EXHIBIT 10.(Z)(3)
U.S. $140,000,000
CREDIT AGREEMENT,
dated as of April 11, 1996,
among
PRICE COSTCO NOVA SCOTIA COMPANY,
as the Borrower,
and
CERTAIN COMMERCIAL LENDING INSTITUTIONS,
as the Lenders,
and
CANADIAN IMPERIAL BANK OF COMMERCE,
as the Agent for the Lenders.
CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of April 11, 1996, among PRICE COSTCO
NOVA SCOTIA COMPANY, a Nova Scotia unlimited company (the "BORROWER"), the
various financial institutions as are or may become parties hereto
(collectively, the "LENDERS"), and CANADIAN IMPERIAL BANK OF COMMERCE
("CIBC"), as agent (the "AGENT") for the Lenders,
W I T N E S S E T H:
WHEREAS, the Borrower is engaged in the business of providing financing
for various Affiliates of Price/Costco, Inc.; and
WHEREAS, the Borrower desires to obtain Commitments from the Lenders
pursuant to which Loans, in a maximum aggregate principal amount not to
exceed $140,000,000, will be made to the Borrower in a single Borrowing on or
before April 11, 1996; and
WHEREAS, the Lenders are willing, on the terms and subject to the
conditions hereinafter set forth (including ARTICLE V), to extend such
Commitments and make such Loans to the Borrower; and
WHEREAS, the proceeds of such Loans will be used for general corporate
purposes of the Borrower;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1. DEFINED TERMS. The following terms (whether or not
underscored) when used in this Agreement, including its preamble and
recitals, shall, except where the context otherwise requires, have the
following meanings (such meanings to be equally applicable to the singular
and plural forms thereof):
"AFFILIATE" of any Person means any other Person which, directly or
indirectly, controls, is controlled by or is under common control with such
Person (excluding any trustee under, or any committee with responsibility for
administering, any Plan). A Person shall be deemed to be "controlled by" any
other Person if such other Person possesses, directly or indirectly, power
(a) to vote 10% or more of the securities (on a fully diluted basis)
having ordinary voting power for the election of directors or managing
general partners; or
(b) to direct or cause the direction of the management and policies
of such Person whether by contract or otherwise.
"AGENT" is defined in the PREAMBLE and includes each other Person as
shall have subsequently been appointed as the successor Agent pursuant to
SECTION 9.4.
"AGREEMENT" means, on any date, this Credit Agreement as originally in
effect on the Effective Date and as thereafter from time to time amended,
supplemented, amended and restated, or otherwise modified and in effect on
such date.
"ALTERNATE BASE RATE" means, on any date and with respect to all Base
Rate Loans, a fluctuating rate of interest per annum equal to the higher of
(a) the rate of interest most recently established by CIBC at its
Domestic Office as its reference rate for Dollar loans; and
(b) the Federal Funds Rate most recently determined by CIBC plus
.50%.
The Alternate Base Rate is not necessarily intended to be the lowest rate of
interest determined by CIBC in connection with extensions of credit. Changes
in the rate of interest on that portion of any Loans maintained as Base Rate
Loans will take effect simultaneously with each change in the Alternate Base
Rate. The Agent will give notice promptly to the Borrower and the Lenders of
changes in the Alternate Base Rate.
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"ASSIGNEE LENDER" is defined in SECTION 10.10.1.
"AUTHORIZED OFFICER" means, relative to any Obligor, those of its
officers whose signatures and incumbency shall have been certified to the
Agent and the Lenders pursuant to SECTION 5.1.1.
"BASE RATE LOAN" means a Loan bearing interest at a fluctuating rate
determined by reference to the Alternate Base Rate.
"BORROWER" is defined in the PREAMBLE.
"BORROWING" means the Loans of the same type and, in the case of LIBO
Rate Loans, having the same Interest Period made by all Lenders on the same
Business Day and pursuant to the same Borrowing Request in accordance with
SECTION 2.1.
"BORROWING REQUEST" means a loan request and certificate duly executed by
an Authorized Officer of the Borrower, substantially in the form of EXHIBIT B
hereto.
"BUSINESS DAY" means
(a) any day which is neither a Saturday or Sunday nor a legal holiday
on which banks are authorized or required to be closed in New York, New
York; and
(b) relative to the making, continuing, prepaying or repaying of any
LIBO Rate Loans, any day on which dealings in Dollars are carried on in the
London interbank market.
"CAPITAL EXPENDITURES" means, for any period, the sum of
(a) the aggregate amount of all expenditures of the Borrower for
fixed or capital assets made during such period which, in accordance with
GAAP, would be classified as capital expenditures; and
(b) the aggregate amount of all Capitalized Lease Liabilities
incurred during such period.
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"CAPITALIZED LEASE LIABILITIES" means all monetary obligations of the
Borrower under any leasing or similar arrangement which, in accordance with
GAAP, would be classified as capitalized leases, and, for purposes of this
Agreement and each other Loan Document, the amount of such obligations shall
be the capitalized amount thereof, determined in accordance with GAAP, and
the stated maturity thereof shall be the date of the last payment of rent or
any other amount due under such lease prior to the first date upon which such
lease may be terminated by the lessee without payment of a penalty.
"CASH EQUIVALENT INVESTMENT" means, at any time:
(a) any evidence of the Indebtedness, maturing not more than one year
after such time, issued or guaranteed by the United States Government;
(b) commercial paper, maturing not more than nine months from the
date of issue, which is issued by
(i) a corporation (other than an Affiliate of any Obligor)
organized under the laws of any state of the United States or of the
District of Columbia and rated A-l by Standard & Poor's Ratings Group
or P-l by Xxxxx'x Investors Service, Inc., or
(ii) any Lender (or its holding company);
(c) any certificate of deposit or bankers acceptance, maturing not
more than one year after such time, which is issued by either
(i) a commercial banking institution that is a member of the
Federal Reserve System and has a combined capital and surplus and
undivided profits of not less than $500,000,000, or
(ii) any Lender; or
(d) any repurchase agreement entered into with any Lender (or other
commercial banking institution of the stature referred to in CLAUSE (c)(i))
which
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(i) is secured by a fully perfected security interest in any
obligation of the type described in any of CLAUSES (a) through (c);
and
(ii) has a market value at the time such repurchase agreement is
entered into of not less than 100% of the repurchase obligation of
such Lender (or other commercial banking institution) thereunder.
"CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended.
"CERCLIS" means the Comprehensive Environmental Response Compensation
Liability Information System List.
"CHANGE IN CONTROL" means
(a) the acquisition by any Person or group of Persons (within the
meaning of Section 13 or 14 of the Securities Exchange Act of 1934, as
amended) of beneficial ownership (within the meaning of Rule 13d-3
promulgated by the Securities and Exchange Commission under said Act) of
thirty percent (30%) or more of the outstanding shares of common stock of
Price/Costco, Inc.; or
(b) individuals who have become directors of Price/Costco, Inc.
within any two (2) year period (other than by reelection to a successive
term) constituting a majority of the board of directors of Price/Costco,
Inc.; or
(c) the failure of The Price Company to own, free and clear of all
Liens or other encumbrances, at least 100% of the outstanding shares of
voting stock of the Borrower on a fully diluted basis; or
(d) the failure of Price/Costco, Inc. to own, free and clear of all
Liens or other encumbrances, at least 100% of the outstanding shares of
voting stock of The Price Company on a fully diluted basis.
"CIBC" is defined in the PREAMBLE.
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"CODE" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"COMMITMENT" means, relative to any Lender, such Lender's obligation to
make Loans pursuant to SECTION 2.1.1.
"COMMITMENT AMOUNT" means, on any date, $140,000,000, as such amount may be
reduced from time to time pursuant to SECTION 2.2.
"COMMITMENT TERMINATION DATE" means the earliest of
(a) April 11, 2001; and
(b) the date on which any Commitment Termination Event occurs.
Upon the occurrence of any event described in clause (a) or (b), the Commitments
shall terminate automatically and without any further action.
"COMMITMENT TERMINATION EVENT" means
(a) the occurrence of any Default described in CLAUSES (a) through
(d) of SECTION 8.1.9 with respect to the Borrower; or
(b) the occurrence and continuance of any other Event of Default and
either
(i) the declaration of the Loans to be due and payable pursuant
to SECTION 8.3, or
(ii) in the absence of such declaration, the giving of notice by
the Agent, acting at the direction of the Required Lenders, to the
Borrower that the Commitments have been terminated.
"CONTINGENT LIABILITY" means any agreement, undertaking or arrangement by
which any Person guarantees, endorses or otherwise becomes or is contingently
liable upon (by direct or indirect agreement, contingent or otherwise, to
provide funds for payment,
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to supply funds to, or otherwise to invest in, a debtor, or otherwise to
assure a creditor against loss) the indebtedness, obligation or any other
liability of any other Person (other than by endorsements of instruments in
the course of collection), or guarantees the payment of dividends or other
distributions upon the shares of any other Person. The amount of any Person's
obligation under any Contingent Liability shall (subject to any limitation
set forth therein) be deemed to be the outstanding principal amount (or
maximum principal amount, if larger) of the debt, obligation or other
liability guaranteed thereby.
"CONTINUATION/CONVERSION NOTICE" means a notice of continuation or
conversion and certificate duly executed by an Authorized Officer of the
Borrower, substantially in the form of EXHIBIT C hereto.
"CONTROLLED GROUP" means all members of a controlled group of
corporations and all members of a controlled group of trades or businesses
(whether or not incorporated) under common control which, together with the
Borrower, are treated as a single employer under Section 414(b) or 414(c) of
the Code or Section 4001 of ERISA.
"DEFAULT" means any Event of Default or any condition, occurrence or
event which, after notice or lapse of time or both, would constitute an Event
of Default.
"DISCLOSURE SCHEDULE" means the Disclosure Schedule attached hereto as
SCHEDULE I, as it may be amended, supplemented or otherwise modified from
time to time by the Borrower with the written consent of the Agent and the
Required Lenders.
"DOLLAR" and the sign "$" mean lawful money of the United States.
"DOMESTIC OFFICE" means, relative to any Lender, the office of such
Lender designated as such below its signature hereto or designated in the
Lender Assignment Agreement or such other office of a Lender (or any
successor or assign of such Lender) within the United States as may be
designated from time to time by notice from such Lender, as the case may be,
to each other Person party hereto.
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"EFFECTIVE DATE" means the date this Agreement becomes effective pursuant
to SECTION 10.7.
"ENVIRONMENTAL LAWS" means all applicable federal, state or local
statutes, laws, ordinances, codes, rules, regulations and guidelines
(including consent decrees and administrative orders) relating to public
health and safety and protection of the environment.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time to time.
References to sections of ERISA also refer to any successor sections.
"EVENT OF DEFAULT" is defined in SECTION 8.1.
"FEDERAL FUNDS RATE" means, for any period, a fluctuating interest rate
per annum equal for each day during such period to
(a) the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by federal
funds brokers, as published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal Reserve Bank of
New York; or
(b) if such rate is not so published for any day which is a Business
Day, the average of the quotations for such day on such transactions
received by CIBC from three federal funds brokers of recognized standing
selected by it.
"FEE LETTER" means that certain confidential letter dated March 11, 1996
among CIBC and Price/Costco, Inc.
"FISCAL QUARTER" means any quarter of a Fiscal Year.
"FISCAL YEAR" means any 52/53 week period ending on the Sunday nearest
August 31st; references to a Fiscal Year with a number corresponding to any
calendar year (E.G. the "1995 Fiscal
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Year") refer to the Fiscal Year ending on the Sunday nearest August 31st
occurring during such calendar year.
"F.R.S. BOARD" means the Board of Governors of the Federal Reserve System
or any successor thereto.
"GAAP" is defined in SECTION 1.4.
"GUARANTORS" means Price/Costco, Inc.; Costco Wholesale Corporation; and
The Price Company.
"GUARANTEES" means the Guaranty Agreements executed and delivered
pursuant to SECTION 5.1.3, substantially in the form of EXHIBIT H hereto, as
amended, supplemented, restated or otherwise modified from time to time.
"HAZARDOUS MATERIAL" means
(a) any "hazardous substance", as defined by CERCLA;
(b) any "hazardous waste", as defined by the Resource Conservation
and Recovery Act, as amended;
(c) any petroleum product; or
(d) any pollutant or contaminant or hazardous, dangerous or toxic
chemical, material or substance within the meaning of any other applicable
federal, state or local law, regulation, ordinance or requirement
(including consent decrees and administrative orders) relating to or
imposing liability or standards of conduct concerning any hazardous, toxic
or dangerous waste, substance or material, all as amended or hereafter
amended.
"HEDGING OBLIGATIONS" means, with respect to any Person, all liabilities
of such Person under interest rate swap agreements, interest rate cap
agreements and interest rate collar agreements, and all other agreements or
arrangements designed to protect such Person against fluctuations in interest
rates or currency exchange rates.
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"HEREIN", "HEREOF", "HERETO", "HEREUNDER" and similar terms contained in
this Agreement or any other Loan Document refer to this Agreement or such
other Loan Document, as the case may be, as a whole and not to any particular
Section, paragraph or provision of this Agreement or such other Loan Document.
"IMPERMISSIBLE QUALIFICATION" means, relative to the opinion or
certification of any independent public accountant as to any financial
statement of any Obligor, any qualification or exception to such opinion or
certification
(a) which is of a "going concern" or similar nature;
(b) which relates to the limited scope of examination of matters
relevant to such financial statement; or
(c) which relates to the treatment or classification of any item in
such financial statement and which, as a condition to its removal, would
require an adjustment to such item the effect of which would be to cause
such Obligor to be in default of any of its obligation under any Loan
Document.
"INCLUDING" means including without limiting the generality of any
description preceding such term.
"INDEBTEDNESS" of any Person means, without duplication:
(a) all obligations of such Person for borrowed money and all
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments;
(b) all obligations, contingent or otherwise, relative to the face
amount of all letters of credit, whether or not drawn, and banker's
acceptances issued for the account of such Person;
(c) all obligations of such Person as lessee under leases which have
been or should be, in accordance with GAAP, recorded as Capitalized Lease
Liabilities;
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(d) all other items which, in accordance with GAAP, would be included
as liabilities on the liability side of the balance sheet of such Person as
of the date at which Indebtedness is to be determined;
(e) net liabilities of such Person under all Hedging Obligations;
(f) whether or not so included as liabilities in accordance with
GAAP, all obligations of such Person to pay the deferred purchase price of
property or services, and indebtedness (excluding prepaid interest thereon)
secured by a Lien on property owned or being purchased by such Person
(including indebtedness arising under conditional sales or other title
retention agreements), whether or not such indebtedness shall have been
assumed by such Person or is limited in recourse; and
(g) all Contingent Liabilities of such Person in respect of any of
the foregoing.
For all purposes of this Agreement, the Indebtedness of any Person shall
include the Indebtedness of any partnership or joint venture in which such
Person is a general partner or a joint venturer.
"INDEMNIFIED LIABILITIES" is defined in SECTION 10.3.
"INDEMNIFIED PARTIES" is defined in SECTION 10.3.
"INTEREST PERIOD" means, relative to any LIBO Rate Loans, the period
beginning on (and including) the date on which such LIBO Rate Loan is made or
continued as, or converted into, a LIBO Rate Loan pursuant to SECTION 2.3 or
2.4 and shall end on (but exclude) the day which numerically corresponds to
such date one, two, three or six months thereafter (or, if such month has no
numerically corresponding day, on the last Business Day of such month), as
the Borrower may select in its relevant notice pursuant to SECTION 2.2 or
2.3; PROVIDED, HOWEVER, that
(a) the Borrower shall not be permitted to select Interest Periods to
be in effect at any one time which have
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expiration dates occurring on more than five different dates;
(b) Interest Periods commencing on the same date for Loans comprising
part of the same Borrowing shall be of the same duration;
(c) if such Interest Period would otherwise end on a day which is not
a Business Day, such Interest Period shall end on the next following
Business Day (unless, if such Interest Period applies to LIBO Rate Loans,
such next following Business Day is the first Business Day of a calendar
month, in which case such Interest Period shall end on the Business Day
next preceding such numerically corresponding day); and
(d) no Interest Period may end later than the Stated Maturity Date.
"INVESTMENT" means, relative to any Person,
(a) any loan or advance made by such Person to any other Person
(excluding commission, travel and similar advances to officers and
employees made in the ordinary course of business);
(b) any Contingent Liability of such Person; and
(c) any ownership or similar interest held by such Person in any
other Person.
The amount of any Investment shall be the original principal or capital
amount thereof less all returns of principal or equity thereon (and without
adjustment by reason of the financial condition of such other Person) and
shall, if made by the transfer or exchange of property other than cash, be
deemed to have been made in an original principal or capital amount equal to
the fair market value of such property.
"LENDER ASSIGNMENT AGREEMENT" means a Lender Assignment Agreement
substantially in the form of EXHIBIT D hereto.
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"LENDERS" is defined in the PREAMBLE.
"LIBO RATE" is defined in SECTION 3.2.1.
"LIBO RATE LOAN" means a Loan bearing interest, at all times during an
Interest Period applicable to such Loan, at a fixed rate of interest
determined by reference to the LIBO Rate (Reserve Adjusted).
"LIBO RATE (RESERVE ADJUSTED)" is defined in SECTION 3.2.1.
"LIBOR OFFICE" means, relative to any Lender, the office of such Lender
designated as such below its signature hereto or designated in the Lender
Assignment Agreement or such other office of a Lender as designated from time
to time by notice from such Lender to the Borrower and the Agent, whether or
not outside the United States, which shall be making or maintaining LIBO Rate
Loans of such Lender hereunder.
"LIBOR RESERVE PERCENTAGE" is defined in SECTION 3.2.1.
"LIEN" means any security interest, mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or otherwise),
charge against or interest in property to secure payment of a debt or
performance of an obligation or other priority or preferential arrangement of
any kind or nature whatsoever.
"LOAN" is defined in SECTION 2.1.1.
"LOAN DOCUMENT" means this Agreement, the Notes, the Guarantees and each
other relevant agreement, document or instrument delivered in connection with
this Agreement and the other Loan Documents.
"MARGIN" means, in the case of a LIBO Rate Loan, a per annum interest
rate determined in accordance with the following table:
Price/Costco, Inc.'s
Credit Rating Margin (per annum)
------------- ------------------
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Level 1 18.5 basis points (.001850)
Level 2 20.0 basis points (.002000)
Level 3 22.5 basis points (.002250)
Level 4 25.0 basis points (.002500)
Level 5 30.0 basis points (.003000)
"NOTE" means a promissory note of the Borrower payable to any Lender, in
the form of EXHIBIT A hereto (as such promissory note may be amended,
endorsed or otherwise modified from time to time), evidencing the aggregate
Indebtedness of the Borrower to such Lender resulting from outstanding Loans,
and also means all other promissory notes accepted from time to time in
substitution therefor or renewal thereof.
"OBLIGATIONS" means all obligations (monetary or otherwise) of the
Borrower and each other Obligor arising under or in connection with this
Agreement, the Notes and each other Loan Document.
"OBLIGOR" means the Borrower or any other Person (other than the Agent or
any Lender) obligated under any Loan Document.
"ORGANIC DOCUMENT" means, relative to any Obligor, as applicable, its
certificate of incorporation, its articles of incorporation, its by-laws, its
memorandum of association, articles of association and all shareholder
agreements, voting trusts and similar arrangements applicable to any of its
authorized shares of capital stock.
"PARTICIPANT" is defined in SECTION 10.10.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"PENSION PLAN" means a "pension plan", as such term is defined in section
3(2) of ERISA, which is subject to Title IV of ERISA (other than a
multiemployer plan as defined in section 4001(a)(3) of ERISA), and to which
the Borrower or any corporation, trade or business that is, along with the
Borrower, a member of a Controlled Group, may have liability, including any
liability by reason of having been a substantial employer within the meaning
of section 4063 of ERISA at any time during the
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preceding five years, or by reason of being deemed to be a contributing
sponsor under section 4069 of ERISA.
"PERCENTAGE" means, relative to any Lender, the percentage set forth
opposite its signature hereto or set forth in the Lender Assignment
Agreement, as such percentage may be adjusted from time to time pursuant to
Lender Assignment Agreement(s) executed by such Lender and its Assignee
Lender(s) and delivered pursuant to SECTION 10.10.
"PERSON" means any natural person, corporation, partnership, firm,
association, trust, government, governmental agency or any other entity,
whether acting in an individual, fiduciary or other capacity.
"PLAN" means any Pension Plan or Welfare Plan.
"PRICE/COSTCO, INC.'S CREDIT RATING" means a level of credit determined
in accordance with the following standards: Price/Costco, Inc.'s Credit
Rating shall be "Level 1" if Price/Costco, Inc. has either (a) an S&P Rating
of A or better or (b) a Xxxxx'x Rating of A2 or better. Price/Costco, Inc.'s
Credit Rating shall be "Level 2" if Price/Costco, Inc. does not meet the
standards for a "Level 1" rating set forth above and has either (a) an S&P
Rating of A- or better or (b) a Xxxxx'x Rating of A3 or better.
Price/Costco, Inc.'s Credit Rating shall be "Level 3" if Price/Costco, Inc.
does not meet the standards for a "Level 1" or "Level 2" rating set forth
above and has either (a) an S&P Rating of BBB+ or better or (b) a Xxxxx'x
Rating of Baa1 or better. Price/Costco, Inc.'s Credit Rating shall be "Level
4" if Price/Costco, Inc. does not meet the standards for a "Level 1", "Level
2" or "Level 3" rating set forth above and has either (a) an S&P Rating of
BBB or better or (b) a Xxxxx'x Rating of Baa2 or better. If Price/Costco,
Inc. does not meet the standards for "Level 1", "Level 2", "Level 3" or
"Level 4" set forth above or fails to maintain either an S&P Rating or a
Xxxxx'x Rating, then Price/Costco, Inc.'s Credit Rating shall be "Level 5".
If a difference of more than one rating level exists, the rating which falls
between the two shall apply. As used herein, "S&P Rating" means the implied
senior unsecured debt rating given from time to time to Costco Wholesale
Corporation and The Price Company (collectively, the "Rated Guarantors") by
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Standard & Poor's Ratings Group ("S&P"). In the event that S&P does not
expressly publish an implied senior unsecured debt rating for Price/Costco,
Inc., the "S&P Rating" shall be deemed to be that rating which is one level
higher than (i) the level of the S&P subordinated debt ratings of the Rated
Guarantors if the Rated Guarantors have the same rating or (ii) in the event
that the Rated Guarantors have different subordinated debt ratings, the level
of the lower of such ratings. As used herein, "Xxxxx'x Rating" means the
senior unsecured debt rating given from time to time to Price/Costco, Inc. by
Xxxxx'x Investor Service, Inc ("Moody's"). In the event that Moody's does
not expressly publish an implied senior unsecured debt rating for
Price/Costco, Inc., then "Xxxxx'x Rating" shall be deemed to be that rating
which is one level higher than (i) the level of the Moody's subordinated debt
ratings of the Rated Guarantors if the Rated Guarantors have the same rating
or (ii) in the event that the Rated Guarantors have different subordinated
debt ratings, the level of the lower of such ratings. For example, if there
is no implied senior unsecured debt rating for Price/Costco, Inc. from S&P
and if the Rated Guarantors each have an S&P subordinated debt rating of BBB,
then the S&P rating would be BBB+. As a further example, if there is no
implied senior unsecured debt rating for Price/Costco, Inc. from Moody's and
if one Rated Guarantor has a Moody's subordinated debt rating of Baa1 and one
Rated Guarantor has a Moody's subordinated debt rating of Baa2, then the
Xxxxx'x Rating would be Baa1. The Lenders acknowledge that as of the date of
this Agreement, Price/Costco's Credit Rating is at Level 2.
Changes in Price/Costco, Inc.'s Credit Rating shall take effect (i) in the
case of Margin, at the beginning of the following Interest Period, and (ii)
in the case of facility fee rate, as of the date of public announcement by
either S&P or Moody's.
"QUARTERLY PAYMENT DATE" means the last day of each March, June,
September, and December or, if any such day is not a Business Day, the next
succeeding Business Day.
"RELEASE" means a "release", as such term is defined in CERCLA.
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"REQUIRED LENDERS" means, at any time, any Lenders holding at least 60%
of the then aggregate outstanding principal amount of the Notes then held by
the Lenders, or, if no such principal amount is then outstanding, any Lenders
having at least 60% of the Commitments.
"RESOURCE CONSERVATION AND RECOVERY ACT" means the Resource Conservation
and Recovery Act, 42 U.S.C. Section 690, ET SEQ., as in effect from time to
time.
"STATED MATURITY DATE" means April 11, 2001.
"SUBORDINATED DEBT" means all unsecured Indebtedness of the Borrower for
money borrowed which is subordinated, upon terms satisfactory to the Agent
and the Required Lenders, in right of payment to the payment in full in cash
of all Obligations.
"SUBSIDIARY" means, with respect to any Person, (i) any corporation,
partnership, limited liability company or other business entity of which more
than 50% of the total voting power (irrespective of whether at the time any
other class or classes of voting interests shall or might have voting power
upon the occurrence of any contingency) is at the time directly or indirectly
owned by such Person, by such Person and one or more other Subsidiaries of
such Person, or by one or more other Subsidiaries of such Person and (ii) any
general partnership in which such Person is a general partner.
"TAXES" is defined in SECTION 4.6.
"TYPE" means, relative to any Loan, the portion thereof, if any, being
maintained as a Base Rate Loan or a LIBO Rate Loan.
"UNITED STATES" or "U.S." means the United States of America, its fifty
States and the District of Columbia.
"WELFARE PLAN" means a "welfare plan", as such term is defined in section
3(1) of ERISA.
SECTION 1.2. USE OF DEFINED TERMS. Unless otherwise defined or the
context otherwise requires, terms for which meanings are provided in this
Agreement shall have such meanings
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when used in the Disclosure Schedule and in each Note, Borrowing Request,
Continuation/Conversion Notice, Loan Document, notice and other communication
delivered from time to time in connection with this Agreement or any other
Loan Document.
SECTION 1.3. CROSS-REFERENCES. Unless otherwise specified, references
in this Agreement and in each other Loan Document to any Article or Section
are references to such Article or Section of this Agreement or such other
Loan Document, as the case may be, and, unless otherwise specified,
references in any Article, Section or definition to any clause are references
to such clause of such Article, Section or definition.
SECTION 1.4. ACCOUNTING AND FINANCIAL DETERMINATIONS. Unless otherwise
specified, all accounting terms used herein or in any other Loan Document
shall be interpreted, all accounting determinations and computations
hereunder or thereunder shall be made, and all financial statements required
to be delivered hereunder or thereunder shall be prepared in accordance with,
those generally accepted accounting principles ("GAAP") applied in the
preparation of the financial statements referred to in SECTION 6.5.
ARTICLE II
COMMITMENTS, BORROWING PROCEDURES AND NOTES
SECTION 2.1. COMMITMENTS. On the terms and subject to the conditions of
this Agreement (including ARTICLE V), each Lender severally agrees to make
Loans pursuant to the Commitments described in this SECTION 2.1.
SECTION 2.1.1. COMMITMENT OF EACH LENDER. On a single Business Day
occurring prior to April 11, 1996, each Lender will make Loans (relative to
such Lender, and of any type, its "LOANS") to the Borrower equal to such
Lender's Percentage of the aggregate amount of the Borrowing requested by the
Borrower to be made on such day. The commitment of each Lender described in
this SECTION 2.1.1 is herein referred to as its "COMMITMENT". There shall be
only one Borrowing of Loans under this Agreement.
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No amounts paid or prepaid with respect to any Loans may be reborrowed.
SECTION 2.1.2. LENDERS NOT PERMITTED OR REQUIRED TO MAKE LOANS. No
Lender shall be permitted or required to make any Loan if, after giving
effect thereto, the aggregate original principal amount of all Loans
(a) of all Lenders would exceed the Commitment Amount, or
(b) of such Lender would exceed such Lender's Percentage of the
Commitment Amount.
SECTION 2.2. BORROWING PROCEDURE. By delivering a Borrowing Request to
the Agent on or before 12:00, noon, New York time, on a Business Day prior to
April 11, 1996, the Borrower may irrevocably request that a Borrowing of Base
Rate Loans be made in a minimum amount of $5,000,000 and an integral multiple
of $1,000,000. By delivering a Borrowing Request to the Agent on or before
10:30 a.m., New York time, on a Business Day prior to April 9, 1996, the
Borrower may irrevocably request, on not less than three Business Days'
notice, that a Borrowing of LIBO Rate Loans be made in a minimum amount of
$5,000,000 and an integral multiple of $1,000,000. On the terms and subject
to the conditions of this Agreement, the Borrowing shall be comprised of the
type of Loans, and shall be made on the Business Day, specified in such
Borrowing Request. On or before 1:00 p.m., New York time, in the case of
Base Rate Loans, or 11:30 a.m., New York time, in the case of LIBO Rate
Loans, on such Business Day each Lender shall deposit with the Agent same day
funds in an amount equal to such Lender's Percentage of the requested
Borrowing. Such deposit will be made to an account which the Agent shall
specify by notice to the Lenders. To the extent funds are received from the
Lenders, the Agent shall make such funds available to the Borrower by wire
transfer to the accounts the Borrower shall have specified in its Borrowing
Request. No Lender's obligation to make any Loan shall be affected by any
other Lender's failure to make any Loan.
SECTION 2.3. CONTINUATION AND CONVERSION ELECTIONS. By delivering a
Continuation/Conversion Notice to the Agent on or
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before 10:30 a.m., New York time, on a Business Day, the Borrower may from
time to time irrevocably elect, on not less than three nor more than five
Business Days' notice that all, or any portion in an aggregate minimum amount
of $5,000,000 and an integral multiple of $1,000,000, of any Loans be, in the
case of Base Rate Loans, converted into LIBO Rate Loans or, in the case of
LIBO Rate Loans, be converted into a Base Rate Loan or continued as a LIBO
Rate Loan (in the absence of delivery of a Continuation/ Conversion Notice
with respect to any LIBO Rate Loan at least three Business Days before the
last day of the then current Interest Period with respect thereto, such LIBO
Rate Loan shall, on such last day, automatically convert to a LIBO Rate Loan
having an Interest Period of one month, unless such LIBO Rate Loan at such
time has an Interest Period of one month due to a prior automatic conversion,
in which case such LIBO Rate Loan shall, on such last day, automatically
convert to a Base Rate Loan); PROVIDED, HOWEVER, that (i) each such
conversion or continuation shall be prorated among the applicable outstanding
Loans of all Lenders, and (ii) no portion of the outstanding principal amount
of any Loans may be continued as, or be converted into, LIBO Rate Loans when
any Default has occurred and is continuing.
SECTION 2.4. FUNDING. Each Lender may, if it so elects, fulfill its
obligation to make, continue or convert LIBO Rate Loans hereunder by causing
one of its branches or Affiliates (or an international banking facility
created by such Lender) which is subject to the tax laws of the United States
(and which would not cause the representation of such Lender in the last
paragraph of Section 4.6 to be incorrect) to make or maintain such LIBO Rate
Loan; PROVIDED, HOWEVER, that such LIBO Rate Loan shall nonetheless be deemed
to have been made and to be held by such Lender, and the obligation of the
Borrower to repay such LIBO Rate Loan shall nevertheless be to such Lender
for the account of such foreign branch, Affiliate or international banking
facility. In addition, the Borrower hereby consents and agrees that, for
purposes of any determination to be made for purposes of SECTIONS 4.1, 4.2,
4.3 or 4.4, it shall be conclusively assumed that each Lender elected to fund
all LIBO Rate Loans by purchasing, as the case may be, Dollar certificates of
deposit in the U.S. or Dollar deposits in its LIBOR Office's interbank
eurodollar market.
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SECTION 2.5. NOTES. Each Lender's Loans under its Commitment shall be
evidenced by a Note payable to the order of such Lender in a maximum
principal amount equal to such Lender's Percentage of the original Commitment
Amount. The Borrower hereby irrevocably authorizes each Lender to make (or
cause to be made) appropriate notations on the grid attached to such Lender's
Note (or on any continuation of such grid), which notations, if made, shall
evidence, INTER ALIA, the date of, the outstanding principal of, and the
interest rate and Interest Period applicable to the Loans evidenced thereby.
Such notations shall be presumed correct; PROVIDED, HOWEVER, that the failure
of any Lender to make any such notations shall not limit or otherwise affect
any Obligations of the Borrower or any other Obligor.
ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
SECTION 3.1. REPAYMENTS AND PREPAYMENTS. The Borrower shall repay in
full the unpaid principal amount of each Loan upon the Stated Maturity Date
therefor. Prior thereto, the Borrower
(a) may, from time to time on any Business Day, make a voluntary
prepayment, in whole or in part, of the outstanding principal amount of any
Loans; PROVIDED, HOWEVER, that
(i) any such prepayment shall be made PRO RATA among Loans of
the same type and, if applicable, having the same Interest Period of
all Lenders;
(ii) no such prepayment of any LIBO Rate Loan may be made on any
day other than the last day of the Interest Period for such Loan;
(iii) all such voluntary prepayments shall require at least
three but no more than five Business Days' prior written notice to the
Agent;
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(iv) all such voluntary partial prepayments shall be in an
aggregate minimum amount of $1,000,000 and an integral multiple of
$500,000; and
(b) shall, immediately upon any acceleration of the Stated Maturity
Date of any Loans pursuant to SECTION 8.2 or SECTION 8.3, repay all Loans,
unless, pursuant to SECTION 8.3, only a portion of all Loans is so
accelerated.
Each prepayment of any Loans made pursuant to this Section shall be without
premium or penalty, except as may be required by SECTION 4.4.
SECTION 3.2. INTEREST PROVISIONS. Interest on the outstanding principal
amount of Loans shall accrue and be payable in accordance with this SECTION
3.2.
SECTION 3.2.1. RATES. Pursuant to an appropriately delivered Borrowing
Request or Continuation/Conversion Notice, the Borrower may elect that Loans
comprising a Borrowing accrue interest at a rate per annum:
(a) on that portion maintained from time to time as a Base Rate Loan,
equal to the sum of the Alternate Base Rate from time to time in effect;
and
(b) on that portion maintained as a LIBO Rate Loan, during each
Interest Period applicable thereto, equal to the LIBO Rate (Reserve
Adjusted) for such Interest Period plus the Margin.
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The "LIBO RATE (RESERVE ADJUSTED)" means, relative to any Loan to be
made, continued or maintained as, or converted into, a LIBO Rate Loan for any
Interest Period, a rate per annum (rounded upwards, if necessary, to the
nearest 1/16 of 1%) determined pursuant to the following formula:
LIBO RATE
LIBO Rate = -------------------------------
(Reserve Adjusted) 1.00 - LIBOR Reserve Percentage
The LIBO Rate (Reserve Adjusted) for any Interest Period for LIBO Rate
Loans will be determined by the Agent on the basis of the LIBOR Reserve
Percentage in effect on, and the applicable rates furnished to and received
by the Agent from CIBC, two Business Days before the first day of such
Interest Period.
"LIBO RATE" means, relative to any Interest Period for LIBO Rate Loans,
the rate of interest equal to the average (rounded upwards, if necessary, to
the nearest 1/16 of 1%) of the rates per annum at which Dollar deposits in
immediately available funds are offered to CIBC's LIBOR Office in the
eurodollar interbank market as at or about 10:00 a.m. New York time two
Business Days prior to the beginning of such Interest Period for delivery on
the first day of such Interest Period, and in an amount approximately equal
to the amount of CIBC's LIBO Rate Loan and for a period approximately equal
to such Interest Period.
"LIBOR RESERVE PERCENTAGE" means, relative to any Interest Period for
LIBO Rate Loans, the reserve percentage (expressed as a decimal) equal to the
maximum aggregate reserve requirements (including all basic, emergency,
supplemental, marginal and other reserves and taking into account any
transitional adjustments or other scheduled changes in reserve requirements)
specified under regulations issued from time to time by the F.R.S. Board and
then applicable to assets or liabilities consisting of and including
"Eurocurrency Liabilities", as currently defined in Regulation D of the
F.R.S. Board, having a term approximately equal or comparable to such
Interest Period.
All LIBO Rate Loans shall bear interest from and including the first day
of the applicable Interest Period to (but not
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including) the last day of such Interest Period at the interest rate
determined as applicable to such LIBO Rate Loan.
SECTION 3.2.2. POST-MATURITY RATES. After the date any principal amount
of any Loan is due and payable (whether on the Stated Maturity Date, upon
acceleration or otherwise), or after any other monetary Obligation of the
Borrower shall have become due and payable, the Borrower shall pay, but only
to the extent permitted by law, interest (after as well as before judgment)
on such amounts at a rate per annum equal to the Alternate Base Rate plus a
margin of 2%.
SECTION 3.2.3. PAYMENT DATES. Interest accrued on each Loan shall be
payable, without duplication:
(a) on the Stated Maturity Date therefor;
(b) on the date of any payment or prepayment, in whole or in part, of
principal outstanding on such Loan;
(c) with respect to Base Rate Loans, on each Quarterly Payment Date
occurring after the Effective Date;
(d) with respect to LIBO Rate Loans, the last day of each applicable
Interest Period (and, if such Interest Period shall exceed 90 days, on the
90th day of such Interest Period);
(e) with respect to any Base Rate Loans converted into LIBO Rate Loans
on a day when interest would not otherwise have been payable pursuant to
CLAUSE (c), on the date of such conversion; and
(f) on that portion of any Loans the Stated Maturity Date of which is
accelerated pursuant to SECTION 8.2 or SECTION 8.3, immediately upon such
acceleration.
Interest accrued on Loans or other monetary Obligations arising under this
Agreement or any other Loan Document after the date such amount is due and
payable (whether on the Stated Maturity Date, upon acceleration or otherwise)
shall be payable upon demand.
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SECTION 3.3. FACILITY FEES. The Borrower agrees to pay to the Agent for
the account of each Lender, for the period commencing on the Effective Date
and continuing through the final Commitment Termination Date, a facility fee
equal to the Facility Fee Rate on such Lender's Percentage of the Loans.
Such facility fees shall be payable by the Borrower in arrears on each
Quarterly Payment Date, commencing with the first such day following the
Effective Date, and on the Commitment Termination Date. As used herein the
"Facility Fee Rate" shall be determined in accordance with the following
table:
Price/Costco, Inc.'s
Credit Rating Facility Fee Rate (per annum)
------------- -----------------------------
Xxxxx 0 9.0 basis points (.000900)
Level 2 10.0 basis points (.001000)
Level 3 10.0 basis points (.001000)
Level 4 12.5 basis points (.001250)
Level 5 17.5 basis points (.001750)
ARTICLE IV
CERTAIN LIBO RATE AND OTHER PROVISIONS
SECTION 4.1. LIBO RATE LENDING UNLAWFUL. If any Lender shall determine
(which determination shall, upon notice thereof to the Borrower and the
Lenders, be conclusive and binding on the Borrower) that the introduction of
or any change in or in the interpretation of any law makes it unlawful, or
any central bank or other governmental authority asserts that it is unlawful,
for such Lender to make, continue or maintain any Loan as, or to convert any
Loan into, a LIBO Rate Loan, the obligations of all Lenders to make,
continue, maintain or convert any such Loans shall, upon such determination,
forthwith be suspended until such Lender shall notify the Agent that the
circumstances causing such suspension no longer exist, and all LIBO Rate
Loans shall automatically convert into Base Rate Loans at the end of the then
current Interest Periods with respect thereto or sooner, if required by such
law or assertion.
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SECTION 4.2. DEPOSITS UNAVAILABLE. If the Agent shall have determined
that
(a) Dollar deposits in the relevant amount and for the relevant
Interest Period are not available to CIBC in its relevant market; or
(b) by reason of circumstances affecting CIBC's relevant market,
adequate means do not exist for ascertaining the interest rate applicable
hereunder to LIBO Rate Loans,
then, upon notice from the Agent to the Borrower and the Lenders, the
obligations of all Lenders under SECTION 2.2 and SECTION 2.3 to make or
continue any Loans as, or to convert any Loans into, LIBO Rate Loans shall
forthwith be suspended until the Agent shall notify the Borrower and the
Lenders that the circumstances causing such suspension no longer exist.
SECTION 4.3. INCREASED LIBO RATE LOAN COSTS, ETC. The Borrower agrees
to reimburse each Lender for any increase in the cost to such Lender of, or
any reduction in the amount of any sum receivable by such Lender in respect
of, making, continuing or maintaining (or of its obligation to make, continue
or maintain) any Loans as, or of converting (or of its obligation to convert)
any Loans into, LIBO Rate Loans. Such Lender shall promptly notify the Agent
and the Borrower in writing of the occurrence of any such event, such notice
to state, in reasonable detail, the reasons therefor and the additional
amount required fully to compensate such Lender for such increased cost or
reduced amount. Such additional amounts shall be payable by the Borrower
directly to such Lender within five days of its receipt of such notice, and
such notice shall be presumed correct.
SECTION 4.4. FUNDING LOSSES. In the event any Lender shall incur any
loss or expense (including any loss or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by such
Lender to make, continue or maintain any portion of the principal amount of
any Loan as, or to convert any portion of the principal amount of any Loan
into, a LIBO Rate Loan) as a result of
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(a) any conversion or repayment or prepayment of the principal amount
of any LIBO Rate Loans on a date other than the scheduled last day of the
Interest Period applicable thereto, whether pursuant to SECTION 3.1 or
otherwise;
(b) any Loans not being made as LIBO Rate Loans in accordance with the
Borrowing Request therefor; or
(c) any Loans not being continued as, or converted into, LIBO Rate
Loans in accordance with the Continuation/ Conversion Notice therefor,
then, upon the written notice of such Lender to the Borrower (with a copy to
the Agent), the Borrower shall, within five days of its receipt thereof, pay
directly to such Lender such amount as will (in the reasonable determination
of such Lender) reimburse such Lender for such loss or expense. Such written
notice (which shall include calculations in reasonable detail) shall be
presumed correct.
SECTION 4.5. INCREASED CAPITAL COSTS. If any change in, or the
introduction, adoption, effectiveness, interpretation, reinterpretation or
phase-in of, any law or regulation, directive, guideline, decision or request
(whether or not having the force of law) of any court, central bank,
regulator or other governmental authority affects or would affect the amount
of capital required or expected to be maintained by any Lender or any Person
controlling such Lender, and such Lender determines (in its sole and absolute
discretion) that the rate of return on its or such controlling Person's
capital as a consequence of its Commitment or the Loans made by such Lender
is reduced to a level below that which such Lender or such controlling Person
could have achieved but for the occurrence of any such circumstance, then, in
any such case upon notice from time to time by such Lender to the Borrower,
the Borrower shall immediately pay directly to such Lender additional amounts
sufficient to compensate such Lender or such controlling Person for such
reduction in rate of return. A statement of such Lender as to any such
additional amount or amounts (including calculations thereof in reasonable
detail) shall be presumed correct. In determining such amount, such Lender
may use any method of
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averaging and attribution that it (in its sole and absolute discretion) shall
deem applicable.
SECTION 4.6. TAXES. All payments by the Borrower of principal of, and
interest on, the Loans and all other amounts payable hereunder shall be made
free and clear of and without deduction for any present or future income,
excise, stamp or franchise taxes and other taxes, fees, duties, withholdings
or other charges of any nature whatsoever imposed by any taxing authority,
but excluding franchise taxes and taxes imposed on or measured by any
Lender's overall net income or gross receipts (such non-excluded items being
called "TAXES"). In the event that any withholding or deduction from any
payment to be made by the Borrower hereunder is required in respect of any
Taxes pursuant to any applicable law, rule or regulation, then the Borrower
will
(a) pay directly to the relevant authority the full amount required to
be so withheld or deducted;
(b) promptly forward to the Agent an official receipt or other
documentation satisfactory to the Agent evidencing such payment to such
authority; and
(c) pay to the Agent for the account of the Lenders such additional
amount or amounts as is necessary to ensure that the net amount actually
received by each Lender will equal the full amount such Lender would have
received had no such withholding or deduction been required.
Without limitation of the foregoing, if any taxes, fees, duties, withholdings
or other charges of any nature whatsoever imposed by any taxing authority,
including franchise taxes and taxes imposed on or measured by any Lender's
overall net income or gross receipts (other than a change in the rate of tax
based solely on the overall net or gross income of such Lender) ("Further
Taxes") are directly or indirectly asserted against the Agent or any Lender
with respect to any payment received by the Agent or such Lender under
Section 4.6(a) or (c) or this sentence, the Agent or such Lender may pay such
Further Taxes and the Borrower will promptly pay to the Agent or such Lender,
at the time interest is paid, such additional amounts (including any
penalties, interest
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or expenses) that the respective Lender or Agent specifies as necessary to
preserve the after-tax yield that the Agent or Lender would have received if
such Taxes or Further Taxes had not been imposed.
If the Borrower fails to pay any Taxes when due to the appropriate taxing
authority or fails to remit to the Agent, for the account of the respective
Lenders, the required receipts or other required documentary evidence, the
Borrower shall indemnify the Lenders for any incremental Taxes, interest or
penalties that may become payable by any Lender as a result of any such
failure. For purposes of this SECTION 4.6, a distribution hereunder by the
Agent or any Lender to or for the account of any Lender shall be deemed a
payment by the Borrower.
Each Lender represents and warrants that it is subject to the tax laws of
the United States, including but not limited to the fact that the interest
income derived from this Agreement is effectively connected with its United
States trade or business. Each Lender agrees to provide internal revenue
service forms reasonably requested by the Borrower in connection with the
foregoing. The Borrower will not be obligated to pay any amounts pursuant to
this Section 4.6 (and no Guarantor will be obligated to pay any amounts
pursuant to any corresponding provision in any Guarantee) to the extent such
amounts are incurred as a result of the representation contained in the first
sentence of this paragraph not being true and correct at any time during the
term of this Agreement.
SECTION 4.7. PAYMENTS, COMPUTATIONS, ETC. Unless otherwise expressly
provided, all payments by the Borrower pursuant to this Agreement, the Notes
or any other Loan Document shall be made by the Borrower to the Agent for the
PRO RATA account of the Lenders entitled to receive such payment. All such
payments required to be made to the Agent shall be made, without setoff,
deduction or counterclaim, not later than 1:00 p.m., New York time, on the
date due, in same day or immediately available funds, to such account as the
Agent shall specify from time to time by notice to the Borrower. Funds
received after that time shall be deemed to have been received by the Agent
on the next succeeding Business Day. The Agent shall promptly remit in same
day funds to each Lender its share, if any, of such
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payments received by the Agent for the account of such Lender. All interest
and fees shall be computed on the basis of the actual number of days
(including the first day but excluding the last day) occurring during the
period for which such interest or fee is payable over a year comprised of 360
days (or, in the case of interest on a Base Rate Loan, 365 days or, if
appropriate, 366 days). Whenever any payment to be made shall otherwise be
due on a day which is not a Business Day, such payment shall (except as
otherwise required by CLAUSE (c) of the definition of the term "INTEREST
PERIOD" with respect to LIBO Rate Loans) be made on the next succeeding
Business Day and such extension of time shall be included in computing
interest and fees, if any, in connection with such payment.
SECTION 4.8. SHARING OF PAYMENTS. If any Lender shall obtain any
payment or other recovery (whether voluntary, involuntary, by application of
setoff or otherwise) on account of any Loan (other than pursuant to the terms
of SECTIONS 4.3, 4.4 and 4.5) in excess of its PRO RATA share of payments
then or therewith obtained by all Lenders, such Lender shall purchase from
the other Lenders such participations in Loans made by them as shall be
necessary to cause such purchasing Lender to share the excess payment or
other recovery ratably with each of them; PROVIDED, HOWEVER, that if all or
any portion of the excess payment or other recovery is thereafter recovered
from such purchasing Lender, the purchase shall be rescinded and each Lender
which has sold a participation to the purchasing Lender shall repay to the
purchasing Lender the purchase price to the ratable extent of such recovery
together with an amount equal to such selling Lender's ratable share
(according to the proportion of
(a) the amount of such selling Lender's required repayment to the
purchasing Lender
TO
(b) the total amount so recovered from the purchasing Lender)
of any interest or other amount paid or payable by the purchasing Lender in
respect of the total amount so recovered. The Borrower
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agrees that any Lender so purchasing a participation from another Lender
pursuant to this Section may, to the fullest extent permitted by law,
exercise all its rights of payment (including pursuant to SECTION 4.9) with
respect to such participation as fully as if such Lender were the direct
creditor of the Borrower in the amount of such participation. If under any
applicable bankruptcy, insolvency or other similar law, any Lender receives a
secured claim in lieu of a setoff to which this Section applies, such Lender
shall, to the extent practicable, exercise its rights in respect of such
secured claim in a manner consistent with the rights of the Lenders entitled
under this Section to share in the benefits of any recovery on such secured
claim.
SECTION 4.9. SETOFF. Each Lender shall, upon the occurrence of any
Default described in CLAUSES (a) through (d) of SECTION 8.1.9 or, with the
consent of the Required Lenders, upon the occurrence of any other Event of
Default, have the right to appropriate and apply to the payment of the
Obligations owing to it (whether or not then due), and (as security for such
Obligations) the Borrower hereby grants to each Lender a continuing security
interest in, any and all balances, credits, deposits, accounts or moneys of
the Borrower then or thereafter maintained with such Lender; PROVIDED,
HOWEVER, that any such appropriation and application shall be subject to the
provisions of SECTION 4.8. Each Lender agrees promptly to notify the
Borrower and the Agent after any such setoff and application made by such
Lender; PROVIDED, HOWEVER, that the failure to give such notice shall not
affect the validity of such setoff and application. The rights of each
Lender under this Section are in addition to other rights and remedies
(including other rights of setoff under applicable law or otherwise) which
such Lender may have.
SECTION 4.10. USE OF PROCEEDS. The Borrower shall apply the proceeds of
each Borrowing in accordance with the FOURTH RECITAL; without limiting the
foregoing, no proceeds of any Loan will be used to acquire or carry any
equity security of a class which is registered pursuant to Section 12 of the
Securities Exchange Act of 1934 or any "margin stock", as defined in F.R.S.
Board Regulation U.
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ARTICLE V
CONDITIONS TO BORROWING
SECTION 5.1. CONDITIONS TO BORROWING. The obligations of the Lenders to
fund the Borrowing shall be subject to the prior or concurrent satisfaction
of each of the conditions precedent set forth in this SECTION 5.1.
SECTION 5.1.1. RESOLUTIONS, ETC. The Agent shall have received from
each Obligor a certificate, dated the date of the initial Borrowing, of its
Secretary or Assistant Secretary as to
(a) resolutions of its Board of Directors then in full force and
effect authorizing the execution, delivery and performance of this
Agreement, the Notes and each other Loan Document to be executed by it; and
(b) the incumbency and signatures of those of its officers authorized
to act with respect to this Agreement, the Notes and each other Loan
Document executed by it,
upon which certificate each Lender may conclusively rely until it shall have
received a further certificate of the Secretary of such Obligor canceling or
amending such prior certificate.
SECTION 5.1.2. DELIVERY OF NOTES. The Agent shall have received, for
the account of each Lender, its Note duly executed and delivered by the
Borrower.
SECTION 5.1.3. GUARANTEES. The Agent shall have received the
Guarantees, dated the date hereof, duly executed by each of the Guarantors.
SECTION 5.1.4. OPINIONS OF COUNSEL. The Agent shall have received
opinions, dated the date of the initial Borrowing and addressed to the Agent
and all Lenders, from
(a) Xxxxxx, Pepper & Shefelman, counsel to the Obligors, substantially
in the form of EXHIBIT E hereto;
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(b) Xxxxxxx XxXxxxxx Stirling Scales, special Canadian counsel to the
Obligors, substantially in the form of EXHIBIT F hereto;
(c) Xxxxx Xxxxxx & Harcourt, special Canadian tax counsel to the
Obligors, substantially in the form of EXHIBIT G hereto.
SECTION 5.1.5. CLOSING FEES, EXPENSES, ETC. The Agent shall have
received for its own account all fees, costs and expenses due and payable
pursuant to SECTIONS 19 and 20 of The Price Company Guaranty Agreement dated
concurrently herewith, if then invoiced.
SECTION 5.1.6. COMPLIANCE WITH WARRANTIES, NO DEFAULT, ETC. Both before
and after giving effect to the Borrowing, the following statements shall be
true and correct
(a) the representations and warranties set forth in ARTICLE VI
(excluding, however, those contained in SECTION 6.7) shall be true and
correct with the same effect as if then made (unless stated to relate
solely to an early date, in which case such representations and warranties
shall be true and correct as of such earlier date);
(b) except as disclosed by the Borrower to the Agent and the Lenders
pursuant to SECTION 6.7
(i) no labor controversy, litigation, arbitration
or governmental investigation or proceeding shall be pending or, to
the knowledge of the Borrower, threatened against the Borrower which
might materially adversely affect the Borrower's business, operations,
assets, revenues, properties or prospects or which purports to affect
the legality, validity or enforceability of this Agreement, the Notes
or any other Loan Document; and
(ii) no development shall have occurred in any
labor controversy, litigation, arbitration or governmental
investigation or proceeding disclosed pursuant to SECTION 6.7 which
might materially
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adversely affect the consolidated businesses, operations, assets,
revenues, properties or prospects of the Borrower; and
(c) no Default shall have then occurred and be continuing, and neither
the Borrower nor any other Obligor is in material violation of any law or
governmental regulation or court order or decree.
SECTION 5.1.7. BORROWING REQUEST. The Agent shall have received a
Borrowing Request for such Borrowing. Each of the delivery of a Borrowing
Request and the acceptance by the Borrower of the proceeds of such Borrowing
shall constitute a representation and warranty by the Borrower that on the
date of such Borrowing (both immediately before and after giving effect to
such Borrowing and the application of the proceeds thereof) the statements
made in SECTION 5.1.6 are true and correct.
SECTION 5.1.8. SATISFACTORY LEGAL FORM. All documents executed or
submitted pursuant hereto by or on behalf of the Borrower or any other
Obligors shall be satisfactory in form and substance to the Agent and its
counsel.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders and the Agent to enter into this Agreement
and to make Loans hereunder, the Borrower represents and warrants unto the
Agent and each Lender as set forth in this ARTICLE VI.
SECTION 6.1. ORGANIZATION, ETC. The Borrower is an entity validly
organized and existing and in good standing under the laws of the
jurisdiction of its formation, is duly qualified to do business and is in
good standing as a foreign entity in each jurisdiction where the nature of
its business requires such qualification, and has full power and authority
and holds all requisite governmental licenses, permits and other approvals to
enter into and perform its Obligations under this Agreement, the Notes and
each other Loan Document to which it is a party and to
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own and hold under lease its property and to conduct its business
substantially as currently conducted by it.
SECTION 6.2. DUE AUTHORIZATION, NON-CONTRAVENTION, ETC. The execution,
delivery and performance by the Borrower of this Agreement, the Notes and
each other Loan Document executed or to be executed by it, and the execution,
delivery and performance by each other Obligor of each Loan Document executed
or to be executed by it, are within the Borrower's and each such Obligor's
corporate powers, have been duly authorized by all necessary corporate
action, and do not
(a) contravene the Borrower's or any such Obligor's Organic Documents;
(b) contravene any contractual restriction, law or governmental
regulation or court decree or order binding on or affecting the Borrower or
any such Obligor; or
(c) result in, or require the creation or imposition of, any Lien on
any of any Obligor's properties.
SECTION 6.3. GOVERNMENT APPROVAL, REGULATION, ETC. No authorization or
approval or other action by, and no notice to or filing with, any
governmental authority or regulatory body or other Person is required for the
due execution, delivery or performance by the Borrower or any other Obligor
of this Agreement, the Notes or any other Loan Document to which it is a
party. The Borrower is not an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, or a "holding company", or a
"subsidiary company" of a "holding company", or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company", within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
SECTION 6.4. VALIDITY, ETC. This Agreement constitutes, and the Notes
and each other Loan Document executed by the Borrower will, on the due
execution and delivery thereof, constitute, the legal, valid and binding
obligations of the Borrower enforceable in accordance with their respective
terms; and each Loan Document executed pursuant hereto by each other Obligor
will, on the due execution and delivery thereof by such
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Obligor, be the legal, valid and binding obligation of such Obligor
enforceable in accordance with its terms.
SECTION 6.5. FINANCIAL INFORMATION. The balance sheet of the Borrower
as at the Effective Date, a copy of which has been furnished to the Agent and
each Lender, has been prepared in accordance with GAAP consistently applied,
and presents fairly the financial condition of the Borrower as at the date
thereof.
SECTION 6.6. NO MATERIAL ADVERSE CHANGE. Since the date of the
financial statements described in SECTION 6.5, there has been no material
adverse change in the financial condition, operations, assets, business,
properties or prospects of the Borrower.
SECTION 6.7. LITIGATION, LABOR CONTROVERSIES, ETC. There is no pending
or, to the knowledge of the Borrower, threatened litigation, action,
proceeding, or labor controversy affecting the Borrower, or any of its
respective properties, businesses, assets or revenues, which may materially
adversely affect the financial condition, operations, assets, business,
properties or prospects of the Borrower or which purports to affect the
legality, validity or enforceability of this Agreement, the Notes or any
other Loan Document, except as disclosed in ITEM 6.7 ("Litigation") of the
Disclosure Schedule.
SECTION 6.8. SUBSIDIARIES. The Borrower has no Subsidiaries.
SECTION 6.9. OWNERSHIP OF PROPERTIES. The Borrower owns good and
marketable title to all of its properties and assets, real and personal,
tangible and intangible, of any nature whatsoever (including patents,
trademarks, trade names, service marks and copyrights), free and clear of all
Liens, charges or claims (including infringement claims with respect to
patents, trademarks, copyrights and the like) except as permitted pursuant to
SECTION 7.2.3.
SECTION 6.10. TAXES. The Borrower has filed all tax returns and reports
required by law to have been filed by it and has paid all taxes and
governmental charges thereby shown to be owing, except any such taxes or
charges which are being
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diligently contested in good faith by appropriate proceedings and for which
adequate reserves in accordance with GAAP shall have been set aside on its
books.
SECTION 6.11. ENVIRONMENTAL WARRANTIES. Except as set forth in ITEM
6.11 ("Environmental Matters") of the Disclosure Schedule:
(a) all facilities and property (including underlying groundwater)
owned or leased by the Borrower have been, and continue to be, owned or
leased by the Borrower in material compliance with all Environmental Laws;
(b) there have been no past, and there are no pending or threatened
(i) claims, complaints, notices or requests for information
received by the Borrower with respect to any alleged violation of any
Environmental Law, or
(ii) complaints, notices or inquiries to the Borrower regarding
potential liability under any Environmental Law;
(c) there have been no Releases of Hazardous Materials at, on or
under any property now or previously owned or leased by the Borrower that,
singly or in the aggregate, have, or may reasonably be expected to have, a
material adverse effect on the financial condition, operations, assets,
business, properties or prospects of the Borrower;
(d) the Borrower has been issued and are in material compliance with
all permits, certificates, approvals, licenses and other authorizations
relating to environmental matters and necessary or desirable for their
businesses;
(e) no property now or previously owned or leased by the Borrower is
listed or proposed for listing (with respect to owned property only) on the
National Priorities List pursuant to CERCLA, on the CERCLIS or on any
similar state list of sites requiring investigation or clean-up;
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(f) there are no underground storage tanks, active or abandoned,
including petroleum storage tanks, on or under any property now or
previously owned or leased by the Borrower that, singly or in the
aggregate, have, or may reasonably be expected to have, a material adverse
effect on the financial condition, operations, assets, business, properties
or prospects of the Borrower;
(g) the Borrower has not directly transported or directly arranged
for the transportation of any Hazardous Material to any location which is
listed or proposed for listing on the National Priorities List pursuant to
CERCLA, on the CERCLIS or on any similar state list or which is the subject
of federal, state or local enforcement actions or other investigations
which may lead to material claims against the Borrower thereof for any
remedial work, damage to natural resources or personal injury, including
claims under CERCLA;
(h) there are no polychlorinated biphenyls or friable asbestos
present at any property now or previously owned or leased by the Borrower
that, singly or in the aggregate, have, or may reasonably be expected to
have, a material adverse effect on the financial condition, operations,
assets, business, properties or prospects of the Borrower; and
(i) no conditions exist at, on or under any property now or
previously owned or leased by the Borrower which, with the passage of time,
or the giving of notice or both, would give rise to liability under any
Environmental Law.
SECTION 6.12. REGULATIONS G, U AND X. The Borrower is not engaged in
the business of extending credit for the purpose of purchasing or carrying
margin stock, and no proceeds of any Loans will be used for a purpose which
violates, or would be inconsistent with, F.R.S. Board Regulation G, U or X.
Terms for which meanings are provided in F.R.S. Board Regulation G, U or X or
any regulations substituted therefor, as from time to time in effect, are
used in this Section with such meanings.
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SECTION 6.13. ACCURACY OF INFORMATION. All factual information
heretofore or contemporaneously furnished by or on behalf of the Borrower in
writing to the Agent or any Lender for purposes of or in connection with this
Agreement or any transaction contemplated hereby is, and all other such
factual information hereafter furnished by or on behalf of the Borrower to
the Agent or any Lender will be, true and accurate in every material respect
on the date as of which such information is dated or certified and as of the
date of execution and delivery of this Agreement by the Agent and such
Lender, and such information is not, or shall not be, as the case may be,
incomplete by omitting to state any material fact necessary to make such
information not misleading.
ARTICLE VII
COVENANTS
SECTION 7.1. AFFIRMATIVE COVENANTS. The Borrower agrees with the Agent
and each Lender that, until all Commitments have terminated and all
Obligations have been paid and performed in full, the Borrower will perform
the obligations set forth in this SECTION 7.1.
SECTION 7.1.1. FINANCIAL INFORMATION, REPORTS, NOTICES, ETC. The
Borrower will furnish, or will cause to be furnished, to each Lender and the
Agent copies of the following financial statements, reports, notices and
information:
(a) as soon as possible and in any event within three days after the
occurrence of each Default, a statement of the chief financial Authorized
Officer of the Borrower setting forth details of such Default and the
action which the Borrower has taken and proposes to take with respect
thereto; and
(b) as soon as possible and in any event within three days after
(x) the occurrence of any adverse development with respect to any
litigation, action, proceeding, or labor controversy described in SECTION
6.7 or (y) the commencement of any labor controversy, litigation, action,
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proceeding of the type described in SECTION 6.7, notice thereof and copies
of all documentation relating thereto.
SECTION 7.1.2. COMPLIANCE WITH LAWS, ETC. The Borrower will comply in
all material respects with all applicable laws, rules, regulations and
orders, such compliance to include (without limitation):
(a) the maintenance and preservation of its corporate existence and
qualification as a foreign corporation in each jurisdiction necessary to
make the representation set forth in Section 6.1 true and correct; and
(b) the payment, before the same become delinquent, of all taxes,
assessments and governmental charges imposed upon it or upon its property
except to the extent being diligently contested in good faith by
appropriate proceedings and for which adequate reserves in accordance with
GAAP shall have been set aside on its books.
SECTION 7.1.3. BOOKS AND RECORDS. The Borrower will keep reasonable
books and records which accurately reflect all of its business affairs and
transactions and permit the Agent and each Lender or any of their respective
representatives, at reasonable times and intervals, to visit all of its
offices, to discuss its financial matters with its officers and independent
public accountant (and the Borrower hereby authorizes such independent public
accountant to discuss the Borrower's financial matters with each Lender or
its representatives whether or not any representative of the Borrower is
present) and to examine (and, at the expense of the Borrower, photocopy
extracts from) any of its books or other corporate records, other than any
such information reasonably believed by the Borrower to be confidential. The
Borrower shall pay any fees of such independent public accountant incurred in
connection with the Agent's or any Lender's exercise of its rights pursuant
to this Section.
SECTION 7.2. NEGATIVE COVENANTS. The Borrower agrees with the Agent and
each Lender that, until all Commitments have terminated and all Obligations
have been paid and performed in
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full, the Borrower will perform the obligations set forth in this SECTION 7.2.
SECTION 7.2.1. BUSINESS ACTIVITIES. The Borrower will not engage in any
business activity, except those described in the FIRST RECITAL and such
activities as may be incidental or related thereto.
SECTION 7.2.2. INDEBTEDNESS. The Borrower will not create, incur,
assume or suffer to exist or otherwise become or be liable in respect of any
Indebtedness, other than (i) Indebtedness in respect of the Loans and other
Obligations and (ii) Indebtedness to Affiliates.
SECTION 7.2.3. LIENS. The Borrower will not create, incur, assume or
suffer to exist any Lien upon any of its property, revenues or assets,
whether now owned or hereafter acquired, except:
(a) Liens for taxes, assessments or other governmental charges or
levies not at the time delinquent or thereafter payable without penalty or
being diligently contested in good faith by appropriate proceedings and for
which adequate reserves in accordance with GAAP shall have been set aside
on its books;
(b) Liens of carriers, warehousemen, mechanics, materialmen and
landlords incurred in the ordinary course of business for sums not overdue
or being diligently contested in good faith by appropriate proceedings and
for which adequate reserves in accordance with GAAP shall have been set
aside on its books;
(c) Liens incurred in the ordinary course of business in connection
with workmen's compensation, unemployment insurance or other forms of
governmental insurance or benefits, or to secure performance of tenders,
statutory obligations, leases and contracts (other than for borrowed money)
entered into in the ordinary course of business or to secure obligations on
surety or appeal bonds; and
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(d) judgment Liens in existence less than 15 days after the entry
thereof or with respect to which execution has been stayed or the payment
of which is covered in full (subject to a customary deductible) by
insurance maintained with responsible insurance companies.
SECTION 7.2.4. INVESTMENTS. The Borrower will not make, incur, assume
or suffer to exist any Investment in any other Person, except:
(a) Cash Equivalent Investments; PROVIDED, HOWEVER, that any
Investment which when made complies with the requirements of the definition
of the term "CASH EQUIVALENT INVESTMENT" may continue to be held
notwithstanding that such Investment if made thereafter would not comply
with such requirements; and
(b) Investments by the Borrower in any Affiliate of Price/Costco, Inc.
(i) by way of loans or advances maturing on or prior to the Stated Maturity
Date or (ii) by way of equity investments.
SECTION 7.2.5. RESTRICTED PAYMENTS, ETC. On and at all times after the
Effective Date:
(a) the Borrower will not declare, pay or make any dividend or
distribution (in cash, property or obligations) on any shares of any class
of capital stock (now or hereafter outstanding) of the Borrower or on any
warrants, options or other rights with respect to any shares of any class
of capital stock (now or hereafter outstanding) of the Borrower (other than
dividends or distributions payable in its common stock or warrants to
purchase its common stock or splitups or reclassifications of its stock
into additional or other shares of its common stock) or apply any of its
funds, property or assets to the purchase, redemption, sinking fund or
other retirement of, or agree to purchase or redeem, any shares of any
class of capital stock (now or hereafter outstanding) of the Borrower, or
warrants, options or other rights with respect to any shares of any class
of capital stock (now or hereafter outstanding) of the Borrower; and
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(b) the Borrower will not make any deposit for any of the foregoing
purposes.
SECTION 7.2.6. CAPITAL EXPENDITURES, ETC. The Borrower will not make or
commit to make any Capital Expenditures.
SECTION 7.2.7. CONSOLIDATION, MERGER, ETC. The Borrower will not
liquidate or dissolve, consolidate with, or merge into or with, any other
corporation, or purchase or otherwise acquire all or substantially all of the
assets of any Person (or of any division thereof).
SECTION 7.2.8. ASSET DISPOSITIONS, ETC. Except as permitted by Section
7.2.4, the Borrower will not sell, transfer, lease, contribute or otherwise
convey, or grant options, warrants or other rights with respect to, all or
any substantial part of its assets to any Person.
SECTION 7.2.9. NEGATIVE PLEDGES, RESTRICTIVE AGREEMENTS, ETC. The
Borrower will not enter into any agreement (excluding this Agreement or any
other Loan Document) prohibiting the creation or assumption of any Lien upon
its properties, revenues or assets, whether now owned or hereafter acquired,
or the ability of the Borrower or any other Obligor to amend or otherwise
modify this Agreement or any other Loan Document.
SECTION 7.2.10. CREATION OF SUBSIDIARIES. The Borrower will not create
any new Subsidiary.
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.1. LISTING OF EVENTS OF DEFAULT. Each of the following events
or occurrences described in this SECTION 8.1 shall constitute an "EVENT OF
DEFAULT".
SECTION 8.1.1. NON-PAYMENT OF OBLIGATIONS. The Borrower shall default
in the payment or prepayment when due of any principal of or interest on any
Loan, or the Borrower or any Obligor shall default (and such default shall
continue unremedied
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for a period of five days) in the payment when due of any facility fee or of
any other Obligation.
SECTION 8.1.2. BREACH OF WARRANTY. Any representation or warranty of
the Borrower or any other Obligor made or deemed to be made hereunder or in
any other Loan Document executed by it or any other writing or certificate
furnished by or on behalf of the Borrower or any other Obligor to the Agent
or any Lender for the purposes of or in connection with this Agreement or any
such other Loan Document (including any certificates delivered pursuant to
ARTICLE V) is or shall be incorrect when made in any material respect.
SECTION 8.1.3. NON-PERFORMANCE OF CERTAIN COVENANTS AND OBLIGATIONS.
The Borrower shall default in the due performance and observance of any of
its obligations under SECTION 7.2 (other than SECTION 7.2.3) or SECTION
7.1.1(A).
SECTION 8.1.4. NON-PERFORMANCE OF OTHER COVENANTS AND OBLIGATIONS. Any
Obligor shall default in the due performance and observance of any other
agreement contained herein or in any other Loan Document executed by it, and
such default shall continue unremedied for a period of 30 days after notice
thereof shall have been given to the Borrower by the Agent or any Lender.
SECTION 8.1.5. DEFAULT ON OTHER INDEBTEDNESS. A default shall occur in
the payment when due (subject to any applicable grace period), whether by
acceleration or otherwise, of any Indebtedness for borrowed money (other than
Indebtedness described in SECTION 8.1.1) of the Borrower or any other
Obligor, or a default shall occur in the performance or observance of any
obligation or condition with respect to such Indebtedness if the effect of
such default is to accelerate the maturity of any such Indebtedness or such
default shall continue unremedied for any applicable period of time
sufficient to permit the holder or holders of such Indebtedness, or any
trustee or agent for such holders, to cause such Indebtedness to become due
and payable prior to its expressed maturity.
SECTION 8.1.6. JUDGMENTS. Any judgment or order for the payment of money
in excess of $30,000,000 shall be rendered against the Borrower or any other
Obligor and either
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(a) enforcement proceedings shall have been commenced by any creditor
upon such judgment or order; or
(b) there shall be any period of 30 consecutive days during which a
stay of enforcement of such judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect.
SECTION 8.1.7. PENSION PLANS. Any of the following events shall occur
with respect to any Pension Plan
(a) the institution of any steps by the Borrower, any member of its
Controlled Group or any other Person to terminate a Pension Plan if, as a
result of such termination, the Borrower or any such member could be
required to make a contribution to such Pension Plan, or could reasonably
expect to incur a liability or obligation to such Pension Plan, in excess
of $500,000; or
(b) a contribution failure occurs with respect to any Pension Plan
sufficient to give rise to a Lien under Section 302(f) of ERISA.
SECTION 8.1.8. CHANGE IN CONTROL. Any Change in Control shall occur.
SECTION 8.1.9. BANKRUPTCY, INSOLVENCY, ETC. The Borrower or any other
Obligor shall
(a) become insolvent or generally fail to pay, or admit in writing its
inability or unwillingness to pay, debts as they become due;
(b) apply for, consent to, or acquiesce in, the appointment of a
trustee, receiver, sequestrator or other custodian for the Borrower or any
other Obligor or any property of any thereof, or make a general assignment
for the benefit of creditors;
(c) in the absence of such application, consent or acquiescence,
permit or suffer to exist the appointment of a trustee, receiver,
sequestrator or other custodian for
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the Borrower or any other Obligor or for a substantial part of the
property of any thereof, and such trustee, receiver, sequestrator or
other custodian shall not be discharged within 60 days, provided that
the Borrower and each other Obligor hereby expressly authorizes the
Agent and each Lender to appear in any court conducting any relevant
proceeding during such 60-day period to preserve, protect and defend
their rights under the Loan Documents;
(d) permit or suffer to exist the commencement of any bankruptcy,
reorganization, debt arrangement or other case or proceeding under any
bankruptcy or insolvency law, or any dissolution, winding up or liquidation
proceeding, in respect of the Borrower or any other Obligor, and, if any
such case or proceeding is not commenced by the Borrower or such other
Obligor, such case or proceeding shall be consented to or acquiesced in by
the Borrower or such other Obligor or shall result in the entry of an order
for relief or shall remain for 60 days undismissed, provided that the
Borrower and each other Obligor hereby expressly authorizes the Agent and
each Lender to appear in any court conducting any such case or proceeding
during such 60-day period to preserve, protect and defend their rights
under the Loan Documents; or
(e) take any corporate action authorizing, or in furtherance of, any
of the foregoing, other than those resolutions dated March 28, 1996, copies
of which have been furnished to the Agent and the Lenders.
SECTION 8.1.10. IMPAIRMENT OF SECURITY, ETC. Any Loan Document shall
(except in accordance with its terms), in whole or in part, terminate, cease
to be effective or cease to be the legally valid, binding and enforceable
obligation of any Obligor party thereto; the Borrower, any other Obligor or
any other party shall, directly or indirectly, contest in any manner such
effectiveness, validity, binding nature or enforceability.
SECTION 8.2. ACTION IF BANKRUPTCY. If any Event of Default described in
CLAUSES (a) through (d) of SECTION 8.1.9 shall occur with respect to the
Borrower or any other Obligor, the Commitments (if not theretofore
terminated) shall
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automatically terminate and the outstanding principal amount of all
outstanding Loans and all other Obligations shall automatically be and become
immediately due and payable, without notice or demand.
SECTION 8.3. ACTION IF OTHER EVENT OF DEFAULT. If any Event of Default
(other than any Event of Default described in CLAUSES (a) through (d) of
SECTION 8.1.9 with respect to the Borrower or any other Obligor) shall occur
for any reason, whether voluntary or involuntary, and be continuing, the
Agent, upon the direction of the Required Lenders, shall by notice to the
Borrower declare all or any portion of the outstanding principal amount of
the Loans and other Obligations to be due and payable and/or the Commitments
(if not theretofore terminated) to be terminated, whereupon the full unpaid
amount of such Loans and other Obligations which shall be so declared due and
payable shall be and become immediately due and payable, without further
notice, demand or presentment, and/or, as the case may be, the Commitments
shall terminate.
ARTICLE IX
THE AGENT
SECTION 9.1. ACTIONS. Each Lender hereby appoints CIBC as its Agent
under and for purposes of this Agreement, the Notes and each other Loan
Document. Each Lender authorizes the Agent to act on behalf of such Lender
under this Agreement, the Notes and each other Loan Document and, in the
absence of other written instructions from the Required Lenders received from
time to time by the Agent (with respect to which the Agent agrees that it
will comply, except as otherwise provided in this Section or as otherwise
advised by counsel), to exercise such powers hereunder and thereunder as are
specifically delegated to or required of the Agent by the terms hereof and
thereof, together with such powers as may be reasonably incidental thereto.
Each Lender hereby indemnifies (which indemnity shall survive any termination
of this Agreement) the Agent, PRO RATA according to such Lender's Percentage,
from and against any and all liabilities, obligations, losses, damages,
claims, costs or expenses of any kind or nature whatsoever which may at any
time be imposed on,
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incurred by, or asserted against, the Agent in any way relating to or arising
out of this Agreement, the Notes and any other Loan Document, including
reasonable attorneys' fees, and as to which the Agent is not reimbursed by
the Borrower; PROVIDED, HOWEVER, that no Lender shall be liable for the
payment of any portion of such liabilities, obligations, losses, damages,
claims, costs or expenses which are determined by a court of competent
jurisdiction in a final proceeding to have resulted solely from the Agent's
gross negligence or wilful misconduct. The Agent shall not be required to
take any action hereunder, under the Notes or under any other Loan Document,
or to prosecute or defend any suit in respect of this Agreement, the Notes or
any other Loan Document, unless it is indemnified hereunder to its
satisfaction. If any indemnity in favor of the Agent shall be or become, in
the Agent's determination, inadequate, the Agent may call for additional
indemnification from the Lenders and cease to do the acts indemnified against
hereunder until such additional indemnity is given.
SECTION 9.2. FUNDING RELIANCE, ETC. Unless the Agent shall have been
notified by telephone, confirmed in writing, by any Lender by 5:00 p.m., New
York time, on the day prior to a Borrowing that such Lender will not make
available the amount which would constitute its Percentage of such Borrowing
on the date specified therefor, the Agent may assume that such Lender has
made such amount available to the Agent and, in reliance upon such
assumption, make available to the Borrower a corresponding amount. If and to
the extent that such Lender shall not have made such amount available to the
Agent, such Lender and the Borrower severally agree to repay the Agent
forthwith on demand such corresponding amount together with interest thereon,
for each day from the date the Agent made such amount available to the
Borrower to the date such amount is repaid to the Agent, at the Federal Funds
Rate.
SECTION 9.3. EXCULPATION. Neither the Agent nor any of its directors,
officers, employees or agents shall be liable to any Lender for any action
taken or omitted to be taken by it under this Agreement or any other Loan
Document, or in connection herewith or therewith, except for its own wilful
misconduct or gross negligence, nor responsible for any recitals or
warranties herein or therein, nor for the effectiveness, enforceability,
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validity or due execution of this Agreement or any other Loan Document, nor
to make any inquiry respecting the performance by the Borrower of its
obligations hereunder or under any other Loan Document. Any such inquiry
which may be made by the Agent shall not obligate it to make any further
inquiry or to take any action. The Agent shall be entitled to rely upon
advice of counsel concerning legal matters and upon any notice, consent,
certificate, statement or writing which the Agent believes to be genuine and
to have been presented by a proper Person.
SECTION 9.4. SUCCESSOR. The Agent may resign as such at any time upon
at least 30 days' prior notice to the Borrower and all Lenders. If the Agent
at any time shall resign, the Required Lenders may appoint another Lender as
a successor Agent which shall thereupon become the Agent hereunder. If no
successor Agent shall have been so appointed by the Required Lenders, and
shall have accepted such appointment, within 30 days after the retiring
Agent's giving notice of resignation, then the retiring Agent may, on behalf
of the Lenders, appoint a successor Agent, which shall be one of the Lenders
or a commercial banking institution organized under the laws of the U.S. (or
any State thereof) or a U.S. branch or agency of a commercial banking
institution, and having a combined capital and surplus of at least
$500,000,000. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall be entitled to receive from the
retiring Agent such documents of transfer and assignment as such successor
Agent may reasonably request, and shall thereupon succeed to and become
vested with all rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations
under this Agreement. After any retiring Agent's resignation hereunder as
the Agent, the provisions of
(a) this ARTICLE IX shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was the Agent under this Agreement;
and
(b) SECTION 20 of The Price Company Guaranty Agreement dated
concurrently herewith and SECTION 10.4 shall continue to inure to its
benefit.
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SECTION 9.5. LOANS BY CIBC. CIBC shall have the same rights and powers
with respect to (x) the Loans made by it or any of its Affiliates, and (y)
the Notes held by it or any of its Affiliates as any other Lender and may
exercise the same as if it were not the Agent. CIBC and its Affiliates may
accept deposits from, lend money to, and generally engage in any kind of
business with the Borrower or Affiliate of the Borrower as if CIBC were not
the Agent hereunder.
SECTION 9.6. CREDIT DECISIONS. Each Lender acknowledges that it has,
independently of the Agent and each other Lender, and based on such Lender's
review of the financial information of the Borrower, this Agreement, the
other Loan Documents (the terms and provisions of which being satisfactory to
such Lender) and such other documents, information and investigations as such
Lender has deemed appropriate, made its own credit decision to extend its
Commitment. Each Lender also acknowledges that it will, independently of the
Agent and each other Lender, and based on such other documents, information
and investigations as it shall deem appropriate at any time, continue to make
its own credit decisions as to exercising or not exercising from time to time
any rights and privileges available to it under this Agreement or any other
Loan Document.
SECTION 9.7. COPIES, ETC. The Agent shall give prompt notice to each
Lender of each notice or request required or permitted to be given to the
Agent by the Borrower pursuant to the terms of this Agreement (unless
concurrently delivered to the Lenders by the Borrower). The Agent will
distribute to each Lender each document or instrument received for its
account and copies of all other communications received by the Agent from the
Borrower for distribution to the Lenders by the Agent in accordance with the
terms of this Agreement.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1. WAIVERS, AMENDMENTS, ETC. The provisions of this
Agreement and of each other Loan Document may from time to time be amended,
modified or waived, if such amendment,
-50-
modification or waiver is in writing and consented to by the Borrower and the
Required Lenders; PROVIDED, HOWEVER, that no such amendment, modification or
waiver which would:
(a) modify any requirement hereunder that any particular action be
taken by all the Lenders or by the Required Lenders shall be effective
unless consented to by each Lender;
(b) modify this SECTION 10.1, change the definition of "REQUIRED
LENDERS", terminate any Guarantees, increase the Commitment Amount or the
Percentage of any Lender, reduce any fees described in ARTICLE III, or
extend the Commitment Termination Date shall be made without the consent of
each Lender;
(c) extend the due date for, or reduce the amount of, any scheduled
repayment or prepayment of principal of or interest on any Loan (or reduce
the principal amount of or rate of interest on any Loan) shall be made
without the consent of the holder of that Note evidencing such Loan; or
(d) affect adversely the interests, rights or obligations of the Agent
QUA the Agent shall be made without consent of the Agent.
No failure or delay on the part of the Agent, any Lender or the holder of any
Note in exercising any power or right under this Agreement or any other Loan
Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power or right preclude any other or further exercise
thereof or the exercise of any other power or right. No notice to or demand
on the Borrower in any case shall entitle it to any notice or demand in
similar or other circumstances. No waiver or approval by the Agent, any
Lender or the holder of any Note under this Agreement or any other Loan
Document shall, except as may be otherwise stated in such waiver or approval,
be applicable to subsequent transactions. No waiver or approval hereunder
shall require any similar or dissimilar waiver or approval thereafter to be
granted hereunder.
-51-
SECTION 10.2. NOTICES. All notices and other communications provided to
any party hereto under this Agreement or any other Loan Document shall be in
writing or by facsimile and addressed, delivered or transmitted to such party
at its address or facsimile number set forth below its signature hereto or
set forth in the Lender Assignment Agreement or at such other address or
facsimile number as may be designated by such party in a notice to the other
parties. Any notice, if mailed and properly addressed with postage prepaid
or if properly addressed and sent by pre-paid courier service, shall be
deemed given when received; any notice, if transmitted by facsimile, shall be
deemed given when transmitted.
SECTION 10.3. INDEMNIFICATION. In consideration of the execution and
delivery of this Agreement by each Lender and the extension of the
Commitments, the Borrower hereby indemnifies, exonerates and holds the Agent
and each Lender and each of their respective officers, directors, employees
and agents (collectively, the "INDEMNIFIED PARTIES") free and harmless from
and against any and all actions, causes of action, suits, losses, costs,
liabilities and damages, and expenses incurred in connection therewith
(irrespective of whether any such Indemnified Party is a party to the action
for which indemnification hereunder is sought), including reasonable
attorneys' fees and disbursements (collectively, the "INDEMNIFIED
LIABILITIES"), incurred by the Indemnified Parties or any of them as a result
of, or arising out of, or relating to
(a) any transaction financed or to be financed in whole or in part,
directly or indirectly, with the proceeds of any Loan;
(b) the entering into and performance of this Agreement and any other
Loan Document by any of the Indemnified Parties (including any action
brought by or on behalf of the Borrower as the result of any determination
by the Required Lenders pursuant to ARTICLE V not to fund the Borrowing);
(c) any investigation, litigation or proceeding related to any
acquisition or proposed acquisition by the Borrower of all or any portion
of the stock or assets of
-52-
any Person, whether or not the Agent or such Lender is party thereto;
(d) any investigation, litigation or proceeding related to any
environmental cleanup, audit, compliance or other matter relating to the
protection of the environment or the Release by the Borrower of any
Hazardous Material; or
(e) the presence on or under, or the escape, seepage, leakage,
spillage, discharge, emission, discharging or releases from, any real
property owned or operated by the Borrower thereof of any Hazardous
Material (including any losses, liabilities, damages, injuries, costs,
expenses or claims asserted or arising under any Environmental Law),
regardless of whether caused by, or within the control of, the Borrower,
except for any such Indemnified Liabilities arising for the account of a
particular Indemnified Party (i) by reason of the relevant Indemnified
Party's gross negligence or wilful misconduct or (ii) solely in connection
with disputes by and among the Agent and the Lenders (or any assignees or
participants thereof) or among the Lenders (or any assignees or participants
thereof). If and to the extent that the foregoing undertaking may be
unenforceable for any reason, the Borrower hereby agrees to make the maximum
contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law.
SECTION 10.4. SURVIVAL. The obligations of the Borrower under SECTIONS
4.3, 4.4, 4.5, 4.6, and 10.4, the obligations of The Price Company under
Section 20 of The Price Company Guaranty Agreement dated concurrently
herewith, and the obligations of the Lenders under SECTION 9.1, shall in each
case survive any termination of this Agreement, the payment in full of all
Obligations and the termination of all Commitments. The representations and
warranties made by each Obligor in this Agreement and in each other Loan
Document shall survive the execution and delivery of this Agreement and each
such other Loan Document.
-53-
SECTION 10.5. SEVERABILITY. Any provision of this Agreement or any
other Loan Document which is prohibited or unenforceable in any jurisdiction
shall, as to such provision and such jurisdiction, be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions of this Agreement or such Loan Document or affecting the
validity or enforceability of such provision in any other jurisdiction.
SECTION 10.6. HEADINGS. The various headings of this Agreement and of
each other Loan Document are inserted for convenience only and shall not
affect the meaning or interpretation of this Agreement or such other Loan
Document or any provisions hereof or thereof.
SECTION 10.7. EXECUTION IN COUNTERPARTS, EFFECTIVENESS, ETC. This
Agreement may be executed by the parties hereto in several counterparts, each
of which shall be executed by the Borrower and the Agent and be deemed to be
an original and all of which shall constitute together but one and the same
agreement. This Agreement shall become effective when counterparts hereof
executed on behalf of the Borrower and each Lender (or notice thereof
satisfactory to the Agent) shall have been received by the Agent and notice
thereof shall have been given by the Agent to the Borrower and each Lender.
SECTION 10.8. GOVERNING LAW; ENTIRE AGREEMENT. THIS AGREEMENT, THE
NOTES AND EACH OTHER LOAN DOCUMENT SHALL EACH BE DEEMED TO BE A CONTRACT MADE
UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK. This
Agreement, the Notes and the other Loan Documents (including the Fee Letter)
constitute the entire understanding among the parties hereto with respect to
the subject matter hereof and supersede any prior agreements, written or
oral, with respect thereto.
SECTION 10.9. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns; PROVIDED, HOWEVER, that:
-54-
(a) the Borrower may not assign or transfer its rights or obligations
hereunder without the prior written consent of the Agent and all Lenders;
and
(b) the rights of sale, assignment and transfer of the Lenders are
subject to SECTION 10.10.
Notwithstanding the foregoing, the Borrower may assign its rights and
obligations hereunder to The Price Company, provided that the Guarantees
remain in full force and effect and the Agent and the Lenders receive
reaffirmations to such effect and such other documents as they may reasonably
require in connection with any such assignment.
SECTION 10.10. SALE AND TRANSFER OF LOANS AND NOTE; PARTICIPATIONS IN
LOANS AND NOTE. Each Lender may assign, or sell participations in, its Loans
and Commitment to one or more other Persons in accordance with this SECTION
10.10.
SECTION 10.10.1. ASSIGNMENTS. Any Lender,
(a) with the written consents of the Borrower and the Agent (which
consents shall not be unreasonably delayed or withheld and which consent,
in the case of the Borrower, shall be deemed to have been given in the
absence of a written notice delivered by the Borrower to the Agent, on or
before the fifth Business Day after receipt by the Borrower of such
Lender's request for consent, stating, in reasonable detail, the reasons
why the Borrower proposes to withhold such consent) may at any time assign
and delegate to one or more commercial banks or other financial
institutions which are subject to the tax laws of the United States,
including but not limited to the fact that the interest income derived from
this Agreement shall be effectively connected with such assignee's United
States trade or business; and
(b) with notice to the Borrower and the Agent, but without the consent
of the Borrower or the Agent, may assign and delegate to any of its
Affiliates or to any other Lender which is subject to the tax laws of the
United States, including but not limited to the fact that the
-55-
interest income derived from this Agreement shall be effectively connected
with such assignee's United States trade or business
(each Person described in either of the foregoing clauses as being the Person
to whom such assignment and delegation is to be made, being hereinafter
referred to as an "ASSIGNEE LENDER"), all or any fraction of such Lender's
total Loans and Commitment (which assignment and delegation shall be of a
constant, and not a varying, percentage of all the assigning Lender's Loans
and Commitment) in a minimum aggregate amount of $5,000,000; PROVIDED,
HOWEVER, that, the Borrower, each other Obligor and the Agent shall be
entitled to continue to deal solely and directly with such Lender in
connection with the interests so assigned and delegated to an Assignee Lender
until
(c) written notice of such assignment and delegation, together with
payment instructions, addresses and related information with respect to
such Assignee Lender, shall have been given to the Borrower and the Agent
by such Lender and such Assignee Lender;
(d) such Assignee Lender shall have executed and delivered to the
Borrower and the Agent a Lender Assignment Agreement, accepted by the
Agent; and
(e) the processing fees described below shall have been paid.
From and after the date that the Agent accepts such Lender Assignment
Agreement, (x) the Assignee Lender thereunder shall be deemed automatically
to have become a party hereto and to the extent that rights and obligations
hereunder have been assigned and delegated to such Assignee Lender in
connection with such Lender Assignment Agreement, shall have the rights and
obligations of a Lender hereunder and under the other Loan Documents, and (y)
the assignor Lender, to the extent that rights and obligations hereunder have
been assigned and delegated by it in connection with such Lender Assignment
Agreement, shall be released from its obligations hereunder and under the
other Loan Documents. Within five Business Days after its receipt of notice
that the Agent has received an executed Lender Assignment
-56-
Agreement, the Borrower shall execute and deliver to the Agent (for delivery
to the relevant Assignee Lender) a new Note evidencing such Assignee Lender's
assigned Loans and Commitment and, if the assignor Lender has retained Loans
and its Commitment hereunder, a replacement Note in the principal amount of
the Loans and Commitment retained by the assignor Lender hereunder (such Note
to be in exchange for, but not in payment of, that Note then held by such
assignor Lender). Each such Note shall be dated the date of the predecessor
Note. The assignor Lender shall xxxx the predecessor Note "exchanged" and
deliver it to the Borrower. Accrued interest on that part of the predecessor
Note evidenced by the new Note, and accrued fees, shall be paid as provided
in the Lender Assignment Agreement. Accrued interest on that part of the
predecessor Note evidenced by the replacement Note shall be paid to the
assignor Lender. Accrued interest and accrued fees shall be paid at the same
time or times provided in the predecessor Note and in this Agreement. Such
assignor Lender or such Assignee Lender must also pay a processing fee to the
Agent upon delivery of any Lender Assignment Agreement in the amount of
$3,000. Any attempted assignment and delegation not made in accordance with
this SECTION 10.10.1 shall be null and void. Nothing in this SECTION 10.10.1
shall prevent or prohibit any Lender from pledging its rights (but not its
obligations to make Loans) under this Agreement and/or its Loans and/or its
Notes hereunder to a Federal Reserve Bank in support of borrowings made by
such Lender from such Federal Reserve Bank.
SECTION 10.10.2. PARTICIPATIONS. Any Lender may at any time sell to one
or more commercial banks or other Persons which are subject to the tax laws
of the United States, including but not limited to the fact that the interest
income derived from this Agreement shall be effectively connected with such
Person's United States trade or business (each of such commercial banks and
other Persons being herein called a "PARTICIPANT") participating interests in
any of the Loans, Commitment, or other interests of such Lender hereunder;
PROVIDED, HOWEVER, that
(a) no participation contemplated in this SECTION 10.10 shall relieve
such Lender from its Commitment or its other obligations hereunder or under
any other Loan Document;
-57-
(b) such Lender shall remain solely responsible for the performance of
its Commitment and such other obligations;
(c) the Borrower and each other Obligor and the Agent shall continue
to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement and each of the other
Loan Documents;
(d) no Participant, unless such Participant is an Affiliate of such
Lender, or is itself a Lender, shall be entitled to require such Lender to
take or refrain from taking any action hereunder or under any other Loan
Document, except that such Lender may agree with any Participant that such
Lender will not, without such Participant's consent, take any actions of
the type described in CLAUSE (b) or (c) of SECTION 10.1; and
(e) the Borrower shall not be required to pay any amount under SECTION
4.6 that is greater than the amount which it would have been required to
pay had no participating interest been sold.
The Borrower acknowledges and agrees that each Participant, for purposes of
SECTIONS 4.3, 4.4, 4.5, 4.6, 4.8, 4.9, and 10.4, shall be considered a Lender.
SECTION 10.11. OTHER TRANSACTIONS. Nothing contained herein shall
preclude the Agent or any other Lender from engaging in any transaction, in
addition to those contemplated by this Agreement or any other Loan Document,
with the Borrower or any of its Affiliates in which the Borrower or such
Affiliate is not restricted hereby from engaging with any other Person.
SECTION 10.12. FORUM SELECTION AND CONSENT TO JURISDICTION. ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH,
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE
OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE AGENT,
THE LENDERS OR THE BORROWER MAY BE BROUGHT AND MAINTAINED IN THE COURTS OF
THE STATE OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK. THE BORROWER HEREBY EXPRESSLY
-58-
AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW
YORK AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW
YORK FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE AND
IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION
WITH SUCH LITIGATION. THE BORROWER FURTHER IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL
SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK. THE BORROWER HEREBY
EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF
ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM
THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE
EXTENT THAT THE BORROWER HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM
JURISDICTION OF ANY COURT OF FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE
OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR
OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, THE BORROWER HEREBY
IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS.
SECTION 10.13. WAIVER OF JURY TRIAL. THE AGENT, THE LENDERS AND THE
BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR
ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
VERBAL OR WRITTEN) OR ACTIONS OF THE AGENT, THE LENDERS OR THE BORROWER. THE
BORROWER ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT
CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH OTHER LOAN
DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE AGENT AND THE LENDERS ENTERING INTO THIS AGREEMENT AND EACH
SUCH OTHER LOAN DOCUMENT.
-59-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
PRICE COSTCO NOVA SCOTIA COMPANY
By
--------------------------------------------
Title:
Address:
-------------------------------------
-------------------------------------
Facsimile No.:
-------------------------------
Attention:
-----------------------------------
-----------------------------------
CANADIAN IMPERIAL BANK OF COMMERCE,
as the Agent
By
--------------------------------------------
Title:
Address: 000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
Attention: Syndications Department
-60-
PERCENTAGE LENDERS
---------- -------
CIBC INC.
28.5715% ($40,000,000.00)
By
--------------------------------------------
Title:
Notice Address:
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Syndications Department
Facsimile No.: (000) 000-0000
with a copy to:
CIBC Inc.
000 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxx Xxxxxxx
Facsimile No.: (000) 000-0000
Domestic
Office: 000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
Attention:
-----------------------------------
-----------------------------------
LIBOR
Office: 000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
-61-
Attention:
-----------------------------------
-----------------------------------
-62-
11.9050% (16,667,000.00) BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By
--------------------------------------------
Title:
Notice Address:
Credit Products #3838
000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxx-Xxxxxxx
Facsimile No.: (000) 000-0000
Domestic
Office: Bank of America NT&SA
0000 Xxxxxxx Xxxx.
0xx Xxxxx
Xxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Xxxx Xxxxxx
Account Administrator
LIBOR
Office: Bank of America NT&SA
0000 Xxxxxxx Xxxx.
0xx Xxxxx
Xxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Xxxx Xxxxxx
Account Administrator
-63-
23.8095% ($33,333,333.33) XXXXXX GUARANTY TRUST COMPANY OF NEW YORK
By
--------------------------------------------
Title:
Notice Address:
00/00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxxx Xxxxxxx
Facsimile No.: (000) 000-0000
Domestic
Office: X.X. Xxxxxx Services Inc.
000 Xxxxxxx Xxxxxxxxxx Xxxx
Xxxxxx, XX 00000 2107
Facsimile No.: (000) 000-0000
Attention: Loan Department
LIBOR
Office: X.X. Xxxxxx Services Inc.
Euro-Loan Servicing Xxxx
000 Xxxxxxx Xxxxxxxxxx Xxxx
Xxxxxx, XX 00000 2107
Facsimile No.: (000) 000-0000
-64-
11.9045% ($16,666,333.34) BANK OF AMERICA NW, N.A.
doing business as SeaFirst Bank
By
--------------------------------------------
Title:
Notice Address:
SeaFirst Bank
N.W. National Division
000 0xx Xxx., Xxxxx 00
Xxxxxxx, XX 00000
Attention: Xxxxxxxxx X. Xxxxxxxxxx
Facsimile No.: (000) 000-0000
Domestic
Office: Bank of America NW, N.A.
d/b/a SeaFirst Bank
Northwest National Div.
000 Xxxxx Xxxxxx,
Xxxxx 00
Xxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxx Xxxxx Stakke
Operations Officer
LIBOR
Office: Bank of America NW, N.A.
d/b/a SeaFirst Bank
Northwest National Div.
000 Xxxxx Xxxxxx,
Xxxxx 00
Xxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxx Xxxxx Stakke
Operations Officer
-65-
-66-
23.8095% ($33,333,333.33) NATIONSBANK OF TEXAS, N.A.
By
--------------------------------------------
Title:
Domestic
Office:
-------------------------------------
-------------------------------------
Facsimile No.:
-------------------------------
Attention:
-----------------------------------
-----------------------------------
LIBOR
Office:
-------------------------------------
-------------------------------------
Facsimile No.:
-------------------------------
Attention:
-----------------------------------
----
100%
----
-67-
SCHEDULE I
DISCLOSURE SCHEDULE
ITEM 6.7 LITIGATION.
DESCRIPTION OF PROCEEDING ACTION OR CLAIM SOUGHT
NONE.
ITEM 6.11 ENVIRONMENTAL MATTERS.
NONE.
EXHIBIT A
NOTE
$_________________________ __________________, 19___
FOR VALUE RECEIVED, the undersigned, PRICE COSTCO NOVA SCOTIA COMPANY, a
Canadian unlimited liability company (the "BORROWER"), promises to pay to the
order of _____________________________ (the "LENDER") the principal sum of
______________________ DOLLARS ($__________) or, if less, the aggregate unpaid
principal amount of all Loans shown on the schedule attached hereto (and any
continuation thereof) made by the Lender pursuant to that certain Credit
Agreement, dated as of April __, 1996 (together with all amendments and other
modifications, if any, from time to time thereafter made thereto, the "CREDIT
AGREEMENT"), among the Borrower, CANADIAN IMPERIAL BANK OF COMMERCE, as Agent,
the various financial institutions (including the Lender) as are, or may from
time to time become, parties thereto, payable as set forth in the Credit
Agreement, with a final payment (in the amount necessary to pay in full this
Note) due and payable on April 11, 2001.
The Borrower also promises to pay interest on the unpaid principal amount
hereof from time to time outstanding from the date hereof until maturity
(whether by acceleration or otherwise) and, after maturity, until paid, at
the rates per annum and on the dates specified in the Credit Agreement.
Payments of both principal and interest are to be made in lawful money of
the United States of America in same day or immediately available funds to
the account designated by the Agent pursuant to the Credit Agreement.
This Note is a Note referred to in, and evidences Indebtedness incurred
under, the Credit Agreement, to which reference is made (i) for a statement
of the terms and conditions on which the Borrower is permitted and required
to make prepayments and repayments of principal of the Indebtedness
evidenced by this Note and on which such Indebtedness may be declared to be
immediately due and payable, and (ii) for restrictions relating to the
transfer or assignment of this Note. Unless otherwise defined, terms used
herein have the meanings provided in the Credit Agreement.
All parties hereto, whether as makers, endorsers, or otherwise, severally
waive presentment for payment, demand, protest and notice of dishonor.
THIS NOTE SHALL BE DEEMED TO BE MADE UNDER AND GOVERNED BY THE INTERNAL
LAWS OF THE STATE OF NEW YORK.
PRICE COSTCO NOVA SCOTIA COMPANY
By:
----------------------------------------
Title:
-2-
LOANS AND PRINCIPAL PAYMENTS
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Amount of Loan Amount of Unpaid Principal
Made Principal Repaid Balance Nota-
-------------- Interest --------------------------------------- tion
Base LIBO Period (if Base LIBO Base LIBO Made
Date Rate Rate applicable) Rate Rate Rate Rate Total By
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TABLE OF CONTENTS
Page
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I DEFINITIONS AND ACCOUNTING TERMS . . . . . . . . . . . . . . . . . . . . . . . .1
1.1. Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
1.2. Use of Defined Terms. . . . . . . . . . . . . . . . . . . . . . . . . .14
1.3. Cross-References. . . . . . . . . . . . . . . . . . . . . . . . . . . .15
1.4. Accounting and Financial Determinations . . . . . . . . . . . . . . . .15
II COMMITMENTS, BORROWING PROCEDURES AND NOTES. . . . . . . . . . . . . . . . . . .15
2.1. Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
2.1.1. Commitment of Each Lender . . . . . . . . . . . . . . . . . . . . . . .15
2.1.2. Lenders Not Permitted or Required To Make Loans . . . . . . . . . . . .15
2.3. Continuation and Conversion Elections . . . . . . . . . . . . . . . . .16
2.4. Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
2.5. Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
III REPAYMENTS, PREPAYMENTS, INTEREST AND FEES . . . . . . . . . . . . . . . . . . .17
3.1. Repayments and Prepayments. . . . . . . . . . . . . . . . . . . . . . .17
3.2. Interest Provisions . . . . . . . . . . . . . . . . . . . . . . . . . .18
3.2.1. Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
3.2.2. Post-Maturity Rates . . . . . . . . . . . . . . . . . . . . . . . . . .19
3.2.3. Payment Dates . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
3.3. Facility Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
IV CERTAIN LIBO RATE AND OTHER PROVISIONS . . . . . . . . . . . . . . . . . . . . .21
4.1. LIBO Rate Lending Unlawful. . . . . . . . . . . . . . . . . . . . . . .21
4.2. Deposits Unavailable. . . . . . . . . . . . . . . . . . . . . . . . . .21
4.3. Increased LIBO Rate Loan Costs, etc . . . . . . . . . . . . . . . . . .21
4.4. Funding Losses. . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
4.5. Increased Capital Costs . . . . . . . . . . . . . . . . . . . . . . . .22
4.6. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
4.7. Payments, Computations, etc . . . . . . . . . . . . . . . . . . . . . .24
4.8. Sharing of Payments . . . . . . . . . . . . . . . . . . . . . . . . . .24
4.9. Setoff. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25
4.10. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . .26
V CONDITIONS TO BORROWING. . . . . . . . . . . . . . . . . . . . . . . . . . . . .26
5.1. Conditions to Borrowing . . . . . . . . . . . . . . . . . . . . . . . .26
5.1.1. Resolutions, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . .26
5.1.2. Delivery of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . .26
5.1.3. Guarantees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26
5.1.4. Opinions of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . .27
5.1.5. Closing Fees, Expenses, etc . . . . . . . . . . . . . . . . . . . . . .27
5.1.6. Compliance with Warranties, No Default, etc . . . . . . . . . . . . . .27
5.1.7. Borrowing Request . . . . . . . . . . . . . . . . . . . . . . . . . . .28
5.1.8. Satisfactory Legal Form . . . . . . . . . . . . . . . . . . . . . . . .28
VI REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . .28
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6.1. Organization, etc . . . . . . . . . . . . . . . . . . . . . . . . . . .28
6.2. Due Authorization, Non-Contravention, etc . . . . . . . . . . . . . . .28
6.3. Government Approval, Regulation, etc. . . . . . . . . . . . . . . . . .29
6.4. Validity, etc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . .29
6.5. Financial Information . . . . . . . . . . . . . . . . . . . . . . . . .29
6.6. No Material Adverse Change. . . . . . . . . . . . . . . . . . . . . . .29
6.7. Litigation, Labor Controversies, etc. . . . . . . . . . . . . . . . . .29
6.8. Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30
6.9. Ownership of Properties . . . . . . . . . . . . . . . . . . . . . . . .30
6.10. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30
6.11. Environmental Warranties. . . . . . . . . . . . . . . . . . . . . . . .30
6.12. Regulations G, U and X. . . . . . . . . . . . . . . . . . . . . . . . .31
6.13. Accuracy of Information . . . . . . . . . . . . . . . . . . . . . . . .32
VII COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32
7.1. Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . . . .32
7.1.1. Financial Information, Reports, Notices, etc. . . . . . . . . . . . . .32
7.1.2. Compliance with Laws, etc . . . . . . . . . . . . . . . . . . . . . . .33
7.1.3. Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . .33
7.2. Negative Covenants. . . . . . . . . . . . . . . . . . . . . . . . . . .33
7.2.1. Business Activities . . . . . . . . . . . . . . . . . . . . . . . . . .33
7.2.2. Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .33
7.2.3. Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34
7.2.4. Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34
7.2.5. Restricted Payments, etc. . . . . . . . . . . . . . . . . . . . . . . .34
7.2.6. Capital Expenditures, etc . . . . . . . . . . . . . . . . . . . . . . .35
7.2.7. Consolidation, Merger, etc. . . . . . . . . . . . . . . . . . . . . . .35
7.2.8. Asset Dispositions, etc . . . . . . . . . . . . . . . . . . . . . . . .35
7.2.9. Negative Pledges, Restrictive Agreements, etc . . . . . . . . . . . . .35
7.2.10. Creation of Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . .35
VIII EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . .35
8.1. Listing of Events of Default. . . . . . . . . . . . . . . . . . . . . .36
8.1.1. Non-Payment of Obligations. . . . . . . . . . . . . . . . . . . . . . .36
8.1.2. Breach of Warranty. . . . . . . . . . . . . . . . . . . . . . . . . . .36
8.1.3. Non-Performance of Certain Covenants and Obligations. . . . . . . . . .36
8.1.4. Non-Performance of Other Covenants and Obligations. . . . . . . . . . .36
8.1.5. Default on Other Indebtedness . . . . . . . . . . . . . . . . . . . . .36
8.1.6. Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36
8.1.7. Pension Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37
8.1.8. Change in Control . . . . . . . . . . . . . . . . . . . . . . . . . . .37
8.1.9. Bankruptcy, Insolvency, etc . . . . . . . . . . . . . . . . . . . . . .37
8.1.10. Impairment of Security, etc . . . . . . . . . . . . . . . . . . . . . .38
8.2. Action if Bankruptcy. . . . . . . . . . . . . . . . . . . . . . . . . .38
8.3. Action if Other Event of Default. . . . . . . . . . . . . . . . . . . .38
IX THE AGENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .39
9.1. Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .39
9.2. Funding Reliance, etc . . . . . . . . . . . . . . . . . . . . . . . . .39
9.3. Exculpation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40
9.4. Successor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40
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9.5. Loans by CIBC . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41
9.6. Credit Decisions. . . . . . . . . . . . . . . . . . . . . . . . . . . .41
9.7. Copies, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41
X MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . .41
10.1. Waivers, Amendments, etc. . . . . . . . . . . . . . . . . . . . . . . .41
10.2. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42
10.3. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . .43
10.4. Survival. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .44
10.5. Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .44
10.6. Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .44
10.7. Execution in Counterparts, Effectiveness, etc.. . . . . . . . . . . . .44
10.8. Governing Law; Entire Agreement . . . . . . . . . . . . . . . . . . . .45
10.9. Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . . . .45
10.10. Sale and Transfer of Loans and Note; Participations in
Loans and Note. . . . . . . . . . . . . . . . . . . . . . . . . . . . .45
10.10.1. Assignments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45
10.10.2. Participations. . . . . . . . . . . . . . . . . . . . . . . . . . . . .47
10.11. Other Transactions. . . . . . . . . . . . . . . . . . . . . . . . . . .48
10.12. Forum Selection and Consent to Jurisdiction . . . . . . . . . . . . . .48
10.13. Waiver of Jury Trial. . . . . . . . . . . . . . . . . . . . . . . . . .49
EXHIBIT A FORM OF NOTE
EXHIBIT B FORM OF BORROWING REQUEST
EXHIBIT C FORM OF CONTINUATION/CONVERSION NOTICE
EXHIBIT D FORM OF LENDER ASSIGNMENT AGREEMENT
EXHIBIT E FORM OF OPINION OF COUNSEL TO THE OBLIGORS
EXHIBIT F FORM OF OPINION OF SPECIAL CANADIAN COUNSEL TO THE OBLIGORS
EXHIBIT G FORM OF OPINION OF SPECIAL CANADIAN TAX COUNSEL TO THE OBLIGORS
EXHIBIT H FORM OF GUARANTEES
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