
"UNFUNDED PENSION LIABILITY" means, as to any Loan Party at
any time, the sum of (i) the aggregate amount, if any, by which the present
value of all accrued benefits under each Title IV Plan of such Loan Party, any
of its Subsidiaries or any ERISA Affiliate exceeds the fair market value of all
assets of such Title IV Plan allocable to such benefits in accordance with Title
IV of ERISA, all determined as of the most recent valuation date for each such
Title IV Plan using the actuarial assumptions in effect under such Title IV
Plan, and (ii) for a period of five years following a transaction reasonably
likely to be covered by Section 4069 of ERISA, the aggregate amount, if any, of
liabilities (whether or not accrued) that could be avoided by any Loan Party,
any of its Subsidiaries or any ERISA Affiliate as a result of such transaction.
"WELFARE BENEFIT PLAN" means an employee welfare benefit plan,
as defined in Section 3(1) of ERISA, to which any Loan Party or any of its
Subsidiaries has any obligation or liability, contingent or otherwise.
"WITHDRAWAL LIABILITY" means, as to any Loan Party at any
time, the aggregate amount of the unsatisfied liabilities of any Loan Party, any
of its Subsidiaries or any ERISA Affiliate pursuant to Section 4201 of ERISA
with respect to all Multiemployer Plans.
"ZANESVILLE BONDS" means the Variable Rate Demand Industrial
Development Revenue Bonds in the original aggregate principal amount of $4.1
million, issued by the County of Muskingum, Ohio, on March 1, 1985, the proceeds
of which were used to finance the construction of the
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Borrower's Colony Square Shopping Center Store located in Zanesville, Ohio.
1.2. COMPUTATION OF TIME PERIODS. In this Agreement, in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding" and the word "through" means "to and including".
1.3. ACCOUNTING TERMS; CHANGES IN GAAP. All accounting terms
not specifically defined herein shall be construed in conformity with GAAP and
all accounting determinations required to be made pursuant hereto shall, unless
expressly otherwise provided herein, be made in conformity with GAAP. Upon any
change in GAAP that would affect in any material respect the calculations
required by Article V, the Borrower and the Agent agree to negotiate in good
faith to modify Article V to reflect in such financial ratios and covenants such
changes in GAAP and still maintain the original economic terms of such financial
ratios and covenants as in effect under this Agreement on the date hereof. The
Agent shall promptly notify the Lenders in writing of any negotiated changes to
such financial ratios, covenants and definitions and propose that this Agreement
shall be amended in accordance with the terms of Section 10.1 to reflect such
changes as may be necessary to maintain the original economic terms of such
financial ratios and covenants.
1.4. CERTAIN PRE-REORGANIZATION MATTERS. For the purpose of
calculating compliance with the financial covenants in Article V for periods
prior to the Closing Date, Average Total Debt shall exclude liabilities subject
to compromise (in accordance with GAAP) and any requirement to pay on or prior
to the Closing Date principal in respect of such liabilities shall be ignored in
the calculation of Fixed Charges.
1.5. CERTAIN TERMS. (a) The words "herein," "hereof" and
"hereunder" and other words of similar import refer to this Agreement as a
whole, and not to any particular Article, Section, subsection or clause in this
Agreement. References herein to an Exhibit, Schedule, Article, Section,
subsection or clause refer to the appropriate Exhibit or Schedule to, or
Article, Section, subsection or clause in this Agreement.
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(b) The terms "Lender", "Issuer", "Swing Loan Bank" and
"Agent" include their respective successors and the term "Lender" includes each
assignee of such Lender who becomes a party hereto pursuant to Section 10.7.
ARTICLE II
AMOUNTS AND TERMS OF THE LOANS
2.1. THE REVOLVING CREDIT LOANS. On the terms and subject to
the conditions contained in this Agreement, each Lender severally and not
jointly agrees to make loans (each a "REVOLVING CREDIT LOAN") to the Borrower
from time to time on any Business Day during the period from the Closing Date
until the Termination Date in an aggregate amount not to exceed at any time
outstanding such Lender's Commitment; PROVIDED, HOWEVER, that at no time shall
any Lender be obligated to make a Revolving Credit Loan in excess of such
Lender's Ratable Portion of the Available Credit. Within the limits of each
Lender's Commitment, amounts prepaid pursuant to Section 2.6 may be reborrowed
under this Section 2.1. The Revolving Credit Loans of each Lender shall be
evidenced by the Revolving Credit Note to the order of such Lender.
2.2. MAKING THE LOANS. (a) Revolving Credit Loans shall be
made pursuant to a Revolving Credit Borrowing. Each Revolving Credit Borrowing
shall be made on notice, given by the Borrower to the Agent not later than 11:00
A.M. (New York City time) on the Business Day prior to the date of the proposed
Revolving Credit Borrowing; PROVIDED, HOWEVER, that in the case of Eurodollar
Rate Loans, the Borrower shall give notice to the Agent three Business Days
prior to the date of the proposed Revolving Credit Borrowing. Each such notice
(a "NOTICE OF BORROWING") shall be in substantially the form of EXHIBIT B.
Revolving Credit Loans shall be made as Base Rate Loans unless (subject to
Section 2.11) the Notice of Borrowing specifies that all or a pro rata portion
thereof shall be Eurodollar Rate Loans; PROVIDED, HOWEVER, that the aggregate of
the Eurodollar Rate Loans for each Interest Period must be in an amount of not
less than $5,000,000 or an integral multiple of $1,000,000 in excess thereof.
(b) Each Swing Loan shall be made upon such notice as the
Swing Loan Bank and the Borrower shall agree. All Swing Loan Borrowings shall be
made as Base Rate Loans.
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(c) The Agent shall give to each Lender prompt notice of the
Agent's receipt of a Notice of Borrowing with respect to Revolving Credit Loans
and, if Eurodollar Rate Loans are properly requested in such Notice of
Borrowing, the information required under Section 2.9. Each Lender shall, before
11:00 A.M. (New York City time) on the date of the proposed Revolving Credit
Borrowing, make available for the account of its Applicable Lending Office to
the Agent at its address referred to in Section 10.2, in immediately available
funds, such Lender's Ratable Portion of such proposed Revolving Credit
Borrowing. After the Agent's receipt of such funds and upon fulfillment of the
applicable conditions set forth in Article III, the Agent will make such funds
available to the Borrower in a bank account maintained by the Borrower at CUSA.
(d) Each Borrowing shall be in an aggregate amount of not less
than $1,000,000.
(e) Each Notice of Borrowing shall be irrevocable and binding
on the Borrower. In the case of any proposed Borrowing which the related Notice
of Borrowing specifies is to be comprised of Eurodollar Rate Loans, the Borrower
shall indemnify each Lender against any loss, cost or expense incurred by such
Lender as a result of any failure to fulfill on or before the date specified in
such Notice of Borrowing for such proposed Revolving Credit Borrowing the
applicable conditions set forth in Article III, including, without limitation,
any loss (including, without limitation, loss of anticipated profits), cost or
expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by such Lender to fund any Eurodollar Rate Loan to be made
by such Lender as part of such proposed Borrowing when such Eurodollar Rate
Loan, as a result of such failure, is not made on such date. There shall be no
more than six separate Interest Periods in the aggregate outstanding at any one
time in respect of Eurodollar Rate Loans.
(f) Unless the Agent shall have received notice from a Lender
prior to the date of any proposed Borrowing that such Lender will not make
available to the Agent such Lender's Ratable Portion of such Borrowing, the
Agent may assume that such Lender has made such Ratable Portion available to the
Agent on the date of such Revolving Credit Borrowing in accordance with this
Section 2.2 and the Agent may, in reliance upon such assumption, make available
to the Borrower on such date a corresponding amount. If and to the
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extent that such Lender shall not have so made such Ratable Portion available to
the Agent, such Lender and the Borrower severally agree to repay to the Agent
forthwith on demand such corresponding amount together with interest thereon,
for each day from the date such amount is made available to the Borrower until
the date such amount is repaid to the Agent, at (i) in the case of the Borrower,
the interest rate applicable at the time to the Loans comprising such Borrowing
and (ii) in the case of such Lender, the Federal Funds Rate. If such Lender
shall repay to the Agent such corresponding amount, such amount so repaid shall
constitute such Lender's Loan as part of such Borrowing for purposes of this
Agreement. If the Borrower shall repay to the Agent such corresponding amount,
such payment shall not relieve such Lender of any obligation it may have to the
Borrower hereunder.
(g) The failure of any Lender to make the Loan to be made by
it as part of any Borrowing shall not relieve any other Lender of its
obligation, if any, hereunder to make its Loan on the date of such Borrowing,
but no Lender shall be responsible for the failure of any other Lender to make
the Loan to be made by such other Lender on the date of any Borrowing.
2.3. FEES. (a) The Borrower shall pay to each Lender a
commitment fee (the "COMMITMENT FEE") computed on the daily unused portion of
such Lender's Commitment from the date hereof until the Termination Date at the
rate of .375% per annum, payable (i) quarterly in arrears on the first Business
Day of the month following the close of each calendar quarter during the term of
such Lender's Commitment, commencing April 1, 1998 and (ii) on the Termination
Date.
(b) The Borrower has agreed to pay CUSA additional fees, the
amount, terms and dates of payment of which are embodied in a separate agreement
dated July 1, 1997 between the Borrower and CUSA.
2.4. REDUCTION AND TERMINATION OF THE COMMITMENTS. (a) The
Borrower may, upon at least three Business Days' prior notice to the Agent,
terminate in whole or reduce ratably in part the unused portions of the
respective Commitments; PROVIDED, HOWEVER, that each partial reduction shall be
in the aggregate amount of not less than $5,000,000 or an integral multiple of
$1,000,000 in excess thereof.
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(b) The then current Commitments shall be reduced (and the
Commitment of each Lender shall be reduced by its Ratable Portion of such
amount) on each date determined pursuant to paragraph (c) below in an amount
equal to (i) as long as no Default or Event of Default shall have occurred and
be continuing (A) with respect to each Asset Sale that includes Eligible
Inventory, an amount equal to the Advance Rate then in effect multiplied by the
Attributed Value of such Eligible Inventory sold, determined on the basis of the
most recent Borrowing Base Certificate and (B) with respect to all other Asset
Sales, (x) 50% of the amount of such Asset Sale Proceeds received by any Loan
Party or any of its Subsidiaries on or after the Closing Date in excess of
$10,000,000 and up to $15,000,000 per year and (y) 100% of the aggregate amount
of such Asset Sale Proceeds in excess of $15,000,000 per year and (ii) following
the occurrence of a Default or Event of Default, 100% of all Asset Sale
Proceeds.
(c) If pursuant to paragraph (b) above the Commitments are to
be reduced as a result of an Asset Sale, such reduction shall be made on the
date of receipt of such Asset Sale Proceeds by any Loan Party.
2.5. REPAYMENT. (a) The Borrower shall repay the
entire unpaid principal amount of the Loans on the
Termination Date.
(b) For a period of not less than 45 consecutive days (i)
during the three-month period commencing on January 1, 1998 and ending on March
31, 1998 the Borrower shall repay the Loans to the extent necessary so that the
outstanding principal amount of the Loans do not exceed an aggregate of
$30,000,000, (ii) during the three-month period commencing on January 1, 1999
and ending on March 31, 1999 the Borrower shall repay the Loans to the extent
necessary so that the outstanding principal amount of the Loans do not exceed an
aggregate of $7,500,000, and (iii) during the three month period commencing on
January 1, 2000 and ending on March 31, 2000 the Borrower shall repay the Loans
in full such that there are no Loans outstanding during such period.
2.6. PREPAYMENTS.
(a) The Borrower may, upon at least one Business Day's prior
notice to the Agent stating the proposed date and aggregate principal amount of
the prepayment, prepay the outstanding principal amount of the Loans in whole or
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ratably in part, together with accrued interest to the date of such prepayment
on the principal amount prepaid; PROVIDED, HOWEVER, that any such prepayment
shall be applied first to the Swing Loans outstanding, and then to the Revolving
Credit Loans outstanding; and, PROVIDED, FURTHER, that each partial prepayment
shall be in an aggregate principal amount not less than $5,000,000 or integral
multiples of $1,000,000 in excess thereof. Upon the giving of such notice of
prepayment, the principal amount of the Loans specified to be prepaid shall
become due and payable on the date specified for such prepayment. The notice
requirement in this Section 2.6(a) shall not apply to any application of
available funds pursuant to Section 2.6(c).
(b) (i) Upon receipt by the Borrower or any Subsidiary of the
Borrower of Asset Sale Proceeds, the Borrower shall forthwith prepay, in an
amount equal to such Asset Sale Proceeds, the Swing Loans outstanding, and if no
Swing Loans are outstanding (determined after the foregoing application), the
Revolving Credit Loans, together with accrued interest to the date of such
prepayment.
(ii) If, at any time, the sum of the aggregate principal
amount of the outstanding Swing Loans, Revolving Credit Loans and Letter of
Credit Obligations exceeds either the Commitments at such time or a Borrowing
Base Deficiency exists, the Borrower shall forthwith prepay the Swing Loans then
outstanding in an amount equal to such excess, together with accrued interest
thereon, and if there are no Swing Loans outstanding or if such prepayment does
not eliminate such excess, the Revolving Credit Loans then outstanding to the
extent necessary to eliminate such excess, together with accrued interest
thereon, and if no Revolving Credit Loans are then outstanding, the Borrower
shall forthwith cash collateralize such excess by paying to the Agent
immediately available funds in the amount of such excess, which funds shall be
held by the Agent as cash collateral on terms satisfactory to the Agent as long
as and to the extent such excess exists.
(c) The Borrower agrees that all available funds in the Cash
Collateral Account shall be applied first to accrued and unpaid interest on the
Loans to the extent then due and payable, next, PRO RATA, to the amount of the
Swing Loans and any Reimbursement Obligations then outstanding, next to the
outstanding principal amount of the Revolving Credit Loans and Loans deemed to
be made by the Lenders pursuant to Section 2.16(m), and next to any other
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Obligations then due and payable, then on any Business Day that any funds are on
deposit in the Cash Collateral Account and no Default or Event of Default has
occurred, the Borrower may direct the Agent to disburse such funds to the
Borrower's disbursement account. The Borrower shall utilize funds on deposit in
the Cash Collateral Account that are available to it pursuant to the terms
hereof prior to requesting Loans to be made hereunder.
2.7. CONVERSION/CONTINUATION OPTION. The Borrower may elect
(i) at any time to convert Base Rate Loans or any portion thereof to Eurodollar
Rate Loans or (ii) at the end of any Interest Period with respect thereto, to
convert Eurodollar Rate Loans or any portion thereof into Base Rate Loans, or to
continue such Eurodollar Rate Loans or any portion thereof for an additional
Interest Period; PROVIDED, HOWEVER, that the aggregate amount of the Eurodollar
Loans for each Interest Period therefor must be in the amount of $5,000,000 or
an integral multiple of $1,000,000 in excess thereof. Each conversion or
continuation shall be allocated among the Loans of all Lenders in accordance
with their Ratable Portions. Each such election shall be in substantially the
form of EXHIBIT C (a "NOTICE OF CONVERSION OR CONTINUATION") and shall be made
by giving the Agent at least three Business Days prior written notice thereof
specifying (A) the amount and type of conversion or continuation, (B) in the
case of a conversion to or a continuation of Eurodollar Rate Loans, the Interest
Period therefor, and (C) in the case of a conversion, the date of conversion
(which date shall be a Business Day and, if a conversion from Eurodollar Rate
Loans, shall also be the last day of the Interest Period therefor). The Agent
shall promptly notify each Lender of its receipt of a Notice of Conversion or
Continuation and of the contents thereof. Notwithstanding the foregoing, no
conversion in whole or in part of Base Rate Loans to Eurodollar Rate Loans, and
no continuation in whole or in part of Eurodollar Rate Loans upon the expiration
of any Interest Period therefor, shall be permitted at any time at which an
Event of Default shall have occurred and be continuing. If, within the time
period required under the terms of this Section 2.7, the Agent does not receive
a Notice of Conversion or Continuation from the Borrower containing a permitted
election to continue any Eurodollar Rate Loans for an additional Interest Period
or to convert any such Loans, then, upon the expiration of the Interest Period
therefor, such Loans will be automatically converted to Base Rate Loans. Each
Notice of Conversion or Continuation shall be irrevocable.
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2.8. INTEREST. The Borrower shall pay interest on the unpaid
principal amount of each Loan from the date thereof until the principal amount
thereof shall be paid in full, at the following rates per annum:
(a) For Base Rate Loans, at a rate per annum equal at
all times to the Base Rate in effect from time to time PLUS the
Applicable Base Rate Margin, payable quarterly in arrears on the first
day of each quarter, on the Termination Date and on the date any Base
Rate Loan is paid in full; PROVIDED, HOWEVER, that during the
continuance of an Event of Default, interest shall be payable on demand
and all Base Rate Loans shall bear interest at a rate per annum equal
at all times to 2.0% per annum above the Base Rate in effect from time
to time PLUS the Applicable Base Rate Margin.
(b) For Eurodollar Rate Loans, at a rate per annum
equal at all times during the applicable Interest Period for each
Eurodollar Rate Loan to the sum of the Eurodollar Rate for such
Interest Period PLUS the Applicable Eurodollar Rate Margin in effect on
the first day of such Interest Period, payable on the last day of such
Interest Period, on the Termination Date and on the date any Eurodollar
Rate Loan is paid in full; PROVIDED, HOWEVER, that during the
continuance of an Event of Default, all Eurodollar Rate Loans shall
bear interest, payable on demand, at a rate per annum equal at all
times to 2.0% above the Eurodollar Rate in effect from time to time
PLUS the Applicable Eurodollar Rate Margin until the maturity of the
Loans or the end of such Interest Period, whichever occurs first, and
thereafter at the greater of (x) 2.0% per annum above the Base Rate in
effect from time to time and (y) 2.0% per annum above the rate per
annum required to be paid on such Loan immediately prior to the date on
which such Event of Default occurred.
2.9. INTEREST RATE DETERMINATION AND PROTECTION. (a) The
Eurodollar Rate for each Interest Period for Eurodollar Rate Loans shall be
determined by the Agent two Business Days before the first day of such Interest
Period in the case of Eurodollar Rate Loans.
(b) The Agent shall give prompt notice to the Borrower and the
Lenders of the applicable interest rate determined by the Agent for purposes of
Section 2.9(a).
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(c) If, with respect to Eurodollar Rate Loans, the Majority
Lenders notify the Agent that the Eurodollar Rate for any Interest Period
therefor will not adequately reflect the cost to such Majority Lenders of making
such Loans or funding or maintaining their respective Eurodollar Rate Loans for
such Interest Period, the Agent shall forthwith so notify the Borrower and the
Lenders, whereupon
(i) each Eurodollar Loan will automatically, on the
last day of the then existing Interest Period therefor, convert into a
Base Rate Loan; and
(ii) the obligations of the Lenders to make Eurodollar
Rate Loans or to convert Base Rate Loans into Eurodollar Rate Loans
shall be suspended until the Agent shall notify the Borrower that such
Lenders have determined that the circumstances causing such
suspension no longer exist.
(d) The initial Applicable Base Rate Margin and Eurodollar
Rate Margin shall be 37.5 bps and 137.5 bps, respectively. Any change in the
Applicable Margin shall be based on the Average Total Debt to EBITDA ratio for
the four Fiscal Quarters ending on the last day of each Fiscal Quarter for which
the Borrower delivers financial statements and certificates pursuant to Section
6.10(b) and shall take effect on the third Business Day following receipt by the
Agent of such financial statements and certificates in the case of Base Rate
Loans and on the first day of the next Interest Period commencing on or after
such third Business Day in the case of Eurodollar Loans.
2.10. INCREASED COSTS. If, due to either (i) the introduction
of or any change in or in the interpretation of any law or regulation (other
than any change by way of imposition or increase of reserve requirements
included in determining the Eurodollar Rate Reserve Percentage) or (ii)
compliance with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law), there shall be
any increase in the cost to any Lender of agreeing to make or making, funding or
maintaining any Eurodollar Rate Loans (excluding for purposes of this Section
2.10 any such increased costs resulting from (i) Taxes or Other Taxes (as to
which Section 2.14 shall govern) and (ii) changes in the basis of taxation of
overall net income or overall gross income by the United States or by the
foreign jurisdiction or state under the laws of which such Lender is organized
or has its Applicable
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Lending Office or any political subdivision thereof), then the Borrower shall
from time to time, upon demand by such Lender (with a copy of such demand to the
Agent), pay to the Agent for the account of such Lender additional amounts
sufficient to compensate such Lender for such increased cost. Such demand shall
be accompanied by a statement of the amount of such compensation and include a
summary of the basis for such demand. A certificate as to the amount of such
increased cost, submitted to the Borrower and the Agent by such Lender, shall be
conclusive and binding for all purposes, absent manifest error. If the Borrower
so notifies the Agent within five Business Days after any Lender notifies the
Borrower of any increased cost pursuant to the foregoing provisions of this
Section 2.10, the Borrower may either (A) prepay in full all Eurodollar Rate
Loans, as the case may be, of such Lender then outstanding in accordance with
Section 2.6(a) and, additionally, reimburse such Lender for such increased cost
in accordance with this Section 2.10 or (B) convert all Eurodollar Rate Loans,
as the case may be, of all Lenders then outstanding into Base Rate Loans in
accordance with Section 2.7 and, additionally, reimburse such Lender for such
increased cost in accordance with this Section 2.10.
2.11. ILLEGALITY. Notwithstanding any other provision of this
Agreement, if the introduction of or any change in or in the interpretation of
any law or regulation shall make it unlawful, or any central bank or other
Governmental Authority shall assert that it is unlawful, for any Lender or its
Eurodollar Lending Office to make Eurodollar Rate Loans or to continue to fund
or maintain Eurodollar Rate Loans, then, on notice thereof and demand therefor
by such Lender to the Borrower through the Agent, (i) the obligation of such
Lender to make or to continue Eurodollar Rate Loans and to convert Base Rate
Loans into Eurodollar Rate Loans shall terminate and (ii) the Borrower shall
forthwith prepay in full all Eurodollar Rate Loans of such Lender then
outstanding, together with interest accrued thereon, unless the Borrower, within
five Business Days of such notice and demand, converts all Eurodollar Rate Loans
of all Lenders then outstanding into Base Rate Loans; provided, however, that,
to the extent permitted by law, the Borrower may defer such prepayment or
conversion to the end of the applicable Interest Period.
2.12. CAPITAL ADEQUACY. If (i) the introduction of or any
change in or in the interpretation of any law or regulation, (ii) compliance
with any law or regulation, or
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(iii) compliance with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law) affects or would
affect the amount of capital required or expected to be maintained by any Lender
or any corporation controlling any Lender and such Lender reasonably determines
that such amount is based upon the existence of such Lender's Commitments, Loans
and commitments in respect of Letters of Credit and its other commitments and
loans of such type, including, without limitation, its other commitments in
respect of letters of credit (or similar contingent obligations), then, upon
demand by such Lender (with a copy of such demand to the Agent), the Borrower
shall pay to the Agent for the account of such Lender, from time to time as
specified by such Lender, additional amounts sufficient to compensate such
Lender in the light of such circumstances, to the extent that such Lender
reasonably determines such increase in capital to be allocable to the existence
of any or all of such Lender's Commitments, Loans and agreements herein with
respect to Letters of Credit. Such demand shall be accompanied by a statement as
to the amount of such compensation and shall include a summary of the basis for
such demand. A certificate as to such amounts submitted to the Borrower and the
Agent by such Lender shall be conclusive and binding for all purposes absent
manifest error.
2.13. PAYMENTS AND COMPUTATIONS. (a) The Borrower shall make
each payment hereunder and under the Notes not later than 1:00 P.M. (New York
City time) on the day when due, in Dollars, to the Agent at its address referred
to in Section 10.2 in immediately available funds without set-off or
counterclaim. The Agent will promptly thereafter cause to be distributed
immediately available funds relating to the payment of principal or interest or
fees (other than amounts payable pursuant to Sections 2.10, 2.11, 2.12, 2.14,
2.16 and 2.17) to the Lenders, in accordance with the respective amounts owed to
each, for the account of their respective Applicable Lending Offices, and like
funds relating to the payment of any other amount payable to any Lender to such
Lender for the account of its Applicable Lending Office, in each case to be
applied in accordance with the terms of this Agreement. Payment received by the
Agent after 1:00 P.M. (New York City time) shall be deemed to be received on the
next Business Day.
(b) The Borrower hereby authorizes each Lender, if and to the
extent payment owed to such Lender is not made
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when due hereunder or under any Loan held by such Lender, to charge from time to
time against any or all of the accounts of the Borrower with such Lender any
amount so due.
(c) All computations of interest based on the Base Rate, the
Eurodollar Rate or the Federal Funds Rate and of fees shall be made by the Agent
on the basis of a year of 360 days, in each case for the actual number of days
occurring in the period for which such interest and fees are payable. Each
determination by the Agent of an interest rate hereunder shall be conclusive and
binding for all purposes, absent manifest error.
(d) Whenever any payment hereunder or under the Notes shall be
stated to be due on a day other than a Business Day, such payment shall be made
on the next succeeding Business Day, and such extension of time shall in such
case be included in the computation of payment of interest or fees, as the case
may be; PROVIDED, HOWEVER, that if such extension would cause payment of
interest on or principal of any Eurodollar Rate Loan to be made in the next
calendar month, such payment shall be made on the next preceding Business Day.
(e) Unless the Agent shall have received notice from the
Borrower prior to the date on which any payment is due hereunder to the Lenders
that the Borrower will not make such payment in full, the Agent may assume that
the Borrower has made such payment in full to the Agent on such date and the
Agent may, in reliance upon such assumption, cause to be distributed to each
Lender on such due date an amount equal to the amount then due such Lender. If
and to the extent the Borrower shall not have so made such payment in full to
the Agent, each Lender shall repay to the Agent forthwith on demand such amount
distributed to such Lender together with interest thereon, for each day from the
date such amount is distributed to such Lender until the date such Lender repays
such amount to the Agent, at the Federal Funds Rate.
(f) If any Lender (a "NON-FUNDING LENDER") has (i) failed to
make a Revolving Credit Loan required to be made by it hereunder or (ii) given
notice to the Borrower or the Agent that it will not make, or that it has
disaffirmed or repudiated any obligation to make, Revolving Credit Loans, (A)
any payment made on account of the principal of the Revolving Credit Loans
outstanding shall be made as follows:
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(x) in the case of any such payment made on any date
when due and to the extent that, in the determination of the Agent, the
Borrower would be able, under the terms and conditions hereof, to
reborrow the amount of such payment under the Commitments and to
satisfy any applicable conditions precedent set forth in Section 3.3 to
such reborrowing, such payment shall be made on account of the
outstanding Revolving Credit Loans held by the Lenders other than the
Non-Funding Lender PRO RATA according to the respective outstanding
principal amounts of the Revolving Credit Loans of such Lenders;
(y) otherwise, such payment shall be made on account
of the outstanding Revolving Credit Loans held by the Lenders PRO RATA
according to the respective outstanding principal amounts of such
Revolving Credit Loans; and
(B) any payment made on account of interest on the Revolving Credit Loans shall
be made PRO RATA according to the respective amounts of accrued and unpaid
interest due and payable on the Revolving Credit Loans with respect to which
such payment is being made.
2.14. TAXES. (a) Any and all payments by the Borrower under
each Loan Document shall be made free and clear of and without deduction for any
and all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding, in the case
of each Lender and the Agent, taxes measured by its net income, and franchise
taxes imposed on it, by the jurisdiction under the laws of which such Lender or
the Agent (as the case may be) is organized or any political subdivision thereof
and, in the case of each Lender, taxes measured by its net income, and franchise
taxes imposed on it, by the jurisdiction of such Lender's Applicable Lending
Office or any political subdivision thereof (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "TAXES"). If the Borrower shall be required by law to
deduct any Taxes from or in respect of any sum payable hereunder to any Lender
or the Agent (i) the sum payable shall be increased as may be necessary so that
after making all required deductions (including, without limitation, deductions
applicable to additional sums payable under this Section 2.14) such Lender or
the Agent (as the case may be) receives an amount equal to the sum it would
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have received had no such deductions been made, (ii) the Borrower shall make
such deductions, (iii) the Borrower shall pay the full amount deducted to the
relevant taxing authority or other authority in accordance with applicable law,
and (iv) the Borrower shall deliver to the Agent evidence of such payment to the
relevant taxation or other authority.
(b) In addition, the Borrower agrees to pay any present or
future stamp or documentary taxes or any other excise or property taxes, charges
or similar levies of the United States or any political subdivision thereof or
any applicable foreign jurisdiction which arise from any payment made under any
Loan Document or from the execution, delivery or registration of, or otherwise
with respect to, any Loan Document (collectively, "OTHER TAXES").
(c) The Borrower shall indemnify each Lender and the Agent for
the full amount of Taxes or Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this
Section 2.14) paid by such Lender or the Agent (as the case may be) and any
liability (including, without limitation, for penalties, interest and expenses)
arising therefrom or with respect thereto, whether or not such Taxes or Other
Taxes were correctly or legally asserted. A certificate as to the amount of such
indemnification submitted to the Borrower or to the Agent by such Lender or the
Agent setting forth the calculation thereof in reasonable detail shall be
conclusive and binding for all purposes, absent manifest error. This
indemnification shall be made within 30 days from the date such Lender or the
Agent (as the case may be) makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes, the
Borrower shall furnish to the Agent, at its address referred to in Section 10.2,
the original or a certified copy of a receipt evidencing such payment. In the
case of any payment hereunder or under the Notes by or on behalf of the Borrower
through an account or branch outside the United States or by or on behalf of the
Borrower by a payor that is not a United States person, if the Borrower
determines that no Taxes are payable in respect thereof, the Borrower shall
furnish, or shall cause such payor to furnish, to the Agent, at such address, an
opinion of counsel acceptable to the Agent stating that such payment is exempt
from Taxes. For purposes of this subsection (d) and subsection (e), the terms
"UNITED STATES" and "UNITED STATES
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PERSON" shall have the meanings specified in Section 7701 of the Internal
Revenue Code.
(e) Each Lender organized under the laws of a jurisdiction
outside the United States, on or prior to the date of its execution and delivery
of this Agreement (if lawfully able to do so), and from time to time thereafter
as requested in writing by the Borrower or the Agent (but only so long as such
Lender remains lawfully able to do so), shall provide each of the Agent and the
Borrower with two original Internal Revenue Service forms 1001 or 4224, as
appropriate, or any successor or other form prescribed by the Internal Revenue
Service, certifying that such Lender is exempt from or entitled to a reduced
rate of United States withholding tax on payments pursuant to this Agreement or
the Notes. If the form provided by a Lender at the time such Lender first
becomes a party to this Agreement indicates a United States interest withholding
tax rate in excess of zero, withholding tax at such rate shall be considered
excluded from Taxes unless and until such Lender provides the appropriate forms
certifying that a lesser rate applies, whereupon withholding tax at such lesser
rate only shall be considered excluded from Taxes for periods governed by such
form. If any form or document referred to in this subsection (e) requires the
disclosure of information, other than information necessary to compute the tax
payable and information required on the date hereof by Internal Revenue Service
form 1001 or 4224, that the Lender reasonably considers to be confidential, the
Lender shall give notice thereof to the Borrower and shall not be obligated to
include in such form or document such confidential information.
(f) For any period with respect to which a Lender has failed
to provide the Borrower and the Agent with the appropriate form described in
Section 2.14(e) (OTHER THAN if such failure is due to a change in law occurring
subsequent to the date on which a form originally was required to be provided,
or if such form otherwise is not required under subsection (e) above), such
Lender shall not be entitled to indemnification under Section 2.14(a) or (c)
with respect to Taxes imposed by the United States by reason of such failure;
PROVIDED, HOWEVER, that should a Lender become subject to Taxes because of its
failure to deliver a form required hereunder, the Borrower shall take such steps
as the Lender shall reasonably request to assist the Lender to recover such
Taxes.
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(g) Any Lender claiming any additional amounts payable
pursuant to this Section 2.14 agrees to use reasonable efforts (consistent with
its internal policy and legal and regulatory restrictions, and at the Borrower's
expense) to change the jurisdiction of its Eurodollar Lending Office if the
making of such a change would avoid the need for, or reduce the amount of, any
such additional amounts that may thereafter accrue and would not, in the sole
judgment of such Lender, be otherwise disadvantageous to such Lender.
(h) Without prejudice to the survival of any other agreement
of the Borrower hereunder, the agreements and obligations of the Borrower
contained in this Section 2.14 shall survive the payment in full of the
Obligations.
2.15. SHARING OF PAYMENTS, ETC. (a) If any Lender (other than
the Swing Loan Bank) shall obtain any payment (whether voluntary, involuntary,
through the exercise of any right of set off on otherwise) on account of Loans
made by it (other than pursuant to Section 2.10, 2.11, 2.12 or 2.14), and there
is any Swing Loan outstanding in respect of which the Swing Loan Bank has not
received payment in full from the Lenders pursuant to Section 2.17(c) or there
is any Reimbursement Obligation outstanding in respect of which the relevant
Issuer has not received payment in full from the Lenders pursuant to Section
2.16(i), such Lender (a "PURCHASING LENDER") shall purchase a participation in
all such Swing Loans and Reimbursement Obligations (pro rata as between each, if
both Swing Loans and Reimbursement Obligations are then outstanding) in an
amount equal to the lesser of such payment and the amount of such Swing Loan and
Reimbursement Obligation for which the Swing Loan Bank and the relevant Issuer
has not so received payment in full. If, after giving effect to the foregoing,
any Lender shall obtain any payment (whether voluntary, involuntary, through the
exercise of any right of set-off, or otherwise) on account of the Revolving
Credit Loans made by it (other than pursuant to Section 2.10, 2.11, 2.12 or
2.14) in excess of its Ratable Portion of payments on account of the Revolving
Credit Loans obtained by all the Lenders, such Lender shall forthwith purchase
from the other Lenders such participations in their Loans as shall be necessary
to cause such purchasing Lender to share the excess payment ratably with each of
them.
(b) If all or any portion of any payment received
by a Purchasing Lender is thereafter recovered from such
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Purchasing Lender, such purchase from each selling Lender described in paragraph
(a) above (a "SELLING LENDER") shall be rescinded and such Selling Lender shall
repay to the Purchasing Lender the purchase price to the extent of such recovery
together with an amount equal to such Selling Lender's ratable share (according
to the proportion of (i) the amount of such Selling Lender's required repayment
to (ii) the total amount so recovered from the Purchasing Lender) of any
interest or other amount paid or payable by the Purchasing Lender in respect of
the total amount so recovered.
(c) The Borrower agrees that any Purchasing Lender purchasing
a participation from a Selling Lender pursuant to this Section 2.15 may, to the
fullest extent permitted by law, exercise all its rights of payment (including,
without limitation, the right of set-off) with respect to such participation as
fully as if such Lender were the direct creditor of the Borrower in the amount
of such participation.
2.16. LETTER OF CREDIT FACILITY. (a) On the terms and subject
to the conditions contained in this Agreement, each Issuer agrees to issue one
or more Letters of Credit at the request of the Borrower for the account of the
Borrower from time to time during the period commencing on the date hereof and
ending on December 20, 2000 (or if earlier on the Termination Date); PROVIDED,
HOWEVER, that no Issuer shall be under any obligation to issue any Letter of
Credit if:
(i) any order, judgment or decree of any
Governmental Authority or arbitrator shall purport by its terms to enjoin or
restrain such Issuer from issuing such Letter of Credit or any Requirement of
Law applicable to such Issuer or any request or directive (whether or not having
the force of law) from any Governmental Authority with jurisdiction over such
Issuer shall prohibit, or request that such Issuer refrain from, the issuance of
letters of credit generally or such Letter of Credit in particular or shall
impose upon such Issuer with respect to such Letter of Credit any restriction or
reserve or capital requirement (for which such Issuer is not otherwise
compensated) not in effect on the date hereof or result in any unreimbursed
loss, cost or expense which was not applicable, in effect or known to such
Issuer as of the date hereof and which such Issuer in good xxxxx xxxxx material
to it;
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(ii) such Issuer shall have received written
notice from the Agent, any Lender or the Borrower, on or prior to the Business
Day prior to the requested date of issuance of such Letter of Credit, that one
or more of the applicable conditions contained in Article III is not then
satisfied;
(iii) after giving effect to the issuance of
such Letter of Credit, the Letter of Credit Obligations exceed $30,000,000;
(iv) the amount of the Letter of Credit
requested exceeds the Available Credit; or
(v) fees due in connection with a requested
issuance have not been paid.
Only an Issuer shall have an obligation hereunder to issue any Letter of Credit.
(b) Notwithstanding anything to the contrary contained in this
Agreement, any and all letters of credit issued and outstanding on the Closing
Date pursuant to the DIP Facility shall automatically and without any further
action on the part of any party, be deemed to be Letters of Credit issued by the
Issuer pursuant to this Section 2.16 and covered by the terms hereof and any
reimbursement agreement pertaining to any such Letter of Credit shall be deemed
to be a Letter of Credit Reimbursement Agreement hereunder. Schedule 2.16(b)
reflects all Letters of Credit outstanding under the DIP Facility and deemed to
be Letters of Credit for purposes of this Agreement.
(c) In no event shall:
(i) the expiration date of (x) any standby
Letter of Credit be more than 360 days after the date of issuance thereof, or
(y) any other Letter of Credit be more than 180 days after the date of issuance
thereof, other than the Letter of Credit in the face amount of $3,133,287.67
issued in respect of the Zanesville Bonds, which may be up to 360 days;
(ii) any Issuer issue any Letter of Credit
for the purpose of supporting the issuance of any letter of credit by any
other Person; or
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(iii) the expiration date of any Letter of
Credit be later than the seventh calendar day preceding the Termination Date
unless on the date of issuance thereof, the Borrower shall have cash
collateralized such Letter of Credit to the satisfaction of the Agent in an
amount equal to 105% of the undrawn face amount thereof.
(d) Prior to the issuance of each Letter of Credit, the
Borrower shall have delivered to the Issuer thereof a letter of credit
reimbursement agreement, in a form attached hereto as EXHIBIT L (a "LETTER OF
CREDIT REIMBURSEMENT AGREEMENT"), signed by the Borrower, and such other
documents or items as may be required pursuant to the terms thereof. In the
event of any conflict between the terms of any Letter of Credit Reimbursement
Agreement and this Agreement, the terms of this Agreement shall govern.
(e) In connection with the issuance of each Letter of Credit,
the Borrower shall give the Issuer thereof and the Agent at least two Business
Days' prior written notice (a "LETTER OF CREDIT REQUEST"), in substantially the
form of EXHIBIT D, of the requested issuance of such Letter of Credit. Such
notice shall be irrevocable and shall specify the stated amount of the Letter of
Credit requested, the date of issuance of such requested Letter of Credit (which
day shall be a Business Day), the date on which such Letter of Credit is to
expire (which date shall be a Business Day), and the Person for whose benefit
the requested Letter of Credit is to be issued. Such notice, to be effective,
must be received by such Issuer and the Agent not later than 11:00 A.M. (New
York City time) on the last Business Day on which notice can be given under the
immediately preceding sentence.
(f) Subject to the terms and conditions of this Section 2.16
and provided that the applicable conditions set forth in Article III are
satisfied, such Issuer shall, on the requested date, issue a Letter of Credit on
behalf of the Borrower in accordance with the Issuer's usual and customary
business practices. On the date of the proposed issuance of the Letter of Credit
the Agent shall confirm to the Issuer of the requested Letter of Credit that the
applicable conditions in Article III are satisfied. The Issuer shall give prompt
notice to the Agent of the issuance, modification or surrender of Letters of
Credit.
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(g) Immediately upon the issuance by an Issuer of a Letter of
Credit in accordance with the terms and conditions of this Agreement, such
Issuer shall be deemed to have sold and transferred to each Lender, and each
Lender shall be deemed irrevocably and unconditionally to have purchased and
received from such Issuer, without recourse or warranty, an undivided interest
and participation, to the extent of such Lender's Ratable Portion, in such
Letter of Credit and the obligations of the Borrower with respect thereto
(including, without limitation, all Letter of Credit Obligations with respect
thereto) and any security therefor and guaranty pertaining thereto.
(h) In determining whether to pay under any Letter of Credit,
no Issuer shall have any obligation relative to the Lenders other than to
confirm that any documents required to be delivered under such Letter of Credit
appear to have been delivered and that they appear to comply on their face with
the requirements of such Letter of Credit. Any action taken or omitted to be
taken by any Issuer under or in connection with any Letter of Credit, if taken
or omitted in the absence of gross negligence or willful misconduct, shall not
put such Issuer under any resulting liability to any Lender.
(i) In the event that any Issuer makes any payment under any
Letter of Credit and the Borrower shall not have repaid such amount to such
Issuer pursuant to Section 2.16(m), such Issuer shall promptly notify the Agent,
which shall promptly notify each Lender of such failure, and each Lender shall
promptly and unconditionally pay to the Agent for the account of such Issuer the
amount of such Lender's Ratable Portion of such payment in Dollars and in
immediately available funds. If the Agent so notifies such Lender prior to 11:00
A.M. (New York City time) on any Business Day, such Lender shall make available
to the Agent for the account of such Issuer its Ratable Portion of the amount of
such payment on such Business Day in immediately available funds. If and to the
extent such Lender shall not have so made such Lender's Ratable Portion of the
amount of such payment available to the Agent for the account of such Issuer,
such Lender agrees to pay to the Agent for the account of such Issuer forthwith
on demand such amount together with interest thereon, for each day from such
date until the date such amount is repaid to the Agent for the account of such
Issuer, at the Federal Funds Rate. The failure of any Lender to make available
to the Agent for the account of such Issuer its Ratable Portion of
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any such payment shall not relieve any other Lender of its obligation hereunder
to make available to the Agent for the account of such Issuer its Ratable
Portion of any payment on the date such payment is to be made, but no Lender
shall be responsible for the failure of any other Lender to make available to
the Agent for the account of any Issuer such other Lender's Ratable Portion of
any such payment.
(j) Whenever any Issuer receives a payment of a Reimbursement
Obligation as to which the Agent has received for the account of such Issuer any
payment from a Lender pursuant to Section 2.15 or 2.16(i), the Issuer shall pay
to the Agent and the Agent shall promptly pay to each Lender, in immediately
available funds, an amount equal to such Lender's pro rata share of such payment
based on the respective amounts the Lenders have paid in respect of such
Reimbursement Obligation.
(k) Upon the request of any Lender, each Issuer shall furnish
to such Lender copies of any Letter of Credit Reimbursement Agreement to which
such Issuer is a party and such other documentation as may reasonably be
requested by such Lender.
(l) The obligations of the Lenders to make payments to the
Agent for the account of each Issuer with respect to Letters of Credit shall be
irrevocable and not subject to any qualification or exception whatsoever and
shall be made in accordance with the terms and conditions of this Agreement
under all circumstances (except as expressly provided in Section 2.16(h)),
including, without limitation, any of the following circumstances:
(i) any lack of validity or enforceability
of this Agreement;
(ii) the existence of any claim, set-off,
defense or other right which the Borrower may have at any time against a
beneficiary named in a Letter of Credit, any transferee of any Letter of Credit
(or any Person for whom any such transferee may be acting), the Agent, any
Issuer, any Lender or any other Person, whether in connection with this
Agreement, any Letter of Credit or any unrelated transaction (including, without
limitation, any underlying transaction between the Borrower and the beneficiary
named in any Letter of Credit);
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(iii) any draft, certificate or any other document
presented under the Letter of Credit proving to be forged, fraudulent, invalid
or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) the surrender or impairment of any security for
the performance or observance of any of the terms of any of the Loan
Documents; or
(v) the occurrence of any Default or Event of Default.
(m) The Borrower agrees to pay to each Issuer the amount of
all Reimbursement Obligations owing to such Issuer under any Letter of Credit
immediately when due, irrespective of any claim, set-off, defense or other right
which the Borrower may have at any time against such Issuer or any other Person.
The Borrower agrees to reimburse each Issuer for all amounts which such Issuer
pays under such Letter of Credit no later than the time specified in such Letter
of Credit Reimbursement Agreement. If the Borrower does not pay (either from the
proceeds of a Borrowing or otherwise) any such Reimbursement Obligation when
due, such Reimbursement Obligation shall bear interest computed from the date on
which such Reimbursement Obligation arose to the date of repayment in full of
such loan, at the rate of interest applicable to past due Revolving Credit Loans
bearing interest at a rate based on the Base Rate during such period. If any
payment made by or on behalf of the Borrower and received by an Issuer with
respect to any Letter of Credit is rescinded or must otherwise be returned by
such Issuer for any reason and if such Issuer has made payment to the Agent on
account thereof pursuant to Section 2.16(j), each Lender shall, upon notice by
such Issuer, forthwith pay over to such Issuer an amount equal to such Lender's
pro rata share of the amount which must be so returned by such Issuer based on
the respective amounts paid in respect thereof to the Lenders pursuant to
Section 2.16(j).
(n) The Borrower agrees to pay the following amounts with
respect to Letters of Credit issued:
(i) to each Issuer, with respect to each Letter of
Credit issued by such Issuer, a fee equal to 1/4 of 1% per annum of the Letter
of Credit Undrawn Amount thereof, payable monthly in arrears on the first of
each
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month and on the termination of such Letter of Credit, and calculated on the
basis of a 360-day year and the actual number of days elapsed;
(ii) to the Agent for the account of the Lenders, an
amount equal to the product of the Letter of Credit Undrawn Amount thereof
times the Applicable Eurodollar Rate Margin, payable monthly in arrears on the
first of each month and on the termination of such Letter of Credit, and
calculated on the basis of a 360-day year and the actual number of days
elapsed; and
(iii) to each Issuer, with respect to the issuance,
amendment or transfer of each Letter of Credit and each drawing made
thereunder, documentary and processing charges in accordance with such Issuer's
standard schedule for such charges in effect at the time of issuance,
amendment, transfer or drawing, as the case may be.
2.17. SWING LOANS. (a) The Swing Loan Bank, in its sole
discretion, on the terms and subject to the conditions contained in this
Agreement, may make advances (each a "SWING LOAN") to the Borrower from time to
time on any Business Day during the period from the date hereof until the day
preceding the Termination Date in an aggregate amount not to exceed at any time
outstanding the lesser of (i) the Swing Loan Available Credit, and (ii) the
difference between the Swing Loan Bank's Commitment and the aggregate
outstanding principal amount of the Swing Loans and the Loans made by it and its
Ratable Portion of all Letter of Credit Obligations then outstanding. The Swing
Loan Bank shall be entitled to rely on the most recent Borrowing Base
Certificate delivered to the Agent. Within the limits set forth above, Swing
Loans repaid may be reborrowed under this Section 2.17.
(b) Each Swing Loan shall be made upon such notice as the
Swing Loan Bank and the Borrower shall agree. Upon fulfillment of the applicable
conditions set forth in Article III and if the Swing Loan Bank elects, in its
sole discretion, to make such Swing Loan, the Swing Loan Bank will make each
Swing Loan available to the Borrower at the Agent's address referred to in
Section 10.2. Unless the Borrower advises the Swing Loan Bank to the contrary,
the Swing Loan Bank may make a Swing Loan to pay any of the Obligations that are
due and payable without notice or further request from the Borrower.
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(c) The Agent shall notify each Lender no less frequently than
weekly, as determined by the Agent, of the amount of the Swing Loans outstanding
as of 1:00 P.M. (New York City time) as of such date (the "COMPUTATION DATE")
and each Lender's Ratable Portion thereof. Each Lender shall before 11:00 A.M.
(New York City time) on the next Business Day (the "SETTLEMENT DATE") make
available to the Agent, in immediately available funds, the amount of its
Ratable Portion of the principal amount of all such Swing Loans. Upon such
payment by a Lender, such Lender shall be deemed to have made a Revolving Credit
Loan to the Borrower in the amount of such payment. The Agent shall use such
funds to repay the Swing Loan to the Swing Loan Bank. To the extent that any
Lender fails to make such payment to the Swing Loan Bank, the Borrower shall
repay such Swing Loan on demand and in any event on the Termination Date. The
Agent's books and records shall be conclusive and binding, absent manifest
error, for all purposes of determining the Swing Loans outstanding at any time.
2.18. CASH COLLATERAL ACCOUNT AND CASH MANAGEMENT SYSTEM. (a)
The Borrower shall, and shall cause its Subsidiaries to, cause all cash, checks,
notes, drafts or other similar items of payment relating to or constituting
Proceeds from the sale of any Collateral, and any other similar payments to be
deposited via wire transfer in immediately available funds, to a bank account
maintained at Citibank, Account No. 4068-3555 (the "CASH COLLATERAL ACCOUNT"),
which shall be under the sole dominion and control of the Agent and administered
as provided in this Section 6.15 and in Section 2.6(c).
(b) The Borrower hereby pledges, and grants to the Agent a
Lien on all of its right, title and interest in and to all funds held in the
Cash Collateral Account from time to time, and all proceeds thereof, as security
for the payment the Obligations from the Borrower to the Lenders and Issuers
under the Loan Documents.
(c) All immediately available funds on deposit in the Cash
Collateral Account shall be applied by the Agent against the outstanding balance
of the Obligations in accordance with Section 2.6(c). Notwithstanding anything
contained herein to the contrary, upon the occurrence of any Event of Default,
the Agent shall have the continuing exclusive right to reverse and reapply any
and all proceeds from the Cash Collateral Account to any portion of and such
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of the Obligations as it, in its discretion, shall determine.
(d) Neither the Borrower nor any Person claiming on behalf of
or through the Borrower shall have any right to withdraw any of the funds held
in the Cash Collateral Account.
(e) The Borrower agrees that it will not (i) sell or otherwise
dispose of any interest in the Cash Collateral Account or any funds held therein
or (ii) create or permit to exist any Lien upon or with respect to the Cash
Collateral Account or any funds held therein, except as provided in or
contemplated by this Agreement.
2.19. SUBSTITUTION OF LENDERS. In the event that (a)(i) any
Lender makes a claim under Section 2.10 or 2.12, (ii) it becomes illegal for any
Lender to continue to fund or make any Eurodollar Rate Loan pursuant to Section
2.1, (iii) the Borrower is required to make any payment pursuant to Section 2.14
that is attributable to any Lender, or (iv) any Lender is in default of any of
its obligations hereunder or shall take or be the subject of any action or
proceeding of a type described in Subsection 8.1(e), (b) in the case of clause
(a)(i) above, as a consequence of increased costs in respect of which such claim
is made, the effective rate of interest payable to such Lender under this
Agreement with respect to its Loans materially exceeds the effective average
annual rate of interest payable to the Majority Lenders under this Agreement and
(c) Lenders holding at least 75% of the Commitments are not subject to such
increased costs or illegality, payment or proceedings (any such Lender, an
"Affected Lender"), the Borrower or the Majority Lenders may substitute another
financial institution for such Affected Lender hereunder, upon reasonable prior
written notice (which written notice must be given within 90 days following the
occurrence of any of the events described in clauses (a)(i), (ii), (iii) or
(iv)) by the Borrower or the Majority Lenders, as the case may be, to the Agent
and the Affected Lender that the Borrower or the Majority Lender intends to make
such substitution, which substitute financial institution must be an Eligible
Assignee and, if not a Lender, reasonably acceptable to the Agent, provided that
if more than one Lender claims increased costs, illegality or right to payment
arising from the same act or condition and such claims are received by the
Borrower or the Majority Lender within 30 days of each other, then the Borrower
or the Majority Lenders may
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substitute all, but not (except to the extent the Borrower or the Majority
Lenders has already substituted one of such Affected Lenders before the
Borrower's or the Majority Lenders' receipt of the other Affected Lenders'
claim) less than all, Lenders making such claims. In the event that the proposed
substitute financial institution is reasonably acceptable to the Agent and the
written notice was properly issued under this Section 2.19, the Affected Lender
shall sell and the substitute financial institution shall purchase, pursuant to
an Assignment and Acceptance, all rights and claims of such Affected Lender
under the Loan Documents and the substitute financial institution shall assume
and the Affected Lender shall be relieved of its Commitment and all other
theretofore unperformed obligations of the Affected Lender under the Loan
Documents (other than in respect of any damages (other than exemplary or
punitive damages, to the extent permitted by applicable law) in respect of any
such unperformed obligations). Upon the effectiveness of such sale, purchase and
assumption (which, in any event shall be conditioned upon the payment in full by
the Borrowers to the Affected Lender in cash of all fees, unreimbursed costs and
expenses and indemnities accrued and unpaid through such effective date), the
substitute financial institution shall become a "Lender" hereunder for all
purposes of this Agreement having a Commitment in the amount of such Affected
Lender's Commitment assumed by it and such Commitment of the Affected Lender
shall be terminated, provided that all indemnities under the Loan Documents
shall continue in favor of such Affected Lender.
ARTICLE III
CONDITIONS OF LENDING
3.1. CONDITIONS PRECEDENT TO INITIAL LOANS AND LETTERS OF
CREDIT. The obligation of each Lender to make its initial Loan and the
obligation of the Issuer to issue the initial Letter of Credit is subject to
satisfaction of the conditions precedent that the Agent shall have received, on
the Closing Date, the following, each dated the Closing Date unless otherwise
indicated, in form and substance satisfactory to the Agent and (except for the
Notes) in sufficient copies for each Lender:
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(a) This Agreement, duly executed and delivered by the
Borrower, in form and substance satisfactory to the Agent and the Lenders.
(b) The Notes to the order of the Lenders.
(c) Certified copies of (i) the resolutions of the Board of
Directors of each Loan Party approving the Loan Documents to which it is a
party, and (ii) all documents evidencing other necessary corporate action and
required governmental and third party approvals, licenses and consents with
respect to each Loan Document and the transactions contemplated thereby.
(d) A copy of the articles or certificate of incorporation of
each Loan Party certified as of a recent date by the Secretary of State of the
state of incorporation of such Loan Party, together with certificates of such
official attesting to the good standing of each such Loan Party, and a copy of
the certificate of incorporation and the By-Laws of each Loan Party certified as
of the Closing Date by the Secretary or an Assistant Secretary of each such Loan
Party.
(e) A certificate of the Secretary or an Assistant Secretary
of each Loan Party certifying the names and true signatures of each officer of
such Loan Party who has been authorized to execute and deliver any Loan Document
or other document required hereunder to be executed and delivered by or on
behalf of such Loan Party.
(f) A Subsidiary Guaranty, duly executed by each Guarantor.
(g) The Security Agreement duly executed by the Borrower and
each Guarantor together with:
(i) acknowledgment copies or other evidence
satisfactory to the Agent of proper financing statements (Form
UCC-1) (the "FINANCING STATEMENTS") duly filed under the
Uniform Commercial Code of all jurisdictions as may be
necessary or, in the opinion of the Agent, desirable to
perfect the Lien created by such Security Agreement,
(ii) certified copies of Requests for Information or
Copies (Form UCC-11), or equivalent
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reports, listing the Financing Statements referred to in
paragraph (i) above and all other effective financing
statements which name any Loan Party (under its present name
and or previous name) as debtor and which are filed in the
jurisdictions referred to in said paragraph (i) above,
together with copies of such other financing statements (none
of which shall cover the Collateral purported to be covered by
such Security Agreement except as otherwise permitted by the
Loan Documents); and
(iii) evidence that the insurance required by the
terms of the Collateral Documents and by Section 6.4 is in
full force and effect.
(h) The Intercreditor Agreement, duly executed by each party
thereto.
(i) The Borrower Pledge Agreement and the Chargit Pledge
Agreement (collectively, the "Pledge Agreements") duly executed by the Borrower
and Chargit, together with the certificates evidencing the Pledged Shares
referred to therein, accompanied by appropriate executed stock powers endorsed
in blank and the instruments evidencing the Pledged Debt referred to therein,
accompanied by executed assignments endorsed in blank.
(j) The Blocked Account Letter, duly executed by each party
thereto.
(k) The mortgage and pledge agreement with respect to the
Zanesville Bonds shall have been assigned to the Agent pursuant to an
assignment, in form and substance satisfactory to the Agent, as security for the
Reimbursement Obligations in connection with the Letter of Credit issued in
connection with the Zanesville Bonds.
(l) A favorable opinion of Xxxxx, Day, Xxxxxx & Xxxxx, counsel
to the Loan Parties, in substantially the form of EXHIBIT I, and as to such
other matters as any Lender or Issuer through the Agent may reasonably request,
together with a copy of the opinion rendered by such firm with respect to the
enforceability of the Securitization Documents and related matters accompanied
by a letter to the effect that the Agent, the Lenders and the Issuer may rely
thereon.
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(m) A certificate, signed by a Responsible Officer of the
Borrower, stating that each of the conditions specified in Sections 3.2(a), (b),
(c), (d) and (n) and 3.3(b) has been satisfied.
(n) A copy of the most recent business and financial plan of
the Borrower and its Subsidiaries, in form and substance satisfactory to the
Lenders, setting forth, INTER ALIA, by month for 1998 the expected amount and
payment dates of all material liabilities.
(o) Pro forma consolidated and consolidating statements of
capitalization of the Borrower and its Subsidiaries as of the consummation of
the Plan of Reorganization, giving effect to the consummation of the Plan of
Reorganization, this Agreement, the transactions contemplated hereby and thereby
and the payment or accrual of all fees and expenses payable on the consummation
of the Plan of Reorganization.
(p) Such additional documents, information and materials as
any Lender or Issuer, through the Agent, may reasonably request.
3.2. ADDITIONAL CONDITIONS TO THE INITIAL LOANS AND LETTERS OF
CREDIT. It shall be a further condition to the making of the initial Revolving
Credit Loan and the initial issuance of the Letters of Credit that:
(a) There shall be no existing secured lenders to the Borrower
other than those specified in Schedule 3.2(a).
(b) No Borrowing Base Deficiency shall exist.
(c) On the Closing Date, except as set forth in or
contemplated by the Plan of Reorganization, the following statements shall be
true:
(i) there has been no change since February 1, 1997
in the corporate, capital or legal structure of the Borrower or any of
its Subsidiaries without the consent of the Lenders and the Agent;
(ii) all necessary governmental and third party
approvals required to be obtained by any Loan Party in connection with
(A) the Plan of Reorganization, (B) the transactions contemplated
thereby and (C) the financing to be provided pursuant
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to this Agreement, shall have been obtained and remain in effect;
(iii) there exists no judgment, order, injunction or
other restraint prohibiting or in the reasonable judgment of the
Majority Lenders imposing materially adverse conditions upon the
Borrower or any of its Subsidiaries; and
(iv) there exists no claim, action, suit,
investigation or proceeding (including, without limitation, shareholder
or derivative litigation) pending or, to the knowledge of the Borrower,
threatened in any court or before any arbitrator or Governmental
Authority which relates to the financing hereunder or which, if
adversely determined, could reasonably be expected to have a Material
Adverse Effect.
(d) All costs and accrued and unpaid fees and expenses
(including, without limitation, legal fees and expenses) required to be paid to
the Lenders on or before the Closing Date, including, without limitation, those
referred to in Sections 2.3 and 10.4, to the extent then due and payable, shall
have been paid.
(e) The Lenders shall have received satisfactory October 31,
1997 and latest monthly financial statements prepared by management of the
Borrower on the same basis as the financial statements reported on by the
Borrower's independent public accountants.
(f) There shall not exist any judgment, order, injunction or
other restraint prohibiting or, in the reasonable judgment of the Lenders,
imposing materially adverse conditions upon the Borrower or any of its
Subsidiaries.
(g) Nothing contained in any disclosure made by the Borrower
or any of its subsidiaries after the date hereof shall lead the Agent or any
Lender to determine that, and neither the Agent nor any Lender shall have become
aware of any fact or condition not disclosed to them prior to the date hereof
which shall lead the Agent or any Lender to determine that, the Borrower's
condition (financial or otherwise), operations, performance, properties or
prospects are different in any material and adverse respect from that
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derived by the Agent or such Lender from the public filings of the Borrower or
prior to such date.
(h) There shall have occurred no adverse change since February
1, 1997, which the Agent or any Lender deems material, in the condition
(financial or otherwise), operations, performance, properties or prospects of
the Borrower and its Subsidiaries taken as a whole, and nothing shall have
occurred since the date hereof which, in the judgment of the Agent or any
Lender, has or can reasonably be expected to have a material adverse effect on
the rights and remedies of the Lenders or the Agent or on the ability of the
Borrower to perform its obligations to them.
(i) There shall exist no event of default (or event which
would constitute an event of default with the giving of notice or lapse of time)
under any of the existing debt instruments of the Borrower or any of its
Subsidiaries or of any of the Loan Documents and the representations and
warranties in the Loan Documents shall be true and correct in all material
respects.
(j) Each Lender shall have received such financial and other
information regarding the Borrower and its subsidiaries as such Lender shall
have reasonably requested through the Agent.
(k) There shall not have occurred any material change in loan
syndication, financial or capital market conditions generally that, in the
Agent's judgment, would materially impair syndication of the Facility.
(l) The Confirmation Order shall not have been reversed,
vacated, amended, supplemented, modified or remanded and the Plan of
Reorganization shall not have been amended, supplemented or modified, and no
provision of either the Confirmation Order or the Plan of Reorganization shall
have been waived, in each case without the prior written consent of the Lenders,
and all transactions in connection with the Plan of Reorganization shall have
been or will be consummated on terms and conditions reasonably satisfactory to
all Lenders and in compliance with all relevant laws and regulations.
(m) The Plan of Reorganization and the Confirmation Order
shall be in form and substance reasonably satisfactory to the Lenders.
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(n) All conditions precedent to Confirmation and to the
Effective Date under and as defined in the Plan of Reorganization shall have
been satisfied (or the waiver thereof shall have been consented to by the Agent
and the Lenders) and the Effective Date shall have occurred or shall be
scheduled to occur but for the initial extension of credit contemplated for the
Facility.
(o) Except as consented to by the Agent and Lenders, the
Bankruptcy Court's retention of jurisdiction under the Confirmation Order shall
not govern the enforcement of the Loan Documents or any rights or remedies
relating thereto.
(p) All sources and uses of funds to consummate the Plan of
Reorganization shall otherwise be substantially as described in the Disclosure
Statement.
(q) The Agent and the Lenders shall be satisfied in all
respects with the terms and extent of all material liabilities of the Borrower
which are not otherwise being discharged upon consummation of the Plan or
Reorganization as contemplated by the terms thereof.
(r) Each Lender shall be satisfied, in its sole judgment,
exercised reasonably, with the corporate, capital, legal and management
structure of the Borrower and shall be satisfied, in its sole judgment exercised
reasonably, with the nature and status of all Contractual Obligations,
securities, labor, tax, ERISA, employee benefit, environmental, health and
safety matters, in each case, involving or affecting the Borrower or any of its
Subsidiaries.
(s) Either the Confirmation Order shall have become a Final
Order or the Majority Lenders shall have agreed in writing that the Closing Date
may occur prior to the date on which the Confirmation Order becomes a Final
Order and no appeal or petition for certiorari is pending.
3.3. CONDITIONS PRECEDENT TO EACH LOAN AND LETTER OF CREDIT.
The obligation of each Lender to make any Loan and of each Issuer to issue any
Letter of Credit and Letters of Credit being issued by such Issuer (including
the Loans being made by such Lender on the Closing Date) shall be subject to the
further conditions precedent that:
(a) No Borrowing Base Deficiency shall exist.
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(b) The following statements shall be true on the date of such
Loan or issuance, before and after giving effect thereto and to the application
of the proceeds therefrom and to such issuance (and the acceptance by the
Borrower of the proceeds of such Loan shall constitute a representation and
warranty by the Borrower that on the date of such Loan or issuance such
statements are true):
(i) The representations and warranties of the
Borrower contained in Article IV and of each Loan Party in the other
Loan Documents are true and correct on and as of such date as though
made on and as of such date other than any such representations and
warranties that, by their terms, refer specifically to a date other
than the date of such Borrowing or issuance; and
(ii) No Default or Event of Default has occurred and is
continuing or would result from the Loans being made or any Letter of
Credit being issued on such date.
(c) The Borrower shall have delivered to Lender a Borrowing
Base Certificate, required by Section 6.10(e), as of no more than nine days
prior to the date on which a Revolving Credit Loan is to be made or a Letter of
Credit is to be issued, which Borrowing Base Certificate shall include
supporting schedules as required by the Agent.
(d) No Revolving Credit Loans shall be made if any Swing Loans
are outstanding unless, to the extent necessary, proceeds of such Revolving
Credit Loans are used to repay in full the outstanding Swing Loans.
(e) The making of the Loans on such date does not violate any
Requirement of Law and is not stayed or enjoined, temporarily, preliminarily or
permanently.
(f) The Agent shall have received such additional documents,
information and materials as any Lender or Issuer, through the Agent, may
reasonably request.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
To induce the Lenders and the Agent to enter into this
Agreement, the Borrower represents and warrants to the Lenders and the Agent
that:
4.1. CORPORATE EXISTENCE; COMPLIANCE WITH LAW. Each Loan Party
and each of its Subsidiaries (i) is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation; (ii) is duly qualified as a foreign corporation, except for
failures which in the aggregate have no Material Adverse Effect; (iii) has all
requisite corporate power and authority and the legal right to own, pledge,
mortgage and operate its properties, to lease the property it operates under
lease and to conduct its business as now or currently proposed to be conducted;
(iv) is in compliance with its certificate of incorporation and by-laws; (v) is
in compliance with all other applicable Requirements of Law except for such
non-compliances as in the aggregate have no Material Adverse Effect; and (vi)
has all necessary licenses, permits, consents or approvals from or by, has made
all necessary filings with, and has given all necessary notices to, each
Governmental Authority having jurisdiction, to the extent required for such
ownership, operation and conduct, except for licenses, permits, consents or
approvals which can be obtained by the taking of ministerial action to secure
the grant or transfer thereof or failures which in the aggregate have no
Material Adverse Effect. The only Subsidiaries of the Borrower are Chargit,
Bee-Gee and El-Bee, each of which is wholly owned by the Borrower.
4.2. CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS.
(a) The execution, delivery and performance by each Loan Party of the Loan
Documents and the Securitization Documents to which it is a party and the
consummation of the transactions related to the financing contemplated hereby,
including, without limitation, the consummation of the Plan of Reorganization:
(i) are within such Loan Party's corporate
powers;
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(ii) have been duly authorized by all necessary corporate
action, including, without limitation, the consent of shareholders
where required;
(iii) do not and will not (A) contravene any Loan Party's
or any of its Subsidiaries' respective certificate of incorporation or
by-laws or other comparable governing documents, (B) violate any other
applicable Requirement of Law (including, without limitation,
Regulations G, T, U and X of the Board of Governors of the Federal
Reserve System), or any order or decree of any Governmental Authority
or arbitrator, (C) conflict with or result in the breach of, or
constitute a default under, or result in or permit the termination or
acceleration of, any Contractual Obligation of any Loan Party or any of
its Subsidiaries, or (D) result in the creation or imposition of any
Lien upon any of the property of any Loan Party or any of its
Subsidiaries, other than those in favor of the Agent pursuant to the
Loan Documents; and
(iv) do not require the consent of, authorization by,
approval of, notice to, or filing or registration with, any
Governmental Authority or any other Person.
(b) This Agreement has been, and each of the other Loan
Documents and the Securitization Documents will have been upon delivery thereof
pursuant to Section 3.1, duly executed and delivered by each Loan Party thereto.
This Agreement is, and the other Loan Documents will be, when delivered
hereunder, the legal, valid and binding obligation of each Loan Party thereto,
enforceable against it in accordance with its terms.
4.3. TAXES. (a) All federal, state, local and foreign tax
returns, reports and statements (collectively, the "Tax Returns") required to be
filed by each Borrower or any of its respective Tax Affiliates have been filed
with the appropriate governmental agencies in all jurisdictions in which such
Tax Returns, are required to be filed, all such Tax Returns are true and correct
in all material respects, and all taxes, charges and other impositions due and
payable have been timely paid prior to the date on which any fine, penalty,
interest, late charge or loss may be added thereto for nonpayment thereof,
except where contested in good faith and by appropriate proceedings if (i)
adequate
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reserves therefor have been established on the books of the Borrower or such Tax
Affiliate in conformity with GAAP and (ii) all such nonpayments in the aggregate
have no Material Adverse Effect. Proper and accurate amounts have been withheld
by the Borrower and each of its Tax Affiliates from their respective employees
for all periods in full and complete compliance with the tax, social security
and unemployment withholding provisions of applicable federal, state, local and
foreign law and such withholdings have been timely paid to the respective
Governmental Authorities, except where the Borrower or a Tax Affiliate, as the
case may be, has not withheld and paid such taxes on the basis of a good faith
determination that one or more individuals are not employees for applicable
employment tax purposes and a contrary determination by a Government Authority
as to the employment status of such individual or individuals would not have a
Material Adverse Effect. Except as set forth on Schedule 4.3(a), neither the
Borrower nor any of its Tax Affiliates has any obligation under any written tax
sharing agreement.
(b) Set forth on Schedule 4.3(b) is a complete and accurate
list, as of the date hereof, of each taxable year of the Borrower (or of the
consolidated group of which the Borrower was a member prior to the Effective
Date of the Plan of Reorganization) for which Federal income tax returns have
been filed and for which the expiration of the applicable statute of limitations
for assessment or collection has not occurred by reason of extension or
otherwise (an "OPEN YEAR").
(c) The aggregate unpaid amount, as of the date hereof, of
adjustments to the Federal income tax liability of the Borrower proposed by the
IRS with respect to Open Years does not exceed $17,000,000. No issues have been
raised by the IRS in respect of Open Years that, in the aggregate, could be
reasonably be expected to have a Material Adverse Effect.
(d) The aggregate unpaid amount, as of the date hereof, of
adjustments to the state, local and foreign tax liability of the Borrower and
its Subsidiaries proposed by all state, local and foreign taxing authorities
(other than amounts arising from adjustments to Federal income tax returns) does
not exceed $4,000,000. Except as set forth on Schedule 4.3(d), no issues have
been raised by such taxing authorities that, in the aggregate, could reasonably
be expected to have a Material Adverse Effect.
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4.4. FULL DISCLOSURE. (a) No information, exhibit or report
(whether or not in writing) furnished by or on behalf of any Loan Party or any
of its Affiliates to the Agent or any Lender in connection with any of the Loan
Documents or the consummation of the transactions contemplated thereby and no
financial statement delivered pursuant hereto or thereto, contains any untrue
statement of a material fact or omits to state a material fact necessary to make
the statements made therein not misleading. All facts known to the Borrower
which are material to an understanding of the financial condition, business,
properties or prospects of the Borrower and its Subsidiaries taken as one
enterprise have been disclosed to the Lenders.
(b) The Borrower has delivered to each Lender a true, complete
and correct copy of the Disclosure Statement. As of the Closing Date, the
Disclosure Statement does not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements made
therein, in light of the circumstances under which they were made, not
misleading and as of the Closing Date, the Disclosure Statement complies as to
form in all material respects with all applicable requirements of the Bankruptcy
Code and related rules.
(c) The pro forma forecasted balance sheets, income statements
and cash flow statements of the Borrower and its Subsidiaries delivered to the
Lenders pursuant to this Agreement were prepared in good faith on the basis of
the assumptions stated therein, which assumptions were fair in the light of
conditions existing at the time of delivery of such forecasts, and represented,
at the time of delivery, the Borrower's best estimate of its future financial
performance.
4.5. FINANCIAL MATTERS. (a) The consolidated balance sheet of
the Borrower and its Subsidiaries at February 1, 1997 and the related
consolidated statements of operations, shareholders' equity and cash flows of
the Borrower and its Subsidiaries for the fiscal year then ended, certified by
Deloitte & Touche and the consolidated balance sheets of the Borrower and its
Subsidiaries at October 4, 1997, and the related consolidated statements of
operations, shareholders' equity and cash flows of the Borrower and its
Subsidiaries for the thirty-five weeks then ended, certified by the chief
financial officer of the Borrower copies of which have been furnished to each
Lender, fairly present, subject, in the case of said balance sheets
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at October 4, 1997, and said statements of operations, shareholders' equity and
cash flows for the thirty-five weeks then ended, to year-end audit adjustments,
the consolidated financial condition of the Borrower and its Subsidiaries as at
such dates and the consolidated results of the operations of the Borrower and
its Subsidiaries for the period ended on such dates, all in conformity with
GAAP.
(b) Since February 1, 1997, there has been no Material Adverse
Change and there have been no events or developments that in the aggregate have
had a Material Adverse Effect.
(c) The unaudited pro forma consolidated balance sheet of the
Borrower and its Subsidiaries, a copy of which has been delivered to each Lender
prior to the date of this Agreement, gives effect to the consummation of the
Plan of Reorganization, the financing thereof and all fees and expenses payable
in connection therewith and reflect as of the date thereof, on a pro forma
basis, the consolidated financial condition of the Borrower and its Subsidiaries
assuming the consummation of the Plan of Reorganization and the financing
thereof had actually occurred on such date, and the projections and assumptions
expressed therein were reasonably based on the information available to the
Borrower at the time so furnished and on the Closing Date.
(d) The Borrower is, and on a consolidated basis the Borrower
and its Subsidiaries are, Solvent.
4.6. LITIGATION. Schedule 4.6 sets forth, as of the date
hereof, each action, suit, investigation, litigation or proceeding affecting any
Loan Party or any of its Subsidiaries, pending or, to the best of the Loan
Parties' knowledge, threatened before any court, Governmental Authority or
arbitrator that in the aggregate (i) if adversely determined would have a
Material Adverse Effect or (ii) purports to affect the legality, validity or
enforceability of this Agreement, any Note or any other Loan Document or the
consummation of the transactions contemplated hereby and thereby.
4.7. MARGIN REGULATIONS. The Borrower is not engaged in the
business of extending credit for the purpose of purchasing or carrying margin
stock (within the meaning of Regulation U issued by the Board of Governors of
the Federal Reserve System), and no proceeds of any Borrowing will be used to
purchase or carry any margin stock or to
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extend credit to others for the purpose of purchasing or carrying any margin
stock in contravention of Regulation G, T, U or X of the Board of Governors of
the Federal Reserve System.
4.8. ERISA. (a) Each Qualified Plan is qualified under Section
401 of the Code, and the trusts created thereunder are exempt from tax under the
provisions of Section 501 of the Code, except where all such failures to be
qualified or exempt, as the case may be, in the aggregate, have no Material
Adverse Effect.
(b) Except as set forth on Schedule 4.8(b) attached hereto,
none of the Borrower, any of its Subsidiaries or any ERISA Affiliate, with
respect to any Qualified Plan, has failed to make any contribution or pay any
amount due as required by Section 412 of the Code or Section 302 of ERISA.
(c) There has been no, nor, to the knowledge of the Borrower,
is there reasonably expected to occur, any ERISA Event or event described in
Section 4068 of ERISA with respect to any Title IV Plan or Multiemployer Plan
which has a Material Adverse Effect.
(d) Except as set forth on Schedule 4.8(d), there are no
pending or, to the knowledge of the Borrower, threatened claims, actions or
lawsuits (other than claims for benefits in the normal course), asserted or
instituted against (i) any Qualified Plan or Multiemployer Plan, or its assets,
(ii) any fiduciary with respect to any Qualified Plan or Multiemployer Plan, or
(iii) the Borrower, any of its Subsidiaries or any ERISA Affiliate with respect
to any Qualified Plan or Multiemployer Plan, other than those that in the
aggregate, if adversely determined, have no Material Adverse Effect.
(e) None of the Borrower, any of its Subsidiaries or any ERISA
Affiliate intends to take or is contemplating actions which reasonably could be
expected to result in any Withdrawal Liability under Section 4201 of ERISA as a
result of a complete or partial withdrawal from a Multiemployer Plan (and no
event has occurred which, with the giving of notice under Section 4219 of ERISA,
would result in any such liability) that would have a Material Adverse Effect.
(f) None of the Borrower nor any of its Subsidiaries has
incurred any obligation or liability with
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respect to one or more prohibited transactions, as defined in Section 4975 of
the Code or Section 406 of ERISA, in connection with any Qualified Plan or
Multiemployer Plan, which would subject or has any reasonable likelihood of
subjecting the Borrower or any of its Subsidiaries (after giving effect to any
exemption) to a tax on prohibited transactions imposed by Section 4975 of the
Code or any other liability, in either case, which in the aggregate could
reasonably be expected to have a Material Adverse Effect.
4.9. LIENS. There are no Liens of any nature whatsoever on any
properties of any Loan Party or any of its Subsidiaries other than Permitted
Liens. The Liens granted by the Loan Parties to the Agent pursuant to the
Collateral Documents are fully perfected first priority Liens in and to the
Collateral.
4.10. NO BURDENSOME RESTRICTIONS; NO DEFAULTS. (a) No Loan
Party or Subsidiary of any Loan Party (i) is a party to any Contractual
Obligation the compliance with which would have a Material Adverse Effect or the
performance of which by any thereof, either unconditionally or upon the
happening of an event, will result in the creation of a Lien (other than a Lien
granted pursuant to the Loan Documents and Permitted Liens) on the property or
assets of any thereof, or (ii) is subject to any charter or corporate
restriction which has a Material Adverse Effect.
(b) No Loan Party or Subsidiary of any Loan Party is in
default under or with respect to any Contractual Obligation owed by it and, to
the knowledge of the Borrower, no other party is in default under or with
respect to any Contractual Obligation owed to any Loan Party or to any
Subsidiary of a Loan Party, other than those defaults which in the aggregate
have no Material Adverse Effect.
(c) No Event of Default or Default has occurred and is
continuing.
(d) There is no Requirement of Law the compliance with which
by any Loan Party would have a Material Adverse Effect.
(e) No Subsidiary of the Borrower is subject to any
Contractual Obligation restricting or limiting its ability to declare or make
any dividend payment or other
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distribution on account of any shares of any class of its Stock or its ability
to purchase, redeem, or otherwise acquire for value or make any payment in
respect of any such shares or any shareholder rights.
4.11. NO OTHER VENTURES. Except as set forth on Schedule 4.11,
neither the Borrower nor any of its Subsidiaries is engaged in any joint venture
or partnership with any other Person.
4.12. SECURITIZATION DOCUMENTS; INTEREST RATE CONTRACTS.
(a) The Agent has been provided with true and complete copies
of the Securitization Documents, none of which has been amended or modified
since the date hereof.
(b) Schedule 4.12(b) sets forth a description of each Interest
Rate Contract to which any Loan Party or Subsidiary thereof is party as of the
date hereof. The Agent has been provided true and complete copies of all
documentation relating to the Interest Rate Contracts.
4.13. INVESTMENT COMPANY ACT. The Borrower is not an
"investment company" or an "affiliated person" of, or "promoter" or "principal
underwriter" for, an "investment company", as such terms are defined in the
Investment Company Act of 1940, as amended. The making of the Loans by the
Lenders, the application of the proceeds and repayment thereof by the Borrower
and the consummation of the transactions contemplated by the Loan Documents will
not violate any provision of such Act or any rule, regulation or order issued by
the Securities and Exchange Commission thereunder.
4.14. PUBLIC UTILITY HOLDING COMPANY ACT. Neither the Borrower
nor any of its Subsidiaries is a "holding company" or an "affiliate" of a
"holding company" or of a "subsidiary company" of a "holding company" within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
4.15. SECURITY INTERESTS. On and after the Closing Date, each
of the Security Documents creates, as security for the Obligations, a valid and
enforceable perfected security interest in and Lien on all of the Collateral,
superior to and prior to the rights of all third parties and subject to no other
Liens except Permitted
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Liens, in favor of the Agent for the benefit of the Lenders. No filings or
recordings are required in order to perfect the security interests created under
any Collateral Document except for filings or recordings required in connection
with any such Collateral Document which shall have been made on or prior to the
Closing Date.
4.16. INSURANCE. All policies of insurance of any kind or
nature owned by or issued to any Loan Party or any of its Subsidiaries,
including, without limitation, policies of life, fire, theft, product liability,
public liability, property damage, other casualty, employee fidelity, workers'
compensation and employee health and welfare insurance, are in full force and
effect and are of a nature and provide such coverage as is sufficient and as is
customarily carried by companies of the size and character of such Person. No
Loan Party or any of its Subsidiaries has been refused insurance for which it
applied or had any policy of insurance terminated (other than at its request).
4.17. USE OF PROCEEDS. The proceeds of the Loans and the
Letters of Credit shall be used solely to make payments required pursuant to the
Plan of Reorganization, for working capital and for general corporate purposes.
4.18. ENVIRONMENTAL PROTECTION. (a) Except as
disclosed on Schedule 4.18:
(i) The operations of each Loan Party and each of their
respective Subsidiaries or tenants comply with all Environmental Laws other than
such non-compliance the consequences of which in the aggregate could not result
in material liability under Environmental Laws;
(ii) Each Loan Party and each of their respective Subsidiaries
have obtained all environmental, health and safety Permits necessary for their
operations, and all such Permits are in good standing and each Loan Party and
each of their respective Subsidiaries are in compliance with the terms and
conditions of such Permits other than such non-compliance the consequences of
which individually or in the aggregate could not result in material liability
under Environmental Laws;
(iii) No Loan Party or any of its Subsidiaries or any of its
currently or, to the knowledge of the Borrower, previously owned or leased
property or operations is subject to any outstanding or, to the knowledge of the
Borrower,
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threatened order from or agreement with any Governmental Authority or other
Person or is subject to any judicial or docketed administrative proceeding
respecting (x) Environmental Laws, (y) Remedial Action or (z) any Environmental
Liabilities and Costs arising from a Release or threatened Release, other than
those the consequences of which individually or in the aggregate could not
result in material liability under Environmental Laws;
(iv) There are no conditions or circumstances associated with
the currently or, to the knowledge of the Borrower, previously owned or leased
properties or operations of any Loan Party or any of its Subsidiaries or tenants
which may give rise to the Borrower incurring any Environmental Liabilities and
Costs other than those which in the aggregate could not result in material
liability under Environmental Laws;
(v) No Loan Party or any of its Subsidiaries is a treatment,
storage or disposal facility requiring a permit under the Resource Conservation
and Recovery Act, 42 U.S.C. Section 6901 ET SEQ., the regulations thereunder or
any state analog;
(vi) No Loan Party nor any of its Subsidiaries has filed or
failed to file any notice required under any applicable Environmental Law
reporting a Release under CERCLA or RCRA, other than those which individually or
in the aggregate could not result in material liability under Environmental
Laws;
(vii) There is not now on or in the property owned, leased or
operated by any Loan Party or any of its Subsidiaries (w) any underground
storage tanks or surface impoundments, (x) any friable asbestos-containing
material, the presence of which violates any Environmental Law, or (y) any
polychlorinated biphenyls ("PCBS") used in electrical or other equipment owned
by any Loan Party or any of its Subsidiaries or (z) any other Environmental
Liabilities and Costs, other than, in case of any of clauses (w) through (z),
those that could not result in material liability under Environmental Laws.
(b) Each Loan Party has made available to the Lenders copies
of all environmental audits, reports, and assessments relating to any currently
or formerly owned or operated real estate currently in its possession, custody
or control.
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(c) None of the exceptions listed on Schedule 4.18 could have
a Material Adverse Effect.
(d) The transactions contemplated by this Agreement do not
trigger any environmental property transfer laws, including, but not limited to
ISRA.
4.19. INTELLECTUAL PROPERTY. The Loan Parties and their
Subsidiaries own or license or otherwise have the right to use all material
licenses, permits, patents, patent applications, trademarks, trademark
applications, service marks, trade names, copyrights, copyright applications,
franchises, authorizations and other intellectual property rights that are
necessary for the operations of their respective businesses, without
infringement upon or conflict with the rights of any other Person with respect
thereto, including, without limitation, all trade names associated with any
private label brands of any Loan Party or any of its Subsidiaries. To the best
knowledge of the Borrower, no slogan or other advertising device, product,
process, method, substance, part or component, or other material now employed,
or now contemplated to be employed, by any Loan Party or any of their respective
Subsidiaries infringes upon or conflicts with any rights owned by any other
Person, and no claim or litigation regarding any of the foregoing is pending or
threatened.
4.20. LEASED PROPERTY. Set forth on Schedule 4.20 is a
complete and accurate list at the date hereof of all leases of real property
under which any of the Loan Parties, or any of their Subsidiaries is the lessee,
showing the street address, state, lessor and lessee. To the Borrower's
knowledge, each such lease is the legal, valid and binding obligation of the
lessor thereof.
4.21. CERTAIN INDEBTEDNESS. Schedule 4.21 separately
identifies all Indebtedness at the date hereof (other than trade payables) of
each Loan Party and its Subsidiaries which is either (i) for borrowed money,
(ii) incurred outside of the ordinary course of the business or in a manner and
to the extent consistent with past practice, or (iii) material to the financial
condition, business, operations or prospects of such Loan Party or such
Subsidiary (or will be material to the financial condition, business, operations
or prospects of such Loan Party or such Subsidiary), $1,000,000 being hereby
deemed material for purposes of this Section 4.21.
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4.22. REAL PROPERTY. Set forth on Schedule 4.22 is a complete
and accurate list of all Real Property owned by each Loan Party and its
Subsidiaries. Such Loan Party or such Subsidiary has good, marketable and
insurable fee simple title to such real property located in the United States or
any of its territories, free and clear of all Liens, other than Liens created or
permitted by the Loan Documents.
4.23. RESTRICTED PAYMENTS. Since August 30, 1997, the Borrower
has not (a) declared or made any dividend payment or other distribution of
assets, properties, cash, rights, obligations or securities on account of any
shares of any class of its Stock, (b) except as permitted under Section 7.3 or
pursuant to the Plan of Reorganization, made any payment or distribution on
account of any Indebtedness for or in respect of borrowed money (other than the
making of regularly scheduled interest payments) including, without limitation,
to secure any waiver or consent in respect of any such Indebtedness, (c)
purchased, redeemed, or otherwise acquired for value or made any payment in
respect of any of its Stock or Stock Equivalents (d) purchased, redeemed,
prepaid, defeased or otherwise, acquired for value any Indebtedness for or in
respect of borrowed money or (e) in the case of clauses (b) and (d) above,
permitted any of its Subsidiaries to do so.
4.24. OBLIGATIONS WITH RESPECT OF GIFT CERTIFICATES. To the
knowledge of the Borrower, as of the Confirmation Date, the aggregate amount of
all claims arising or that are deemed to have arisen prior to the Confirmation
Date in respect of the Loan Parties' obligations to customers incurred in the
ordinary course of business (including honoring obligations arising from
deposits, prepayments, gift certificates, warranties, refunds, returns,
exchanges and other credit balances) totaled approximately $3,500,000, and there
has been no material change in such amount since the Confirmation Date.
4.25. ALLOWED AND DISPUTED CLAIMS. The allowed amount of
administrative expense claims (including claims of professionals for services
rendered and expenses incurred), priority tax claims, and claims in Class C-2B
(other secured claims), Class C-3 (unsecured priority claims), and Class C- 4
(convenience claims) under the Plan of Reorganization, and any amount reserved
on account of disputed claims in such classes in accordance with the Plan, do
not exceed $90,000,000.
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ARTICLE V
FINANCIAL COVENANTS
As long as any of the Obligations or Commitments remain
outstanding, unless the Majority Lenders otherwise consent in writing, the
Borrower agrees with the Lenders and the Agent that:
5.1. FIXED CHARGE COVERAGE RATIO. The Borrower shall maintain
at the end of each Fiscal Quarter during the Fiscal Years set forth below,
commencing with the Fiscal Quarter ending on January 31, 1998, a ratio of EBITDA
minus Capital Expenditures to Fixed Charges, in each case determined on the
basis of the four Fiscal Quarters ending on the date of determination, not less
than the ratio set forth below for such Fiscal Quarter:
For each Fiscal Quarter Minimum Fixed Charge
Ending Coverage Ratio
----------------------- ---------------------
Closing Date through 1.50:1
January 31, 1999
February 1, 1999 and 1.75:1
thereafter
5.2. TOTAL INDEBTEDNESS. The Borrower shall not permit the
total outstanding Indebtedness of the Borrower and its Subsidiaries on a
consolidated basis, including, without limitation, Average Total Debt, at the
end of any Fiscal Quarter commencing with the Fiscal Quarter ending on January
31, 1998 to exceed 4.75 times EBITDA determined on the basis of the four Fiscal
Quarters ending on the date of determination.
5.3. INTEREST COVERAGE RATIO. The Borrower shall maintain at
the end of each Fiscal Quarter a ratio of EBITDA to Net Interest Expense, in
each case determined on the basis of the four Fiscal Quarters ending on the date
of determination as follows: (i) not less than 2.5:1 through and including
January 31, 1999 and (ii) not less than 3:1 thereafter.
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5.4. CAPITAL EXPENDITURES. The Borrower shall not permit any
Capital Expenditures to be made during each of the periods set forth below to be
in excess of the maximum amount set forth below for such period:
Maximum Amount of
Period Capital Expenditures
------ --------------------
Closing Date - January 31, 1998 $ 9,000,000
February 1, 1998 - January 31, 1999 $ 23,000,000
February 1, 1999 - January 29, 2000 $ 21,000,000
January 30, 2000 - Termination Date $ 27,000,000
ARTICLE VI
AFFIRMATIVE COVENANTS
As long as any of the Obligations or the Commitments remain
outstanding, unless the Majority Lenders otherwise consent in writing, the
Borrower agrees with the Lenders and the Agent that:
6.1. COMPLIANCE WITH LAWS, ETC. The Borrower shall comply, and
cause each of its Subsidiaries to comply, in all material respects, with all
applicable laws, rules, regulations and orders, such compliance to include,
without limitation, compliance with ERISA, except where the failure to comply in
the aggregate have no Material Adverse Effect.
6.2. CONDUCT OF BUSINESS. The Borrower shall, subject to the
provisions of Section 6.5, (a) conduct, and cause each of its Subsidiaries to
conduct, its business in the ordinary course and consistent with past practice;
(b) use, and cause each of its Subsidiaries to use, its reasonable efforts, in
the ordinary course and consistent with past practice, to (i) preserve its
business and the goodwill and business of the customers, advertisers, suppliers
and others having business relations with the Borrower or any of its
Subsidiaries, and (ii) keep available the services and goodwill of its present
employees; (c) preserve, and from and after the date hereof cause each of its
Subsidiaries to preserve, all registered patents, trademarks, trade names,
copyrights and service marks with respect to its business; and (d) perform and
observe, and cause each of its Subsidiaries to perform and observe, all the
terms, covenants and conditions required to be performed and observed by it
under its Contractual Obligations (including, without limitation, to pay all
rent and other
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charges payable under any lease and all debts and other obligations as the same
become due), and do, and cause its Subsidiaries to do, all things necessary to
preserve and to keep unimpaired its rights under such Contractual Obligations;
PROVIDED, HOWEVER, that, in the case of each of clauses (a) through (d), the
Borrower shall not be deemed in default of this Section 6.2 if all such failures
in the aggregate have no Material Adverse Effect.
6.3. PAYMENT OF TAXES, ETC. The Borrower shall pay and
discharge, and cause each of its Subsidiaries to pay and discharge, before the
same shall become delinquent all lawful governmental claims, taxes, assessments,
charges and levies imposed upon it or upon its property; PROVIDED, HOWEVER, that
neither the Borrower nor any of its Subsidiaries shall be required to pay or
discharge any such tax, assessment, charge or claim that is being contested in
good faith and by proper proceedings and as to which appropriate reserves are
being maintained, unless and until any Lien resulting therefrom attaches to its
property and becomes enforceable against its other creditors.
6.4. MAINTENANCE OF INSURANCE. The Borrower shall maintain,
and cause each of its Subsidiaries to maintain, insurance with responsible and
reputable insurance companies or associations in such amounts and covering such
risks as is usually carried by companies engaged in similar businesses and
owning similar properties in the same general areas in which the Borrower or
such Subsidiary operates and as otherwise satisfactory to the Agent, in its sole
judgment exercised reasonably, and, in any event, all insurance required by the
Collateral Documents. All such insurance shall name the Agent and the Lenders as
additional insured or loss payees, as the Agent shall determine. The Borrower
will furnish to the Agent from time to time such information as may be requested
as to such insurance.
6.5. PRESERVATION OF CORPORATE EXISTENCE, ETC. The Borrower
shall preserve and maintain, and cause each of its Subsidiaries to preserve and
maintain, its corporate existence, rights (charter and statutory) and
franchises, except as permitted under Section 7.4; PROVIDED, HOWEVER, that
neither the Borrower nor any Subsidiary shall be prohibited from withdrawing its
qualification to do business in any jurisdiction from which it no longer is
conducting business.
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6.6. ACCESS. The Borrower shall, at any reasonable time and
from time to time, upon prior reasonable notice, permit the Agent and any of the
Lenders, or any agents or representatives thereof, to (a) examine and make
copies of and abstracts from the records and books of account of such Borrower
and each of its Subsidiaries, (b) visit the properties of the Borrower and each
of its Subsidiaries, (c) discuss the affairs, finances and accounts of the
Borrower and each of its Subsidiaries with any of their respective officers or
directors, and (d) communicate directly with the Borrower's independent
certified public accountants. The Borrower shall authorize its independent
certified public accountants to disclose to the Agent or any Lender any and all
financial statements and other information of any kind, including, without
limitation, copies of any management letter, or the substance of any oral
information that such accountants may have with respect to the business,
financial condition, results of operations or other affairs of the Borrower or
any of its Subsidiaries.
6.7. KEEPING OF BOOKS. The Borrower shall keep, and shall
cause each of its Subsidiaries to keep, proper books of record and account, in
which full and correct entries in all material respects shall be made of all
financial transactions and the assets and business of the Borrower and each such
Subsidiary.
6.8. MAINTENANCE OF PROPERTIES, ETC. The Borrower shall
maintain and preserve, and shall cause each of its Subsidiaries to maintain and
preserve, (i) all of its properties which are used or useful or necessary in the
conduct of its business in good working order and condition, and (ii) all
rights, permits, licenses, approvals and privileges (including, without
limitation, all Permits) which are used or useful or necessary in the conduct of
its business; PROVIDED, HOWEVER, that the Borrower shall not be deemed in
default of this Section 6.8 if all such failures in the aggregate have no
Material Adverse Effect.
6.9. APPLICATION OF PROCEEDS. The Borrower shall use the
entire amount of the proceeds of the Loans as provided in Section 4.17.
6.10. FINANCIAL STATEMENTS. The Borrower shall
furnish to the Lenders:
(a) Within 30 days after the end of each fiscal month the
unaudited consolidated balance sheet of the
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Borrower and its Subsidiaries as of the end of such month and the related
consolidated statements of operations and consolidated statements of cash flows
for that portion of the Fiscal Year ending as of the end of such month setting
forth in comparative form with respect to the balance sheet and statements of
income the results from both the comparable period for the preceding Fiscal
Year, and the projected consolidated figures for the current period, accompanied
by the certification of the treasurer or controller of the Borrower stating (i)
that all such financial statements are complete and correct (subject to year-end
audit adjustments), (ii) the consolidated and consolidating financial position,
the consolidated and consolidating results of operations and consolidated
statements of cash flows of the Borrower and its Subsidiaries as at the end of
such months and for the periods then ended, and (iii) that there was no Default
or Event of Default in existence as of such time;
(b) as soon as available and in any event within 45 days after
the end of each Fiscal Quarter of each Fiscal Year, consolidated and
consolidating balance sheets of the Borrower and its Subsidiaries as of the end
of such quarter and consolidated and consolidating statements of operations and
retained earnings and consolidated statements of cash flow of the Borrower and
its Subsidiaries for the period commencing at the end of the previous Fiscal
Year and ending with the end of such Fiscal Quarter, setting forth in
comparative form the results from the comparable period for the preceding Fiscal
Year all prepared in conformity with GAAP (subject to year-end audit
adjustments) and certified by the treasurer or controller of the Borrower as
fairly presenting the financial condition and results of operations of the
Borrower and its Subsidiaries at such dates and for such periods, together with
(i) a certificate of said officer stating that no Default or Event of Default
has occurred and is continuing or, if a Default or an Event of Default has
occurred and is continuing, a statement as to the nature thereof and the action
which the Borrower proposes to take with respect thereto, (ii) a schedule in
form satisfactory to the Agent of the computations used by the Borrower in
determining compliance with all financial covenants contained herein, and (iii)
a written discussion and analysis by the management of the Borrower of the
financial statements furnished in respect of such Fiscal Quarter;
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(c) as soon as available and in any event within 90 days after
the end of each Fiscal Year, consolidated balance sheets of the Borrower and its
Subsidiaries as of the end of such year and consolidated statements of
operations and retained earnings and consolidated statements of cash flow of the
Borrower and its Subsidiaries and divisional operating results for such Fiscal
Year, setting forth in comparative form the results from the preceding Fiscal
Year, all prepared in conformity with GAAP and certified, in the case of such
consolidated financial statements, without qualification as to the scope of the
audit by Deloitte and Touche or other independent public accountants of
recognized national standing acceptable to the Majority Lenders, together with
(i) a certificate of such accounting firm stating that in the course of the
regular audit of the business of the Borrower and its Subsidiaries, which audit
was conducted by such accounting firm in accordance with generally accepted
auditing standards, such accounting firm has obtained no knowledge that a
Default or Event of Default has occurred and is continuing, or, if in the
opinion of such accounting firm, a Default or Event of Default has occurred and
is continuing, a statement as to the nature thereof, (ii) a schedule in form
satisfactory to the Agent of the computations used by such accountants in
determining, as of the end of such Fiscal Year, the Borrower's compliance with
all financial covenants contained herein, and (iii) a written discussion and
analysis by the management of the Borrower of the financial statements furnished
in respect of such Fiscal Year;
(d) promptly after the same are received by the Borrower, a
copy of each management letter provided to the Borrower by its independent
certified public accountants which refers in whole or in part to any inadequacy,
defect, problem, qualification or other lack of fully satisfactory accounting
controls utilized by the Borrower or any of its Subsidiaries; and
(e) no later than Friday of each week, a Borrowing Base
Certificate as of the immediately preceding Wednesday of such week executed by a
Responsible Officer of the Borrower.
6.11. REPORTING REQUIREMENTS. The Borrower shall
furnish to the Lenders:
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(a) to the extent practicable prior to any Asset Sale
anticipated to generate in excess of $1,000,000 in Asset Sale Proceeds, a notice
(i) describing the assets being sold and (ii) stating the estimated Asset Sale
Proceeds in respect of such Asset Sale;
(b) as soon as available and in any event no later than 30
days prior to the end of each Fiscal Year, an annual budget of the Borrower and
each of its Subsidiaries for the succeeding Fiscal Year, displaying on a monthly
and quarterly basis anticipated balance sheets, forecasted revenues, net income
and cash flow and annual business and financial plans, such business and
financial plans being updated quarterly;
(c) as soon as available and in any event within 30 days prior
to the end of each Fiscal Year, a forecast of annual sales, EBITDA, Capital
Expenditures, working capital requirements and projected cash flow results of
the Borrower and its Subsidiaries on a consolidated and consolidating basis for
the next succeeding twelve months;
(d) (i) promptly and in any event within 30 days after the
Borrower, any of its Subsidiaries or any ERISA Affiliate knows or has reason to
know that any ERISA Event has occurred, and (ii) promptly and in any event
within 10 days after the Borrower, any of their Subsidiaries or any ERISA
Affiliate knows or has reason to know that a request for a minimum funding
waiver under Section 412 of the Code has been filed with respect to any
Qualified Plan, a written statement of the chief financial officer or other
appropriate officer of the Borrower describing such ERISA Event or waiver
request and the action, if any, which the Borrower, its Subsidiaries and ERISA
Affiliates propose to take with respect thereto and a copy of any notice filed
with the PBGC or the IRS pertaining thereto;
(e) promptly and in any event within 30 days after the filing
thereof by the Borrower, any of its Subsidiaries or any ERISA Affiliate, a copy
of each annual report (Form 5500 Series, including Schedule B thereto) filed
with respect to a Pension Plan, and upon request by any Lender through the
Agent, with respect to any other Plan;
(f) promptly and in any event within 30 days after receipt
thereof, a copy of any adverse notice, determination letter, ruling or opinion
the Borrower, any of
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its Subsidiaries or any ERISA Affiliate receives from the PBGC, DOL or IRS with
respect to any Qualified Plan;
(g) promptly and in any event within 10 days after receipt
thereof, a copy of any correspondence the Borrower, any of its Subsidiaries or
any ERISA Affiliate receives from the plan sponsor (as defined by Section 4001
(a)(10) of ERISA) of any Multiemployer Plan concerning potential withdrawal
liability of the Borrower, any of its Subsidiaries or any ERISA Affiliate, or
notice of any reorganization with respect to any Multiemployer Plan, together
with a written statement of the chief financial officer or other appropriate
officer of the Borrower of the action which the Borrower, its Subsidiaries and
ERISA Affiliates propose to take with respect thereto;
(h) promptly and in any event within 30 days after the
adoption thereof, notice of (i) any amendment to a Title IV Plan which results
in any material increase in benefits or the adoption of any new Title IV Plan
and (ii) any amendment to a, or adoption of a new, Welfare Benefit Plan, which
results in material new or increased benefits for retirees, their spouses or
their beneficiaries;
(i) promptly and in any event after receipt of written notice
of commencement thereof, notice of any action, suit or proceeding before any
Governmental Authority or arbitrator affecting the Borrower, any of its
Subsidiaries or any ERISA Affiliate with respect to any Plan, except those which
in the aggregate, if adversely determined, would have no Material Adverse
Effect;
(j) promptly and in any event within 30 days after notice or
knowledge thereof, notice that the Borrower or any of its Subsidiaries has
become subject to a material amount of tax on prohibited transactions imposed by
Section 4975 of the Code, together with a copy of any Form 5330 filed in respect
thereof;
(k) promptly after the commencement thereof, notice of all
actions, suits and proceedings before any domestic or foreign Governmental
Authority or arbitrator, affecting the Borrower or any of its Subsidiaries,
except those which in the aggregate, if adversely determined, would have no
Material Adverse Effect;
(l) promptly and in any event within two Business Days after
the Borrower becomes aware of the existence of
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(i) any Default or Event of Default, (ii) any breach or non-performance of, or
any default under, any Contractual Obligation which is material to the business,
prospects, operations or financial condition of the Borrower and its
Subsidiaries taken as one enterprise, or (iii) any Material Adverse Change or
any event, development or other circumstance which has any reasonable likelihood
of causing or resulting in a Material Adverse Change, telephonic or telegraphic
notice in reasonable detail specifying the nature of the Default, Event of
Default, breach, non-performance, default, event, development or circumstance,
including, without limitation, the anticipated effect thereof, which notice
shall be promptly confirmed in writing within five days;
(m) promptly after the sending or filing thereof, copies of
all reports which the Borrower sends to its security holders generally, and
copies of all reports and registration statements which the Borrower or any of
its Subsidiaries files with the Securities and Exchange Commission or any
national securities exchange or the National Association of Securities Dealers,
Inc.;
(n) upon the request of any Lender, through the Agent, copies
of all federal, state and local tax returns and reports filed by the Borrower or
any of its Subsidiaries in respect of taxes measured by income (excluding sales,
use and like taxes);
(o) promptly and in any event within five days after any Loan
Party or any Subsidiary thereof learning of any of the following, written notice
of any of the following: (i) the Release or threatened Release of any Hazardous
Material on or from any property owned, operated or leased by such Loan Party or
any of its Subsidiaries required to be reported to any Governmental Authority
under Environmental Laws; (ii) any Remedial Action taken by any Loan Party or
any of its Subsidiaries or any other Person in response to any Hazardous
Material on, under or about any real property owned, operated or leased by such
Loan Party or any of its Subsidiaries, unless such Remedial Action is not
reasonably likely to subject such Loan Party or any of its Subsidiaries to
Environmental Liabilities and Costs in excess of $1,000,000; (iii) receipt by
such Loan Party or any of its Subsidiaries of any notice of violation of, or
knowledge by such Loan Party or any of its Subsidiaries that there exists a
condition which may result in a violation by such Loan Party or any of its
Subsidiaries of, any
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Environmental Law, unless such violation is not reasonably likely to subject
such Loan Party to Environmental Liabilities and Costs in excess of $1,000,000;
(iv) the commencement of any judicial or administrative proceeding or
investigation alleging a material violation of any Environmental Law; (v) any
material non-compliance by any Loan party or any of its Subsidiaries under
Environmental Laws; or (vi) any facts or circumstances at any real property
owned, operated or leased by any Loan Party or any of its Subsidiaries that
could reasonably be expected to result in such Loan Party incurring
Environmental Liabilities and costs in excess of $1,000,000 or cause any such
property to be subject of any material restrictions on ownership, occupancy, use
or transferability under Environmental Laws; and
(p) a schedule (Schedule 6.11(p)) listing those Persons who,
within sixty days after the date hereof, own of record or, to the knowledge of
the Borrower, beneficially ten percent or more of any class of its outstanding
capital stock; and
(q) such other information respecting the business,
properties, condition, financial or otherwise, or operations of the Borrower or
any of its Subsidiaries as any Lender through the Agent may from time to time
reasonably request.
6.12. EMPLOYEE PLANS. With respect to each Qualified Plan
hereafter adopted or first maintained by the Borrower, any of its Subsidiaries
or any ERISA Affiliate, the Borrower shall (i) seek, and cause its Subsidiaries
and ERISA Affiliates to seek, and receive determination letters from the IRS to
the effect that such Qualified Plan is qualified within the meaning of Section
401(a) of the Code; and (ii) from and after the adoption of any such Qualified
Plan, cause such plan to be qualified within the meaning of Section 401(a) of
the Code and to be administered in all material respects in accordance with the
requirements of ERISA and Section 401(a) of the Code.
6.13. FISCAL YEAR. The Borrower shall maintain as its Fiscal
Year the period of 52 or 53 weeks ending on the Saturday nearest to January 31
of each calendar year.
6.14. BORROWING BASE DETERMINATION. (a) The Borrower shall
conduct, or shall cause to be conducted, at its expense, and upon request of the
Agent, and shall
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present to the Agent for approval, such appraisals, investigations and reviews
as the Agent shall reasonably request for the purpose of confirming the
Borrowing Base, all upon reasonable notice and at such reasonable times during
normal business hours and as often as may be reasonably requested. The Borrower
shall furnish to the Agent any information which the Agent may reasonably
request regarding the determination and calculation of the Borrowing Base
including, without limitation, correct and complete copies of any invoices,
underlying agreements, instruments or other documents and the identity of all
obligors.
(b) The Borrower shall promptly notify the Agent and the
Lenders in writing in the event that at any time the Borrower receives or
otherwise gains knowledge that (i) the Borrowing Base is less than 90% of the
Borrowing Base reflected in the most recent Borrowing Base Certificate delivered
pursuant to Section 6.10(e) or that (ii) the outstanding Loans and the Letter of
Credit Obligations exceed the Borrowing Base as a result of a decrease therein,
and the amount of such excess.
(c) The Agent may make physical verifications of the Inventory
in any manner and through any medium that the Agent considers advisable, and the
Borrower shall furnish all such assistance and information as the Agent may
require in connection therewith.
6.15. CERTAIN COVENANTS REGARDING THE RECEIVABLES
SECURITIZATION. The Borrower shall:
(a) cause El-Bee to remain the sole record and beneficial
owner of the Exchangeable Transferor Certificate and the Subordinated Transferor
Certificate provided for in the Receivables Securitization;
(b) cause El-Bee to direct Bankers Trust Company, as Trustee of the
Xxxxx-Xxxxxxx Master Trust (in that capacity, the Trustee), established as part
of the Receivables Securitization, to make payment to an account of El-Bee at
Citibank; and
(c) cause El-Bee not to modify the foregoing payment
instructions to the Trustee;
(d) cause El-Bee to make all payments to Chargit for purchases pursuant
to the Purchase Agreement between Chargit as seller and El-Bee as purchaser
entered into as part of
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the Receivables Securitization to be made to an account of Chargit at Citibank;
and
(e) cause Chargit to make all payments to the Borrower for purchases
pursuant to the Purchase Agreement between the Borrower as seller and Chargit as
purchaser entered into as part of the Receivables Securitization to be made to
the Cash Collateral Account; and
(f) cause El-Bee to make all payments on the Subordinated Note issued
by El-Bee to Chargit as part of the Receivables Securitization and assigned by
Chargit to the Borrower as part of the Receivables Securitization to be made to
the Cash Collateral Account.
6.16. ENVIRONMENTAL MATTERS. (a) Each Loan Party shall comply
and shall cause each of its Subsidiaries to comply in all material respects with
all applicable Environmental Laws currently or hereafter in effect.
(b) If the Agent or the Lenders at any time have a reasonable
basis to believe that there may be a violation of any Environmental Law in
excess of $1,000,000, by any Loan Party or any of its Subsidiaries related to
any real property owned, leased or operated by such Loan Party or any of its
Subsidiaries, such Loan Party agrees, upon request from the Agent, to provide
the Agent, at such Loan Party's expense, with such reports, certificates,
engineering studies or other written material or data as the Agent or the
Lenders may reasonably require so as to reasonably satisfy the Agent and the
Lenders that such Loan Party or such Subsidiary is in material compliance with
all applicable Environmental Laws.
(c) Each Loan Party shall, and shall cause each of its
Subsidiaries to, take such Remedial Action or other action as required by
Environmental Laws, as any Governmental Authority requires, except to the extent
contested in good faith and by proper proceedings, or as is appropriate and
consistent with good business practice.
6.17. TERMINATION OF RECEIVABLES SECURITIZATION. The Borrower
shall cease selling Accounts pursuant to the Receivables Securitization upon
notice to the Borrower by the Agent if at the date such notice is given (i) an
Event of Default has occurred and is continuing and (ii) the Available Credit is
less than $12,000,000.
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6.18. REDUCTION OF SUBORDINATED NOTE. The Borrower shall each
day cause El-Bee and Chargit each to repay the outstanding principal amount of
the Pledged Debt (as defined in the Borrower Pledge Agreement) to the extent of
any cash not needed that day to purchase Accounts pursuant to the Securitization
Documents.
6.19 COLLECTION ACCOUNT LETTERS. The Borrower shall provide
the Agent not later than 60 days after the date hereof with executed copies of a
Collection Account Letter in the form of EXHIBIT Q from each bank listed on
Schedule 6.19.
ARTICLE VII
NEGATIVE COVENANTS
As long as any of the Obligations or the Commitments remain
outstanding, without the written consent of the Majority Lenders, the Borrower
agrees with the Lenders, the Issuer and the Agent that:
7.1. LIENS, ETC. The Borrower shall not create or suffer to
exist, and shall not permit any of its Subsidiaries to create or suffer to
exist, any Lien upon or with respect to any of their or such Subsidiary's
properties, whether now owned or hereafter acquired, or assign, or permit any of
its Subsidiaries to assign, any right to receive income, except for
(collectively, the following are hereinafter referred to as the "PERMITTED
LIENS"):
(a) Liens in favor of the Agent and the Lenders created
pursuant to the Loan Documents or to secure the Borrower's obligations
under Interest Rate Contracts with Citibank;
(b) Purchase money Liens or purchase money security interests
upon or in any property acquired or held by the Borrower or any
Subsidiary of the Borrower in the ordinary course of business or in
connection with the acquisition of new stores to secure the purchase
price of such property or to secure Indebted ness incurred solely for
the purpose of financing the acquisition of such property; PROVIDED,
HOWEVER, that the aggregate principal amount of the Indebtedness
secured by the Liens referred to in this clause
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(b) shall not exceed $20,000,000 at any time outstanding;
(c) Any Lien securing the renewal, extension or refunding of
any Indebtedness or other Obligation secured by any Lien permitted by
subsections (b) or (i) of this Section 7.1 without any increase in the
amount secured thereby or in the assets subject to such Lien;
(d) Liens arising by operation of law in favor of materialmen,
mechanics, warehousemen, carriers, lessors or other similar Persons
incurred by either Borrower or any of its Subsidiaries in the ordinary
course of business which secure its obligations to such Person;
PROVIDED, HOWEVER, that (i) the Borrower or such Subsidiary is not in
default with respect to such payment obligation to such Person, (ii)
the Borrower or such Subsidiary is in good faith and by appropriate
proceedings diligently contesting such obligation and adequate
provision is made for the payment thereof, and (iii) all such failures
in the aggregate have no Material Adverse Effect;
(e) Liens (excluding Environmental Liens) securing taxes,
assessments or governmental charges or levies; PROVIDED, HOWEVER, that
(i) neither the Borrower nor any of its Subsidiaries is in default in
respect of any payment obligation with respect thereto unless the
Borrower or such Subsidiary is in good faith and by appropriate
proceedings diligently contesting such obligation and adequate
provision is made for the payment thereof, and (ii) all such failures
in the aggregate have no Material Adverse Effect;
(f) Liens incurred or pledges and deposits made in the
ordinary course of business in connection with workers' compensation,
unemployment insurance, old-age pensions and other social security
benefits;
(g) Liens securing the performance of bids, tenders, leases,
contracts (other than for the repayment of borrowed money), statutory
obligations, surety and appeal bonds and other obligations of like
nature, incurred as an incident to and in the ordinary course of
business, and judgment liens; PROVIDED, HOWEVER, that all such Liens
(i) in the aggregate have no Material Adverse Effect and (ii) do not
secure
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directly or indirectly judgments in excess of $500,000
in the aggregate;
(h) Zoning restrictions, easements, licenses, reservations,
restrictions on the use of real property or minor irregularities
incident thereto which do not in the aggregate materially detract from
the value or use of the property or assets of the Borrower or any of
its Subsidiaries or impair, in any material manner, the use of such
property for the purposes for which such property is held by the
Borrower or any such Subsidiary; and
(i) Liens to secure Capitalized Lease Obligations if the
incurrence of such Indebtedness is permitted by Section 7.2; PROVIDED,
HOWEVER, that: (i) any such Lien is created solely for the purpose of
securing Indebtedness representing, or incurred to finance, refinance
or refund, the cost (including, without limitation, the cost of
construction) of the property subject thereto, (ii) the principal
amount of the Indebtedness secured by such Lien does not exceed 100% of
such cost, (iii) such Lien does not extend to or cover any other
property other than such item of property and any improvements on such
item and (iv) the aggregate principal amount of Indebtedness secured by
the Liens referred to in this clause (i) shall not exceed $20,000,000
at any time outstanding.
7.2. INDEBTEDNESS. The Borrower shall not create
or suffer to exist, or permit any of its Subsidiaries to
create or suffer to exist, any Indebtedness except:
(i) the Obligations;
(ii) current liabilities in respect of taxes,
assessments and governmental charges or levies incurred, or claims for
labor, materials, inventory, services, supplies and rentals incurred,
or for goods or services purchased, in the ordinary course of business
consistent with the past practice of the Borrower and its Subsidiaries;
(iii) Indebtedness arising under any performance bond
reimbursement obligation entered into consistent with the past
practice of the Borrower;
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(iv) Indebtedness permitted under Section 7.5;
(v) Indebtedness secured by Liens permitted
by Section 7.1(b);
(vi) Indebtedness of the Borrower or any of
its Subsidiaries under Capitalized Lease Obligations; PROVIDED,
HOWEVER, that the aggregate amount of Capitalized Lease Obligations
incurred under this clause (vi) by the Borrower and its Subsidiaries
and the aggregate principal amount of Indebtedness incurred pursuant to
clause (v) above by the Borrower and their Subsidiaries shall not
exceed $20,000,000 at any one time outstanding;
(vii) Indebtedness in respect of amounts
awarded by a court of competent jurisdiction for fees and expenses
under Sections 330 and 503(b) of the Bankruptcy Code in an amount not
to exceed $4,000,000; and
(viii) Indebtedness of the Borrower arising
under any third-party credit card issued to certain employees of the
Borrower for the incurrence of business expenses in the ordinary course
of business and consistent with past practices; PROVIDED, HOWEVER, that
the aggregate principal amount of such Indebtedness shall not exceed
$200,000 at any time outstanding; and
(ix) Receivables Securitization Attributed
Indebtedness not to exceed $125,000,000 in aggregate principal amount
outstanding at any one time.
7.3. RESTRICTED PAYMENTS. The Borrower shall not and shall not
permit any of its Subsidiaries to (i) declare or make any dividend payment or
other distribution of assets, properties, cash, rights, obligations or
securities on account or in respect of any of its Stock other than dividends
paid to the Borrower or any wholly owned Subsidiary of the Borrower by any
Subsidiary of the Borrower, including without limitation to the Borrower by
Chargit or (ii) purchase, redeem, prepay, defease or otherwise acquire for value
or make any payment (other than required interest payments) on account or in
respect of any principal amount of Indebtedness for borrowed money, now or
hereafter outstanding, except (A) the Loans, (B) the
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Middletown Lease Payments, (C) in the case of a Subsidiary, payments may be made
to the Borrower on account of any Indebtedness owing to the Borrower by such
Subsidiary, (D) the Zanesville Bonds, and (E) the Moraine Mortgage.
7.4. MERGERS, STOCK ISSUANCES, SALE OF ASSETS, ETC. (a) The
Borrower shall not and shall not permit any of its Subsidiaries to (i) merge
with any Person, (ii) consolidate with any Person, (iii) acquire all or
substantially all of the Stock or Stock Equivalents of any Person, (iv) acquire
all or substantially all of the assets of any Person, (v) enter into any joint
venture or partnership with any Person, (vi) sell, lease, transfer or otherwise
dispose of, whether in one transaction or in a series of transactions all or
substantially all of its assets, except as permitted pursuant to subsection (c)
below, or (vii) form any Subsidiary.
(b) The Borrower shall not (i) issue or transfer, or permit
any of its Subsidiaries to issue or transfer, any Stock or Stock Equivalents
other than any such issuance or transfer (A) by a Subsidiary of the Borrower to
a wholly-owned Subsidiary of the Borrower, (B) by a wholly-owned Subsidiary of
the Borrower to such Borrower, or (C) to employees and directors of the Borrower
pursuant to a plan approved by the Board of Directors of the Borrower, or (ii)
sell, convey, transfer, lease or otherwise dispose of, or permit any of its
Subsidiaries to sell, convey, transfer, lease or otherwise dispose of, any Stock
or Stock Equivalents of any of the Borrower's Subsidiaries unless, in any such
case, both (A) all of the Stock and Stock Equivalents of such Subsidiary owned
by the Borrower and its Subsidiaries is transferred and (B) such issuance, sale,
conveyance, transfer, lease or disposition would be permitted by subsection (c)
below.
(c) The Borrower shall not and shall not permit any of its
Subsidiaries to, sell, convey, transfer, lease or otherwise dispose of any of
its assets or any interest therein to any Person, or permit or suffer any other
Person to acquire any interest in any of the assets of the Borrower or any such
Subsidiary except (i) the sale or disposition of Inventory or other assets in
the ordinary course of business or other tangible personal property which has
become obsolete or is replaced in the ordinary course of business, (ii) sales by
the Borrower of Chargit Receivables to Chargit and by Chargit to El-Bee, (iii)
any sale or other disposition approved by the Agent pursuant to Section 10.1
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and (iv) Sale/Leaseback Transactions, provided that no Default or Event of
Default is continuing or would result from the consummation of any such
Sale/Leaseback Transaction and the cash proceeds are deposited in the Cash
Collateral Account and applied in accordance with Section 6.15(b). In connection
with any Asset Sale permitted under this Section 7.4(c), at the request of the
Borrower, the Agent shall release any Lien granted to it by the Borrower or any
Subsidiary of the Borrower upon any assets disposed of in such Asset Sale.
(d) The Borrower shall not sell or otherwise dispose of, or
factor at maturity or collection, or permit any of its Subsidiaries to sell or
otherwise dispose of, or factor at maturity or collection, any Accounts, except
pursuant to the Receivables Securitization and the bulk sale of written-off
receivables.
7.5. INVESTMENTS IN OTHER PERSONS. The Borrower shall not,
directly or indirectly, make or maintain, or permit any of its Subsidiaries to
make or maintain, any loan or advance to any Person or own, purchase or
otherwise acquire, or permit any of its Subsidiaries to own, purchase or
otherwise acquire, any Stock, other equity interest, obligations or other
securities of, or any assets constituting the purchase of a business or line of
business, or make or maintain, or permit any of its Subsidiaries to make or
maintain, any capital contribution to, or otherwise invest in, any Person (any
such transaction being an "INVESTMENT"), except:
(i) loans or advances to employees of the
Borrower or any of its Subsidiaries, which loans and
advances shall not in the aggregate exceed $250,000
outstanding at any time;
(ii) travel advances to employees of the
Borrower or any of its Subsidiaries in the ordinary
course of business, consistent with past practices;
(iii) extensions of consumer credit by the
Borrower or any of its Subsidiaries to their respective employees, in
the ordinary course of business and consistent with past practices, in
connection with its private-label credit card;
(iv) Investments (in the form of either cash
contributions, loans or advances) in Bee-Gee; PROVIDED,
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HOWEVER, that the net aggregate amount of such Investments from and
after the Closing Date shall not exceed $7,500,000 in the aggregate at
any time outstanding in excess of the Investment existing on the
Closing Date;
(v) Investments in Cash Equivalents;
(vi) Investments existing on the date hereof
and set forth on Schedule 7.5; or
(vii) Investments in El-Bee arising from the
transfer by the Borrower to Chargit and by Chargit to El-Bee of Chargit
Receivables or the issuance by El-Bee of one or more promissory notes
to Chargit, in each case in connection with the Receivables
Securitization; PROVIDED, HOWEVER, that at the time of and immediately
after giving effect to each such Investment, no Default or Event of
Default exists or would result and the aggregate amount of such
Investments in El-Bee does not exceed the amount necessary to
consummate the sales of Receivables and related assets contemplated by
the Securitization Documents.
7.6. CHANGE IN NATURE OF BUSINESS. The Borrower shall not
make, or permit any of its Subsidiaries to make, any material change in the
nature or conduct of its business as carried on at the date hereof, except as
expressly permitted hereunder.
7.7. MODIFICATION OF SECURITIZATION DOCUMENTS, ETC. The
Borrower shall not and shall not permit any of its Subsidiaries to (i) alter,
rescind, terminate, amend, supplement, waive or otherwise modify any provision
of or permit any breach or default to exist under any Securitization Document,
or (ii) take or fail to take any action thereunder, if to do so would have a
Material Adverse Effect, or (iii) amend, modify or change, or consent or agree
to any amendment, modification or change to, any of the terms relating to the
payment or prepayment of principal of, or premium or interest on, any
Indebtedness incurred or arising in connection with any Securitization Document
(other than any such amendment, modification or change which would extend the
maturity or reduce the amount of any payment of principal thereof or which would
reduce the rate or extend the date for payment of interest thereon).
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7.8. MODIFICATION OF MATERIAL AGREEMENTS. The Borrower shall
not, and shall not permit any of its Subsidiaries to, alter, amend, modify,
rescind, terminate or waive any of their respective rights under, or fail to
comply in all material respects with, any of its material Contractual
Obligations; PROVIDED, HOWEVER, that the Borrower shall not be deemed in default
of this Section 7.8 if all such failures in the aggregate have no Material
Adverse Effect; and PROVIDED, FURTHER, that in the event of any breach or event
of default by a Person other than the Borrower or any of its Subsidiaries, the
Borrower shall promptly notify the Agent of any such breach or event of default
and take all such action as may be reasonably necessary in order to endeavor to
avoid having such breach or event of default have a Material Adverse Effect.
7.9. COMPLIANCE WITH ERISA. (a) The Borrower shall not,
directly or indirectly, and shall not permit any of its Subsidiaries or any
ERISA Affiliate to, directly or indirectly, by reason of an amendment, or the
adoption of, a Title IV Plan, permit the present value of all benefit
liabilities, as defined in Title IV of ERISA (using the actuarial assumptions
utilized by the PBGC upon termination of the respective plans), of such Title IV
Plan immediately after such amendment or adoption to increase by more than
$500,000 over what such amount was immediately prior to such amendment or
adoption; PROVIDED, HOWEVER, that this limitation shall not be applicable to the
extent (i) that the fair market value of assets allocable to such benefit
liabilities, all determined as of the most recent valuation date for each such
Title IV Plan for which a valuation is available, is in excess of the benefit
liabilities or (ii) that any such amendment is required by applicable law.
(b) Neither the Borrower nor any of its Subsidiaries shall
establish or become obligated with respect to any new Welfare Benefit Plan, or
modify any existing Welfare Benefit Plan, which would result in the accumulated
benefit obligations (in excess of plan assets) of post-retirement benefit
obligations (determined for SFAS 106 purposes) under all such plans immediately
after such establishment or modification to increase by more than $500,000 over
what such amount was immediately prior to such establishment or modification.
(c) Neither the Borrower nor any of its Subsidiaries shall
establish or become obligated to contribute to any new unfunded Pension Plan, or
modify any
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existing unfunded Pension Plan, which would result in the present value of
future liabilities under all such plans (using the actuarial assumptions used
for valuation purposes for the respective plans) immediately after such
establishment or modification to increase by more than $500,000 over what such
amount was immediately prior to such establishment or modification.
(d) The Borrower shall not, directly or indirectly, and shall
not permit any of its Subsidiaries or any ERISA Affiliate, directly or
indirectly, to (i) satisfy any liability under any Qualified Plan with a policy
or other contract from an insurance company or (ii) invest the assets of any
Qualified Plan in the general account of or in an obligation of an insurance
company, unless in each case at the time of application for any such policy or
contract or of such investment, as the case may be, such insurance company is
rated AA or better by Standard & Poor's Corporation or an equivalent or higher
rating by another nationally recognized rating agency.
7.10. ACCOUNTING CHANGES. The Borrower shall not make, or
permit any of its Subsidiaries to make, any "Change in Accounting Principle" as
defined in APB Opinion #20, except as required by GAAP or law, in each case, as
disclosed to the Lenders and the Agent.
7.11. TRANSACTIONS WITH AFFILIATES. The Borrower shall not and
shall not permit any of its Subsidiaries to, except as otherwise expressly
permitted herein, enter into any other transaction directly or indirectly with
or for the benefit of any Affiliate of the Borrower which is not a wholly-owned
Subsidiary of the Borrower (including, without limitation, guaranties and
assumptions of obligations of any such Affiliate) except for (A) transactions in
the ordinary course of business on a basis no less favorable to the Borrower or
such Subsidiary as would be obtained in a comparable arm's length transaction
with a Person not an Affiliate, (B) reasonable salaries and other employee
compensation to officers or directors of the Borrower or any of its Subsidiaries
commensurate with current compensation levels and (C) any transaction required
or otherwise expressly permitted by this Agreement.
7.12. ADVERSE TRANSACTIONS. The Borrower shall not enter into
or be a party to, or permit any of its Subsidiaries to enter into or be a party
to, any transaction the performance of which in the future would be inconsistent
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with or has any reasonable likelihood of resulting in a breach of any covenant
contained herein or give rise to a Default or Event of Default.
7.13. CANCELLATION OF INDEBTEDNESS OWED TO IT. The Borrower
shall not cancel, or permit any of its Subsidiaries to cancel, any claim or
Indebtedness owed to it except for adequate consideration or in the ordinary
course of business.
7.14. NO NEGATIVE PLEDGE. The Borrower shall not enter into,
or permit any of its Subsidiaries to enter into, any agreement that restricts
its ability to create or suffer to exist any Lien, other than one which
expressly permits the Liens contemplated by this Agreement and any agreement for
the refinancing of the Facility.
7.15. CAPITAL STRUCTURE. The Borrower shall not make, or
permit any of its Subsidiaries to make, any change in its capital structure
(including, without limitation, in the terms of its outstanding Stock) or amend
its certificate of incorporation or by-laws other than for amendments which in
the aggregate have no Material Adverse Effect.
7.16. NO SPECULATIVE TRANSACTIONS. The Borrower shall not and
shall not permit any of its Subsidiaries to engage in any speculative
transaction or in any transaction involving commodity options or futures
contracts except for the sole purpose of hedging in the normal course of
business and consistent with industry practices.
7.17. ENVIRONMENTAL MATTERS. The Borrower shall not permit any
Loan Party or any Subsidiary of a Loan Party to, and to the extent practicable,
any other Person to,
(a) dispose of any Hazardous Material by placing it in or on
the ground or waters of any property owned, operated or leased by such Loan
Party or any of its Subsidiaries, except in compliance with all Environmental
Laws, provided that no Loan Party or Subsidiary of a Loan Party shall undertake
any activities that would require it to obtain a permit as a treatment, storage
or disposal facility under Environmental Laws; or
(b) dispose or to arrange for the disposal of any Hazardous
Material on any property owned, operated or leased by any other Person, except
in material compliance with all
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applicable Environmental Laws currently and hereinafter in effect.
7.18. CHANGE IN OWNERSHIP UNDER SECTION 382 OF THE CODE. The
Borrower shall not take, or permit any of its Subsidiaries to take, any action
which, alone or in combination with any other action, would, within the
reasonable determination of the Agent, result in there being or having been an
ownership change within the meaning of Section 382 of the Code, other than any
such change occurring on the Effective Date pursuant to the Plan of
Reorganization.
7.19. CONTINGENT OBLIGATIONS. The Borrower shall not, and
shall not permit any of its Subsidiaries to, incur, assume, endorse, be or
become liable for, or guarantee, directly or indirectly, or permit or suffer to
exist, any Contingent Obligation, except for:
(i) Contingent Obligations evidenced by a
Loan Document;
(ii) guarantees by the Borrower of Indebtedness of
any of its Subsidiaries, to the extent such underlying
Indebtedness is permitted hereunder; and
(iii) the Parent Undertaking pursuant to the
Securitization Documents.
ARTICLE VIII
EVENTS OF DEFAULT
8.1. EVENTS OF DEFAULT. Each of the following events shall be
an Event of Default:
(a) (i) The Borrower shall fail to pay any principal
(including, without limitation, mandatory prepayments of principal) of
any Loan when the same becomes due and payable or (ii) any Loan Party
shall fail to make any other payment, under any other Loan Document
within three days after the same becomes due and payable; or
(b) Any representation or warranty made or deemed made by any
Loan Party in any Loan Document or by any
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Loan Party (or any of its officers) in connection with any Loan
Document shall prove to have been incorrect in any material respect
when made or deemed made; or
(c) Any Loan Party shall fail to perform or observe (i) any
term, covenant or agreement contained in Article V, VI (other than
Section 6.10(a), (b) and (c)), Section 6.17, 6.18 or 6.19 or VII or in
any Loan Document, or (ii) any other term, covenant or agreement
contained in this Agreement or in any other Loan Document if such
failure under this clause (ii) shall remain unremedied for ten Business
Days after the earlier of the date on which (A) a Responsible Officer
of the Borrower becomes aware of such failure or (B) written notice
thereof shall have been given to the Borrower by the Agent or any
Lender; or
(d) Any Loan Party or any of its Subsidiaries shall fail to
pay any principal of or premium or interest on Indebtedness of such
Loan Party or Subsidiary having an aggregate principal amount of
$5,000,000 or more (excluding Indebtedness evidenced by the Notes),
when the same becomes due and payable (whether by scheduled maturity,
required prepayment, acceleration, demand or otherwise), or any other
event shall occur or condition shall exist under any agreement or
instrument relating to any such Indebtedness, if the effect of such
event or condition is to accelerate, or to permit the acceleration of,
the maturity of such Indebtedness; or any such Indebtedness shall
become or be declared to be due and payable, or required to be prepaid
(other than by a regularly scheduled required prepayment), or any Loan
Party or any of its Subsidiaries shall be required to repurchase or
offer to repurchase such Indebtedness, prior to the stated maturity
thereof; or
(e) Any Loan Party or any of its Subsidiaries shall generally
not pay its debts as such debts become due, or shall admit in writing
its inability to pay its debts generally, or shall make a general
assignment for the benefit of creditors, or any proceeding shall be
instituted by or against any Loan Party or any of its Subsidiaries
seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or
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relief of debtors, or seeking the entry of an order for relief or the
appointment of a custodian, receiver, trustee or other similar official
for it or for any substantial part of its property and, in the case of
any such proceedings instituted against any Loan Party or any of its
Subsidiaries (but not instituted by it), either such proceedings shall
remain undismissed or unstayed for a period of 30 days or any of the
actions sought in such proceedings shall occur; or any Loan Party or
any of its Subsidiaries shall take any corporate action to authorize
any of the actions set forth above in this subsection (e); or
(f) Any judgment or order for the payment of money in excess
of $1,000,000 to the extent not fully covered by insurance shall be
rendered against any Loan Party or any of its Subsidiaries and either
(i) enforcement proceedings shall have been commenced by any creditor
upon such judgment or order, or (ii) there shall be any period of ten
consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in
effect; or
(g) (i) With respect to any Plan, a prohibited transaction within
the meaning of Section 4975 of the Code or Section 406 of ERISA shall
occur which in the reasonable determination of the Agent has a
reasonable likelihood of resulting in direct or indirect liability to
any Borrower or any of its Subsidiaries, (ii) with respect to any Title
IV Plan, the filing of a notice to voluntarily terminate any such Plan
in a distress termination, (iii) with respect to any Multiemployer
Plan, the Borrower, any of its Subsidiaries or any ERISA Affiliate
shall incur any Withdrawal Liability, (iv) with respect to any
Qualified Plan subject to Section 412 of the Code, the Borrower, any of
its Subsidiaries or any ERISA Affiliate shall incur an accumulated
funding deficiency, as defined in Section 412 of the Code, or request a
funding waiver thereunder from the IRS, or (v) with respect to any
Title IV Plan or Multiemployer Plan which has an ERISA Event not
described in clauses (i) through (iv) hereof, in the reasonable
determination of the Agent there is a reasonable likelihood for
termination of any such Plan by the PBGC; PROVIDED, HOWEVER, that the
events listed in clauses (i) through (v) hereof shall constitute Events
of Default only if the liability, deficiency or
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waiver request of the Borrower, any of its Subsidiaries or any ERISA
Affiliate, whether or not assessed, exceeds $500,000 in any case set
forth in (i) through (v) above, or exceeds $1,000,000 in the aggregate
for all such cases; or
(h) There shall occur a Change of Control; or
(i) There shall occur in the reasonable judgment of the
Majority Lenders a Material Adverse Change or an event which would have
a Material Adverse Effect; or
(j) The Borrower or any of its Subsidiaries shall have entered
into any consent or settlement decree or agreement or similar
arrangement with an Governmental Authority or any judgment, order,
decree or similar action shall have been entered against the Borrower
or any of its Subsidiaries, in either case based on or arising from the
violation of or pursuant to any Environmental Law, or the generation,
storage, transportation, treatment, disposal or Release of any
Contaminant and, in connection with all the foregoing, thus the
Borrower and its Subsidiaries are likely to incur Environmental
Liabilities and Costs in excess of $1,000,000;
(k) Notwithstanding the occurrence of the Closing Date, the
Confirmation Order shall be revoked or there shall occur a default
under the Plan of Reorganization; or
(l) The Receivables Securitization shall be terminated and the
Borrower or any of its Subsidiaries shall enter into a receivables
securitization program without the consent of the Agent and the
Majority Lenders, such consent not to be unreasonably withheld.
8.2. REMEDIES. (a) If there shall occur and be continuing any
Event of Default, the Agent (i) shall at the request, or may with the consent,
of the Majority Lenders by notice to the Borrower, declare the obligation of
each Lender to make Loans and each Issuer to issue a Letter of Credit to be
terminated, whereupon the same shall forthwith terminate, and (ii) shall at the
request, or may with the consent, of the Majority Lenders by notice to the
Borrower, declare the Loans, all interest thereon and all other amounts and
Obligations payable under this Agreement to be forthwith due and payable,
whereupon the Notes, all such
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interest and all such amounts and Obligations shall become and be forthwith due
and payable, without presentment, demand, protest or further notice of any kind,
all of which are hereby expressly waived by the Borrower; PROVIDED, HOWEVER,
that upon the occurrence of the Event of Default specified in Section 8.1(e),
(A) the obligation of each Lender to make Revolving Credit Loans shall
automatically be terminated and (B) the Loans, all such interest and all such
amounts and Obligations shall automatically become and be due and payable,
without presentment, demand, protest or any notice of any kind, all of which are
hereby expressly waived by the Borrower. In addition to the remedies set forth
above, the Agent may exercise any remedies provided for by the Loan Documents in
accordance with the terms thereof or any other remedies provided by applicable
law.
(b) In addition to the remedies set forth above, the Agent, on
behalf of the Lenders, may exercise any of the remedies with respect to the
Collateral provided for in the Collateral Documents or any other remedies
provided by applicable law.
8.3 ACTIONS IN RESPECT OF LETTERS OF CREDIT. (a) Upon the
Termination Date, the Borrower shall pay to the Agent in immediately available
funds at the Agent's office specified in the Notes, for deposit in the Cash
Collateral Account be maintained with and in the name of the Agent on behalf of
the Secured Parties at such place as shall be designated by the Agent, an amount
equal to all outstanding Letter of Credit Obligations.
(b) Following the Termination Date the Agent may, from time to
time apply funds then held in the Cash Collateral Account to the payment of any
of the Obligations, in such order as the Agent may elect.
(c) The Agent may also exercise, in its sole discretion, in
respect of the Cash Collateral Account, in addition to the other rights and
remedies provided for herein or otherwise available to it, all the rights and
remedies of a secured party upon default under the Uniform Commercial Code in
effect in the State of New York at that time, and the Agent may, without notice
except as specified below, sell the Cash Collateral Account or any part thereof
in one or more sales, at public or private sale, at any of the Agent's offices
or elsewhere, for cash, or credit or for future delivery, and upon such other
terms as the Agent may deem commercially reasonable. The Borrower agrees that,
to
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the extent notice of sale shall be required by law, at least ten days' notice to
the Borrower of the time and place of any public sale or the time after which
any private sale is to be made shall constitute reasonable notification. The
Agent shall not be obligated to make any sale of the Cash Collateral Account,
regardless of notice of sale having been given. The Agent may adjourn any public
or private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time and
place to which it was so adjourned.
(d) Any cash held in the Cash Collateral Account, and all cash
proceeds received by the Agent in respect of any sale of, collection from or
other realization upon all or any part of the Cash Collateral Account, may, in
the discretion of the Agent, then or at any time thereafter be applied (after
[all payments provided for in Section 8.3(c),] the expiration of all outstanding
Letters of Credit and the payment of any amounts payable pursuant to Section
10.4) in whole or in part by the Agent against all or any part of the other
Obligations in such order as the Agent shall elect. Any surplus of such cash or
cash proceeds held by the Agent and remaining after the indefeasible cash
payment in full of all of the Obligations shall be paid over to the Borrower or
to whomsoever may be lawfully entitled to receive such surplus.
ARTICLE IX
THE AGENT
9.1. AUTHORIZATION AND ACTION. (a) Each Lender hereby appoints
and authorizes the Agent to take such action as agent on its behalf and to
exercise such powers under this Agreement and the other Loan Documents as are
delegated to the Agent by the terms hereof and thereof, together with such
powers as are reasonably incidental thereto. Without limitation of the
foregoing, each Lender hereby authorizes the Agent to execute and deliver, and
to perform its obligations under, each of the Loan Documents to which the Agent
is a party, and to exercise all rights, powers and remedies that the Agent may
have under such Loan Documents.
(b) As to any matters not expressly provided for by this
Agreement and the other Loan Documents (including, without limitation,
enforcement or collection of the Notes), the Agent shall not be required to
exercise any discretion
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or take any action, but shall be required to act or to refrain from acting (and
shall be fully protected in so acting or refraining from acting) upon the
instructions of the Majority Lenders, and such instructions shall be binding
upon all Lenders and all holders of Notes; PROVIDED, HOWEVER, that the Agent
shall not be required to take any action which the Agent in good faith believes
exposes it to personal liability or is contrary to this Agreement or applicable
law. The Agent agrees to give to each Lender prompt notice of each notice given
to it by any Loan Party pursuant to the terms of this Agreement or the other
Loan Documents.
9.2. AGENT'S RELIANCE, ETC. Neither the Agent, nor any of its
Affiliates or any of the respective directors, officers, agents or employees of
the Agent or any such Affiliate shall be liable for any action taken or omitted
to be taken by it, him, her or them under or in connection with this Agreement
or the other Loan Documents, except for its, his, her or their own gross
negligence or wilful misconduct. Without limitation of the generality of the
foregoing, the Agent (i) may treat the payee of any Note as the holder thereof
until such note has been assigned in accordance with Section 10.7; (ii) may rely
on the Register to the extent set forth in Section 10.7(c); (iii) may consult
with legal counsel (including, without limitation, counsel to the Borrower or
any other Loan Party), 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; (iv) makes no warranty or representation to any Lender and shall not be
responsible to any Lender for any statements, warranties or representations made
in or in connection with this Agreement or any of the other Loan Documents; (v)
shall not have any duty to ascertain or to inquire as to the performance or
observance of any of the terms, covenants or conditions of this Agreement or any
of the other Loan Documents on the part of the Borrower or any other Loan Party
or to inspect the property (including, without limitation, the books and
records) of the Borrower or any other Loan Party; (vi) shall not be responsible
to any Lender for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or any of the other Loan
Documents or any other instrument or document furnished pursuant hereto or
thereto; and (vii) shall incur no liability under or in respect of this
Agreement or any of the other Loan Documents by acting upon any notice, consent,
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certificate or other instrument or writing (which may be by telegram, cable,
telex or facsimile transmission) believed by it to be genuine and signed or sent
by the proper party or parties.
9.3. CUSA AND AFFILIATES. With respect to its Commitment, the
Loans made by it and each Note issued to it and Letters of Credit issued by it,
CUSA shall have the same rights and powers under this Agreement as any other
Lender and may exercise the same as though it were not the Agent; and the term
"Lender" or "Lenders" shall, unless otherwise expressly indicated, include CUSA
in its individual capacity. CUSA and its affiliates may accept deposits from,
lend money to, act as trustee under indentures of, and generally engage in any
kind of business with, the Borrower or any other Loan Party or any of their
respective Subsidiaries and any Person who may do business with or own
securities of the Borrower or any other Loan Party or any of their respective
Subsidiaries, all as if CUSA were not the Agent and without any duty to account
therefor to the Lenders.
9.4. LENDER CREDIT DECISION. Each Lender acknowledges that it
has, independently and without reliance upon the Agent or any other Lender and
based on the financial statements referred to in Article IV and such other
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 Agent or
any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement and other Loan Documents.
9.5. INDEMNIFICATION. The Lenders agree to indemnify the Agent
and its Affiliates, and their respective directors, officers, employees, agents
and advisors (to the extent not reimbursed by the Borrower or other Loan
Parties), ratably according to the respective principal amounts of the Notes
then held by each of them and Letter of Credit Obligations (including, without
limitation, participations therein) owing to them (or if no Notes and Letter of
Credit Obligations are at the time outstanding, ratably according to the
respective amounts of the aggregate of their Commitments), from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses and disbursements
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(including, without limitation, fees and disbursements of legal counsel) of any
kind or nature whatsoever which may be imposed on, incurred by, or asserted
against, the Agent in any way relating to or arising out of this Agreement or
the other Loan Documents or any action taken or omitted by the Agent under this
Agreement or the other Loan Documents; PROVIDED, HOWEVER, that no Lender shall
be liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from the Agent's or such Affiliate's gross negligence or wilful misconduct.
Without limitation of the foregoing, each Lender agrees to reimburse the Agent
promptly upon demand for its ratable share of any out-of-pocket expenses
(including, without limitation, fees and disbursements of legal counsel)
incurred by the Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
its rights or responsibilities under, this Agreement or the other Loan
Documents, to the extent that the Agent is not reimbursed for such expenses by
the Borrowers or another Loan Party.
9.6. SUCCESSOR AGENT. The Agent may resign at any time by
giving written notice thereof to the Lenders and the Borrower. Upon any such
resignation, the Majority Lenders shall have the right to appoint a successor
Agent. If no successor Agent shall have been so appointed by the Majority
Lenders, and shall have accepted such appointment, within 30 days after the
retiring Agent's giving of notice of resignation, then the retiring Agent may,
on behalf of the Lenders, appoint a successor Agent, which shall be a commercial
bank organized under the laws of the United States of America or of any State
thereof and having a combined capital and surplus of at least $50,000,000. Upon
the acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations under this Agreement
and the other Loan Documents. After any retiring Agent's resignation hereunder
as Agent, the provisions of this Article X shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under this
Agreement and the other Loan Documents.
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ARTICLE X
MISCELLANEOUS
10.1. AMENDMENTS, ETC. (a) No amendment or waiver of any
provision of this Agreement nor consent to any departure by the Borrower
therefrom shall in any event be effective unless the same shall be in writing
and signed by the Majority Lenders, and then any such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; PROVIDED, HOWEVER, that no amendment, waiver or consent shall, unless in
writing and signed by all the Lenders, do any of the following: (i) increase the
Commitments of the Lenders or subject the Lenders to any additional obligations;
(ii) reduce the principal of, or interest on, the Loans or any fees or other
amounts payable hereunder; (iii) postpone any date fixed for any payment of
principal of, or interest on, the Loans or any fees or other amounts payable
hereunder; (iv) change the percentage of the Commitments, the aggregate unpaid
principal amount of the Loans, or the number of Lenders which shall be required
for the Lenders or any of them to take any action hereunder; (v) release any
Collateral except as shall otherwise be provided in (A) clause (ii) of the
second proviso of this Section 10.1, (B) Section 7.4 or (C) the other Loan
Documents; (vi) amend this Section 10.1; or (vii) increase the Advance Rate in
effect from time to time above the rates set forth on Schedule IV as of the
Closing Date; and PROVIDED, FURTHER, that (i) no amendment, waiver or consent
shall, unless in writing and signed by the Agent in addition to the Lenders
required above to take such action, affect the rights or duties of the Agent
under this Agreement or the other Loan Documents and (ii) the Agent may, without
the consent of the Lenders, release Collateral which has a value determined at
the lower of cost or net book value not in excess of $15,000,000 in the
aggregate; provided that each disposition of Collateral pursuant to clause (ii)
above shall be at the fair market value of such Collateral, as determined by the
Agent in its reasonable discretion based upon facts and circumstances existing
at the time of such sale or other disposition as shall be presented to it by the
Borrower and provided further that all net proceeds from any sale or other
disposition shall be applied to prepay the Loans in the same manner provided for
the application of Asset Sales in Section 2.6(b)(i) and reduce the Commitments
in the same manner provided for Asset Sales in Section 2.4(b).
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(b) If, in connection with any proposed amendment or waiver of
any of the provisions of this Agreement as contemplated by clauses (i) through
(vii) of the first proviso of Section 10.1(a) above, the consent of the Majority
Lenders is obtained but the consent of one or more of such other Lenders whose
consent is required is not obtained, then the Agent shall have the right to
purchase the interest of each such non-consenting Lender (so long as the
interests of all non-consenting Lenders are so purchased), together with accrued
and unpaid interest, and assume each such Lender's Commitment.
10.2. NOTICES, ETC. All notices and other communications
provided for hereunder shall be in writing telecopied or delivered by hand or by
nationally recognized overnight courier, if to the Borrower, addressed to it at
0000 Xx-Xxx Xxxx, Xxxxxx, Xxxx 00000 (telecopy number: (000) 000-0000)
(telephone number: (000) 000-0000), Attention: Secretary; if to any Lender, at
its Domestic Lending Office specified opposite its name on Schedule II; if to
any Issuer at its address set forth on Schedule III; and if to the Agent, at its
address at 000 Xxxx Xxxxxx, sixth floor, zone 4, Xxx Xxxx, Xxx Xxxx 00000
(telecopy number: (000) 000-0000) (telephone number: (000) 000-0000), Attention:
Xxxxxxx Xxxxxx; or, as to the Borrowers or the Agent, at such other address as
shall be designated by such party in a written notice to the other parties and,
as to each other party, at such other address as shall be designated by such
party in a written notice to the Borrowers and the Agent. All such notices and
communications shall be effective when telecopied with confirmation of receipt
or delivered by hand or by nationally recognized overnight courier to the
addressee or its agent, respectively, except that notices and communications to
the Agent pursuant to Article II or IX shall not be effective until received by
the Agent.
10.3. NO WAIVER; REMEDIES. No failure on the part of any
Lender or the Agent to exercise, and no delay in exercising, any right hereunder
or under any Note shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
10.4. COSTS; EXPENSES; INDEMNITIES. (a) The
Borrower agrees to pay on demand (i) all costs and expenses
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of the Agent in connection with the preparation, execution, delivery,
administration, modification and amendment of this Agreement, each of the other
Loan Documents and each of the other documents to be delivered hereunder and
thereunder, including, without limitation, the fees and out-of-pocket expenses
of counsel, accountants, appraisers, consultants or industry experts retained by
the Agent with respect thereto, search, filing and recording fees due diligence,
syndication including printing, distribution and bank meeting, transportation,
computer, duplication, messenger, audit, insurance, appraisal and consultation
costs and expenses and, as to the Agent, with respect to advising it as to its
rights and responsibilities under this Agreement and the other Loan Documents,
and (ii) all costs and expenses of the Agent, each Issuer and each Lender
(including, without limitation, the fees and out-of-pocket expenses of counsel,
accountants, appraisers, consultants or industry experts retained by the Agent
or any Issuer or Lender) in connection with the enforcement (whether through
negotiation, legal proceedings or otherwise) of this Agreement and the other
Loan Documents.
(b) The Borrower agrees to indemnify and hold harmless the
Agent and each Issuer and Lender and their respective Affiliates, and the
directors, officers, employees, agents, attorneys, consultants and advisors of
or to any of the foregoing (including, without limitation, those retained in
connection with the satisfaction or attempted satisfaction of any of the
conditions set forth in Article III) (each of the foregoing being an
"INDEMNITEE") from and against any and all claims, damages, liabilities,
obligations, losses, penalties, actions, judgments, suits, costs, disbursements
and expenses of any kind or nature (including, without limitation, fees and
disbursements of counsel to any such Indemnitee) which may be imposed on,
incurred by or asserted against any such Indemnitee in connection with or
arising out of any investigation, litigation or proceeding, whether or not any
such Indemnitee is a party thereto, whether direct, indirect, or consequential
and whether based on any federal, state or local law or other statutory
regulation, securities or commercial law or regulation, or under common law or
in equity, or on contract, tort or otherwise, in any manner relating to or
arising out of this Agreement, any other Loan Document, any Obligation, any
Letter of Credit, or any act, event or transaction related or attendant to any
thereof, including, without limitation, (i) all Environmental Liabilities and
Costs arising from or connected with the
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past, present or future operations of the Borrower or any of its Subsidiaries
involving any property subject to a Collateral Document, or damage to real or
personal property or natural resources or harm or injury alleged to have
resulted from any Release of contaminants on, upon or into such property or any
contiguous real estate; (ii) any costs or liabilities incurred in connection
with any Remedial Action concerning the Borrower or any of its Subsidiaries;
(iii) any costs or liabilities incurred in connection with any Environmental
Lien; (iv) any costs or liabilities incurred in connection with any other matter
under any Environmental Law, including, without limitation, CERCLA and
applicable state property transfer laws, whether, with respect to any of the
foregoing, such Indemnitee is a mortgagee pursuant to any leasehold mortgage, a
mortgagee in possession, the successor in interest to the Borrower or any of its
Subsidiaries, or the owner, lessee or operator of any property of the Borrower
or any of its Subsidiaries by virtue of foreclosure, except, with respect to any
of the foregoing referred to in clauses (i), (ii), (iii) and (iv), to the extent
incurred following (A) foreclosure by the Agent or any Lender, or the Agent or
any Issuer or Lender having become the successor in interest to the Borrower or
any of its Subsidiaries, and (B) attributable solely to acts of the Agent or
such Issuer or Lender or any agent on behalf of the Agent or such Issuer or
Lender; or (v) the use or intended use of the proceeds of the Loans or in
connection with any investigation of any potential matter covered hereby
(collectively, the "INDEMNIFIED MATTERS"); PROVIDED, HOWEVER, that the Borrower
shall not have any obligation under this Section 10.4(b) to an Indemnitee with
respect to any Indemnified Matter caused by or resulting from the gross
negligence or willful misconduct of that Indemnitee, as determined by a court of
competent jurisdiction in a final non-appealable judgment or order, but in no
event shall an Indemnitee be liable for punitive, exemplary or consequential
damages.
(c) If any Lender receives any payment of principal of, or is
subject to a conversion of, any Euro dollar Rate Loan other than on the last day
of an Interest Period relating to such Loan, as a result of any payment or
conversion made by the Borrower or acceleration of the maturity of the Notes
pursuant to Section 8.2 or for any other reason, the Borrower shall, upon demand
by such Lender (with a copy of such demand to the Agent), pay to the Agent for
the account of such Lender all amounts required to compensate such Lender for
any additional losses, costs or
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expenses which it may reasonably incur as a result of such payment or
conversion, including, without limitation, any loss, cost or expense incurred by
reason of the liquidation or reemployment of deposits or other funds acquired by
such Lender to fund or maintain such Loan.
(d) The Borrower shall indemnify the Agent and the Issuers and
Lenders for, and hold the Agent and the Lenders harmless from and against, any
and all claims for brokerage commissions, fees and other compensation made
against the Agent and the Lenders for any broker, finder or consultant with
respect to any agreement, arrangement or understanding made by or on behalf of
any Loan Party or any of its Subsidiaries in connection with the transactions
contemplated by this Agreement.
(e) The Agent and each Issuer and Lender agree that in the
event that any such investigation, litigation or proceeding set forth in
subparagraph (b) above is asserted or threatened in writing or instituted
against it or any other Indemnitee, or any Remedial Action, is requested of it
or any of its officers, directors, agents and employees, for which any
Indemnitee may desire indemnity or defense hereunder, such Indemnitee shall
promptly notify the Borrower in writing.
(f) The Borrower, at the request of any Indemnitee, shall have
the obligation to defend against such investigation, litigation or proceeding or
requested Remedial Action, and the Borrower, in any event, may participate in
the defense thereof with legal counsel of the Borrower's choice. In the event
that such Indemnitee requests the Borrower to defend against such investigation,
litigation or proceeding or requested Remedial Action, the Borrower shall
promptly do so and such Indemnitee shall have the right to have legal counsel of
its choice participate in such defense; PROVIDED, HOWEVER, that in connection
with any such investigation, litigation or proceeding or the preparation of a
defense with respect thereto, the Borrower shall not be responsible for, or
required to hold harmless any Indemnitee from and against the fees and
disbursements of more than one counsel for all of the Indemnitees taken
together, except to the extent any such Indemnitee requires its own counsel in
order to be adequately represented in the reasonable judgment of counsel for
such Indemnitee. No action taken by legal counsel chosen by such Indemnitee in
defending against any such investigation, litigation or proceeding or requested
Remedial Action, shall vitiate or in
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any way impair the Borrower's obligation and duty hereunder to indemnify and
hold harmless such Indemnitee.
(g) The Borrower agrees that any indemnification or other
protection provided to any Indemnitee pursuant to this Agreement (including,
without limitation, pursuant to this Section 10.4) or any other Loan Document
shall (i) survive payment of the Obligations and (ii) inure to the benefit of
any Person who was at any time an Indemnitee under this Agreement or any other
Loan Document.
10.5. RIGHT OF SET-OFF. Upon the occurrence and during the
continuance of any Event of Default each Lender 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 indebtedness at any time owing by such Lender
to or for the credit or the account of the Borrower against any and all of the
Obligations now or hereafter existing whether or not such Lender shall have made
any demand under this Agreement or any Note or any Reimbursement Agreement or
other Loan Document and although such Obligations may be unmatured. Each Lender
agrees promptly to notify the Borrower after any such set-off and application
made by such Lender; PROVIDED, HOWEVER, that the failure to give such notice
shall not affect the validity of such set-off and application. The rights of
each Lender under this Section are in addition to the other rights and remedies
(including, without limitation, other rights of set-off) which such Lender may
have.
10.6. BINDING EFFECT. This Agreement shall become effective
when it shall have been executed by the Borrower and the Agent and when the
Agent shall have been notified by each Lender and Issuer that such Lender and
Issuer has executed it and thereafter shall be binding upon and inure to the
benefit of the Borrower, the Agent and each Lender and Issuer and their
respective successors and assigns, except that the Borrower shall not have the
right to assign its rights hereunder or any interest herein without the prior
written consent of the Lenders.
10.7. ASSIGNMENTS AND PARTICIPATIONS. (a) Each Lender may
sell, transfer, negotiate or assign to one or more other Lenders or Eligible
Assignees all or a portion of its Commitment, including, without limitation, in
the case of an Issuer, its commitment to issue Letters of Credit and,
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in the case of each Lender, to participate in Letter of Credit Obligations and
Swing Loans, the Loans and Letter of Credit Obligations owing to it and the Note
held by it and a commensurate portion of its rights and obligations hereunder
and under the other Loan Documents; PROVIDED, HOWEVER, that (i) each such
assignment shall be of a constant, and not a varying, percentage of all of the
assigning Lender's rights and obligations under this Agreement (ii) the
aggregate amount of the Commitments, Letters of Credit, Letter of Credit
Obligations and Loans being assigned pursuant to each such assignment
(determined as of the date of the Assignment and Acceptance with respect to such
assignment) shall in no event (if less than the Assignor's entire interest) be
less than $5,000,000 or an integral multiple of $1,000,000 in excess thereof,
except, in either case, with the consent of the Borrower and the Agent, and
(iii) each assignee hereunder shall also be an Eligible Assignee. The parties to
each assignment shall execute and deliver to the Agent, for its acceptance and
recording, together with a $3,500 fee payable to the Agent for processing such
assignment, an Assignment and Acceptance, together with the Notes (or an
Affidavit of Loss and Indemnity with respect to such Notes satisfactory to the
Agent) subject to such assignment. Upon such execution, delivery, acceptance and
recording, from and after the effective date specified in such Assignment and
Acceptance, (A) the assignee thereunder shall become a party hereto and, to the
extent that rights and obligations under the Loan Documents have been assigned
to such assignee pursuant to such Assignment and Acceptance, have the rights and
obligations of a Lender, and if such Lender was an Issuer, of an Issuer
hereunder and thereunder, and (B) the assignor thereunder shall, to the extent
that rights and obligations under this Agreement have been assigned by it
pursuant to such Assignment and Acceptance, relinquish its rights (except those
which survive the payment in full of the Obligations) and be released from its
obligations under the Loan Documents (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under the Loan Documents, such Lender shall cease to be a party
hereto).
(b) By executing and delivering an Assignment and Acceptance,
the Lender assignor thereunder and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any of
the statements,
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warranties or representations made in or in connection with this Agreement or
any other Loan Document furnished pursuant thereto or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement
or any other Loan Document or any other instrument or document furnished
pursuant hereto or thereto; (ii) such assigning Lender makes no representation
or warranty and assumes no responsibility with respect to the financial
condition of any Loan Party or the performance or observance by any Loan Party
of any of its obligations under this Agreement or any other Loan Document or of
any other instrument or document furnished pursuant hereto or thereto; (iii)
such assigning Lender confirms that it has delivered to the assignee and the
assignee confirms that it has received a copy of this Agreement and each of the
Loan Documents together with a copy of the most recent financial statements
delivered by the Borrower to the Lenders pursuant to each of the clauses of
Section 6.10 (or if no such statements have been delivered, the financial
statements referred to in Section 4.5 of this Agreement) and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance; (iv) such
assignee will, independently and without reliance upon the Agent, such assigning
Lender or any other Lender, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement; (v) such assignee confirms
that it is an Eligible Assignee; (vi) such assignee appoints and authorizes the
Agent to take such action as agent on its behalf and to exercise such powers
under this Agreement and the other Loan Documents as are delegated to the Agent
by the terms hereof and thereof, together with such powers as are reasonably
incidental thereto; and (vii) such assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of this
Agreement are required to be performed by it as a Lender and if such assignor
Lender was an Issuer, as an Issuer.
(c) The Agent shall maintain at its address referred to in
Section 10.2 a copy of each Assignment and Acceptance delivered to and accepted
by it and a register for the recordation of the names and addresses of the
Lenders and the Commitments of, commitments to issue Letters of Credit, Letter
of Credit Obligations owing to, and principal amount of the Loans owing to each
Lender from time to time (the "REGISTER"). The entries in the Register shall
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be conclusive and binding for all purposes, absent manifest error, and the Loan
Parties, the Agent and the Lenders may treat each Person whose name is recorded
in the Register as a Lender or Issuer, as the case may be, for all purposes of
this Agreement. The Register shall be available for inspection by the Borrower,
the Agent or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender and an assignee representing that it is an Eligible
Assignee, together with the Notes subject to such assignment, the Agent shall,
if such Assignment and Acceptance has been completed, (i) accept such Assignment
and Acceptance, (ii) record the information contained therein in the Register
and (iii) give prompt notice thereof to the Borrower. Within five Business Days
after its receipt of such notice, the Borrower, at its own expense, shall
execute and deliver to the Agent, in exchange for such surrendered Notes, new
Notes to the order of such Eligible Assignee in an amount equal to the
Commitments assumed by it pursuant to such Assignment and Acceptance and, if the
assigning Lender has retained Commitments hereunder, new Notes to the order of
the assigning Lender in an amount equal to the Commitments retained by it
hereunder. Such new Notes shall be dated the same date as the Surrendered Notes
and be in substantially the form of EXHIBIT A hereto, as applicable.
(e) In addition to the other assignment rights provided in
this Section 10.7, each Lender may assign, as collateral or otherwise, any of
its rights under this Agreement (including, without limitation, rights to
payments of principal or interest on the Notes) to any Federal Reserve Bank
without notice to or consent of the Borrower or the Agent; PROVIDED, HOWEVER,
that no such assignment shall release the assigning Lender from any of its
obligations hereunder. The terms and conditions of any such assignment and the
documentation evidencing such assignment shall be in form and substance
satisfactory to the assigning Lender and the assignee Federal Reserve Bank.
(f) Each Lender may sell participations to one or more banks
or other Persons in or to all or a portion of its rights and obligations under
the Loan Documents (including, without limitation, all or a portion of its
Commitments, the Letter of Credit Obligations owing to it, the Loans owing to it
and the Notes held by it). The terms of such
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participation shall not, in any event, require the participant's consent to any
amendments, waivers or other modifications of any provision of any Loan
Documents, the consent to any departure by any Loan Party therefrom, or to the
exercising or refraining from exercising any powers or rights which such Lender
may have under or in respect of the Loan Documents (including, without
limitation, the right to enforce the obligations of the Loan Parties), except if
any such amendment, waiver or other modification or consent would (i) reduce the
amount, or postpone any date fixed for, any amount (whether of principal,
interest or fees) payable to such participant under the Loan Documents, to which
such participant would otherwise be entitled under such participation or (ii)
result in the release of all or substantially all of the Collateral other than
in accordance with the Loan Documents. In the event of the sale of any
participation by any Lender, (i) such Lender's obligations under the Loan
Documents (including, without limitation, its Commitments and commitment
hereunder to issue Letters of Credit) shall remain unchanged, (ii) such Lender
shall remain solely responsible to the other parties hereto for the performance
of such obligations, (iii) such Lender shall remain the holder of such Notes and
Obligations for all purposes of this Agreement and (iv) the Borrower, the Agent
and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement.
(g) Each Issuer may at any time assign its rights and
obligations hereunder to any other Issuer or to any Lender by an instrument in
form and substance satisfactory to the Agent and the parties thereto.
(h) Each participant shall be entitled to the benefits of
Sections 2.10, 2.12 and 2.14 as if it were a Lender; PROVIDED, HOWEVER, that
anything herein to the contrary notwithstanding, the Borrower shall not, at any
time, be obligated to pay to any participant of any interest of any Lender,
under Section 2.10, 2.12 or 2.14, any sum in excess of the sum which the
Borrower would at the time of such participation have been obligated to pay to
such Lender any such amount in respect of such interest had such participation
not been effected or had such participation not been sold.
10.8. GOVERNING LAW. This Agreement and the Notes and the
rights and obligations of the parties hereto and thereto shall be governed by,
and construed and
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interpreted in accordance with, the law of the State of New York.
10.9. SUBMISSION TO JURISDICTION; SERVICE OF PROCESS. (a) Any
legal action or proceeding with respect to this Agreement or the Notes or any
document related thereto may be brought in the courts of the State of New York
or of the United States of America for the Southern District of New York, and,
by execution and delivery of this Agreement, each Borrower hereby accepts for
itself and in respect of its property, generally and unconditionally, the
jurisdiction of the aforesaid courts. The parties hereto hereby irrevocably
waive any objection, including, without limitation, any objection to the laying
of venue or based on the grounds of FORUM NON CONVENIENS, which any of them may
now or hereafter have to the bringing of any such action or proceeding in such
respective jurisdictions.
(b) The Borrower irrevocably consents to the service of
process of any of the aforesaid courts in any such action or proceeding by the
mailing of copies thereof by registered or certified mail, postage prepaid, to
the Borrower at its address provided herein.
(c) Nothing contained in this Section 10.9 shall affect the
right of the agent, any Lender or any holder of a Note to serve process in any
other manner permitted by law or commence legal proceedings or otherwise proceed
against the Borrower in any other jurisdiction.
10.10. SECTION TITLES. The Section titles contained in this
Agreement are and shall be without substantive meaning or content of any kind
whatsoever and are not a part of the agreement between the parties hereto.
10.11. EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement.
10.12. ENTIRE AGREEMENT. This Agreement, together with all of
the other Loan Documents and all certificates and documents delivered hereunder
or there under, and the Fee Letter embodies the entire agreement of the parties
and supersedes all prior agreements and understandings relating to the subject
matter hereof.
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10.13. CONFIDENTIALITY. Each Lender and the Agent agrees to
keep information obtained by it pursuant hereto and the other Loan Documents
confidential in accordance with such Lender's or the Agent's, as the case may
be, customary practices and agrees that it will only use such information in
connection with the transactions contemplated by this Agreement and not disclose
any of such information other than (i) to such Lender's or the Agent's, as the
case may be, employees, representatives and agents who are or are expected to be
involved in the evaluation of such information in connection with the
transactions contemplated by this Agreement and who are advised of the
confidential nature of such information, (ii) to the extent such information
presently is or hereafter becomes available to such Lender or the Agent, as the
case may be, on a non-confidential basis from a source other than the Borrower,
(iii) to the extent disclosure is required by law, regulation or judicial order
or requested or required by any regulator having jurisdiction over such Lender
or the Agent, as the case may be, or auditors, or (iv) to assignees or
participants or potential assignees or participants who agree to be bound by the
provisions of this sentence.
10.14. ACKNOWLEDGMENTS. The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents;
(b) none of the Agent, any Lender or any Issuer has any
fiduciary relationship with or fiduciary duty to the Borrower arising out of or
in connection with this Agreement or any of the other Loan Documents, and the
relationship between the Agent and the Lenders and the Issuers, on the one hand,
and the Borrower, on the other hand, in connection herewith or therewith is
solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated hereby
among the Lenders and Issuers or among the Borrower and the Lenders and Issuers
or among the Borrower and the Agent.
10.15. WAIVER OF TRIAL BY JURY. The Borrower, the Lenders, the
Issuer and the Agent hereby waive any right
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to a trial by jury in any action or proceeding arising out of this Agreement or
any other Loan Document.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
THE XXXXX-XXXXXXX STORES CORP.
By:
-------------------------------------
Title:
CITICORP USA, INC.,
as Agent
By:
-------------------------------------
Title: Vice President
LENDERS
CITICORP USA, INC.
By:
-------------------------------------
Title: Vice President
ISSUER
CITIBANK, N.A.
By:
-------------------------------------
Title: Vice President
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LENDERS
BANKAMERICA BUSINESS CREDIT, INC.
By: __________________________
Title:
BANKBOSTON, N.A.
By: __________________________
Title:
BANK ONE, NA
By: __________________________
Title:
DRESDNER BANK AG
New York and Grand Cayman Branches
By: __________________________
Title:
By: __________________________
Title:
FLEET NATIONAL BANK
By: __________________________
Title:
XXXXXX FINANCIAL, INC.
By: __________________________
Title:
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XXXXXXX NATIONAL LIFE INSURANCE
COMPANY
By: PPM Finance, Inc.,
Attorney-In-Fact
By: __________________________
Title:
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SCHEDULE I
COMMITMENT
Lender Commitment
------ ----------
CITICORP USA, INC. $ 20,000,000
BANKAMERICA BUSINESS CREDIT, INC. $ 15,000,000
BANKBOSTON, N.A. $ 15,000,000
BANK ONE, NA $ 15,000,000
DRESDNER BANK AG $ 15,000,000
FLEET NATIONAL BANK $ 15,000,000
XXXXXX FINANCIAL, INC. $ 15,000,000
XXXXXXX NATIONAL LIFE INSURANCE COMPANY $ 15,000,000
============
TOTAL $125,000,000
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SCHEDULE II
APPLICABLE LENDING OFFICES AND ADDRESSES FOR NOTICES
Lender Domestic Lending Office
------ -----------------------
CITICORP USA, INC. 000 Xxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx Xxxxxx
BANKAMERICA BUSINESS CREDIT, INC. 00 Xxxx 00xx Xxxxxx
Xxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx Xxxxxxxx
BANKBOSTON, N.A. 000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxxx
BANK ONE, NA Kettering Tower
00 Xxxxx Xxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxxxx
DRESDNER BANK AG 000 Xxxxx XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attn: Xxxxxxx Xxxx
FLEET NATIONAL BANK Mail Stop: RI-MO-M03B
000 Xxxxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxxxxxx
XXXXXX FINANCIAL, INC. 000 Xxxx 00xx Xxxxxx
0xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx Xxxxxxx
XXXXXXX NATIONAL LIFE INSURANCE COMPANY 000 Xxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxxx
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SCHEDULE III
ADDRESSES FOR NOTICES TO THE ISSUERS
Issuer Address
------ -------
CITIBANK, N.A. 0 Xxxxx Xxx - XXX0/0
Xxx Xxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxxxx
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SCHEDULE IV
ADVANCE RATES
With respect to Inventory other than shoes at Bee-Gee:
------------------------------------------------------
January through October 60%
November and December 65%
-- Inventory in respect of which the Borrower's customary
receiving process has not yet been completed shall in no event
have an advance rate in excess of 50% which will be reflected
on the Borrowing Base Certificate as "Miscellaneous
Inventory"
With Respect to Shoes at Bee-gee:
---------------------------------
All months 40%
128
