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EXHIBIT 10.5
EXECUTION COPY
AMENDED AND RESTATED
DEBTOR IN POSSESSION
LOAN AND SECURITY AGREEMENT
BY AND AMONG
FRANK'S NURSERY & CRAFTS, INC.
AS BORROWER,
THE LENDERS THAT ARE SIGNATORIES HERETO
AS THE LENDERS,
AND
XXXXX FARGO RETAIL FINANCE, LLC
AS AGENT
DATED AS OF FEBRUARY 19, 2001
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Table of Contents
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Page
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1. DEFINITIONS AND CONSTRUCTION.............................................................................1
1.1. Definitions.....................................................................................1
1.2. Accounting Terms...............................................................................23
1.3. Bankruptcy Code................................................................................23
1.4. Code...........................................................................................23
1.5. Construction...................................................................................23
1.6. Schedules and Exhibits.........................................................................24
2. LOAN AND TERMS OF PAYMENT...............................................................................24
2.1. Revolving Advances; Swing Loans................................................................24
2.2. Letters of Credit..............................................................................31
2.3. Special Real Estate Line.......................................................................34
2.4. Reserved.......................................................................................34
2.5. Payments.......................................................................................35
2.6. Overadvances...................................................................................36
2.7. Interest and Letter of Credit Fees: Rates, Payments, and Calculations.........................36
2.8. Collection of Accounts.........................................................................37
2.9. Crediting Payments; Application of Collections.................................................37
2.10. Designated Account.............................................................................38
2.11. Maintenance of Loan Account; Statements of Obligations.........................................38
2.12. Fees...........................................................................................39
2.13. LIBOR Option...................................................................................39
2.14. Capital Requirements...........................................................................41
3. CONDITIONS; TERM OF AGREEMENT...........................................................................42
3.1. Conditions Precedent to the Initial Advance and issuance of the Initial Letter of Credit.......42
3.2. Conditions Precedent to all Advances and all Letters of Credit.................................44
3.3. Conditions Subsequent..........................................................................45
3.4. Term...........................................................................................46
3.5. Effect of Termination..........................................................................46
3.6. Early Termination by Borrower..................................................................46
3.7. Termination Upon Event of Default..............................................................46
4. CREATION OF SECURITY INTEREST...........................................................................46
4.1. Grant of Security Interest.....................................................................46
4.2. Negotiable Collateral..........................................................................48
4.3. Collection of Accounts, General Intangibles, and Negotiable Collateral.........................48
4.4. Delivery of Additional Documentation Required..................................................48
4.5. Power of Attorney..............................................................................49
4.6. Right to Inspect; Inventories, Appraisals, Audits..............................................49
5. REPRESENTATIONS AND WARRANTIES..........................................................................50
5.1. No Encumbrances................................................................................50
5.2. Reserved.......................................................................................50
5.3. Eligible Inventory.............................................................................50
5.4. Equipment......................................................................................50
5.5. Location of Inventory and Equipment............................................................50
5.6. Inventory Records..............................................................................51
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5.7. Location of Chief Executive Office; FEIN.......................................................51
5.8. Due Organization and Qualification; Subsidiaries...............................................51
5.9. Due Authorization; No Conflict.................................................................51
5.10. Litigation.....................................................................................52
5.11. No Material Adverse Change.....................................................................52
5.12. Reserved.......................................................................................52
5.13. Employee Benefits..............................................................................52
5.14. Environmental Condition........................................................................53
5.15. Licenses.......................................................................................53
5.16. Leases.........................................................................................53
5.17. DDAs...........................................................................................53
5.18. Credit Card Receipts...........................................................................53
5.19. PACA...........................................................................................54
6. AFFIRMATIVE COVENANTS...................................................................................54
6.1. Accounting System..............................................................................54
6.2. Collateral and Financial Reporting.............................................................54
6.3. Tax Returns....................................................................................58
6.4. Guarantor Reports..............................................................................58
6.5. Returns........................................................................................58
6.6. Title to Equipment.............................................................................58
6.7. Maintenance of Equipment.......................................................................58
6.8. Taxes..........................................................................................58
6.9. Insurance......................................................................................59
6.10. No Setoffs or Counterclaims....................................................................60
6.11. Location of Inventory and Equipment............................................................60
6.12. Compliance with Laws...........................................................................60
6.13. Employee Benefits..............................................................................61
6.14. Leases.........................................................................................61
6.15. Mailing Lists, Advertising.....................................................................61
6.16. Depository Accounts............................................................................62
6.17. Avoidance Actions..............................................................................62
7. NEGATIVE COVENANTS......................................................................................62
7.1. Indebtedness...................................................................................62
7.2. Liens..........................................................................................63
7.3. Restrictions on Fundamental Changes............................................................63
7.4. Disposal of Assets.............................................................................63
7.5. Change Name....................................................................................63
7.6. Guarantee......................................................................................63
7.7. Nature of Business.............................................................................63
7.8. Prepayments and Amendments.....................................................................63
7.9. Change of Control..............................................................................63
7.10. Consignments...................................................................................64
7.11. Distributions..................................................................................64
7.12. Accounting Methods.............................................................................64
7.13. Investments....................................................................................64
7.14. Transactions with Affiliates...................................................................64
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7.15. Suspension.....................................................................................64
7.16. Compensation...................................................................................64
7.17. Use of Proceeds................................................................................64
7.18. Change in Location of Chief Executive Office; Inventory and Equipment with Bailees.............64
7.19. No Prohibited Transactions Under ERISA.........................................................65
7.20. Reserved.......................................................................................65
7.21. Financial and Inventory Covenants..............................................................66
7.22. Capital Expenditures...........................................................................66
8. EVENTS OF DEFAULT.......................................................................................66
9. THE LENDER GROUP'S RIGHTS AND REMEDIES..................................................................68
9.1. Rights and Remedies............................................................................68
9.2. Remedies Cumulative............................................................................71
10. TAXES AND EXPENSES......................................................................................71
11. WAIVERS; INDEMNIFICATION................................................................................71
11.1. Demand; Protest; etc...........................................................................71
11.2. The Lender Group's Liability for Collateral....................................................71
11.3. Indemnification................................................................................72
11.4. Damages........................................................................................72
12. NOTICES.................................................................................................72
13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER..............................................................73
14. DESTRUCTION OF BORROWER'S DOCUMENTS.....................................................................74
15. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS..............................................................74
15.1. Assignments and Participations.................................................................74
15.2. Successors.....................................................................................76
16. AMENDMENTS; WAIVERS.....................................................................................77
16.1. Amendments and Waivers.........................................................................77
16.2. No Waivers; Cumulative Remedies................................................................78
17. AGENT; THE LENDER GROUP.................................................................................78
17.1. Appointment and Authorization of Agent.........................................................78
17.2. Delegation of Duties...........................................................................79
17.3. Liability of Agent-Related Persons.............................................................79
17.4. Reliance by Agent..............................................................................79
17.5. Notice of Default or Event of Default..........................................................80
17.6. Credit Decision................................................................................80
17.7. Costs and Expenses; Indemnification............................................................81
17.8. Agent in Individual Capacity...................................................................81
17.9. Successor Agent................................................................................82
17.10. Withholding Tax................................................................................82
17.11. Collateral Matters.............................................................................83
17.12. Restrictions on Actions by Lenders; Sharing of Payments........................................84
17.13. Agency for Perfection..........................................................................85
17.14. Payments by Agent to the Lenders...............................................................85
17.15. Concerning the Collateral and Related Loan Documents...........................................85
17.16. Field Audits and Examination Reports; Confidentiality; Disclaimers by Lenders; Other Reports
and Information................................................................................86
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17.17. Several Obligations; No Liability..............................................................87
18. GENERAL PROVISIONS......................................................................................87
18.1. Effectiveness..................................................................................87
18.2. Section Headings...............................................................................87
18.3. Interpretation.................................................................................87
18.4. Severability of Provisions.....................................................................88
18.5. Counterparts; Telefacsimile Execution..........................................................88
18.6. Revival and Reinstatement of Obligations.......................................................88
18.7. Integration....................................................................................88
Exhibit A-1 Form of Assignment and Acceptance
Exhibit B-1 Business Plan
Exhibit C-1 Form of Compliance Certificate
Exhibit D-1 Form of Interim Order
Exhibit X-0 Xxxxx Xxxxxxxxx
Xxxxxxx X-0 Xxxx XXXXX Notice
Exhibit 6.2 Form of Borrowing Base Certificate
Schedule A-1 Core Properties
Schedule A-2 Second Priority Real Estate
Schedule C-1 Commitments
Schedule E-1 Eligible Inventory
Schedule P-1 Permitted Liens
Schedule R-1 Real Property
Schedule 5.8 Due Organization and Qualification; Subsidiaries
Schedule 5.10 Litigation
Schedule 5.13 Employee Benefits
Schedule 5.16 Leases
Schedule 5.17 DDA's
Schedule 5.18 Credit Card Receipts
Schedule 6.11 Location of Inventory and Equipment
Schedule 7.21 Financial and Inventory Covenants
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LOAN AND SECURITY AGREEMENT
THIS AMENDED AND RESTATED DEBTOR IN POSSESSION LOAN AND SECURITY
AGREEMENT (this "Agreement"), is entered into as of February 19, 2001, among
Frank's Nursery & Crafts, Inc., a Michigan corporation and a debtor and
debtor-in-possession under Chapter 11 of the Bankruptcy Code (as defined below)
("Borrower"), with its chief executive office located at 0000 Xxxx Xxxx Xxxx
Xxxx, Xxxx, Xxxxxxxx 00000, on the one hand, and the financial institutions
listed on the signature pages hereof (such financial institutions, together with
their respective successors and assigns, are referred to hereinafter each
individually as a "Lender" and collectively as the "Lenders"), and XXXXX FARGO
RETAIL FINANCE, LLC, as Agent, on the other hand.
The parties agree as follows:
1. DEFINITIONS AND CONSTRUCTION.
1.1. DEFINITIONS. As used in this Agreement, the following terms shall
have the following definitions:
"Account Debtor" means any Person who is or who may become obligated
under, with respect to, or on account of, an Account.
"Accounting Period" means a four-calendar-week period within a fiscal
year of the Borrower with the first such period commencing on the first day of a
fiscal year and each subsequent such four-calendar-week period subsequently
commencing at the end of the immediately proceeding period, resulting in
thirteen four-week periods in one fiscal year; each such "Accounting Period" is
referred to herein consecutively as Accounting Period 1 through Accounting
Period 13.
"Accounts" means all currently existing and hereafter arising accounts,
contract rights, and all other forms of obligations owing to Borrower arising
out of the sale or lease of goods or the rendition of services by Borrower,
irrespective of whether earned by performance, and any and all credit insurance,
guaranties, or security therefor.
"Advances" has the meaning set forth in Section 2.1(a).
"Adjusted Letter of Credit Usage" means, as of any date of
determination, the sum of (a) (i) 100%, minus the Applicable Inventory Advance
Rate, times (ii) the undrawn amount of outstanding Inventory Letters of Credit,
plus (b) 50% of the outstanding amount of all other outstanding Letters of
Credit, plus (c) all domestic landing, freight and duty charges applicable
thereto.
"Adverse Action" means any action or any assertion of any claims or
causes of action against Agent or Lenders or their officers, directors,
employees, agents, attorneys, affiliates, assigns or successors to object to or
contest, or raise any defenses to, the validity, perfection, priority, or
enforceability of the Obligations of the Liens of Agent or Lender granted
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under the Loan Documents; or to take any act which has the effect of materially
modifying or compromising the rights and remedies of Agent or Lenders, including
without limitation the preparation and/or support of a Chapter 11 plan of
reorganization that is contrary to any term or condition set forth in or
acknowledged by this Agreement or the Orders.
"Affiliate" means, as applied to any Person, any other Person
who directly or indirectly controls, is controlled by, is under common control
with or is a director or officer of such Person. For purposes of this
definition, "control" means the possession, directly or indirectly, of the power
to vote 5% or more of the securities having ordinary voting power for the
election of directors or the direct or indirect power to direct the management
and policies of a Person.
"Agent" means Xxxxx Fargo Retail Finance, LLC, solely in its capacity
as agent for the Lenders, and shall include any successor agent.
"Agent Advance" has the meaning set forth in Section 2.1(h).
"Agent Loan" has the meaning set forth in Section 2.1(g).
"Agent-Related Persons" means Agent, together with its Affiliates, and
the officers, directors, employees, counsel, agents (including Oversight Agent),
and attorneys-in-fact of Agent and such Affiliates.
"Agent's Account" has the meaning set forth in Section 2.8.
"Agent's Discretion" means:
(a) Each reference in the Loan Documents to the exercise of
discretion or the like by the Agent shall be to that Agent's exercise of its
reasonable (from the perspective of a secured asset-based lender) business
judgment, in good faith (which shall be presumed), based upon that Agent's
consideration of any such factor as the Agent, taking into account information
of which that Agent then has actual knowledge, believes:
(i) Will or reasonably could be expected to affect the
value of the Collateral, the enforceability of the Agent's security and
collateral interests therein, or the amount which the Agent would
likely realize therefrom (taking into account delays which may possibly
be encountered in the Agent's realizing upon the Collateral and likely
Lender Group Expenses in connection with the enforcement of remedies
and associated costs of collection);
(ii) Indicates that any report or financial information
delivered to the Agent by or on behalf of the Borrower is incomplete,
inaccurate, or misleading in any material manner or was not prepared in
accordance with the requirements of this Agreement; and/or
(iii) Constitutes a Default or an Event of Default.
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(b) In the exercise of such judgment, as set forth in clause (a)
above, the Agent also may take into account any of the following factors:
(i) Those included in, or tested by, the definitions of
"Eligible Inventory" and "Cost";
(ii) The current financial and business climate of the
industry in which the Borrower competes (having regard for the
Borrower's position in that industry);
(iii) General economic conditions which have a material
effect on cost structure;
(iv) Material changes in or to the mix of the Borrower's
Inventory;
(v) Seasonality with respect to the Borrower's Inventory
and pattern of the Borrower's retail sales versus that which was
projected;
(vi) Material changes in Availability versus that which
was projected; and/or
(vii) Such other factors as the Agent determines as
having a material bearing on credit risks associated with the providing
of loans and financial accommodations to the Borrower.
(c) The burden of establishing the failure of the Agent
to have acted in a reasonable manner in such Agent's exercise of discretion
shall be the Borrower's.
"Agent's Liens" means the Liens granted by Borrower to Agent
for the benefit of the Lender Group under this Agreement and/or the other Loan
Documents.
"Agreement" has the meaning set forth in the preamble hereto.
"Applicable Inventory Advance Rate" means with respect to any
Inventory Letter of Credit issued for the purpose of purchasing: (i) Eligible
Lawn & Garden Inventory, seventy percent (70%); (ii) Eligible Live Plants
Inventory, fifty-five percent (55%); (iii) Eligible Floral & Crafts inventory,
sixty percent (60%); (iv) Eligible Christmas Decoration Inventory to be
delivered to Borrower during Accounting Periods 7 through 12 of each fiscal
year, sixty percent (60%); or (v) Eligible Christmas Decoration Inventory to be
delivered to Borrower during any other Accounting Period of each fiscal year,
thirty percent (30%).
"Assignee" has the meaning set forth in Section 15.1.
"Assignment and Acceptance" has the meaning set forth in
Section 15.1 (a) and shall be in the form of Exhibit A-1.
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"Authorized Person" means any officer or other employee of
Borrower.
"Availability" means, as of any date of determination, the
result (so long as such result is a positive number) of (a) the lesser of the
Borrowing Base (net of applicable Reserves) or the Maximum Revolving Amount,
plus (b) the lesser of the Maximum Special Real Estate Line Amount or the Real
Estate Line Borrowing Base (net of applicable Reserves), less (c) the Revolving
Facility Usage.
"Availability Reserves" means such reserves as Agent from time
to time determines in Agent's Discretion as being appropriate to reflect the
impediments to the Agent's ability to realize upon the Collateral. Without
limiting the generality of the foregoing, Availability Reserves may include (but
are not limited to) reserves based on the following:
(a) rent for any leased store location where the landlord
or any of other Person could assert a statutory lien in respect of the
Collateral, for which an acceptable Collateral Access Agreement has not been
received by Agent (irrespective of whether any rent is currently due);
(b) in-store customer credits and gift certificates;
(c) payables (based upon payables which are past due
normal trade terms);
(d) frequent shopper programs;
(e) special orders and customer deposits;
(f) taxes and other governmental charges, including ad
valorem, personal property, sales, and other taxes which may have priority over
the security interests of the Lender Group in the Collateral;
(g) held or post-dated checks;
(h) claims that Agent believes in Agent's Discretion
could have priority over the Obligations by virtue of Borrower's Bankruptcy Case
and application of the Bankruptcy Code;
(i) the Carve Out Reserve;
(j) any "self-insurance" program maintained by the
Borrower;
(k) any claims or Liens under PACA; and
(l) in respect of the Special Real Estate Line Advances,
environmental or title issues or competing Liens in respect of the Core
Properties.
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"Average Unused Portion of the Total Commitment" means, as of
any date of determination, (a) the Total Commitment, less (b) the sum of (i) the
average Daily Balance of Advances that were outstanding during the immediately
preceding month, plus (ii) the average Daily Balance of the undrawn Letters of
Credit that were outstanding during the immediately preceding month.
"Bankruptcy Case" means the case filed by Borrower under
Chapter 11 of the Bankruptcy Code with the Bankruptcy Court, case no.
01-52415-JS.
"Bankruptcy Code" means the United States Bankruptcy Code (11
U.S.C.ss.101 et seq.), as amended, and any successor statute.
"Bankruptcy Court" means the United States Bankruptcy Court
for the District of Maryland, or such other successor court where the Bankruptcy
Case is pending.
"Base LIBOR Rate" means the rate per annum, determined by
Agent in accordance with its customary procedures, and utilizing such electronic
or other quotation sources as it considers appropriate (rounded upwards, if
necessary, to the next 1/16%), on the basis of the rates at which Dollar
deposits are offered to major banks in the London interbank market on or about
11:00 a.m. (California time) 2 Business Days prior to the commencement of the
applicable Interest Period, for a term and in amounts comparable to the Interest
Period and amount of the LIBOR Rate Loan requested by Borrower in accordance
with this Agreement, which determination shall be conclusive in the absence of
manifest error.
"Benefit Plan" means a "defined benefit plan" (as defined in
Section 3(35) of ERISA) for which Borrower, any Subsidiary of Borrower, or any
ERISA Affiliate has been an "employer" (as defined in Section 3(5) of ERISA)
within the past six years.
"Blocked Account" means any DDA for which a DDA Notification
has been received by the depository institution that maintains such DDA.
"Borrower" has the meaning set forth in the preamble to this
Agreement.
"Borrower's Books" means all of Borrower's books and records
including: ledgers; records indicating, summarizing, or evidencing Borrower's
properties or assets (including the Collateral) or liabilities; all information
relating to Borrower's business operations or financial condition; and all
computer programs, disk or tape files, printouts, runs, or other computer
prepared information.
"Borrowing" means a borrowing hereunder consisting of Advances
made on the same day by the Lenders, or by Agent in the case of an Agent Loan or
an Agent Advance.
"Borrowing Base" has the meaning set forth in Section 2.1(a).
"Business Day" means any day that is not a Saturday, Sunday,
or other day on which national banks are authorized or required to close.
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"Business Plan" means Borrower's business plan attached hereto
as Exhibit B-1, together with any amendment, modification, or revision to such
business plan approved by Agent.
"Capital Lease" means any lease which may be capitalized in
accordance with GAAP.
"Carve-Out Expenses" means: (a) the quarterly fees required to
be paid by Borrower pursuant to 28 U.S.C. ss. 1930(a); (b) fees payable to the
clerk of the Bankruptcy Court; and (c) to the extent that there are insufficient
assets in the Estate to pay all allowed but unpaid administrative expenses and
only to the extent that the fees and expenses incurred on or after the Petition
Date by professionals retained under sections 327 or 1103 by Borrower or by any
official committee appointed pursuant to section 1102 (collectively,
"Professional Fees"), all of the foregoing up to a maximum aggregate sum not
exceeding the amount of the Carve Out Reserve; provided that the Carve-Out
Expenses shall not include (i) any other claims that are or may be senior to or
pari passu with any of the Carve-Out Expenses or any Professional Fees and
expenses of a Chapter 7 trustee; (ii) any prepetition retainer paid to
Borrower's counsel in connection with or related to the Bankruptcy Case; and
(iii) any Professional Fees and expenses related to or arising from any Adverse
Lender Action.
"Carve-Out Reserve" means $2,000,000.
"Change of Control" shall be deemed to have occurred at such
time as a "person" or "group" (within the meaning of Sections 13(d) and 14(d)(2)
of the Securities Exchange Act of 1934), other than the holders thereof on the
date hereof and their Affiliates, becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Securities Exchange Act of 1934), directly or indirectly,
of more than 10% of the total voting power of all classes of stock then
outstanding of Borrower entitled to vote in the election of directors.
"Christmas Nursery" means all live Christmas plants and trees
included in Department 1.
"Closing Date" means the date of the first to occur of the
making of the initial Advance or the issuance of the initial Letter of Credit.
"Code" means the Uniform Commercial Code as in effect in the
Commonwealth of Massachusetts.
"Collateral" means each of the following:
(a) the Accounts,
(b) Borrower's Books,
(c) the Equipment,
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(d) the General Intangibles,
(e) the Inventory,
(f) the Investment Property,
(g) the Negotiable Collateral,
(h) the Real Property Collateral,
(i) any money, or other assets of Borrower that now or
hereafter come into the possession, custody, or control of the Lender Group, and
(j) the proceeds and products, whether tangible or
intangible, of any of the foregoing, including proceeds of insurance covering
any or all of the Collateral, and any and all Accounts, Borrower's Books,
Equipment, General Intangibles, Inventory, Negotiable Collateral, Real Property,
money, deposit accounts, or other tangible or intangible property resulting from
the sale, exchange, collection, or other disposition of any of the foregoing, or
any portion thereof or interest therein, and the proceeds thereof,
provided that any avoidance actions under Sections 544, 547 or 548 of the
Bankruptcy Code and the proceeds thereof shall not be included in the
Collateral.
"Collateral Access Agreement" means a landlord waiver,
mortgagee waiver, bailee letter, or acknowledgment agreement of any
warehouseman, processor, lessor, consignee, or other Person in possession of,
having a Lien upon, or having rights or interests in the Equipment or Inventory,
in each case, in form and substance satisfactory to Agent.
"Collections" means all cash, checks, notes, instruments, and
other items of payment (including, insurance proceeds, proceeds of cash sales,
rental proceeds, and tax refunds).
"Commitment" means, at any time with respect to a Lender, the
principal amount set forth beside such Lender's name under the heading
"Commitment" on Schedule C-1 or on the signature page of the Assignment and
Acceptance pursuant to which such Lender became a Lender hereunder in accordance
with the provisions of Section 15.1, as such Commitment may be adjusted from
time to time in accordance with the provisions of Section 15.1 and "Commitments"
means, collectively, the aggregate amount of the commitments of all of the
Lenders.
"Compliance Certificate" means a certificate substantially in
the form of Exhibit C-1 and delivered by the chief accounting officer of
Borrower to Agent.
"Concentration Account" means account number 144094771 of
Borrower, maintained at The Chase Manhattan Bank, or such other deposit account
of Borrower (located in
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the United States) into which cash received in the other Blocked Accounts is
wire transferred as provided in Section 2.8(b).
"Concentration Account Agreement" means the Blocked Account
Agreement among Borrower, the Concentration Account Bank and Agent, applicable
to the Concentration Account.
"Concentration Account Bank" means The Chase Manhattan Bank.
"Core Properties" means, collectively, each of the parcels of
Real Property Collateral identified on Schedule A-1 and any other parcel of Real
Property Collateral designated by the Agent from time to time in its Agent's
Discretion as a "Core Property".
"Cost" means the calculated cost of Inventory, as determined
from invoices received by Borrower, Borrower's purchase journal or stock ledger,
based upon Borrower's accounting practices, known to Agent, which practices are
in effect on the date on which this Agreement was executed. "Cost" does not
include any inventory capitalization costs inclusive of advertising, but may
include other charges used in Borrower's determination of cost of goods sold and
bringing goods to market, all within Agent's sole discretion and in accordance
with GAAP.
"Credit Card Agreements" means those certain agreements
between Agent and the credit card clearinghouses and processors of Borrower
pursuant to which such credit card clearinghouse or processors agree to transfer
on a daily basis all credit card receipts of Borrower, or other amounts payable
by such clearinghouse or processor, into the Concentration Account. All Credit
Card Agreements shall be in form and substance satisfactory to Agent.
"Daily Balance" means, with respect to each day during the
term of this Agreement, the amount of an Obligation owed at the end of such day.
"DDA" means any checking or other demand daily depository
account maintained by Borrower.
"DDA Notification" has the meaning set forth in Section
3.1(k).
"deems itself insecure" means that the Person deems itself
insecure in accordance with the provisions of Section 1208 of the Code.
"Default" means an event, condition, or default that, with the
giving of notice, the passage of time, or both, would be an Event of Default.
"Defaulting Lender" has the meaning set forth in Section 2.1
(f)(ii).
"Defaulting Lenders Rate" means the Reference Rate for the
first three days from and after the date the relevant payment is due and
thereafter at the interest rate then applicable to Advances.
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"Department 1" means the category of Inventory historically
referred to by the Borrower in its books and records as "Department 1"
consisting primarily of Outdoor Live Plants.
"Department 2" means the category of Inventory historically
referred to by the Borrower in its books and records as "Department 2"
consisting primarily of indoor live foliage, indoor flowering plants, hanging
baskets, table plants and indoor bedding and hanging plants.
"Department 3" means the category of Inventory historically
referred to by the Borrower in its books and records as "Department 3"
consisting primarily of planters and plant accessories.
"Department 4" means the category of Inventory historically
referred to by the Borrower in its books and records as "Department 4"
consisting primarily of gardening tools, gardening accessories, water management
tools and seasonal accessories (except for Christmas accessories).
"Department 5" means the category of Inventory historically
referred to by the Borrower in its books and records as "Department 5"
consisting primarily of fertilizer, spreaders, chemicals, sprayers and seeds.
"Department 6" means the category of Inventory historically
referred to by the Borrower in its books and records as "Department 6"
consisting primarily of bird food, bird feeders, bird accessories, outdoor
living, seasonal hardgoods and outdoor bulk goods.
"Department 7" means the category of Inventory historically
referred to by the Borrower in its books and records as "Department 7"
consisting primarily of Christmas Decoration Inventory.
"Department 8" means the category of Inventory historically
referred to by the Borrower in its books and records as "Department 8"
consisting primarily of annual and perennial bedding plans and bulbs.
"Department 9" means the category of Inventory historically
referred to by the Borrower in its books and records as "Department 9"
consisting primarily of silk and dried flowers, potted trees and floral craft
arrangements.
"Department 10" means the category of Inventory historically
referred to by the Borrower in its books and records as "Department 10"
consisting primarily of paints, paint accessories, wood crafts, craft
accessories, ribbon, furniture, garden decor,
"Department 999" means the category of Inventory historically
referred to by the Borrower in its books and records as "Department 999".
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"Designated Account" means account number 323837735 of
Borrower maintained with Borrower's Designated Account Bank, or such other
deposit account of Borrower (located within the United States) which has been
designated, in writing and from time to time, by Borrower to Agent.
"Designated Account Bank" means The Chase Manhattan Bank,
whose office is located at 1 Chase Manhattan Xxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000, and whose ABA number is 000000000.
"Disbursement Letter" means an instructional letter executed
and delivered by Borrower to Agent regarding the extensions of credit to be made
on the Closing Date, the form and substance of which shall be satisfactory to
Agent.
"Dollars or $" means United States dollars.
"Early Termination Premium" has the meaning set forth in
Section 3.6.
"EBITDA" means the consolidated net income of Borrower and its
Subsidiaries (excluding extraordinary items) for the applicable period (a) plus
all interest expense, income tax expense, depreciation and amortization
(including amortization of any goodwill or other intangibles) for the period,
(b) plus or minus losses or gains attributable to any fixed asset sales in the
period and (c) plus or minus any other non-cash charges which have been
subtracted or added in calculating consolidated net income for the period, (d)
plus any non-recurring charge or restructuring charge (including retention
plans), (e) plus the cumulative effect of any change in accounting principles
and (f) plus "Chapter 11 expenses" (or "administrative costs reflecting Chapter
11 expenses") as shown on the Borrower's statement of income for such period.
"Eligible Christmas Decoration Inventory" means all Eligible
Inventory consisting of Christmas tree electronics, lifelike Christmas trees,
Christmas tree decorations, boutique items, Christmas tree stands, stationary,
wreaths, garland and all other Inventory included in Department 7; provided that
Christmas Inventory does not include Christmas Nursery.
"Eligible Floral & Crafts Inventory" means all Eligible
Inventory consisting of silk and dried flowers, potted trees, floral crafts,
furniture, garden decor, paints, paint accessories, wood crafts, craft
accessories, candles, party goods, frames, door mats, ribbon and all other
Inventory included in Xxxxxxxxxx 0, Xxxxxxxxxx 00 and Department 999.
"Eligible Inventory" means Inventory consisting of first
quality finished goods held for sale in the ordinary course of Borrower's
business that are located at or in-transit between Borrower's premises
identified on Schedule E-1, that strictly comply with each and all of the
representations and warranties respecting Inventory made by Borrower to the
Lender Group in the Loan Documents, and that are and at all times continue to be
acceptable to the Lender Group in all respects; provided, however, that
standards of eligibility may be fixed and revised from time to time by the Agent
in the Agent's Discretion. In determining the amount to be so included, Eligible
Inventory shall be valued at the lower of Cost or market on a basis
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consistent with Borrower's current and historical accounting practices less the
amount of all Inventory Reserves. An item of Inventory shall not be included in
Eligible Inventory if:
(a) it is not owned solely by Borrower or Borrower does
not have good, valid, and marketable title thereto or is subject to a Lien under
PACA;
(b) it is not located at one of the locations set forth
on Schedule E-1 or in transit between such locations;
(c) it is not subject to a valid and perfected first
priority security interest in favor of the Lender Group;
(d) it consists of goods returned or rejected by
Borrower's customers or goods in transit; and
(e) it is obsolete or slow moving, a restrictive or
custom item, packaging and shipping materials, supplies used or consumed in
Borrower's business, Inventory subject to a Lien in favor of any third Person,
defective goods, "seconds," or Inventory acquired on consignment.
"Eligible Lawn & Garden Inventory" means all Eligible
Inventory consisting of planters, planting accessories, gardening tools,
gardening accessories, water management tools, sprayers, seed, bird food, bird
feeders, bird accessories, outdoor living, seasonal hardgoods, outdoor bulk
goods and all other Inventory included in Xxxxxxxxxx 0, Xxxxxxxxxx 0, Xxxxxxxxxx
0 and Department 6.
"Eligible Live Plants Inventory" means all Eligible Inventory
consisting of outdoor live plants, indoor live foliage, flowering plants,
hanging baskets, table plants, annual and perennial bulbs, bedding and hanging
plants and all other Inventory included in Department 1, Department 2 and
Department 8.
"Eligible Transferee" means (a) a commercial bank organized
under the laws of the United States, or any state thereof, and having total
assets in excess of $5,000,000,000, or the asset based lending Affiliate of such
bank, (b) a commercial bank organized under the laws of any other country which
is a member of the Organization for Economic Cooperation and Development or a
political subdivision of any such country, and having total assets in excess of
$5,000,000,000, or the asset based lending Affiliate of such bank; provided that
such bank is acting through a branch or agency located in the United States, (c)
a finance company, insurance or other financial institution, or fund that is
engaged in making, purchasing, or otherwise investing in commercial loans in the
ordinary course of its business and having total assets in excess of
$500,000,000, (d) any Affiliate (other than individuals) of an existing Lender,
and (e) any other Person approved by Agent and Borrower.
"Entered" means recorded on the docket with respect to the
Bankruptcy Case by the Clerk of the Bankruptcy Court.
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"Equipment" means all of Borrower's present and hereafter
acquired machinery, machine tools, motors, equipment, furniture, furnishings,
fixtures, vehicles (including motor vehicles and trailers), tools, parts, goods
(other than consumer goods, farm products, or Inventory), wherever located,
including, all attachments, accessories, accessions, replacements,
substitutions, additions, and improvements to any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of
1974, 29 U.S.C.ss.ss.1000 et seq., amendments thereto, successor statutes, and
regulations or guidance promulgated thereunder.
"ERISA Affiliate" means (a) any corporation subject to ERISA
whose employees are treated as employed by the same employer as the employees of
Borrower under IRC Section 414(b), (b) any trade or business subject to ERISA
whose employees are treated as employed by the same employer as the employees of
Borrower under IRC Section 414(c), (c) solely for purposes of Section 302 of
ERISA and Section 412 of the IRC, any organization subject to ERISA that is a
member of an affiliated service group of which Borrower is a member under IRC
Section 414(m), or (d) solely for purposes of Section 302 of ERISA and Section
412 of the IRC, any party subject to ERISA that is a party to an arrangement
with Borrower and whose employees are aggregated with the employees of Borrower
under IRC Section 414(o).
"ERISA Event" means (a) a Reportable Event with respect to any
Benefit Plan or Multiemployer Plan, (b) the withdrawal of Borrower, any of its
Subsidiaries or ERISA Affiliates from a Benefit Plan during a plan year in which
it was a "substantial employer" (as defined in Section 4001(a)(2) of ERISA), (c)
the providing of notice of intent to terminate a Benefit Plan in a distress
termination (as described in Section 4041(c) of ERISA), (d) the institution by
the PBGC of proceedings to terminate a Benefit Plan or Multiemployer Plan, (e)
any event or condition (i) that provides a basis under Section 4042(a)(1), (2),
or (3) of ERISA for the termination of, or the appointment of a trustee to
administer, any Benefit Plan or Multiemployer Plan, or (ii) that may result in
termination of a Multiemployer Plan pursuant to Section 4041A of ERISA, (f) the
partial or complete withdrawal within the meaning of Sections 4203 and 4205 of
ERISA, of Borrower, any of its Subsidiaries or ERISA Affiliates from a
Multiemployer Plan, or (g) providing any security to any Plan under Section
401(a)(29) of the IRC by Borrower or its Subsidiaries or any of their ERISA
Affiliates.
"Estate" means the estate created by virtue of the Bankruptcy
Case.
"Event of Default" has the meaning set forth in Section 8.
"Existing Lender" means, collectively, the lenders party to
the Credit Agreement dated as of December 24, 1997, as amended, among Borrower,
The Chase Manhattan Bank, as Agent, and the institutions party thereto.
"Fee Letter" means that certain fee letter agreement dated as
of the date hereof between Borrower and Agent, in form and substance
satisfactory to Agent in Agent's discretion.
"FEIN" means Federal Employer Identification Number.
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"Final Bankruptcy Court Order" means an order containing a
finding of good faith under Section 364(e) of the Bankruptcy Code in form, scope
and substance acceptable to the Agent in Agent's Discretion finally approving
this Agreement and the other Loan Documents, as such order may be amended,
modified or supplemented from time to time with the express written joinder and
consent of the Agent and the Borrower and the approval of the Bankruptcy Court,
which order has not been vacated, appealed with respect to the question of
whether the Agent or any Lender is a good faith lender under Section 364(e) of
the Bankruptcy Code, reversed, stayed, modified or supplemented.
"Final Bankruptcy Court Order Date" means the date which the
Final Bankruptcy Court Order shall have been duly Entered by the Bankruptcy
Court and shall be in full force and effect, and shall not have been reversed,
stayed, modified or amended, absent written consent of the Agent and the
Borrower.
"Final Order" means an order of the Bankruptcy Court (a) as to
which the time to appeal, petition for certiorari or move for reargument or
rehearing has expired and as to which no appeal, petition for certiorari or
other proceedings for reargument or rehearing shall then be pending, or (b) if
an appeal, writ of certiorari, reargument or rehearing thereof has been filed or
sought, such order of the Bankruptcy Court shall have been affirmed by the
highest court to which such order was appealed, or certiorari shall have been
denied or reargument or rehearing shall have been denied or resulted in no
modification of such order, and the time to take any further appeal, petition
for certiorari or move for reargument or rehearing shall have expired.
"Funding Date" means the date on which a Borrowing occurs.
"Funding Orders" means, collectively, the Final Bankruptcy
Court Order and the Interim Bankruptcy Order, as respectively Entered by the
Bankruptcy Court.
"GAAP" means generally accepted accounting principles as in
effect from time to time in the United States, consistently applied.
"General Intangibles" means all of Borrower's present and
future general intangibles and other personal property (including Borrower's
rights under the Hilco Agreement, contract rights, rights arising under common
law, statutes, or regulations, choses or things in action, the Borrower's
avoidance action rights under Section 549 of the Bankruptcy Code, commercial
tort claims, goodwill, patents, trade names, trademarks, servicemarks,
copyrights, blueprints, drawings, purchase orders, customer lists, monies due or
recoverable from pension funds, route lists, rights to payment and other rights
under any royalty or licensing agreements, infringement claims, computer
programs, information contained on computer disks or tapes, literature, reports,
catalogs, deposit accounts, insurance premium rebates, tax refunds, and tax
refund claims), other than goods, Accounts, and Negotiable Collateral.
"Governing Documents" means the certificate or articles of
incorporation, by-laws, or other organizational or governing documents of any
Person.
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"Governmental Authority" means any nation or government, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Gross Margin" means, at any date of determination, the
percentage resulting from: (i) the Borrower's sales for any applicable period
minus the cost of goods sold for such period, divided by (ii) Borrower's sales
for such period.
"Hazardous Materials" means (a) substances that are defined or
listed in, or otherwise classified pursuant to, any applicable laws or
regulations as "hazardous substances," "hazardous materials," "hazardous
wastes," "toxic substances," or any other formulation intended to define, list,
or classify substances by reason of deleterious properties such as ignitability,
corrosivity, reactivity, carcinogenicity, reproductive toxicity, or "EP
toxicity", (b) oil, petroleum, or petroleum derived substances, natural gas,
natural gas liquids, synthetic gas, drilling fluids, produced waters, and other
wastes associated with the exploration, development, or production of crude oil,
natural gas, or geothermal resources, (c) any flammable substances or explosives
or any radioactive materials, and (d) asbestos in any form or electrical
equipment that contains any oil or dielectric fluid containing levels of
polychlorinated biphenyls in excess of 50 parts per million.
"Hilco Agreement" means the Agency Agreement dated as of
December 1, 2000 between Hilco Merchant Resources, LLC, as Agent, and the
Borrower, as the same may be amended, modified, extended or restated from time
to time, a copy of which is attached hereto as Exhibit E-1.
"Indebtedness" means: (a) all obligations of Borrower for
borrowed money, (b) all obligations of Borrower evidenced by bonds, debentures,
notes, or other similar instruments and all reimbursement or other obligations
of Borrower in respect of letters of credit, bankers acceptances, interest rate
swaps, or other financial products, (c) all obligations of Borrower under
Capital Leases, (d) all obligations or liabilities of others secured by a Lien
on any property or asset of Borrower, irrespective of whether such obligation or
liability is assumed, and (e) any obligation of Borrower guaranteeing or
intended to guarantee (whether guaranteed, endorsed, co-made, discounted, or
sold with recourse to Borrower) any indebtedness, lease, dividend, letter of
credit, or other obligation of any other Person.
"Insolvency Proceeding" means any proceeding commenced by or
against any Person under any provision of the Bankruptcy Code or under any other
bankruptcy or insolvency law, assignments for the benefit of creditors, formal
or informal moratoria, compositions, extensions generally with creditors, or
proceedings seeking reorganization, arrangement, or other similar relief.
"Intangible Assets" means, with respect to any Person, that
portion of the book value of all of such Person's assets that would be treated
as intangibles under GAAP.
"Intellectual Property Security Agreement" means that certain
Intellectual Property Security Agreement, of even date herewith, between
Borrower and Agent.
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"Interest Period" means, with respect to each LIBOR Rate Loan,
a period commencing on the date of the making of such LIBOR Rate Loan and ending
1, 2, or 3 months thereafter; provided, however, that (a) if any Interest Period
would end on a day that is not a Business Day, such Interest Period shall be
extended (subject to clauses (c)-(e) below) to the next succeeding Business Day,
(b) interest shall accrue at the applicable rate based upon the LIBOR Rate from
and including the first day of each Interest period to, but excluding, the day
on which any Interest Period expires, (c) any Interest period that would end on
a day that is not a Business Day shall be extended to the next succeeding
Business Day unless such Business Day falls in another calendar month, in which
case such Interest Period shall end on the next preceding Business Day, (d) with
respect to an Interest period numerically corresponding day in the calendar
month (or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period), the Interest Period shall
end on the last Business Day of the calendar month that is 1, 2, or 3 months
after the date on which the Interest Period began, as applicable, and (e)
Borrower may not elect an Interest Period which will end after the Maturity
Date.
"Interim Bankruptcy Court Order" means an order of the
Bankruptcy Court in form, scope and substance satisfactory to Agent in Agent's
Discretion, substantially in the form attached hereto as Exhibit D-1, as such
order may be amended, modified, or supplemented from time to time with the
express written consent of Agent and the Borrower and the approval of the
Bankruptcy Court.
"Interim Bankruptcy Court Order Date" means the date (which
shall be no later than ten (10) days after the Petition Date) on which each of
the following shall have occurred: (i) the Interim Bankruptcy Court Order shall
have been duly Entered by the Bankruptcy Court and shall be in full force and
effect, and shall not have been appealed with respect to the question of whether
the Agent of any Lender is a good faith lender under Section 364(e) of the
Bankruptcy Code, reversed, stayed, modified, supplemented, vacated, or amended,
absent written consent of Agent and the Borrower; and (ii) Agent shall have
determined that all conditions set forth in Sections 3.1 and 3.2 shall have been
satisfied or waived by Agent.
"Inventory" means all present and future inventory in which
Borrower has any interest, including goods held for sale or lease or to be
furnished under a contract of service and all of Borrower's present and future
raw materials, work in process, finished goods, and packing and shipping
materials, wherever located.
"Inventory Letter of Credit" means a documentary Letter of
Credit issued to support the purchase by Borrower of Inventory prior to transit
to a location set forth on Schedule E-1, that provides that all draws thereunder
must require presentation of customary documentation (including, if applicable,
commercial invoices, packing list, certificate of origin, xxxx of lading or
airway xxxx, customs clearance documents, quota statement, inspection
certificate, beneficiaries statement and xxxx of exchange, bills of lading, dock
warrants, dock receipts, warehouse receipts, or other documents of title) in
form and substance reasonably satisfactory to Agent and reflecting the passage
to Borrower of title to first quality Inventory conforming to Borrower's
contract with the seller thereof. Any such Letter of Credit shall cease
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to be an "Inventory Letter of Credit" at such time, if any, as the goods
purchased thereunder become Eligible Inventory.
"Inventory Reserves" means such reserves as may be established
from time to time by Agent in Agent's Discretion with respect to the
determination of the saleability, at retail, of the Eligible Inventory or which
reflect such other factors as affect the current retail or market value of the
Eligible Inventory. Without limiting the generality of the foregoing, Inventory
Reserves may include (but are not limited to) reserves based on the following:
(a) obsolescence (determined based upon Inventory on hand
beyond a given number of days);
(b) seasonality;
(c) shrinkage;
(d) imbalance;
(e) change in Inventory character, composition or mix;
(f) markdowns (both permanent and point of sale);
(g) vendor chargebacks;
(h) duty and freight;
(i) retail markons or markups inconsistent with prior
period practice and performance, current business plans, or advertising calendar
and planned advertising events; and
(j) estimated reclamation claims of unpaid sellers of
Inventory to Borrower.
"Investment Property" means all of Borrower's presently
existing and hereafter acquired or arising investment property (as that term is
defined in Section 9115 of the Code).
"IRC" means the Internal Revenue Code of 1986, as amended, and
the regulations thereunder.
"L/C" has the meaning set forth in Section 2.2(a).
"L/C Guaranty" has the meaning set forth in Section 2.2(a).
"Lease" means any lease or other agreement, no matter how
styled or structured, which the Borrower is entitled to the use or occupancy of
any space.
"Leasehold Interest" means Borrower's interest under any lease
in any Real Property at which it maintains any of the Collateral (other than the
Real Property Collateral).
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"Lender" and "Lenders" have the respective meanings set forth
in the preamble to this Agreement, and shall include any other Person made a
party to this Agreement in accordance with the provisions of Section 15.1.
"Lender Group" means, individually and collectively, each of
the individual Lenders and Agent.
"Lender Group Expenses" means all: costs or expenses
(including taxes and insurance premiums) required to be paid by Borrower under
any of the Loan Documents that are paid or incurred by the Lender Group; fees or
charges paid or incurred by the Lender Group in connection with the Lender
Group's transactions with Borrower contemplated by the Loan Documents, including
fees or charges for photocopying, notarization, couriers and messengers,
telecommunication, public record searches (including tax lien, litigation, and
UCC searches and including searches with the patent and trademark office, the
copyright office, or the department of motor vehicles), filing, recording,
publication, appraisal (including periodic Personal Property Collateral or Real
Property Collateral appraisals), real estate surveys, real estate title policies
and endorsements, and environmental audits; costs and expenses incurred by Agent
in the disbursement of funds to Borrower (by wire transfer or otherwise);
charges paid or incurred by Agent resulting from the dishonor of checks; costs
and expenses paid or incurred by Agent to correct any default or enforce any
provision of the Loan Documents, or in gaining possession of, maintaining,
handling, preserving, storing, shipping, selling, preparing for sale, or
advertising to sell the Personal Property Collateral or the Real Property
Collateral, or any portion thereof, irrespective of whether a sale is
consummated; costs and expenses paid or incurred by the Lender Group in
examining Borrower's Books in connection with the transaction contemplated by
the Loan Documents; costs and expenses of third party claims or any other suit
paid or incurred by the Lender Group in enforcing or defending the Loan
Documents or in connection with the transactions contemplated by the Loan
Documents or the Lender Group's relationship with Borrower or any guarantor; and
the Lender Group's reasonable attorneys fees and expenses incurred in advising,
structuring, drafting, reviewing, administering, amending, terminating,
enforcing, defending, or concerning the Loan Documents (including attorneys fees
and expenses incurred in connection with the Bankruptcy Case, or any other
Insolvency Proceeding concerning Borrower, Parent Guarantor or any other
guarantor of the Obligations), irrespective of whether suit is brought.
"Letter of Credit" means an L/C or an L/C Guaranty, as the
context requires.
"LIBOR Deadline" has the meaning set forth in Section
2.13(b)(i).
"LIBOR Notice" means a written notice in the form of Exhibit
L-1.
"LIBOR Rate" means, for each Interest Period for each LIBOR
Rate Loan, the rate per annum determined by Agent (rounded upwards, if
necessary, to the next 1/16%) by dividing (a) the Base LIBOR Rate for such
Interest Period, by (b) 100% minus the Reserve Percentage. The LIBOR Rate shall
be adjusted on and as of the effective day of any change in the Reserve
Percentage.
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"LIBOR Rate Loan" means each portion of an Advance that bears
interest at a rate determined by reference to the LIBOR Rate.
"LIBOR Rate Margin" means 3.50%.
"Lien" means any interest in property securing an obligation
owed to, or a claim by, any Person other than the owner of the property, whether
such interest shall be based on the common law, statute, or contract, whether
such interest shall be recorded or perfected, and whether such interest shall be
contingent upon the occurrence of some future event or events or the existence
of some future circumstance or circumstances, including the lien or security
interest arising from a mortgage, deed of trust, encumbrance, pledge,
hypothecation, assignment, deposit arrangement, security agreement, adverse
claim or charge, conditional sale or trust receipt, or from a lease,
consignment, or bailment for security purposes and also including reservations,
exceptions, encroachments, easements, rights-of-way, covenants, conditions,
restrictions, leases, and other title exceptions and encumbrances affecting Real
Property.
"Loan Account" has the meaning set forth in Section 2.11.
"Loan Documents" means this Agreement, the Disbursement
Letter, the Letters of Credit, the Concentration Account Agreement, the Blocked
Account Agreements, the Intellectual Property Security Agreement, the Mortgages,
the Parent Guaranty, the Parent Pledge and Security Agreement, the Credit Card
Agreements, any note or notes executed by Borrower and payable to the Lender
Group, and any other agreement entered into, now or in the future, in connection
with this Agreement.
"Material Adverse Change" means (a) a material adverse change
in the business, prospects, operations, results of operations, assets,
liabilities or condition (financial or otherwise) of Borrower, including,
without limitation, a material adverse change in the business, prospects,
operations, results or operations, assets, liabilities or condition since the
Closing Date, or since the date of the latest financial information supplied
hereunder after the Closing Date or at any time as compared to the Business Plan
attached hereto on the date of execution hereof as Exhibit B-1, (b) the material
impairment of Borrower's ability to perform its obligations under the Loan
Documents to which it is a party or of the Lender Group to enforce the
Obligations or realize upon the Collateral, (c) a material adverse effect, in
relation to the Revolving Facility Usage, on the value of the Collateral or the
amount that the Lender Group would be likely to receive (after giving
consideration to delays in payment and costs of enforcement) in the liquidation
of such Collateral, or (d) a material impairment of the priority of the Lender
Group's Liens with respect to the Collateral.
"Maturity Date" has the meaning set forth in Section 3.4.
"Maximum Revolving Amount" means sixty million Dollars
($60,000,000).
"Maximum Special Real Estate Line Amount" means forty million
Dollars ($40,000,000), less (i) the sum of $500,000 per month during the term of
this Agreement, commencing with the month ending on July 31, 2001 and continuing
on the last day of each
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calendar month thereafter, and (ii) the aggregate net proceeds realized by the
Borrower from the sale or assignment of any Core Properties.
"Mortgages" means one or more mortgages, leasehold mortgages,
deeds of trust, leasehold deeds of trust, or deeds to secure debt, executed by
Borrower in favor of Agent, the form and substance of which shall be
satisfactory to Agent, that encumber the Real Property Collateral and the
related improvements thereto.
"Multiemployer Plan" means a "multiemployer plan" (as defined
in Section 4001(a)(3) of ERISA) to which Borrower, any of its Subsidiaries, or
any ERISA Affiliate has contributed, or was obligated to contribute, within the
past six years.
"Negotiable Collateral" means all of Borrower's present and
future letters of credit, notes, drafts, instruments, Investment Property,
securities (including the shares of stock of Subsidiaries of Borrower),
documents, personal property leases (wherein Borrower is the lessor), and
chattel paper.
"Net Lendable Real Estate Value" means at any date of
determination: (i) the aggregate net fair market value of the Real Property
Collateral that is owned in fee simple and is subject to a valid, enforceable
and first priority Lien of the Agent for the benefit of the Lender Group, as
established in an appraisal conducted on or about the Closing Date by an
appraiser acceptable to Agent, as such appraisal may be updated in the future by
such appraisers or other appraisers acceptable to Agent, after taking into
account any Liens on such Collateral, plus (ii) the aggregate appraised value of
all Core Properties sold, assigned or transferred prior to such date of
determination (using the last appraised value of any such Core Property prior to
it being sold, assigned or transferred).
"Net Retail Liquidation Value" means the appraised liquidation
value of Eligible Inventory less liquidation expenses, as each is determined by
Agent in the Agent's Discretion or its agents from time to time.
"Obligations" means all loans, Advances, debts, principal,
interest (including any interest that, but for the provisions of the Bankruptcy
Code, would have accrued), contingent reimbursement obligations under any
outstanding Letters of Credit, premiums (including Early Termination Premiums),
liabilities (including all amounts charged to Borrower's Loan Account pursuant
hereto), obligations, fees, charges, costs, or Lender Group Expenses (including
any fees or expenses that, but for the provisions of the Bankruptcy Code, would
have accrued), lease payments, guaranties, covenants, and duties owing by
Borrower to the Lender Group of any kind and description (irrespective of
whether for the payment of money), whether direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter arising, and
including any debt, liability, or obligation owing from Borrower to others that
the Lender Group may have obtained by assignment or otherwise, and further
including all interest not paid when due and all Lender Group Expenses that
Borrower is required to pay or reimburse by the Loan Documents, by law, or
otherwise.
"Originating Lender" has the meaning set forth in Section
15.1(e).
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"Overadvance" has the meaning set forth in Section 2.6.
"PACA" means the Perishable Agricultural Commodities Act, 7
U.S.C. ss.ss.499-a - 499s, as amended, and any successor statutes and any
regulations promulgated thereunder.
"Parent Guarantor" means FNC Holdings, Inc.
"Parent Guaranty" means that certain general continuing
guaranty executed and delivered by Parent Guarantor in favor of Agent, for the
benefit of the Lender Group, in form and substance satisfactory to Agent.
"Parent Pledge and Security Agreement" means that certain
pledge and security agreement executed and delivered by Parent Guarantor in
favor of Agent, for the benefit of the Lender Group, in form and substance
satisfactory to Agent.
"Participant" has the meaning set forth in Section 15.1(e).
"Pay-Off Letter" means a letter, in form and substance
reasonably satisfactory to Agent, from Existing Lender respecting the amount
necessary to repay in full all of the obligations of Borrower owing to Existing
Lender and obtain a termination or release of all of the Liens existing in favor
of Existing Lender in and to the properties or assets of Borrower.
"PBGC" means the Pension Benefit Guaranty Corporation as
defined in Title IV of ERISA, or any successor thereto.
"Permitted Liens" means the following Liens: (a) Liens held by
the Lender Group, (b) Liens for unpaid taxes that either (i) are not yet due and
payable or (ii) are the subject of Permitted Protests, (c) Liens set forth on
Schedule P-1, (d) the interests of lessors under operating leases and purchase
money security interests and Liens of lessors under Capital Leases to the extent
that the acquisition or lease of the underlying asset is permitted under Section
7.21 and so long as the Lien only attaches to the asset purchased or acquired
and only secures the purchase price of the asset, (e) Liens arising by operation
of law in favor of warehousemen, landlords, carriers, mechanics, materialmen,
laborers, or suppliers, incurred in the ordinary course of business of Borrower
and not in connection with the borrowing of money, and which Liens either (i)
are for sums not yet due and payable or for amounts due prior to the Petition
Date, or (ii) are the subject of Permitted Protests, (f) Liens arising from
deposits made in connection with obtaining worker's compensation or other
unemployment insurance, (g) Liens or deposits to secure performance of bids,
tenders, or leases (to the extent permitted under this Agreement), incurred in
the ordinary course of business of Borrower and not in connection with the
borrowing of money, (h) Liens arising by reason of security for surety or appeal
bonds in the ordinary course of business of Borrower, (i) Liens with respect to
the Real Property Collateral that are exceptions to the commitments for title
insurance issued in connection with the Mortgages, as accepted by Agent, (j)
with respect to any Real Property that is not part of the Real Property
Collateral, easements, rights of way, zoning and similar covenants and
restrictions, and similar encumbrances that customarily exist on properties of
Persons engaged in similar
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activities and similarly situated and that in any event do not materially
interfere with or impair the use or operation of the Collateral by Borrower or
the value of the Lender Group's Lien thereon or therein, or materially interfere
with the ordinary conduct of the business of Borrower, and (k) Permitted
Mortgages (but only to the extent such Permitted Mortgages do not attach to any
of the Core Properties).
"Permitted Mortgages" means Liens existing on the Petition Date
in favor of Persons other than the Agent and covering one or more parcels of the
Second Priority Real Estate.
"Permitted Protest" means the right of Borrower to protest any
Lien (other than any such Lien that secures the Obligations), tax (other than
payroll taxes or taxes that are the subject of a United States federal tax lien
or any state or local tax lien), or rental payment, provided that (a) a reserve
with respect to such obligation is established on the books of Borrower in an
amount that is reasonably satisfactory to Agent, (b) any such protest is
instituted and diligently prosecuted by Borrower in good faith, and (c) Agent is
satisfied that, while any such protest is pending, there will be no impairment
of the enforceability, validity, or priority of any of the Liens of the Lender
Group in and to the Collateral.
"Person" means and includes natural persons, corporations,
limited liability companies, limited partnerships, general partnerships, limited
liability partnerships, joint ventures, trusts, land trusts, business trusts, or
other organizations, irrespective of whether they are legal entities, and
governments and agencies and political subdivisions thereof.
"Personal Property Collateral" means all Collateral other than
the Real Property Collateral.
"Petition Date" means February 19, 2001, the date Borrower filed
a voluntary petition under Chapter 11 of the Bankruptcy Code commencing the
Bankruptcy Case.
"Plan" means any employee benefit plan, program, or arrangement
maintained or contributed to by Borrower or with respect to which it may incur
liability.
"Pro-Rata Share" means, with respect to a Lender, a fraction
(expressed as a percentage), the numerator of which is the amount of such
Lender's Commitment and the denominator of which is the aggregate amount of the
Commitments.
"Real Estate Line Borrowing Base" means, at any date of
determination, fifty percent (50%) of the Net Lendable Real Estate Value, less
(i) the sum of $500,000 per month during the term of this Agreement, commencing
with the month ending on July 31, 2001 and continuing on the last day of each
calendar month thereafter, and (ii) the aggregate net proceeds realized by
Borrower from the sale, assignment or other transfer of any Core Properties.
"Real Property" means any estates or interests(including
leasehold interests) in real property now owned or hereafter acquired by
Borrower.
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"Real Property Collateral" means all of Borrower's right, title,
and interest (whether as owner, lessee, or otherwise) in (i) any owned parcel or
parcels of Real Property and the related improvements thereto (including,
without limitation, the Core Properties and the Second Priority Real Estate),
and (ii) each of the Borrower's leased locations, in either case whether or not
identified on Schedule R-1, and any Real Property hereafter acquired by
Borrower.
"Reference Rate" means the variable rate of interest, per annum,
most recently announced by Xxxxx Fargo Bank, National Association, or any
successor thereto, as its "prime rate," irrespective of whether such announced
rate is the best rate available from such financial institution.
"Reference Rate Loan" means each portion of an Advance that
bears interest at a rate determined by reference to the Reference Rate.
"Reference Rate Margin" means 1.75%.
"Reference Rate Swing Loan Margin"
"Renewal Date" has the meaning set forth in Section 3.4.
"Reportable Event" means any of the events described in Section
4043(c) of ERISA or the regulations thereunder other than a Reportable Event as
to which the provision of 30 days notice to the PBGC is waived under applicable
regulations.
"Required Lenders" means, at any time, Agent, together with such
other Lenders whose Pro Rata Shares together with Agent aggregate 50.1% or more
of the Commitments.
"Reserve Percentage" means, on any day, for any Lender, the
maximum percentage prescribed by the Board of Governors of the Federal Reserve
System (or any successor Governmental Authority) for determining the reserve
requirements (including any basic, supplemental, marginal, or emergency
reserves) that are in effect on such date with respect to eurocurrency funding
(currently referred to as "eurocurrency liabilities") of that Lender, but so
long as such Lender is not required or directed under applicable regulations to
maintain such reserves, the Reserve Percentage shall be zero.
"Reserves" means all (if any) Availability Reserves, Inventory
Reserves and any other reserves which may be established in the Agent's
Discretion under this Agreement.
"Retiree Health Plan" means an "employee welfare benefit plan"
within the meaning of Section 3(1) of ERISA that provides benefits to
individuals after termination of their employment, other than as required by
Section 601 of ERISA.
"Revolving Facility Usage" means, as of any date of
determination, the aggregate amount of Advances (including any Swing Loans or
Special Real Estate Line Advances) and undrawn or unreimbursed Letters of Credit
outstanding.
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"Second Priority Real Estate" means, collectively, each of the
parcels of Real Property Collateral identified on Schedule A-2.
"Settlement" has the meaning set forth in Section 2.1(i)(i).
"Settlement Date" has the meaning set forth in Section
2.1(i)(i).
"Special Real Estate Line Advances" has the meaning set forth in
Section 2.2.
"Special Real Estate Line Limit" means forty million Dollars
($40,000,000).
"Subsidiary" of a Person means a corporation, partnership,
limited liability company, or other entity in which that Person directly or
indirectly owns or controls the shares of stock or other ownership interests
having ordinary voting power to elect a majority of the board of directors (or
appoint other comparable managers) of such corporation, partnership, limited
liability company, or other entity.
"Swing Lender" means WFRF or any other Lender that, at the
request of Borrower and with the consent of Agent agrees, in such Lender's sole
discretion, to become the Swing Lender hereunder.
"Swing Loan" has the meaning set forth in Section 2.1(m).
"Total Commitment" means one hundred million Dollars
($100,000,000), as reduced from time to time in accordance with this Agreement.
"Voidable Transfer" has the meaning set forth in Section 18.6.
"WFRF" means Xxxxx Fargo Retail Finance, LLC.
1.2. ACCOUNTING TERMS. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP. When used herein, the
term "financial statements" shall include the notes and schedules thereto.
Whenever the term "Borrower" is used in respect of a financial covenant or a
related definition, it shall be understood to mean Borrower on a consolidated
basis unless the context clearly requires otherwise.
1.3. BANKRUPTCY CODE. Any terms used in this Agreement which are
defined in the Bankruptcy Code shall be construed and defined as set forth in
the Bankruptcy Code, unless otherwise defined herein.
1.4. CODE. Any terms used in this Agreement that are defined in the
Code shall be construed and defined as set forth in the Code unless otherwise
defined herein.
1.5. CONSTRUCTION. Unless the context of this Agreement clearly
requires otherwise, references to the plural include the singular, references to
the singular include the plural, the term "including" is not limiting, and the
term "or" has, except where otherwise indicated, the inclusive
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meaning represented by the phrase "and/or." The words "hereof," "herein,"
"hereby," "hereunder," and similar terms in this Agreement refer to this
Agreement as a whole and not to any particular provision of this Agreement. An
Event of Default shall "continue" or be "continuing" until such Event of Default
has been waived in writing by the requisite members of the Lender Group.
Section, subsection, clause, schedule, and exhibit references are to this
Agreement unless otherwise specified. Any reference in this Agreement or in the
Loan Documents to this Agreement or any of the Loan Documents shall include all
alterations, amendments, changes, extensions, modifications, renewals,
replacements, substitutions, and supplements, thereto and thereof, as
applicable.
1.6. SCHEDULES AND EXHIBITS. All of the schedules and exhibits
attached to this Agreement shall be deemed incorporated herein by reference.
2. LOAN AND TERMS OF PAYMENT.
2.1. REVOLVING ADVANCES; SWING LOANS.
(a) Subject to the terms and conditions of this Agreement and
subject to the Interim Bankruptcy Court Order and the Final Bankruptcy Court
Order, as the case may be, each Lender agrees to make advances (collectively,
including the Swing Loans and the Special Real Estate Line Advances, the
"Advances") to Borrower in an aggregate amount at any one time outstanding not
to exceed such Lender's Pro Rata Share of an amount equal to the least of (i)
the Maximum Revolving Amount, less the outstanding balance of all undrawn or
unreimbursed Letters of Credit, less the outstanding balance of all Swing Loans,
or (ii) the Borrowing Base, less (A) the Adjusted Letter of Credit Usage, less
(B) the aggregate amount of Availability Reserves (without duplication). For
purposes of this Agreement, "Borrowing Base", as of any date of determination,
shall mean the result of:
(y) the lesser of: (1) the sum of (i) seventy percent
(70%) of the Cost of Eligible Lawn & Garden Inventory,
plus (ii) fifty-five percent (55%) of the Cost of Eligible
Live Plants Inventory, plus (iii) sixty percent (60%) of
the Cost of Eligible Floral and Crafts Inventory, plus
(iv)(a) during Accounting Periods 7-12 of each fiscal
year, sixty percent (60%) of the Cost of Eligible
Christmas Decoration Inventory, or (b) thirty percent
(30%) of the Cost of Eligible Christmas Decoration
Inventory during each other Accounting Period of each
fiscal year, or (2) eighty-five percent (85%) of the Net
Retail Liquidation Value, minus
(z) the aggregate amount of Reserves (without
duplication), if any, established by Agent under Sections
2.1(b), 6.14 and 10.
(b) Anything to the contrary in Section 2.1(a) above
notwithstanding, Agent may create Reserves against the Borrowing Base (without
duplication) or reduce its advance rates based upon Eligible Inventory without
declaring an Event of Default (i) for any amount subject to a Permitted Protest,
(ii) for amounts owing to landlords or similar Persons who could assert a
statutory lien in respect of any of the Collateral, (iii) as determined by Agent
based on
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noncompliance with the covenants set forth in Section 7.21, and (iv) as
determined in the Agent's Discretion.
(c) Amounts borrowed pursuant to this Section 2.1 may be repaid
and, subject to the terms and conditions of this Agreement, reborrowed at any
time during the term of this Agreement.
(d) Procedure for Borrowing. Each Borrowing shall be made upon
Borrower's irrevocable request therefor delivered to Agent (which notice must be
received by Agent no later than 11:30 a.m. (Eastern time) on the Funding Date if
such advance is for $5,000,000 or less or no later than 11:30 a.m. (Eastern
time) on the Business Day immediately preceding the requested Funding Date if
such advance is for more than $5,000,000) specifying (i) the amount of the
Borrowing; and (ii) the requested Funding Date, which shall be a Business Day.
(e) Agent's Election. Promptly after receipt of a request for a
Borrowing pursuant to Section 2.1(d) in excess of $5,000,000, the Agent may
elect, in Agent's discretion, (i) to have the terms of Section 2.1(f) apply to
such requested Borrowing, or (ii) to make an Agent Loan pursuant to the terms of
Section 2.1(g) in the amount of the requested Borrowing, or (iii) to request
Swing Lender to make a Swing Loan pursuant to the terms of Section 2.1(m) in the
amount of the requested Borrowing; provided, however, that if Swing Lender
declines in its sole discretion to make a Swing Loan pursuant to Section 2.1(m),
Agent shall elect to have the terms of Section 2.1(f) apply to such requested
Borrowing. Any requested Borrowing of $5,000,000 or less shall be made as an
Agent Loan pursuant to the terms of Section 2.1(g).
(f) Making of Advances.
(i) In the event that the Agent shall elect to have the
terms of this Section 2.1(f) apply to a requested Borrowing in excess of
$5,000,000 as described in Section 2.1(e), then promptly after receipt of a
request for a Borrowing pursuant to Section 2.1(d), the Agent shall notify the
Lenders, not later than 1:00 p.m. (Eastern time) on the Business Day immediately
preceding the Funding Date applicable thereto, by telephone and promptly
followed by telecopy, or other similar form of transmission, of the requested
Borrowing. Each Lender shall make the amount of such Lender's Pro Rata Share of
the requested Borrowing available to the Agent in same day funds, to such
account of the Agent as the Agent may designate, not later than 12:00 p.m.
(Eastern time) on the Funding Date applicable thereto. After the Agent's receipt
of the proceeds of such Advances, upon satisfaction of the applicable conditions
precedent set forth in Sections 3.1 and 3.2, the Agent shall make the proceeds
of such Advances available to Borrower on the applicable Funding Date by
transferring same day funds equal to the proceeds of such Advances received by
the Agent to the Designated Deposit Account; provided, however, that, subject to
the provisions of Section 2.1(l), the Agent shall not request any Lender to
make, and no Lender shall have the obligation to make, any Advance if the Agent
shall have received written notice from any Lender, or otherwise has actual
knowledge, that (A) one or more of the applicable conditions precedent set forth
in Sections 3.1 or 3.2 will not be satisfied on the requested Funding Date for
the applicable Borrowing, or (B) the requested Borrowing would
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exceed the Availability on such Funding Date. No Lender shall provide any such
notice unless it believes, in good faith, that such events or conditions have
occurred.
(ii) Unless Agent receives notice from a Lender on or
prior to the Closing Date or, with respect to any Borrowing after the Closing
Date, at least one Business Day prior to the date of such Borrowing, that such
Lender will not make available as and when required hereunder to Agent for the
account of Borrower the amount of that Lender's Pro Rata Share of the Borrowing,
Agent may assume that each Lender has made or will make such amount available to
Agent in immediately available funds on the Funding Date and Agent may (but
shall not be so required), in reliance upon such assumption, make available to
Borrower on such date a corresponding amount. If and to the extent any Lender
shall not have made its full amount available to Agent in immediately available
funds and Agent in such circumstances has made available to Borrower such
amount, that Lender shall on the Business Day following such Funding Date make
such amount available to Agent, together with interest at the Defaulting Lenders
Rate for each day during such period. A notice from Agent submitted to any
Lender with respect to amounts owing under this subsection shall be conclusive,
absent manifest error. If such amount is paid to Agent such payment to Agent
shall constitute such Lender's Advance on the date of Borrowing for all purposes
of this Agreement. If such amount is not paid to Agent on the Business Day
following the Funding Date, Agent will notify Borrower of such failure to fund
and, upon demand by Agent, Borrower shall pay such amount to Agent for Agent's
account, together with interest thereon for each day elapsed since the date of
such Borrowing, at a rate per annum equal to the interest rate applicable at the
time to the Advances composing such Borrowing. The failure of any Lender to make
any Advance on any Funding Date shall not relieve any other Lender of any
obligation hereunder to make an Advance on such Funding Date, but no Lender
shall be responsible for the failure of any other Lender to make the Advance to
be made by such other Lender on any Funding Date. Any Lender that fails to make
any Advance that it is required to make hereunder on any Funding Date and that
has not cured such failure by making such Advance within one Business Day after
written demand upon it by Agent to do so, shall constitute a "Defaulting Lender"
for purposes of this Agreement until such Advance is made.
(iii) Agent shall not be obligated to transfer to a
Defaulting Lender any payments made by Borrower to Agent for the Defaulting
Lender's benefit; nor shall a Defaulting Lender be entitled to the sharing of
any payments hereunder. Amounts payable to a Defaulting Lender shall instead be
paid to or retained by Agent. Agent may hold and, in its discretion, re-lend to
Borrower the amount of all such payments received or retained by it for the
account of such Defaulting Lender. Solely for the purposes of voting or
consenting to matters with respect to the Loan Documents and determining Pro
Rata Shares, such Defaulting Lender shall be deemed not to be a "Lender" and
such Defaulting Lender's Commitment shall be deemed to be zero. This section
shall remain effective with respect to such Defaulting Lender until (A) the
Obligations under this Agreement shall have been declared or shall have become
immediately due and payable or (B) the requisite non-Defaulting Lenders, Agent,
and Borrower shall have waived such Defaulting Lender's default in writing. The
operation of this section shall not be construed to increase or otherwise affect
the Commitment of any non Defaulting Lender, or relieve or excuse the
performance by Borrower of their duties and obligations hereunder.
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(g) Making of Agent Loans.
(i) In the event the Agent shall elect to have the terms
of this Section 2.1(g) apply to a requested Borrowing in excess of $5,000,000 as
described in Section 2.1(e) or in the event of any requested Borrowing of
$5,000,000 or less, Agent shall make an Advance in the amount of such Borrowing
(any such Advance made solely by Agent pursuant to this Section 2.1(g) being
referred to as an "Agent Loan" and such Advances being referred to collectively
as "Agent Loans") available to Borrower on the Funding Date applicable thereto
by transferring same day funds to Borrower's Designated Deposit Account. Each
Agent Loan is an Advance hereunder and shall be subject to all the terms and
conditions applicable to other Advances, except that all payments thereon shall
be payable to Agent solely for its own account (and for the account of the
holder of any participation interest with respect to such Advance). Subject to
the provisions of Section 2.1(l), the Agent shall not make any Agent Loan if the
Agent shall have received written notice from any Lender, or otherwise has
actual knowledge, that (i) one or more of the applicable conditions precedent
set forth in Sections 3.1 or 3.2 will not be satisfied on the requested Funding
Date for the applicable Borrowing, or (ii) the requested Borrowing would exceed
the Availability on such Funding Date. No Lender shall provide any such notice
unless it believes, in good faith, that such events or conditions have occurred.
Agent shall not otherwise be required to determine whether the applicable
conditions precedent set forth in Sections 3.1 or 3.2 have been satisfied on the
Funding Date applicable thereto prior to making, in its sole discretion, any
Agent Loan.
(ii) The Agent Loans shall be secured by the Agent's Liens
and shall constitute Advances and Obligations hereunder, and shall bear interest
at the rate applicable from time to time to Obligations pursuant to Section 2.7.
(h) Agent Advances.
(i) Agent hereby is authorized by Borrower and the
Lenders, from time to time in Agent's sole discretion, (1) after the occurrence
of a Default or an Event of Default (but without constituting a waiver of such
Default or Event of Default), or (2) at any time that any of the other
applicable conditions precedent set forth in Section 3.1 or 3.2 have not been
satisfied, to make Advances to Borrower on behalf of the Lenders which Agent, in
its reasonable business judgment, deems necessary or desirable (A) to preserve
or protect the Collateral, or any portion thereof, (B) to enhance the likelihood
of, or maximize the amount of, repayment of the Obligations, or (C) to pay any
other amount chargeable to Borrower pursuant to the terms of this Agreement,
including Lender Group Expenses and the costs, fees, and expenses described in
Section 10 (any of the Advances described in this Section 2.1(h) being
hereinafter referred to as "Agent Advances"); provided, that Agent shall not
make any Agent Advances to Borrower without the consent of the Required Lenders
if the amount thereof would exceed $5,000,000 in the aggregate at any one time.
(ii) Agent Advances shall be repayable on demand and
secured by the Collateral, shall constitute Advances and Obligations hereunder,
and shall bear interest at the rate applicable from time to time to the
Obligations pursuant to Section 2.7.
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(i) Settlement. It is agreed that each Lender's funded portion
of the Advances is intended by the Lenders to be equal at all times to such
Lender's Pro Rata Share of the outstanding Advances. Such agreement
notwithstanding, the Agent and the Lenders agree (which agreement shall not be
for the benefit of or enforceable by Borrower) that in order to facilitate the
administration of this Agreement and the other Loan Documents, settlement among
them as to the Advances, the Agent Loans, the Agent Advances and the Swing Loans
shall take place on a periodic basis in accordance with the following
provisions:
(i) The Agent shall request settlement ("Settlement") with
the Lenders on a weekly basis, or on a more frequent basis if so determined by
the Agent, (1) for itself, with respect to each Agent Loan and Agent Advance,
(2) for the Swing Lender, with respect to each Swing Loan, and (3) with respect
to Collections received, as to each by notifying the Lenders by telephone and
promptly followed by telecopy, or other similar form of transmission, of such
requested Settlement, no later than 1:00 p.m. (Eastern time) on the Business
Date immediately preceding the date of such requested Settlement (the
"Settlement Date"). Such notice of a Settlement Date shall include a summary
statement of the amount of outstanding Advances, Agent Loans, Agent Advances and
Swing Loans for the period since the prior Settlement Date, the amount of
repayments received in such period, and the amounts allocated to each Lender of
the principal, interest, fees, and other charges for such period. Subject to the
terms and conditions contained herein (including Section 2.1(i)(ii)): (y) if a
Lender's balance of the Advances, Agent Loans, Agent Advances and Swing Loans
exceeds such Lender's Pro Rata Share of the Advances, Agent Loans, Agent
Advances and Swing Loans as of a Settlement Date, then Agent shall by no later
than 1:00 p.m (Eastern time) on the Settlement Date transfer in same day funds
to the account of such Lender as Lender may designate, an amount such that each
such Lender shall, upon receipt of such amount, have as of the Settlement Date,
its Pro Rata Share of the Advances, Agent Loans, Agent Advances and Swing Loans;
and (z) if a Lender's balance of the Advances, Agent Loans, Agent Advances and
Swing Loans is less than such Lender's Pro Rata Share of the Advances, Agent
Loans, Agent Advances and Swing Loans as of a Settlement Date, such Lender shall
no later than 1:00 p.m. (Eastern time) on the Settlement Date transfer in same
day funds to such account of the Agent as the Agent may designate, an amount
such that each such Lender shall, upon transfer of such amount, have as of the
Settlement Date, its Pro Rata Share of the Advances, Agent Loans, Agent Advances
and Swing Loans. Such amounts made available to the Agent under clause (z) of
the immediately preceding sentence shall be applied against the amounts of the
applicable Agent Loan, Agent Advance or Swing Loans and, together with the
portion of such Agent Loan, Agent Advance or Swing Loan representing WFRF's Pro
Rata Share thereof, shall constitute Advances of such Lenders. If any such
amount is not made available to the Agent by any Lender on the Settlement Date
applicable thereto to the extent required by the terms hereof, the Agent shall
be entitled to recover for its account such amount on demand from such Lender
together with interest thereon at the Defaulting Lenders Rate.
(ii) In determining whether a Lender's balance of the
Advances, Agent Loans, Agent Advances and Swing Loans is less than, equal to, or
greater than such Lender's Pro Rata Share of the Advances, Agent Loans, Agent
Advances and Swing Loans as of a Settlement Date, Agent shall, as part of the
relevant Settlement, apply to such balance the portion of payments actually
received by Agent with respect to principal, interest, fees payable by
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Borrower and allocable to the Lenders hereunder, and proceeds of Collateral. To
the extent that a net amount is owed to any such Lender after such application,
such net amount shall be distributed by Agent to that Lender as part of such
Settlement; provided, however, that the closing fee payable by Borrower under
Section 2.12(a) shall be distributed to the Lenders within three Business Days
following the Closing Date without regard to the netting of amounts owing to or
owed by any Lender as part of a Settlement.
(iii) Between Settlement Dates, the Agent, to the extent
no Agent Advances or Agent Loans are outstanding, may pay over to WFRF any
payments received by the Agent, which in accordance with the terms of the
Agreement would be applied to the reduction of the Advances, for application to
WFRF's Pro Rata Share of the Advances. If, as of any Settlement Date,
Collections received since the then immediately preceding Settlement Date have
been applied to WFRF's Pro Rata Share of the Advances other than to Agent Loans
or Agent Advances, as provided for in the previous sentence, WFRF shall pay to
the Agent for the accounts of the Lenders, and Agent shall pay to the Lenders,
to be applied to the outstanding Advances of such Lenders, an amount such that
each Lender shall, upon receipt of such amount, have, as of such Settlement
Date, its Pro Rata Share of the Advances. During the period between Settlement
Dates, the Agent with respect to Agent Loans and Agent Advances, and each Lender
with respect to the Advances other than Agent Loans and Agent Advances, shall be
entitled to interest at the applicable rate or rates payable under this
Agreement on the daily amount of funds employed by the Agent or the Lenders, as
applicable.
(j) Notation. The Agent shall record on its books the principal
amount of the Advances owing to each Lender, including the Agent Loans, Agent
Advances and Swing Loans owing to the Agent, and the interests therein of each
Lender, from time to time. In addition, each Lender is authorized, at such
Lender's option, to note the date and amount of each payment or prepayment of
principal of such Lender's Advances in its books and records, including computer
records, such books and records constituting rebuttably presumptive evidence,
absent manifest error, of the accuracy of the information contained therein.
(k) Lenders' Failure to Perform. All Advances (other than Agent
Loans, Swing Loans and Agent Advances) shall be made by the Lenders
simultaneously and in accordance with their Pro Rata Shares. It is understood
that (i) no Lender shall be responsible for any failure by any other Lender to
perform its obligation to make any Advances hereunder, nor shall any Commitment
of any Lender be increased or decreased as a result of any failure by any other
Lender to perform its obligation to make any Advances hereunder, and (ii) no
failure by any Lender to perform its obligation to make any Advances hereunder
shall excuse any other Lender from its obligation to make any Advances
hereunder.
(l) Overadvances. Agent may make voluntary Overadvances without
the written consent of the Required Lenders for amounts charged to the
applicable Loan Account for interest, fees or Lender Group Expenses pursuant to
Section 2.1(h)(i)(2)(C). If the conditions for borrowing under Section 3.2(d)
cannot be fulfilled, the Agent may, but is not obligated to, knowingly and
intentionally continue to make Advances (including Agent Loans) to Borrower in
its discretion. The Advances and Agent Loans, as applicable, that are made
pursuant to this Section 2.1(l) shall be subject to the same terms and
conditions as any other Agent Advance or
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Agent Loan, as applicable, except that the rate of interest applicable thereto
shall be the rates set forth in Section 2.7(c)(i) without regard to the presence
or absence of a Default or Event of Default.
In the event Agent obtains actual knowledge that Revolving Facility
Usage exceeds the amount permitted by the preceding paragraph, regardless of the
amount of or reason for such excess, Agent shall notify Lenders as soon as
practicable (and prior to making any (or any further) intentional Overadvances
(except for and excluding amounts charged to the applicable Loan Account for
interest, fees, or Lender Group Expenses) unless Agent determines that prior
notice would result in imminent harm to the Collateral or its value), and
Lenders thereupon shall, together with Agent, jointly determine the terms of
arrangements that shall be implemented with Borrower intended to reduce, within
a reasonable time, the outstanding principal amount of the Advances to Borrower
to an amount permitted by the preceding paragraph. In the event any Lender
disagrees over the terms of reduction and/or repayment of any Overadvance, the
terms of reduction and/or repayment thereof shall be implemented according to
the determination of the Required Lenders.
Each Lender shall be obligated to settle with Agent as provided in
Section 2.1(i) for the amount of such Lender's Pro Rata Share of any
unintentional Overadvances by Agent reported to such Lender, any intentional
Overadvances made as permitted under this Section 2.1(l), and any Overadvances
resulting from the charging to the applicable Loan Account of interest, fees, or
Lender Group Expenses.
(m) Making of Swing Loans.
(i) In the event Agent shall elect, with the consent of
Swing Lender, as a Lender, to have the terms of this Section 2.1(m) apply to a
requested Borrowing as described in Section 2.1(e), Swing Lender as a Lender
shall make such Advance in the amount of such Borrowing (any such Advance made
solely by Swing Lender as a Lender pursuant to this Section 2.1(m) being
referred to as a "Swing Loan" and such Advances being referred to collectively
as "Swing Loans") available to Borrower on the Funding Date applicable thereto
by transferring immediately available funds to Borrower's Designated Account,
provided that in no event shall the aggregate outstanding principal amount of
the Swing Loans exceed $15,000,000. Each Swing Loan is an Advance hereunder and
shall be subject to all the terms and conditions applicable to other Advances,
except that no such Swing Loan shall be eligible for the LIBOR Option and all
payments on any Swing Loan shall be payable to Swing Lender as a Lender solely
for its own account (and for the account of the holder of any participation
interest with respect to such Swing Loan). Subject to the provisions of Section
2.1(m), Agent shall not request Swing Lender as a Lender to make, and Swing
Lender as a Lender shall not make, any Swing Loan if Agent has actual knowledge
that (i) one or more of the applicable conditions precedent set forth in Section
3 will not be satisfied on the requested Funding Date for the applicable
Borrowing unless such condition has been waived, or (ii) the requested Borrowing
would exceed the Availability on such Funding Date. Swing Lender as a Lender
shall not otherwise be required to determine whether the applicable conditions
precedent set forth in Section 3 have been satisfied on the Funding Date
applicable thereto prior to making, in its sole discretion, any Swing Loan.
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(ii) The Swing Loans shall be secured by the Agent's
Liens, shall constitute Advances and Obligations hereunder, and shall bear
interest at the rate applicable from time to time to Advances that are Base Rate
Loans.
2.2. LETTERS OF CREDIT.
(a) Agreement to Cause Issuance; Amounts; Outside Expiration
Date. Subject to the terms and conditions of this Agreement and subject to the
Interim Bankruptcy Court Order and the Final Bankruptcy Court Order, as the case
may be, Agent agrees to issue letters of credit for the account of Borrower
(each, an "L/C") or to issue guarantees of payment (each such guaranty, an "L/C
Guaranty") with respect to letters of credit issued by an issuing bank for the
account of Borrower. Agent shall have no obligation to issue a Letter of Credit
if any of the following would result:
(i) the aggregate amount of all undrawn and unreimbursed
Letters of Credit would exceed the Borrowing Base less the amount of outstanding
Advances (including any Agent Advances and Agent Loans); or
(ii) the aggregate amount of all undrawn or unreimbursed
Letters of Credit would exceed the lower of: (x) the Maximum Revolving Amount
less the amount of outstanding Advances (including any Agent Advances, Agent
Loans or Swing Loans), other than the Special Real Estate Line Advances; or (y)
fifteen million Dollars ($15,000,000); or
(iii) the outstanding Obligations would exceed the
Availability. Borrower expressly understands and agrees that Agent shall have no
obligation to arrange for the issuance by issuing banks of the letters of credit
that are to be the subject of L/C Guarantees. Borrower and the Lender Group
acknowledge and agree that certain of the letters of credit that are to be the
subject of L/C Guarantees may be outstanding on the Closing Date. Each Letter of
Credit shall have an expiry date no later than 60 days prior to the date on
which this Agreement is scheduled to terminate under Section 3.4 (without regard
to any potential renewal term) and all such Letters of Credit shall be in form
and substance acceptable to Agent in its sole discretion. If the Lender Group is
obligated to advance funds under a Letter of Credit, Borrower immediately shall
reimburse such amount to Agent and, in the absence of such reimbursement, the
amount so advanced immediately and automatically shall be deemed to be an
Advance hereunder and, thereafter, shall bear interest at the rate then
applicable to Advances under Section 2.7.
(b) Indemnification. Borrower hereby agrees to indemnify, save,
defend, and hold the Lender Group harmless from any loss, cost, expense, or
liability, including payments made by the Lender Group, expenses, and reasonable
attorneys fees incurred by the Lender Group arising out of or in connection with
any Letter of Credit, provided, however, that Borrower shall not be obligated
hereunder to indemnify for any loss, cost, expense or liability that is caused
by the gross negligence or willful misconduct of the Lender Group. Borrower
agrees to be bound by the issuing bank's regulations and interpretations of any
letters of credit guarantied by the Lender Group and opened to or for Borrower's
account or by Agent's
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interpretations of any Letter of Credit issued by Agent to or for Borrower's
account, even though this interpretation may be different from Borrower's own,
and Borrower understands and agrees that the Lender Group shall not be liable
for any error, negligence, or mistake, whether of omission or commission, in
following Borrower's instructions or those contained in the Letter of Credit or
any modifications, amendments, or supplements thereto. Borrower understands that
the L/C Guarantees may require the Lender Group to indemnify the issuing bank
for certain costs or liabilities arising out of claims by Borrower against such
issuing bank. Borrower hereby agrees to indemnify, save, defend, and hold the
Lender Group harmless with respect to any loss, cost, expense (including
reasonable attorneys fees), or liability incurred by the Lender Group under any
L/C Guaranty as a result of the Lender Group's indemnification of any such
issuing bank.
(c) Supporting Materials. Borrower hereby authorizes and directs
any bank that issues a letter of credit guaranteed by an L/C Guaranty to deliver
to Agent all instruments, documents, and other writings and property received by
the issuing bank pursuant to such letter of credit, and to accept and rely upon
Agent's instructions and agreements with respect to all matters arising in
connection with such letter of credit and the related application. Borrower may
or may not be the "applicant" or "account party" with respect to such letter of
credit.
(d) Costs of Letters of Credit. Any and all charges,
commissions, fees, and costs incurred by Agent relating to the letters of credit
guaranteed by an L/C Guaranty shall be considered Lender Group Expenses for
purposes of this Agreement and immediately shall be reimbursable by Borrower to
Agent.
(e) Indemnification. Immediately upon the termination of this
Agreement, Borrower agrees to either (i) provide cash collateral to be held by
Agent in an amount equal to 102% of the Maximum Revolving Amount of the Lender
Group's obligations under outstanding Letters of Credit, or (ii) cause to be
delivered to Agent releases of all of the Lender Group's obligations under
outstanding Letters of Credit. At Agent's Discretion, any proceeds of Collateral
received by Agent after the occurrence and during the continuation of an Event
of Default may be held as the cash collateral required by this Section 2.2(e).
(f) Increased Costs. If by reason of (i) any change in any
applicable law, treaty, rule, or regulation or any change in the interpretation
or application by any governmental authority of any such applicable law, treaty,
rule, or regulation, or (ii) compliance by the issuing bank or the Lender Group
with any direction, request, or requirement (irrespective of whether having the
force of law) of any governmental authority or monetary authority including,
without limitation, Regulation D of the Board of Governors of the Federal
Reserve System as from time to time in effect (and any successor thereto):
(i) any reserve, deposit, or similar requirement is or
shall be imposed or modified in respect of any Letters of Credit issued
hereunder, or
(ii) there shall be imposed on the issuing bank or the
Lender Group any other condition regarding any letter of credit, or Letter of
Credit, as applicable, issued pursuant hereto;
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and the result of the foregoing is to increase, directly or indirectly, the cost
to the issuing bank or the Lender Group of issuing, making, guaranteeing, or
maintaining any letter of credit, or Letter of Credit, as applicable, or to
reduce the amount receivable in respect thereof by such issuing bank or the
Lender Group, then, and in any such case, Agent may, at any time within a
reasonable period after the additional cost is incurred or the amount received
is reduced, notify Borrower, and Borrower shall pay on demand such amounts as
the issuing bank or Agent may specify to be necessary to compensate the issuing
bank or Agent for such additional cost or reduced receipt, together with
interest on such amount from the date of such demand until payment in full
thereof at the rate set forth in Section 2.7(a) or (c)(i), as applicable. The
determination by the issuing bank or Agent, as the case may be, of any amount
due pursuant to this Section 2.2(f), as set forth in a certificate setting forth
the calculation thereof in reasonable detail, shall, in the absence of manifest
or demonstrable error, be final and conclusive and binding on all of the parties
hereto.
(g) Participations.
(i) Purchase of Participations. Immediately upon issuance
of any Letter of Credit in accordance with this Section 2.2, each Lender shall
be deemed to have irrevocably and unconditionally purchased and received without
recourse or warranty, an undivided interest and participation in the credit
support or enhancement provided through the Agent to such issuer in connection
with the issuance of such Letter of Credit, equal to such Lender's Pro Rata
Share of the face amount of such Letter of Credit (including, without
limitation, all obligations of Borrower with respect thereto, and any security
therefor or guaranty pertaining thereto).
(ii) Documentation. Upon the request of any Lender, the
Agent shall furnish to such Lender copies of any Letter of Credit, reimbursement
agreements executed in connection therewith, application for any Letter of
Credit and credit support or enhancement provided through the Agent in
connection with the issuance of any Letter of Credit, and such other
documentation as may reasonably by requested by such Lender.
(iii) Obligations Irrevocable. The obligations of each
Lender to make payments to the Agent with respect to any Letter of Credit or
with respect to any credit support or enhancement provided through the Agent
with respect to a Letter of Credit, and the obligations of Borrower to make
payments to the Agent, for the account of the Lenders, shall be irrevocable, not
subject to any qualification or exception whatsoever, including, without
limitation, any of the following circumstances:
(A) any lack of validity or enforceability of this
Agreement or any of the other Loan Documents;
(B) the existence of any claim, setoff, defense, or
other right which any Borrower may have at any
time against a beneficiary named in a Letter of
Credit or any transferee of any Letter of
Credit (or any Person for whom any such
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transferee may be acting), any Lender, the
Agent, the issuer of such Letter of Credit, or
any other Person, whether in connection with
this Agreement, any Letter of Credit, the
transactions contemplated herein or any
unrelated transactions (including any
underlying transactions between such Borrower
or any other Person and the beneficiary named
in any Letter of Credit);
(C) any draft, certificate, or any other document
presented under the Letter of Credit proving to
be forged, fraudulent, invalid, or insufficient
in any respect or any statement therein being
untrue or inaccurate in any respect;
(D) the surrender or impairment of any security for
the performance or observance of any of the
terms of any of the Loan Documents; or
(E) the occurrence of any Default or Event of
Default.
2.3. SPECIAL REAL ESTATE LINE.
(a) Subject to the terms and conditions of this Agreement and
subject to the Interim Bankruptcy Court Order and the Final Bankruptcy Court
Order, as the case may be, each Lender agrees to make special real estate line
advances ("Special Real Estate Line Advances") to Borrower in an amount at any
one time outstanding not to exceed such Lender's Pro Rata Share of an amount
equal to the lesser of (i) the Maximum Special Real Estate Line Amount, or (ii)
the Real Estate Line Borrowing Base, in either instance net of any applicable
Availability Reserves, provided that in no event shall a Special Real Estate
Line Advance be made if the total outstanding amount of the Obligations, either
prior to after giving effect thereto, would exceed the Availability. Each
Special Real Estate Line Advance is an Advance hereunder and shall be subject to
the terms and conditions applicable to other Advances, except that no such
Special Real Estate Line Advance shall be eligible for the LIBOR Option.
(b) Amounts borrowed pursuant to this Section 2.3 may be
repaid and, subject to the terms and conditions of this Agreement and the
periodic reductions in the Maximum Special Real Estate Line Amount contemplated
hereby, reborrowed at any time during the term of this Agreement. The procedure
for any Borrowing under the Special Real Estate Line shall conform with Section
2.1(d).
(c) The Special Real Estate Line Advances shall be secured by
the Agent's Liens, and shall constitute Advances and Obligations hereunder.
2.4. RESERVED.
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2.5. PAYMENTS.
(a) Payments by Borrower.
(i) All payments to be made by Borrower shall be made
without set-off, recoupment, deduction, or counterclaim, except as otherwise
required by law. Except as otherwise expressly provided herein, all payments by
Borrower shall be made to Agent for the account of the Lenders or Agent, as the
case may be, at Agent's address set forth in Section 12, and shall be made in
immediately available funds, no later than 11:30 a.m. (Eastern time) on the date
specified herein. Any payment received by Agent later than 11:30 a.m. (Eastern
time), at the option of Agent, shall be deemed to have been received on the
following Business Day and any applicable interest or fee shall continue to
accrue until such following Business Day.
(ii) Whenever any payment is due on a day other than a
Business Day, such payment shall be made on the following Business Day, and such
extension of time shall in such case be included in the computation of interest
or fees, as the case may be.
(iii) Unless Agent receives notice from Borrower prior to
the date on which any payment is due to the Lenders that Borrower will not make
such payment in full as and when required, Agent may assume that Borrower has
made such payment in full to Agent on such date in immediately available funds
and Agent may (but shall not be so required), in reliance upon such assumption,
distribute to each Lender on such due date an amount equal to the amount then
due such Lender. If and to the extent Borrower has not made such payment in full
to Agent, each Lender shall repay to Agent on demand such amount distributed to
such Lender, together with interest thereon at the Reference Rate for each day
from the date such amount is distributed to such Lender until the date repaid.
(b) Apportionment and Application of Payments. Except as
otherwise provided with respect to Defaulting Lenders, aggregate principal and
interest payments shall be apportioned ratably among the Lenders (according to
the unpaid principal balance of the Advances to which such payments relate held
by each Lender) and payments of the fees (other than fees designated for Agent's
separate account) shall, as applicable, be apportioned ratably among the
Lenders. All payments shall be remitted to Agent and all such payments not
relating to principal or interest on specific Advances, or not constituting
payment of specific fees and all proceeds of Collateral received by Agent, shall
be applied, first, to pay any fees or expense reimbursements then due to Agent
from Borrower; second, to pay any fees or expense reimbursements then due to the
Lenders from Borrower; third, to pay interest due in respect of all Advances,
including Agent Loans and Agent Advances; fourth, to pay or prepay principal of
Agent Loans and Agent Advances; fifth, ratably to pay principal of the Advances
(other than Agent Loans and Agent Advances) and unreimbursed obligations in
respect of Letters of Credit; and sixth, ratably to pay any other Obligations
due to Agent or any Lender by Borrower. Agent shall promptly distribute to each
Lender, pursuant to the applicable wire transfer instructions received from each
Lender in writing, such funds as it may be entitled to receive, subject to a
Settlement delay as provided for in Section 2.1(i).
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2.6. OVERADVANCES. If, at any time or for any reason, the amount of
Obligations owed by Borrower to the Lender Group pursuant to Sections 2.1, 2.2
and 2.3 is greater than either the Dollar or percentage limitations set forth in
Sections 2.1 or 2.2 or 2.3 (an "Overadvance"), Borrower immediately shall pay to
Agent, in cash, the amount of such excess to be used by Agent to reduce the
Obligations pursuant to the terms of Section 2.5(b).
2.7. INTEREST AND LETTER OF CREDIT FEES: RATES, PAYMENTS, AND
CALCULATIONS.
(a) Interest Rates. Except as provided in Section 2.7(c), (i)
all Obligations (except for undrawn Letters of Credit) shall bear interest on
the Daily Balance thereof as follows (i) if the relevant Obligation is an
Advance that is a LIBOR Rate Loan, at a per annum rate equal to the LIBOR Rate
plus the LIBOR Rate Margin, and (ii) otherwise, at a per annum rate equal to the
Reference Rate plus the Reference Rate Margin.
(b) Letter of Credit Fee. Borrower shall pay Agent, for the
benefit of the Lender Group, a fee (in addition to the charges, commissions,
fees, and costs set forth in Section 2.2(d)) equal to three percent (3.00%) per
annum times the aggregate undrawn amount of all Letters of Credit outstanding as
of the end of the day.
(c) Default Rate. Upon the occurrence and during the
continuation of an Event of Default, (i) all Obligations (except for undrawn
Letters of Credit) shall bear interest on the Daily Balance at a per annum rate
equal to three (3) percentage points above the Reference Rate, and (ii) the
Letter of Credit fee provided in Section 2.7(b) shall be increased to five (5%)
percent per annum times the aggregate undrawn amount of all outstanding Letters
of Credit.
(d) Minimum Interest. In no event shall the rate of interest
chargeable hereunder for any day be less than seven (7%) percent per annum. To
the extent that interest accrued hereunder at the rate set forth herein would be
less than the foregoing minimum daily rate, the interest rate chargeable
hereunder for such day automatically shall be deemed increased to the minimum
rate.
(e) Payments. Interest and Letter of Credit fees payable
hereunder shall be due and payable, in arrears, on the first day of each month
during the term hereof. Borrower hereby authorizes Agent, at its option, without
prior notice to Borrower, to charge such interest and Letter of Credit fees, all
Lender Group Expenses (as and when incurred), the charges, commissions, fees,
and costs provided for in Section 2.2(d) (as and when accrued or incurred), the
fees and charges provided for in Section 2.12 (as and when accrued or incurred),
and all installments or other payments due under any Loan Document to the
applicable Loan Account, which amounts thereafter shall accrue interest at the
rate then applicable to Advances hereunder. Any interest not paid when due shall
be compounded and shall thereafter accrue interest at the rate then applicable
to Advances hereunder.
(f) Computation. The Reference Rate as of the date of this
Agreement is eight and one-half (8.5%) percent per annum. In the event the
Reference Rate is changed from time to time hereafter, the applicable rate of
interest hereunder automatically and immediately shall be increased or decreased
by an amount equal to such change in the Reference Rate. All
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interest and fees chargeable under the Loan Documents shall be computed on the
basis of a 360 day year for the actual number of days elapsed.
(g) Intent to Limit Charges to Maximum Lawful Rate. In no event
shall the interest rate or rates payable under this Agreement, plus any other
amounts paid in connection herewith, exceed the highest rate permissible under
any law that a court of competent jurisdiction shall, in a final determination,
deem applicable. Borrower and the Lender Group, in executing and delivering this
Agreement, intend legally to agree upon the rate or rates of interest and manner
of payment stated within it; provided, however, that, anything contained herein
to the contrary notwithstanding, if said rate or rates of interest or manner of
payment exceeds the maximum allowable under applicable law, then, ipso facto as
of the date of this Agreement, Borrower is and shall be liable only for the
payment of such maximum as allowed by law, and payment received from Borrower in
excess of such legal maximum, whenever received, shall be applied to reduce the
principal balance of the Obligations to the extent of such excess.
2.8. COLLECTION OF ACCOUNTS.
(a) Borrower shall, within one Business Day after the Closing
Date, instruct all Account Debtors to remit all Collections directly to the
Concentration Account via electronic funds transfer (including, but not limited
to ACH transfers) on each Business Day. Borrower shall cause all cash received
by Borrower at any retail store location to be deposited on a daily basis into a
DDA that has received a DDA Notification or, at Agent's option, any other bank
account, thereupon to be deposited to or sent by electronic funds transfer
(including, but not limited to, ACH transfers) on each Business Day to the
Concentration Account; provided, that up to $500 per store location may be
retained in such accounts, subject to the Lien of the Agent. In addition,
Borrower agrees that all other Collections and other amounts received directly
by Borrower from any Account Debtor or any other source immediately upon receipt
shall be deposited into any Blocked Account. With respect to each account (other
than Blocked Accounts) into which Collections are deposited, as required by
Section 3.3(b), Borrower shall irrevocably authorize and direct in writing, in
form and substance satisfactory to Agent, each such bank to send via wire
transfer (including, but not limited to, ACH transfers) each Business Day
without further instructions by any Person all funds deposited into each such
account to the Concentration Account and each such bank shall agree to do so. No
DDA Notification or other arrangement contemplated in this Section 2.8(a) shall
be modified by Borrower without the prior written consent of Agent. Upon the
terms and subject to the conditions set forth in the Concentration Account
Agreement, all amounts received in the Concentration Account shall be wired each
Business Day into an account (the "Agent's Account") maintained by Agent at a
depositary selected by Agent.
(b) Borrower shall not, and shall not permit any of its
Subsidiaries to, open or maintain any deposit account or investment account with
any bank or other financial institution other than the Designated Account, the
Blocked Accounts and the other accounts listed on Schedule 5.17. All deposit
accounts and investment accounts of Borrower and its Subsidiaries are listed on
Schedule 5.17.
2.9. CREDITING PAYMENTS; APPLICATION OF COLLECTIONS. The receipt of
any Collections by Agent (whether from transfers to Agent by the Concentration
Account Bank
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pursuant to the Concentration Account Agreement, or by any other Blocked Account
Bank, pursuant to any Blocked Account Agreements, or otherwise) immediately
shall be applied provisionally to reduce the Obligations outstanding under
Section 2.1, but shall not be considered a payment on account unless such
Collection item is a wire transfer of immediately available federal funds and is
made to the Agent's Account or unless and until such Collection item is honored
when presented for payment. From and after the Closing Date, Agent shall be
entitled to charge Borrower for one Business Day of "clearance" or "float" at
the rate set forth in Section 2.7(a)(i) or Section 2.7(c)(i), as applicable, on
all Collections that are received by Agent (regardless of whether forwarded by
the Lockbox Banks to Agent, whether provisionally applied to reduce the
Obligations under Section 2.1, or otherwise). This across-the-board one Business
Day clearance or float charge on all Collections is acknowledged by the parties
to constitute an integral aspect of the pricing of the Lender Group's financing
of Borrower, and shall apply irrespective of the characterization of whether
receipts are owned by Borrower or Agent, and whether or not there are any
outstanding Advances, the effect of such clearance or float charge being the
equivalent of charging two Business Days of interest on such Collections. Should
any Collection item not be honored when presented for payment, then Borrower
shall be deemed not to have made such payment, and interest shall be
recalculated accordingly. Anything to the contrary contained herein
notwithstanding, any Collection item shall be deemed received by Agent only if
it is received into the Agent's Account on a Business Day on or before 11:30
a.m. Eastern time. If any Collection item is received into the Agent's Account
on a non-Business Day or after 11:30 a.m. Eastern time on a Business Day, it
shall be deemed to have been received by Agent as of the opening of business on
the immediately following Business Day.
2.10. DESIGNATED ACCOUNT. Agent and the Lender Group is authorized to
make the Advances and issue the Letters of Credit under this Agreement based
upon telephonic or other instructions received from anyone purporting to be an
Authorized Person, or without instructions if pursuant to Section 2.7(e).
Borrower agrees to establish and maintain the Designated Account with the
Designated Account Bank for the purpose of receiving the proceeds of the
Advances requested by Borrower and made by the Lender Group hereunder. Unless
otherwise agreed by Agent and Borrower, any Advance requested by Borrower and
made by the Lender Group hereunder shall be made to the Designated Account.
2.11. MAINTENANCE OF LOAN ACCOUNT; STATEMENTS OF OBLIGATIONS. Agent
shall maintain an account on its books in the name of Borrower (the "Loan
Account") on which Borrower will be charged with all Advances made by the Lender
Group to Borrower or for Borrower's account, including, accrued interest, Lender
Group Expenses, and any other payment Obligations of Borrower. In accordance
with Section 2.9, the Loan Account will be credited with all payments received
by Agent from Borrower or for Borrower's account, including all amounts received
in the Agent's Account from any Collection Account Bank or Blocked Account Bank.
Agent shall render statements regarding the Loan Account to Borrower, including
principal, interest, fees, and including an itemization of all charges and
expenses constituting the Lender Group Expenses owing, and such statements shall
be conclusively presumed to be correct and accurate and constitute an account
stated between Borrower and the Lender Group unless, within 30 days after
receipt thereof by Borrower, Borrower shall deliver to Agent written objection
thereto describing the error or errors contained in any such statements.
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2.12. FEES. Borrower shall pay to Agent for the ratable benefit of
the Lender Group (except where otherwise indicated) the following fees:
(a) Fee Letter Fees. All fees set forth in the Fee Letter as
and when due under the terms thereof; and
(b) Financial Examination, Documentation, and Appraisal Fees.
For each of the respective sole accounts of Agent and, to the extent any Lenders
accompany Agent under Section 4.6, up to three (3) such Lenders: (i) a fee of
Seven Hundred Fifty ($750) Dollars per day per examiner, plus out-of-pocket
expenses for each financial analysis and examination (i.e., audits) of Borrower
performed by personnel employed by Agent and any such Lender; (ii) an appraisal
fee of seven hundred fifty ($750) Dollars per day per appraiser, plus
out-of-pocket expenses for each appraisal of the Collateral performed by
personnel employed by Agent and any such Lender; (iii) the actual charges paid
or incurred by Agent if it elects to employ the services of one or more third
Persons to perform such financial analyses and examinations (i.e., audits) of
Borrower or to appraise the Collateral; and (iv) the actual charges paid or
incurred by Agent if it elects to employ the services of one or more third
Persons to appraise the Collateral provided that if no Event of Default has
occurred and is continuing, Borrower shall not be responsible for the costs of
more than four (4) financial audits and four (4) Collateral appraisals per
fiscal year.
2.13. LIBOR OPTION.
(a) Interest and Interest Payment Dates. In lieu of having
interest charged at the rate based upon the Base Rate, Borrower shall have the
option (the "LIBOR Option") to have interest on all or a portion of the Advances
(other than the Swing Loans and Special Real Estate Line Advances, for which
there is no LIBOR Option) be charged at the LIBOR Rate. Interest on LIBOR Rate
Loans shall be payable on the earliest of (i) the last day of the Interest
Period applicable thereto, (ii) the occurrence of an Event of Default in
consequence of which the Required Lenders or Agent on behalf thereof elect to
accelerate the maturity of the Obligations, (iii) termination of this Agreement
pursuant to the terms hereof, or (iv) the first day of each month that such
LIBOR Rate Loan is outstanding. On the last day of each applicable Interest
Period, unless Borrower properly has exercised the LIBOR Option with respect
thereto, the interest rate applicable to such LIBOR Rate Loan automatically
shall convert to the rate of interest then applicable to Base Rate Loans of the
same type hereunder. At any time that a Default or Event of Default has occurred
and is continuing, Borrower no longer shall have the option to request that
Advances bear interest at the LIBOR Rate and Agent shall have the right to
convert the interest rate on all outstanding LIBOR Rate Loans to the rate then
applicable to Base Rate Loans hereunder.
(b) LIBOR Election.
(i) Borrower may, at any time and from time to time, so
long as no Event of Default has occurred and is continuing, elect to exercise
the LIBOR Option by notifying Agent prior to 11:00 a.m. (California time) at
least 3 Business Days prior to the commencement of the proposed Interest Period
(the "LIBOR Deadline"). Notice of Borrower's election of the
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LIBOR Option for a permitted portion of the Advances or the Term Loan and an
Interest Period pursuant to this Section shall be made by delivery to Agent of a
LIBOR Notice received by Agent before the LIBOR Deadline, or by telephonic
notice received by Agent before the LIBOR Deadline (to be confirmed by delivery
to Agent of a LIBOR Notice received by Agent prior to 5:00 p.m. (California
time) on the same day. Promptly upon its receipt of each such LIBOR Notice,
Agent shall provide a copy thereof to each of the Lenders.
(ii) Each LIBOR Notice shall be irrevocable and binding
on Borrower. In connection with each LIBOR Rate Loan, Borrower shall indemnify,
defend, and hold Agent and the Lenders harmless against any loss, cost, or
expense incurred by Agent or any Lender as a result of (a) the payment of any
principal of any LIBOR Rate Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default), (b)
the conversion of any LIBOR Rate Loan other than on the last day of the Interest
Period applicable thereto, or (c) the failure to borrow, convert, continue or
prepay any LIBOR Rate Loan on the date specified in any LIBOR Notice delivered
pursuant hereto (such losses, costs, and expenses, collectively, "Funding
Losses"). Funding Losses shall, with respect to Agent or any Lender, be deemed
to equal the amount determined by Agent or such Lender to be the excess, if any,
of (i) the amount of interest that would have accrued on the principal amount of
such LIBOR Rate Loan had such event not occurred, at the LIBOR Rate that would
have been applicable thereto, for the period from the date of such event to the
last day of the then current Interest Period therefor (or, in the case of a
failure to borrow, convert, or continue, for the period that would have been the
Interest Period therefor), minus (ii) the amount of interest that would accrue
on such principal amount for such period at the interest rate which Agent or
such Lender would be offered were it to be offered, at the commencement of such
period, Dollar deposits of a comparable amount and period in the London
interbank market. A certificate of Agent or a Lender delivered to Borrower
setting forth any amount or amounts that Agent or such Lender is entitled to
receive pursuant to this Section shall be conclusive absent manifest error.
(iii) Borrower shall have not more than eight (8) LIBOR
Rate Loans in effect at any given time. Borrower only may exercise the LIBOR
Option for LIBOR Rate Loans of at least $1,000,000 and integral multiples of
$500,000 in excess thereof.
(c) Prepayments. Borrower may prepay LIBOR Rate Loans at any
time; provided, however, that in the event that LIBOR Rate Loans are prepaid on
any date that is not the last day of the Interest Period applicable thereto,
including as a result of any automatic prepayment through the required
application by Agent of proceeds of Collections in accordance with Section
2.4(b) upon conversion by Agent, in accordance with Section 2.13 or for any
other reason, including early termination of the term of this Agreement or
acceleration of the Obligations pursuant to the terms hereof, Borrower shall
indemnify, defend, and hold Agent and the Lenders and their Participants
harmless against any and all Funding Losses in accordance with clause (b)(ii)
above.
(d) Special Provisions Applicable to LIBOR Rate.
(i) The LIBOR Rate may be adjusted by Agent with respect
to any Lender on a prospective basis to take into account any additional or
increased costs to such
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Lender of maintaining or obtaining any eurodollar deposits or increased costs
due to changes in applicable law occurring subsequent to the commencement of the
then applicable Interest Period, including changes in tax laws (except changes
of general applicability in corporate income tax laws) and changes in the
reserve requirements imposed by the Board of Governors of the Federal Reserve
System (or any successor), excluding the Reserve Percentage, which additional or
increased costs would increase the cost of funding loans bearing interest at the
LIBOR Rate. In any such event, the affected Lender shall give Borrower and Agent
notice of such a determination and adjustment and Agent promptly shall transmit
the notice to each other Lender and, upon its receipt of the notice from the
affected Lender, Borrower may, by notice to such affected Lender (y) require
such Lender to furnish to Borrower a statement setting forth the basis for
adjusting such LIBOR Rate and the method for determining the amount of such
adjustment, or (z) repay the LIBOR Rate Loans with respect to which such
adjustment is made (together with any amounts due under clause (b)(ii) above).
(ii) In the event that any change in market conditions or
any law, regulation, treaty, or directive, or any change therein or in the
interpretation of application thereof, shall at any time after the date hereof,
in the reasonable opinion of any Lender, make it unlawful or commercially
impracticable for such Lender to fund or maintain LIBOR Advances or to continue
such funding or maintaining, or to determine or charge interest rates at the
LIBOR Rate, such Lender shall give notice of such changed circumstances to Agent
and Borrower and Agent promptly shall transmit the notice to each other Lender
and (y) in the case of any LIBOR Rate Loans of such Lender that are outstanding,
the date specified in such Lender's notice shall be deemed to be the last day of
the Interest Period of such LIBOR Rate Loans, and interest upon the LIBOR Rate
Loans of such Lender thereafter shall accrue interest at the rate then
applicable to Base Rate Loans, and (z) Borrower shall not be entitled to elect
the LIBOR Option until such Lender determines that it would no longer be
unlawful or commercially impracticable to do so.
(e) No Requirement of Matched Funding. Anything to the contrary
contained herein notwithstanding, neither Agent, nor any Lender, nor any of
their Participants, is required actually to acquire eurodollar deposits to fund
or otherwise match fund any Obligation as to which interest accrues at the LIBOR
Rate. The provisions of this Section shall apply as if each Lender or its
Participants had match funded any Obligation as to which interest is accruing at
the LIBOR Rate by acquiring eurodollar deposits for each Interest Period in the
amount of the LIBOR Rate Loans.
2.14. CAPITAL REQUIREMENTS. If, after the date hereof, any Lender
determines that (i) the adoption of or change in any law, rule, regulation or
guideline regarding capital requirements for banks or bank holding companies, or
any change in the interpretation or application thereof by any Governmental
Authority charged with the administration thereof, or (ii) compliance by such
Lender or its parent bank holding company with any guideline, request, or
directive of any such entity regarding capital adequacy (whether or not having
the force of law), the effect of reducing the return on such Lender's or such
holding company's capital as a consequence of such Lender's Commitments
hereunder to a level below that which such Lender or such holding company could
have achieved but for such adoption, change, or compliance (taking into
consideration such Lender's or such holding company's then existing policies
with respect to capital adequacy and assuming the full utilization of such
entity's capital) by any amount deemed by such Lender to be material, then such
Lender may notify Borrower and Agent
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thereof. Following receipt of such notice, Borrower agrees to pay such Lender on
demand the amount of such reduction of return of capital as and when such
reduction is determined, payable within 90 days after presentation by such
Lender of a statement in the amount and setting forth in reasonable detail such
Lender's calculation thereof and the assumptions upon which such calculation was
based (which statement shall be deemed true and correct absent manifest error).
In determining such amount, such Lender may use any reasonable averaging and
attribution methods.
3. CONDITIONS; TERM OF AGREEMENT.
3.1. CONDITIONS PRECEDENT TO THE INITIAL ADVANCE AND ISSUANCE OF THE
INITIAL LETTER OF CREDIT. The obligation of the Lender Group to make the initial
Advance and to issue the initial Letter of Credit is subject to the fulfillment,
to the satisfaction of Agent and its counsel, of each of the following
conditions on or before the Closing Date:
(a) the Closing Date shall occur on or before March 10, 2001;
(b) Agent shall have received satisfactory results of background
checks on Borrower's key management personnel;
(c) Agent shall have received each of the following documents,
duly executed, and each such document shall be in full force and effect:
(i) the Disbursement Letter;
(ii) the Pay-Off Letter, together with UCC termination
statements and other documentation evidencing the termination by Existing Lender
of its Liens in and to the properties and assets of Borrower;
(iii) the Intellectual Property Security Agreement;
(iv) the Parent Guaranty and the Parent Pledge and Security
Agreement;
(v) the Fee Letter;
(vi) this Agreement; and
(d) Agent shall have received a certificate from the Secretary of
Borrower attesting to the resolutions of Borrower's Board of Directors
authorizing its execution, delivery, and performance of this Agreement and the
other Loan Documents to which Borrower is a party and authorizing specific
officers of Borrower to execute the same, and a similar certificate from the
Secretary of Parent Guarantor authorizing the execution, delivery and
performance of the Parent Guaranty and Parent Pledge and Security Agreement.
(e) Agent shall have received copies of Borrower's Governing
Documents, as amended, modified, or supplemented to the Closing Date, certified
by the Secretary of Borrower;
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(f) Agent shall have received a certificate of status with
respect to Borrower, dated within 10 days of the Closing Date, such certificate
to be issued by the appropriate officer of the jurisdiction of organization of
Borrower, which certificate shall indicate that Borrower is in good standing in
such jurisdiction;
(g) Agent shall have received certificates of status with
respect to Borrower, each dated within 15 days of the Closing Date, such
certificates to be issued by the appropriate officer of the jurisdictions in
which its failure to be duly qualified or licensed would constitute a Material
Adverse Change, which certificates shall indicate that Borrower is in good
standing in such jurisdictions;
(h) Agent shall have received satisfactory evidence that
Borrower has requested certificates of status with respect to Borrower to be
issued by the appropriate officer of the jurisdictions where Borrower is
required to file a state or local tax return, which certificates shall indicate
that Borrower is in tax good standing in such jurisdictions (collectively, the
"Tax Good Standing Certificates");
(i) Agent shall have received a certificate of insurance,
together with the endorsements thereto, as are required by Section 6.9, the form
and substance of which shall be satisfactory to Agent and its counsel;
(j) Agent shall have received an opinion of Borrower's counsel
in form and substance satisfactory to Agent in its sole discretion;
(k) Agent shall have received proof of the mailing, to each
depository institution with which any DDA is maintained, of notification (in
form satisfactory to Agent) of the Lender Group's interest in such DDA (each, a
"DDA Notification") or shall have received properly addressed DDA Notifications
executed by Borrower for each such depository institution and been authorized by
Borrower to deliver the notifications thereto;
(l) Borrower shall have Availability of not less than ten
million Dollars ($10,000,000), after taking into account the initial Advances
(in an aggregate amount sufficient to pay in full all obligations owing to
Existing Lender) and the issuance of any Letters of Credit on the Closing Date;
(m) Agent shall have received satisfactory evidence that all tax
returns required to be filed by Borrower have been timely filed and all taxes
upon Borrower or its properties, assets, income, and franchises (including real
property taxes and payroll taxes) have been paid prior to delinquency, except
such taxes that are the subject of a Permitted Protest;
(n) All other documents and legal matters in connection with the
transactions contemplated by this Agreement shall have been delivered, executed,
or recorded and shall be in form and substance satisfactory to Agent and its
counsel;
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(o) The Interim Bankruptcy Court Order shall have been Entered
and the Agent shall have received a file stamped copy of same together with an
acceptable debtor in possession weekly budget for the thirteen (13) weeks
following the Petition Date;
(p) No order shall have been entered or requested by any Person
(i) for appointment of a trustee or examiner, or (ii) to convert the Bankruptcy
Case to Chapter 7 or to dismiss the Bankruptcy Case;
(q) All obligations (including principal, accrued interest and
fees) owing to the Existing Lender shall have been paid (or cash collateralized)
in full with the proceeds of the initial Advances and the commitments of the
Existing Lender under the Prepetition Loan and Security Agreement shall have
been terminated;
(r) The Agent shall have received all "first day" pleadings in
connection with the Bankruptcy Case, and been satisfied with all such pleadings
which would have a material effect on the Lenders, including, without
limitation, any pleadings concerning the payment of pre-petition claims of any
Persons; and
(s) The Agent shall have received an appraisal of the Net
Lendable Real Estate Value.
3.2. CONDITIONS PRECEDENT TO ALL ADVANCES AND ALL LETTERS OF CREDIT.
The following shall be conditions precedent to all Advances and all Letters of
Credit hereunder:
(a) the representations and warranties contained in this
Agreement and the other Loan Documents shall be true and correct in all respects
on and as of the date of such extension of credit, as though made on and as of
such date (except to the extent that such representations and warranties relate
solely to an earlier date);
(b) no Default or Event of Default shall have occurred and be
continuing on the date of such extension of credit, nor shall either result from
the making thereof;
(c) no injunction, writ, restraining order, or other order of
any nature prohibiting, directly or indirectly, the extending of such credit
shall have been issued and remain in force by any governmental authority against
Borrower, the Lender Group or any of their Affiliates;
(d) the amount of any requested Advance or Letter of Credit
shall not exceed Availability at such time; and
(e) the Interim Bankruptcy Court Order (if the Final Bankruptcy
Court Order is not Entered) or the Final Bankruptcy Court Order, as the case may
be, in form and substance satisfactory to the Agent, shall be in full force and
effect and shall not have been reversed, stayed, modified or amended, except for
such modifications and amendments mutually agreed to by Borrower and Agent.
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3.3. CONDITIONS SUBSEQUENT. As a condition subsequent to the initial
funding hereunder, Borrower shall perform or cause to be performed the following
(the failure by Borrower to so perform or cause to be performed constituting an
Event of Default):
(a) within 5 Business Days of the Closing Date, file with the
Bankruptcy Court a motion to assume the Hilco Agreement pursuant to Section 365
of the Bankruptcy Code;
(b) within 20 days of the Closing Date, deliver to Agent (i)
the executed Credit Card Agreements, and (ii) the executed Concentration Account
Agreement, the form and substance of which, in each case, shall be satisfactory
to Agent and its counsel;
(c) within 14 days of the Closing Date, provide evidence to
Agent that Borrower has irrevocably authorized and directed each depository
institution holding an account into which Collections are deposited, and each
such depository institution has agreed, to send via wire transfer each Business
Day all funds deposited into such accounts (subject to the provision in Section
2.8) to the Concentration Account without further instructions by any Person.
(d) within 45 days of the Closing Date, deliver to Agent the
certified copies of the policies of insurance, together with the endorsements
thereto, as are required by Section 6.9, the form and substance of which shall
be satisfactory to Agent and its counsel;
(e) use its best efforts to obtain within 30 days of the
Closing Date Collateral Access Agreements, in form and substance acceptable to
Agent, for any distribution centers, regional headquarters, warehouses or other
facilities where Inventory is stored, handled or processed or the Borrower's
Books are maintained, store locations for which such Collateral Access
Agreements were not obtained as of the Closing Date (Borrower acknowledges that
the failure to obtain any such agreements will result in the creation or
maintenance (as the case may be) of a reserve as set forth in the definition of
"Availability Reserves"); and
(f) Within 60 days after the Closing Date: Agent shall have
received (i) searches reflecting the filing of its financing statements and
fixture filings, (ii) mortgagee title insurance policies (or marked commitments
to issue the same) for each of the Core Properties, issued by a title insurance
company satisfactory to Agent (each a "Mortgage Policy" and, collectively, the
"Mortgage Policies") in amounts satisfactory to Agent assuring Agent that the
Mortgages on such parcels of Real Property Collateral are valid and enforceable
first priority mortgage Liens on such Real Property Collateral free and clear of
all defects and encumbrances except Permitted Liens, and the Mortgage Policies
shall otherwise be in form and substance reasonably satisfactory to Agent; and
(iii) a phase-I environmental report and a real estate survey shall have been
completed with respect to each of the Core Properties and copies thereof
delivered to Agent (or Agent shall have received a reliance letter addressed to
it in respect of a report completed within one (1) year prior to the Closing
Date), and the environmental consultants and surveyors retained for such reports
or surveys, the scope and dates of completion of the reports or surveys, and the
results thereof shall be acceptable to Agent in Agent's Discretion.
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3.4. TERM. This Agreement shall become effective upon the execution
and delivery hereof by Borrower and the Lender Group and shall continue in full
force and effect for a term ending on the date (the "Maturity Date") that is the
earlier of: (a) two (2) years from the Closing Date or (b) the effective date of
a plan of reorganization in the Bankruptcy Case. The foregoing notwithstanding,
Agent (on behalf of the Lender Group) shall have the right to terminate the
Lender Group's obligations under this Agreement immediately and without notice
upon the occurrence and during the continuation of an Event of Default.
3.5. EFFECT OF TERMINATION. On the date of termination of this
Agreement, all Obligations (including contingent reimbursement obligations of
Borrower with respect to any outstanding Letters of Credit) immediately shall
become due and payable without notice or demand. No termination of this
Agreement, however, shall relieve or discharge Borrower of Borrower's duties,
Obligations, or covenants hereunder, and the Lender Group's continuing security
interests in the Collateral shall remain in effect until all Obligations have
been fully and finally discharged and the Lender Group's obligation to provide
additional credit hereunder is terminated.
3.6. EARLY TERMINATION BY BORROWER. The provisions of Section 3.4
that allow termination of this Agreement by Borrower only on the Maturity Date
notwithstanding, Borrower has the option, at any time upon 90 days' prior
written notice to Agent, to terminate this Agreement by paying to Agent (for the
ratable benefit of the Lender Group), in cash, the Obligations (including an
amount equal to 102% of the undrawn amount of the Letters of Credit), in full,
together with a premium (the "Early Termination Premium") equal to (a) the Total
Commitment times one (1%) percent if such termination is effective on or before
the Maturity Date or any extension thereof by the Lenders, except such Early
Termination Premium shall be $0 if the termination is in connection with
effective date of a plan of reorganization of the Borrower occurring on or
before the first anniversary of the Closing Date.
3.7. TERMINATION UPON EVENT OF DEFAULT. If the Lender Group
terminates this Agreement upon the occurrence of an Event of Default prior to
the Maturity Date, in view of the impracticability and extreme difficulty of
ascertaining actual damages and by mutual agreement of the parties as to a
reasonable calculation of the Lender Group's lost profits as a result thereof,
Borrower shall pay, in addition to all other Obligations due hereunder, to Agent
(for the ratable benefit of the Lender Group) upon the effective date of such
termination, a premium in an amount equal to the Early Termination Premium. The
Early Termination Premium shall be presumed to be the amount of damages
sustained by the Lender Group as the result of the early termination and
Borrower agrees that it is reasonable under the circumstances currently
existing. The Early Termination Premium provided for in this Section 3.7 shall
be deemed included in the Obligations.
4. CREATION OF SECURITY INTEREST.
4.1. GRANT OF SECURITY INTEREST.
(a) Borrower hereby grants to Agent, for the benefit of the
Lender Group, a continuing security interest in all currently existing and
hereafter acquired or arising Personal Property Collateral and Real Property
Collateral in order to secure prompt repayment of any and
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all Obligations and in order to secure prompt performance by Borrower of each of
its covenants and duties under the Loan Documents. The security interests of
Agent for the benefit of the Lender Group in the Personal Property Collateral
shall attach to all Personal Property Collateral without further act on the part
of the Lender Group or Borrower. This grant of a security interest shall
continue in full force and effect applicable to all Obligations until all
Obligations have been paid and/or satisfied in full and the security interest
granted herein is specifically terminated in writing by a duly authorized
officer of the Agent. Anything contained in this Agreement or any other Loan
Document to the contrary notwithstanding, except for the sale of Inventory to
buyers in the ordinary course of business, Borrower has no authority, express or
implied, to dispose of any item or portion of the Personal Property Collateral
or the Real Property Collateral, and, in the event that Borrower obtains
authority to sell any Collateral utilizing any agent, such engagement shall be
on terms, including, without limitation, bidding procedures and on agreement
acceptable to Agent.
(b) Leasehold Interests.
(i) Borrower hereby grants to Agent, for the benefit of the
Lender Group, without further order of the Bankruptcy Court, a security interest
in, collateral assignment of, and mortgage upon all of the Borrower's Leasehold
Interests to secure all Obligations. The Borrower agrees to execute and deliver
to Agent, upon the request of Agent, one or more leasehold mortgages which are
acceptable to Lender and its counsel with respect to Borrower's Leasehold
Interests, duly executed and acknowledged on behalf of the Borrower and in
proper form for recording in the appropriate land records with the appropriate
county or municipal filing officer ("Leasehold Mortgages"), together with any
UCC-1 Financing Statements covering any ancillary security interest granted
under any of the Leasehold Mortgages, and has provided herewith full legal
descriptions, including the identity of each fee owner, of each Leasehold
Interest.
(ii) Borrower represents and covenants to the Agent and the
Lender Group and shall, as of the date hereof and until the Borrower has
indefeasibly paid and satisfied in full any and all of the Obligations, fully
comply with each of the following terms and conditions:
(A) Except to the extent provided in any lease
thereof or, as of the Petition Date, there
existed a valid, unavoidable statutory or
state law lien in favor of any Landlord,
each Leasehold Interest is and shall at all
times be free and clear of all liens, claims
and encumbrances of any nature or
description and no other creditor of the
Estate (secured or unsecured), shall be
entitled to encumber the Leasehold Interests
without the written consent of Agent.
(B) The security interest and mortgage upon the
Leasehold Interest granted to Agent is and
shall be subordinate, where applicable, only
to the liens or mortgages granted by the
owner of the fee and any other Encumbrance
which,
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pursuant to the terms of the Borrowing
Order, is accorded priority ahead of the
liens of the Agent under the Loan Documents;
(C) Except: (x) for those Leasehold Interests
which, with Agent's consent, Borrower has
voluntarily closed and/or are the subject of
a motion filed by Borrower before the
Bankruptcy Court seeking to reject,
terminate or modify Borrower's Leasehold
Interest, (y) where Agent otherwise consents
and/or (z) for amounts the validity of which
is being contested in good faith by the
Borrower and for which reserves may be
established at any time by Agent as provided
herein in respect of the amounts due or
amounts which may become due from Borrower
to such owners or lessors, Borrower is and
shall remain current in the payment of all
rent and additional rent accruing on and
after the Petition Date, including, without
limitation, taxes, insurance, and other
charges or amounts due each of owner and/or
lessor as provided for in each Leasehold
Interest, as well as in compliance with all
other terms of each Leasehold interest,
(iv) Borrower shall pay all fees and expenses associated with
any recordation of the Leasehold Mortgages, including, without limitation,
reasonable attorney's fees and legal expenses incurred by Agent's retention of
local real estate counsel, if necessary.
4.2. NEGOTIABLE COLLATERAL. In the event that any Collateral, including
proceeds, is evidenced by or consists of Negotiable Collateral, Borrower,
immediately upon receipt thereof, shall endorse and deliver physical possession
of such Negotiable Collateral to Agent.
4.3. COLLECTION OF ACCOUNTS, GENERAL INTANGIBLES, AND NEGOTIABLE
COLLATERAL. At any time, Agent or Agent's designee may (a) notify customers or
Account Debtors of Borrower that the Accounts, General Intangibles, or
Negotiable Collateral have been assigned to Agent for the benefit of the Lender
Group or that Agent for the benefit of the Lender Group has a security interest
therein, and (b) collect the Accounts, General Intangibles, and Negotiable
Collateral directly and charge the collection costs and expenses to the Loan
Account. Borrower agrees that it will hold in trust for the Lender Group, as the
Lender Group's trustee, any Collections that it receives and immediately will
deliver said Collections to Agent in their original form as received by
Borrower.
4.4. DELIVERY OF ADDITIONAL DOCUMENTATION REQUIRED. At any time upon
the request of Agent, Borrower shall execute and deliver to Agent all financing
statements, continuation financing statements, fixture filings, security
agreements, pledges, assignments, control agreements, endorsements of
certificates of title, applications for title, affidavits, reports, notices,
schedules of accounts, letters of authority, and all other documents that Agent
reasonably may request, in form satisfactory to Agent, to perfect and continue
perfected the Agent's Liens in the
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Collateral, and in order to fully consummate all of the transactions
contemplated hereby and under the other the Loan Documents.
4.5. POWER OF ATTORNEY. Borrower hereby irrevocably makes, constitutes,
and appoints Agent (and any of Agent's officers, employees, or agents designated
by Agent) as Borrower's true and lawful attorney, with power to (a) if Borrower
refuses to, or fails timely to execute and deliver any of the documents
described in Section 4.4, sign the name of Borrower on any of the documents
described in Section 4.4, (b) at any time that an Event of Default has occurred
and is continuing, sign Borrower's name on any invoice or xxxx of lading
relating to any Account, drafts against Account Debtors, schedules and
assignments of Accounts, verifications of Accounts, and notices to Account
Debtors, (c) send requests for verification of Accounts, (d) endorse Borrower's
name on any Collection item that may come into the Lender Group's possession,
(e) at any time that an Event of Default has occurred and is continuing or the
Lender Group deems itself insecure, notify the post office authorities to change
the address for delivery of Borrower's mail to an address designated by Agent,
to receive and open all mail addressed to Borrower, and to retain all mail
relating to the Collateral and forward all other mail to Borrower, (f) at any
time that an Event of Default has occurred and is continuing or the Lender Group
deems itself insecure, make, settle, and adjust all claims under Borrower's
policies of insurance and make all determinations and decisions with respect to
such policies of insurance, and (g) at any time that an Event of Default has
occurred and is continuing or Agent deems itself insecure, settle and adjust
disputes and claims respecting the Accounts directly with Account Debtors, for
amounts and upon terms that Agent determines to be reasonable, and Agent may
cause to be executed and delivered any documents and releases that Agent
determines to be necessary. The appointment of Agent as Borrower's attorney, and
each and every one of Agent's rights and powers, being coupled with an interest,
is irrevocable until all of the Obligations have been fully and finally repaid
and performed and the Lender Group's obligation to extend credit hereunder is
terminated.
4.6. RIGHT TO INSPECT; INVENTORIES, APPRAISALS, AUDITS. Agent (through
any of its officers, employees, or agents), and together with any Lender that so
elects shall have the right, from time to time hereafter to inspect Borrower's
Books and to check, test, and appraise the Collateral in order to verify
Borrower's financial condition or the amount, quality, value, condition of, or
any other matter relating to, the Collateral. Without limiting the generality of
the foregoing:
(a) Agent, at the expense of Borrower, may participate in
and/or observe each physical count and/or inventory of so much of the Collateral
as consists of Inventory which is undertaken on behalf of Borrower.
(b) Agent may, from time to time, obtain or conduct (in all
events, at Borrower's expense) financial or SKU based physical counts and/or
inventories of the Collateral, conducted by such inventory takers as are
satisfactory to Agent and following such methodology as may be required by Agent
each of which physical counts and/or financial or SKU based inventories shall be
observed by Borrower's accountants, provided, that, (1) if no Event of Default
has occurred and is continuing, and (2) Borrower continues to perform a "cycle
count" of its Inventory in accordance with its historical practices, Borrower
shall be required to conduct only one fiscal year-end physical count and/or
inventory of the Collateral located at all of
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Borrower's locations, provided, further, that Agent may obtain or conduct (in
all events, at Borrower's expense) more frequent physical counts and/or
inventories of the Collateral located at store locations with a higher rate of
shrinkage than the average rate of shrinkage at all of Borrower's store
locations (such shrinkage rates to be determined as of the last completed full
physical count). The draft or unaudited results of all inventories or counts
shall be furnished to Agent within 5 business days of the taking of such
inventories or counts. Borrower agrees that Lender shall have the right to
receive directly from the inventory taker the unaudited or draft results of any
such inventory or audit.
(c) Agent may, from time to time, but not less often than
semi-annually, obtain or conduct (in all events, at Borrower's expense)
appraisals conducted by such appraisers as are satisfactory to Agent.
(d) Agent contemplates conducting four (4) commercial finance
audits per fiscal year (in each event, at the Borrower's expense) of Borrower's
books and records.
(e) Agent from time to time (in all events, at Borrower's
expense) may undertake "mystery shopping" (so-called) visits to all or any of
Borrower's business premises. Agent shall provide Borrower with a copy of any
non-company confidential results of such mystery shopping upon Borrower's
written request.
5. REPRESENTATIONS AND WARRANTIES.
In order to induce the Lender Group to enter into this Agreement,
Borrower makes the following representations and warranties, which shall be
true, correct, and complete in all respects as of the date hereof, and shall be
true, correct, and complete in all respects as of the Closing Date, and at and
as of the date of the making of each Advance and the issuance of each Letter of
Credit thereafter, as though made on and as of the date of such Advance or,
Letter of Credit (except to the extent that such representations and warranties
relate solely to an earlier date) and such representations and warranties shall
survive the execution and delivery of this Agreement:
5.1. NO ENCUMBRANCES. Borrower has good and indefeasible title to the
Collateral, free and clear of Liens except for Permitted Liens. Agent's Liens on
each of the Core Properties are valid and enforceable first priority Liens on
such Real Property, subject only to Permitted Liens
5.2. RESERVED.
5.3. ELIGIBLE INVENTORY. All Eligible Inventory is of good and
merchantable quality, free from defects.
5.4. EQUIPMENT. All of the Equipment is used or held for use in
Borrower's business and is fit for such purposes, ordinary wear and tear
excepted.
5.5. LOCATION OF INVENTORY AND EQUIPMENT. The Inventory and Equipment
are not stored with a bailee, warehouseman, or similar party (without Agent's
prior written consent) and
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are located only at the locations identified on Schedule 6.11 or otherwise
permitted by Section 6.11.
5.6. INVENTORY RECORDS. Borrower keeps correct and accurate records
itemizing and describing the kind, type, quality, and quantity of the Inventory,
and Borrower's Cost therefor.
5.7. LOCATION OF CHIEF EXECUTIVE OFFICE; FEIN. The chief executive
office of Borrower is located at the address indicated in the preamble to this
Agreement and Borrower's FEIN is 00-0000000.
5.8. DUE ORGANIZATION AND QUALIFICATION; SUBSIDIARIES.
(a) Borrower is duly organized and existing and in good
standing under the laws of the jurisdiction of its incorporation and qualified
and licensed to do business in, and in good standing in, any state where the
failure to be so licensed or qualified reasonably could be expected to cause a
Material Adverse Change.
(b) Set forth on Schedule 5.8, is a complete and accurate list
of Borrower's direct and indirect Subsidiaries, showing: (i) the jurisdiction of
their incorporation; (ii) the number of shares of each class of common and
preferred stock authorized for each of such Subsidiaries; and (iii) the number
and the percentage of the outstanding shares of each such class owned directly
or indirectly by Borrower. All of the outstanding capital stock of each such
Subsidiary has been validly issued and is fully paid and non-assessable.
(c) Except as set forth on Schedule 5.8, no capital stock (or
any securities, instruments, warrants, options, purchase rights, conversion or
exchange rights, calls, commitments or claims of any character convertible into
or exercisable for capital stock) of any direct or indirect Subsidiary of
Borrower is subject to the issuance of any security, instrument, warrant,
option, purchase right, conversion or exchange right, call, commitment or claim
of any right, title, or interest therein or thereto.
5.9. DUE AUTHORIZATION; NO CONFLICT.
(a) The execution, delivery, and performance by Borrower of
this Agreement and the Loan Documents to which it is a party have been duly
authorized by all necessary corporate action.
(b) Subject to the entry of the Interim Bankruptcy Court
Order, the execution, delivery, and performance by Borrower of this Agreement
and the Loan Documents to which it is a party do not and will not (i) violate
any provision of federal, state, or local law or regulation (including
Regulations T, U, and X of the Federal Reserve Board) applicable to Borrower,
the Governing Documents of Borrower, or any order, judgment, or decree of any
court or other Governmental Authority binding on Borrower, (ii) conflict with,
result in a breach of, or constitute (with due notice or lapse of time or both)
a default under any material contractual obligation or material lease of
Borrower, (iii) result in or require the creation or imposition of any Lien of
any nature whatsoever upon any properties or assets of Borrower, other than
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Permitted Liens, or (iv) require any approval of stockholders or any approval or
consent of any Person under any material contractual obligation of Borrower.
(c) Other than entry of the Funding Orders and the filing of
appropriate financing statements, fixture filings, and mortgages, the execution,
delivery, and performance by Borrower of this Agreement and the Loan Documents
to which Borrower is a party do not and will not require any registration with,
consent, or approval of, or notice to, or other action with or by, any federal,
state, foreign, or other Governmental Authority or other Person.
(d) This Agreement and the Loan Documents to which Borrower is
a party, and all other documents contemplated hereby and thereby, when executed
and delivered by Borrower, subject to the entry of the Funding Orders will be
the legally valid and binding obligations of Borrower, enforceable against
Borrower in accordance with their respective terms, except as enforcement may be
limited by equitable principles or by bankruptcy, insolvency, reorganization,
moratorium, or similar laws relating to or limiting creditors' rights generally.
(e) The Agent's Liens granted by Borrower in and to its
properties and assets pursuant to this Agreement and the other Loan Documents
are validly created, perfected, and first priority Liens, subject only to
Permitted Liens.
5.10. LITIGATION. Other than the Bankruptcy Case, there are no actions
or proceedings pending by or against Borrower before any court or administrative
agency and Borrower does not have knowledge or belief of any pending,
threatened, or imminent litigation, governmental investigations, or claims,
complaints, actions, or prosecutions involving Borrower or any guarantor of the
Obligations, except for: (a) ongoing collection matters in which Borrower is the
plaintiff; (b) matters disclosed on Schedule 5.10; (c) matters arising after the
date hereof that, if decided adversely to Borrower, would not cause a Material
Adverse Change; and (d) actions or other proceedings that are stayed under
Section 362(a) of the Bankruptcy Code.
5.11. NO MATERIAL ADVERSE CHANGE. All financial statements relating to
Borrower, Parent Guarantor or any other guarantor of the Obligations that have
been delivered by Borrower to the Lender Group have been prepared in accordance
with GAAP (except, in the case of unaudited financial statements, for the lack
of footnotes and being subject to year-end audit adjustments) and fairly present
Borrower's (or such guarantor's, as applicable) financial condition as of the
date thereof and Borrower's and Parent Guarantor's results of operations for the
period then ended. Except for the commencement of the Bankruptcy Case, there has
not been a Material Adverse Change with respect to Borrower or Parent Guarantor
(or such other guarantor, as applicable) since the Closing Date.
5.12. RESERVED.
5.13. EMPLOYEE BENEFITS. None of Borrower, any of its Subsidiaries, or
any of their ERISA Affiliates maintains or contributes to any Benefit Plan,
other than those listed on Schedule 5.13. Borrower, each of its Subsidiaries and
each ERISA Affiliate have satisfied the minimum funding standards of ERISA and
the IRC with respect to each Benefit Plan to which it is obligated to
contribute. No ERISA Event has occurred nor has any other event occurred that
may result in an ERISA Event that reasonably could be expected to result in a
Material Adverse
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Change. None of Borrower or its Subsidiaries, any ERISA Affiliate, or any
fiduciary of any Plan is subject to any direct or indirect liability with
respect to any Plan under any applicable law, treaty, rule, regulation, or
agreement. None of Borrower or its Subsidiaries or any ERISA Affiliate is
required to provide security to any Plan under Section 401(a)(29) of the IRC.
5.14. ENVIRONMENTAL CONDITION. None of Borrower's properties or assets
has ever been used by Borrower or, to the best of Borrower's knowledge, by
previous owners or operators in the disposal of, or to produce, store, handle,
treat, release, or transport, any Hazardous Materials. None of Borrower's
properties or assets has ever been designated or identified in any manner
pursuant to any environmental protection statute as a Hazardous Materials
disposal site, or a candidate for closure pursuant to any environmental
protection statute. No Lien arising under any environmental protection statute
has attached to any revenues or to any real or personal property owned or
operated by Borrower. Borrower has not received a summons, citation, notice, or
directive from the Environmental Protection Agency or any other federal or state
governmental agency concerning any action or omission by Borrower resulting in
the releasing or disposing of Hazardous Materials into the environment.
5.15. LICENSES. Each license, distributorship, franchise, and similar
agreement issued to, or to which Borrower is a party is in full force and
effect. No party to any such license or agreement is in default or violation
thereof. Borrower has not received any notice or threat of cancellation of any
such license or agreement.
5.16. LEASES. Schedule 5.16, is a schedule of all presently effective
Leases and Capital Leases. Each of such Leases and Capital Leases is in full
force and effect. The Borrower hereby authorizes Agent at any time and from time
to time to contact any of Borrower's landlords in order to confirm Borrower's
continued compliance with the terms and conditions of the Lease(s) between
Borrower and that landlord and to discuss such issues, concerning Borrower's
occupancy under such Lease(s), as Agent may determine.
5.17. DDAS.
(a) Schedule 5.17 sets forth all present DDAs, and includes,
with respect to each depository (i) the name and address of that depository;
(ii) the account number(s) of the account(s) maintained with such depository;
(iii) a contact person at such depository; and (iv) the telephone number of the
contact person.
(b) Borrower will not establish any DDA hereafter unless
Borrower, contemporaneous with such establishment, delivers to Agent an
agreement (in form satisfactory to Agent) executed on behalf of the depository
with which such DDA is being established.
5.18. CREDIT CARD RECEIPTS. Schedule 5.18 sets forth all arrangements
to which Borrower is a party with respect to the payment to Borrower of the
proceeds of all credit card charges for sales by Borrower and all such proceeds
are paid directly to the Concentration Account. Borrower shall not attempt to
change any direction or designation regarding payment of charges without the
prior written consent of Agent.
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5.19. PACA. Borrower does not, in the ordinary course of its business,
deal in any material amount of goods within the scope of PACA, and has not
received notice from any supplier that such supplier intends to preserve against
Borrower the benefit of the statutory trust created by PACA in respect of any
claim for an unpaid invoice in excess of $50,000.
6. AFFIRMATIVE COVENANTS.
Borrower covenants and agrees that, so long as any credit hereunder
shall be available and until full and final payment of the Obligations, Borrower
shall do all of the following:
6.1. ACCOUNTING SYSTEM. Maintain a standard and modern system of
accounting that enables Borrower to produce financial statements in accordance
with GAAP, and maintain records pertaining to the Collateral that contain
information as from time to time may be requested by Agent. Borrower also shall
keep a modern inventory reporting system that shows accurate current stock, cost
and sales records of Inventory, that accurately and sufficiently itemizes and
describes the kinds, types and quantities of Inventory and the cost and selling
prices thereof, and that shows all additions, sales, claims, returns, and
allowances with respect to the Inventory.
6.2. COLLATERAL AND FINANCIAL REPORTING. Provide Agent, or such other
party as Agent shall designate with the following documents at the following
times in form satisfactory to Agent in Agent's Discretion (it being understood
that such reports shall take into account Department 999):
(a) Borrowing Base Certificate. Borrower shall provide to
Agent, on each Business Day, a Borrowing Base Certificate (in the form of
Exhibit 6.2, as such form may be revised from time to time by Agent). Such
Certificate may be sent to Agent by facsimile transmission, provided that, upon
request by Agent, the original thereof is forwarded to Agent on the date of such
transmission. No adjustments to the Borrowing Base Certificate may be made
without supporting documentation and such other documentation as may be
requested by Agent from time to time.
(b) Weekly Reports. Weekly, not later than Wednesday for the
immediately preceding fiscal week:
(i) a daily sales report per store for all of
Borrower's stores;
(ii) a rolling thirteen week cash flow report for the
period ending during such preceding fiscal week; and
(iii) a report detailing any alleged claims or Liens
under PACA.
(c) Accounting Periods.
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(i) Monthly, Borrower shall provide to Agent (each in
such form as Agent from time to time may specify) within 15 days of the end of
each Accounting Period for the immediately preceding Accounting Period:
(A) an inventory cost ledger report by
department (prepared using
Borrower's "JDA" system);
(B) an inventory report by store
(prepared using Borrower's "JDA"
system);
(C) an inventory certificate in Agent's
format;
(D) a cash requirements report (by due
date) with Aging Analysis Form in
Agent's format;
(E) a rent, tax and insurance
compliance certificate;
(F) an open to buy report; and
(G) on order reporting.
(ii) Monthly, Borrower shall provide to Agent (each
in such form as Agent from time to time may specify), within 30 days of the end
of each Accounting Period for the immediately preceding Accounting Period:
(A) a reconciliation of the stock
ledger to general ledger and the
calculation of Availability;
(B) financial statements including
balance sheet, income statement
(consolidated and by store), cash
flow report and comparison of same
store sales;
(C) statement of store activity in
Agent's format; and
(D) officer's compliance certificate in
Agent's format.
(iii) For purposes of Section 6.2(c), above, the
first "Accounting Period" in respect of which the items required by that Section
shall be provided shall be Accounting Period 1, 2001.
(d) Quarterly Reports. Quarterly, within 45 days following the
end of each of Borrower's fiscal quarters, Borrower shall provide to Agent an
original counterpart of a management prepared financial statement of Borrower
and its Subsidiaries, on a consolidated and consolidating basis, for the period
from the beginning of Borrower's and its Subsidiaries' then current fiscal year
through the end of the subject quarter, with comparative information for the
same period of the previous fiscal year, which statement shall include, at a
minimum, a
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balance sheet, income statement (on a store specific and on a "consolidated"
basis), statement of changes in shareholders' equity, and cash flow report and
comparisons for the corresponding quarter of the then immediately previous year,
as well as to the Business Plan.
(e) Annual Reports.
(i) In addition to the monthly reports required under
this Section 6.2 annually, within 100 days following the end of Borrower's and
its Subsidiaries' fiscal year, Borrower shall deliver to Agent an original
signed counterpart of Borrower's and its Subsidiaries' annual financial
statement, on a consolidated and consolidating basis, which statement shall have
been audited by, and bear the unqualified opinion of Borrower's independent
certified public accountants reasonably acceptable to Agent (i.e. said statement
shall be "certified" by such accountants) certifying that such statements have
been prepared in accordance with GAAP and without any explanatory paragraphs or
other qualifying paragraphs, together with (x) a certificate of such accountants
addressed to Agent stating that such accountants do not have knowledge of the
existence of any Default or Event of Default, and (y) a copy of such
accountant's letter to management. Such annual statement shall include, at a
minimum (with comparative information for the then prior fiscal year) a balance
sheet, profit and loss statement, income statement of changes in shareholders'
equity, and cash flows. Borrower shall provide an interim draft of such
financial statements within 60 days after year-end, inclusive of subsequent
periods, until the year-end statements are finalized. Together with the above,
Borrower also shall deliver to Agent Borrower's Form 10-Q Quarterly Reports,
Form 10-K Annual Reports, and Form 8-K Current Reports, and any other filings
made by Borrower with the Securities and Exchange Commission as soon as the same
are filed, any press releases of Borrower, and any other information that is
provided by Borrower to its shareholders, and any other report reasonably
requested by Agent relating to the financial condition of Borrower and its
Subsidiaries. Within five (5) Business Days of the Closing Date, Borrower shall
have issued written instructions to its independent certified public accountants
authorizing them to communicate with Agent and to release to Agent whatever
financial information concerning Borrower that Agent may request. Borrower
hereby irrevocably authorizes and directs all auditors, accountants, or other
third parties to deliver to Agent, at Borrower's expense, copies of Borrower's
and its Subsidiaries' financial statements, papers related thereto, and other
accounting records of any nature in their possession and to disclose to Agent
any information they may have regarding Borrower's and its Subsidiaries'
business affairs and financial condition.
(ii) Each annual statement shall be accompanied by
such accountant's certificate indicating that in the course of the regular audit
of the Borrower's business, such accountant has obtained no knowledge that an
Event of Default has occurred and is continuing.
(iii) Borrower hereby acknowledges that the Lender
Group relied upon Borrower's audited financial statements for the fiscal year
ended January 31, 2000 in extending credit to Borrower.
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(f) Officers' Certificates. Borrower shall cause Borrower's
chief accounting officer to provide a Compliance Certificate with those monthly,
quarterly, and annual statements to be furnished pursuant to this Agreement,
which Compliance Certificate shall:
(i) indicate that the subject statement was prepared
in accordance with GAAP consistently applied, and presents fairly the financial
condition of Borrower and its Subsidiaries at the close of, and the results of
Borrower's and its Subsidiaries' operations and cash flows for, the period(s)
covered, subject, however (with the exception of the certificate which
accompanies such annual statement) to usual year end adjustments;
(ii) indicate either that (i) no Default or Event of
Default has occurred or (ii) if such an event has occurred, its nature (in
reasonable detail) and the steps (if any) being taken or contemplated by
Borrower to be taken on account thereof;
(iii) include calculations concerning Borrower's
compliance (or failure to comply) at the date of the subject statement with the
covenant included in Sections 7.20 through 7.22;
(iv) indicate that all post-petition rent and
additional rent has been paid or if not paid exceptions to be broken down by
store locations; and
(v) indicate that premiums for insurance required
under Section 6.9 have or have not been paid.
(g) Bankruptcy Documents. Borrower shall promptly provide or
cause to be provided to Agent:
(i) Copies of all pleadings, motions, applications,
plans, disclosure statements, schedules, reports, financial information and
other materials and documents filed or received by Borrower in connection with
the Bankruptcy Case promptly following Borrower's filing or receipt thereof, and
(ii) Copies of all written reports given by the
Borrower to the Office of the United States Trustee and of all material written
reports given by the Borrower to any official or unofficial committee in the
Bankruptcy Case promptly after the sending thereof.
(h) Additional Financial Information.
(i) In addition to all other information required to
be provided pursuant to this Section 6.2, Borrower promptly shall provide to
Agent such other and additional information concerning Borrower, any Subsidiary
of Borrower, and any guarantor of the Obligations, the Collateral (and other
collateral securing repayment of the Obligations), the operation of Borrower's
and its Subsidiaries' business, and Borrower's and its Subsidiaries' financial
condition, including original counterparts of financial reports and statements,
as Agent may from time to time reasonably request from Borrower.
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(ii) Borrower may provide Agent, from time to time
hereafter, with updated Business Plans. In all events, Borrower, not later than
60 days prior to the end of each of Borrower's fiscal years, shall deliver to
agent an updated and extended Business Plan which shall go out at least through
the end of the then next fiscal year and the final Business Plan within 15 days
of the end of Borrower's fiscal year. In each event, such updated and extended
Business Plans shall be provided in the same form as that provided to and
approved by Borrower's Board of Directors and reasonably satisfactory to Agent.
(i) Electronic Reporting. At Agent's option, all information
and reports required to be submitted to Agent by Borrower, to the extent
practicable, shall be transmitted electronically pursuant to an electronic
transmitting reporting system and shall be in a record layout format designated
by Agent from time to time.
6.3. TAX RETURNS. Deliver to Agent copies of each of Borrower's future
federal income tax returns, and any amendments thereto, within 30 days of the
filing thereof with the Internal Revenue Service.
6.4. GUARANTOR REPORTS. Cause Parent Guarantor and any other guarantor
of any of the Obligations to deliver its annual financial statements at the time
when Borrower provides its audited financial statements to Agent and copies of
all federal income tax returns as soon as the same are available and in any
event no later than 30 days after the same are required to be filed by law.
6.5. RETURNS. Cause returns and allowances, if any, as between Borrower
and its Account Debtors to be on the same basis and in accordance with the usual
customary practices of Borrower, as they exist at the time of the execution and
delivery of this Agreement. If any Account Debtor of Borrower returns any
Inventory to Borrower, if Borrower accepts such return, Borrower shall issue a
credit memorandum in the appropriate amount to such Account Debtor.
6.6. TITLE TO EQUIPMENT. Upon Agent's reasonable request, Borrower
immediately shall deliver to Agent, properly endorsed, any and all evidences of
ownership of, certificates of title, or applications for title to any items of
Equipment.
6.7. MAINTENANCE OF EQUIPMENT. Maintain the Equipment in good operating
condition and repair (ordinary wear and tear excepted), and make all necessary
replacements thereto so that the value and operating efficiency thereof shall at
all times be maintained and preserved. Other than those items of Equipment that
constitute fixtures on the Closing Date, Borrower shall not permit any item of
Equipment (other than trade fixtures) to become a fixture or an accession to
real estate on any real property other than the Core Properties, and such
Equipment shall at all times remain personal property.
6.8. TAXES. Cause all assessments and taxes, whether real, personal, or
otherwise, due or payable by, or imposed, levied, or assessed against Borrower
or any of its property to be paid in full, before delinquency or before the
expiration of any extension period, except to the extent that the validity of
such assessment or tax shall be the subject of a Permitted Protest. Borrower
shall make due and timely payment or deposit of all such federal, state, and
local taxes, assessments, or contributions required of it by law, and will
execute and deliver to Agent, on
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demand, appropriate certificates attesting to the payment thereof or deposit
with respect thereto. Borrower will make timely payment or deposit of all tax
payments and withholding taxes required of it by applicable laws, including
those laws concerning F.I.C.A., F.U.T.A., state disability, and local, state,
and federal income taxes, and will, upon request, furnish Agent with proof
satisfactory to Agent indicating that Borrower has made such payments or
deposits.
6.9. INSURANCE.
(a) At its expense, keep the Personal Property Collateral
insured against loss or damage by fire, theft, explosion, sprinklers, and all
other hazards and risks, and in such amounts, as are ordinarily insured against
by other owners in similar businesses. Borrower also shall maintain business
interruption, public liability, product liability, and property damage insurance
relating to Borrower's ownership and use of the Personal Property Collateral, as
well as insurance against larceny, embezzlement, and criminal misappropriation.
(b) At its expense, obtain and maintain (i) insurance of the
type necessary to insure the Improvements and Chattels (as such terms are
defined in the Mortgages), for the full replacement cost thereof, against any
loss by fire, lightning, windstorm, hail, explosion, aircraft, smoke damage,
vehicle damage, earthquakes, elevator collision, and other risks from time to
time included under "extended coverage" policies, in such amounts as Agent may
require, but in any event in amounts sufficient to prevent Borrower from
becoming a co-insurer under such policies, (ii) combined single limit bodily
injury and property damages insurance against any loss, liability, or damages
on, about, or relating to each parcel of Real Property Collateral, in an amount
of not less than $2,000,000; (iii) business rental insurance covering annual
receipts for a 12 month period for each parcel of Real Property Collateral; and
(iv) insurance for such other risks as Agent may require. Replacement costs, at
Agent's option, may be redetermined by an insurance appraiser, satisfactory to
Agent, not more frequently than once every 12 months at Borrower's cost.
(c) All such policies of insurance shall be in such form, with
such companies, and in such amounts as may be reasonably satisfactory to Agent.
All insurance required herein shall be written by companies which are authorized
to do insurance business in the State of California. All hazard insurance and
such other insurance as Agent shall specify, shall contain a Form 438BFU (NS)
mortgagee endorsement, or an equivalent endorsement satisfactory to Agent,
showing Agent (for the ratable benefit of the Lenders) as loss payee thereof, as
its interests may appear, and shall contain a waiver of warranties. Every policy
of insurance referred to in this Section 6.9 shall contain an agreement by the
insurer that it will not cancel such policy except after 30 days prior written
notice to Agent (for the ratable benefit of the Lenders) and that any loss
payable thereunder shall be payable notwithstanding any act or negligence of
Borrower or the Lender Group which might, absent such agreement, result in a
forfeiture of all or a part of such insurance payment and notwithstanding (i)
occupancy or use of the Real Property Collateral for purposes more hazardous
than permitted by the terms of such policy, (ii) any foreclosure or other action
or proceeding taken by the Lender Group pursuant to the Mortgages upon the
happening of an Event of Default, or (iii) any change in title or ownership of
the Real Property Collateral. Borrower shall deliver to Agent certified copies
of such policies of insurance and evidence of the payment of all premiums
therefor.
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(d) Original policies or certificates thereof satisfactory to
Agent evidencing such insurance shall be delivered to Agent when available and
at least 30 days prior to the expiration of the existing or preceding policies
(or such shorter period as is reasonably acceptable to Agent). Borrower shall
give Agent prompt notice of any loss covered by such insurance. Agent shall have
the exclusive right to adjust all property losses payable under any such
insurance policies in excess of $250,000 without any liability to Borrower
whatsoever in respect of such adjustments, provided that if an Event of Default
has occurred and is continuing, Agent shall have the exclusive right to adjust
any and all losses payable under any such insurance policies, without liability
to Borrower whatsoever in respect of such adjustments. Any monies received as
payment for any loss under any insurance policy (other than liability insurance
policies or losses payable in an amount less than $250,000) or as payment of any
award or compensation for condemnation or taking by eminent domain, shall be
paid over to Agent to be disbursed to Borrower under stage payment terms
satisfactory to Agent in Agent's Discretion for application to the cost of
repairs, replacements, or restorations, provided that if an Event of Default has
occurred and is continuing, any such payment shall be applied to the prepayment
of the Obligations in such order or form as Agent shall determine. All repairs,
replacements, or restorations shall be effected with reasonable promptness and
shall be of a value at least equal to the value of the items or property
destroyed prior to such damage or destruction. Upon the occurrence of an Event
of Default, Agent shall have the right to apply all prepaid premiums to the
payment of the Obligations in such order or form as Agent shall determine.
(e) Borrower shall not take out separate insurance concurrent
in form or contributing in the event of loss with that required to be maintained
under this Section 6.9, unless Agent is included thereon as named insured with
the loss payable to Agent (for the ratable benefit of Lenders) under a standard
438BFU (NS) Mortgagee endorsement, or its local equivalent. Borrower immediately
shall notify Agent whenever such separate insurance is taken out, specifying the
insurer thereunder and full particulars as to the policies evidencing the same,
and originals of such policies immediately shall be provided to Agent.
6.10. NO SETOFFS OR COUNTERCLAIMS. Make payments hereunder and under
the other Loan Documents by or on behalf of Borrower without setoff or
counterclaim and free and clear of, and without deduction or withholding for or
on account of, any federal, state, or local taxes.
6.11. LOCATION OF INVENTORY AND EQUIPMENT. Keep the Inventory and
Equipment only at the locations identified on Schedule 6.11; provided, however,
that Borrower may amend Schedule 6.11 so long as such amendment occurs by
written notice to Agent not less than 30 days prior to the date on which the
Inventory or Equipment is moved to such new location, so long as such new
location is within the continental United States, and so long as, at the time of
such written notification, Borrower provides any financing statements or fixture
filings necessary to perfect and continue perfecting the Lien of Agent for the
benefit of the Lender Group, security interests in such assets and also provides
to Agent a Collateral Access Agreement.
6.12. COMPLIANCE WITH LAWS. Comply with the requirements of all
applicable laws, rules, regulations, and orders of any governmental authority,
including the Fair Labor Standards Act and the Americans With Disabilities Act,
other than laws, rules, regulations, and orders the non-compliance with which,
individually or in the aggregate, would not have and could not reasonably be
expected to cause a Material Adverse Change.
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6.13. EMPLOYEE BENEFITS.
(a) Deliver to Agent: (i) promptly, and in any event within 10
Business Days after Borrower or any of its Subsidiaries knows or has reason to
know that an ERISA Event has occurred that reasonably could be expected to
result in a Material Adverse Change, a written statement of the chief financial
officer of Borrower describing such ERISA Event and any action that is being
taking with respect thereto by Borrower, any such Subsidiary or ERISA Affiliate,
and any action taken or threatened by the IRS, Department of Labor, or PBGC.
Borrower or such Subsidiary, as applicable, shall be deemed to know all facts
known by the administrator of any Benefit Plan of which it is the plan sponsor,
(ii) promptly, and in any event within 3 Business Days after the filing thereof
with the IRS, a copy of each funding waiver request filed with respect to any
Benefit Plan and all communications received by Borrower, any of its
Subsidiaries or, to the knowledge of Borrower, any ERISA Affiliate with respect
to such request, and (iii) promptly, and in any event within 3 Business Days
after receipt by Borrower, any of its Subsidiaries or, to the knowledge of
Borrower, any ERISA Affiliate, of the PBGC's intention to terminate a Benefit
Plan or to have a trustee appointed to administer a Benefit Plan, copies of each
such notice.
(b) Cause to be delivered to Agent, upon Agent's request, each
of the following: (i) a copy of each Plan (or, where any such plan is not in
writing, complete description thereof) (and if applicable, related trust
agreements or other funding instruments) and all amendments thereto, all written
interpretations thereof and written descriptions thereof that have been
distributed to employees or former employees of Borrower or its Subsidiaries;
(ii) the most recent determination letter issued by the IRS with respect to each
Benefit Plan; (iii) for the three most recent plan years, annual reports on Form
5500 Series required to be filed with any governmental agency for each Benefit
Plan; (iv) all actuarial reports prepared for the last three plan years for each
Benefit Plan; (v) a listing of all Multiemployer Plans, with the aggregate
amount of the most recent annual contributions required to be made by Borrower
or any ERISA Affiliate to each such plan and copies of the collective bargaining
agreements requiring such contributions; (vi) any information that has been
provided to Borrower or any ERISA Affiliate regarding withdrawal liability under
any Multiemployer Plan; and (vii) the aggregate amount of the most recent annual
payments made to former employees of Borrower or its Subsidiaries under any
Retiree Health Plan.
6.14. LEASES. Commencing March 1, 2001, pay when due all rents and
other amounts payable under any Leases (other than amounts payable with respect
to periods prior to the Petition Date or amounts payable under an unexpired
Lease that has been rejected or is the subject of a pending rejection motion
before the Bankruptcy Court) to which Borrower is a party or by which Borrower's
properties and assets are bound, unless such payments are the subject of a
Permitted Protest. To the extent that Borrower fails timely to make payment of
such rents and other amounts payable when due under its Leases, Agent shall be
entitled, in its Agent's Discretion, to reserve an amount equal to such unpaid
amounts against the Borrowing Base without declaring the occurrence of an Event
of Default.
6.15. MAILING LISTS, ADVERTISING. Borrower shall add Agent as an
addressee on all mailing lists maintained by or for Borrower. At the request of
Agent, Borrower shall provide
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Agent with copies of all advertising (including copies of all print advertising
and duplicate tapes of all video and radio advertising).
6.16. DEPOSITORY ACCOUNTS. Maintain separate operating accounts and
zero balance payroll accounts at depository institution acceptable to Agent.
6.17. AVOIDANCE ACTIONS. Borrower, promptly after learning that any
alleged Lien on the Collateral in favor of any Person other than the Agent
(including, without limitation, any Permitted Mortgage) was not properly
perfected under applicable law as of the Petition Date, shall advise Agent of
the avoidability of such Lien and shall upon Agent's reasonable request commence
proceedings in the Bankruptcy Court to avoid such Lien pursuant to the
"strong-arm" powers granted to Borrower under the Bankruptcy Code.
7. NEGATIVE COVENANTS.
Borrower covenants and agrees that, so long as any credit hereunder
shall be available and until full and final payment of the Obligations, Borrower
will not do any of the following:
7.1. INDEBTEDNESS. Create, incur, assume, permit, guarantee, or
otherwise become or remain, directly or indirectly, liable with respect to any
Indebtedness, except:
(a) Indebtedness evidenced by this Agreement, together with
Indebtedness to issuers of letters of credit that are the subject of L/C
Guarantees;
(b) Indebtedness set forth in the latest financial statements
of Borrower submitted to Agent on or prior to the Closing Date;
(c) Indebtedness secured by Permitted Liens;
(d) Purchase money Indebtedness in a maximum aggregate amount
of $500,000, to the extent incurred after the Petition Date in accordance with
the Business Plan;
(e) Indebtedness related to the financing of insurance
premiums, to the extent incurred after the Petition Date in accordance with the
Business Plan;
(f) refinancings, renewals, or extensions of Indebtedness
permitted under clauses (b), (c), (d) and (e) of this Section 7.1 (and
continuance or renewal of any Permitted Liens associated therewith) so long as:
(i) the terms and conditions of such refinancings, renewals, or extensions do
not materially impair the prospects of repayment of the Obligations by Borrower,
(ii) the net cash proceeds of such refinancings, renewals, or extensions do not
result in an increase in the aggregate principal amount of the Indebtedness so
refinanced, renewed, or extended, (iii) such refinancings, renewals, refundings,
or extensions do not result in a shortening of the average weighted maturity of
the Indebtedness so refinanced, renewed, or extended, and (iv) to the extent
that Indebtedness that is refinanced was subordinated in right of payment to the
Obligations (whether under the Financial Orders or otherwise), then the
subordination terms and conditions of the refinancing Indebtedness must be at
least as favorable to the Lender Group as those applicable to the refinanced
Indebtedness, provided, however, that
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Borrower shall not refinance, renew or extend any Indebtedness secured by a
Permitted Mortgage without the Agent's prior written consent.
7.2. LIENS. Create, incur, assume, or permit to exist, directly or
indirectly, any Lien on or with respect to any of its property or assets, of any
kind, whether now owned or hereafter acquired, or any income or profits
therefrom, except for Permitted Liens (including Liens that are replacements of
Permitted Liens to the extent that the original Indebtedness is refinanced under
Section 7.1(d) and so long as the replacement Liens only encumber those assets
or property that secured the original Indebtedness).
7.3. RESTRICTIONS ON FUNDAMENTAL CHANGES. Enter into any merger,
consolidation, reorganization, or recapitalization, or reclassify its capital
stock, or liquidate, wind up, or dissolve itself (or suffer any liquidation or
dissolution), or convey, sell, assign, lease, transfer, or otherwise dispose of,
in one transaction or a series of transactions, all or any substantial part of
its property or assets.
7.4. DISPOSAL OF ASSETS. (A) Sell, lease, assign, transfer, or
otherwise dispose of any of Borrower's properties or assets other than: (i)
sales of Inventory to buyers in the ordinary course of Borrower's business as
currently conducted, and (ii) sales of other assets outside the ordinary course
of business to the extent specifically contemplated by the Business Plan,
provided that such sales are for cash and for fair market value and the methods
of effectuating such sales are reasonably acceptable to Agent, or (B) move the
Bankruptcy Court for authority to reject any unexpired lease of real property
without the prior written consent of the Agent, which consent shall not be
unreasonably withheld.
7.5. CHANGE NAME. Change Borrower's name, FEIN, corporate structure
(within the meaning of Section 9402(7) of the Code), or identity, or add any new
fictitious name.
7.6. GUARANTEE. Guarantee or otherwise become in any way liable with
respect to the obligations of any third Person except by endorsement of
instruments or items of payment for deposit to the account of Borrower or which
are transmitted or turned over to Agent.
7.7. NATURE OF BUSINESS. Make any change in the principal nature of
Borrower's business.
7.8. PREPAYMENTS AND AMENDMENTS.
(a) Except in connection with a refinancing permitted by
Section 7.1(d), prepay, redeem, retire, defease, purchase, or otherwise acquire
any Indebtedness owing to any third Person, other than the Obligations in
accordance with this Agreement, and
(b) Directly or indirectly, amend, modify, alter, increase, or
change any of the terms or conditions of any agreement, instrument, document,
indenture, or other writing evidencing or concerning Indebtedness permitted
under Sections 7.1(b), (c), or (d).
7.9. CHANGE OF CONTROL. Cause, permit, or suffer, directly or
indirectly, any Change of Control.
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7.10. CONSIGNMENTS. Consign any Inventory or sell any Inventory on xxxx
and hold, sale or return, sale on approval, or other conditional terms of sale
(except for Borrower's customary return policy applicable to the return of
inventory purchased by Borrower's retail customers in the ordinary course of
Borrower's business), or have possession of any property on consignment to
Borrower.
7.11. DISTRIBUTIONS. Make any distribution or declare or pay any
dividends (in cash or other property, other than capital stock) on, or purchase,
acquire, redeem, or retire any of Borrower's capital stock, of any class,
whether now or hereafter outstanding.
7.12. ACCOUNTING METHODS. Modify or change its method of accounting or
enter into, modify, or terminate any agreement currently existing, or at any
time hereafter entered into with any third party accounting firm or service
bureau for the preparation or storage of Borrower's accounting records without
said accounting firm or service bureau agreeing to provide Agent information
regarding the Collateral or Borrower's financial condition. Borrower waives the
right to assert a confidential relationship, if any, it may have with any
accounting firm or service bureau in connection with any information requested
by Agent pursuant to or in accordance with this Agreement, and agrees that Agent
may contact directly any such accounting firm or service bureau in order to
obtain such information.
7.13. INVESTMENTS. Directly or indirectly make, acquire, or incur any
liabilities (including contingent obligations) for or in connection with (a) the
acquisition of the securities (whether debt or equity) of, or other interests
in, a Person, (b) loans, advances, capital contributions, or transfers of
property to a Person, or (c) the acquisition of all or substantially all of the
properties or assets of a Person.
7.14. TRANSACTIONS WITH AFFILIATES. Directly or indirectly enter into
or permit to exist any material transaction with any Affiliate of Borrower
except for transactions that are in the ordinary course of Borrower's business,
upon fair and reasonable terms, that are fully disclosed to Agent, and that are
no less favorable to Borrower than would be obtained in an arm's length
transaction with a non-Affiliate.
7.15. SUSPENSION. Suspend or go out of a substantial portion of its
business.
7.16. COMPENSATION. Increase the annual fee or per-meeting fees paid to
directors during any year by more than 5% over the prior year or, except as
contemplated in the Business Plan, pay or accrue total cash compensation, during
any year, to officers and senior management employees in an aggregate amount in
excess of 115% of that paid or accrued in the prior year.
7.17. USE OF PROCEEDS. Use the proceeds of the Advances for any purpose
other than (a) on the Closing Date, (i) to repay in full the outstanding
principal, accrued interest, and accrued fees and expenses owing to Existing
Lender, and (ii) to pay transactional costs and expenses incurred in connection
with this Agreement, and (b) thereafter, consistent with the terms and
conditions hereof and the Business Plan, for its lawful and permitted corporate
purposes.
7.18. CHANGE IN LOCATION OF CHIEF EXECUTIVE OFFICE; INVENTORY AND
EQUIPMENT WITH BAILEES. Relocate its chief executive office to a new location
without providing 30 days
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prior written notification thereof to Agent and so long as, at the time of such
written notification, Borrower provides any financing statements or fixture
filings necessary to perfect and continue perfected the Lien of Agent (for the
benefit of the Lender Group) and also provides to Agent a Collateral Access
Agreement with respect to such new location. The Inventory and Equipment shall
not at any time now or hereafter be stored with a bailee, warehouseman, or
similar party without Agent's prior written consent.
7.19. NO PROHIBITED TRANSACTIONS UNDER ERISA. Directly or indirectly:
(a) engage, or permit any Subsidiary of Borrower to engage, in
any prohibited transaction which is reasonably likely to result in a civil
penalty or excise tax described in Sections 406 of ERISA or 4975 of the IRC for
which a statutory or class exemption is not available or a private exemption has
not been previously obtained from the Department of Labor;
(b) permit to exist with respect to any Benefit Plan any
accumulated funding deficiency (as defined in Sections 302 of ERISA and 412 of
the IRC), whether or not waived;
(c) fail, or permit any Subsidiary of Borrower to fail, to pay
timely required contributions or annual installments due with respect to any
waived funding deficiency to any Benefit Plan;
(d) terminate, or permit any Subsidiary of Borrower to
terminate, any Benefit Plan where such event would result in any liability of
Borrower, any of its Subsidiaries or any ERISA Affiliate under Title IV of
ERISA;
(e) fail, or permit any Subsidiary of Borrower to fail, to
make any required contribution or payment to any Multiemployer Plan;
(f) fail, or permit any Subsidiary of Borrower to fail, to pay
any required installment or any other payment required under Section 412 of the
IRC on or before the due date for such installment or other payment;
(g) amend, or permit any Subsidiary of Borrower to amend, a
Plan resulting in an increase in current liability for the plan year such that
either of Borrower, any Subsidiary of Borrower or any ERISA Affiliate is
required to provide security to such Plan under Section 401(a)(29) of the IRC;
or
(h) withdraw, or permit any Subsidiary of Borrower to
withdraw, from any Multiemployer Plan where such withdrawal is reasonably likely
to result in any liability of any such entity under Title IV of ERISA;
which, individually or in the aggregate, results in or reasonably would be
expected to result in a claim against or liability of Borrower, any of its
Subsidiaries or any ERISA Affiliate in excess of $100,000.
7.20. RESERVED.
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7.21. FINANCIAL AND INVENTORY COVENANTS. Fail to observe or comply with
each of the covenants set forth on Schedule 7.21.
7.22. CAPITAL EXPENDITURES. Make capital expenditures in any fiscal
year in excess of $4,000,000.
8. EVENTS OF DEFAULT.
Any one or more of the following events shall constitute an event of
default (each, an "Event of Default") under this Agreement:
8.1 If Borrower fails to pay when due and payable or when declared due
and payable, any portion of the Obligations (whether of principal, interest
(including any interest which, but for the provisions of the Bankruptcy Code,
would have accrued on such amounts), fees and charges due the Lender Group,
reimbursement of Lender Group Expenses, or other amounts constituting
Obligations);
8.2 (a) If Borrower fails or neglects to perform, keep, or observe
any term, provision, condition, covenant, or agreement contained in 6.3 (Tax
Returns), 6.6 (Title to Equipment), 6.11 (Location of Inventory and Equipment),
6.12 (Compliance with Laws), or 6.13 (Employee Benefits), of this Agreement and
such failure continues for a period of 5 Business Days;
(b) If Borrower fails or neglects to perform, keep, or observe
any term, provision, condition, covenant, or agreement contained in Sections 6.1
(Accounting System), 6.7 (Maintenance of Equipment) or 6.15 (Mailing Lists,
Advertising) of this Agreement and such failure continues for a period of 15
Business Days; or
(c) If Borrower fails or neglects to perform, keep, or observe
any other term, provision, condition, covenant, or agreement contained in this
Agreement, or in any of the other Loan Documents (giving effect to any grace
periods, cure periods, or required notices, if any, expressly provided for in
such Loan Documents); in each case, other than any such term, provision,
condition, covenant, or agreement that is the subject of another provision of
this Section 8, in which event such other provision of this Section 8 shall
govern.
8.3 If there is a Material Adverse Change;
8.4 If any material portion of Borrower's properties or assets is
attached, seized, subjected to a writ or distress warrant, or is levied upon, or
comes into the possession, or is the subject of an order of the Bankruptcy Court
granting relief from the automatic stay in favor of any third Person;
8.5 If Borrower is enjoined, restrained, or in any way prevented by
court order from continuing to conduct all or any material part of its business
affairs;
8.6 If a notice of Lien, levy, or assessment is filed of record with
respect to any of Borrower's properties or assets by the United States
Government, or any department, agency, or instrumentality thereof, or by any
state, county, municipal, or governmental agency, or if any
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taxes or debts owing at any time hereafter to any one or more of such entities
becomes a Lien, whether xxxxxx or otherwise, upon any of Borrower's properties
or assets and the same is not paid on the payment date thereof;
8.7 If a judgment or other claim becomes a Lien or encumbrance upon any
material portion of Borrower's properties or assets;
8.8 If there is a material default in the Hilco Agreement or any
post-petition material agreement to which Borrower is a party with one or more
third Persons and such default (a) occurs at the final maturity of the
obligations thereunder, or (b) results in a right by such third Person(s),
irrespective of whether exercised, to accelerate the maturity of Borrower's
obligations thereunder;
8.9 If Borrower makes any payment on account of Indebtedness that has
been contractually subordinated in right of payment to the payment of the
Obligations, except to the extent such payment is permitted by the terms of the
subordination provisions applicable to such Indebtedness;
8.10 If any misstatement or misrepresentation exists now or hereafter
in any warranty, representation, statement, or report made to the Lender Group
by Borrower or any officer, employee, agent, or director of Borrower, or if any
such warranty or representation is withdrawn;
8.11 If the obligation of the Parent Guarantor or of any other
guarantor under its guaranty or other third Person under any Loan Document is
limited or terminated by operation of law or by the guarantor or other third
Person thereunder, or any such guarantor (other than the Parent Guarantor) or
other third Person becomes the subject of an Insolvency Proceeding;
8.12 If a motion is filed by Borrower seeking an order with respect to
the Bankruptcy Case, or an order with respect to the Bankruptcy Case is Entered
by the Bankruptcy Court (i) appointing a trustee or (ii) appointing an examiner
with expanded powers;
8.13 If a motion is filed by Borrower seeking an order with respect to
the Bankruptcy Case, or an order with respect to the Bankruptcy Case is Entered
by the Bankruptcy Court converting such Bankruptcy Case to Chapter 7 of the
Bankruptcy Code;
8.14 If a disclosure statement for a plan of reorganization is filed by
Borrower in the Bankruptcy Case which does not (x) contain a provision for
termination of all of the Lenders' Commitments and indefeasible payment in full
in cash of all Obligations and the cash collateralization or return of all
Letters of Credit in a manner satisfactory to Agent on or before the effective
date of such plan and (y) provide for the continuation of the Liens and
priorities until such effective date;
8.15 If a motion is filed by Borrower seeking an order dismissing the
Bankruptcy Case, or an Order is Entered dismissing the Bankruptcy Case, which
does not contain a provision for termination of all of the Lenders' Commitments
and indefeasible payment in full in cash of all
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Obligations and the cash collateralization or return of all Letters of Credit in
a manner satisfactory to the Agent and the Lenders upon such dismissal;
8.16 If a motion is filed by Borrower seeking an order to, or an Order
is Entered that by its terms would, (i) revoke, vacate, reverse, stay, modify,
supplement or amend the credit facility herein contemplated, any Loan Document,
the Interim Bankruptcy Court Order or the Final Bankruptcy Court Order, as the
case may be, or (ii) permit any administrative expense claim or any claim (now
existing or hereafter arising, of any kind or nature whatsoever) to have
administrative priority as to Borrower equal or superior to the priority of the
Lenders and the Agent in respect of the Obligations, or (iii) grant or permit
the grant of a Lien on any Collateral, other than Permitted Liens;
8.17 If an order is Entered by the Bankruptcy Court granting relief
from the automatic stay and (i) the Agent shall determine that a Material
Adverse Change is reasonably likely to result from the grant of such relief, or
(ii) the aggregate value or property subject to such order is greater than
$500,000;
8.18 If the Interim Bankruptcy Court Order shall not have been Entered
within ten (10) days of the Petition Date or (ii) the Final Bankruptcy Court
Order shall not have occurred by the date which is thirty (30) days after the
date the Interim Bankruptcy Court Order is Entered;
8.19 If (i) any Person files a plan of reorganization in the Bankruptcy
Case which does not contain a provision for termination of all Lenders'
Commitments and indefeasible payment in full in cash of all Obligations and the
cash collateralization or return of all Letters of Credit in a manner
satisfactory to the Agent on or before the effective date of such plan and (ii)
an order shall be Entered by the Bankruptcy Court approving such plan;
8.20 If Borrower attempts to invalidate, reduce or otherwise impair the
Agent's or any Lender's pre or post petition claims or Liens against Borrower or
to subject any Collateral to surcharge or assessment pursuant to Section 506(c)
of the Bankruptcy Code or an order is Entered (on motion of any Person) that
invalidates, reduces or otherwise impairs the Agent's or any Lender's pre or
post petition claims or Liens against Borrower or subjects any Collateral to
surcharge or assessment pursuant to Section 506(c) of the Bankruptcy Code;
8.21 If there shall be any payment on, or application by Borrower for
authority to pay, any prepetition claim (other than payments specifically
contemplated by the Business Plan) without the express prior written consent of
the Agent; and
8.22 Commencing March 1, 2001, if Borrower fails to timely perform any
monetary obligation within the scope of Section 365(d)(3) of the Bankruptcy Code
(other than monetary obligations under a Lease that has been rejected or is the
subject of a pending rejection motion before the Bankruptcy Court with respect
to such Lease).
9. THE LENDER GROUP'S RIGHTS AND REMEDIES.
9.1. RIGHTS AND REMEDIES. Subject to the terms of the Funding Orders,
as applicable upon the occurrence, and during the continuation, of an Event of
Default Agent may, pursuant to
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Sections 17.4 and 17.5, without notice of its election and without demand, do
any one or more of the following, all of which are authorized by Borrower:
(a) Declare all Obligations, whether evidenced by this
Agreement, by any of the other Loan Documents, or otherwise, immediately due and
payable;
(b) Cease advancing money or extending credit to or for the
benefit of Borrower under this Agreement, under any of the Loan Documents, or
under any other agreement between Borrower and the Lender Group;
(c) Terminate this Agreement and any of the other Loan
Documents as to any future liability or obligation of the Lender Group, but
without affecting the Lender Group's rights and security interests in the
Personal Property Collateral or the Real Property Collateral and without
affecting the Obligations;
(d) Settle or adjust disputes and claims directly with Account
Debtors for amounts and upon terms which Agent considers advisable, and in such
cases, Agent will credit Borrower's Loan Account with only the net amounts
received by Agent in payment of such disputed Accounts after deducting all
Lender Group Expenses incurred or expended in connection therewith;
(e) Cause Borrower to hold all returned Inventory in trust for
the Lender Group, segregate all returned Inventory from all other property of
Borrower or in Borrower's possession and conspicuously label said returned
Inventory as the property of the Lender Group;
(f) Without notice to or demand upon Borrower or any
guarantor, make such payments and do such acts as Agent considers necessary or
reasonable to protect its security interests in the Collateral. Borrower agrees
to assemble the Personal Property Collateral if Agent so requires, and to make
the Personal Property Collateral available to Agent as Agent may designate.
Borrower authorizes Agent to enter the premises where the Personal Property
Collateral is located, to take and maintain possession of the Personal Property
Collateral, or any part of it, and to pay, purchase, contest, or compromise any
encumbrance, charge, or Lien that in Agent's determination appears to conflict
with the Liens of Agent (for the benefit of the Lender Group) in the Collateral
and to pay all expenses incurred in connection therewith. With respect to any of
Borrower's owned or leased premises, and in addition to the Lien of Agent for
the benefit of the Lender Group therein, Borrower hereby grants Agent a license
to enter into possession of such premises and to occupy the same, without
charge, for up to 120 days in order to exercise any of the Lender Group's rights
or remedies provided herein, at law, in equity, or otherwise;
(g) Without notice to Borrower (such notice being expressly
waived), and without constituting a retention of any collateral in satisfaction
of an obligation (within the meaning of Section 9505 of the Code), set off and
apply to the Obligations any and all (i) balances and deposits of Borrower held
by the Lender Group (including any amounts received in the Concentration Account
or any other Blocked Account), or (ii) indebtedness at any time owing to or for
the credit or the account of Borrower held by the Lender Group;
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(h) Hold, as cash collateral, any and all balances and
deposits of Borrower held by the Lender Group, and any amounts received in the
Concentration Account or the other Blocked Accounts, to secure the full and
final repayment of all of the Obligations;
(i) Ship, reclaim, recover, store, finish, maintain, repair,
prepare for sale, advertise for sale, and sell (in the manner provided for
herein) the Personal Property Collateral. Agent is hereby granted a license or
other right to use, without charge, Borrower's labels, patents, copyrights,
rights of use of any name, trade secrets, trade names, trademarks, service
marks, and advertising matter, or any property of a similar nature, as it
pertains to the Personal Property Collateral, in completing production of,
advertising for sale, and selling any Personal Property Collateral and
Borrower's rights under all licenses and all franchise agreements shall inure to
the Lender Group's benefit;
(j) Sell the Personal Property Collateral at either a public
or private sale (including going out of business sales), or both, by way of one
or more contracts or transactions, for cash or on terms, in such manner and at
such places (including Borrower's premises) as Agent determines is commercially
reasonable. It is not necessary that the Personal Property Collateral be present
at any such sale. Agent may conduct one or more going out of business sales, in
Agent's own right or by one or more agents and contractors. Such sale(s) may be
conducted upon any premises owned, leased, or occupied by Borrower. Agent and
any such agent or contractor, in conjunction with any such sale, may augment the
Inventory with other goods (all of which other goods shall remain the sole
property of Agent or such agent or contractor). Any amounts realized from the
sale of such goods which constitute augmentations to the Inventory (net of an
allocable share of the costs and expenses incurred in their disposition) shall
be the sole property of Agent or such agent or contractor and neither Borrower
nor any Person claiming under or in right of Borrower shall have any interest
therein.
(k) Agent shall give notice of the disposition of the Personal
Property Collateral as follows:
(i) Agent shall give Borrower and each holder of a
security interest in the Personal Property Collateral who has filed with Agent a
written request for notice, a notice in writing of the time and place of public
sale, or, if the sale is a private sale or some other disposition other than a
public sale is to be made of the Personal Property Collateral, then the time on
or after which the private sale or other disposition is to be made;
(ii) The notice shall be personally delivered or
mailed, postage prepaid, to Borrower as provided in Section 12, at least 5 days
before the date fixed for the sale, or at least 5 days before the date on or
after which the private sale or other disposition is to be made; no notice needs
to be given prior to the disposition of any portion of the Personal Property
Collateral that is perishable or threatens to decline speedily in value or that
is of a type customarily sold on a recognized market. Notice to Persons other
than Borrower claiming an interest in the Personal Property Collateral shall be
sent to such addresses as they have furnished to Agent;
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(iii) If the sale is to be a public sale, Agent also shall
give notice of the time and place by publishing a notice one time at least
5 days before the date of the sale in a newspaper of general circulation in the
county in which the sale is to be held;
(l) Agent may credit bid and purchase at any public sale; and
(m) Any deficiency that exists after disposition of the
Personal Property Collateral as provided above will be paid immediately by
Borrower. Any excess will be returned, without interest and subject to the
rights of third Persons, by Agent to Borrower.
9.2. REMEDIES CUMULATIVE. The Lender Group's rights and remedies
under this Agreement, the Loan Documents, and all other agreements shall be
cumulative. The Lender Group shall have all other rights and remedies not
inconsistent herewith as provided under the Code, by law, or in equity. No
exercise by the Lender Group of one right or remedy shall be deemed an election,
and no waiver by the Lender Group of any Event of Default shall be deemed a
continuing waiver. No delay by the Lender Group shall constitute a waiver,
election, or acquiescence by it.
10. TAXES AND EXPENSES.
If Borrower fails to pay any monies (whether taxes, assessments,
insurance premiums, or, in the case of leased properties or assets, rents or
other amounts payable under such leases) due to third Persons, or fails to make
any deposits or furnish any required proof of payment or deposit, all as
required under the terms of this Agreement, then, to the extent that Agent
reasonably determines that such failure by Borrower could result in a Material
Adverse Change, in its discretion and without prior notice to Borrower, Agent
may do any or all of the following: (a) make payment of the same or any part
thereof; (b) set up such reserves in Borrower's Loan Account as Agent deems
necessary to protect the Lender Group from the exposure created by such failure;
or (c) obtain and maintain insurance policies of the type described in Section
6.9, and take any action with respect to such policies as Agent deems prudent.
Any such amounts paid by Agent shall constitute Lender Group Expenses. Any such
payments made by Agent shall not constitute an agreement by the Lender Group to
make similar payments in the future or a waiver by the Lender Group of any Event
of Default under this Agreement. Agent need not inquire as to, or contest the
validity of, any such expense, tax, or Lien and the receipt of the usual
official notice for the payment thereof shall be conclusive evidence that the
same was validly due and owing.
11. WAIVERS; INDEMNIFICATION.
11.1. DEMAND; PROTEST; ETC. Borrower waives demand, protest, notice of
protest, notice of default or dishonor, notice of payment and nonpayment,
nonpayment at maturity, release, compromise, settlement, extension, or renewal
of accounts, documents, instruments, chattel paper, and guarantees at any time
held by the Lender Group on which Borrower may in any way be liable.
11.2. THE LENDER GROUP'S LIABILITY FOR COLLATERAL. The Lender Group
shall not in any way or manner be liable or responsible for: (a) the safekeeping
of the Collateral; (b) any loss
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or damage thereto occurring or arising in any manner or fashion from any cause;
(c) any diminution in the value thereof; or (d) any act or default of any
carrier, warehouseman, bailee, forwarding agency, or other Person. All risk of
loss, damage, or destruction of the Collateral (except to the extent caused by
the gross negligence or willful misconduct of the Lender Group) shall be borne
by Borrower.
11.3. INDEMNIFICATION. Borrower shall pay, indemnify, defend, and hold
each Agent-Related Person, each Lender, each Participant, and each of their
respective officers, directors, employees, counsel, agents, and
attorneys-in-fact (each, an "Indemnified Person") harmless (to the fullest
extent permitted by law) from and against any and all claims, demands, suits,
actions, investigations, proceedings, and damages, and all reasonable attorneys
fees and disbursements and other costs and expenses actually incurred in
connection therewith (as and when they are incurred and irrespective of whether
suit is brought), at any time asserted against, imposed upon, or incurred by any
of them in connection with or as a result of or related to the execution,
delivery, enforcement, performance, and administration of this Agreement and any
other Loan Documents or the transactions contemplated herein, and with respect
to any investigation, litigation, or proceeding related to this Agreement, any
other Loan Document, or the use of the proceeds of the credit provided hereunder
(irrespective of whether any Indemnified Person is a party thereto), or any act,
omission, event or circumstance in any manner related thereto (all the
foregoing, collectively, the "Indemnified Liabilities"). Borrower shall have no
obligation to any Indemnified Person under this Section 11.3 with respect to any
Indemnified Liability that a court of competent jurisdiction finally determines
to have resulted from the gross negligence or willful misconduct of such
Indemnified Person. This provision shall survive the termination of this
Agreement and the repayment of the Obligations.
11.4. DAMAGES. Borrower waives any claim it may now or in the future
have against the Lender Group or any of them for consequential, special, or
punitive damages.
12. NOTICES.
Unless otherwise provided in this Agreement, all notices or demands by
any party relating to this Agreement or any other Loan Document shall be in
writing and (except for financial statements and other informational documents
which may be sent by first-class mail, postage prepaid) shall be personally
delivered or sent by registered or certified mail (postage prepaid, return
receipt requested), overnight courier, or telefacsimile to Borrower or to Agent,
as the case may be, at its address set forth below:
If to Borrower: FRANK'S NURSERY & CRAFTS
0000 Xxxx Xxxx Xxxx Xxxx
Xxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxx Xxxxx
Tel: 000-000-0000
Fax: 000-000-0000
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with copies to: XXXXXXX XXXX & XXXXXXXXX
The Equitable Center
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Tel: 000.000.0000
Fax: 000.000.0000
If to Agent or the XXXXX FARGO RETAIL FINANCE, LLC
Lender Group in One Boston Place
care of Agent: 00xx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxx
Tel: 000.000.0000
Fax: 000.000.0000
and with copies to: XXXXXX, XXXX & XXXXXXX
00 Xxxxx Xxxxxx, Xxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxxx, P.C.
Tel: 000-000-0000
Fax: 000-000-0000
The parties hereto may change the address at which they are to receive
notices hereunder, by notice in writing in the foregoing manner given to the
other. All notices or demands sent in accordance with this Section 12, other
than notices by Agent in connection with Sections 9.504 or 9.505 of the Code,
shall be deemed received on the earlier of the date of actual receipt or 3 days
after the deposit thereof in the mail. Borrower acknowledges and agrees that
notices sent by Agent in connection with Sections 9.504 or 9.505 of the Code
shall be deemed sent when deposited in the mail or personally delivered, or,
where permitted by law, transmitted by telefacsimile or other similar method set
forth above.
13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.
THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (UNLESS EXPRESSLY
PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT), THE CONSTRUCTION,
INTERPRETATION, AND ENFORCEMENT HEREOF AND THEREOF, AND THE RIGHTS OF THE
PARTIES HERETO AND THERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR
THEREUNDER OR RELATED HERETO OR THERETO SHALL BE DETERMINED UNDER, GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS.
THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND LITIGATED ONLY IN
THE BANKRUPTCY COURT (TO THE EXTENT THAT SUCH COURT RETAINS JURISDICTION OF SUCH
ACTION OR PROCEEDING) OR THE STATE AND FEDERAL
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COURTS LOCATED IN THE COUNTY OF SUFFOLK, COMMONWEALTH OF MASSACHUSETTS OR, AT
THE SOLE OPTION OF THE LENDER GROUP, IN ANY OTHER COURT IN WHICH THE LENDER
GROUP SHALL INITIATE LEGAL OR EQUITABLE PROCEEDINGS AND WHICH HAS SUBJECT MATTER
JURISDICTION OVER THE MATTER IN CONTROVERSY. BORROWER AND EACH MEMBER OF THE
LENDER GROUP WAIVES, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT
EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO
VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION
13. BORROWER AND EACH MEMBER OF THE LENDER GROUP HEREBY WAIVES THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN,
INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER
COMMON LAW OR STATUTORY CLAIMS. BORROWER AND EACH MEMBER OF THE LENDER GROUP
REPRESENTS THAT IT HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY
WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE
EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT
TO A TRIAL BY THE COURT.
14. DESTRUCTION OF BORROWER'S DOCUMENTS.
All documents, schedules, invoices, agings, or other papers delivered
to Agent may be destroyed or otherwise disposed of by Agent 4 months after they
are delivered to or received by Agent, unless Borrower requests, in writing, the
return of said documents, schedules, or other papers and makes arrangements, at
Borrower's expense, for their return.
15. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.
15.1. ASSIGNMENTS AND PARTICIPATIONS.
(a) Any Lender may, with the written consent of Agent, assign
and delegate to one or more Eligible Transferees (each an "Assignee") all, or
any ratable part, of the Obligations, the Commitments, and the other rights and
obligations of such Lender hereunder and under the other Loan Documents, in a
minimum amount of $5,000,000; provided, however, that Borrower and Agent may
continue to deal solely and directly with such Lender in connection with the
interest so assigned to an Assignee until (i) written notice of such assignment,
together with payment instructions, addresses, and related information with
respect to the Assignee, shall have been given to Borrower and Agent by such
Lender and the Assignee; (ii) such Lender and its Assignee shall have delivered
to Borrower and Agent a fully executed Assignment and Acceptance ("Assignment
and Acceptance") in the form of Exhibit A-1; and (iii) the assignor Lender or
Assignee has paid to Agent for Agent's sole and separate account a processing
fee in the amount of $5,000. Anything contained herein to the contrary
notwithstanding, the consent of Agent shall not be required (and payment of any
fees shall not be required) if such assignment is in connection with any merger,
consolidation, sale, transfer, or other disposition of all or any substantial
portion of the business or loan portfolio of such Lender.
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(b) From and after the date that Agent notifies the assignor
Lender that it has received a fully executed Assignment and Acceptance and
payment of the above-referenced processing fee, (i) the Assignee thereunder
shall be a party hereto and, to the extent that rights and obligations hereunder
have been assigned to it pursuant to such Assignment and Acceptance, shall have
the rights and obligations of a Lender under the Loan Documents, and (ii) the
assignor Lender shall, to the extent that rights and obligations hereunder and
under the other Loan Documents have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights and be released from its
obligations under this Agreement (and in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement and the other Loan Documents, such Lender
shall cease to be a party hereto and thereto), and such assignment shall effect
a novation between Borrower and the Assignee.
(c) By executing and delivering an Assignment and Acceptance,
the assigning Lender thereunder and the Assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (1) other than as
provided in such Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties, or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency, or value of this Agreement or any other Loan Document furnished
pursuant hereto; (2) such assigning Lender makes no representation or warranty
and assumes no responsibility with respect to the financial condition of
Borrower or any guarantor or the performance or observance by Borrower or any
guarantor of any of its obligations under this Agreement or any other Loan
Document furnished pursuant hereto; (3) such Assignee confirms that it has
received a copy of this Agreement, together with such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (4) such Assignee will,
independently and without reliance upon Agent, such assigning Lender, or any
other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement; (5) such Assignee appoints and
authorizes Agent to take such action as agent on its behalf and to exercise such
powers under this Agreement as are delegated to Agent by the terms hereof,
together with such powers as are reasonably incidental thereto; and (6) such
Assignee agrees that it will perform in accordance with their terms all of the
obligations which by the terms of this Agreement are required to be performed by
it as a Lender.
(d) Immediately upon each Assignee's making its processing fee
payment under the Assignment and Acceptance, this Agreement shall be deemed to
be amended to the extent, but only to the extent, necessary to reflect the
addition of the Assignee and the resulting adjustment of the Commitments of the
Assignor and Assignee arising therefrom. The Commitment allocated to each
Assignee shall reduce such Commitment of the assigning Lender pro tanto.
(e) Any Lender may at any time, with the written consent of
Agent, which consent shall not be unreasonably withheld, sell to one or more
Persons (a "Participant") participating interests in the Obligations, the
Commitment, and the other rights and interests of
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that Lender (the "Originating Lender") hereunder and under the other Loan
Documents; provided, however, that (i) the Originating Lender's obligations
under this Agreement shall remain unchanged, (ii) the Originating Lender shall
remain solely responsible for the performance of such obligations, (iii)
Borrower and Agent shall continue to deal solely and directly with the
Originating Lender in connection with the Originating Lender's rights and
obligations under this Agreement and the other Loan Documents, (iv) no
Originating Lender shall transfer or grant any participating interest under
which the Participant has the sole and exclusive right to approve any amendment
to, or any consent or waiver with respect to, this Agreement or any other Loan
Document, except to the extent such amendment to, or consent or waiver with
respect to this Agreement or of any other Loan Document would (A) extend the
final maturity date of the Obligations hereunder in which such participant is
participating; (B) reduce the interest rate applicable to the Obligations
hereunder in which such Participant is participating; (C) release all or a
material portion of the Collateral (except to the extent expressly provided
herein or in any of the Loan Documents) supporting the Obligations hereunder in
which such Participant is participating; (D) postpone the payment of, or reduce
the amount of, the interest or fees hereunder in which such Participant is
participating; or (E) change the amount or due dates of scheduled principal
repayments or prepayments or premiums in respect of the Obligations hereunder in
which such Participant is participating; and (v) all amounts payable by Borrower
hereunder shall be determined as if such Originating Lender had not sold such
participation; except that, if amounts outstanding under this Agreement are due
and unpaid, or shall have been declared or shall have become due and payable
upon the occurrence of an Event of Default, each Participant shall be deemed to
have the right of set-off in respect of its participating interest in amounts
owing under this Agreement to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under this
Agreement; provided, however, that no Participant may exercise any such right of
setoff without the notice to and consent of Agent. The rights of any Participant
shall only be derivative through the Originating Lender with whom such
Participant participates and no Participant shall have any direct rights as to
the other Lenders, Agent, Borrower, the Collections, the Collateral, or
otherwise in respect of the Advances or the Letters of Credit. No Participant
shall have the right to participate directly in the making of decisions by the
Lenders among themselves. The provisions of this Section 15.1(e) are solely for
the benefit of the Lender Group, and Borrower shall have no rights as a third
party beneficiary of any of such provisions.
(f) In connection with any such assignment or participation or
proposed assignment or participation, a Lender may disclose to a third party all
documents and information which it now or hereafter may have relating to
Borrower or Borrower's business.
(g) Notwithstanding any other provision in this Agreement, any
Lender may at any time create a security interest in, or pledge, all or any
portion of its rights under and interest in this Agreement in favor of any
Federal Reserve Bank in accordance with Regulation A of the FRB or U.S. Treasury
Regulation 31 CFR ss. 203.14, and such Federal Reserve Bank may enforce such
pledge or security interest in any manner permitted under applicable law.
15.2. SUCCESSORS. This Agreement shall bind and inure to the benefit of
the respective successors and assigns of each of the parties; provided, however,
that Borrower may not assign this Agreement or any rights or duties hereunder
without the Lenders' prior written consent and any prohibited assignment shall
be absolutely void. No consent to assignment by the Lenders
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shall release Borrower from its Obligations. A Lender may assign this Agreement
and its rights and duties hereunder pursuant to Section 15.1 and, except as
expressly required pursuant to Section 15.1, no consent or approval by Borrower
is required in connection with any such assignment.
16. AMENDMENTS; WAIVERS.
16.1. AMENDMENTS AND WAIVERS. No amendment or waiver of any provision
of this Agreement or any other Loan Document, and no consent with respect to any
departure by Borrower therefrom, shall be effective unless the same shall be in
writing and signed by the Required Lenders (or by Agent at the written request
of the Required Lenders) and Borrower and then any such waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given; provided, however, that no such waiver, amendment, or consent
shall, unless in writing and signed by all the Lenders and Borrower and
acknowledged by Agent, do any of the following:
(a) increase or extend the Commitment of any Lender;
(b) postpone or delay any date fixed by this Agreement or any
other Loan Document for any payment of principal, interest, fees, or other
amounts due to the Lenders (or any of them) hereunder or under any other Loan
Document;
(c) reduce the principal of, or the rate of interest specified
herein on, any Loan, or any fees or other amounts payable hereunder or under any
other Loan Document;
(d) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Advances which is required for the
Lenders or any of them to take any action hereunder;
(e) increase the advance rate with respect to Advances (except
for the restoration of an advance rate after the prior reduction thereof), or
change Section 2.1(b);
(f) amend this Section or any provision of the Agreement
providing for consent or other action by all Lenders;
(g) release Collateral, or subordinate the Lien of Agent in
any of the Collateral, other than as permitted by Section 17.11;
(h) change the definition of "Required Lenders";
(i) release Borrower from any Obligation for the payment of
money; or
(j) amend any of the provisions of Article 17.
and, provided further, that no amendment, waiver or consent shall, unless in
writing and signed by Agent, affect the rights or duties of Agent under this
Agreement or any other Loan Document; and, provided further, that the limitation
contained in clause (e) above shall not be deemed to
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limit the ability of Agent to make Advances or Agent Loans, as applicable, in
accordance with the provisions of Sections 2.1(g), (h), or (l). The foregoing
notwithstanding, any amendment, modification, waiver, consent, termination, or
release of or with respect to any provision of this Agreement or any other Loan
Document that relates only to the relationship of the Lender Group among
themselves, and that does not affect the rights or obligations of Borrower,
shall not require consent by or the agreement of Borrower.
16.2. NO WAIVERS; CUMULATIVE REMEDIES. No failure by Agent or any
Lender to exercise any right, remedy, or option under this Agreement, any other
Loan Document, or any present or future supplement hereto or thereto, or in any
other agreement between or among Borrower and Agent and/or any Lender, or delay
by Agent or any Lender in exercising the same, will operate as a waiver thereof.
No waiver by Agent or any Lender will be effective unless it is in writing, and
then only to the extent specifically stated. No waiver by Agent or the Lenders
on any occasion shall affect or diminish Agent's and each Lender's rights
thereafter to require strict performance by Borrower of any provision of this
Agreement. Agent's and each Lender's rights under this Agreement and the other
Loan Documents will be cumulative and not exclusive of any other right or remedy
which Agent or any Lender may have.
17. AGENT; THE LENDER GROUP.
17.1. APPOINTMENT AND AUTHORIZATION OF AGENT. Each Lender hereby
designates and appoints WFRF as its Agent under this Agreement and the other
Loan Documents and each Lender hereby irrevocably authorizes Agent to take such
action on its behalf under the provisions of this Agreement and each other Loan
Document and to exercise such powers and perform such duties as are expressly
delegated to it by the terms of this Agreement or any other Loan Document,
together with such powers as are reasonably incidental thereto. Agent agrees to
act as such on the express conditions contained in this Article 17. The
provisions of this Article 17 are solely for the benefit of Agent and the
Lenders, and Borrower shall not have any rights as a third party beneficiary of
any of the provisions contained herein; provided, however, that the provisions
of Sections 17.10, 17.11, and 17.16(d) also shall be for the benefit of
Borrower. Any provision to the contrary contained elsewhere in this Agreement or
in any other Loan Document notwithstanding, Agent shall not have any duties or
responsibilities, except those expressly set forth herein, nor shall Agent have
or be deemed to have any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations, or liabilities
shall be read into this Agreement or any other Loan Document or otherwise exist
against Agent. Except as expressly otherwise provided in this Agreement, Agent
shall have and may use its sole discretion with respect to exercising or
refraining from exercising any discretionary rights or taking or refraining from
taking any actions which Agent is expressly entitled to take or assert under or
pursuant to this Agreement and the other Loan Documents, including making the
determinations contemplated by Section 2.1(b). Without limiting the generality
of the foregoing, or of any other provision of the Loan Documents that provides
rights or powers to Agent, Lenders agree that Agent shall have the right to
exercise the following powers as long as this Agreement remains in effect: (a)
maintain, in accordance with its customary business practices, ledgers and
records reflecting the status of the Advances, the Collateral, the Collections,
and related matters; (b) execute and/or file any and all financing or similar
statements or notices, amendments, renewals, supplements, documents,
instruments, proofs of claim for Lenders, notices and other written agreements
with respect to the Loan Documents; (c) make Advances
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for itself or on behalf of Lenders as provided in the Loan Documents; (d)
exclusively receive, apply, and distribute the Collections as provided in the
Loan Documents; (e) open and maintain such bank accounts and lock boxes as Agent
deems necessary and appropriate in accordance with the Loan Documents for the
foregoing purposes with respect to the Collateral and the Collections; (f)
perform, exercise, and enforce any and all other rights and remedies of the
Lender Group with respect to Borrower, the Advances, the Collateral, the
Collections, or otherwise related to any of same as provided in the Loan
Documents; and (g) incur and pay such Lender Group Expenses as Agent may deem
necessary or appropriate for the performance and fulfillment of its functions
and powers pursuant to the Loan Documents.
17.2. DELEGATION OF DUTIES. Except as otherwise provided in this
Section, Agent may execute any of its duties under this Agreement or any other
Loan Document by or through agents, employees, or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining to such duties.
Agent shall not be responsible for the negligence or misconduct of any agent or
attorney-in-fact that it selects as long as such selection was made in
compliance with this Section and without gross negligence or willful misconduct.
The foregoing notwithstanding, Agent shall not make any material delegation of
duties to subagents or non-employee delegees without the prior written consent
of Required Lenders (it being understood that routine delegation of such
administrative matters as filing financing statements, or conducting appraisals
or audits, is not viewed as a material delegation that requires prior Required
Lender approval). Notwithstanding anything herein which may be construed to the
contrary, the Lenders and Borrower acknowledge and agree that Agent may engage
the Oversight Agent pursuant to the Oversight Agreement as it may be modified
and amended from time to time and the Oversight Agent may carry out its duties
as set forth in such agreement.
17.3. LIABILITY OF AGENT-RELATED PERSONS. None of the Agent-Related
Persons shall (i) be liable for any action taken or omitted to be taken by any
of them under or in connection with this Agreement or any other Loan Document or
the transactions contemplated hereby (except for its own gross negligence or
willful misconduct), or, (ii) be responsible in any manner to any of the Lenders
for any recital, statement, representation or warranty made by Borrower, or any
Subsidiary or Affiliate of Borrower, or any officer or director thereof,
contained in this Agreement or in any other Loan Document, or in any
certificate, report, statement, or other document referred to or provided for
in, or received by Agent under or in connection with, this Agreement or any
other Loan Document, or the validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or any other Loan Document, or for any failure
of Borrower or any other party to any Loan Document to perform its obligations
hereunder or thereunder. No Agent-Related Person shall be under any obligation
to any Lender to ascertain or to inquire as to the observance or performance of
any of the agreements contained in, or conditions of, this Agreement or any
other Loan Document, or to inspect the properties, books, or records of
Borrower, or any of Borrower's Subsidiaries or Affiliates.
17.4. RELIANCE BY AGENT. Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex, or telephone
message, statement or other document or conversation believed by it to be
genuine and correct and to have been signed, sent, or made by the proper Person
or Persons, and upon advice and statements of legal counsel (including counsel
to Borrower or counsel to any Lender), independent accountants, and other
experts selected by Agent. Agent
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shall be fully justified in failing or refusing to take any action under this
Agreement or any other Loan Document unless it shall first receive such advice
or concurrence of the Required Lenders or all Lenders, as applicable, and until
such instructions are received, Agent shall act, or refrain from acting, as it
deems advisable so long as it is not grossly negligent or guilty of willful
misconduct. If Agent so requests, it shall first be indemnified to its
reasonable satisfaction by Lenders against any and all liability and expense
which may be incurred by it by reason of taking or continuing to take any such
action. Agent shall in all cases be fully protected in acting, or in refraining
from acting, under this Agreement or any other Loan Document in accordance with
a request or consent of the Required Lenders or all Lenders, as applicable, and
such request and any action taken or failure to act pursuant thereto shall be
binding upon all of the Lenders.
17.5. NOTICE OF DEFAULT OR EVENT OF DEFAULT. Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or Event of
Default, except with respect to defaults in the payment of principal, interest,
fees, and expenses required to be paid to Agent for the account of Agent or the
Lenders, except with respect to actual knowledge of the existence of an
Overadvance, and except with respect to Defaults and Events of Default of which
Agent has actual knowledge, unless Agent shall have received written notice from
a Lender or Borrower referring to this Agreement, describing such Default or
Event of Default, and stating that such notice is a "notice of default." Agent
promptly will notify the Lenders of its receipt of any such notice or of any
Event of Default of which Agent has, or is deemed to have, actual knowledge. If
any Lender obtains actual knowledge of any Event of Default, such Lender
promptly shall notify the other Lenders and Agent of such Event of Default. Each
Lender shall be solely responsible for giving any notices to its Participants,
if any. Subject to Section 17.4, Agent shall take such action with respect to
such Default or Event of Default as may be requested by the Required Lenders;
provided, however, that:
(a) At all times, Agent may propose and, with the consent of
Required Lenders (which shall not be unreasonably withheld and which shall be
deemed to have been given by a Lender unless such Lender has notified Agent to
the contrary in writing within three days of notification of such proposed
actions by Agent) exercise, any remedies on behalf of the Lender Group; and
(b) At all times, once Required Lenders or all Lenders, as the
case may be, have approved the exercise of a particular remedy or pursuit of a
course of action, Agent may, but shall not be obligated to, make all
administrative decisions in connection therewith or take all other actions
reasonably incidental thereto (for example, if the Required Lenders approve the
foreclosure of certain Collateral, Agent shall not be required to seek consent
for the administrative aspects of conducting such sale or handling of such
Collateral).
17.6. CREDIT DECISION. Each Lender acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that no
act by Agent hereinafter taken, including any review of the affairs of Borrower
and its Subsidiaries or Affiliates, shall be deemed to constitute any
representation or warranty by any Agent-Related Person to any Lender. Each
Lender represents to Agent that it has, independently and without reliance upon
any Agent-Related Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition, and
creditworthiness of Borrower and any other Person (other than
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the Lender Group) party to a Loan Document, and all applicable bank regulatory
laws relating to the transactions contemplated hereby, and made its own decision
to enter into this Agreement and to extend credit to Borrower. Each Lender also
represents that it will, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals, and decisions in taking or not taking action under this Agreement
and the other Loan Documents, and to make such investigations as it deems
necessary to inform itself as to the business, prospects, operations, property,
financial and other condition, and creditworthiness of Borrower, and any other
Person (other than the Lender Group) party to a Loan Document. Except for
notices, reports, and other documents expressly herein required to be furnished
to the Lenders by Agent, Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the business,
prospects, operations, property, financial and other condition, or
creditworthiness of Borrower, and any other Person party to a Loan Document that
may come into the possession of any of the Agent-Related Persons.
17.7. COSTS AND EXPENSES; INDEMNIFICATION. Agent may incur and pay
Lender Group Expenses to the extent Agent deems reasonably necessary or
appropriate for the performance and fulfillment of its functions, powers, and
obligations pursuant to the Loan Documents, including without limiting the
generality of the foregoing, but subject to any requirements of the Loan
Documents that it obtain any applicable consents or engage in any required
consultation, court costs, reasonable attorneys fees and expenses, costs of
collection by outside collection agencies and auctioneer fees and costs of
security guards or insurance premiums paid to maintain the Collateral, whether
or not Borrower are obligated to reimburse Agent or Lenders for such expenses
pursuant to the Loan Agreement or otherwise. Agent is authorized and directed to
deduct and retain sufficient amounts from Collections to reimburse Agent for
such out-of-pocket costs and expenses prior to the distribution of any amounts
to Lenders. In the event Agent is not reimbursed for such costs and expenses
from Collections, each Lender hereby agrees that it is and shall be obligated to
pay to or reimburse Agent for the amount of such Lender's Pro Rata Share
thereof. Whether or not the transactions contemplated hereby are consummated,
the Lenders shall indemnify upon demand the Agent-Related Persons (to the extent
not reimbursed by or on behalf of Borrower and without limiting the obligation
of Borrower to do so), according to their Pro Rata Shares, from and against any
and all Indemnified Liabilities; provided, however, that no Lender shall be
liable for the payment to the Agent-Related Persons of any portion of such
Indemnified Liabilities resulting solely from such Person's gross negligence,
bad faith, or willful misconduct. Without limitation of the foregoing, each
Lender shall reimburse Agent upon demand for its ratable share of any costs or
out-of-pocket expenses (including attorney fees and expenses) incurred by Agent
in connection with the preparation, execution, delivery, administration,
modification, amendment, or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any document
contemplated by or referred to herein, to the extent that Agent is not
reimbursed for such expenses by or on behalf of Borrower. The undertaking in
this Section 17.7 shall survive the payment of all Obligations hereunder and the
resignation or replacement of Agent.
17.8. AGENT IN INDIVIDUAL CAPACITY. WFRF and its Affiliates may make
loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests, in and generally engage in any kind of banking, trust,
financial advisory, underwriting, or other
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business with Borrower and its Subsidiaries and Affiliates and any other Person
party to any Loan Documents as though WFRF were not Agent hereunder without
notice to or consent of the Lenders. The Lenders acknowledge that, pursuant to
such activities, WFRF and its Affiliates may receive information regarding
Borrower or their Affiliates and any other Person party to any Loan Documents
that is subject to confidentiality obligations in favor of Borrower or such
other Person and that prohibit the disclosure of such information to the
Lenders, and the Lenders acknowledge that, in such circumstances (and in the
absence of a waiver of such confidentiality obligations, which waiver Agent will
use its reasonable best efforts to obtain), Agent shall be under no obligation
to provide such information to them. With respect to the Agent Loans and Agent
Advances, WFRF shall have the same rights and powers under this Agreement as any
other Lender and may exercise the same as though it were not Agent, and the
terms "Lender" and "Lenders" include WFRF in its individual capacity.
17.9. SUCCESSOR AGENT. Agent may resign as Agent following notice of
such resignation ("Notice") to the Lenders and Borrower, and effective upon the
appointment of and acceptance of such appointment by, a successor Agent. If
Agent resigns under this Agreement, the Required Lenders shall appoint any
Lender or Eligible Transferee as successor Agent for the Lenders. If no
successor Agent is appointed within 30 days of such retiring Agent's Notice,
Agent may appoint a successor Agent, after consulting with the Lenders and
Borrower. In any such event, upon the acceptance of its appointment as successor
Agent hereunder, such successor Agent shall succeed to all the rights, powers
and duties of the retiring Agent and the term "Agent" shall mean such successor
Agent and the retiring Agent's appointment, powers, and duties as Agent shall be
terminated. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Section 17 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Agent under this Agreement.
17.10. WITHHOLDING TAX.
(a) If any Lender is a "foreign corporation, partnership or
trust" within the meaning of the IRC and such Lender claims exemption from, or a
reduction of, U.S. withholding tax under Sections 1441 or 1442 of the IRC, such
Lender agrees with and in favor of Agent and Borrower, to deliver to Agent and
Borrower:
(i) if such Lender claims an exemption from, or a
reduction of, withholding tax under a United States tax treaty, properly
completed IRS Forms 1001 and W 8 before the payment of any interest in the first
calendar year and before the payment of any interest in each third succeeding
calendar year during which interest may be paid under this Agreement;
(ii) if such Lender claims that interest paid under
this Agreement is exempt from United States withholding tax because it is
effectively connected with a United States trade or business of such Lender, two
properly completed and executed copies of IRS Form 4224 before the payment of
any interest is due in the first taxable year of such Lender and in each
succeeding taxable year of such Lender during which interest may be paid under
this Agreement, and IRS Form W 9; and
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(iii) such other form or forms as may be required
under the IRC or other laws of the United States as a condition to exemption
from, or reduction of, United States withholding tax.
Such Lender agrees to promptly notify Agent and Borrower of any change in
circumstances which would modify or render invalid any claimed exemption or
reduction.
(b) If any Lender claims exemption from, or reduction of,
withholding tax under a United States tax treaty by providing IRS Form 1001 and
such Lender sells, assigns, grants a participation in, or otherwise transfers
all or part of the Obligations of Borrower, such Lender agrees to notify Agent
and Borrower of the percentage amount in which it is no longer the beneficial
owner of Obligations of Borrower to such Lender. To the extent of such
percentage amount, Agent and Borrower will treat such Lender's IRS Form 1001 as
no longer valid.
(c) If any Lender claiming exemption from United States
withholding tax by filing IRS Form 4224 with Agent sells, assigns, grants a
participation in, or otherwise transfers all or part of the Obligations of
Borrower to such Lender, such Lender agrees to undertake sole responsibility for
complying with the withholding tax requirements imposed by Sections 1441 and
1442 of the IRC.
(d) If any Lender is entitled to a reduction in the applicable
withholding tax, Agent may withhold from any interest payment to such Lender an
amount equivalent to the applicable withholding tax after taking into account
such reduction. If the forms or other documentation required by subsection (a)
of this Section are not delivered to Agent, then Agent may withhold from any
interest payment to such Lender not providing such forms or other documentation
an amount equivalent to the applicable withholding tax.
(e) If the IRS or any other Governmental Authority of the
United States or other jurisdiction asserts a claim that Agent or Borrower did
not properly withhold tax from amounts paid to or for the account of any Lender
(because the appropriate form was not delivered, was not properly executed, or
because such Lender failed to notify Agent and Borrower of a change in
circumstances which rendered the exemption from, or reduction of, withholding
tax ineffective, or for any other reason) such Lender shall indemnify Agent and
Borrower fully for all amounts paid, directly or indirectly, by Agent or
Borrower as tax or otherwise, including penalties and interest, and including
any taxes imposed by any jurisdiction on the amounts payable to Agent or
Borrower under this Section, together with all costs and expenses (including
attorneys fees and expenses). The obligation of the Lenders under this
subsection shall survive the payment of all Obligations and the resignation of
Agent.
17.11. COLLATERAL MATTERS.
(a) The Lenders hereby irrevocably authorize Agent, to release
any Lien on any Collateral (i) upon the termination of the Commitments and
payment and satisfaction in full by Borrower of all Obligations; and upon such
termination and payment Agent shall deliver to Borrower, at Borrower's sole cost
and expense, all UCC termination statements and any other
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documents necessary to terminate the Loan Documents and release the Liens with
respect to the Collateral; (ii) constituting property being sold or disposed of
if a release is required or desirable in connection therewith and if Borrower
certifies to Agent that the sale or disposition is permitted under Section 7.4
of this Agreement or the other Loan Documents (and Agent may rely conclusively
on any such certificate, without further inquiry); (iii) constituting property
in which Borrower owned no interest at the time the Lien was granted or at any
time thereafter; or (iv) constituting property leased to Borrower under a lease
that has expired or been terminated in a transaction permitted under this
Agreement. Except as provided above, Agent will not release any Lien on any
Collateral without the prior written authorization of the Required Lenders. Upon
request by Agent or Borrower at any time, the Lenders will confirm in writing
Agent's authority to release any such Liens on particular types or items of
Collateral pursuant to this Section 17.11; provided, however, that (i) Agent
shall not be required to execute any document necessary to evidence such release
on terms that, in Agent's opinion, would expose Agent to liability or create any
obligation or entail any consequence other than the release of such Lien without
recourse, representation, or warranty, and (ii) such release shall not in any
manner discharge, affect or impair the Obligations or any Liens (other than
those expressly being released), upon (or obligations of Borrower in respect of)
all interests retained by Borrower, including, the proceeds of any sale, all of
which shall continue to constitute part of the Collateral.
(b) Agent shall have no obligation whatsoever to any of the
Lenders to assure that the Collateral exists or is owned by Borrower, is cared
for, protected, or insured or has been encumbered, or that the Liens of the
Agent (for the benefit of the Lender Group) have been properly or sufficiently
or lawfully created, perfected, protected, or enforced or are entitled to any
particular priority, or to exercise at all or in any particular manner or under
any duty of care, disclosure, or fidelity, or to continue exercising, any of the
rights, authorities and powers granted or available to Agent pursuant to any of
the Loan Documents, it being understood and agreed that in respect of the
Collateral, or any act, omission or event related thereto, subject to the terms
and conditions contained herein, Agent may act in any manner it may deem
appropriate, in its sole discretion given Agent's own interest in the Collateral
in its capacity as one of the Lenders and that Agent shall have no other duty or
liability whatsoever to any Lender as to any of the foregoing, except as
otherwise provided herein.
17.12. RESTRICTIONS ON ACTIONS BY LENDERS; SHARING OF PAYMENTS.
(a) Each of the Lenders agrees that it shall not, without the
express consent of Agent, and that it shall, to the extent it is lawfully
entitled to do so, upon the request of Agent, set off against the Obligations
any amounts owing by such Lender to Borrower or any accounts of Borrower now or
hereafter maintained with such Lender. Each of the Lenders further agrees that
it shall not, unless specifically requested to do so by Agent, take or cause to
be taken any action, including the commencement of any legal or equitable
proceedings, to foreclose any Lien on, or otherwise enforce any security
interest in, any of the Collateral the purpose of which is, or could be, to give
such Lender any preference or priority against the other Lenders with respect to
the Collateral.
(b) Subject to Section 17.8, if, at any time or times any
Lender shall receive (i) by payment, foreclosure, setoff, or otherwise, any
proceeds of Collateral or any payments
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with respect to the Obligations of Borrower to such Lender arising under, or
relating to, this Agreement or the other Loan Documents, except for any such
proceeds or payments received by such Lender from Agent pursuant to the terms of
this Agreement, or (ii) payments from Agent in excess of such Lender's Pro Rata
Share of all such distributions by Agent, such Lender shall promptly (1) turn
the same over to Agent, in kind, and with such endorsements as may be required
to negotiate the same to Agent, or in same day funds, as applicable, for the
account of all of the Lenders and for application to the Obligations in
accordance with the applicable provisions of this Agreement, or (2) purchase,
without recourse or warranty, an undivided interest and participation in the
Obligations owed to the other Lenders so that such excess payment received shall
be applied ratably as among the Lenders in accordance with their Pro Rata
Shares; provided, however, that if all or part of such excess payment received
by the purchasing party is thereafter recovered from it, those purchases of
participations shall be rescinded in whole or in part, as applicable, and the
applicable portion of the purchase price paid therefor shall be returned to such
purchasing party, but without interest except to the extent that such purchasing
party is required to pay interest in connection with the recovery of the excess
payment.
17.13. AGENCY FOR PERFECTION. Agent and each Lender hereby appoints
each other Lender as agent for the purpose of perfecting the Liens of the Lender
Group in assets which, in accordance with Division 9 of the UCC can be perfected
only by possession. Should any Lender obtain possession of any such Collateral,
such Lender shall notify Agent thereof, and, promptly upon Agent's request
therefor shall deliver such Collateral to Agent or in accordance with Agent's
instructions.
17.14. PAYMENTS BY AGENT TO THE LENDERS. All payments to be made by
Agent to the Lenders shall be made by bank wire transfer or internal transfer of
immediately available funds pursuant to such wire transfer instructions as each
party may designate for itself by written notice to Agent. Concurrently with
each such payment, Agent shall identify whether such payment (or any portion
thereof) represents principal, premium or interest on revolving advances or
otherwise.
17.15. CONCERNING THE COLLATERAL AND RELATED LOAN DOCUMENTS. Each
member of the Lender Group authorizes and directs Agent to enter into this
Agreement and the other Loan Documents relating to the Collateral, for the
ratable benefit (subject to Sections 2.3(b) and 4.1) of the Lender Group. Each
member of the Lender Group agrees that any action taken by Agent, Required
Lenders, or all Lenders, as applicable, in accordance with the terms of this
Agreement or the other Loan Documents relating to the Collateral and the
exercise by Agent, Required Lenders, or all Lenders, as applicable, of their
respective powers set forth therein or herein, together with such other powers
that are reasonably incidental thereto, shall be binding upon all of the
Lenders.
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17.16. FIELD AUDITS AND EXAMINATION REPORTS; CONFIDENTIALITY;
DISCLAIMERS BY LENDERS; OTHER REPORTS AND INFORMATION. By signing this
Agreement, each Lender;
(a) is deemed to have requested that Agent furnish such
Lender, promptly after it becomes available, a copy of each field audit or
examination report (each a "Report" and collectively, "Reports") prepared by
Agent, and Agent shall so furnish each Lender with such Reports;
(b) expressly agrees and acknowledges that Agent (i) does not
make any representation or warranty as to the accuracy of any Report, and (ii)
shall not be liable for any information contained in any Report;
(c) expressly agrees and acknowledges that the Reports are not
comprehensive audits or examinations, that Agent or other party performing any
audit or examination will inspect only specific information regarding Borrower
and will rely significantly upon Borrower's books and records, as well as on
representations of Borrower's personnel;
(d) agrees to keep all Reports and other material information
obtained by it pursuant to the requirements of this Agreement in accordance with
its reasonable customary procedures for handling confidential information; it
being understood and agreed by Borrower that in any event such Lender may make
disclosures (i) reasonably required by any bona fide potential or actual
Assignee, transferee, or Participant in connection with any contemplated or
actual assignment or transfer by such Lender of an interest herein or any
participation interest in such Lender's rights hereunder provided that such
Person agrees in writing for the benefit of the Borrower to be bound by the
confidentiality provisions contained in this Agreement, (ii) of information that
has become public by disclosures made by Persons other than such Lender, its
Affiliates, assignees, transferees, or participants, or (iii) as required or
requested by any court, governmental or administrative agency, pursuant to any
subpoena or other legal process, or by any law, statute, regulation, or court
order; provided, however, that, unless prohibited by applicable law, statute,
regulation, or court order, such Lender shall notify Borrower of any request by
any court, governmental or administrative agency, or pursuant to any subpoena or
other legal process for disclosure of any such non-public material information
concurrent with, or where practicable, prior to the disclosure thereof; and
(e) without limiting the generality of any other
indemnification provision contained in this Agreement, agrees: (i) to hold Agent
and all Agent Related Persons and any such other Lender preparing a Report
harmless from any action the indemnifying Lender may take or conclusion the
indemnifying Lender may reach or draw from any Report in connection with any
loans or other credit accommodations that the indemnifying Lender has made or
may make to Borrower, or the indemnifying Lender's participation in, or the
indemnifying Lender's purchase of, a loan or loans of Borrower; and (ii) to pay
and protect, and indemnify, defend, and hold Agent and all Agent Related Persons
and any such other Lender preparing a Report harmless from and against, the
claims, actions, proceedings, damages, costs, expenses and other amounts
(including, attorney costs) incurred by Agent and all Agent Related Persons and
any such other Lender preparing a Report as the direct or indirect result of any
third parties who might obtain all or part of any Report through the
indemnifying Lender.
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In addition to the foregoing: (x) any Lender may from time to time request of
Agent in writing that Agent provide to such Lender a copy of any report or
document provided by Borrower to Agent, and, upon receipt of such request, Agent
shall provide a copy of same to such Lender promptly upon receipt thereof; (y)
to the extent that Agent is entitled, under any provision of the Loan Documents,
to request additional reports or information from Borrower, any Lender may, from
time to time, reasonably request Agent to exercise such right as specified in
such Lender's notice to Agent, whereupon Agent promptly shall request of
Borrower the additional reports or information specified by such Lender, and,
upon receipt thereof, Agent promptly shall provide a copy of same to such
Lender; and (z) any time that Agent renders to Borrower a statement regarding
the Loan Account, Agent shall send a copy of such statement to each Lender.
17.17. SEVERAL OBLIGATIONS; NO LIABILITY. Notwithstanding that certain
of the Loan Documents now or hereafter may have been or will be executed only by
or in favor of Agent in its capacity as such, and not by or in favor of the
Lenders, any and all obligations on the part of Agent (if any) to make any
Advances shall constitute the several (and not joint) obligations of the
respective Lenders on a ratable basis, according to their respective
Commitments, to make an amount of such Advances not to exceed, in principal
amount, at any one time outstanding, the amount of their respective Commitments.
Nothing contained herein shall confer upon any Lender any interest in, or
subject any Lender to any liability for, or in respect of, the business, assets,
profits, losses, or liabilities of any other Lender. Each Lender shall be solely
responsible for notifying its Participants of any matters relating to the Loan
Documents to the extent any such notice may be required, and no Lender shall
have any obligation, duty, or liability to any Participant of any other Lender.
Except as provided in Section 17.7, no member of the Lender Group shall have any
liability for the acts of any other member of the Lender Group. No Lender shall
be responsible to Borrower or any other Person for any failure by any other
Lender to fulfill its obligations to make Advances, nor to advance for it or on
its behalf in connection with its Commitment, nor to take any other action on
its behalf hereunder or in connection with the financing contemplated herein.
18. GENERAL PROVISIONS.
18.1. EFFECTIVENESS. This Agreement shall be binding and deemed
effective when executed by Borrower and the Lender Group.
18.2. SECTION HEADINGS. Headings and numbers have been set forth herein
for convenience only. Unless the contrary is compelled by the context,
everything contained in each section applies equally to this entire Agreement.
18.3. INTERPRETATION. Neither this Agreement nor any uncertainty or
ambiguity herein shall be construed or resolved against the Lender Group or
Borrower, whether under any rule of construction or otherwise. On the contrary,
this Agreement has been reviewed by all parties and shall be construed and
interpreted according to the ordinary meaning of the words used so as to fairly
accomplish the purposes and intentions of all parties hereto.
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18.4. SEVERABILITY OF PROVISIONS. Each provision of this Agreement
shall be severable from every other provision of this Agreement for the purpose
of determining the legal enforceability of any specific provision.
18.5. COUNTERPARTS; TELEFACSIMILE EXECUTION. This Agreement may be
executed in any number of counterparts and by different parties on separate
counterparts, each of which, when executed and delivered, shall be deemed to be
an original, and all of which, when taken together, shall constitute but one and
the same Agreement. Delivery of an executed counterpart of this Agreement by
telefacsimile shall be equally as effective as delivery of an original executed
counterpart of this Agreement. Any party delivering an executed counterpart of
this Agreement by telefacsimile also shall deliver an original executed
counterpart of this Agreement but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Agreement.
18.6. REVIVAL AND REINSTATEMENT OF OBLIGATIONS. If the incurrence or
payment of the Obligations by Borrower or any guarantor of the Obligations or
the transfer by any or all of such parties to the Lender Group of any property
of either or both of such parties should for any reason subsequently be declared
to be void or voidable under any state or federal law relating to creditors'
rights, including provisions of the Bankruptcy Code relating to fraudulent
conveyances, preferences, and other voidable or recoverable payments of money or
transfers of property (collectively, a "Voidable Transfer"), and if the Lender
Group is required to repay or restore, in whole or in part, any such Voidable
Transfer, or elects to do so upon the reasonable advice of its counsel, then, as
to any such Voidable Transfer, or the amount thereof that the Lender Group is
required or elects to repay or restore, and as to all reasonable costs,
expenses, and attorneys fees of the Lender Group related thereto, the liability
of Borrower or such guarantor automatically shall be revived, reinstated, and
restored and shall exist as though such Voidable Transfer had never been made.
18.7. INTEGRATION. This Agreement, together with the other Loan
Documents, reflects the entire understanding of the parties with respect to the
transactions contemplated hereby and shall not be contradicted or qualified by
any other agreement, oral or written, before the date hereof; provided that in
the event of any direct inconsistency between the Loan Documents and the Funding
Orders, as applicable, the terms of the Funding Orders shall prevail.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed in Boston, Massachusetts.
BORROWER
FRANK'S NURSERY & CRAFTS, INC.
/s/ Xxxxx X. Xxxxx
--------------------------------------------
By: XXXXX X. XXXXX
Title: VICE CHAIRMAN & CFO
AGENT
XXXXX FARGO RETAIL FINANCE, LLC, as Agent
/s/ Xxxxxx X. Xxxxxxxxxx
--------------------------------------------
By:
Title:
LENDER
XXXXX FARGO RETAIL FINANCE, LLC, as a Lender
/s/ Xxxxxx X. Xxxxxxxxxx
--------------------------------------------
By:
Title:
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EXHIBIT A-1
FORM OF ASSIGNMENT AND ACCEPTANCE
This ASSIGNMENT AND ACCEPTANCE (this "Assignment and Acceptance") dated
as of ____________________, _____ is made between (the "Assignor")
and (the "Assignee").
RECITALS
(A) The Assignor is party to that certain Loan and Security Agreement,
dated as of _____________ (as amended, amended and restated, modified,
supplemented or renewed from time to time, the "Loan Agreement"), among Frank's
Nursery & Crafts, Inc., as debtor and debtor in possession, ("Borrower"), the
several financial institutions from time to time party thereto (including the
Assignor, collectively, the "Lenders"), and Xxxxx Fargo Retail Finance, LLC, as
agent for the Lenders (the "Agent"). Any terms defined in the Loan Agreement and
not defined in this Assignment and Acceptance are used herein as defined in the
Loan Agreement;
(B) As provided under the Loan Agreement, the Assignor has committed to
making Loans (the "Committed Loans") to the Borrower in an aggregate amount not
to exceed $ (the "Commitment");
(C) [The Assignor has made Committed Loans in the aggregate principal
amount of $ to the Borrower] [No Committed Loans are outstanding under
the Loan Agreement];
(D) [The Assignor has acquired a participation in the Agent's liability
under Letters of Credit in an aggregate outstanding principal amount of
$ (the "L/C Obligations")] [No Letters of Credit are outstanding under the
Loan Agreement]; and
(E) The Assignor wishes to assign to the Assignee [part of the] [all]
rights and obligations of the Assignor under the Loan Agreement in respect of
its Commitment, [together with a corresponding portion of each of its
outstanding Committed Loans and L/C Obligations,] in an amount equal to
$ (the "Assigned Amount") on the terms and subject to the conditions set
forth herein and the Assignee wishes to accept assignment of such rights and to
assume such obligations from the Assignor on such terms and subject to such
conditions.
NOW THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
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1. Assignment and Acceptance.
(a) Subject to the terms and conditions of this Assignment and
Acceptance, (i) the Assignor hereby sells, transfers, delegates, and assigns to
the Assignee, and (ii) the Assignee hereby purchases, assumes and undertakes
from the Assignor, without recourse and without representation or warranty
(except as provided in this Assignment and Acceptance) __% (the "Assignee's
Percentage Share") of (A) the Commitment [and the Committed Loans and the L/C
Obligations] of the Assignor and (B) all related rights, benefits, obligations,
liabilities and indemnities of the Assignor under and in connection with the
Loan Agreement and the other Loan Documents.
[If appropriate, add paragraph specifying payment to Assignor by
Assignee of outstanding principal of, accrued interest on, and fees with respect
to, Committed Loans and L/C Obligations assigned.]
(b) With effect on and after the Effective Date (as defined in Section
5 hereof), the Assignee shall be a party to the Loan Agreement and succeed to
all of the rights and be obligated to perform all of the obligations of a Lender
under the Loan Agreement, including the requirements concerning confidentiality
(if any) and the payment of indemnification to the Agent, with a Commitment in
an amount equal to the Assigned Amount. The Assignee agrees that it will perform
in accordance with their terms all of the obligations which by the terms of the
Loan Agreement are required to be performed by it as a Lender. It is the intent
of the parties hereto that the Commitment of the Assignor shall, as of the
Effective Date, be reduced by an amount equal to the Assigned Amount and the
Assignor shall relinquish its rights and be released from its obligations under
the Loan Agreement to the extent such obligations have been assumed by the
Assignee; provided, however, the Assignor shall not relinquish the rights under
the Loan Agreement to the extent such rights relate to the time prior to the
Effective Date.
(c) After giving effect to the assignment and assumption set forth
herein, on the Effective Date the Assignee's Commitment will be $ .
(d) After giving effect to the assignment and assumption set forth
herein, on the Effective Date the Assignor's Commitment will be $ .
2. Payments.
(a) As consideration for the sale, assignment and transfer contemplated
in Section 1 hereof, the Assignee shall pay to the Assignor on the Effective
Date in immediately available funds an amount equal to $ , representing the
Assignee's Percentage Share of the principal amount of all Committed Loans.
(b) The [Assignor] [Assignee] further agrees to pay to the Agent a
processing fee in the amount of ___________________ ($_______), as specified in
Section 15.1(a) of the Loan Agreement.
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3. Reallocation of Payments.
Any interest, fees and other payments accrued to the Effective Date
with respect to the Commitment [,] [and] Committed Loans [and L/C Obligations]
shall be for the account of the Assignor. Any interest, fees and other payments
accrued on and after the Effective Date with respect to the Assigned Amount
shall be for the account of the Assignee. Each of the Assignor and the Assignee
agrees that it will hold in trust for the other party any interest, fees and
other amounts which it may receive to which the other party is entitled pursuant
to the preceding sentence and pay to the other party any such amounts which it
may receive promptly upon receipt.
4. Independent Credit Decision
The Assignee (a) acknowledges that it has received a copy of the Loan
Agreement and the Schedules and Exhibits thereto, together with copies of the
most recent financial statements referred to in Section 6.2 of the Loan
Agreement, and such other documents and information as it has deemed appropriate
to make its own credit and legal analysis and decision to enter into this
Assignment and Acceptance; and (b) agrees that it will, independently and
without reliance upon the Assignor, the Agent or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit and legal decisions in taking or not taking
action under the Loan Agreement.
5. Effective Date; Notices.
(a) As between the Assignor and the Assignee, the effective date for
this Assignment and Acceptance (the "Effective Date") shall be the later of: (i)
____________, 199_; and (ii) the first day on which the following conditions
precedent have been satisfied:
(i) this Assignment and Acceptance shall be executed and
delivered by the Assignor and the Assignee;
(ii) the consent of the Agent required for an effective
assignment of the Assigned Amount by the Assignor to
the Assignee under Section 15.1(a) of the Loan
Agreement shall have been duly obtained and shall be
in full force and effect as of the Effective Date;
(iii) the Assignee shall pay to the Assignor all amounts
due to the Assignor under this Assignment and
Acceptance;
(iv) the processing fee referred to in Section 2(b) hereof
and in Section 15.1 of the Loan Agreement in the
amount of _______________________ ($______), shall
have been paid to the Agent; and
(v) the Assignor shall have assigned and the Assignee
shall have assumed a percentage equal to the
Assignee's Percentage Share of the rights and
obligations of the Assignor under the Loan Agreement.
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(b) Promptly following the execution of this Assignment and Acceptance,
the Assignor shall deliver to the Borrower and the Agent for acknowledgment by
the Agent, a Notice of Assignment [substantially] in the form attached hereto as
Schedule 1.
6. Agent.
(a) The Assignee hereby appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under the Loan
Agreement as are delegated to the Agent by the Lenders pursuant to the terms of
the Loan Agreement.
(b) [INCLUDE ONLY IF ASSIGNOR IS AGENT] [ The Assignee shall assume no
duties or obligations held by the Assignor in its capacity as Agent under the
Loan Agreement.]
7. Withholding Tax.
The Assignee (a) represents and warrants to the Lenders, the Agent and
the Borrower that under applicable law and treaties no tax will be required to
be withheld by the Lenders with respect to any payments to be made to the
Assignee hereunder, (b) agrees to furnish (if it is organized under the laws of
any jurisdiction other than the United States or any State thereof) to the Agent
and the Borrower prior to the time that the Agent or the Borrower is required to
make any payment of principal, interest or fees hereunder, duplicate executed
originals of either U.S. Internal Revenue service Form 4224 or U.S. Internal
Revenue Service Form 1001 (wherein the Assignee claims entitlement to the
benefits of a tax treaty that provides for a complete exemption from U.S.
federal income withholding tax on all payments hereunder) and agrees to provide
new Forms 4224 or 1001 upon the expiration of any previously delivered form or
comparable statements in accordance with all applicable U.S. laws and
regulations and amendments thereto, duly executed and completed by the Assignee,
and (c) agrees to comply with all applicable U.S. laws and regulations with
regard to such withholding tax exemption.
8. Representations and Warranties.
(a) The Assignor represents and warrants that (i) it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any lien or other adverse claim; (ii) it is duly
organized and existing and it has the full power and authority to take, and has
taken, all action necessary to execute and deliver this Assignment and
Acceptance and any other documents required or permitted to be executed or
delivered by it in connection with this Assignment and Acceptance and to fulfill
its obligations hereunder; (iii) no notices to, or consents, authorizations or
approvals of, any person are required (other than any already given or obtained)
for its due execution, delivery and performance of this Assignment and
Acceptance, and apart from any agreements or undertakings or filings required by
the Loan Agreement, no further action by, or notice to, or filing with, any
person is required of it for such execution, delivery or performance; and (iv)
this Assignment and Acceptance has been duly executed and delivered by it and
constitutes the legal, valid and binding obligation of the Assignor, enforceable
against the Assignor in accordance with the terms hereof, subject, as to
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enforcement, to bankruptcy, insolvency, moratorium, reorganization and other
laws of general application relating to or affecting creditors' rights and to
general equitable principles.
(b) The Assignor makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Loan Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Loan
Agreement or any other instrument or document furnished pursuant thereto. The
Assignor makes no representation or warranty in connection with, and assumes no
responsibility with respect to, the financial condition of the Borrower, or the
performance or observance by the Borrower, of any of its obligations under the
Loan Agreement or any other instrument or document furnished in connection
therewith.
(c) The Assignee represents and warrants that (i) it is duly organized
and existing and is an Eligible Transferee and it has full power and authority
to take, and has taken, all action necessary to execute and deliver this
Assignment and Acceptance and any other documents required or permitted to be
executed or delivered by it in connection with this Assignment and Acceptance,
and to fulfill its obligations hereunder; (ii) no notices to, or consents,
authorizations or approvals of, any person are required (other than any already
given or obtained) for its due execution, delivery and performance of this
Assignment and Acceptance; and apart from any agreements or undertakings or
filings required by the Loan Agreement, no further action by, or notice to, or
filing with any person is required of it for such execution, delivery or
performance; (iii) this Assignment and Acceptance has been duly executed and
delivered by it and constitutes the legal, valid and binding obligation of the
Assignee, enforceable against the Assignee in accordance with the terms hereof,
subject, as to enforcement, to bankruptcy, insolvency, moratorium,
reorganization and other laws of general application relating to or affecting
creditors' rights and to general equitable principles.
9. Further Assurances.
The Assignor and the Assignee each hereby agrees to execute and deliver
such other instruments, and take such other action, as either party may
reasonably request in connection with the transactions contemplated by this
Assignment and Acceptance, including the delivery of any notices or other
documents or instruments to the Borrower or the Agent, which may be required in
connection with the assignment and assumption contemplated hereby.
10. Miscellaneous.
(a) Any amendment or waiver of any provision of this Assignment and
Acceptance shall be in writing and signed by the parties hereto. No failure or
delay by either party hereto in exercising any right, power or privilege
hereunder shall operate as a waiver thereof and any waiver of any breach of the
provisions of this Assignment and Acceptance shall be without prejudice to any
rights with respect to any other or further breach thereof.
(b) All payments made hereunder shall be made without any set-off or
counterclaim.
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(c) The Assignor and the Assignee shall each pay its own costs and
expenses incurred in connection with the negotiation, preparation, execution and
performance of this Assignment and Acceptance.
(d) This Assignment and Acceptance may be executed in any number of
counterparts, each of which shall be an original, but all of which shall
together constitute one and the same agreement.
(e) THIS ASSIGNMENT AND ACCEPTANCE SHALL BE DEEMED TO HAVE BEEN MADE IN
THE COMMONWEALTH OF MASSACHUSETTS AND SHALL BE GOVERNED BY AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF SUCH STATE, EXCEPT THAT NO DOCTRINE OF CHOICE OF LAW
SHALL BE USED TO APPLY THE LAWS OF ANY OTHER STATE OR JURISDICTION. The Assignor
and Assignee each agrees that, in addition to any other courts that may have
jurisdiction under applicable laws or rules, any action or proceeding to enforce
or arising out of this Assignment and Acceptance may be commenced in the
Superior Court of the Commonwealth of Massachusetts for Suffolk County, or in
the United States District Court for the District of Massachusetts, Boston
Division, and the Assignor and Assignee each consents and submits in advance to
such jurisdiction and agrees that venue will be proper in such courts on any
such matter. Each party to this Assignment and Acceptance hereby irrevocably
waives, to the fullest extent it may effectively do so, the defense of an
inconvenient forum to the maintenance of such action or proceeding.
(f) THE ASSIGNOR AND THE ASSIGNEE EACH HEREBY WAIVES TRIAL BY JURY,
RIGHTS OF SETOFF, AND THE RIGHT TO IMPOSE COUNTERCLAIMS IN ANY LITIGATION IN ANY
COURT WITH RESPECT TO, IN CONNECTION WITH, OR ARISING OUT OF THIS ASSIGNMENT AND
ACCEPTANCE, THE LOAN AGREEMENT, ANY RELATED DOCUMENTS AND AGREEMENTS OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, OR STATEMENTS (WHETHER ORAL OR WRITTEN)
DELIVERED PURSUANT HERETO OR THERETO, OR ANY OTHER CLAIM OR DISPUTE HOWSOEVER
ARISING, BETWEEN THE ASSIGNOR AND THE ASSIGNEE. THE ASSIGNOR AND THE ASSIGNEE
EACH CONFIRMS THAT THE FOREGOING WAIVERS ARE INFORMED AND FREELY MADE.
[Other provisions to be added as may be negotiated between the Assignor
and the Assignee, provided that such provisions are not inconsistent with the
Loan Agreement.]
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IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Assignment and Acceptance to be executed and delivered by their duly authorized
officers as of the date first above written.
[ASSIGNOR]
------------------------------
By:
Title:
Address:
[ASSIGNEE]
------------------------------
By:
Title:
Address:
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SCHEDULE 1
NOTICE OF ASSIGNMENT AND ACCEPTANCE
,_____
________________
________________
________________
________________
[Name and Address of Borrower]
Ladies and Gentlemen:
We refer to the Loan and Security Agreement, dated as of ______________
(as amended, amended and restated, modified, supplemented or renewed from time
to time, the "Loan Agreement"), [among/between] _____________________ [jointly
and severally as borrowers ([collectively,] "Borrower"),] the several financial
institutions from time to time party thereto (collectively, the "Lenders"), and
_______________, as agent for the Lenders (the "Agent"). defined in the Loan
Agreement are used herein as therein defined.
1. We hereby give you notice of, and request your consent to, the
assignment by (the "Assignor") to (the "Assignee") of _____% of the
right, title and interest of the Assignor in and to the Loan Agreement
(including, without limitation, the right, title and interest of the Assignor in
and to the Commitments of the Assignor[,] [and] all outstanding loans made by
the Assignor [and the Assignor's participation in the Letters of Credit])
pursuant to the Assignment and Acceptance Agreement attached hereto (the
"Assignment and Acceptance"). Before giving effect to such assignment, the
Assignor's Commitment is $ [,] [and] the aggregate amount of its
outstanding loans is $ [, and its participation in L/C Obligations
is $ ].
2. The Assignee agrees that, upon receiving the consent of the Agent to
such assignment, the Assignee will be bound by the terms of the Loan Agreement
as fully and to the same extent as if the Assignee were the Lender originally
holding such interest in the Loan Agreement.
3. The following administrative details apply to the Assignee:
(A) Notice Address:
Assignee name:
Address:
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(B) Payment Instructions:
Account No.:
At:
Reference:
Attention:
4. You are entitled to rely upon the representations, warranties and
covenants of each of the Assignor and Assignee contained in the Assignment and
Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused
this Notice of Assignment and Acceptance to be executed by their respective duly
authorized officials, officers or agents as of the date first above mentioned.
Very truly yours,
[NAME OF ASSIGNOR]
By:________________________
Title:
[NAME OF ASSIGNEE]
By:________________________
Title:
ACKNOWLEDGED:
,
a ___________ corporation, as Borrower
By:_______________________________
Title:________________ ___________
104
ACKNOWLEDGED AND ASSIGNMENT
CONSENTED TO:
[AGENT]
By:
-----------------------------------------
Title:
--------------------------------------
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Frank's Nursery & Crafts
(Exhibit B-1)
Business Plan
The Business Plan has been filed with the United States Bankruptcy Court under
seal pursuant to Section 107 of the Bankruptcy Code. However, any official
committee of unsecured creditors or pre-petition creditor that is not a
competitor of Frank's Nursery & Crafts, Inc. is entitled to obtain a copy upon
(i) the execution and delivery of a confidentiality agreement in form and
substance acceptable to Frank's Nursery & Crafts, Inc., or (ii) as may be
ordered by the United States Bankruptcy Court.
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EXHIBIT C-1
COMPLIANCE CERTIFICATE SAMPLE COPY
(Loan and Security Agreement Section 6.2(f))
Date _______________, _____
XXXXX FARGO RETAIL FINANCE, LLC
Xxx Xxxxxx Xxxxx, 00xx Xxxxx
Xxxxxx, XX 00000
RE: Loan and Security Agreement, dated as of ______________ ___, ______
(the "Agreement") by and between XXXXX FARGO RETAIL FINANCE, LLC as
agent ("Agent") for certain financial institutions and
_____________________ ("Borrower").
Dear _______________:
In accordance with Section 6.2(f) of the Agreement, this letter shall serve as
certification to Agent that to the best of my knowledge: (i) all financial
statements have been prepared in accordance with GAAP and presents fairly the
financial condition of Borrower and its Subsidiaries at the close of, and
results of Borrower's and its Subsidiaries' operations and cash flows for, the
periods covered, subject, however to usual year end adjustments, (ii) the
representations and warranties of Borrower set forth in the Agreement and other
Loan Documents are true and correct in all material respects on and as of the
date of this certification, (iii) as demonstrated on Exhibit 1 attached hereto,
Borrower is in compliance with each of its financial covenants set forth in
Sections 7.20 through 7.22 of the Agreement as of the date of this
certification, (iv) there does not exist any condition or event that constitutes
a Default or Event of Default, or of if there is such a Default or Event of
Default, the nature of it and the steps (if any) being taken or contemplated by
Borrower to be taken on account thereof as demonstrated on Exhibit "3" attached
hereto, (v) all rent and additional rent has been paid or if not paid exceptions
to be broken down by store locations, demonstrated as on Exhibit "2" attached
hereto and (vi) all premiums for insurance as required under Section 6.9 [have]
[have not] been paid. Such certification is made as of the fiscal month ending
______________, 199___.
Sincerely,
Chief Financial Xxxxxxx
000
XXXXXXX X-0
XX XXX XXXXXX XXXXXX BANKRUPTCY COURT
FOR THE DISTRICT OF MARYLAND
(Baltimore Division)
In re: * Case Nos. 01-5-2415-JS and
01-5-2416-XX
XXXXX'X NURSERY & CRAFTS, INC., et *
al.,
Debtors. * (Chapter 11)
(Jointly Administered)
* * * * * * * * * * * * * * * * * * * *
INTERIM ORDER PURSUANT TO SECTIONS 105, 107, 362 AND 364 OF THE BANKRUPTCY CODE
AND RULE 4001 OF THE FEDERAL RULES OF BANKRUPTCY PROCEDURE AUTHORIZING DEBTORS
(1) TO OBTAIN INTERIM FINANCING, (2) GRANTING SENIOR LIENS AND SUPERPRIORITY
ADMINISTRATIVE EXPENSE STATUS, (3) MODIFYING THE AUTOMATIC STAY AND (4)
AUTHORIZING DEBTORS TO ENTER INTO AGREEMENTS WITH XXXXX FARGO RETAIL
FINANCE, LLC
THIS MATTER came before the Court for an interim hearing on February
20, 2001, upon the Motion ("Motion"), filed on February 19, 2001 (the "Petition
Date"), of Frank's Nursery & Crafts, Inc., (hereinafter "Frank's") and of FNC
Holdings, Inc. (hereinafter, "FNC" and together with Frank's, the "Debtors")
seeking, inter alia:
a. authority, pursuant to Sections 105, 107, 362 and 364 of the United
States Bankruptcy Code, 11 U.S.C. xx.xx. 101, et seq. (the "Bankruptcy Code")
and Rules 4001 and 9014 of the Federal Rules of Bankruptcy Procedure and any
applicable local bankruptcy rules (collectively the "Bankruptcy Rules"), for the
Debtors to obtain post-petition loans, advances and other financial
accommodations (the "Financing") on an interim and permanent basis from Xxxxx
Fargo Retail Finance, LLC, as agent (the "Agent") for a syndicate of other
financial institutions arranged by Agent and defined as "Lenders" in the
Financing Agreements (as hereinafter defined) in accordance with the formulae
and the terms and conditions set forth in the Financing Agreements;
ENTERED
FEB 20 2001 Filed February 20, 2001
CLERK'S OFFICE 9:55 p.m.
U.S. BANKRUPTCY COURT Xxxxx X. Xxxxxxxxx
DISTRICT OF MARYLAND
BALTIMORE
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b. authority to enter into a certain Loan and Security Agreement dated
February 19, 2001 (the "Loan and Security Agreement") and the related loan,
financing, security agreements and mortgages and fee letter by and among the
Debtors, the Agent and the Lenders named therein (collectively, the "Financing
Agreements") (terms not otherwise defined herein shall have the meanings set
forth in the Financing Agreements);
c. approval of all of the terms and conditions of the Financing
Agreements by and between Debtors and Agent and the Lenders as so ratified,
extended, adopted and amended;
d. modification of the automatic stay;
e. to grant super-priority administrative claim status upon Agent and
Lenders pursuant to Section 364(c)(l) of the Bankruptcy Code as well as senior
and junior liens pursuant to Sections 364(c)(2) and 364(c)(3) of the Bankruptcy
Code;
f. permission to refinance the Pre-Petition Lenders (as that term is
defined herein) subject to a full reservation of rights;
g. authority to enter into an unlimited guaranty and pledge and
security agreement (collectively, the "Parent Financing Documents") by FNC,
pursuant to which FNC will guarantee all of Frank's obligations and liabilities
under the Financing Agreements and xxxxx x Xxxx in all of its assets to Agent
(on behalf of Lenders) to secure such guarantee;
h. to provide for the filing of the Business Plan under seal pursuant
to Section 107 of the Bankruptcy Code; and
i. the setting of a final hearing on the Motion.
IT APPEARING THAT, at or prior to the hearing on the Motion, pursuant
to Bankruptcy Rules 4001(b), (c) and (d), the Debtors have used their best
efforts to provide each of the parties set forth below such notice of the time,
place, and nature of the interim hearing as practicable under the circumstances,
whether by telephone, facsimile, overnight courier or by hand delivery: (1) the
Office of the United States Trustee, (2) the Agent and attorneys for Agent, (3)
all known secured creditors of the Debtors, including the Pre-Petition Lenders
and mortgagees on real property owned by the Debtors, (4) all attorneys who have
filed a request for service of all
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pleadings and notices prior to service of such notice, (5) such taxing
authorities known by the Debtors to have asserted a lien against the Debtors,
(6) Debtors' consolidated thirty (30) largest unsecured creditors, (7) all
lessors of any real property upon which the Debtors conduct their businesses
("Landlords"), (8) all financial institutions at which the Debtors or their
affiliates maintain an account, (9) Hilco Merchant Resources, Inc. ("Hilco"),
and (10) Bankers Trust Company, as Trustee, and it further
APPEARING, that each of the Debtors filed a voluntary petition for
relief under Chapter 11 of the Bankruptcy Code on the Petition Date and is
continuing in the management and possession of its businesses and properties as
a debtor and debtor-in-possession pursuant to Sections 1107 and 1108 of the
Bankruptcy Code; and it further
APPEARING, that, as of the Petition Date, the Debtors each were
indebted to The Chase Manhattan Bank ("Chase") and other lenders (collectively
with Chase, the "Pre-Petition Lenders") on account of advances under a revolving
credit facility (the "Pre-Petition Revolving Credit Facility") established by a
certain Credit Agreement dated as of December 24, 1997 as supplemented and
amended (the "Pre-Petition Credit Agreement") and related documents (the "Chase
Agreements") in the approximate amount of $63 million (the "Chase Claim"),
secured by first priority security interests and liens in substantially all of
the Debtors' pre-petition personal property and first priority security
interests in and mortgages on certain real estate owned by the Debtors
(collectively, the "Chase Pre-Petition Collateral") pursuant to the Chase
Agreements; and it further
APPEARING, that without the financing proposed by the Motion, the
Debtors will not have the funds necessary to pay their payroll, payroll taxes,
inventory suppliers and other critical vendors, overhead and other expenses
necessary for the continued operation of the Debtors' businesses and the
management and preservation of the Debtors' assets and properties; and it
further
APPEARING, that the Debtors have requested that Agent and Lenders make
loans and advances and provide other financial and credit accommodations to the
Debtors in order to
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provide funds to be used by Frank's for its general operating, working capital
and other business purposes in the ordinary course of Frank's business and for
payment of the Chase Claim; and it further
APPEARING, that all such additional loans, advances and other financial
accommodations by Agent and Lenders will benefit the Debtors and their estates
and creditors; and it further
APPEARING, that the ability of the Debtors to continue their businesses
and remain viable entities and thereafter reorganize under Chapter 11 of the
Bankruptcy Code depends upon the Debtors obtaining such financing from Agent and
Lenders; and it further
APPEARING, that Frank's has prepared a Business Plan covering the
period through January 31, 2002 (the "Business Plan"), which has been reviewed
by Frank's and its management and sets forth, among other things, the working
capital and other cash requirements of Frank's for the periods covered thereby,
and has been relied upon by Agent and Lenders in determining to enter into
post-petition financing arrangements with the Debtors; and it further
APPEARING, that Agent and Lenders are willing to make loans and
advances and issue letters of credit and extend other financial and credit
accommodations to the Debtors on a secured and administrative priority basis as
described herein and subject to the terms and conditions contained herein; and
it further
APPEARING, that the relief requested in the Motion is necessary,
essential, and appropriate for the continued operation of the Debtors'
businesses and the management and preservation of the Debtors' assets and
properties and is in the best interests of the Debtors and their estates and
creditors;
NOW, THEREFORE, upon the record set forth by the Debtors, including the
Motion, the other pleadings in this case, the record of the proceedings
heretofore held before this Court with respect to the Motion and upon completion
of the interim hearing and sufficient cause appearing therefor, the Court hereby
finds as follows:
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A. The Debtors are unable to obtain unsecured credit allowable under
Section 503(b)(1) of the Bankruptcy Code, or pursuant to Sections 364(a) and (b)
of the Bankruptcy Code.
B. Despite diligent efforts, the Debtors are unable to procure other
financing in exchange for the grant of an administrative expense priority
pursuant to Bankruptcy Code Section 364(c)(1). As of the date of the Motion,
Debtors have been unable to procure the financing necessary to continue as
viable businesses on terms more favorable than those contained in the Financing
Agreements. Based on the foregoing, it is improbable that the Debtors would be
able to obtain any other financing in an amount sufficient to provide for
Debtors' current and anticipated needs without granting the liens and security
interest hereunder on all or substantially all of the Debtors' assets. Under the
circumstances, no other source of financing exists on terms more favorable than
those offered by Agent and Lenders.
C. The notice of the hearing on the Motion constitutes sufficient and
adequate notice in accordance with Bankruptcy Rules 4001(b), (c) and (d), and
Bankruptcy Code Sections 102(1) and 364(c). No further notice of the relief
sought in the Motion is required.
D. Consideration of this Motion constitutes a "core proceeding" as
defined in 28 U.S.C. ss. ss. 157(b)(2)(A), (D), (G), (K), (M) and (O). This
Court has jurisdiction over this proceeding and the parties and property
affected hereby pursuant to 28 X.X.X.xx. ss. 157 and 1334. Venue is proper in
this District under 28 U.S.C. Sections 1408 and 1409.
E. Good, adequate and sufficient cause has been shown to justify the
granting of the interim relief requested herein, and the immediate entry of this
Interim Order.
F. The relief granted by this Court pursuant to this Interim Order is
necessary to avoid immediate and irreparable harm and injury to Debtors and
their estates.
G. The terms and conditions of the Financing Agreements are fair, just
and reasonable under the circumstances and reflect Debtors' prudent business
judgment consistent with their fiduciary duties, and are supported by reasonably
equivalent value and fair consideration. Based on the record before this Court,
the Financing has been negotiated in good
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112
faith and at arms' length by and between the parties, with all parties
represented by counsel. Accordingly, any credit extended or financing provided
pursuant to this Interim Order shall be deemed to have been extended or provided
in good faith under Section 364(e) of the Bankruptcy Code.
ACCORDINGLY, IT IS HEREBY ORDERED, ADJUDGED AND DECREED, that:
1. The Motion is granted on an interim basis, effective as of the Entry
of this Order. Any objections to the Motion which have not been withdrawn are
hereby overruled. This Order shall be referred to as the "Interim Order."
2. Sufficient and appropriate notice of the Motion and the hearing
requesting the entry of this Interim Order has been provided.
3. Pending final hearing on this Court's approval of the Financing
Agreements and entry of a final order (the "Final Order"), the Debtors are
hereby authorized and empowered to immediately borrow and obtain other financial
accommodations from Agent and Lenders pursuant to the terms of this Interim
Order and the terms and conditions set forth in the Financing Agreements, in
such amount or amounts as may be made available to the Debtors by Agent and
Lenders up to the aggregate amount of $75,000,000 in Advances (including any
letters of credit) and including, without limitation, an amount sufficient to
pay the Chase Claim in full and cash-collateralize any outstanding letters of
credit issued under the Chase Agreements including any interest, fees, costs and
expenses accruing under the Chase Agreements through the date of payment in
accordance with the terms and conditions set forth in this Interim Order.
4. Debtors shall use the proceeds of the loans and advances made by
Agent and Lenders to Debtors pursuant to this Interim Order and the Financing
Agreements, only for the payment of employee salaries, payroll, taxes, the
purchase of inventory and other general operating and working capital purposes
in the ordinary course of Debtors' businesses in accordance with the Business
Plan and for payment of the Chase Claim.
5. The Debtors are authorized and directed to enter into, execute,
deliver, perform and comply and continue to perform and comply with all of the
terms, conditions and covenants
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of the Financing Agreements including, without limitation, the Fee Letter, as
may be amended from time to time by agreement of the Debtors and Agent (on
behalf of Lenders) and such terms, conditions and covenants shall be sufficient
and conclusive evidence of the borrowing arrangements between Debtors and Agent
(on behalf of Lenders) and of the Debtors' agreement to and adoption of the
terms, conditions and covenants of the Financing Agreements for all purposes,
including, without limitation, the payment of all principal, interest, and fees
and expenses, all as more fully set forth in the Financing Agreements. The
executed Financing Agreements shall constitute valid and binding obligations of
the Debtors enforceable in accordance with their respective terms.
6. As security for the Obligations, the Agent and the Lenders shall
have and are hereby granted (effective upon Entry of this Order and without the
necessity of the recordation of mortgages, security agreements, pledge
agreements, financing statements or otherwise) valid and perfected security
interests in, and liens and mortgages (the "Liens"), upon all present and
after-acquired property of the Debtors of any nature whatsoever, whether real or
personal, including, without limitation, all cash contained in any account
maintained by Debtors, accounts, accounts receivable, inventory, equipment,
vehicles, furniture, fixtures, intellectual property, investment property,
intercompany claims, contract rights, general intangibles, any and all amounts
due from Hilco, including the so-called "Guaranteed Amount" and any amounts
payable under letters of credit, and the proceeds of all causes of action
(subject to the following clause (b)) (collectively with all proceeds and
products of any or all of the foregoing, including proceeds of sale of real
property, the "Collateral"):
(a) pursuant to Section 364(c)(2) of the Bankruptcy Code, a
first priority, perfected Lien upon all of the Debtors' right, title and
interest in, to and under all Collateral that is not otherwise encumbered by a
valid security interest or lien on the Petition Date including, without
limitation, upon the Core Properties appearing on the attached Exhibit A,
Leasehold Interests, and property in which the Pre-Petition Lenders held or
asserted a first priority security interest as of the Petition Date; and
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(b) pursuant to Section 364(c)(3) of the Bankruptcy Code, a
second priority, junior, perfected Lien upon all of the Debtors' right, title
and interest in, to and under all Collateral that is subject to a valid security
interest or lien in existence as of the Petition Date including, without
limitation, upon the real property owned by the Debtors appearing on the
attached Exhibit B (the "Second Priority Real Estate").
Notwithstanding anything to the contrary contained herein, the
Agent and the Lenders shall not have or be granted a lien upon actions commenced
pursuant to Bankruptcy Code Sections 544, 547, 548 and 550, all of which such
actions and recoveries shall be preserved for the benefit of the Debtors'
Estates.
7. Agent and Lenders shall have all rights and remedies with respect to
the Debtors, the Obligations and the Collateral as are set forth in the
Financing Agreements and this Interim Order. All obligations of the Debtors to
the Agent under the Financing Agreements and this Interim Order shall constitute
"Senior Debt" within the meaning of and as defined by that certain Indenture
dated as of February 26, 1998 among the Debtors and Bankers Trust Company, as
Trustee.
8. At Agent's discretion, the Financing Agreements shall be subject to
termination as to any future loans, advances and other credit accommodations to
be made or provided by Agent and Lenders to Debtors upon the occurrence of any
Event of Default (as defined in the Financing Agreements) or the termination of
Debtors' rights to borrow or obtain other credit accommodations from Agent and
Lenders pursuant to the Financing Agreements or if sooner provided by an order
of this Court.
9. The Debtors have provided the Court and the Agent and Lenders with
the Business Plan upon which the Agent and Lenders are relying in agreeing to
enter into the Financing Agreements. The Debtors shall provide Agent and Lenders
with additional and/or updated Business Plans in such form and such detail as
may be reasonably requested by Agent. The Business Plan shall be filed with the
Court under seal pursuant to Section 107 of the Bankruptcy Code; provided,
however, that any official committee of unsecured creditors or
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pre-petition creditor that is not a competitor of the Debtors shall be entitled
to obtain a copy of the Business Plan upon (i) the execution and delivery of a
confidentiality agreement in form and substance acceptable to the Debtors, or
(ii) as may be ordered by the Court.
10. Agent may, in its discretion, apply the proceeds of the Collateral
or any other amounts received by Agent in respect of the Obligations, in such
order or manner as Agent may deem appropriate.
11. This Interim Order shall be sufficient and conclusive evidence of
the priority, perfection and validity of all of the security interests and
mortgages in and liens upon the property of the Debtors' estates granted to
Agent (on behalf of Lenders) as set forth herein and in the Financing
Agreements, without the necessity of filing, recording or serving any financing
statements, leasehold mortgages, mortgages, deeds of trust, or other documents
which may otherwise be required under federal or state law in any jurisdiction
or the taking of any other action to validate or perfect the security interests
and liens granted to Agent (on behalf of Lenders) in this Interim Order and the
Financing Agreements. If the Agent shall, in its discretion, elect for any
reason to file any such financing statements, leasehold mortgages, mortgages,
deeds of trust, or other documents with respect to such security interests and
liens, the Debtors are authorized and directed to execute, or cause to be
executed, all such financing statements, mortgages or other documents upon
Agent's request and the filing, recording or service thereof (as the case may
be) of such financing statements, mortgages or similar documents shall be deemed
to have been made at the time of and on the Petition Date. The Agent may, in its
discretion, file a certified copy of this Interim Order in any filing or
recording office in any county or other jurisdiction in which the Debtors have
an interest in real or personal property and, in such event, the subject filing
or recording officer is authorized and directed to file or record such certified
copy of this Interim Order. The liens, security interests and mortgages granted
Agent hereby shall be deemed valid and perfected notwithstanding the
requirements of non-bankruptcy law with respect to perfection.
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12. Pursuant to Sections 363(b)(1) and 364(c)(2) of the Bankruptcy
Code, any provisions in any of the Leasehold Interests or Permitted Mortgages
that require the consent or approval of one or more of the Landlords or
mortgagees in order for the Debtors to pledge or mortgage such Leasehold
Interests or mortgage interests in accordance with the Financing Agreements are
and shall be deemed to be inconsistent with the provisions of the Bankruptcy
Code and are and shall have no force and effect with respect to the transactions
granting the Agent an interest in Leasehold Interests and in the Second Priority
Real Estate in accordance with the terms of the Financing Agreements.
13. The Debtors are hereby authorized and directed to perform all acts,
and execute and comply with the terms of such other documents, including,
without limitation the Leasehold Mortgages as the Agent may reasonably require
as evidence of and for the protection of the Obligations and the Collateral or
which may be otherwise deemed necessary by Agent to effectuate the terms and
conditions of this Interim Order and the Financing Agreements. The Debtors are
authorized to pay reasonable costs and expenses related to the foregoing.
14. The Debtors are authorized and directed to: (a) in accordance with
the DDA Notification, deposit or cause to be deposited into the Concentration
Account established for the benefit of the Agent and Lenders in accordance with
the Financing Agreements, all collections and all other proceeds of the
Collateral, including any sums payable to Debtors under the Hilco Agreement and
any sums payable by credit card processors and any other payments received from
their account debtors and other parties, now or hereafter obligated to pay
Debtors for services provided by Debtors or for inventory or other property of
the Debtors' estates, including without limitation, any amounts received on
account of any sale or liquidation of any of the Debtors' inventory; and Agent
is authorized to apply such payments and proceeds received by Agent (on behalf
of Lenders) to the Obligations as set forth in this Interim Order and the
Financing Agreements; (b) enter into similar arrangements with such other banks
as are designated for such purposes pursuant to the Financing Agreements; (c)
instruct, to the extent required by the Financing Agreements, all account
debtors and other parties now or hereafter
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obligated to pay the Debtors for goods and services provided by Debtors to them
or for inventory or other property of Debtors' estates in which Agent has a
security interest or lien to remit such payments to the Concentration Account
or, at Agent's election, directly to Agent; and (d) enter into such agreements
as may be necessary to effectuate the foregoing. All financial institutions at
which the Debtors maintain depository accounts shall remit funds to the
Concentration Account each business day in accordance with the DDA Notification
delivered by Agent.
15. The Debtors are authorized and directed, without further order of
this Court, to pay or reimburse Agent and Lenders for all present and future
reasonable costs and expenses, including attorneys' fees and legal expenses,
paid or incurred by Agent or Lenders to effectuate the financing transactions as
provided in this Interim Order and the Financing Agreements, all of which unpaid
fees, commissions, costs and expenses shall be and are included as part of the
Obligations, and shall be secured by the Collateral.
16. The automatic stay provisions of Section 362 of the Bankruptcy Code
are vacated and modified to the extent necessary to permit Agent and Lenders to
implement the terms and conditions of the Financing Agreements and the
provisions of this Interim Order.
17. The Debtors are authorized and directed to deliver to Agent all of
the documentation and other information which Debtors are required to provide to
Agent under the Financing Agreements and this Interim Order, including, without
limitation, such reports, forecasts and other documentation required by Section
6.2 of the Loan and Security Agreement.
18. For all of the Obligations, and in addition to the foregoing and
subject only to the Carve-Out, Agent is granted an allowed super-priority
administrative claim in accordance with Section 364(c)(1) of the Bankruptcy Code
having priority in right of payment over any and all other obligations,
liabilities and indebtedness of the Debtors, now in existence or hereafter
incurred by Debtors and over any and all administrative expenses or priority
claims of the kinds specified in, or ordered pursuant to any provision of the
Bankruptcy Code, including Sections 105, 326, 328, 330, 331, 365, 503(b),
506(c), 507(a), 507(b), 546(c) or 726 and over all rights of set-off recognized
under the Bankruptcy Code.
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19. Notwithstanding anything to the contrary contained in this Order,
Agent's and Lenders liens, security interests and super-priority administrative
expense claim shall be subject and subordinate only to (i) amounts payable
pursuant to 28 U.S.C. ss. 1930(a)(6) and any fees payable to the clerk of the
Court (collectively, the "UST/Clerk Fees"); and (ii) allowed, unpaid fees and
expenses incurred during the time these Debtors are in Chapter 11 to attorneys,
accountants, and other professionals retained in the Bankruptcy Cases pursuant
to Sections 327 and 1103 of the Bankruptcy Code ("Priority Professional
Expenses"), but the amount entitled to priority under this sub-clause (ii) shall
not exceed $2,000,000 outstanding in the aggregate at any time (the
"Professional Expense Cap," and together with the UST/Clerk Fees, the "Carve
Out"); provided, however, that: (A) after Agent has provided fax or
hand-delivered notice to the Debtors of the occurrence of an Event of Default
under the Financing Agreements or a default by Debtors under this Interim Order
or the Final Order, any payments actually made to such professionals after the
occurrence and during such continuance of such Event of Default or default
hereunder pursuant to Sections 330 and 331 of the Bankruptcy Code or otherwise,
shall reduce the Professional Expense Cap on a dollar-for-dollar basis; and (B)
for the avoidance of doubt, any payment actually made to such professionals
prior to the notice described in clause (A) above may be retained by such
professionals and shall not reduce the Professional Expense Cap. The Carve Out
shall be free and clear of all liens, claims and encumbrances granted hereunder
and shall be subject only to the allowed claims of counsel to Debtors, counsel
to any committee of creditors appointed pursuant to Section 1102 and other court
appointed professionals ("Professionals") for such fees and expenses as may be
awarded by this Court under Sections 330 and 331 of the Code, provided, however,
the Carve Out cannot be used for the payment or reimbursement of any fees or
disbursements of Debtors or any committee of creditors incurred in connection
with the assertion or joinder in any claim, counter-claim, action, proceeding,
application, motion, objection, defense or other contested matter, the purpose
of which is to seek any order, judgment, determination or similar relief: (A)
invalidating, setting aside, avoiding, subordinating, in whole or in part, the
Obligations or Agent's and Lenders' liens
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and security interests in any of the Collateral; or (B) preventing, hindering or
delaying, whether directly or indirectly, Agent's or Lenders' assertion or
enforcement of its liens or realization upon any Collateral. Except as provided
for in this paragraph, no other claim or right of set-off, including, without
limitation any post-petition super-priority administrative claims granted by
order of the Bankruptcy Court, shall be granted or allowed priority superior to
or pari passu with the priority of the claims of Agent granted by this Interim
Order while any of the Obligations remain outstanding.
20. The Debtors shall not sell, transfer, lease, encumber or otherwise
dispose of any portion of the Collateral without the prior written consent of
Agent (and no such consent shall be implied, from any other action, inaction or
acquiescence by Agent), except for sales of the Debtors' Inventory in the
ordinary course of their businesses, or any storage or any distribution
warehouse transfers or inter-store transfers of inventory, or as may be
permitted by the Financing Agreements or otherwise consented to by Agent.
21. The Debtors' having waived and relinquished all rights under and
pursuant to Bankruptcy Code Section 506(c), no costs or expenses of
administration which have or may be incurred (by the Debtors or any other party)
in the Debtors' Chapter 11 cases, or in any conversion of the Chapter 11 cases,
pursuant to Section 506(c) of the Bankruptcy Code, shall be charged against
Agent or the Lenders, their claims, or the Collateral, without the prior written
consent of Agent and no such consent shall be implied from any other action,
inaction or acquiescence by Agent and no obligations incurred or payments or
other transfers made by or on behalf of the Debtors, including, without
limitation, funding of the payment of the Chase Claim, shall be avoidable or
recoverable from Agent and Lenders under Sections 542, 544, 547, 548, 549, 550,
553 or any other provision of the Bankruptcy Code; provided, however, that
nothing contained in this Interim Order or in the Financing Agreements shall
constitute a release or waiver of any claims or causes of action that the
Debtors or their estates have or may have against the Pre-Petition Lenders or
the liens and claims relating to the Chase Agreements.
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22. An event of default under this Interim Order ("Event of Default")
shall include an Event of Default under any of the Financing Agreements,
including, without limitation, those Events of Default set forth in Section 8 of
the Loan Agreement. Unless such Event of Default is specifically waived in
writing by Agent, which waiver shall not be implied from any other action,
inaction or acquiescence by Agent, upon or after the occurrence of an Event of
Default and at all times thereafter, in accordance with the terms of the
Financing Agreements, Agent shall have no obligation to lend or advance any
additional funds to Debtors, or provide other financial accommodations to
Debtors, and after giving five (5) business days notice in writing, served by
overnight delivery service or fax upon Debtors, Debtors' counsel, counsel to any
committee of creditors, a trustee if appointed and the United States Trustee:
without need for further order or action of the Bankruptcy Court, (1) all of the
Obligations shall become immediately due and payable, and (2) so long as no
proceeding raising a good xxxxx xxxx fide dispute as to whether an Event of
Default has occurred which is filed within such five day period, is pending as
to whether or not an Event of Default has occurred, Agent (on behalf of Lenders)
shall be relieved from the automatic stay provided for pursuant to Section 362
of the Bankruptcy Code and any other restrictions on the enforcement of its
Liens and security interests or any other rights under the Financing Agreements
granted to or for the benefit of Agent and Lenders or pursuant to this Interim
Order and Agent, in its discretion, may take any and all actions or remedies
which Agent may deem appropriate to proceed against and realize upon the
Collateral and any other property of the Debtors' estates upon which it has been
or may hereafter be granted Liens and security interests to obtain repayment of
the Obligations; in any proceeding regarding whether or not an Event of Default
has occurred, the burden of proof shall be on the Agent (on behalf of the
Lenders). Notwithstanding the terms of Section 8.2, 8.6, 8.10 or 8.21 of the
Loan Agreement, the Agent (on behalf of the Lenders) shall not be entitled to
the relief referred to in clause (2) of the proceeding sentence unless the Event
of Default of any such Section is material. Once the Agent has provided notice
of an Event of Default, a party seeking to challenge such notice shall file such
challenge with the Court as soon as practicable, but in no
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event later then five (5) business days after such notice. After such challenge
has been filed a hearing thereon shall be scheduled to occur within (2) business
days.
23. Until all of the Obligations shall have been indefeasibly paid and
satisfied in full and without further order of the Court: (a) no other party
shall foreclose or otherwise seek to enforce any lien or other right such other
party may have in and to any property of the Debtors' estates upon which Agent
holds or asserts a lien or security interest, provided, however, that any other
party may bring any motion or pleading before the Court to seek any such relief;
(b) upon and after the occurrence of an Event of Default, Agent, in its
discretion, in connection with a liquidation of any of the Collateral may use
any real property, equipment, leases, trademarks, trade names, copyrights,
licenses, patents or any other assets of Debtors which are owned by or subject
to a lien of any third party and which are used by Debtors in their businesses;
and (c) Agent, in its discretion, shall be authorized to enter, occupy and use
any premises subject to any Leasehold Interest or Permitted Mortgage
("Leasehold"), and the furniture, fixtures and equipment located therein, for
the purpose of conducting inventory liquidation sales, provided, that, (i) Agent
shall pay rent at the rate provided in any applicable lease which may include
charges for taxes, insurance, common area charges and utilities, but shall not
include the amount of any unpaid rent or other charges due the Landlord as of
the date thereof of the monthly rent and other charges including real estate
taxes, insurance, common area charges and utilities, in an amount to be
calculated on a pro-rated, per diem basis for each day that Agent actually
occupies and uses any Leasehold and (ii) on or before thirty (30) days after the
Closing Date (as defined in the Financing Agreements), the Debtors shall use
their best efforts to obtain from landlords or mortgagees executed copies of
access agreements in form and scope acceptable to Agent and relating to
locations identified by Agent. Agent is hereby authorized to have the same
access that the Debtors have and enjoy with respect to the Leaseholds.
24. Upon the payment in full of all Obligations and termination of the
rights and obligations arising under the Financing Agreements and this Interim
Order, Agent and Lenders on the one hand and Debtors on the other shall each be
released from any and all obligations,
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liabilities, actions, duties, responsibilities and causes of action with respect
to one another pursuant to the terms of this Interim Order and/or the Financing
Agreements.
25. All advances and other financial accommodations under the Financing
Agreements after the Petition Date are made in reliance on this Interim Order
and there shall not at any time be entered in Debtors' Chapter 11 cases any
order which (a) authorizes the use of cash collateral of Debtors in which Agent
and Lenders have an interest, or the sale, lease, or other disposition of
property of Debtors' estates in which the Agent and Lenders have a lien or
security interest, or (b) under Section 364 of the Bankruptcy Code authorizing
the obtaining of credit or the incurring of indebtedness secured by any lien
equal or senior to any lien of Agent and Lenders, or (c) which has
administrative claim status which is equal to or senior to that granted to Agent
and Lenders herein; unless, Agent, prior to entry of such an order, shall have
given its express prior written consent (and no such consent shall be implied,
from any other action, inaction or acquiescence by Agent), or unless the
Obligations, without limitation, shall first be indefeasibly paid in full,
including all debts and obligations of Debtors to Agent and Lenders which arise
or result from the obligations, loans, security interests and liens acknowledged
and authorized herein; provided, however, that nothing contained in this
paragraph 25 shall alter or effect the priority of the Priority Professional
Expenses.
26. The security interests and Liens granted to or for the benefit of
Agent and Lenders hereunder and the rights of Agent and Lenders pursuant to this
Interim Order shall not be altered, modified, extended, impaired or affected by
any plan of reorganization of the Debtors and shall continue after confirmation
and consummation of any plan until Agent and Lenders are indefeasibly paid in
full.
27. In making decisions to make advances to the Debtors under the
Financing Agreements or to collect any of the Obligations of Debtors, Agent and
Lenders shall not be deemed to be in control of the operations of Debtors or to
be acting as a "responsible person" or "owner" or "operator" with respect to the
operation or management of the Debtors including, without limitation, with
respect to the Collateral and the real property subject to the Agent's liens
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or Leasehold Interests (as such terms, or any similar terms, are used in the
United States Comprehensive, Environmental Response, Compensation and Liability
Act, as amended or any similar or other federal or state statute).
28. The provisions of this Interim Order shall inure to the benefit of
the Debtors, the Agent and the Lenders and shall be binding upon, among other
parties, the Debtors, Agent, the Lenders, the Pre-Petition Lenders, Bankers
Trust Company, Hilco and their respective successors and assigns including any
Chapter 11 Trustee, Chapter 7 Trustee, any committee, or other fiduciary
hereafter appointed as a legal representative of the Debtors or with respect to
property of the estates of Debtors and shall also be binding upon all creditors
of Debtors and other parties in interest, including, without limitation, all
Landlords and holders of Permitted Mortgages.
29. If any or all of the provisions of this Interim Order are hereafter
modified, vacated or stayed, such modification, vacation or stay shall not
affect (a) the validity of any obligation, indebtedness or liability incurred by
Debtors to Agent and Lenders prior to the effective date of such modification,
vacation or stay, and any security interests, liens or priorities granted to or
rights conferred upon the Agent and Lenders hereunder or (b) the validity or
enforceability of any security interest, Lien, or priority authorized or created
hereunder or pursuant to the Financing Agreements. Notwithstanding any such
modification, vacation or stay, any indebtedness, obligations or liabilities
incurred by Debtors to Agent and Lenders prior to the effective date of such
modification, vacation or stay shall be governed in all respects by the original
provisions of this Interim Order, and Agent and Lenders shall be entitled to all
the rights, remedies, privileges and benefits granted herein and pursuant to the
Financing Agreements with respect to all such indebtedness, obligations or
liabilities. For purposes of Section 364(e) of the Bankruptcy Code, "appeal"
shall include any proceeding for reconsideration, rehearing or reevaluation of
this Interim Order by this court or any other tribunal. The obligations and
indebtedness of Debtors to Agent and Lenders under this Interim Order and the
Financing Agreements shall not be discharged by the entry of an order confirming
any plan of
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reorganization in Debtors' bankruptcy cases or under the Bankruptcy Code, unless
and until the Obligations are paid in full prior to or concurrently with the
"effective date" of any such plan.
30. The Debtors irrevocably waive any right to seek any modifications
or extensions of this Interim Order without the prior written consent of Agent,
and no such consent shall be implied by any other action, inaction or
acquiescence by Agent.
31. To the extent the terms and conditions of the Financing Agreements
are in conflict with the terms and conditions of this Interim Order, the terms
and conditions of this Interim Order shall control.
32. The terms of the Financing Agreements and the terms of this Interim
Order have been negotiated in good faith and at arm's length between Debtors,
Agent and the Lenders, and any loans, advances or other financial and credit
accommodations which are made or caused to be made to Debtors by Agent or the
Lenders pursuant to the Financing Agreements are deemed to have been extended in
good faith, as the term "good faith" is used in Section 364(e) of the Bankruptcy
Code, and shall be entitled to the full protection of Section 364(e) of the
Bankruptcy Code.
33. No later than twenty-four (24) hours following the Entry of this
Interim Order, the Pre-Petition Lenders shall provide the Debtors and Agent with
a "Pay-Off Letter" substantially in the form attached hereto which sets forth
the balance of the Chase Claim as of the date of such Pay-Off Letter.
34. The Debtors shall utilize the proceeds of the initial borrowing
under the Financing Agreements to retire (or cash-collateralize) the Debtors'
obligations to the Pre-Petition Lenders. Upon the receipt by the Pre-Petition
Lenders of the proceeds of the wire transfer of all amounts owed to the
Pre-Petition Lenders as set forth in the Pay-Off Letter (the "Pay-Off"):
a. Any lien or security interest of the Pre-Petition Lenders
on any asset of the Debtors shall be terminated and extinguished and of no force
or effect whatsoever;
x. Xxxxx as Collateral Agent (as defined in the Chase
Agreements) shall, at the request and expense of the Debtors, promptly after
receipt of the Pay-Off, deliver to Agent
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the stock certificates and promissory notes issued or pledged under the Chase
Agreements, execute and deliver any Uniform Commercial Code termination
statements, lien, releases, mortgage releases, re-assignments of trademarks,
discharges of security interests, and other similar discharge or release
documents (and if applicable, in recordable form) as are reasonably necessary to
release, as of record, the security interests, financing statements, and all
other notices of security interests and liens previously field by Chase, as the
Collateral Agent, with respect to the obligations under the Chase Agreements.
x. Xxxxx, as Administrative Agent (as defined in the Chase
Agreements), will, as promptly as practicable upon receipt of the Pay-Off, use
its commercially reasonable effort to return to the Debtors the originals of any
and all promissory notes and stock certificates, if any, previously delivered to
Chase, as Administrative Agent, in connection with the Chase Agreements, duly
marked "paid in full" or "cancelled" (or with written authorizations to so xxxx
such documents after the Pay-Off actually occurs) as may be appropriate.
35. Nothing contained herein shall be deemed to terminate or otherwise
impair (i) those expense reimbursement, indemnification or other provisions of
the Chase Agreements which by their terms survive the repayment of the
obligations due thereunder, and the obligations of the Debtors with respect to
any such provision shall constitute a super-priority administrative claim,
subject only to the super-priority claims granted to Agent and Lenders and to
the Carve-Out, or (ii) any other claim or cause of action of Chase or the
Pre-Petition Lenders against the Debtors.
36. The payment to the Pre-Petition Lenders, as provided in paragraph
34, shall be without prejudice to the right of Debtors or any Official
Creditors' Committee appointed in these proceedings (the "Creditors' Committee")
or any other appropriate party with standing to seek to (i) disallow or
challenge the amount of the Pre-Petition Lenders' claims, (ii) avoid any
security or collateral interest in the assets of the Debtors claimed by the
Pre-Petition Lenders, (iii) otherwise challenge the validity, priority or extent
of the Pre-Petition Lenders' liens and/or claims, (iv) disgorge all or any part
of any payment or transfer made by the Debtors to the Pre-Petition
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Lenders, or (v) obtain any other relief, legal or equitable, against the
Pre-Petition Lenders or otherwise recover from the Pre-Petition Lenders on
account of their relationship with the Debtors prior to the commencement of
these proceedings; provided, however, any such rights shall be as against
Pre-Petition Lenders only and not against Agent or the Lenders and the
Obligations under the Financing Agreements shall not be subject to any such
disallowance, avoidance, disgorgement or other relief on account of Debtors'
payment of the Pre-Petition Lenders' claims; provided, further, however, that in
the event that any or all payments to the Pre-Petition Lenders are disgorged,
such disgorgement shall be without prejudice to any rights, claim and
obligations of the Pre-Petition Lenders and any other party in interest under
that certain Indenture dated as of February 26, 1998 among the Debtors and
Bankers Trust Company, as Trustee, including, without limitation, the
consequences of any subordination provisions. Any such proceeding shall set
forth with reasonable particularity the basis and the reason why the
Pre-Petition Lenders' claim should not have been paid in full in accordance with
this Interim Order.
37. Notwithstanding any provision of the Agency Agreement, dated as of
December 1, 2000 (the "Agency Agreement"), between Hilco, as Agent, and Frank's,
as Merchant: (a) Hilco shall not be free to pursue foreclosure and other
remedies with respect to the Merchandise and the Proceeds (each as defined in
the Agency Agreement) absent relief from the automatic stay under Section 362 of
the Bankruptcy Code; and (b) the Debtors, as debtors in possession, shall be
entitled (under Sections 105 and 362 of the Bankruptcy Code or otherwise) to
object to any request for such relief or to seek to stay, enjoin or otherwise
delay or impede Hilco's remedies against the Merchandise and the Proceeds,
including, without limitation, Hilco's right to foreclose.
38. The Debtors shall, on or before February 21, 2001, serve by (x)
overnight courier copies of a notice of approval of this Interim Order, together
with a copy of this Interim Order, to (i) the parties having been given notice
of the emergency hearing, (ii) any other party which has filed a request for
special notice with this Court and served such request on Debtors' counsel prior
to such date, (iii) counsel for any statutory committee; and (iv) to all
Landlords; provided,
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however, that counsel to the Creditors' Committee shall be served as soon as
practicable after formation and retention and any party requesting notice shall
be served as soon as practicable after receipt by Debtors' counsel of such
request. The notice of approval of this Interim Order shall state that any party
in interest objecting to the approval of the proposed Final Order shall file
written objections with the United States Bankruptcy Court Clerk for the
District of Maryland no later than March 2, 2001, which objections shall be
served so that the same are received on or before noon of such date by the
United States Trustee and the following counsel:
Counsel to Debtors: Xxxx X. Xxxxxx
Xxxxx X. Xx
Xxxxxxx Xxxx & Xxxxxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
and
Xxxxxx Xxxxxxxx
Xxxxxxxxx, Xxxxxx & Xxxxxxx LLP
Seven Saint Xxxx Street
Baltimore, MD 21202-1626
Phone: (000) 000-0000
Fax: (000) 000-0000
Counsel to Agent: Xxxxx X. Xxxxxxxxx
Xxxxxxx X. Xxxxxxx
Xxxx X. Xxxxxxx
Xxxxxx, Xxxx & Xxxxxxx
Exchange Place
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
and
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Xxxxx X. Xxxxxxx
Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx, LLP
000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Phone: (000) 000-0000
Fax: (000) 000-0000
Counsel to Pre-Petition Lenders: Xxxxxx XxXxxxxx
Xxxx X. Xxxxxxxxx
White & Case LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Counsel to Provisional Committee:
Xxxx X. Xxxx
Xxxxxxx Xxxxxxxx
Xxxxxxx, Xxxx & Guinot
Suite 2000
00 X. Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
39. FNC is authorized to execute and deliver the Parent Financing
Documents and thereby guarantee all of the Frank's Obligations under the
Financing Agreements. FNC's guarantee shall be secured by a lien on and security
interest in all of FNC's assets and properties (including, without limitation,
the capital stock of Frank's owned by FNC) in favor of the Agent on behalf of
the Lenders.
40. Each of the Debtors is authorized to perform all acts, to make,
execute and deliver all instruments and documents, to retain all professionals,
and to pay fees, expenses and all other amounts including, without limitation,
payment of all title insurance premiums, title search costs and filing and
recording fees required in connection with the Financing Agreements and the sale
of real estate assets, and disbursements incurred prior to the Petition Date
which may be required or necessary for their performance under the Financing
Agreements, FNC Financing Documents and the related documents. Notwithstanding
anything to the contrary contained in this Order,
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legal descriptions may be attached to this Interim Order in the event the
Debtors or Agent or Lenders desire to record this Interim Order in connection
with any transactions contemplated by the Financing Agreements. Any such
recordation shall be exempt from any filing and recording fees, mortgage
recording taxes, documentary stamp taxes, intangible taxes and similar taxes
imposed upon such financing or recordation under any federal, state or local
law.
41. Paragraph 17 of the Bridge Stipulation and Order (I) Authorizing
and Restricting Use of Cash Collateral Pursuant to 11 U.S.C.ss.363 and
Bankruptcy Rule 4001(b); and (II) Granting Adequate Protection Pursuant to 11
U.S.C.ss.ss.361 and 363 is hereby incorporated by reference herein in its
entirety.
42. The final hearing to approve the proposed Final Order shall be held
on March 6, 2001 at 10:00 a.m.
JFS
February 20, 0000 /x/ Xxxxx X. Xxxxxxxxx
-----------------------------------
XXXXXX XXXXXX BANKRUPTCY JUDGE
cc: Xxxx X. Xxxxxxxx, Esq.
Xxxxxx X. Xxxxxxxx, Esq.
Xxxxxxxxx, Xxxxxx & Preston, L.L.P.
0 Xxxxx Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, XX 00000-0000
Xxxx Xxxxxx, Esq.
Xxxxxxxxx X.X. Xxxxxxxx, Esq.
Xxxxxx Xxxxxxxxxx, Esq.
Xxxxxxx Xxxx & Xxxxxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Xxxxx Xxxxx, Esq.
Xxxx Xxxx, Esq.
Office of the United States Trustee
000 Xxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Xxxxx X. Xxxxxxx
Xxxxxxx Xxxxx Xxxxxxx & Ingersoll, LLP
000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
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EXHIBIT A
SCHEDULE A-1
CORE PROPERTIES*
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STORE LOCATION
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5 DEARBORN HTS., MI
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26 COLUMBUS, OH
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27 COLUMBUS, OH
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28 FT. XXXXX, IN
------------ -------------------------------------------------------------------
29 FT. XXXXX, IN
------------ -------------------------------------------------------------------
30 UTICA, MI
------------ -------------------------------------------------------------------
45 BLOOMINGTON, MN
------------ -------------------------------------------------------------------
58 COLUMBUS, OH
------------ -------------------------------------------------------------------
81 GRANDVILLE, MI
------------ -------------------------------------------------------------------
00 XXXXXX, XXXX., XX
------------ -------------------------------------------------------------------
85 PORTAGE, MI
------------ -------------------------------------------------------------------
86 FLORENCE, KY
------------ -------------------------------------------------------------------
00 XXXXXXXXX XXXX, XX
------------ -------------------------------------------------------------------
88 WAUKEGAN, IL
------------ -------------------------------------------------------------------
90 MERRILLVILLE, IN
------------ -------------------------------------------------------------------
92/401 CLINTON TWP. MI
------------ -------------------------------------------------------------------
93 LANSING, MI
------------ -------------------------------------------------------------------
------------------
* Street Addresses are shown on Schedule X-0
000
00 TOLEDO, OH
------------ -------------------------------------------------------------------
00 XX XXXXXXX, XX
------------ -------------------------------------------------------------------
000 XXXXXXXXXXXX, XX
------------ -------------------------------------------------------------------
000 XXXX XXXXXX, XX
------------ -------------------------------------------------------------------
000 XXXXXX XXXXX, XX
------------ -------------------------------------------------------------------
000 XXXXX, XX
------------ -------------------------------------------------------------------
000 XXXXXXXXXX, XX
------------ -------------------------------------------------------------------
000 XXXXXXXXXX, XX
------------ -------------------------------------------------------------------
112 BLAINE, MN
------------ -------------------------------------------------------------------
000 XXX XXXX XXXXXX, XX
------------ -------------------------------------------------------------------
000 XXXXX, XX
------------ -------------------------------------------------------------------
118 FLINT, MI
------------ -------------------------------------------------------------------
119 LARGO, FL
------------ -------------------------------------------------------------------
000 XXXXXXX, XX
------------ -------------------------------------------------------------------
000 XXXXXXX XXXX, XX
------------ -------------------------------------------------------------------
000 XXXXXX, XX
------------ -------------------------------------------------------------------
156 MICHIGAN CITY, IN
------------ -------------------------------------------------------------------
000 XXXXXXXXX, XX
------------ -------------------------------------------------------------------
000 XXXXXX XXXXXX, XX
------------ -------------------------------------------------------------------
000 XX. XXXX, XX
------------ -------------------------------------------------------------------
000 XXXXXXXXXXX, XX
------------ -------------------------------------------------------------------
000 XXXXXXXXXX, XX
------------ -------------------------------------------------------------------
000 XXXXXXXXX, XX
------------ -------------------------------------------------------------------
000 XXXXXXXX, XX
------------ -------------------------------------------------------------------
132
219 COLUMBUS, IN
------------ -------------------------------------------------------------------
000 XXXXX XXXXXXX, XX
------------ -------------------------------------------------------------------
259 MISHAWAKA, IN
------------ -------------------------------------------------------------------
000 XXXXXXXXXX, XX
------------ -------------------------------------------------------------------
267 SOUTH BEND, IN
------------ -------------------------------------------------------------------
000 XXX XXXX, XX
------------ -------------------------------------------------------------------
000 XXXXX XXXX XXXXX, XX
------------ -------------------------------------------------------------------
000 X. XXXX XXXXXX, XX
------------ -------------------------------------------------------------------
000 XXXXXXX, XX
------------ -------------------------------------------------------------------
000 XXXXXX, XX
------------ -------------------------------------------------------------------
000 XXXXXX, XX
------------ -------------------------------------------------------------------
000 XXXXXX, XX
------------ -------------------------------------------------------------------
000 XXXXXX, XX
------------ -------------------------------------------------------------------
000 XXXXXXXX, XX
------------ -------------------------------------------------------------------
133
EXHIBIT B
SCHEDULE A-2
SECOND PRIORITY REAL ESTATE*
-------------- -----------------------------------------------------------------
STORE LOCATION
-------------- -----------------------------------------------------------------
00 XXXXX XXXXXX, XX
-------------- -----------------------------------------------------------------
32 COLUMBUS, OH
-------------- -----------------------------------------------------------------
00 XXXXX XXXXXX, XX
-------------- -----------------------------------------------------------------
34 OKEMOS, MI
-------------- -----------------------------------------------------------------
65 ROSEVILLE, MN
-------------- -----------------------------------------------------------------
80 FLINT, MI
-------------- -----------------------------------------------------------------
99 BROOKHAVEN, PA
-------------- -----------------------------------------------------------------
000 XXXXXX, XX
-------------- -----------------------------------------------------------------
000 XXXXXXXX, XX
-------------- -----------------------------------------------------------------
000 XXXXXXXXXXXX, XX
-------------- -----------------------------------------------------------------
000 XXXXXXXXX, XX
-------------- -----------------------------------------------------------------
000 XX. XXXXXXX, XX
-------------- -----------------------------------------------------------------
000 XXXX XXXXXX, XX
-------------- -----------------------------------------------------------------
000 XXXXXXXXXX, XX
-------------- -----------------------------------------------------------------
000 XXXXXXX XXXX, XX
-------------- -----------------------------------------------------------------
167 SCHAUMBURG, IL
-------------- -----------------------------------------------------------------
000 XXXXXX XXXXX, XX
-------------- -----------------------------------------------------------------
-----------------
* Street Addresses are shown on Schedule X-0
000
000 XXXXXXXXXX, XX
-------------- -----------------------------------------------------------------
000 XXXXXXXXXX, XX
-------------- -----------------------------------------------------------------
000 XXXX XXXXXXX, XX
-------------- -----------------------------------------------------------------
245 XXXXX, MN
-------------- -----------------------------------------------------------------
000 XX. XXXXXXX, XX
-------------- -----------------------------------------------------------------
000 XXXXXXXXXX, XX
-------------- -----------------------------------------------------------------
000 XXXXXXXXXX, XX
-------------- -----------------------------------------------------------------
000 XXXXXX XXXXXX, XX
-------------- -----------------------------------------------------------------
000 XXXXX XXXX, XX
-------------- -----------------------------------------------------------------
000 XXXXXXXXXXX, XX
-------------- -----------------------------------------------------------------
000 XXXXXXXX, XX
-------------- -----------------------------------------------------------------
000 XXXXXXXXXXX, XX
-------------- -----------------------------------------------------------------
000 XXXXXXXXXX, XX
-------------- -----------------------------------------------------------------
000 XXXXXXXX, XX
-------------- -----------------------------------------------------------------
000 XXXX XXXXXXXX, XX
-------------- -----------------------------------------------------------------
135
EXHIBIT B
Dockets
000
X.X. XXXXXXXXXX XXXXX
XXXXXXXX XX XXXXXXXX (BALTIMORE)
- Bankruptcy Petition #: 01-52415 Date filed: 2/19/01
- Assigned to: Xxxxx X. Xxxxxxxxx
- Chapter 11, voluntary, asset
---------------------------------------------------- ---------------------------------------------------------
*PARTIES* *ATTORNEYS*
---------------------------------------------------- ---------------------------------------------------------
FRANK'S NURSERY & CRAFTS, INC. XXXX X. XXXXXXXX
dba Xxxxxxxxx, Xxxxxx & Xxxxxxx
Xxxxx'x Nursery & Crafts 0 Xx. Xxxx Xx., #0000
xxx Xxxxxxxxx, XX 00000
Halloween By Frank's 000-000-0000
dba
In the Garden By Frank's
dba
Frank's Supercrafts
dba
Christmas By Frank's
dba
Frank's Kids Corner
dba
Frank's 5 Seasons
0000 Xxxx Xxxx Xxxx
Xxxx, XX 00000
Tax ID: 00-0000000
*Debtor*
DOCKET PROCEEDINGS
DATE DOC. NO. DOCKET ENTRY
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
2/19/01 1 Voluntary Petition missing documents: Statement of Financial
Affairs Schedule A Schedule B Schedule C Schedule D Schedule E
Schedule F Schedule G Schedule H Due on 3/6/01, Disclosure
statement due 6/19/01 Chapter 11 Plan due 6/19/01; Proof of Claim
(gov) Deadline: 8/18/01 (Filing Fee $830.00 Receipt # 392102)
(xxxx) [EOD 02/20/01]
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
2/19/01 2 Motion by Debtor Frank's Nursery & Crafts, Inc. For Order
Determining Adequate Assurance of Payment for Future Utility
Services AND Prohibiting Utility Companies from Altering, Refusing,
or Discontinuing Service to the Debtors Pursuant to Section 366 of
the Bankruptcy Code (xxxx) [EOD 02/20/01]
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
2/19/01 3 Motion For Authorization to Pay Certain Pre-Petition Wages,
Salaries and Other Compensation; Employee Medical and Similar
Benefits; Reimbursable Employee Expenses; Ordinary Course
Performance Payments; Retention Payments; Other Miscellaneous
Employee Expenses and Benefits Filed by Debtor Frank's Nursery &
Crafts, Inc. (xxxx) [EOD 02/20/01]
------------------------------------------------------------------------------------------------------------------------------------
137
---------------------------------------------------------------------------------
2/19/01 4 Motion By Debtor Frank's Nursery & Crafts, Inc. For Joint
Administration of Cases 01-52415 and 01-52416. (xxxx)
[EOD 02/20/01]
---------------------------------------------------------------------------------
2/19/01 5 Motion By Debtor Frank's Nursery & Crafts, Inc. For Orders
Pursuant to Bankruptcy Code Sections 105, 107, 362, and
364 and Bankruptcy Rules 2002, 4001, and 9014 Authorizing
Debtors-In-Possession to Obtain Secured Super-Priority
Post-Petition Financing on an Interim and Final Basis;
Approving Agreements Relating to Foregoing; Scheduling a
Hearing and Proscribing Form and Manner of Notice; and
Granting Related Relief, Including Approval of a Cash
Collateral Stipulation With Chase. (xxxx) [EOD 02/20/01]
---------------------------------------------------------------------------------
2/19/01 6 Application By Debtor Frank's Nursery & Crafts, Inc. To
Employ Xxxx Xxxxxxxx and his firm Xxxxxxxxx, Xxxxxx &
Preston LLP as Counsel and verified statement of proposed
party. (xxxx) [EOD 02/20/01]
---------------------------------------------------------------------------------
2/19/01 7 Application By Debtor Frank's Nursery & Crafts, Inc. To
Employ Xxxx X. Xxxxxx and his firm Xxxxxxx Xxxx &
Xxxxxxxxx as Counsel. (xxxx) [EOD 02/20/01]
---------------------------------------------------------------------------------
2/19/01 8 Application By Debtor Frank's Nursery & Crafts, Inc. To
Employ Xxxxxx X. Rock and his firm Xxx Xxxx & Associates
as Financial Consultants. (xxxx) [EOD 02/20/01]
---------------------------------------------------------------------------------
2/20/01 9 Order Granting [2-1] Motion For Order Determining Adequate
Assurance of Payment for Future Utility Services AND
Prohibiting Utility Companies from Altering, Refusing, or
Discontinuing Service to the Debtors Pursuant to Section
366 of the Bankruptcy Code by Frank's Nursery & Crafts,
Inc. (xxxx) [EOD 02/20/01]
---------------------------------------------------------------------------------
REPORT CRITERIA
------------------------------------------------------
CASE NUM: 01-52415
------------------------------------------------------
FILED BETWEEN: 01/01/31 and 02/21/01
------------------------------------------------------
END OF REPORT
--------------------------------------------------------------------------------
------------------------------------------------------------------------
PACER SERVICE CENTER
------------------------------------------------------------------------
TRANSACTION RECEIPT
------------------------------------------------------------------------
02/21/2001 10:36:19
------------------------------------------------------------------------
PACER LOGIN: wt0006 CLIENT CODE: 0-6072
------------------------------------------------------------------------
DESCRIPTION: docket report CASE NUMBER: 2001-52415
------------------------------------------------------------------------
BILLABLE PAGES: 2 COST: 0.14
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138
EXHIBIT E-1
--------------------------------------------------------------------------------
AGENCY AGREEMENT
Dated as of
December 1, 2000
Between
HILCO MERCHANT RESOURCES, LLC,
as Agent
and
FRANK'S NURSERY & CRAFTS, INC.
as Merchant
--------------------------------------------------------------------------------
139
Section 1. Defined Terms ............................................................. 1
Section 2. Appointment Of Agent ...................................................... 2
Section 3. Consideration To Merchant And Agent ....................................... 2
3.1 Payment(S) To Merchant ...................................................... 2
3.2 Compensation To Agent ....................................................... 4
3.3 Time Of Payments ............................................................ 4
3.4 Security .................................................................... 5
3.5 Conversion to Cash
7
SECTION 4. EXPENSES OF THE SALE.
4.1 Expenses .................................................................... 7
4.2 Payment Of Expenses .........................................................10
Section 5. Inventory Valuation; Merchandise ..........................................10
5.1 Inventory Taking ............................................................10
5.2 Merchandise Subject To This Agreement .......................................11
5.3 Valuation ...................................................................13
5.4 Excluded Goods ..............................................................14
Section 6. Sale Term .................................................................14
6.1 Term..........................................................................14
6.2 Vacating The Stores ..........................................................15
6.3 Gross Rings ..................................................................15
Section 7. Sale Proceeds .............................................................16
7.1 Proceeds .....................................................................16
7.2 Deposit Of Proceeds ..........................................................16
7.3 Credit Card Proceeds .........................................................17
Section 8. Conduct Of The Sale .......................................................18
8.1 Rights Of Agent ..............................................................18
8.2 Terms Of Sales To Customers ..................................................19
8.3 Sales Taxes ..................................................................19
8.4 Supplies .....................................................................20
8.5 Returns Of Merchandise .......................................................20
8.6 Intentionally Deleted ........................................................21
8.7 Compliance With Law ..........................................................21
8.8 Sale Reconciliation ..........................................................22
8.9 Force Majeure ................................................................22
140
Section 9. Employee Matters............................................................................23
9.1 Merchant's Employees.............................................................................23
9.2 Termination Of Employees.........................................................................23
9.3 Payroll Matters..................................................................................24
9.4 Employee Retention Bonuses.......................................................................24
Section 10. Conditions Precedent.......................................................................24
Section 11. Representations, Warranties And Covenants..................................................26
11.1 Merchant Representations, Warranties And Covenants..............................................26
11.2 Agent Representations And Warranties............................................................32
Section 12. Insurance..................................................................................33
12.1 Merchant's Liability Insurance..................................................................33
12.2 Merchant's Casualty Insurance...................................................................34
12.3 Agent's Insurance...............................................................................34
12.4 Worker's Compensation Insurance.................................................................35
12.5 Risk Of Loss....................................................................................35
Section 13. Indemnification............................................................................36
13.1 Merchant Indemnification........................................................................36
13.2 Agent Indemnification...........................................................................37
Section 14. Defaults...................................................................................38
Section 15. Bankruptcy Agreements And Waivers..........................................................38
Section 16. Sale Of Ff&E...............................................................................39
Section 17. Grant Of Security Interest.................................................................39
Section 18. Miscellaneous..............................................................................40
18.1 Notices........................................................................................40
18.2 Governing Law; Consent To Jurisdiction.........................................................40
18.3 Termination....................................................................................41
18.4 Entire Agreement...............................................................................41
18.5 Amendments.....................................................................................41
18.6 No Waiver......................................................................................41
18.7 Successors And Assigns.........................................................................42
18.8 Execution In Counterparts; Facsimile...........................................................42
18.9 Section Headings...............................................................................42
18.10 Survival.......................................................................................42
18.11 Severability...................................................................................42
(ii)
141
LIST OF EXHIBITS
EXHIBIT DESCRIPTION
Exhibit 1 The Stores
Exhibit 3.1 Merchandise Threshold
Exhibit 3.1(a) Immediate On Order Merchandise
Exhibit 3.4 Letters of Credit
Exhibit 4.1 Occupancy Expenses
Exhibit 5.1 Inventory Taking Procedures
Exhibit 8.7 Merchant's Employee Rules
Exhibit 9.3 Employee Payroll and Benefits
Exhibit 11.1(e) Not Included
Exhibit 11.1(f) Not Included
Exhibit 11.1(m) Historic Sales
Exhibit 11.1(q) Severance Package
Exhibit 11.1(s) Labor Matters
Exhibit 11.1(v) Aggregate Prices of Merchandise
Exhibit 12.1 Merchant Liability Insurance
Exhibit 12.2 Merchant Casualty Insurance
Exhibit 12.3 Agent's Liability Insurance
142
AGENCY AGREEMENT
This Agency Agreement is made as of this 1st day of December, 2000, by
and between HILCO MERCHANT RESOURCES, LLC, a Delaware limited liability company
with a principal place of business at 0 Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxxx,
Xxxxxxxx 00000 (the "Agent") and FRANK'S NURSERY & CRAFTS, INC. a corporation
with a principal place of business at 0000 Xxxx Xxxx Xxxx Xxxx, Xxxx, Xxxxxxxx
00000 (the "Merchant").
RECITALS
WHEREAS, the Merchant desires that the Agent act as the Merchant's
exclusive agent for the limited purpose of selling all of the Merchandise (as
hereinafter defined) located in Merchant's 44 retail store location(s) listed on
Exhibit 1 attached hereto (each individually a "Store," and collectively the
"Stores"), by means of a promotional, store closing, or similar sale (as further
described below, the "Sale").
NOW THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Agent and the Merchant hereby
agree as follows:
Section 1. Defined Terms. The terms set forth below are defined in the
referenced sections of this Agreement:
Defined Term Section Reference
Agency Accounts Section 7.2
Agency Documents Section 11.1(b)
Agent Preamble
Agent Letter of Credit Section 3.4
Agent Claim Section 12.5
Agent Indemnified Parties Section 13.1
Benefits Cap Section 4.1
Central Service Expenses Section 4.1
143
Clearance Merchandise Section 5.2(b)
Defective Merchandise Section 5.2(b)
Excluded Benefits Section 4.1
Expenses Section 4.1
FF&E Section 5.2(a)
Guaranteed Amount Section 3.1(a)
Gross Rings Section 6.3
Immediate On Order Merchandise Section 3.1(a)
Initial Payment Section 3.3
Inventory Date Section 5.1
Inventory Taking Section 5.1
Merchant Letter of Credit Section 3.4
Merchandise Section 5.2(a)
Merchandise Threshold Section 3.1(b)
Merchant Preamble
Merchant Consignment Goods Section 5.4
Occupancy Agreements Section 8.7
Occupancy Expenses Section 4.1
Out of Season Merchandise Section 5.2(b)
Proceeds Section 7.1
Remaining Stores Section 8.4
Retail Price Section 5.3
Retained Employee Section 9.1
Retention Bonus Section 9.4
Returned Merchandise Section 8.5
Sale Recitals
Sale Commencement Date Section 6.1
Sale Term Section 6.1
Sale Termination Date Section 6.1
Sales Taxes Section 8.3
Store(s) Recitals
Supplies Section 8.4
Value Added Merchandise Section 5.2(b)
WARN Act Section 9.1
Section 2. Appointment of Agent. The Merchant hereby appoints the
Agent, and the Agent hereby agrees to serve, as the Merchant's exclusive agent
for the limited purpose of conducting the Sale in accordance with the terms and
conditions of this Agreement.
Section 3. Consideration to Merchant and Agent.
3.1 Payment(s) to Merchant.
2
144
(a) (i) As a guaranty of Agent's performance hereunder,
Merchant shall receive from Agent the sum of 42.15% of the aggregate Retail
Price of the Merchandise, except for (a) fresh, current new in-season
Merchandise which is consistent as to type, quality and mix as Merchandise
presently located at the Stores and which is described on Exhibit 3.1(a)
hereto received at the Stores after the Sale Commencement Date and prior to
December 18, 2000 (the "Immediate On Order Merchandise"), as to which Agent
shall pay to Merchant the lower of (x) 42.15% of the aggregate Retail Price
thereof or (y) Merchant's actual cost therefor, and (b) any Merchandise received
at the Stores on and after December 19, 2000, as to which the percentage of the
aggregate Retail Price to be paid shall be the product of 42.15% times the
complement of the then prevailing Sale discount at the time of the receipt of
such Merchandise at the Stores (the "Guaranteed Amount").
(ii) Agent shall pay to Merchant the Guaranteed
Amount in the manner and at the times specified in Section 3.3 below. The
Guaranteed Amount will be calculated based upon (A) the final certified report
of the inventory taking service after verification and reconciliation thereof by
Agent and Merchant, (B) the aggregate amount of Gross Rings, and (C)
reconciliation by Merchant and Agent of Immediate On order Merchandise and On
Order Merchandise received at the Stores in the manner provided herein.
(b) The Guaranteed Amount has been calculated and agreed upon
based upon Merchant's representation that the aggregate Retail Price of the
Merchandise as of the Sale Commencement Date will not be less than $33,000,000
(the "Merchandise Threshold"), that all such Merchandise will conform to
Merchant's representations and warranties contained herein, and that no
representations, warranties or covenants of Merchant hereunder have been
breached. Merchant and Agent agree that in the event that the final report of
the inventory taking service
3
145
indicates that the Retail Price of Merchandise is less than the Merchandise
Threshold, then the percentage on which the Guaranteed Amount is based shall be
reduced as provided in Exhibit 3.1 attached hereto; provided, however, under no
circumstances will the aggregate Retail Price of the Merchandise be more than
$36,000,000 or less than $32,000,000.
3.2 Compensation to Agent. Agent shall receive as its
compensation for services rendered to Merchant all remaining Proceeds after
payment of Expenses, the Guaranteed Amount, and all other amounts payable to
Merchant from Proceeds hereunder ("Agent's Fee").
Provided that no Event of Default has occurred and continues to exist
on the part of the Agent, all Merchandise remaining at the conclusion of the
Sale shall become the property of Agent, free and clear of all liens, claims and
encumbrances of any kind or nature. Agent agrees not to sell such Merchandise to
any direct competitors of Merchant or sell in markets in which Merchant
continues to operate stores. Agent also agrees to remove the Frank's label from
any such Merchandise to be sold in bulk.
3.3 Time of Payments. During the Sale, Proceeds shall be
applied first to pay Expenses, second to pay the Guaranteed Amount and third to
pay Agent's Fee. After the Guaranteed Amount has been paid in full, Agent shall
receive weekly disbursements of Proceeds. In the event that the aggregate
Proceeds received by Merchant from the Sale after conclusion of the final
reconciliation pursuant to Section 8.8 hereof do not exceed the sum of the
Guaranteed Amount plus the Expenses paid by Merchant or paid out of Proceeds,
then within ten (10) days of the conclusion of the final reconciliation Agent
shall pay an amount equal to the difference to Merchant.
4
146
All payments by either party hereunder shall be by wire transfer of
immediately available funds. Merchant agrees that any amounts due by Agent to
Merchant pursuant to this Section 3 may in Agent's discretion be offset by the
amount of Proceeds which have not, as of the applicable date of payment by Agent
to Merchant, been transferred by Merchant to Agent.
3.4 Security.
(a) To secure payment of the Guaranteed Amount, Expenses and
any other amounts due from Agent to Merchant hereunder, Agent shall deliver to
Merchant an irrevocable standby letter of credit in the original face amount of
$15,500,000 naming Merchant as beneficiary, substantially in the form of
Exhibit 3.4(a) attached hereto (the "Agent Letter of Credit"). The Agent Letter
of Credit shall be delivered no later than two (2) business days following the
Sale Commencement Date, shall be issued by a bank selected by Agent and
reasonably acceptable to Merchant, and shall contain terms, provisions and
conditions mutually acceptable to Agent and Merchant. In the event that Agent
shall fail to pay to Merchant any amount required to be paid hereunder, Merchant
shall be entitled to draw on the Agent Letter of Credit to fund such amount
following five (5) days written notice to Agent of Merchant's intention to do
so, provided that no material default or Event of Default has then occurred on
the part of the Merchant hereunder. The Agent Letter of Credit shall expire on
May 15, 2001, provided that in the event that Agent shall have paid to Merchant
all amounts due hereunder prior to such date, Merchant agrees to surrender the
original Agent Letter of Credit to the issuer thereof together with written
notification that the Agent Letter of Credit may be terminated. Merchant and
Agent agree that following payment of the Guaranteed Amount in full, the face
amount of the Agent Letter of Credit shall be reduced to $750,000.
5
147
(b) To secure payment of the Agent's Fee, Expenses paid by
Agent and not reimbursed out of Proceeds and any other obligations of or amounts
due from Merchant to Agent hereunder, Merchant shall deliver to Agent an
irrevocable standby letter of credit in the original face amount of $2,200,000
naming Agent as beneficiary, substantially in the form of Exhibit 3.4(b)
attached hereto (the "Merchant Letter of Credit"). The Merchant Letter of Credit
shall be delivered no later than two (2) business days following the Sale
Commencement Date, shall be issued by a bank selected by Merchant and reasonably
acceptable to Agent, and shall contain terms, provisions and conditions mutually
acceptable to Agent and Merchant. In the event that Merchant shall fail to pay
to Agent any amount required to be paid hereunder, Agent shall be entitled to
draw on the Merchant Letter of Credit to fund such amount following five (5)
days written notice to Merchant of Agent's intention to do so (no notice shall
be required in the event Merchant has commenced a bankruptcy proceeding),
provided that no material default or Event of Default has then occurred on the
part of the Agent hereunder. The Merchant Letter of Credit shall expire on May
15, 2001, provided that in the event that Merchant shall have paid to Agent all
amounts due hereunder prior to such date, Agent agrees to surrender the original
Merchant Letter of Credit to the issuer thereof together with written
notification that the Merchant Letter of Credit may be terminated. Agent also
agrees to terminate the Merchant Letter of Credit within ninety-one (91) days
after Merchant grants Agent a properly perfected first-priority security
interest in the Merchandise and Proceeds as referenced in Section 17 hereof and
provides Agent with control of the Proceeds of the Sale in accordance with
Section 7.2(a) hereof. 3.5
Conversion to Cash Deal. In the event that Merchant
grants Agent a properly perfected first-priority security interest in the
Merchandise and Proceeds as referenced in Section 17 hereof and provides Agent
with control of the Proceeds of the Sale in accordance
6
148
with Section 7.2(a) hereof, Agent shall pay to Merchant within five (5) days
thereof (a) if the final reconciliation of the report of the inventory taking
service has been finalized by Merchant and Agent, the balance of the Guaranteed
Amount not previously paid from Proceeds or (b) if the final reconciliation of
the report of the inventory taking service has not been finalized by Merchant
and Agent (the "Initial Payment"), 75% of the estimated the balance of the
Guaranteed Amount not previously paid from Proceeds based upon the Merchant's
books and records as of the date thereof. Thereafter in the event of payment of
only the Initial Payment, within two (2) business days of the reconciliation by
Merchant and Agent of the final inventory report by the inventory taking
service, Agent shall pay to Merchant the unpaid balance of the Guaranteed Amount
or, to the extent that Agent's payment on account of the estimated Guaranteed
Amount exceeds the actual Guaranteed Amount, Merchant shall reimburse such
excess to Agent. Merchant Agent shall complete the final reconciliation by
December 29, 2000, unless otherwise agreed by both parties.
Section 4.
4.1 Expenses. Agent shall be responsible for all Expenses
incurred in conducting the Sale; provided, however, that such Expenses shall be
paid using Proceeds of the Sale to the extent that such Proceeds are sufficient
to make such payments. Agent shall have sole discretion with respect to the
amount and type of Expenses utilized during the Sale Term. As used herein,
"Expenses" shall mean Store-level operating expenses of the Sale which arise
during the Sale Term at the Stores limited to the following:
(a) base payroll for Retained Employees for actual days/hours
worked in the conduct of the Sale and the costs of Merchant's retention program
for part-time workers that are retained employees over and above Merchant's cost
of $120,000;
7
149
(b) amounts actually payable in respect of FICA, unemployment
taxes, worker's compensation and health care insurance benefits for Retained
Employees (excluding vacation days or vacation pay, sick days or sick leave,
maternity leave or other leaves of absence, termination or severance pay, union
dues, pension benefits, ERISA coverage and similar contributions), in an amount
not to exceed 16% of base payroll for each Retained Employee (the "Benefits
Cap");
(c) 50% of the fees and costs of the inventory taking service
to conduct the Inventory Taking;
(d) Agent's supervision fees and expenses (including, without
limitation, travel costs and bonuses);
(e) advertising and signage expenses (at Merchant's contract
rates, if available);
(f) long distance telephone expenses incurred in the conduct
of the Sale;
(g) credit card and bank card fees and discounts (at
Merchant's customary rates), chargebacks, bad check fees, cash shortages in
registers and courier services;
(h) costs of security personnel in the Stores;
(i) a pro-rata portion of Merchant's casualty insurance
premiums attributable to the Merchandise;
(j) costs of transfers of Merchandise during the Sale Term
other than transfers of Immediate On Order Merchandise to the Stores (which
shall be borne by Merchant);
(k) Retention Bonuses as described in Section 9.4 below;
8
150
(l) Agent's cost of capital and letter of credit fees and
Merchant's letter of credit fees;
(m) Agent's legal fees and expenses;
(n) costs and expenses of additional Supplies other than those
located at the Stores;
(o) Occupancy Expenses, limited on a per diem per Store basis
and limited to those amounts and categories as described in Exhibit 4.1 attached
hereto; and
(p) the costs and expenses of providing such additional
services which the Agent in its sole discretion deems appropriate.
"Expenses" shall not include: (i) Excluded Benefits; (ii) any rent or
occupancy expenses related to the Stores other than Occupancy Expenses; (iii)
Central Service Expenses; (iv) costs of obtaining all permits, licenses,
consents and approvals required under Sections 10(a) and 10(b) hereof, (v) any
costs, expenses and liabilities that would otherwise constitute "Expenses"
hereunder but that were not disclosed to Agent prior to the date of this
Agreement; and (vi) any other costs, expenses or liabilities payable by
Merchant, all of which shall be paid by Merchant promptly when due for and
during the Sale Term.
As used herein, the following terms have the following respective
meanings:
"Central Service Expenses" means costs and expenses for
Merchant's central administrative services necessary for the Sale, including,
but not limited to, sales audit, MIS services, POS systems, payroll processing,
cash reconciliation, inventory processing and handling, and data processing and
reporting.
"Excluded Benefits" means (i) vacation days or vacation pay,
sick days or sick leave, maternity leave or other leaves of absence, termination
or severance pay, union dues,
9
151
pension benefits, ERISA coverage and similar contributions, and (ii) payroll
taxes, worker's compensation and health insurance benefits in excess of the
Benefits Cap.
"Occupancy Expenses" means base rent, percentage rent, HVAC,
utilities, CAM, real estate and use taxes, merchant's association dues, and
building insurance relating to the Stores.
4.2 Payment of Expenses. All Expenses incurred during each
week of the Sale (i.e. Monday through Sunday) shall be offset from Proceeds held
by Merchant or Agent, or if such Proceeds are insufficient to fund such
Expenses, then the difference shall be paid by Agent subject to reimbursement
from subsequent Proceeds, immediately following the weekly Sale reconciliation
by Merchant and Agent pursuant to Section 8.8 below, based upon invoices and
other documentation reasonably satisfactory to Agent.
Section 5. Inventory Valuation; Merchandise.
5.1 Inventory Taking. Merchant and Agent shall cause to be
taken (i) a Retail Price physical inventory, and (ii) an "SKU" inventory of the
Merchandise (the "Inventory Taking") commencing at the close of business at
each of the Stores on a date mutually agreed upon by Agent and Merchant, but in
no event later than December 14, 2000 (the date of the Inventory Taking at each
Store being the "Inventory Date" for such Store). Merchant and Agent shall
jointly employ RGIS or another mutually acceptable inventory taking service to
conduct the Inventory Taking. Agent shall be responsible for 50% of the costs
and fees of the inventory taking service as an Expense hereunder, and the
balance of such costs and fees shall be paid by Merchant. Except as provided in
the immediately preceding sentence, Merchant and Agent shall bear their
respective costs and expenses relative to the Inventory Taking. Merchant and
Agent shall each have representatives present during the Inventory Taking, and
shall each have the right
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to review and verify the listing and tabulation of the inventory taking service.
Merchant agrees that during the conduct of the Inventory Taking at each Store
such Store shall be closed to the public and no sales or other transactions
shall be conducted. The procedures to be used in the conduct of the Inventory
Taking and its verifications are set forth on Exhibit 5.1 attached hereto. In
order to facilitate the Inventory Taking, Merchant agrees to make its SKU data
files and related computer hardware and software available to Agent and the
inventory taking service commencing prior to the Inventory Date.
5.2 Merchandise Subject to this Agreement.
(a) For purposes of this Agreement, "Merchandise" shall mean
all: (i) finished goods inventory that is located at the Stores as of the Sale
Commencement Date, including, (A) Defective Merchandise, (B) Out of Season
Merchandise, (C) Clearance Merchandise, (D) Value Added Merchandise and (E)
Merchandise subject to Gross Rings; (ii) Christmas Clearance Merchandise; (iii)
Immediate On Order Merchandise; and (iv) On Order Merchandise. Notwithstanding
the foregoing, "Merchandise" shall not include: (1) goods which belong to
sublessees, licensees or concessionaires of Merchant; (2) firearms, ammunition,
alcohol, tobacco products and prescription medicines (unless (x) such products
may be sold by Agent pursuant to law, (y) Agent has obtained all licenses,
permits and governmental consents required therefor, and (z) in the case of
firearms, ammunition and prescription medicines, Merchant shall throughout the
Sale Term provide Agent with a sufficient number of employees who have obtained
all requisite permits, licenses, authorizations and training with regard to the
sale of the same); (3) goods held by Merchant on memo, on consignment, or as
bailee; (4) defective goods for which Merchant and Agent cannot agree upon a
Retail Price; (5) furnishings, trade fixtures,
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equipment and improvements to real property which are located in the Stores
(collectively, "FF&E"); and (6) Merchant Consignment Goods.
(b) As used in this Agreement the following terms have the
respective meanings set forth below:
"Clearance Merchandise" means any item of Merchandise sold at
any time prior to the Sale Commencement Date at a discount of 50% or more from
the original retail ticketed price.
"Christmas Clearance Merchandise" means any item of Christmas
merchandise identified by Merchant on the ticket, SKU or the merchandising
system as designated for clearance.
"Defective Merchandise" means any item of merchandise agreed
upon and identified by Agent and Merchant during the Inventory Taking as
defective or otherwise not salable in the ordinary course
because it is dented, worn, scratched, broken, faded, torn, mismatched or
affected by other similar defects rendering it not first quality, and as to
which Agent and Merchant mutually agree on its value to define its Retail Price.
"Out of Season Merchandise" means all items of Merchandise not
usually sold for full value during the Sale Term, and all items of Merchandise
which relate to holidays falling outside of the Sale Term, including (in each
case) items which are packed away for sale on a future date. "Out of Season
Merchandise" shall not include Christmas Merchandise.
"Value Added Merchandise" means items of Merchandise which
require the application of labor or construction of component parts (e.g., mylar
balloons, craft magazines
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and patterns), in order to make the item salable in the ordinary course for a
price in excess of the component parts.
5.3 Valuation. For purposes of this Agreement, "Retail Price"
shall mean, with respect to each item of Merchandise, the lower of (a) the
lowest ticketed, lowest marked, lowest shelf price or lowest price offered to
the public by any and all means (including, without limitation, by means of
advertisement, coupon, circular, in-Store promotion, point of sale discount or
otherwise) of such item on or after November 19, 2000, or (b) the SKU or "scan"
price of such item on or after November 19, 2000 (in both cases of (a) and (b)
excluding prices offered only on November 24, 2000), except for:
(i) items of Out of Season Merchandise, Clearance
Merchandise and Value Added Merchandise where "Retail Price" shall mean the
lower of (A) fifty percent (50%) of the original retail ticketed price of each
such item, or (B) the lowest price offered to the public for such item on or
after November 19, 2000 by any and all means (including, without limitation, by
means of advertisement, coupon, circular, in-Store promotion, point of sale
discount or otherwise);
(ii) Defective Merchandise where "Retail Price" shall
mean such value as to which Agent and Merchant shall agree;
(iii) Christmas Clearance Merchandise where "Retail
Price" shall mean the lower of (A) sixty percent (60%) of the original retail
ticketed price of each such item, or (B) the lower of the lowest ticketed,
lowest marked, lowest shelf price or lowest price offered to the public for such
item on or after November 19, 2000 by any and all means (including, without
limitation, by means of advertisement, coupon, circular, in-Store promotion,
point of sale discount or otherwise).
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The Retail Price of any item of Merchandise shall exclude all Sales
Taxes, and Merchant represents that (a) the ticketed prices of all items of
Merchandise do not and shall not include any Sales Taxes, and (b) all registers
located at the Stores are programmed to correctly compute all Sales Taxes
required to be paid by the customer under applicable law. If an item of
Merchandise has more than one ticketed price, or if multiple items of the same
SKU are marked at different prices, the lowest ticketed price on any such item
shall prevail for such item or for all such items within the same SKU, as the
case may be, unless it is clear that the lowest ticket price was mismarked.
5.4 Excluded Goods. Merchant shall retain all responsibility
for any goods not included as "Merchandise" hereunder. If Merchant elects at
the beginning of the Sale Term, Agent shall accept defective goods not included
as "Merchandise" hereunder for sale as "Merchant Consignment Goods" at prices
established by the Agent. The Agent shall retain 25% of the sale price for all
sales of Merchant Consignment Goods, and Merchant shall receive 75% of the
receipts in respect of such sales. Merchant shall receive its share of the
receipts of sales of Merchant Consignment Goods on a weekly basis, immediately
following the weekly Sale reconciliation by Merchant and Agent pursuant to
Section 8.8 below. If Merchant does not elect to have Agent sell defective goods
not included as Merchandise, then all such items will be removed by Merchant
from the Stores at its expense as soon as practicable after the date hereof.
Except as expressly provided in this Section 5.4, Agent shall have no cost,
expense or responsibility in connection with any goods not included in
Merchandise.
Section 6. Sale Term.
6.1 Term. Subject to satisfaction of the conditions precedent
set forth in Section 10 hereof, the Sale shall commence at each Store on
December 4, 2000 (such date with
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respect to each Store being the "Sale Commencement Date"). The Agent shall
complete the Sale at each Store no later than March 4, 2000, unless the Sale is
extended by mutual written agreement of Agent, and Merchant (the "Sale
Termination Date;" the period from the Sale Commencement Date to the Sale
Termination Date as to each Store being the "Sale Term"); provided, however,
that in the event that Merchant has not sold or assigned any leases or fees with
respect to a Store by March 4, 2000, Merchant agrees that if Agent so desires,
the Sale Termination Date for such Store(s) may be extended to no later than
March 31, 2000. The Agent may, in its discretion, terminate the Sale at any
Store at any time within the Sale Term (i) upon the occurrence of an Event of
Default by Merchant, or (ii) upon not less than five (5) days' prior written
notice to Merchant.
6.2 Vacating the Stores. At the conclusion of the Sale, Agent agrees
to leave the Stores in "broom clean" condition, ordinary wear and tear excepted,
except for remaining Supplies and unsold items of FF&E. Agent shall vacate the
Stores on or before the Sale Termination Date, at which time Agent shall
surrender and deliver the Store premises and Store keys to Merchant. All assets
of Merchant used by Agent in the conduct of the Sale (e.g. FF&E, Supplies, etc.)
shall be left by Agent at the Stores for Merchant at the end of the Sale Term to
the extent the same have not been used in the conduct of the Sale or have not
been otherwise disposed of through no fault of the Agent.
6.3 Gross Rings. In the event that the Sale commences at any Store
prior to the completion of the Inventory Taking at such Store, then for the
period from the sale commencement date for such store until the inventory date
for such store, Agent and Merchant shall jointly keep (i) a strict count of
gross register receipts or Merchant's system less applicable Sales Taxes ("Gross
Rings"), and (ii) cash reports of sales within such Store. Register receipts
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shall show for each item sold the Retail Price for such item and the Storewide
or other markdown or discount granted by Agent in connection with such sale.
All such records and reports shall be made available to Agent and Merchant
during regular business hours upon reasonable notice.
Section 7. Sale Proceeds.
7.1 Proceeds. For purposes of this Agreement, "Proceeds" shall mean
the aggregate of: (a) the total amount (in dollars) of all sales of Merchandise
made under this Agreement, exclusive of Sales Taxes; and (b) all proceeds of
Merchant's insurance for loss or damage to Merchandise or loss of cash arising
from events occurring during the Sale Term.
7.2 Deposit of Proceeds.
This Section 7.2(a) shall apply in the event that the transaction is to be
converted to a cash payment transaction pursuant to Section 3.5 hereof. All cash
Proceeds shall be deposited by Agent in agency accounts established by Agent
(the "Agency Accounts"). Agent may, in its discretion, designate new or
existing accounts of Agent or Merchant as the Agency Accounts, provided that
such accounts are dedicated solely to the deposit of Proceeds and the
disbursement of amounts payable by Agent hereunder. Agent shall exercise sole
signatory authority and control with respect to the Agency Accounts. Merchant
shall promptly upon Agent's request execute and deliver all necessary documents
to open and maintain the Agency Accounts. To the extent that Agent shall elect
to use existing accounts of Merchant as the Agency Accounts, (a) all Proceeds
deposited in such accounts will constitute the property of Agent and shall be
held in trust by Merchant for Agent, (b) commencing on the first business day
following the Sale Commencement Date, and on each business day thereafter,
Merchant shall pay to Agent by wire funds transfer all collected funds
constituting Proceeds deposited in such accounts, and (c) upon request, Merchant
shall deliver to Agent copies of all bank statements and other information
relating to such
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accounts. Merchant shall not be responsible for and Agent shall pay as an
Expense hereunder, all bank fees and charges, including wire transfer charges,
related to the Agency Accounts, whether received during or after the Sale Term.
Merchant shall deposit all credit card Proceeds into a designated account and
shall transfer such Proceeds to Agent daily (on the date received by Merchant if
received prior to 12:00 noon, or otherwise within one business day) by wire
transfer of immediately available funds. At Agent's request, Merchant shall
cooperate with Agent to establish merchant identification numbers under Agent's
name to enable Agent to process all credit card Proceeds for Agent's account.
7.3 Credit Card Proceeds. Agent shall have the right (but not the
obligation) to use Merchant's credit card facilities (including Merchant's
credit card terminals and processor(s), credit card processor coding, merchant
identification number(s) and existing bank accounts) for credit card Proceeds.
In the event that Agent elects so to use Merchant's credit card facilities,
Merchant shall process credit card transactions on behalf of Agent and for
Agent's account, applying customary practices and procedures. Without limiting
the foregoing, Merchant shall cooperate with Agent to down-load data from all
credit card terminals each day during the Sale Term and to effect settlement
with Merchant's credit card processor(s), and shall take such other actions
necessary to process credit card transactions on behalf of Agent under
Merchant's merchant identification number(s). Merchant shall not be responsible
for and Agent shall pay as an Expense hereunder, all credit card fees, charges,
and chargebacks related to the Sale, whether received during or after the Sale
Term.
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Section 8. Conduct of the Sale.
8.1 Rights of Agent. Agent shall be permitted to conduct the Sale as a
"store closing" or similar sale throughout the Sale Term. Agent shall conduct
the Sale in the name of and on behalf of Merchant in a commercially reasonable
manner and in compliance with (i) the terms of this Agreement and (ii)
provisions of applicable laws, regulations and ordinances. In addition to any
other rights granted to Agent hereunder, in conducting the Sale, Agent, in the
exercise of its sole discretion, shall have the right, subject to the
immediately preceding sentence:
(a) to establish and implement advertising, signage, and promotion
programs consistent with the "store closing" theme (including, without
limitation, by means of media advertising, banners, A-frame, and similar
interior and exterior signs); provided, however, that Agent shall deliver copies
of all advertising materials for the Sale to Xxxx Xxxxxxxxx or another designee
of Merchant identified in writing, who shall have the right, within forty-eight
hours of such delivery, to approve such materials (which approval shall not be
unreasonably withheld or delayed); and provided further that the failure of such
designee to respond to any request for approval within forty-eight hours shall
be deemed to be approval of the subject materials;
(b) to establish Sale prices and Store hours;
(c) to use without charge during the Sale Term all FF&E, motor
vehicles, advertising materials, bank accounts, Store-level customer lists and
mailing lists, computer hardware and software, Supplies, intangible assets
(including Merchant's name, logo and tax identification numbers), Store keys,
case keys, security codes, and safe and lock combinations required to gain
access to and operate the Stores, and any other assets of Merchant located at
the Stores (whether owned, leased, or licensed);
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(d) to transfer Merchandise between Stores; and
(e) to use without charge (i) Merchant's central office facilities,
POS systems, central and administrative services and personnel to process
payroll, perform MIS services, sales audit and cash reconciliation, and provide
other central office services, necessary for the Sale, and (ii) one office
located at Merchant's central office facility.
8.2 Terms of Sales to Customers. All sales of Merchandise will be
"final sales" and "as is," and all advertisements and sales receipts will
reflect the same. Agent shall not warrant the Merchandise in any manner, but
will, to the extent legally permissible, pass on all manufacturer's warranties
to customers. Agent shall use its best efforts to identify Merchandise being
sold at the Stores in markets where Merchant will continue to operate stores.
All sales will be made only for cash, by approved check, and by bank credit
cards currently accepted by Merchant. Merchant and Agent agree that any amounts
charged by customers on Merchant's private label account shall be reimbursed by
Merchant to Agent in cash or offset from Expenses on a weekly basis. Agent shall
accept Merchant gift certificates, Store credits, due bills, rain checks,
discount cards and other promotional items providing the customer with an
additional discount on Store Merchandise which have been issued by Merchant
prior to the Sale Commencement Date, provided that Merchant agrees to reimburse
Agent in cash for the face amount of any such items within five (5) days after
Agent's request therefor.
8.3 Sales Taxes. During the Sale Term, all sales, excise, gross
receipts and other taxes attributable to sales of Merchandise (other than taxes
on income) payable to any taxing authority having jurisdiction (collectively,
"Sales Taxes") shall be added to the sales price of Merchandise and collected by
Agent at the time of sale. The Agent shall draw checks on the Agency Accounts
payable to the applicable taxing authorities in the amount so collected, which
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shall be delivered together with accompanying schedules to Merchant on a timely
basis for payment of taxes when due. Merchant shall promptly pay all Sales Taxes
and file all applicable reports and documents required by the applicable taxing
authorities. Merchant will be given access to the computation of gross receipts
for verification of all such tax collections.
8.4 Supplies. Agent shall have the right to use, without charge, all
existing supplies located at the Stores, including, without limitation, boxes,
bags, paper, twine and similar sales materials (collectively, "Supplies"). In
the event that additional Supplies are required in any of the Stores during the
Sale, Merchant agrees to promptly provide the same to Agent, if available, for
which Agent shall reimburse Merchant at Merchant's cost therefor. Merchant does
not warrant that the existing Supplies in the Stores as of the Sale Commencement
Date are adequate for the purposes of the Sale. Supplies have not been since
September 1, 2000, and shall not be prior to the Sale Commencement Date,
transferred by Merchant between or among the Stores, Merchant's other locations
not subject to the Sale (the "Remaining Stores") and/or Merchant's warehouse,
so as to alter the mix or quantity of Supplies at the Stores from that existing
on such date, other than in the ordinary course of business.
8.5 Returns of Merchandise. During the Sale Term the Agent shall
accept returns of goods sold by Merchant from the Stores prior to the Sale
Commencement Date ("Returned Merchandise"), provided such returns meet a policy
to be agreed upon by Merchant and Agent. Merchant shall reimburse Agent in cash
for the amount of any store credit or refund given to any customer in respect of
Returned Merchandise. To the extent that Returned Merchandise is salable as
first-quality merchandise, it shall be included in Merchandise and for purposes
of calculation of the Guaranteed Amount, shall be valued at the Retail Price
applicable to such item multiplied by the compliment of the prevailing Sale
discount at the time of the return.
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If the Returned Merchandise constitutes Defective Merchandise, it shall be
included in Merchandise and assigned a Retail Price in accordance with the
applicable provisions of Section 5.3 above. Subject to Merchant's reimbursement
to Agent of the amount of any store credit or refund granted for any Returned
Merchandise, the aggregate Retail Price of the Merchandise shall be increased by
the Retail Price of any Returned Merchandise included in Merchandise (determined
in accordance with this Section 8.5), and the Guaranteed Amount shall be
adjusted accordingly. Any Returned Merchandise which is not included in
Merchandise shall be disposed of by Agent in accordance with instructions
received from Merchant or, in the absence of such instructions, left at the
Stores for Merchant at the end of the Sale Term. In the event that the Section
3.5 has been invoked, any increases in the Guaranteed Amount and any
reimbursements due to Agent as result of Returned Merchandise shall be accounted
for and paid by Agent and/or Merchant, as applicable, immediately following the
weekly Sale reconciliation pursuant to Section 8.8 hereof.
8.6 8.6. Intentionally Deleted
8.7 Compliance with Law. Agent shall comply in the conduct of the Sale
with (i) all applicable statutes, rules, regulations and orders of, and
applicable restrictions imposed by, governmental authorities, including, without
limitation, all so called "going out of business laws" and all laws and
regulations relating to treatment of employees and (ii) all of Merchant's
employee rules, regulations, guidelines and policies, which have been provided
to Agent in writing and which are listed in Exhibit 8.7 attached hereto.
Merchant agrees to cooperate with Agent to obtain all required permits and
otherwise comply with such laws and regulations. To the extent necessary to
effectuate the Sale, Merchant shall obtain all approvals
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and consents under all Store leases, reciprocal easement agreements and other
similar agreements relating to the occupancy of the Stores (collectively,
"Occupancy Agreements").
8.8 Sale Reconciliation. On each Wednesday during the Sale Term,
commencing on the second Wednesday after the Sale Commencement Date, Agent and
Merchant shall cooperate to reconcile Expenses, receipts of Immediate On Order
Merchandise, On Order Merchandise and Returned Merchandise at the Stores
(including quantities and Retail Price thereof), sales of Merchant Consignment
Goods, Gross Rings, and such other Sale-related items as either party shall
reasonably request, in each case for the prior week or partial week (i.e.,
Monday through Sunday), all pursuant to procedures agreed upon by Merchant and
Agent. Within thirty (30) days after the end of the Sale Term, Agent and
Merchant shall complete a final reconciliation of the Sale, the written results
of which shall be certified by representations of each of Merchant and Agent as
a final settlement of accounts between Merchant and Agent.
8.9 Force Majeure. If any casualty or act of God prevents or
substantially inhibits the conduct of business in the ordinary course at any
Store, such Store and the Merchandise located at such Store shall, in Agent's
discretion, be eliminated from the Sale and considered to be deleted from this
Agreement as of the date of such event, and Agent and Merchant shall have no
further rights or obligations hereunder with respect thereto; provided, however,
that (i) the proceeds of any insurance attributable to such Merchandise shall
constitute Proceeds hereunder, and (ii) the Guaranteed Amount shall be reduced
to account for any Merchandise eliminated from the Sale which is not the subject
of insurance proceeds, and Merchant shall reimburse Agent for the amount the
Guaranteed Amount is so reduced prior to the end of the Sale Term.
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Section 9. Employee Matters.
9.1 Merchant's Employees. Agent may use Merchant's employees in the
conduct of the Sale to the extent Agent in its sole discretion deems expedient,
and Agent may select and schedule the number and classification of Merchant's
employees required for the Sale. Agent shall identify any such employees to be
used in connection with the Sale (each such employee, a "Retained Employee")
prior to the Sale Commencement Date. Retained Employees shall at all times
remain employees of Merchant, and shall not be considered or deemed to be
employees of Agent. Merchant and Agent agree that except to the extent that
wages and benefits of Retained Employees constitute Expenses hereunder, nothing
contained in this Agreement and none of Agent's actions taken in respect of the
Sale shall be deemed to constitute an assumption by Agent of any of Merchant's
obligations relating to any of Merchant's employees including, without
limitation, Excluded Benefits, Worker Adjustment Retraining Notification Act
("WARN Act") claims and other termination type claims and obligations, or any
other amounts required to be paid by statute or law; nor shall Agent become
liable under any collective bargaining or employment agreement or be deemed a
joint or successor employer with respect to such employees. Merchant shall not,
without Agent's prior written consent, raise the salary or wages or increase the
benefits for, or pay any bonuses or make any other extraordinary payments to,
any of its employees prior to the Sale Termination Date.
9.2 Termination of Employees. Agent may in its discretion stop using
any Retained Employee at any time during the Sale. Agent shall comply in the
conduct of the Sale with all of Merchant's employee rules, regulations,
guidelines and policies which have been provided to Agent in writing and are
listed in Exhibit 9.2 attached hereto. In the event of termination of any
Retained Employee, Agent will use all reasonable efforts to notify Merchant at
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least five (5) days prior thereto, except for termination "for cause" (such as
dishonesty, fraud or breach of employee duties), in which event no prior notice
to Merchant shall be required, provided Agent shall notify Merchant as soon as
practicable after such termination. From and after the date of this Agreement
and until the Sale Termination Date, Merchant shall not transfer or dismiss
employees of the Stores except "for cause" without Agent's prior consent.
Without limiting the foregoing, Merchant has not distributed, and shall not
distribute any notice to its employees under the WARN Act without Agent's prior
written consent.
9.3 Payroll Matters. During the Sale Term Merchant shall process the
base payroll for all Retained Employees. On Thursday of each week a payroll is
to be paid during the Sale Term, Agent shall transfer from the Agency Accounts
to Merchant's payroll accounts an amount equal to the base payroll for Retained
Employees plus related payroll taxes, worker's compensation and benefits for
such week which constitute Expenses hereunder. Attached hereto as Exhibit 9.3 is
a description of Merchant's base payroll, related payroll taxes, worker's
compensation and employee benefits, which Merchant represents is true and
accurate as of the date hereof.
9.4 Employee Retention Bonuses. In Agent's sole discretion Proceeds
may be used to pay, as an Expense, retention bonuses ("Retention Bonuses")
(which bonuses shall be inclusive of payroll taxes but as to which no benefits
shall be payable) to Retained Employees who do not voluntarily leave employment
and are not terminated "for cause." Such Retention Bonuses shall be payable
within thirty (30) days after the Sale Termination Date, and shall be processed
through Merchant's payroll system.
Section 10. Conditions Precedent. The willingness of Agent to enter into
the transactions contemplated under this Agreement are directly conditioned upon
the satisfaction of
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Section 11. Representations Warranties and Covenants.
11.1 Merchant Representations, Warranties and Covenants. Merchant
hereby represents, warrants and covenants in favor of Agent as follows:
(a) Merchant: (i) is a corporation duly organized, validly existing
and in good standing under the laws of the state of its incorporation; (ii) has
all requisite corporate power and authority to own, lease and operate its assets
and properties and to carry on its business as presently conducted; and (iii) is
and during the Sale Term will continue to be, duly authorized and qualified as a
foreign corporation to do business and in good standing in each jurisdiction
where the nature of its business or properties requires such qualification,
including all jurisdictions in which the Stores are located.
(b) The Merchant has the right, power and authority to execute and
deliver this Agreement and each other document and agreement contemplated hereby
(collectively, together with this Agreement, the "Agency Documents") and to
perform fully its obligations thereunder. Merchant has taken all necessary
actions required to authorize the execution, delivery and performance of the
Agency Documents, and no further consent or approval is required for Merchant to
enter into and deliver the Agency Documents, to perform its obligations
thereunder, and to consummate the Sale. Each of the Agency Documents has been
duly executed and delivered by Merchant and constitutes the legal, valid and
binding obligation of Merchant enforceable in accordance with its terms. No
court order or decree of any federal, state or local governmental authority or
regulatory body is in effect that would prevent or impair, or is required for
the Merchant's consummation of, the transactions contemplated by this Agreement,
and no consent of any third party which will not be obtained prior to the Sale
Commencement Date is required therefor. No contract or other agreement to which
the Merchant is a party or by
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Agent and are listed in Exhibit 11.1(e). All such pricing files and records
are true and accurate in all material respects as to the actual cost to Merchant
for purchasing the goods referred to therein and as to the selling price to the
public for such goods as of the dates and for the periods indicated therein.
From September 1, 2000 through the Sale Commencement Date, the pricing of
Merchandise at the Stores has been and will be substantially the same as the
pricing of the corresponding inventory at the Remaining Stores.
(f) As of the Sale Commencement Date, the levels of goods (as to
quantity) and the mix of goods (as to type, category, style, brand and
description) at the Stores are in all material respects described in Exhibit
11.1(f) attached hereto. There is no on order merchandise except Christmas live
goods in Merchant's class 653.
(g) As of the Sale Commencement Date, all normal course permanent
markdowns on inventory located at the Stores will have been taken on a basis
consistent with Merchant's historical practices and policies and on a basis
consistent with permanent markdowns taken at the Remaining Stores.
(h) Merchant has not and will not have from September 1, 2000 through
the Sale Commencement Date, marked up or raised the price of any items of
Merchandise, or removed or altered any tickets or any indicia of clearance
merchandise, except in the ordinary course of business.
(i) Merchant shall ticket or xxxx all items of inventory received at
the Stores prior to the Sale Commencement Date (including, without limitation,
all Immediate On Order Merchandise and On Order Merchandise), in a manner
consistent with similar Merchandise located at the Stores and the Remaining
Stores and in accordance with Merchant's historic practices and policies
relative to pricing and marking inventory.
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(j) Merchant has not and shall not purchase or transfer to or from the
Stores any FF&E, Supplies, merchandise or goods outside the ordinary course of
business in anticipation of the Sale or of the Inventory Taking or otherwise.
(k) As of the Sale Commencement Date, goods constituting Merchandise
located at the Stores shall be no less than $32,000,000 or more than $36,000,000
at Retail Price. The aggregate ticketed price of the Christmas Clearance
Merchandise shall not exceed $1,800,000.
(l) No action, arbitration, suit, notice, or legal, administrative or
other proceeding before any court or governmental body has been instituted by or
against the Merchant, or has been settled or resolved, or to Merchant's
knowledge, is threatened against or affects Merchant, relative to Merchant's
business or properties, or which questions the validity of this Agreement, or
that if adversely determined, would adversely affect the conduct of the Sale.
(m) Exhibit 11.1(m) attached hereto sets forth (i) historic sales at
the Stores for the year(s) month(s) ending as set forth thereon.
(n) Merchant covenants to continue to operate the Stores in the
ordinary course of business from the date of this Agreement to the Sale
Commencement Date, and to operate the Remaining Stores in the ordinary course of
business from the date of this Agreement through the Sale Termination Date, in
each case (i) selling inventory during such period at customary prices, (ii) not
promoting or advertising any sales or in-store promotions (including POS
promotions) to the public (except for Merchant's historic and customary
promotions for all of its locations as set forth in Exhibit 11.1(c) attached
hereto), (ii) not returning inventory to vendors and not transferring inventory
or supplies between or among Stores, Remaining Stores and Merchant's warehouse,
except as permitted under Section 8.4 above, and
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(iv) not making any management personnel moves or changes at the Stores without
Agent's prior written consent (which consent will not be unreasonably withheld).
Without limiting the foregoing, Merchant shall not conduct or advertise "going
out of business", "store closing", or "liquidation" sales at any of the
Remaining Stores located within the market area of any Store at any time during
the Sale Term and Merchant shall not offer a discount in such closing Remaining
Store or Remaining Stores greater than that being simultaneously offered by
Agent in the Stores in such market area.
(o) To the best of Merchant's knowledge, all Merchandise is in
compliance with all applicable federal, state or local product safety laws,
rules and standards. Merchant shall provide Agent with its historic policies and
practices regarding product recalls prior to the taking of the inventory at the
Stores.
(p) As of the date of the Agreement no event of default or event which
with the giving of notice, the passage of time, or both has occurred on the part
of the Merchant under any Occupancy Agreement which could have a material
adverse effect on the Sale. Throughout the Sale Term, the Agent shall have the
right to the unencumbered use and occupancy of, and peaceful and quiet
possession of, each of the Stores, the assets currently located at the Stores,
and the utilities and other services provided at the Stores. Merchant shall
throughout the Sale Term maintain in good working order, condition and repair,
at its sole expenses, all cash registers, heating systems, air conditioning
systems, elevators, escalators, Store alarm systems, and all other mechanical
devices used in the ordinary course of operation of the Stores.
(q) Merchant has paid and will continue to pay throughout the Sale
Term, (i) all self-insured or Merchant funded employee benefit programs for
employees, including
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health and medical benefits and insurance and all proper claims made or to be
made in accordance with such programs, (ii) all casualty, liability, worker's
compensation and other insurance premiums, (iii) all utilities provided to the
stores, and (iv) all applicable taxes. Attached hereto as Exhibit 11.1(q) is a
description of Merchant's severance benefits for which Retained Employees will
be eligible at the conclusion of the Sale. Following the conclusion of the Sale,
Merchant shall pay all such severance benefits to applicable Retained Employees
in the ordinary course.
(r) Merchant has not and shall not throughout the Sale Term take any
actions the result of which is to materially increase the cost of operating the
Sale, including, without limitation, increasing salaries or other amounts
payable to employees.
(s) Except as disclosed on Exhibit 11.1(s) attached hereto, (i)
Merchant is not a party to any collective bargaining agreements with its
employees, (ii) to the best of Merchant's knowledge, no labor unions represent
Merchant's employees at the Stores, and (iii) to the best of Merchant's
knowledge, there are currently no strikes, work stoppages or other labor
disturbances affecting the Stores, Merchant's central office facilities or
Merchant's Warehouse.
(t) As of the date of this Agreement, Merchant is current in the
payment of all telephone, utilities, taxes, insurance and advertising
liabilities. Merchant agrees that in the event that Agent receives notice that
any such liability is overdue or unpaid, or Agent is unable to advertise the
Sale with any newspapers, magazines, radio or television stations or other media
providers which target or serve the market areas of the Stores or is unable to
obtain Merchant's contract rate with any such provider as a result of the
Merchant's failure to pay its outstanding balances with such providers, Merchant
shall immediately pay such applicable balances in full.
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(u) Agent and Merchant agree to cooperate to create a "bag stuffer"
program and signage, at Merchant's expense, designed to transfer business from
the Stores to the Remaining Stores upon completion of the Sale.
(v) The percentage relationship between the aggregate cost, retail and
PLU inventory of Merchandise at the Stores on the Sale Commencement Date shall
be substantially as set forth on Exhibit 11.1(v).
(w) All information provided by Merchant to Agent is true, correct and
complete.
11.2 Agent Representations and Warranties. Agent hereby represents,
warrants and covenants in favor of the Merchant as follows:
(a) Agent: (i) is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of Illinois; (ii) has
all requisite power and authority under its operating agreement to consummate
the transactions contemplated hereby; and (iii) is and during the Sale Term will
continue to be, duly authorized and qualified as a foreign corporation to do
business and in good standing in each jurisdiction where the nature of its
business or properties requires such qualification.
(b) Agent has the right, power and authority to execute and deliver
each of the Agency Documents to which it is a party and to perform fully its
obligations thereunder. Agent has taken all necessary actions required under its
operating agreement to authorize the execution, delivery, and performance of the
Agency Documents. Each of the Agency Documents has been duly executed and
delivered by Agent and constitutes the legal, valid and binding obligation of
Agent enforceable in accordance with its terms. No contract or other
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172
agreement to which Agent is a party or by which Agent is otherwise bound will
prevent or impair the consummation of the transactions contemplated by this
Agreement.
(c) No action, arbitration, suit, notice, or legal, administrative or
other proceeding before any court or governmental body has been instituted by or
against Agent, or has been settled or resolved, or to Agent's knowledge, has
been threatened against or affects Agent, which questions the validity of this
Agreement or any action taken or to be taken by the Agent in connection with
this Agreement, or which if adversely determined, would have a material adverse
effect upon the Agent's ability to perform its obligations under this Agreement.
Section 12. Insurance.
12.1 Merchant's Liability Insurance. Merchant shall continue at its
cost and expense until the Sale Termination Date, in such amounts as it
currently has in effect, all of its liability insurance policies including, but
not limited to, products liability, comprehensive public liability, auto
liability and umbrella liability insurance, covering injuries to persons and
property in, or in connection with Merchant's operation of the Stores, and shall
cause Agent to be named an additional named insured with respect to all such
policies. Exhibit 12.1 attached hereto contains a description of all such
policies. Prior to the sale Commencement Date, Merchant shall deliver to Agent
certificates evidencing such insurance setting forth the duration thereof and
naming Agent as an additional named insured, in form reasonably satisfactory to
Agent. All such policies shall require at least thirty (30) days prior notice to
Agent of cancellation, non-renewal of material change. In the event of a claim
under any such policies Merchant shall be responsible for the payment of all
deductibles, retentions or self-insured amounts thereunder, unless it is
determined that liability arose by reason of the wrongful acts or omissions or
negligence of Agent, or Agent's employees, independent contractors or agents
(other than Merchant's employees).
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omissions or negligence of Agent, or Agent's employees, independent contractors
or agents (other than Merchant's employees).
12.2 Merchant's Casualty Insurance. Merchant will provide throughout
the Sale Term, at Agent's cost as an Expense hereunder, fire, flood, theft and
extended coverage casualty insurance covering the Merchandise in a total amount
equal to no less than the retail value thereof. Exhibit 12.2 attached hereto
contains a description of all such policies. From and after the date of this
Agreement until the Sale Termination Date, all such policies will name Agent as
loss payee. In the event of a loss to the Merchandise on or after the date of
this Agreement, the proceeds of such insurance attributable to the Merchandise
plus any self insurance amounts and the amount of any deductible (which amounts
shall be paid by Merchant), shall constitute Proceeds hereunder and shall be
paid to Agent. In the event of such a loss Agent shall have the sole right to
adjust the loss with the Insurer. Prior to the Sale Commencement Date, Merchant
shall deliver to Agent certificates evidencing such insurance setting forth the
duration thereof and naming the Agent as loss payee, in form and substance
reasonably satisfactory to Agent. All such policies shall require at least
thirty (30) days prior notice to the Agent of cancellation, non-renewal or
material change. Merchant shall not make any change in the amount of any
deductibles or self insurance amounts prior to the Sale Termination Date without
Agent's prior written consent.
12.3 Agent's Insurance. Agent shall maintain at Agent's cost and
expense throughout the Sale Term, in such amounts as it currently has in effect,
comprehensive public liability and automobile liability insurance policies
covering injuries to persons and property in or in connection with Agent's
agency at the Stores, and shall cause Merchant to be named an additional insured
with respect to such policies. Exhibit 12.3 attached hereto contains
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naming Merchant as an additional insured, in form and substance reasonably
satisfactory to Merchant. In the event of a claim under any such policies Agent
shall be responsible for the payment of all deductibles, retentions or
self-insured amounts thereunder, unless it is determined that liability arose by
reason of the wrongful acts or omissions or negligence of Merchant or Merchant's
employees, independent contractors or agents (other than Agent or Agent's
employees, agents or independent contractors).
12.4 Worker's Compensation Insurance. Merchant shall at all times
during the Sale Term maintain in full force and effect worker's compensation
insurance (including employer liability insurance) covering all Retained
Employees in compliance with all statutory requirements. Prior to the Sale
Commencement Date, Merchant shall deliver to Agent a certificate of Merchant's
insurance broker or carrier evidencing such insurance.
12.5 Risk of Loss. Without limiting any other provision of this
Agreement, Merchant acknowledges that Agent is conducting the Sale on behalf of
Merchant solely in the capacity of an agent, and that in such capacity (i) Agent
shall not be deemed to be in possession or control of the Stores or the assets
located therein or associated therewith, or of Merchant's employees located at
the Stores, and (ii) except as expressly provided in this Agreement, Agent does
not assume any of Merchant's obligations or liabilities with respect to any of
the foregoing. Merchant and Agent agree that Merchant shall bear all
responsibility for liability claims of customers, employees and other persons
arising from events occurring at the Stores during and after the Sale Term,
except to the extent any such claim arises directly from the acts or omissions
of Agent, or its supervisors or employees located at the Stores (an "Agent
Claim"). In the event of any such liability claim other than an Agent Claim,
Merchant shall administer such claim and shall present such claim to Merchant's
liability insurance carrier in accordance with
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175
Merchant's historic policies and procedures, and shall provide a copy of the
initial documentation relating to such claim to Agent. To the extent that
Merchant and Agent agree that a claim constitutes an Agent Claim, Agent shall
administer such claim and shall present such claim to its liability insurance
carrier, and shall provide a copy of the initial documentation relating to such
claim to Merchant. In the event that Merchant and Agent cannot agree whether a
claim constitutes an Agent Claim, each party shall present the claim to its own
liability insurance carrier, and a copy of the initial claim documentation shall
be delivered to the other party.
Section 13. Indemnification.
13.1 Merchant Indemnification. Provided that Agent makes a written
demand on Merchant for indemnification on or prior to December 31, 2001,
Merchant shall indemnify and hold Agent and its officers, directors, employees,
agents and independent contractors (collectively, "Agent Indemnified Parties")
harmless from and against all claims, demands, penalties, losses, liability or
damage, including, without limitation, reasonable attorneys' fees and expenses,
directly or indirectly asserted against, resulting from, or related to:
(a) Merchant's material breach of or failure to comply with any of its
agreements, covenants, representations or warranties contained in any Agency
Document;
(b) any failure of Merchant to pay to its employees any wages,
salaries or benefits due to such employees during the Sale Term;
(c) subject to Agent's compliance with its obligations under Section
8.3 hereof, any failure by Merchant to pay any Sales Taxes to the proper taxing
authorities or to properly file with any taxing authorities any reports or
documents required by applicable law to be filed in respect thereof;
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176
(d) any consumer warranty or products liability claims relating to
Merchandise or Merchant Consignment Goods;
(e) any liability or other claims asserted by customers, any of
Merchant's employees, or any other person against any Agent Indemnified Party
(including, without limitation, claims by employees arising under collective
bargaining agreements, worker's compensation or under the WARN Act), except for
Agent Claims; and
(f) the gross negligence or willful misconduct of Merchant or any of
its officers, directors, employees, agents or representatives.
13.2 Agent Indemnification. Provided that Merchant makes a written
demand on Agent for indemnification on or prior to December 31, 2001, Agent
shall indemnify and hold Merchant and its officers, directors, employees, agents
and representatives harmless form and against all claims, demands, penalties,
losses, liability or damage, including, without limitation, reasonable
attorneys' fees and expenses, directly or indirectly asserted against, resulting
from, or related to:
(a) Agent's material breach of or failure to comply with any of its
agreements, covenants, representations or warranties contained in any Agency
Document;
(b) any harassment or any other unlawful, tortious or otherwise
actionable treatment of any employees or agents of Merchant by Agent or any of
its representatives;
(c) any claims by any party engaged by Agent as an employee or
independent contractor arising out of such employment;
(d) any Agent Claims; and
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(e) the gross negligence or willful misconduct of Agent or any of its
officer, directors, employees, agents or representatives.
Section 14. Defaults. The following shall constitute "Events of Default"
hereunder:
(a) Merchant's or Agent's failure to perform any of their respective
material obligations hereunder;
(b) Any representation or warranty made by Merchant or Agent proves
untrue in any material respect as of the date made; or
(c) A bankruptcy, reorganization, receivership or other similar
proceeding is filed by or against Merchant or Agent; or
(d) The Sale is terminated at a Store for any reason other than (i) an
Event of Default by Agent, (ii) any other breach or action by Agent not
authorized hereunder, or (iii) an event administered pursuant to Section 8.9
above.
In the event of an Event of Default, the non-defaulting party or, in the
case of an Event of Default under Section 14(d), the Agent, may, in its
discretion, upon five (5) days' written notice to the other party (or in the
case of an Event of Default under Section 14(c), without any notice), (x) elect
to terminate this Agreement and (y) exercise any rights otherwise available to
it under applicable law. Any party's damages or entitlement to equitable relief
hereunder shall be determined by a court of competent jurisdiction located in
the State of Michigan.
Section 15. Bankruptcy Agreements and Waivers. Merchant agrees that in the
event a bankruptcy, reorganization, receivership or other similar proceeding is
filed by or against it, (a) Merchant shall immediately move to assume its rights
and obligations under this Agreement pursuant to section 365 of the Bankruptcy
Code, (b) Agent shall be free to pursue foreclosure and
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other remedies with respect to the Merchandise and the Proceeds without
opposition or interference by Merchant, (c) Agent shall be entitled to seek and
obtain relief from the automatic stay under section 362 of the Bankruptcy Code
without objection by Merchant and (d) any rights of Merchant (whether arising
under sections 105 or 362 of the Bankruptcy Code or otherwise) to stay, enjoin
or otherwise delay or impede Agent's remedies against the Merchandise and the
Proceeds, including, without limitation, Agent's right to foreclose, are hereby
released and waived.
Section 16. Sale of FF&E. Agent shall advertise in the context of
advertising for the Sale that items of FF&E at the Stores are for sale, and
shall contact and solicit known purchasers and dealers of furniture and
fixtures. Merchant shall notify Agent if any such FF&E are to be excluded from
sale and/or if terms and conditions of sale are to be set or restricted in any
manner. In consideration of providing such services, Agent shall retain thirty
percent (30%) of receipts (net of Sales Taxes) from all sales or other
dispositions of FF&E. In addition, Merchant shall reimburse Agent for Agent's
reasonable out of pocket expenses incurred in connection with the liquidation of
FF&E including, without limitation, costs of commissions and advertising. Agent
shall leave unsold FF&E at the Stores and shall have no liability to Merchant
for its failure to sell any or all of the FF&E.
Section 17. Grant of Security Interest. In the event that Merchant desires
to invoke Section 3.5 hereof, to secure its obligations to Agent hereunder,
Merchant shall grant to Agent a first-priority security interest in and lien
upon all goods constituting Merchandise and all Proceeds and all proceeds and
products thereof. Merchant shall execute all such documents and take all such
other actions as are reasonably required to perfect and maintain such security
interest as a valid and perfected first priority security interest.
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Section 18. Miscellaneous.
18.1 Notices. All notices and communications provided for pursuant to
this Agreement shall be in writing, and sent by hand, by facsimile, or by
Federal Express or other recognized overnight delivery service, as follows:
If to the Agent: Hilco Merchant Resources, LLC
One Northbrook Place
0 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxx Xxxxxx
Telecopy No. (000) 000-0000
and
Xxxxxx & Xxxxxxx
0000 Xxxxx Xxxxx
Xxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxx
Telecopy No. (000) 000-0000
If to the Merchant: Frank's Nursery & Crafts
0000 Xxxx Xxxx Xxxx Xxxx
Xxxx, Xxxxxxxx 00000
Attn: Xxxx X. Xxxxxxxxx
Xxxxx X. Xxxxx
Telecopy No. (000) 000-0000
18.2 Governing Law; Consent to Jurisdiction. This Agreement shall be
governed and construed in accordance with the laws of the State of Michigan
without regarding to conflicts of laws principles thereof. The parties hereto
agree that any legal action or proceeding arising out of or in connection with
this Agreement may be brought in the federal or state courts located in the
State of Michigan, and by execution of this Agreement each party hereby
irrevocably accepts and submits to the jurisdiction of such courts in personam
with respect to any such action or proceeding.
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18.3 Termination. This Agreement shall remain in full force and effect
until the first to occur of: (a) receipt by Merchant of written notice from
Agent that any of the conditions specified in Section 10 hereof have not been
satisfied; (b) termination by the non-defaulting party after an Event of Default
pursuant to Section 14 hereof; or (c) the expiration of the Sale Term and
completion and certification by Merchant and Agent of the final Sale
reconciliation pursuant to Section 8.8 above. Notwithstanding the foregoing, the
representations and warranties of Merchant and Agent contained herein and the
provisions of Section 13 above shall survive the termination of this Agreement
pursuant to this Section 18.3.
18.4 Entire Agreement. This Agreement and the side letter dated as of
the same date hereof contains the entire agreement between the parties hereto
with respect to the transactions contemplated hereby and supersedes and cancels
all prior agreements, including, but not limited to, all proposals, letters of
intent or representations, written or oral, with respect thereto. The side
letter shall control over this Agreement.
18.5 Amendments. This Agreement may not be modified except in a
written instrument executed by each of the parties hereto.
18.6 No Waiver. No consent or waiver by any party, express or implied,
to or of any breach or default by the other in the performance of its
obligations hereunder shall be deemed or construed to be a consent or waiver to
or of any other breach or default in the performance by such other party of the
same or any other obligation of such party. Failure on the part of any party to
complain of any act or failure to act by the other party or to declare the other
party in default, irrespective of how long such failure continues, shall not
constitute a waiver by such party of its rights hereunder.
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18.7 Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon Agent and Merchant, and their respecting successors and
assigns; provided, however, that this Agreement may not be assigned by Merchant
or Agent to any party without the prior written consent of the other.
18.8 Execution in Counterparts; Facsimile. This Agreement may be
executed in two or more counterparts, each of which shall be deemed an original
but all of which together shall constitute but one agreement. This Agreement may
be executed by facsimile, and such facsimile signature shall be treated as an
original signature hereunder.
18.9 Section Headings. The headings of sections of this Agreement are
inserted for convenience only and shall not be considered for the purpose of
determining the meaning or legal effect of any provisions hereof.
18.10 Survival. All representations, warranties, covenants and
agreements made by the parties hereto shall be considered to have been relied
upon by the parties and shall survive the execution, delivery and performance of
this Agreement.
18.11 Severability. Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.
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IN WITNESS WHEREOF, Agent and Merchant hereby execute this Agreement by
their duly authorized representatives as of the day and year first written
above.
HILCO MERCHANT RESOURCES, LLC
By: /s/ XXXXXXX X. XXXXX
-----------------------------------
Its: PRESIDENT & CEO
----------------------------------
FRANK'S NURSERY & CRAFTS, INC.
By: /s/ XXXXX X. XXXXX
-----------------------------------
Its: VICE CHAIRMAN & CFO
----------------------------------
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Frank's Nursery & Crafts
Exhibit 1
Store List
Store # Name Xxxxxxx Xxxx Xxxxx Xxx
00 00-XXX XXXX 0000 Xxx Xx. Xxxxxxx Xxxx XX 00000
00 00-XXXXX XXXXXX 0000 X. Xxxxx Xx. Xxxxxxx XX 00000
28 28-S XXXXXXX 0000 Xxxxx Xxxxxxx Xx. Xxxxx XX 00000
110 000-X XXX XXXXX 0000 Xxxx Xxx Xx. Xxxxxxxxxx XX 00000
111 111-49TH ST. N. 0000 00xx Xx X. Xx. Xxxxxxxxxx XX 00000
113 113-US 19 U.S.19 N., X xx Xxxxx 00 Xxx Xxxx Xxxxxx XX 00000
000 000-XXXXXX XXXX 0000 Xxxxxx Xx. Xxx Xxxx Xxxxxx XX 00000
115 115-VALRICO 0000 Xxxxx Xxx. 00 Xxxxxxx XX 00000
000 000-00XX XX. XX. 0000 00xx Xxxxxx Xxxxx Xx. Xxxxxxxxxx XX 00000
000 000-XXXXXX XXXXXX 0000 X. Xxxxxx Xxx. Xxxxx XX 00000
119 119-WALSINGHAM COM 00000 Xxxxxxxxxx Xx. Xxxxx XX 00000
120 120-NORTHDALE SQ 00000 Xxxxxxxxx Xxxx. Xxxxx XX 00000
121 121-XXXX XXXXX 0000 X. Xxxx Xxxxx Xxxxx XX 00000
122 122-HIGHWAY 000 000X Xxxxx Xxx. 000 Xxxxxxxxxxx XX 00000
123 123-HURSTBOURN LN 0000 Xxxxxxxxxxx Xxxx. Xxxxxxxxxx XX 00000
000 000-XXXXXXX XXXX 0000 Xxxxxxx Xx. Xxxxxxxxx XX 00000
135 135-BRIDGETON 00000 Xx. Xxxxxxx Xxxx Xx. Xxxxxxxxx XX 00000
139 139-ST. XXXXXXX 0000 Xxxxx X. Xxxxxx Xx. Xxxxxxx XX 00000
146 146-PALM HARBOR U.S.19 N., X xx Xxxxxx Xx Xxxx Xxxxxx XX 00000
156 156-MICHIGAN CITY 0000 X. Xxxxxxxx Xx. Xxxxxxxx Xxxx XX 00000
164 164-BAY CITY 0000 X. Xxxxxx Xx. Xxx Xxxx XX 00000
167 167-SHAUMBURG 0000 Xxxxxx Xxxx Xx. Xxxxxxxxxx XX 00000
168 168-BATTLE CREEK 0000 Xxxxxxx Xx. Xxxxxx Xxxxx XX 00000
178 178-SAGINAW 0000 Xxxxxxxxxxxxx Xx. Xxxxxxx XX 00000
179 179-NORTHWOOD 0000 Xxxxxxxxx Xx. Xxxxxxxxx XX 00000
184 184-8 MILE 00000 0 Xxxx Xx. Xxxxxx XX 00000
189 189-XXXXX XX 0000 X. Xxxxx Xxxxxx XX 00000
205 205-XXXXX HWY 0000 Xxxxx Xxx. Xxxxxxxxxx XX 00000
208 208-OUTER LOOP 0000 Xxxxx Xxxx Xxxxxxxxxx XX 00000
214 214-FRANKIN 0000 Xxxxx Xxxx. Xxxxxxxx XX 00000
245 245-EAGAN 0000 Xxxxxxxx Xxxxx Xxxxx XX 00000
259 259-MISHAWAKA 0000 X. Xxxxx Xx. Xxxxxxxxx XX 00000
265 265-ST. XXXXXX 0000 Xxx. 00 X. Xxxxx Xx. Xx. Xxxxxx XX 00000
272 272-WESTFIELD 00 X. Xxxx Xx. Xxxxxxxxx XX 00000
273 273-MIDDLETON 000 X. Xxxx Xx. Xxxxxxxxx XX 00000
284 284-NORWOOD 0000 Xxxxxx Xxxxxxxxxx Xxx. Xxxxxxx XX 00000
622 622-MILFORD 000 Xxxxx Xx. Xxxxxxx XX 00000
632 632-XXXXXX 000 Xxxxxxxxxxxx Xx. Xxxxxx XX 00000
000 000-XXXXXXXX Xxxxx 0, X. Xxxxxxx Xxxx Xxxxxxxx XX 00000
643 643-EAST HARTFORD 000 Xxxxxx Xxxx Xxxx Xxxxxxxx XX 00000
645 645-TAUNTON 000 Xxxxxxxx Xxxxxx (Xxxxx 00) Xxxxxxx XX 00000
648 648-BROCKTON 00 Xxxxxxxxxx Xxxxx Xxxxxxxx XX 00000
649 649-HADLEY 000 Xxxxxxx Xxxxxx (Xxx. 0) Xxxxxx XX 00000
652 652-SPRINGFIELD 000 Xxxxxx Xx. (Xxxxx 00) Xxxxxxxxxxx XX 00000
184
Frank's Nursery and Crafts
Exhibit 3.1
Merchandise Threshold
For every $100,000 below $33,000,000 at the retail price the guarantee will
reduce by .14%
Retail Price Guarantee
------------ ---------
33,000,000 42.15 %
32,900,000 42.01 %
32,800,000 41.87 %
32,700,000 41.73 %
32,600,000 41.59 %
32,500,000 41.45 %
32,400,000 41.31 %
32,300,000 41.17 %
32,200,000 41.03 %
32,100,000 40.89 %
32,000,000 40.75 %
185
Frank's Nursery & Crafts
Exhibit 3.1(a)
None
186
EXHIBIT B
TO IRREVOCABLE STANDBY LETTER OF CREDIT NO.
----------
Re: Reduction of Face Amount
HILCO MERCHANT RESOURCES, LLC
Ladies and Gentlemen:
I refer to your Letter of Credit No. (the "Letter of
Credit"). The undersigned, a duly authorized officer of Hilco Merchant
Resources, LLC (the "Beneficiary") hereby certify to you that the face amount of
the Letter of Credit No. hereby shall be reduced from its original face
amount to a new face amount of $ .
IN WITNESS WHEREOF, I have executed and delivered this
certificate as of this day of 200 .
Very truly yours,
HILCO MERCHANT RESOURCES, LLC
------------------------------------
By:
Title:
187
[NAME OF ISSUING BANK]
[ADDRESS]
Date: December , 2000
Irrevocable Standby Letter of Credit Number:
-------------
BENEFICIARY:
FRANK'S NURSERY & CRAFTS, INC.
Credit Number:
Opener's Reference No:
Gentlemen:
BY ORDER OF: [Agent]
We hereby open in your favor our Irrevocable Standby Letter of Credit for the
account of for a sum or sums not exceeding a total of $
U.S. Dollars ( ) available by your draft(s) at SIGHT at OURSELVES
effective immediately and expiring at OUR COUNTERS on May 15, 2001, or such
earlier date on which the beneficiary shall notify us in writing that this
Standby Letter of Credit shall be terminated accompanied by the original Letter
of Credit (the "Expiry Date").
Draft(s) must be accompanied by a signed statement in the form attached as
Exhibit A, and the original Letter of Credit. The amount available to be drawn
by you may be reduced from time to time by Xxxxxx' Nursery & Crafts, Inc..
("Merchant") by delivering to us a signed statement in the form attached as
Exhibit B.
Partial and/or multiple drawings are permitted.
Each draft must bear upon its fact the clause "Drawn under Letter of Credit
No. dated 2000 of [NAME AND ADDRESS
OF ISSUING BANK]."
Except so far as otherwise expressly stated herein, this Letter of Credit is
subject to the "Uniform Customs and Practices for Documentary Credits (1993
Revision), International Chamber of Commerce Publication No. 500".
188
EXHIBIT A
TO IRREVOCABLE STANDBY LETTER OF CREDIT NO.________
Re: Drawing for Amounts Due to:
FRANK'S NURSERY & CRAFTS, INC.
Ladies and Gentlemen:
I refer to your Letter of Credit No._________ (the "Letter of Credit"). The
undersigned, a duly authorized officer of Frank's Nursery & Crafts, Inc., as
beneficiary, hereby certifies to you that:
(i) Hilco Merchant Resources, LLC (the "Agent") has not made a
payment when due of the Guaranteed Amount or Expenses as such terms are
defined in that certain Agency Agreement dated as of December 1, 2000,
between Frank's Nursery & Crafts, Inc. (the "Merchant") and the Agent
(the "Amount Owing"). Merchant has provided Agent with the notice
required under the Agency Agreement prior to this draw being made.
(ii) The Merchant has not had an involuntary
bankruptcy petition filed against it or the Merchant has had an
involuntary bankruptcy petition filed against it and (a) the involuntary
proceeding has been dismissed or (b) no order for relief has been
entered against the Merchant and no order has been entered by the
bankruptcy court prohibiting the continuation of the Sale or (c) an
order for relief has been entered or an order has been entered by the
bankruptcy court prohibiting continuation of the Sale and thereafter
the Agency Agreement has been assumed by the Merchant without alteration
of any of the terms of the Agency Agreement, unless agreed to by Agent,
pursuant to a final order of the bankruptcy court having jurisdiction
over the Merchant's bankruptcy proceeding within thirty days of the
entry of the order for relief.
(iii) The Merchant has not commenced a
voluntary bankruptcy proceeding or the Merchant has commenced a
voluntary bankruptcy proceeding and the Agency Agreement has been
assumed by the Merchant without alteration of any of the terms of the
Agency Agreement, unless agreed to by Agent, pursuant to a final order
of the bankruptcy court having jurisdiction over the Merchant's
voluntary bankruptcy proceeding within thirty days of the commencement
of the case.
(iv) No Event of Default with respect to the
Merchant or event which, with the passage of time or lapse of time and
notice, will constitute an Event of Default with respect to the
Merchant exists under the Agency Agreement.
189
(v) The amount to be drawn is
$_____________ (the "Draw Amount"). The Draw Amount is less than or
equal to the Amount Owing.
(iii) Payment is hereby demanded in an amount equal to the lesser of
(a) the Draw Amount and (b) the amount available on the date hereof to be drawn
under the Letter of Credit.
(iv) The Letter of Credit has not expired prior to the delivery of this
letter and the accompanying sight draft.
(v) The payment hereby demanded is requested to be made in immediately
available funds upon delivery of this certificate by wire transfer to the
following account:
[Bank Name]
[Bank Address]
ABA No:__________________
Further Credit to: [Account Title]
Account No.
190
IN WITNESS WHEREOF, I have executed and delivered this certificate as of
this date of 200 .
Very truly yours,
FRANK'S NURSERY & CRAFTS, INC.
----------------------------------------
By:
Title:
191
EXHIBIT B
TO IRREVOCABLE STANDBY LETTER OF CREDIT NO.
----------
Re: Reduction of Face Amount
FRANK'S NURSERY & CRAFTS, INC.
Ladies and Gentlemen:
I refer to your Letter of Credit No. (the
"Letter of Credit"). The undersigned, a duly authorized officer of Frank's
Nursery & Crafts, Inc. (the "Beneficiary") hereby certify to you that the face
amount of the Letter of Credit No. hereby shall be reduced from
its original face amount to a new face amount of $ .
IN WITNESS WHEREOF, I have executed and delivered this
certificate as of this day of 200 .
Very truly yours,
FRANK'S NURSERY & CRAFTS, INC.
------------------------------------
By:
Title:
192
[NAME OF ISSUING BANK]
[ADDRESS)
Date: December , 2000
----
Irrevocable Standby Letter of Credit Number:
----------
BENEFICIARY:
HILCO MERCHANT RESOURCES, LLC.
Credit Number:
Opener's Reference No:
Gentlemen:
BY ORDER OF: [Merchant]
We hereby open in your favor our Irrevocable Standby Letter of Credit for the
account of for a sum or sums not exceeding a total of $ U.S.
Dollars ( ) available by your draft(s) at SIGHT at OURSELVES effective
immediately and expiring at OUR COUNTERS on May 15, 2001, or such earlier date
on which the beneficiary shall notify us in writing that this Standby Letter
of Credit shall be terminated accompanied by the original Letter of Credit (the
"Expiry Date").
Draft(s) must be accompanied by a signed statement in the form attached as
Exhibit A, and the original Letter of Credit. The amount available to be drawn
by you may be reduced from time to time by delivering to us a signed statement
in the form attached as Exhibit B.
Partial and/or multiple drawings are permitted.
Each draft must bear upon its fact the clause "Drawn under Letter of Credit
No. dated 2000 of [NAME AND ADDRESS OF ISSUING BANK]."
Except so far as otherwise expressly stated herein, this Letter of Credit is
subject to the "Uniform Customs and Practices for Documentary Credits (1993
Revision), International Chamber of Commerce Publication No. 500".
193
We hereby agree that drafts drawn under an in compliance with the terms of this
letter of credit will be duly honored if presented to the above mentioned drawee
bank on or before the Expiry Date.
Kindly address all correspondence regarding this letter of credit to the
attention of our Letter of Credit Operations, [ADDRESS OF L/C DEPARTMENT OF
ISSUING BANK] attention , mention our reference number as it appears
above. Telephone inquiries can be made to at .
Very truly yours,
Authorized official
194
EXHIBIT A
TO IRREVOCABLE STANDBY LETTER OF CREDIT NO.
----------
Re: Drawing for Amounts Due to:
HILCO MERCHANT RESOURCES, LLC
Ladies and Gentlemen:
I refer to your Letter of Credit No. (the "Letter of Credit"). The
undersigned, a duly authorized officer of Hilco Merchant Resources, LLC (the
"Agent"), as beneficiary, hereby certifies to you that:
(i) A payment, distribution or reimbursement, as the case may be, when
due of the Agent's Fee, Proceeds or unreimbursed Expenses incurred by
Agent, as such terms are defined in that certain Agency Agreement dated as
of December 1, 2000 (the "Agency Agreement"), between Frank's Nursery &
Crafts, Inc. (the "Merchant") and Agent, or such other obligation of or
amount is due to Agent by Merchant under the Agency Agreement. Agent has
provided Merchant with the notice, if any, required under the Agency
Agreement prior to this draw being made.
(ii) No Event of Default with respect to the
Agent or event which, with the passage of time or lapse of time and
notice, will constitute an Event of Default with respect to the Agent
exists under the Agency Agreement.
(iii) The amount to be drawn is $ (the "Draw
Amount"). The Draw Amount does not exceed the obligation or
amount referred to in Paragraph (i) above.
(iv) Payment is hereby demanded in an amount equal to the Draw Amount.
(v) The Letter of Credit has not expired prior to the delivery of this
letter and the accompanying sight draft.
(vi) The payment hereby demanded is requested to be made in
immediately available funds upon delivery of this certificate by wire transfer
to the following account:
[Bank Name]
[Bank Address]
ABA No:
Further Credit to: [Account Title]
Account No.
195
IN WITNESS WHEREOF, I have executed and delivered this certificate as of
this date of 200 .
Very truly yours,
HILCO MERCHANT RESOURCES, LLC
--------------------------------
By:
Title:
196
FRANK'S NURSERY & CRAFTS
EXHIBIT 4.1
---------------------------------------------------------------------------------------------------------
PER DIEM
---------------------------------------------------------------------------------------------------------
RUBBISH ADDL RENT PROP. RENT
STORE # STORE NAME TELEPHONE BLDG INS REMOVAL UTILITIES CAM INSURANCE NORMAL TAXES - STEP & Exc Total
------------------------------------------------------------------------------------------------------------------------------------
15 15-XXX ROAD 18 3 12 98 0 0 0 59 0 190
23 23-STATE STREET 21 3 12 74 0 0 0 66 0 176
28 28-S XXXXXXX 41 3 5 67 0 0 0 100 0 216
110 000-X XXX XXXXX 28 3 24 57 0 0 0 161 0 273
111 111-49TH ST. N. 26 3 16 82 0 0 0 157 0 284
113 113-US 19 29 3 7 47 0 0 0 73 0 158
114 114-LITTLE ROAD 25 3 14 61 31 0 454 57 0 645
115 115-VALRICO 26 3 8 35 35 0 352 41 0 500
116 116-34TH ST. SO. 26 3 1 73 88 0 500 11 0 702
117 117-WATERS AVENUE 21 3 10 75 0 0 0 66 0 175
119 119-WALSINGHAM COM 24 3 14 65 11 0 0 197 0 314
120 120-NORTHDALE SQ 35 3 13 141 0 0 0 78 0 269
121 121-XXXX XXXXX 27 3 21 81 17 0 160 62 (6) 364
122 122-HIGHWAY 131 42 3 13 (3) 22 0 371 82 (7) 524
123 123-HURSTBOURN LN 24 3 9 (4) 39 1 708 38 0 819
124 124-LIBERTY ROAD 25 3 8 99 106 5 264 97 0 606
135 135-BRIDGETON 28 3 9 41 41 0 0 82 0 203
139 139-ST. XXXXXXX 30 3 17 70 0 0 0 65 0 183
146 146-PALM HARBOR 25 3 0 47 42 10 683 144 0 953
156 156-MICHIGAN CITY 24 3 11 113 0 0 0 74 0 225
164 164-BAY CITY 19 3 18 (4) 0 0 0 58 0 93
167 167-SHAUMBURG 20 3 9 92 0 0 0 241 0 365
168 168-BATTLE CREEK 25 3 9 49 36 0 0 105 0 226
178 178-SAGINAW 19 3 7 97 0 0 0 61 0 187
179 179-NORTHWOOD 21 3 4 110 0 0 0 90 0 227
184 184-8 MILE 22 3 14 50 0 0 96 45 (14) 218
189 189-XXXXX XX 21 3 4 79 0 0 0 60 0 167
205 205-XXXXX HWY 31 3 14 33 16 0 0 44 0 140
208 208-OUTER LOOP 35 3 9 46 0 0 0 39 0 131
214 214-FRANKLIN 20 3 5 114 0 0 0 52 0 192
245 245-XXXXX 24 3 14 135 0 0 0 162 0 338
259 259-MISHAWAKA 19 3 5 72 0 0 0 133 0 232
265 265-ST. XXXXXX 35 3 18 50 0 0 0 129 0 235
272 272-WESTFIELD 18 3 10 128 0 0 0 81 0 240
273 273-MIDDLETON 17 3 14 102 0 0 421 38 12 606
284 284-XXXXXXX 18 3 8 118 0 0 437 65 33 681
622 622-MILFORD 32 3 29 128 0 0 0 56 0 247
632 632-XXXXXX 24 3 9 203 0 0 0 116 0 355
639 639-KINGSTON 21 3 22 121 0 0 0 81 0 247
643 643-EAST HARTFORD 42 3 12 154 0 0 0 114 0 323
645 645-TAUNTON 19 3 14 144 0 0 0 73 0 251
648 648-BROCKTON 19 3 6 164 0 0 0 118 0 309
649 649-XXXXXX 33 3 4 130 0 0 0 31 0 201
652 652-SPRINGFIELD 21 3 6 157 0 0 0 127 0 313
---------------------------------------------------------------------------------------------------------
44 TOTAL 1,119 126 486 3,788 484 16 4,445 3,825 18 14,307
---------------------------------------------------------------------------------------------------------
Per Week 7,832 880 3,402 26,519 3,391 109 31,113 26,772 129 100,146
---------------------------------------------------------------------------------------------------------
Per Store Week
Occupany Page 1
197
DRAFT EXHIBIT 5.1
FRANK'S NURSERY & CRAFTS/
HILCO MERCHANT RESOURCES, LLC
LIQUIDATION INVENTORY INSTRUCTION
SUPPLEMENT
Store Manager, Frank's Nursery & Crafts Representative, and
Liquidation Representative Guidelines
This guide outlines only the critical variations between the normal
"Physical Count Instructions" and the Liquidation Agreement. Please
refer to your normal "Physical Count Instructions" for details of any
physical inventory related activity not outlined in these instructions.
198
INVENTORY INSTRUCTION SUPPLEMENT FOR STORE MANAGER,
FRANK'S NURSERY & CRAFTS REPRESENTATIVE, AND
LIQUIDATION REPRESENTATIVE
OBJECTIVE
The objectives of the liquidation inventory is to ensure:
1. The inventory process is accurate and reflects the true on-hand and retail
value of the inventory
2. The inventory is taken in accordance with the liquidation agreement.
3. The issues that may cause discrepancies are investigated on the day of
inventory.
During the inventory process, the Store Manager and Liquidation
Representative own the inventory and are responsible for the overall
inventory execution. To aid in the process, a Representative from Frank's
Nursery & Crafts will be established to review the accuracy of the data
captured as well as ensure procedural compliance.
GENERAL INFORMATION
- Inventory Service will be RGIS Inventory Specialists
- The following information will be captured at the point of counting
- Scan UPC or Enter SKU
- Enter Quantity
- Enter Lowest Ticketed Selling Price
- The inventory will be attended jointly by a liquidation representative and a
Frank's Nursery & Crafts Representative. The Frank's Nursery & Crafts
Representative will be assigned by Frank's Nursery & Crafts.
PREPARATION
- Ensure all merchandise is properly ticketed and barcodes are easily visible
for quick scanning. If a ticket is missing or incorrect, validate the item
with the LRT and or Master SKU book.
- Use the "Set/Component" listing to verify that this merchandise is ticketed
correctly.
- Move as much stock as possible from the back room to the sales floor.
- Clean and organize sales floor and back room. Make sure that like
merchandise is set up behind facings on peg hook and shelves. Square off on
shelves, floor, and yard area for easier counting and auditing.
199
INVENTORY INSTRUCTION SUPPLEMENT FOR STORE MANAGER,
FRANK'S NURSERY & CRAFTS REPRESENTATIVE, AND
LIQUIDATION REPRESENTATIVE
PREPARATION (CONT)
- Have adequate personnel scheduled for inventory. Your store will be CLOSED
for business during the inventory process.
- Prepare adequate space and personnel to facilitate unloading storage
trailer(s) for counting and stocking or reloading.
- Develop a logical strategy for laying fixture tickets. Apply tickets in
a sequential pattern that will mimic the inventory service workflow.
Allow adequate time to lay fixture tickets. Count locations should be a
maximum of four feet sections to maximize auditing efficiency, with
clearly defined starting and ending breaks.
- Complete all accounting cut off schedules regarding receipts, transfers,
POS closing, damage write-offs, layaways, and gift certificates, as per
your normal Physical Count Instructions.
- Layaways subject to prior sale should be segregated with necessary
customer detail attached.
- All "Customer Owned" merchandise awaiting Repair should be segregated and
clearly marked: DO NOT INVENTORY.
- GIFT CERTIFICATE counts should be completed as normal, and packaged for
return to your Home Office.
- Empty boxes for display items, should be segregated and clearly marked:
DO NOT INVENTORY.
DATA COLLECTION
PRE DEFINED AREA NUMBERS
4000 RANGE
- OUT OF SEASONAL MERCHANDISE. Merchandise relating to holidays outside the
sale term, and merchandise not usually sold for full value during the sale
term, or packed away for sale on a future date. (i.e. Halloween merchandise)
Out of season merchandise shall NOT include Christmas merchandise.
200
INVENTORY INSTRUCTION SUPPLEMENT FOR STORE MANAGER,
FRANK'S NURSERY & CRAFTS REPRESENTATIVE, AND
LIQUIDATION REPRESENTATIVE
DATA COLLECTION (CONT)
5000 RANGE
- VALUE ADDED MERCHANDISE which requires the application of labor,
construction, or components to make the item salable for a price in
excess of the components. (i.e. mylar balloons, craft patterns/magazines)
6000 RANGE
- SALEABLE DAMAGED/DEFECTIVES should be counted in the above area number.
At a mutually agreed upon price.
7000 RANGE
- CHRISTMAS CLEARANCE MERCHANDISE should be counted in the above area
number. This is Christmas season 1999 merchandise, discontinued, or from
an earlier season.
8000 RANGE
- CHRISTMAS LIVE GOODS, trees, Poinsettias, wreaths, and garland/roping,
or other Christmas related Live goods.
9000 RANGE
- UN SALEABLE DAMAGED/DEFECTIVE. Merchandise that cannot be sold to the
general public, during the normal course of business, for the original
intent of the manufacturer. The above merchandise should be counted into
these area number ranges to aid in reconciling any Merchant perpetual
differences where all Write-Off activity may have been missed, or to
address recent shop worn damages.
1000 RANGE
- STORAGE TRAILERS/POLYHOUSE
- Hold a pre-inventory meeting with store associates and RGIS counters to
ensure all parties involved understand and follow the instructions.
- The inventory service will scan each Item's UPC/SKU barcode.
- Lowest Retail Ticketed Price, will be entered for all selling floor
stock.
- In the event of buy one get one type promotions, the RGIS counter will
use the promotional price, divided by the number of units purchased for
such promotion. (Example: socks are priced at $5.99/pr OR 3 pr for
$15.00. The RGIS counter would use the price of $5.00/pr or $15.00/3)
201
INVENTORY INSTRUCTION SUPPLEMENT FOR STORE
MANAGER, FRANK'S NURSERY & CRAFTS REPRESENTATIVE,
AND LIQUIDATION REPRESENTATIVE
AUDITING
- Types of auditing required
- Inventory AUDITS - Each RGIS counter should be audited for accuracy within
the first hour. Address any concerns with the RGIS supervisor. If a counter
continues to illustrate a high error ratio, they may have to be removed from
counting.
- The Frank's Nursery & Crafts Representative may have a "Check-Off Procedure
List" which they will complete.
- DETAIL AUDITS - A detail printout of each fixture can be supplied by the
inventory service. This detail printout should be physically attached to its
corresponding fixture of merchandise. This will allow both the Frank's
Nursery & Crafts Representative and the liquidation representative to perform
audits on any of these fixtures as necessary.
- Auditing must include verification of both the UPC/SKU and ticket price.
- The following minimum amounts must be detail audited:
Pre Counts 100%
Pack Aways 100%
Normal Areas 20%
- In addition to the detail audits outlined above, each detail printout should
be reviewed for reasonability focusing on both units and retail values.
- Invalids must be researched and corrected during the Physical Inventory
process. This occurs when an item is scanned or Keyed into the RGIS
equipment and the item is either entered incorrectly or the UPC/SKU was not
included in the data files supplied to RGIS.
202
INVENTORY INSTRUCTION SUPPLEMENT FOR STORE MANAGER,
FRANK'S NURSERY & CRAFTS REPRESENTATIVE, AND
LIQUIDATION REPRESENTATIVE
CLOSE-OUT
> Walk the sales floor, stock room, and any other areas to ensure all
fixtures have been inventoried.
> Instruct the inventory service to run the following reports to ensure
all merchandise is accounted for. ENSURE INVENTORY SERVICE HAS A FRESH
PRINTER RIBBON INSTALLED.
REPORT NAME
REPORT CONTENT RGIS
Details the Fixture Taps Applied Missing Range Report
Unit and Dollar Totals by Fixture F1 Summary Report
UPC/SKUs Not in RGIS Files Invalids
> The above reports must be reviewed by both the Frank's Nursery & Crafts
Representative, and the Liquidation representative.
> When the inventory is deemed closed, the Frank's Nursery & Crafts
Representative must forward all required information to the designated
Inventory Control contact at Their Home Office, Attn: Xxxxxxx Xxxxxxx
> The Liquidation Representative must fax the following information to:
Attn: Xxxx Xxxxxxx @ (000) 000-0000
> Store Number / Location
> Your Name
> Time the inventory was completed
> Total Units transmitted
> Total Dollars transmitted
> F1 Summary Page Signed by RGIS, Yourself, and the Frank's Nursery &
Crafts Representative
> Vault Fund Count Sheet
> Copy Of RGIS Time Sheet(s)
Also second day air mail above detail to,
Xxxx Xxxxxxx
0000 Xxxx Xxxxx Xx.
Xxx Xxxxx, XX 00000
PLEASE REFER TO YOUR NORMAL PHYSICAL COUNT INSTRUCTIONS FOR
DETAILS OF ANY PHYSICAL INVENTORY RELATED ACTIVITY NOT OUTLINED
IN THESE INSTRUCTIONS.
203
EXHIBIT 8.7
Frank's Nursery & Crafts
Merchant Employee Rules
Refer to Frank's Handbook of Hourly Store Associates, Issued 9/1999
and
Refer to Frank's TIPS: Training, Information, Procedures and Standards,
Issued 8/1999
204
EXHIBIT 9.3
HILCO MERCHANT RESOURCES
FRANK'S NURSERY & Crafts
------------------------------------------------------------------------------------------------------------------------------------
EXHIBIT 9.3 PAYROLL
------------------------------------------------------------------------------------------------------------------------------------
# of Weeks 4
----------------------------------------------------------------------------------------
PD 12 99 DEC
----------------------------------------------------------------------------------------
% OF
PAYROLL PAYROLL STORE PAYROLL EMPL. BENEFITS
STORE # STORE NAME - MGT - HRLY INCENTIVES TAXES BENEFITS TOTAL TO PAYROLL
------------------------------------------------------------------------------------------------------------------------------------
00 00-XXX XXXX 2,923 12,341 0 1,389 809 3,732 14.4%
00 00-XXXXX XXXXXX 3,000 10,329 0 1,213 706 3,706 14.4%
28 28-S XXXXXXX 3,077 9,275 0 1,124 655 3,732 14.4%
110 000-X XXX XXXXX 2,483 11,853 0 1,304 760 3,243 14.4%
000 000-00XX XX. X. 3,087 14,172 0 1,571 915 4,002 14.4%
113 113-US 19 2,480 11,969 0 1,315 766 3,246 14.4%
000 000-XXXXXX XXXX 2,871 10,011 0 1,172 683 3,554 14.4%
115 115-VALRICO 2,480 12,331 0 1,348 785 3,265 14.4%
000 000-00XX XX. XX. 2,504 13,811 0 1,484 865 3,369 14.4%
000 000-XXXXXX XXXXXX 2,480 10,204 0 1,155 672 3,152 14.4%
119 119-WALSINGHAM COM 2,856 12,545 0 1,401 817 3,673 14.4%
000 000-XXXXXXXXX XX 4,483 10,398 0 1,354 789 5,272 14.4%
121 121-XXXX XXXXX 2,550 13,992 0 1,505 877 3,427 14.4%
122 122-HIGHWAY 131 1,864 11,628 0 1,228 715 2,579 14.4%
000 000-XXXXXXXXXX XX 2,962 10,812 0 1,254 730 3,692 14.4%
000 000-XXXXXXX XXXX 2,484 12,708 0 1,382 805 3,289 14.4%
135 135-BRIDGETON 2,580 10,750 0 1,213 707 3,287 14.4%
139 139-ST. XXXXXXX 3,217 10,651 0 1,262 735 3,952 14.4%
146 146-PALM HARBOR 3,127 16,426 0 1,780 1,037 4,164 14.4%
156 156-MICHIGAN CITY 2,814 10,643 0 1,224 714 3,528 14.4%
164 164-BAY CITY 2,511 10,954 0 1,226 714 3,225 14.4%
167 167-SHAUMBURG 3,090 14,506 0 1,602 932 4,022 14.4%
000 000-XXXXXX XXXXX 3,077 12,987 0 1,462 851 3,928 14.4%
178 178-SAGINAW 2,769 10,033 0 1,165 678 3,447 14.4%
179 179-NORTHWOOD 2,354 10,913 0 1,207 703 3,057 14.4%
000 000-0 XXXX 3,365 13,306 0 1,517 884 4,249 14.4%
000 000-XXXXX XX 2,192 8,511 0 974 567 2,759 14.4%
000 000-XXXXX XXX 823 14,581 0 1,402 816 1,639 14.4%
000 000-XXXXX XXXX 2,550 11,796 0 1,306 760 3,310 14.4%
214 214-FRANKLIN 2,824 13,589 0 1,493 870 3,694 14.4%
245 245-XXXXX 2,800 12,741 0 1,414 824 3,624 14.4%
259 259-MISHAWAKA 2,900 10,556 0 1,225 713 3,613 14.4%
265 265-ST. XXXXXX 0 13,199 0 1,202 699 699 14.4%
272 272-WESTFIELD 3,308 10,771 0 1,281 746 4,054 14.4%
273 273-MIDDLETON 1,056 15,661 0 1,522 886 1,942 14.4%
284 284-XXXXXXX 3,040 14,118 0 1,562 909 3,949 14.4%
622 622-MILFORD 3,276 16,681 0 1,816 1,058 4,334 14.4%
632 632-XXXXXX 2,820 14,068 0 1,536 895 3,715 14.4%
639 639-KINGSTON 2,680 12,438 0 1,375 801 3,481 14.4%
643 643-EAST HARTFORD 3,138 11,265 0 1,311 764 3,902 14.4%
645 645-TAUNTON 2,825 11,477 0 1,302 758 3,583 14.4%
648 648-BROCKTON 3,154 11,920 0 1,371 799 3,953 14.4%
649 649-XXXXXX 3,550 11,387 0 1,359 791 4,341 14.4%
652 652-SPRINGFIELD 2,615 11,756 0 1,307 762 3,377 14.4%
--------- -------------------------------------------------------------------------------------
44 TOTAL 119,039 536,063 0 59,615 34,722 153,761 14.4%
--------- -------------------------------------------------------------------------------------
Per Week 29,760 134,016 0 14,904 8,681 38,440 14.4%
-------------------------------------------------------------------------------------
Per Store Week 676 3,046 0 339 197 874 14.4%
=====================================================================================
------------------------------------------------------------------------------------------------------------------------------------
EXHIBIT 9.3 PAYROLL
------------------------------------------------------------------------------------------------------------------------------------
# of Weeks 4
----------------------------------------------------------------------------------------
PD 13 99 JAN
----------------------------------------------------------------------------------------
% OF
PAYROLL PAYROLL STORE PAYROLL EMPL. BENEFITS
STORE # STORE NAME - MGT - HRLY INCENTIVES TAXES BENEFITS TOTAL TO PAYROLL
------------------------------------------------------------------------------------------------------------------------------------
00 00-XXX XXXX 2,923 12,485 0 759 (727) 2,196 0.2%
00 00-XXXXX XXXXXX 3,000 11,974 0 766 (640) 2,360 0.8%
28 28-S XXXXXXX 2,308 12,356 0 671 (815) 1,493 -1.0%
110 000-X XXX XXXXX 2,483 16,954 0 1,148 (461) 2,022 3.5%
000 000-00XX XX. X. 3,087 14,312 0 890 (741) 2,346 0.9%
113 113-US 19 2,480 13,294 0 809 (667) 1,813 0.9%
000 000-XXXXXX XXXX 2,871 11,844 0 753 (626) 2,245 0.9%
115 115-VALRICO 22,480 14,210 0 899 (604) 21,876 0.8%
000 000-00XX XX. XX. 2,504 14,609 0 895 (684) 1,820 1.2%
000 000-XXXXXX XXXXXX 2,480 11,574 0 723 (587) 1,893 1.0%
119 119-WALSINGHAM COM 2,856 13,500 0 838 (696) 2,160 0.9%
000 000-XXXXXXXXX XX 4,483 16,485 0 1,249 (471) 4,012 3.7%
121 121-XXXX XXXXX 2,550 13,230 0 769 (766) 1,784 0.0%
122 122-HIGHWAY 131 2,519 11,229 0 587 (864) 1,655 -2.0%
000 000-XXXXXXXXXX XX 2,962 11,794 0 706 (744) 2,218 -0.3%
000 000-XXXXXXX XXXX 2,484 14,560 0 872 (726) 1,758 0.9%
135 135-BRIDGETON 2,580 17,390 0 1,115 (627) 1,953 2.4%
139 139-ST. XXXXXXX 3,217 13,157 0 811 (761) 2,456 0.3%
146 146-PALM HARBOR 3,127 13,564 0 750 (962) 2,165 -1.3%
156 156-MICHIGAN CITY 2,814 11,634 0 708 (691) 2,123 0.1%
164 164-BAY CITY 2,511 12,598 0 762 (671) 1,840 0.6%
167 167-SHAUMBURG 773 14,330 0 703 (809) (36) -0.7%
168 168-BATTLE CREEK 3,077 15,114 0 960 (704) 2,373 1.4%
178 178-SAGINAW 2,769 11,922 0 737 (660) 2,109 0.5%
179 179-NORTHWOOD 2,354 11,225 0 693 (582) 1,772 0.8%
000 000-0 XXXX 2,692 13,519 0 827 (695) 1,997 0.8%
000 000-XXXXX XX 2,192 10,953 0 679 (545) 1,647 1.0%
000 000-XXXXX XXX 000 14,160 0 625 (868) (700) -1.7%
000 000-XXXXX XXXX 2,550 12,548 0 671 (886) 1,664 -1.4%
214 214-FRANKLIN 2,824 13,130 0 817 (678) 2,146 0.9%
245 245-XXXXX 2,800 12,579 0 746 (753) 2,047 0.0%
259 259-MISHAWAKA 2,900 11,345 0 647 (801) 2,099 -1.1%
265 265-ST. XXXXXX 0 17,142 0 886 (709) (709) 1.0%
272 272-WESTFIELD 3,308 12,686 0 805 (713) 2,595 0.6%
273 273-MIDDLETON 3,120 16,127 0 971 (871) 2,249 0.5%
284 284-XXXXXXX 3,040 13,891 0 836 (792) 2,248 0.3%
622 622-MILFORD 3,276 14,860 0 878 (894) 2,382 -0.1%
632 632-XXXXXX 2,820 16,001 0 991 (736) 2,084 1.4%
639 639-KINGSTON 2,680 11,666 0 650 (812) 1,868 -1.1%
643 643-EAST HARTFORD 3,138 12,891 0 810 (707) 2,431 0.6%
645 645-TAUNTON 2,825 13,402 0 849 (646) 2,179 1.3%
648 648-BROCKTON 3,154 14,155 0 894 (719) 2,435 1.0%
649 649-XXXXXX 3,550 12,197 0 770 (757) 2,793 0.1%
652 652-SPRINGFIELD 2,615 13,159 0 790 (714) 1,901 0.5%
--------- -------------------------------------------------------------------------------------
44 TOTAL 137,344 591,755 0 35,715 (31,582) 105,762 0.6%
--------- -------------------------------------------------------------------------------------
Per Week 34,336 147,939 0 8,929 (7,896) 26,441 0.6%
-------------------------------------------------------------------------------------
Per Store Week 780 3,362 0 203 (179) 601 0.6%
=====================================================================================
------------------------------------------------------------------------------------------------------------------------------------
EXHIBIT 9.3 PAYROLL
------------------------------------------------------------------------------------------------------------------------------------
# of Weeks 4
----------------------------------------------------------------------------------------
PD 1 00 FEB
----------------------------------------------------------------------------------------
% OF
PAYROLL PAYROLL STORE PAYROLL EMPL. BENEFITS
STORE # STORE NAME - MGT - HRLY INCENTIVES TAXES BENEFITS TOTAL TO PAYROLL
------------------------------------------------------------------------------------------------------------------------------------
00 00-XXX XXXX 15,410 0 0 1,402 724 16,134 13.8%
00 00-XXXXX XXXXXX 12,164 847 0 1,184 612 12,776 13.8%
28 28-S XXXXXXX 13,872 486 0 1,307 675 14,547 13.8%
110 000-X XXX XXXXX 13,572 100 0 1,244 643 14,215 13.8%
000 000-00XX XX. X 14,897 271 0 1,380 713 15,610 13.8%
113 113-US 19 14,381 0 0 1,309 676 15,057 13.8%
000 000-XXXXXX XXXX 13,250 46 0 1,210 625 13,875 13.8%
115 115-VALRICO 12,012 320 0 1,122 580 12,592 13.8%
116 116-34TH ST. SO 14,413 0 0 1,312 677 15,090 13.8%
000 000-XXXXXX XXXXXX 11,620 53 0 1,062 549 12,169 13.8%
119 119-WALSINGHAM COM 13,609 779 0 1,309 676 14,285 13.8%
000 000-XXXXXXXXX XX 14,118 0 0 1,285 664 14,782 13.8%
121 121-XXXX XXXXX 13,502 0 0 1,229 635 14,137 13.8%
122 122-HIGHWAY 131 11,933 0 0 1,086 561 12,494 13.8%
000 000-XXXXXXXXXX XX 12,688 75 0 1,161 600 13,288 13.8%
000 000-XXXXXXX XXXX 14,629 105 0 1,341 693 15,322 13.8%
135 135-BRIDGETON 13,203 645 0 1,260 651 13,854 13.8%
139 139-ST. XXXXXXX 12,672 922 0 1,237 639 13,311 13.8%
146 146-PALM HARBOR 17,615 0 0 1,603 828 18,443 13.8%
156 156-MICHIGAN CITY 13,297 0 0 1,210 625 13,922 13.8%
164 164-BAY CITY 12,659 0 0 1,152 595 13,254 13.8%
167 167-SHAUMBURG 12,026 1,039 0 1,189 614 12,640 13.8%
168 168-BATTLE CREEK 13,031 525 0 1,234 637 13,668 13.8%
178 178-SAGINAW 12,004 909 0 1,175 607 12,611 13.8%
179 179-NORTHWOOD 11,105 29 0 1,013 523 11,628 13.8%
000 000-0 XXXX 12,279 822 0 1,192 616 12,895 13.8%
000 000-XXXXX XX 10,973 0 0 999 516 11,489 13.8%
000 000-XXXXX XXX 14,455 0 0 1,315 679 15,134 13.8%
000 000-XXXXX XXXX 11,878 638 0 1,139 588 12,466 13.8%
214 214-FRANKLIN 13,406 247 0 1,242 642 14,048 13.8%
245 245-XXXXX 12,754 653 0 1,220 630 13,384 13.8%
259 259-MISHAWAKA 15,632 56 0 1,428 737 16,369 13.8%
265 265-ST. XXXXXX 13,088 201 0 1,209 625 13,713 13.8%
272 272-WESTFIELD 13,403 1,018 0 1,312 678 14,081 13.8%
273 273-MIDDLETON 15,793 0 0 1,437 742 16,535 13.8%
284 284-XXXXXXX 15,745 38 0 1,436 742 16,487 13.8%
622 622-MILFORD 16,032 56 0 1,464 756 16,788 13.8%
632 632-XXXXXX 14,099 613 0 1,339 691 14,790 13.8%
639 639-KINGSTON 13,189 0 0 1,200 620 13,809 13.8%
643 643-EAST HARTFORD 13,400 455 0 1,261 651 14,051 13.8%
645 645-TAUNTON 14,648 177 0 1,349 697 15,345 13.8%
648 648-BROCKTON 14,420 0 0 1,312 678 15,098 13.8%
649 649-XXXXXX 14,249 0 0 1,297 670 14,919 13.8%
652 652-SPRINGFIELD 12,736 70 0 1,165 602 13,338 13.8%
--------- -------------------------------------------------------------------------------------
44 TOTAL 595,861 12,195 0 55,332 28,582 624,443 13.8%
--------- -------------------------------------------------------------------------------------
Per Week 148,965 3,049 0 13,833 7,146 156,111 13.8%
-------------------------------------------------------------------------------------
Per Store Week 3,386 69 0 314 162 3,548 13.8%
=====================================================================================
------------------------------------------------------------------------------------------------------------------------------------
EXHIBIT 9.3 PAYROLL
------------------------------------------------------------------------------------------------------------------------------------
# of Weeks 12
----------------------------------------------------------------------------------------
TOTAL QUARTER
----------------------------------------------------------------------------------------
% OF
PAYROLL PAYROLL STORE PAYROLL EMPL. BENEFITS
STORE # STORE NAME - MGT - HRLY INCENTIVES TAXES BENEFITS TOTAL TO PAYROLL
------------------------------------------------------------------------------------------------------------------------------------
00 00-XXX XXXX 21,256 24,826 0 3,550 806 22,062 9.5%
00 00-XXXXX XXXXXX 18,164 23,150 0 3,163 678 18,842 9.3%
28 28-S XXXXXXX 19,257 22,117 0 3,102 515 19,772 8.7%
110 000-X XXX XXXXX 18,538 28,907 0 3,696 942 19,480 9.8%
000 000-00XX XX. X 21,071 28,755 0 3,841 887 21,958 9.5%
113 113-US 19 19,341 25,263 0 3,433 775 20,116 9.4%
000 000-XXXXXX XXXX 18,992 21,901 0 3,135 682 19,674 9.3%
115 115-VALRICO 36,972 26,861 0 3,369 761 37,733 6.5%
116 116-34TH ST. SO 19,421 28,420 0 3,691 858 20,279 9.5%
000 000-XXXXXX XXXXXX 16,580 21,831 0 2,940 634 17,214 9.3%
119 119-WALSINGHAM COM 19,321 26,824 0 3,548 797 20,118 9.4%
000 000-XXXXXXXXX XX 23,084 26,883 0 3,888 982 24,066 9.7%
121 121-XXXX XXXXX 18,602 27,222 0 3,503 746 19,348 9.3%
122 122-HIGHWAY 131 16,316 22,857 0 2,901 412 16,728 8.5%
000 000-XXXXXXXXXX XX 18,612 22,681 0 3,121 586 19,198 9.0%
000 000-XXXXXXX XXXX 19,597 27,373 0 3,595 772 20,369 9.3%
135 135-BRIDGETON 18,363 28,785 0 3,588 731 19,094 9.2%
139 139-ST. XXXXXXX 19,106 24,730 0 3,310 613 19,719 8.9%
146 146-PALM HARBOR 23,869 29,990 0 4,133 903 24,772 9.4%
156 156-MICHIGAN CITY 18,925 22,277 0 3,142 648 19,573 9.2%
164 164-BAY CITY 17,681 23,552 0 3,140 638 18,319 9.2%
167 167-SHAUMBURG 15,889 29,875 0 3,494 737 16,626 9.2%
168 168-BATTLE CREEK 19,185 28,626 0 3,656 784 19,969 9.3%
178 178-SAGINAW 17,542 22,864 0 3,077 625 18,167 9.2%
179 179-NORTHWOOD 15,813 22,167 0 2,913 644 16,457 9.4%
000 000-0 XXXX 18,336 27,647 0 3,536 805 19,141 9.4%
000 000-XXXXX XX 15,357 19,464 0 2,652 538 15,895 9.2%
000 000-XXXXX XXX 15,446 28,741 0 3,342 627 16,073 9.0%
000 000-XXXXX XXXX 16,978 24,982 0 3,116 462 17,440 8.5%
214 214-FRANKLIN 19,054 26,966 0 3,552 834 19,888 9.5%
245 245-XXXXX 18,354 25,973 0 3,380 701 19,055 9.2%
259 259-MISHAWAKA 21,432 21,957 0 3,300 649 22,081 9.1%
265 265-ST. XXXXXX 13,088 30,542 0 3,297 615 13,703 9.0%
272 272-WESTFIELD 20,019 24,475 0 3,398 711 20,730 9.2%
273 273-MIDDLETON 19,969 31,788 0 3,930 757 20,726 9.1%
284 284-XXXXXXX 21,825 28,047 0 3,834 859 22,684 9.4%
622 622-MILFORD 22,584 31,597 0 4,158 920 23,504 9.4%
632 632-XXXXXX 19,739 30,682 0 3,866 850 20,589 9.4%
639 639-KINGSTON 18,549 24,104 0 3,225 609 19,158 9.0%
643 643-EAST HARTFORD 19,676 24,611 0 3,382 708 20,384 9.2%
645 645-TAUNTON 20,298 25,056 0 3,500 809 21,107 9.5%
648 648-BROCKTON 20,728 26,075 0 3,577 758 21,486 9.3%
649 649-XXXXXX 21,349 23,584 0 3,426 704 22,053 9.2%
652 652-SPRINGFIELD 17,966 24,985 0 3,262 650 18,616 9.1%
--------- -------------------------------------------------------------------------------------
44 TOTAL 852,244 1,140,013 0 150,662 31,722 883,966 9.2%
--------- -------------------------------------------------------------------------------------
Per Week 71,020 95,001 0 12,555 2,644 73,664 9.2%
-------------------------------------------------------------------------------------
Per Store Week 1,614 2,159 0 285 60 1,674 9.2%
=====================================================================================
205
Frank's Nursery & Crafts
EXHIBIT 11.1(m)
--------------------------------------------------------------------------------
Historic Sales
--------------------------------------------------------------------------------
STORE # STORE NAME PD 12 99 DEC PD 13 99 JAN PD 1 00 FEB PD 2 00 MAR TOTAL
---------------------------------------------------------------------------------------------------------
00 00-XXX XXXX 136,763 21,688 24,199 54,295 236,944
00 00-XXXXX XXXXXX 118,732 23,600 27,185 60,761 230,278
28 28-S XXXXXXX 95,537 23,204 27,064 59,839 205,544
110 000-X XXX XXXXX 154,904 47,401 71,851 114,190 388,346
111 111-49TH ST. N. 223,641 58,954 91,675 145,185 519,455
113 113-US 19 157,308 49,348 76,219 108,258 391,133
000 000-XXXXXX XXXX 127,589 35,728 56,092 91,698 311,107
115 115-VALRICO 223,702 41,727 62,084 96,251 423,775
116 116-34TH ST. SO. 202,910 61,809 87,228 123,098 475,045
000 000-XXXXXX XXXXXX 160,421 34,134 47,234 68,799 310,589
119 119-WALSINGHAM COM 194,248 54,971 95,918 149,447 494,584
000 000-XXXXXXXXX XX 206,627 36,990 61,955 100,672 406,244
121 121-XXXX XXXXX 230,970 51,601 72,339 99,673 454,582
122 122-HIGHWAY 131 120,545 29,547 35,567 55,117 270,776
000 000-XXXXXXXXXX XX 105,855 18,055 22,241 64,468 211,616
000 000-XXXXXXX XXXX 148,808 25,683 29,872 49,626 253,988
135 135-BRIDGETON 123,536 19,299 29,184 69,755 241,773
139 139-ST. XXXXXXX 125,133 22,253 29,223 71,544 248,153
146 146-PALM HARBOR 229,543 57,870 100,761 169,655 557,830
156 156-MICHIGAN CITY 120,033 27,212 27,582 57,563 232,390
164 164-BAY CITY 116,905 25,500 27,337 64,568 234,309
167 167-SHAUMBURG 112,421 21,420 26,727 58,315 218,882
168 168-BATTLE CREEK 145,475 30,510 36,727 68,965 281,678
178 178-SAGINAW 109,151 19,055 21,612 44,812 194,629
179 179-NORTHWOOD 104,088 22,518 22,873 43,405 192,884
000 000-0 XXXX 82,172 16,115 19,730 36,624 154,640
000 000-XXXXX XX 79,632 14,484 15,811 33,283 143,210
205 205-XXXXX HWY 118,096 26,209 31,270 78,169 253,744
208 208-OUTER LOOP 116,678 23,150 29,935 74,853 244,617
214 214-FRANKLIN 134,853 25,725 33,685 68,621 262,884
245 245-XXXXX 100,516 18,531 21,003 35,987 176,337
259 259-MISHAWAKA 113,795 23,084 25,911 64,745 227,535
265 265-ST. XXXXXX 125,865 20,655 28,347 82,254 257,131
272 272-WESTFIELD 122,393 21,564 26,354 51,742 222,052
273 273-MIDDLETON 155,026 30,339 36,470 60,041 281,875
284 284-XXXXXXX 154,200 35,338 42,062 82,457 314,058
622 622-MILFORD 118,277 15,648 19,188 56,506 209,619
632 632-XXXXXX 115,598 25,995 31,527 65,158 238,278
639 639-KINGSTON 138,460 24,273 27,725 54,720 245,177
643 643-EAST HARTFORD 112,021 24,252 30,134 59,055 225,463
645 645-TAUNTON 94,267 23,239 30,088 58,687 206,280
648 648-BROCKTON 87,678 19,642 22,507 41,724 171,551
649 649-XXXXXX 132,856 33,949 36,842 63,469 267,116
652 652-SPRINGFIELD 86,731 18,157 21,370 36,865 163,123
--------- -------------------------------------------------------------------------
44 Total 5,984,958 1,300,727 1,740,703 3,224,939 12,251,327
========= =========================================================================
206
[LOGO]
Retention and Severance Provisions
Store Managers
Store Managers will qualify for a retention bonus equivalent to six week's
salary. To receive that payment you must:
- Have worked in a store that was closed on or before February 28, 2001
- Have worked through the closing date
In addition, you may qualify for a severance payment equivalent to one half
week of pay for each completed year of service. To receive a severance payment
you must:
- Have worked in a store that was closed on or before February 28, 2001
- Have worked through the closing date
- Not be employed by the company after your store closes
- have signed a statement releasing the company from any legal
liabilities at the time of termination
- Have not turned down a similar position within the company that was a
reasonable commuting distance from your home
If you receive a severance and/or retention payment, you cannot be rehired
within one year.
207
Retention and Severance Provisions
Assistant Managers, Regular Full Time Hourly, and Regular Part Time Hourly
To receive payment under the retention and severance provisions listed below,
you must:
- Have worked in a store that was closed on or before February 28, 2001
- Have worked through the closing date
- Not be employed by the company after your stores closes
- Have signed a statement releasing the company from any legal
liabilities at the time of termination
- Have not turned down a similar position within the company that was a
reasonable commuting distance from your home
If you receive a severance and/or retention payment, you cannot be rehired
within one year.
Assistant Managers:
- Retention Bonus: Four Weeks
- Severance: 1/2 week for each completed year of service
- Paid out based on 40 hours per week
All Other Regular Full Time Associates:
- Retention Bonus: Two Weeks
- Severance Pay: 1/2 week for each completed year of service
- Paid out based on 40 hours per week
Regular Part Time Associates:
- Retention Bonus: 15% premium on your hourly rate for all hours worked
during the retention period.
208
Frank's Nursery & Crafts
Exhibit 11.1(S)
None
209
EXHIBIT 11.1(v)
Frank's Nursery and Crafts Inc.
Closing Store Analysis
Estimated Inventory Week 44
Est. Cost Est. Retail Est. PLU
Inventory Inventory Inventory
12/03/2000 12/03/2000 12/03/2000
001-001 OUTDOOR LIVE GOODS $ 73,781.69 $ 150,787.59 $ 57,106.57
001-004 OUTDR NURSRY CHRISTMAS $ 235,745.04 $ 493,162.15 $ 472,624.37
002-006 INDOOR FOLIAGE/FLWRING $ 227,379.56 $ 466,319.40 $ 384,736.98
003-017 PLANTERS $ 1,039,867.11 $ 2,266,848.96 $ 2,289,007.29
003-018 PLANT ACCESSORIES $ 595,446.38 $ 1,313,217.53 $ 1,281,632.34
004-019 SEASONAL ACCESSORIES $ 329,872.58 $ 690,452.35 $ 607,052.96
004-020 WATER MANAGEMENT TOOLS $ 301,724.42 $ 578,568.64 $ 547,494.87
004-021 GARDENING TOOLS $ 319,515.74 $ 595,042.46 $ 416,090.30
004-022 GARDENING ACCESSORIES $ 254,257.66 $ 509,007.50 $ 561,771.24
005-010 FERTILIZER $ 530,763.68 $ 1,074,466.27 $ 781,339.14
005-011 SPREADERS $ 30,292.02 $ 52,078.48 $ 51,455.78
005-012 CHEMICALS $ 567,170.48 $ 1,103,160.43 $ 1,141,647.50
000-000 XXXXXXXX $ 16,250.86 $ 28,699.47 $ 28,465.34
005-014 SEED $ 163,728.05 $ 338,860.51 $ 272,380.72
006-015 PETS $ 312,568.66 $ 593,641.62 $ 577,867.75
006-016 SEASONAL HARDGOODS $ 241,388.81 $ 470,443.14 $ 406,515.34
006-023 OUTDOOR BULK GOODS $ 357,969.49 $ 672,039.16 $ 475,833.43
007-024 ELECTRICS $ 1,978,467.30 $ 4,325,218.99 $ 3,917,757.02
007-025 TREES, LIFELIKE $ 665,381.18 $ 1,302,227.84 $ 1,325,988.80
007-026 TREE DECORATIONS $ 816,283.11 $ 1,465,025.65 $ 1,845,541.75
007-027 BOUTIQUE $ 601,332.72 $ 1,105,328.64 $ 1,341,961.00
007-028 STANDS $ 80,039.15 $ 189,558.64 $ 200,750.31
007-029 STATIONARY $ 300,596.33 $ 658,468.17 $ 706,454.35
007-030 WREATHS/GARLANDS $ 648,232.78 $ 1,352,210.06 $ 1,439,557.58
008-005 BULBS & SEASONAL MERCH. $ 101,401.69 $ 248,111.15 $ 152,897.60
008-008 ANNUAL BEDDING PLANTS $ 40,198.35 $ 76,080.46 $ 44,605.36
008-009 PERENNIAL BEDDING PLNT $ 1,719.31 $ 3,242.58 $ 38.52
009-041 FLORAL CRAFT $ 2,119,837.93 $ 5,297,296.07 $ 4,639,610.27
009-042 ARRANGEMENTS $ 625,649.66 $ 1,317,535.15 $ 1,171,189.92
009-043 LIFE STYLES $ 809,346.17 $ 1,557,830.05 $ 1,456,472.50
010-031 SOFT CRAFTS $ 3,238.47 $ 4,816.59 $ 5,304.62
010-032 STITCHERY CRAFTS $ 34,923.63 $ 39,218.79 $ 30,599.87
010-033 PAINTING-FINISHING SUPPLY $ 938,574.28 $ 1,821,956.95 $ 1,826,730.78
010-034 WOOD CRAFT $ 403,867.58 $ 790,306.94 $ 713,673.04
010-035 BASIC CRAFT $ 326,429.58 $ 683,699.42 $ 727,500.74
010-036 HOME DECOR CRAFT $ 1,093,521.26 $ 2,155,463.24 $ 1,973,508.87
010-037 FRAMES $ 479,239.23 $ 936,416.15 $ 852,587.14
010-038 CANDY $ 59,876.16 $ 89,797.33 $ 90,120.65
010-039 RIBBON $ 272,001.86 $ 612,805.01 $ 618,467.17
010-040 CHRISTMAS CRAFT $ 430,250.94 $ 1,077,826.33 $ 1,015,940.83
999-999 Dp:999 Sd:999 Cl:000 Sc:0 $ -99,177.83 $ -183,059.33 $ -180,323.32
Totals(*) $ 18,328,753.11 $ 36,320,178.34 $ 36,279,957.29
(*)= The above numbers are projected to the end of period 11 and do not
include a provision for shrinkage.
210
================================================================================
HILCO TRADING CO, INC.
Exhibit 12.3 11/29/00
Schedules of Insurance page 1
================================================================================
Hilco Trading Co., Inc. & Hilco Merchant Resources, LLC Agent
Xx. Xxxx Xxxxxx Xxxxxx-Xxxxxx Company
0 Xxxxxx Xxxxx, Xxxxx 000 0000 X. Xxxxx Xxx., Xxxxx 0000
Xxxxxxxxxx, XX 00000 Xxx Xxxxxxx, XX 00000-0000
Bus: (000) 000-0000 Tel: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
E-mail: xxxxxxx@xxxxxxxxxxxx.xxx
================================================================================
Policy Information
================================================================================
Policy # Effective Expiration Company
4016005 07/20/2000 07/20/2001 American Internat'l Cos
Line of Business/
Inland Marine (C) - Property
Policy # Effective Expiration Company
IYG372198 07/17/2000 07/17/2001 General Star Indemnity Company
Applications/Line of Business:
General Liability
Business Auto
Policy # Effective Expiration Company
WC6523227 07/17/2000 07/19/2001 Illinois National
Applications/Line of Business:
Workers Compensation
These schedules are provided as a brief outline of our policy. In order to put
Insurance in place you must receive a certificate of Insurance naming you as
an additional Insured.
211
================================================================================
Exhibit 12.3 HILCO TRADING CO, INC.
Schedules of Insurance 11/29/00
page 2
================================================================================
Policy # Effective Expiration Company
XYZ96402003 07/21/2000 07/21/2001 Fireman's Fund Insurance Co.
Line of Business/Premium:
Umbrella
================================================================================
Named Insureds
================================================================================
Named Insured
1 Hilco Trading Co, Inc.
2 Hilco Appraisal Service, LLC
3 Hilco Real Estates Services, LLC
4 Hilco Receivables, LLC
5 Hilco Auction & Appraisal Services, LLC
6 Danbury Auction & appraisal Services
7 Hilco Merchant Resources, LLC
8 Hilco Merchant Resources I, LLC
9 Merchant Resources, Inc.
These schedules are provided as a brief outline of our policy. In order to put
insurance in place you must receive a certificate of insurance naming you as an
additional insured.
212
ANNEX B
TO AMENDMENT NO. 5
[HILCO MERCHANT RESOURCES LETTERHEAD] EXHIBIT L
December 1, 2000
RE: Agency Agreement
VIA FACSIMILE
Dear Xxxxx,
This letter is to confirm our agreement as to the matter set forth herein,
Reference is made to the Agency Agreement dated as of December 1, 2000 (the
"Agency Agreement") between Frank's Nursery & Crafts, Inc. ("Merchant") and
Hilco Merchant Resources, LLC ("Agent"). Capitalized terms not defined herein
have the meaning specified in the Agency Agreement
Notwithstanding the terms of the Agency Agreement, we have agreed as
follows: (a) the Merchant shall use it best efforts to obtain the consent of its
lenders to issue the Merchant Letter of Credit to Agent or grant Agent the
security interest contemplated by Section 17 of the Agency Agreement in form and
substance satisfactory to Agent (the "Lender Consent"), (b) the Agent shall have
no obligation to issue the Agent Letter of Credit prior to receiving the Lender
Consent and either (i) receiving the Merchant Letter of Credit or (ii)
perfection of the security interest contemplated by Section 17 of the Agency
Agreement, (c) Merchant shall have no obligation to issue the Merchant Letter of
Credit prior to receiving the Lender Consent, (d) in the event that the Lender
Consent has not been obtained by December 15, 2000 then Agent shall have the
right to terminate the Agency Agreement and shall have no liability to Merchant
for such termination, (e) in the event that Agent terminates the Agency
Agreement pursuant to the preceding clause (e), Merchant hereby agrees to
reimburse Agent for its costs and expenses incurred through and including the
date of termination in connection with the transaction contemplated by the
Agency Agreement in an amount not to exceed $300,000 by not later than two
business days after receiving an invoice from Agent of such costs and expenses,
and (f) Merchant shall not directly or indirectly enter into negotiations with
any other party with respect to the transactions contemplated by the Agency
Agreement on or before January 1, 2001. An estimate of our potential costs and
expenses is attached hereto through December 17, 2000.
If this letter agreement is in accordance with the Merchant's
understanding, please sign below. By executing this letter agreement, both Agent
and Merchant represent and warrant to each other that (i) they have the right,
power and authority to execute and deliver this letter agreement and to fully
perform their obligations hereunder, (ii) this agreement constitutes the legal,
valid and binding obligation of each
213
-2- December 1, 2000
respectively and (iii) no further consent or approval is required to enter into
or perform this letter agreement.
Sincerely,
/s/ Xxxx Xxxxxxxx
Senior Vice President and General Counsel of Member
AGREED AND ACCEPTED:
FRANK'S NURSERY & CRAFTS, INC.
/s/ Xxxxx X. Xxxxx
-------------------------------
Xxxxx Xxxxx, Vice Chairman and
Chief Financial Officer
cc: Xxxxxxx Xxxxx
214
EXHIBIT L-1
FORM OF LIBOR NOTICE
Xxxxx Fargo Retail Finance, LLC, as Agent
under the below referenced Loan Agreement
Xxx Xxxxxx Xxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: ________________________
Ladies and Gentlemen:
Reference hereby is made to that certain Debtor in Possession
Loan and Security Agreement, dated as of ______________ (the "Loan Agreement"),
among ______________ _________, a ____________________________ ("Borrower"), the
lenders signatory thereto (the "Lenders"), and Xxxxx Fargo Retail Finance, LLC,
a Delaware limited liability company, as the arranger and administrative agent
for the Lenders ("Agent"). Capitalized terms used herein and not otherwise
defined herein shall have the meanings ascribed to them in the Loan Agreement.
This LIBOR Notice represents Borrower's request to elect the
LIBOR Option with respect to outstanding Advances in the amount of $____________
(the "LIBOR Rate Advance")[, and is a written conformation of the telephonic
notice of such election given to Agent].
Such LIBOR Rate Advance will have an Interest Period of [1, 2,
or 3] month(s) commencing on ____________________.
This LIBOR Notice further confirms Borrower's acceptance, for
purposes of determining the rate of interest based on the LIBOR Rate under the
Loan Agreement, of the LIBOR Rate as determined pursuant to the Loan Agreement.
215
Borrower represents and warrants that (i) as of the date
hereof, each representation or warranty contained in or pursuant to any Loan
Document, any agreement, instrument, certificate, document or other writing
furnished at any time under or in connection with any Loan Document, and as of
the effective date of any advance, continuation or conversion requested above is
true and correct in all material respects (except to the extent any
representation or warranty expressly related to an earlier date), (ii) each of
the covenants and agreements contained in any Loan Document have been performed
(to the extent required to be performed on or before the date hereof or each
such effective date), and (iii) no Default or Event of Default has occurred and
is continuing on the date hereof, nor will any thereof occur after giving effect
to the request above.
Dated:__________________________________
____________________________, a ________
________________, as Borrower
By _____________________________________
Name:___________________________________
Title:__________________________________
Acknowledged by:
XXXXX FARGO RETAIL FINANCE, LLC
as Agent
By: ___________________________
Name: _________________________
Title: ________________________
2
216
AVAILABILITY CALCULATION
Beginning Principal Balance as of: 02/21/01 0
-------- -----------
ADD: Advances through 02/31/01 0
-------- -----------
Fees as of 02/21/01 2,000,000
-------- -----------
Adjustments 02/21/01 0
-------- -----------
LESS: Payments through 02/21/01 0
-------- -----------
Ending Principal Balance Prior to Advance Request 2,000,000
-----------
PLUS: Est. Accrued Interest LIBOR + 3.5% 0
-----------
Loan Balance Prior to Today's Request 2,000,000 (F)
-----------
Net Availability Prior to Today's Request (E-F) 73,727,184 (G)
-----------
Today's Advance Request: 62,130,719 (H)
-----------
Excess Availability (G - H) -- Covenant language needed Minimum at closing $10,000,000 11,596,465 (I)
-----------
Ending Loan Balance (F + H) 64,130,719 (J)
-----------
Effective Advance Rate (J + A) 34.8% (K)
-----------
Real Estate (ending loan balance [Inventory
availability-availability reserves] lending loan balance) 42.3% (L)
Week to Date: Cash Receipts:
The undersigned represents and warrants that the information set forth above is true and complete. The undersigned grants a security
interest in the collateral reflected above to Xxxxx Fargo Retail Finance, LLC. Frank's Nursery and Crafts represents and warrants
that (a) said collateral complies with their representations, warrants, and covenants contained in the security agreement between
lender and undersigned; (b) no "Event of Default" (as defined in the Loan Agreement) is presently in existence; and (c) all or a
portion of the advance request hereby will be utilized by the Borrower to cover 100% of the Borrower's obligation for sales tax on
account of sales since the most recent borrowing under the Loan Agreement.
Authorized Signer: Printed Name: Xxxxx X. Xxxxx Signature: /s/ Xxxxx X. Xxxxx
--------------------------------- --------------------------------
WFRF Account Manager: Printed Name: Signature:
------------------------------------ --------------------------------
Today's Advance Request consists of the following:
Vendor Reason Amount Wiring Instructions
------------------------------ ------------------ -------------- ------------------------------------
Chase Manhattan Bank Pay-Off $62,007,400.02 ABA # 000000000 Acct. # 323517218
Fidelity National Title Ins. Title Insurance $ 33,319.00 ABA # 072000086 Acct. # 1850973916
217
CERT #: 0001
------------
REVOLVING LINE OF CREDIT AVAILABILITY CALCULATION DATE: 2/21/01
------------
FAX TO: XXXX COLPUTS 617 523-1027 (AFTER 2/25/01) WEEKLY TUESDAYS
------------------------------------------------------------------------------------------------------------------------------------
1,2,5 3,4,5,6 7 9,10,999
LAWN AND FLORAL, CRAFTS
LIVE PLANTS GARDEN CHRISTMAS AND HOME DECOR TOTAL
Beginning Inventory Balance As Of: 01/28/01 1,457,748 25,470,093 15,512,330 34,053,581 72,493,852
--------- --------- ---------- ---------- ---------- ----------
ADD: Receipts/Purchases 852,009 2,978,603 19 2,119,673 5,950,304
--------- ---------- ---------- ---------- ----------
Freight Cost 93,518 231,174 1 427,492 752,183
--------- ---------- ---------- ---------- ----------
Inventory Available for Sale 2,403,273 28,679,870 11,512,350 38,600,846 79,195,339
--------- ---------- ---------- ---------- ----------
LESS: Cost of Goods Sold @ Cost (725,117) (1,299,107) (23,074) (2,579,574) (4,626,872)
--------- ---------- ---------- ---------- ----------
Return to Vendor (1,503) (102,360) (289) (3,828) (307,780)
--------- ---------- ---------- ---------- ----------
Net Transfers 0 (1,026) 0 (4,356) (5,382)
--------- ---------- ---------- ---------- ----------
Net Adjustments 167 (10,596) 2,356 16,713 8,640
--------- ---------- ---------- ---------- ----------
Xxxx Outs (57,540) (49,713) (6,827) (67,580) (181,660)
--------- ---------- ---------- ---------- ----------
Other Adjustment(s) 0 0 0 0 0
-------- --------- ---------- ---------- ---------- ----------
Total Reductions (783,993) (1,462,802) (27,834) (2,638,425) (4,913,054)
--------- ---------- ---------- ---------- ----------
Ending Inventory Balance As Of: 02/20/01 1,619,280 27,217,065 11,484,516 33,962,421 74,283,285
--------- --------- ---------- ---------- ---------- ----------
Percent to Total Inventory 2.2% 36.6% 15.5% 45.7% 100.0%
--------- ---------- ---------- ---------- ---------
--------------------------------------------------------------------------------
The undersigned represents and warrants that the information set forth above is
true and complete. The undersigned grants a security interest in the collateral
reflected above to Xxxxx Fargo Retail Finance, LLC. Frank's Nursery and Crafts
represents and warrants that (a) said collateral complies with their
representations, warrants, and covenants contained in the security agreement
between lender and undersigned; (b) no "Event of Default" (as defined in the
Loan Agreement) is presently in existence; and (c) all or a portion of the
advance request hereby will be utilized by the Borrower to cover 100% of the
Borrower's obligation for sales tax on account of sales since the most recent
borrowing under the Loan Agreement.
Authorized Signer: Printed Name: Xxxxx X. Xxxxx Signature: /s/ Xxxxx X. Xxxxx
---------------------- ----------------------
WFRF Account Manager: Printed Name: Signature:
------------------- -----------------------
218
SCHEDULES TO DEBTOR IN POSSESSION AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
FRANK'S NURSERY-XXXXX FARGO
219
SCHEDULE A-1
CORE PROPERTIES*
------------ -------------------------------------------------------------------
STORE LOCATION
------------ -------------------------------------------------------------------
5 DEARBORN HTS., MI
------------ -------------------------------------------------------------------
26 COLUMBUS, OH
------------ -------------------------------------------------------------------
27 COLUMBUS, OH
------------ -------------------------------------------------------------------
28 FT. XXXXX, IN
------------ -------------------------------------------------------------------
29 FT. XXXXX, IN
------------ -------------------------------------------------------------------
30 UTICA, MI
------------ -------------------------------------------------------------------
45 BLOOMINGTON, MN
------------ -------------------------------------------------------------------
58 COLUMBUS, OH
------------ -------------------------------------------------------------------
81 GRANDVILLE, MI
------------ -------------------------------------------------------------------
00 XXXXXX, XXX., XX
------------ -------------------------------------------------------------------
85 PORTAGE, MI
------------ -------------------------------------------------------------------
86 FLORENCE, KY
------------ -------------------------------------------------------------------
00 XXXXXXXXX XXXX, XX
------------ -------------------------------------------------------------------
88 WAUKEGAN, IL
------------ -------------------------------------------------------------------
90 MERRILLVILLE, IN
------------ -------------------------------------------------------------------
92/401 CLINTON TWP. MI
------------ -------------------------------------------------------------------
93 LANSING, MI
------------ -------------------------------------------------------------------
94 TOLEDO, OH
------------ -------------------------------------------------------------------
-----------------------------
* Street Addresses are shown on Schedule E-1
220
------------ -------------------------------------------------------------------
00 XX XXXXXXX, XX
------------ -------------------------------------------------------------------
000 XXXXXXXXXXXX, XX
------------ -------------------------------------------------------------------
000 XXXX XXXXXX, XX
------------ -------------------------------------------------------------------
000 XXXXXX XXXXX, XX
------------ -------------------------------------------------------------------
000 XXXXX, XX
------------ -------------------------------------------------------------------
000 XXXXXXXXXX, XX
------------ -------------------------------------------------------------------
000 XXXXXXXXXX, XX
------------ -------------------------------------------------------------------
112 BLAINE, MN
------------ -------------------------------------------------------------------
000 XXX XXXX XXXXXX, XX
------------ -------------------------------------------------------------------
000 XXXXX, XX
------------ -------------------------------------------------------------------
118 FLINT, MI
------------ -------------------------------------------------------------------
119 LARGO, FL
------------ -------------------------------------------------------------------
000 XXXXXXX, XX
------------ -------------------------------------------------------------------
000 XXXXXXX XXXX, XX
------------ -------------------------------------------------------------------
000 XXXXXX, XX
------------ -------------------------------------------------------------------
156 MICHIGAN CITY, IN
------------ -------------------------------------------------------------------
000 XXXXXXXXX, XX
------------ -------------------------------------------------------------------
000 XXXXXX XXXXXX, XX
------------ -------------------------------------------------------------------
000 XX. XXXX, XX
------------ -------------------------------------------------------------------
000 XXXXXXXXXXX, XX
------------ -------------------------------------------------------------------
000 XXXXXXXXXX, XX
------------ -------------------------------------------------------------------
000 XXXXXXXXX, XX
------------ -------------------------------------------------------------------
000 XXXXXXXX, XX
------------ -------------------------------------------------------------------
219 COLUMBUS, IN
------------ -------------------------------------------------------------------
221
------------ -------------------------------------------------------------------
000 XXXXX XXXXXXX, XX
------------ -------------------------------------------------------------------
259 MISHAWAKA, IN
------------ -------------------------------------------------------------------
000 XXXXXXXXXX, XX
------------ -------------------------------------------------------------------
267 SOUTH BEND, IN
------------ -------------------------------------------------------------------
000 XXX XXXX, XX
------------ -------------------------------------------------------------------
000 XXXXX XXXX XXXXX, XX
------------ -------------------------------------------------------------------
000 X. XXXX XXXXXX, XX
------------ -------------------------------------------------------------------
000 XXXXXXX, XX
------------ -------------------------------------------------------------------
000 XXXXXX, XX
------------ -------------------------------------------------------------------
000 XXXXXX, XX
------------ -------------------------------------------------------------------
000 XXXXXX, XX
------------ -------------------------------------------------------------------
000 XXXXXX, XX
------------ -------------------------------------------------------------------
000 XXXXXXXX, XX
------------ -------------------------------------------------------------------
222
SCHEDULE A-2
SECOND PRIORITY REAL ESTATE*
-------------- -----------------------------------------------------------------
STORE LOCATION
-------------- -----------------------------------------------------------------
00 XXXXX XXXXXX, XX
-------------- -----------------------------------------------------------------
32 COLUMBUS, OH
-------------- -----------------------------------------------------------------
00 XXXXX XXXXXX, XX
-------------- -----------------------------------------------------------------
34 OKEMOS, MI
-------------- -----------------------------------------------------------------
65 ROSEVILLE, MN
-------------- -----------------------------------------------------------------
80 FLINT, MI
-------------- -----------------------------------------------------------------
99 BROOKHAVEN, PA
-------------- -----------------------------------------------------------------
000 XXXXXX, XX
-------------- -----------------------------------------------------------------
000 XXXXXXXX, XX
-------------- -----------------------------------------------------------------
000 XXXXXXXXXXXX, XX
-------------- -----------------------------------------------------------------
000 XXXXXXXXX, XX
-------------- -----------------------------------------------------------------
000 XX. XXXXXXX, XX
-------------- -----------------------------------------------------------------
000 XXXX XXXXXX, XX
-------------- -----------------------------------------------------------------
000 XXXXXXXXXX, XX
-------------- -----------------------------------------------------------------
000 XXXXXXX XXXX, XX
-------------- -----------------------------------------------------------------
167 SCHAUMBURG, IL
-------------- -----------------------------------------------------------------
000 XXXXXX XXXXX, XX
-------------- -----------------------------------------------------------------
000 XXXXXXXXXX, XX
-------------- -----------------------------------------------------------------
-----------------------------
* Street Addresses are shown on Schedule E-1
223
-------------- -----------------------------------------------------------------
000 XXXXXXXXXX, XX
-------------- -----------------------------------------------------------------
000 XXXX XXXXXXX, XX
-------------- -----------------------------------------------------------------
245 XXXXX, MN
-------------- -----------------------------------------------------------------
000 XX. XXXXXXX, XX
-------------- -----------------------------------------------------------------
000 XXXXXXXXXX, XX
-------------- -----------------------------------------------------------------
000 XXXXXXXXXX, XX
-------------- -----------------------------------------------------------------
000 XXXXXX XXXXXX, XX
-------------- -----------------------------------------------------------------
000 XXXXX XXXX, XX
-------------- -----------------------------------------------------------------
000 XXXXXXXXXXX, XX
-------------- -----------------------------------------------------------------
000 XXXXXXXX, XX
-------------- -----------------------------------------------------------------
000 XXXXXXXXXXX, XX
-------------- -----------------------------------------------------------------
000 XXXXXXXXXX, XX
-------------- -----------------------------------------------------------------
000 XXXXXXXX, XX
-------------- -----------------------------------------------------------------
000 XXXX XXXXXXXX, XX
-------------- -----------------------------------------------------------------
224
SCHEDULE C-1
COMMITMENTS ON CLOSING DATE
Lender Commitment
------ ----------
Xxxxx Fargo Retail Finance, LLC $100,000,000
225
SCHEDULE E-1
ELIGIBLE INVENTORY
1. 0000 Xxxx Xxxx Xxxx Xxxx, Xxxx, Xxxxxxxx 00000
2. 0000 Xxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000
3. 000 Xxxxx Xxxx, Xxxx, Xxxxxxxx 00000
4. 0000 Xxxxxxxxxx Xxxx, Xxxxxxxxxx, XX 00000
5. 0000 Xxxxx Xxxxx Xxxx #0, Xxxx, Xxxxxxx 00000
(ALSO SEE ATTACHED LIST OF STORES)
226
LEASED
OR
STORE # CITY STATE ZIP OWNED
1 3 00000 Xxxxxxxx Xxx Xxxx XX 00000 Leased
---------------------------------------------------------------------------------
2 5 00000 Xxxxxxxx Xxx. Xxxxxxxx Xxxxxxx XX 00000 Owned
---------------------------------------------------------------------------------
3 6 00000 Xxxxxx Xx. Xxxxxxxxx XX 00000 Leased
---------------------------------------------------------------------------------
4 8 27650 Xxxxxxxxxxx Xxxxxxx XX 00000 Leased
---------------------------------------------------------------------------------
5 9 00000 Xxxxxxxxx Xxx. Xxxxxxx Xxxxxxxx XX 00000 Leased
---------------------------------------------------------------------------------
6 10 00000 Xxxxxx Xx. Xxxxx Xxxxxx XX 00000 Leased
---------------------------------------------------------------------------------
7 12 27650 Xxx Xxxx Xxxxxx XX 00000 Leased
---------------------------------------------------------------------------------
8 14 44 Batchewana Xxxxxxx XX 00000 Leased
---------------------------------------------------------------------------------
9 15 0000 Xxx Xx. Xxxxxxx Xxxx XX 00000 Owned
---------------------------------------------------------------------------------
10 16 31590 Grand River Xxxxxxxxxx XX 00000 Leased
---------------------------------------------------------------------------------
11 17 3590 Washtenaw Xxx Xxxxx XX 00000 Leased
---------------------------------------------------------------------------------
12 19 0000 X. Xxxx Xxx. Xxxxx XX 00000 Leased
---------------------------------------------------------------------------------
13 21 0000 Xxxxxxxx Xx. Xxxxxxxxx XX 00000 Leased
---------------------------------------------------------------------------------
14 22 00000 Xxxx Xx. Xxxxxxxx XX 00000 Leased
---------------------------------------------------------------------------------
16 24 4832 Saginaw Xx. Xxxxxxx XX 00000 Leased
---------------------------------------------------------------------------------
17 25 0000 00xx Xx. XX Xxxxx Xxxxxx XX 00000 Owned
---------------------------------------------------------------------------------
18 26 0000 X. Xxxxx Xxxxxxxx XX 00000 Owned
---------------------------------------------------------------------------------
19 27 0000 X. Xxxxx Xx. Xxxxxxxx XX 00000 Owned
---------------------------------------------------------------------------------
20 28 0000 X. Xxxxxxx Xx. Xxxxx XX 00000 Owned
---------------------------------------------------------------------------------
21 29 0000 Xxxxxxxx Xxxx. Xx. Xxxxx XX 00000 Owned
---------------------------------------------------------------------------------
22 30 47340 Van Dyke Xxxxx XX 00000 Owned
---------------------------------------------------------------------------------
23 31 0000 Xxxxxx Xx. Xxxxxx XX 00000 Leased
---------------------------------------------------------------------------------
24 32 0000 X. Xxxxxx-Xxxxxxxxxx Xxxxxxxx XX 00000 Owned
---------------------------------------------------------------------------------
25 33 0000 Xxxxxxxxxx XX Xxxxx Xxxxxx XX 00000 Owned
---------------------------------------------------------------------------------
26 34 1941 Grand River Xxxxxx XX 00000 Owned
---------------------------------------------------------------------------------
27 35 0000 X. Xxxx Xxxxxxxxx XX 00000 Leased
---------------------------------------------------------------------------------
28 36 2520 X. Xxxxxxxx Xxxxxx XX 00000 Leased
---------------------------------------------------------------------------------
29 37 000 Xxxx Xx. Xxxxxxxxx Xxxxxxx XX 00000 Leased
---------------------------------------------------------------------------------
30 38 000 X. Xxxx Xxxxxxxxxx XX 00000 Leased
---------------------------------------------------------------------------------
31 39 6715 Xxxxxxxx Xxxxxx Xxxxx XX 00000 Leased
---------------------------------------------------------------------------------
32 40 000 X. Xxxxx Xxx. Xxxxx Xxxxxx XX 00000 Leased
---------------------------------------------------------------------------------
33 42 0000 Xxxxxxxx Xxx. X Xxx Xxxx XX 00000 Leased
---------------------------------------------------------------------------------
34 44 0000 Xxxxxx Xx. 000 Xxxxxxxxxx XX 00000 Leased
---------------------------------------------------------------------------------
35 45 0000 Xxxx Xxx. X Xxxxxxxxxxx XX 00000 Owned
---------------------------------------------------------------------------------
36 46 0000 Xxxxxxx Xx. Xxxxxxxxxx XX 00000 Leased
---------------------------------------------------------------------------------
37 47 00000 Xxxxxxxx Xxx. Xxxxxxxxxx XX 00000 Leased
---------------------------------------------------------------------------------
38 48 00 X. Xxxxx Xxxxxxxxx Xxxxx XX 00000 Leased
---------------------------------------------------------------------------------
39 50 000 Xxxx Xxxx Xx. Xxxxxxxxx XX 00000 Leased
---------------------------------------------------------------------------------
40 51 000 X. Xxxxxxxxx Xxxxxxx XX 00000 Leased
---------------------------------------------------------------------------------
41 52 0000 Xxxxx Xxxx Xx. Xxxxxxx Xxxx XX 00000 Leased
---------------------------------------------------------------------------------
42 53 0000 X. 000xx Xx. Xxxxxxxx XX 00000 Leased
---------------------------------------------------------------------------------
43 55 0000 X. Xxxxxxxx Xxxxxxx XX 00000 Leased
---------------------------------------------------------------------------------
44 56 00000 Xxxxx Xx. Xxxxxxxxx XX 00000 Leased
---------------------------------------------------------------------------------
45 57 000 X. Xxxxx Xx. Xxx Xxxxx XX 00000 Leased
---------------------------------------------------------------------------------
46 58 0000 Xxxxxxx Xx. Xxxxxxxx XX 00000 Owned
---------------------------------------------------------------------------------
47 59 0000 X. Xxxxxx-Xxxxxxxxxx Xxxxxx XX 00000 Leased
---------------------------------------------------------------------------------
48 62 0000 X. 00xx Xx. Xxxxxxxxx XX 00000 Leased
---------------------------------------------------------------------------------
49 63 8802 US 00 Xxxxx Xxxxxxxxxxxx XX 00000 Leased
---------------------------------------------------------------------------------
50 64 0000 X. 00xx Xx. Xxxxxxxxxxxx XX 00000 Leased
---------------------------------------------------------------------------------
51 65 0000 Xxxxxxx 00 Xxxxxxxxx XX 00000 Owned
---------------------------------------------------------------------------------
52 66 0000 X. Xxxxxx Xx. X. Xx. Xxxx XX 00000 Leased
---------------------------------------------------------------------------------
53 67 0000 X. 000xx Xx. Xxxxxx Xxxx XX 00000 Leased
---------------------------------------------------------------------------------
54 68 0000 X. 00xx Xx. Xxxxxxxxx XX 00000 Leased
---------------------------------------------------------------------------------
227
LEASED
OR
STORE # CITY STATE ZIP OWNED
55 69 0000 X. Xxxxxxxx Xx. Xxxxxxxx XX 00000 Leased
---------------------------------------------------------------------------------
56 70 6639 Gov. Xxxxxxx Xxx. Xxxx Xxxxxx XX 00000 Leased
---------------------------------------------------------------------------------
57 71 0000 Xxxxxxxx xx. Xxxxxxxxx XX 00000 Leased
---------------------------------------------------------------------------------
58 72 0000 Xxxxxxxxx Xxxxxxxx Xxxx Xxxxxxxxx XX 00000 Leased
---------------------------------------------------------------------------------
59 73 0000 Xxxxxxx Xxxx. Xxxxxxxxx XX 00000 Leased
---------------------------------------------------------------------------------
60 74 0000 00 xxxx Xx. Xxxxxxxx Xxxxxxx XX 00000 Leased
---------------------------------------------------------------------------------
61 75 0000 X. Xxxxxxxxxx Xxxxxxxxxxxx XX 00000 Leased
---------------------------------------------------------------------------------
62 76 0000 Xxxxxxxxx Xx. Xxxxxxxx XX 00000 Leased
---------------------------------------------------------------------------------
63 77 000 X. Xxxxxx Xxxxx Xxxxxx XX 00000 Leased
---------------------------------------------------------------------------------
64 78 000 X. Xxxxx Xx. Xxxxxxxx XX 00000 Leased
---------------------------------------------------------------------------------
65 79 0000 Xxxxxxxxx Xx. Xxxxxxxxxxxx XX 00000 Leased
---------------------------------------------------------------------------------
66 80 X-0000 Xxxxxx Xx. Xxxxx XX 00000 Owned
---------------------------------------------------------------------------------
67 81 0000 00xx Xx. XX Xxxxxxxxxx XX 00000 Owned
---------------------------------------------------------------------------------
68 82 000 Xxxxxxx Xxx. Xxxxxxx Xxxx XX 00000 Leased
---------------------------------------------------------------------------------
69 83 0000 00xx Xx. Xxxxxxxxxx XX 00000 Leased
---------------------------------------------------------------------------------
70 84 00000 Xxxx Xx. Xxxxxx Xxx. XX 00000 Owned
---------------------------------------------------------------------------------
71 85 000 Xxxx Xx. Xxxxxxx XX 00000 Owned
---------------------------------------------------------------------------------
72 86 8032 Xxx-18 Burlington Pk. Xxxxxxxx XX 00000 Owned
---------------------------------------------------------------------------------
73 87 0000 00xx Xx. Xxxxxxxxx Xxxx XX 00000 Owned
---------------------------------------------------------------------------------
74 88 000 X. Xxxxx Xxx Xx. Xxxxxxxx XX 00000 Owned
---------------------------------------------------------------------------------
75 89 000 X. Xxxx Xx. Xxxxxxx XX 00000 Leased
---------------------------------------------------------------------------------
76 90 0000 X. Xxxxxxx Xxx. Xxxxxxxxxxxx XX 00000 Owned
---------------------------------------------------------------------------------
77 91 0000 Xxxxx Xxxx. X Xxxxxx Xxxxx XX 00000 Leased
---------------------------------------------------------------------------------
78 92/401 00000 Xxxx Xx. Xxxxxxx Xxxxxxxx XX 00000 Owned
---------------------------------------------------------------------------------
79 93 0000 X. Xxxxxxxxxxxx Xxxxxxx XX 00000 Owned
---------------------------------------------------------------------------------
80 94 6142 Telegraph Xxxxxx XX 00000 Owned
---------------------------------------------------------------------------------
81 95 00 Xxxxxxx Xxxxxx X. Xxxxx XX 00000 Leased
---------------------------------------------------------------------------------
82 96 000 X. Xxxxx Xxx. Xxxxxxxxxxx XX 00000 Leased
---------------------------------------------------------------------------------
83 97 00 Xxxxxxxxxxx Xxxxx Xxxxxxxxxxx XX 00000 Leased
---------------------------------------------------------------------------------
84 98 0000 Xxxxx Xx. Xx. Xxxxxxx XX 00000 Owned
---------------------------------------------------------------------------------
85 99 4703 Edgemont Xxxxxxxxxx XX 00000 Owned
---------------------------------------------------------------------------------
86 100 1395 Xxxxxx Xxxxxx XX 00000 Owned
---------------------------------------------------------------------------------
87 101 0000 Xxxxxxxx Xxxxxx Xx. Xxxxxxxx XX 00000 Owned
---------------------------------------------------------------------------------
88 102 10901 Bustleton Xxxxxxxxxxx XX 00000 Owned
---------------------------------------------------------------------------------
89 103 0000 Xxxx Xxxxxx Xxxx. Xxxx Xxxxxx XX 00000 Owned
---------------------------------------------------------------------------------
90 104 00000 Xxxxxxxxxxx Xx. Xxxxxx Xxxx XX 00000 Owned
---------------------------------------------------------------------------------
91 105 000 X. Xxxxxxx Xxx. Xxxxx XX 00000 Owned
---------------------------------------------------------------------------------
92 106 0000 X. Xxxxxxxxx Xxxxxxxxxxxx XX 00000 Owned
---------------------------------------------------------------------------------
93 107 1520 Aurora Xxxxxxxxxx XX 00000 Owned
---------------------------------------------------------------------------------
94 108 0000 X. 00xx Xx. Xxxxx Xxxxxxxxx XX 00000 Leased
---------------------------------------------------------------------------------
95 109 000 00xx Xxx. Xxxxxxx XX 00000 Leased
---------------------------------------------------------------------------------
96 110 0000 X. Xxx Xx. Xxxxxxxxxx XX 00000 Owned
---------------------------------------------------------------------------------
97 111 0000 00xx Xx. X Xx. Xxxxxxxxxx XX 00000 Owned
---------------------------------------------------------------------------------
98 112 000 00xx Xxx. Xxxxxx XX 00000 Owned
---------------------------------------------------------------------------------
99 113 4720 XX 00 Xxx Xxxx Xxxxxx XX 00000 Owned
---------------------------------------------------------------------------------
100 114 0000 Xxxxxx Xx. Xxx Xxxx Xxxxxx XX 00000 Leased
---------------------------------------------------------------------------------
101 115 0000 Xxxxx Xx. 00 Xxxxxxx XX 00000 Leased
---------------------------------------------------------------------------------
102 116 0000 00xx Xxxxxx X Xx. Xxxxxxxxxx XX 00000 Leased
---------------------------------------------------------------------------------
103 117 0000 X. Xxxxxx Xxx. Xxxxx XX 00000 Owned
---------------------------------------------------------------------------------
104 118 0000 Xxxxxxx Xx. Xxxxx XX 00000 Owned
---------------------------------------------------------------------------------
105 119 00000 Xxxxxxxxxx Xx. Xxxxx XX 00000 Owned
---------------------------------------------------------------------------------
107 121 0000 X. Xxxx Xxxxx Xxxxx XX 00000 Leased
---------------------------------------------------------------------------------
108 122 000X Xxxxxxx 000 Xxxxxxxxxxx XX 00000 Leased
---------------------------------------------------------------------------------
109 123 0000 Xxxxxxxxxxx Xxxx. Xxxxxxxxxx XX 00000 Leased
---------------------------------------------------------------------------------
228
LEASED
OR
STORE # CITY STATE ZIP OWNED
-------------------------------------------------------------------------------------
110 124 0000 Xxxxxxx Xx. Xxxxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------
111 125 0000 Xxx Xxx Xx. Xxxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------
112 127 2730 DeKalb Pike-Rt. 202 Xxxxxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------
113 129 0000 X. Xxxxx Xx. Xxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------
114 130 0000 Xxxxxxx Xxxxxxxx Xxxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------
115 131 000 Xxxxx Xx. Xxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------
116 133 00000 Xxx Xxxxxxx Xxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------
117 134 00000 Xxxxxxxxxx Xx. Xxxxxxx XX 00000 Owned
-------------------------------------------------------------------------------------
118 135 00000 Xx. Xxxxxxx Xxxx Xx. Xxxxxxxxxx XX 00000 Owned
-------------------------------------------------------------------------------------
119 136 11015 Xxx Xxxxx Xxxxx Xx. Xx. Xxxxx XX 00000 Leased
-------------------------------------------------------------------------------------
120 137 000 Xxxxxxx Xxxxx Xx. Xxxxxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------
121 138 0000 X. Xxxxxxxx Xxxx. Xxxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------
122 139 0000 Xxxxx Xx. Xxxxxx Xx. Xxxxxxx XX 00000 Owned
-------------------------------------------------------------------------------------
123 140 000 X. Xxxx Xx. Xxxx Xxxxxx XX 00000 Owned
-------------------------------------------------------------------------------------
124 141 0000 X. Xxxxx Xx. Xxxxxxx Xxxx XX 00000 Owned
-------------------------------------------------------------------------------------
125 142 000 Xxxxxxxx Xx. Xxxxxxxxxx XX 00000 Owned
-------------------------------------------------------------------------------------
126 144 0000 Xxxxxxxx Xxx. Xxxxxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------
127 145 0000 Xxxxx Xxxx Xxxx Xxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------
128 146 30701 XX 00 Xxxxx Xxxx Xxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------
129 147 000 Xxxxx Xx. 000 Xxxxxxxx XX 00000 Owned
-------------------------------------------------------------------------------------
130 150 6380 Tussing Xxxxxxxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------
131 151 0000 00 Xxxx Xx. Xxxxxx XX 00000 Owned
-------------------------------------------------------------------------------------
132 152 00 X. Xxxxxxx Xxx. Xxxxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------
133 156 3822 X. Xxxxxxxx Xx. Xxxxxxxx Xxxx XX 00000 Owned
-------------------------------------------------------------------------------------
134 157 0000 Xxx Xxxxxxxxxx Xx. Xxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------
135 159 0000 Xxxxxxxxxx Xx. Xxxxxxx XX 00000 Owned
-------------------------------------------------------------------------------------
136 162 0000 Xxxxx Xxxx Xxxxxxxxxx XX 00000 Owned
-------------------------------------------------------------------------------------
137 163 0000 X. XX Xxxxxxx Xxxxxxx Xxxx XX 00000 Owned
-------------------------------------------------------------------------------------
139 165 7235 N. Keystone Ave. (431) Xxxxxxxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------
140 167 0000 Xxxxxx xxxx Xx. Xxxxxxxxx XX 00000 Owned
-------------------------------------------------------------------------------------
141 168 0000 Xxxxxxx Xx. Xxxxxx Xxxxx XX 00000 Owned
-------------------------------------------------------------------------------------
142 173 0000 Xxxxxxx Xxx. Xxxxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------
143 174 00000 Xxxxxxxxx Xx. Xxxxxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------
144 175 0000 X. Xxxxxx Xx. X Xxxxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------
145 176 000 Xxxxx 00 Xxxxx, Xxxx #0 X. Xxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------
146 177 0000 X. Xxxxxx Xx. Xxxxxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------
147 178 0000 Xxxxxxxxxxxxx Xx. Xxxxxxx XX 00000 Owned
-------------------------------------------------------------------------------------
148 179 0000 Xxxxxxxxx Xx. Xxxxxxxxx XX 00000 Owned
-------------------------------------------------------------------------------------
149 180 000 Xxxxxxxx Xxxx Xxxxxxxx Xxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------
150 181 0000 Xxxx Xxx Xx. Xxxxxx Xxxxxx XX 00000 Owned
-------------------------------------------------------------------------------------
151 182 0000 Xxxxxxxxxx Xx. Xxxxx XX 00000 Leased
-------------------------------------------------------------------------------------
152 183 8901 Page Xxxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------
153 184 00000 X. Xxxxx Xxxx Xx. Xxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------
154 185 00 X. Xxxxxx Xx. Xxxxxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------
155 186 0000X X. Xxxxxxx Xxxxxxxxxx XX 00000 Owned
-------------------------------------------------------------------------------------
156 187 0000 Xxxxxxxxx Xxxxx Xxx. Xxxxxxxxxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------
157 188 000 X. Xxxxxxxxx Xxxx. Xx. Xxxx XX 00000 Owned
-------------------------------------------------------------------------------------
158 189 1210 X. Xxxxx Xxxxxx XX 00000 Owned
-------------------------------------------------------------------------------------
159 190 0000 Xxxxx Xx. #0 Xxxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------
160 192 0000 X. Xxxxx Xxxx. Xxxxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------
161 195 0000 X. Xxxxxxxx Xxxxx X. Xxxx Xxxxx XX 00000 Owned
-------------------------------------------------------------------------------------
162 196 5201 Belair Xxxxxxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------
163 198 0000 Xxxxxxxxx Xx. Xxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------
165 200 0000 Xxxxxx Xx. Xxxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------
229
LEASED
OR
STORE # CITY STATE ZIP OWNED
-------------------------------------------------------------------------------------------------------
167 202 0000 Xxxxxxxx Xxx. Xxxxxxxxxx XX 00000 Owned
-------------------------------------------------------------------------------------------------------
168 000 Xxxxxxx & Xxxxxxxxxx Xxxxx, Xxxxxxxxxx Xxxx Xxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
169 204 0000 Xxxxx Xxxx #00 Xxxxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
170 205 0000 Xxxxx Xxx. Xxxxxxxxxx XX 00000 Owned
-------------------------------------------------------------------------------------------------------
171 207 000 Xxxxxxx Xx. Xxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
172 208 0000 Xxxxx Xxxx Xxxxxxxxxx XX 00000 Owned
-------------------------------------------------------------------------------------------------------
173 212 4700 Xxxxxxx St. NE, Xxxx 00 Xxxx Xxx XX 00000 Owned
-------------------------------------------------------------------------------------------------------
174 213 0000 Xxxxxx Xx. Xxxxxxxxx XX 00000 Owned
-------------------------------------------------------------------------------------------------------
175 214 0000 Xxxxx Xxxx. Xxxxxxxx XX 00000 Owned
-------------------------------------------------------------------------------------------------------
176 215 0000 XxxXxxxxx Xx. Xxxxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
177 216 0000 Xxxxx 000 Xxxxx Xxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
178 217 0000X X. Xxxxxxxxx Xxx. Xxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
179 219 0000 Xxxxxx Xx. Xxxxxxxx XX 00000 Owned
-------------------------------------------------------------------------------------------------------
180 221 000 X. Xxxx Xxxxx Xx. Xxxxxxxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
181 225 3804 Nolensville Xxxxxxxxx XX 00000 Owned
-------------------------------------------------------------------------------------------------------
182 227 0000 Xxxxxxxxxx Xxxx Xxxxxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
183 000 X. Xxxxxxxxx Xxx. & Xxx Xx. Xxxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
184 230 0000 Xxxxxxxxx Xxxx Xxxxxxx Xxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
185 231 000 Xxxxxxxxxx Xxxx Xxxxxxxxxx Xxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
186 232 0000 Xxxxxxxxx Xxxx. Xxxxxxxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
187 000 Xxxxx 00 & Xxxxxx Xx. Xxxxxx Xxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
188 235 000 Xxxxxxx Xxx. Xxxxxxxx Xxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
189 236 000 Xxxxx Xxxx Xxxx Xxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
190 237 000 Xxxxx Xx. Xxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
191 238 00 Xxxxx 00 Xxxx Xxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
192 240 0000 Xxx Xxxx Xxxx Xxxxx Xxxxxxx XX 00000 Owned
-------------------------------------------------------------------------------------------------------
193 241 0000 X. Xxxxxx Xx. Xxxxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
194 242 0000 Xxxxx Xxx. Xxxxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
195 243 00000 Xxxx Xxxx Xxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
196 244 0000 Xxxx Xxxx Xxxx Xxxxxxx XX 00000 Owned
-------------------------------------------------------------------------------------------------------
197 245 0000 Xxxxxxxx Xx. Xxxxx XX 00000 Owned
-------------------------------------------------------------------------------------------------------
198 246 63 Rice Xxxx Xxxxxx Xxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
199 248 0000 Xxxxxx Xxxx Xx. Xxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
200 249 000 Xxxxxxxxxxx Xxx. Xxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
201 250 0000 Xxxxxxxx Xx. X #000 Xxxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
202 251 0000 Xxxxxxxxxx Xxxx. Xxxxxxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
203 252 0000 Xxx Xxxxxxx Xxxx. Xxxxxxxxx XX 00000 Owned
-------------------------------------------------------------------------------------------------------
204 253 0000 Xxxxxxxxx Xx. Xxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
205 254 0000 X. Xxxxxx Xxx., Xxxxxx Xxx Xxxxx Xxxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
206 255 00000 Xxxxxxxxx Xx. Xxxx Xxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
207 256 000 Xxxxxxxxxxxxx Xx. Xxxxxxxx Xxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
208 259 0000 X. Xxxxx Xx. Xxxxxxxxx XX 00000 Owned
-------------------------------------------------------------------------------------------------------
209 260 0000 Xxxxxxxx Xx. Xxxx Xxxxxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
210 261 14641 XX 00 Xxxxx Xxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
211 262 0000 000XX Xxxxxx Xxxx Xxxxx Xxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
212 264 00 Xxxxxx Xxx. Xxxxxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
213 265 4360 Highway 00 X Xxxxx Xx. Xx. Xxxxxx XX 00000 Owned
-------------------------------------------------------------------------------------------------------
214 266 00000 Xxxxxxxxxx Xx. Xxxxxxxxxx XX 00000 Owned
-------------------------------------------------------------------------------------------------------
215 267 0000 X. Xxxxxxx Xx. Xxxxx Xxxx XX 00000 Owned
-------------------------------------------------------------------------------------------------------
216 268 000 Xxxx Xx. Xxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
217 270 3137 Berlin Turnpike Xxxxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
218 272 00 X. Xxxx Xx. Xxxxxxxxx XX 00000 Owned
-------------------------------------------------------------------------------------------------------
219 273 000 X. Xxxx Xx. Xxxxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
220 277 2050 S. Telegraph Xxxxxxxxxx Xxx. XX 00000 Owned
-------------------------------------------------------------------------------------------------------
230
LEASED
OR
STORE # CITY STATE ZIP OWNED
-------------------------------------------------------------------------------------------------------
221 284 0000 Xxxxxxxxxx Xxx. Xxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
222 286 0000 Xxxxxxx 00 Xxx Xxxx XX 00000 Owned
-------------------------------------------------------------------------------------------------------
223 289 0000 Xxxxxx Xxxxx Xxxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
224 290 0000 Xxxxxxx Xxx. Xxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
225 291 0000 Xxxxxx Xxxxxxx Xx. Xxxxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
226 292 0000 Xxxxxxx Xxxx Xxx. Xxxxxxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
227 293 0000 Xxxxxxxxxxxx Xxxx, Xxxx Xxxxxxxx Xxxxxx Xxxxxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
228 294 000 Xxxxx Xxxx Xxx Xxxx. Xxxxxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
229 295 0000 X. Xxxxxxx Xx. Xxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
230 296 0000 Xxxxx Xxxxx 00 Xxxxx Xxxxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
231 297 0000 X. Xxxxx 00 Xxxxx Xxxx Xxxxx XX 00000 Owned
-------------------------------------------------------------------------------------------------------
232 298 000 Xxxxxxxx Xxxx. Xxxx Xxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
233 301 0000 X. Xxxxxxxx Xxx. Xxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
234 302 000 Xxxxxxx Xx. Xxxxxxx Xxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
235 303 000 Xxxxx 000 Xxxx Xxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
236 304 000 Xxx Xxxx Xxx. Xxxxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
237 305 0000 Xxxxxxxx Xx. Xxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
238 306 0000 Xxxxxx Xxxxxxxxxx Xxx. Xxxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
239 307 0000 Xxxx Xxxxxxx Xx. Xxxxxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
240 601 0000 X. Xxxxxxx Xxxxxxxx Xxxxxxxxxx XX 00000 Owned
-------------------------------------------------------------------------------------------------------
241 602 0000 Xxxxxxx Xxxx Xxx. Xxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
242 604 000 Xxxxx 0 X Xxxxxxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
243 605 000 Xxxxxxxx Xx. Xxxx Xxxx Xxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
244 606 0000 Xxxxxxx Xxxxxxxx Xxxx Xxxxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
245 608 00 Xxxxxxxxxxx Xx. Xxxx Xxxxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
246 610 000 Xxxxx Xxxxx Xx. Xxxxx Xxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
247 611 0000 Xxxxxxxxx Xxxxxxxx Xxxxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
248 612 000 Xxxxxxxxx Xxxxxx Xxxxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
249 615 000 X. Xxxxxxx Xxx. Xxxxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
250 616 000 Xxxxxxx Xxx. Xxx Xxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
251 000 Xxxxx 00X & Xxxxx Xxxxx Xx. Xxxxx Xxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
252 620 000 Xxxxxxx Xxx. Xxxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
253 621 0000 Xxxxx Xxxxxxxx Xxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
254 622 000 Xxxxx Xx. Xxxxxxx XX 00000 Owned
-------------------------------------------------------------------------------------------------------
255 623 000 Xxx Xxxx Xxxx Xxxxxx Xxxxxx XX 00000 Owned
-------------------------------------------------------------------------------------------------------
256 624 000 Xxxxx 00 Xxxxxx XX 00000 Owned
-------------------------------------------------------------------------------------------------------
257 625 0000 Xxxxxxx 00 Xxxxxx XX 00000 Owned
-------------------------------------------------------------------------------------------------------
258 626 000 Xxxxx Xxxx. Xxxxxxxxx XX 00000 Owned
-------------------------------------------------------------------------------------------------------
259 628 000 Xxxxxxx 000 Xxxxx Xxxxxxxxxxx XX 00000 Owned
-------------------------------------------------------------------------------------------------------
260 631 000 X. Xxxx Xx. Xxxxxxxx XX 00000 Owned
-------------------------------------------------------------------------------------------------------
261 632 000 Xxxxxxxxxxxx Xx. Xxxxxx XX 00000 Owned
-------------------------------------------------------------------------------------------------------
262 633 0000 Xxxxx Xx. Xxxxxxxxxxx XX 00000 Owned
-------------------------------------------------------------------------------------------------------
263 636 000 Xxxxx Xxxxx Xx. Xxxxxxxxxx XX 00000 Owned
-------------------------------------------------------------------------------------------------------
264 638 0000 Xxxxx 0 Xxxxx Xxxxxx XX 00000 Owned
-------------------------------------------------------------------------------------------------------
265 000 Xxxxx #0 X. Xxxxxxx xxxx Xxxxxxxx XX 00000 Owned
-------------------------------------------------------------------------------------------------------
266 641 0000 X. Xxxx Xx. (Xxxxx 0) Xxxxxxx Xxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
267 643 000 Xxxxxx Xxxx Xxxx Xxxxxxxx XX 00000 Owned
-------------------------------------------------------------------------------------------------------
268 645 447 Winthrop Street (Rt. 44) Xxxxxxx XX 00000 Owned
-------------------------------------------------------------------------------------------------------
269 646 67 Xxxxxxx Xx. Xxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
270 647 000 Xxxxx 000 Xxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
271 648 76 Xxxxxxxxxx Dr. Xxxxxxxx XX 00000 Owned
-------------------------------------------------------------------------------------------------------
272 649 310 Xxxxxxx St. (Rt. 9) Xxxxxx XX 00000 Owned
-------------------------------------------------------------------------------------------------------
273 652 000 Xxxxxx Xx. (Xxxxx 00) Xxxxxxxxxxx XX 00000 Owned
-------------------------------------------------------------------------------------------------------
274 752 00000 Xxxxxx Xx. Xxxxxxxx XX 00000 Leased
-------------------------------------------------------------------------------------------------------
231
LEASED
OR
STORE # CITY STATE ZIP OWNED
-----------------------------------------------------------------------------------
275 991 0000 Xxxxxxxxxx Xx. Xxxxxxxxxx XX 00000 Leased
-----------------------------------------------------------------------------------
276 997 8055 Xxxxx Xxxxx 0 Xxxx XX 00000 Leased
-----------------------------------------------------------------------------------
277 000 Xxx Xxxxxxx Xxxxx Xxxxxxxx XX 00000 Leased
-----------------------------------------------------------------------------------
278 1193 000 Xxxxx Xxxx., Xxx. 000 Xxxx XX 00000 Leased
-----------------------------------------------------------------------------------
279 1194 0000 X. Xxxx Xxxx Xx. Xxxx XX 00000 Leased
-----------------------------------------------------------------------------------
280 1195 0000 X. Xxxxxx Xxxxxxx XX 00000 Leased
-----------------------------------------------------------------------------------
281 0000 Xxxxxxxxx Xxxxxx Xxxxxx Xxxxxxxxx Xxxxx XX Leased
-----------------------------------------------------------------------------------
282 2278 00000 Xxx Xxxx Xxxxx XX 00000 Leased
-----------------------------------------------------------------------------------
283 4478 0000 Xxxxxxxx Xx. Xxx Xxxxx Xxxxxxx XX 00000 Leased
-----------------------------------------------------------------------------------
284 9001 00000 Xxxxxxxx Xx. Xxxxxxxxxx XX 00000 Leased
-----------------------------------------------------------------------------------
285 9156 0000 Xxxxxxxxxx Xxx. Xxxxxxxxxx XX 00000 Leased
-----------------------------------------------------------------------------------
232
SCHEDULE P-1
PERMITTED LIENS
NON-CHASE UCC FILING CHART
-----------------------------------------------------------------------------------------------------------------------------
SECURED PARTY FILING UCC-1 UCC-1 UCC-3 UCC-3 COLLATERAL
JURISDICTION FILE DATE FILE NO. FILE DATE FILE NO.
-----------------------------------------------------------------------------------------------------------------------------
People's Bank CT, 01/31/96 0001669843 Fixtures and all
Central collateral related to
the property, but
excluding inventory
-----------------------------------------------------------------------------------------------------------------------------
IBM Credit CT, 11/16/00 0002034754 consigned goods
Corp Central
("IBM")
-----------------------------------------------------------------------------------------------------------------------------
Hilco Merchant CT, 12/13/00 2039985 All Merchandise and
Resources Central Proceeds as per Agency
("Hilco") Agreement
-----------------------------------------------------------------------------------------------------------------------------
IBM FL, 11/16/00 200000261827-8 consigned goods
Central
-----------------------------------------------------------------------------------------------------------------------------
Hilco Merchant FL, 12/13/00 200000281149-3 All Merchandise and
Resources Central Proceeds as per Agency
Agreement
-----------------------------------------------------------------------------------------------------------------------------
Midland Commercial IL 02/20/96 003506604 02/27/98 3808450 All collateral as
Financing Corp., Central 10/27/00 4283693 related to mortgaged
assigned to LaSalle property, but
("Midland"), excluding inventory
("LaSalle")
-----------------------------------------------------------------------------------------------------------------------------
Midland Commercial IL 02/20/96 003506605 All collateral as
Financing Corp., Central related to mortgaged
assigned to LaSalle property
-----------------------------------------------------------------------------------------------------------------------------
233
-----------------------------------------------------------------------------------------------------------------------------
SECURED PARTY FILING UCC-1 UCC-1 UCC-3 FILE UCC-3 COLLATERAL
JURISDICTION FILE DATE FILE NO. DATE FILE NO.
-----------------------------------------------------------------------------------------------------------------------------
Midland IL 02/20/96 3506602 All collateral related
Central Mortgaged Property,
but excluding inventory
-----------------------------------------------------------------------------------------------------------------------------
LaSalle Il Central 08/24/00 4257249 Continuation,
re:3548813
-----------------------------------------------------------------------------------------------------------------------------
KC Funding Corp IL, 11/3/95 003466398 8/8/00 4257249 Fixtures
("KC"), assigned to Central
Midland Loan Services
-----------------------------------------------------------------------------------------------------------------------------
Midland IL, 02/20/96 003506602 02/27/98 3808448 Fixtures, RE
assigned to LaSalle Central 10/10/00 4286680 Continuation, but
excluding inventory.
-----------------------------------------------------------------------------------------------------------------------------
Midland IL, 02/20/96 003506603 02/27/98 3808449 All collateral as
assigned to LaSalle Central 10/18/00 4283694 related to mortgaged
property, but
excluding inventory.
-----------------------------------------------------------------------------------------------------------------------------
KC. IL, 11/03/95 3466398 All collateral related
Central to Mortgaged Property,
but excluding inventory
-----------------------------------------------------------------------------------------------------------------------------
LaSalle IL, re:11/03/95 re:3466398 Assignment, RE:
Central 06/05/96 3548813 Mortgaged Property,
but excluding inventory
-----------------------------------------------------------------------------------------------------------------------------
IL, re:02/20/96 re:3506602 Assignment
LaSalle Central 02/27/98 3808448
-----------------------------------------------------------------------------------------------------------------------------
IL, 00/02/00 4286680 Continuation of 3808448
LaSalle Central
-----------------------------------------------------------------------------------------------------------------------------
234
-----------------------------------------------------------------------------------------------------------------------------
SECURED PARTY FILING UCC-1 UCC-1 UCC-3 FILE UCC-3 COLLATERAL
JURISDICTION FILE DATE FILE NO. DATE FILE NO.
-----------------------------------------------------------------------------------------------------------------------------
Midland IL, 02/20/96 3506603 All collateral related
Central to Mortgaged Property,
but excluding
inventory.
-----------------------------------------------------------------------------------------------------------------------------
LaSalle IL, re:02/20/96 re:3506603 Assignment by Midland
Central 02/27/98 3808449
-----------------------------------------------------------------------------------------------------------------------------
LaSalle IL, continuation of 3808449
Central 10/27/00 4283694
-----------------------------------------------------------------------------------------------------------------------------
Midland IL, 02/20/96 3506604 All collateral related
Central to Mortgaged Property,
but excluding inventory
-----------------------------------------------------------------------------------------------------------------------------
IL, re:02/20/96 re:3506604 Assignment by Midland
LaSalle Central 02/27/98 3808450
-----------------------------------------------------------------------------------------------------------------------------
LaSalle IL, 10/27/00 4283693 continuation
Central
-----------------------------------------------------------------------------------------------------------------------------
Midland IL, 02/20/96 3506605 All collateral related
Central to Mortgaged Property,
but excluding inventory
-----------------------------------------------------------------------------------------------------------------------------
LaSalle IL, re:02/20/96 re:3506605 Assignment by Midland
Central 04/02/98 3827388
-----------------------------------------------------------------------------------------------------------------------------
IBM IL, 12/05/00 4298112 Fixtures
Central
-----------------------------------------------------------------------------------------------------------------------------
Xxxxx XX, 00/00/00 0000000 Merchandise and
Central Proceeds as per agency
agreement
-----------------------------------------------------------------------------------------------------------------------------
Midland IL, 01/31/96 96U00226 All collateral related
McHenry to Mortgaged Property,
but excluding inventory
-----------------------------------------------------------------------------------------------------------------------------
235
-----------------------------------------------------------------------------------------------------------------------------
SECURED PARTY FILING UCC-1 UCC-1 UCC-3 FILE UCC-3 COLLATERAL
JURISDICTION FILE DATE FILE NO. DATE FILE NO.
-----------------------------------------------------------------------------------------------------------------------------
LaSalle IL, re:01/31/96 re:96U00226 Assignment
McHenry 09/25/97 97U01265
-----------------------------------------------------------------------------------------------------------------------------
LaSalle IL, 10/20/00 2000U694 Continuation
McHenry
-----------------------------------------------------------------------------------------------------------------------------
Midland IL/Lake 02/02/96 96U0306 All collateral per
mortgaged property,
excludes inventory
-----------------------------------------------------------------------------------------------------------------------------
Midland IL/Lake 02/02/96 96U0309 All collateral per
mortgaged property,
excludes inventory
-----------------------------------------------------------------------------------------------------------------------------
LaSalle IL/Lake 03/03/98 9703648 Assignment
re: 96U0309
-----------------------------------------------------------------------------------------------------------------------------
IL/Lake 09/29/00 9710000 Continuation:
re: 96U0309
-----------------------------------------------------------------------------------------------------------------------------
Hilco IN, Xxxxx 02/14/00 200003230 Merchandise and
Proceeds per Agency
Agreement
-----------------------------------------------------------------------------------------------------------------------------
LMA Capital Group, IN, 09/11/96 2077010 Stretch Wrappers
LLC ("LMA") Central Lease, # Z07962491
-----------------------------------------------------------------------------------------------------------------------------
The CIT Group ("CIT") IN, re:09/11/96 re:2077010 Assignment
Central 07/30/97 2139421
-----------------------------------------------------------------------------------------------------------------------------
CIT IN, re:09/11/96 re:2077010 Assignment
Central 10/02/97 2149753
-----------------------------------------------------------------------------------------------------------------------------
CIT IN, re:09/11/96 re:2077010 Duplicate
Central 10/02/97 2149753
-----------------------------------------------------------------------------------------------------------------------------
G/S Leasing, Inc IN, 10/08/98 2217420 equipment
("G/S") Central
-----------------------------------------------------------------------------------------------------------------------------
236
-----------------------------------------------------------------------------------------------------------------------------
SECURED PARTY FILING UCC-1 UCC-1 UCC-3 FILE UCC-3 COLLATERAL
JURISDICTION FILE DATE FILE NO. DATE FILE NO.
-----------------------------------------------------------------------------------------------------------------------------
IN, 10/08/98 2217421 equipment
G/S Central
-----------------------------------------------------------------------------------------------------------------------------
IN, 11/30/98 2226288 equipment
G/S Central
-----------------------------------------------------------------------------------------------------------------------------
IN, 02/19/99 2240226 equipment
G/S Central
-----------------------------------------------------------------------------------------------------------------------------
IN, 04/26/99 2252787 equipment
G/S Central
-----------------------------------------------------------------------------------------------------------------------------
IN, 04/26/99 2252788 equipment
G/S Central
-----------------------------------------------------------------------------------------------------------------------------
IN, 04/26/99 2252789 equipment
G/S Central
-----------------------------------------------------------------------------------------------------------------------------
IBM IN, 11/22/00 2360289 Fixture
Central
-----------------------------------------------------------------------------------------------------------------------------
Hilco IN, 12/14/00 2363794 Merchandise and
Central proceeds as per Agency
Agreement
-----------------------------------------------------------------------------------------------------------------------------
Hilco IN, 12/14/00 2604 Merchandise and
Xxxxx proceeds as per Agency
Agreement
-----------------------------------------------------------------------------------------------------------------------------
Hilco IN, 12/15/00 2501 Merchandise and
La Porte proceeds as per Agency
Agreement
-----------------------------------------------------------------------------------------------------------------------------
Hilco IN, 12/15/00 2000U054097 Merchandise and
Xxxxxx proceeds as per Agency
Agreement
-----------------------------------------------------------------------------------------------------------------------------
First Union National KY, Central 05/13/96 140301 All structures,
Bank of North buildings and
Carolina ("First improvements
Union")
-----------------------------------------------------------------------------------------------------------------------------
First Union KY, Central 05/13/96 140302 All structures,
buildings and
improvements
-----------------------------------------------------------------------------------------------------------------------------
237
-----------------------------------------------------------------------------------------------------------------------------
SECURED PARTY FILING UCC-1 UCC-1 UCC-3 FILE UCC-3 COLLATERAL
JURISDICTION FILE DATE FILE NO. DATE FILE NO.
-----------------------------------------------------------------------------------------------------------------------------
First Union assignor KY, Central 12/22/97 assignment
State Street Bank and
Trust ("State")
assignee
-----------------------------------------------------------------------------------------------------------------------------
State Street KY, Central 01/09/01 002937217 continuation
-----------------------------------------------------------------------------------------------------------------------------
State Street KY, Central 01/09/01 continuation
-----------------------------------------------------------------------------------------------------------------------------
IBM KY, Central 11/16/00 2653158-41-1 Equipments
-----------------------------------------------------------------------------------------------------------------------------
IBM KY, Central 11/16/00 1605436 Equipments
-----------------------------------------------------------------------------------------------------------------------------
Hilco KY, Central 12/13/00 1605829 All goods constituting
merchandise and all
proceeds and products
thereof
-----------------------------------------------------------------------------------------------------------------------------
First Union KY, 05/1/96 96-03702 All collateral related
Jefferson to mortgaged property,
but excluding inventory
-----------------------------------------------------------------------------------------------------------------------------
State Street KY, re:05/1/96 re:96-03702 Assignment
Jefferson 01/06/98 96-03702A
-----------------------------------------------------------------------------------------------------------------------------
State Street KY, 12/28/00 00-10383 Continuation
Jefferson
-----------------------------------------------------------------------------------------------------------------------------
First Union KY, 05/01/96 96-03703 All collateral related
Jefferson to mortgaged property,
but excluding inventory
-----------------------------------------------------------------------------------------------------------------------------
State Street KY, re:05/01/96 96-03703 Assignment
Jefferson 01/06/98 96-03703A
-----------------------------------------------------------------------------------------------------------------------------
State Street KY, 12/28/00 00-10382 Continuation
Jefferson
-----------------------------------------------------------------------------------------------------------------------------
238
-----------------------------------------------------------------------------------------------------------------------------
SECURED PARTY FILING UCC-1 UCC-1 UCC-3 FILE UCC-3 COLLATERAL
JURISDICTION FILE DATE FILE NO. DATE FILE NO.
-----------------------------------------------------------------------------------------------------------------------------
Hilco KY, 12/15/00 00-10078 Merchandise and
Jefferson Proceeds
-----------------------------------------------------------------------------------------------------------------------------
Hilco MA, 12/14/00 00-214 All Merchandise and
Middleton Proceeds as per Agency
Agreement
-----------------------------------------------------------------------------------------------------------------------------
Hilco MA, 12/14/00 50783 All Merchandise and
Xxxxxxx Proceeds as per Agency
Agreement
-----------------------------------------------------------------------------------------------------------------------------
Hilco MA, 12/14/00 30126 All Merchandise and
Tauton Proceeds as per Agency
Agreement
-----------------------------------------------------------------------------------------------------------------------------
IBM MA, Central 11/16/00 756898 Fixture
-----------------------------------------------------------------------------------------------------------------------------
Hilco MA, Central 12/20/00 764154 All Merchandise and
Proceeds as per Agency
Agreement
-----------------------------------------------------------------------------------------------------------------------------
IBM MD, Central 11/16/00 181065551 Fixture
-----------------------------------------------------------------------------------------------------------------------------
Hilco MD, Central 12/13/00 181068144 The form is not there
-----------------------------------------------------------------------------------------------------------------------------
G/S MI, Central 01/12/01 D732728 Equipment, 92140-70
-----------------------------------------------------------------------------------------------------------------------------
Midland MI, Central 2/16/96 67311B All collateral related
to mortgaged property,
excludes inventory
-----------------------------------------------------------------------------------------------------------------------------
Xxxxxxxx/XxXxxxxx MI, Central 04/21/94 42052B All equipment
Associates, Inc. pursuant to lease
("Xxxxxxxx") #F21171
-----------------------------------------------------------------------------------------------------------------------------
Xxxxxxxx/ MI, Central 02/08/99 00993C continuation, re:42052B
-----------------------------------------------------------------------------------------------------------------------------
239
-----------------------------------------------------------------------------------------------------------------------------
SECURED PARTY FILING UCC-1 UCC-1 UCC-3 UCC-3 COLLATERAL
JURISDICTION FILE DATE FILE NO. FILE DATE FILE NO.
-----------------------------------------------------------------------------------------------------------------------------
Xxxxxxxx (assignor) to MI, Central 11/05/96 79988B Computer, data
Norwest Equipment processing and related
finance (assignee) equipment, subject to
schedule M of lease #
F 21171
-----------------------------------------------------------------------------------------------------------------------------
AT&T Systems Leasing MI, Central 08/27/98 D414765 All equipment under
Corporation ("AT&T) schedule no: 001A
-----------------------------------------------------------------------------------------------------------------------------
Newcourt Technologies MI, Central 02/01/99 D473375 Amendment to D414765
Corporation, f/k/a
AT&T Systems Leasing
Agreement,
("Newcourt")
-----------------------------------------------------------------------------------------------------------------------------
G/S. MI, Central 11/19/98 D445615 Equipment pursuant to
lease #92140-50
-----------------------------------------------------------------------------------------------------------------------------
Siemens Credit MI, Central 11/24/98 D447717 Property covered under
Corporation lease
("Siemens") #000-0000000-000,
including the
equipment listed and
all proceeds,
including insurance
proceeds.
-----------------------------------------------------------------------------------------------------------------------------
G/S. MI, Central 02/05/99 D476077 Equipment, pursuant
to lease #92140-52
-----------------------------------------------------------------------------------------------------------------------------
G/S. MI, Central 02/05/99 D476078 Equipment pursuant to
lease #92140-51
-----------------------------------------------------------------------------------------------------------------------------
G/S MI, Central 02/12/99 D478165 Equipment, pursuant to
lease #92140-53
-----------------------------------------------------------------------------------------------------------------------------
240
-----------------------------------------------------------------------------------------------------------------------------
SECURED PARTY FILING UCC-1 UCC-1 UCC-3 FILE UCC-3 COLLATERAL
JURISDICTION FILE DATE FILE NO. DATE FILE NO.
-----------------------------------------------------------------------------------------------------------------------------
G/S. MI, Central 04/13/99 D502117 Equipment, pursuant to
lease #92140-46
-----------------------------------------------------------------------------------------------------------------------------
G/S. MI, Central 04/13/99 D502118 Equipment, pursuant to
lease #92140-47
-----------------------------------------------------------------------------------------------------------------------------
G/S. MI, Central 08/20/99 D557065 Equipment, pursuant to
lease #92140-55
-----------------------------------------------------------------------------------------------------------------------------
G/S MI, Central 08/20/99 D557066 Equipment, pursuant to
lease #92140-54
-----------------------------------------------------------------------------------------------------------------------------
Atlas Auto Leasing MI, Central 12/04/00 D719863 (4)Lift Trucks
Inc. ("Atlas")
-----------------------------------------------------------------------------------------------------------------------------
Atlas. MI, Central 12/04/00 D719864 (27) Lift Trucks
-----------------------------------------------------------------------------------------------------------------------------
Steelcase Financial MI, Central 10/27/97 D295019 Furniture and
Services ("Steelcase) Equipment, pursuant to
lease #10928,
including proceeds.
-----------------------------------------------------------------------------------------------------------------------------
Midland. MI, Central 10/30/95 D027119 All collateral related
to mortgaged property,
but excluding
inventory.
-----------------------------------------------------------------------------------------------------------------------------
KC (assignor), MI, Central re:10/30/95 re:D027119 Assignment
LaSalle (assignee) 06/04/96 D103017
-----------------------------------------------------------------------------------------------------------------------------
LaSalle, f/k/a MI, Central re:10/30/95 re:D027119 Continuation
LaSalle National Bank 08/23/00 D687262
-----------------------------------------------------------------------------------------------------------------------------
Midland MI, Central 02/06/96 D060706 All collateral related
to the mortgaged
property, but
excluding inventory
-----------------------------------------------------------------------------------------------------------------------------
241
-----------------------------------------------------------------------------------------------------------------------------
SECURED PARTY FILING UCC-1 UCC-1 UCC-3 FILE UCC-3 COLLATERAL
JURISDICTION FILE DATE FILE NO. DATE FILE NO.
-----------------------------------------------------------------------------------------------------------------------------
Midland (assignor), MI, Central re:02/06/96 re:D060706 Assignment
LaSalle (assignee) 09/30/97 D285186
-----------------------------------------------------------------------------------------------------------------------------
LaSalle MI, Central re:02/06/96 re:D060706 Continuation
11/06/00 D711949
-----------------------------------------------------------------------------------------------------------------------------
Midland MI, Central 02/16/96 67305B All collateral related
to Mortgaged Property,
excluding inventory.
-----------------------------------------------------------------------------------------------------------------------------
Midland (assignor), MI, Central re:02/16/96 re:67305B Assignment
LaSalle (assignee) 02/06/98 D335858
-----------------------------------------------------------------------------------------------------------------------------
LaSalle MI, Central re:02/16/96 re:67305B Continuation
10/23/00 D706917
-----------------------------------------------------------------------------------------------------------------------------
Midland MI, Central 02/16/96 67306B All collateral related
to the Mortgaged
Property, but
excluding inventory.
-----------------------------------------------------------------------------------------------------------------------------
Midland (assignor), MI, Central re:02/16/96 re:67306B Assignment
LaSalle (assignee) 10/16/97 D292930
-----------------------------------------------------------------------------------------------------------------------------
LaSalle MI, Central re:02/16/96 re:67306B Assignment
09/14/99 D565937
-----------------------------------------------------------------------------------------------------------------------------
MI, Central re:02/16/96 re:67306B Continuation
LaSalle 10/31/00 D709903
-----------------------------------------------------------------------------------------------------------------------------
Midland MI, Central 02/16/96 67307B All Collateral related
to Mortgaged Property,
but excluding inventory
-----------------------------------------------------------------------------------------------------------------------------
242
-----------------------------------------------------------------------------------------------------------------------------
SECURED PARTY FILING UCC-1 UCC-1 UCC-3 FILE UCC-3 COLLATERAL
JURISDICTION FILE DATE FILE NO. DATE FILE NO.
-----------------------------------------------------------------------------------------------------------------------------
Midland (assignor), MI, Central re:02/16/96 re: 67307B Assignment
LaSalle (assignee) 10/16/97 D292932
-----------------------------------------------------------------------------------------------------------------------------
LaSalle MI, Central 10/24/00 D707735 Continuation
re: 67307B
-----------------------------------------------------------------------------------------------------------------------------
Midland MI, Central 2/16/96 67308B All collateral related
to Mortgaged Property,
excludes inventory
-----------------------------------------------------------------------------------------------------------------------------
LaSalle (Assignee) MI, Central 02/06/98 D335856 Assignment
re: 67308B
-----------------------------------------------------------------------------------------------------------------------------
LaSalle MI, Central 10/31/00 D709902 Continuation
re: 67308B
-----------------------------------------------------------------------------------------------------------------------------
Midland MI, Central 2/16/96 67309B All collateral
relating to mortgaged
property, excludes
inventory
-----------------------------------------------------------------------------------------------------------------------------
LaSalle (Assignee) MI, Central 10/16/97 D292933 Assignment re: 67309B
-----------------------------------------------------------------------------------------------------------------------------
LaSalle MI, Central 10/24/00 D707734 Continuation, re:
67309B
-----------------------------------------------------------------------------------------------------------------------------
Midland MI, Central 2/16/96 67310B All collateral
relating to mortgaged
property, excludes
inventory
-----------------------------------------------------------------------------------------------------------------------------
LaSalle (Assignee) MI, Central 9/30/97 D285185 Assignment re: 67310B
-----------------------------------------------------------------------------------------------------------------------------
LaSalle MI, Central 10/26/00 D708472 Continuation, re: 67310B
-----------------------------------------------------------------------------------------------------------------------------
LaSalle (Assignee) MI, Central 9/30/97 D285187 Assignment re: 67311B
-----------------------------------------------------------------------------------------------------------------------------
LaSalle MI, Central 10/23/00 D706918 Continuation, re:
67311B
----------------------------------------------------------------------------------------------------------------------------
243
-----------------------------------------------------------------------------------------------------------------------------
SECURED PARTY FILING UCC-1 UCC-1 UCC-3 FILE UCC-3 COLLATERAL
JURISDICTION FILE DATE FILE NO. DATE FILE NO.
-----------------------------------------------------------------------------------------------------------------------------
Midland MI, Central 2/16/96 67312B All collateral
relating to mortgaged
property, excludes
inventory
-----------------------------------------------------------------------------------------------------------------------------
LaSalle (Assignee) MI, Central 9/30/97 D285188 Assignment re: 67312B
-----------------------------------------------------------------------------------------------------------------------------
LaSalle MI, Central 10/23/00 D706915 Continuation, re:
67312B
-----------------------------------------------------------------------------------------------------------------------------
Midland MI, Central 2/16/96 67313B All collateral
relating to mortgaged
property, excludes
inventory
-----------------------------------------------------------------------------------------------------------------------------
LaSalle (Assignee) MI, Central 12/09/97 D313258 Assignment re: 67313B
-----------------------------------------------------------------------------------------------------------------------------
LaSalle MI, Central 10/30/00 D709626 Continuation, re:
67313B
-----------------------------------------------------------------------------------------------------------------------------
Midland MI, Central 2/16/96 67314B All collateral
relating to mortgaged
property, excludes
inventory
-----------------------------------------------------------------------------------------------------------------------------
LaSalle (Assignee) MI, Central 9/30/97 D285189 Assignment re: 67314B
-----------------------------------------------------------------------------------------------------------------------------
LaSalle MI, Central 9/26/00 D697951 Continuation, re:
67314B
-----------------------------------------------------------------------------------------------------------------------------
Xxxx X. Xxxxxxx MI, Central 2/29/96 D068718 All collateral related
to mortgaged property,
excludes inventory
-----------------------------------------------------------------------------------------------------------------------------
Midland MI, Central 2/29/96 D068719 All collateral related
to mortgaged property,
excludes inventory
-----------------------------------------------------------------------------------------------------------------------------
244
-----------------------------------------------------------------------------------------------------------------------------
SECURED PARTY FILING UCC-1 UCC-1 UCC-3 FILE UCC-3 COLLATERAL
JURISDICTION FILE DATE FILE NO. DATE FILE NO.
-----------------------------------------------------------------------------------------------------------------------------
LaSalle (Assignee) MI, Central 02/06/98 D335857 Assignment re: D068719
-----------------------------------------------------------------------------------------------------------------------------
LaSalle MI, Central 10/23/00 D706916 Continuation, re:
D068719
-----------------------------------------------------------------------------------------------------------------------------
Xxxx X. Xxxxxxx MI, Central 2/29/96 D068720 All collateral
relating to mortgaged
property, excludes
inventory
-----------------------------------------------------------------------------------------------------------------------------
LaSalle (Assignee) MI, Central 12/19/00 D725044 Assignment re: D068720
-----------------------------------------------------------------------------------------------------------------------------
LaSalle MI, Central 12/19/00 D725045 Continuation, re:
D068720
-----------------------------------------------------------------------------------------------------------------------------
Midland MI, Central 3/25/96 D077329 All collateral related
to mortgaged property,
excludes inventory
-----------------------------------------------------------------------------------------------------------------------------
LaSalle (Assignee) MI, Central 02/03/98 D334725 Assignment re: D77329
-----------------------------------------------------------------------------------------------------------------------------
LaSalle MI, Central 10/30/00 D709627 Continuation, re:
D077329
-----------------------------------------------------------------------------------------------------------------------------
Xxxxxxxx MI, Central 12/17/96 D173937 Standard Bindfast 5
binder
-----------------------------------------------------------------------------------------------------------------------------
National Realty Corp. MI, Central 9/11/97 79074BA All collateral related
("National") to mortgaged property,
excludes inventory
-----------------------------------------------------------------------------------------------------------------------------
National MI, Central 09/11/97 79075BA Assignment
-----------------------------------------------------------------------------------------------------------------------------
Siemens MI, Central 10/21/97 D294789 Property, covered
under lease
#000-0000000-000
-----------------------------------------------------------------------------------------------------------------------------
G/S MI, Central 11/14/97 D304814 Equipment, pursuant to
lease #92140-34
-----------------------------------------------------------------------------------------------------------------------------
G/S MI, Central 9/30/98 D426414 Equipment, per lease
#92140-38
-----------------------------------------------------------------------------------------------------------------------------
245
-----------------------------------------------------------------------------------------------------------------------------
SECURED PARTY FILING UCC-1 UCC-1 UCC-3 FILE UCC-3 COLLATERAL
JURISDICTION FILE DATE FILE NO. DATE FILE NO.
-----------------------------------------------------------------------------------------------------------------------------
First Union MI, Central 5/10/96 71005B All collateral related
to mortgaged property,
excludes inventory
-----------------------------------------------------------------------------------------------------------------------------
First Union MI, Central 12/29/97 D320600 Assignment re: 71005B
-----------------------------------------------------------------------------------------------------------------------------
State Street MI, Central 01/12/01 20765C
-----------------------------------------------------------------------------------------------------------------------------
First Union MI, Central 05/10/96 71006B All collateral related
to mortgaged property,
excludes inventory
-----------------------------------------------------------------------------------------------------------------------------
First Union MI, Central 12/29/97 D320599 Assignment re: 71006B
-----------------------------------------------------------------------------------------------------------------------------
State Street MI, Central 01/12/01 20766C
-----------------------------------------------------------------------------------------------------------------------------
AT&T MI, Central 07/27/98 D403237 All leased equipment
per schedule 001
-----------------------------------------------------------------------------------------------------------------------------
New Court MI, Central 02/01/99 D473374 Amendment, re: D403237
-----------------------------------------------------------------------------------------------------------------------------
Siemens MI, Central 03/01/99 D484560 Property under
co-terminous
#000-0000000-000
-----------------------------------------------------------------------------------------------------------------------------
IBM MI, Central 11/16/00 D715245
-----------------------------------------------------------------------------------------------------------------------------
Hilco MI, Central 12/13/00 19900C Merchandise & Proceeds
per Agency Agreement
-----------------------------------------------------------------------------------------------------------------------------
Resource Leasing MI, Central 05/25/99 D522351 Collateral: Schedule
Corp.("Resource") FNC99001-01
-----------------------------------------------------------------------------------------------------------------------------
Resource MI, Central 07/28/99 D540465 Schedule FNC99001-01
-----------------------------------------------------------------------------------------------------------------------------
246
-----------------------------------------------------------------------------------------------------------------------------
SECURED PARTY FILING UCC-1 UCC-1 UCC-3 FILE UCC-3 COLLATERAL
JURISDICTION FILE DATE FILE NO. DATE FILE NO.
-----------------------------------------------------------------------------------------------------------------------------
G/S. MI, Central 10/15/99 D577164 Equipment per lease
#92140-60
-----------------------------------------------------------------------------------------------------------------------------
G/S. MI, Central 10/15/99 D577165 Equipment per lease
#92140-62
-----------------------------------------------------------------------------------------------------------------------------
New Court MI, Central 03/06/00 D627356 Equipment per schedule
001C
-----------------------------------------------------------------------------------------------------------------------------
G/S MI, Central 4/19/00 D643605 Equipment SN: E7438,
E7693, E7726
-----------------------------------------------------------------------------------------------------------------------------
G/S MI, Central 4/19/00 D643606 Equipment, per 92140-63
-----------------------------------------------------------------------------------------------------------------------------
G/S MI, Central 4/19/00 D643607 Equipment, per 92140-65
-----------------------------------------------------------------------------------------------------------------------------
G/S MI, Central 4/19/00 D643608 Equipment, per 92140-64
-----------------------------------------------------------------------------------------------------------------------------
G/S MI, Central 4/19/00 D643609 Equipment, per 92140-67
-----------------------------------------------------------------------------------------------------------------------------
G/S MI, Central 4/19/00 D643610 Equipment, 92140-66
-----------------------------------------------------------------------------------------------------------------------------
G/S MI, Central 01/12/01 D732726 Equipment, 92140-68
-----------------------------------------------------------------------------------------------------------------------------
G/S MI, Central 01/12/01 D732727 Equipment, 92140-69
-----------------------------------------------------------------------------------------------------------------------------
G/S MI, Central 1/12/01 D732728 Equipment, 92140-70
-----------------------------------------------------------------------------------------------------------------------------
G/S MI, Central 01/12/01 D732729 Equipment, 92140-71
-----------------------------------------------------------------------------------------------------------------------------
G/S MI, Central 01/12/01 D732730 Equipment, 92140-72
-----------------------------------------------------------------------------------------------------------------------------
G/S MI, Central 01/12/01 D732731 Equipment, 92140-73
-----------------------------------------------------------------------------------------------------------------------------
G/S MI, Central 01/12/01 D732732 Equipment, 92140-74
-----------------------------------------------------------------------------------------------------------------------------
G/S MI, Central 01/12/01 D732733 Equipment, 92140-75
-----------------------------------------------------------------------------------------------------------------------------
G/S MI, Central 01/12/01 D732734 Equipment, 94900-76
-----------------------------------------------------------------------------------------------------------------------------
KC MI/Xxxxxx 11/02/95 560437 Collateral per
mortgaged property,
excluding inventory
-----------------------------------------------------------------------------------------------------------------------------
247
-----------------------------------------------------------------------------------------------------------------------------
SECURED PARTY FILING UCC-1 UCC-1 UCC-3 FILE UCC-3 COLLATERAL
JURISDICTION FILE DATE FILE NO. DATE FILE NO.
-----------------------------------------------------------------------------------------------------------------------------
Midland MI/Oakland 02/02/96 96-00964 Collateral per
mortgaged property,
excludes inventory
-----------------------------------------------------------------------------------------------------------------------------
LaSalle MI/Oakland 11/03/97 97-05892 Assignment re: 96-00964
-----------------------------------------------------------------------------------------------------------------------------
LaSalle MI/Oakland 11/07/00 00-04842 Continuation, re:
96-00964
-----------------------------------------------------------------------------------------------------------------------------
Resource MI/Xxxxx 11/26/96 D521477 125 xxxx verifone
-----------------------------------------------------------------------------------------------------------------------------
Midland MN/Central 2/7/96 1823388 Collateral per
mortgaged property,
excludes inventory
-----------------------------------------------------------------------------------------------------------------------------
La Salle MN/Central 10/7/97 1978734 Assignment from
Midland, re:1823388
-----------------------------------------------------------------------------------------------------------------------------
LaSalle MN/Central 10/31/00 2271187 Continuation,
re:1823388
-----------------------------------------------------------------------------------------------------------------------------
Midland MN/Central 2/5/96 1822598 Collateral per
mortgaged property,
excludes inventory
-----------------------------------------------------------------------------------------------------------------------------
LaSalle MN/Central 12/2/97 1992834 Assignment, re:1822598
-----------------------------------------------------------------------------------------------------------------------------
Midland MN/Central 2/5/96 1822597 Collateral per
mortgaged property,
excludes inventory
-----------------------------------------------------------------------------------------------------------------------------
LaSalle MN/Central 2/10/98 2011059 Assignment, re:
1822597
-----------------------------------------------------------------------------------------------------------------------------
LaSalle MN/Central 11/13/00 2273964 Continuation, re:
1822597
-----------------------------------------------------------------------------------------------------------------------------
IBM MN/Central 11/20/00 2276016 Fixtures
-----------------------------------------------------------------------------------------------------------------------------
248
-----------------------------------------------------------------------------------------------------------------------------
SECURED PARTY FILING UCC-1 UCC-1 UCC-3 FILE UCC-3 COLLATERAL
JURISDICTION FILE DATE FILE NO. DATE FILE NO.
-----------------------------------------------------------------------------------------------------------------------------
Midland MN/Dakota 2/5/96 285635 Collateral per
mortgaged property,
excludes inventory
-----------------------------------------------------------------------------------------------------------------------------
Midland MN/Hennepin 2/12/96 1115554 Collateral per
mortgaged property,
excludes inventory
-----------------------------------------------------------------------------------------------------------------------------
LaSalle MN/Hennepin 3/2/98 1131235 Assignment, re:1115554
-----------------------------------------------------------------------------------------------------------------------------
LaSalle MN/Hennepin 11/2/00 1147180 Continuation,
re:1115554
-----------------------------------------------------------------------------------------------------------------------------
Midland MN/Xxxxxx 2/7/96 9600318 Collateral per
mortgaged property,
excludes inventory
-----------------------------------------------------------------------------------------------------------------------------
LaSalle MN/Xxxxxx 12/5/97 9702615 Assignment, re: 9600318
-----------------------------------------------------------------------------------------------------------------------------
LaSalle MN/Xxxxxx 12/4/00 9904534 continuation,
re:9600318
-----------------------------------------------------------------------------------------------------------------------------
Midland MO/Central 04/01/96 2649466 Collateral per
mortgaged property,
excludes inventory
-----------------------------------------------------------------------------------------------------------------------------
LaSalle MO/Central 02/09/98 2880087 Assignment
re: 2649466
-----------------------------------------------------------------------------------------------------------------------------
LaSalle MO/Central 11/01/00 4102555 Continuation:
re: 2649466
-----------------------------------------------------------------------------------------------------------------------------
Xxxx X. Xxxxxxx MO/Central 04/01/96 2649467 Collateral per
mortgaged property,
excludes inventory
-----------------------------------------------------------------------------------------------------------------------------
LaSalle MO/Central 02/09/98 2880088 assign
-----------------------------------------------------------------------------------------------------------------------------
LaSalle MO/Central 11/01/00 4102549 continued
-----------------------------------------------------------------------------------------------------------------------------
249
-----------------------------------------------------------------------------------------------------------------------------
SECURED PARTY FILING UCC-1 UCC-1 UCC-3 FILE UCC-3 COLLATERAL
JURISDICTION FILE DATE FILE NO. DATE FILE NO.
-----------------------------------------------------------------------------------------------------------------------------
IBM MO/Central 11/16/00 4106789 extension sheet UCC #
CPC 00904194
-----------------------------------------------------------------------------------------------------------------------------
Hilco MO/Central 12/13/00 4114315 Merchandise & Proceeds
per Agreement
------------------------------------------------------------------------------------------------------------------------------
Midland MO/St. Xxxxxxx 01/29/96 00424 Collateral per
mortgaged property,
excludes inventory
------------------------------------------------------------------------------------------------------------------------------
LaSalle MO/St. Xxxxxxx 03/03/98 00424 assign
-----------------------------------------------------------------------------------------------------------------------------
LaSalle MO/St. Xxxxxxx 10/27/00 00424 continued
-----------------------------------------------------------------------------------------------------------------------------
Midland MO/St. Xxxxxxx 01/29/96 00425 Collateral per
mortgaged property,
excludes inventory
-----------------------------------------------------------------------------------------------------------------------------
LaSalle MO/St. Xxxxxxx 03/03/98 0425 assign
-----------------------------------------------------------------------------------------------------------------------------
LaSalle MO/St. Xxxxxxx 10/27/00 0425 continued
-----------------------------------------------------------------------------------------------------------------------------
Midland MO/St. Xxxxxxx 01/29/96 00430 Collateral per
mortgaged property,
excludes inventory
-----------------------------------------------------------------------------------------------------------------------------
LaSalle MO/St. Xxxxxxx 03/03/98 00430 assign
-----------------------------------------------------------------------------------------------------------------------------
LaSalle MO/St. Xxxxxxx 11/20/00 00430 continued
-----------------------------------------------------------------------------------------------------------------------------
Midland MO/St. Xxxxxxx 01/29/96 00431 Collateral per
mortgaged property,
excludes inventory
-----------------------------------------------------------------------------------------------------------------------------
LaSalle MO/St. Xxxxxxx 03/23/98 00431 assign
-----------------------------------------------------------------------------------------------------------------------------
LaSalle MO/St. Xxxxxxx 11/20/00 00431 continued
-----------------------------------------------------------------------------------------------------------------------------
250
-----------------------------------------------------------------------------------------------------------------------------
SECURED PARTY FILING UCC-1 UCC-1 UCC-3 FILE UCC-3 COLLATERAL
JURISDICTION FILE DATE FILE NO. DATE FILE NO.
-----------------------------------------------------------------------------------------------------------------------------
Hilco MO/St. Xxxxxxx 12/19/00 3604 Merchandise/proceeds
per agency agreement
-----------------------------------------------------------------------------------------------------------------------------
Midland MO/St. Louis 03/07/96 2556 Merchandise/proceeds
per agency agreement
-----------------------------------------------------------------------------------------------------------------------------
Xxxx X. Xxxxxxx MO/St. Louis 03/07/96 2557 Collateral per
mortgaged property,
excludes inventory
-----------------------------------------------------------------------------------------------------------------------------
Hilco MO/St. Louis 12/15/00 2000/546/ Merchandise/proceeds
per agency agreement
-----------------------------------------------------------------------------------------------------------------------------
Midland NJ/Central 2/13/96 1681728 All collateral with
respect to mortgaged
property
-----------------------------------------------------------------------------------------------------------------------------
LaSalle NJ/Central 2/23/98 1681728 Assignment, re: 161728
-----------------------------------------------------------------------------------------------------------------------------
Midland NJ/Central 2/13/96 1681784 All collateral with
respect to mortgaged
property
-----------------------------------------------------------------------------------------------------------------------------
LaSalle NJ/Central 10/3/97 1681784 Assignment, re: 1681784
-----------------------------------------------------------------------------------------------------------------------------
LaSalle NJ/Central 10/26/00 1681784 Continuation, re:
1681784
-----------------------------------------------------------------------------------------------------------------------------
Midland NJ/Central 2/20/96 1682817 All collateral with
respect to mortgaged
property
-----------------------------------------------------------------------------------------------------------------------------
LaSalle NJ/Central 3/11/98 1682817 Assignment, re: 1682817
-----------------------------------------------------------------------------------------------------------------------------
LaSalle NJ/Central 11/6/00 1682817 Continuation, re:
1682817
-----------------------------------------------------------------------------------------------------------------------------
People's Bank NY/Central 2/7/96 026380 Collateral per
mortgaged property,
excludes inventory
-----------------------------------------------------------------------------------------------------------------------------
251
-----------------------------------------------------------------------------------------------------------------------------
SECURED PARTY FILING UCC-1 UCC-1 UCC-3 FILE UCC-3 COLLATERAL
JURISDICTION FILE DATE FILE NO. DATE FILE NO.
-----------------------------------------------------------------------------------------------------------------------------
Midland NY/Central 3/18/96 055059 Collateral per
mortgaged property,
excludes inventory
-----------------------------------------------------------------------------------------------------------------------------
Sanwa leasing corp NY/Central 7/11/96 138248 Konica copier
("Sanwa")
-----------------------------------------------------------------------------------------------------------------------------
National NY/Central 8/29/97 180566 Collateral per
mortgaged property,
excludes inventory
-----------------------------------------------------------------------------------------------------------------------------
National NY/Central 6/30/00 128643 assignment,re:180566
-----------------------------------------------------------------------------------------------------------------------------
National NY/Central 10/30/00 209721 assignment, re:180566
-----------------------------------------------------------------------------------------------------------------------------
IBM NY/Central 11/16/00 222558 Fixtures
-----------------------------------------------------------------------------------------------------------------------------
Hilco NY/Central 12/13/00 239180 All Merchandise and
Proceeds, as per
agency agreement
-----------------------------------------------------------------------------------------------------------------------------
Sanwa NY/Suffolk 6/20/96 96-010135 Konica Copier
-----------------------------------------------------------------------------------------------------------------------------
National NY/Suffolk 8/27/97 97-15148 Collateral per
mortgaged property,
excludes inventory
-----------------------------------------------------------------------------------------------------------------------------
National NY/Suffolk 8/28/97 97-15243 Assignment, re:97-15148
-----------------------------------------------------------------------------------------------------------------------------
IBM OH/Central 11/15/00 AP292581 Fixtures
-----------------------------------------------------------------------------------------------------------------------------
First Union OH/Central 5/13/96 AM72706 All collateral related
to mortgaged property,
but excluding inventory
-----------------------------------------------------------------------------------------------------------------------------
State Street OH/Central 12/27/00 20010170224 assignment
-----------------------------------------------------------------------------------------------------------------------------
252
-----------------------------------------------------------------------------------------------------------------------------
SECURED PARTY FILING UCC-1 UCC-1 UCC-3 FILE UCC-3 COLLATERAL
JURISDICTION FILE DATE FILE NO. DATE FILE NO.
-----------------------------------------------------------------------------------------------------------------------------
State Street OH/Central 1/3/01 20010240336 continuation
-----------------------------------------------------------------------------------------------------------------------------
First Union OH/Central 5/13/96 AM72707 All collateral related
to mortgaged property,
but excluding inventory
-----------------------------------------------------------------------------------------------------------------------------
State Street OH/Central 12/27/00 20010170220 Assignment
-----------------------------------------------------------------------------------------------------------------------------
State Street OH/Central 1/3/01 20010240334 continuation
-----------------------------------------------------------------------------------------------------------------------------
Hilco OH/Central 12/13/00 AP300661 All collateral related
to mortgaged property,
but excluding inventory
-----------------------------------------------------------------------------------------------------------------------------
First Union OH, 05/08/96 04700F10 All collateral related
Franklin to mortgaged property,
but excluding inventory
-----------------------------------------------------------------------------------------------------------------------------
State Street OH, re:05/08/96 re:04700F10 Assignment
Franklin 12/23/97 199712230173841
-----------------------------------------------------------------------------------------------------------------------------
State Street OH, 12/27/00 200012270260337 Assignment
Franklin
-----------------------------------------------------------------------------------------------------------------------------
State Street OH, 12/27/00 200012270260338 Continuation
Franklin
-----------------------------------------------------------------------------------------------------------------------------
Hilco OH, 12/14/00 509009 All Merchandise and
Xxxxx Proceeds as per Agency
Agreement
-----------------------------------------------------------------------------------------------------------------------------
OH, 12/14/00 66697 All Merchandise and
Hilco Xxxxxx Proceeds as per Agency
Agreement
-----------------------------------------------------------------------------------------------------------------------------
253
-----------------------------------------------------------------------------------------------------------------------------
SECURED PARTY FILING UCC-1 UCC-1 UCC-3 FILE UCC-3 COLLATERAL
JURISDICTION FILE DATE FILE NO. DATE FILE NO.
-----------------------------------------------------------------------------------------------------------------------------
Hilco OH, 2/14/00 00 1896 All Merchandise and
Wood Proceeds as per Agency
Agreement
-----------------------------------------------------------------------------------------------------------------------------
Midland PA, 01/31/00 00-000-000 All Collateral related
Delaware to Mortgaged Property,
but excluding inventory
-----------------------------------------------------------------------------------------------------------------------------
Midland (assignor) PA, 02/17/98 96-200197 All collateral
LaSalle National Bank Delaware described in financing
(assignee) agreement
-----------------------------------------------------------------------------------------------------------------------------
LaSalle National Bank PA, 10/27/00 96-200197 Continuation of
Delaware Assignment
-----------------------------------------------------------------------------------------------------------------------------
Midland (assignor) PA, Central 02/06/98 28540020 Assignment by Midland
LaSalle (assignment)
-----------------------------------------------------------------------------------------------------------------------------
LaSalle Bank National PA, Central 10/26/00 33221204 All collateral as per
Association, f/k/a financing statement
LaSalle National Bank
-----------------------------------------------------------------------------------------------------------------------------
PA, Central 11/12/97 28210710 Equipment, pursuant to
G/S lease #92140-32
-----------------------------------------------------------------------------------------------------------------------------
G/S. PA, Central 10/8/98 29461533 Equipment pursuant to
lease #92140-36
-----------------------------------------------------------------------------------------------------------------------------
G/S PA, Central 12/18/98 29710560 Equipment, pursuant to
lease 92140-48
-----------------------------------------------------------------------------------------------------------------------------
G/S PA, Central 02/12/99 29910460 Equipment, pursuant to
lease #92140-51
-----------------------------------------------------------------------------------------------------------------------------
G/S PA, Central 05/13/99 30260337 Equipment, pursuant to
lease # 92140-43
-----------------------------------------------------------------------------------------------------------------------------
254
-----------------------------------------------------------------------------------------------------------------------------
SECURED PARTY FILING UCC-1 UCC-1 UCC-3 FILE UCC-3 COLLATERAL
JURISDICTION FILE DATE FILE NO. DATE FILE NO.
-----------------------------------------------------------------------------------------------------------------------------
PA, Central 05/13/99 30260588 Equipment, pursuant to
G/S lease #92140-40
-----------------------------------------------------------------------------------------------------------------------------
Midland PA, Central 02/01/96 25120447 All collateral related
to Mortgaged Property,
but excluding inventory
-----------------------------------------------------------------------------------------------------------------------------
G/S PA, Central 06/24/99 30410705 Equipment, lease#
92140-44
-----------------------------------------------------------------------------------------------------------------------------
PA, Central 11/16/00 33301284 Fixture
IBM
-----------------------------------------------------------------------------------------------------------------------------
IBM VA, Central 11/15/00 0011157149 Fixture
-----------------------------------------------------------------------------------------------------------------------------
Midland NJ, Gloucester 1/30/96 41730 All collateral related
County to Mortgaged Property,
but excluding inventory
-----------------------------------------------------------------------------------------------------------------------------
LaSalle NJ, Gloucester 9/29/97 2397 Assignment re: 41730
County
-----------------------------------------------------------------------------------------------------------------------------
LaSalle NJ, Gloucester 10/23/00 41730 Continuation, re: 44200
County
-----------------------------------------------------------------------------------------------------------------------------
Midland NJ, Ocean 1/30/96 79718 All collateral related
County to Mortgaged Property,
but excluding inventory
-----------------------------------------------------------------------------------------------------------------------------
LaSalle NJ, Ocean 2/18/98 79718 Assignment, re: 626
County
-----------------------------------------------------------------------------------------------------------------------------
LaSalle NJ, Ocean 10/25/00 136349 Continuation, re: 626
County
-----------------------------------------------------------------------------------------------------------------------------
255
-----------------------------------------------------------------------------------------------------------------------------
SECURED PARTY FILING UCC-1 UCC-1 UCC-3 FILE UCC-3 COLLATERAL
JURISDICTION FILE DATE FILE NO. DATE FILE NO.
-----------------------------------------------------------------------------------------------------------------------------
Midland. NJ, Somerset 2/6/96 96-2506 All collateral related
County to Mortgaged Property,
but excluding inventory
-----------------------------------------------------------------------------------------------------------------------------
LaSalle NJ, Somerset 2/6/98 002801 Assignment, re: 628
County
-----------------------------------------------------------------------------------------------------------------------------
LaSalle NJ, Somerset 10/27/00 022264 Continuation, re: 628
County
-----------------------------------------------------------------------------------------------------------------------------
Midland. NJ, Somerset 2/6/96 96-2507 All collateral related
County to Mortgaged Property,
but excluding inventory
-----------------------------------------------------------------------------------------------------------------------------
Hilco MA, Springfield 12/19/00 111927 Merchandise and
Proceeds related to
Agency Agreement
-----------------------------------------------------------------------------------------------------------------------------
Hilco MA, Westfield 12/15/98 22952 Merchandise and
Proceeds related to
Agency Agreement
-----------------------------------------------------------------------------------------------------------------------------
People's Bank NY, Ulster 4/17/96 96-0876 All collateral related
County to Mortgaged Property,
but excluding inventory
-----------------------------------------------------------------------------------------------------------------------------
Hilco NY, Ulster 12/15/00 00-2981 Merchandise and
County Proceeds related to
Agency
-----------------------------------------------------------------------------------------------------------------------------
Midland NY, Richmond 2/26/96 96-731 All collateral related
County to Mortgaged Property,
but excluding inventory
-----------------------------------------------------------------------------------------------------------------------------
256
-----------------------------------------------------------------------------------------------------------------------------
SECURED PARTY FILING UCC-1 UCC-1 UCC-3 FILE UCC-3 COLLATERAL
JURISDICTION FILE DATE FILE NO. DATE FILE NO.
-----------------------------------------------------------------------------------------------------------------------------
LaSalle NY Richmond 7/21/00 96-731 Assignment, re: 623
County
-----------------------------------------------------------------------------------------------------------------------------
257
JUDGMENT LIENS
1. Xxxxxx Xxxxxx x. Xxxxx'x Nursery & Crafts, Inc. - Award for Plaintiff -
$35,000, plus $10,718.75. Filed in Bucks County, PA. Date of hearing and award -
7/23/97
2. Xxxxx Contractors x. Xxxxx'x Nursery & Crafts, Inc. - Claim for Mechanics
Lien -$4,034 plus interest. Filed in Bucks County, PA.- Letter sent by Frank's
indicates it was settled for $2,000
3. R.E. Xxxxxxxx x. Xxxxx'x Nursery & Crafts, Inc. filed in Bucks County, PA.
Claim for Mechanics Lien -$208,633.28 plus interest. Filed in Bucks County, PA.-
Court document indicates lien was released and discharged with prejudice on
September 27, 1999.
4. Xxxxxx'x Shopping Center as Plaintiff. $3,494.00. Filed in NJ. Judgment
entered on 7/31/90.
5. Maiorello vs Frank's Nursery & Crafts, Inc. filed in Philadelphia, PA. This
case was settled November 1997 for $41,000.
6. Stalker vs Frank's Nursery & Crafts, Inc. filed in Philadelphia, PA. This
case was settled August 21, 2000.
7. Xxx Xxxxx Xxxx and Xxxxxx Xxxx vs. Frank's Nursery, Inc. filed in Delaware
County, Philadelphia. Judgment for Xxx Xxxxx Xxxx in the amount of $8,493.00.
Judgment in the name of Xxxxxx Xxxx.
258
SCHEDULE R-1
REAL PROPERTY
(SEE ATTACHMENT TO SCHEDULE E-1)
259
SCHEDULE 5.8
DUE ORGANIZATION AND QUALIFICATION; SUBSIDIARIES
------------------------------------ ----------------------- ---------------------------------------------------------
Subsidiary Jurisdiction of Number and Percentage of the Outstanding Shares of
Incorporation stock owned Directly of Indirectly by Frank's Nursery &
Crafts, Inc.
------------------------------------ ----------------------- ---------------------------------------------------------
Nursery Distributors, Inc. New York 10 shares of common stock, 100% of shares
------------------------------------ ----------------------- ---------------------------------------------------------
260
SCHEDULE 5.10
LITIGATION
------------------------------------------------------------ ---------------------------------------------------------
CASE NAME CASE NO. / JURISDICTION
------------------------------------------------------------ ---------------------------------------------------------
Xxxxxx, Xxxxxxxxx X. vs. Candle-Lite/Lancaster Colony and January Term, 2000, No. 368
Frank's Nursery & Crafts, Inc.
Court of Common Pleas of Philadelphia County,
Commonwealth of Pennsylvania
------------------------------------------------------------ ---------------------------------------------------------
Xxxxxxxxx, Xxxx vs. Frank's Nursery & Crafts, Inc. Docket No. CV-96-0053826-S
State of Connecticut, Superior Court
X.X. of Ansonia/Milford at Milford
------------------------------------------------------------ ---------------------------------------------------------
Xxxxx, Xxxxxxx X. vs. Frank's Nursery & Crafts and Frank's Case No. C-99-55633-OC
Nursery & Crafts, Inc.
Circuit Court for Xxxx Arundel County, Maryland
------------------------------------------------------------ ---------------------------------------------------------
Xxxxxxx, Xxxxxxx vs. Frank's Nursery & Crafts, Inc., Index Xx. 00000/00
Xxxxxxxx X'Xxxxxxxx, Individually and d/b/a D'Agostino
Brothers Nursery and N/A/D/ Realty Co., Inc. Supreme Court of the State of New York
County of Westchester
------------------------------------------------------------ ---------------------------------------------------------
Xxxxxxx, Xxxxxx, Individually and as Mother, Natural Case No. 00-CA-001082 (ON)
Guardian and Next Friend of Xxxxxx Xxxxxxx, a Minor vs.
Frank's Nursery & Crafts, Inc. Circuit Court of the Nineteenth Judicial Circuit In and
For St. Lucie County, Florida
------------------------------------------------------------ ---------------------------------------------------------
De Grazia, Danielle, a Minor by and through her Mother and Docket No. L-2163-00, Civil Action
Guardian Ad Litem, Xxxxxxx De Grazia and Xxxxxxx De
Grazia, Individually vs. Xxxxxx' Nursery & Crafts, Inc. Superior Court of New Jersey
Law Division, Camden County
------------------------------------------------------------ ---------------------------------------------------------
Xxxxxx, Xxxxxxxxx and Xxxxxx Xxxxxx vs. American Docket No. L-7169-99 Civil Action
Continental Properties, Inc. t/a Frank's Nursery & Crafts,
Inc. et al. *** Superior Court of New Jersey
Xxxxxx Road Construction Co., Third-Party Plaintiff vs. Law Division: Camden
Merchants Insurance Group, Third Party Defendant
------------------------------------------------------------ ---------------------------------------------------------
261
------------------------------------------------------------ ---------------------------------------------------------
CASE NAME CASE NO. / JURISDICTION
------------------------------------------------------------ ---------------------------------------------------------
XxXxxxxxxx, Xxxxx and Xxxx XxXxxxxxxx vs. Frank's Nursery Index No. 17622/99
& Crafts, Inc.
Supreme Court of the State of New York
County of Westchester
------------------------------------------------------------ ---------------------------------------------------------
Xxxxx, Xxxx Xxx and Xxxx Xxxxx vs. Frank's Nursery & Civil Action Law No. 96-13818
Crafts, Inc.
Court of Common Pleas of Xxxxxxxxxx County,
Commonwealth of Pennsylvania
------------------------------------------------------------ ---------------------------------------------------------
Xxxxx, Xxxxx and Xxxxx Xxxxx vs. Frank's Nursery & Crafts, No. 00-759-NO - Xxx. Xxxx X. Xxxxx
Inc.
State of Michigan
Macomb County Circuit Court
------------------------------------------------------------ ---------------------------------------------------------
Gal-Xxxxxxx, Xxxx vs. Frank's Nursery & Crafts, Inc. Index No. 00-13290
Supreme Court of the State of New York
County of Suffolk
------------------------------------------------------------ ---------------------------------------------------------
Gdoviak, Xxxxxx and Xxxxxxxxx Gdoviak vs. Copiague Index No. 00-05677
Associates; Copiague Associates, Inc.; FNC Holdings
Company, and Frank's Nursery & Crafts, Inc. Supreme Court of the State of New York
County of Suffolk
------------------------------------------------------------ ---------------------------------------------------------
Xxxxxx, Xxxxx vs. Frank's Nursery & Crafts, Inc. and No. 00--X-0000
Xxxxxx Xxxxxx Steel and Wire, a Division of Roblin
Industries, Inc. Circuit Court of Xxxx County, Illinois
County Department, Law Division
------------------------------------------------------------ ---------------------------------------------------------
Xxxxxxxxx, Xxxxxx and Xxxx Xxxxxxxxx vs. FNC Holdings, Index No. 08943/00
Inc. and Frank's Nursery & Crafts, Inc.
Supreme Court of the State of New York
County of Westchester
------------------------------------------------------------ ---------------------------------------------------------
262
------------------------------------------------------------ ---------------------------------------------------------
CASE NAME CASE NO. / JURISDICTION
------------------------------------------------------------ ---------------------------------------------------------
Xxxxxxx, Xxxxxxxx vs. Frank's Nursery & Crafts, Inc. Case Xx. 00XX0 0000 XX 0000
Xxxxx xx Xxxxxxx, Xxxxxx of Lake
Lake Superior Court
Room Number Two, Sitting at East Chicago
Settled 12/00 at $85,000 - not paid
------------------------------------------------------------ ---------------------------------------------------------
Xxxxxxx, Xxxxxxx vs. Frank's Nursery & Crafts, Inc. D.N. CV 98 0166071 S
State of Connecticut
Superior Court, Judicial District of Stamford/Norwalk
at Stamford
------------------------------------------------------------ ---------------------------------------------------------
Xxxxx, Xxxxxxx vs. Frank's Nursery & Crafts, Inc. Court No. 00-33506-NO1
Xxx. Xxxx X. Xxxxxxxx
State of Michigan
Circuit Court for the County of Saginaw
------------------------------------------------------------ ---------------------------------------------------------
Xxxx, Xxxxxx and Xxxxxx Xxxx vs. Frank's Nursery & Crafts, Index No. 97-16383
Inc., xx.xx.
Supreme Court of the State of New York
County of Suffolk
------------------------------------------------------------ ---------------------------------------------------------
Xxxxxxx, Xxxxx vs. Frank's Nursery & Crafts, Inc. Index Xx. 00000/00
Xxxxxxx Xxxxx of the State of New York
County of Suffolk
------------------------------------------------------------ ---------------------------------------------------------
Xxxxxxxx, Xxxxxxx and Xxxxx Xxxxxxxx vs. Frank's Nursery & Index No. 98-26611
Crafts, Inc.
Supreme Court of the State of New York
County of Suffolk
------------------------------------------------------------ ---------------------------------------------------------
263
------------------------------------------------------------ ---------------------------------------------------------
CASE NAME CASE NO. / JURISDICTION
------------------------------------------------------------ ---------------------------------------------------------
Xxxxx, Xxxxxxxx vs. Frank's Nursery & Crafts, Inc. Cause Xx. 00XX0-0000 XX 00
Xxxxx xx Xxxxxxx, Xxxxxx of Lake
Lake Superior Court, Civil Division, Room 5
------------------------------------------------------------ ---------------------------------------------------------
Xxxxxxx, Xxxxxxx and Xxxxxx Xxxxxxx vs. Frank's Nursery & Cause Xx. 00XX0-0000 XX 00000
Crafts, Inc.
State of Indiana, County of Lake
Lake Circuit Court, Crown Point, Indiana
------------------------------------------------------------ ---------------------------------------------------------
Xxxxxxxx, Xxxx X. and Xxxxxxx X. Xxxxxxxx vs. Frank's No. 99-C-1586 Civil Action - Law
Nursery & Crafts, Inc.
Court of Common Pleas of Lehigh County, Pennsylvania,
Civil Division - Law
------------------------------------------------------------ ---------------------------------------------------------
Xxxxxxxxx, Xxxxxx vs. Frank's Nursery & Crafts, Inc. Index Xx. 00000/00
Xxxxxxx Xxxxx of the State of New York
County of Suffolk
------------------------------------------------------------ ---------------------------------------------------------
Xxxxxxxxxxxx, Xxxxxx and Xxxxxxx Xxxxxxxxxxxx vs. Frank's Cause Xx. 00XX0-0000 XX 00000
Nursery & Crafts, Inc.
State of Indiana, County of Lake
Lake Circuit Court, Crown Point, Indiana
------------------------------------------------------------ ---------------------------------------------------------
Xxxxxx, Xxxxxxxxx and Xxxx X. Xxxxxx vs. Frank's Nursery & Civil Action No. JFM-00CV-1292
Crafts, Inc.
U.S. District Court, District of Maryland
------------------------------------------------------------ ---------------------------------------------------------
Xxxxxx, Xxxxxxxx X. vs. Frank's Nursery & Crafts, Inc. Xx. 00 X 0000
X.X. Xxxxxxxx Xxxxx, Xxxxxxxx Xxxxxxxx of Illinois,
Eastern Division
------------------------------------------------------------ ---------------------------------------------------------
Xxxxxx, Xxxxx and Xxx Xxxxxx vs. Frank's Nursery & Crafts, Circuit Case No. 97-7228-CI-20
Inc.
Circuit Court of the Sixth Judicial Circuit
in and for Pinellas County, Florida
------------------------------------------------------------ ---------------------------------------------------------
264
------------------------------------------------------------ ---------------------------------------------------------
CASE NAME CASE NO. / JURISDICTION
------------------------------------------------------------ ---------------------------------------------------------
Xxxxxxxx, Xxxx X. vs. Frank's Nursery & Crafts, Inc. Cause Xx. 00XX0-0000 XX 000000
Xxxxx xx Xxxxxxx, Xxxxxx of Xxxxxx
Xxxxxx County Superior Court, Room No.
------------------------------------------------------------ ---------------------------------------------------------
Xxxxx, Xxxx and Xxxxx Xxxxx vs. Frank's Nursery & Crafts, Docket No. 99-6927
Inc.
New York Supreme Court - Suffolk County
Appellate Division - Second Department
------------------------------------------------------------ ---------------------------------------------------------
Xxxxxxx, Xxxxxxx vs. Frank's Nursery & Crafts, Inc. Case No. CV 000091340
State of Connecticut - Superior Court
Judicial District of Middlesex at Middletown
------------------------------------------------------------ ---------------------------------------------------------
Xxxxxx, Xxxxxxxxx and Xxxxxxx Xxxxxx vs. Frank's Nursery & Cause No. 71CO1 0007 CT 00130
Crafts, Inc.
State of Indiana, County of St. Xxxxxx
In The St. Xxxxxx Circuit Court
------------------------------------------------------------ ---------------------------------------------------------
Xxxxxxxxx, Xxxxx Xxxxxxx, Xx., and Xxxxxxx Xxxxxxxxx vs. Case No. 99-CI-543
Frank's Nursery & Crafts, Inc.
Commonwealth of Kentucky
Xxxxx Circuit Court
------------------------------------------------------------ ---------------------------------------------------------
Xxxxxxx, Xxxxxxxxx and Xxxxxx Xxxxxxx vs. Frank's Nursery Index No. 99/07242
& Crafts, Inc.
Supreme Court of the State of New York
County of Suffolk
------------------------------------------------------------ ---------------------------------------------------------
Vojahosky, Xxxxxx X. vs. Frank's Nursery & Crafts, Inc. Case No. 00 LM K 0000
Xxxxxxx Xxxxx of the Sixteenth Judicial Circuit
Xxxx County, Illinois
------------------------------------------------------------ ---------------------------------------------------------
265
------------------------------------------------------------ ---------------------------------------------------------
CASE NAME CASE NO. / JURISDICTION
------------------------------------------------------------ ---------------------------------------------------------
Xxxxx, Xxxxxx, as Next Friend of Xxxxx Xxxxx, a Minor vs. No. 9915CV2222
Frank's Nursery & Crafts, Inc.
Commonwealth of Massachusetts, Plymouth
District Court Department of the Trial Court
------------------------------------------------------------ ---------------------------------------------------------
Xxxxxxxx, Xxxxxx vs. Frank's Nursery & Crafts, Inc. Circuit Case No. 00-0000-XX-00
Xxxxxxx Xxxxx of the Sixth Judicial Circuit
in and for Pinellas County, Florida
------------------------------------------------------------ ---------------------------------------------------------
Xxxxxxxxxx, Xxxx and Xxxxxx Xxxxxxxxxx vs. Frank's Nursery Xx. 00 0000
& Xxxxxx, Xxx., xx.xx.
Commonwealth of Pennsylvania
Court of Common Pleas for Delaware County
------------------------------------------------------------ ---------------------------------------------------------
266
SCHEDULE 5.13
EMPLOYEE BENEFIT PLANS
1. Frank's Nursery & Crafts 401(k) Plan
267
SCHEDULE 5.16
LEASES
(SEE ATTACHMENT TO SCHEDULE E-1)
268
SCHEDULE 5.17
DDA'S
BANK ACCOUNT INFORMATION
AS OF CLOSING
----------------- ---------------- ---------------------- ---------------------------- --------------------
G/L # ACCOUNT # NAME AND DEPOSITORY CONTACT PERSON PHONE NUMBER
----- --------- ------------------- -------------- ------------
----------------- ---------------- ---------------------- ---------------------------- --------------------
105-003 323840523 Chase Manhattan Bank Xxx Xxxxx (000) 000-0000
1 Chase Xxxxxxxxx Xxxxx
0xx Xxxxx
Xxx Xxxx, XX 00000
----------------- ---------------- ---------------------- ---------------------------- --------------------
105-002 0000000000000 Chase Manhattan P/R Chase Manhattan Bank (000) 000-0000
Attn: Global Payables
0000 Xxxxxxx Xxxx
Xxxxxxxx, XX 00000
----------------- ---------------- ---------------------- ---------------------------- --------------------
###-##-#### Strong Capital Attn: Xxxxx Oleszcznk (000) 000-0000
Management Xxx Xxxxxxx Xxxxxxxx
Xxxxxxx
Xxxxxxxxx Xxxxx, XX 00000
----------------- ---------------- ---------------------- ---------------------------- --------------------
105-006 2661006151 Comerica Bank Xxx Xxxxxxx (313) 222-6239
102-002 2665000010 Comerica Bank One Detroit Center
P.O. Box 75000
Detroit, MI 48275-3280
---------------- ----------------- ---------------------- ---------------------------- --------------------
105-008 144094771 & 323837 Chase Manhattan Bank Jay Singh (212) 552-7313
105-007 323089526 Chase Manhattan Bank 1 Chase Manhattan Plaza
230-205 0021071170 Chase Manhattan Bank 7th Floor
New York, NY 10081
---------------- ----------------- ---------------------- ---------------------------- --------------------
105-004 6301425660509 Chase Manhattan A/P Chase Manhattan Bank (315) 433-2460
230-207 6301501635509 Chase Manhattan Bank Attn: Global Payables
6040 Tarbell Road
Syracuse, NY 13206
---------------- ----------------- ---------------------- ---------------------------- --------------------
102-001 9361599726 Fleet Bank Theodore O'Sullivan (630) 536-9006
705 Zaininger Avenue
Naperville, IL 60563
---------------- ----------------- ---------------------- ---------------------------- --------------------
102-003 2088220003302 First Union Bank Paul Menconi (704) 374-6874
102-038 2100010427717 First Union Bank NC 0815
201 South College Street - CP
Charlotte, NC 28288-0815
---------------- ----------------- ---------------------- ---------------------------- --------------------
102-005 6300602833 Bank of New York Kevin Higgins (212) 815-4891
101 Barclay Street - 18W
New York, NY 10286
---------------- ----------------- ---------------------- ---------------------------- --------------------
102-006 1933069633 Michigan National Doug Henderson (517) 377-3559
Bank Commercial Treasury
Services (98-03)
269
----------------- ---------------- ---------------------- ---------------------------- --------------------
G/L # ACCOUNT # NAME AND DEPOSITORY CONTACT PERSON PHONE NUMBER
----- --------- ------------------- -------------- ------------
----------------- ---------------- ---------------------- ---------------------------- --------------------
124 West Allegan
P.O. Box 40766
Lansing, MI 48901-7966
---------------- ----------------- ---------------------- ---------------------------- --------------------
102-010 5312299 Provident Bank Bernard Robinson (410) 281-7244
5225 Belair Road
Baltimore, MD 21206
---------------- ----------------- ---------------------- ---------------------------- --------------------
102-011 5570883 Bank One Philomena Price (312) 732-6015
525 W. Monroe Street -
6th Fl.
Mail Suite 0239
Chicago, IL 60601
---------------- ----------------- ---------------------- ---------------------------- --------------------
102-012 590119486 Union Federal Bank Jenny Horton (317) 822-1325
45 N. Pennsylvania Avenue
Indianapolis, IN 46204
---------------- ----------------- ---------------------- ---------------------------- --------------------
102-013 3750932551 Bank of America Melinda Langley (704) 386-4552
Global Treasury Services
NC1-002-28-14
101 S. Tryon Street - 28 Fl.
Charlotte, NC 28255
---------------- ----------------- ---------------------- ---------------------------- --------------------
102-014 1064428 Wells Fargo Bank Melissa Machman (312) 553-2353
230 W. Monroe - Suite 2900
Chicago, IL 60606
---------------- ----------------- ---------------------- ---------------------------- --------------------
102-022 21902853 Bank of Waukegan Kari Biegay (847) 244-6000
1601 North Lewis Avenue
Waukegan, IL 60085
---------------- ----------------- ---------------------- ---------------------------- --------------------
102-024 1800000031348 Bank One/Indiana Dave Herriman (313) 225-3759
Mail Code: MI1-8033
611 Woodward Avenue
Detroit, MI 48226
---------------- ----------------- ---------------------- ---------------------------- --------------------
102-030 922145466 HSBC Bank Joe Vacarro (631) 585-8300
2245 Middle Country Road
Centereach, NY 11720
---------------- ----------------- ---------------------- ---------------------------- --------------------
102-036 230002578 National City Marcus Gleaton (616) 376-9249
Bank - MI/IL 108 E. Michigan Avenue
Kalamazoo, MI 49007
---------------- ----------------- ---------------------- ---------------------------- --------------------
102-037 11700654785 Home Federal Cindy Murphy (812) 36-9094
Bank 3751 Brentwood
Columbus, OH 47203
---------------- ----------------- ---------------------- ---------------------------- --------------------
102-039 836811524 National City Bank - Rick Marroti (614) 463-7305
OH 155 E. Broad Street
Columbus, OH 43251
---------------- ----------------- ---------------------- ---------------------------- --------------------
102-041 17199095 Allfirst Bank Stefan Hoenicke (410) 244-4208
270
----------------- ---------------- ---------------------- ---------------------------- --------------------
G/L # ACCOUNT # NAME AND DEPOSITORY CONTACT PERSON PHONE NUMBER
----- --------- ------------------- -------------- ------------
----------------- ---------------- ---------------------- ---------------------------- --------------------
MC 101-745 - 18 Fl.
25 South Charles Street
Baltimore, MD 21201
---------------- ----------------- ---------------------- ---------------------------- --------------------
102-051 99936190 Fifth Third Bank Marie Magnin (513) 744-6974
Fifth Third Center
Cincinnati, OH 45263
---------------- ----------------- ---------------------- ---------------------------- --------------------
102-052 1217645 First Source Bank Lorraine Cochran (219) 235-2380
P.O. Box 1602
South Bend, IN 46634
---------------- ----------------- ---------------------- ---------------------------- --------------------
102-054 180192032654 US Bank Therese Knutson (612) 973-8223
MPFMO109
90 South Sixth Street
Minneapolis, MN 55402
---------------- ----------------- ---------------------- ---------------------------- --------------------
102-059 2078689606 Old National Bank Joanne Kelly (765) 649-4464
2040 S. Scatterfield Road
Anderson, IN 46016
---------------- ----------------- ---------------------- ---------------------------- --------------------
102-060 239438653 National City Phyllis (614) 463-7551
Bank - PA 155 E. Broad Street
Columbus, OH 43251
---------------- ----------------- ---------------------- ---------------------------- --------------------
102-061 5200521093 LaSalle Bank Kimberly Pearson (312) 904-0312
135 South LaSalle Street
Chicago, IL 60603
---------------- ----------------- ---------------------- ---------------------------- --------------------
102-062 793424748 Firstar Bank Matt Zeck (513) 632-3002
102-040 1082500602 Firstar Bank 425 Walnut Street
102-027 7160000795 Firstar Bank MC CN-WN-08
Cincinnati, OH 45201-1038
---------------- ----------------- ---------------------- ---------------------------- --------------------
105-014 035-7024373 People's Bank Arthur Murphy (800) 894-0300
350 Bedford Street
Stamford, CT 06901
---------------- ----------------- ---------------------- ---------------------------- --------------------
271
SCHEDULE 5.18
CREDIT CARD ARRANGEMENTS
The Borrower has credit arrangements with:
1. AMERICAN EXPRESS - Agreement For American Express Card Acceptance, between
American Express Travel Related Services Company, Inc. And Frank's Nursery &
Crafts, Inc. Dated 11/9/93.
2. DISCOVER CARD - Frank's Nursery & Crafts, Inc. has no written record
3. NATIONAL PROCESSING COMPANY - Frank's Nursery & Crafts, Inc. has no record of
a signed agreement.
272
SCHEDULE 6.11
LOCATION OF INVENTORY AND EQUIPMENT
(SEE SCHEDULE E-1)
273
SCHEDULE 7-21
FINANCIAL AND INVENTORY COVENANTS
MINIMUM AVAILABILITY
Measured each Accounting Period, commencing as of the end of Accounting Period
1, 2001 Availability at the end of each Accounting Period shall equal at least
85% of Planned Availability (provided that during Accounting Periods 4, 5, 6, 7,
8 and 12, Availability shall be the lesser of 85% of Planned Availability or
$25,000,000). Planned Availability for the one year after the Closing Date is
detailed below:
End of Period Planned Availability
------------- --------------------
1 2001 $10,249,000
2 2001 $17,266,000
3 2001 $23,868,000
4 2001 $58,548,000
5 2001 $51,859,000
6 2001 $41,482,000
7 2001 $36,475,000
8 2001 $31,104,000
9 2001 $21,251,000
10 2001 $12,772,000
11 2001 $22,860,000
12 2001 $32,283,000
13 2002 $15,994,000
274
Planned Availability for second year after the Closing Date shall be detailed
based on the Business Plan submitted to, and approved by, the Agent.
INVENTORY COMPOSITION
Eligible Decoration Christmas Inventory shall be limited to no more than 20% of
total Inventory as of the end of Accounting Period 13 and each Accounting Period
during Accounting Period 1 through and including Accounting Period 7. Eligible
Christmas Inventory shall be limited to 50% of total Inventory as of the end of
each of Accounting Period during Accounting Period 8 through and including
Accounting Period 12. Testing shall commence as of the end of Accounting Period
1, 2001.
For Accounting Period 3 through Accounting Period 5, measured as of the end of
each Accounting Period, Eligible Live Plant Inventory (Departments 1, 2, 8) as a
percentage of Eligible Inventory shall be limited to no more than 15% of total
Eligible Inventory. Testing shall commence as of the end of Accounting Period 3,
2001.
For Accounting Period 3 and Accounting Period 4, measured as of the end of each
Accounting Period, Inventory at cost must be not less than 90% of planned
Inventory, or sales for the period must have exceeded those projected in the
Business Plan. Testing shall commence as of the end of Accounting Period 3,
2001.
MINIMUM GROSS MARGIN TEST
Measured as of the end of each Accounting Period on a rolling thirteen
Accounting Period basis, Gross Margin shall not vary negatively from the
Business Plan in any one Accounting Period by more than two (2) percentage
points. Testing shall commence as of the end of Accounting Period 1, 2001.
MINIMUM EBITDA
Measured on each Accounting Period end on a rolling three Accounting Period
basis, EBITDA shall not vary negatively from the Business Plan by more than the
greater of 15% of planned EBITDA (as set forth in the Business Plan for the
applicable period) for such period or $1,000,000, unless EBITDA as of the test
date shall exceed, on a cumulative basis, EBITDA as projected in the Business
Plan as of such test date. Testing shall commence as of the end of Accounting
Period 3, 2001.
275
SPECIAL REAL ESTATE LINE ADVANCES
Commencing with the end of Accounting Period 2, 2001, the amount of Special Real
Estate Line Advances will be limited at all times to 40% of the total
outstanding amount of Advances (excluding the face amount of any issued but
undrawn Letters of Credit).
