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EXHIBIT 10.1.1
CREDIT AGREEMENT
THIS CREDIT AGREEMENT dated as of October 31, 1996 ("this Agreement")
is entered into by HIBBETT SPORTING GOODS, INC., a Delaware corporation
("Hibbett"), HIBBETT TEAM SALES, INC., an Alabama corporation ("HTS"), and
SPORTS WHOLESALE, INC., an Alabama corporation ("SW"; HTS and SW are sometimes
together referred to as the "Initial Participating Entities"; Hibbett and the
Initial Participating Entities, together with all entities that hereafter
become Participating Entities, being hereafter sometimes together referred to
as the "Borrowers") and AMSOUTH BANK OF ALABAMA, an Alabama banking corporation
(the "Lender").
RECITALS
A. The Borrowers have applied to the Lender for an active
revolving credit facility in an aggregate principal amount outstanding not to
exceed $12,500,000 (the "Active Facility"), and a reserve revolving credit
facility amount in an aggregate principal amount outstanding not to exceed
$7,500,000 (the "Reserve Facility; the Active Facility and the Reserve Facility
are sometimes together referred to as the "Revolving Facility") the proceeds of
which are to be used by the Borrowers for general corporate purposes, including
seasonal working capital, and letters of credit issued in the ordinary course
of business.
B. The Lender is willing to make the Revolving Facility available
to the Borrowers only if, among other things, the Borrowers enter into this
Agreement and the other Loan Documents (as hereinafter defined).
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing Recitals, and to
induce the Lender to make the Revolving Facility available, the Borrowers and
the Lender agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1 For the purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires:
Unless otherwise specified, all accounting terms used herein
have the meanings assigned to them, and all computations herein
provided shall be made, in accordance with
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those generally accepted accounting principles applied in the
preparation of the audited financial statements of Hibbett referred to
in Section 5.3; provided that the financial statements required to be
delivered pursuant to clauses (1) and (2) of Section 7.3 shall be
prepared in accordance with generally accepted accounting principles
as in effect from time to time and provided further that quarterly
financial statements delivered pursuant to such clause (1) are not
required to contain footnote disclosure and shall be subject to
ordinary year-end audit adjustments. All references herein to
"generally accepted accounting principles" refer to such principles as
they exist at the date of application thereof.
All references in this Agreement to designated "Articles",
"Sections" and other subdivisions or to lettered Exhibits are to the
designated Articles, Sections and other subdivisions hereof and the
lettered Exhibits annexed hereto unless the context otherwise clearly
indicates. All Article, Section, other subdivision and Exhibit
captions herein are used for reference only and in no way limit or
describe the scope or intent of, or in any way affect, this Agreement.
The terms "herein", "hereof" and "hereunder" and other words
of similar import refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision.
The terms "include," "including" and similar terms shall be
construed as if followed by the phrase "without being limited to."
The terms defined in this article have the meanings attributed
to them in this article. Singular terms shall include the plural as
well as the singular, and vice versa. Words of masculine, feminine or
neuter gender shall mean and include the correlative words of other
genders.
All recitals set forth in this Agreement are hereby
incorporated in the operative provisions of this Agreement.
No inference in favor of or against any party shall be drawn
from the fact that such party or its counsel has drafted any portion
hereof.
All references herein to a separate instrument are to such
separate instrument as the same may be amended or supplemented from
time to time pursuant to the applicable provisions thereof.
Actual/360 Basis shall mean a method of computing interest or
other charges hereunder on the basis of an assumed year of 360 days
for actual number of days elapsed, meaning that interest or other
charges accrued for each day will be computed by multiplying the rate
applicable on that day by the unpaid principal balance (or other
relevant sum) on that day and dividing the result by 360.
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Advance shall mean a borrowing under the Revolving Facility
pursuant to Section 2.1.
Affiliate of any specified person shall mean any person
directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified person. For purposes of
this definition "control" when used with respect to any specified
person means the power to direct the management and policies of such
person, directly or indirectly, whether through the ownership of
voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the
foregoing.
Agreement shall mean, on any date, this Credit Agreement, as
originally in effect on the Closing Date and as thereafter from time
to time amended, supplemented, restated or otherwise modified and in
effect on such date.
Application shall have the meaning attributed to that term in
Section 2.3(b).
Assumption Agreement shall have the meaning attributed to that
term in Section 2.1(i).
Base Rate shall mean the higher of the (i) Federal Funds
Effective Rate plus 1/2% per annum and (ii) Prime Rate.
Base Rate Advances shall mean Advances that bear interest at
rates based upon the Base Rate.
Business Day shall mean (a) any day on which commercial banks
are not authorized or required to close in Birmingham, Alabama and (b)
if such day relates to the giving of notices or quotes in connection
with a borrowing of, a payment or prepayment of principal of or
interest on, a Conversion of or into, or an Interest Period for, a
LIBOR Advance or a notice by Hibbett with respect to any such
borrowing, payment, prepayment, Conversion or Interest Period, any day
on which dealings in Dollar deposits are carried out in the London
interbank market.
Capital Expenditures shall mean any expenditure for fixed
assets or that is properly chargeable to capital account in accordance
with generally accepted accounting principles.
Closing Date shall mean the date of this Agreement.
Consolidated Entity shall mean a person whose financial
statements are appropriately consolidated with Hibbett's financial
statements.
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Consolidated Net Income shall mean, with reference to any
period, the net income of Hibbett and its Consolidated Entities (on a
consolidated basis) for such period after eliminating all
non-recurring non-cash items of income and expense.
Convert, Conversion and Converted shall refer to a conversion
pursuant to Section 3.2 hereof of one Type of Loan into another Type
of Loan.
Credit Obligations shall mean the Revolving Facility
Obligations, the Letter of Credit Obligations and all other
obligations and debts of the Borrowers owing to the Lender and arising
under the terms of this Agreement, the Notes, the Applications and the
other Loan Documents, whether now or hereafter incurred, existing or
arising, including the principal amount of all Advances, all Letter of
Credit Borrowings and all Reimbursement Obligations, any sums expended
by the Lender in exercising the rights and remedies described in
Section 8.1, all accrued interest on Advances and Reimbursement
Obligations, and all costs, fees, charges and expenses incurred and
payable in connection therewith, including fees payable under the
terms of, or in connection with, this Agreement, and all other
obligations and debts owing to the Lender arising in connection with,
ancillary to, or in support of Advances and Letter of Credit
Borrowings, and all extensions, alterations, modifications, revisions
and renewals of any of the foregoing.
Current Maturities shall mean principal maturing or coming due
on Funded Debt (other than the Credit Obligations) during the next
succeeding period of twelve calendar months.
Debt of any person shall mean, without duplication, (i) the
Credit Obligations and all other indebtedness, whether or not
represented by bonds, debentures, notes or other securities, for the
repayment of borrowed money or for reimbursement of drafts drawn or
available to be drawn under letters of credit (provided that letters
of credit issued to secure trade obligations, workmen's compensation
or similar liabilities and other obligations (not constituting Debt)
arising in the ordinary course of business shall count as Debt only to
the extent that the aggregate face amount of such letters of credit
exceeds $2,000,000) and banker's acceptances issued for the account of
such person, (ii) all indebtedness deferred for the payment of the
purchase price of property or assets purchased (except accounts
payable arising in the ordinary course of business and not incurred
through the borrowing of money), (iii) all capitalized lease
obligations, (iv) all indebtedness secured by any mortgage or pledge
of, or Lien on, property of such person, whether or not the
indebtedness secured thereby shall have been assumed, (v) Guaranteed
Obligations, (vi) all obligations with respect to any conditional sale
contract or title retention agreement, and (vii) all obligations with
respect to interest rate swap agreements.
Default shall mean an Event of Default or an event that with
notice or lapse of time or both would become an Event of Default.
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Dollars and the symbol $ shall mean dollars constituting legal
tender for the payment of public and private debts in the United
States of America.
EBITDA for any period shall mean Consolidated Net Income (or
the net deficit, if expenses and charges exceed revenues and other
proper income credits) for such period, plus amounts that have been
deducted for (i) depreciation, (ii) amortization, (iii) Interest
Expense and (iv) income and profit taxes in determining Consolidated
Net Income for such period.
EBITDAR for any period shall mean Consolidated Net Income (or
the net deficit, if expenses and charges exceed revenues and other
proper income credits) for such period, plus amounts that have been
deducted for (i) Interest Expense, (ii) Operating Lease Payments,
(iii) depreciation, (iv) amortization and (v) income and profit taxes
in determining Consolidated Net Income for such period.
ERISA shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time, and the regulations promulgated
and rulings issued thereunder.
ERISA Affiliate shall mean, as of any date, any corporation,
partnership or other trade or business (whether or not incorporated)
under common control with Hibbett and which together with Hibbett is
treated as single employer under Section 414 of the Internal Revenue
Code, as amended.
Event of Default shall have the meaning assigned to such term
in Article 8 hereof.
Federal Funds Effective Rate shall mean, for any day, the rate
per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by
Federal funds brokers on such day, as published by the Federal Reserve
Bank of Atlanta on the Business Day next succeeding such day, provided
that (a) if the day for which such rate is to be determined is not a
Business Day, the Federal Funds Effective Rate for such day shall be
such rate on such transactions on the next preceding Business Day as
so published for any Business Day, and (b) if such rate is not so
published for any Business Day, the Federal Funds Effective Rate for
such Business Day shall be the average rate charged to the Lender on
such Business Day on such transactions as determined by the Lender.
Fixed Rate shall mean the Quoted Cost of Funds Rate or the
LIBOR-Based Rate.
Fixed Rate Segment shall mean a Segment to which a Fixed Rate
is (or is proposed to be) applicable.
Funded Debt shall mean all Debt of Hibbett and the
Consolidated Entities, on a consolidated basis, that matures by its
terms more than one year after, or is renewable
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or extendible at the option of the debtor to a date more than one year
after, the date as of which Funded Debt is being determined.
Governmental Authority shall mean any national, federal,
state, county, municipal or other agency, authority, department,
commission, bureau, board, court or instrumentality thereof.
Governmental Requirements shall mean all laws, rules,
regulations, requirements, ordinances, judgments, decrees, codes and
orders of any Governmental Authority applicable to the Borrowers or
any Consolidated Entity.
Guaranteed Obligations of any person shall mean all guaranties
(including guaranties of guaranties and guaranties of dividends and
other monetary obligations), endorsement assumptions and other
contingent obligations with respect to, or to purchase or otherwise
pay or acquire, Debt of others.
Hazardous Material shall mean (a) any asbestos or insulation
or other material composed of or containing asbestos and (b) any
hazardous, toxic or dangerous waste, substance or material defined as
such in the Comprehensive Environmental Response, Compensation and
Liability Act, any so-called "Superfund" or "Superlien" law, or any
other Governmental Requirement regulating, relating to, or imposing
liability or standards of conduct concerning, any hazardous, toxic or
dangerous waste, substance or material. This definition refers to the
amounts of such waste, substance or material present at a particular
facility in excess of the reportable quantity or threshold planning
quantity, if applicable, for such waste, substance or material as may
be listed in such act, law or other Governmental Requirement described
in the foregoing sentence.
Immaterial Subsidiary shall mean any Subsidiary of the
Borrowers that either (a) has assets with a gross fair market value of
less than $250,000 and gross revenues (determined for the most
recently ended period of twelve consecutive fiscal months) of less
than $250,000 or (b) has been organized by the Borrowers as an
acquisition vehicle solely for the purpose of merging with another
person in connection with an acquisition permitted under Section
7.7(15).
Interest Expense shall mean all interest incurred on Debt
(including obligations payable under capitalized leases attributable
to interest) during the period in question.
Interest Period shall mean:
(a) with respect to any LIBOR Advance, each period
commencing on the date such LIBOR Advance is made or Converted from an
Advance of another Type or the last day of the next preceding Interest
Period for such Advance and ending on the numerically corresponding
day in the first, second, third, or sixth calendar month thereafter,
as Hibbett may select as provided in Section 3.2 hereof, except that
each Interest Period that commences on the last Business Day of a
calendar month (or on any
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day for which there is no numerically corresponding day in the
appropriate subsequent calendar month) shall end on the last Business
Day of the appropriate subsequent calendar month; and
(b) with respect to any Quoted Cost of Funds Rate
Advance, the period commencing on the date such Quoted Cost of Funds
Rate Advance is made and ending on any Business Day up to 29 days
thereafter, as Hibbett may select as provided in Section 3.2 hereof.
Notwithstanding the foregoing: (i) if any Interest Period for any
LIBOR Advance would otherwise end after the Termination Date, such
Interest Period shall end on the Termination Date; (ii) each Interest
Period that would otherwise end on a day which is not a Business Day
shall end on the next succeeding Business Day (or, in the case of an
Interest Period for a LIBOR Advance, if such next succeeding Business
Day falls in the next succeeding calendar month, on the next preceding
Business Day); and (iii) notwithstanding clauses (i) and (ii) above,
no Interest Period for any LIBOR Advance shall have a duration of less
than one month and, if the Interest Period for any LIBOR Advance would
otherwise be a shorter period, such Advance shall not be available
hereunder for such period.
Letter of Credit Borrowings shall mean as of any date the
maximum aggregate amount that the Lender could be required to pay
under drafts that could be, or have been, properly drawn in compliance
with the terms of all Letters of Credit outstanding on such date,
other than drafts that have been drawn and paid.
Letter of Credit Obligations shall mean (a) the Letter of
Credit Borrowings and (b) the Reimbursement Obligations and the
Borrowers' other obligations under this Agreement and the Applications
with respect to Letters of Credit or drawings made thereunder,
including obligations with respect to all principal, interest, fees
and other charges related thereto.
Letters of Credit shall mean all letters of credit issued on
or after the Closing Date by the Lender for the account of the
Borrowers or any of them under this Agreement.
Liabilities shall mean all Debt and all other items (including
taxes accrued as estimated) that, in accordance with generally
accepted accounting principles, would be included in determining total
liabilities as shown on the liabilities side of a balance sheet.
LIBOR Advances shall mean Advances on which interest rates are
determined on the basis of LIBOR Based Rates.
LIBOR-Based Rate shall mean a rate per annum equal to the
LIBOR Quote plus 100 basis points.
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LIBOR Quote shall mean, with respect to any time at which the
LIBOR-Based Rate is to be determined, the rate of interest determined
by the Lender by reference to the Xxxxxx-Xxxxxx Money Center reporting
service or other comparable financial information reporting service at
the time employed by the Lender as of 10:00 a.m. (Birmingham, Alabama
time) two (2) Business Days prior to the commencement of the Interest
Period, in the approximate amount of the Segment that is to bear
interest at the LIBOR-Based Rate, having a maturity comparable to the
Interest Period during which the LIBOR-Based Rate is to be in effect.
LIBOR Reserve Requirement shall mean the percentage (expressed
as a decimal) prescribed by the Board of Governors of the Federal
Reserve System (or any successor), on the date on which the
LIBOR-Based Rate is determined, for determining the reserve
requirements of the Lender (including any marginal, emergency,
supplemental, special or other reserves) with respect to liabilities
relating to time deposits purchased in the London interbank market
having a maturity equal to the period during which the LIBOR-Based
Rate will be in effect and in an amount equal to the Segment involved,
without any benefit or credit for any proration, exemptions or offsets
under any now or hereafter applicable regulations.
Lien shall mean any mortgage, pledge, assignment, charge,
encumbrance, lien, security interest or financing lease.
Loan Documents shall mean this Agreement, any Assumption
Agreement, the Notes, the Applications and all other agreements,
instruments and documents executed or delivered at any time in
connection with the Credit Obligations, or to evidence or secure any
of the Credit Obligations.
Loans shall mean the aggregate outstanding amount of all
Advances, Letter of Credit Borrowings and Reimbursement Obligations,
and all extensions and renewals thereof.
Margin Stock shall have the meaning attributed to that term in
Regulation U of the Federal Reserve Board, as amended.
Material Adverse Change shall mean a material adverse change
in the financial condition, results of operations or business of
Hibbett and its Subsidiaries, taken as a whole.
Material Adverse Effect shall mean a material adverse effect
upon (i) the financial condition, results of operations or business of
Hibbett and its Subsidiaries, taken as a whole, (ii) the ability of
Hibbett and the Participating Entities, taken as a whole, to perform
their obligations under this Agreement or any of the other Loan
Documents or (iii) the legality, validity or enforceability of this
Agreement or any of the other Loan Documents or the rights and
remedies of the Lender hereunder and thereunder.
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Material Contract shall mean any contract or agreement (i) to
which Hibbett or any of its Subsidiaries is a party, by which any of
them or their respective properties is bound or to which any of them
is subject and (ii) that is required to be filed as an exhibit to
Hibbett's registration statements or periodic reports (including on
Forms 10-Q and 10-K) submitted to the Securities and Exchange
Commission under the Securities Act of 1933, as amended, and the rules
and regulations from time to time promulgated thereunder, or under the
Exchange Act of 1934.
Maximum Active Facility Amount shall mean $12,500,000.
Maximum Credit Amount shall mean the total of the Maximum
Active Facility Amount and the Maximum Reserve Facility Amount.
Maximum Reserve Facility Amount shall mean $7,500,000 as such
amount may be reduced from time to time pursuant to Section 2.6.
Notes shall have the meaning assigned to such term in Section
2.1(a) hereof.
Operating Lease Payments shall mean all amounts payable under
any lease or rental agreement (other than obligations under capital
leases) during the period in question (but excluding, in any event,
amounts paid in respect of taxes, utilities, insurance, common area
maintenance and other like charges associated with the lease and
rental of real and personal property).
Opinion of Counsel shall mean a favorable written opinion of
an attorney or firm of attorneys duly licensed to practice law in the
jurisdiction the laws of which are applicable to the legal matters in
question and who is not an employee of the Borrowers or of an
Affiliate of the Borrowers.
Participating Entity shall mean any person that hereafter
executes and delivers to the Lender an Assumption Agreement and all
other documents necessary to assume joint and several liability as to
the Credit Obligations.
PBGC shall mean the Pension Benefit Guaranty Corporation and
any successor thereto.
Permitted Encumbrances shall mean:
(1) Liens for taxes, assessments and other governmental
charges that are not delinquent or that are being contested in good
faith by appropriate proceedings duly pursued, and for which adequate
reserves have been established and are being maintained;
(2) mechanics', materialmen's, contractors', landlords'
or other similar liens arising in the ordinary course of business,
securing obligations that are not delinquent or
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that are being contested in good faith by appropriate proceedings duly
pursued, and for which adequate reserves have been established and are
being maintained;
(3) restrictions, exceptions, reservations, easements,
conditions, limitations and other matters of record that do not
materially adversely affect the value or utility of the property
affected thereby or the use to which such property is being put;
(4) Liens and other matters approved in writing by the
Lender;
(5) Liens for purchase money obligations or capital
leases provided that such Liens attach only to the property so
purchased or leased;
(6) Liens existing on any asset prior to the acquisition
thereof by a Borrower and not created in contemplation of such
acquisition;
(7) deposits under workmen's compensation, unemployment
insurance and Social Security laws;
(8) Liens arising out of any litigation, legal proceeding
or judgment that are not delinquent or that are being contested in
good faith by appropriate proceedings duly pursued, and for which
adequate reserves have been established and are being maintained, and
any pledges or deposits to secure, or in lieu of, any surety, stay or
appeal bond with respect to any litigation, legal proceeding or
judgment;
(9) the existing Liens described in Exhibit A hereto; and
(10) Liens arising out of the refinancing, extension,
renewal or refunding of any Debt secured by Liens permitted by any of
the foregoing clauses (5) or (6), provided that such Debt is not
increased other than by an amount equal to any reasonable financing
fees and is not secured by any additional assets.
Permitted Investments shall mean:
(1) direct obligations of, or obligations the payment of
which is guaranteed by, the United States of America or an interest in
any trust or fund that invests solely in such obligations or
repurchase agreements, properly secured, with respect to such
obligations;
(2) direct obligations of agencies or instrumentalities
of the United States of America having a rating of A or higher by
Standard & Poor's Ratings Group or A2 or higher by Xxxxx'x Investors
Service, Inc.;
(3) a certificate of deposit issued by, or other
interest-bearing deposits with, a bank having its principal place of
business in the United States of America and having equity capital of
not less than $250,000,000;
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(4) certificates of deposit issued by, or other
interest-bearing deposits with, any other bank organized under the
laws of the United States of America or any state thereof, provided
that such deposit is either (i) insured by the Federal Deposit
Insurance Corporation or (ii) properly secured by such bank by
pledging direct obligations of the United States of America having a
market value not less than the face amount of such deposits;
(5) commercial paper maturing within 270 days of the
acquisition thereof and, at the time of acquisition, having a rating
of A-1 or higher by Standard & Poor's Ratings Group, or P-1 or higher
by Xxxxx'x Investors Service, Inc.;
(6) eligible banker's acceptances, repurchase agreements
and tax-exempt municipal bonds having a maturity of less than one
year, in each case having a rating of, or that is the full recourse
obligation of a person whose senior debt is rated, A or higher by
Standard & Poor's Ratings Group or A2 or higher by Xxxxx'x Investors
Service, Inc.;
(7) any other investment having a rating of A or higher
or A-1 or higher by Standard & Poor's Ratings Group or A2 or higher or
P-1 or higher by Xxxxx'x Investors Service, Inc;
(8) mutual funds, the stated investment policies of which
require substantially all assets in such mutual funds to be invested
in one or more other itemized Permitted Investments;
(9) investments consisting of loans and advances by any
of the Borrowers to (i) the Consolidated Entities and (ii) employees
for reasonable travel, relocation, business expenses and other various
purposes in the ordinary course of business not exceeding $250,000 in
the aggregate; and
(10) other investments made with the express prior written
approval of the Lender.
person (whether or not capitalized) shall include natural
persons, sole proprietorships, corporations, trusts, unincorporated
organizations, associations, companies, institutions, entities, joint
ventures, partnerships, limited liability companies and Governmental
Authorities.
Plan shall mean an employee pension benefit plan as defined in
Section 3(2) of ERISA which is covered by Title IV of ERISA or subject
to the minimum funding standards under Section 412 of the Internal
Revenue Code and which is maintained, or contributed to, by Hibbett or
any ERISA Affiliate for employees of Hibbett or any ERISA Affiliate.
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Prime Rate shall mean that rate of interest designated by the
Lender from time to time as its "prime rate", it being expressly
understood and agreed that its prime rate is merely an index rate used
by the Lender to establish lending rates and is not necessarily the
Lender's most favorable lending rate, and that changes in the Lender's
prime rate are discretionary with the Lender. Any change in the Prime
Rate shall be effective as of the date of such change.
Principal Office shall mean the principal office of the Lender
located at AmSouth-Sonat Tower, 0000 Xxxxx Xxxxxx Xxxxx, Xxxxxxxxxx,
Xxxxxxx 00000, or such other location in Jefferson County, Alabama
designated by the Lender by notice to the Borrower.
Quarterly Payment Date shall have the meaning attributed to
that term in Section 2.4.
Quoted Cost of Funds Rate shall mean the per annum rate of
interest designated by the Lender as its quoted cost of funds
determined by the Lender in its sole discretion (provided market
conditions and other considerations allow the Lender to quote such
rate), plus 100 basis points.
Quoted Cost of Funds Rate Advances shall mean Advances that
bear interest at rates based upon the Quoted Cost of Funds Rate.
Regulatory Change shall mean on or after the date hereof, the
adoption of any applicable law, rule or regulation, or any change in
any applicable law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by the Lender
with any request or directive (whether or not having the force of law)
of any such authority, central bank or comparable agency with respect
to maintaining LIBOR Advances or establishing reserves for Letters of
Credit, as the case may be.
Reimbursement Obligation shall mean at any time the obligation
of the Borrowers with respect to any Letter of Credit to reimburse the
Lender for amounts theretofore paid by the Lender pursuant to a
drawing under such Letter of Credit.
Request for Advance or Interest Rate Election shall have the
meaning attributed to that term in Section 2.2.
Revolving Facility shall mean the credit facility made
available to the Borrower by the Lender under the terms of Article 2
in an aggregate amount of up to $20,000,000 as reduced by the Borrower
pursuant to Section 2.6 hereof.
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Revolving Facility Obligations shall mean the outstanding
principal amount of all Advances, all interest accrued thereon, all
costs, charges, fees and expenses payable in connection therewith and
all extensions and renewals thereof.
Segment shall mean a portion of the Advances (or all thereof)
with respect to which a particular interest rate is (or is proposed to
be) applicable.
Solvent shall mean, as to any person, on a particular date,
that such person has capital sufficient to carry on its business and
transactions and all business and transactions in which it is about to
engage, is able to pay its debts as they mature, owns property having
a value, both at fair valuation and at present fair saleable value,
greater than the amount required to pay its probable liability on
existing debts as they become mature (including known reasonable
contingencies and contingencies that should be included in notes of
such person's financial statements pursuant to generally accepted
accounting principles), and does not intend to, and does not believe
that it will, incur debts or probable liabilities beyond its ability
to pay such debts or liabilities as they mature.
Stores shall mean the existing and hereafter acquired or
opened retail sporting goods stores owned and operated by the
Borrowers.
Subsidiary shall mean any corporation or other entity of which
securities or other ownership interests having ordinary voting power
to elect a majority of the board of directors or other persons
performing similar functions are at the time directly or indirectly
owned by Hibbett, and which is a Consolidated Entity.
Termination Date means October 31, 1999.
Type shall have the meaning as assigned to such term in
Section 1.2 hereof.
SECTION 1.2 TYPES OF ADVANCES. The "Type" of an Advance refers to
whether such Advance is a Base Rate Advance, a LIBOR Advance, a Quoted Cost of
Funds Rate Advance, each of which constitutes a Type.
ARTICLE 2
REVOLVING FACILITY TERMS
SECTION 2.1 ADVANCES.
(a) From and after the Closing Date to (but not including) the
Termination Date, on the terms and subject to the conditions set forth in this
Agreement, the Lender agrees to lend to the Borrowers, jointly and severally,
and the Borrowers may borrow, repay and reborrow, an amount not exceeding the
difference between (i) the Maximum Credit Amount in effect from
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time to time, and (ii) the sum of the then outstanding (x) Letter of Credit
Borrowings and (y) Reimbursement Obligations; provided, however, that no more
than seven (7) different Interest Periods may be outstanding at the same time
(for which purpose Interest Periods described in different lettered clauses of
the definition of the term "Interest Period" shall be deemed to be different
Interest Periods even if they are coterminous). All Advances made by the
Lender to the Borrowers under this Agreement shall be treated as Advances under
the Active Facility until the Maximum Active Facility Amount is exceeded and
then as Advances under the Reserve Facility. All Advances made by the Lender
to the Borrowers under this Agreement with respect to the Revolving Facility
shall be evidenced by promissory notes for the Lender dated the Closing Date
payable to the order of the Lender, duly executed by the Borrowers, and in the
aggregate maximum principal amount of $20,000,000 (the "Notes"). The date,
amount, Type, interest rate and duration of Interest Period (if applicable) of
each Advance made by the Lender to the Borrowers, and each payment made on
account of the principal thereof, shall be recorded by the Lender on its books;
provided that the failure of the Lender to make, or any error by the Lender in
making, any such recordation shall not affect the obligations of the Borrowers
to make a payment when due of any amount owing hereunder or under the Notes
with respect to the Advances to be evidenced by the Notes. The Advances shall
bear interest as provided in Article 3 below. The unpaid principal amount of
all Loans hereunder shall not exceed the Revolving Facility.
(b) If a draft drawn under any Letter of Credit is paid by the
Lender, and the Borrowers fail or refuse to reimburse the Lender for such
payment, as required by Section 2.3, on or before the close of business on the
next Business Day after demand is made by the Lender on the Borrowers for such
reimbursement, the Borrowers hereby authorize the Lender, without the
requirement of notice to the Borrowers, to satisfy the Reimbursement Obligation
created by the payment of such draft by making Advances to the Borrowers under
the Revolving Facility with interest at the Base Rate. Such Advances shall not
be subject to the provisions of Section 2.2.
(c) Each Participating Entity, separately and severally, hereby
appoints and designates Hibbett as its agent and attorney-in-fact to act on
behalf of it for all purposes of the Loan Documents. Hibbett shall have
authority to exercise on behalf of each Participating Entity all rights and
powers that Hibbett deems necessary, incidental or convenient in connection
with the Loan Documents, including the authority to execute and deliver
certificates, documents, agreements and other instruments referred to or
provided for in the Loan Documents, request Advances and elect interest rate
options hereunder, receive all proceeds of Advances, give all notices,
approvals and consents required or requested from time to time by the Lender
and take any other actions and steps that each Participating Entity could take
for its own account in connection with the Loan Documents from time to time, it
being the intent of each Participating Entity to grant to Hibbett plenary power
to act on behalf of each Participating Entity in connection with and pursuant
to the Loan Documents. The appointment of Hibbett as agent and
attorney-in-fact for each Participating Entity hereunder shall be coupled with
an interest and be irrevocable so long as any Loan Document shall remain in
effect. The Lender need not obtain each Participating Entity's consent or
approval for any act taken by Hibbett pursuant to any Loan Document, and all
such acts shall bind and obligate Hibbett and each Participating Entity,
jointly and severally. Each Participating Entity forever waives and releases
any claim (whether now
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or hereafter arising) against the Lender based on any claim of Hibbett's lack
of authority to act on behalf of each Participating Entity in connection with
the Loan Documents.
(d) The liability of each Participating Entity with respect to the
Credit Obligations shall be limited to an amount equal to the greater of (i)
$1.00 less than the greatest of (A) the Participating Entity's Net Worth (as
hereinafter defined) as of the end of the most recently concluded fiscal
quarter of the Participating Entity ended on or prior to the date the
Participating Entity became a Borrower, (B) the highest Net Worth of the
Participating Entity at the end of any fiscal quarter ending after the
Participating Entity became a Borrower and prior to the earlier of the date of
the commencement of a case under the United States Bankruptcy Code (the
"Bankruptcy Code") involving the Participating Entity or the date enforcement
of this Agreement or any of the other Loan Documents is sought against the
Participating Entity and (C) the Net Worth of the Participating Entity at the
earlier of the date of the commencement of a case under the Bankruptcy Code
involving the Participating Entity or the date enforcement of this Agreement or
any of the other Loan Documents is sought against the Participating Entity; or
(ii) the amount that in a legal proceeding brought within the applicable
limitations period is determined by the final, non-appealable order of a court
having jurisdiction over the issue and the applicable parties to be the amount
of value or benefit given by the Lender, or received by the Participating
Entity, in exchange for the obligations of the Participating Entity under this
Agreement and the other Loan Documents. As used in this subsection 2.1(c),
"Net Worth" shall mean (x) the fair value of the property of the Participating
Entity from time to time (taking into consideration the value, if any, of
rights of subrogation, contribution and indemnity), minus (y) the total
liabilities of the Participating Entity (including contingent liabilities
[discounted in appropriate instances], but excluding liabilities of the
Participating Entity under this Agreement and the other Loan Documents) from
time to time.
(e) Each Initial Participating Entity (i) acknowledges that it has
had full and complete access to the underlying papers relating to the Credit
Obligations and all other papers executed by any person in connection with the
Credit Obligations, has reviewed them and is fully aware of the meaning and
effect of their contents; (ii) is fully informed of all circumstances that bear
upon the risks of executing this Agreement and the other Loan Documents that a
diligent inquiry would reveal; (iii) has adequate means to obtain from Hibbett
on a continuing basis information concerning Hibbett's financial condition and
is not depending on the Lender to provide such information, now or in the
future; and (iv) agrees that the Lender shall not have any obligation to advise
or notify it or to provide it with any data or information.
(f) Each Initial Participating Entity hereby agrees that its
obligations and liabilities with respect to the Credit Obligations are joint
and several with Hibbett, continuing, absolute and unconditional (subject to
the provisions of subsection (d) of this section). Without limiting the
generality of the foregoing, the obligations and liabilities of each Initial
Participating Entity with respect to the Credit Obligations shall not be
released, discharged, impaired, modified or in any way affected by (i) the
invalidity or unenforceability of any Loan Document, (ii) the failure of the
Lender to give each Initial Participating Entity a copy of any notice given to
Hibbett, (iii) any modification, amendment or supplement of any obligation,
covenant or agreement contained in any Loan Document, (iv) any compromise,
settlement, release or termination of any obligation, covenant or agreement in
any Loan Document, (v) any waiver of
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payment, performance or observance by or in favor of Hibbett of any obligation,
covenant or agreement under any Loan Document, (vi) any consent, extension,
indulgence or other action or inaction, or any exercise or non-exercise of any
right, remedy or privilege with respect to any Loan Document, (vii) the
extension of time for payment or performance of any of the Credit Obligations,
(viii) any other matter that might otherwise be raised in avoidance of, or in
defense against an action to enforce, the obligations of each Initial
Participating Entity under this Agreement, the Revolving Facility, the Notes or
any other Loan Document.
(g) None of the Borrowers will exercise any rights that it may
have or acquire by way of subrogation under this Agreement or any of the other
Loan Documents or the Subrogation and Contribution Agreement referred to in
subsection (h) below, by any payment made hereunder or under any of the other
Loan Documents or otherwise, until all the Credit Obligations have been paid in
full and this Agreement has been terminated and is no longer subject to
reinstatement under Section 9.8. If any amount shall be paid to a Borrower on
account of any such subrogation rights at any time when all of the Credit
Obligations shall not have been paid in full and this Agreement terminated,
such amount shall be held in trust for the benefit of the Lender and shall be
paid forthwith to the Lender to be credited and applied upon the Credit
Obligations, whether matured or unmatured, in accordance with the terms of the
Loan Documents.
(h) The Borrowers will not amend or waive any provision of the
Subrogation and Contribution Agreement dated the Closing Date entered into by
the Borrowers nor consent to any departure from such Subrogation and
Contribution Agreement, without having obtained the prior written consent of
the Lender to such amendment, waiver or consent.
(i) Each person that is to become after the Closing Date a
Participating Entity shall, at the time it is to become a Participating Entity,
execute and deliver to the Lender, in accordance with the provisions of Section
7.13, an Assumption Agreement in the form attached hereto as Exhibit E
("Assumption Agreement").
SECTION 2.2 ADVANCES OF LOANS. Except as otherwise provided in
Section 2.1(b) or except as may be consistent with the provisions of the
Control Account Credit Line Service Agreement executed by the Borrowers in
favor of the Lender, Advances shall be made no more frequently than once in
each week, shall be in an amount not less than $250,000 and shall be in an
integral multiple of $50,000. Each request for an Advance must be received by
the Lender not later than (x) 11:00 a.m., Birmingham, Alabama time, at least
three Business Days prior to the date of any LIBOR Advance and (y) 11:30 a.m.,
Birmingham, Alabama time, on the day which such Advance is to be made in the
case of a Base Rate Advance or Quoted Cost of Funds Rate Advance. Each request
for an Advance shall be in the form attached hereto as Exhibit B ("Request for
Advance or Interest Rate Election") and shall specify the amount of the Advance
requested, the date as of which the Advance is to be made, the amount of the
Advance, if any, attributed to the Reserve Facility and shall provide the
interest rate information called for in Section 3.2. The Lender shall accept
from the Borrowers telephonic requests for Advances without requiring the
submission of a Request for Advances or Interest Rate Election form. Any
request for Advances not made in writing shall be promptly confirmed in
writing. Not later than
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1:00 P.M. Birmingham, Alabama time, on the date specified for each Advance
hereunder, the Lender shall make available the amount of the Advance to be made
by it on such date to the Borrowers by depositing the proceeds thereof into an
account with the Lender in the name of the Borrowers. The Lender's obligation
to make Advances shall terminate, if not sooner terminated pursuant to other
provisions of this Agreement, on the Termination Date. The Lender shall have
no obligation to make Advances if a Default has occurred and is continuing.
Each Request for Advance or Interest Rate Election, whether submitted under
this Section 2.2 in connection with a requested Advance or under Section 3.2 in
connection with an interest rate election, shall be signed by an officer of
Hibbett designated as authorized to sign and submit Request for Advance or
Interest Rate Election forms in the documents submitted to the Lender pursuant
to Section 6.3 below. Hibbett may, from time to time, by notice to the Lender,
terminate the authority of any person to submit Request for Advance or Interest
Rate Election forms and designate new or additional persons to so act by
delivering to the Lender a certificate of the Secretary or Assistant Secretary
of Hibbett certifying the incumbency and specimen signature of each such
person. The Lender shall be entitled to rely conclusively upon the authority
of any person so designated by Hibbett.
SECTION 2.3 LETTER OF CREDIT BORROWINGS.
(a) From and after the Closing Date to and including thirty (30)
Business Days prior to the Termination Date, the Lender shall, upon the terms
and subject to the conditions of this Agreement, issue Letters of Credit from
time to time for the account of the Borrowers in such amounts as may be
requested by the Borrowers, up to a maximum aggregate amount of Letter of
Credit Borrowings at any one time outstanding that, when added to (i) the then
outstanding Reimbursement Obligations plus (ii) the then outstanding Advances,
would not exceed the Maximum Credit Amount then in effect; provided, however,
that no Letter of Credit shall be issued if the issuance thereof would cause
the aggregate outstanding amount of Letter of Credit Borrowings and
Reimbursement Obligations to exceed $5,000,000.
(b) Each request by the Borrowers for the issuance of a Letter of
Credit (an "Application") shall be submitted to the Lender by Hibbett, on
behalf of itself and each Participating Entity, at least five Business Days
prior to the date the Letter of Credit is to be issued, shall be on the
Lender's then standard application form for letters of credit, shall obligate
the Borrowers to reimburse the Lender on demand for any amounts drawn under a
Letter of Credit and such other sums as may be provided for therein, and shall
be executed by a duly authorized officer of Hibbett, on behalf of itself and
each Participating Entity. In the event of any conflict between the provisions
of any Application and the provisions of this Agreement, the provisions of this
Agreement shall govern.
(c) Each Letter of Credit shall (i) be a letter of credit issued
in the ordinary course of the business of the Borrowers; (ii) expire by its
terms on a date not later than thirty (30) Business Days prior to the
Termination Date; (iii) be in an amount that complies with paragraph (a) of
this Section 2.3; and (iv) contain such further provisions and conditions as
are standard and reasonable for ordinary irrevocable letters of credit and as
may be requested by Hibbett, on behalf of itself and each Participating Entity,
and reasonably satisfactory to the Lender.
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(d) The Borrowers shall pay to the Lender a letter of credit fee
payable on each Quarterly Payment Date in arrears equal to the rate of one
percent (1%) per annum times the average daily aggregate amount of Letter of
Credit Borrowings outstanding from time to time during the most recently ended
calendar quarter.
The Borrowers acknowledge that the Lender as issuer of the Letters of
Credit will be required by applicable rules and regulations of the Federal
Reserve Board to maintain reserves for its liability to honor draws made
pursuant to a Letter of Credit. The Borrowers agree to reimburse the Lender
promptly for all additional costs incurred by reason of any Regulatory Change
that the Lender may hereafter incur solely by reason of its acting as issuer of
the Letters of Credit and its being required to reserve for such liability, it
being understood by the Borrowers that other interest and fees payable under
this Agreement do not include compensation of the Lender for such reserves.
The Lender shall furnish to the Borrowers, at the time of its demand for
payment of such additional costs, the computation of such additional cost,
which shall be conclusive absent demonstrable error, provided that such
computations are made on a reasonable basis.
The Borrowers shall pay to the Lender administrative and other fees,
if any, in connection with the Letters of Credit in such amounts and at such
times as the Lender and the Borrowers shall agree from time to time.
(e) If a draft drawn under a Letter of Credit is presented to the
Lender and the Lender honors such draft, the Borrowers shall, promptly upon
demand of the Lender therefor and no later than the Business Day following the
date of such demand, reimburse the Lender for the amount of such draft, with
interest thereon (i) from the date such draft is honored by the Lender to but
not including the date the Lender makes demand on the Borrowers for
reimbursement, at the applicable Federal Funds Effective Rate and (ii) if the
Borrowers do not reimburse the Lender on the date such demand is made, from the
date on which such demand is made to, but not including, the date of
reimbursement by the Borrowers to the Lender, at the Base Rate then in effect.
SECTION 2.4 PAYMENTS. All interest accrued on Advances and
Reimbursement Obligations subject to the Base Rate and Quoted Cost of Funds
Rate shall be payable on the first day of each successive January, April, July
and October (each, a "Quarterly Payment Date"), commencing on January 1, 1997
and upon payment in full of such Advances and Reimbursement Obligations. All
interest accrued on each LIBOR Advance having an Interest Period of three
months or less shall be payable at the end of the applicable Interest Period
then in effect. All interest accrued on each LIBOR Advance having an Interest
Period of greater than three months shall be payable (a) on the date that is
three months after the initial date of the Interest Period applicable to such
LIBOR Advance and (b) the last day of the Interest Period applicable to such
LIBOR Advance. The principal amount of Advances and Reimbursement Obligations,
together with accrued interest thereon, shall be due on the Termination Date.
All payments of Credit Obligations shall be payable to the Lender on or before
10:00 a.m. Birmingham, Alabama time on the date when due, at the Principal
Office in Dollars and in immediately available funds free and clear of all
rights of set-off or counterclaim. If any payment falls due on a day that is
not
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a Business Day, then such due date shall be extended to the next succeeding
Business Day (except that, in the case of LIBOR Advances, if the next
succeeding Business Day falls in another calendar month, such due date shall be
the next preceding Business Day), and such extension of time shall then be
included in the computation of payment of interest, fees or other applicable
amounts. Payments received by the Lender shall be applied first to expenses,
fees and charges, then to accrued interest and finally to principal.
SECTION 2.5 PREPAYMENT.
(a) The Borrowers may at any time prepay all or any part of the
Advances, without premium or penalty (except as set forth below); provided,
however, that no Fixed Rate Segment may be prepaid during an Interest Period
unless the Borrowers shall pay to the Lender the amounts required by Section
4.5 hereof. The Borrowers shall pay, on the date of prepayment, all interest
accrued to the date of prepayment on any amount prepaid.
(b) If at any time the principal amount of the Advances, together
with the sum of the then outstanding Letter of Credit Borrowings and
Reimbursement Obligations, is greater than the Maximum Credit Amount then in
effect, the Borrower shall immediately make a prepayment (notwithstanding the
provisions of clause (a) of this section, but subject to the provisions of
Section 4.5) on the Advances equal to the difference between (a) said aggregate
principal amount of the Advances plus the sum of the then outstanding Letter of
Credit Borrowings and Reimbursement Obligations and (b) the Maximum Credit
Amount.
SECTION 2.6 REDUCTION IN RESERVE FACILITY. The Borrowers shall have
the right from time to time upon not less than three (3) Business Days' notice
to the Lender, to reduce the amount of the Reserve Facility. Each such
reduction shall be in the aggregate principal amount of $1,000,000 or a larger
integral multiple of $100,000, and shall permanently reduce the Reserve
Facility Credit Amount. Any such reduction resulting in payment of a Fixed
Rate Segment other than on the last day of the respective Interest Period shall
be permitted subject to the provisions of Section 4.5. Each reduction of the
Reserve Facility shall be accompanied by payment of the Loans to the extent
that the principal amount of the Advances plus the sum of the then outstanding
Letter of Credit Borrowings and Reimbursement Obligations exceed the Reserve
Facility after giving effect to such reductions together with accrued and
unpaid interest on the amounts prepaid.
SECTION 2.7 AVAILABILITY FEE.
(a) Until the first day that the sum of the principal amount of
the Advances plus the then outstanding Letter of Credit Borrowings and
Reimbursement Obligations exceeds the Maximum Active Facility Amount (the
"Usage of the Reserve Facility"), the Borrowers shall pay to the Lender, for
each day, an availability fee (the "Active Facility Availability Fee") that
begins to accrue on the Closing Date and shall be computed at the rate of
one-quarter of one percent (.25%) per annum times the difference on such day
between (1) the Maximum Active Facility Amount and (2) the sum of (x) the
aggregate outstanding principal amount of the Advances made by the Lender, (y)
the outstanding Letter of Credit Borrowings and (z) the
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outstanding Reimbursement Obligations on such day. The Active Facility
Availability Fee shall be payable in arrears on each Quarterly Payment Date and
on the Termination Date, commencing on January 1, 1997. The Active Facility
Availability Fee shall not be refundable under any circumstances and shall be
calculated on an Actual/360 Basis.
(b) The Borrowers shall pay to the Lender, for each day, an
additional availability fee (the "Reserve Facility Availability Fee") that
begins to accrue on the Closing Date and shall be computed at the rate of
one-eighth of one percent (.125%) per annum times the difference on such day
between (1) the Maximum Reserve Facility Amount and (2) the greatest amount, if
any, of Usage of the Reserve Facility on such or any previous day. The Reserve
Facility Availability Fee shall be payable in arrears on each Quarterly Payment
Date and on the Termination Date, commencing on January 1, 1997. The Reserve
Facility Availability Fee shall not be refundable under any circumstances and
shall be calculated on an Actual/360 Basis.
(c) If on any day there is a Usage of the Reserve Facility, the
Borrowers shall pay to the Lender on the fifth Business Day thereafter an
activation fee (the "Activation Fee") that shall be computed at the rate of one
eighth of one percent (.125%) of the amount of usage of the Reserve Facility
that exceeds the greatest previous amount, if any, of usage of the Reserve
Facility on any previous day; provided that in the case of any usage of the
Reserve Facility before the first anniversary of the Closing Date the
Activation Fee payable shall be an adjusted amount equal to the Activation Fee
otherwise determined multiplied by a fraction, the numerator of which is the
number of days since the Closing Date and the denominator of which is 360. The
Activation Fee shall not be refundable under any circumstances and shall be
calculated on an Actual 360/Basis.
(d) On and after the first day on which there is any Usage of the
Reserve Facility, the Borrowers shall pay to the Lender, for each day, an
availability fee that shall be computed at the rate of one-quarter of one
percent (.25%) per annum times the difference on such day between (1) the
highest amount that has ever been outstanding at any time under the Revolving
Facility and (2) the sum of (x) the aggregate outstanding principal amount of
the Advances made by the Lender, (y) the outstanding Letter of Credit
Borrowings and (z) the outstanding Reimbursement Obligations. This fee shall
be payable in arrears on each Quarterly Payment Date and on the Termination
Date, commencing on the first Quarterly Payment Date following the calendar
quarter in which there is first Usage of the Reserve Facility. This fee shall
not be refundable under any circumstances and shall be calculated on an Actual
360/Basis.
ARTICLE 3
INTEREST ON LOANS
SECTION 3.1 APPLICABLE INTEREST RATES. The Borrowers shall have the
option to elect to have any Segment bear interest at the Base Rate, the Quoted
Cost of Funds Rate or at the LIBOR-Based Rate. For any period of time and for
any Segment with respect to which the Borrowers do not elect another interest
rate, such Segment shall bear interest at the Base Rate.
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The Borrowers' right to elect a LIBOR-Based Rate for a Segment shall be subject
to the following requirements: (a) each Segment shall be in the amount of
$100,000 or more and in an integral multiple thereof, (b) each such Segment
shall have a maturity selected by the Borrower of one, two, three or six months
and (c) no more than seven Segments may be outstanding at any time; provided,
however, that no such Segment shall have a maturity date later than the
Termination Date. The Borrowers' right to elect a Quoted Cost of Funds Rate
for a Segment shall be subject to the following requirements: (a) each Segment
shall be in the amount of $50,000 or more and in an integral multiple thereof,
(b) each Segment shall have a maturity selected by the Borrower of from one to
twenty-nine days, (c) no more than four Segments may be outstanding at any
time, and (d) no Segment may have a maturity date later than the Termination
Date.
SECTION 3.2 PROCEDURE FOR EXERCISING INTEREST RATE OPTIONS. Hibbett,
on behalf of itself and each Participating Entity, may elect to have a
particular interest rate apply to a Segment by notifying the Lender in writing
not later than 11:00 a.m., Birmingham, Alabama time, three (3) Business Days
prior to the effective date on which any LIBOR-Based Rate is to become
applicable or not later than 9:00 a.m., Birmingham, Alabama time, on the same
day on which a requested Base Rate or Quoted Cost of Funds Rate is to become
applicable. Any notice of interest rate election hereunder shall be
irrevocable and shall be in the form attached hereto as Exhibit B and shall set
forth the following: (a) the amount of the Segment to which the requested
interest rate will apply, (b) the date on which the selected interest rate will
become applicable, (c) whether the interest rate selected is the Base Rate,
Quoted Cost of Funds Rate or a LIBOR-Based Rate and (d) if the interest rate
selected is a LIBOR-Based Rate or Quoted Cost of Funds Rate, the maturity
selected for the Interest Period. The Lender shall accept from the Borrowers
telephonic requests to have a particular rate applied to a Segment without
requiring the submission of a Request for Advances or Interest Rate Election
form. Any request to have a particular rate applied to a Segment not made in
writing shall be promptly confirmed in writing. On the second Business Day
preceding the Business Day that a requested LIBOR-Based Rate is to become
applicable or on the same day that a requested Quoted Cost of Funds Rate is to
become applicable, the Lender shall notify Hibbett by telephone or by facsimile
transmission of the applicable LIBOR-Based Rate or Quoted Cost of Funds Rate,
as the case may be, by 11:00 a.m., Birmingham, Alabama time, or as earlier on
that day as may be practical in the circumstances. The Lender shall not be
required to provide a LIBOR-Based Rate on any day on which a LIBOR Quote is not
available. If Hibbett does not accept any Quoted Cost of Funds Rate quoted by
the Lender within 15 minutes of it being provided by the Lender, the Lender
may, in view of changing market conditions, revise the Quoted Cost of Funds
Rate at any time. No Quoted Cost of Funds Rate shall be effective until
mutually agreed upon by Hibbett and the Lender. If the Lender and Hibbett
attempt to agree on the Quoted Cost of Funds Rate but fail so to agree, or if
there is any uncertainty as to whether or not the Lender and Hibbett have
agreed upon the Quoted Cost of Funds Rate, interest shall accrue on the Segment
for which the Quoted Cost of Funds Rate has been selected at the then
applicable Base Rate.
SECTION 3.3 BASE RATE. Each Segment subject to the Base Rate shall
bear interest from the date the Base Rate becomes applicable thereto until
payment in full, or until a XXXXX-
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Based Rate or Quoted Cost of Funds Rate is selected by the Borrowers and
becomes applicable thereto, on the unpaid principal balance of such Segment on
an Actual/360 Basis. Any change in the Base Rate shall take effect on the
effective date of such change in the Base Rate designated by the Lender,
without notice to the Borrowers and without any further action by the Lender.
Notwithstanding the foregoing, for the purpose of enabling the Lender to send
periodic billing statements in advance of each interest payment date reflecting
the amount of interest payable on such interest payment date, the Base Rate, in
effect 15 days prior to each interest payment date shall be deemed to be the
Base Rate, as continuing in effect until the date prior to such interest
payment date for purposes of computing the amount of interest payable on such
interest payment date. If the Lender elects to use the Base Rate, 15 days
prior to the interest payment date for billing purposes, and if the Base Rate
changes during such 15-day period, the difference between the amount of
interest that in fact accrues during such period and the amount of interest
actually paid will be added to or subtracted from, as the case may be, the
interest otherwise payable in preparing the periodic billing statement for the
next succeeding interest payment date. In determining the amount of interest
payable at the Termination Date or upon full prepayment of the Credit
Obligations, all changes in the Base Rate occurring on or prior to the day
before the Termination Date or the date of such full prepayment shall be taken
into account.
SECTION 3.4 LIBOR-BASED RATE/QUOTED COST OF FUNDS RATE.
(a) Each Segment subject to the LIBOR-Based Rate shall bear
interest from the date the LIBOR-Based Rate becomes applicable thereto until
the end of the applicable Interest Period on the unpaid principal balance of
such Segment at the LIBOR-Based Rate on an Actual/360 Basis.
(b) Each Segment subject to the Quoted Cost of Funds Rate shall
bear interest from the date the Quoted Cost of Funds Rate becomes applicable
thereto until the end of the applicable Interest Period on the unpaid principal
balance of such Segment at the Quoted Cost of Funds Rate on an Actual/360
Basis.
SECTION 3.5 POST MATURITY INTEREST. Upon and after the occurrence of
any Event of Default, the outstanding principal amount of all Advances and
Reimbursement Obligations and, to the extent permitted by applicable law, any
interest payments thereon not paid when due and any fees and other amounts then
due and payable hereunder, shall thereafter bear interest (including
post-petition interest in any proceeding under applicable bankruptcy laws)
payable upon demand at a rate that is 2.00% per annum (calculated on an
Actual/360 Basis) in excess of the interest rate otherwise payable under this
Agreement with respect to the applicable Advances and Reimbursement Obligations
(or, in the case of any such fees and other amounts, at a rate that is 2.00%
per annum in excess of the interest rate otherwise payable under this Agreement
for Base Rate Advances); provided that, in the case of Advances subject to a
Fixed Rate, upon the expiration of the Interest Period in effect at the time
any such increase in interest rate is effective, such Advances subject to a
Fixed Rate shall thereupon become Base Rate Advances and thereafter bear
interest payable upon demand at a rate that is 2.00% per annum (calculated on
an Actual/360 Basis) in excess of the interest rate otherwise payable under
this
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Agreement for Base Rate Advances. The payment or acceptance of the increased
rate provided by this Section 3.5 shall not constitute a waiver of any Event of
Default or an amendment to this Agreement or otherwise prejudice or limit any
rights or remedies of the Lender. Interest on all Advances and Reimbursement
Obligations shall be calculated on an Actual/360 Basis.
ARTICLE 4
TERMINATION OF LIBOR-BASED RATE AND YIELD PROTECTION
SECTION 4.1 ADDITIONAL COSTS.
(a) The Borrowers shall pay directly to the Lender from time to
time such amounts as the Lender may determine in good faith to be necessary to
compensate it for any costs which the Lender determines are attributable to its
making or maintaining any LIBOR Advance or its obligation to make any LIBOR
Advances hereunder, or any reduction in any amount receivable by the Lender
hereunder in respect of any of such Advances or such obligation (such increases
in costs and reductions in amounts receivable being herein called "Additional
Costs") resulting from any Regulatory Change which:
(i) changes the basis of taxation of any amounts
payable to the Lender under this Agreement or its Notes in
respect of any of such Advances (other than taxes imposed on
or measured by the overall net income of the Lender or of its
Principal Office for any of such Advances by the jurisdiction
in which the Lender has its Principal Office);
(ii) imposes or modifies any reserve, special
deposit or similar requirements relating to any extensions of
credit or other assets of, or any deposits with or other
liabilities of, the Lender including any change in the LIBOR
Reserve Requirement; or
(iii) imposes any other condition affecting the
interests of the Lender under this Agreement or its LIBOR
Advances to the Borrowers.
If the Lender requests compensation from the Borrowers in writing
under this Section 4.1(a), the Borrowers may, by notice to the Lender, (i)
suspend the obligation of the Lender to make or continue LIBOR Advances until
the regulatory change giving rise to such request ceases to be in effect or
(ii) require the Lender to designate another of its existing facilities as the
Principal Office for making LIBOR Advances or take other reasonable action if
such designation or other action would avoid the need for, or reduce the amount
of, compensation pursuant to this Section 4.1(a) and would not in the Lender's
good faith judgment be disadvantageous to the Lender. Any amounts due under
this Section 4.1(a) as a result of a change in the LIBOR Reserve Requirement
shall only be payable by the Borrowers to the extent the Lender incurs actual
costs associated with any such change.
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(b) Without limiting the effect of the foregoing provisions of
this Section 4.1 (but without duplication), the Borrowers shall pay directly to
the Lender from time to time on written request such amounts as the Lender may
determine in good faith to be necessary to compensate the Lender for any
increased costs which it determines are attributable to the maintenance by the
Lender of capital in respect of its Loans pursuant to any Regulatory Change or
implementing any risk-based capital guideline or requirement (whether or not
having the force of law and whether or not the failure to comply therewith
would be unlawful) hereafter issued by any government or governmental or
supervisory authority implementing at the national level the Basle Accord
(including the Final Risk-Based Capital Guidelines of the Board of Governors of
the Federal Reserve System (12 CFR Part 208, Appendix A; 00 XXX Xxxx 000,
Xxxxxxxx X) and the Final Risk-Based Capital Guidelines of the Office of the
Comptroller of the Currency (12 CFR Part 3, Appendix A)), such compensation to
include an amount equal to any reduction of the rate of return on assets or
equity of the Lender to a level below that which the Lender could have achieved
but for such Regulatory Change. For purposes of this Section 4.1(b), "Basle
Accord" shall mean the proposals for risk-based capital framework described by
the Basle Committee on Banking Regulations and Supervisory Practices in its
paper entitled "International Convergence of Capital Measurement and Capital
Standards" dated July 1988, as amended, modified and supplemented in effect
from time to time or any replacement thereof.
(c) The Lender shall notify Hibbett of any event occurring after
the Closing Date that will entitle the Lender to compensation under Section
4.1(a) or (c) as promptly as practicable, but in any event within 45 days after
the Lender obtains actual knowledge thereof; provided however, that if the
Lender fails to give such notice within 45 days after it obtains actual
knowledge of such an event, the Lender shall, with respect to compensation
payable pursuant to this Section 4.1 in respect of any costs resulting from
such event, only be entitled to payment under this Section 4.1 for costs
incurred from and after the date 45 days prior to the date that the Lender does
give such notice. The Lender will furnish to Hibbett a certificate setting
forth in reasonable detail the basis and amount of each request by the Lender
for compensation under Section 4.1(a) or (b) and such compensation shall be due
five Business Days from the date Hibbett receives such certificate.
Determinations and allocations by the Lender for purposes of this Section 4.1
of the effect of any regulatory change pursuant to Section 4.1(a) or (b), of
maintaining Loans or its obligation to make Loans or on amounts receivable by
it in respect of Loans, and of the amounts required to compensate the Lender
under this Section 4.1, shall be made in a manner consistent with that applied
by the Lender in similar contexts and shall be conclusive in the absence of
demonstrable error.
SECTION 4.2 LIMITATION ON TYPES OF ADVANCES. Anything herein to the
contrary notwithstanding, if on or prior to the determination of any
LIBOR-Based Rate for any Interest Period:
(a) the Lender determines in good faith (which determination shall
be conclusive) that quotations of interest rates for the relevant deposits
referred to in the definition of LIBOR-Based Rate are not being provided by the
financial reporting service used by the Lender in the relevant amounts or for
the relevant maturities for purposes of determining rates of interest for LIBOR
Advances as provided herein; or
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(b) if the Lender determines in good faith (which determination
shall be conclusive) that the relevant rates of interest referred to in the
definition of LIBOR-Based Rate in this Agreement upon the basis of which the
rate of interest for LIBOR Advances for such Interest Period is to be
determined are not likely to adequately cover the cost to the Lender of making
or maintaining LIBOR Advances for such Interest Period;
then the Lender shall give Hibbett notice thereof, and so long as such
condition remains in effect, the Lender shall be under no obligation to make
additional LIBOR Advances, and the Borrower shall, on the last day(s) of the
then-current Interest Period(s) for the outstanding LIBOR Advances, either
prepay such Advances or convert such Advances into Base Rate Advances.
SECTION 4.3 ILLEGALITY. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for the Lender to honor its
obligation to make or maintain LIBOR Advances hereunder, then the Lender shall
promptly notify Hibbett and the Lender's obligation to make LIBOR Advances
shall be suspended until such time as the Lender may again make and maintain
LIBOR Advances.
SECTION 4.4 TREATMENT OF AFFECTED LOANS.
If the obligation of the Lender to make LIBOR Advances shall be
suspended pursuant to Sections 4.1 or 4.3, the Lender's LIBOR Advances shall be
automatically converted into Base Rate Advances on the last day(s) of the
then-current Interest Period(s) for such outstanding Advances (or, in the case
of a conversion pursuant to Section 4.3 that is legally required to be made
immediately, on such earlier date as the Lender may specify to Hibbett) and,
unless and until the Lender gives notice as provided below that the
circumstances specified in Sections 4.1 or 4.3 which gave rise to such
conversion no longer exist to the extent that the Lender's LIBOR Advances have
been so converted, all payments and prepayments of principal which would
otherwise be applied to the Lender's LIBOR Advances shall be applied instead to
its Base Rate Advances.
SECTION 4.5 COMPENSATION. The Borrowers shall pay to the Lender five
Business Days after Hibbett receives the certificate referred to herein, such
amount or amounts as shall be sufficient to compensate it for any loss, cost,
or expense which the Lender determines in good faith is attributable to:
(a) any payment, prepayment or conversion of a LIBOR Advance by
the Borrowers for any reason on a date other than the last day of the Interest
Period for such Loan; or
(b) any failure by the Borrowers for any reason to borrow a LIBOR
Advance (other than a refusal by the Lender to make such a LIBOR Advance
pursuant to this Article 4) from the Lender on the date for such borrowing
specified in the relevant Request for Advance or Interest Rate Election.
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Without limiting the effect of the preceding sentence, such
compensation shall include an amount equal to the excess, if any, of (i) the
amount of interest which otherwise would have accrued on the principal amount
so paid, prepaid or converted or not borrowed for the period from the date of
such payment, prepayment, conversion or failure to borrow to the last day of
the then-current Interest Period for such Advance (or, in the case of a failure
to borrow, the Interest Period for such Advance which would have commenced on
the date specified for such borrowing) at the applicable rate of interest for
such Advance provided for herein over (ii) the amount of interest which would
otherwise have accrued on such principal amount at a rate per annum equal to
the interest component of the amount the Lender would have bid in the London
interbank market for Dollar deposits of leading banks in amounts comparable to
such principal amount and with maturities comparable to such period (as
determined in good faith by the Lender); provided that such compensation shall
not include loss of margin for the period after any payment, prepayment,
conversion or failure to borrow described in Sections 4.5(a) or (b).
SECTION 4.6 TAXES.
(a) Any and all payments by the Borrowers hereunder shall be paid
(except to the extent required by law) free and clear of and without deduction
for any and all present or future taxes, levies, imposts, deductions, charges
or withholdings, and all liabilities with respect thereto, excluding franchise
taxes and taxes based on net income imposed on the Lender by the United States
or the jurisdiction (or any political subdivision thereof) in which the Lender
has its Principal Office (all such nonexcluded taxes, levies, imposts
deductions, charges, withholding and liabilities being hereinafter referred to
as "Taxes"). If the Borrowers shall be required by law to deduct any Taxes
from or in respect of any sum payable hereunder to the Lender (i) the sum
payable by the Borrowers shall be increased by the amount necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section 4.6) the Lender shall receive an
amount equal to the sum it would have received had no such deductions been
made, (ii) the Borrowers shall make such deduction, and (iii) the Borrowers
shall pay the full amount deducted to the relevant taxing authority or other
Governmental Authority in accordance with applicable law.
(b) In addition, the Borrowers agree to pay any present or future
stamp or documentary taxes or an other excise or property taxes, charges or
similar levies which arise from any payment made hereunder or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement or any other Loan Document (hereinafter referred to as "Other
Taxes").
(c) The Borrowers will indemnify the Lender for the full amount of
Taxes and Other Taxes (including any Taxes or Other Taxes imposed by any
jurisdiction on amounts payable under this Section 4.6) paid by the Lender, and
any liability (including penalties, interest and expenses) arising therefrom or
with respect thereto, whether or not such Taxes or Other Taxes were correctly
or legally asserted. Such indemnification shall be made within five Business
Days after the date of receipt of a written demand therefor from the Lender.
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(d) Within 30 days after the date of any payment of Taxes or Other
Taxes withheld by the Borrowers in respect of any payment to the Lender, the
Borrowers will furnish to the Lender the original or a certified copy of a
receipt evidencing payment thereof.
(e) The Lender claiming any additional amounts payable pursuant to
this Section 4.6 shall use reasonable efforts (consistent with legal and
regulatory restrictions) to file any certificate or document reasonably
requested by the Borrowers if the making of such a filing would avoid the need
for or reduce the amount of any such additional amounts which may thereafter
accrue and would not, in the sole determination of the Lender, be otherwise
disadvantageous to the Lender. To the extent the Lender shall receive a refund
of all or a portion of the additional amounts payable pursuant to this Section
4.6, the Lender shall promptly notify and refund to the Borrowers the amount of
such refund.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
Each of the Borrowers, jointly and severally, represents and warrants
to the Lender as follows:
SECTION 5.1 ORGANIZATION POWERS, EXISTENCE, ETC. (a) Hibbett and
each Consolidated Entity (other than Immaterial Subsidiaries) are duly
organized, validly existing and in good standing under the laws of the state in
which it is incorporated, (b) Hibbett and each Consolidated Entity (other than
Immaterial Subsidiaries) have the corporate power and authority to own its
properties and assets and to carry on its business as now being conducted, (c)
Hibbett and each Consolidated Entity (other than Immaterial Subsidiaries) have
the corporate power to execute, deliver and perform the Loan Documents to which
they are a party, (d) Hibbett and each Consolidated Entity (other than
Immaterial Subsidiaries) are duly qualified to do business in each state with
respect to which the failure to be so qualified would have a Material Adverse
Effect and (e) except as set forth in Exhibit D hereto, Hibbett and each
Consolidated Entity has not done business under any other name, trade name or
otherwise within the five years immediately preceding the Closing Date.
SECTION 5.2 AUTHORIZATION OF BORROWING, ETC. The execution, delivery
and performance of the Loan Documents (a) have been duly authorized by all
requisite corporate action and (b) will not violate any Governmental
Requirement, the certificate of incorporation or bylaws of Hibbett or any
Consolidated Entity, or any Material Contract to which Hibbett or any
Consolidated Entity is a party, or by which Hibbett or any Consolidated Entity
or any of their properties are bound, or be in conflict with, result in a
breach of or constitute (with due notice or lapse of time or both) a default
under, any such Material Contract.
SECTION 5.3 LIABILITIES. Hibbett has furnished to the Lender a copy
of the audited consolidated balance sheet of Hibbett and the Consolidated
Entities dated as of February 3, 1996 and a statement of changes in
shareholders' equity and the related statements of income and cash
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flow as of the end of fiscal year 1995 and the unaudited consolidated balance
sheet of Hibbett and the Consolidated Entities dated as of August 3, 1996 and
the related statements of income and cash flow for the seven month period then
ended. Such financial statements were prepared in conformity with generally
accepted accounting principles consistently applied throughout the period
involved (subject, with respect to the unaudited financial statements, to the
absence of notes required by generally accepted accounting principles and to
normal year-end audit adjustments), are in accordance with the books and
records of Hibbett and the Consolidated Entities in all material respects, are
correct and complete in all material respects and present fairly the financial
condition of Hibbett and the Consolidated Entities as of the date of such
financial statements, and, since the date of such financial statements, no
material adverse change in the financial condition, business or results of
operations of Hibbett and the Consolidated Entities, taken as a whole, has
occurred. Neither Hibbett nor any Consolidated Entity has any Liabilities,
Guaranteed Obligations or other obligations or liabilities, direct or
contingent, that are material in amount other than the Liabilities reflected in
such balance sheet and the notes thereto.
SECTION 5.4 TAXES. Hibbett and each Consolidated Entity has filed or
caused to be filed all federal, state and local tax returns that are required
to be filed (other than such state or local tax returns and reports the failure
to file which would not be reasonably likely, individually or in the aggregate,
to have a Material Adverse Effect), and has paid all taxes as shown on said
returns or on any assessment received by Hibbett or any Consolidated Entity to
the extent that such taxes have become due, other than those that are being
contested in good faith and by proper proceedings and for which adequate
reserves have been established in accordance with generally accepted accounting
principles. The Borrowers have reserves which are believed by the officers of
the Borrowers to be adequate for the payment of additional taxes for years
which have not been audited by the respective tax authorities.
SECTION 5.5 LITIGATION. There are no actions, suits or proceedings
pending or, to the best knowledge of the Borrowers, threatened against or
affecting Hibbett or any Consolidated Entity, by or before any Governmental
Authority that involve any of the transactions contemplated in this Agreement
or the reasonable likelihood of any judgment or liability that may result in a
Material Adverse Change; and neither Hibbett nor any Consolidated Entity is in
default with respect to any material Governmental Requirement which default
could reasonably be likely to have a Material Adverse Effect.
SECTION 5.6 AGREEMENTS. Neither Hibbett nor any Consolidated Entity
is in default in the performance, observance or fulfillment of any of the
obligations contained in any Material Contract to which it is a party, which
default could reasonably be likely to have a Material Adverse Effect.
SECTION 5.7 USE OF PROCEEDS. None of the Borrowers intends to use
any part of the proceeds of Advances for the purpose of purchasing or carrying
any Margin Stock or retiring any debt incurred to purchase or carry any Margin
Stock or for any other purpose that is not expressly authorized by this
Agreement.
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SECTION 5.8 ERISA. Neither Hibbett nor any ERISA Affiliate maintains
or contributes to, or has within the preceding five years maintained or
contributed to, any Plan that is a Plan subject to Title IV of ERISA.
SECTION 5.9 SUBSIDIARIES. As of the Closing Date, Hibbett has no
Subsidiaries other than the Initial Participating Entities. The Participating
Entities have no direct or indirect equity ownership in any other person other
than other Subsidiaries of Hibbett. Hibbett's ownership interest in each
Participating Entity is free and clear of all Liens, warrants, options, rights
to purchase and other interests of any person. All capital stock of the
Participating Entity has been duly authorized and validly issued and is fully
paid and non-assessable.
SECTION 5.10 ENVIRONMENTAL LAWS.
(a) To the best knowledge of the Borrowers, all properties owned
or used by the Borrowers, while under the custody, care and control of the
Borrowers, have been maintained in compliance in all material respects with all
applicable federal, state and local environmental protection, occupational,
health and safety or similar laws, including the Federal Water Pollution
Control Act (33 U.S.C. Section 1251 et seq.), Resource Conservation & Recovery
Act (42 U.S.C. Section 6901 et seq.), Safe Water Drinking Act (42 U.S.C.
Section 300(f) et seq.), Toxic Substances Control Act (15 U.S.C. Section 2601
et seq.), Clean Air Act (42 U.S.C. Section 7401 et seq.) and Comprehensive
Environmental Response of Compensation and Liability Act (42 U.S.C. Section
6901 et seq.) ("CERCLA").
(b) The Borrowers have not received any material written
notification from any Governmental Authority with respect to current, existing
violations of any of the laws enumerated in clause (a) above, or pursuant to
any of their respective implementing regulations or state analogues to such
laws or regulations.
(c) To the best knowledge of the Borrowers, there has not been, at
any location owned or used by the Borrowers, any "Release" (as defined in
Section 101(22) of CERCLA) by the Borrowers, anyone within the Borrowers'
control, or any other person, of any Hazardous Materials.
(d) To the best knowledge of the Borrowers, the Borrowers have not
sent or arranged for the transportation or disposal of Hazardous Materials or
wastes to a site which, pursuant to CERCLA or any similar state law (i) has
been placed, or is proposed (by the Environmental Protection Agency or relevant
state authority) to be placed, on the "National Priorities List" of hazardous
waste sites or its state equivalent, or (ii) is subject to a claim, an
administrative order or other request to take "removal" or "remedial" action
(in each case as defined in CERCLA) by any person.
SECTION 5.11 DISCLOSURE. No financial statement, document,
certificate or other written communication furnished to the Lender by or on
behalf of the Borrowers in connection with any Loan Document contained when so
furnished any statement of a material fact that was untrue in any material
respect.
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SECTION 5.12 LICENSES. All material licenses, permits,
accreditations and approvals required by all Governmental Authorities necessary
in order for each Store to be operated for its intended purpose have been
obtained and are in full force and effect, except for those the failure to
obtain which would not be reasonably likely, individually or in the aggregate,
to have a Material Adverse Effect.
SECTION 5.13 TITLE TO PROPERTIES. As of the Closing Date, the
Borrowers have good and marketable title to all their properties and assets
reflected on the balance sheet referred to in Section 5.3 except for those
matters shown on such balance sheet and except for such properties and assets
as have been disposed of since the date of said balance sheet as no longer used
or useful in the conduct of its business or as have been disposed of in the
ordinary course of the business. All such properties and assets are free and
clear of all Liens, except as otherwise permitted or required by the provisions
of the Loan Documents.
SECTION 5.14 ENFORCEABILITY. This Agreement and each of the other
Loan Documents, when duly executed and delivered by the Borrowers, as
appropriate, in accordance with the provisions of this Agreement, will
constitute the legal, valid and binding, joint and several, obligations of the
Borrowers, enforceable in accordance with their respective terms, subject to
the effect of bankruptcy, insolvency, reorganization, receivership, moratorium
and similar laws affecting the rights and remedies of creditors generally.
SECTION 5.15 CONSENTS, REGISTRATIONS, APPROVALS, ETC. No
registration with or consent or approval of, or other action by, any
Governmental Authority is required for the execution, delivery and performance
of this Agreement or the other Loan Documents, or the borrowings under this
Agreement, by the Borrowers.
SECTION 5.16 SOLVENCY. Hibbett is Solvent, and Hibbett will not, as
a result of the transactions provided for herein (i) become not Solvent, (ii)
be left with unreasonably small capital, (iii) incur debts beyond its ability
to pay them as they mature or (iv) have Liabilities (including reasonable
contingencies) in excess of the fair saleable value of its assets.
ARTICLE 6
GENERAL CONDITIONS OF LENDING
The Lender's obligation to make each Advance and to issue each Letter
of Credit hereunder is subject to the following conditions precedent:
SECTION 6.1 REPRESENTATIONS AND WARRANTIES. On the date of each
Advance or issuance of a Letter of Credit hereunder, the representations and
warranties set forth in this Agreement and in all other Loan Documents shall be
true and correct on and as of such date with the same effect as though such
representations and warranties had been made on the date of the Advance or
issuance of the Letter of Credit, as the case may be (or in the case of any
such representation and warranty made as of a particular date, as of such
particular date), except
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to the extent previously fulfilled in accordance with the terms hereof,
subsequently inapplicable, or modified as a result of activities of the
Borrowers, or any of them. The borrowing of each Advance or obtaining of each
Letter of Credit shall constitute a representation and warranty by the
Borrowers to the Lender that no material adverse change in the financial
condition of Hibbett and the Consolidated Entities, on a consolidated basis, as
reflected in the financial statements delivered to the Lender pursuant to
Section 5.3 has occurred since the date of such financial statements.
SECTION 6.2 NO DEFAULT. On the date of each Advance hereunder and on
the date of the issuance of each Letter of Credit, the Borrowers shall be in
compliance with all the terms and conditions set forth in this Agreement on
their part to be observed or performed, and no Default shall have occurred and
be continuing. The borrowing of each Advance or obtaining of each Letter of
Credit shall constitute a representation and warranty by the Borrowers to the
Lender that no Default has occurred and is continuing.
SECTION 6.3 SUPPORTING DOCUMENTS.
(a) The Lender shall have also received on the Closing Date (i) a
copy of resolutions of the Board of Directors of each of the Borrowers,
certified as in full force and effect on such date by the Secretary or
Assistant Secretary of the respective Borrower, authorizing the execution,
delivery and performance of the Loan Documents and authorizing designated
officers of the Borrowers to execute and deliver the Loan Documents on behalf
of the Borrowers, and with respect to Hibbett, to execute and deliver to the
Lender a Request for Advance or Interest Rate Election or Application forms;
(ii) a certificate of the Secretary or Assistant Secretary of each of the
Borrowers, dated such date, certifying that (A) an attached copy of the
Certificate of Incorporation and bylaws of such Borrower as true and correct as
of such date, (B) that the Certificate of Incorporation and Bylaws of such
Borrower has not been amended since the date of the last amendment attached
thereto and (c) the incumbency and specimen signatures of the designated
officers referred to in clause (i) above; (iii) an Opinion of Counsel to the
Borrowers in the form required by the Lender and its counsel; and (iv) such
additional supporting documents as the Lender or its counsel may reasonably
request.
(b) The Lender shall also have received on or before any date
after the Closing Date on which a person becomes a Participating Entity (i) a
copy of resolutions of the Board of Directors and, if necessary, the
shareholders, partners or members of such person certified as in full force and
effect on the date thereof by the Secretary or Assistant Secretary of such
person, authorizing such person's execution, delivery and performance of, the
Loan Documents and all other agreements and instruments that this Agreement
requires to be executed, delivered and performed by such person; (ii) a copy of
the organizational documents of such person, certified as true and correct on
and as of the date on which Loan Documents are executed and delivered by such
person; (iii) certificates of good standing with respect to such person from
the appropriate Governmental Authorities in the jurisdiction under the laws of
which such person is incorporated or formed; (iv) an Opinion of Counsel to such
person consistent with the form of the Opinions of Counsel to the Borrowers
delivered pursuant to subsection (a) of this Section 6.3 (with such changes
therein as are appropriate in the circumstances) as to the
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execution and delivery by such person of the Loan Documents and other matters
related thereto; (v) fully executed copies of all Loan Documents that this
Agreement requires to be executed or delivered (or both) by such person
(including a fully executed Assumption Agreement); and (vi) such additional
supporting documents as the Lender or its counsel may reasonably request.
SECTION 6.4 INITIAL PUBLIC OFFERING. Hibbett shall have consummated
its initial public offering of its common stock with the cash proceeds (net of
underwriting discounts and commissions and all other costs and expenses
associated therewith) received by Hibbett from such public offering being not
less than $22,500,000.
ARTICLE 7
GENERAL COVENANTS OF THE BORROWERS
From the Closing Date until payment in full of the Credit Obligations
and the termination of the Revolving Facility, the Borrowers, jointly and
severally, covenant and agree that:
SECTION 7.1 EXISTENCE, PROPERTIES, ETC. Each of the Borrowers shall,
and (to the extent of its right to do so) shall cause each other Consolidated
Entity (other than Immaterial Subsidiaries) to (a) do or cause to be done all
things necessary to preserve and keep in full force and effect its existence,
rights and franchises and comply with all Governmental Requirements applicable
to it except to the extent the failure to do so would not be reasonably likely
to have a Material Adverse Effect or as otherwise permitted by clause (i) of
Section 7.7(6) and (b) at all times maintain, preserve and protect all
franchises and trade names and preserve all of its property used or useful in
the conduct of its business and keep the same in good repair, working order and
condition, and from time to time make, or cause to be made, all needful and
proper repairs, renewals and replacements, betterments and improvements
thereto, so that the business carried on in connection therewith may be
properly and advantageously conducted at all times except to the extent the
failure to do so would not be reasonably likely to have a Material Adverse
Effect.
SECTION 7.2 PAYMENT OF INDEBTEDNESS, TAXES, ETC. Each of the
Borrowers shall, and (to the extent of its right to do so) shall cause each
Consolidated Entity to, (a) pay its indebtedness and obligations in accordance
with its terms except to the extent the failure to do so would not be
reasonably likely to have a Material Adverse Effect and (b) pay and discharge
or cause to be paid and discharged promptly all taxes, assessments and other
charges or levies of Governmental Authorities imposed upon it or upon its
income and profits or upon any of its properties before the same shall become
in default, as well as all lawful claims for labor, materials and supplies or
otherwise, which, if unpaid, might become a Lien upon such properties or any
part thereof except to the extent the failure to do so would not be reasonably
likely to have a Material Adverse Effect; provided, however, that Hibbett and
the other Consolidated Entities shall not be required to pay and discharge or
cause to be paid and discharged any such indebtedness, obligation, tax,
assessment, charge, levy or claim so long as the validity or amount thereof is
being duly contested in good faith by appropriate proceedings and Hibbett and
the
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Consolidated Entities shall maintain adequate reserves for such taxes,
indebtedness, obligations, assessments, charges, levies or claims during such
proceedings.
SECTION 7.3 FINANCIAL STATEMENTS, REPORTS, ETC. The Borrowers shall
deliver or cause to be delivered to the Lender:
(1) Not later than 50 days after the end of each first,
second and third fiscal quarter, a copy of Hibbett's 10-Q as filed
with the Securities and Exchange Commission or if such filing is no
longer required, a balance sheet and a statement of revenues and
expenses of Hibbett and its Consolidated Entities on a consolidated
basis and a statement of cash flow of Hibbett and its Consolidated
Entitles on a consolidated basis for such fiscal quarter and for the
period beginning on the first day of the fiscal year and ending on the
last day of such fiscal quarter (in sufficient detail to indicate
Hibbett's and each Consolidated Entity's compliance with the financial
covenants set forth in Section 7.7), together with statements in
comparative form for the corresponding periods in the preceding fiscal
year, and certified by the president or chief financial officer of
Hibbett; each certificate provided pursuant to this clause (1) shall
state that, except as disclosed in such certificate no Default has
occurred and is continuing as of such date or, if such certificate
discloses that a Default has occurred and is continuing as of such
date, such certificate shall describe such Default in reasonable
detail and state what action, if any, the Borrowers are taking or
propose to take with respect thereto.
(2) Not later than 100 days after the end of each fiscal
year, a copy of Hibbett's 10-K as filed with the Securities and
Exchange Commission or if such filing is no longer required, financial
statements (including a balance sheet, a statement of revenues and
expenses, a statement of changes in shareholders' equity and a
statement of cash flow) of Hibbett and its Consolidated Entities on a
consolidated and for such fiscal year (in sufficient detail to
indicate Hibbett's and each Consolidated Entity's compliance with the
financial covenants set forth in this Article 7), together with
statements in comparative form for the preceding fiscal year, and
accompanied by an opinion of certified public accountants of
recognized national standing, which opinion shall state in effect that
such financial statements (A) were audited using generally accepted
auditing standards, (B) were prepared in accordance with generally
accepted accounting principles applied on a consistent basis, and (C)
present fairly the financial condition and results of operations of
Hibbett and its Consolidated Entities for the periods covered.
(3) Together with the financial statements required by
paragraphs (1) and (2) above a compliance certificate duly executed by
the president or chief financial officer of Hibbett in the form of
Exhibit C attached hereto ("Compliance Certificate").
(4) Promptly upon receipt thereof, copies of all
management or similar letters submitted to the Borrowers or any
Consolidated Entity by independent accountants in connection with any
annual or interim audit of the books of the Borrowers or any
Consolidated Entity made by such accountants.
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(5) After the filing or receiving thereof, copies of all
material reports and notices that any Borrower or other ERISA
Affiliate files under ERISA with the Internal Revenue Service or the
PBGC or the United States Department of Labor.
(6) As soon as practicable, such other information
regarding the business affairs, financial condition or operations of
the Borrower or its Consolidated Entities as the Lender shall
reasonably request from time to time or at any time.
The Lender shall have no obligation to make Advances or issue Letters
of Credit at any time at which the Borrowers or any of them is delinquent in
the preparation and delivery of any of the items described above, whether or
not such delinquency constitutes an Event of Default.
SECTION 7.4 LITIGATION NOTICE. Each of the Borrowers shall, promptly
after the same shall have become known to any officer of such Borrower, notify
the Lender in writing of any action, suit or proceeding at law or in equity or
by or before any Governmental Authority in which there is a reasonable
likelihood of an outcome that would have a Material Adverse Effect.
SECTION 7.5 DEFAULT NOTICE. Hibbett shall promptly give notice in
writing to the Lender of the occurrence of any Default, together with a written
statement of the chief executive officer or chief financial officer of Hibbett
setting forth the nature and period of existence thereof and the action that
the Borrowers have taken and propose to take with respect thereto.
SECTION 7.6 INSURANCE. The Borrowers shall and (to the extent of
their right to do so) shall cause each of the Consolidated Entities to keep at
all times their insurable properties adequately insured with reputable insurers
and maintain in force, and pay all premiums and costs related to (a) insurance
on such properties to such extent and against such risks, including fire, as is
customary with companies in the same or a similar business of comparable size,
(b) necessary xxxxxxx'x compensation insurance and (c) such other insurance
(including liability insurance) as may be required by applicable Governmental
Requirements or as may otherwise be customarily maintained by companies in the
same or a similar business of comparable size.
SECTION 7.7 COVENANTS REGARDING FINANCIAL CONDITION. Except as
otherwise expressly provided in this Section 7.7, Hibbett shall also cause and
require each of the Consolidated Entities to observe and perform each of the
covenants and agreements of this section to be observed and performed by the
Borrowers or any of them, whether or not a specific reference is made to the
Consolidated Entities in each such covenant.
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The Borrowers, jointly and severally, covenant and agree that:
(1) Fixed Charges Coverage Ratio. The ratio of (A)
EBITDAR for any consecutive four quarter period to (B) the sum of (i)
Interest Expense, Operating Lease Payments, all income taxes (but only
to the extent actually paid during such period), dividends (but only
to the extent actually paid during such period) and (ii) Current
Maturities of Hibbett and the Consolidated Entities on a consolidated
basis at the end of such period shall not be less than 1.25 to 1.0 at
any time.
(2) Funded Debt to EBITDA Ratio. The ratio of Funded
Debt on the last day of any consecutive four quarter period to EBITDA
for such period shall not be greater than 2.0 to 1.0.
(3) Capital Expenditures. Hibbett and the Consolidated
Entities on a consolidated basis will not make in the aggregate in any
consecutive four fiscal quarters Capital Expenditures (net of landlord
allowances, proceeds of asset sales and casualty insurance proceeds)
that exceed $10,000,000.
(4) Investment and Loans. Hibbett and the Consolidated
Entities on a consolidated basis will not, directly or indirectly,
purchase or otherwise acquire any stock, security, obligation or
evidence of indebtedness of, make any capital contribution to, own any
equity interest in, or make any loan or advance to, any other person;
provided, however, that it may acquire and continue to hold (A) all
stock of and own interests in the persons that constitute or, after
giving effect to such purchase, will constitute Consolidated Entities;
and (B) Permitted Investments.
(5) Disposition of Assets. Hibbett and the Consolidated
Entities on a consolidated basis will not without the consent of the
Lender, sell, lease, transfer or otherwise dispose of all or any
substantial part of its properties and assets.
(6) Consolidation or Merger. Hibbett and the
Consolidated Entities will not consolidate with or merge with or into
another person or permit any other person to merge into it; provided,
however, (i) it may permit the Consolidated Entities to merge or
consolidate with other Consolidated Entities or Hibbett and (ii) it
may merge or consolidate with another person so long as (x) any
Borrower is the surviving corporation, (y) if such merger or
consolidation is in connection with a permitted acquisition, the
applicable conditions of subparagraph (15) of this Section shall be
satisfied and (z) immediately after giving effect thereto, no Default
would exist.
(7) Liens. Hibbett will not, and will not permit any
Consolidated Entity to, incur, create, assume or permit to exist any
Lien upon any of its accounts receivable, contract rights, chattel
paper, inventory, equipment, instruments, general intangibles or other
personal or real property of any character, whether now owned or
hereafter acquired, other than Liens that constitute Permitted
Encumbrances.
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(8) Sale of Receivables. Hibbett will not, and will not
permit any Consolidated Entity to, sell, assign or discount, or grant
or permit any Lien on, any of its accounts receivable or any
promissory note held by it, with or without recourse, other than the
discount of such notes in the ordinary course of business for
collection.
(9) Lease Obligations. Hibbett and the Consolidated
Entities on a consolidated basis will not incur, create, permit to
exist or assume any obligation to make Operating Lease Payments under
any lease (other than any capital lease or the QRS Lease) that (x) has
an unexpired term (including renewals at the option of the lessee) of
more than 20 years or (y) provides for aggregate Operating Lease
Payments during any consecutive four fiscal quarters in excess of
$1,000,000, if (z) immediately thereafter, the aggregate Operating
Lease Payments to be made by it under all leases (other than any
capital leases or the QRS Lease) described in the preceding subclauses
(x) or (y) would exceed $10,000,000 in any consecutive four fiscal
quarters.
(10) Indebtedness. Hibbett and the Consolidated Entities
on a consolidated basis will not incur, create, assume or permit to
exist any Debt, except (A) the indebtedness evidenced by the Notes,
(B) other Debt to the Lender, (C) purchase money obligations allowed
under Section 7.7(7), (D) Debt not exceeding $2,000,000 in the
aggregate (E) capitalized lease obligations and (F) Debt owed to a
Consolidated Entity.
(11) Guaranties. Except for the existing guaranty by
Hibbett of the obligations of SW under the QRS Lease and any other
guaranty by a Borrower of another Consolidated Entity's obligations,
Hibbett will not, and will not permit any Consolidated Entity to,
guarantee, endorse, become surety for or otherwise in any way become
or be responsible for the indebtedness, liabilities or obligations of
any other person, whether by agreement to purchase the indebtedness or
obligations of any other person, or agreement for the furnishing of
funds to any other person (directly or indirectly, through the
purchase of goods, supplies or services or by way of stock purchase,
capital contribution, working capital maintenance agreement, advance
or loan) or for the purpose of paying or discharging the indebtedness
or obligations of any other person, or otherwise, except for the
endorsement of negotiable instruments in the ordinary course of
business for collection.
(12) Take or Pay Contracts. Hibbett will not, and will
not permit any Consolidated Entity to, enter into or be a party to any
contract for the purchase of merchandise, materials, supplies or other
property if such contract provides that payment for such merchandise,
materials, supplies or other property shall be made regardless of
whether delivery of such merchandise, materials, supplies or other
property is ever made or tendered.
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(13) Sale-Leaseback. Except for the Lease Agreement
between QRS 12-14 (AL), Inc. and SW dated February 12, 1996 (the "QRS
Lease"), Hibbett will not, and will not permit any Consolidated Entity
to, enter into any arrangement, directly or indirectly, with any
person whereby it sells or transfers any property, real, personal or
mixed, and used or useful in its business, whether now owned or
hereafter acquired, and thereafter rents or leases such property or
other property that it intends to use for substantially the same
purpose or purposes as the property sold or transferred.
(14) Dividends and Distributions. Hibbett will not permit
any Consolidated Entity to be or become subject to any restrictions on
the ability of such Consolidated Entity to pay dividends or to make
distributions.
(15) Permitted Acquisitions. The Borrowers shall not make
in any given fiscal year any acquisitions of stock or assets of
persons engaged primarily in the same line of business as the
Borrowers having a cost in excess of $5,000,000, if, on the date of
the acquisition a Default exists or would result from such acquisition
without the express prior consent of the Lender; provided that this
Section 7.7(15) shall not prohibit Hibbett from complying with its
obligations under the Purchase Agreement relating to the QRS Lease if
Hibbett can do so without causing a Default under some other provision
of this Agreement.
SECTION 7.8 CONTINUATION OF CURRENT BUSINESS. Neither the Borrowers
nor any Consolidated Entity will engage in any business other than the business
now being conducted by it or other business reasonably ancillary thereto.
SECTION 7.9 COOPERATION; INSPECTION OF PROPERTIES. The Borrowers
shall, and shall cause the Consolidated Entities to, permit the Lender and its
representatives, at the Lender's sole cost and expense (so long as no Default
exists) to inspect the Borrowers' and the Consolidated Entities' properties and
assets (including all Stores), and to inspect, review and audit the Borrowers'
and the Consolidated Entities' books and records from time to time and at any
time, after reasonable notice and at reasonable times.
SECTION 7.10 USE OF PROCEEDS. The Borrowers shall use the proceeds
exclusively for general corporate purposes.
SECTION 7.11 TRANSACTIONS WITH AFFILIATES. Except as set forth in
Exhibit F, none of the Borrowers nor any other Consolidated Entity will,
directly or indirectly, enter into any lease or other transaction with any
Affiliate (other than a Borrower or another Consolidated Entity) on terms that
are less favorable to such Borrower or Consolidated Entity entering into such
lease or other transaction than would have been obtained on an arm's length
basis with persons who are not Affiliates of such Borrower or other
Consolidated Entity.
SECTION 7.12 ERISA. The Borrowers will not and will not permit any
other ERISA Affiliate to establish any Plan subject to Title IV of ERISA
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SECTION 7.13 CREATION OR ACQUISITION OF SUBSIDIARIES. The Borrowers
may from time to time create or acquire new Subsidiaries in connection with
permitted acquisitions allowed under Section 7.7(15) or otherwise in accordance
with this Agreement, provided that neither the aggregate fair market value at
any time of the assets of all Subsidiaries that are Immaterial Subsidiaries at
such time, nor the aggregate gross revenues (determined for the most recently
ended period of twelve consecutive fiscal months) of all Subsidiaries that are
Immaterial Subsidiaries at such time, shall exceed $2,000,000, and provided
further that promptly (and in any event within fifteen (15) Business Days)
after the creation or direct or indirect acquisition by any Borrower of any
such new Subsidiary (or, if such new Subsidiary is an Immaterial Subsidiary
when so created or acquired, promptly (and in any event within fifteen (15)
Business Days) after such new Subsidiary ceases to be an Immaterial Subsidiary
), such new Subsidiary will execute and deliver to the Lender an Assumption
Agreement and all other documents necessary to cause it to become jointly and
severally liable for all the Credit Obligations (subject to the limitations
provided in the Assumption Agreement).
ARTICLE 8
EVENTS OF DEFAULT AND REMEDIES
SECTION 8.1 EVENTS OF DEFAULT. The following shall constitute Events
of Default under this Agreement:
(a) default in the due payment of any principal or
interest payable on any Advance, Reimbursement Obligation or any other
amount payable under Articles 2, 3 and 4 of this Agreement and such
default shall continue unremedied for a period of 5 days after the
date the Lender gives Hibbett telephonic (confirmed promptly in
writing) or written notice of such default; provided, however, that
the Lender shall not be required to provide such notice more than 3
times in any 12 consecutive month period; or
(b) any of the Borrowers shall default in the observance
or performance of any provision in Sections 7.7, 7.8, 7.10, 7.12 and
7.13; or
(c) any of the Borrowers shall default in the performance
or observance of any provision of this Agreement, except those covered
by clauses (a) or (b) above, and shall not cure such default within 30
days after the date the Lender gives written or telephonic notice of
the default to Hibbett; or
(d) any statement, certification, representation or
warranty contained herein, or in any of the other Loan Documents or in
any report, financial statement, certificate or other instrument
delivered to the Lender by or on behalf of the Borrowers, was
misleading or untrue in any material respect at the time it was made;
or
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(e) default shall be made with respect to any Debt of any
of the Borrowers or of any other Consolidated Entity (other than the
Credit Obligations) when due or within any applicable grace period or
the performance of any other obligation incurred in connection with
any Debt of such Borrower or other Consolidated Entity (other than the
Credit Obligations), if the effect of such default is to accelerate
the maturity of such Debt or to permit the holder thereof to cause
such Debt to become due prior to its stated maturity, or any such Debt
shall not be paid when due or within any applicable grace period, if
the aggregate amount of all such Debt involved exceeds $1,000,000; or
(f) any of the Borrowers or any other Consolidated Entity
(other than an Immaterial Subsidiary) shall (i) apply for or consent
to the appointment of a receiver, trustee, liquidator or other
custodian of it or any of its properties or assets, (ii) fail or admit
in writing its inability to pay its debts generally as they become
due, (iii) make a general assignment for the benefit of creditors,
(iv) suffer or permit an order for relief to be entered against it in
any proceeding under the federal Bankruptcy Code, or (v) file a
voluntary petition in bankruptcy, or a petition or an answer seeking
an arrangement with creditors or seeking to take advantage of any
bankruptcy, reorganization, insolvency, readjustment of debt,
dissolution or liquidation law or statute, or an answer admitting the
material allegations of a petition filed against it in any proceeding
under any such law or statute, or if corporate or partnership action
shall be taken by the Borrowers or any other Consolidated Entity
(other than an Immaterial Subsidiary) for the purpose of effecting any
of the foregoing; or
(g) a petition shall be filed, without the application,
approval or consent of any of the Borrowers or any other Consolidated
Entity (other than an Immaterial Subsidiary), in any court of
competent jurisdiction, seeking bankruptcy, reorganization,
rearrangement, dissolution or liquidation of such Borrower or other
Consolidated Entity (other than an Immaterial Subsidiary) or of all or
a substantial part of the properties or assets of such Borrowers or
other Consolidated Entity (other than an Immaterial Subsidiary), or
seeking any other relief under any law or statute of the type referred
to in clause (v) of paragraph (h) above against such Borrower or other
Consolidated Entity (other than an Immaterial Subsidiary), or the
appointment of a receiver, trustee, liquidator or other custodian of
the Borrower or any other Consolidated Entity (other than an
Immaterial Subsidiary) or of all or a substantial part of the
properties or assets of such Borrower or any other Consolidated Entity
(other than an Immaterial Subsidiary), and such petition shall not
have been dismissed within 60 days after the filing thereof; or
(h) an Event of Default (as therein defined) under the
QRS Lease shall have occurred and be continuing, and the Landlord
thereunder shall have given notice pursuant to Section 23 of the QRS
Lease of its intention to exercise remedies thereunder; or
(i) final judgment or judgments for the payment of money
in excess of an aggregate of $500,000 shall be rendered against any of
the Borrowers and the same shall remain undischarged for a period of
30 days during which execution shall not be effectively stayed; or
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(j) (1) The persons listed on Exhibit G hereto and the
beneficiaries of any trusts listed therein, taken together, shall
cease to beneficially own and control, directly or indirectly, at
least (a) 50% of the number of issued and outstanding shares of the
capital stock of Hibbett entitled (without regard to the occurrence of
any contingency) to vote for the election of a majority of the members
of the board of directors of Hibbett (the "Voting Shares")
beneficially owned and controlled by them on the Closing Date (as such
number may be adjusted for stock splits, combinations and similar
events) and (b) 20% of the total issued and outstanding Voting Shares
at any time, or (2) Hibbett ceases to beneficially own and control at
least one hundred percent (100%) of the issued and outstanding shares
of each class of capital stock of the Initial Participating Entities.
then, and in any such event and at any time thereafter, if such Event of
Default shall then be continuing,
(A) either or both of the following actions may be taken:
(i) the Lender may declare any obligation of the Lender to make
further Advances or issue Letters of Credit terminated, whereupon the
obligation of the Lender to make further Advances or issue Letters of
Credit hereunder shall terminate immediately, and (ii) the Lender may
declare by notice to the Borrowers any or all of the Credit
Obligations (other than Letter of Credit Borrowings) to be immediately
due and payable, and the same, including all interest accrued thereon
and all other obligations of the Borrowers to the Lender, shall
forthwith become immediately due and payable without presentment,
demand, protest, notice or other formality of any kind, all of which
are hereby expressly waived, anything contained herein or in any
instrument evidencing the Credit Obligations to the contrary
notwithstanding; provided, however, that notwithstanding the above, if
there shall occur an Event of Default under clauses (f) or (g) above,
then the obligation of the Lender to lend hereunder shall
automatically terminate and any and all of the Credit Obligations
(other than Letter of Credit Borrowings) shall be immediately due and
payable without the necessity of any action by the Lender or notice to
the Lender;
(B) the Borrowers shall, promptly upon demand of the
Lender, deposit in cash with the Lender an amount equal to the amount
of all Letter of Credit Borrowings then outstanding, as collateral
security for the repayment thereof, which deposit shall be held by the
Lender under the provisions of Section 9.8; and
(C) the Lender may exercise any and all rights and
remedies available to the Lender under the Loan Documents and
applicable law.
SECTION 8.2 CUMULATIVE RIGHTS. No right or remedy herein conferred
upon the Lender is intended to be exclusive of any other rights or remedies
contained herein or in any other Loan Document, and every such right or remedy
shall be cumulative and shall be in addition to every other such right or
remedy contained herein and therein or now or hereafter existing at law or in
equity or by statute, or otherwise.
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SECTION 8.3 NO WAIVER. No course of dealing between the Borrowers
and the Lender or any failure or delay on the part of the Lender in exercising
any rights or remedies hereunder shall operate as a waiver of any rights or
remedies hereunder and no single or partial exercise of any rights or remedies
hereunder shall operate as a waiver or preclude the exercise of any other
rights or remedies hereunder or of the same right or remedy on a future
occasion.
SECTION 8.4 DEFAULT. The Lender shall have no right to accelerate
any of the Loans except upon the occurrence of an Event of Default; provided,
however, nothing contained in this sentence shall in any respect impair or
adversely affect the right, power and authority of the Lender (i) to take any
action expressly required or permitted to be taken under the Loan Documents
upon the occurrence of any Default (and including any action or proceeding
which the Lender may determine to be necessary or appropriate in furtherance of
any such expressly authorized action) and (ii) to take any action provided
under the Loan Documents or otherwise available by statute, at law or in equity
upon the occurrence of any Default.
ARTICLE 9
MISCELLANEOUS
SECTION 9.1 PARTICIPATIONS. The Borrowers and the Lender understand
that the Lender may grant a participation in the Notes, Loans and interest in
the Credit Obligations and the Loan Documents to any Affiliate of the Lender,
and all communications with the Lender and the Borrowers shall be solely with
the Lender and not with any participant. The Borrowers agree that any
participant or subparticipant (which, like a participant, must be an Affiliate
of the Lender) may exercise any and all rights of banker's lien or set-off with
respect to any Borrower, as fully as if such participant or subparticipant had
made a loan directly to such Borrower in the amount of the participation or
subparticipation given to such participant or subparticipant in the Credit
Obligations and the Loan Documents. For purposes of this Section 9.1 only, the
Borrowers shall be deemed to be directly obligated to each participant or
subparticipant in the amount of its participating interest in the amount of the
principal of, and interest on, the Credit Obligations. Nothing contained in
this section shall affect the Lender's right of set-off (under Section 9.3 or
applicable law) with respect to the entire amount of the Credit Obligations,
notwithstanding any such participation or subparticipation. The Lender may
divulge to any participant or subparticipant all information, reports,
financial statements, certificates and documents obtained by the Lender from
any of the Borrowers or any other person under any provisions of this Agreement
or the other Loan Documents or otherwise.
SECTION 9.2 NOTICES.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other document provided or permitted by this Agreement or
the other Loan Documents to be made upon, given or furnished to, or filed with,
any of the Borrowers the Lender must (except as otherwise provided in this
Agreement or the other Loan Documents) be in writing and be delivered by one of
the following means: (1) by personal delivery at the hand delivery address
specified below, (2) by first-class, registered or certified mail, postage
prepaid and addressed
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as specified below, or (3) if facsimile transmission facilities for such party
are identified below or pursuant to a separate notice from such party, sent by
facsimile transmission to the number specified below or in such notice.
(b) The hand delivery address, mailing address and (if applicable)
facsimile transmission number for receipt of notice or other documents by such
parties are as set forth below the signatures of the Borrowers and the Lender
on the attached signature pages. Any of such parties may change its address or
facsimile transmission number for receiving any such notice or other document
by giving notice of the change to the other parties referred to in this Section
9.2.
(c) Any such notice or other document shall be deemed delivered
when actually received by an officer, director, partner or other legal
representative of the party at the address or number specified pursuant to this
Section 9.2, or, if sent by mail, three Business Days after such notice or
document is deposited in the United States mail, addressed as provided above.
(d) Five (5) Business Days' notice to the Borrowers as provided
above shall constitute reasonable notification to the Borrowers when
notification is required by law; provided, however, that nothing contained in
the foregoing shall be construed as requiring five (5) Business Days' notice
if, under applicable law and the circumstances then existing, a shorter period
of time would constitute reasonable notice.
SECTION 9.3 SETOFF. Upon the occurrence and during the continuance
of any Event of Default each Lender is hereby authorized at any time and from
time to time, without notice to the Borrowers or any of them (any such notice
being expressly waived by the Borrowers), to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by the Lender (including any
branches, agencies or Affiliates of the Lender, wherever located) to or for the
credit or the account of the Borrowers or any of them against any and all of
the obligations of the Borrowers and each of them now or hereafter existing
under any of the Loan Documents, irrespective of whether or not any demand
shall have been made under the Loan Documents and although such obligations may
be unmatured. The Lender agrees promptly to notify each affected Borrower
after any such set-off and application, provided that the failure to give such
notice shall not affect the validity of such set-off and application or impose
any liability on the Lender. The rights of the Lender under this Section 9.3
are in addition to all other rights and remedies (including other rights of
set-off or pursuant to any banker's lien) that the Lender may have.
SECTION 9.4 SURVIVAL. All representations and warranties made under
this Agreement shall be deemed to be made, and shall be true and correct, at
and as of the Closing Date and the date of each Loan except to the extent (a)
previously fulfilled in accordance with the terms hereof, (b) subsequently
inapplicable, (c) modified as a result of activities of the Borrowers or
changes in circumstances, in any case as permitted hereunder or consented to in
accordance with the provisions hereof or (d) such representations and
warranties specifically relate to an earlier date. All covenants, agreements,
representations and warranties made in this Agreement or in any of the other
Loan Documents and in the certificates delivered pursuant to any of the Loan
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Documents shall survive the making by the Lender of the Loans and the execution
and delivery to the Lender of this Agreement, the Notes and the other Loan
Documents and shall continue in full force and effect so long as any of the
Credit Obligations remain outstanding.
SECTION 9.5 EXPENSES. (a) The Borrowers shall pay all reasonable
out-of-pocket expenses of the Lender, including fees and disbursements of
counsel for the Lender, in connection with the preparation of the Loan
Documents, any waiver or consent hereunder or thereunder or any amendment
hereof or thereof or any Default or alleged Default hereunder (including those
in connection with collection and other enforcement proceedings resulting
therefrom), other than expenses due to the Lender's own gross negligence or
willful misconduct. Any amount paid or advanced by the Lender under this
section or the other Loan Documents not immediately reimbursed to the Lender
after demand shall bear interest until paid at a rate equal to two percent (2%)
in excess of the Base Rate in effect from time to time, or the highest rate
permitted by law, whichever is less. The Borrowers shall pay all costs and
expenses of performing and satisfying their obligations under this Agreement.
The Borrowers' obligations under this Section 9.5 shall survive the payment in
full of the Credit Obligations and the termination of this Agreement.
SECTION 9.6 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which when so executed and delivered shall be
deemed an original, and it shall not be necessary in making proof of this
Agreement to produce or account for more than one such fully-executed
counterpart.
SECTION 9.7 SUBMISSION TO JURISDICTION. Each Borrower irrevocably
(a) acknowledges that this Agreement will be accepted by the Lender and
performed by such Borrower in the State of Alabama; (b) submits to the
jurisdiction of each state or federal court sitting in Jefferson County,
Alabama (collectively, the "Courts") over any suit, action or proceeding
arising out of or relating to this Agreement or any of the other Loan Documents
(individually, an "Agreement Action"); (c) waives, to the fullest extent
permitted by law, any objection or defense that such Borrower may now or
hereafter have based on improper venue, lack of personal jurisdiction,
inconvenience of forum or any similar matter in any Agreement Action brought in
any of the Courts; (d) agrees that final judgment in any Agreement Action
brought in any of the Courts shall be conclusive and binding upon such Borrower
and may be enforced in any other court to the jurisdiction of which such
Borrower is subject, by a suit upon such judgment; (e) consents to the service
of process on such Borrower in any Agreement Action by the mailing of a copy
thereof by registered or certified mail, postage prepaid, to such Borrower at
its address designated in or pursuant to Section 9.2; (f) agrees that service
in accordance with this Section 9.7 shall in every respect be effective and
binding on such Borrower to the same extent as though served on such Borrower
in person by a person duly authorized to serve such process; and (g) AGREES
THAT THE PROVISIONS OF THIS SECTION, EVEN IF FOUND NOT TO BE STRICTLY
ENFORCEABLE BY ANY COURT, SHALL CONSTITUTE "FAIR WARNING" TO SUCH BORROWER THAT
THE EXECUTION OF THIS AGREEMENT MAY SUBJECT SUCH BORROWER TO THE JURISDICTION
OF EACH STATE OR FEDERAL COURT SITTING IN JEFFERSON COUNTY, ALABAMA WITH
RESPECT TO ANY AGREEMENT ACTIONS, AND THAT
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IT IS FORESEEABLE BY SUCH BORROWER THAT IT MAY BE SUBJECTED TO THE JURISDICTION
OF SUCH COURTS AND MAY BE SUED IN THE STATE OF ALABAMA IN ANY AGREEMENT
ACTIONS. Nothing in this Section 9.7 shall limit or restrict the Lender's
right to serve process or bring Agreement Actions in manners and in courts
otherwise than as herein provided.
SECTION 9.8 TERMINATION. The termination of this Agreement shall not
affect any rights of the Borrowers or the Lender or any obligation of the
Borrowers or the Lender, arising prior to the effective date of such
termination, and the provisions hereof shall continue to be fully operative
until all transactions entered into or rights created or obligations incurred
prior to such termination have been fully disposed of, concluded or liquidated
and the Credit Obligations arising prior to or after such termination have been
irrevocably paid in full. The rights granted to the Lender for the benefit of
the Lender hereunder and under the other Loan Documents shall continue in full
force and effect, notwithstanding the termination of this Agreement, until all
of the Credit Obligations have been paid in full after the termination hereof
or the Borrowers have furnished the Lender with an indemnification satisfactory
to the Lender with respect thereto. All representations, warranties, covenants,
waivers and agreements contained herein shall survive termination hereof until
payment in full of the Credit Obligations unless otherwise provided herein.
Notwithstanding the foregoing, if after receipt of any payment of all or any
part of the Credit Obligations, the Lender is for any reason compelled to
surrender such payment to any Person because such payment is determined to be
void or voidable as a preference, impermissible setoff, a diversion of trust
funds or for any other reason, this Agreement shall continue in full force and
the Borrowers shall be liable to, and shall indemnify and hold the Lender
harmless for, the amount of such payment surrendered until the Lender shall
have been finally and irrevocably paid in full. The provisions of the foregoing
sentence shall be and remain effective notwithstanding any contrary action
which may have been taken by the Lender in reliance upon such payment, and any
such contrary action so taken shall be without prejudice to the Lender's rights
under this Agreement and shall be deemed to have been conditioned upon such
payment having become final and irrevocable. If on any date on which the
Borrowers wish to pay the Credit Obligations in full and terminate this
Agreement, there are any outstanding Letter of Credit Borrowings, the Borrowers
shall, unless otherwise agreed by the Lender in its sole discretion, make a
cash prepayment to the Lender on such date in an amount equal to the
then-outstanding Letter of Credit Borrowings, and the Lender shall hold such
prepayment in an interest-bearing cash collateral account in the name and under
the sole control of the Lender (which account shall bear interest at the
Lender's then-current rate for such accounts) as security for the Reimbursement
Obligations and other Letter of Credit Obligations. To the extent allowed by
law, such account shall not constitute an asset of the Borrowers, or any of
them, subject to their rights therein under this Section 9.8. The Lender shall
from time to time debit such account for the payment of the Letter of Credit
Obligations as the same become due and payable and shall promptly refund any
excess funds (including interest) held in said account to the Borrowers if and
when no Letter of Credit Borrowings remain outstanding hereunder and all of the
Credit Obligations have been paid in full. The Borrowers shall remain liable
for any Credit Obligations in excess of the amounts paid from such account.
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SECTION 9.9 GOVERNING LAW. All documents executed pursuant to the
transactions contemplated herein, including this Agreement and each of the Loan
Documents, shall be deemed to be contracts made under, and for all purposes
shall be construed in accordance with, the internal laws and judicial decisions
of the State of Alabama.
SECTION 9.10 INDEMNIFICATION. In consideration of the execution and
delivery of this Agreement by the Lender, and so long as the Lender has
fulfilled its obligations hereunder, each of the Borrowers hereby indemnifies,
exonerates and holds the Lender and its officers, directors, employees and
agents (collectively, the "Indemnified Parties") free and harmless from and
against any and all actions, causes of action, claims, suits, losses, costs,
liabilities and damages, and expenses incurred in connection therewith
(irrespective of whether any such Indemnified Party is a party to the action
for which indemnification hereunder is sought), including reasonable attorneys'
fees and disbursements (collectively, the "Indemnified Liabilities"), incurred
by the Indemnified Parties or any of them as a result of, or arising out of, or
relating to any of the following:
(a) any transaction financed or to be financed in whole
or in part, directly or indirectly, with the proceeds of any Loan;
(b) the entering into and performance of this Agreement
and any other Loan Document by any of the Indemnified Parties;
(c) any investigation, litigation or proceeding related
to any environmental cleanup, audit, compliance or other matter
relating to the protection of the environment in connection with the
Borrowers or the release by the Borrowers of any Hazardous Materials;
or
(d) the presence on or under, or the escape, seepage,
leakage, spillage, discharge, emission, discharging or releases from,
any real property owned or operated by the Borrowers thereof of any
Hazardous Materials (including any losses, liabilities, damages,
injuries, costs, expenses or claims asserted or arising under any
environmental laws), regardless of whether caused by, or within the
control of, the Borrower,
except for any such Indemnified Liabilities arising for the account of a
particular Indemnified Party by reason of the relevant Indemnified Party's
gross negligence or willful misconduct, and if and to the extent that the
foregoing undertaking may be unenforceable for any reason, the Borrower hereby
agrees to make the maximum contribution to the payment and satisfaction of each
of the Indemnified Liabilities which is permissible under applicable law.
SECTION 9.11 AGREEMENT CONTROLS. In the event that any term of any
of the Loan Documents other than this Agreement conflicts with any term of this
Agreement, the terms and provisions of this Agreement shall control.
SECTION 9.12 SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns;
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provided, however, that the Borrowers may not assign or transfer their rights
or obligations hereunder without the prior written consent of the Lender. The
Lender may not assign or transfer its interest hereunder except as otherwise
provided in this Agreement.
SECTION 9.13 SEVERABILITY. Any provision of any of the Loan
Documents 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 or
thereof or affecting the validity or enforceability of such provision in any
other jurisdiction.
SECTION 9.14 OBLIGATIONS OF HIBBETT ABSOLUTE. Hibbett hereby agrees
that its obligations and liabilities with respect to the Credit Obligations are
joint and several with the Participating Entities, continuing, absolute and
unconditional. Without limiting the generality of the foregoing, the
obligations and liabilities of Hibbett with respect to the Credit Obligations
shall not be released, discharged, impaired, modified or in any way affected by
(a) the invalidity or unenforceability of any Loan Document executed by any
other person with respect to the Credit Obligations, (b) the failure of the
Lender to give Hibbett a copy of any notice given to any other person, (c) any
modification, amendment or supplement of any obligation, covenant or agreement
contained in any Loan Document executed by any other person with respect to the
Credit Obligations, (d) any compromise, settlement, release or termination of
any obligation, covenant or agreement in any Loan Document executed with
respect to the Credit Obligations, (e) any waiver of payment, performance or
observance by or in favor of any other person of any obligation, covenant or
agreement under any Loan Document, (f) any consent, extension, indulgence or
other action or inaction, or any exercise or non- exercise of any right, remedy
or privilege with respect to any Loan Document executed by any other person
with respect to the Credit Obligations, or (g) the extension of time for
payment or performance of any Credit Obligation by any other person.
SECTION 9.15 ARBITRATION; PRESERVATION AND LIMITATION OF REMEDIES.
(a) If any dispute or controversy shall arise among the parties
hereto as to any matter arising out of or in connection with the Loan
Documents, the parties shall attempt in good faith to resolve such controversy
by mutual agreement. If such dispute or controversy cannot be so resolved, it
shall be resolved solely in accordance with the provisions of this Section
9.15. Institution of a judicial proceeding by a party does not waive the right
of that party to demand arbitration hereunder.
(b) Any dispute, controversy or claim between or among the parties
hereto (the "Disputing Parties"), including disputes, controversies and claims
arising out of or related to the Loan Documents, or the breach thereof, and the
subject matter hereof, shall, except as provided in this Section 9.15, be
settled by a single arbitrator by arbitration in Birmingham, Alabama in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association as amended from time to time and as modified by this Agreement.
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(c) The arbitrator shall be selected by the Disputing Parties
within 15 days after demand for arbitration is made by a Disputing Party. If
the Disputing Parties are unable to agree on an arbitrator within such period,
then each Disputing Party shall select one arbitrator, and each such arbitrator
shall select a third arbitrator and the dispute shall be settled by the panel
consisting of such three arbitrators (such panel, or the single arbitrator
agreed to by both parties, as the case may be, being hereinafter referred to as
the "Arbiter"). Each arbitrator shall be a licensed attorney in the State of
Alabama and shall possess substantive legal experience with respect to the
principal issues in dispute.
(d) Except as may otherwise be agreed in writing by the Disputing
Parties or as ordered by the Arbiter upon substantial justification, the
hearing of the dispute shall be held and concluded within 90 days of submission
of the dispute to arbitration. The Arbiter shall render its final award within
30 days following conclusion of the hearing. The Arbiter shall state the
factual and legal basis for the award. The decision of the Arbiter shall be
final and binding except as provided in the Federal Arbitration Act, 9 U.S.C.
Section 1 et. seq., and except for errors of law based on findings of fact.
Final judgment may be entered upon such an award in any court of competent
jurisdiction, but entry of such judgment shall not be required to make such
award effective.
(e) Nothing in this Section 9.15 shall limit any right that any
party may otherwise have to seek to obtain preliminary injunctive relief in
order to preserve the status quo pending the disposition of any such
arbitration proceeding.
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IN WITNESS WHEREOF, each of the Borrowers and the Lender have caused
this Credit Agreement to be executed and delivered by its duly authorized
corporate officer as of the day and year first above written.
HIBBETT SPORTING GOODS, INC.
By: /s/ Xxxxx Xxxxxxxxxx
----------------------------------
Its Chief Financial Officer
----------------------------
HIBBETT TEAM SALES, INC.
By: /s/ Xxxxx Xxxxxxxxxx
----------------------------------
Its Chief Financial Officer
----------------------------
SPORTS WHOLESALE, INC.
By: /s/ Xxxxx Xxxxxxxxxx
----------------------------------
Its Chief Financial Officer
----------------------------
Hand Delivery Address:
000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx 00000
FAX: (000) 000-0000
Attention: Chief Financial Officer
Mailing Address:
Post Office Box ___________
Xxxxxxxxxx, Xxxxxxx 00000
FAX: (000) 000-0000
Attention: Chief Financial Officer
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AMSOUTH BANK OF ALABAMA
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------
Its Senior Vice President
Hand Delivery Address:
7th Floor, AmSouth-Sonat Tower
0000 Xxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
FAX: (000) 000-0000
Attention: Regional Banking Department
Mailing Address:
Xxxx Xxxxxx Xxx 00000
Xxxxxxxxxx, Xxxxxxx 00000
FAX: (000) 000-0000
Attention: Regional Banking Department
