CREDIT AGREEMENT, dated as of March 19, 1999, among DEPARTMENT 56,
INC., a Delaware corporation (the "BORROWER"), the several banks and other
financial institutions or entities from time to time parties to this Agreement
(the "LENDERS"), ABN AMRO BANK N.V. and THE FIRST NATIONAL BANK OF CHICAGO, as
documentation agents (each, in such capacity, a "DOCUMENTATION AGENT", and
collectively, the "DOCUMENTATION AGENTS"), U.S. BANK NATIONAL ASSOCIATION as
managing agent (in such capacity, the "MANAGING AGENT"), and THE CHASE MANHATTAN
BANK ("CHASE"), as administrative agent for the Lenders (in such capacity,
together with any of its successors, the "ADMINISTRATIVE AGENT").
The parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 DEFINED TERMS. As used in this Agreement, the terms listed in
this Section 1.1 shall have the respective meanings set forth in this Section
1.1.
"ABR": for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) determined by the Administrative Agent equal
to the greater of (a) the Prime Rate in effect on such day, and (b) the Federal
Funds Effective Rate in effect on such day plus 1/2 of 1%. For purposes hereof:
"Prime Rate" shall mean the rate of interest per annum publicly announced from
time to time by the Reference Lender as its prime rate in effect at its
principal office in New York City (the Prime Rate not being intended to be the
lowest rate of interest charged by the Reference Lender in connection with
extensions of credit to debtors). Any change in the ABR due to a change in the
Prime Rate or the Federal Funds Effective Rate shall be effective as of the
opening of business on the effective day of such change in the Prime Rate or the
Federal Funds Effective Rate, respectively.
"ABR LOANS": Loans the rate of interest applicable to which is
based upon the ABR.
"ACCEPTANCE MARGIN": with respect to any Acceptance at any time,
the rate per annum determined pursuant to the Pricing Grid at such time.
"ACCEPTANCE OBLIGATIONS": at any time, an amount equal to the sum
of (a) the aggregate face amount of unmatured Acceptances and (b) the aggregate
amount of all unpaid Acceptance Reimbursement Obligations.
"ACCEPTANCE PARTICIPANTS": with respect to each Acceptance,
collectively, all the Working Capital Lenders other than the Accepting Bank.
"ACCEPTANCE RATE": the rate for any Acceptance financing equal to
the Acceptance Margin plus the discount rate, as determined from time to time by
the Accepting Bank in its sole and absolute discretion, as generally available
as the discount rate to other customers of the Accepting Bank for bankers'
acceptances of an amount comparable to the amount of such Acceptance and having
a tenor comparable to the tenor of such Acceptance.
"ACCEPTANCE REIMBURSEMENT OBLIGATIONS": the obligation of the
Borrower to reimburse the Accepting Bank pursuant to Section 3.14 for the face
amount of Acceptances.
"ACCEPTANCE REQUEST": an Acceptance Request, substantially in the
form of Exhibit H hereto, with appropriate insertions, or in such other form as
the Accepting Bank shall reasonably request.
"ACCEPTANCE TERMINATION DATE": the earlier of March 19, 2001 and
the Working Capital Termination Date, and, if each Lender, in accordance with
then applicable law, is permitted on or after such date to extend the Acceptance
Termination Date to the earlier of March 19, 2003 and the Working Capital
Termination Date, then such date, and, if each Lender, in accordance with then
applicable law, is permitted on or after such date to extend the Acceptance
Termination Date to the Working Capital Termination Date, then the Working
Capital Termination Date.
"ACCEPTANCES": as defined in Section 3.9(a).
"ACCEPTING BANK": The Chase Manhattan Bank, together with any
successor, in its capacity as creator of any Acceptance.
"ADJUSTMENT DATE": as defined in the Pricing Grid.
"ADMINISTRATIVE AGENT": as defined in the preamble hereto.
"AFFILIATE": as to any Person, any other Person that, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Person. For purposes of this definition, "control" of a Person means the
power, directly or indirectly, either to (a) vote 10% or more of the securities
having ordinary voting power for the election of directors (or persons
performing similar functions) of such Person or (b) direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise.
"AGENTS": the collective reference to the Documentation Agents,
the Administrative Agent and the Managing Agent.
"AGGREGATE EXPOSURE": with respect to any Lender at any time, an
amount equal to the sum of (i) the amount of such Lender's 364-Day Commitment
then in effect or, after the 364-Day Commitment Period or if the 364-Day
Commitments have been terminated, the aggregate then unpaid principal amount of
such Lender's 364-Day Loans and (ii) the amount of such Lender's Working Capital
Commitment then in effect or, if the Working Capital Commitments have been
terminated, the amount of such Lender's Working Capital Extensions of Credit
then outstanding.
"AGGREGATE EXPOSURE PERCENTAGE": with respect to any Lender at any
time, the ratio (expressed as a percentage) of such Lender's Aggregate Exposure
at such time to the Aggregate Exposure of all Lenders at such time.
"AGREEMENT": this Credit Agreement, as amended, supplemented or
otherwise modified from time to time.
"APPLICABLE MARGIN": for each Type of Loan at any time, the rate
per annum determined pursuant to the Pricing Grid at such time.
"APPLICATION": an application, in such form as the Issuing Lender
may specify from time to time, requesting the Issuing Lender to open a Letter of
Credit.
"ASSET SALE": any Disposition of property or series of related
Dispositions of property (excluding any such Disposition permitted by clause
(a), (b), (c) or (d) of Section 7.5) that yields gross proceeds to the Borrower
or any of its Subsidiaries (valued at the initial principal amount thereof in
the case of non-cash proceeds consisting of notes or other debt securities and
valued at fair market value in the case of other non-cash proceeds) in excess of
$500,000.
"ASSIGNEE": as defined in Section 10.6(c).
"ASSIGNMENT AND ACCEPTANCE": an Assignment and Acceptance,
substantially in the form of Exhibit E.
"ASSIGNOR": as defined in Section 10.6(c).
"AVAILABLE 364-DAY COMMITMENT": as to any 364-Day Lender at any
time, an amount equal to the excess, if any, of (a) such Lender's 364-Day
Commitment then in effect OVER (b) such Lender's 364-Day Loans then outstanding.
"AVAILABLE WORKING CAPITAL COMMITMENT": as to any Working Capital
Lender at any time, an amount equal to the excess, if any, of (a) such Lender's
Working Capital Commitment then in effect over (b) such Lender's Working Capital
Extensions of Credit then outstanding.
"BENEFITTED LENDER": as defined in Section 10.7(a).
"BOARD": the Board of Governors of the Federal Reserve System of
the United States (or any successor).
"BORROWER": as defined in the preamble hereto.
"BORROWING BASE": as defined in Section 2.4(a).
"BORROWING DATE": any Business Day specified by the Borrower as a
date on which the Borrower requests the relevant Lenders to make Loans
hereunder.
"BUSINESS": as defined in Section 4.17(b).
"BUSINESS DAY": a day other than a Saturday, Sunday or other day
on which commercial banks in New York City are authorized or required by law to
close, PROVIDED, that with respect to notices and determinations in connection
with, and payments of principal and interest on, Eurodollar Loans, such day is
also a day for trading by and between banks in Dollar deposits in the London
interbank eurodollar market.
"CAPITAL LEASE OBLIGATIONS": as to any Person, the obligations of
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP
and, for the purposes of this Agreement, the amount of such obligations at any
time shall be the capitalized amount thereof at such time determined in
accordance with GAAP.
"CAPITAL STOCK": any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants, rights or options to purchase any of the foregoing.
"CASH EQUIVALENTS": (a) marketable direct obligations issued by,
or unconditionally guaranteed by, the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition; (b)
certificates of deposit, time deposits, eurodollar time deposits or overnight
bank deposits having maturities of six months or less from the date of
acquisition issued by any Lender or by any commercial bank organized under the
laws of the United States or any state thereof having combined capital and
surplus of not less than $500,000,000; (c) commercial paper of an issuer rated
at least A-1 by S&P or P-1 by Xxxxx'x, or carrying an equivalent rating by a
nationally recognized rating agency, if both of the two named rating agencies
cease publishing ratings of commercial paper issuers generally, and maturing
within six months from the date of acquisition; (d) repurchase obligations of
any Lender or of any commercial bank satisfying the requirements of clause (b)
of this definition, having a term of not more than 30 days, with respect to
securities issued or fully guaranteed or insured by the United States
government; (e) securities with maturities of one year or less from the date of
acquisition issued or fully guaranteed by any state, commonwealth or territory
of the United States, by any political subdivision or taxing authority of any
such state, commonwealth or territory or by any foreign government, the
securities of which state, commonwealth, territory, political subdivision,
taxing authority or foreign government (as the case may be) are rated at least A
by S&P or A by Xxxxx'x; (f) securities with maturities of six months or less
from the date of acquisition backed by standby letters of credit issued by any
Lender or any commercial bank satisfying the requirements of clause (b) of this
definition; or (g) shares of money market mutual or similar funds which invest
exclusively in assets satisfying the requirements of clauses (a) through (f) of
this definition.
"CHANGE IN LAW": with respect to any Lender or the Accepting Bank,
subsequent to the date hereof, the adoption of any law, rule, regulation,
policy, guideline or directive (whether or not having the force of law) or any
change therein or in the interpretation or application thereof by any
Governmental Authority (including, without limitation, any Federal Reserve Bank
or bank examiner) applicable to such Lender, including, without limitation, the
issuance of any final rule, regulation or guideline by any regulatory agency
having jurisdiction over such Lender or Accepting Bank.
"CLOSING DATE": the date on which the conditions precedent set
forth in Section 5.1 shall have been satisfied, which date is no later than
March 31, 1999.
"CODE": the Internal Revenue Code of 1986, as amended from time to
time.
"COLLATERAL": all property of the Loan Parties, now owned or
hereafter acquired, upon which a Lien is purported to be created by any Security
Document.
"COMMERCIAL L/C": a commercial documentary Letter of Credit under
which the Issuing Lender agrees to make payments in Dollars for the account of
the Borrower, on behalf of the Borrower in respect of obligations of the
Borrower for the purposes described in subsection 4.16(c).
"COMMITMENT": as to any Lender, the sum of the 364-Day Commitment
and the Working Capital Commitment of such Lender.
"COMMITMENT FEE RATE": at any time, the rate per annum designated
as the Commitment Fee Rate on and determined pursuant to the Pricing Grid at
such time.
"COMMONLY CONTROLLED ENTITY": an entity, whether or not
incorporated, that is under common control with the Borrower within the meaning
of Section 4001 of ERISA or is part of a group that includes the Borrower and
that is treated as a single employer under Section 414 of the Code.
"COMPLIANCE CERTIFICATE": a certificate duly executed by a
Responsible Officer substantially in the form of Exhibit B.
"CONFIDENTIAL INFORMATION MEMORANDUM": the Confidential
Information Memorandum dated February 1999 and furnished to the Lenders.
"CONSOLIDATED EBITDA": for any period, Consolidated Net Income for
such period plus, without duplication and to the extent reflected as a charge in
the statement of such Consolidated Net Income for such period, the sum of (a)
income tax expense, (b) interest expense, amortization or writeoff of debt
discount and debt issuance costs and commissions, discounts and other fees and
charges associated with Indebtedness (including the Loans), (c) depreciation and
amortization expense, (d) amortization of intangibles (including, but not
limited to, goodwill) and organization costs, (e) any extraordinary, unusual or
non-recurring non-cash expenses or losses (including, whether or not otherwise
includable as a separate item in the statement of such Consolidated Net Income
for such period, non-cash losses on sales of assets outside of the ordinary
course of business), PROVIDED, that the amounts referred to in this clause (e)
shall not, in the aggregate, exceed $5,000,000 for any fiscal year of the
Borrower, and (f) any other non-cash charges, and MINUS, to the extent included
in the statement of such Consolidated Net Income for such period, the sum of (a)
any extraordinary, unusual or non-recurring income or gains (including, whether
or not otherwise includable as a separate item in the statement of such
Consolidated Net Income for such period, gains on the sales of assets outside of
the ordinary course of business) and (b) any other non-cash income, all as
determined on a consolidated basis. For the purposes of calculating Consolidated
EBITDA for any period of four consecutive fiscal quarters (each, a "Reference
Period") pursuant to any determination of the Consolidated Leverage Ratio, if
during such Reference Period the Borrower or any Subsidiary shall have made a
Permitted Acquisition, Consolidated EBITDA for such Reference Period shall be
calculated after giving PRO FORMA effect thereto as if such Permitted
Acquisition occurred on the first day of such Reference Period.
"CONSOLIDATED INTEREST COVERAGE RATIO": for any period of four
consecutive fiscal quarters, the ratio of (a) Consolidated EBITDA for such
period to (b) Consolidated Interest Expense for such period.
"CONSOLIDATED INTEREST EXPENSE": for any period, total cash
interest expense (including that attributable to Capital Lease Obligations) of
the Borrower and its Subsidiaries for such period with respect to all
outstanding Indebtedness of the Borrower and its Subsidiaries (including all
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers' acceptance financing and net costs under Hedge Agreements
in respect of interest rates to the extent such net costs are allocable to such
period in accordance with GAAP).
"CONSOLIDATED LEVERAGE RATIO": for any period of four consecutive
fiscal quarters, the ratio of (a) Consolidated Total Debt as at the last day of
such period to (b) Consolidated EBITDA for such period.
"CONSOLIDATED NET INCOME": for any period, the consolidated net
income (or loss) of the Borrower and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP; PROVIDED that there shall be
excluded (a) the income (or deficit) of any Person accrued prior to the date it
becomes a Subsidiary of the Borrower or is merged into or consolidated with the
Borrower or any of its Subsidiaries, (b) the income (or deficit) of any Person
(other than a Subsidiary of the Borrower) in which the Borrower or any of its
Subsidiaries has an ownership interest, except to the extent that any such
income is actually received by the Borrower or such Subsidiary in the form of
dividends or similar distributions and (c) the undistributed earnings of any
Subsidiary of the Borrower to the extent that the declaration or payment of
dividends or similar distributions by such Subsidiary is not at the time
permitted by the terms of any Contractual Obligation (other than under any Loan
Document) or Requirement of Law applicable to such Subsidiary.
"CONSOLIDATED NET WORTH": at any date, all amounts that would, in
conformity with GAAP, be included on a consolidated balance sheet of the
Borrower and its Subsidiaries under stockholders' equity at such date.
"CONSOLIDATED SUBSIDIARY GUARANTOR": any Subsidiary Guarantor the
financial results of which would be required to be consolidated for federal
income tax purposes with the financial results of the Borrower.
"CONSOLIDATED TOTAL DEBT": at any date, the aggregate principal
amount of all Indebtedness of the Borrower and its Subsidiaries at such date,
determined on a consolidated basis in accordance with GAAP, provided that for
the purposes hereof, there shall be included in Consolidated Total Debt, in lieu
of the amount of Indebtedness outstanding under the Working Capital Facility on
such date, an amount of Indebtedness equal to (i) the average daily amount of
Total Working Capital Extensions of Credit for the period of four consecutive
fiscal quarters ending on such date (it being agreed that, for the purposes of
calculating such amount for any test period a portion of which is a period prior
to the Closing Date, the average daily amount of Total Working Capital
Extensions of Credit for such pre-Closing Date period shall be deemed to be the
average daily amount of total extensions of credit outstanding under the
revolving credit facility of the Existing Credit Agreement during such
pre-Closing Date period), plus, (ii) for the purpose of determining pro forma
compliance in respect of any Permitted Acquisition or Restricted Payment
pursuant to Sections 7.6(b) or 7.7(g), the amount by which Total Working Capital
Extensions of Credit increased as a result of such Permitted Acquisition or
Restricted Payment.
"CONTINGENT OBLIGATION": as to any Person any guarantee of payment
or performance by such Person of any Indebtedness or other obligation of any
other Person, or any agreement to provide financial assurance with respect to
the financial condition, or the payment of the obligations of, such other Person
(including, without limitation, purchase or repurchase agreements, reimbursement
agreements with respect to letters of credit or acceptances, indemnity
arrangements, grants of security interests to support the obligations of another
Person, keepwell agreements and take-or-pay or through-put arrangements) which
has the effect of assuring or holding harmless any third Person against loss
with respect to one or more obligations of such third Person; provided, however,
that the term Contingent Obligation shall not include endorsements of
instruments for deposit or collection in the ordinary course of business. The
amount of any Contingent Obligation of any Person shall be deemed to be the
lower of (a) an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Contingent Obligation is made and (b) the
maximum amount for which such contingently liable Person may be liable pursuant
to the terms of the instrument embodying such Contingent Obligation, unless such
primary obligation and the maximum amount for which such contingently liable
Person may be liable are not stated or determinable, in which case the amount of
such Contingent Obligation shall be such contingently liable Person's maximum
reasonably anticipated liability in respect thereof as determined by the
Borrower in good faith.
"CONTINUING DIRECTORS": the directors of the Borrower on the
Closing Date and each other director, if, in each case, such other director's
nomination for election to the board of directors of the Borrower is recommended
by at least 66-2/3% of the then Continuing Directors.
"CONTRACTUAL OBLIGATION": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"DEFAULT": any of the events specified in Section 8, whether or
not any requirement for the giving of notice, the lapse of time, or both, has
been satisfied.
"DISPOSITION": with respect to any property, any sale, lease, sale
and leaseback, assignment, conveyance, transfer or other disposition thereof.
The terms "DISPOSE" and "DISPOSED OF" shall have correlative meanings.
"DOCUMENTATION AGENT": as defined in the preamble hereto.
"DOLLARS" and "$": dollars in lawful currency of the United
States.
"DOMESTIC SUBSIDIARY": any Subsidiary of the Borrower organized
under the laws of any jurisdiction within the United States.
"DRAFT": a draft, substantially in the form of Exhibit J, or in
such other form as the Accepting Bank shall reasonably request.
"ELIGIBLE ACCOUNTS": the aggregate face amount of accounts of the
Borrower and its Subsidiaries outstanding from time to time, derived from the
business operations of the Borrower and its Subsidiaries, except those accounts
that (a) (i) in the case of accounts that are stated to be due in the month of
November or December in any year and are stated to be due more than 90 days from
the invoice date, are more than 60 days past due based upon the terms indicated
in the original invoice and (ii) in the case of all other accounts, are more
than 90 days past due based upon the terms indicated in the original invoice,
(b) are subject to any Lien, (c) are due to a Subsidiary of the Borrower any
outstanding capital stock of which is subject to a Lien in favor of a Person
other than the Administrative Agent for the ratable benefit of the Lenders, or
(d) are due from an Affiliate, the Borrower or a Subsidiary.
"ELIGIBLE INVENTORY": the aggregate book value of inventory
(including inventory in transit), whether now owned or hereafter acquired, to
which the Borrower and/or any of its Subsidiaries have taken title and which is
not (i) work-in-process, (ii) subject to any Lien or (iii) owned by a Subsidiary
of the Borrower any outstanding capital stock of which is subject to a Lien in
favor of a Person other than the Administrative Agent for the ratable benefit of
the Lenders, after adjusting for reserves for obsolescence, inventory
adjustments and damages (including, but not limited to, foreign exchange
adjustments).
"ENVIRONMENTAL LAWS": any and all foreign, Federal, state, local
or municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, requirements of any Governmental Authority or other Requirements of Law
(including common law) regulating, relating to or imposing liability or
standards of conduct concerning protection of human health or the environment,
as now or may at any time hereafter be in effect.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"EUROCURRENCY RESERVE REQUIREMENTS": for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the maximum rates
(expressed as a decimal fraction) of reserve requirements in effect on such day
(including basic, supplemental, marginal and emergency reserves under any
regulations of the Board or other Governmental Authority having jurisdiction
with respect thereto) dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board) maintained by a member bank of the Federal Reserve
System.
"EURODOLLAR RATE": with respect to each Interest Period pertaining
to a Eurodollar Loan, the rate per annum determined by the Administrative Agent
to be equal to the rate for deposits in Dollars
for a period equal to such Interest Period commencing on the first day of
such Interest Period appearing on Page 3750 of the Dow Xxxxx Markets screen
as of 11:00 A.M., London time, two London Banking Days prior to the beginning
of such Interest Period which rate, for the avoidance of doubt, is commonly
referred to as the LIBO rate. In the event that such rate does not appear on
Page 3750 of the Dow Xxxxx Markets screen (or otherwise on such screen), the
"EURODOLLAR RATE" shall be determined by the Administrative Agent by
reference to such other comparable publicly available service for displaying
eurodollar rates as may be selected by the Administrative Agent or, in the
absence of such availability, by reference to the rate at which the Reference
Lender is offered Dollar deposits at or about 11:00 A.M., London time, two
London Banking Days prior to the beginning of such Interest Period in the
London interbank eurodollar market for delivery on the first day of such
Interest Period for the number of days comprised therein and in an amount
comparable to the amount of such Eurodollar Loan outstanding during such
Interest Period.
"EURODOLLAR LOANS": Loans the rate of interest applicable to which
is based upon the Eurodollar Rate.
"EURODOLLAR TRANCHE": the collective reference to Eurodollar Loans
the then current Interest Periods with respect to all of which begin on the same
date and end on the same later date (whether or not such Loans shall originally
have been made on the same day).
"EVENT OF DEFAULT": any of the events specified in Section 8,
PROVIDED that any requirement for the giving of notice, the lapse of time, or
both, has been satisfied.
"EXCLUDED FOREIGN SUBSIDIARY": any Foreign Subsidiary in respect
of which the pledge of all of the Capital Stock of such Subsidiary as Collateral
would, in the good faith judgment of the Borrower, result in adverse tax
consequences to the Borrower.
"EXISTING CREDIT AGREEMENT": the Amended and Restated Credit
Agreement, dated as of February 17, 1995, among D56, Inc., the lenders and
agents parties thereto and The Chase Manhattan Bank (formerly Chemical Bank), as
Agent, Issuing Bank and Accepting Bank, as amended.
"FACILITY": each of the 364-Day Facility and the Working Capital
Facility.
"FEDERAL FUNDS EFFECTIVE RATE": for any day, 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 on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average,
rounded upward to the nearest 1/16th of 1% of the quotations for the day of such
transactions received by the Reference Lender from three federal funds brokers
of recognized standing selected by it.
"FOREIGN SUBSIDIARY": any Subsidiary of the Borrower that is not a
Domestic Subsidiary.
"FUNDING OFFICE": the office of the Administrative Agent specified
in Section 10.2 or such other office as may be specified from time to time by
the Administrative Agent as its funding office by written notice to the Borrower
and the Lenders.
"GAAP": generally accepted accounting principles in the United
States as in effect from time to time, except that for purposes of Section 7.1,
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 most recent
audited financial statements delivered pursuant to Section 4.1(b). In the event
that any "Accounting Change" (as defined below) shall occur and such change
results in a change in the method of calculation of financial covenants,
standards or terms in this Agreement, then the Borrower and the Administrative
Agent
agree to enter into negotiations in order to amend such provisions of this
Agreement so as to equitably reflect such Accounting Changes with the desired
result that the criteria for evaluating the Borrower's financial condition
shall be the same after such Accounting Changes as if such Accounting Changes
had not been made. Until such time as such an amendment shall have been
executed and delivered by the Borrower, the Administrative Agent and the
Required Lenders, all financial covenants, standards and terms in this
Agreement shall continue to be calculated or construed as if such Accounting
Changes had not occurred. "Accounting Changes" refers to changes in
accounting principles required by the promulgation of any rule, regulation,
pronouncement or opinion by the Financial Accounting Standards Board of the
American Institute of Certified Public Accountants or, if applicable, the SEC.
"GOVERNMENTAL AUTHORITY": any nation or government, any state or
other political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative functions of or
pertaining to government, any securities exchange and any self-regulatory
organization (including the National Association of Insurance Commissioners).
"GUARANTEE AND COLLATERAL AGREEMENT": the Guarantee and Collateral
Agreement to be executed and delivered by the Borrower and each Subsidiary
Guarantor, substantially in the form of Exhibit A, as the same may be amended,
supplemented or otherwise modified from time to time.
"GUARANTEE OBLIGATION": as to any Person (the "GUARANTEEING
PERSON"), any obligation of (a) the guaranteeing person or (b) another Person
(including any bank under any letter of credit) to induce the creation of which
the guaranteeing person has issued a reimbursement, counterindemnity or similar
obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the "PRIMARY OBLIGATIONS")
of any other third Person (the "PRIMARY OBLIGOR") in any manner, whether
directly or indirectly, including any obligation of the guaranteeing person,
whether or not contingent, (i) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (ii) to advance or
supply funds (1) for the purchase or payment of any such primary obligation or
(2) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (iv) otherwise to assure or hold
harmless the owner of any such primary obligation against loss in respect
thereof; PROVIDED, HOWEVER, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Guarantee Obligation of any guaranteeing person
shall be deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such Guarantee
Obligation is made and (b) the maximum amount for which such guaranteeing person
may be liable pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such primary obligation and the maximum amount for which such
guaranteeing person may be liable are not stated or determinable, in which case
the amount of such Guarantee Obligation shall be such guaranteeing person's
maximum reasonably anticipated liability in respect thereof as determined by the
Borrower in good faith.
"GUARANTORS": the collective reference to the Subsidiary
Guarantors.
"HEDGE AGREEMENTS": all interest rate swaps, caps or collar
agreements or similar arrangements providing for protection against fluctuations
in interest rates or currency exchange rates or the exchange of nominal interest
obligations, either generally or under specific contingencies.
"INDEBTEDNESS": of any Person at any date, without duplication,
(a) all indebtedness of such Person for borrowed money, (b) all obligations of
such Person for the deferred purchase price of
property or services (other than current trade payables incurred in the
ordinary course of such Person's business), (c) all obligations of such
Person evidenced by notes, bonds, debentures or other similar instruments,
(d) all indebtedness 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), (e) all Capital Lease Obligations of such Person, (f) all
obligations of such Person, contingent or otherwise, as an account party
under acceptance, letter of credit or similar facilities, (g) the liquidation
value of all redeemable preferred Capital Stock of such Person, (h) all
Guarantee Obligations of such Person in respect of obligations of the kind
referred to in clauses (a) through (g) above; (i) all obligations of the kind
referred to in clauses (a) through (h) above secured by (or for which the
holder of such obligation has an existing right, contingent or otherwise, to
be secured by) any Lien on property (including accounts and contract rights)
owned by such Person, whether or not such Person has assumed or become liable
for the payment of such obligation; and (j) for the purposes of Section 8(e)
only, all obligations of such Person in respect of Hedge Agreements.
"INSOLVENCY": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section 4245 of
ERISA.
"INSOLVENT": pertaining to a condition of Insolvency.
"INTELLECTUAL PROPERTY": the collective reference to all rights,
priorities and privileges relating to intellectual property, whether arising
under United States, multinational or foreign laws or otherwise, including
copyrights, copyright licenses, patents, patent licenses, trademarks, trademark
licenses, technology, know-how and processes, and all rights to xxx at law or in
equity for any infringement or other impairment thereof, including the right to
receive all proceeds and damages therefrom.
"INTEREST PAYMENT DATE": (a) as to any ABR Loan, the last day of
each March, June, September and December to occur while such Loan is outstanding
and the final maturity date of such Loan, (b) as to any Eurodollar Loan having
an Interest Period of three months or less, the last day of such Interest
Period, (c) as to any Eurodollar Loan having an Interest Period longer than
three months, each day that is three months, or a whole multiple thereof, after
the first day of such Interest Period and the last day of such Interest Period
and (d) as to any Loan (other than any Working Capital Loan that is an ABR
Loan), the date of any repayment or prepayment made in respect thereof.
"INTEREST PERIOD": as to any Eurodollar Loan, (a) initially, the
period commencing on the borrowing or conversion date, as the case may be, with
respect to such Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by the Borrower in its notice of borrowing or notice of
conversion, as the case may be, given with respect thereto; and (b) thereafter,
each period commencing on the last day of the next preceding Interest Period
applicable to such Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by the Borrower by irrevocable notice to the
Administrative Agent not less than three Business Days prior to the last day of
the then current Interest Period with respect thereto; PROVIDED that, all of the
foregoing provisions relating to Interest Periods are subject to the following:
(i) 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 the result of such extension
would be to carry such Interest Period into another calendar month in
which event such Interest Period shall end on the immediately preceding
Business Day;
(ii) the Borrower may not select an Interest Period under a
particular Facility that would extend beyond the Scheduled Working
Capital Termination Date or beyond the date final payment is due on the
364-Day Loans, as the case may be; and
(iii) any Interest Period that begins on the last Business
Day of a calendar 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.
"INVESTMENTS": as defined in Section 7.7.
"ISSUING LENDER": The Chase Manhattan Bank, together with any
successor, in its capacity as issuer of any Letter of Credit.
"L/C OBLIGATIONS": at any time, an amount equal to the sum of (a)
the aggregate then undrawn and unexpired amount of the then outstanding Letters
of Credit and (b) the aggregate amount of drawings under Letters of Credit that
have not then been reimbursed pursuant to Section 3.5.
"L/C PARTICIPANTS": the collective reference to all the Working
Capital Lenders other than the Issuing Lender.
"L/C REIMBURSEMENT OBLIGATION": the obligation of the Borrower to
reimburse the Issuing Lender pursuant to Section 3.5 for amounts drawn under
Letters of Credit.
"LENDERS": as defined in the preamble hereto.
"LETTERS OF CREDIT": as defined in Section 3.1(a).
"LIEN": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other security
interest or any preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including any conditional sale or
other title retention agreement and any capital lease having substantially the
same economic effect as any of the foregoing).
"LOAN": any loan made by any Lender pursuant to this Agreement.
"LOAN DOCUMENTS": this Agreement, the Security Documents and the
Notes.
"LOAN PARTIES": The Borrower and each Subsidiary of the Borrower
that is a party to a Loan Document.
"LONDON BANKING DAY": any day on which commercial banks are open
for international business (including dealings in Dollar deposits) in London.
"MAJORITY FACILITY LENDERS": with respect to either Facility, the
Majority Working Capital Facility Lenders, in the case of the Working Capital
Facility, or the Majority 364-Day Facility Lenders, in the case of the 364-Day
Facility, as applicable.
"MAJORITY 364-DAY FACILITY LENDERS": at any time, the holders of
more than 50% of the aggregate principal amount of the 364-Day Loans outstanding
at such time (or, during the 364-Day Commitment Period prior to any termination
of the 364-Day Commitments, the holders of more than 50% of the Total 364-Day
Commitments at such time).
"MAJORITY WORKING CAPITAL FACILITY LENDERS": at any time, the
holders of more than 50% of the Total Working Capital Extensions of Credit
outstanding under such Facility at such time (or, prior to any termination of
the Working Capital Commitments, the holders of more than 50% of the Total
Working Capital Commitments at such time).
"MATERIAL ADVERSE EFFECT": a material adverse effect on (a) the
business, property, operations, condition (financial or otherwise) or prospects
of the Borrower and its Subsidiaries taken as a whole or (b) the validity or
enforceability of this Agreement or any of the other Loan Documents or the
rights or remedies of the Administrative Agent or the Lenders hereunder or
thereunder.
"MATERIAL SUBSIDIARY": any Subsidiary of the Borrower, (a) whose
total assets at the last day of the four consecutive fiscal quarters of the
Borrower for which Section 6.1 financial statements were most recently
delivered, were equal to or greater than 5% of the consolidated total assets of
the Borrower and its Subsidiaries at such date or (b) whose gross revenues for
such period were equal to or greater than 5% of the consolidated gross revenues
of the Borrower and its Subsidiaries for such period, in each case determined in
accordance with GAAP PROVIDED that if, at any time, the Subsidiaries that would
not be Material Subsidiaries pursuant to the foregoing constitute 10% of such
consolidated assets or revenues, a sufficient number of Subsidiaries shall be
designated by the Borrower as "Material Subsidiaries", and the actions taken
with respect thereto set forth in Section 6.9, so that the Subsidiaries that are
not Material Subsidiaries and Subsidiary Guarantors do not constitute 10% or
more of such consolidated assets or revenue.
"MATERIALS OF ENVIRONMENTAL CONCERN": any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products,
polychlorinated biphenyls, urea-formaldehyde insulation, asbestos, pollutants,
contaminants, radioactivity, and any other substances or forces of any kind,
whether or not any such substance or force is defined as hazardous or toxic
under any Environmental Law, that is regulated pursuant to or could give rise to
liability under any Environmental Law.
"MOODY'S": Xxxxx'x Investors Service, Inc.
"MULTIEMPLOYER PLAN": a Plan that is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"NEGATIVE SECURITY EVENT": the occurrence of any of the following
events during a Positive Security Period, and the giving of notice to the
Borrower by the Administrative Agent that such event has occurred and, in the
case of clause (c), has been determined by the Required Lenders to constitute a
Negative Security Event: (a) the Borrower's unsecured long-term senior non
credit-enhanced debt is rated below BBB- by S&P or below Baa3 by Moody's, (b)
the Borrower's long-term senior unsecured non-credit-enhanced debt shall be
unrated by either S&P and Moody's or (c) an Event of Default shall occur and be
continuing; for purposes of this Agreement, the effectiveness of a Negative
Security Event shall continue from the occurrence thereof pursuant to this
definition until the occurrence thereafter of a Positive Security Event.
"NEGATIVE SECURITY PERIOD": shall mean (i) the period from the
Closing Date until the first occurrence of a Positive Security Event thereafter
and (ii) each period commencing upon the occurrence of a Negative Security Event
and ending upon the occurrence of a Positive Security Event.
"NET CASH PROCEEDS": (a) in connection with any Asset Sale,
Recovery Event or Subsidiary Stock Event, the proceeds thereof in the form of
cash and Cash Equivalents (including any such proceeds received by way of
deferred payment of principal pursuant to a note or installment receivable or
purchase price adjustment receivable or otherwise, but only as and when
received) of such Asset Sale,
Recovery Event or Subsidiary Stock Event, net of attorneys' fees,
accountants' fees, investment banking fees, amounts required to be applied to
the repayment of Indebtedness secured by a Lien expressly permitted hereunder
on any asset that is the subject of such Asset Sale, Recovery Event or
Subsidiary Stock Event (other than any Lien pursuant to a Security Document)
and other customary fees and expenses actually incurred in connection
therewith and net of taxes paid or reasonably estimated to be payable as a
result thereof and (b) in connection with any issuance or sale of equity
securities or debt securities or instruments or the incurrence of loans, the
cash proceeds received from such issuance or incurrence, net of attorneys'
fees, investment banking fees, accountants' fees, underwriting discounts and
commissions and other customary fees and expenses actually incurred in
connection therewith.
"NON-EXCLUDED TAXES": as defined in Section 2.17(a).
"NON-U.S. LENDER": as defined in Section 2.17(d).
"NOTES": the collective reference to any promissory note
evidencing Loans.
"OBLIGATIONS": the unpaid principal of and interest on (including
interest accruing after the maturity of the Loans and Reimbursement Obligations
and interest accruing after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
the Borrower, whether or not a claim for post-filing or post-petition interest
is allowed in such proceeding) the Loans and all other obligations and
liabilities of the Borrower to the Administrative Agent or to any Lender (or, in
the case of Hedge Agreements, any affiliate of any Lender), whether direct or
indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection with, this
Agreement, any other Loan Document, the Letters of Credit, the Acceptances, any
Hedge Agreement entered into with any Lender or any affiliate of any Lender or
any other document made, delivered or given in connection herewith or therewith,
whether on account of principal, interest, reimbursement obligations, fees,
indemnities, costs, expenses (including all reasonable and documented fees,
charges and disbursements of counsel to the Administrative Agent or to any
Lender that are required to be paid by the Borrower pursuant hereto) or
otherwise.
"OTHER TAXES": any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made hereunder or from the execution, delivery or enforcement
of, or otherwise with respect to, this Agreement or any other Loan Document.
"PARTICIPANT": as defined in Section 10.6(b).
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA (or any successor).
"PERMITTED ACQUISITION": any acquisition of property or series of
related acquisitions of property that (a) constitutes assets comprising all or
substantially all of an operating unit of a business or constitutes all or
substantially all of the common stock of a Person and (b) is permitted by and
consummated in compliance with the requirements of Section 7.7(g).
"PERSON": an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.
"PLAN": at a particular time, any employee benefit plan that is
covered by ERISA and in respect of which the Borrower or a Commonly Controlled
Entity is (or, if such plan were terminated at such time, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"PLEDGED STOCK": as defined in the Guarantee and Collateral
Agreement.
"POSITIVE SECURITY EVENT": at any time after all 364-Day Loans
have been paid in full, all 364-Day Commitments have been terminated and all
Obligations under such Facility have been satisfied in full, the occurrence of
both of the following events: (a) the Borrower's unsecured long-term senior non
credit-enhanced debt is rated at least BBB- by S&P and at least Baa3 by Moody's
and (b) if a Negative Security Period is in effect and if an Event of Default
gave rise to such Negative Security Period (and the conditions in clause (a) are
also satisfied), the Required Lenders have determined that such Event of Default
shall no longer be continuing.
"POSITIVE SECURITY PERIOD": shall mean (i) each period commencing
upon the occurrence of a Positive Security Event and ending upon the occurrence
of a Negative Security Event and (ii) if the events specified in clause (a) of
the definition of Positive Security Event shall have occurred and are in effect
on the Closing Date, from the Closing Date until the first occurrence of a
Negative Security Event thereafter.
"PRICING GRID": the pricing grid attached hereto as Annex A.
"PRO FORMA CAPITALIZATION TABLE": as defined in Section 4.1(a).
"PROCEEDS": as defined in the Guarantee and Collateral Agreement.
"PROPERTIES": as defined in Section 4.17(a).
"RECOVERY EVENT": any settlement or payment in excess of $500,000
in respect of any property or casualty insurance claim (other than business
interruption insurance claims) or any condemnation proceeding relating to any
asset (other than assets constituting inventory) of the Borrower or any of its
Subsidiaries.
"REFERENCE LENDER": The Chase Manhattan Bank.
"REGISTER": as defined in Section 10.6(d).
"REGULATION U": Regulation U of the Board as in effect from time
to time.
"REIMBURSEMENT OBLIGATION": the collective reference to the L/C
Reimbursement Obligations and the Acceptance Reimbursement Obligations.
"REINVESTMENT DEFERRED AMOUNT": with respect to any Reinvestment
Event, that portion of the aggregate Net Cash Proceeds received by the Borrower
or any of its Subsidiaries in connection therewith that but for the delivery of
a Reinvestment Notice would have been required to be applied to the prepayment
of 364-Day Loans.
"REINVESTMENT EVENT": any Asset Sale, Recovery Event or Subsidiary
Stock Event in respect of which the Borrower has delivered a Reinvestment
Notice.
"REINVESTMENT NOTICE": a written notice executed by a Responsible
Officer stating that no Event of Default has occurred and is continuing and that
the Borrower (directly or indirectly through a Subsidiary) intends and expects
to use all or a specified portion of the Net Cash Proceeds of an Asset Sale,
Recovery Event or Subsidiary Stock Event to acquire assets useful in the
Borrower's Business within 180 days.
"REINVESTMENT PREPAYMENT AMOUNT": with respect to any Reinvestment
Event, the Reinvestment Deferred Amount relating thereto less any amount
expended prior to the relevant Reinvestment Prepayment Date to acquire assets
useful in the Borrower's business.
"REINVESTMENT PREPAYMENT DATE": with respect to any Reinvestment
Event, the earlier of (a) the date occurring six months after such Reinvestment
Event and (b) the date on which the Borrower shall have determined not to
acquire assets useful in the Borrower's business with all or any portion of the
relevant Reinvestment Deferred Amount or, in the case of this clause (b) only,
such later dates as chosen by the Borrower to coincide with the end of one or
more Interest Periods so long as such later dates are not more than six months
after such Reinvestment Event.
"REORGANIZATION": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section 4241
of ERISA.
"REPORTABLE EVENT": any of the events set forth in Section 4043(c)
of ERISA, other than those events as to which the thirty day notice period is
waived under PBGC Reg. ss. 4043.
"REQUIRED LENDERS": at any time, the holders of more than 50% of
the sum of (i) the Total 364-Day Commitments then in effect or, after the
364-Day Commitment Period or after the termination of the 364-Day Commitments,
aggregate unpaid principal amount of the 364-Day Loans then outstanding, and
(ii) the Total Working Capital Commitments then in effect or, if the Working
Capital Commitments have been terminated, the Total Working Capital Extensions
of Credit then outstanding.
"REQUIRED PREPAYMENT LENDERS": the Majority Facility Lenders in
respect of each Facility.
"REQUIREMENT OF LAW": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"RESPONSIBLE OFFICER": the chief executive officer, president or
chief financial officer of the Borrower, but in any event, with respect to
financial matters, the chief financial officer of the Borrower.
"RESTRICTED PAYMENTS": as defined in Section 7.6.
"S&P": Standard & Poor's Ratings Group.
"SCHEDULED WORKING CAPITAL TERMINATION DATE": March 19, 2004.
"SEC": the Securities and Exchange Commission, any successor
thereto and any analogous Governmental Authority.
"SECURITY DOCUMENTS": the collective reference to the Guarantee
and Collateral Agreement, and all other security documents hereafter delivered
to the Administrative Agent granting a
Lien on any property of any Person to secure the obligations and liabilities
of any Loan Party under any Loan Document.
"SECURITY PERFECTION DATE": the date that is five days after the
date that the Administrative Agent gives notice of the occurrence of a Negative
Security Event.
"SINGLE EMPLOYER PLAN": any Plan that is covered by Title IV of
ERISA, but that is not a Multiemployer Plan.
"SOLVENT": when used with respect to any Person, means that, as of
any date of determination, (a) the amount of the "present fair saleable value"
of the assets of such Person will, as of such date, exceed the amount of all
"liabilities of such Person, contingent or otherwise", as of such date, as such
quoted terms are determined in accordance with applicable federal and state laws
governing determinations of the insolvency of debtors, (b) the present fair
saleable value of the assets of such Person will, as of such date, be greater
than the amount that will be required to pay the liability of such Person on its
debts as such debts become absolute and matured, (c) such Person will not have,
as of such date, an unreasonably small amount of capital with which to conduct
its business, and (d) such Person will be able to pay its debts as they mature.
For purposes of this definition, (i) "debt" means liability on a "claim", and
(ii) "claim" means any (x) right to payment, whether or not such a right is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or unsecured or (y)
right to an equitable remedy for breach of performance if such breach gives rise
to a right to payment, whether or not such right to an equitable remedy is
reduced to judgment, fixed, contingent, matured or unmatured, disputed,
undisputed, secured or unsecured.
"STANDBY L/C": an irrevocable letter of credit under which the
Issuing Lender agrees to make payments in Dollars for the account of the
Borrower, on behalf of the Borrower or any Subsidiary thereof for purposes
described in subsection 4.16(d).
"SUBSIDIARY": as to any Person, a corporation, partnership,
limited liability company or other entity of which shares of stock or other
ownership interests having ordinary voting power (other than stock or such other
ownership interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other managers of
such corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer
to a Subsidiary or Subsidiaries of the Borrower.
"SUBSIDIARY GUARANTOR": each Subsidiary of the Borrower that is a
party to the Guarantee and Collateral Agreement as a guarantor thereunder (it
being understood that except as required by the definition of "Material
Subsidiary", Subsidiaries that are not Material Subsidiaries and Subsidiaries
that are Foreign Subsidiaries are not required by this Agreement to become
Subsidiary Guarantors, but may elect to do so).
"SUBSIDIARY STOCK EVENT": the sale or issuance of Capital Stock of
any Subsidiary of the Borrower.
"364-DAY COMMITMENT": as to any Lender, the obligation of such
Lender, if any, to make a 364-Day Loan to the Borrower hereunder in a principal
amount not to exceed the amount set forth under the heading "364-Day Commitment"
opposite such Lender's name on Schedule 1.1A or in the Assignment and Acceptance
pursuant to which such Lender became a party hereto, as the same may be changed
from time to time pursuant to the terms hereof.
"364-DAY COMMITMENT PERIOD": the period from and including the
Closing Date to the 364-Day Termination Date.
"364-DAY FACILITY": the 364-Day Commitments and the 364-Day Loans
hereunder.
"364-DAY LENDER": each Lender that has a 364-Day Commitment or is
the holder of a 364-Day Loan.
"364-DAY LOANS": as defined in Section 2.1.
"364-DAY PERCENTAGE": as to any 364-Day Lender at any time, the
percentage which such Lender's 364-Day Commitment then constitutes of the Total
364-Day Commitments (or, at any time after the 364-Day Commitment Period or the
termination of the 364-Day Commitments, the percentage which the aggregate
principal amount of such Lender's 364-Day Loans then outstanding constitutes of
the aggregate principal amount of the 364-Day Loans then outstanding).
"364-DAY TERMINATION DATE": the 364th day following the Closing
Date.
"TOTAL 364-DAY COMMITMENTS": at any time, the aggregate amount of
the 364-Day Commitments then in effect. The original amount of the Total 364-Day
Commitments is $150,000,000.
"TOTAL WORKING CAPITAL COMMITMENTS": at any time, the aggregate
amount of the Working Capital Commitments then in effect. The original amount of
the Total Working Capital Commitments is $100,000,000.
"TOTAL WORKING CAPITAL EXTENSIONS OF CREDIT": at any time, the
aggregate amount of the Working Capital Extensions of Credit of the Working
Capital Lenders outstanding at such time.
"TRANSFEREE": any Assignee or Participant.
"TYPE": as to any Loan, its nature as an ABR Loan or a Eurodollar
Loan.
"UNIFORM COMMERCIAL CODE": the Uniform Commercial Code as from
time to time in effect in the State of New York.
"UNITED STATES": the United States of America.
"U.S. TAXES": as defined in Section 10.6(d).
"WORKING CAPITAL COMMITMENT": as to any Lender, the obligation of
such Lender, if any, to make Working Capital Loans, to participate in Letters of
Credit and to create or participate in Acceptances, in an aggregate principal
and/or face amount not to exceed the amount set forth under the heading "Working
Capital Commitment" opposite such Lender's name on Schedule 1.1A or in the
Assignment and Acceptance pursuant to which such Lender became a party hereto,
as the same may be changed from time to time pursuant to the terms hereof.
"WORKING CAPITAL COMMITMENT PERIOD": the period from and including
the Closing Date to the Scheduled Working Capital Termination Date; PROVIDED
that with respect to Acceptances, the "Working Capital Commitment Period" shall
be the period including the Closing Date to but not including the then
applicable Acceptance Termination Date.
"WORKING CAPITAL EXTENSIONS OF CREDIT": as to any Working Capital
Lender at any time, an amount equal to the sum of (a) the aggregate principal
amount of all Working Capital Loans held by such Lender then outstanding, (b)
such Lender's Working Capital Percentage of the L/C Obligations then outstanding
and (c) such Lender's Working Capital Percentage of the Acceptance Obligations
then outstanding.
"WORKING CAPITAL FACILITY": the Working Capital Commitments and
the Working Capital Extensions of Credit.
"WORKING CAPITAL LENDER": each Lender that has a Working Capital
Commitment or that holds Working Capital Loans.
"WORKING CAPITAL LOANS": as defined in Section 2.4(a).
"WORKING CAPITAL PERCENTAGE": as to any Working Capital Lender at
any time, the percentage which such Lender's Working Capital Commitment then
constitutes of the Total Working Capital Commitments (or, at any time after the
Working Capital Commitments shall have expired or terminated, the percentage
which the aggregate principal amount of such Lender's Working Capital Extensions
of Credit then outstanding constitutes of the Total Working Capital Extensions
of Credit at such time).
"WORKING CAPITAL TERMINATION DATE": the earlier of (a) the
Scheduled Working Capital Termination Date and (b) the date on which the Working
Capital Loans shall be paid in full and the Working Capital Commitments
terminated.
1.2 OTHER DEFINITIONAL PROVISIONS. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in the other Loan Documents or any certificate or other document made
or delivered pursuant hereto or thereto.
(b) As used herein and in the other Loan Documents, and any
certificate or other document made or delivered pursuant hereto or thereto, (i)
accounting terms relating to the Borrower and its Subsidiaries not defined in
Section 1.1 and accounting terms partly defined in Section 1.1, to the extent
not defined, shall have the respective meanings given to them under GAAP, and
(ii) the words "include", "includes" and "including" shall be deemed to be
followed by the phrase "without limitation".
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
(e) Section headings are for ease of reference only, and shall not
be used in the interpretation of this Agreement.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 364-DAY COMMITMENTS. Subject to the terms and conditions
hereof, each 364-Day Lender severally agrees to make loans ("364-DAY LOANS") to
the Borrower from time to time during the 364-Day Commitment Period in an
aggregate principal amount at any one time outstanding which does not
exceed the amount of such Lender's 364-Day Commitment. During the 364-Day
Commitment Period the Borrower may use the 364-Day Commitments by borrowing,
prepaying the 364-Day Loans in whole or in part, and reborrowing, all in
accordance with the terms and conditions hereof. The 364-Day Loans may from
time to time be Eurodollar Loans or ABR Loans, as determined by the Borrower
and notified to the Administrative Agent in accordance with Sections 2.2 and
2.10.
2.2 PROCEDURE FOR 364-DAY LOAN BORROWING. (a) The Borrower may
borrow under the 364-Day Commitments during the 364-Day Commitment Period on any
Business Day, provided that the Borrower shall give the Administrative Agent
irrevocable notice (which notice must be received by the Administrative Agent
(a) prior to 12:00 Noon, New York City time, three Business Days prior to the
requested Borrowing Date, in the case of Eurodollar Loans, or (b) prior to 10:00
a.m., New York City time, the same Business Day as the requested Borrowing Date,
in the case of ABR Loans), specifying (i) the amount and Type of 364-Day Loans
to be borrowed, (ii) the requested Borrowing Date and (iii) in the case of
Eurodollar Loans, the respective amounts of each Eurodollar Tranche and the
respective lengths of the initial Interest Periods therefor. Any 364-Day Loans
made on the Closing Date shall initially be ABR Loans. Each borrowing under the
364-Day Commitments shall be in an amount equal to (x) in the case of ABR Loans,
$1,000,000 or a $1,000,000 multiple (or, if the then aggregate Available 364-Day
Commitments are less than $1,000,000 such lesser amount) and (y) in the case of
Eurodollar Loans, $5,000,000 or a whole multiple of $1,000,000 in excess
thereof. Upon receipt of any such notice from the Borrower, the Administrative
Agent shall promptly notify each 364-Day Lender thereof. Each 364-Day Lender
will make the amount of its PRO RATA share of each borrowing available to the
Administrative Agent for the account of the Borrower at the Funding Office prior
to 12:00 Noon, New York City time, on the Borrowing Date requested by the
Borrower in funds immediately available to the Administrative Agent. Such
borrowing will, as soon as practicable, be made available to the Borrower by the
Administrative Agent crediting the account of the Borrower on the books of such
office with the aggregate of the amounts made available to the Administrative
Agent by the 364-Day Lenders and in like funds as received by the Administrative
Agent.
(b) Any amount outstanding as of the 364-Day Termination Date
shall be repaid as set forth in Section 2.3.
2.3 REPAYMENT OF 364-DAY LOANS. The 364-Day Loan of each 364-Day
Lender shall mature and be payable in 4 consecutive annual installments,
commencing on March 19, 2001, each of which shall be in an amount equal to such
Lender's 364-Day Percentage of the amount equal to the percentage set forth
below opposite such installment of the aggregate amount of the 364-Day Loans
outstanding as of the 364-Day Termination Date (as each such installment may
have been reduced by application of prepayments thereto pursuant to Sections 2.8
and 2.9):
INSTALLMENT PERCENTAGE OF PRINCIPAL AMOUNT
----------- -------------------------------
March 19, 2001 15%
March 19, 2002 20%
March 19, 2003 25%
March 19, 2004 40%
2.4 WORKING CAPITAL COMMITMENTS. (a) Subject to the terms and
conditions hereof, each Working Capital Lender severally agrees to make working
capital loans ("WORKING CAPITAL LOANS") to the Borrower from time to time during
the Working Capital Commitment Period in an aggregate principal amount at any
one time outstanding which, when added to such Lender's Working Capital
Percentage of the sum of (i) the L/C Obligations then outstanding and (ii) the
Acceptance Obligations, does not exceed the amount of such Lender's Working
Capital Commitment. Notwithstanding the above, in no event shall
any Working Capital Loan be made, Letter of Credit be issued or Acceptance be
created, if, after giving effect to such making, issuance or creation and the
use of proceeds thereof as irrevocably directed by the Borrower, the Total
Working Capital Extensions of Credit would exceed the greater of (A)
$30,000,000 and (B) the sum of 80% of the aggregate amount of all Eligible
Accounts and 50% of the aggregate amount of all Eligible Inventory as of the
date of the most recent certificate furnished to the Administrative Agent
pursuant to Section 5.1(k) or Section 6.2(g) (such greater amount, the
"Borrowing Base"). During the Working Capital Commitment Period the Borrower
may use the Working Capital Commitments by borrowing, prepaying the Working
Capital Loans in whole or in part, and reborrowing, all in accordance with
the terms and conditions hereof. The Working Capital Loans may from time to
time be Eurodollar Loans or ABR Loans, as determined by the Borrower and
notified to the Administrative Agent in accordance with Sections 2.5 and 2.10.
(b) The Borrower shall repay all outstanding Working Capital Loans
on the Scheduled Working Capital Termination Date.
2.5 PROCEDURE FOR WORKING CAPITAL LOAN BORROWING. The Borrower may
borrow under the Working Capital Facility during the Working Capital Commitment
Period on any Business Day, provided that the Borrower shall give the
Administrative Agent irrevocable notice (which notice must be received by the
Administrative Agent (a) prior to 12:00 Noon, New York City time three Business
Days prior to the requested Borrowing Date, in the case of Eurodollar Loans, or
(b) prior to 10:00 a.m., New York City time the same Business Day as the
requested Borrowing Date, in the case of ABR Loans), specifying (i) the amount
and Type of Working Capital Loans to be borrowed, (ii) the requested Borrowing
Date and (iii) in the case of Eurodollar Loans, the respective amounts of each
Eurodollar Tranche and the respective lengths of the initial Interest Periods
therefor. Any Working Capital Loans made on the Closing Date shall initially be
ABR Loans. Each borrowing under the Working Capital Commitments shall be in an
amount equal to (x) in the case of ABR Loans, $250,000 or a whole multiple
thereof (or, if the then aggregate Available Working Capital Commitments are
less than $250,000, such lesser amount) and (y) in the case of Eurodollar Loans,
$1,500,000 or a whole multiple of $500,000 in excess thereof. Upon receipt of
any such notice from the Borrower, the Administrative Agent shall promptly
notify each Working Capital Lender thereof. Each Working Capital Lender will
make the amount of its pro rata share of each borrowing available to the
Administrative Agent for the account of the Borrower at the Funding Office prior
to 12:00 Noon, New York City time, on the Borrowing Date requested by the
Borrower in funds immediately available to the Administrative Agent. Such
borrowing will, as soon as practicable, be made available to the Borrower by the
Administrative Agent crediting the account of the Borrower on the books of such
office with the aggregate of the amounts made available to the Administrative
Agent by the Working Capital Lenders and in like funds as received by the
Administrative Agent.
2.6 COMMITMENT FEES, ETC. (a) The Borrower agrees to pay to the
Administrative Agent for the account of each Working Capital Lender a commitment
fee for the period from and including the Closing Date to the last day of the
Working Capital Commitment Period, computed at the Commitment Fee Rate on the
average daily amount of the Available Working Capital Commitment of such Lender
during the period for which payment is made, payable quarterly in arrears at the
rates set forth in the Pricing Grid on Annex A; PROVIDED, HOWEVER, that if the
applicable Commitment Fee Rate changes during such period for which payment is
made, the commitment fee shall be calculated by applying the applicable
Commitment Fee Rate to the average daily amount of the Available Working Capital
Commitment during the portion of such period during which such Commitment Fee
Rate was in effect.
(b) The Borrower agrees to pay to the Administrative Agent for the
account of each 364-Day Lender a commitment fee for the period from and
including the Closing Date to the last day of the 364-Day Commitment Period,
computed at the Commitment Fee Rate on the average daily amount of the Available
364-Day Commitment of such Lender during the period for which payment is made,
payable
quarterly in arrears at the rates set forth in the Pricing Grid on Annex A;
provided, however, that if the applicable Commitment Fee Rate changes during
such period for which payment is made, the commitment fee shall be calculated
by applying the applicable Commitment Fee Rate to the average daily amount of
the Available 364-Day Commitment during the portion of such period during
which such Commitment Fee Rate was in effect.
(c) The Borrower agrees to pay to the Administrative Agent the
fees in the amounts and on the dates previously agreed to in writing by the
Borrower and the Administrative Agent.
2.7 TERMINATION OR REDUCTION OF COMMITMENTS. (a) The Borrower
shall have the right, upon not less than three Business Days' notice to the
Administrative Agent, to terminate the Working Capital Commitments or, from time
to time, to reduce the amount of the Working Capital Commitments; PROVIDED that
no such termination or reduction of Working Capital Commitments shall be
permitted if, after giving effect thereto and to any prepayments of the Working
Capital Loans made on the effective date thereof, the Total Working Capital
Extensions of Credit would exceed the Total Working Capital Commitments. Any
such reduction shall be in an amount equal to $5,000,000, or a whole multiple
thereof, and shall reduce permanently the Working Capital Commitments then in
effect.
(b) The Borrower shall have the right, upon not less than three
Business Days' notice to the Administrative Agent, to terminate the 364-Day
Commitments or, from time to time, to reduce the amount of the 364-Day
Commitments; PROVIDED that no such termination or reduction of 364-Day
Commitments shall be permitted if, after giving effect thereto and to any
prepayments of the 364-Day Loans made on the effective date thereof, the
aggregate principal amount of 364-Day Loans then outstanding would exceed the
Total 364-Day Commitments. Any such reduction shall be in an amount equal to
$5,000,000, or a whole multiple thereof, and shall reduce permanently the
364-Day Commitments then in effect.
2.8 OPTIONAL PREPAYMENTS. The Borrower may at any time and from
time to time prepay the Loans, in whole or in part, without premium or penalty,
upon irrevocable notice delivered to the Administrative Agent at least three
Business Days prior thereto in the case of Eurodollar Loans and at least one
Business Day prior thereto in the case of ABR Loans, which notice shall specify
the date and amount of prepayment, whether such prepayment is under the Working
Capital Facility or the 364 Day Facility and whether the prepayment is of
Eurodollar Loans or ABR Loans; PROVIDED, that if a Eurodollar Loan is prepaid on
any day other than the last day of the Interest Period applicable thereto, the
Borrower shall also pay any amounts owing pursuant to Section 2.18(c). Upon
receipt of any such notice the Administrative Agent shall promptly notify each
relevant Lender thereof. If any such notice is given, the amount specified in
such notice shall be due and payable on the date specified therein, together
with (except in the case of Working Capital Loans that are ABR Loans and, during
the 364-Day Commitment Period, 364-Day Loans that are ABR Loans) accrued
interest to such date on the amount prepaid. Partial prepayments of Loans shall
be in an aggregate principal amount of at least $1,000,000 in the case of
364-Day Loans or at least $250,000 in the case of Working Capital Loans.
Optional prepayments with respect to the 364-Day Facility made after the 364-Day
Termination Date shall be applied first to the remaining balance of the next
scheduled principal installment of the 364-Day Loans and then to the remaining
installments of the 364-Day Loans on a PRO RATA basis, and may not be
reborrowed.
2.9 MANDATORY PREPAYMENTS AND COMMITMENT REDUCTIONS.
(a) Unless the Required Prepayment Lenders under the 364-Day
Facility shall otherwise agree, if on any date the Borrower or any of its
Subsidiaries shall receive Net Cash Proceeds from any Asset Sale, Recovery Event
or Subsidiary Stock Event that, when added to the aggregate amount of such Net
Cash Proceeds prior thereto in the same fiscal year of the Borrower, exceed
$20,000,000, then, unless
a Reinvestment Notice shall be delivered in respect thereof, 75% of the
amount by which such aggregate Net Cash Proceeds received during such fiscal
year exceed $20,000,000 shall be applied on such date toward the prepayment
of the 364-Day Loans and the reduction of the 364-Day Commitments as set
forth in Section 2.9(b); PROVIDED, that on each Reinvestment Prepayment Date,
an amount equal to the Reinvestment Prepayment Amount with respect to the
relevant Reinvestment Event shall be applied toward the prepayment of the
364-Day Loans and the reduction of the 364-Day Commitments as set forth in
Section 2.9(b), and PROVIDED, FURTHER, in the case of any such required
prepayment in respect of which a Reinvestment Notice has not been delivered,
such prepayment may be made on a date subsequent to the date of receipt of
such Net Cash Proceeds chosen by the Borrower to coincide with the end of one
or more Interest Periods so long as such later date is not more than six
months after such date of receipt of such Net Cash Proceeds.
(b) Prior to the 364-Day Termination Date, the Total 364-Day
Commitments shall automatically be permanently reduced by the amount required to
be applied to prepayments and 364-Day Commitment reductions pursuant to Section
2.9(a). After the 364-Day Termination Date, prepayments required by Section
2.9(a) shall be applied first to the remaining balance of the next scheduled
principal installment of the 364-Day Loans and then to the remaining
installments of the 364-Day Loans on a pro rata basis, and may not be
reborrowed.
(c) Unless the Required Prepayment Lenders under the Working
Capital Facility shall agree otherwise, if on any date the Total Working Capital
Extensions of Credit exceeds the Borrowing Base then in effect as of the date of
the most recent certificate furnished to the Administrative Agent pursuant to
Section 5.1(k) or Section 6.2(g), the Working Capital Loans shall be repaid on
such date, and obligations in respect of Acceptances and Letters of Credit shall
be replaced or cash collateralized on such date as set forth below, to the
extent that the Total Working Capital Extensions of Credit exceeds such
Borrowing Base. If the aggregate principal amount of Working Capital Loans
outstanding on the date of any such required prepayment is less than the amount
of the excess of the Total Working Capital Extensions of Credit over such
Borrowing Base (because L/C Obligations and Acceptance Obligations constitute a
portion thereof), the Borrower shall, to the extent of the balance of such
excess, replace outstanding Letters of Credit and/or deposit, in respect of
outstanding L/C Obligations and Acceptance Obligations, an amount in cash in a
cash collateral account established with the Administrative Agent for the
benefit of the Lenders on terms and conditions satisfactory to the
Administrative Agent.
(d) The Borrower shall borrow and repay Working Capital Loans,
cause Acceptance Obligations to be created and repaid, and cause Letters of
Credit to be issued and expire, in such a way so that for at least 30
consecutive days annually during the period beginning November 1 and ending on
March 31 the Total Working Capital Extensions of Credit do not exceed
$30,000,000 for such 30-day period.
(e) Each prepayment of the Loans under Section 2.9 (except in the
case of Working Capital Loans that are ABR Loans and, during the 364-Day
Commitment Period, 364-Day Loans that are ABR Loans) shall be accompanied by
accrued interest to the date of such prepayment on the amount prepaid.
2.10 CONVERSION AND CONTINUATION OPTIONS. (a) The Borrower may
elect from time to time to convert Eurodollar Loans to ABR Loans by giving the
Administrative Agent at least two Business Days' prior irrevocable notice of
such election, provided that any such conversion of Eurodollar Loans may only be
made on the last day of an Interest Period with respect thereto. The Borrower
may elect from time to time to convert ABR Loans to Eurodollar Loans by giving
the Administrative Agent at least three Business Days' prior irrevocable notice
of such election (which notice shall specify the length of the initial Interest
Period therefor), PROVIDED that no ABR Loan under a particular Facility may be
converted into a Eurodollar Loan when any Event of Default has occurred and is
continuing and the Administrative Agent
or the Majority Facility Lenders in respect of such Facility have determined
in its or their sole discretion not to permit such conversions. Upon receipt
of any such notice the Administrative Agent shall promptly notify each
relevant Lender thereof.
(b) Any Eurodollar Loan may be continued as such upon the
expiration of the then current Interest Period with respect thereto by the
Borrower giving irrevocable notice to the Administrative Agent, in accordance
with the applicable provisions of the term "Interest Period" set forth in
Section 1.1, of the length of the next Interest Period to be applicable to such
Loans, PROVIDED that no Eurodollar Loan under a particular Facility may be
continued as such when any Event of Default has occurred and is continuing and
the Administrative Agent has or the Majority Facility Lenders in respect of such
Facility have determined in its or their sole discretion not to permit such
continuations, and PROVIDED, FURTHER, that if the Borrower shall fail to give
any required notice as described above in this paragraph or if such continuation
is not permitted pursuant to the preceding proviso such Loans shall be
automatically converted to ABR Loans on the last day of such then expiring
Interest Period. Upon receipt of any such notice the Administrative Agent shall
promptly notify each relevant Lender thereof.
2.11 LIMITATIONS ON EURODOLLAR TRANCHES. Notwithstanding anything
to the contrary in this Agreement, all borrowings, conversions and continuations
of Eurodollar Loans hereunder and all selections of Interest Periods hereunder
shall be in such amounts and be made pursuant to such elections so that, (a)
after giving effect thereto, the aggregate principal amount of the Eurodollar
Loans comprising each Eurodollar Tranche shall be equal to $1,000,000 or a whole
multiple of $500,000 in excess thereof and (b) no more than twenty-five
Eurodollar Tranches shall be outstanding at any one time. If practicable, the
Borrower shall select Interest Periods so as not to require a principal payment
with respect to any Eurodollar Loan during an Interest Period for such Loan.
2.12 INTEREST RATES AND PAYMENT DATES. (a) Each Eurodollar Loan
shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined for such
Interest Period plus the Applicable Margin in effect from time to time.
(b) Each ABR Loan shall bear interest for each day at a rate per
annum equal to the ABR plus the Applicable Margin in effect from time to time.
(c) Notwithstanding the foregoing, if any principal of or interest
on any Loan or any fee or other amount payable by the Borrower hereunder is not
paid when due, whether at stated maturity, upon acceleration or otherwise, such
overdue amount shall, without limiting the rights of the Lenders under Section
8, bear interest, after as well as before judgment, at a rate per annum equal to
(i) in the case of overdue principal of any Loan, 2% plus the rate otherwise
applicable to such Loan as provided in the preceding paragraphs of this section
or (ii) in the case of any other amount, 2% plus the rate applicable to ABR
Loans as provided in paragraph (b) of the Section 2.12.
(d) Interest shall be payable in arrears on each Interest Payment
Date, PROVIDED that interest accruing pursuant to paragraph (c) of this Section
2.12 shall be payable from time to time on demand.
2.13 COMPUTATION OF INTEREST AND FEES. (a) Interest and fees
payable pursuant hereto shall be calculated on the basis of a 360-day year for
the actual days elapsed, except that, with respect to ABR Loans the rate of
interest on which is calculated on the basis of the Prime Rate, the interest
thereon shall be calculated on the basis of a 365- (or 366-, as the case may be)
day year for the actual days elapsed. The Administrative Agent shall as soon as
practicable notify the Borrower and the relevant Lenders of each determination
of a Eurodollar Rate. Any change in the interest rate on a Loan resulting from a
change in the ABR shall become effective as of the opening of business on the
day on which such change becomes
effective. The Administrative Agent shall as soon as practicable notify the
Borrower and the relevant Lenders of the effective date and the amount of
each such change in interest rate.
(b) Each determination of an interest rate by the Administrative
Agent pursuant to any provision of this Agreement shall be conclusive and
binding on the Borrower and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the Borrower, deliver to the
Borrower a statement showing the quotations used by the Administrative Agent in
determining any interest rate pursuant to Section 2.12(a).
2.14 INABILITY TO DETERMINE INTEREST RATE. If prior to the first
day of any Interest Period:
(a) the Administrative Agent shall have reasonably determined
(which determination shall be conclusive and binding upon the Borrower) that, by
reason of circumstances affecting the relevant market, adequate and reasonable
means do not exist for ascertaining the Eurodollar Rate for such Interest
Period, or
(b) the Administrative Agent shall have received notice from
the Majority Facility Lenders in respect of the relevant Facility that the
Eurodollar Rate determined or to be determined for such Interest Period will
not adequately and fairly reflect the cost to such Lenders (as conclusively
certified by such Lenders) of making or maintaining their affected Loans
during such Interest Period, the Administrative Agent shall give telecopy or
telephonic notice thereof to the Borrower and the relevant Lenders as soon as
practicable thereafter. If such notice is given (x) any Eurodollar Loans
under the relevant Facility requested to be made on the first day of such
Interest Period shall be made as ABR Loans, (y) any Loans under the relevant
Facility that were to have been converted on the first day of such Interest
Period to Eurodollar Loans shall be continued as ABR Loans and (z) any
outstanding Eurodollar Loans under the relevant Facility shall be converted,
on the last day of the then-current Interest Period with respect to each such
Loan, to ABR Loans. The Administrative Agent shall withdraw such notice
promptly after it receives conclusive notice that the conditions giving rise
to the delivery of such notice cease to exist. Until such notice has been
withdrawn by the Administrative Agent, no further Eurodollar Loans under the
relevant Facility shall be made or continued as such, nor shall the Borrower
have the right to convert Loans under the relevant Facility to Eurodollar
Loans.
2.15 PRO RATA TREATMENT AND PAYMENTS. (a) Each borrowing by the
Borrower from the Lenders hereunder, each payment by the Borrower on account of
any commitment fee and any reduction of the Commitments of the Lenders shall be
made PRO RATA according to the respective 364-Day Percentages or Working Capital
Percentages, as the case may be, of the relevant Lenders.
(b) Each payment (including each prepayment) by the Borrower on
account of principal of and interest on the 364-Day Loans shall be made PRO RATA
according to the respective outstanding principal amounts of the 364-Day Loans
then held by the 364-Day Lenders.
(c) Each payment (including each prepayment) by the Borrower on
account of principal of and interest on the Working Capital Loans shall be made
PRO RATA according to the respective outstanding principal amounts of the
Working Capital Loans then held by the Working Capital Lenders.
(d) All payments (including prepayments) to be made by the
Borrower hereunder, whether on account of principal, interest, fees or
otherwise, shall be made without setoff or counterclaim and shall be made prior
to 12:00 Noon, New York City time, on the due date thereof to the Administrative
Agent, for the account of the Lenders, at the Funding Office, in Dollars and in
immediately available funds. The Administrative Agent shall distribute such
payments to the Lenders promptly upon receipt in
like funds as received. If any payment hereunder (other than payments on the
Eurodollar Loans) becomes due and payable on a day other than a Business Day,
such payment shall be extended to the next succeeding Business Day. If any
payment on a Eurodollar Loan becomes due and payable on a day other than a
Business Day, the maturity thereof shall be extended to the next succeeding
Business Day unless the result of such extension would be to extend such
payment into another calendar month, in which event such payment shall be
made on the immediately preceding Business Day. In the case of any extension
of any payment of principal pursuant to the preceding two sentences, interest
thereon shall be payable at the then applicable rate during such extension.
(e) Unless the Administrative Agent shall have been notified in
writing by any Lender prior to a borrowing that such Lender will not make the
amount that would constitute its share of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the Administrative
Agent may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. If such amount is not made available to the Administrative
Agent by the required time on the Borrowing Date therefor, such Lender shall pay
to the Administrative Agent, on demand, such amount with interest thereon at a
rate equal to the daily average Federal Funds Effective Rate for the period
until such Lender makes such amount immediately available to the Administrative
Agent. A certificate of the Administrative Agent submitted to any Lender with
respect to any amounts owing under this paragraph shall be conclusive in the
absence of manifest error. If such Lender's share of such borrowing is not made
available to the Administrative Agent by such Lender within three Business Days
of such Borrowing Date, the Administrative Agent shall also be entitled to
recover such amount with interest thereon at the rate per annum applicable to
ABR Loans under the relevant Facility, on demand, from the Borrower.
(f) Unless the Administrative Agent shall have been notified in
writing by the Borrower prior to the date of any payment being made hereunder
that the Borrower will not make such payment to the Administrative Agent, the
Administrative Agent may assume that the Borrower is making such payment, and
the Administrative Agent may, but shall not be required to, in reliance upon
such assumption, make available to the Lenders their respective PRO RATA shares
of a corresponding amount. If such payment is not made to the Administrative
Agent by the Borrower within three Business Days of such required date, the
Administrative Agent shall be entitled to recover, on demand, from each Lender
to which any amount which was made available pursuant to the preceding sentence,
such amount with interest thereon at the rate per annum equal to the daily
average Federal Funds Effective Rate. Nothing herein shall be deemed to limit
the rights of the Administrative Agent or any Lender against the Borrower.
Notwithstanding the provisions of Section 2.15(b) and (c), if, on any date on
which amounts are payable or past due under both Facilities, the aggregate
amount of payments received on such date is insufficient to pay all such amounts
in full, such payments shall be allocated among the 364-Day Lenders and the
Working Capital Lenders PRO RATA according to the respective amounts then
payable to them.
2.16 CHANGE IN LAW. (a) If any Change in Law:
(i) shall subject any Lender to any tax of any kind whatsoever
with respect to this Agreement, any Letter of Credit, any Application,
any Acceptance or any Eurodollar Loan made by it, or change the basis
of taxation of payments to such Lender in respect thereof (except for
Non-Excluded Taxes covered by Section 2.17 and changes in the rate of
tax on the overall net income of such Lender);
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement (including any
Eurocurrency Reserve Requirement) against assets held by, deposits or
other liabilities in or for the account of, advances, loans or other
extensions of credit by, or any other acquisition of funds by, any
office of such Lender; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such
Lender, by an amount that such Lender reasonably deems to be material,
of making, converting into, continuing or maintaining Eurodollar Loans
or issuing or participating in Letters of Credit or creating or
participating in Acceptances, or to reduce any amount receivable
hereunder in respect thereof, then, in any such case, the Borrower
shall promptly pay such Lender, upon its demand, any additional amounts
necessary to compensate such Lender for such increased cost or reduced
amount receivable. If any Lender becomes entitled to claim any
additional amounts pursuant to this paragraph, it shall promptly notify
the Borrower (with a copy to the Administrative Agent) of the event by
reason of which it has become so entitled.
(b) If any Lender shall have determined that any Change in Law
regarding capital adequacy shall have the effect of reducing the rate of return
on capital of such Lender (or any corporation controlling such Lender) as a
consequence of its obligations hereunder or under or in respect of any Letter of
Credit or Acceptance to a level below that which such Lender or such corporation
could have achieved but for such adoption, change or compliance (taking into
consideration such Lender's or such corporation's policies with respect to
capital adequacy) by an amount reasonably deemed by such Lender to be material,
then from time to time, after submission by such Lender to the Borrower (with a
copy to the Administrative Agent) of a written request therefor, the Borrower
shall pay to such Lender such additional amount or amounts as will compensate
such Lender for the portion of such reduction which is reasonably allocable to
this Agreement; PROVIDED that the Borrower shall not be required to compensate a
Lender pursuant to this paragraph for any amounts incurred more than three
months prior to the date that such Lender notifies the Borrower of such Lender's
intention to claim compensation therefor; and PROVIDED FURTHER that, if the
circumstances giving rise to such claim have a retroactive effect, then such
three-month period shall be extended to include the period of such retroactive
effect.
(c) A certificate as to any additional amounts payable pursuant to
this Section submitted by any Lender to the Borrower (with a copy to the
Administrative Agent) shall be conclusive in the absence of manifest error,
PROVIDED, HOWEVER, that such certificate shall be accompanied by a statement in
reasonable detail of the calculation of such amounts and the assumptions used in
making such calculations. In determining such amounts, such Lender may use any
reasonable averaging and attribution methods; PROVIDED, that such Lender shall
use commercially reasonable efforts to make such calculation on a basis
consistent with such Lender's treatment of similarly situated customers. The
obligations of the Borrower pursuant to this Section shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
2.17 TAXES. (a) All payments made by the Borrower under this
Agreement shall be made free and clear of, and without deduction or withholding
for or on account of, any present or future income, stamp or other taxes,
levies, imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any Governmental
Authority, excluding net income taxes and franchise taxes (imposed in lieu of
net income taxes) imposed on the Administrative Agent or any Lender as a result
of a present or former connection between the Administrative Agent or such
Lender and the jurisdiction of the Governmental Authority imposing such tax or
any political subdivision or taxing authority thereof or therein (other than any
such connection arising solely from the Administrative Agent or such Lender
having executed, delivered or performed its obligations or received a payment
under, or enforced, this Agreement or any other Loan Document). If any such
non-excluded taxes, levies, imposts, duties, charges, fees, deductions or
withholdings ("NON-EXCLUDED TAXES") or Other Taxes are required to be withheld
from any amounts payable to the Administrative Agent or any Lender hereunder,
the amounts so payable to the Administrative Agent or such Lender shall be
increased to the extent necessary to yield to the Administrative Agent or such
Lender (after payment of all Non-Excluded Taxes and Other Taxes) interest or any
such other amounts payable hereunder at the rates or in the amounts specified in
this
Agreement, PROVIDED, HOWEVER, that the Borrower shall not be required to
increase any such amounts payable to any Lender with respect to any
Non-Excluded Taxes (i) that are attributable to such Lender's failure to
comply with the requirements of paragraph (d) or (e) of this Section or (ii)
that are United States withholding taxes imposed on amounts payable to such
Lender at the time the Lender becomes a party to this Agreement, except to
the extent that such Lender's assignor (if any) was entitled, at the time of
assignment, to receive additional amounts from the Borrower with respect to
such Non-Excluded Taxes pursuant to this paragraph.
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) Whenever any Non-Excluded Taxes or Other Taxes are payable by
the Borrower, as promptly as possible thereafter the Borrower shall send to the
Administrative Agent for its own account or for the account of the relevant
Lender, as the case may be, a certified copy of an original official receipt
received by the Borrower showing payment thereof. If the Borrower fails to pay
any Non-Excluded Taxes or Other Taxes when due to the appropriate taxing
authority or fails to remit to the Administrative Agent the required receipts or
other required documentary evidence, the Borrower shall indemnify the
Administrative Agent and the Lenders for any incremental taxes, interest or
penalties that may become payable by the Administrative Agent or any Lender as a
result of any such failure.
(d) Each Lender (or Transferee) that is not a United States person
as defined in Section 7701(a)(30) of the Code (a "NON-U.S. LENDER") shall
deliver to the Borrower and the Administrative Agent (or, in the case of a
Participant, to the Lender from which the related participation shall have been
purchased) two copies of either U.S. Internal Revenue Service Form 1001 or Form
4224, or, in the case of a Non-U.S. Lender claiming exemption from U.S. federal
withholding tax under Section 871(h) or 881(c) of the Code with respect to
payments of "portfolio interest", a statement substantially in the form of
Exhibit G and a Form W-8, or any subsequent versions thereof or successors
thereto, properly completed and duly executed by such Non-U.S. Lender claiming
complete exemption from (if possible), or a reduced rate of, U.S. federal
withholding tax on all payments by the Borrower under this Agreement and the
other Loan Documents. Such forms shall be delivered by each Non-U.S. Lender on
or before the date it becomes a party to this Agreement (or, in the case of any
Participant, on or before the date such Participant purchases the related
participation). In addition, each Non-U.S. Lender shall deliver such forms
promptly upon the obsolescence or invalidity of any form previously delivered by
such Non-U.S. Lender. Each Non-U.S. Lender shall promptly notify the Borrower at
any time it determines that it is no longer in a position to provide any
previously delivered certificate to the Borrower (or any other form of
certification adopted by the U.S. taxing authorities for such purpose).
Notwithstanding any other provision of this paragraph, a Non-U.S. Lender shall
not be required to deliver any form pursuant to this paragraph that such
Non-U.S. Lender is not legally able to deliver.
(e) A Lender that is entitled to an exemption from or reduction of
non-U.S. withholding tax under the law of the jurisdiction in which the Borrower
is located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law or
reasonably requested by the Borrower, such properly completed and executed
documentation prescribed by applicable law as will permit such payments to be
made without withholding or at a reduced rate, provided that such Lender is
legally entitled to complete, execute and deliver such documentation and in such
Lender's judgment such completion, execution or submission would not materially
prejudice the legal position of such Lender.
(f) The agreements in this Section shall survive the termination
of this Agreement and the payment of the Loans and all other amounts payable
hereunder.
2.18 INDEMNITY. The Borrower agrees to indemnify each Lender
and to hold each Lender harmless from any loss or expense that such Lender
may sustain or incur as a consequence of (a) default by the Borrower in
making a borrowing of, conversion into or continuation of Eurodollar Loans
after the Borrower has given a notice requesting the same in accordance with
the provisions of this Agreement, (b) default by the Borrower in making any
prepayment of or conversion from Eurodollar Loans after the Borrower has
given a notice thereof in accordance with the provisions of this Agreement or
(c) the making of a prepayment of Eurodollar Loans on a day that is not the
last day of an Interest Period with respect thereto. Such indemnification may
(to the extent such losses and expenses are actually incurred) include an
amount equal to the excess, if any, of (i) the amount of interest that would
have accrued on the amount so prepaid, or not so borrowed, converted or
continued, for the period from the date of such prepayment or of such failure
to borrow, convert or continue to the last day of such Interest Period (or,
in the case of a failure to borrow, convert or continue, the Interest Period
that would have commenced on the date of such failure) in each case at the
applicable rate of interest for such Loans provided for herein (excluding,
however, the Applicable Margin included therein, if any) OVER (ii) the amount
of interest (as reasonably determined by such Lender) that would have accrued
to such Lender on such amount by placing such amount on deposit for a
comparable period with leading banks in the interbank eurodollar market. A
certificate as to any amounts payable pursuant to this Section submitted to
the Borrower by any Lender shall be conclusive in absence of manifest error
and shall be accompanied by a statement in reasonable detail of losses and
expenses incurred, the assumptions used in calculating the amount thereof,
and the assumptions used in making such calculations. This covenant shall
survive the termination of this Agreement and the payment of the Loans and
all other amounts payable hereunder.
2.19 CHANGE OF LENDING OFFICE. Each Lender agrees that, upon
the occurrence of any event giving rise to the operation of Section 2.16 or
2.17(a) with respect to such Lender, it will, if requested by the Borrower,
use reasonable efforts (subject to overall policy considerations of such
Lender) to take actions (including, without limitation, designating another
lending office for any Loans affected by such event) with the object of
avoiding the consequences of such event; PROVIDED, that such action is made
on terms that, in the sole judgment of such Lender, cause such Lender and its
lending office(s) to suffer no economic, legal or regulatory disadvantage,
and PROVIDED, FURTHER, that nothing in this Section shall affect or postpone
any of the obligations of any Borrower or the rights of any Lender pursuant
to Section 2.16 or 2.17(a).
2.20 REPLACEMENT OF LENDERS. The Borrower shall be permitted to
replace any Lender that (a) requests reimbursement for amounts owing pursuant to
Section 2.16 or 2.17(a) or (b) defaults in its obligation to make Loans
hereunder, with a replacement financial institution; PROVIDED that (i) such
replacement does not conflict with any Requirement of Law, (ii) no Event of
Default shall have occurred and be continuing at the time of such replacement,
(iii) prior to any such replacement, such Lender shall have taken no action
under Section 2.19 so as to eliminate the continued need for payment of amounts
owing pursuant to Section 2.16 or 2.17(a), (iv) the replacement financial
institution shall purchase, at par, all Loans and other amounts owing to such
replaced Lender on or prior to the date of replacement, (v) the Borrower shall
be liable to such replaced Lender under Section 2.18 if any Eurodollar Loan
owing to such replaced Lender shall be purchased other than on the last day of
the Interest Period relating thereto, (vi) the replacement financial
institution, if not already a Lender, shall be reasonably satisfactory to the
Administrative Agent, (vii) the replaced Lender shall be obligated to make such
replacement in accordance with the provisions of Section 10.6 (provided that the
Borrower shall be obligated to pay the registration and processing fee referred
to therein), (viii) until such time as such replacement shall be consummated,
the Borrower shall pay all additional amounts (if any) required pursuant to
Section 2.16 or 2.17(a), as the case may be, and (ix) any such replacement shall
not be deemed to be a waiver of any rights that the Borrower, the Administrative
Agent or any other Lender shall have against the replaced Lender.
2.21 INCREASE OF COMMITMENTS. (a) The Borrower may from time to
time during the 364-Day Commitment Period, in the case of the 364-Day
Commitments, and the Working Capital Commitment Period, in the case of the
Working Capital Commitments, by notice to the Administrative Agent, request that
either or both of the 364-Day Commitments and the Working Capital Commitments be
increased by an aggregate amount that is not less than $5,000,000 and will not
result in an increase in the aggregate amount of the Commitments for all Lenders
in excess of $50,000,000 under both Facilities after giving effect thereto,
PROVIDED that such increase may not be requested or become effective at any time
that a Default or Event of Default exists. Upon receipt of such notice, the
Administrative Agent will request the agreement of one or more existing or new
Lenders to increase or, in the case of new Lenders, provide, its or their
applicable Commitments in an aggregate amount equal to the increase so requested
by such Borrower. No Lender shall have any obligation to agree to any increase
of its commitments, and may decline any such request in its sole discretion.
(b) If one or more existing or new Lenders shall have agreed to
increase or provide its or their applicable Commitments pursuant to a request
made as described in the foregoing clause (a) in an aggregate amount not less
than $5,000,000, such increases and such new Commitments shall become effective
on a date mutually agreed upon among the Administrative Agent, the Borrower and
the Lenders providing such increase and/or such new Commitments and shall be
implemented pursuant to documentation consistent herewith and otherwise in form
and substance reasonably satisfactory to the Administrative Agent, providing,
among other things, for adjustments to cause the 364-Day Loans and the Working
Capital Loans of each Lender to correspond ratably to their respective 364-Day
Percentages and Working Capital Percentages, as applicable, after giving effect
to such increase (including, without limitation, by providing for prepaying and
reborrowing all then outstanding Loans of the affected Facility).
SECTION 3. LETTERS OF CREDIT AND ACCEPTANCES
3.1 L/C COMMITMENT. (a) Subject to the terms and conditions
hereof, the Issuing Lender, in reliance on the agreements of the other Working
Capital Lenders set forth in Section 3.4(a), agrees to issue letters of credit
("LETTERS OF CREDIT") for the account of the Borrower on any Business Day during
the Working Capital Commitment Period in such form as may be approved from time
to time by the Issuing Lender; PROVIDED that the Issuing Lender shall have no
obligation to issue any Letter of Credit if, after giving effect to such
issuance, (i) Section 2.4 would be violated or (ii) the aggregate amount of the
Available Working Capital Commitments would be less than zero. Letters of Credit
may be Commercial L/Cs or Standby L/Cs. Each Letter of Credit shall (i) be
denominated in Dollars and (ii) expire no later than the earlier of (x) the
first anniversary of its date of issuance and (y) the date that is five Business
Days prior to the Scheduled Working Capital Termination Date, PROVIDED that any
Letter of Credit with a one-year term may provide for the renewal thereof for
additional one-year periods (which shall in no event extend beyond the date
referred to in clause (y) above).
(b) The Issuing Lender shall not at any time be obligated to issue
any Letter of Credit hereunder if such issuance would conflict with, or cause
the Issuing Lender or any L/C Participant to exceed any limits imposed by, any
applicable Requirement of Law.
(c) The letters of credit issued under the Existing Credit
Agreement and listed on Schedule 3.1 hereto shall, effective as of the Closing
Date, be deemed for all purposes to be Letters of Credit issued hereunder.
3.2 PROCEDURE FOR ISSUANCE OF LETTER OF CREDIT. The Borrower may
from time to time request that the Issuing Lender issue a Letter of Credit by
delivering to the Issuing Lender at its address for notices specified herein an
Application therefor, completed to the satisfaction of the Issuing Lender, and
such other certificates, documents and other papers and information as the
Issuing Lender may request. Upon receipt of any Application, the Issuing Lender
will process such Application and the certificates, documents and other papers
and information delivered to it in connection therewith in accordance with its
customary procedures and shall promptly issue the Letter of Credit requested
thereby (but in no event shall the Issuing Lender be required to issue any
Letter of Credit earlier than three Business Days after its receipt of the
Application therefor and all such other certificates, documents and other papers
and information relating thereto) by issuing the original of such Letter of
Credit to the beneficiary thereof or as otherwise may be agreed to by the
Issuing Lender and the Borrower. The Issuing Lender shall furnish a copy of such
Letter of Credit to the Borrower promptly following the issuance thereof. The
Issuing Lender shall promptly furnish to the Administrative Agent, which shall
in turn promptly furnish to the Lenders, notice of the issuance of each Letter
of Credit (including the amount thereof).
3.3 FEES AND OTHER CHARGES. (a) In lieu of any letter of credit
commissions and fees provided for in any Application relating to Standby L/Cs
(other than standard administrative, issuance, amendment and negotiation fees),
the Borrower agrees to pay the Administrative Agent, for the PRO RATA account of
the Working Capital Lenders, with respect to each Standby L/C, a Standby L/C fee
on the undrawn amount thereof for each day that such Standby L/C is outstanding
calculated at a rate per annum equal to the Applicable Margin for Eurodollar
Loans in effect for each such date, less 0.125%.
(b) In lieu of any letter of credit commissions and fees provided
for in any Application relating to Commercial L/Cs (other than standard
administrative, issuance, amendment and negotiation fees), the Borrower agrees
to pay the Administrative Agent, for the PRO RATA account of the Working Capital
Lenders, with respect to each Commercial L/C, a Commercial L/C fee on the
undrawn amount thereof for each day that such Commercial L/C is outstanding
calculated at a rate per annum equal to 0.50%.
(c) In addition, the Borrower shall pay to the Administrative
Agent for the account of the Issuing Lender a fronting fee in respect of each
Letter of Credit of 0.125% per annum on the undrawn amount thereof for each day
that such Letter of Credit is outstanding. All fees described in clauses (a),
(b) and (c) of this Section 3.3 shall be payable in arrears on the last day of
each March, June, September and December and on the Working Capital Termination
Date.
(d) In addition to the foregoing fees, the Borrower shall pay or
reimburse the Issuing Lender for such normal and customary costs and expenses as
are incurred or charged by the Issuing Lender in issuing, negotiating, effecting
payment under, amending or otherwise administering any Letter of Credit.
(e) In connection with any payment of fees, costs and expenses
pursuant to this subsection 3.3, the Administrative Agent agrees to provide to
the Borrower a statement of any such fees, costs and expenses so incurred;
PROVIDED that the failure by the Administrative Agent to provide the Borrower
with any such invoice shall not relieve the Borrower of its obligation to pay
such fees, costs and expenses.
3.4 L/C PARTICIPATIONS. (a) The Issuing Lender irrevocably agrees
to grant and hereby grants to each L/C Participant, and, to induce the Issuing
Lender to issue Letters of Credit hereunder, each L/C Participant irrevocably
agrees to accept and purchase and hereby accepts and purchases from the Issuing
Lender, on the terms and conditions hereinafter stated, for such L/C
Participant's own account and risk an undivided interest equal to such L/C
Participant's Working Capital Percentage in the Issuing Lender's obligations and
rights under each Letter of Credit issued hereunder and the amount of each draft
paid by the Issuing Lender thereunder. Each L/C Participant unconditionally and
irrevocably agrees with the Issuing Lender that, if a draft is paid under any
Letter of Credit for which the Issuing Lender is not reimbursed in full by the
Borrower in accordance with the terms of this Agreement, such L/C Participant
shall pay to the Issuing Lender upon demand at the Issuing Lender's address for
notices specified herein an
amount equal to such L/C Participant's Working Capital Percentage of the
amount of such draft, or any part thereof, that is not so reimbursed.
(b) If any amount required to be paid by any L/C Participant to
the Issuing Lender pursuant to Section 3.4(a) in respect of any unreimbursed
portion of any payment made by the Issuing Lender under any Letter of Credit is
paid to the Issuing Lender within three Business Days after the date such
payment is due, such L/C Participant shall pay to the Issuing Lender on demand
an amount equal to the product of (i) such amount, times (ii) the daily average
Federal Funds Effective Rate during the period from and including the date such
payment is required to the date on which such payment is immediately available
to the Issuing Lender, times (iii) a fraction the numerator of which is the
number of days that elapse during such period and the denominator of which is
360. If any such amount required to be paid by any L/C Participant pursuant to
Section 3.4(a) is not made available to the Issuing Lender by such L/C
Participant within three Business Days after the date such payment is due, the
Issuing Lender shall be entitled to recover from such L/C Participant, on
demand, such amount with interest thereon calculated from such due date at the
rate per annum applicable to ABR Loans under the Working Capital Facility. A
certificate of the Issuing Lender submitted to any L/C Participant with respect
to any amounts owing under this Section shall be conclusive in the absence of
manifest error.
(c) Whenever, at any time after the Issuing Lender has made
payment under any Letter of Credit and has received from any L/C Participant its
pro rata share of such payment in accordance with Section 3.4(a), the Issuing
Lender receives any payment related to such Letter of Credit (whether directly
from the Borrower or otherwise, including proceeds of collateral applied thereto
by the Issuing Lender), or any payment of interest on account thereof, the
Issuing Lender will distribute to such L/C Participant its pro rata share
thereof; PROVIDED, HOWEVER, that in the event that any such payment received by
the Issuing Lender shall be required to be returned by the Issuing Lender, such
L/C Participant shall return to the Issuing Lender the portion thereof
previously distributed by the Issuing Lender to it.
3.5 REIMBURSEMENT OBLIGATION OF THE BORROWER. The Borrower agrees
to reimburse the Issuing Lender on each date on which the Issuing Lender
notifies the Borrower of the date and amount of a draft presented under any
Letter of Credit and paid by the Issuing Lender for the amount of (a) such draft
so paid and (b) any taxes, fees, charges or other costs or expenses incurred by
the Issuing Lender in connection with such payment (to the extent not
duplicative of taxes, fees, charges and other costs and expenses charged to the
Borrower pursuant to Section 3.3(d)). Each such payment shall be made to the
Issuing Lender at its address for notices specified herein in lawful money of
the United States and in immediately available funds. Interest shall be payable
on any and all amounts remaining unpaid by the Borrower under this Section 3.5
from the date such amounts become payable (whether at stated maturity, by
acceleration or otherwise) until payment in full at the rate set forth in (i)
until the second Business Day following the date of notification of the
applicable drawing, Section 2.12(b) and (ii) thereafter, Section 2.12(c).
3.6 OBLIGATIONS ABSOLUTE. Without limiting any right of the
Borrower to pursue any claims it may have against the Issuing Lender for breach
of its obligations hereunder or under applicable law, the Borrower's obligations
under this Section 3 shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to payment
that the Borrower may have or have had against the Issuing Lender, any
beneficiary of a Letter of Credit or any other Person. The Borrower also agrees
with the Issuing Lender that the Issuing Lender shall not be responsible for,
and the Borrower's L/C Reimbursement Obligations under Section 3.5 shall not be
affected by, among other things, the validity or genuineness of documents or of
any endorsements thereon, even though such documents shall in fact prove to be
invalid, fraudulent or forged, or any dispute between or among the Borrower and
any beneficiary of any Letter of Credit or any other party to which such Letter
of Credit may be transferred or any claims whatsoever of the Borrower against
any beneficiary of such Letter of Credit or
any such transferee. The Issuing Lender shall not be liable for any error,
omission, interruption or delay in transmission, dispatch or delivery of any
message or advice, however transmitted, in connection with any Letter of
Credit, except for errors or omissions found by a final and nonappealable
decision of a court of competent jurisdiction to have resulted from the gross
negligence or willful misconduct of the Issuing Lender. The Borrower agrees
that any action taken or omitted by the Issuing Lender under or in connection
with any Letter of Credit or the related drafts or documents, if done in the
absence of gross negligence or willful misconduct and in accordance with the
standards of care specified in the Uniform Commercial Code of the State of
New York, shall be binding on the Borrower and shall not result in any
liability of the Issuing Lender to the Borrower.
3.7 LETTER OF CREDIT PAYMENTS. If any draft shall be presented for
payment under any Letter of Credit, the Issuing Lender shall promptly notify the
Borrower of the date and amount thereof (it being agreed that the Issuing Lender
will use commercially reasonable efforts to give such notice not later than the
Business Day following such presentation, but failure to do so shall not affect
the obligations of the Borrower in respect thereof under this Section). Drawings
under any Letter of Credit shall be reimbursed by the Borrower (whether with its
own funds or with the proceeds of Working Capital loans) on the same business
day. The responsibility of the Issuing Lender to the Borrower in connection with
any draft presented for payment under any Letter of Credit shall, in addition to
any payment obligation expressly provided for in such Letter of Credit, be
limited to determining that the documents (including each draft) delivered under
such Letter of Credit in connection with such presentment are substantially in
conformity with such Letter of Credit.
3.8 APPLICATIONS. To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the provisions
of this Section 3, the provisions of this Section 3 shall apply.
3.9 ACCEPTANCES. (a) Subject to the terms and conditions hereof,
the Accepting Bank, in reliance on the agreements of the other Lenders set forth
in Section 3.11(a), agrees to create acceptances (the "ACCEPTANCES") in respect
of Drafts drawn on the Accepting Bank by the Borrower and discounted by the
Accepting Bank for the account of the Borrower on any Business Day during the
Working Capital Commitment Period; PROVIDED that the Accepting Bank shall have
no obligation to create any Acceptance, if (i) Section 2.4 would be violated
thereby or (ii) the aggregate amount of the Available Working Capital
Commitments would be less than zero. Concurrently with the creation of each
Acceptance, the Borrower requests that the Accepting Bank discount each related
Draft pursuant to Section 3.12.
(b) The Accepting Bank shall not at any time be obligated to
create an Acceptance hereunder if such creation would conflict with, or cause
the Accepting Bank or any Acceptance Participant to exceed any limits imposed
by, any applicable Requirement of Law or if such Acceptance does not comply with
applicable requirements of Section 13 of the Federal Reserve Act or the
regulations of the Board governing the creation and discounting of, and the
maintenance of reserves with respect to, bankers' acceptances.
3.10 PROCEDURE FOR CREATION OF ACCEPTANCES. (a) The Borrower may
from time to time request the creation of Acceptances hereunder by delivering to
the Accepting Bank at its address for notices specified herein on any Business
Day (i) an Acceptance Request, completed to the satisfaction of the Accepting
Bank and specifying, among other things, the date (which must be a Business
Day), maturity and amount of the Draft to be accepted, (ii) to the extent not
theretofore supplied to the Accepting Bank in accordance with Section 3.20, a
Draft to be drawn on the Accepting Bank, appropriately completed in accordance
with this Section 3.10 and (iii) such other certificates, documents and other
papers and information as the Accepting Bank may reasonably request.
(b) Each Draft submitted by the Borrower for acceptance hereunder
shall be denominated in Dollars, shall be dated the date of acceptance of such
Draft by the Accepting Bank and shall be stated to mature on a Business Day not
fewer than 30 nor more than 180 days after the date thereof and, in any event,
not more than 90 days after the anticipated date of shipment specified in the
relevant Acceptance Request. No Acceptance created hereunder shall (i) be
created more than 30 days after the date of any shipments of goods to which such
Acceptance relates, (ii) have a tenor in excess of the period of time which is
usual and reasonably necessary to finance transactions of a similar character,
(iii) be in a face amount of less than $500,000 or (iv) be in a face amount
which, when taken together with all other Acceptances and other financings
relating to the shipment of goods to which such Acceptance relates, exceeds the
fair market value of such shipment.
(c) Subject to Section 3.10(d), not later than the close of
business at its address for notices specified herein on the Business Day
specified in an Acceptance Request, and upon fulfillment of the applicable
conditions set forth in Section 5, the Accepting Bank shall, in accordance with
such Acceptance Request, (i) complete the date, amount and maturity of each
Draft presented for acceptance (to the extent not completed by the Borrower),
(ii) accept such Drafts and (iii) upon such acceptance, discount such
Acceptances in accordance with Section 3.12.
(d) The acceptance and discounting of Drafts by the Accepting Bank
hereunder shall at all times be in the sole and absolute discretion of the
Accepting Bank.
3.11 ACCEPTANCE PARTICIPATIONS. (a) Effective in the case of each
Acceptance created by the Accepting Bank as of the date of the creation thereof,
the Accepting Bank agrees to allot and does allot, to itself and each other
Acceptance Participant, and each Acceptance Participant severally and
irrevocably agrees to take and does take in such Acceptance for such Acceptance
Participant's own account and risk, an undivided interest equal to such
Acceptance Participant's Working Capital Percentage in the Accepting Bank's
obligations and rights under each Acceptance created hereunder and the face
amount of each Acceptance created by the Accepting Bank. In the event that the
Accepting Bank is not reimbursed in full by the Borrower for the face amount of
any Acceptance in accordance with the terms of this Agreement, the Accepting
Bank will promptly notify each Acceptance Participant through the Administrative
Agent. Forthwith, upon its receipt of any such notice, each Acceptance
Participant will transfer to the Accepting Bank, in immediately available funds,
an amount equal to such Acceptance Participant's Working Capital Percentage of
the face amount of such Acceptance, or any part thereof, which is not so
reimbursed.
(b) If any amount required to be paid by any Acceptance
Participant to the Accepting Bank pursuant to Section 3.11(a) in respect of any
unreimbursed portion of any payment made by the Accepting Bank under any
Acceptance is paid to the Accepting Bank after the date such payment is due but
within three Business Days after the date such payment is due, such Acceptance
Participant shall pay to the Accepting Bank on demand an amount equal to the
product of (i) such amount, times (ii) the daily average Federal Funds Effective
Rate during the period from and including the date such payment is required to
the date on which such payment is immediately available to the Accepting Bank,
times (iii) a fraction the numerator of which is the number of days that elapse
during such period and the denominator of which is 360. If any such amount
required to be paid by any Acceptance Participant pursuant to Section 3.11(a) is
not in fact made available to the Accepting Bank by such Acceptance Participant
within three Business Days after the date such payment is due, the Accepting
Bank shall be entitled to recover from such Acceptance Participant, on demand,
such amount with interest thereon calculated from such due date at the rate per
annum applicable to ABR Loans hereunder. A certificate of the Accepting Bank
submitted to any Acceptance Participant with respect to any amounts owing under
this section shall be conclusive in the absence of manifest error.
(c) Whenever, at any time after the Accepting Bank has made a
payment under any Acceptance and has received from any Acceptance Participant
its PRO RATA share of such payment in accordance with Section 3.11(a), the
Accepting Bank receives any payment on account of such Acceptance, the Accepting
Bank will distribute to such Acceptance Participant through the Administrative
Agent its PRO RATA share thereof in like funds as received; PROVIDED, HOWEVER,
that in the event that any such payment received by the Accepting Bank is
required to be returned, such Acceptance Participant will return to the
Accepting Bank, through the Administrative Agent, the portion thereof previously
distributed by the Accepting Bank to it in like funds as such payment is
required to be returned by the Accepting Bank.
3.12 DISCOUNT OF ACCEPTANCES. (a) The Accepting Bank agrees, on
the terms and conditions of this Agreement, that on any date on which it creates
an Acceptance hereunder, the Accepting Bank will discount such Acceptance at the
Acceptance Rate, by making available to the Borrower an amount in immediately
available funds equal to the face amount of each Acceptance created by the
Accepting Bank on such date less such discount and notify the Administrative
Agent that such Draft has been accepted and discounted by the Accepting Bank.
The Accepting Bank will then pay to the Administrative Agent for the account of
the Borrower an amount equal to the proceeds of such discounted Draft.
(b) Within three Business Days after any Acceptance is discounted
pursuant to Section 3.12(a), the Accepting Bank shall pay to each Acceptance
Participant an amount equal to such Acceptance Participant's Working Capital
Percentage of the amount equal to (i) the face amount of such Acceptance less
(ii) the sum of (x) the amount of proceeds paid in respect of the Draft relating
to such Acceptance and (y) .125% per annum on the face amount of such Acceptance
for the term thereof. The Accepting Bank shall retain an acceptance fee in
respect of each Acceptance calculated at the rate of 0.125% per annum on the
face amount of such Acceptance for the term thereof.
3.13 MANDATORY PREPAYMENT. (a) In the event that (i) there is a
Change in Law to the effect that any Acceptance or any bankers' acceptances
created in connection with a substantially similar facility (whether or not the
Borrower or any Lender is directly involved as a party) is or, in the case of an
already discounted Acceptance, becomes ineligible for reserve-free treatment
under Section 13 of the Federal Reserve Act or any other regulation or rule of
the Board and, as a result, any Lender maintains additional reserves, or (ii)
any legal or regulatory restriction is imposed on any Lender (including, without
limitation, any change in acceptance limits imposed on any Lender) which limits
or prevents such Lender from creating or participating in bankers' acceptances
or otherwise performing its obligations in respect of the Acceptances, then,
with the consent of the Required Lenders, the Administrative Agent may, or upon
the direction of the Majority Working Capital Facility Lenders, the
Administrative Agent shall, by notice to the Borrower in accordance with Section
10.2, demand prepayment of the affected Acceptances, in the case of clause (i)
above, and all outstanding Acceptances, in the case of clause (ii) above, and
the Accepting Bank shall have no further obligation to accept or discount Drafts
hereunder, PROVIDED, HOWEVER, that neither the Administrative Agent nor the
Majority Working Capital Facility Lenders shall be able to demand prepayment of
Acceptances or terminate their respective obligations to accept or discount
Drafts unless the Majority Working Capital Facility Lenders shall have
determined in good faith that there are no actions reasonably available to them
that could be taken by them to avoid the effect of such Change in Law,
including, without limitation, demanding reimbursement for any increase in costs
as a result of such Change in Law pursuant to Section 3.15, and that would not
in the opinion of the Majority Working Capital Facility Lenders be prejudicial
to them. Prior to any such prepayment, the Administrative Agent shall, to the
extent permitted by applicable law and to the extent it has actual knowledge of
any such event, give the Borrower reasonable notice of any event of the type
described in the preceding clause (i) or (ii). The Borrower agrees that it
shall, within two Business Days of its receipt of a notice of mandatory
prepayment of the Acceptances, prepay all Acceptance Obligations in accordance
with the provisions of Section 3.13(b).
(b) Any prepayment of any Acceptance Obligation permitted to be
made pursuant hereto shall be made to the Accepting Bank and shall be in an
amount equal to the face amount of such Acceptance MINUS a prepayment discount
calculated by the Accepting Bank in accordance with its customary practice for
similar Acceptances and communicated to the Borrower; PROVIDED that, in the
event that the Borrower fails to make such prepayment as provided in this
Section 3.13(b), such Acceptance Obligation shall, subject to compliance with
the conditions therefor set forth in Section 5, be automatically converted into
Working Capital Loans in the amount of such prepayment. The Borrowing Date with
respect to such borrowing shall be the date of such prepayment.
(c) Except as otherwise provided herein, Acceptances may not be
prepaid prior to maturity.
3.14 PAYMENTS IN RESPECT OF ACCEPTANCES. The Borrower shall be
obligated, and hereby unconditionally agrees, to reimburse the Accepting Bank on
demand on the maturity date of each Acceptance or on such earlier date as the
Acceptance Obligations in respect thereof shall become or shall have been
declared due and payable in an amount equal to the face amount of such
Acceptance or, in the case of a prepayment under Section 3.13, MINUS a
prepayment discount calculated as set forth in Section 3.13(b). Each such
payment shall be made to the Accepting Bank at its address for notices specified
herein in lawful money of the United States of America and in immediately
available funds. Interest shall be payable on any and all amounts remaining
unpaid by the Borrower under this section from the date such amounts became
payable until payment in full at the rate which would be payable on any
outstanding ABR Loans which were then overdue.
3.15 ACCEPTANCE RESERVES. (a) If (i) any Change in Law shall
either (a) impose, modify or deem or make applicable any reserve, special
deposit, assessment or similar requirement against bankers' acceptances created
by the Accepting Bank or (b) impose on the Accepting Bank any other condition
regarding this Agreement or any Acceptance, and the result of any event referred
to in clause (a) or (b) above shall be to increase the cost to the Accepting
Bank of creating or maintaining any Acceptance (which increase in cost shall be
the result of the Accepting Bank's reasonable allocation of the aggregate of
such cost increases resulting from such events) or (ii) if any Acceptance
created hereunder shall not be "eligible" under the applicable regulations of
the Board or any successor, governing bankers' acceptances, then from time to
time following notice by the Accepting Bank to the Borrower, within 15 days
after demand by the Accepting Bank, the Borrower shall pay to the Accepting
Bank, as specified by the Accepting Bank, additional amounts which shall be
sufficient to compensate the Accepting Bank for any increased cost attributable
thereto, together with interest on each such amount from the date demanded until
payment in full thereof at a rate per annum equal to the ABR plus the Applicable
Margin for ABR Loans. A certificate submitted by the Accepting Bank to the
Borrower concurrently with any such demand by the Accepting Bank, shall be
conclusive, absent manifest error, as to the amount thereof; such certificate
shall be accompanied by a statement setting forth in reasonable detail the
calculation of such amounts and the assumptions used in making such
calculations.
(b) In the event that at any time after the date hereof any Change
in Law with respect to the Accepting Bank shall, in the Accepting Bank's
opinion, require that any Acceptance be treated as an asset or otherwise be
included for purposes of calculating the appropriate amount of capital to be
maintained by the Accepting Bank or any corporation controlling the Accepting
Bank, and such Change in Law shall have the effect of reducing the rate of
return on the Accepting Bank's or such corporation's capital, as the case may
be, as a consequence of the Accepting Bank's obligations under such Acceptance
to a level below that which the Accepting Bank or such corporation, as the case
may be, could have
achieved but for such Change in Law (taking into account the Accepting Bank's
or such corporation's policies, as the case may be, with respect to capital
adequacy) by an amount deemed by the Accepting Bank to be material, then from
time to time following notice by the Accepting Bank to the Borrower of such
Change in Law, within 15 days after demand by the Accepting Bank, the
Borrower shall pay to the Accepting Bank such additional amount or amounts as
will compensate the Accepting Bank or such corporation, as the case may be,
for such reduction. If the Accepting Bank becomes entitled to claim any
additional amounts pursuant to this Section 3.15(b), it shall promptly notify
the Borrower of the event by reason of which it has become so entitled. A
certificate submitted by the Accepting Bank to the Borrower concurrently with
any such demand by the Accepting Bank, shall be conclusive, absent manifest
error, as to the amount thereof; such certificate shall be accompanied by a
statement setting forth in reasonable detail the calculation of such amounts
and the assumptions used in making such calculations.
(c) The Borrower agrees that the provisions of the foregoing
paragraphs (a) and (b) and the provisions of each Acceptance providing for
payment to the Accepting Bank in the event of the imposition or implementation
of, or increase in, any reserve, special deposit, capital adequacy or similar
requirement in respect of such Acceptance shall apply equally to each Acceptance
Participant in respect of its undivided interest in such Acceptance, as if the
references in such paragraphs and provisions referred to, where applicable, such
Acceptance Participant or any corporation controlling such Acceptance
Participant.
3.16 FURTHER ASSURANCES. The Borrower hereby agrees, from time to
time, to do and perform any and all acts and to execute any and all further
instruments reasonably requested by the Accepting Bank more fully to effect the
purposes of this Agreement and the creation of Acceptances hereunder, and
further agrees to execute any and all instruments reasonably requested by the
Accepting Bank in connection with the obtaining and/or maintaining of any
insurance coverage applicable to any Acceptances.
3.17 OBLIGATIONS ABSOLUTE. The payment obligations of the Borrower
under this Agreement with respect to Acceptances shall be unconditional and
irrevocable and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances, including, without limitation, the following
circumstances:
(a) the existence of any claim, set-off, defense or other right
which the Borrower or any of its Subsidiaries may have at any time
against any transferee of any Acceptance, the Accepting Bank, the
Administrative Agent or any Lender, or any other Person, whether in
connection with this Agreement, any Loan Document, the transactions
contemplated herein, or any unrelated transaction;
(b) any statement or any other document presented in connection
with any Acceptance proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect; or
(c) any other circumstances or happening whatsoever, whether or
not similar to any of the foregoing, except for any such circumstances
or happening constituting gross negligence or wilful misconduct on the
part of the Accepting Bank.
3.18 ASSIGNMENTS. No Acceptance Participant's participation in any
Acceptance or any of its rights or duties hereunder shall be subdivided,
assigned or transferred (other than in connection with a transfer of part or all
of such Acceptance Participant's Commitment in accordance with Section 10.6(c))
without the prior written consent of the Accepting Bank and the Borrower. Such
consent may be given or withheld without the consent or agreement of any other
Acceptance Participant. Notwithstanding the
foregoing, an Acceptance Participant may subparticipate its undivided
interest in any Acceptances without obtaining the prior written consent of
the Accepting Bank or the Borrower.
3.19 PARTICIPATIONS. Each Acceptance Participant's obligation to
purchase participating interests pursuant to Section 3.11 shall be absolute and
unconditional and shall not be affected by any circumstance, including, without
limitation, (a) any set-off, counterclaim, recoupment, defense or other right
which such Acceptance Participant may have against the Accepting Bank, the
Borrower or any other Person for any reason whatsoever; (b) the occurrence or
continuance of a Default or Event of Default; (c) any adverse change in the
condition (financial or otherwise) of the Borrower; (d) any breach of this
Agreement by the Borrower, the Administrative Agent or any other Lender or
Acceptance Participant; or (e) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing.
3.20 SUPPLY OF DRAFTS. To enable the Accepting Bank to create
Acceptances in the manner specified in this Section 3 the Borrower may provide
to the Accepting Bank, on the Closing Date and thereafter from time to time upon
request of the Administrative Agent or the Accepting Bank, such number of blank
Drafts conforming to the requirements hereof as the Administrative Agent or the
Accepting Bank may reasonably request, each duly executed on behalf of the
Borrower, and the Accepting Bank shall hold any such documents in safekeeping.
The Borrower and the Accepting Bank hereby agree that in the event that any
authorized signatory of the Borrower whose signature shall appear on any Draft
shall cease to have such authority at the time that an Acceptance is to be
created with respect thereto, such signature shall nevertheless be valid and
sufficient for all purposes as if such authority had remained in full force and
effect at the time of such creation.
3.21 DELIVERY OF CERTAIN DOCUMENTATION. Upon request by the
Administrative Agent or the Accepting Bank, the Borrower shall furnish to the
Administrative Agent or the Accepting Bank (a) a copy of the contract of sale or
any xxxx of lading, warehouse receipt, policy or certificate of insurance or
other document covering or otherwise relating to each shipment of goods
specified in the Acceptance Request relating to such Acceptance and (b) such
other documents or information as the Accepting Bank or the Administrative Agent
shall reasonably request with respect to the creation of such Acceptance.
3.22 NOTICE. The Administrative Agent shall notify the Federal
Reserve Bank of New York of the terms under which Acceptances may be made if
requested or required to do so by such institution.
3.23 USE OF PROCEEDS. The proceeds of the Acceptances shall be
used solely to finance the purchase of inventory of the Borrower in transactions
which fulfill the requirements of Section 13 of the Federal Reserve Act or the
regulations of the Board governing the creation and discounting of, and the
maintenance of reserves with respect to, bankers' acceptances.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into
this Agreement and to make the Loans and issue or participate in the Letters of
Credit, and to induce the Accepting Bank to create and the Acceptance
Participants to participate in, the Acceptances, the Borrower hereby represents
and warrants to the Administrative Agent, the Issuing Lender, the Accepting Bank
and each Lender that:
4.1 FINANCIAL CONDITION. (a) The unaudited PRO FORMA
capitalization table of the Borrower and its consolidated Subsidiaries as at
January 2, 1999 (the "PRO FORMA CAPITALIZATION TABLE"), copies of which have
heretofore been furnished to each Lender, has been prepared giving effect (as if
such events had occurred on such date) to (i) the Loans to be made on the
Closing Date and the use of proceeds
thereof and (ii) the payment of fees and expenses in connection with the
foregoing. The Pro Forma Capitalization Table has been prepared based on the
best information available to the Borrower as of the date of delivery
thereof, and presents fairly in all material respects on a PRO FORMA basis
the estimated capitalization of Borrower and its consolidated Subsidiaries as
at January 2, 1999, assuming that the events specified in the preceding
sentence had actually occurred at such date.
(b) The audited consolidated balance sheets of the Borrower and
its consolidated Subsidiaries as at December 28, 1996 and January 3, 1998, and
the related consolidated statements of income and of cash flows for the fiscal
years ended on such dates, reported on by and accompanied by an unqualified
report from Deloitte & Touche LLC present fairly the consolidated financial
condition of the Borrower and its consolidated Subsidiaries as at such date, and
the consolidated results of its operations and its consolidated cash flows for
the respective fiscal years then ended. The unaudited consolidated balance sheet
of the Borrower and its consolidated Subsidiaries as at October 1, 1998, and the
related unaudited consolidated statements of income and cash flows for the
nine-month period ended on such date, present fairly the consolidated financial
condition of the Borrower and its consolidated Subsidiaries as at such date, and
the consolidated results of its operations and its consolidated cash flows for
the nine-month period then ended (subject to normal year-end audit adjustments).
All such financial statements, including the related schedules and notes
thereto, have been prepared in accordance with GAAP applied consistently
throughout the periods involved (except as approved by the aforementioned firm
of accountants and disclosed therein). The Borrower and its consolidated
Subsidiaries do not have any material Guarantee Obligations, contingent
liabilities and liabilities for taxes, or any long-term leases or unusual
forward or long-term commitments, including any interest rate or foreign
currency swap or exchange transaction or other obligation in respect of
derivatives, that are not reflected in the most recent financial statements
referred to in this paragraph.
4.2 NO CHANGE. Since January 3, 1998, there has been no
development or event that has had or could reasonably be expected to have a
Material Adverse Effect.
4.3 CORPORATE EXISTENCE; COMPLIANCE WITH LAW. Each of the Borrower
and its Subsidiaries (a) is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (b) has the
corporate power and authority, and the legal right, to own and operate its
property, to lease the property it operates as lessee and to conduct the
business in which it is currently engaged, (c) is duly qualified as a foreign
corporation and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of its business
requires such qualification and (d) is in compliance with all Requirements of
Law except to the extent that the failure to comply therewith could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
4.4 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. Each
Loan Party has the corporate power and authority, and the legal right, to make,
deliver and perform the Loan Documents to which it is a party and, in the case
of the Borrower, to borrow hereunder, to have Letters of Credit issued for its
account hereunder, and to have Acceptances created for its account hereunder.
Each Loan Party has taken all necessary corporate action to authorize the
execution, delivery and performance of the Loan Documents to which it is a party
and, in the case of the Borrower, to authorize the borrowings on the terms and
conditions of this Agreement, the issuance of Letters of Credit for its account
hereunder and the creation of Acceptances for its account hereunder. No consent
or authorization of, filing with, notice to or other act by or in respect of,
any Governmental Authority or any other Person is required in connection with
the borrowings hereunder or with the execution, delivery, performance, validity
or enforceability of this Agreement or any of the Loan Documents, except (i)
consents, authorizations, filings and notices described in Schedule 4.4, which
consents, authorizations, filings and notices have been obtained or made and are
in full force and effect and (ii) the filings referred to in Section 4.19. Each
Loan Document has been duly executed and delivered on behalf of each Loan Party
party thereto. This Agreement constitutes,
and each other Loan Document upon execution will constitute, a legal, valid
and binding obligation of each Loan Party party thereto, enforceable against
each such Loan Party in accordance with its terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles (whether enforcement is sought
by proceedings in equity or at law).
4.5 NO LEGAL BAR. The execution, delivery and performance of this
Agreement and the other Loan Documents, the issuance of Letters of Credit, the
creation and discounting of Acceptances, the borrowings hereunder and the use of
the proceeds thereof will not violate any Requirement of Law or any Contractual
Obligation of the Borrower or any of its Subsidiaries and will not result in, or
require, the creation or imposition of any Lien on any of their respective
properties or revenues pursuant to any Requirement of Law or any such
Contractual Obligation (other than the Liens created by the Security Documents).
4.6 LITIGATION. Except as set forth in Schedule 4.9, no
litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of the Borrower,
threatened by or against the Borrower or any of its Subsidiaries or against any
of their respective properties or revenues (a) with respect to any of the Loan
Documents, the borrowings hereunder and the use of the proceeds thereof, of any
drawings under a Letter of Credit or of the creation and discounting of any
Acceptance, or any of the transactions contemplated hereby or thereby, or (b)
that could reasonably be expected to have a Material Adverse Effect.
4.7 NO DEFAULT. Neither the Borrower nor any of its Subsidiaries
is in default under or with respect to any of its Contractual Obligations in any
respect that could reasonably be expected to have a Material Adverse Effect. No
Default or Event of Default has occurred and is continuing.
4.8 OWNERSHIP OF PROPERTY; LIENS. Each of the Borrower and its
Subsidiaries has title in fee simple to, or a valid leasehold interest in, all
its real property, and good title to, or a valid leasehold interest in, all its
other property, and none of such property is subject to any material Lien except
as permitted by Section 7.3.
4.9 INTELLECTUAL PROPERTY. Except as set forth in Schedule 4.9
hereto, (a) the Borrower and each of its Subsidiaries owns, or is licensed to
use, all Intellectual Property necessary for the conduct of its business as
currently conducted; (b) no material claim that could reasonably be expected to
result in a Material Adverse Effect has been asserted and is pending by any
Person challenging or questioning the use of any Intellectual Property or the
validity or effectiveness of any Intellectual Property, nor does the Borrower
know of any valid basis for any such claim; and (c) the use of Intellectual
Property by the Borrower and its Subsidiaries does not infringe on the rights of
any Person in any material respect.
4.10 TAXES. The Borrower and each of its Subsidiaries has filed or
caused to be filed all Federal, state and other material tax returns that are
required to be filed and has paid all taxes shown to be due and payable on said
returns or on any assessments made against it or any of its property and all
other material taxes, fees or other charges imposed on it or any of its property
by any Governmental Authority (other than any the amount or validity of that are
currently being contested in good faith by appropriate proceedings and with
respect to which reserves in conformity with GAAP have been provided on the
books of the Borrower or its Subsidiaries, as the case may be); no tax Lien has
been filed, and, to the knowledge of the Borrower, no claim is being asserted,
with respect to any such tax, fee or other charge except for Liens for
immaterial amounts affecting assets other than any Collateral.
4.11 FEDERAL REGULATIONS. No part of the proceeds of any Loans or
any drawing under a Letter of Credit or the creation and discounting of any
Acceptance will be used for "buying" or "carrying"
any "margin stock" within the respective meanings of each of the quoted terms
under Regulation U as now and from time to time hereafter in effect or for
any purpose that violates the provisions of the Regulations of the Board. If
requested by any Lender or the Administrative Agent, the Borrower will
furnish to the Administrative Agent and each Lender a statement to the
foregoing effect in conformity with the requirements of FR Form G-3 or FR
Form U-1, as applicable, referred to in Regulation U.
4.12 LABOR MATTERS. Except as, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect: (a) there are no
strikes or other labor disputes against the Borrower or any of its Subsidiaries
pending or, to the knowledge of the Borrower, threatened which could reasonably
be expected to have an Material Adverse Effect; (b) hours worked by and payment
made to employees of the Borrower and its Subsidiaries have not been in material
violation of the Fair Labor Standards Act or any other applicable Requirement of
Law dealing with such matters; and (c) all material payments due from the
Borrower or any of its Subsidiaries on account of employee health and welfare
insurance have been paid or accrued as a liability on the books of the Borrower
or the relevant Subsidiary.
4.13 ERISA. Neither a Reportable Event nor an "accumulated funding
deficiency" (within the meaning of Section 412 of the Code or Section 302 of
ERISA) has occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Single Employer Plan,
and each Single Employer Plan and, to the knowledge of the Borrower, any
Multiemployer Plan, has complied in all material respects with the applicable
provisions of ERISA and the Code. No termination of a Single Employer Plan has
occurred, and no Lien in favor of the PBGC or a Single Employer Plan has arisen,
during such five-year period. The present value of all accrued benefits under
each Single Employer Plan (based on those assumptions used to fund such Plans)
did not, as of the last annual valuation date prior to the date on which this
representation is made or deemed made, exceed the value of the assets of such
Plan allocable to such accrued benefits by a material amount. Neither the
Borrower nor any Commonly Controlled Entity has had a complete or partial
withdrawal from any Multiemployer Plan that has resulted or could reasonably be
expected to result in a material liability under ERISA, and neither the Borrower
nor any Commonly Controlled Entity would become subject to any material
liability under ERISA if the Borrower or any such Commonly Controlled Entity
were to withdraw completely from all Multiemployer Plans as of the valuation
date most closely preceding the date on which this representation is made or
deemed made. No such Multiemployer Plan is in Reorganization or Insolvent as a
result of which the Borrower or any Commonly Controlled Entity has incurred or
could reasonably be expected to incur a material liability.
4.14 INVESTMENT COMPANY ACT; OTHER REGULATIONS. No Loan Party is
an "investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended. No Loan
Party is subject to regulation under any Requirement of Law (other than
Regulation X of the Board) that limits its ability to incur Indebtedness.
4.15 SUBSIDIARIES. Except as disclosed to the Administrative Agent
by the Borrower in writing from time to time after the Closing Date, (a)
Schedule 4.15 sets forth the name and jurisdiction of incorporation of each
Subsidiary and, as to each such Subsidiary, the percentage of each class of
Capital Stock owned by any Loan Party and (b) there are no outstanding
subscriptions, options, warrants, calls, rights or other agreements or
commitments (other than stock options granted to employees or directors and
directors' qualifying shares) of any nature relating to any Capital Stock of the
Borrower or any Subsidiary, except as created by the Loan Documents.
4.16 USE OF PROCEEDS. (a) The proceeds of the 364-Day Loans shall
be used for general corporate purposes including to finance permitted
acquisitions and share repurchases and to refinance the outstanding obligations
under the Existing Credit Agreement, (b) the proceeds of the Working Capital
Loans shall be used to finance the working capital needs, Letters of Credit,
Acceptances and for general
corporate purposes of the Borrower and its Subsidiaries, (c) the Commercial
L/Cs shall be issued, and drawn upon, in connection with the importation or
exportation by the Borrower of goods in the ordinary course of business, (d)
the Standby L/Cs shall be issued, and drawn upon, in respect of obligations
of the Borrower or any of its Subsidiaries incurred pursuant to contracts
made or performances undertaken or to be undertaken or like matters relating
to contracts to which the Borrower or such Subsidiary is or proposes to
become a party in the ordinary course of the Borrower's or such Subsidiary's
business, including, without limiting the foregoing, for insurance purposes
or in respect of advance payments or as bid or performance bonds, (e) the
Acceptances shall be used by the Borrower in the ordinary course of business
in connection with the importation or exportation by the Borrower of goods
and for other customary purposes in the ordinary course of business.
4.17 ENVIRONMENTAL MATTERS. Except as, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect:
(a) to the knowledge of the Borrower after due inquiry (but
subject to the qualification set forth below) the facilities and
properties owned, leased or operated by the Borrower or any of its
Subsidiaries (the "PROPERTIES") do not contain, and have not previously
contained, any Materials of Environmental Concern in amounts or
concentrations or under circumstances that constitute or constituted a
violation of, or could give rise to liability under, any applicable
Environmental Law;
(b) neither the Borrower nor any of its Subsidiaries has received
or is aware of any notice of violation, alleged violation,
non-compliance, liability or potential liability regarding
environmental matters or compliance with applicable Environmental Laws
with regard to any of the Properties or the business operated by the
Borrower or any of its Subsidiaries (the "BUSINESS"), nor does the
Borrower have knowledge or reason to believe that any such notice will
be received or is being threatened;
(c) to the knowledge of the Borrower after due inquiry (but
subject to the qualification set forth below) Materials of
Environmental Concern have not been transported or disposed of from the
Properties in violation of, or in a manner or to a location that could
give rise to liability under, any applicable Environmental Law, nor
have any Materials of Environmental Concern been generated, treated,
stored or disposed of at, on or under any of the Properties in
violation of, or in a manner that could give rise to liability under,
any applicable Environmental Law;
(d) no judicial proceeding or governmental or administrative
action is pending or, to the knowledge of the Borrower, threatened,
under any applicable Environmental Law to which the Borrower or any
Subsidiary is or will be named as a party with respect to the
Properties or the Business, nor are there any consent decrees or other
decrees, consent orders, administrative orders or other orders, or
other administrative or judicial requirements outstanding under any
applicable Environmental Law with respect to the Properties or the
Business;
(e) there has been no release or threat of release of Materials of
Environmental Concern at or from the Properties, or arising from or
related to the operations of the Borrower or any Subsidiary in
connection with the Properties or otherwise in connection with the
Business, in violation of or in amounts or in a manner that could give
rise to liability under Environmental Laws;
(f) the Properties and all operations at the Properties are in
compliance, and to the knowledge of the Borrower after due inquiry (but
subject to the qualification set forth below) have in the last five
years been in compliance, with all applicable Environmental Laws, and
to the knowledge of the Borrower after due inquiry (but subject to the
qualification set forth below) there
is no contamination at, under or about the Properties or violation of
any applicable Environmental Law with respect to the Properties or
the Business; and
(g) neither the Borrower nor any of its Subsidiaries has assumed
any liability of any other Person under Environmental Laws.
Notwithstanding the qualifications of the foregoing representations as the
Borrower's knowledge in clauses (a), (c) and (f) above, in the event that a
condition exists that would have resulted in an Event of Default pursuant to
Section 8(b) but for such qualification, such Event of Default shall be deemed
to have occurred notwithstanding such qualification.
4.18 ACCURACY OF INFORMATION, ETC. The statements and information
contained in this Agreement, the other Loan Documents, the Confidential
Information Memorandum (except, in the case of certain financial information
contained therein, to the extent superseded by subsequent information delivered
to the Lenders prior to the Closing Date) and any other document, certificate or
statement furnished by or on behalf of any Loan Party to the Administrative
Agent or the Lenders, or any of them, for use in connection with the
transactions contemplated by this Agreement or the other Loan Documents, as of
the date such statements and information were or are so furnished (or, in the
case of the Confidential Information Memorandum, as of the date of this
Agreement), were or are true and correct in all material respects. Any
projections and PRO FORMA financial information contained in the materials
referenced above are based upon good faith estimates and assumptions believed by
management of the Borrower to be reasonable at the time made, it being
recognized by the Lenders that such financial information as it relates to
future events is not to be viewed as fact and that actual results during the
period or periods covered by such financial information may differ from the
projected results set forth therein by a material amount. As of the date hereof,
the representations and warranties contained in the Loan Documents are true and
correct in all material respects. There is no fact known to any Loan Party that
could reasonably be expected to have a Material Adverse Effect that has not been
expressly disclosed herein, in the other Loan Documents, in the Confidential
Information Memorandum or in any other documents, certificates and statements
furnished to the Administrative Agent and the Lenders for use in connection with
the transactions contemplated hereby and by the other Loan Documents.
4.19 SECURITY DOCUMENTS. (a) The Guarantee and Collateral
Agreement is effective to create in favor of the Administrative Agent, for the
benefit of the Lenders, a legal, valid and enforceable security interest in the
Collateral described therein and proceeds thereof. In the case of the Pledged
Stock described in the Guarantee and Collateral Agreement (i) referred to on
Schedule 2 of the Guarantee and Collateral Agreement and (ii) any items that
become Pledged Stock after the Closing Date that constitute Certificated
Securities (as defined in the Uniform Commercial Code) when stock certificates
representing such Pledged Stock are delivered to the Administrative Agent, the
Guarantee and Collateral Agreement shall constitute a fully perfected Lien on,
and security interest in, all right, title and interest of the Loan Parties in
such Collateral and the proceeds thereof, as security for the Obligations (as
defined in the Guarantee and Collateral Agreement), in each case prior and
superior in right to any other Person (except, in the case of Collateral other
than Pledged Stock, Liens permitted by Section 7.3, and subject, in the case of
Proceeds, to the applicable limitations under Section 9-306 of the Uniform
Commercial Code). In the case of the Pledged Stock of Department 56 Minnesota,
LLC, and any items that become Pledged Stock after the Closing Date that
constitute General Intangibles (as defined in the Uniform Commercial Code), when
financing statements specified on Schedule 4.19(a) in appropriate form are filed
in the offices specified on Schedule 4.19(a), the Guarantee and Collateral
Agreement shall constitute a fully perfected Lien on, and security interest in,
all right, title and interest of the Loan Parties in such Collateral and the
Proceeds thereof, as security for the Obligations (as defined in the Guarantee
and Collateral Agreement), in each case prior and superior in right to any other
Person (except, in the case of Collateral other than Pledged Stock, Liens
permitted by Section 7.3, and subject, in the case of Proceeds to the applicable
limitations under Section 9-306 of the Uniform Commercial Code). Schedule
4.19(a) specifies the locations in which to file the financing statements
which may perfect a legal, valid and enforceable security interest granted
under the Guarantee and Collateral Agreement in the Investment Property (as
defined in the Guarantee and Collateral Agreement) pursuant to Sections 9-115
and 9-103(6)(f) of the Uniform Commercial Code.
4.20 SOLVENCY. Each Loan Party is, and after giving effect to the
incurrence of all Indebtedness and obligations being incurred in connection
herewith will be and will continue to be, Solvent.
4.21 YEAR 2000 MATTERS. Any material reprogramming required to
permit the proper functioning (but only to the extent that such proper
functioning would otherwise be impaired by the occurrence of the year 2000) in
and following the year 2000 of computer systems and other equipment containing
embedded microchips, in either case owned or operated by the Borrower or any of
its Subsidiaries or used by the Borrower and its Subsidiaries in the conduct of
their business (including any such systems and other equipment supplied by
others or with which the computer systems of the Borrower or any of its
Subsidiaries interface), and the testing of all such systems and other equipment
as so reprogrammed, will be substantially completed by June 30, 1999. The costs
to the Borrower and its Subsidiaries that have not been incurred as of the date
hereof for such reprogramming and testing and for the other reasonably
foreseeable consequences to them of any improper functioning of other computer
systems and equipment containing embedded microchips due to the occurrence of
the year 2000 could not reasonably be expected to result in a Default or Event
of Default or to have a Material Adverse Effect.
SECTION 5. CONDITIONS PRECEDENT
5.1 CONDITIONS TO INITIAL EXTENSION OF CREDIT. The agreement of
each Lender to make the initial extension of credit requested to be made by it
is subject to the satisfaction, prior to or concurrently with the making of such
extension of credit on the Closing Date of the following conditions precedent:
(a) CREDIT AGREEMENT; GUARANTEE AND COLLATERAL AGREEMENT. The
Administrative Agent shall have received (i) this Agreement, executed
and delivered by the Administrative Agent, the Borrower and each Person
listed on Schedule 1.1A, (ii) the Guarantee and Collateral Agreement,
executed and delivered by the Borrower and each Subsidiary Guarantor
and (iii) an Acknowledgement and Consent in the form attached to the
Guarantee and Collateral Agreement, executed and delivered by each
Issuer (as defined therein), if any, that is not a Loan Party.
In the event that this Agreement has not been duly executed and
delivered by each Person listed on Schedule 1.1A on the date scheduled
to be the Closing Date, the condition referred to in clause (i) above
shall nevertheless be deemed satisfied if on such date the Borrower and
the Administrative Agent shall have designated one or more Persons (the
"Designated Lenders") to assume, in the aggregate, all of the
Commitments that would have been held by the Persons listed on Schedule
1.1A (the "Non-Executing Persons") which have not so executed and
delivered this Agreement (subject to each such Designated Lender's
consent and its execution and delivery of this Agreement). Schedule
1.1A shall automatically be deemed to be amended to reflect the
respective Commitments of the Designated Lenders and the omission of
the Non-Executing Persons as Lenders hereunder.
(b) PRO FORMA CAPITALIZATION TABLE; FINANCIAL STATEMENTS. The
Lenders shall have received (i) the Pro Forma Capitalization Table of
the Borrower adjusted to give effect to the consummation of the
financings contemplated hereby as if such financings had occurred on
the
date of such Pro Forma Capitalization Table, (ii) audited
consolidated financial statements of the Borrower for the 1996 and 1997
fiscal years and (iii) unaudited interim consolidated financial
statements of the Borrower for each quarterly period ended subsequent
to the date of the latest applicable financial statements delivered
pursuant to clause (ii) of this paragraph as to which such financial
statements are available, and such financial statements shall not, in
the reasonable judgment of the Lenders, reflect any material adverse
change in the consolidated financial condition of the Borrower, as
reflected in the financial statements or projections contained in the
Confidential Information Memorandum.
(c) APPROVALS. All governmental and third party approvals
necessary in connection with the continuing operations of the Borrower
and its Subsidiaries and the transactions contemplated hereby shall
have been obtained and be in full force and effect, and all applicable
waiting periods shall have expired without any action being taken or
threatened by any competent authority that would restrain, prevent or
otherwise impose adverse conditions on the financing contemplated
hereby.
(d) FEES. The Lenders and the Administrative Agent shall have
received all fees required to be paid, and all expenses for which
invoices have been presented (including the reasonable and documented
fees and expenses of legal counsel), on or before the Closing Date. All
such amounts will be paid with proceeds of Loans made on the Closing
Date and will be reflected in the funding instructions given by the
Borrower to the Administrative Agent on or before the Closing Date.
(e) CLOSING CERTIFICATE. The Administrative Agent shall have
received, with a counterpart for each Lender, a certificate of each
Loan Party, dated the Closing Date, substantially in the form of
Exhibit C, with appropriate insertions and attachments.
(f) LEGAL OPINIONS. The Administrative Agent shall have received
the following executed legal opinions:
(i) the legal opinion of Cleary, Gottlieb, Xxxxx &
Xxxxxxxx, counsel to the Borrower and its Subsidiaries,
substantially in the form of Exhibit F-1; and
(ii) the legal opinion of Xxxxx X. Xxxxxx, General Counsel
of the Borrower and its Subsidiaries, substantially in the form of
Exhibit F-2.
(g) PLEDGED STOCK; STOCK POWERS. The Administrative Agent shall
have received the certificates representing the shares of Capital Stock
pledged pursuant to the Guarantee and Collateral Agreement, together
with an undated stock power for each such certificate executed in blank
by a duly authorized officer of the pledgor thereof.
(h) FILINGS, REGISTRATIONS AND RECORDINGS. Each document
(including any Uniform Commercial Code financing statement) required by
the Security Documents or under law or reasonably requested by the
Administrative Agent to be filed, registered or recorded in order to
create in favor of the Administrative Agent, for the benefit of the
Lenders, a perfected Lien on the Collateral described therein, prior
and superior in right to any other Person (other than with respect to
Liens expressly permitted by Section 7.3), shall be in proper form for
filing, registration or recordation.
(i) The Administrative Agent shall have received a copy of a
satisfactory business plan for the Borrower and its Subsidiaries for
the fiscal year 1999 through fiscal year 2003 and detailed written
financial assumptions.
(j) No governmental inquiries, injunctions or restraining orders
shall then be pending or entered or any statute or rule proposed,
enacted or promulgated which (i) would enjoin or otherwise would have a
Material Adverse Effect on the Facilities or (ii) results or will
result in a Material Adverse Effect.
(k) BORROWING BASE CERTIFICATE. The Administrative Agent shall
have received, with a counterpart for each Lender, a certificate
substantially in the form of Exhibit D, dated the Closing Date,
executed and delivered by a duly authorized officer of the Borrower.
5.2 CONDITIONS TO EACH EXTENSION OF CREDIT. The agreement of each
Lender to make any extension of credit requested to be made by it on any date
(including its initial extension of credit) is subject to the satisfaction of
the following conditions precedent:
(a) REPRESENTATIONS AND WARRANTIES. Each of the representations
and warranties made by any Loan Party in or pursuant to the Loan
Documents shall be true and correct on and as of such date as if made
on and as of such date, except for representations and warranties
expressly stated to relate to an earlier date, in which case such
representations and warranties shall have been true and correct on such
earlier date.
(b) NO DEFAULT. No Default or Event of Default shall have occurred
and be continuing on such date or after giving effect to the extensions
of credit requested to be made on such date.
Each borrowing by, and each issuance of a Letter of Credit or creation of an
Acceptance on behalf of, the Borrower hereunder shall constitute a
representation and warranty by the Borrower as of the date of such extension of
credit that the conditions contained in this Section 5.2 have been satisfied (or
waived in accordance with the terms of this Agreement).
SECTION 6. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments remain
in effect, any Letter of Credit or Acceptance Obligation remains outstanding or
any Loan or other amount is owing to any Lender or the Administrative Agent
hereunder, the Borrower shall and shall cause each of its Subsidiaries to:
6.1 FINANCIAL STATEMENTS. Furnish to the Administrative Agent and
each Lender:
(a) as soon as available, but in any event within 90 days after
the end of each fiscal year of the Borrower, a copy of the audited
consolidated balance sheet of the Borrower and its consolidated
Subsidiaries as at the end of such year and the related audited
consolidated statements of income and of cash flows for such year,
setting forth in each case in comparative form the figures for the
previous year, reported on without a "going concern" or like
qualification or exception, or qualification arising out of the scope
of the audit, by Deloitte & Touche or other independent certified
public accountants of nationally recognized standing;
(b) as soon as available, but in any event not later than 45 days
after the end of each of the first three quarterly periods of each
fiscal year of the Borrower, the unaudited consolidated balance sheet
of the Borrower and its consolidated Subsidiaries as at the end of such
quarter and the related unaudited consolidated statements of income and
of cash flows for such quarter and the portion of the fiscal year
through the end of such quarter, setting forth in each case in
comparative form
the figures for the previous year, certified by a Responsible Officer
as being fairly stated in all material respects (subject to normal
year-end audit adjustments); and
(c) as soon as practicable, and in any event within 40 days after
the end of each calendar month of each year (or, in the case of
December of each year, or March, June and September of each year,
together with the financial statements referred to in Section 6.1(a) or
6.1(b) for the applicable period), the unaudited consolidated balance
sheet of Borrower and its Subsidiaries as at the end of such month and
the related unaudited statements of income of the Borrower and its
Subsidiaries for such month and for the portion of the fiscal year of
the Borrower through such date, in the form and detail similar to those
customarily prepared by the Borrower's management for internal use as
in effect on or prior to the Closing Date and as furnished to the
Administrative Agent on or prior to the Closing Date, setting forth in
each case in comparative form the consolidated figures for the
corresponding fiscal month of the previous year, certified by the chief
financial officer, controller or treasurer of the Borrower as being
fairly stated in all material respects;
All such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).
6.2 CERTIFICATES; OTHER INFORMATION. Furnish to the Administrative
Agent and each Lender (or, in the case of clause (h), to the relevant Lender):
(a) concurrently with the delivery of the consolidated financial
statements referred to in Section 6.1(a), a letter from the independent
certified public accountants reporting on such financial statements
stating that in making the examination necessary to express their
opinion on such financial statements no knowledge was obtained of any
Default or Event of Default, except as specified in such letter;
(b) concurrently with the delivery of the financial statements
referred to in Sections 6.1(a) and (b), a certificate of the chief
financial officer of the Borrower substantially in the form of Exhibit
B hereto (i) stating that, to the best of such officer's knowledge,
each of the Borrower and its Subsidiaries has observed or performed all
of its covenants and other agreements, and satisfied every condition,
contained in this Agreement, the Notes and the other Loan Documents to
be observed, performed or satisfied by it, and that such officer has
obtained no knowledge of any Default or Event of Default except as
specified in such certificate, (ii) showing in detail as of the end of
the related fiscal period the figures and calculations supporting such
statement in respect of Sections 7.1(a) through 7.1(c) (iii) if not
specified in the financial statements delivered pursuant to Section
6.1, specifying the aggregate amount of interest paid or accrued by the
Borrower and its Subsidiaries, and the aggregate amount of
depreciation, depletion and amortization charged on the books of the
Borrower and its Subsidiaries, during such accounting period and (iv)
listing all Contingent Obligations of the type described in Section
7.3(a) and all Indebtedness (other than Indebtedness hereunder) in each
case incurred since the date of the previous consolidated balance sheet
of the Borrower delivered pursuant to Section 6.1(a) or (b);
(c) concurrently with the financial statements referred to in
Sections 6.1(a) and (b), a management summary describing and analyzing
the performance of the Borrower and its Subsidiaries during the periods
covered by such financial statements;
(d) promptly upon receipt thereof, copies of all final reports
submitted to the Borrower or to any of its Subsidiaries by independent
certified public accountants in connection with each annual, interim or
special audit of the books of the Borrower or any of its Subsidiaries
made by such accountants, including, without limitation, any final
comment letter submitted by such accountants to management in
connection with their annual audit;
(e) not later than 60 days after the beginning of each fiscal year
of the Borrower, a copy of the business plan for such fiscal year on a
consolidated basis as adopted by the Board of Directors of the
Borrower;
(f) promptly upon their becoming available, copies of all
financial statements, reports, notices and proxy statements sent or
made available generally by the Borrower or any of its Subsidiaries to
its shareholders and all regular and periodic reports and all final
registration statements and final prospectuses, if any, filed by the
Borrower or any of its Subsidiaries with any securities exchange or
with the SEC or any Governmental Authority succeeding to any of its
functions;
(g) within 20 Business Days after the last day of each month, a
fully completed certificate substantially in the form of Exhibit D with
respect to Eligible Accounts and Eligible Inventory as of such last day
of such month; and
(h) promptly, such additional financial and other information as
any Lender may from time to time reasonably request.
6.3 PAYMENT OF OBLIGATIONS. Pay, discharge or otherwise satisfy at
or before maturity or before they become delinquent, as the case may be, all its
material obligations of whatever nature, except where the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and reserves in conformity with GAAP with respect thereto have been provided on
the books of the Borrower or its Subsidiaries, as the case may be.
6.4 MAINTENANCE OF EXISTENCE; COMPLIANCE. (a) (i) Preserve, renew
and keep in full force and effect its corporate existence and (ii) take all
reasonable action to maintain all rights, privileges and franchises necessary or
desirable in the normal conduct of its business, except, in each case, as
otherwise permitted by Section 7.4 and except, in the case of clause (ii) above,
to the extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect; and (b) comply with all Contractual Obligations and
Requirements of Law except to the extent that failure to comply therewith could
not, in the aggregate, reasonably be expected to have a Material Adverse Effect.
6.5 MAINTENANCE OF PROPERTY; INSURANCE. (a) Keep all property
useful and necessary in its business in good working order and condition,
ordinary wear and tear excepted and (b) maintain with financially sound and
reputable insurance companies insurance on all its property in at least such
amounts and against at least such risks (but including in any event public
liability, product liability and business interruption) as are usually insured
against in the same general area by companies engaged in the same or a similar
business.
6.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS. (a)
Keep proper books of records and account in which full, true and correct entries
in conformity with GAAP and all Requirements of Law shall be made of all
dealings and transactions in relation to its business and activities and (b)
permit representatives of any Lender, at such Lender's expense, to visit and
inspect any of its properties and examine any of its books and records upon
reasonable notice to the Borrower; PROVIDED, that, for so long as no Event of
Default has occurred and is continuing, such requests and visitations (i) shall
be coordinated
through the Administrative Agent, and (ii) shall not interfere
with or disrupt operations of the Borrower or its Subsidiaries, and (c) to
discuss the business, operations, properties and financial and other condition
of the Borrower and its Subsidiaries with officers and employees of the Borrower
and its Subsidiaries and with its independent certified public accountants at
any reasonable time.
6.7 NOTICES. Promptly give notice to the Administrative Agent and
each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of the Borrower or any of its Subsidiaries or (ii)
litigation, investigation or proceeding that may exist at any time
between the Borrower or any of its Subsidiaries and any Governmental
Authority, that in either case, if not cured or if adversely
determined, as the case may be, could reasonably be expected to have a
Material Adverse Effect;
(c) any litigation or proceeding affecting the Borrower or any of
its Subsidiaries in which the amount involved is $1,000,000 or more and
not covered by insurance or in which injunctive or similar relief is
sought that if not cured or if adversely determined, as the case may
be, could reasonably be expected to have a Material Adverse Effect;
(d) the following events, as soon as possible and in any event
within 30 days after the Borrower knows or has reason to know thereof:
(i) the occurrence of any Reportable Event with respect to any Plan, a
failure to make any required contribution to a Plan, the creation of
any Lien in favor of the PBGC or a Plan or any withdrawal from, or the
termination, Reorganization or Insolvency of, any Multiemployer Plan or
(ii) the institution of proceedings or the taking of any other action
by the PBGC or the Borrower or any Commonly Controlled Entity or any
Multiemployer Plan with respect to the withdrawal from, or the
termination, Reorganization or Insolvency of, any Plan; and
(e) any development or event that has had or could reasonably
be expected to have a Material Adverse Effect.
Each notice pursuant to this Section 6.7 shall be accompanied by a statement of
a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action the Borrower or the relevant Subsidiary proposes
to take with respect thereto.
6.8 ENVIRONMENTAL LAWS. (a) Comply in all material respects with
all applicable Environmental Laws, and obtain and comply in all material
respects with and maintain, any and all material licenses, approvals,
notifications, registrations or permits required by applicable Environmental
Laws.
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws.
6.9 ADDITIONAL COLLATERAL, ETC. If, after the date hereof, any
Material Subsidiary of the Borrower shall be formed, acquired or capitalized,
promptly deliver to the Administrative Agent, as applicable, (A) a stock
certificate or certificates evidencing all of the issued and outstanding shares
of capital stock of such Subsidiary held by Borrower or its Subsidiary, together
with undated stock powers covering each such certificate, duly executed in blank
by the Borrower or the Subsidiary that directly owns such capital stock, (B) a
supplement to the Guarantee and Collateral Agreement, executed by a duly
authorized officer of the Borrower and such Subsidiary, pursuant to which the
capital stock of any such Subsidiary acquired or created is pledged thereunder
on the same terms as those provided in respect of pledges under the Guarantee
and Collateral Agreement on the Closing Date and pursuant to which any such
Subsidiary becomes a Subsidiary Guarantor thereunder on the same terms as those
provided in respect of pledges under the Guarantee and Collateral Agreement on
the Closing Date, pursuant to documentation satisfactory to the Administrative
Agent, (C) legal opinions with respect to the pledge of stock from the General
Counsel of the Borrower and/or such other counsel as are reasonably satisfactory
to the Administrative Agent, PROVIDED that the scope of such opinions shall be
no broader than the scope of the opinions of such counsel delivered on the
Closing Date, and (D) such other certificates, resolutions and documents as the
Administrative Agent may reasonably request; PROVIDED that if such Subsidiary is
a Subsidiary more than 65% of the assets of which are securities of foreign
companies (such determination to be made on the basis of fair market value) or
such Subsidiary is a Foreign Subsidiary, only 65% of the stock of such
Subsidiary shall be required to be pledged pursuant to this subsection;
PROVIDED, FURTHER, that no such Subsidiary shall be required to become a
Guarantor if it is a Foreign Subsidiary; and PROVIDED, FURTHER, that no such
capital stock shall be required to be pledged pursuant hereto during any
Positive Security Period. In addition, the Borrower shall from time to time
promptly take all necessary actions in the foregoing clauses (A) through (D)
with respect to Subsidiaries in order to comply with the definition of "Material
Subsidiary."
6.10 SECURITY EVENTS. If a Negative Security Event occurs during a
Positive Security Period, as promptly as practicable after the occurrence of
such Negative Security Event, and in any event on or before the Security
Perfection Date in respect thereof, take or cause to be taken the following
actions:
(i) take all actions required to grant a first priority
perfected security interest in all Capital Stock held by the Borrower
or any Material Subsidiary existing at such time that would have been
required to be pledged pursuant to Section 6.9 had a Negative Security
Period been in effect prior to the time of such Negative Security Event
and had such Capital Stock been acquired after the Closing Date and
thus been subject to such provisions, including all the actions
described in such Section 6.9 with respect to all such Capital Stock;
and
(ii) thereafter from time to time promptly take or cause to be
taken all such further actions as shall be reasonably requested by the
Administrative Agent in order to ensure that the provisions of the
Guarantee and Collateral Agreement are satisfied and the
representations and warranties therein with respect to the Collateral
that would comprise such Capital Stock and other items included in the
definition of Collateral in respect thereof are true and correct.
6.11 YEAR 2000 MATTERS. Any reprogramming required to permit the
proper functioning (but only to the extent that such proper functioning would
otherwise be impaired by the occurrence of the year 2000) in and following the
year 2000 of computer systems and other equipment containing embedded
microchips, in either case owned or operated by the Borrower or any of its
Subsidiaries or used or relied upon in the conduct of their business, and the
testing of all such systems and other equipment as so reprogrammed, is targeted
to be completed by June 30, 1999, except for such failures to reprogram as would
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. The costs to the Borrower and its Subsidiaries that have not
been incurred as of the date hereof for such reprogramming and testing and for
the other reasonably foreseeable consequences to them of any improper
functioning of other computer systems and equipment containing embedded
microchips due to the occurrence of the year 2000 would not reasonably be
expected to result in a Default or an Event of Default or to have a "Material
Adverse Effect."
SECTION 7. NEGATIVE COVENANTS
Borrower hereby agrees that, so long as the Commitments remain in
effect, any Letter of Credit or Acceptance Obligation remains outstanding or any
Loan or other amount is owing to any Lender or the Administrative Agent
hereunder, and the Borrower shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly:
7.1 FINANCIAL CONDITION COVENANTS.
(a) Consolidated Interest Coverage Ratio. At the last day of any
fiscal quarter, permit the Consolidated Interest Coverage Ratio of the Borrower
for the period of four consecutive fiscal quarters ending on such day to be less
than 4.00 to 1.00.
(b) Consolidated Leverage Ratio. At the last day of any fiscal
quarter permit the Consolidated Leverage Ratio of the Borrower for the period of
four consecutive fiscal quarters ending on such day to be more than 2.75 to
1.00.
(c) Consolidated Net Worth. Permit Consolidated Net Worth at the
last day of any fiscal quarter to be less than the greater of (i) $140,000,000,
or (ii) 80% of Consolidated Net Worth for fiscal year ended January 4, 1999.
7.2 INDEBTEDNESS. Create, issue, incur, assume, become liable in
respect of or suffer to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party pursuant to any Loan Document
or under the Letters of Credit or the Acceptances;
(b) Indebtedness of the Borrower to any Subsidiary Guarantor and
any Consolidated Subsidiary Guarantor (or any other Subsidiary if such
Indebtedness is subordinated to the Obligations on terms satisfactory
to the Administrative Agent) to the Borrower or any other Subsidiary;
(c) Guarantee Obligations incurred in the ordinary course of
business by the Borrower or any of its Subsidiaries of obligations of
any Consolidated Subsidiary Guarantor;
(d) Indebtedness outstanding on the date hereof and listed on
Schedule 7.2(d) and any refinancings, refundings, renewals or
extensions thereof (without increasing, or shortening the maturity of,
the principal amount thereof);
(e) additional Indebtedness of the Subsidiaries of the Borrower in
an aggregate principal amount which when added to the Indebtedness
permitted by Section 7.2(h) shall not exceed an amount equal to 20% of
Consolidated Net Worth calculated as of the end of the most recently
completed fiscal quarter for which financial statements have been
delivered pursuant to Section 6.1(a) or (b) at any one time
outstanding, so long as no Event of Default exists at the time of
incurrence thereof;
(f) unsecured Indebtedness of the Borrower so long as (i) the
Borrower, after giving PRO FORMA effect as if such Indebtedness had
been incurred on the first day of the most recently ended period of
four consecutive fiscal quarters of the Borrower for which Section 6.1
financial statements have been delivered, would be in compliance with
the financial covenants set forth in Section 7.1, (ii) at the time of
incurrence thereof no Default or Event of Default shall have
occurred and be continuing or would result therefrom, (iii) the terms
of such Indebtedness, viewed as a whole are no more favorable to the
holders of such Indebtedness or burdensome on the Borrower or any
Subsidiary than the terms of any Loan Document (other than interest
rates which shall be at market rates), (iv) no principal payments on
such Indebtedness are required to be made on or prior to the
termination of this Facility and (v) such Indebtedness does not
constitute Indebtedness described in clause (h) of the definition
thereof.
(g) unsecured Guarantee Obligations of the Subsidiaries of the
Borrower in respect of Indebtedness permitted under Section 7.2(f), so
long as such Guarantee Obligations are pari passu with (or have
interests or rights that are inferior to pari passu with) the Guarantee
Obligations under any Loan Document and so long as the terms of such
Guarantee Obligations are no more favorable to the holders of such
Indebtedness or burdensome on the Borrower or any Subsidiary than the
terms of the Guarantee Obligations under any Loan Document.
(h) Indebtedness secured by a Lien pursuant to Section 7.3(i)
which when added to Indebtedness permitted under 7.2(e), shall not
exceed an amount equal to 20% of Consolidated Net Worth calculated as
of the end of the most recently completed fiscal quarter for which
financial statements have been delivered pursuant to Section 6.1(a) or
(b) at any one time outstanding.
(i) Indebtedness (including, without limitation, Capital Lease
Obligations) secured by Liens permitted by Section 7.3(j) PROVIDED that
the amount of such Indebtedness incurred in any fiscal year pursuant to
this clause (i) after the Closing Date does not exceed an aggregate
principal amount of the sum of (A) $5,000,000 and (B) the portion of
the amount permitted to be incurred pursuant to this clause (i) in the
fiscal years prior to such fiscal year to the extent not utilized to
incur Indebtedness pursuant to this clause (i) in any other fiscal year
prior to such current fiscal year;
7.3 LIENS. Create, incur, assume or suffer to exist any Lien upon
any of its property, whether now owned or hereafter acquired, except
for:
(a) Liens for taxes, assessments or other governmental charges
or levies not yet due or that are being contested in good faith by
appropriate proceedings, PROVIDED that adequate reserves with respect
thereto are maintained on the books of the Borrower or its
Subsidiaries, as the case may be, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's, custom's or other like Liens arising in the ordinary
course of business that are not overdue for a period of more than 30
days or that are being contested in good faith by appropriate
proceedings;
(c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security
legislation;
(d) deposits (i) to secure Permitted Acquisitions so long as
the aggregate amount of any deposits at any time outstanding does not
exceed $3,000,000 and (ii) to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of
business; (e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business that, in the
aggregate, are not substantial in amount and that do not in
any case materially detract from the value of the property subject
thereto or materially interfere with the ordinary conduct of the
business of the Borrower or any of its Subsidiaries;
(f) Liens in existence on the date hereof listed on Schedule
7.3(f), securing Indebtedness permitted by Section 7.2(d), PROVIDED
that no such Lien is spread to cover any additional property after the
Closing Date and that the amount of Indebtedness secured thereby is not
increased;
(g) Liens created pursuant to the Security Documents;
(h) Liens arising in the course of the Borrower conducting
ordinary commercial banking transactions, including repurchase
agreements;
(i) additional Liens securing Indebtedness (including, without
limitation, Capital Lease Obligations) of the Borrower and its
Subsidiaries which when added to Indebtedness permitted under Section
7.2(e) shall not exceed an amount equal to 20% of Consolidated Net
Worth calculated as of the end of the most recently completed fiscal
quarter for which financial statements pursuant to Sections 6.1(a) and
6.1(b) have been delivered at any one time outstanding, so long as (i)
no such Lien encumbers any Collateral and (ii) no Event of Default
exists at the time of the creation or incurrence of such Lien or would
result therefrom; and
(j) Liens securing Indebtedness of the Borrower or any
Subsidiary incurred pursuant to Section 7.2(i) to finance the
acquisition of fixed or capital assets constituting plant, property or
equipment, PROVIDED that (i) such Liens shall be created substantially
simultaneously with the acquisition of such fixed or capital assets,
and (ii) such Liens do not at any time encumber any property other than
the property financed by such Indebtedness;
PROVIDED, that, notwithstanding the foregoing, in no event shall any Lien be
created, incurred, assumed or suffered to exist that covers or affects any
Capital Stock or related asset or interest that would be Collateral if a
Negative Security Event were in effect and such item were subject to the
Guarantee and Collateral Agreement.
7.4 FUNDAMENTAL CHANGES. Enter into any merger, consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or Dispose of, all or substantially all of its
property or business, except that:
(a) any Subsidiary of the Borrower may be merged or consolidated
with or into the Borrower (PROVIDED that the Borrower shall be the
continuing or surviving corporation) or with or into any Consolidated
Subsidiary Guarantor (PROVIDED that the Consolidated Subsidiary
Guarantor shall be the continuing or surviving corporation);
(b) any Subsidiary of the Borrower may Dispose of any or all of
its assets (upon voluntary liquidation or otherwise) to the Borrower or
any Consolidated Subsidiary Guarantor;
(c) the Borrower and its Subsidiaries may Dispose of any or all of
its or their assets in a transaction satisfying the requirements of
Section 7.5; and
(d) the Subsidiaries of the Borrower may enter into any merger,
consolidation or acquisition transaction meeting the requirements of
Section 7.7(g).
7.5 DISPOSITION OF PROPERTY. Dispose of any of its property,
whether now owned or hereafter acquired, or, in the case of any Subsidiary,
issue or sell any shares of such Subsidiary's Capital Stock to any Person,
except:
(a) the Disposition of obsolete or worn out property in the
ordinary course of business;
(b) the sale of inventory in the ordinary course of business;
(c) Dispositions permitted by Section 7.4(b);
(d) the sale or issuance of any Subsidiary's Capital Stock to the
Borrower or any Consolidated Subsidiary Guarantor and, in the event
that the Borrower or such Consolidated Subsidiary Guarantor does not
own all of the applicable class of such Capital Stock, to any minority
holder of such Capital Stock on a pro rata basis based on the interests
of such holders immediately prior thereto; and
(e) Subsidiary Stock Events and Dispositions of any other property
(including, without limitation, Collateral) having a fair market value
not to exceed $100,000,000 in the aggregate cumulatively after the
Closing Date.
7.6 RESTRICTED PAYMENTS. Declare or pay any dividend (other than
dividends payable solely in common stock of the Person making such dividend) on,
or make any payment on account of, or set apart assets for a sinking or other
analogous fund for, the purchase, redemption, defeasance, retirement or other
acquisition of, any Capital Stock of the Borrower or any Subsidiary, whether now
or hereafter outstanding, or make any other distribution in respect thereof,
either directly or indirectly, whether in cash or property or in obligations of
the Borrower or any Subsidiary (collectively, "Restricted Payments"), except
that:
(a) any Subsidiary may make Restricted Payments (i) to the
Borrower or any Consolidated Subsidiary Guarantor and in the event
that, the Borrower or such Consolidated Subsidiary Guarantor does not
own all of the applicable Class of the Capital Stock in respect of
which such Restricted Payment is made, to the minority holders of such
Capital Stock, so long as such Restricted Payments shall be made pro
rata based on the interests of such holders immediately prior thereto,
or (ii) to any other Subsidiary and in the event that such Subsidiary
does not own all of the applicable class of the Capital Stock in
respect of which such Restricted Payment is made, to the minority
holders of such Capital Stock, so long as such Restricted Payments
shall be made pro rata based on the interests of such holders
immediately prior thereto, and so long as such Restricted Payments
received by such Subsidiary are, immediately upon receipt thereof, made
as Restricted Payments to the Borrower or any Consolidated Subsidiary
Guarantor in accordance with clause (i) above; and
(b) so long as no Default or Event of Default shall have occurred
and be continuing or would result therefrom, the Borrower may pay
dividends and redeem or repurchase its Capital Stock if, after giving
effect thereto, it would be in compliance with the financial covenants
set forth in Section 7.1, on a pro forma basis as of the last day of
the most recently completed fiscal quarter for which financial
statements have been delivered pursuant to Section 6.1(a) or (b).
7.7 INVESTMENTS. Make any advance, loan, extension of credit (by
way of guaranty or otherwise) or capital contribution to, or purchase any
Capital Stock, bonds, notes, debentures or other debt securities of, or any
assets constituting a business unit of, or make any other investment in, any
Person (all of the foregoing, "INVESTMENTS"), except:
(a) extensions of trade credit in the ordinary course of business;
(b) investments in Cash Equivalents;
(c) Guarantee Obligations permitted by Section 7.2 and the
advances permitted by 7.2(b);
(d) loans and advances to employees and sales representatives of
the Borrower or any Subsidiary of the Borrower in the ordinary course
of business (including for travel, entertainment and relocation
expenses) in an aggregate amount for the Borrower or any Subsidiary of
the Borrower not to exceed $1,000,000 at any one time outstanding;
(e) Investments in assets useful in the business of the Borrower
and its Subsidiaries made by the Borrower or any of its Subsidiaries
with the proceeds of any Reinvestment Deferred Amount;
(f) Investments by the Borrower or any of its Subsidiaries in the
Borrower or any Person that, prior to and after such investment, is a
Consolidated Subsidiary Guarantor; and
(g) the Borrower or any Subsidiary may make Permitted
Acquisitions, and may create Subsidiaries to own, directly or
indirectly, the property acquired thereby; provided that (i) any
acquisition of Capital Stock results in the issuer thereof becoming a
Subsidiary (ii) any Material Subsidiary created or acquired in
connection therewith shall become a Subsidiary Guarantor and the
requirements of Section 6.9 shall be satisfied prior to or concurrently
with the consummation of such Permitted Acquisition, (iii) no Permitted
Acquisition shall be consummated unless, after giving pro forma effect
thereto as if such Permitted Acquisition had been made (and the related
Indebtedness incurred or assumed) on the first day of the most recent
period of four consecutive fiscal quarters ending prior thereto for
which financial statements have been delivered pursuant to Section
6.1(a) or (b), the Borrower and its Subsidiaries would have a
Consolidated Leverage Ratio of less than or equal to 2.50:1.00 and a
Consolidated Interest Coverage Ratio of greater than or equal to
4.25:1.00 during such period (as demonstrated, in the case of any
Permitted Acquisition the aggregate consideration for which exceeds
$10,000,000, by delivery to the Administrative Agent of a certificate
to such effect showing such calculation in reasonable detail), (iv) no
Default or Event of Default exists at the time thereof or would result
therefrom, and (v) such acquisition has not been opposed, or has been
approved, prior to the consummation thereof, by a majority of the board
of directors of the entity being acquired; and
(h) in addition to Investments otherwise expressly permitted by
this Section, Investments by the Borrower or any of its Subsidiaries in
an aggregate amount (valued at cost) not to exceed, at any time,
$10,000,000 plus 10% of the Consolidated Net Worth calculated as of the
end of the most recently completed fiscal quarter for which financial
statements have been delivered pursuant to Sections 6.1(a) and 6.1(b).
7.8 TRANSACTIONS WITH AFFILIATES. Enter into any transaction,
including any purchase, sale, lease or exchange of property, the rendering of
any service or the payment of any management, advisory or similar fees, with any
Affiliate (other than the Borrower or any Consolidated Subsidiary Guarantor)
unless such transaction is upon fair and reasonable terms no less favorable to
the Borrower or such Subsidiary, as the case may be, than it would obtain in a
comparable arm's length transaction with a Person that is not an Affiliate.
7.9 CHANGES IN FISCAL PERIODS. For financial reporting purposes,
permit the fiscal year of the Borrower to end on a day other than the Saturday
closest to the end of the calendar year, or change the Borrower's method of
determining fiscal quarters, except that the Borrower may, upon written notice
to the Administrative Agent, change the financial reporting convention specified
above to any other financial
reporting convention reasonable acceptable to the Administrative Agent, in
which case the Borrower and the Administrative Agent will, and are hereby
authorized by the Lenders to, make any adjustments to this Agreement that are
necessary in order to reflect such change in financial reporting.
7.10 NEGATIVE PLEDGE CLAUSES. Enter into or suffer to exist or
become effective any agreement that prohibits or limits the ability of the
Borrower or any of its Subsidiaries to create, incur, assume or suffer to exist
any Lien upon any of its property or revenues, whether now owned or hereafter
acquired, other than (a) this Agreement and the other Loan Documents, (b) any
agreements governing any purchase money Liens or Capital Lease Obligations
otherwise permitted hereby (in which case, any prohibition or limitation shall
only be effective against the assets financed thereby) and (c) agreements
governing any indebtedness issued under 7.2(e), 7.2(f) or 7.2(h) that contain
limitations on Liens customary for such issuances, PROVIDED that in no event
shall any such agreement affect the Capital Stock of any Subsidiary.
7.11 CLAUSES RESTRICTING SUBSIDIARY DISTRIBUTIONS. Enter into or
suffer to exist or become effective any consensual encumbrance or restriction on
the ability of any Subsidiary of the Borrower to (a) make Restricted Payments in
respect of any Capital Stock of such Subsidiary held by, or pay any Indebtedness
owed to, the Borrower or any other Subsidiary of the Borrower, (b) make loans or
advances to, or other Investments in, the Borrower or any other Subsidiary of
the Borrower or (c) transfer any of its assets to the Borrower or any other
Subsidiary of the Borrower, except for such encumbrances or restrictions
existing under or by reason of (i) any restrictions existing under the Loan
Documents and (ii) any restrictions with respect to a Subsidiary imposed
pursuant to an agreement that has been entered into in connection with the
Disposition of all or substantially all of the Capital Stock or assets of such
Subsidiary.
7.12 LINES OF BUSINESS. Enter into any business, either directly
or through any Subsidiary, except for those businesses in which the Borrower and
its Subsidiaries are engaged on the date of this Agreement or that are
reasonably related thereto, including, without limitation, collectibles,
giftware and decorative accessories.
7.13 CONTINGENT OBLIGATIONS. Create, incur, assume or suffer to
exist any Contingent Obligation except:
(a) guarantees, if any, created pursuant to this Agreement;
(b) guarantees made in the ordinary course of its business by the
Borrower of the obligations of any of its Subsidiaries, PROVIDED those
obligations are otherwise permitted under this Agreement;
(c) Contingent Obligations described on Schedule 7.13;
(d) Contingent Obligations arising on account of the Letters of
Credit and Acceptances; and
(e) Contingent Obligations permitted by Section 7.2.
7.14 FOREIGN EXCHANGE AND HEDGE AGREEMENTS. Enter into any foreign
currency exchange contracts (other than foreign currency exchange contracts
entered into for the sole purpose of hedging with respect to the purchase or
sale by the Borrower or its Subsidiaries of inventory to be purchased or sold
for payments in foreign currencies in the ordinary course of their respective
businesses); or enter into any other Hedge Agreement other than in the ordinary
course of business to protect the Borrower and its Subsidiaries from interest
rate and currency fluctuations in respect of Indebtedness owed by them.
SECTION 8. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) the Borrower shall fail to pay any principal of any Loan or
Reimbursement Obligation when due in accordance with the terms hereof;
or the Borrower shall fail to pay any interest on any Loan or
Reimbursement Obligation, or any other amount payable hereunder or
under any other Loan Document, within five days after any such interest
or other amount becomes due in accordance with the terms hereof; or
(b) any representation or warranty made or deemed made by any Loan
Party herein or in any other Loan Document or that is contained in any
certificate, document or financial or other statement furnished by it
at any time under or in connection with this Agreement or any such
other Loan Document shall prove to have been materially inaccurate in
any material respect on or as of the date made or deemed made; or
(c) any Loan Party shall default in the observance or performance
of any agreement contained in clause (i) or (ii) of Section 6.4(a)
(with respect to the Borrower only), Section 6.7(a) or Section 7 of
this Agreement or Sections 5.3(a), 5.3(b) and 5.6 of the Guarantee and
Collateral Agreement; or
(d) any Loan Party shall default in the observance or performance
of any other agreement contained in this Agreement or any other Loan
Document (other than as provided in paragraphs (a) through (c) of this
Section), and such default shall continue unremedied for a period of 30
days; or
(e) The Borrower or any of its Subsidiaries shall (i) default in
making any payment of any principal of any Indebtedness (including any
Guarantee Obligation, but excluding the Loans) on the scheduled or
original due date with respect thereto or within any applicable grace
period; or (ii) default in making any payment of any interest on any
such Indebtedness beyond the period of grace, if any, provided in the
instrument or agreement under which such Indebtedness was created; or
(iii) default in the observance or performance of any other agreement
or condition relating to any such Indebtedness or contained in any
instrument or agreement evidencing, securing or relating thereto, or
any other event shall occur or condition exist, the effect of which
default or other event or condition is to cause, or to permit the
holder or beneficiary of such Indebtedness (or a trustee or agent on
behalf of such holder or beneficiary) to cause, with the giving of
notice if required, such Indebtedness to become due prior to its stated
maturity or (in the case of any such Indebtedness constituting a
Guarantee Obligation) to become payable; PROVIDED, that a default,
event or condition described in clause (i), (ii) or (iii) of this
paragraph (e) shall not at any time constitute an Event of Default
unless, at such time, one or more defaults, events or conditions of the
type described in clauses (i), (ii) and (iii) of this paragraph (e)
shall have occurred and be continuing with respect to Indebtedness the
outstanding principal amount of which exceeds in the aggregate
$3,000,000; or
(f) (i) the Borrower or any of its Material Subsidiaries shall
commence any case, proceeding or other action (A) under any existing or
future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors, seeking to
have an order for relief entered with respect to it, or seeking to
adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution,
composition or other relief with respect to it or its debts, or (B)
seeking appointment of a receiver,
trustee, custodian, conservator or other similar official for it or
for all or any substantial part of its assets, or the Borrower or
any of its Material Subsidiaries shall make a general assignment for
the benefit of its creditors; or (ii) there shall be commenced
against the Borrower or any of its Material Subsidiaries any case,
proceeding or other action of a nature referred to in clause (i)
above that (A) results in the entry of an order for relief or any
such adjudication or appointment or (B) remains undismissed,
undischarged or unbonded for a period of 60 days; or (iii) there
shall be commenced against the Borrower or any of its Material
Subsidiaries any case, proceeding or other action seeking issuance
of a warrant of attachment, execution, distraint or similar process
against all or any substantial part of its assets that results in
the entry of an order for any such relief that shall not have been
vacated, discharged, or stayed or bonded pending appeal within 60
days from the entry thereof; or (iv) the Borrower or any of its
Subsidiaries shall take any action in furtherance of, or indicating
its consent to, approval of, or acquiescence in, any of the acts set
forth in clause (i), (ii), or (iii) above; or (v) the Borrower or
any of its Material Subsidiaries shall generally not, or shall be
unable to, or shall admit in writing its inability to, pay its debts
as they become due; or
(g) (i) any Person shall engage in any "prohibited transaction"
(as defined in Section 406 of ERISA or Section 4975 of the Code)
involving any Plan, (ii) any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived, shall exist
with respect to any Single Employer Plan or any Lien in favor of the
PBGC or a Plan shall arise on the assets of the Borrower or any
Commonly Controlled Entity, (iii) a Reportable Event shall occur with
respect to, or the PBGC shall commence proceedings to have a trustee
appointed, or a trustee shall be appointed, to administer or to
terminate, any Single Employer Plan, which Reportable Event or
commencement of proceedings or appointment of a trustee is reasonably
likely to result in the termination of such Plan for purposes of Title
IV of ERISA, (iv) any Single Employer Plan shall terminate for purposes
of Title IV of ERISA, (v) the Borrower or any Commonly Controlled
Entity shall or is reasonably likely to, incur any liability in
connection with a withdrawal from, or the Insolvency or Reorganization
of, a Multiemployer Plan or (vi) any other similar event or condition
shall occur or exist with respect to a Plan other than in the ordinary
course; and in each case in clauses (i) through (vi) above, such event
or condition, together with all other such events or conditions, if
any, could, in the reasonable judgment of the Required Lenders, be
expected to have a Material Adverse Effect; or
(h) one or more judgments or decrees shall be entered against the
Borrower or any of its Subsidiaries involving in the aggregate a
liability (not paid or fully covered by insurance as to which the
relevant insurance company has acknowledged coverage) of $3,000,000 or
more, and all such judgments or decrees shall not have been vacated,
discharged, stayed or bonded pending appeal within 60 days from the
entry thereof; or
(i) except to the extent that during the existence of a Positive
Security Event the Liens thereunder may be released in accordance with
the terms thereof, any of the Security Documents shall cease, for any
reason, to be in full force and effect, or any Loan Party or any
Affiliate of any Loan Party shall so assert, or any Lien created by any
of the Security Documents shall cease to be enforceable and of the same
effect and priority purported to be created thereby; or
(j) the guarantee contained in Section 2 of the Guarantee and
Collateral Agreement shall cease, for any reason, to be in full force
and effect or any Loan Party shall so assert; or
(k) (i) any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), shall become, or obtain rights (whether
by means or warrants, options or otherwise) to become, the "beneficial
owner" (as defined in Rules 13(d)-3 and 13(d)-5 under the Exchange
Act), directly or indirectly, of more than
30% of the outstanding common stock of the Borrower; (ii) the board
of directors of the Borrower shall cease to consist of a majority of
Continuing Directors; (iii) the Borrower shall cease to own and
control, of record and beneficially, directly, 100% of each class of
outstanding Capital Stock of D56, Inc. free and clear of all Liens
(except Liens created by the Guarantee and Collateral Agreement).
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement and the other Loan Documents (including all amounts of L/C
Obligations, whether or not the beneficiaries of the then outstanding Letters of
Credit shall have presented the documents required thereunder and the
Acceptances, although contingent and unmatured) shall immediately become due and
payable, and (B) if such event is any other Event of Default, either or both of
the following actions may be taken: (i) with the consent of the Majority Working
Capital Facility Lenders, the Administrative Agent may, or upon the request of
the Majority Working Capital Facility Lenders, the Administrative Agent shall,
by notice to the Borrower declare the Working Capital Commitments to be
terminated forthwith, whereupon the Working Capital Commitments shall
immediately terminate; (ii) with the consent of the Majority 364-Day Facility
Lenders, the Administrative Agent may, or upon the request of the Majority
364-Day Facility Lenders, the Administrative Agent shall, by notice to the
Borrower declare the 364-Day Commitments to be terminated forthwith, whereupon
the 364-Day Commitments shall immediately terminate; and (iii) with the consent
of the Required Lenders, the Administrative Agent may, or upon the request of
the Required Lenders, the Administrative Agent shall, by notice to the Borrower,
declare the Loans hereunder (with accrued interest thereon) and all other
amounts owing under this Agreement and the other Loan Documents (including all
amounts of L/C Obligations, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents required
thereunder) and the Acceptances, although contingent and unmatured to be due and
payable forthwith, whereupon the same shall immediately become due and payable.
With respect to all Letters of Credit with respect to which presentment for
honor shall not have occurred at the time of an acceleration pursuant to this
paragraph and with respect to Acceptance Obligations, the Borrower shall at such
time deposit in a cash collateral account opened by the Administrative Agent an
amount equal to the aggregate then undrawn and unexpired amount of such Letters
of Credit and Acceptance Obligations. Amounts held in such cash collateral
account shall be applied by the Administrative Agent to the payment of drafts
drawn under such Letters of Credit and as Acceptances mature, and the unused
portion thereof after all such Letters of Credit shall have expired or been
fully drawn upon, and all Acceptances have matured, if any, shall be applied to
repay other obligations of the Borrower hereunder and under the other Loan
Documents. After all such Letters of Credit shall have expired or been fully
drawn upon, all Acceptances have matured, all Reimbursement Obligations shall
have been satisfied and all other obligations of the Borrower hereunder and
under the other Loan Documents shall have been paid in full, the balance, if
any, in such cash collateral account shall be returned to the Borrower (or such
other Person as may be lawfully entitled thereto). Except as expressly provided
above in this Section, presentment, demand, protest and all other notices of any
kind are hereby expressly waived by the Borrower.
SECTION 9. THE AGENTS
9.1 APPOINTMENT. Each Lender hereby irrevocably designates and
appoints the Administrative Agent as the agent of such Lender under this
Agreement and the other Loan Documents, and each such Lender irrevocably
authorizes the Administrative Agent, in such capacity, to take such action on
its behalf under the provisions of this Agreement and the other Loan Documents
and to exercise such powers and perform such duties as are expressly delegated
to the Administrative Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Administrative Agent shall not have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any Lender, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Administrative Agent.
9.2 DELEGATION OF DUTIES. The Administrative Agent may execute any
of its duties under this Agreement and the other Loan Documents by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agents or attorneys
in-fact selected by it with reasonable care.
9.3 EXCULPATORY PROVISIONS. Neither any Agent nor any of their
respective officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except to the extent that any of the foregoing are found by
a final and nonappealable decision of a court of competent jurisdiction to have
resulted from its or such Person's own gross negligence or willful misconduct)
or (ii) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by any Loan Party or any officer
thereof contained in this Agreement or any other Loan Document or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agents under or in connection with, this Agreement or any
other Loan Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document or
for any failure of any Loan Party a party thereto to perform its obligations
hereunder or thereunder. The Agents shall not be under any obligation to any
Lender to ascertain or to inquire as to the observance or performance of any of
the agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of any Loan Party.
9.4 RELIANCE BY ADMINISTRATIVE AGENT. The Administrative Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
instrument, writing, resolution, notice, consent, certificate, affidavit,
letter, telecopy, telex or teletype message, statement, order or other document
or conversation believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including counsel to the Borrower), independent
accountants and other experts selected by the Administrative Agent. The
Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless a written notice of assignment, negotiation or
transfer thereof shall have been filed with the Administrative Agent. The
Administrative Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Required Lenders (or, if so specified
by this Agreement, all Lenders) as it deems appropriate or it shall first be
indemnified to its satisfaction by the Lenders against any and all liability and
expense that may be incurred by it by reason of taking or continuing to take any
such action. The Administrative Agent shall in all cases be fully protected in
acting, or in refraining from acting, under this Agreement and the other Loan
Documents in accordance with a request of the Required Lenders (or, if so
specified by this Agreement, all Lenders), and such
request and any action taken or failure to act pursuant thereto shall be
binding upon all the Lenders and all future holders of the Loans.
9.5 NOTICE OF DEFAULT. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless the Administrative Agent has received notice from a
Lender, the Borrower referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of default". In the
event that the Administrative Agent receives such a notice, the Administrative
Agent shall give notice thereof to the Lenders. The Administrative Agent shall
take such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders (or, if so specified by this
Agreement, all Lenders); provided that unless and until the Administrative Agent
shall have received such directions, the Administrative Agent may (but shall not
be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in the
best interests of the Lenders.
9.6 NON-RELIANCE ON AGENTS AND OTHER LENDERS. Each Lender
expressly acknowledges that neither the Agents nor any of their respective
officers, directors, employees, agents, attorneys-in-fact or affiliates have
made any representations or warranties to it and that no act by any Agent
hereinafter taken, including any review of the affairs of a Loan Party or any
affiliate of a Loan Party, shall be deemed to constitute any representation or
warranty by any Agent to any Lender. Each Lender represents to the Agents that
it has, independently and without reliance upon any Agent or any other Lender,
and based on such documents and information as it has deemed appropriate, made
its own appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Loan Parties and their
affiliates and made its own decision to make its Loans hereunder and enter into
this Agreement. Each Lender also represents that it will, independently and
without reliance upon any 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 analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Loan Parties and their affiliates. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall not have any duty
or responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of any Loan Party or any affiliate of
a Loan Party that may come into the possession of the Administrative Agent or
any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates.
9.7 INDEMNIFICATION. The Lenders agree to indemnify each Agent in
its capacity as such (to the extent not reimbursed by the Borrower and without
limiting the obligation of the Borrower to do so), ratably according to their
respective Aggregate Exposure Percentages in effect on the date on which
indemnification is sought under this Section (or, if indemnification is sought
after the date upon which the Commitments shall have terminated and the Loans
shall have been paid in full, ratably in accordance with such Aggregate Exposure
Percentages immediately prior to such date), from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever that may at any time
(whether before or after the payment of the Loans) be imposed on, incurred by or
asserted against such Agent in any way relating to or arising out of, the
Commitments, this Agreement, any of the other Loan Documents or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by such Agent
under or in connection with any of the foregoing; PROVIDED that no Lender shall
be liable for the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements that are found by a final and nonappealable decision of a court of
competent jurisdiction to have resulted from such Agent's gross negligence or
willful
misconduct. The agreements in this Section shall survive the payment of the
Loans and all other amounts payable hereunder.
9.8 AGENT IN ITS INDIVIDUAL CAPACITY. Each Agent and its
affiliates may make loans to, accept deposits from and generally engage in any
kind of business with any Loan Party as though such Agent was not an Agent. With
respect to its Loans made or renewed by it, to any Letter of Credit issued or
participated in by it, to any Acceptance created by or participated in by it,
each Agent shall have the same rights and powers under this Agreement and the
other Loan Documents as any Lender and may exercise the same as though it were
not an Agent, and the terms "Lender" and "Lenders" shall include each Agent in
its individual capacity.
9.9 SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent may
resign as Administrative Agent upon 10 days' notice to the Lenders and the
Borrower. If the Administrative Agent shall resign as Administrative Agent under
this Agreement and the other Loan Documents, then the Required Lenders shall
appoint from among the Lenders a successor agent for the Lenders, which
successor agent shall (unless an Event of Default under Section 8(a) or Section
8(f) with respect to the Borrower shall have occurred and be continuing) be
subject to approval by the Borrower (which approval shall not be unreasonably
withheld or delayed), whereupon such successor agent shall succeed to the
rights, powers and duties of the Administrative Agent, and the term
"Administrative Agent" shall mean such successor agent effective upon such
appointment and approval, and the former Administrative Agent's rights, powers
and duties as Administrative Agent shall be terminated, without any other or
further act or deed on the part of such former Administrative Agent or any of
the parties to this Agreement or any holders of the Loans. If no successor agent
has accepted appointment as Administrative Agent by the date that is 10 days
following a retiring Administrative Agent's notice of resignation, the retiring
Administrative Agent's resignation shall nevertheless thereupon become effective
and the Lenders shall assume and perform all of the duties of the Administrative
Agent hereunder until such time, if any, as the Required Lenders appoint a
successor agent as provided for above. After any retiring Administrative Agent's
resignation as Administrative Agent, the provisions of this Section 9 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Administrative Agent under this Agreement and the other Loan Documents.
9.10 DOCUMENTATION AGENTS AND MANAGING AGENT. The Documentation
Agents and the Managing Agent shall not have any duties or responsibilities
hereunder in their capacity as such.
9.11 ISSUING LENDER AS ISSUER OF LETTERS OF CREDIT. Each Lender
hereby acknowledges that the provisions of this Section 9 shall apply to the
Issuing Lender, in its capacity as issuer of the Letters of Credit, in the same
manner as such provisions are expressly stated to apply to the Administrative
Agent.
9.12 ACCEPTING BANK AS CREATOR OF ACCEPTANCES. Each Lender hereby
acknowledges that the provisions of this Section 9 shall apply to the Accepting
Bank, in its capacity as creator and discounter of the Acceptances, in the same
manner as such provisions are expressly stated to apply to the Administrative
Agent.
SECTION 10. MISCELLANEOUS
10.1 AMENDMENTS AND WAIVERS. Neither this Agreement, any other
Loan Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section 10.1. The
Required Lenders and each Loan Party party to the relevant Loan Document may,
or, with the written consent of the Required Lenders, the Administrative Agent
and each Loan Party party to the relevant Loan Document may, from time to time,
(a) enter into written amendments, supplements or modifications hereto and to
the other Loan Documents for the purpose of adding any provisions to this
Agreement or the other Loan Documents or changing in any manner the rights of
the Lenders or of the Loan Parties hereunder or thereunder or (b) waive, on such
terms and conditions as the Required Lenders or the Administrative Agent, as the
case may be, may specify in such instrument, any of the requirements of this
Agreement or the other Loan Documents or any Default or Event of Default and its
consequences; PROVIDED, HOWEVER, that no such waiver and no such amendment,
supplement or modification shall (i) forgive the principal amount or extend the
final scheduled date of maturity of any Loan, extend the scheduled date of any
amortization payment in respect of any Loan, reduce the stated rate of any
interest or fee payable hereunder or extend the scheduled date of any payment
thereof, or increase the amount or extend the expiration date of any Lender's
Commitment, in each case without the consent of each Lender directly affected
thereby; (ii) amend, modify or waive any provision of this Section 10.1 or
reduce any percentage specified in the definition of Required Lenders or
Required Prepayment Lenders, consent to the assignment or transfer by the
Borrower of any of its rights and obligations under this Agreement and the other
Loan Documents, release all or substantially all of the Collateral or release
any Subsidiary Guarantor that is a Material Subsidiary from its obligations
under the Guarantee and Collateral Agreement except as provided in 10.14, in
each case without the written consent of all Lenders; (iii) amend, modify or
waive any condition precedent to any extension of credit set forth in Section
5.2 (including in connection with any waiver of an existing Default or Event of
Default) without the written consent of the Majority Working Capital Facility
Lenders, in the case of any extension of credit under the Working Capital
Facility, or the Majority 364-Day Facility Lenders, in the case of any extension
of credit under the 364-Day Facility; (iv) amend, modify or waive any provision
of Section 2.15 without the consent of the Majority Facility Lenders in respect
of each Facility adversely affected thereby; (v) reduce the percentage specified
in the definition of Majority Facility Lenders with respect to any Facility
without the written consent of all Lenders under such Facility; (vi) amend,
modify or waive any provision of Section 9 without the written consent of the
Administrative Agent; or (vii) amend, modify or waive any provision of Section 3
without the written consent of the Issuing Lender, in the case of any such
matter affecting it, or the Accepting Bank, in the case of any such matter
affecting it. Any such waiver and any such amendment, supplement or modification
shall apply equally to each of the Lenders and shall be binding upon the Loan
Parties, the Lenders, the Administrative Agent and all future holders of the
Loans. In the case of any waiver, the Loan Parties, the Lenders and the
Administrative Agent shall be restored to their former position and rights
hereunder and under the other Loan Documents, and any Default or Event of
Default waived shall be deemed to be cured and not continuing; but no such
waiver shall extend to any subsequent or other Default or Event of Default, or
impair any right consequent thereon.
10.2 NOTICES. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered, or three Business Days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received, addressed as follows in the case of the Borrower and the
Administrative Agent, and as set forth in an administrative questionnaire
delivered to the Administrative Agent in the case of the Lenders, or to such
other address as may be hereafter notified by the respective parties hereto:
The Borrower: DEPARTMENT 56, INC.
0 Xxxxxxx Xxxxx
0000 Xxxx Xxxx Xxxxxxx
Xxxx Xxxxxxx, Xxxxxxxxx 00000
Attention: Xxxx Xxxxxxx
Telecopy: 000-000-0000
Telephone: 000-000-0000
The Administrative Agent: THE CHASE MANHATTAN BANK
One Chase Manhattan Plaza
New York, New York
Attention: Xxxxxx Xxxxxx
Telecopy: 000-000-0000
Telephone: 000-000-0000
with a copy to: CHASE SECURITIES INC.
00 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxxx Xxxxxxxx
Telecopy: 000-000-0000
Telephone: 000-000-0000
10.3 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and no
delay in exercising, on the part of the Administrative Agent or any Lender, any
right, remedy, power or privilege hereunder or under the other Loan Documents
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.
10.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made hereunder, in the other Loan Documents and
in any document, certificate or statement delivered pursuant hereto or in
connection herewith shall survive the execution and delivery of this Agreement
and the making of the Loans and other extensions of credit hereunder.
10.5 PAYMENT OF EXPENSES AND TAXES. The Borrower agrees (a) to pay
or reimburse the Administrative Agent for all its reasonable and documented
out-of-pocket costs and expenses incurred in connection with the development,
preparation and execution of, and any amendment, supplement or modification to,
this Agreement and the other Loan Documents and any other documents prepared in
connection herewith or therewith, and the consummation and administration of the
transactions contemplated hereby and thereby, including the reasonable and
documented fees and disbursements of counsel to the Administrative Agent and
filing and recording fees and expenses, with statements with respect to the
foregoing to be submitted to the Borrower prior to the Closing Date (in the case
of amounts to be paid on the Closing Date) and from time to time thereafter on a
quarterly basis or such other periodic basis as the Administrative Agent shall
deem appropriate, (b) to pay or reimburse each Lender and the Administrative
Agent for all its reasonable and documented costs and expenses incurred in
connection with the enforcement or preservation of any rights under this
Agreement, the other Loan Documents and any such other documents, including the
reasonable and documented fees and disbursements of counsel to each Lender and
of counsel to the Administrative Agent, (c) to pay, indemnify, and hold each
Lender and the Administrative Agent harmless from, any and all recording and
filing fees and any and all liabilities with respect to, or resulting from any
delay in paying, stamp, excise and other taxes, if any, that may be
payable or determined to be payable in connection with the execution and
delivery of, or consummation or administration of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any
waiver or consent under or in respect of, this Agreement, the other Loan
Documents and any such other documents, and (d) to pay, indemnify, and hold
each Lender and the Administrative Agent and their respective officers,
directors, employees, affiliates, agents and controlling persons (each, an
"INDEMNITEE") harmless from and against any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, and
reasonable and documented costs, expenses or disbursements of any kind or
nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement, the other Loan Documents
and any such other documents, including any of the foregoing relating to the
use of proceeds of the Loans or the violation of, noncompliance with or
liability under, any Environmental Law applicable to the operations of the
Borrower, any of its Subsidiaries or any of the Properties and the reasonable
and documented fees and expenses of legal counsel in connection with claims,
actions or proceedings by any Indemnitee against any Loan Party under any
Loan Document (all the foregoing in this clause (d), collectively, the
"INDEMNIFIED LIABILITIES"), PROVIDED, that the Borrower shall have no
obligation hereunder to any Indemnitee with respect to Indemnified
Liabilities to the extent such Indemnified Liabilities are found by a final
and nonappealable decision of a court of competent jurisdiction to have
resulted from the gross negligence or willful misconduct of such Indemnitee.
Without limiting the foregoing, and to the extent permitted by applicable
law, the Borrower agrees not to assert and to cause its Subsidiaries not to
assert, and hereby waives and agrees to cause its Subsidiaries to so waive,
all rights for contribution or any other rights of recovery with respect to
all claims, demands, penalties, fines, liabilities, settlements, damages,
costs and expenses of whatever kind or nature, under or related to
Environmental Laws, that any of them might have by statute or otherwise
against any Indemnitee. All amounts due under this Section 10.5 shall be
payable not later than 30 days after written demand therefor. The agreements
in this Section 10.5 shall survive repayment of the Loans and all other
amounts payable hereunder.
10.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS AND ASSIGNMENTS. (a)
This Agreement shall be binding upon and inure to the benefit of the Borrower,
the Lenders, the Administrative Agent, all future holders of the Loans and their
respective successors and assigns, except that the Borrower may not assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of each Lender.
(b) Any Lender may, without the consent of the Borrower, in
accordance with applicable law, at any time sell to one or more banks, financial
institutions or other entities (each, a "PARTICIPANT") participating interests
in any Loan owing to such Lender, any Commitment of such Lender or any other
interest of such Lender hereunder and under the other Loan Documents. In the
event of any such sale by a Lender of a participating interest to a Participant,
such Lender's obligations under this Agreement to the other parties to this
Agreement shall remain unchanged, such Lender shall remain solely responsible
for the performance thereof, such Lender shall remain the holder of any such
Loan for all purposes under this Agreement and the other Loan Documents, and the
Borrower and the Administrative Agent shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and obligations under
this Agreement and the other Loan Documents. In no event shall any Participant
under any such participation have any right to approve any amendment or waiver
of any provision of any Loan Document, or any consent to any departure by any
Loan Party therefrom, except to the extent that such amendment, waiver or
consent would reduce the principal of, or interest on, the Loans or any fees
payable hereunder, or postpone the date of the final maturity of the Loans, in
each case to the extent subject to such participation. The Borrower agrees that
if amounts outstanding under this Agreement and the Loans are due or unpaid, or
shall have been declared or shall have become due and payable upon the
occurrence of an Event of Default, each Participant shall, to the maximum extent
permitted by applicable law, be deemed to have the right of setoff in respect of
its participating interest in amounts owing under this Agreement to the same
extent as if the amount of its participating interest were owing directly to it
as a Lender under this
Agreement, PROVIDED that, in purchasing such participating interest, such
Participant shall be deemed to have agreed to share with the Lenders the
proceeds thereof as provided in Section 10.7(a) as fully as if it were a
Lender hereunder. The Borrower also agrees that each Participant shall be
entitled to the benefits and subject to the obligations of Sections 2.16,
2.17 and 2.19 with respect to its participation in the Commitments and the
Loans outstanding from time to time as if it was a Lender; PROVIDED that, in
the case of Section 2.17, such Participant shall have complied with the
requirements of said Section and PROVIDED, FURTHER, that no Participant shall
be entitled to receive any greater amount pursuant to any such Section than
the transferor Lender would have been entitled to receive in respect of the
amount of the participation transferred by such transferor Lender to such
Participant had no such transfer occurred.
(c) Any Lender (an "ASSIGNOR") may, in accordance with applicable
law, at any time and from time to time assign to any Lender or any affiliate
thereof or, with the consent of the Borrower and the Administrative Agent
(which, in each case, shall not be unreasonably withheld or delayed), to an
additional bank, financial institution or other entity (an "ASSIGNEE") all or
any part of its rights and obligations under this Agreement pursuant to an
Assignment and Acceptance, executed by such Assignee, such Assignor and any
other Person whose consent is required pursuant to this paragraph, and delivered
to the Administrative Agent for its acceptance and recording in the Register;
PROVIDED that no such assignment to an Assignee (other than any Lender or any
affiliate thereof) shall be in an aggregate principal amount of less than
$5,000,000, and, after giving effect thereto, the assigning Lender shall have
commitments and Loans aggregating at least $5,000,000 (other than in the case of
an assignment of all of a Lender's interests under this Agreement), in each case
unless otherwise agreed by the Borrower and the Administrative Agent. Any such
assignment need not be ratable as among the Facilities. Upon such execution,
delivery, acceptance and recording, from and after the effective date determined
pursuant to such Assignment and Acceptance, (x) the Assignee thereunder shall be
a party hereto and, to the extent provided in such Assignment and Acceptance,
have the rights and obligations of a Lender hereunder with a Commitment and/or
Loans as set forth therein, and (y) the Assignor thereunder shall, to the extent
provided in such Assignment and Acceptance, be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance covering
all of an Assignor's rights and obligations under this Agreement, such Assignor
shall cease to be a party hereto). Notwithstanding any provision of this Section
10.6, the consent of the Borrower shall not be required for any assignment that
occurs when an Event of Default pursuant to Section 8(f) shall have occurred and
be continuing with respect to the Borrower.
(d) The Administrative Agent shall, on behalf of the Borrower,
maintain at its address referred to in Section 10.2 a copy of each Assignment
and Acceptance delivered to it and a register (the "REGISTER") for the
recordation of the names and addresses of the Lenders and the Commitment of, and
the principal amount of the Loans owing to, each Lender from time to time. The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Borrower, each other Loan Party, the Administrative Agent and the
Lenders shall treat each Person whose name is recorded in the Register as the
owner of the Loans and any Notes evidencing the Loans recorded therein for all
purposes of this Agreement. Any assignment of any Loan, whether or not evidenced
by a Note, shall be effective only upon appropriate entries with respect thereto
being made in the Register (and each Note shall expressly so provide). Any
assignment or transfer of all or part of a Loan evidenced by a Note shall be
registered on the Register only upon surrender for registration of assignment or
transfer of the Note evidencing such Loan, accompanied by a duly executed
Assignment and Acceptance, and thereupon one or more new Notes shall be issued
to the designated Assignee and the old Notes will be returned to the Borrower
marked "canceled".
(e) Upon its receipt of an Assignment and Acceptance executed by
an Assignor, an Assignee and any other Person whose consent is required by
Section 10.6(c), together with payment to the Administrative Agent of a
registration and processing fee of $4,000, the Administrative Agent shall (i)
promptly accept such Assignment and Acceptance and (ii) record the information
contained therein in the Register on the effective date determined pursuant
thereto.
(f) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this Section 10.6 concerning assignments of
Loans and Notes relate only to absolute assignments and that such provisions do
not prohibit assignments creating security interests, including any pledge or
assignment by a Lender of any Loan or Note to any Federal Reserve Bank in
accordance with applicable law.
(g) The Borrower, upon receipt of written notice from the relevant
Lender, agrees to issue Notes to any Lender requiring Notes to facilitate
transactions of the type described in paragraph (f) above.
10.7 ADJUSTMENTS; SET-OFF. (a) Except to the extent that this
Agreement expressly provides for payments to be allocated to a particular Lender
or to the Lenders under a particular Facility, if any Lender (a "BENEFITTED
LENDER") shall receive any payment of all or part of the Obligations owing to
it, or receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in Section 8(f), or otherwise), in a greater proportion than any
such payment to or collateral received by any other Lender, if any, in respect
of the Obligations owing to such other Lender, such Benefitted Lender shall
purchase for cash from the other Lenders a participating interest in such
portion of the Obligations owing to each such other Lender, or shall provide
such other Lenders with the benefits of any such collateral, as shall be
necessary to cause such Benefitted Lender to share the excess payment or
benefits of such collateral ratably with each of the Lenders; PROVIDED, HOWEVER,
that if all or any portion of such excess payment or benefits is thereafter
recovered from such Benefitted Lender, such purchase shall be rescinded, and the
purchase price and benefits returned, to the extent of such recovery, but
without interest.
(b) In addition to any rights and remedies of the Lenders provided
by law, each Lender shall have the right, without prior notice to the Borrower,
any such notice being expressly waived by the Borrower to the extent permitted
by applicable law, upon any amount becoming due and payable by the Borrower
hereunder (whether at the stated maturity, by acceleration or otherwise), to set
off and appropriate and apply against such amount any and all deposits (general
or special, time or demand, provisional or final), in any currency, and any
other credits, indebtedness or claims, in any currency, in each case whether
direct or indirect, absolute or contingent, matured or unmatured, at any time
held or owing by such Lender or any branch or agency thereof to or for the
credit or the account of the Borrower, as the case may be. Each Lender agrees
promptly to notify the Borrower and the Administrative Agent after any such
setoff and application made by such Lender, PROVIDED that the failure to give
such notice shall not affect the validity of such setoff and application.
10.8 COUNTERPARTS. This Agreement may be executed by one or more
of the parties to this Agreement on any number of separate counterparts, and all
of said counterparts taken together shall be deemed to constitute one and the
same instrument. Delivery of an executed signature page of this Agreement by
facsimile transmission shall be effective as delivery of a manually executed
counterpart hereof. A set of the copies of this Agreement signed by all the
parties shall be lodged with the Borrower and the Administrative Agent.
10.9 SEVERABILITY. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
10.10 INTEGRATION. This Agreement and the other Loan Documents
represent the agreement of the Borrower, the Administrative Agent and the
Lenders with respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by the Administrative Agent or any
Lender relative to subject matter hereof not expressly set forth or referred to
herein or in the other Loan Documents.
10.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
10.12 SUBMISSION TO JURISDICTION; WAIVERS. The Borrower hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any judgment
in respect thereof, to the non-exclusive general jurisdiction of the
courts of the State of New York, the courts of the United States for
the Southern District of New York, and appellate courts from any
thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have
to the venue of any such action or proceeding in any such court or that
such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to the Borrower, as the case may be at its address set forth
in Section 10.2 or at such other address of which the Administrative
Agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit
the right to xxx in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right
it may have to claim or recover in any legal action or proceeding
referred to in this Section any special, exemplary, punitive or
consequential damages.
10.13 ACKNOWLEDGEMENTS. 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) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to the Borrower arising out of or
in connection with this Agreement or any of the other Loan Documents,
and the relationship between Administrative Agent and Lenders, on 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 or among the Borrower and the
Lenders.
10.14 RELEASES OF GUARANTEES AND LIENS. (a) Notwithstanding
anything to the contrary contained herein or in any other Loan Document, the
Administrative Agent is hereby irrevocably authorized by each Lender and, upon
the Borrower's request shall, take any action requested by the Borrower having
the effect of (A) releasing any Collateral during a Positive Security Period or
(B) releasing any Collateral or Guarantee Obligations (i) to the extent
necessary to permit consummation of any transaction not prohibited by any Loan
Document or that has been consented to in accordance with Section 10.1, (ii)
under the circumstances described in paragraph (b) below, or (iii) with respect
to a Material Subsidiary, if such Material Subsidiary becomes a Subsidiary that
is not a Material Subsidiary and is not required to be a Material Subsidiary to
satisfy the requirements of such definition and upon delivery to the
Administrative Agent of reasonably detailed calculations demonstrating that such
Subsidiary is not a Material Subsidiary and is not required to be a Material
Subsidiary in order to satisfy the requirements of such definition.
(b) At such time as the Loans, the Reimbursement Obligations and
the other obligations under the Loan Documents (other than obligations under or
in respect of Hedge Agreements) shall have been paid in full, the Commitments
have been terminated and no Letters of Credit shall be outstanding, the
Collateral shall be released from the Liens created by the Security Documents,
and the Security Documents and all obligations (other than those expressly
stated to survive such termination) of the Administrative Agent and each Loan
Party under the Security Documents shall terminate, all without delivery of any
instrument or performance of any act by any Person.
10.15 CONFIDENTIALITY. Each of the Administrative Agent and each
Lender agrees to keep confidential all non-public information provided to it by
any Loan Party pursuant to this Agreement that is designated by such Loan Party
as confidential; PROVIDED that nothing herein shall prevent the Administrative
Agent or any Lender from disclosing any such information (a) to the
Administrative Agent, any other Lender, (b) to any Transferee or prospective
Transferee that agrees to comply with the provisions of this Section, (c) to its
employees, directors, agents, attorneys, accountants and other professional
advisors or those of any of its affiliates who by their acceptance thereof are
deemed to be bound by the provisions of this Section, (d) upon the request or
demand of any Governmental Authority, (e) in response to any order of any court
or other Governmental Authority or as may otherwise be required pursuant to any
Requirement of Law, (f) if requested or required to do so in connection with any
litigation or similar proceeding, (g) that has been publicly disclosed, (h) to
the National Association of Insurance Commissioners or any similar organization
or any nationally recognized rating agency that requires access to information
about a Lender's investment portfolio in connection with ratings issued
with respect to such Lender, or (i) in connection with the exercise of any
remedy hereunder or under any other Loan Document.
10.16 WAIVERS OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE
AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY
IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered by their proper and duly authorized officers
as of the day and year first above written. DEPARTMENT 56, INC.
By: /s/ XXXXXXX X. XXXXXXX
Name: Xxxxxxx X. Xxxxxxx
Title: V.P. - Finance
THE CHASE MANHATTAN BANK, as Administrative
Agent and as a Lender
By: /s/ XXXXXX XXXXXXXXX
Name: Xxxxxx Xxxxxxxxx
Title: Vice President
ABN AMRO BANK N.V., as Co-Documentation
Agent and as a Lender
By: /s/ XXXX X. HONDA
Name: Xxxx X. Honda
Title: Vice President
By: /s/ XXXXX X. XXXXXXX
Name: Xxxxx X. Xxxxxxx
Title: Assistant Vice President
THE FIRST NATIONAL BANK OF CHICAGO, as
Co-Documentation Agent and as a Lender
By: /s/ J. XXXXXXX XXXXX
Name: J. Xxxxxxx Xxxxx
Title: First Vice President
U.S. BANK NATIONAL ASSOCIATION, as Managing
Agent and as a Lender
By: /s/ XXXXXXX X. XXXXXXX
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
COMERICA BANK
By: /s/ XXXXXXX X. X'XXXXXX
Name: Xxxxxxx X. X'Xxxxxx
Title: Vice President
FIRSTAR BANK MILWAUKEE, N.A.
By: /s/ XXXXX X. XXXXXX
Name: Xxxxx X. Xxxxxx
Title: Commercial Banking Officer
XXXXXX TRUST AND SAVINGS BANK
By: /s/ XXXXXX X. XXXXXXXX
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
M&I XXXXXXXX & ILSLEY BANK
By: /s/ XXXXXX X. XXXXXXX
Name: Xxxxxx X. Xxxxxxx
Title: Asst. Vice President
THE FIFTH THIRD BANK
By: /s/ XXXXX X. XXXXXX
Name: Xxxxx X. Xxxxxx
Title: Corporate Banking Officer
NORWEST BANK MINNESOTA, N.A.
By: /s/ XXXXX X. VAN METRE
Name: Xxxxx X. Van Metre
Title: Vice President
MICHIGAN NATIONAL BANK
By: /s/ XXXXX XXXXXXXX
Name: Xxxxx Xxxxxxxx
Title: Relationship Manager
WACHOVIA BANK
By: /s/ XXXXXX X. XXXXXXXX
Name: Xxxxxx X. Xxxxxxxx
Title: Senior Vice President
BANK HAPOALIM B.M.
By: /s/ XXXXXX XXXXXX
Name: Xxxxxx Xxxxxx
Title: First Vice President
By: /s/ XXXXX XXXXXXXXX
Name: Xxxxx Xxxxxxxxx
Title: Vice President
