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EXHIBIT 10.5
CREDIT AGREEMENT
by and among
LINENS 'N THINGS, INC.,
THE SUBSIDIARY BORROWERS PARTY HERETO,
THE LENDERS PARTY HERETO,
and
THE BANK OF NEW YORK,
as Agent,
with
BNY CAPITAL MARKETS, INC., as Arranging Agent
--------------------------
$125,000,000
--------------------------
Dated as of November 20, 1996
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CREDIT AGREEMENT, dated as of November 20, 1996, by and among LINENS 'N
THINGS, INC., a Delaware corporation (the "COMPANY"), each Subsidiary Borrower
which is a signatory hereto or becomes a party hereto pursuant to the provisions
of Section 2.10, the Lenders party hereto from time to time (each a "LENDER"
and, collectively, the "LENDERS") and THE BANK OF NEW YORK ("BNY"), as agent for
the Lenders (in such capacity, the "AGENT").
1. DEFINITIONS AND PRINCIPLES OF CONSTRUCTION
1.1. Definitions
When used in any Loan Document (as defined below), each of
the following terms shall have the meaning ascribed thereto unless the context
otherwise specifically requires:
"ABR Advances": the Revolving Credit Loans (or any portions thereof) at
such time as they (or such portions) are made or are being maintained at a rate
of interest based upon the Alternate Base Rate.
"Accumulated Funding Deficiency": defined in Section 302 of ERISA.
"Acquisition": with respect to any Person, the purchase or other
acquisition by such Person, by any means whatsoever (including by devise,
bequest, gift, through a dividend or otherwise), of (a) stock of, or other
equity securities of, any other Person if, immediately thereafter, such other
Person would be either a consolidated subsidiary of such Person or otherwise
under the control of such Person, (b) any business, going concern or division or
segment thereof, or (c) the Property of any other Person other than in the
ordinary course of business, provided, however, that no acquisition of
substantially all of the assets, or any division or segment, of such other
Person shall be deemed to be in the ordinary course of business.
"Affected Advance": defined in Section 3.8(b).
"Affiliate": with respect to any Person at any time and from time to
time, any other Person (other than a wholly-owned subsidiary of such Person)
which, at such time (a) controls such Person, (b) is controlled by such Person
or (c) is under common control with such Person. The term "control", as used in
this definition with respect to any Person,
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means the power, whether direct or indirect through one or more intermediaries,
to direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities or other interests, by
contract or otherwise.
"Agent": defined in the preamble.
"Aggregate Commitment Amount": at any time, the sum of the Commitment
Amounts of the Lenders at such time.
"Aggregate Credit Exposure": at any time, the sum of the Credit
Exposures of the Lenders at such time.
"Agreement": this Credit Agreement, as amended, supplemented or
otherwise modified from time to time.
"Alternate Base Rate": for any day, a rate per annum equal to the
greater of (a) the BNY Rate in effect on such day, or (b) 0.50% plus the Federal
Funds Effective Rate (rounded, if necessary, to the nearest 1/100th of 1% or, if
there is no nearest 1/100 of 1%, then to the next higher 1/100 of 1%) in effect
on such day.
"Amended and Restated Certificate of Incorporation": the Amended and
Restated Certificate of Incorporation of the Company to be filed by the Company
as part of the Reorganization, substantially in the form filed as an exhibit to
the Registration Statement, as the same may be amended, modified or supplemented
from time to time in accordance with Section 8.9.
"Applicable Margin": (i) with respect to the unpaid principal balance
of ABR Advances, the applicable percentage set forth below in the column
entitled "ABR Advances", (ii) with respect to the unpaid principal balance of
Eurodollar Advances, the applicable percentage set forth below in the column
entitled "Eurodollar Advances", (iii) with respect to the Commitment Fee, the
applicable percentage set forth below in the column entitled "Commitment Fee"
(iv) with respect to the Letter of Credit Participation Fee, the applicable
percentage set forth below in the column entitled "Standby Letters of Credit" or
"Commercial Letters of Credit"; in each case opposite the applicable Pricing
Level:
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Standby Commercial
ABR Eurodollar Commitment Letters Letters of
Pricing Level Advances Advances Fee of Credit Credit
------------- ---------- -------- ------- --------- ------
Pricing Level I 0% 1.000% 0.200% 1.000% 0.5000%
Pricing Level II 0% 1.250% 0.300% 1.250% 0.6250%
Pricing Level III 0% 1.375% 0.375% 1.375% 0.6875%
Pricing Level IV 0% 1.625% 0.500% 1.625% 0.8125%
Changes in the Applicable Margin resulting from a change in a
Pricing Level shall become effective upon the date of the delivery by the
Company to the Agent of a certificate pursuant to Section 7.7(c) evidencing a
change in the Fixed Charge Coverage Ratio which would affect the applicable
Pricing Level. If the Company shall fail to deliver a certificate within 50 days
after the end of each of the first three fiscal quarters (or 90 days after the
end of the last fiscal quarter) as required by Section 7.7(c), Pricing Level IV
shall apply from and including the 51st day (the 91st day in the case of the
last quarter) after the end of such fiscal quarter to the date of the delivery
by the Company to the Agent of a certificate demonstrating that a different
Pricing Level is applicable.
"Approved Bank": any bank whose short-term commercial paper rating from
(i) S&P is at least A-1 or the equivalent thereof or (ii) Xxxxx'x is at least
P-1 or the equivalent thereof.
"Assignment": defined in Section 12.7(c).
"Assignment and Acceptance Agreement": an assignment and acceptance
agreement executed by an assignor and an assignee pursuant to which, subject to
the terms and conditions hereof and thereof, the assignor assigns to the
assignee all or any portion of such assignor's interests under this Agreement,
substantially in the form of Exhibit G.
"Assignment Fee": defined in Section 12.7(c).
"Authorized Signatory": as to (i) any Person which is a corporation,
the chairman of the board, the president, any vice president, the chief
financial officer or any other officer (acceptable to the Agent) of such Person
and (ii) any Person which is not a corporation, the general partner or other
managing Person thereof.
"Benefited Lender": defined in Section 12.9(b).
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"BNY": defined in the preamble.
"BNY Rate": a rate of interest per annum equal to the rate of interest
publicly announced in New York City by BNY from time to time as its prime
commercial lending rate, such rate to be adjusted automatically (without notice)
on the effective date of any change in such publicly announced rate.
"BNYCMI": BNY Capital Markets, Inc., the Arranging Agent.
"Borrower Addendum": an Addendum in the form of Exhibit D pursuant to
which a Subsidiary of the Company may become a Subsidiary Borrower pursuant to
the provisions of Section 2.10.
"Borrowers": collectively, the Company and the Subsidiary Borrowers;
each a "Borrower".
"Borrowing Date": (i) in respect of Revolving Credit Loans, any
Business Day on which the Lenders shall make Revolving Credit Loans pursuant to
a Borrowing Request or pursuant to a Mandatory Borrowing, (ii) in respect of
Swing Line Loans, any Business Day on which the Swing Line Lender shall make a
Swing Line Loan pursuant to a Borrowing Request and (iii) in respect of Letters
of Credit, any Business Day on which the Issuer shall issue a Letter of Credit
pursuant to a Letter of Credit Request.
"Borrowing Request": a request for Revolving Credit Loans or Swing Line
Loans in the form of Exhibit B.
"Cash Equivalents": (i) securities issued or directly and fully
guaranteed or insured by the United States or any agency or instrumentality
thereof (provided that the full faith and credit of the United States is pledged
in support thereof) having maturities of not more than six months from the date
of acquisition, (ii) Dollar denominated time deposits, certificates of deposit
and bankers acceptances of (x) any Lender or (y) any Approved Bank, in each case
with maturities of not more than six months from the date of acquisition, (iii)
commercial paper issued by any Approved Bank or by the parent company of any
Approved Bank and commercial paper issued by, or guaranteed by, any industrial
or financial company with a short-term commercial paper rating of at least A- 1
or the equivalent thereof by S&P or at least P-1 or the equivalent thereof by
Moody's, or guaranteed by any industrial or financial company with a long term
unsecured debt rating of at least A or A-2, or the equivalent of each thereof,
by S&P or Moody's, as the case
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may be, and in each case maturing within six months after the date of
acquisition, (iv) marketable direct obligations issued by any state of the
United States or any political subdivision of any such state or any public
instrumentality thereof maturing within six months from the date of acquisition
thereof and, at the time of acquisition, having one of the two highest ratings
obtainable from either S&P or Moody's, (v) investments in money market funds
substantially all the assets of which are comprised of securities of the types
described in clauses (i) through (iv) above, (vi) investments in tax-exempt
municipal bonds maturing within six months from the date of acquisition thereof
and, at the time of acquisition, having one of the two highest ratings
obtainable with respect thereto from either S&P or Moody's and (vii) investments
in overnight repurchase agreements with any Lender or any primary securities
dealer to the extent that such Lender or securities dealer is able to segregate
the securities subject to such repurchase agreements and such securities consist
of the type described in clauses (i) and (iii) above.
"Commitment": in respect of any Lender, such Lender's undertaking to
make Revolving Credit Loans, subject to the terms and conditions hereof, in an
aggregate outstanding principal amount not to exceed the Commitment Amount of
such Lender.
"Commitment Amount": at any time and with respect to any Lender, the
amount set forth adjacent to such Lender's name under the heading "Commitment
Amount" in Exhibit A at such time or, in the event that such Lender is not
listed on Exhibit A, the "Commitment Amount" which such Lender shall have
assumed from another Lender in accordance with Section 12.7 on or prior to such
time, as the same may be adjusted from time to time pursuant to Sections 2.6 and
12.7(c).
"Commitment Fee": defined in Section 3.11.
"Commitment Percentage": at any time and with respect to any Lender, a
fraction the numerator of which is such Lender's Commitment Amount at such time,
and the denominator of which is the Aggregate Commitment Amount at such time.
"Commitment Period": the period commencing on the Effective Date and
ending on the Commitment Termination Date, or on such earlier date as all of the
Commitments shall have been terminated in accordance with the terms hereof.
"Commitment Termination Date": the earlier of the third anniversary of
the Effective Date and the date on which the Loans shall become due and payable,
whether by acceleration, notice of intention to prepay or otherwise.
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"Company Guaranty": the guaranty of the Company as set forth in Section
11.
"Compensatory Interest Payment": defined in Section 3.4(c).
"Consolidated": the Company and the Subsidiaries on a consolidated
basis in accordance with GAAP.
"Contingent Obligation": as to any Person (the "secondary obligor"),
any obligation of such secondary obligor (a) guaranteeing or in effect
guaranteeing any return on any investment made by another Person, or (b)
guaranteeing or in effect guaranteeing any Indebtedness, lease, dividend or
other obligation ("primary obligation") of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, including any
obligation of such secondary obligor, whether contingent, (i) to purchase any
such primary obligation or any Property constituting direct or indirect security
therefor, (ii) to advance or supply funds (A) for the purchase or payment of any
such primary obligation or (B) to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase Property, securities or services primarily
for the purpose of assuring the beneficiary of any such primary obligation of
the ability of the primary obligor to make payment of such primary obligation,
(iv) otherwise to assure or hold harmless the beneficiary of such primary
obligation against loss in respect thereof, and (v) in respect of the
Indebtedness of any partnership in which such secondary obligor is a general
partner, except to the extent that such Indebtedness of such partnership is
nonrecourse to such secondary obligor and its separate Property; provided that
the term "Contingent Obligation" shall not include the indorsement of
instruments for deposit or collection in the ordinary course of business or
indemnity obligations under the Stockholder Agreement.
"Control Person": defined in Section 3.6.
"Convert", "Conversion" and "Converted": each, a reference to a
conversion pursuant to Section 3.3 of one Type of Revolving Credit Loan into
another Type of Revolving Credit Loan.
"Credit Exposure": with respect to any Lender at any time, the sum at
such time of (a) the outstanding principal balance of such Lender's Revolving
Credit Loans, (b) the Swing Line Exposure of such Lender and (c) the Letter of
Credit Exposure of such Lender.
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"Credit Parties": the Company, the Borrowers and the Guarantors; each a
"Credit Party".
"CVS": CVS Corporation, a Delaware corporation.
"CVS Group": CVS and its subsidiaries, which shall not include the
Company or any of the Subsidiaries.
"CVS Subordinated Debt": the indebtedness evidenced by the CVS
Subordinated Note.
"CVS Subordinated Note": the Subordinated Note in the principal amount
of $13,500,000, substantially in the form of Exhibit H, made by the Company to
Nashua Xxxxxx CVS, Inc. as such Subordinated Note may be amended or otherwise
modified from time to time in accordance with Section 8.9.
"Default": any of the events specified in Section 9.1, whether any
requirement for the giving of notice, the lapse of time, or both, or any other
condition, has been satisfied.
"Disposition": with respect to any Person, any sale, assignment,
transfer or other disposition by such Person by any means, of:
(a) the Stock of, or other equity interests of, any other Person,
(b) any business, operating entity, division or segment thereof,
or
(c) any other Property of such Person, other than sales of
inventory (other than in connection with bulk transfers);
provided, however, that the term "Disposition" shall not include a sale,
assignment, transfer or other disposition by a Subsidiary to any other
Subsidiary, provided that the same does not materially and adversely affect the
interests of the Lenders under the Loan Documents or the CVS Subordinated Note.
"Dollar or "$": lawful currency of the United States of America.
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"Domestic Business Day": any day (other than a Saturday, Sunday or
legal holiday in the State of New York) on which banks are open for business in
New York City.
"EBITDA": earnings from operations of the Company and its Subsidiaries
on a Consolidated basis for the immediately preceding four fiscal quarter
period, plus the sum of, without duplication, (i) interest expense, (ii)
provision for income taxes and (iii) depreciation and amortization for such
period, each to the extent deducted from such earnings for such period. EBITDA
shall be adjusted to exclude nonrecurring gains and losses.
"Effective Date": defined in Section 12.20.
"Employee Benefit Plan": an employee benefit plan, within the meaning
of Section 3(3) of ERISA, maintained, sponsored or contributed to by the
Company, any Subsidiary or any ERISA Affiliate.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time, or any successor thereto, and the rules and
regulations issued thereunder, as from time to time in effect.
"ERISA Affiliate": when used with respect to an Employee Benefit Plan,
ERISA, the PBGC or a provision of the Internal Revenue Code pertaining to
employee benefit plans, any Person that is a member of any group of
organizations within the meaning of Sections 414(b) or (c) of the Internal
Revenue Code or, solely with respect to the applicable provisions of the
Internal Revenue Code, Sections 414(m) or (o) of the Internal Revenue Code, of
which the Company or any Subsidiary is a member.
"Eurodollar Advance": a portion of the Revolving Credit Loans selected
by a Borrower to bear interest during a Eurodollar Interest Period selected by
such Borrower at a rate per annum based upon a Eurodollar Rate determined with
reference to such Interest Period, all pursuant to and in accordance with
Section 2.1 or 3.3.
"Eurodollar Business Day": any Domestic Business Day, other than a
Domestic Business Day on which banks are not open for dealings in Dollar
deposits in the interbank eurodollar market.
"Eurodollar Interest Period": the period commencing on any Eurodollar
Business Day selected by a Borrower in accordance with Section 2.1 or Section
3.3 and ending one,
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two, three or six months thereafter, as selected by such Borrower in accordance
with either such Sections, subject to the following:
(i) if any Interest Period would otherwise end on a day which
is not a Eurodollar Business Day, such Interest Period shall be extended to the
immediately succeeding Eurodollar Business Day unless the result of such
extension would be to carry the end of such Interest Period into another
calendar month, in which event such Interest Period shall end on the Eurodollar
Business Day immediately preceding such day; and
(ii) if any Interest Period shall begin on the last Eurodollar
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period),
such Interest Period shall end on the last Eurodollar Business Day of such
latter calendar month.
"Eurodollar Rate": with respect to each Eurodollar Advance and as
determined by the Agent, the rate of interest per annum (rounded, if necessary,
to the nearest 1/100 of 1% or, if there is no nearest 1/100 of 1%, then to the
next higher 1/100 of 1%) equal to a fraction, the numerator of which is the rate
per annum quoted by BNY at approximately 11:00 A.M. (or as soon thereafter as
practicable) two Eurodollar Business Days prior to the first day of such
Interest Period to leading banks in the interbank eurodollar market as the rate
at which BNY is offering Dollar deposits in an amount approximately equal to its
Commitment Percentage of such Eurodollar Advance and having a period to maturity
approximately equal to the Interest Period applicable to such Eurodollar
Advance, and the denominator of which is an amount equal to 1.00 minus the
aggregate of the then stated maximum rates during such Interest Period of all
reserve requirements (including marginal, emergency, supplemental and special
reserves), expressed as a decimal, established by the Board of Governors of the
Federal Reserve System and any other banking authority to which BNY and other
major United States money center banks are subject, in respect of eurocurrency
liabilities.
"Event of Default": any of the events specified in Section 9.1,
provided that any requirement for the giving of notice, the lapse of time, or
both, or any other condition has been satisfied.
"Execution Date": the date on which this Agreement is executed and
delivered by and among the parties hereto.
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"Expiration Date": the first date, occurring after the Commitments
shall have terminated or been terminated in accordance herewith, upon which
there shall be no Loans or Letters of Credit outstanding.
"Federal Funds Effective Rate": for any period, a fluctuating interest
rate per annum equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Domestic Business Day, for the next preceding Domestic
Business Day) by the Federal Reserve Bank of New York, or, if such rate is not
so published for any day which is a Domestic Business Day, the average (rounded,
if necessary, to the nearest 1/100 of 1% or, if there is no nearest 1/100 of 1%,
then to the next higher 1/100 of 1%) of the quotations for such day on such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by the Agent.
"Fees": defined in Section 3.2.
"Financial Statements": defined in Section 4.13.
"Fixed Charge Coverage Ratio: at any time of determination, the ratio
of (i) the sum of EBITDA and Rental Expense to (ii) the sum of Interest Expense
and Rental Expense.
"Free Cash Flow": at any time of determination, EBITDA for the
immediately preceding fiscal year less the sum, without duplication, of
Consolidated capital expenditures, Consolidated interest expense, Consolidated
income taxes, permanent payments and prepayments of Consolidated Indebtedness
(excluding payments and prepayments of the Loans and Indebtedness under
revolving credit, line of credit or similar facilities which may be reborrowed)
and the net increase (if positive) in Consolidated working capital, in each case
for such immediately preceding fiscal year, all as determined in accordance with
GAAP.
"GAAP": generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or such other principles as may be
approved by a significant segment of the accounting profession, which are
applicable to the circumstances as of the date of determination, consistently
applied.
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"Governmental Authority": any foreign, federal, state, municipal or
other government, or any department, commission, board, bureau, agency, public
authority or instrumentality thereof, or any court or arbitrator.
"Guaranties": collectively, the Company Guaranty and the Subsidiary
Guaranty; individually, a "Guaranty".
"Guarantor": at any time, the Company and the Subsidiaries party to the
Subsidiary Guaranty at such time.
"Highest Lawful Rate": the maximum rate of interest, if any, which at
any time or from time to time may be contracted for, taken, charged or received
on the Loans or the Notes or which may be owing to any Lender pursuant to this
Agreement under the laws applicable to such Lender and this Agreement.
"Indebtedness": as to any Person at a particular time, all items of
such Person which constitute, without duplication, (a) indebtedness for borrowed
money or the deferred purchase price of Property (other than trade payables and
accrued expenses incurred in the ordinary course of business), (b) indebtedness
evidenced by notes, bonds, debentures or similar instruments, (c) obligations
with respect to any conditional sale or other title retention agreement, (d)
indebtedness arising under acceptance facilities and the amount available to be
drawn under all letters of credit (excluding for purposes of Section 7.10(b)
letters of credit obtained in the ordinary course of business by the Company or
any Subsidiary) issued for the account of such Person and, without duplication,
all drafts drawn thereunder to the extent such Person shall not have reimbursed
the issuer in respect of the issuer's payment of such drafts, (e) all
liabilities secured by any Lien on any Property owned by such Person even though
such Person shall not have assumed or otherwise become liable for the payment
thereof (other than carriers', warehousemen's, mechanics', repairmen's or other
like non-consensual Liens arising in the ordinary course of business), (f) that
portion of any obligation of such Person, as lessee, which in accordance with
GAAP is required to be capitalized on a balance sheet of such Person, and (g)
Contingent Obligations (excluding for purposes of Sections 7.10(b) Contingent
Obligations in respect of any indebtedness, obligation or liability other than
those described in items (a) - (f) above); provided that, for purposes of this
definition, Indebtedness shall not include Intercompany Debt and obligations in
respect of interest rate caps, collars, exchanges, swaps or other, similar
agreements.
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"Indemnified Liabilities": defined in Section 12.5.
"Intercompany Debt": (i) Indebtedness of the Company to one or more of
the Subsidiaries and (ii) demand Indebtedness of one or more of the Subsidiaries
to the Company or any one or more of the other Subsidiaries.
"Interest Expense": the sum of all interest (adjusted to give effect to
all interest rate swap, cap or other similar interest rate hedging arrangements,
all as determined in accordance with GAAP) paid or accrued in respect of
Consolidated Indebtedness for the immediately preceding four fiscal quarter
period, determined in accordance with GAAP.
"Interest Payment Date": (i) as to any ABR Advance, the last day of
each March, June, September and December, commencing on the first of such days
to occur after such ABR Advance is made or any Eurodollar Advance is converted
to an ABR Advance, (ii) as to any Swing Line Loan, the day on which the
outstanding principal balance of such Swing Line Loan shall become due and
payable in accordance with Section 2.2(a), (iii) as to any Eurodollar Advance in
respect of which a Borrower has selected an Interest Period of one, two or three
months, the last day of such Interest Period, (iv) as to any Eurodollar Advance
in respect of which a Borrower has selected an Interest Period greater than
three months, the last day of the third month of such Interest Period and the
last day of such Interest Period.
"Interest Period": a Eurodollar Interest Period or a Swing Line
Interest Period, as the case may be.
"Internal Revenue Code": the Internal Revenue Internal Revenue Code of
1986, as amended from time to time, or any successor thereto, and the rules and
regulations issued thereunder, as from time to time in effect.
"Investments": defined in Section 8.12.
"Issuer": BNY.
"Lender": defined in the preamble; such term to also include the Swing
Line Lender and the Issuer where the context hereof requires or permits such
inclusion.
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"Letter of Credit": defined in Section 2.7, provided that each of the
letters of credit listed on Schedule 1.1L shall constitute a Letter of Credit
for the purposes of this Agreement.
"Letter of Credit Commitment": the commitment of the Issuer to issue
Letters of Credit in an aggregate face amount not in excess of $25,000,000
pursuant to Section 2.7.
"Letter of Credit Exposure": at any time, (a) in respect of all
Lenders, the sum, without duplication, of (i) the maximum aggregate amount which
may be drawn under all unexpired Letters of Credit at such time (whether the
conditions for drawing thereunder have or may be satisfied), (ii) the aggregate
amount, at such time, of all unpaid drafts (which have not been dishonored)
drawn under all Letters of Credit, and (iii) the aggregate unpaid Reimbursement
Obligations at such time, and (b) in respect of any Lender, an amount equal to
such Lender's Commitment Percentage at such time multiplied by the amount
determined under clause (a) of this definition.
"Letter of Credit Participation": with respect to each Lender, its
obligations to the Issuer under Section 2.8.
"Letter of Credit Participation Fee": defined in Section 3.12.
"Letter of Credit Request": a request in the form of Exhibit C.
"Leverage Ratio": at any time of determination, the ratio of (i) the
sum of Consolidated Indebtedness (excluding the CVS Subordinated Debt) and eight
times Minimum Rentals to (ii) the sum of EBITDA plus Rental Expense.
"Lien": any mortgage, pledge, hypothecation, assignment, lien, deposit
arrangement, charge, encumbrance or other security arrangement or security
interest of any kind, or the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title retention agreement and
any financing lease having substantially the same economic effect as any of the
foregoing.
"Loan": a Revolving Credit Loan or a Swing Line Loan, as the case may
be.
"Loan Documents": this Agreement, the Subsidiary Guaranty and, upon the
execution and delivery thereof, any Notes executed and delivered pursuant to
Section 2.11.
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"Loans": the Revolving Credit Loans and the Swing Line Loans.
"Mandatory Borrowing": defined in Section 2.2(b).
"Margin Stock": any "margin stock", as said term is defined in
Regulation U of the Board of Governors of the Federal Reserve System, as the
same may be amended or supplemented from time to time.
"Material Adverse": with respect to any change or effect, a material
adverse change in, or effect on, as the case may be, (i) the financial
condition, operations, business, or Property of the Company and the Subsidiaries
taken as a whole, (ii) the ability of any Credit Party to perform its
obligations under any Loan Document to which it is a party, or (iii) the ability
of the Agent or any Lender to enforce the Loan Documents or the CVS Subordinated
Note.
"Minimum Rental": Consolidated minimum rentals (determined in the same
manner as set forth in the notes to the Financial Statements) excluding up to
$5,000,000 of Consolidated equipment rentals for (i) in the case of any
determination on or prior to December 31, 1996, the twelve month period ending
September 30, 1996 and (ii) in the case of any determination thereafter, the
immediately preceding fiscal year.
"Moody's": Xxxxx'x Investors Service, Inc., or any successor thereto.
"Multiemployer Plan": a Pension Plan which is a multiemployer plan
defined in Section 4001(a)(3) of ERISA.
"Negotiated Rate": with respect to a Swing Line Loan, the rate per
annum agreed to in writing by the Borrower requesting such Swing Line Loan and
the Swing Line Lender as the interest rate which such Swing Line Loan shall
bear.
"Net Worth": at any date of determination, the sum of all amounts which
would be included under shareholders' equity on a Consolidated balance sheet of
the Company and its Subsidiaries determined in accordance with GAAP as at such
date.
"Obligations": defined in Section 11.1.
"Offering": defined in the Registration Statement.
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"PBGC": the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA, or any Governmental Authority succeeding to
the functions thereof.
"Pension Plan": at any time, any Employee Benefit Plan (including a
Multiemployer Plan) subject to Section 302 of ERISA or Section 412 of the
Internal Revenue Code, the funding requirements of which are, or at any time
within the six years immediately preceding the time in question, were in whole
or in part, the responsibility of the Company, any Subsidiary or an ERISA
Affiliate.
"Person": any individual, firm, partnership, limited liability company,
limited liability partnership, joint venture, corporation, association, business
trust, joint stock company, unincorporated association, trust, Governmental
Authority or any other entity, whether acting in an individual, fiduciary, or
other capacity, and for the purpose of the definition of "ERISA Affiliate", a
trade or business.
"Pricing Level I": any time when the Fixed Charge Coverage Ratio is
greater than or equal to 2.00:1.00.
"Pricing Level II": any time when (i) the Fixed Charge Coverage Ratio
is greater than or equal to 1.80:1.00 and (ii) Pricing Level I does not apply.
"Pricing Level III": any time when (i) the Fixed Charge Coverage Ratio
is greater than or equal to 1.60:1.00 and (ii) neither Pricing Level I nor
Pricing Level II applies.
"Pricing Level IV": any time when (i) the Fixed Charge Coverage Ratio
is less than 1.60:1.00 and (ii) none of Pricing Level I, Pricing Level II or
Pricing Level III applies.
"Principal Office": from time to time, the principal office of BNY,
located on the date hereof in New York, New York.
"Prohibited Transaction": a transaction that is prohibited under
Section 4975 of the Internal Revenue Code or Section 406 of ERISA and not exempt
under Section 4975 of the Internal Revenue Code or Section 408 of ERISA.
- 17 -
18
"Property": in respect of any Person, all types of real, personal or
mixed property and all types of tangible or intangible property owned or leased
by such Person.
"Registration Statement": the Registration Statement filed on Form S- 1
by the Company with the Securities and Exchange Commission with respect to the
offering of shares of the common stock of the Company to the public, as amended
by amendment filed October 30, 1996.
"Regulatory Change": (a) the introduction or phasing in of any law,
rule or regulation after the date hereof, (b) the issuance or promulgation after
the date hereof of any directive, guideline or request from any central bank or
United States or foreign Governmental Authority (whether having the force of
law), or (c) any change after the date hereof in the interpretation of any
existing law, rule, regulation, directive, guideline or request by any central
bank or United States or foreign Governmental Authority charged with the
administration thereof, in each case applicable to the transactions contemplated
by this Agreement.
"Reimbursement Obligations": all obligations and liabilities of the
Borrowers due and to become due hereunder in respect of Letters of Credit.
"Rental Expense": the sum of all rental expense (determined in the same
manner as set forth in the notes to the Financial Statements) of the Company and
its Subsidiaries on a Consolidated basis for the immediately preceding four
fiscal quarter period, determined in accordance with GAAP.
"Reorganization": defined in the Registration Statement (and shall
include the Offering).
"Reorganization Documents": the CVS Subordinated Note, the Stockholder
Agreement, the Tax Disaffiliation Agreement, the Transitional Services Agreement
and the Amended and Restated Certificate of Incorporation.
"Reportable Event": with respect to any Pension Plan, (a) any event set
forth in Sections 4043(b) (other than a Reportable Event as to which the 30 day
notice requirement is waived by the PBGC under applicable regulations), 4062(e)
or 4063(a) of ERISA, or the regulations thereunder, (b) an event requiring the
Company, any Subsidiary or any ERISA Affiliate to provide security to a Pension
Plan under Section 401(a)(29) of the
- 18 -
19
Internal Revenue Code, or (c) the failure to make any payment required by
Section 412(m) of the Internal Revenue Code.
"Required Lenders": at any time prior to the Commitment Termination
Date or such earlier date as all of the Commitments shall have terminated or
been terminated in accordance herewith, Lenders having Commitment Amounts equal
to or more than 51% of the Aggregate Commitment Amount, and at all other times,
Lenders having Credit Exposures equal to or more than 51% of the Aggregate
Credit Exposure.
"Restricted Payment": with respect to any Person, any of the following,
whether direct or indirect: (a) the declaration or payment by such Person of any
dividend or distribution on any class of Stock of such Person, other than a
dividend payable solely in shares of that class of Stock to the holders of such
class, (b) the declaration or payment by such Person of any distribution on any
other type or class of equity interest or equity investment in such Person, and
(c) any redemption, retirement, purchase or acquisition of, or sinking fund or
other similar payment in respect of, any class of Stock of, or other type or
class of equity interest or equity investment in, such Person.
"Revolving Credit Loan" and "Revolving Credit Loans": defined in
Section 2.1(a).
"S&P": Standard & Poor's Ratings Group, a division of XxXxxx-Xxxx,
Inc., or any successor thereto.
"Solvent": with respect to any Person on a particular date, the
condition that on such date, (i) the fair value of the Property of such Person
is greater than the total amount of liabilities, including, without limitation,
contingent liabilities, of such Person, (ii) the present fair salable value of
the assets of such Person is not less than the amount that will be required to
pay the probable liability of such Person on its debts as they become absolute
and matured, (iii) such Person does not intend to, and does not believe that it
will, incur debts or liabilities beyond such Person's ability to pay as such
debts and liabilities mature, and (iv) such Person is not engaged in business or
a transaction, and is not about to engage in business or a transaction, for
which such Person's Property would constitute an unreasonably small amount of
capital. For purposes of this definition, the amount of any contingent liability
at any time shall be computed as the amount that, in light of all the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability after taking into account
probable payments by co-obligors.
- 19 -
20
"Special Counsel": Xxxxx, Xxxxxx & Xxxxxx, LLP.
"Stock": any and all shares, interests, participations or other
equivalents (however designated) of corporate stock.
"Stockholder Agreement": the Stockholder Agreement, between the Company
and CVS, substantially in the form filed as an exhibit to the Registration
Statement, as the same may be amended, modified or supplemented from time to
time in accordance with Section 8.9.
"Subsidiary": at any time and from time to time, any corporation,
association, partnership, limited liability company, joint venture or other
business entity of which the Company and/or any Subsidiary of the Company,
directly or indirectly at such time, either (a) in respect of a corporation,
owns or controls more than 50% of the outstanding stock having ordinary voting
power to elect a majority of the board of directors or similar managing body,
irrespective of whether a class or classes shall or might have voting power by
reason of the happening of any contingency, or (b) in respect of an association,
partnership, limited liability company, joint venture or other business entity,
is entitled to share in more than 50% of the profits and losses, however
determined.
"Subsidiary Borrowers": collectively, wholly-owned Subsidiaries of the
Company which are signatories hereto on the Effective Date and each other
Subsidiary of the Company which becomes a party to this Agreement by the
execution of a Borrower Addendum pursuant to Section 2.10; each a "Subsidiary
Borrower".
"Subsidiary Guarantors": collectively, each Subsidiary of the Company
in existence on the Effective Date and each other Subsidiary which becomes a
party to the Subsidiary Guaranty by the execution of a Subsidiary Guaranty
Addendum; each a "Subsidiary Guarantor".
"Subsidiary Guaranty": the guaranty of each Subsidiary in the form of
Exhibit I.
"Subsidiary Guaranty Addendum": an addendum in the form of Annex B to
the Subsidiary Guaranty pursuant to which a new Subsidiary shall become a party
to the Subsidiary Guaranty as required by Section 8.11.
"Swing Line Commitment": the commitment of the Swing Line Lender to
make Swing Line Loans in accordance with the terms hereof, in an aggregate
outstanding prin-
- 20 -
21
cipal amount not exceeding at any time (i) $25,000,000 until December 31, 1996
and (ii) $15,000,000 thereafter, as the same may be reduced pursuant to Section
2.6.
"Swing Line Commitment Period": the period from the Effective Date to,
but excluding, the Swing Line Termination Date.
"Swing Line Exposure": at any time, in respect of any Lender, an amount
equal to the aggregate principal balance of Swing Line Loans at such time
multiplied by such Lender's Commitment Percentage at such time.
"Swing Line Interest Period": as to any Swing Line Loan, the period
commencing on the date of such Swing Line Loan and ending on the date set forth
by the Borrower requesting such Swing Line Loan in the Borrowing Request with
respect thereto; provided that the last day of any Swing Line Interest Period
shall not be earlier than one day after the date of such Swing Line Loan or
later than 7 days after the date of such Swing Line Loan and in no event later
than the Swing Line Termination Date; and provided further that if any Swing
Line Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day.
"Swing Line Lender": BNY.
"Swing Line Loan" and "Swing Line Loans": defined in Section 2.2(a).
"Swing Line Maturity Date": defined in Section 2.2(a).
"Swing Line Participation Amount": defined in Section 2.2(c).
"Swing Line Termination Date": the date which is 10 days prior to the
Commitment Termination Date.
"Tangible Net Worth": at any time of determination, Net Worth less all
assets of the Company and its Subsidiaries included in such Net Worth,
determined on a Consolidated basis at such date, that would be classified as
intangible assets in accordance with GAAP.
"Tax Disaffiliation Agreement": the Tax Disaffiliation Agreement
between the Company and CVS, substantially in the form filed as an exhibit to
the Registration
- 21 -
22
Statement, as the same may be amended, modified or supplemented from time to
time in accordance with Section 8.9.
"Termination Event": with respect to any Pension Plan, (a) a Reportable
Event, (b) the termination of a Pension Plan under Section 4041(c) of ERISA, or
the filing of a notice of intent to terminate a Pension Plan under Section
4041(c) of ERISA, or the treatment of a Pension Plan amendment as a termination
under Section 4041(e) of ERISA (except an amendment made after such Pension Plan
satisfies the requirement for a standard termination under Section 4041(b) of
ERISA), (c) the institution of proceedings by the PBGC to terminate a Pension
Plan under Section 4042 of ERISA, or (d) the appointment of a trustee to
administer any Pension Plan under Section 4042 of ERISA.
"Transitional Services Agreement": the Transitional Services Agreement
between the Company and CVS, substantially in the form filed as an exhibit to
the Registration Statement, as the same may be amended, modified or supplemented
from time to time in accordance with Section 8.9.
"Type": with respect to any Revolving Credit Loan, the characteristic
of such Loan as an ABR Advance or a Eurodollar Advance, each of which
constitutes a Type of Revolving Credit Loan.
"Unqualified Amount": defined in Section 3.4(c).
"Upstream Dividends": defined in Section 8.7.
1.2. Principles of Construction
(a) All capitalized terms defined in this Agreement shall have
the meanings given such capitalized terms herein when used in the other Loan
Documents or in any certificate, opinion or other document made or delivered
pursuant hereto or thereto, unless otherwise expressly provided therein.
(b) Unless otherwise expressly provided herein, the word
"fiscal" when used herein shall refer to the relevant fiscal period of the
Company. As used in the Loan Documents and in any certificate, opinion or other
document made or delivered pursuant thereto, accounting terms not defined in
Section 1.1, and accounting terms partly defined in Section 1.1, to the extent
not defined, shall have the respective meanings given to them under GAAP.
- 22 -
23
(c) The words "hereof", "herein", "hereto" and "hereunder" and
similar words when used in each Loan Document shall refer to such Loan Document
as a whole and not to any particular provision of such Loan Document, and
Section, schedule and exhibit references contained therein shall refer to
Sections thereof or schedules or exhibits thereto unless otherwise expressly
provided therein.
(d) All references herein to a time of day shall mean the then
applicable time in New York, New York, unless otherwise expressly provided
herein.
(e) Section headings have been inserted in the Loan Documents
for convenience only and shall not be construed to be a part thereof. Unless the
context otherwise requires, words in the singular number include the plural, and
words in the plural include the singular.
(f) Whenever in any Loan Document or in any certificate or
other document made or delivered pursuant thereto, the terms thereof require
that a Person sign or execute the same or refer to the same as having been so
signed or executed, such terms shall mean that the same shall be, or was, duly
signed or executed by an Authorized Signatory of such Person.
(g) The words "include" and "including", when used in each
Loan Document, shall mean that the same shall be included "without limitation",
unless otherwise specifically provided.
(h) Certain provisions hereof concerning Credit Parties are
incorporated by reference into other Loan Documents as if fully set forth
therein.
2. AMOUNT AND TERMS OF LOANS
2.1. Revolving Credit Loans
(a) Subject to the terms and conditions hereof, each Lender
severally (and not jointly) agrees to make loans under this Agreement (each a
"Revolving Credit Loan" and, collectively with each other Revolving Credit Loan
of such Lender and/or with each Revolving Credit Loan of each other Lender, the
"Revolving Credit Loans") to one or more Borrowers from time to time during the
Commitment Period, during which
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period the Borrowers may borrow, prepay and reborrow in accordance with the
provisions hereof. Immediately after making each Revolving Credit Loan and after
giving effect to all Swing Line Loans repaid and all Reimbursement Obligations
paid on the same date, the Aggregate Credit Exposure will not exceed the
Aggregate Commitment Amount. With respect to each Lender, at the time of the
making of any Revolving Credit Loan, the sum of (i) the principal amount of such
Lender's Revolving Credit Loan constituting a part of the Revolving Credit Loans
to be made, (ii) the aggregate principal balance of all other Revolving Credit
Loans (exclusive of Revolving Credit Loans which are repaid with the proceeds
of, and simultaneously with the incurrence of, the Revolving Credit Loans to be
made) then outstanding from such Lender and (iii) the product of (A) such
Lender's Commitment Percentage and (B) the sum of (1) the aggregate principal
balance of all Swing Line Loans (exclusive of Swing Line Loans which are repaid
with the proceeds of, and simultaneously with the incurrence of, the respective
Revolving Credit Loans) then outstanding and (2) the Letter of Credit Exposure
of all Lenders, will not exceed the Commitment of such Lender at such time.
During the Commitment Period, each Borrower may borrow, prepay in whole or in
part and reborrow Revolving Credit Loans under the Commitments, all in
accordance with the terms and conditions hereof. At the option of a Borrower,
indicated in its Borrowing Request, Revolving Credit Loans may be made as ABR
Advances or Eurodollar Advances.
(b) The aggregate outstanding principal balance of all
Revolving Credit Loans shall be due and payable on the Commitment Termination
Date or on such earlier date upon which all of the Commitments shall have been
voluntarily terminated by the Borrower in accordance with Section 2.6.
2.2. Swing Line Loans
(a) Subject to the terms and conditions hereof, the Swing Line
Lender agrees to make loans under this Agreement (each a "Swing Line Loan" and,
collectively, the "Swing Line Loans") to one or more Borrowers from time to time
during the Swing Line Commitment Period. Swing Line Loans (i) may be repaid and
reborrowed in accordance with the provisions hereof, (ii) shall not, immediately
after giving effect thereto, result in the Aggregate Credit Exposure exceeding
the Aggregate Commitment Amount, and (iii) shall not, immediately after giving
effect thereto, result in the aggregate outstanding principal balance of all
Swing Line Loans exceeding the Swing Line Commitment. The Swing Line Lender
shall not be obligated to make any Swing Line Loan at a time when any Lender
shall be in default of its obligations under this Agreement unless the Swing
Line Lender has entered into arrangements satisfactory to it and the Company
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to eliminate the Swing Line Lender's risk with respect to such defaulting
Lender's participation in such Swing Line Loan. The Swing Line Lender will not
make a Swing Line Loan if the Agent, or any Lender by notice to the Swing Line
Lender, the Company and the applicable Borrower no later than one Business Day
prior to the Borrowing Date with respect to such Swing Line Loan, shall have
determined that the conditions set forth in Sections 5 and 6 have not been
satisfied and such conditions remain unsatisfied as of the requested time of the
making such Loan. Each Swing Line Loan shall be due and payable on the day (the
"Swing Line Maturity Date") being the earliest of the last day of the Swing Line
Interest Period applicable thereto, the date on which the Swing Line Commitment
shall have been voluntarily terminated in accordance with Section 2.6, and the
date on which the Loans shall become due and payable pursuant to the provisions
hereof, whether by acceleration or otherwise. Each Swing Line Loan shall bear
interest at the Negotiated Rate applicable thereto. The Swing Line Lender shall
disburse the proceeds of Swing Line Loans at its office designated in Section
12.2 by crediting such proceeds to an account of the Borrower thereof maintained
with the Swing Line Lender or as such Borrower shall otherwise direct in its
Borrowing Request therefor.
(b) On any Business Day on which a Swing Line Loan shall be
due and payable and shall remain unpaid, the Swing Line Lender may, in its sole
discretion, give notice to the Lenders and the applicable Borrower that such
outstanding Swing Line Loan shall be funded with a borrowing of Revolving Credit
Loans (provided that such notice shall be deemed to have been automatically
given upon the occurrence of a Default or an Event of Default under Sections
9.1(h) or (i)), in which case a borrowing of Revolving Credit Loans made as ABR
Advances to such Borrower (each such borrowing, a "Mandatory Borrowing"), shall
be made by all Lenders pro rata based on each such Lender's Commitment
Percentage on the Business Day immediately succeeding the giving of such notice.
The proceeds of each Mandatory Borrowing shall be remitted directly to the Swing
Line Lender to repay such outstanding Swing Line Loan. Each Lender irrevocably
agrees to make a Revolving Credit Loan pursuant to each Mandatory Borrowing in
the amount and in the manner specified in the preceding sentence and on the date
specified in writing by the Swing Line Lender notwithstanding: (i) the amount of
such Mandatory Borrowing may not comply with the minimum amount for Loans
otherwise required hereunder, (ii) whether any condition specified in Section 6
is then unsatisfied, (iii) whether a Default or an Event of Default then exists,
(iv) the Borrowing Date of such Mandatory Borrowing, (v) the aggregate principal
amount of all Loans then outstanding, (vi) the Aggregate Credit Exposure at such
time and (vii) the amount of the Commitments at such time.
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(c) Upon each receipt by a Lender of notice of an Event of
Default from the Agent pursuant to Section 10.5, such Lender shall purchase
unconditionally, irrevocably, and severally (and not jointly) from the Swing
Line Lender a participation in the outstanding Swing Line Loans (including
accrued interest thereon) in an amount equal to the product of its Commitment
Percentage and the outstanding balance of the Swing Line Loans (each, a "Swing
Line Participation Amount"). Each Lender shall also be liable for an amount
equal to the product of its Commitment Percentage and any amounts paid by a
Borrower pursuant to this Section that are subsequently rescinded or avoided, or
must otherwise be restored or returned. Such liabilities shall be unconditional
and without regard to the occurrence of any Default or Event of Default or the
compliance by any Borrower with any of its obligations under the Loan Documents.
(d) In furtherance of Section 2.2(c), upon each receipt by a
Lender of notice of an Event of Default from the Agent pursuant to Section 10.5,
such Lender shall promptly make available to the Agent for the account of the
Swing Line Lender its Swing Line Participation Amount at the office of the Agent
specified in Section 12.2, in lawful money of the United States and in
immediately available funds. The Agent shall deliver the payments made by each
Lender pursuant to the immediately preceding sentence to the Swing Line Lender
promptly upon receipt thereof in like funds as received. Each Lender hereby
indemnifies and agrees to hold harmless the Agent and the Swing Line Lender from
and against any and all losses, liabilities (including liabilities for
penalties), actions, suits, judgments, demands, costs and expenses resulting
from any failure on the part of such Lender to pay, or from any delay in paying
the Agent any amount such Lender is required by notice from the Agent to pay in
accordance with this Section upon receipt of notice of an Event of Default from
the Agent pursuant to Section 10.5 (except in respect of losses, liabilities or
other obligations suffered by the Agent or the Swing Line Lender, as the case
may be, resulting from the gross negligence or willful misconduct of the Agent
or the Swing Line Lender, as the case may be), and such Lender shall pay
interest to the Agent for the account of the Swing Line Lender from the date
such amount was due until paid in full, on the unpaid portion thereof, at a rate
of interest per annum, whether before or after judgment, equal to (i) from the
date such amount was due until the third day therefrom, the Federal Funds
Effective Rate, and (ii) thereafter, the Federal Funds Effective Rate plus 2%,
payable upon demand by the Swing Line Lender. The Agent shall distribute such
interest payments to the Swing Line Lender upon receipt thereof in like funds as
received.
(e) Whenever the Agent is reimbursed by a Borrower for the
account of the Swing Line Lender for any payment in connection with Swing Line
Loans made to
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such Borrower and such payment relates to an amount previously paid by a Lender
pursuant to this Section, the Agent will promptly remit such payment to such
Lender.
2.3. Notice of Borrowing-Revolving Credit Loans and Swing Line Loans
Whenever a Borrower desires to borrow Loans hereunder
(excluding Mandatory Loans), the Company on behalf of such Borrower agrees to
notify the Agent (and with respect to a Swing Line Loan, the Swing Line Lender),
which notification shall be irrevocable, no later than (a) 12:00 Noon on the
proposed Borrowing Date in the case of Swing Line Loans, (b) 10:00 A.M. on the
proposed Borrowing Date in the case of Revolving Credit Loans to consist of ABR
Advances and (c) 9:00 A.M. at least two Eurodollar Business Days prior to the
proposed Borrowing Date in the case of Revolving Credit Loans to consist of
Eurodollar Advances. Each such notice shall specify (i) the aggregate amount
requested to be borrowed under the Commitments or the Swing Line Commitment,
(ii) the proposed Borrowing Date, (iii) whether a borrowing of Revolving Credit
Loans is to be of ABR Advances or Eurodollar Advances, and the amount of each
thereof (iv) the Interest Period for such Eurodollar Advances and (v) the Swing
Line Interest Period for, and the amount of, each Swing Line Loan. Each such
notice shall be promptly confirmed by delivery to the Agent (and, with respect
to a Swing Line Loan, the Swing Line Lender) of a Borrowing Request. Each
Eurodollar Advance to be made on a Borrowing Date, when aggregated with all
amounts to be Converted to Eurodollar Advances on such date and having the same
Interest Period as such Eurodollar Advance, shall equal no less than $1,000,000,
or an integral multiple of $1,000,000 in excess thereof, (ii) each ABR Advance
made on each Borrowing Date shall equal no less than $500,000 or an integral
multiple of $100,000 in excess thereof and (iii) each Swing Line Loan made on
each Borrowing Date shall equal no less than $500,000 or an integral multiple of
$100,000 in excess thereof. The Agent shall promptly notify each Lender (by
telephone or otherwise, such notification to be confirmed by fax or other
writing) of each such Borrowing Request. Subject to its receipt of each such
notice from the Agent and subject to the terms and conditions hereof, (A) each
Lender shall make immediately available funds available to the Agent at the
address therefor set forth in Section 12.2 not later than 1:00 P.M. on each
Borrowing Date in an amount equal to such Lender's Commitment Percentage of the
Revolving Credit Loans requested on such Borrowing Date and/or (B) the Swing
Line Lender shall make immediately available funds available to the Borrower
requesting the Swing Line Loan on such Borrowing Date in an amount equal to the
Swing Line Loan requested by such Borrower.
2.4. Use of Proceeds
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Each Borrower agrees that the proceeds of the Loans and
Letters of Credit shall be used solely for its general corporate purposes not
inconsistent with the provisions hereof. Notwithstanding anything to the
contrary contained in any Loan Document, each Borrower further agrees that no
part of the proceeds of any Loan or Letter of Credit will be used, directly or
indirectly, for a purpose which violates any law, rule or regulation of any
Governmental Authority, including the provisions of Regulations G, U or X of the
Board of Governors of the Federal Reserve System, as amended or any provision of
this Agreement, including, without limitation, the provisions of Section 4.9.
2.5. Termination or Reduction of Commitments
(a) Voluntary Termination or Reductions. At the Company's
option and upon at least three Domestic Business Days' prior irrevocable notice
to the Agent, the Company may (i) terminate the Commitments, the Swing Line
Commitment and the Letter of Credit Commitment, at any time, or (ii) permanently
reduce the Aggregate Commitment Amount, the Swing Line Commitment or the Letter
of Credit Commitment, in part at any time and from time to time, provided that
(1) each such partial reduction shall be in an amount equal to at least (i) in
the case of the Aggregate Commitment Amount, $10,000,000 or an integral multiple
of $1,000,000 in excess thereof, (ii) in the case of the Swing Line Commitment,
$1,000,000, or an integral multiple of $1,000,000 in excess thereof, and (iii)
in the case of the Letter of Credit Commitment, $1,000,000, or an integral
multiple of $1,000,000 in excess thereof, and (2) immediately after giving
effect to each such reduction, (i) the Aggregate Commitment Amount shall equal
or exceed the sum of the aggregate outstanding principal balance of all Loans
and the Letter of Credit Exposure, (ii) the Swing Line Commitment shall equal or
exceed the aggregate outstanding principal balance of all Swing Line Loans and
(iii) the Letter of Credit Commitment shall equal or exceed the Letter of Credit
Exposure of all Lenders.
(b) Mandatory Termination The Commitments shall automatically
terminate on February 15, 1997 unless the Effective Date shall have occurred by
such date.
(c) In General. Each reduction of the Aggregate Commitment
Amount shall be made by reducing each Lender's Commitment Amount by a sum equal
to such Lender's Commitment Percentage of the amount of such reduction.
2.6. Prepayments of Loans
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(a) Voluntary Prepayments. Each Borrower may prepay Revolving
Credit Loans and Swing Line Loans, in whole or in part, without premium or
penalty, but subject to Section 3.5 at any time and from time to time, by
notifying the Agent, which notification shall be irrevocable, by 9:00 A.M. at
least two Eurodollar Business Days, in the case of a prepayment of Eurodollar
Advances, or one Domestic Business Day, in the case of a prepayment of ABR
Advances, prior to the proposed prepayment date specifying (i) the Loans to be
prepaid, (ii) the amount to be prepaid, and (iii) the date of prepayment. Upon
receipt of each such notice, the Agent shall promptly notify each Lender
thereof. Each such notice given by a Borrower pursuant to this Section shall be
irrevocable. Each partial prepayment under this Section shall be in a minimum
amount of $1,000,000 ($500,000 in the case of ABR Advances and Swing Line Loans)
or an integral multiple of $1,000,000 ($100,000 in the case of ABR Advances and
Swing Line Loans) in excess thereof.
(b) Mandatory Prepayments.
(i) For 30 consecutive days during each period
beginning on December 15 and ending on the following February 28, commencing on
December 15, 1996, the Borrowers shall prepay and reduce to less than
$35,000,000 the outstanding principal balance of the Loans.
(ii) Subject to clause (iii) below with respect to
Swing Line Loans, simultaneously with each reduction of the Aggregate
Commitments under Section 2.5, the Borrowers shall prepay the Loans by the
amount, if any, by which the Aggregate Credit Exposure exceeds the amount of the
Aggregate Commitments as so reduced.
(iii) Simultaneously with each reduction of the Swing
Line Commitment under Section 2.5, the Borrowers shall prepay the Swing Line
Loans by the amount, if any, by which the outstanding principal balance of the
Swing Line Loans exceeds the amount of the Swing Line Commitment as so reduced.
(iv) If on any Borrowing Date or Conversion Date, the
Aggregate Credit Exposure shall exceed the Aggregate Commitments, the Borrowers
shall prepay the Loans in an aggregate principal amount such that immediately
after giving effect to the Loans or conversion to be made on such Borrowing Date
or Conversion Date the Aggregate Credit Exposure shall not exceed the Aggregate
Commitments.
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(c) In General. Simultaneously with each prepayment hereunder,
the Borrowers shall prepay all accrued interest on the amount prepaid through
the date of prepayment and indemnify the Lenders in accordance with Section 3.5.
2.7. Letter of Credit Sub-facility
(a) Subject to the terms and conditions hereof, the Issuer
agrees, in reliance on the agreement of the other Lenders set forth in Section
2.8, to issue standby and commercial letters of credit (each a "Letter of
Credit" and, collectively, the "Letters of Credit") during the Commitment Period
for the account of a Borrower, provided that immediately after the issuance of
each Letter of Credit (i) the Letter of Credit Exposure of all Lenders shall not
exceed the Letter of Credit Commitment, and (ii) the Aggregate Credit Exposure
would not exceed the Aggregate Commitment Amount. Each Letter of Credit shall
have an expiration date which shall be not later than the earlier to occur of 12
months from the date of issuance thereof or 10 days prior to the Commitment
Termination Date. No Letter of Credit shall be issued if the Agent, or any
Lender by notice to the Agent, the Issuer and the Company no later than 3:00
P.M. one Domestic Business Day prior to the requested date of issuance of such
Letter of Credit, shall have determined that the conditions set forth in
Sections 5 and 6 have not been satisfied and such conditions remain unsatisfied
as of the requested date of issuance of such Letter of Credit.
(b) Each Letter of Credit shall be issued for the account of
the applicable Borrower in support of an obligation of such Borrower in favor of
a beneficiary who has requested the issuance of such Letter of Credit as a
condition to a transaction entered into in connection with such Borrower's
ordinary course of business. The Company on behalf of a Borrower shall give the
Agent a Letter of Credit Request for the issuance of each Letter of Credit by
12:00 Noon at least two Domestic Business Days (or such other period as the
Issuer and the Company may agree) prior to the requested date of issuance. Upon
receipt of such Letter of Credit Request from a Borrower, the Agent shall
promptly notify the Issuer and each other Lender thereof. The Issuer shall, on
the proposed date of issuance and subject to the other terms and conditions of
this Agreement, issue the requested Letter of Credit. Each Letter of Credit
shall be in form and substance reasonably satisfactory to the Issuer, with such
provisions with respect to the conditions under which a drawing may be made
thereunder and the documentation required in respect of such drawing as the
Issuer shall reasonably require. Each Letter of Credit shall be used solely for
the purposes described therein.
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(c) Each payment by the Issuer of a draft drawn under a Letter
of Credit shall give rise to the obligation of the applicable Borrower to
immediately reimburse the Issuer for the amount thereof. If all or any portion
of any reimbursement obligation in respect of a Letter of Credit shall not be
paid when due (whether at the stated maturity thereof, by acceleration or
otherwise), such overdue amount shall bear interest, payable upon demand, at a
rate per annum equal to the Alternate Base Rate plus the Applicable Margin
applicable to ABR Advances plus 2%, from the date of such nonpayment until paid
in full (whether before or after the entry of a judgment thereon).
2.8. Letter of Credit Participation
(a) Each Lender hereby unconditionally and irrevocably,
severally (and not jointly) takes an undivided participating interest in the
obligations of the Issuer under and in connection with each Letter of Credit in
an amount equal to such Lender's Commitment Percentage of the amount of such
Letter of Credit. Each Lender shall be liable to the Issuer for its Commitment
Percentage of the unreimbursed amount of any draft drawn and honored under each
Letter of Credit. Each Lender shall also be liable for an amount equal to the
product of its Commitment Percentage and any amounts paid by a Borrower pursuant
to Sections 2.7 and 2.9 that are subsequently rescinded or avoided, or must
otherwise be restored or returned. Such liabilities shall be unconditional and
without regard to the occurrence of any Default or Event of Default or the
compliance by any Borrower with any of its obligations under the Loan Documents.
(b) The Issuer shall promptly notify the Agent, and the Agent
shall promptly notify each Lender (which notice shall be promptly confirmed in
writing), of the date and the amount of each draft paid under each Letter of
Credit with respect to which full reimbursement payment shall not have been made
by the applicable Borrower as provided in Section 2.8(c), and forthwith upon
receipt of such notice, such Lender shall promptly make available to the Agent
for the account of the Issuer its Commitment Percentage of the amount of such
unreimbursed draft at the office of the Agent specified in Section 12.2 in
lawful money of the United States and in immediately available funds. The Agent
shall distribute the payments made by each Lender pursuant to the immediately
preceding sentence to the Issuer promptly upon receipt thereof in like funds as
received. Each Lender shall indemnify and hold harmless the Agent and the Issuer
from and against any and all losses, liabilities (including liabilities for
penalties), actions, suits, judgments, demands, costs and expenses (including,
without limitation, reasonable attorneys' fees and expenses) resulting from any
failure on the part of such Lender to provide, or from any delay in providing,
the Agent with such Lender's Commitment Percentage of the amount
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of any payment made by the Issuer under a Letter of Credit in accordance with
this clause (b) above (except in respect of losses, liabilities or other
obligations suffered by the Agent or the Issuer, as the case may be, resulting
from the gross negligence or willful misconduct of the Agent or the Issuer, as
the case may be). If a Lender does not make available to the Agent when due such
Lender's Commitment Percentage of any unreimbursed payment made by the Issuer
under a Letter of Credit, such Lender shall be required to pay interest to the
Agent for the account of the Issuer on such Lender's Commitment Percentage of
such payment at a rate of interest per annum equal to (i) from the date such
Lender should have made such amount available until the third day therefrom, the
Federal Funds Effective Rate, and (ii) thereafter, the Federal Funds Effective
Rate plus 2%, in each case payable upon demand by the Issuer. The Agent shall
distribute such interest payments to the Issuer upon receipt thereof in like
funds as received.
(c) Whenever the Agent is reimbursed by a Borrower, for the
account of the Issuer, for any payment under a Letter of Credit and such payment
relates to an amount previously paid by a Lender in respect of its Commitment
Percentage of the amount of such payment under such Letter of Credit, the Agent
(or the Issuer, if such payment by a Lender was paid by the Agent to the Issuer)
will promptly pay over such payment to such Lender.
2.9. Absolute Obligation with respect to Letter of Credit Payments
A Borrower's obligation to reimburse the Agent for the account
of the Issuer for each payment under or in respect of each Letter of Credit
shall be absolute and unconditional under any and all circumstances and
irrespective of any set-off, counterclaim or defense to payment which such
Borrower may have or have had against the beneficiary of such Letter of Credit,
the Agent, the Issuer, the Swing Line Lender, any Lender or any other Person,
including, without limitation, any defense based on the failure of any drawing
to conform to the terms of such Letter of Credit, any drawing document proving
to be forged, fraudulent or invalid, or the legality, validity, regularity or
enforceability of such Letter of Credit, provided, however, that, with respect
to any Letter of Credit, the foregoing shall not relieve the Issuer of any
liability it may have to a Borrower for any actual damages sustained by such
Borrower arising from a wrongful payment under such Letter of Credit made as a
result of the Issuer's gross negligence or willful misconduct.
2.10. Borrower Addenda
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Provided that no Default or Event of Default has occurred and
is continuing, the Company may direct that any of its domestic wholly-owned
Subsidiaries which is a Subsidiary Guarantor and which is not then a Borrower
become a Borrower by submitting a Borrower Addendum to the Agent with respect to
such Subsidiary duly executed by an Authorized Signatory of each of the Company
and such Subsidiary together with (a) a certificate, dated the date of such
Borrower Addendum of the Secretary or Assistant Secretary of such Subsidiary (i)
attaching a true and complete copy of the resolutions of its Board of Directors
and of all documents evidencing other necessary corporate action (in form and
substance satisfactory to the Agent) taken by it to authorize such Borrower
Addendum, this Agreement and the transactions contemplated hereby, (ii)
attaching a true and complete copy of its certificate of incorporation, by-laws
or other organizational documents, (iii) setting forth the incumbency of its
officer or officers who may sign such Borrower Addendum, including therein a
signature specimen of such officer or officers and (iv) attaching a certificate
of good standing (or equivalent) issued by the jurisdiction of its incorporation
or formation, and (b) an opinion of counsel to such Subsidiary with respect to
such Borrower Addendum in all respects reasonably satisfactory to the Agent.
Upon receipt of a Borrower Addendum and the supporting documentation referred to
above, the Agent shall confirm such Borrower Addendum by signing a copy thereof
and shall deliver a copy thereof to the Company and each Lender. Thereupon the
Subsidiary which executed such Borrower Addendum shall become a "Subsidiary
Borrower" hereunder.
2.11. Records; Notes
(a) Lender's Records. Each Lender will note (manually or
electronically) on its records with respect to each Loan made by it (i) the date
and amount of such Loan, (ii) whether such Loan is a Revolving Loan or a Swing
Line Loan, (iii) the identity of the Borrower thereof, (iv) the interest rate
(in the case of a Eurodollar Advance or a Swing Line Loan) and Interest Period,
if any, applicable to such Loan and (v) each payment and prepayment of the
principal thereof.
(b) Agent's Records. The Agent shall keep records regarding
the Loans, the Letters of Credit and this Agreement in accordance with its
customary procedures for agented credits.
(c) Prima Facie Evidence. The entries made in the records
maintained pursuant to subsections (a) and (b) above shall, to the extent not
prohibited by applicable law, be prima facie evidence of the existence and
amount of the obligations of the
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Company and each Borrower recorded therein; provided, however, that the failure
of the Agent or any Lender, as the case may be, to make any notation on its
records shall not affect the Company's or the respective Borrower's obligations
in respect of the Loans, the Letters of Credit or this Agreement.
(d) Notes. Upon the request of any Lender (in connection with
a proposed assignment to a Federal Reserve Bank as contemplated by Section
12.7(b)) to the Agent and each Borrower, each Borrower agrees, at the expense of
the Company, to execute and deliver to the Agent for the account of such Lender
one or more promissory notes evidencing the Loan or Loans of such Lender to such
Borrower, in form and substance satisfactory to the Agent and such Lender.
3. PROCEEDS, PAYMENTS, CONVERSIONS, INTEREST, YIELD PROTECTION AND FEES
3.1. Disbursement of the Proceeds of the Loans
The Agent shall disburse the proceeds of the Loans (other than
the Swing Line Loans) at its office specified in Section 12.2 by crediting to
the applicable Borrower's general deposit account with the Agent the funds
received from each Lender. Unless the Agent shall have received prior notice
from a Lender (by telephone or otherwise, such notice to be confirmed by fax or
other writing) that such Lender will not make available to the Agent such
Lender's Commitment Percentage of the Revolving Credit Loans, to be made by it
on a Borrowing Date, the Agent may assume that such Lender has made such amount
available to the Agent on such Borrowing Date in accordance with this Section,
provided that such Lender received notice thereof from the Agent in accordance
with the terms hereof, and the Agent may, in reliance upon such assumption, make
available to the applicable Borrower on such Borrowing Date a corresponding
amount. If and to the extent such Lender shall not have so made such amount
available to the Agent, such Lender and the applicable Borrower severally agree
to pay to the Agent, forthwith on demand, such corresponding amount (to the
extent not previously paid by the other), together with interest thereon for
each day from the date such amount is made available to such Borrower until the
date such amount is paid to the Agent, at a rate per annum equal to, in the case
of such Borrower, the applicable interest rate set forth in Section 3.4(a) and,
in the case of such Lender, the Federal Funds Effective Rate from the date such
payment is due until the third day after such date and, thereafter, at the
Federal Funds Effective Rate plus 2%. Any such payment by an applicable Borrower
shall be without
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prejudice to its rights against such Lender. If such Lender shall pay to the
Agent such corresponding amount, such amount so paid shall constitute such
Lender's Loan as part of such Loans to such Borrower for purposes of this
Agreement, which Loan shall be deemed to have been made by such Lender to such
Borrower on the Borrowing Date applicable to such Loans.
3.2. Payments
(a) Each borrowing of Revolving Credit Loans by a Borrower
from the Lenders, any Conversion of Revolving Credit Loans from one Type to
another, and any reduction in the Commitments shall be made pro rata according
to the Commitment Percentage of each Lender. Each payment, including each
prepayment, of principal and interest on the Loans and of the Commitment Fee and
the Letter of Credit Participation Fee (collectively, together with all of the
other fees to be paid to the Agent, the Lenders, the Issuer and the Swing Line
Lender in connection with the Loan Documents, the "Fees"), and of all of the
other amounts to be paid to the Agent and the Lenders in connection with the
Loan Documents shall be made by the Company and the Borrowers to the Agent at
its office specified in Section 12.2 in funds immediately available in New York
by 3:00 P.M. on the due date for such payment. The failure of a Borrower to make
any such payment by such time shall not constitute a default hereunder, provided
that such payment is made on such due date, but any such payment made after 3:00
P.M. on such due date shall be deemed to have been made on the next Domestic
Business Day or Eurodollar Business Day, as the case may be, for the purpose of
calculating interest on amounts outstanding on the Loans. If the Company or a
Borrower has not made any such payment prior to 3:00 P.M., the Company and such
Borrower hereby authorize the Agent to deduct the amount of any such payment
from such account(s) as the Company and such Borrower may from time to time
designate in writing to the Agent, upon which the Agent shall apply the amount
of such deduction to such payment. Promptly upon receipt thereof by the Agent,
each payment of principal and interest on the: (i) Revolving Credit Loans shall
be remitted by the Agent in like funds as received to each Lender (a) first, pro
rata according to the amount of interest which is then due and payable to the
Lenders, and (b) second, pro rata according to the amount of principal which is
then due and payable to the Lenders and (ii) Swing Line Loans shall be remitted
by the Agent in like funds as received to the Swing Line Lender. Each payment of
the Fees shall be promptly transmitted by the Agent in like funds as received to
each party entitled thereto pro rata to each Lender in the case of the
Commitment Fee and the Letter of Credit Participation Fee according to such
Lender's Commitment Amount or, if the Commitments shall have terminated or been
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terminated, according to the outstanding principal amount of such Lender's
Revolving Credit Loans or Letter of Credit Exposure, respectively.
(b) If any payment hereunder or under the Loans shall be due
and payable on a day which is not a Domestic Business Day or Eurodollar Business
Day, as the case may be, the due date thereof (except as otherwise provided in
the definition of Eurodollar Interest Period) shall be extended to the next
Domestic Business Day or Eurodollar Business Day, as the case may be, and
(except with respect to payments in respect of the Commitment Fee and in respect
of the Letter of Credit Participation Fee) interest shall be payable at the
applicable rate specified herein during such extension.
3.3. Conversions; Other Matters
(a) The Company on behalf of a Borrower may elect at any time
and from time to time to Convert one or more Eurodollar Advances to an ABR
Advance by giving the Agent at least one Domestic Business Day's prior
irrevocable notice of such election, specifying the amount to be so Converted,
provided that any such Conversion shall only be made on the last day of the
Interest Period applicable to each such Eurodollar Advance. In addition, a
Borrower may elect from time to time to Convert an ABR Advance to any one or
more new Eurodollar Advances or to Convert any one or more existing Eurodollar
Advances to any one or more new Eurodollar Advances by giving the Agent at least
two Eurodollar Business Days' prior irrevocable notice, in the case of a
Conversion to Eurodollar Advances, of such election, specifying the amount to be
so Converted and the initial Interest Period relating thereto, provided that (i)
any Conversion of an ABR Advance to Eurodollar Advances shall only be made on a
Eurodollar Business Day and (ii) any Conversion of Eurodollar Advances shall
only be made on the last day of the Interest Period applicable thereto. The
Agent shall promptly provide the Lenders with notice of each such election. ABR
Advances and Eurodollar Advances may be Converted pursuant to this Section in
whole or in part, provided that the amount to be Converted to each Eurodollar
Advance, when aggregated with any Eurodollar Advance to be made on such date in
accordance with Section 2.1 and having the same Interest Period as such first
Eurodollar Advance, shall equal no less than $1,000,000 or an integral multiple
of $1,000,000 in excess thereof.
(b) Notwithstanding anything in this Agreement to the
contrary, upon the occurrence and during the continuance of a Default or an
Event of Default, no Borrower shall have the right to elect to Convert any
existing ABR Advance to a new Eurodollar Advance or to Convert any existing
Eurodollar Advance to a new Eurodollar Ad-
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xxxxx. In such event, such ABR Advance shall be automatically continued as an
ABR Advance or such Eurodollar Advance shall be automatically Converted to an
ABR Advance on the last day of the Interest Period applicable to such Eurodollar
Advance. The foregoing shall not affect any other rights or remedies that the
Agent or any Lender may have under this Agreement, any other Loan Document or
the CVS Subordinated Note.
(c) Each Conversion shall be effected by each Lender by
applying the proceeds of each new ABR Advance or Eurodollar Advance, as the case
may be, to the existing Advance (or portion thereof) being Converted (it being
understood that such Conversion shall not constitute a borrowing for purposes of
Sections 4, 5 or 6).
(d) Notwithstanding any other provision of any Loan Document:
(i) if a Borrower shall have failed to elect a
Eurodollar Advance under Section 2.3 or this Section 3.3, as the case
may be, in connection with any borrowing of new Revolving Credit Loans
or expiration of an Interest Period with respect to any existing
Eurodollar Advance, the amount of the Revolving Credit Loans subject to
such borrowing or such existing Eurodollar Advance shall thereafter be
an ABR Advance until such time, if any, as such Borrower shall elect a
new Eurodollar Advance pursuant to this Section 3.3,
(ii) a Borrower shall not be permitted to select a
Eurodollar Advance the Interest Period in respect of which ends later
than the Commitment Termination Date or such earlier date upon which
all of the Commitments shall have been voluntarily terminated in
accordance with Section 2.6, and
(iii) the Borrowers shall not be permitted to have
more than 12 Eurodollar Advances outstanding at any one time, it being
understood and agreed that each borrowing of Eurodollar Advances
pursuant to a single Borrowing Request shall constitute the making of
one Eurodollar Advance for the purpose of calculating such limitation.
3.4. Interest Rates and Payment Dates
(a) Prior to Maturity. Except as otherwise provided in
Sections 3.4(b) and 3.4(c), the Loans shall bear interest on the unpaid
principal balance thereof at the applicable interest rate or rates per annum set
forth below:
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LOANS RATE
Revolving Credit Loans Alternate Base Rate applicable
made as ABR Advances thereto plus the Applicable Margin.
Revolving Credit Loans Eurodollar Rate applicable
made as Eurodollar thereto
Advances plus the Applicable Margin.
Swing Line Loans Negotiated Rate applicable
thereto as provided in
Section 2.2(a).
(b) After Maturity, Late Payment Rate. After maturity, whether
by acceleration, notice of intention to prepay or otherwise, the outstanding
principal balance of the Loans shall bear interest at the Alternate Base Rate
plus 2% per annum until paid (whether before or after the entry of any judgment
thereon). Any payment of principal, interest, Fees or any other amount payable
under the Loan Documents not paid on the date when due and payable shall bear
interest at (i) in the case of principal, the applicable interest rate set forth
in Section 3.4(a) plus 2% per annum and (ii) in the case of interest, Fees or
any other amount payable under the Loan Documents, the Alternate Base Rate plus
the Applicable Margin plus 2% per annum, in each case from the due date thereof
until the date such payment is made (whether before or after the entry of any
judgment thereon.
(c) Highest Lawful Rate. Notwithstanding anything to the
contrary contained in this Agreement, at no time shall the interest rate payable
to any Lender on any of its Loans, together with the Fees and all other amounts
payable hereunder to such Lender to the extent the same constitute or are deemed
to constitute interest, exceed the Highest Lawful Rate. If in respect of any
period during the term of this Agreement, any amount paid to any Lender
hereunder, to the extent the same shall (but for the provisions of this Section
3.4) constitute or be deemed to constitute interest, would exceed the maximum
amount of interest permitted by the Highest Lawful Rate during such period (such
amount being hereinafter referred to as an "Unqualified Amount"), then (i) such
Unqualified Amount shall be applied or shall be deemed to have been applied as a
prepayment of the Loans of such Lender, and (ii) if, in any subsequent period
during the term of this Agreement, all amounts payable hereunder to such Lender
in respect of such period which con-
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stitute or shall be deemed to constitute interest shall be less than the maximum
amount of interest permitted by the Highest Lawful Rate during such period, then
the applicable Borrower shall pay to such Lender in respect of such period an
amount (each a "Compensatory Interest Payment") equal to the lesser of (x) a sum
which, when added to all such amounts, would equal the maximum amount of
interest permitted by the Highest Lawful Rate during such period, and (y) an
amount equal to the aggregate sum of all Unqualified Amounts less all other
Compensatory Interest Payments.
(d) General. Interest shall be payable in arrears on each
Interest Payment Date and, to the extent provided in Section 2.7(b), upon each
prepayment of the Loans. Any change in the interest rate on the Loans resulting
from an increase or a decrease in the Alternate Base Rate or any reserve
requirement shall become effective as of the opening of business on the day on
which such change shall become effective. The Agent shall, as soon as
practicable, notify the Company on behalf of all Borrowers and the Lenders of
the effective date and the amount of each change in the BNY Rate, but any
failure to so notify shall not in any manner affect the obligation of the
Borrowers to pay interest on the Loans in the amounts and on the dates set forth
herein. Each determination by the Agent of the Alternate Base Rate, the Federal
Funds Effective Rate and the Eurodollar Rate pursuant to this Agreement shall be
conclusive and binding on the Borrowers absent manifest error. Each Borrower
acknowledges that to the extent interest payable on the Loans is based on the
Alternate Base Rate, such rate is only one of the bases for computing interest
on loans made by the Lenders, and by basing interest payable on ABR Advances on
the Alternate Base Rate, the Lenders have not committed to charge, and the
Borrowers have not in any way bargained for, interest based on a lower or the
lowest rate at which the Lenders may now or in the future make extensions of
credit to other Persons. All interest (other than interest calculated with
reference to the BNY Rate) shall be calculated on the basis of a 360-day year
for the actual number of days elapsed, and all interest calculated with
reference to the BNY Rate shall be made on the basis of a 365/366-day year for
the actual number of days elapsed.
3.5. Indemnification for Loss
Notwithstanding anything contained herein to the contrary, if
a Borrower shall fail to borrow a Eurodollar Advance or if a Borrower shall fail
to Convert a Eurodollar Advance after it shall have given notice to do so in
which it shall have requested a Eurodollar Advance pursuant to Section 2.3 or
3.3, as the case may be, or if the Borrower shall fail to borrow a Swing Line
Loan after it shall have agreed to a Negotiated Rate with respect thereto in
accordance with Section 2.2(a), or if a Eurodollar Advance or
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Swing Line Loan shall be terminated for any reason prior to the last day of the
Interest Period applicable thereto, or if any repayment or prepayment of the
principal amount of a Eurodollar Advance or Swing Line Loan is made for any
reason on a date which is prior to the last day of the Interest Period
applicable thereto, such Borrower agrees to indemnify each Lender (or the Swing
Line Lender, as applicable) against, and to pay on demand directly to such
Lender the amount (calculated by such Lender using any method chosen by such
Lender which is customarily used by such Lender for such purpose) equal to any
loss or expense suffered by such Lender as a result of such failure to borrow or
Convert, or such termination, repayment or prepayment, including any loss, cost
or expense suffered by such Lender in liquidating or employing deposits acquired
to fund or maintain the funding of such Eurodollar Advance or Swing Line Loan,
as the case may be, or redeploying funds prepaid or repaid, in amounts which
correspond to such Eurodollar Advance or Swing Line Loan, as the case may be,
and any reasonable internal processing charge customarily charged by such Lender
in connection therewith.
3.6. Reimbursement for Costs, Etc.
If at any time or from time to time there shall occur a
Regulatory Change and the Issuer or any Lender shall have reasonably determined
that such Regulatory Change (i) shall have had or will thereafter have the
effect of reducing (A) the rate of return on the Issuer's or such Lender's
capital or the capital of any Person directly or indirectly owning or
controlling the Issuer or such Lender (each a "Control Person"), or (B) the
asset value (for capital purposes) to the Issuer or such Lender or such Control
Person, as applicable, of the Reimbursement Obligations, or any participation
therein, or the Loans, or any participation therein, in any case to a level
below that which the Issuer or such Lender or such Control Person could have
achieved or would thereafter be able to achieve but for such Regulatory Change
(after taking into account the Issuer's, such Lender's or such Control Person's
policies regarding capital), (ii) will impose, modify or deem applicable any
reserve, asset, special deposit or special assessment requirements on deposits
obtained in the interbank eurodollar market in connection with the Loan
Documents (excluding, with respect to any Eurodollar Advance, any such
requirement which is included in the determination of the rate applicable
thereto), (iii) will subject the Issuer, or such Lender or such Control Person,
as applicable, to any tax (documentary, stamp or otherwise) with respect to this
Agreement, any Loan Document, or (iv) will change the basis of taxation of
payments to the Issuer or such Lender or such Control Person, as applicable, of
principal, interest or fees payable under the Loan Documents (except, in the
case of clauses (iii) and (iv) above, for any tax or changes in the rate of tax
on the Issuer's, or such Lender's or such Control Person's net income) then, in
each such case,
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within ten days after demand by the Issuer or such Lender, as applicable, the
Company shall pay to the Issuer, such Lender or such Control Person, as the case
may be, such additional amount or amounts as shall be sufficient to compensate
the Issuer, such Lender or such Control Person, as the case may be, for any such
reduction, reserve or other requirement, tax, loss, cost or expense (excluding
general administrative and overhead costs) attributable to the Issuer's, such
Lender's or such Control Person's compliance during the term hereof with such
Regulatory Change. The Issuer and each Lender may make multiple requests for
compensation under this Section.
3.7. Illegality of Funding
Notwithstanding any other provision hereof, if any Lender
shall reasonably determine that any law, regulation, treaty or directive, or any
change therein or in the interpretation or application thereof, shall make it
unlawful for such Lender to make or maintain any Eurodollar Advance as
contemplated by this Agreement, such Lender shall promptly notify the Company on
behalf of all Borrowers and the Agent thereof, and (a) the commitment of such
Lender to make such Eurodollar Advances or Convert ABR Advances to such
Eurodollar Advances shall forthwith be suspended, (b) such Lender shall fund its
portion of each requested Eurodollar Advance as an ABR Advance and (c) such
Lender's Loans then outstanding as such Eurodollar Advances, if any, shall be
Converted automatically to an ABR Advance on the last day of the then current
Interest Period applicable thereto or at such earlier time as may be required.
If the commitment of any Lender with respect to Eurodollar Advances is suspended
pursuant to this Section and such Lender shall have obtained actual knowledge
that it is once again legal for such Lender to make or maintain Eurodollar
Advances, such Lender shall promptly notify the Agent and the Company on behalf
of all Borrowers thereof and, upon receipt of such notice by each of the Agent
and the Company, such Lender's commitment to make or maintain Eurodollar
Advances shall be reinstated. If the commitment of any Lender with respect to
Eurodollar Advances is suspended pursuant to this Section, such suspension shall
not otherwise affect such Lender's Commitment.
3.8. Option to Fund; Substituted Interest Rate
(a) Each Lender has indicated that, if a Borrower requests a
Swing Line Loan or a Eurodollar Advance, such Lender may wish to purchase one or
more deposits in order to fund or maintain its funding of its Commitment
Percentage of such Swing Line Loan or Eurodollar Advance during the Interest
Period with respect thereto; it being understood that the provisions of this
Agreement relating to such funding are included
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only for the purpose of determining the rate of interest to be paid in respect
of such Swing Line Loan or Eurodollar Advance and any amounts owing under
Sections 3.5 and 3.6. The Swing Line Lender and each Lender shall be entitled to
fund and maintain its funding of all or any part of each Swing Line Loan and
Eurodollar Advance in any manner it sees fit, but all such determinations
hereunder shall be made as if such Lender had actually funded and maintained its
Swing Line Loan or its Commitment Percentage of each Eurodollar Advance during
the applicable Interest Period through the purchase of deposits in an amount
equal to the amount of such Swing Line Loan or Eurodollar Advance, and having a
maturity corresponding to such Interest Period. The Swing Line Lender, with
respect to Swing Line Loans, and any Lender may fund its Commitment Percentage
of each Eurodollar Advance from or for the account of any branch or office of
such Lender as such Lender may choose from time to time, subject to Section
3.10.
(b) In the event that (i) the Agent shall have determined in
good faith (which determination shall be conclusive and binding upon the
Borrower) that by reason of circumstances affecting the interbank eurodollar
market either adequate and reasonable means do not exist for ascertaining the
Eurodollar Rate applicable pursuant to Section 2.3 or Section 3.3, or (ii) the
Required Lenders shall have notified the Agent that they have in good faith
determined (which determination shall be conclusive and binding on the
Borrowers) that the applicable Eurodollar Rate will not adequately and fairly
reflect the cost to such Lenders of maintaining or funding loans bearing
interest based on such Eurodollar Rate with respect to any portion of the Loans
that a Borrower has requested be made as Eurodollar Advances or any Eurodollar
Advance that will result from the requested conversion of any portion of the
Loans into Eurodollar Advances (each, an "Affected Advance"), the Agent shall
promptly notify the Company on behalf of the Borrowers and the Lenders (by
telephone or otherwise, to be promptly confirmed in writing) of such
determination on or, to the extent practicable, prior to the requested Borrowing
Date or conversion date for such Affected Advances. If the Agent shall give such
notice, (A) any Affected Advances shall be made as ABR Advances, (B) the Loans
(or any portion thereof) that were to have been Converted to Affected Advances
shall be Converted to or continued as ABR Advances, and (C) any outstanding
Affected Advances shall be Converted, on the last day of the then current
Interest Period with respect thereto, to ABR Advances. Until any notice under
clauses (i) or (ii), as the case may be, of this Section 3.8(b) has been
withdrawn by the Agent (by notice to the Company on behalf of the Borrowers)
promptly upon either (x) the Agent having determined that such circumstances
affecting the relevant market no longer exist and that adequate and reasonable
means do exist for determining the Eurodollar Rate pursuant to Section 2.3 or
Section 3.3, or (y) the Agent having been notified by such Required Lenders that
circumstances no
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longer render the Loans (or any portion thereof) Affected Advances, no further
Eurodollar Advances shall be required to be made by the Lenders nor shall the
Borrowers have the right to Convert all or any portion of the Loans to
Eurodollar Advances.
3.9. Certificates of Payment and Reimbursement
Each of the Issuer and each Lender agrees, in connection with
any request by it for payment or reimbursement pursuant to Section 3.5 or 3.6,
to provide the applicable Borrower with a certificate, signed by an officer of
the Issuer or such Lender, as the case may be, setting forth a description in
reasonable detail of any such payment or reimbursement. Each determination by
the Issuer and each Lender of such payment or reimbursement shall be conclusive
absent manifest error.
3.10. Taxes; Net Payments
(a) All payments made by the Borrowers under the Loan
Documents shall be made free and clear of, and without reduction for or on
account of, any taxes required by law to be withheld from any amounts payable
under the Loan Documents. In the event that a Borrower is prohibited by law from
making such payments free of deductions or withholdings, then such Borrower
shall pay such additional amounts to the Agent, for the benefit of the Issuer
and the Lenders, as may be necessary in order that the actual amounts received
by the Issuer and the Lenders in respect of interest and any other amounts
payable under the Loan Documents after deduction or withholding (and after
payment of any additional taxes or other charges due as a consequence of the
payment of such additional amounts) shall equal the amount that would have been
received if such deduction or withholding were not required. In the event that
any such deduction or withholding can be reduced or nullified as a result of the
application of any relevant double taxation convention, the Lenders, the Issuer
and the Agent will, at the expense of the applicable Borrower, cooperate with
such Borrower in making application to the relevant taxing authorities seeking
to obtain such reduction or nullification, provided that the Lenders, the Issuer
and the Agent shall have no obligation to (i) engage in litigation with respect
thereto or (ii) disclose any tax return or other confidential information. If a
Borrower shall make any payment under this Section or shall make any deduction
or withholding from amounts paid under any Loan Document, such Borrower shall
forthwith forward to the Agent original or certified copies of official receipts
or other evidence acceptable to the Agent establishing each such payment,
deduction or withholding, as the case may be, and the Agent in turn shall
distribute copies thereof to the Issuer and each Lender. If any payment to the
Issuer or any Lender under any Loan Document is or becomes subject to
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any withholding, the Issuer or such Lender, as the case may be, shall (unless
otherwise required by a Governmental Authority or as a result of any law, rule,
regulation, order or similar directive applicable to the Issuer or such Lender,
as the case may be) designate a different office or branch to which such payment
is to be made from that initially selected thereby, if such designation would
avoid such withholding and would not be otherwise disadvantageous to the Issuer
or such Lender, as the case may be, in any respect. In the event that the Issuer
or any Lender determines that it received a refund or credit for taxes paid by a
Borrower under this Section, the Issuer or such Lender, as the case may be,
shall promptly notify the Agent and such Borrower of such fact and shall remit
to such Borrower the amount of such refund or credit applicable to the payments
made by such Borrower in respect of the Issuer or such Lender, as the case may
be, under this Section.
(b) So long as it is lawfully able to do so, each Lender not
incorporated under the laws of the United States or any State thereof shall
deliver to the Company on behalf of itself and the other Borrowers such
certificates, documents, or other evidence as a Borrower may reasonably require
from time to time as are necessary to establish that such Lender is not subject
to withholding under Section 1441, 1442 or 3406 of the Internal Revenue Code or
as may be necessary to establish, under any law imposing upon such Borrower,
hereafter, an obligation to withhold any portion of the payments made by such
Borrower under the Loan Documents, that payments to the Agent on behalf of such
Lender are not subject to withholding. Notwithstanding any provision herein to
the contrary, a Borrower shall have no obligation to pay to the Issuer, the
Swing Line Lender or any Lender any amount which such Borrower is liable to
withhold due to the failure of the Issuer, the Swing Line Lender or such Lender,
as the case may be, to file any statement of exemption required by the Internal
Revenue Code.
3.11. Commitment Fee
The Company agrees to pay to the Agent for the pro rata
account of each Lender a fee (the "Commitment Fee"), payable quarterly in
arrears during the period commencing on the Execution Date and ending on the
Expiration Date on the last day of each March, June, September and December of
each year, commencing on the last day of the calendar quarter in which the
Execution Date shall have occurred, and on the Expiration Date, at a rate per
annum equal to the Applicable Margin of the difference between (i) such Lender's
Commitment and (ii) the sum of the outstanding principal balance of all
Revolving Credit Loans of such Lender, such Lender's Swing Line Exposure and
such Lender's Letter of Credit Exposure. Notwithstanding anything to the
contrary contained in this Section, on and after the Commitment Termination
Date, the
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Commitment Fee shall be payable upon demand. In addition, upon each reduction of
the Aggregate Commitment Amount, the Company shall pay the Commitment Fee
accrued on the amount of such reduction through the date of such reduction. The
Commitment Fee shall be computed on the basis of a 360-day year for the actual
number of days elapsed.
3.12. Letter of Credit Participation Fee
The Company agrees to pay to the Agent for the pro rata
account of each Lender a fee (the "Letter of Credit Participation Fee") with
respect to each Standby Letter of Credit and Commercial Letter of Credit,
payable quarterly in arrears during the period commencing on the Effective Date
and ending on the Commitment Termination Date on the last day of each March,
June, September and December of each year, commencing on the last day of the
calendar quarter in which the Effective Date shall have occurred, and ending on
the expiration date or the date of termination of such Letter of Credit, at a
rate per annum equal to the Applicable Margin of the average daily amount which
may be drawn under such Letter of Credit during such period (whether or not the
conditions for drawing thereunder have or may be satisfied) multiplied by such
Lender's Commitment Percentage. The Letter of Credit Participation Fee shall be
computed on the basis of a 360-day year for the actual number of days elapsed.
4. REPRESENTATIONS AND WARRANTIES
In order to induce the Agent, the Lenders and the Issuer to enter into
this Agreement, the Lenders to make the Loans and the Issuer to issue Letters of
Credit, the Company (on behalf of itself and all Borrowers) hereby makes the
following representations and warranties to the Agent, the Lenders and the
Issuer:
4.1. Existence and Power
Each of the Company and the Subsidiaries is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or formation (except, in the case of the Subsidiaries, where the
failure to be in such good standing could not reasonably be expected to have a
Material Adverse effect), has all requisite corporate power and authority to own
its Property and to carry on its business as now conducted, and is qualified to
do business as a foreign corporation and is in good standing in each
jurisdiction in which it owns or leases real Property or in which the nature of
its business requires it to be so qualified (except those jurisdictions where
the failure to be so
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qualified or to be in good standing could not reasonably be expected to have a
Material Adverse effect).
4.2. Authority
Each Credit Party has full corporate power and authority to
enter into, execute, deliver and perform the terms of the Loan Documents to
which it is a party, all of which have been duly authorized by all proper and
necessary corporate action and are not in contravention of any applicable law or
the terms of its Certificate of Incorporation and By-Laws. No consent or
approval of, or other action by, shareholders of any Credit Party, any
Governmental Authority, or any other Person (which has not already been
obtained) is required to authorize in respect of such Credit Party, or is
required in connection with the execution, delivery, and performance by such
Credit Party of the Loan Documents to which it is a party, or is required as a
condition to the enforceability of the Loan Documents to which it is a party
against such Credit Party.
4.3. Binding Agreement
The Loan Documents to which it is a party constitute the valid
and legally binding obligations of each Credit Party, enforceable in accordance
with their respective terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by equitable
principles relating to the availability of specific performance as a remedy.
4.4. Litigation
There are no actions, suits, arbitration proceedings or claims
(whether purportedly on behalf of the Company or any Subsidiary or otherwise)
pending or, to the knowledge of the Company, threatened against the Company or
any Subsidiary or any of its respective Properties, or maintained by the Company
or any Subsidiary, at law or in equity, before any Governmental Authority which
could reasonably be expected to have a Material Adverse effect. There are no
proceedings pending or, to the knowledge of the Company, threatened against the
Company or any Subsidiary (a) which call into question the validity or
enforceability of, or otherwise seek to invalidate any Loan Document, or (b)
which might, individually or in the aggregate, materially and adversely affect
any of the transactions contemplated by any Loan Document.
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4.5. No Conflicting Agreements
(a) Neither the Company nor any Subsidiary is in default under
any agreement to which it is a party or by which it or any of its Property is
bound the effect of which could reasonably be expected to have a Material
Adverse effect. No notice to, or filing with, any Governmental Authority is
required for the due execution, delivery and performance by any Credit Party of
the Loan Documents to which it is a party.
(b) No provision of any existing material mortgage, material
indenture, material contract or material agreement or of any existing statute,
rule, regulation, judgment, decree or order binding on the Company or any
Subsidiary or affecting the Property of the Company or any Subsidiary conflicts
with, or requires any consent which has not already been obtained under, or
would in any way prevent the execution, delivery or performance by any Credit
Party of the terms of, any Loan Document to which it is a party. The execution,
delivery or performance by each Credit Party of the terms of each Loan Document
to which it is a party will not constitute a default under, or result in the
creation or imposition of, or obligation to create, any Lien upon the Property
of any Credit Party pursuant to the terms of any such mortgage, indenture,
contract or agreement.
4.6. Taxes
The Company and each Subsidiary has filed or caused to be
filed all tax returns, and has paid, or has made adequate provision for the
payment of, all taxes shown to be due and payable on said returns or in any
assessments made against it, the failure of which to file or pay could
reasonably be expected to have a Material Adverse effect, and no tax Liens
(other than Liens permitted under Section 8.2) have been filed against such
Credit Party and no claims are being asserted with respect to such taxes which
are required by GAAP to be reflected in the Financial Statements and are not so
reflected, except for taxes which have been assessed but which are not yet due
and payable. The charges, accruals and reserves on the books of the Company and
each Subsidiary with respect to all federal, state, local and other taxes are
considered by the management of the Company to be adequate, and the Company
knows of no unpaid assessment which (a) could reasonably be expected to have a
Material Adverse effect, or (b) is or might be due and payable against it or any
Subsidiary or any Property of the Company or any Subsidiary, except such thereof
as are being contested in good faith and by appropriate proceedings diligently
conducted, and for which adequate reserves have been set aside in accordance
with GAAP or which have been assessed but are not yet due and payable.
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4.7. Compliance with Applicable Laws; Filings
Neither the Company nor any Subsidiary is in default with respect
to any judgment, order, writ, injunction, decree or decision of any Governmental
Authority which default could reasonably be expected to have a Material Adverse
effect. The Company and each Subsidiary is complying with all applicable
statutes, rules and regulations of all Governmental Authorities, a violation of
which could reasonably be expected to have a Material Adverse effect. The
Company and each Subsidiary has filed or caused to be filed with all
Governmental Authorities all reports, applications, documents, instruments and
information required to be filed pursuant to all applicable laws, rules,
regulations and requests which, if not so filed, could reasonably be expected to
have a Material Adverse effect.
4.8. Governmental Regulations
Neither the Company nor any Subsidiary nor any corporation
controlling the Company or any Subsidiary or under common control with the
Company or any Subsidiary is subject to regulation under the Investment Company
Act of 1940, as amended, or is subject to any statute or regulation which
regulates the incurrence of Indebtedness.
4.9. Federal Reserve Regulations; Use of Loan Proceeds
No Credit Party is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of purchasing or
carrying any margin stock within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System, as amended. No part of the proceeds of
the Loans or the Letters of Credit has been or will be used, directly or
indirectly, to purchase, acquire or carry any Margin Stock or for a purpose
which violates any law, rule or regulation of any Governmental Authority,
including, without limitation, the provisions of Regulations G, T, U or X of the
Board of Governors of the Federal Reserve System, as amended. Anything in this
Agreement to the contrary notwithstanding, no Lender shall be obligated to
extend credit to a Borrower in violation of any limitation or prohibition
provided by any applicable law, regulation or statute, including Regulation U of
the Board of Governors of the Federal Reserve System.
4.10. No Misrepresentation
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No representation or warranty contained in any Loan Document and
no certificate or written report furnished by a Credit Party to the Agent or any
Lender contains or will contain, as of its date, a misstatement of material
fact, or omits or will omit to state, as of its date, a material fact required
to be stated in order to make the statements therein contained not misleading in
the light of the circumstances under which made.
4.11. Plans
Each Employee Benefit Plan of the Company, each Subsidiary and
each ERISA Affiliate is in compliance with ERISA and the Internal Revenue Code,
where applicable, except where the failure to so comply would not be material.
The Company, each Subsidiary and each ERISA Affiliate have complied with the
material requirements of Section 515 of ERISA with respect to each Pension Plan
which is a Multiemployer Plan, except where the failure to so comply would not
be material. The Company and each Subsidiary and each ERISA Affiliate has, as of
the date hereof, made all contributions or payments to or under each such
Pension Plan required by law or the terms of such Pension Plan or any contract
or agreement. No liability to the PBGC has been, or is reasonably expected by
the Company, any Subsidiary or any ERISA Affiliate to be, incurred by the
Company or such Subsidiary or ERISA Affiliate. Liability, as referred to in this
Section 4.11, includes any joint and several liability, but excludes any
liability for premiums under Section 4007 of ERISA. Each Employee Benefit Plan
which is a group health plan within the meaning of Section 5000(b)(1) of the
Internal Revenue Code is in material compliance with the continuation of health
care coverage requirements of Section 4980B of the Internal Revenue Code.
4.12. Environmental Matters
Neither the Company nor any Subsidiary (a) has received written
notice or otherwise learned of any claim, demand, action, event, condition,
report or investigation indicating or concerning any potential or actual
liability which individually or in the aggregate could reasonably be expected to
have a Material Adverse effect, arising in connection with (i) any
non-compliance with or violation of the requirements of any applicable federal,
state or local environmental health or safety statute or regulation, or (ii) the
release or threatened release of any
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toxic or hazardous waste, substance or constituent, or other substance into the
environment, (b) to the best knowledge of the Company, has any threatened or
actual liability in connection with the release or threatened release of any
toxic or hazardous waste, substance or constituent, or other substance into the
environment which individually or in the aggregate could reasonably be expected
to have a Material Adverse effect, (c) has received notice of any federal or
state investigation evaluating whether any remedial action is needed to respond
to a release or threatened release of any toxic or hazardous waste, substance or
constituent or other substance into the environment for which the Company or
such Subsidiary is or would be liable, which liability would reasonably be
expected to have a Material Adverse effect, or (d) has received notice that the
Company or such Subsidiary is or may be liable to any Person under the
Comprehensive Environmental Response, Compensation and Liability Act, as
amended, 42 U.S.C. Section 9601 et seq., or any analogous state law, which
liability would reasonably be expected to have a Material Adverse effect. The
Company and each Subsidiary is in compliance with the financial responsibility
requirements of federal and state environmental laws to the extent applicable,
including those contained in 40 C.F.R., parts 264 and 265, subpart H, and any
analogous state law, except in those cases in which the failure so to comply
would not reasonably be expected to have a Material Adverse effect.
4.13. Financial Statements
The Company has heretofore delivered to the Lenders through the
Agent copies of (i) the audited Consolidated Balance Sheet of the Company and
its Subsidiaries as of December 31, 1995, and the related consolidated Statement
of Income and Retained Earnings, and consolidated Statement of Cash Flows, for
the fiscal year then ended, and (ii) the unaudited pro-forma (after giving
effect to the Reorganization) Consolidated Balance Sheet of the Company as of
the proposed Reorganization Date, and the related pro-forma (after giving effect
to the Reorganization) Consolidated Statement of Income and Retained Earnings
for the period from January 1, 1996 to September 30, 1996 (collectively,
together with any related notes and schedules, the "Financial Statements"). The
Financial Statements fairly present the Consolidated financial condition and
results of the operations of the Company and the Subsidiaries, in each case as
of the dates and for the periods indicated therein and, except as noted therein,
have been prepared in conformity with GAAP as then in effect. Neither the
Company nor any Subsidiary has any obligation or liability of any kind (whether
fixed, accrued, contingent, unmatured or otherwise) which, in accordance with
GAAP as then in effect, should have been disclosed in the Financial Statements
and was not. Except with respect to the disclosures made in the Registration
Statement, since December 31, 1995 (x) there has been no Material Adverse
change, including as a result of any change in law, in the consolidated
financial condition, operations, business or Property of the Company and its
Subsidiaries and (y) the Company and its Subsidiaries have conducted their
businesses only in the ordinary course.
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4.14. Solvency
Immediately after giving effect to the transactions contemplated
by the Reorganization Documents and to the making of each Loan and the issuance
of each Letter of Credit, the Company and each Subsidiary is and will be
Solvent.
5. CONDITIONS OF LENDING-FIRST LOANS AND LETTERS OF CREDIT ON THE
FIRST BORROWING DATE
In addition to the requirements set forth in Section 6, the obligation of
each Lender on the first Borrowing Date to make one or more Revolving Credit
Loans, the Swing Line Lender to make one or more Swing Line Loans and the Issuer
to issue one or more Letters of Credit are subject to the fulfillment of the
following conditions precedent prior to or simultaneously with the Effective
Date:
5.1. Evidence of Corporate Action
The Agent shall have received a certificate, dated the Effective
Date, of the Secretary or an Assistant Secretary of each Credit Party, (i)
attaching a true and complete copy of the resolutions of its Board of Directors
and of all documents evidencing all other necessary corporate action (in form
and substance reasonably satisfactory to the Agent) taken by such Credit Party
to authorize the Loan Documents to which it is a party and the transactions
contemplated thereby (including the Reorganization), (ii) attaching a true and
complete copy of its Certificate of Incorporation and By-Laws, (iii) setting
forth the incumbency of the officer or officers of such Credit Party who may
sign the Loan Documents to which it is a party and any other certificates,
requests, notices or other documents now or in the future required thereunder,
including therein a signature specimen of such officers, and (iv) attaching a
certificate of good standing of the Secretary of State of the state of
incorporation of the Company, LNT, Inc., Rockford L.T., Inc. and Bloomington,
MN. L.T.,Inc.
5.2. Opinion of Special Counsel
The Agent shall have received from Special Counsel an opinion,
dated the Effective Date, substantially in the form of Exhibit F.
5.3. Opinion of Counsel to the Credit Parties
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The Agent shall have received an opinion of Xxxxxx Xxxxxx, Esq.,
counsel to the Credit Parties, dated the Effective Date, substantially in the
form of Exhibit E.
5.4. Reorganization
The Agent shall have received a certificate, in form and substance
satisfactory to the Agent, from an Authorized Signatory of the Company
certifying that the Reorganization has been consummated in accordance with the
Reorganization Documents and attaching a true and complete copy of each
Reorganization Document, each of which shall be in form and substance
satisfactory to the Agent.
5.5. Subsidiary Guaranty
The Agent shall have received the Subsidiary Guaranty duly
executed by an Authorized Signatory of each Subsidiary Guarantor.
5.6. CVS Subordinated Note
The Agent shall have received a copy of the duly executed CVS
Subordinated Note.
5.7. Tangible Net Worth
The Agent shall have received a certificate from an Authorized
Signatory of the Company setting forth the computation, in detail satisfactory
to the Agent, of the best estimate (based on all information readily available
to the Company on the Effective Date) of Tangible Net Worth on the Effective
Date, such estimate to be not less than $210 million.
6. CONDITIONS OF LENDING-ALL LOANS AND LETTERS OF CREDIT
The obligation of each Lender on any Borrowing Date to make each Revolving
Credit Loan, the Swing Line Lender to make each Swing Line Loan and the Issuer
to issue each Letter of Credit are subject to the fulfillment of the following
conditions precedent:
6.1. Compliance
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On each Borrowing Date, and after giving effect to the Loans to be
made or the Letters of Credit to be issued on such Borrowing Date, (a) there
shall exist no Default or Event of Default, and (b) the representations and
warranties contained in each Loan Document shall be true and correct with the
same effect as though such representations and warranties had been made on such
Borrowing Date, except those which are expressly specified to be made as of an
earlier date.
6.2. Requests
The Agent shall have received either or both, as applicable, of a
Borrowing Request or a Letter of Credit Request from the Company on behalf of
the applicable Borrower.
6.3. Loan Closings
All documents required by the provisions of this Agreement to have
been executed or delivered to the Agent, any Lender or the Issuer on or before
the applicable Borrowing Date shall have been so executed or delivered on or
before such Borrowing Date.
7. AFFIRMATIVE AND FINANCIAL COVENANTS
The Company covenants and agrees that on and after the Effective Date and
until the later to occur of (a) the Commitment Termination Date, and (b) the
payment in full of the Loans, the Reimbursement Obligations, the Fees and all
other sums payable under the Loan Documents, the Company will:
7.1. Legal Existence
Except as may otherwise be permitted by Sections 8.3 and 8.4,
maintain, and cause each Subsidiary to maintain, its corporate existence in good
standing in the jurisdiction of its incorporation or formation and in each other
jurisdiction in which the failure so to do could reasonably be expected to have
a Material Adverse effect, except that the corporate existence of Subsidiaries
operating closing or discontinued operations may be terminated.
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7.2. Taxes
Pay and discharge when due, and cause each Subsidiary so to do,
all taxes, assessments, governmental charges, license fees and levies upon or
with respect to the Company and such Subsidiary, and upon the income, profits
and Property thereof unless, and only to the extent, that either (i)(a) such
taxes, assessments, governmental charges, license fees and levies shall be
contested in good faith and by appropriate proceedings diligently conducted by
the Company or such Subsidiary, and (b) such reserve or other appropriate
provision as shall be required by GAAP shall have been made therefor, or (ii)
the failure to pay or discharge such taxes, assessments, governmental charges,
license fees and levies could not reasonably be expected to have a Material
Adverse effect.
7.3. Insurance
Keep, and cause each Subsidiary to keep, insurance with
responsible insurance companies in such amounts and against such risks as is
usually carried by businesses similar to the Company and the Subsidiaries.
7.4. Performance of Obligations
Pay and discharge promptly when due, and cause each Subsidiary so
to do, all lawful Indebtedness, obligations and claims for labor, materials and
supplies or otherwise which, if unpaid, could reasonably be expected to (a) have
a Material Adverse effect, or (b) become a Lien on the Property of the Borrower
or any Subsidiary, except those Liens permitted under Section 8.2, provided that
neither the Company nor such Subsidiary shall be required to pay or discharge or
cause to be paid or discharged any such Indebtedness, obligation or claim so
long as (i) the validity thereof shall be contested in good faith and by
appropriate proceedings diligently conducted by the Company or such Subsidiary,
and (ii) such reserve or other appropriate provision as shall be required by
GAAP shall have been made therefor.
7.5. Condition of Property
Except for ordinary wear and tear, at all times, maintain, protect
and keep in good repair, working order and condition, all material Property
necessary for the operation of its business (other than Property which is
replaced with similar Property) as then being operated, and cause each
Subsidiary so to do.
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7.6. Observance of Legal Requirements
Observe and comply in all material respects, and cause each
Subsidiary so to do, with all laws, ordinances, orders, judgments, rules,
regulations, certifications, franchises, permits, licenses, directions and
requirements of all Governmental Authorities, which now or at any time hereafter
may be applicable to it or to such Subsidiary, a violation of which could
reasonably be expected to have a Material Adverse effect.
7.7. Financial Statements and Other Information
Maintain, and cause each Subsidiary to maintain, a standard system
of accounting in accordance with GAAP, and furnish to each Lender:
(a) As soon as available and, in any event, within 90 days after
the close of each fiscal year, a copy of (x) the Company's 10-K in respect of
such fiscal year, and (y) (i) the Company's Consolidated Balance Sheet as of the
end of such fiscal year, and (ii) the related Consolidated Statements of
Earnings, Shareholders' Equity and Cash Flows, as of and through the end of such
fiscal year, setting forth in each case in comparative form the corresponding
figures in respect of the previous fiscal year, all in reasonable detail, and
accompanied by a report of the Company's auditors, which report shall contain no
qualification as to scope of audit or going concern and shall state that (A)
such auditors audited such financial statements, (B) such audit was made in
accordance with generally accepted auditing standards in effect at the time and
provides a reasonable basis for such opinion, and (C) said financial statements
have been prepared in accordance with GAAP;
(b) As soon as available, and in any event within 50 days after
the end of each of the first three fiscal quarters of each fiscal year, a copy
of (x) the Company's 10-Q in respect of such fiscal quarter, and (y) (i) the
Company's Consolidated Balance Sheet as of the end of such quarter, and (ii) the
related Consolidated Statements of Earnings, Shareholders' Equity and Cash Flows
for (A) such quarter, and (B) the period from the beginning of the then current
fiscal year to the end of such quarter, in each case in comparable form with the
prior fiscal year, all in reasonable detail and prepared in accordance with GAAP
(without footnotes and subject to year-end adjustments);
(c) Simultaneously with the delivery of the financial statements
required by clauses (a) and (b) above, a certificate of the chief financial
officer or treasurer of the
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Company (or such other officer as shall be acceptable to the Agent) certifying
that no Default or Event of Default shall have occurred or be continuing or, if
so, specifying in such certificate all such Defaults and Events of Default, and
setting forth computations in reasonable detail demonstrating compliance with
Sections 7.10, 8.1, 8.5, 8.12 and 8.16 as at the end of such fiscal quarter or
fiscal year, as the case may be;
(d) Promptly upon becoming available, copies of all regular or
periodic reports (including, without limitation, current reports on Form 8-K)
which the Company or any Subsidiary may now or hereafter be required to file
with or deliver to the Securities and Exchange Commission, or any other
Governmental Authority succeeding to the functions thereof, and copies of all
material news releases sent to all stockholders;
(e) Prompt written notice of: (i) any citation, summons, subpoena,
order to show cause or other order naming the Company or any Subsidiary a party
to any proceeding before any Governmental Authority which could reasonably be
expected to have a Material Adverse effect, and include with such notice a copy
of such citation, summons, subpoena, order to show cause or other order, (ii)
any lapse or other termination of any license, permit, franchise or other
authorization issued to the Company or any Subsidiary by any Governmental
Authority, (iii) any refusal by any Governmental Authority to renew or extend
any license, permit, franchise or other authorization, and (iv) any dispute
between the Company or any Subsidiary and any Governmental Authority, which
lapse, termination, refusal or dispute, referred to in clause (ii), (iii) or
(iv) above, could reasonably be expected to have a Material Adverse effect;
(f) Prompt written notice of the occurrence of (i) each Default,
(ii) each Event of Default, and (iii) each Material Adverse change;
(g) Promptly upon receipt thereof, copies of any audit reports and
management letters delivered in connection with the statements referred to in
Section 7.7(a);
(h) From time to time, such other information regarding the
financial position or business of the Company and the Subsidiaries, as the
Agent, at the request of any Lender, may reasonably request; and
(i) Promptly deliver to the Agent and each Lender a copy of each
proposed modification or other change to any of the Reorganization Documents
prior to the effectiveness thereof.
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7.8. Records
Upon reasonable notice and during normal business hours, permit
representatives of the Agent and each Lender to visit the offices of the Company
and each Subsidiary, to examine the books and records (other than tax returns
and work papers related to tax returns) thereof and auditors' reports relating
thereto, to discuss the affairs of the Company and each Subsidiary with the
respective officers thereof, and to meet and discuss the affairs of the Company
and each Subsidiary with the Company's auditors. Any meeting with the Company's
auditors shall be at the expense of the Company if, at the time thereof, a
Default shall have occurred and be continuing.
7.9. Authorizations
Maintain and cause each Subsidiary to maintain, in full force and
effect, all copyrights, patents, trademarks, trade names, franchises, licenses,
permits, applications, reports, and other authorizations and rights, which, if
not so maintained, would individually or in the aggregate have a Material
Adverse effect.
7.10. Financial Covenants
(a) Fixed Charge Coverage Ratio. Maintain at all times a
Fixed Charge Coverage Ratio of not less than 1.35:1.00.
(b) Leverage Ratio. Maintain at all times during each of
the periods set forth below, a Leverage Ratio of not more than the
applicable ratio set forth below for such period:
Period Ratio
------ -----
Effective Date through
December 30, 1997 4.90:1.00
December 31, 1997 and
thereafter 4.75:1.00.
(c) Minimum Tangible Net Worth. Maintain at all times Tangible Net
Worth in an amount not less than the sum of (i) 90% of Tangible Net Worth as at
the Effective Date, as set forth in the certificate delivered pursuant to
Section 5.7, (ii) 50% of
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cumulative Consolidated net income (without giving effect to any net losses) for
each fiscal year commencing with the 1997 fiscal year and (iii) 100% of the
cumulative net proceeds received by the Company from any sale to the public of
its capital Stock for the period commencing after the Reorganization.
8. NEGATIVE COVENANTS
The Company covenants and agrees that on and after the Effective Date and
until the later to occur of (a) the Commitment Termination Date, and (b) the
payment in full of the Loans, the Reimbursement Obligations, the Fees and all
other sums which are payable under the Loan Documents, the Company will not:
8.1. Indebtedness
Create, incur, assume or suffer to exist any Indebtedness, or
permit any Subsidiary so to do, except (i) the Loans and the Letters of Credit,
(ii) capitalized lease, purchase money and real estate mortgage Indebtedness of
the Company and the Subsidiary Guarantors in an aggregate outstanding principal
amount not exceeding $12,500,000, (iii) the CVS Subordinated Debt, (iv)
Intercompany Debt and (v) additional unsecured Indebtedness of the Company and
the Subsidiary Guarantors in an aggregate outstanding principal amount not
exceeding $10,000,000.
8.2. Liens
Create, incur, assume or suffer to exist any Lien against or on
any Property now owned or hereafter acquired by the Company or any of the
Subsidiaries, or permit any Subsidiary so to do, except any one or more of the
following types of Liens: (a) Liens in connection with workers' compensation,
unemployment insurance or other social security obligations (which phrase shall
not be construed to refer to ERISA or the minimum funding obligations under
Section 412 of the Code), (b) Liens to secure the performance of bids, tenders,
letters of credit (other than letters of credit securing the payment of
Indebtedness), contracts (other than contracts for the payment of Indebtedness),
leases, statutory obligations, surety, customs, appeal, performance and payment
bonds and other obligations of like nature, in each such case arising in the
ordinary course of business, (c) mechanics', workmen's, carriers',
warehousemen's, materialmen's, landlords', or other like Liens arising in the
ordinary course of business with respect to obligations which are not due or
which are being contested in good faith and by ap-
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propriate proceedings diligently conducted, (d) Liens for taxes, assessments,
fees or governmental charges the payment of which is not required by Section
7.2, (e) easements, rights of way, restrictions, leases of Property to others,
easements for installations of public utilities, title imperfections and
restrictions, zoning ordinances and other similar encumbrances affecting
Property which in the aggregate do not materially impair its use for the
operation of the business of the Company or such Subsidiary, (f) Liens on
Property under capital leases and Liens on Property (excluding Liens on the
Stock of any Subsidiary) acquired (whether as a result of purchase, capital
lease, merger or other acquisition) and either existing on such Property when
acquired, or created contemporaneously with such acquisition to secure the
payment or financing of the purchase price of such Property (including the
construction, development, substantial repair, alteration or improvement
thereof), provided that such Liens attach only to the Property so purchased or
acquired (including any such construction, development, substantial repair,
alteration or improvement thereof) and provided further that the Indebtedness
secured by such Liens is permitted by Section 8.1, (g) statutory Liens in favor
of lessors arising in connection with Property leased to the Company or any of
the Subsidiaries, (h) Liens of attachments, judgments or awards against the
Company or any of the Subsidiaries with respect to which an appeal or proceeding
for review shall be pending or a stay of execution shall have been obtained, or
which are otherwise being contested in good faith and by appropriate proceedings
diligently conducted, and in respect of which adequate reserves shall have been
established in accordance with GAAP on the books of the Company or such
Subsidiary, and (i) Liens securing Indebtedness of a Subsidiary to the Company
or another Subsidiary.
8.3. Dispositions
Make any Disposition, or permit any Subsidiary so to do, except
any one or more of the following:
(a) Dispositions of inventory in the ordinary course of business;
(b) Dispositions of individual stores consistent with past
practices;
(c) Dispositions in the form of a sale/lease-back transaction with
respect to the distribution center located at 0000 Xxxxxxxx Xxxx Xxxxx,
Xxxxxxxxxx, Xxxxx Xxxxxxxx, provided that the net proceeds received from such
sale/lease-back transaction are immediately applied to the prepayment of the
Loans;
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(d) Dispositions in the form of a sale/lease-back transaction with
respect to any store constructed by the Company or any Subsidiary, provided that
the sale/lease-back transaction is concluded within 12 months of the
commencement of operations of such store and the net proceeds from such
sale/lease-back transaction are immediately applied to the prepayment of the
Loans; and
(e) Restricted Payments to the extent permitted pursuant to
Section 8.6.
8.4. Merger or Consolidation, Etc.
Consolidate with, be acquired by, or merge into or with any
Person, or convey or otherwise transfer all or substantially all of its
Property, or permit any Subsidiary so to do, except that:
(a) any wholly-owned Subsidiary may consolidate with or merge with
any other wholly-owned Subsidiary, or convey or transfer all or substantially
all of its Property to any other wholly-owned Subsidiary, provided that
immediately before and after giving effect thereto no Default or Event of
Default shall or would exist;
(b) any wholly-owned Subsidiary may consolidate with or merge with
the Company, or convey or transfer all or substantially all of its Property to
the Company, provided that (x) immediately before and after giving effect
thereto no Default or Event of Default shall or would exist and (y) the Company
shall be the survivor of such consolidation or merger; and
(c) any Subsidiary may consolidate with or merge with another
Person, or any Subsidiary may convey or transfer all or substantially all of its
Property to such other Person, in each case solely in connection with and as
part of a permitted Disposition under Section 8.3 or a permitted Acquisition
under Section 8.5, provided that (x) immediately before and after giving effect
thereto no Default or Event of Default shall or would exist and (y) in the event
that the Company is party to any such merger or consolidation, the Company shall
be the survivor of such consolidation or merger; provided that in connection
with each such merger, conveyance or transfer the Company and each Subsidiary
party thereto shall execute and deliver to the Agent such documents and opinions
as the Agent shall require in connection therewith.
8.5. Acquisitions
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Make any Acquisition, or permit any of the Subsidiaries so to do,
except any one or more of the following: (a) Acquisitions of store leaseholds in
the ordinary course of the Company's business and (b) other Acquisitions by the
Company or any of the Subsidiaries, provided that (i) immediately before and
after giving effect to each such other Acquisition, no Default or Event of
Default shall or would exist and (ii) the aggregate amount expended on such
other Acquisitions does not exceed $10,000,000 through the Expiration Date.
8.6. Restricted Payments
Make any Restricted Payment, or permit any Subsidiary so to do,
except any one or more of the following Restricted Payments: (a) any direct or
indirect wholly-owned Subsidiary may make dividends or other distributions to
the Company or to any other direct or indirect wholly-owned Subsidiary, and (b)
the Company may make Restricted Payments in the form of repurchases of its Stock
pursuant to and in accordance with the Company's Incentive Compensation Plan,
provided that, in the case of this clause (b), immediately before and after
giving effect thereto, no Default or Event of Default shall or would exist.
8.7. Limitation on Upstream Dividends by Subsidiaries
Permit or cause any of the Subsidiaries to enter into or agree, or
otherwise be or become subject, to any agreement, contract or other arrangement
(other than this Agreement) with any Person pursuant to the terms of which (a)
such Subsidiary is or would be prohibited from declaring or paying any cash
dividends on any class of its stock owned directly or indirectly by the Company
or any of the other Subsidiaries or from making any other distribution on
account of any class of any such stock (herein referred to as "Upstream
Dividends"), or (b) the declaration or payment of Upstream Dividends by a
Subsidiary to the Company or another Subsidiary, on an annual or cumulative
basis, is or would be otherwise limited or restricted.
8.8. Limitation on Negative Pledges
Enter into any agreement, other than (i) this Agreement and (ii)
purchase money Lien documentation or capital leases permitted by this Agreement
(in which cases, any prohibition or limitation shall only be effective against
the assets financed thereby), or permit any Subsidiary so to do, which prohibits
or limits the ability of the Company or
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such Subsidiary to create, incur, assume or suffer to exist any Lien upon any of
its Property or revenues, whether now owned or hereafter acquired.
8.9. Certain Documents
Amend, modify or otherwise change any term or provision of the
organizational documents of any Credit Party or of the CVS Subordinated Note if
such change would adversely affect the interest of the Agent or the Lenders
under the Loan Documents or the CVS Subordinated Note, or amend, modify or
otherwise change any term or provision of the Reorganization Documents
(excluding the CVS Subordinated Note) if such change would materially adversely
affect the interest of the Agent or the Lenders under the Loan Documents or the
CVS Subordinated Note.
8.10. Business Change
Materially change the nature of the business of the Company and
the Subsidiaries as conducted on the Effective Date.
8.11. New Subsidiaries
Create or acquire any Subsidiary not existing on the Effective
Date, or permit any Subsidiary so to do, except (a) the Company or any
Subsidiary may create a new Subsidiary in connection with the construction or
acquisition of any new store, (b) the Company or any Subsidiary may acquire a
new Subsidiary in connection with an Acquisition permitted by Section 8.5 and
(c) the Company or any Subsidiary may create a new Subsidiary in the ordinary
course of its business. Within 30 days after each time the Agent notifies the
Company that the Agent has determined that one or more of the new Subsidiaries
which are not Subsidiary Guarantors is material, the Company shall cause such
new Subsidiaries as the Agent shall designate to execute and deliver to the
Agent a Subsidiary Guaranty Addendum and such other documents and opinions as
the Agent shall require in connection therewith. In addition, at any time the
Company may cause any Subsidiary which is not a Subsidiary Guarantor to become a
Subsidiary Guarantor by executing and delivering to the Agent a Subsidiary
Guaranty Addendum and such other documents and opinions as the Agent shall
require in connection therewith
8.12. Investments, Acquisitions, Loans, Etc.
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At any time, purchase or otherwise acquire, hold or invest in the
Stock or Property of, or any other interest in, any Person, or make any loan or
advance to, or enter into any arrangement for the purpose of providing funds or
credit to, or make any other investment, whether by way of capital contribution,
deposit or otherwise, in or with any Person, or permit any Subsidiary so to do
(all of which are sometimes referred to herein as "Investments"), except:
(a) Investments in cash or Cash Equivalents;
(b) normal business banking accounts and short-term
certificates of deposit and time deposits in, or issued by, federally insured
institutions in amounts not exceeding the limits of such insurance;
(c) Investments in the form of purchases or other acquisitions
of inventory, materials and equipment in the ordinary course of business; and
(d) Investments permitted by Sections 8.4, 8.5, 8.6 and 8.11.
8.13. Sale and Leaseback
Enter into any arrangement with any Person providing for the
leasing by it of Property which has been or is to be sold or transferred by it
to such Person or to any other Person to whom funds have been or are to be
advanced by such Person on the security of such Property or its rental
obligations, or permit any Subsidiary so to do, except to the extent permitted
under Section 8.3.
8.14. Fiscal Year
Change its fiscal year from that in effect on the Effective Date,
or permit any Subsidiary so to do, except, with 30 days' prior notice to the
Agent and the Lenders, the Company and all of the Subsidiaries may change their
fiscal year.
8.15. Transactions with Affiliates
Become a party to any transaction with an Affiliate unless the
terms and conditions relating thereto are as favorable to it as those which
would be obtainable at the time in a comparable arms-length transaction with a
Person other than an Affiliate, or permit any Subsidiary so to do, except as
provided for in the Reorganization Documents.
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8.16. Capital Expenditures
During any fiscal year, make any capital expenditures, or incur
any obligation so to do, or permit any Subsidiary so to do, in excess of the
following amounts during the following periods:
Period Amount
------ ------
1997 fiscal year $35,000,000
1998 fiscal year $40,000,000
1999 fiscal year $45,000,000
Each amount set forth above for the 1998 and 1999 fiscal years shall be
increased, on a non-cumulative basis, by an amount equal to 40% of Free Cash
Flow generated in the immediately preceding fiscal year.
8.17. CVS Subordinated Debt
Make any payment or prepayment of interest on the CVS Subordinated
Debt except as expressly permitted by the subordination terms of the CVS
Subordinated Note, or purchase or make any payment or prepayment of principal on
the CVS Subordinated Debt prior to the final stated maturity of the CVS
Subordinated Debt, or purchase or make any payment of principal on the CVS
Subordinated Debt on or after the final stated maturity of the CVS Subordinated
Debt except as expressly permitted by the subordination terms of the CVS
Subordinated Note.
9. DEFAULT
9.1. Events of Default
The following shall each constitute an "Event of Default"
hereunder:
(a) Any payment of principal on any Loan or any reimbursement
payment in respect of any Letter of Credit shall not be paid when due and
payable; or
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(b) Any payment of interest on any Loan or of any Fee shall not be
paid when due and payable and such default shall continue unremedied for a
period of 5 Domestic Business Days after the same shall be due and payable; or
(c) The failure of a Borrower to observe any agreement contained
in Section 2.4; or
(d) The failure of the Company to observe or perform any
covenant or agreement contained in Sections 7.1, 7.10 or in Section 8; or
(e) The failure of the Company or any Borrower to observe or
perform any other covenant or agreement contained in this Agreement, and such
failure shall have continued unremedied for a period of 30 days after the
Company or any Borrower shall have become aware of such failure; or
(f) Any representation or warranty made in any Loan Document, or
made in any certificate, report, opinion (other than an opinion of counsel) or
other document delivered on or after the date hereof shall in any such case
prove to have been incorrect or misleading (whether because of misstatement or
omission) in any material respect when made; or
(g) (i) Obligations in an aggregate Consolidated amount in excess
of $2,500,000 of the Company and the Subsidiaries, (other than obligations
hereunder) whether as principal, guarantor, surety or other obligor, for the
payment of any Indebtedness or any net liability under interest rate swap,
collar, exchange or cap agreements, (A) shall become or shall be declared to be
due and payable prior to the expressed maturity thereof, or (B) shall not be
paid when due or within any grace period for the payment thereof, or (ii) any
holder of any such obligations shall have the right to declare the Indebtedness
evidenced thereby due and payable prior to its stated maturity; or
(h) The Company or any Subsidiary shall (i) suspend or discontinue
its business (except for store closings in the ordinary course of business and
except in connection with a permitted Disposition under Section 8.3 and as may
otherwise be expressly permitted herein), or (ii) make an assignment for the
benefit of creditors, or (iii) generally not be paying its debts as such debts
become due, or (iv) admit in writing its inability to pay its debts as they
become due, or (v) file a voluntary petition in bankruptcy, or (vi) become
insolvent (however such insolvency shall be evidenced), or (vii) file any
petition or answer seeking for itself any reorganization, arrangement,
composition, readjustment of debt, liquidation or dissolution or similar relief
under any present or future
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statute, law or regulation of any jurisdiction (including under any law
applicable to insurance companies), or (viii) petition or apply to any tribunal,
or any other Governmental Authority, for any receiver, custodian or any trustee
for any substantial part of its Property, or (ix) be the subject of any
proceeding specified in clause (vii) or (viii) filed against it which remains
undismissed for a period of 60 consecutive days, or (x) file any answer
admitting or not contesting the material allegations of any such petition filed
against it, or of any order, judgment or decree approving such petition in any
such proceeding, or (xi) seek, approve, consent to, or acquiesce in any such
proceeding, or in the appointment of any trustee, receiver, custodian,
liquidator, or fiscal agent for it, or any substantial part of its Property, or
an order is entered appointing any such trustee, receiver, custodian, liquidator
or fiscal agent and such order remains unstayed and in effect for 60 consecutive
days, or (xii) take any formal action for the purpose of effecting any of the
foregoing (except as may otherwise be expressly permitted herein); or
(i) An order for relief is entered under the United States
bankruptcy laws or any other decree or order is entered by a court or other
Governmental Authority having jurisdiction and continues unstayed and in effect
for a period of 60 consecutive days (i) adjudging the Company or any Subsidiary
bankrupt or insolvent, or (ii) approving as properly filed a petition seeking
reorganization, liquidation, arrangement, adjustment or composition of, or in
respect of the Company or any Subsidiary under the United States bankruptcy laws
or any other applicable Federal or state law, or (iii) appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator (or other similar
official) of the Company or any Subsidiary or of substantially all of the
Property of any thereof, or (iv) ordering the winding up or liquidation of the
affairs of the Company or any Subsidiary; or
(j) Judgments or decrees in an aggregate Consolidated amount in
excess of $2,500,000 against the Company and the Subsidiaries shall remain
unpaid, unstayed on appeal, undischarged, unbonded or undismissed for a period
of 60 days; or
(k) After the Effective Date any Person (other than CVS Group),
acting alone or with a group of Persons (within the meaning of Section 13(d) of
the Securities Act of 1934, as amended) acting in concert, (i) shall have or
acquire beneficial ownership of securities (or options therefor) having 20% or
more of the ordinary voting power of the Company, or (ii) shall possess,
directly or indirectly, the power to direct or cause the direction of the
management and policies of the Company, whether through the ownership of voting
securities, by contract or otherwise; or
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(l) (i) Any Termination Event shall occur (x) with respect to any
Pension Plan (other than a Multiemployer Plan) or (y) with respect to any other
retirement plan subject to Section 302 of ERISA or Section 412 of the Internal
Revenue Code, which plan, during the five year period prior to such Termination
Event, was the responsibility in whole or in part of the Company, any Subsidiary
or any ERISA Affiliate, provided that this clause (y) shall only apply if, in
connection with such Termination Event, it is reasonably likely that liability
under Section 4069 of ERISA in an aggregate Consolidated amount in excess of
$1,000,000 will be imposed upon the Company, any Subsidiary or any ERISA
Affiliate; (ii) any Accumulated Funding Deficiency, whether or not waived, in an
aggregate Consolidated amount in excess of $1,000,000 shall exist with respect
to any Pension Plan with respect to any Pension Plan (other than a Multiemployer
Plan); (iii) any Person shall engage in any Prohibited Transaction involving any
Employee Benefit Plan; (iv) the Company, any Subsidiary or any ERISA Affiliate
shall fail to pay when due an amount which is payable by it to the PBGC or to a
Pension Plan (including a Multiemployer Plan) under Title IV of ERISA; (v) the
imposition of any tax under Section 4980(B)(a) of the Internal Revenue Code; or
(vi) the assessment of a civil penalty with respect to any Employee Benefit Plan
under Section 502(c) of ERISA; in each case, to the extent such event or
condition would have a Material Adverse effect; or
(m) A default shall occur under the Company Guaranty or the
Subsidiary Guaranty or if for any reason, after the execution and delivery
thereof, the Company Guaranty or the Subsidiary Guaranty is not in full force
and effect.
9.2. Remedies
(a) Upon the occurrence of an Event of Default or at any time
thereafter during the continuance of an Event of Default, the Agent, at the
written request of the Required Lenders, shall notify the Company (on behalf of
all Borrowers) that the Commitments, the Swing Line Commitment and the Letter of
Credit Commitment have been terminated and/or that all of the Loans and the
Reimbursement Obligations and all accrued and unpaid interest on any thereof and
all other amounts owing under the Loan Documents have been declared immediately
due and payable, provided that upon the occurrence of an Event of Default under
Section 9.1(h) or (i), the Commitments, the Swing Line Commitment and the Letter
of Credit Commitment shall automatically terminate and all of the Loans and the
Reimbursement Obligations and all accrued and unpaid interest on any thereof and
all other amounts owing under the Loan Documents shall become immediately due
and payable without declaration or notice. To the fullest extent not prohibited
by law, except for the notice provided for in the preceding sentence,
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each Borrower expressly waives any presentment, demand, protest, notice of
protest or other notice of any kind in connection with the Loan Documents and
its obligations thereunder. To the fullest extent not prohibited by law, each
Borrower further expressly waives and covenants not to assert any appraisement,
valuation, stay, extension, redemption or similar law, now or at any time
hereafter in force which might delay, prevent or otherwise impede the
performance or enforcement of the Loan Documents.
(b) In the event that the Commitments, the Swing Line Commitment
and the Letter of Credit Commitment shall have been terminated or all of the
Loans and the Reimbursement Obligations shall have been declared due and payable
pursuant to the provisions of this Section, (i) the Company shall forthwith
deposit an amount equal to the Letter of Credit Exposure in a cash collateral
account with and under the exclusive control of the Agent, and (ii) the Agent,
the Issuer and the Lenders agree, among themselves, that any funds received from
or on behalf of the Company under any Loan Document or the CVS Subordinated Note
by the Issuer or any Lender (except funds received by the Issuer or any Lender
as a result of a purchase from the Issuer or such Lender, as the case may be,
pursuant to the provisions of Section 12.9) shall be remitted to the Agent, and
shall be applied by the Agent in payment of the Loans, the Reimbursement
Obligations and the other obligations of the Credit Parties under the Loan
Documents in the following manner and order: (1) first, to reimburse the Agent,
the Issuer and the Lenders, in that order, for any expenses due from the Company
and the Borrowers pursuant to the provisions of Section 12.5 and the
Reimbursement Agreements, (2) second, to the payment of the Fees, (3) third, to
the payment of any expenses or amounts (other than the principal of and interest
on the Loans and the Reimbursement Obligations) payable by the Company and the
Borrowers to the Agent, the Issuer or any of the Lenders under the Loan
Documents, (4) fourth, to the payment, pro rata according to the outstanding
principal balance of the Loans and the Letter of Credit Exposure of each Lender,
of interest due on the Loans and the Reimbursement Obligations, (5) fifth, to
the payment, pro rata according to the sum of (A) the aggregate outstanding
principal balance of the Loans plus (B) the aggregate outstanding balance of the
Reimbursement Obligations, of the aggregate outstanding principal balance of the
Loans and the aggregate outstanding balance of the Reimbursement Obligations,
and (6) sixth, any remaining funds shall be paid to whosoever shall be entitled
thereto or as a court of competent jurisdiction shall direct.
(c) In the event that the Loans and the Reimbursement Obligations
shall have been declared due and payable pursuant to the provisions of this
Section 9.2, the Agent upon the written request of the Required Lenders, shall
proceed to enforce the Reimbursement Obligations and the rights of the holders
of the Loans by suit in equity,
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action at law and/or other appropriate proceedings, whether for payment or the
specific performance of any covenant or agreement contained in the Loan
Documents or the CVS Subordinated Note. In the event that the Agent shall fail
or refuse so to proceed, the Issuer and each Lender shall be entitled to take
such action as the Required Lenders shall deem appropriate to enforce its rights
under the Loan Documents and the CVS Subordinated Note.
10. THE AGENT
10.1. Appointment
Each Lender hereby irrevocably designates and appoints BNY as the
Agent of such Lender under the Loan Documents and the CVS Subordinated Note, and
each Lender irrevocably authorizes the Agent to take such action on its behalf
under the provisions of the Loan Documents and the CVS Subordinated Note and to
exercise such powers and perform such duties as are expressly delegated to the
Agent by the terms of the Loan Documents and the CVS Subordinated Note, together
with such other powers as are reasonably incidental thereto. Notwithstanding any
provision to the contrary contained in the Loan Documents or the CVS
Subordinated Note, the Agent shall not have any duties or responsibilities
except those expressly set forth in the Loan Documents, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into the Loan
Documents or the CVS Subordinated Note or otherwise exist against the Agent.
10.2. Delegation of Duties
The Agent may execute any of its rights or duties under the Loan
Documents or the CVS Subordinated Note by or through agents or attorneys-in-fact
and shall be entitled to rely upon the advice of counsel concerning all matters
pertaining thereto, and shall not be liable for any action taken or omitted to
be taken in good faith upon the advice of such counsel.
10.3. Exculpatory Provisions
None of the Agent or any of its officers, directors, employees,
agents, attorneys-in-fact or Affiliates shall be (i) liable for any action
lawfully taken or omitted to be taken by the Agent or such Person under or in
connection with the Loan Documents or
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the CVS Subordinated Note (except the Agent for its own gross negligence or
willful misconduct), or (ii) responsible in any manner to any of the Lenders for
any recitals, statements, representations or warranties made by any party
contained in the Loan Documents or the CVS Subordinated Note or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agent under or in connection with, the Loan Documents or the
CVS Subordinated Note or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of any of the Loan Documents or the CVS
Subordinated Note or for any failure of any Credit Party or any other Person to
perform its obligations thereunder. The Agent shall not be under any obligation
to any Lender to ascertain or to inquire into the observance or performance of
any of the covenants or agreements contained in, or conditions of, the Loan
Documents or the CVS Subordinated Note, or to inspect the Property, books or
records of the Company or any Subsidiary. The Agent shall not be under any
liability or responsibility to any Credit Party or any other Person as a
consequence of any failure or delay in performance, or any breach, by any Lender
of any of its obligations under any of the Loan Documents or the CVS
Subordinated Note. The Lenders acknowledge that the Agent shall not be under any
duty to take any discretionary action permitted under the Loan Documents or the
CVS Subordinated Note unless the Agent shall be requested in writing to do so by
the Required Lenders.
10.4. Reliance by Agent
The Agent shall be entitled to rely, and shall be fully protected
in relying, upon any writing, resolution, notice, request, consent, certificate,
affidavit, opinion, letter, cablegram, telegram, fax, telex or teletype message,
statement, order or other document or conversation reasonably believed by it to
be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including
counsel to the Company), independent accountants and other experts selected by
the Agent. The Agent may treat each Lender, or the Person designated in the last
notice filed under Section 12.7, as the holder of all of the interests of such
Lender in its Loans until written notice of transfer, signed by such Lender (or
the Person designated in the last notice filed with the Agent) and by the Person
designated in such written notice of transfer, in form and substance
satisfactory to the Agent, shall have been filed with the Agent and all
requirements of Section 12.7 have been satisfied. The Agent shall not be under
any duty to examine or pass upon the validity, effectiveness or genuineness of
the Loan Documents or any instrument, document or communication furnished
pursuant thereto or in connection therewith, and the Agent shall be entitled to
assume that the same are valid, effective and genuine, have been signed or sent
by the proper parties
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and are what they purport to be. The Agent shall be fully justified in failing
or refusing to take any action not expressly required under the Loan Documents
unless it shall first receive such advice or concurrence of the Required Lenders
as it deems appropriate. The Agent shall in all cases be fully protected in
acting, or in refraining from acting, under the Loan Documents in accordance
with a request of the Required Lenders or, if required by Section 12.1, all
Lenders, and such request and any action taken or failure to act pursuant
thereto shall be binding upon the Credit Parties, all the Lenders and all future
holders of the Loans.
10.5. Notice of Default
The Agent shall not be deemed to have knowledge or notice of
the occurrence of any Default or Event of Default unless the Agent shall have
received written notice thereof from a Lender or the Company referring to this
Agreement, describing such Default or Event of Default and stating such notice
is a "Notice of Default." In the event that the Agent receives such a notice,
the Agent shall promptly give notice thereof to the Lenders. The Agent shall
take such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders, provided that unless and until the
Agent shall have received such directions, the Agent may (but shall not be
obligated to) take such action or give such directions, or refrain from taking
such action or giving such directions, with respect to such Default or Event of
Default as it shall deem to be in the best interests of the Lenders.
10.6. Non-Reliance
Each Lender expressly acknowledges that neither the Agent nor
any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates has made any representations or warranties to such Lender and that no
act by the Agent hereafter, including any review of the affairs of the Company
or the Subsidiaries, shall be deemed to constitute any representation or
warranty by the Agent to any Lender. Each Lender represents to the Agent that
such Lender has, independently and without reliance upon the Agent or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own evaluation of and investigation into the business,
operations, Property, financial and other condition and creditworthiness of the
Company and the Subsidiaries and has made its own decision to enter into this
Agreement. Each Lender also represents that it will, independently and without
reliance upon the Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, evaluations and decisions in taking or not taking
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action under the Loan Documents, and to make such investigation as it deems
necessary to inform itself as to the business, operations, Property, financial
and other condition and creditworthiness of the Company and the Subsidiaries.
Each Lender acknowledges that a copy of this Agreement and all exhibits and
schedules hereto have been made available to it and its individual counsel for
review, and each Lender acknowledges that it is satisfied with the form and
substance thereof. Except for notices, reports and other documents expressly
required to be furnished to the Lenders by the Agent hereunder, the Agent shall
have no duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, Property, financial and other
condition or creditworthiness of the Company or the Subsidiaries which may come
into the possession of the Agent or any of its officers, directors, employees,
agents, attorneys-in-fact or Affiliates.
10.7. Indemnification
Each Lender agrees to indemnify the Agent in its capacity as
such (to the extent not promptly reimbursed by the Company and without limiting
the obligation of the Company to do so), pro rata according to (i) at any time
when no Loans are outstanding, its Commitment Percentage, or if no Commitments
then exist, its Commitment Percentage on the last day on which Commitments did
exist, and (ii) at any time when Loans are outstanding (x) if the Commitments
then exist, its Commitment Percentage or (y) if the Commitments have been
terminated or otherwise no longer exist, the percentage equal to the fraction
(A) the numerator of which is such Lender's Credit Exposure and (B) the
denominator of which is the Aggregate Credit Exposure, from and against any and
all liabilities, obligations, claims, losses, damages, penalties, actions,
judgments, suits, costs, expenses and disbursements of any kind whatsoever,
including any amounts paid to the Lenders by or for the account of the Company
pursuant to the terms of the Loan Documents or the CVS Subordinated Note that
are subsequently rescinded or avoided (or must otherwise be restored or
returned), which may at any time (including at any time following the payment of
the Loans and the Notes) be imposed on, incurred by or asserted against the
Agent in any way relating to or arising out of the Loan Documents or the CVS
Subordinated Note or any other document contemplated by or referred to therein
or the transactions contemplated thereby or any action taken or omitted to be
taken by the Agent under or in connection therewith; provided that no Lender
shall be liable for the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements to the extent resulting solely from the gross negligence or
willful misconduct of the Agent. The agreements in this Section shall survive
the payment of the Loans and all other amounts payable under the Loan Documents.
If the Agent is subsequently reimbursed by the Company for such amounts,
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the Agent shall remit to the Lenders their pro rata shares of such reimbursement
to the extent they previously paid such amounts.
10.8. Agent in Its Individual Capacity
BNY and each Affiliate thereof, may make loans to, accept
deposits from, issue letters of credit for the account of and generally engage
in any kind of business with the Borrower and the Subsidiaries as though it were
not the Agent and BNYCMI did not arrange the transactions contemplated hereby.
With respect to the Commitment made or renewed by BNY, BNY shall have the same
rights and powers under the Loan Documents and the CVS Subordinated Note as any
Lender and may exercise the same as though it were not the Agent, the Issuer and
the Swing Line Lender and the term "Lender" shall include BNY.
10.9. Successor Agent
If at any time the Agent deems it advisable, in its sole
discretion, it may submit to each Lender a written notification of its
resignation as Agent under the Loan Documents and the CVS Subordinated Note,
such resignation to be effective on the earlier to occur of (a) the thirtieth
day after the date of such notice, and (b) the date upon which any successor to
the Agent, in accordance with the provisions of this Section, shall have
accepted in writing its appointment as successor Agent. Upon any such
resignation, the Required Lenders shall have the right to appoint from among the
Lenders a successor Agent. If no such successor Agent shall have been so
appointed by the Required Lenders and accepted such appointment within 30 days
after the retiring Agent's giving of notice of resignation, then the retiring
Agent may, on behalf of the Lenders, appoint a successor Agent, which successor
Agent shall be a commercial bank organized and licensed under the laws of the
United States of America or of any State thereof and having a combined capital
and surplus of at least $500,000,000. Upon the written acceptance of any
appointment as Agent hereunder by a successor Agent, such successor Agent shall
automatically become a party to this Agreement and shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent's rights, powers, privileges and duties
as Agent under the Loan Documents and the CVS Subordinated Note shall be
terminated. The Credit Parties and the Lenders shall execute such documents as
shall be necessary to effect such appointment. After any retiring Agent's
resignation as Agent, the provisions of this Section 10 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was the
Agent. If at any time there shall not be a duly appointed and acting Agent, upon
notice duly given, the
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Credit Parties agree to make each payment when due under the Loan Documents and
the CVS Subordinated Note directly to the Lenders entitled thereto during such
time.
11. GUARANTY OF THE COMPANY
In order to induce the Agent, the Issuing Bank and the Lenders to enter
into this Agreement, to make the Loans contemplated hereby and to issue and
participate in the Letters of Credit, the Company hereby agrees as follows:
11.1. Guaranty
The Company hereby absolutely, irrevocably and unconditionally
guarantees to the Agent, the Issuing Bank, the Swing Line Lender and the Lenders
the full and prompt payment when due, whether at stated maturity, by
acceleration, by mandatory prepayment, by notice of intention to prepay or
otherwise, of all obligations, now existing or hereafter arising, of the
Subsidiary Borrowers, including all principal and interest (whether accruing
before or after any event set forth in Sections 9.1(h) or (i) and whether or not
allowed) under this Agreement to which it is a party and whether direct,
indirect or contingent, incurred as primary obligor or otherwise, secured or
unsecured and all costs and expenses incurred by the Agent, the Issuing Bank,
the Swing Line Lender and the Lenders in enforcing any thereof, whether or not
suit is instituted (as the same may be amended, increased, modified, renewed,
refunded, extended, increased or refinanced from time to time, collectively, the
"Obligations"). Regardless of whether the Agent, the Issuing Bank, the Swing
Line Lender or the Lenders are prevented or otherwise hindered by law from
collecting or otherwise enforcing any of the Obligations in accordance with
their terms, whether as the result of the commencement of any bankruptcy or
similar proceedings against any of the Subsidiary Borrowers or otherwise, the
Agent, the Issuing Bank, the Swing Line Lender and the Lenders shall be entitled
to receive hereunder from the Company upon demand therefor the sums which would
have been otherwise due had such collection or enforcement not been prevented or
hindered.
11.2. Absolute Obligation
The obligations of the Company under this Guaranty shall be
absolute, irrevocable, unconditional and continuing until the Aggregate
Commitments have been terminated, the Swing Line Commitment has been terminated,
the Letter of Credit Commitment has been terminated, all Letters of Credit have
expired or otherwise
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terminated and all of the Obligations are indefeasibly paid in full in cash and
shall not be subject to any counterclaim, right or set-off or any defense
whatsoever. The Company acknowledges and agrees that the Agent, the Issuing
Bank, the Swing Line Lender and the Lenders have no responsibility or liability,
and shall not be deemed to have made any representation or warranty, with
respect to the validity, enforceability or collectibility of this Agreement or
any document executed or delivered in connection therewith, or any preference or
priority ranking with respect to the payment of the Obligations or the validity
or perfection of any security interest under any of this Agreement. The Agent,
the Issuing Bank, the Swing Line Lender and the Lenders shall have no obligation
to enforce this Agreement or any collateral security hereunder, by any action,
including, without limitation, making or perfecting any claim against any of the
Subsidiary Borrowers, prior to being entitled to the benefits of this Guaranty.
Nothing except the indefeasible cash payment in full of the Obligations shall
release the Company from liability under this Guaranty. The Company hereby
irrevocably and forever waives any right to succeed to any of the rights of the
Agent, the Issuing Bank, the Swing Line Lender and the Lenders against the
Subsidiary Borrowers under this Agreement, whether by way of subrogation or
otherwise until all Obligations have been indefeasibly paid in full in cash.
11.3. Guaranty of Payment
This Guaranty is a guaranty of payment. The liability and
obligations of the Company shall be primary, direct and absolute, and the
Company hereby waives any right to require that resort be had by the Agent, the
Issuing Bank, the Swing Line Lender and the Lenders against any of the
Subsidiary Borrowers or any other Person, or to require that resort be had by
the Agent, the Issuing Bank, the Swing Line Lender and the Lenders to any direct
or indirect collateral security. The Agent may, at its option, proceed against
the Company in the first instance to enforce any obligation to collect any
monies, the payment of which is guaranteed hereby, without first proceeding
against any of the Subsidiary Borrowers or any other Person and without first
resorting to any other remedies, as the Agent may deem advisable. The liability
of the Company hereunder shall in no way be affected or impaired by any
acceptance by the Agent, the Issuing Bank, the Swing Line Lender or the Lenders
or any direct or indirect security for, or other guarantor upon, any
indebtedness, liability or obligation of the Subsidiary Borrowers to the Agent,
the Issuing Bank, the Swing Line Lender and the Lenders, or by any failure,
delay, neglect or omission of the Agent, the Issuing Bank, the Swing Line Lender
or any Lenders to realize upon or perfect any such security, indebtedness,
liability or obligation, or by any direct or indirect collateral security
therefor, or by the bankruptcy,
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reorganization or insolvency of, or by any other proceeding for the relief of
debtors commenced against, any of the Subsidiary Borrowers or any other Person,
or by the release, exchange, substitution or any loss or impairment of any
collateral security, or the liability of any other Person in respect of the
Obligations, including, without limitation, the release of any other guarantor
or any collateral security provided thereby, or by the invalidity or
unenforceability of this Agreement, or any of the Obligations against any of the
Subsidiary Borrowers for any reason, or by any amendment or waiver of or any
consent to or departure from this Agreement, or by any reason or circumstance
which might constitute a defense available to or a discharge of any Subsidiary
Borrower or the Company in its capacity as a guarantor, including, without
limitation, any defense of sovereign immunity or any similar defense available
to any Subsidiary Borrower or the Company under applicable law, from any of its
obligations (including, without limitation, in respect of the Obligations), or
by the fact that at any time or from time to time none of the Obligations may be
outstanding, or by the merger or consolidation of any Subsidiary Borrower with
any other Person, or by the dissolution or liquidation of any Subsidiary
Borrower, or by any law, rule, regulation or decree now or hereafter in effect
which might affect any of the terms or conditions of the Obligations, or by the
preference, priority ranking or collectibility of any of the Obligations, or by
the existence or exercise of any right of set-off by the Agent, the Issuing
Bank, the Swing Line Lender or any Lender, or by any other reason whatsoever.
11.4. Repayment in Bankruptcy
If, at any time or times subsequent to the performance by the
Company of its obligations hereunder or the termination of this Guaranty, the
Agent, the Issuing Bank, the Swing Line Lender or any Lender shall be required
to repay any amounts previously paid by or on behalf of any of the Subsidiary
Borrowers in reduction of the Obligations under this Agreement by virtue of an
order of any court having jurisdiction in the premises, including, without
limitation, as a result of an adjudication that such amounts constituted
preferential payments or fraudulent conveyances, this Guaranty shall continue to
be effective, or shall be reinstated, as the case may be, all as though such
payments had not been made.
11.5. Other Provisions in Guaranty
(i) No failure by the Agent, the Issuing Bank, the Swing Line
Lender or any of the Lenders to exercise, and no delay by the Agent in
exercising, any right or remedy under this Agreement shall operate as a waiver
thereof.
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(ii) The Company waives all errors or omissions of the Agent,
the Issuing Bank, the Swing Line Lender or any of the Lenders in connection with
the administration of this Agreement, the Letters of Credit and any collateral
security therefor, except errors or omissions which constitute gross negligence
or willful misconduct.
(iii) Without limiting the foregoing, the Company waives any
act or omission of the Agent, the Issuing Bank, the Swing Line Lender or any of
the Lenders which may affect or change in any way the liability of the Company
under this Guaranty.
(iv) This Guaranty shall be binding upon the Company and its
successors and assigns and shall inure to the benefit of the Agent, the Issuing
Bank, the Swing Line Lender and the Lenders and their respective successors and
assigns, provided that the Company may not assign its obligations under this
Guaranty without the consent of all of the Lenders.
(v) Except as expressly provided in Section 9.1, the Company
hereby waives presentment, demand for payment, notice of default, non-
performance and dishonor, protest and notice of protest of or in respect of this
Agreement and the incurrence of the Obligations, and notice of acceptance of
this Guaranty and reliance hereupon by the Agent, the Issuing Bank, the Swing
Line Lender and the Lenders.
(vi) The Company agrees that this Guaranty shall automatically
extend, without any further action, to this Agreement and the Obligations as the
same may be amended, increased, extended, modified, supplemented or waived from
time to time in accordance with the terms hereof.
12. OTHER PROVISIONS
12.1. Amendments, Waivers, Etc.
With the written consent of the Required Lenders, the Agent
and the Credit Parties thereto may, from time to time, enter into written
amendments, supplements or modifications of the Loan Documents or the CVS
Subordinated Note and, with the written consent of the Required Lenders, the
Agent on behalf of the Lenders may execute and deliver to any such parties a
written instrument waiving or consenting to the departure
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from, on such terms and conditions as the Agent may specify in such instrument,
any of the requirements of the Loan Documents or the CVS Subordinated Note or
any Default or Event of Default and its consequences, provided that no such
amendment, supplement, modification, waiver or consent shall, without the
consent of all of the Lenders (i) increase the Commitment Amount of any Lender
(provided that no waiver of a Default or Event of Default shall be deemed to
constitute such an increase), (ii) extend the Commitment Period, (iii) reduce
the amount, or extend the time of payment, of the Fees, (iv) reduce the rate, or
extend the time of payment of, interest on any Loan, any Note or any
Reimbursement Obligation (other than the applicability of any post-default
increase in such rate of interest), (v) reduce the amount, or extend the time of
payment of any payment of any Reimbursement Obligation or principal on any Loan
or any Note, (vi) decrease or forgive the principal amount of any Loan, any Note
or any Reimbursement Obligation, (vii) consent to any assignment or delegation
by a Credit Party of any of its rights or obligations under any Loan Document to
which it is a party or the CVS Subordinated Note (except as expressly
contemplated by Section 8.4), (viii) release either Guaranty or any Guarantor
thereunder, (ix) change the provisions of this Section 12.1, (x) change the
definition of Required Lenders, (xi) change the several nature of the
obligations of the Lenders, or (xii) change the sharing provisions among
Lenders. Notwithstanding the foregoing, no such amendment, supplement,
modification, waiver or consent shall (A) amend, modify or waive any provision
of Section 10 or otherwise change any of the rights or obligations of the Agent,
the Issuer or the Swing Line Lender under any Loan Document or the CVS
Subordinated Note without the written consent of the Agent, the Issuer or the
Swing Line Lender, as the case may be, (B) change the Letter of Credit
Commitment, change the amount or the time of payment of the Letter of Credit
Commissions, or change any other term or provision which relates to the Letter
of Credit Commitment or the Letters of Credit without the written consent of the
Issuer or (C) change the Swing Line Commitment, change the amount or the time of
payment of the Swing Line Loans or interest thereon or change any other term or
provision which relates to the Swing Line Commitment or the Swing Line Loans
without the written consent of the Swing Line Lender. Any such amendment,
supplement, modification, waiver or consent shall apply equally to each of the
Lenders and shall be binding upon the parties to the applicable Loan Document,
the Lenders, the Agent and all future holders of the Loans and the Reimbursement
Obligations. In the case of any waiver, the Credit Parties, the Lenders and the
Agent shall be restored to their former position and rights under the Loan
Documents, but any Default or Event of Default waived shall not extend to any
subsequent or other Default or Event of Default, or impair any right consequent
thereon.
12.2. Notices
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Except as otherwise expressly provided herein, all notices,
requests and demands to or upon the respective parties hereto to be effective
shall be in writing and, if in writing, shall be deemed to have been duly given
or made (a) when delivered by hand, (b) one Domestic Business Day after having
been sent by overnight courier service at the cost of the sender, (c) five
Domestic Business Days after having been deposited in the mail, first-class
postage prepaid, or (d) in the case of fax notice, when sent, addressed as
follows in the case of the Company for itself and on behalf of each other Credit
Party, the Agent, the Issuer and the Swing Line Lender, and as set forth in
Exhibit A in the case of each of the Lenders, or to such other addresses as to
which the Agent may be hereafter notified by the respective parties hereto or
any future holders of the Notes:
The Company:
Linens 'n Things, Inc.
0 Xxxxxxxx Xxxx
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxxxxx,
Senior Vice President/CFO
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
The Agent, the Swing Line Lender and the Issuer:
in the case of each Borrowing request, each notice of
prepayment under Section 2.7 and each Letter of Credit
Request:
The Bank of New York
Xxx Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxx,
Agency Function Administration
Facsimile: (000) 000-0000,6366 or 6367
Telephone: (000) 000-0000,
in all other cases:
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The Bank of New York
Retailing Industry Division
0xx Xxxxx
Xxx Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx,
Vice President
Facsimile: (000) 000-0000
Telephone: (000) 000-0000,
except that any notice, request or demand by a Borrower to or upon the Agent or
the Lenders pursuant to Sections 2.3, 2.4, 2.6, 2.7, 2.8, 2.9 or 3.3 shall not
be effective until received. Any party to a Loan Document may rely on signatures
of the parties thereto which are transmitted by fax or other electronic means as
fully as if originally signed, provided that any notice of Default or Event of
Default and notices under Section 9.2 shall be required to be given or made in
accordance with clauses (a), (b) or (c) of this Section 12.2.
12.3. No Waiver; Cumulative Remedies
No failure to exercise and no delay in exercising, on the part
of the Agent, any Lender or the Issuer, any right, remedy, power or privilege
under any Loan Document or the CVS Subordinated Note shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, remedy, power or
privilege under any Loan Document or the CVS Subordinated Note preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege. The rights, remedies, powers and privileges under the Loan
Documents and the CVS Subordinated Note are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
12.4. Survival of Representations and Warranties
All representations and warranties made in the Loan Documents
and in any document, certificate or statement delivered pursuant thereto or in
connection therewith shall survive the execution and delivery of the Loan
Documents.
12.5. Payment of Expenses and Taxes; Indemnified Liabilities
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The Company agrees, promptly upon presentation of a statement
or invoice therefor setting forth in reasonable detail the items thereof, and
whether any Loan is made or Letter of Credit is issued, (a) to pay or reimburse
the Agent and BNYCMI for all their reasonable costs and expenses actually
incurred in connection with the development, syndication, preparation and
execution of, and any amendment, waiver, consent, supplement or modification to,
the Loan Documents or the CVS Subordinated Note, any documents prepared in
connection therewith and the consummation of the transactions contemplated
thereby, whether such Loan Documents or CVS Subordinated Note or any such
amendment, waiver, consent, supplement or modification thereto or any documents
prepared in connection therewith are executed and whether the transactions
contemplated thereby are consummated, including the reasonable fees and
disbursements of Special Counsel, (b) to pay, indemnify, and hold the Agent, the
Lenders and the Issuer harmless from any and all recording and filing fees and
any and all liabilities and penalties with respect to, or resulting from any
delay (other than penalties to the extent attributable to the negligence of the
Agent, the Lenders or the Issuer, as the case may be, in failing to pay such
fees or other liabilities when due) in paying, stamp, excise and other similar
taxes, if any, which may be payable or determined to be payable in connection
with the execution and delivery of, or consummation of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any waiver
or consent under or in respect of, the Loan Documents, the CVS Subordinated Note
and any such other documents, and (c) to pay, reimburse, indemnify and hold the
Agent, the Lenders and the Issuer and each of their respective officers,
directors and employees harmless from and against any and all other liabilities,
obligations, claims, losses, damages, penalties, actions, judgments, suits,
costs, expenses and disbursements of any kind or nature whatsoever (including
reasonable counsel fees and disbursements of counsel (including the allocated
costs of internal counsel) and such local counsel as may be required) actually
incurred with respect to the enforcement, performance of, and preservation of
rights under, the Loan Documents and the CVS Subordinated Note (all the
foregoing, collectively, the "Indemnified Liabilities") and, if and to the
extent that the foregoing indemnity may be unenforceable for any reason, the
Company agrees to make the maximum payment permitted under applicable law;
provided that the Company shall have no obligation hereunder to pay Indemnified
Liabilities to any indemnified person under this Section arising from the gross
negligence or willful misconduct of such indemnified person. The agreements in
this Section shall survive the termination of the Commitments and the payment of
the Loans and the Notes and all other amounts payable under the Loan Documents.
12.6. Lending Offices
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Each Lender shall have the right at any time and from time to
time to transfer any Loan to a different office of such Lender, subject to
Section 3.10.
12.7. Successors and Assigns
(a) The Loan Documents shall be binding upon and inure to the
benefit of the Credit Parties, the Lenders, the Agent, the Issuer, all future
holders of the Notes and the Reimbursement Obligations and their respective
successors and assigns; provided that no Credit Party shall assign, transfer or
delegate any of its rights or obligations under the Loan Documents or the CVS
Subordinated Note to which it is a party without the prior consent of the Agent,
the Issuer and all of the Lenders.
(b) Notwithstanding Section 12.7(c), but subject to Section
12.7(e), each Lender may at any time assign all or any portion of its rights
under any Loan Document to any Federal Reserve Bank.
(c) In addition to its rights under Section 12.7(b), each
Lender shall have the right, at any time, upon written notice to the Agent of
its intent to do so, to sell, assign, transfer or negotiate (each an
"Assignment") all or any portion of all of its Loans, its Commitment and its
Notes, if any, and its interest in the Loan Documents to any subsidiary or
Affiliate of such Lender, to any other Lender or, with the prior written consent
of the Company, the Swing Line Lender and the Issuer (which consents shall not
be unreasonably withheld and shall not be required of the Company if, at the
time of such Assignment, an Event of Default shall exist), to any other bank,
insurance company, pension fund, mutual or other similar fund or other financial
institution, provided that (i) each such Assignment shall be of a constant, and
not varying, percentage of all of the assigning Lender's rights and obligations
under Loan Documents and be in a minimum amount of $5,000,000 (which minimum
amount shall not be applicable to an Assignment by a Lender to a subsidiary or
Affiliate of such Lender) or the full amount of such Lender's Commitment, and
(ii) the parties to each such Assignment (excluding a Credit Party if such
Credit Party is a party to such assignment) shall execute and deliver to the
Agent an Assignment and Acceptance Agreement, together with a fee (the
"Assignment Fee"), payable to the Agent, of $3,500, provided that no Assignment
Fee shall be payable with respect to an Assignment by a Lender to one or more of
its Affiliates. Upon receipt of each such executed Assignment and Acceptance
Agreement together with the Assignment Fee therefor, the Agent shall execute the
same and, in the event that either the assignee thereunder is a Lender (or a
subsidiary or Affiliate thereof) or the Company shall have consented to such
assignment (to the extent that such consent was not unreasonably
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withheld and is required as aforesaid), (i) record the same and execute two
copies of such Assignment and Acceptance Agreement in the appropriate place,
deliver one copy to the assignor and one copy to the assignee, and (ii) request
a Borrower to execute and deliver (1) to such assignee, one or more Notes, in an
aggregate principal amount equal to the Loans assigned to, and Commitment
assumed by, such assignee, and (2) to such assignor, in the event that such
assignor shall retain any Loans and Commitment, one or more Notes in an
aggregate principal amount equal to the balance of such assignor Lender's Loans
and Commitment, in each case against receipt of such assignor Lender's existing
Note or Notes, as the case may be, appropriately marked to indicate their
substitution. Each Borrower agrees that it shall, upon each such request of the
Agent, execute and deliver such new Notes at its own cost and expense. Upon such
delivery, acceptance and recording by the Agent, from and after the effective
date specified in such Assignment and Acceptance Agreement, the assignee
thereunder shall be a party hereto and shall for all purposes of the Loan
Documents be deemed a "Lender" and, to the extent provided in such Assignment
and Acceptance Agreement, the assignor Lender thereunder shall be released from
its obligations under the Loan Documents.
(d) In addition to the participations provided for in Section
12.9(b), each Lender may grant participations in all or any part of its Loans,
its Notes and its Commitment to one or more banks, insurance companies, pension
funds, mutual funds or other financial institutions, provided that (i) such
Lender's obligations under the Loan Documents shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties to the Loan
Documents for the performance of such obligations, (iii) the Borrowers, the
Agent, the Issuer and the Lenders shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and obligations under
the Loan Documents, (iv) no subparticipations shall be permitted, and (v) the
voting rights of any holder of any participation shall be limited to decisions
that in accordance with Section 12.1 require the consent of all of the Lenders.
The Company acknowledges and agrees that any such participant shall for purposes
of Section 3.5, 3.6, 3.10 and 11.5 be deemed to be a "Lender", provided that in
no event shall the Company be liable for any amounts under said Sections in
excess of the amounts for which it would be liable but for such participation.
(e) No Lender shall, as between and among the Borrowers, the
Agent, the Issuer, the Swing Line Lender and such Lender, be relieved of any of
its obligations under the Loan Documents as a result of any assignment of or
granting of participations in, all or any part of its Loans, its Commitment and
its Notes, except that a Lender shall
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be relieved of its obligations to the extent of any such assignment of all or
any part of its Loans, its Commitment or its Notes pursuant to Section 12.7(c).
12.8. Counterparts
Each of the Loan Documents (other than any Notes) may be
executed on any number of separate counterparts and all of said counterparts
taken together shall be deemed to constitute one and the same agreement. It
shall not be necessary in making proof of any Loan Document to produce or
account for more than one counterpart signed by the party to be charged. A set
of the copies of this Agreement signed by all of the parties hereto shall be
lodged with each of the Company and the Agent. Any party to a Loan Document may
rely upon the signatures of any other party thereto which are transmitted by fax
or other electronic means to the same extent as if originally signed.
12.9. Set-off and Sharing of Payments
(a) In addition to any rights and remedies of the Lenders and
the Issuer provided by law, upon the occurrence of an Event of Default under
Section 9.1(a) or (b) or upon the acceleration of the payment of the Loans and
Reimbursement Obligations, each Lender and the Issuer shall have the right,
without prior notice to the Borrower, any such notice being expressly waived by
any Credit Party, to set-off and apply against any indebtedness or other
liability, whether matured or unmatured, of any Credit Party to such Lender or
the Issuer arising under the Loan Documents, any amount owing from such Lender
or the Issuer to such Credit Party. To the extent permitted by applicable law,
the aforesaid right of set-off may be exercised by such Lender or the Issuer
against a Credit Party or against any trustee in bankruptcy, custodian, debtor
in possession, assignee for the benefit of creditors, receiver, or execution,
judgment or attachment creditor of such Credit Party, or against anyone else
claiming through or against such Credit Party or such trustee in bankruptcy,
custodian, debtor in possession, assignee for the benefit of creditors,
receivers, or execution, judgment or attachment creditor, notwithstanding the
fact that such right of set-off shall not have been exercised by such Lender or
the Issuer prior to the making, filing or issuance of, service upon such Lender
or the Issuer of, or notice to such Lender or the Issuer of, any petition,
assignment for the benefit of creditors, appointment or application for the
appointment of a receiver, or issuance of execution, subpoena, order or warrant.
Each Lender and the Issuer agree promptly to notify the applicable Credit Party
and the Agent after each such set-off and application made by such Lender or the
Issuer, provided that the failure to give such notice shall not affect the
validity of such set-off and application.
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(b) If any Lender or the Issuer (each a "Benefited Lender")
shall obtain any payment (whether voluntary, involuntary, through the exercise
of any right of set-off, or otherwise) on account of its Loans or its Notes or
the Reimbursement Obligations in excess of its pro rata share (in accordance
with the outstanding principal balance of all Loans or the Reimbursement
Obligations ) of payments then due and payable on account of the Loans and Notes
received by all the Lenders or the Reimbursement Obligations, such Lender or the
Issuer, as the case may be, shall forthwith purchase, without recourse, for
cash, from the other Lenders such participations in their Loans and Notes or the
Reimbursement Obligations as shall be necessary to cause such purchasing Lender
or the Issuer to share the excess payment with each of them according to their
pro rata share (in accordance with the outstanding principal balance of all
Loans or the Reimbursement Obligations), provided that if all or any portion of
such excess payment is thereafter recovered from such purchasing Lender or the
Issuer, such purchase from each Lender shall be rescinded and each such Lender
shall repay to the purchasing Lender or the Issuer the purchase price to the
extent of such recovery, together with an amount equal to such Lender's pro rata
share (according to the proportion of (i) the amount of such Lender's required
repayment to (ii) the total amount so recovered from the purchasing Lender or
the Issuer) of any interest or other amount paid or payable by the purchasing
Lender in respect of the total amount so recovered. Each Credit Party agrees
that any Lender or the Issuer so purchasing a participation from another Lender
pursuant to this Section may exercise such rights to payment (including the
right of set-off) with respect to such participation as fully as if such Lender
or the Issuer were the direct creditor of such Credit Party in the amount of
such participation.
12.10. Indemnity
Each Credit Party agrees to indemnify and hold harmless each
of the Agent, BNYCMI, the Issuer and each Lender from and against any loss,
cost, liability, damage or expense, including the reasonable fees and
disbursements of counsel (including the unallocated costs of internal counsel)
and such local counsel as may be required to represent the Agent, the Issuer and
each Lender actually incurred by the Agent, the Issuer or such Lender in
preparing for, defending against, or providing evidence, producing documents or
taking any other action in respect of, any litigation, administrative proceeding
or investigation under any federal securities law or any other statute of any
jurisdiction, or any regulation, or at common law or otherwise, which is alleged
to arise out of or is based upon (1) any untrue statement or alleged untrue
statement of any material fact by or on behalf of any Credit Party, in any
document or schedule executed or
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filed with any Governmental Authority by or on behalf of a Credit Party which
relates to the transactions contemplated by the Loan Documents, (2) any omission
or alleged omission by or on behalf of a Credit Party to state any material fact
required to be stated in such document or schedule, or necessary to make the
statements made therein, in light of the circumstances under which made, not
misleading, (3) any acts, practices or omissions or alleged acts, practices or
omissions of a Credit Party or its agents relating to the use of the proceeds of
any Loan which is alleged to be in violation of Section 2.5, or in violation of
any federal securities law or of any other statute, regulation or other law of
any jurisdiction applicable thereto, or (4) any Loan Document or any other
document contemplated by or referred to therein or the transactions contemplated
thereby or any action taken or omitted to be taken by the Agent, the Issuer or
such Lender under or in connection with any of the foregoing. Notwithstanding
the above, no Credit Party shall have any liability under clause (4) of this
Section to indemnify or hold harmless any Person for any loss, cost, liability,
damage or expense relating to income or withholding taxes or any tax in lieu of
such taxes. The indemnity set forth herein shall be in addition to any other
obligations or liabilities of the Credit Parties to the Agent, the Issuer and
the Lenders under the Loan Documents or at common law or otherwise, shall
include the reasonable fees and disbursements of counsel (including the
unallocated costs of internal counsel) and such local counsel as may be required
in connection with establishing liability under this Section or collecting
amounts payable under this Section and shall survive any termination of this
Agreement, the expiration of the Commitments and the payment of all indebtedness
under the Loan Documents, provided that no Credit Party shall have any liability
under this Section to any indemnified person with respect to indemnified
liabilities which are determined by a final and nonappealable judgment of a
court of competent jurisdiction to have arisen primarily from the gross
negligence or willful misconduct of such indemnified person.
12.11. Governing Law
The Loan Documents and the rights and obligations of the
parties thereto shall be governed by, and construed and interpreted in
accordance with, the laws of the State of New York, without regard to principles
of conflict of laws.
12.12. Severability
Every provision of the Loan Documents is intended to be
severable, and if any term or provision thereof shall be invalid, illegal or
unenforceable for any reason, the validity, legality and enforceability of the
remaining provisions thereof shall not be af-
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fected or impaired thereby, and any invalidity, illegality or unenforceability
in any jurisdiction shall not affect the validity, legality or enforceability of
any such term or provision in any other jurisdiction.
12.13. Integration
All exhibits to the Loan Documents shall be deemed to be a
part thereof. Each Loan Document embodies the entire agreement and understanding
between or among the parties thereto with respect to the subject matter thereof
and supersedes all prior agreements and understandings between or among the
parties thereto with respect to the subject matter thereof.
12.14. Treatment of Certain Information
Each Lender, the Issuer and the Agent agree (on behalf of
itself and each of its affiliates, directors, officers, employees and
representatives) to use reasonable precautions to keep confidential, in
accordance with their customary procedures for handling confidential information
of the same nature and non-public information supplied by the Company pursuant
to this Agreement (a) which is identified by the Company as being confidential
at the time the same is delivered to such Lender, the Issuer or the Agent, or
(b) which constitutes any financial statement, financial projections or
forecasts, budget, compliance certificate, audit report, management letter or
accountants' certification delivered hereunder, or tax return or other tax
related information, provided that nothing herein shall limit the disclosure of
any such information (i) to the extent required by statute, rule, regulation or
judicial process, (ii) to counsel to any Lender, the Issuer or to the Agent,
(iii) to bank examiners, auditors or accountants, (iv) to the Agent, the Issuer
or the Lenders, (v) in connection with any litigation to which any one or more
of the Lenders, the Issuer or the Agent is a party, or (vi) to any assignee or
participant (or prospective assignee or participant) so long as such assignee or
participant (or prospective assignee or participant) first executes and delivers
a confidentiality agreement containing substantially the same restrictions as
set forth in this Section.
12.15. Acknowledgments
Each Credit Party acknowledges that (a) it has been advised by
counsel in the negotiation, execution and delivery of the Loan Documents, (b) by
virtue of the Loan Documents, none of the Agent, the Issuer, or any Lender has
any fiduciary relationship to any Credit Party, and the relationship between the
Agent, the Issuer, and the Lenders, on
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the one hand, and the Credit Parties, on the other hand, is solely that of
debtor and creditor, and (c) by virtue of the Loan Documents, no joint venture
exists among the Lenders or among the Credit Parties and the Lenders.
12.16. Consent to Jurisdiction
Each Credit Party irrevocably submits to the non-exclusive
jurisdiction of any New York State or Federal Court sitting in the City of New
York over any suit, action or proceeding arising out of or relating to the Loan
Documents. Each Credit Party irrevocably waives, to the fullest extent permitted
by law, any objection which it may now or hereafter have to the laying of the
venue of any such suit, action or proceeding brought in such a court and any
claim that any such suit, action or proceeding brought in such a court has been
brought in an inconvenient forum. Each Credit Party agrees that a final judgment
in any such suit, action or proceeding brought in such a court, after all
appropriate appeals, shall be conclusive and binding upon it.
12.17. Service of Process
Each Credit Party agrees that process may be served against it
in any suit, action or proceeding referred to in Section 12.16 by sending the
same by first class mail, return receipt requested or by overnight courier
service, with receipt acknowledged, to the address of the Company on behalf of
such Credit Party set forth in Section 12.2. Each Credit Party agrees that any
such service (i) shall be deemed in every respect effective service of process
upon it in any such suit, action, or proceeding, and (ii) shall to the fullest
extent enforceable by law, be taken and held to be valid personal service upon
and personal delivery to it.
12.18. No Limitation on Service or Suit
Nothing in the Loan Documents or any modification, waiver, or
amendment thereto shall affect the right of the Agent, the Issuer or any Lender
to serve process in any manner permitted by law or limit the right of the Agent,
the Issuer or any Lender to bring proceedings against a Credit Party in the
courts of any jurisdiction or jurisdictions.
12.19. WAIVER OF TRIAL BY JURY
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THE AGENT, THE ISSUER, THE LENDERS AND EACH CREDIT PARTY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT THEY MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION ARISING OUT OF, UNDER OR IN
CONNECTION WITH THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY.
FURTHER, EACH CREDIT PARTY HEREBY CERTIFIES THAT NO REPRESENTATIVE OR AGENT OF
THE AGENT, THE ISSUER, OR THE LENDERS, OR COUNSEL TO THE AGENT, THE ISSUER, OR
THE LENDERS, HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE AGENT, THE
ISSUER, OR THE LENDERS WOULD NOT, IN THE EVENT OF SUCH LITIGATION, SEEK TO
ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL PROVISION. EACH CREDIT PARTY
ACKNOWLEDGES THAT THE AGENT, THE ISSUER, AND THE LENDERS HAVE BEEN INDUCED TO
ENTER INTO THIS AGREEMENT BY, INTER ALIA, THE PROVISIONS OF THIS SECTION.
12.20. Effective Date
This Agreement shall be effective at such time (the "Effective
Date") as the Agent shall have received executed counterparts hereof by the
parties hereto and the conditions set forth in Sections 5.1 through 5.7 have
been or simultaneously will be satisfied, provided that this Agreement shall not
become effective unless all of such conditions are satisfied not later than
February 15, 1997.
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AS EVIDENCE of the agreement by the parties hereto to the
terms and conditions herein contained, each such party has caused this Agreement
to be executed on its behalf.
LINENS 'N THINGS, INC.
By: /s/ XXXXX X. XXXXXXXXXXX
________________________________
Name: Xxxxx X. Xxxxxxxxxxx
______________________________
Title: Senior Vice President/CFO
______________________________
LNT, INC.
By: /s/ XXXXX X. XXXXXXXXXXX
________________________________
Name: Xxxxx X. Xxxxxxxxxxx
_____________________________
Title: Senior Vice President/CFO
_____________________________
THE BANK OF NEW YORK, in its capacity as a
Lender, as Issuer, as the Swing Line Lender
and in its capacity as the Agent
By: /s/ XXXXXX X. XXXXXX, XX.
________________________________
Name: Xxxxxx X. Xxxxxx, Xx.
______________________________
Title: Vice President
______________________________
CORESTATES BANK, N.A.
By: /s/ XXXXXX X. XXXXXXXXX
________________________________
Name: Xxxxxx X. XxXxxxxxx
______________________________
Title: Vice President
______________________________
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THE FIRST NATIONAL BANK OF BOSTON
By: XXXXX X. XXXXXX
_______________________________
Name: Xxxxx X. Xxxxxx
______________________________
Title: Director
______________________________
FLEET NATIONAL BANK
By: XXXXXX X. XXXXXXX
________________________________
Name: Xxxxxx X. Xxxxxxx
______________________________
Title: Vice President
______________________________
CREDIT SUISSE
By: XXXXXX X. XXXX
________________________________
Name: Xxxxxx X. Xxxx
______________________________
Title: Associate
______________________________
By: XXXX XXXXXXXXX
________________________________
Name: Xxxx Xxxxxxxxx
______________________________
Title: Member of Senior Management
______________________________
FIRST UNION NATIONAL BANK
By: XXXX X. XXXXXXXXXX
________________________________
Name: Xxxx X. Xxxxxxxxxx
______________________________
Title: Vice President
______________________________
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PNC BANK, NATIONAL ASSOCIATION
By: XXXXXX X. XXXXXXXXX
________________________________
Name: Xxxxxx X. Xxxxxxxxx
______________________________
Title: Vice President
______________________________
THE SAKURA BANK, LTD.
By: XXXXXXXXX XXXXXX
________________________________
Name: Xxxxxxxxx Xxxxxx
______________________________
Title: Vice President
______________________________
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LINENS 'N THINGS EXHIBIT A
LIST OF COMMITMENTS, APPLICABLE LENDING OFFICES
AND ADDRESSES FOR NOTICES
A. LIST OF COMMITMENTS
Lender Commitment Amount
------------------ -----------------
THE BANK OF NEW YORK $ 25,000,000
CORESTATES BANK, N.A. $ 18,000,000
THE FIRST NATIONAL BANK OF BOSTON $ 18,000,000
FLEET NATIONAL BANK $ 18,000,000
CREDIT SUISSE $ 11,500,000
FIRST UNION NATIONAL BANK $ 11,500,000
PNC BANK, N.A. $ 11,500,000
THE SAKURA BANK, LTD. $ 11,500,000
TOTAL $125,000,000
94
B. LIST OF APPLICABLE LENDING OFFICES AND ADDRESSES FOR NOTICES
THE BANK OF NEW YORK
Applicable Lending Office for each Eurodollar Advance:
The Bank of New York
One Xxxx Xxxxxx, 00xx Xxxxx
Agency Function Administration
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000 or 6366 or 6367
Applicable Lending Office for all other Advances:
The Bank of New York
One Xxxx Xxxxxx, 00xx Xxxxx
Agency Function Administration
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000 or 6366 or 6367
Address for Notices:
The Bank of New York
Xxx Xxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X.Xxxxxx,
Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
CORESTATES BANK, N.A.
Applicable Lending Office for each Eurodollar Advance:
Corestates Bank, N.A.
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
95
Applicable Lending Office for all other Advances:
Corestates Bank, N.A.
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Address for Notices:
Corestates Bank, N.A.
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. XxXxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
FIRST UNION NATIONAL BANK
Applicable Lending Office for each Eurodollar Advance:
First Union National Bank
000 Xxxxx Xxxxxx, XX0000
Xxxxxx, Xxx Xxxxxx 00000
Attention: Xxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Applicable Lending Office for all other Advances:
First Union National Bank
000 Xxxxx Xxxxxx, XX0000
Xxxxxx, Xxx Xxxxxx 00000
Attention: Xxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Address for Notices:
First Union National Bank
000 Xxxxx Xxxxxx, XX0000
Xxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
96
THE SAKURA BANK, LIMITED
Applicable Lending Office for each Eurodollar Advance:
The Sakura Bank, Limited
000 Xxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx X. Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Applicable Lending Office for all other Advances:
The Sakura Bank, Limited
000 Xxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx X. Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Address for Notices:
The Sakura Bank, Limited
000 Xxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
PNC BANK, N.A.
Applicable Lending Office for each Eurodollar Advance:
PNC Bank, N.A.
Xxx Xxxxx Xxxxxx Xxxxxxxxx
Xxxx Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxx Styles
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Applicable Lending Office for all other Advances:
PNC Bank, N.A.
Xxx Xxxxx Xxxxxx Xxxxxxxxx
Xxxx Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxx Styles
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
97
Address for Notices:
PNC Bank, N.A.
Xxx Xxxxx Xxxxxx Xxxxxxxxx
Xxxx Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxx Xxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
CREDIT SUISSE NEW YORK
Applicable Lending Office for each Eurodollar Advance:
Credit Suisse New York
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Applicable Lending Office for all other Advances:
Credit Suisse New York
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Address for Notices:
Credit Suisse New York
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
FIRST NATIONAL BANK OF BOSTON
Applicable Lending Office for each Eurodollar Advance:
Credit Suisse New York
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
98
Applicable Lending Office for all other Advances:
Credit Suisse New York
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Address for Notices:
Credit Suisse New York
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
THE FIRST NATIONAL BANK OF BOSTON
Applicable Lending Office for each Eurodollar Advance:
The First National Bank of Boston
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Applicable Lending Office for all other Advances:
The First National Bank of Boston
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Address for Notices:
The First National Bank of Boston
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx XxXxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
99
FLEET NATIONAL BANK
Applicable Lending Office for each Eurodollar Advance:
Fleet National Bank
Xxx Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Applicable Lending Office for all other Advances:
Fleet National Bank
Xxx Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Address for Notices:
Fleet National Bank
Xxx Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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LINENS 'N THINGS EXHIBIT B
FORM OF BORROWING REQUEST
[Date]
The Bank of New York, as Agent
Xxx Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: ______________,
______________
Re: Credit Agreement, dated as of November __, 1996, by
and among LINENS 'N THINGS, INC., a Delaware
corporation (the "COMPANY"), the Subsidiary Borrowers
party thereto (each a "SUBSIDIARY BORROWER" and
collectively with the Company, the "BORROWERS"), the
Lenders party thereto and THE BANK OF NEW YORK, as
Agent (as amended, supplemented or otherwise modified
from time to time, the "Credit Agreement")
Capitalized terms used herein that are not otherwise defined herein
shall have the respective meanings ascribed thereto in the Credit Agreement.
Pursuant to Section 2.3 of the Credit Agreement, the Company on
behalf of each applicable Borrower signatory hereto hereby gives notice of
intention to borrow Revolving Credit Loans in the aggregate sum of $____________
on ____________, and/or a Swing Line Loan in the sum of $____________ on
____________, which borrowing shall consist of the following:
Type:
(ABR, Eurodollar Interest
Borrower or Swing Line) Amount Period
-------- ---------------- ------ --------
The Company (on behalf of itself and all Borrowers) hereby certifies
that on the date hereof and on the Borrowing Date set forth above, and after
giving effect to the Loans requested hereby:
(a) Each Credit Party is and shall be in compliance with all of the
terms, covenants and conditions of each Loan Document.
(b) There exists and there shall exist no Default or Event of
Default.
101
(c) The representations and warranties contained in the Credit
Agreement are and shall be true and correct, except those which are expressly
specified to be made as of an earlier date.
IN EVIDENCE of the foregoing, the undersigned has caused this Borrowing
Request to be duly executed on its behalf.
LINENS 'N THINGS, INC.
By: ________________________
Name: ______________________
Title: _______________________
[________________________]
By: ________________________
Name: ______________________
Title: _______________________
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LINENS 'N THINGS EXHIBIT C
FORM OF LETTER OF CREDIT REQUEST
[Date]
The Bank of New York, as Agent
Xxx Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: ______________,
______________
Re: Credit Agreement, dated as of November __, 1996, by and among
LINENS 'N THINGS, INC., a Delaware corporation (the
"COMPANY"), the Subsidiary Borrowers party thereto, the
Lenders party thereto and THE BANK OF NEW YORK, as Agent (as
amended, supplemented or otherwise modified from time to time,
the "CREDIT AGREEMENT")
Capitalized terms used herein that are not otherwise defined herein
shall have the respective meanings ascribed thereto in the Credit Agreement.
Pursuant to Section 2.7(b) of the Credit Agreement, the Company, on
behalf of [itself/_____________], as account party (the "Account Party"), hereby
requests the Issuer to issue a Letter of Credit for the account of the Account
Party and for the benefit of ______________________ on ____________ in
connection with ___________________________ in the maximum amount of
$_______________. A drawing may be made under such Letter of Credit under the
following conditions: _______________________________________________.
The Company (on behalf of itself and all Borrowers) hereby certifies
that on the date hereof and on the above requested date of issuance of such
Letter of Credit, and after giving effect to the issuance of such Letter of
Credit:
(a) The Account Party is a Borrower.
(b) Each Credit Party is and shall be in compliance with all of the
terms, covenants and conditions of each Loan Document.
(c) There exists and there shall exist no Default or Event of
Default.
(d) The representations and warranties contained in the Credit
Agreement are and shall be true and correct, except those which are expressly
specified to be made as of an earlier date.
103
IN EVIDENCE of the foregoing, the undersigned has caused this Letter of
Credit Request to be duly executed on its behalf.
LINENS 'N THINGS, INC.
By: ________________________
Name: ______________________
Title: _____________________
[__________________]
By: ________________________
Name: ______________________
Title: _____________________
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LINENS 'N THINGS EXHIBIT D
FORM OF BORROWER ADDENDUM
BORROWER ADDENDUM, dated as of ________, 199_, made by ___________,
a corporation organized under the laws of __________ (the "NEW BORROWER") and
LINENS 'N THINGS, INC., a Delaware corporation (the "COMPANY"), to THE BANK OF
NEW YORK, as agent (the "AGENT") under the Credit Agreement, dated as of
November __, 1996, among the Company, the Subsidiary Borrowers party thereto,
the Lenders party thereto and the Agent (as the same may from time to time be
amended, supplemented or otherwise modified, the "CREDIT AGREEMENT").
I. Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to such terms in the Credit
Agreement.
II. The Company desires to designate the New Borrower as a
Subsidiary Borrower pursuant to Section 2.10 of the Credit Agreement and the New
Borrower desires to become a Subsidiary Borrower pursuant thereto. The New
Borrower is a wholly-owned domestic Subsidiary and a Subsidiary Guarantor.
Accordingly, the Company and the New Borrower agree as follows:
A. The Company represents that no Default or Event of Default has
occurred and is continuing.
B. Pursuant to Section 2.10 of the Credit Agreement the Company
hereby designates the New Borrower as a Subsidiary Borrower under the Credit
Agreement and the New Borrower agrees that upon the acceptance hereof by the
Agent, the New Borrower (i) shall be, and shall be deemed to be, a "Subsidiary
Borrower" under, and as such term is defined in, the Credit Agreement with the
same force and effect as if originally named therein as a Subsidiary Borrower
and (ii) shall have made, and shall be deemed to have made, the representations
and warranties as to itself contained in Section 4 of the Credit Agreement.
C. There is submitted herewith by the New Borrower the certificate
required by Section 2.10 of the Credit Agreement together with the required
attachments thereto.
D. The New Borrower hereby designates the following address as its
address for notices:
______________________
______________________
Attention: ___________
___________
Telephone: (___) ___-____
Fax: (___) ___-____.
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E. This Borrower Addendum shall be governed by and construed in
accordance with the laws of the State of New York without regard to conflicts of
laws rules.
AS EVIDENCE OF THE FOREGOING, this Borrower Addendum has been
executed and delivered as of the day and year first above written.
[NAME OF NEW BORROWER]
By: ____________________________
Name:___________________________
Title: _________________________
LINENS 'N THINGS, INC.
By: ____________________________
Name:___________________________
Title: _________________________
ACCEPTED:
THE BANK OF NEW YORK, as
Agent
By: ____________________________
Name:___________________________
Title: _________________________
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LINENS 'N THINGS EXHIBIT E
FORM OF OPINION OF
SPECIAL COUNSEL TO THE AGENT
____________, 1996
TO THE LENDERS PARTY TO THE CREDIT
AGREEMENT (AS DEFINED BELOW)
Re: Credit Agreement, dated as of November __, 1996, by and among LINENS
'N THINGS, INC., a Delaware corporation (the "COMPANY"), the
Subsidiary Borrowers party thereto, the Lenders party thereto and
THE BANK OF NEW YORK, as Agent (the "Agent") (the "Credit
Agreement")
We have acted as Special Counsel to the Agent in connection with the
Credit Agreement. Capitalized terms used herein that are not defined herein
shall have the respective meanings ascribed thereto in the Credit Agreement.
We have examined originals or copies certified to our satisfaction of the
documents required to be delivered pursuant to the provisions of Section 5 of
the Credit Agreement. In conducting such examination, we have assumed the
genuineness of all signatures, the authenticity of all documents submitted to us
as originals, and the conformity to originals of all documents submitted to us
as copies.
Based upon the foregoing examination, and (1) assuming with your
permission the accuracy of the opinion of Xxxxxx Xxxxxx, counsel to the Credit
Parties, and (2) relying with your permission upon the representations and
warranties of the Company (on behalf of itself and all Borrowers) contained in
the Credit Agreement, we are of the opinion that all legal preconditions to the
effectiveness of the Credit Agreement have been satisfactorily met.
This opinion is rendered solely for your benefit in connection with the
transactions referred to herein and may not be relied upon by any other Person.
107
We express no opinion as to laws other than the laws of the State of New
York and the federal laws of the United States of America.
Very truly yours,
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LINENS 'N THINGS EXHIBIT F
OUTLINE OF OPINIONS OF COUNSEL TO THE CREDIT PARTIES
In connection with the Credit Agreement, dated as of November __,
1996, by and among LINENS 'N THINGS, INC. (the "COMPANY"), the Subsidiary
Borrowers party thereto (each a "SUBSIDIARY BORROWER" and collectively with the
Company, the "BORROWERS"), the Lenders party thereto and THE BANK OF NEW YORK,
as Agent (the "CREDIT AGREEMENT"), set forth below is an outline of the opinion
to be delivered to the Agent and the Lenders by counsel to the Credit Parties,
such opinion, including all qualifications, assumptions and exceptions, to be in
all respects satisfactory to the Agent (the "Opinion").
Capitalized terms used in the Opinion and which are not defined
therein shall have the meanings ascribed thereto in the Credit Agreement.
Opinions
1. Existence and Power
Each of the Company and the Subsidiaries is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or formation (except, in the case of the Subsidiaries, where the
failure to be in such good standing could not reasonably be expected to have a
Material Adverse effect), has all requisite corporate power and authority to own
its Property and to carry on its business as now conducted, and is qualified to
do business as a foreign corporation and is in good standing in each
jurisdiction in which it owns or leases real Property or in which the nature of
its business requires it to be so qualified (except those jurisdictions where
the failure to be so qualified or to be in good standing could not reasonably be
expected to have a Material Adverse effect).
2. Authority
Each Credit Party has full corporate power and authority to enter
into, execute, deliver and perform the terms of the Loan Documents to which it
is a party, all of which have been duly authorized by all proper and necessary
corporate action and are not in contravention of any applicable law or the terms
of its Certificate of Incorporation and By-Laws. No consent or approval of, or
other action by, shareholders of any Credit Party, any Governmental Authority,
or any other Person (which has not already been obtained) is required to
authorize in respect of such Credit Party, or is required in connection with the
execution, delivery and performance by such Credit Party of the Loan Documents
to which it is a party, or is required as a condition to the enforceability
against such Credit Party of the Loan Documents to which it is a party.
3. Binding Agreement
The Loan Documents to which it is a party constitute the valid and
legally binding obligations of each Credit Party, enforceable in accordance with
their respective
109
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and by equitable principles relating to the
availability of specific performance as a remedy.
4. Litigation
To the best of [MY/OUR] knowledge, there are no actions, suits,
arbitration proceedings or claims (whether purportedly on behalf of the Company
or any Subsidiary or otherwise) pending or threatened against the Company or any
Subsidiary or any of its respective Properties, or maintained by the Company or
any Subsidiary, at law or in equity, before any Governmental Authority which
could reasonably be expected to have a Material Adverse effect. To the best of
[MY/OUR] knowledge, there are no proceedings pending or threatened against the
Company or any Subsidiary (a) which call into question the validity or
enforceability of, or otherwise seek to invalidate any Loan Document, or (b)
which might, individually or in the aggregate, materially and adversely affect
any of the transactions contemplated by any Loan Document.
5. No Default
To the best of [MY/OUR] knowledge, neither the Company nor any
Subsidiary is in default under any agreement to which it is a party or by which
it or any of its Property is bound the effect of which could reasonably be
expected to have a Material Adverse effect. No notice to, or filing with, any
Governmental Authority is required for the due execution, delivery and
performance by any Credit Party of the Loan Documents to which it is a party.
6. No Conflicting Laws or Agreements
No provision of any existing statute, rule, regulation, or, to the
best of [MY/OUR] knowledge, any existing material mortgage, material indenture,
material contract, material agreement, judgment, decree or order binding on the
Company or any Subsidiary or affecting the Property of the Company or any
Subsidiary conflicts with, or requires any consent which has not already been
obtained under, or would in any way prevent the execution, delivery or
performance by any Credit Party of the terms of, any Loan Document to which it
is a party. To the best of [MY/OUR] knowledge, the execution, delivery and
performance by each Credit Party of the terms of each Loan Document to which it
is a party will not constitute a default under, or result in the creation or
imposition of, or obligation to create, any Lien upon the Property of any Credit
Party pursuant to the terms of any such mortgage, indenture, contract or
agreement.
7. Compliance with Applicable Laws; Filings
To the best of [MY/OUR] knowledge, neither the Company nor any
Subsidiary is in default with respect to any judgment, order, writ, injunction,
decree or decision of any Governmental Authority which default could reasonably
be expected to have a Material Adverse effect. To the best of [MY/OUR]
knowledge, the Company and each Subsidiary is complying with all applicable
statutes, rules and regulations of all
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110
Governmental Authorities, a violation of which could reasonably be expected to
have a Material Adverse effect. To the best of [MY/OUR] knowledge, the Company
and each Subsidiary has filed or caused to be filed with all Governmental
Authorities all reports, applications, documents, instruments and information
required to be filed pursuant to all applicable laws, rules, regulations and
requests which, if not so filed, could reasonably be expected to have a Material
Adverse effect.
8. Governmental Regulations
Neither the Company nor any Subsidiary nor any corporation
controlling the Company or any Subsidiary or under common control with the
Company or any Subsidiary is subject to regulation under the Investment Company
Act of 1940, as amended, or is subject to any statute or regulation which
regulates the incurrence of Indebtedness.
9. Federal Reserve Regulations; Use of Loan Proceeds
No Credit Party is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of purchasing or
carrying any margin stock within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System, as amended. If used in accordance with
Section 2.4 of the Credit Agreement, no part of the proceeds of the Loans or the
Letters of Credit has been or will be used, directly or indirectly, to purchase,
acquire or carry any Margin Stock or for a purpose which violates any law, rule
or regulation of any Governmental Authority, including, without limitation, the
provisions of Regulations G, T, U or X of the Board of Governors of the Federal
Reserve System, as amended.
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LINENS 'N THINGS EXHIBIT G
FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
Assignment and Acceptance Agreement (as the same may be amended,
supplemented or otherwise modified from time to time, this "AGREEMENT"), dated
as of ____________, by and between ____________ (the "ASSIGNOR") and
____________ (the "ASSIGNEE").
RECITALS
I. Reference is made to the Credit Agreement, dated as of November __,
1996, by and among LINENS 'N THINGS, INC., a Delaware corporation (the
"COMPANY"), the Subsidiary Borrowers party thereto, the Lenders party thereto
and THE BANK OF NEW YORK, as Agent (the "AGENT") (as amended, supplemented or
otherwise modified from time to time, the "CREDIT AGREEMENT").
II. The Assignor wishes to assign and delegate to the Assignee, and the
Assignee wishes to purchase and assume from the Assignor, some or all of the
Assignor's rights and obligations under the Loan Documents upon the terms, and
subject to the conditions, contained herein.
Therefore, in consideration of the Recitals, the terms and conditions
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Assignor and the Assignee
hereby agree as follows:
1. Defined Terms
(a) Each capitalized term used herein that is not defined herein
shall have the meaning ascribed thereto in the Credit Agreement.
(b) When used in this Agreement, each of the following capitalized
terms shall have the meaning ascribed thereto unless the context hereof
otherwise specifically requires:
"ASSIGNED PERCENTAGE": _____%.
"ASSIGNMENT EFFECTIVE DATE": as defined in Section 5.
"ASSIGNOR RIGHTS AND OBLIGATIONS": as of the Assignment
Effective Date, the Assigned Percentage of all of the Assignor's rights
and obligations under the Loan Documents, including, without limita-
tion, such percentage of its Revolving Credit Loans [,SWING LINE LOANS}
and its Commitment.
"PURCHASE PRICE": an amount equal to the Assigned Percentage
of the aggregate unpaid principal amount of the Assignor's Revolving
Credit Loans [AND SWING LINE LOANS] as of the Assignment Effective Date.
112
2. Assignment; Payment by Assignee
The Assignor hereby assigns and delegates to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, without recourse or,
except as otherwise specifically provided herein, representation or warranty,
the Assignor Rights and Obligations. The Assignee agrees to pay to the Assignor
the Purchase Price on the Assignment Effective Date.
3. Representations and Warranties
(a) Assignor. The Assignor hereby represents and warrants to the
Assignee as follows:
(i) the aggregate unpaid principal amount of its Revolving
Credit Loans is $___________, and such Revolving Credit Loans are
composed of the following ABR Advances and Eurodollar Advances:
(1) ABR Advances: $__________, and (2) Eurodollar Advances: (A)
$__________ for [LENGTH OF INTEREST PERIOD], the last day of which
is _______________, (B) $__________ for [LENGTH OF INTEREST
PERIOD], the last day of which is _______________,
[(II) THE AGGREGATE UNPAID PRINCIPAL AMOUNT OF ITS SWING LINE LOANS
IS $___________, AND SUCH SWING LINE LOANS ARE COMPOSED OF THE FOLLOWING:
(A) $__________ FOR [LENGTH OF SWING LINE INTEREST PERIOD], THE LAST DAY
OF WHICH IS _______________, (B) $__________ FOR [LENGTH OF SWING LINE
INTEREST PERIOD], THE LAST DAY OF WHICH IS _______________,]
(iii) its Commitment Amount is $_______, and
(iv) it is the legal and beneficial owner of the Assignor Rights and
Obligations free and clear of any adverse claim created by it.
(b) Assignee. The Assignee hereby represents and warrants to the
Assignor that (i) it is legally authorized to enter into this Agreement, (ii) it
is an "accredited investor" within the meaning of Regulation D, as amended,
promulgated under the Securities Act of 1933, as amended, [AND] (iii) it has,
independently and without reliance upon the Assignor or the Agent, and based on
such documents and information as it has deemed appropriate, made its own
evaluation of, and investigation into, the business, operations, Property,
financial and other condition and creditworthiness of the Borrowers and made its
own decision to enter into this Agreement [, AND (IV) IT IS A LENDER OR A
SUBSIDIARY OR AFFILIATE OF A LENDER].
4. Covenants of the Assignee
The Assignee hereby covenants and agrees that it will, independently
and without reliance upon the Assignor or the Agent, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit analysis, evaluations and decisions in taking or not taking action
under the Loan Documents, and to make such investigation as it deems necessary
to inform itself as to the business, operations, Property, financial and other
condition and creditworthiness of the Borrowers. The Assignee further agrees to
provide to the Agent any forms required by Section 3.10 of the Credit Agreement
and any administrative questionnaire reasonably required by the Agent.
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113
5. Effectiveness of this Agreement
(a) Section 2 of this Agreement shall not become effective until
such date (the "ASSIGNMENT EFFECTIVE DATE") as all of the following conditions
shall have been fulfilled:
(i) The Agent shall have executed a copy of this Agreement and shall
have received duly executed counterparts hereof by each of the Assignor,
the Assignee and, if required by the Credit Agreement, the Issuer, the
Swing Line Lender and the Company;
(ii) The Assignor shall have delivered to the Assignee (with a copy
to the Agent) a duly completed letter in the form of Annex A hereto;
(iii) The Assignee shall have confirmed in writing to the Assignor
(with a copy to the Agent) that, on or before the Assignment Effective
Date, it shall have transferred (in accordance with Section 6 hereof) the
Purchase Price to the Assignor. At the time of such confirmation, the
Assignee shall be deemed to have remade the representations and warranties
contained in Section 3(b)(i), (ii) [AND] (iii) [, AND (IV)] hereof on and
as of the date of such confirmation;
(iv) The Agent shall have received an assignment fee, for its
account, in the amount of $3,500 if required to be paid by the Credit
Agreement; and
(v) The Agent shall have received any forms required by Section 3.10
of the Credit Agreement and any administrative questionnaire reasonably
required by the Agent.
(b) Upon the Assignment Effective Date, (i) the Agent shall record
the assignment contemplated hereby, (ii) the Assignee shall be a Lender, and
(iii) the Assignor, to the extent of the assignment provided for herein, shall
be released from its obligations under the Loan Documents.
(c) The Assignee hereby appoints and authorizes the Agent to take
such action, on and after the Assignment Effective Date, as agent on its behalf
and to exercise such powers under the Loan Documents as are delegated to the
Agent by the terms thereof, together with such powers as are reasonably
incidental thereto.
(d) From and after the Assignment Effective Date, the Agent shall
make all payments in respect of the interest assigned hereby (including payments
of principal, interest, fees and other amounts) to the Assignee. The Assignor
and the Assignee shall make all appropriate adjustments with respect to amounts
under the Loan Documents which accrued prior to the Assignment Effective Date
and which were paid thereafter, directly between themselves.
6. Payment Instructions
All payments to be made to the Assignor by the Assignee hereunder
shall be made by wire transfer of immediately available funds to the Assignor
at: [WIRE INSTRUCTIONS].
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114
7. Notices
All notices, requests and demands to or upon the Assignee in
connection with this Agreement and the Loan Documents are to be sent or
delivered to the place set forth adjacent to its name on the signature page(s)
hereof.
8. Miscellaneous
(a) For purposes of this Agreement, all calculations and
determinations with respect to the outstanding principal amount of the
Assignor's Loans, the Assignor's Commitment Amount and all other similar
calculations and determinations, shall be made and shall be deemed to be made as
of the commencement of business on the date of such calculation or
determination, as the case may be.
(b) Section headings have been inserted herein for convenience only
and shall not be construed to be a part hereof.
(c) This Agreement embodies the entire agreement and understanding
among the parties hereto with respect to the subject matter hereof and
supersedes all other prior arrangements and understandings among the parties
hereto with respect to the subject matter hereof.
(d) This Agreement may be executed in any number of separate
counterparts and all of said counterparts taken together shall be deemed to
constitute one and the same agreement. It shall not be necessary in making proof
of this Agreement to produce or account for more than one counterpart signed by
the party to be charged.
(e) Every provision of this Agreement is intended to be severable,
and if any term or provision hereof shall be invalid, illegal or unenforceable
for any reason, the validity, legality and enforceability of the remaining
provisions hereof shall not be affected or impaired thereby, and any invalidity,
illegality or unenforceability in any jurisdiction shall not affect the
validity, legality or enforceability of any such term or provision in any other
jurisdiction.
(f) This Agreement shall be binding upon and inure to the benefit of
the Assignor and the Assignee and their respective successors and permitted
assigns, except that neither party may assign or transfer any of its rights or
obligations hereunder (i) without the prior written consent of the other party
or (ii) in contravention of the Credit Agreement.
(g) This Agreement and the rights and obligations of the parties
hereunder shall be governed by, and construed and interpreted in accordance
with, the internal laws of the State of New York without regard to principles of
conflicts of law.
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115
AS EVIDENCE of the agreement by the parties hereto to the terms and
conditions herein contained, each such party has caused this Agreement to be
duly executed on its behalf.
[NAME OF ASSIGNOR]
By: ______________________
Name: ____________________
Title: ___________________
[NAME OF ASSIGNEE}
Address for notices:
____________________ By: ______________________
____________________ Name: ____________________
____________________ Title: ___________________
Attention:__________
Telephone:_____________
Facsimile:_____________
Consented to this __ day
of __________, ____
THE BANK OF NEW YORK, as Issuer
and Swing Line Lender
By: ___________________________
Name: _________________________
Title: ________________________
[CONSENTED TO THIS __ DAY
OF __________, ____
LINENS 'N THINGS, INC.
BY: ____________________________
NAME: __________________________
TITLE: _________________________]
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116
Accepted this __ day
of _________, ____
THE BANK OF NEW YORK, as Agent
By: ___________________________
Name: _________________________
Title: ________________________
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ANNEX A TO ASSIGNMENT AND
ACCEPTANCE AGREEMENT
FORM OF LETTER
[Assignment Effective Date]
[Name and Address of Assignee]
Attention: _______________,
_______________
Re: Assignment and Acceptance Agreement, dated as of
_______________, by and between _______________ and
_______________ (as the same may be amended,
supplemented or otherwise modified from time to time,
the "AGREEMENT")
Ladies and Gentlemen:
This letter is being delivered pursuant to Section 5(a)(ii) of the
Agreement. Capitalized terms used herein that are not otherwise defined herein
shall have the respective meanings ascribed thereto in the Agreement.
The Assignor hereby represents and warrants to the Assignee as
follows:
(i) the aggregate unpaid principal amount of its Revolving
Credit Loans is $___________, and such Revolving Credit Loans are
composed of the following ABR Advances and Eurodollar Advances: (1)
ABR Advances: $_________, and (2) Eurodollar Advances: (A)
$__________ for [LENGTH OF INTEREST PERIOD], the last day of which
is _______________, (B) $__________ for [LENGTH OF INTEREST
PERIOD], the last day of which is _______________,
[(II) THE AGGREGATE UNPAID PRINCIPAL AMOUNT OF ITS SWING LINE LOANS
IS $___________, AND SUCH SWING LINE LOANS ARE COMPOSED OF THE FOLLOWING:
(A) $__________ FOR [LENGTH OF SWING LINE INTEREST PERIOD], THE LAST DAY
OF WHICH IS _______________, (B) $__________ FOR [LENGTH OF SWING LINE
INTEREST PERIOD], THE LAST DAY OF WHICH IS _______________,]
(iii) its Commitment Amount is $_______, and
118
(iv) it is the legal and beneficial owner of the Assignor Rights and
Obligations free and clear of any adverse claim created by it.
Very truly yours,
[NAME OF ASSIGNOR]
By: _____________________
Name: ___________________
Title: ____________________
cc: [Name and title
of Agent contact]
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LINENS 'N THINGS EXHIBIT H
CVS SUBORDINATED NOTE
See attached.
120
SCHEDULE 4.4
LIST OF LITIGATION
None
121
SCHEDULE 8.2
LIST OF EXISTING LIENS
None
122
SCHEDULE 8.12
LIST OF EXISTING INVESTMENTS
None
123
SCHEDULE 8.12
LIST OF EXISTING INDEBTEDNESS
CVS Subordinated Note
124
LINENS 'N THINGS EXHIBIT I
SUBSIDIARY GUARANTY AND SUBORDINATION AGREEMENT
SUBSIDIARY GUARANTY AND SUBORDINATION AGREEMENT (as the same may be
amended, supplemented or otherwise modified from time to time, this
"AGREEMENT"), dated as of ________, 1996, by and among the Persons listed on
Annex A attached hereto (the "CURRENT GUARANTORS"), such other Persons which
from time to time may hereafter become party hereto pursuant to Section 9 hereof
(the "ADDITIONAL GUARANTORS", and collectively with the Current Guarantors, the
"GUARANTORS"), LINENS 'N THINGS, INC., a Delaware corporation (the "COMPANY"),
and THE BANK OF NEW YORK (the "AGENT"), in its capacity as agent for the Lenders
under the Credit Agreement referred to below.
RECITALS
I. Reference is made to the Credit Agreement, dated as of _____________,
1996, by and among the Company, the Subsidiary Borrowers party thereto (each a
"SUBSIDIARY BORROWER" and together with the Company, the "BORROWERS"), the
Lenders party thereto and the Agent (as the same may from time to time be
amended, supplemented or otherwise modified, the "CREDIT AGREEMENT").
II. The Company and the Guarantors have been, and are now, engaged in the
business of Retail Sales. In the past, as now, the Company, directly or
indirectly, has provided financing for the Guarantors and the Guarantors have
relied upon the Company to provide such financing. In addition, it is
anticipated that, if the Guarantors execute and deliver this Agreement, the
Company will continue, directly or indirectly, to provide such financing to the
Guarantors, and that the proceeds of the Loans to be made and Letters of Credit
to be issued will be used, in part, for the general working capital purposes of
the Guarantors. Pursuant to the Credit Agreement, the Lenders will not make
Loans and the Issuer will not issue Letters of Credit unless and until the
Guarantors shall have executed and delivered this Agreement and, therefore, in
light of all of the foregoing, each Guarantor expects to derive substantial
benefit from the Credit Agreement and the transactions contemplated thereby and,
in furtherance thereof, has agreed to execute and deliver this Agreement.
Therefore, in consideration of the Recitals, the terms and conditions
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Guarantors, the Company and
the Agent hereby agree as follows:
1. Defined Terms
(a) Capitalized terms used herein which are not otherwise defined
herein shall have the respective meanings ascribed thereto in the Credit
Agreement.
125
(b) When used in this Agreement, the following capitalized terms
shall have the respective meanings ascribed thereto as follows:
"BORROWER OBLIGATIONS": all of the obligations and liabilities
of the Borrowers under the Loan Documents, in each case whether direct, indirect
or contingent, incurred as primary obligor or otherwise, secured or unsecured,
now existing or hereafter arising, created, assumed, incurred or acquired, and
whether before or after the occurrence of any Insolvency Event, and including,
without limitation, (i) any obligation or liability in respect of any breach of
any representation or warranty and in respect of any rights of redemption or
rescission, and (ii) all principal and interest (including all post-petition
interest), funding losses, make-whole premiums and all reasonable costs and
expenses of the Agent and the Lenders in enforcing, preserving and protecting
any thereof, whether or not suit is instituted and whether or not allowed as a
claim in any proceeding arising in connection with an Insolvency Event (as the
same may be amended, increased, modified, renewed, refinanced, refunded or
extended from time to time).
"CONSIDERATION": as of any date of determination and with
respect to each Guarantor, an amount equal to the lesser of (i) the total
"value" (within the meaning of Section 548 of the Bankruptcy Code) given,
directly or indirectly, to such Guarantor during the period commencing on the
date such Guarantor became a party to this Agreement and ending on such date of
determination, in exchange for its execution and delivery of this Agreement, and
(ii) the amount of "fair consideration" (within the meaning of Article 10 of the
New York Debtor Creditor Law) given, directly or indirectly, to such Guarantor
during the period commencing on the date such Guarantor became a party to this
Agreement and ending on such date of determination in exchange for its execution
and delivery of this Agreement.
"EVENT OF DEFAULT": as defined in Section 5.
"GUARANTOR OBLIGATIONS": all of the obligations and li-
abilities of the Guarantors hereunder, whether fixed, contingent, now existing
or hereafter arising, created, assumed, incurred or acquired.
"INSOLVENCY EVENT": any event set forth described in Sections
9.1(h) or 9.1(i) of the Credit Agreement.
"NET WORTH": as of any date and with respect to each
Guarantor, the lesser of the following:
(a)(i) all of such Guarantor's "property, at a fair
valuation" (within the meaning of Section 101(32) of the Bankruptcy Code)
on such date, minus (ii) the sum of such Guarantor's "debts" (within the
meaning of Section 101(12) of the Bankruptcy Code) other than such
Guarantor's liability hereunder.
(b)(i) the "fair salable value of the assets" (within
the meaning of Article 10 of the New York Debtor Creditor Law) of such
Guarantor on such date, minus (ii) "the amount that will be required to
pay such Guarantor's probable liability on its existing debts as they
become absolute and matured" (as such phrase would be construed under
Article 10 of the New York Debtor Creditor Law) on such date other than
such Guarantor's liability hereunder.
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"OBLIGATIONS": collectively, the Borrower Obligations and the
Guarantor Obligations.
"PAYMENT": the indefeasible payment in full in cash.
"SUBORDINATED DEBT": all indebtedness for borrowed
money and any other obligations, contingent or otherwise, of any
Borrower to any Guarantor, including, without limitation, all amounts,
fees and expenses payable by such Borrower to such Guarantor in respect
thereof, in each case whether now existing or hereafter arising, created,
assumed, incurred or acquired.
"SUBSIDIARY GUARANTY ADDENDUM": a Subsidiary Guaranty Addendum
to this Agreement, duly completed, in the form of Annex B attached hereto.
2. Guaranty
(a) Subject to Section 2(b) hereof, each Guarantor hereby
absolutely, irrevocably and unconditionally guarantees the full and prompt
payment when due (whether at stated maturity, by acceleration, by mandatory
prepayment, by notice of intention to prepay or otherwise) of the Borrower
Obligations. This Agreement constitutes a guaranty of payment and neither the
Agent nor any Lender shall have any obligation to enforce any Loan Document or
exercise any right or remedy with respect to any collateral security thereunder
by any action, including, without limitation, making or perfecting any claim
against any Person or any collateral security for any of the Borrower
Obligations prior to being entitled to the benefits of this Agreement. The
Guarantor Obligations shall be absolute, irrevocable, unconditional, direct and
primary and shall not be subject to any counterclaim, right of set-off or
defense whatsoever. The Agent may, at its option, proceed against the
Guarantors, or any one or more of them, in the first instance, to enforce the
Guarantor Obligations without first proceeding against the Borrowers or any
other Person, and without first resorting to any other rights or remedies, as
the Agent may deem advisable. In furtherance hereof, if the Agent or any Lender
is prevented by law from collecting or otherwise hindered from collecting or
otherwise enforcing any Borrower Obligation in accordance with its terms, the
Agent or such Lender, as the case may be, shall be entitled to receive hereunder
from the Guarantors after demand therefor, the sums which would have been
otherwise due had such collection or enforcement not been prevented or hindered.
(b) Notwithstanding anything to the contrary contained in this
Agreement, the maximum liability of each Guarantor hereunder shall not, as of
any date of determination, exceed the lesser of (i) the highest amount that is
valid and enforceable against such Guarantor under principles of New York State
contract law, and (ii) the sum of (A) all Consideration received by such
Guarantor as of such date of determination, plus (B) 95% of the Net Worth of
such Guarantor on such date of determination.
(c) Each Guarantor agrees that the Guarantor Obligations may at any
time and from time to time exceed the maximum liability of such Guarantor
hereunder without impairing this Agreement or affecting the rights and remedies
of the Agent or any Lender hereunder.
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3. Absolute Obligation
Subject to Section 8, no Guarantor shall be released from liability
hereunder unless and until the Commitment Termination Date shall have occurred
and either (a) Payment in full of the Borrower Obligations shall have been made
or (b) Payment in full of the Guarantor Obligations of such Guarantor shall have
been made. Each Guarantor acknowledges and agrees that (i) neither the Agent nor
any Lender has made any representation or warranty to such Guarantor with
respect to the Borrowers, any of their Subsidiaries, any Loan Document, or any
agreement, instrument or document executed or delivered in connection therewith
or any other matter whatsoever, and (ii) such Guarantor shall be liable
hereunder, and such liability shall not be affected or impaired, irrespective of
(A) the validity or enforceability of any Loan Document, or any agreement,
instrument or document executed or delivered in connection therewith, or the
collectability of any of the Borrower Obligations, (B) the preference or
priority ranking with respect to any of the Borrower Obligations, (C) the
existence, validity, enforceability or perfection of any security interest or
collateral security under any Loan Document, or the release, exchange,
substitution or loss or impairment of any such security interest or collateral
security, (D) any failure, delay, neglect or omission by the Agent or any Lender
to realize upon or protect any direct or indirect collateral security,
indebtedness, liability or obligation, any Loan Document, or any agreement,
instrument or document executed or delivered in connection therewith, or any of
the Borrower Obligations, (E) the existence or exercise of any right of set-off
by the Agent or any Lender, (F) the existence, validity or enforceability of any
other guaranty with respect to any of the Borrower Obligations, the liability of
any other Person in respect of any of the Borrower Obligations, or the release
of any such Person or any other guarantor of any of the Borrower Obligations,
(G) any act or omission of the Agent or any Lender in connection with the
administration of any Loan Document, or any of the Borrower Obligations, (H) the
bankruptcy, insolvency, reorganization or receivership of, or any other
proceeding for the relief of debtors commenced by or against, any Person, (I)
the disaffirmance or rejection, or the purported disaffirmance or purported
rejection, of any of the Borrower Obligations, any Loan Document, or any
agreement, instrument or document executed or delivered in connection therewith,
in any bankruptcy, insolvency, reorganization or receivership, or any other
proceeding for the relief of debtor, relating to any Person, (J) any law,
regulation or decree now or hereafter in effect which might in any manner affect
any of the terms or provisions of any Loan Document, or any agreement,
instrument or document executed or delivered in connection therewith or any of
the Borrower Obligations, or which might cause or permit to be invoked any
alteration in the time, amount, manner or payment or performance of any of the
Borrowers' obligations and liabilities (including, without limitation, the
Borrower Obligations), (K) the merger or consolidation of any Borrower into or
with any Person, (L) the sale by any Borrower of all or any part of its assets,
(M) the fact that at any time and from time to time none of the Borrower
Obligations may be outstanding or owing to the Agent or any Lender, (N) any
amendment or modification of, or supplement to, any Loan Document or (O) any
other reason or circumstance which might otherwise constitute a defense
available to or a discharge of the Borrowers in respect of their obligations or
liabilities (including, without limitation, the Borrower Obligations) or of such
Guarantor in respect of any of the Guarantor Obligations (other than by the
performance in full thereof).
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4. Representations and Warranties
Each Guarantor hereby represents and warrants to the Agent as
follows:
(a) Existence and Power. Such Guarantor is duly organized and
validly existing in good standing under the laws of the jurisdiction of its
incorporation and in each other jurisdiction in which the failure to be
qualified and in good standing could reasonably be expected to have a Material
Adverse Effect.
(b) Authority and Execution. Such Guarantor has full legal
power and authority to own its Property, conduct its business, and enter into,
execute, deliver and perform the terms of this Agreement which has been duly
authorized by all proper and necessary corporate or other applicable action and
is in full compliance with its Organizational Documents. Such Guarantor has duly
executed and delivered this Agreement.
(c) Binding Obligation. This Agreement constitutes the valid
and binding obligation of such Guarantor, enforceable in accordance with its
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws related to or affecting
the enforcement of creditors' rights generally.
(d) Solvency. Such Guarantor (if a Current Guarantor, both
immediately before and after giving effect to this Agreement, or, if an
Additional Guarantor, immediately before and after giving effect to the
Subsidiary Guaranty Addendum pursuant to which it becomes a party to this
Agreement) and the transactions contemplated by the Loan Documents is Solvent.
5. Events of Default
Each of the following shall constitute an "EVENT OF DEFAULT":
(a) If any Guarantor shall fail to observe or perform any term,
covenant or agreement contained in this Agreement; or
(b) The occurrence and continuance of an Event of Default under and
as defined in the Credit Agreement.
6. Notices
Except as otherwise specifically provided herein, all notices,
requests, consents, demands, waivers and other communications hereunder shall be
in writing (including facsimile) and shall be electronically transmitted or
mailed by registered or certified mail or delivered in person, and all
statements, reports, documents, certificates and papers to be delivered
hereunder shall be mailed by first class mail or delivered in person, in each
case to the respective parties to this Agreement as follows: in the case of the
Agent or the Company, as set forth in Section 12.2 of the Credit Agreement, in
the case of each Current Guarantor, at the address set forth on Annex C
hereto, and, in the case of each Additional Guarantor, as set forth in the
Subsidiary Guaranty Addendum executed and delivered by such Additional
Guarantor, or to such other addresses as to which the Agent
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may be hereafter notified by the respective parties hereto. Any notice, request,
consent, demand, waiver or communication given in accordance with the provisions
of this Section shall be conclusively deemed to have been received by a party
hereto and to be effective on the day on which delivered to such party at its
address specified above or, if sent by registered or certified mail, on the
delivery date noted on the receipt therefor, provided that a notice of change of
address shall be deemed to be effective only when actually received. Any party
hereto may rely on signatures of the other parties hereto which are transmitted
by facsimile or other electronic means as fully as if originally signed.
7. Expenses
Each Guarantor agrees that it shall, upon demand, pay to the Agent
any and all reasonable out-of-pocket sums, costs and expenses, which the Agent
or any Lender may pay or incur defending, protecting or enforcing this Agreement
(whether suit is instituted or not), including, without limitation, reasonable
attorneys' fees and disbursements. All sums, costs and expenses which are due
and payable pursuant to this Section shall bear interest, payable on demand, at
the highest interest rate then payable on the Borrower Obligations.
8. Repayment in Bankruptcy, etc.
If, at any time or times subsequent to the payment of all or any
part of the Borrower Obligations or the Guarantor Obligations, the Agent or any
Lender shall be required to repay any amounts previously paid by or on behalf of
the Borrowers or any Guarantor in reduction thereof by virtue of an order of any
court having jurisdiction in the premises, including, without limitation, as a
result of an adjudication that such amounts constituted preferential payments or
fraudulent conveyances, the Guarantors unconditionally agree to pay to the Agent
within 10 days after demand a sum in cash equal to the amount of such repayment,
together with interest on such amount from the date of such repayment by the
Agent or such Lender, as the case may be, to the date of payment to the Agent at
the applicable after-maturity rate set forth in the Credit Agreement.
9. Additional Guarantors
Upon the execution and delivery to the Agent of a Subsidiary
Guaranty Addendum by any Person, appropriately acknowledged, such Person
shall be a Guarantor.
10. Subordination
(a) At no time during the continuance of any Default or Event of
Default shall any payment of any nature whatsoever due in respect of the
Subordinated Debt payable to any Guarantor be made after the Agent shall have
given notice to the Company (on behalf of all Borrowers) to such effect.
(b) Upon any bankruptcy, insolvency, liquidation or reorganization
of any Borrower, or upon the filing of a petition in bankruptcy or commencement
of any proceeding in bankruptcy against any Borrower or upon any distribution of
the assets of any Borrower or upon any dissolution, winding up, liquidation or
reorganization of any Borrower, whether in bankruptcy, insolvency,
reorganization, arrangement or receivership proceedings, or upon any assignment
for the benefit of creditors, or any other marshalling
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of the assets and liabilities of either Borrower, or in the event any of the
Subordinated Debt shall for any reason become or be declared due and payable or
otherwise:
(i) the Agent shall first be entitled to receive Payment of
all of the Obligations (whenever arising) before any Guarantor shall be entitled
to receive any payment on account of the Subordinated Debt;
(ii) any payment by, or distribution of the assets of, any
Borrower of any kind or character, whether in cash, property or securities, to
which any Guarantor would be entitled except for the provisions of this
Agreement, in connection with the Subordinated Debt, shall be paid or delivered
by the Person making such payment or distribution (whether a trustee in
bankruptcy, a receiver, custodian or liquidating trustee or otherwise) directly
to the Agent to the extent necessary to make Payment of all of the Obligations
remaining unpaid, after giving effect to any concurrent payment or distribution
(or provision therefor) in cash to the Agent;
(iii) No Guarantor shall ask, demand by legal proceedings or
otherwise, or take or receive from any Borrower, by set-off, counterclaim or in
any other manner, any payment or distribution on account of the Subordinated
Debt other than as expressly permitted hereunder; and
(iv) Each Guarantor agrees to declare the Subordinated Debt to
be due and payable and, at least 30 days before the time required by applicable
law or rule, to file proof of claim therefor, in default of which the Agent is
hereby irrevocably authorized so to declare and file in order to effectuate the
provisions hereof.
Notwithstanding the foregoing, in the event that any payment by, or
distribution of the assets of, any Borrower of any kind or character prohibited
hereby, whether in cash, property or securities, shall for any reason be
received by any Guarantor in respect of the Subordinated Debt, such payment or
distribution shall be held in trust for the benefit of the Agent, and shall be
immediately paid over to the Agent, to the extent necessary to make Payment of
all of the Obligations remaining unpaid, after giving effect to any concurrent
payment or distribution (or provision therefor) in cash to the Agent.
(c) Without the prior written consent of the Agent, no Borrower will
give, and no Guarantor will receive or accept, any collateral of any nature
whatsoever for the Subordinated Debt on any Property or assets, whether now
existing or hereafter acquired, of any Borrower.
(d) Nothing contained in this Agreement is intended to or shall
impair, as between and among the Borrowers, their creditors (other than the
holders of the Obligations) and any Guarantor, the obligation of the Borrowers
to make Payment to such Guarantor of any amount due in respect of the
Subordinated Debt as and when the same shall become due and payable in
accordance with the terms thereof, or affect the relative rights of the
Guarantors and the creditors of the Borrowers (other than the holders of the
Obligations), in each case subject to the rights of the holders of the
Obligations under this Agreement.
(e) Unless and until Payment of all of the Obligations has occurred
and the termination of the Credit Agreement, each Guarantor agrees not to
declare any part of
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the Subordinated Debt to be due and payable or exercise any of the rights or
remedies which it may have, or bring (in its capacity as holder of the
Subordinated Debt), or join with any other creditor in instituting, any
proceedings against any Borrower under any bankruptcy, insolvency,
reorganization, arrangement, receivership or other similar law, unless the
Obligations shall have been declared immediately due and payable or, in the case
of the institution of any such proceedings, the Agent shall have joined in the
institution thereof or expressly consented thereto in writing. In the event that
the Agent shall have so declared the Obligations immediately due and payable,
each Guarantor agrees to declare the Subordinated Debt then due to be due and
payable, provided, however, if the Agent shall rescind any such declaration,
each Guarantor shall automatically be deemed to have rescinded its declaration.
(f) No right of the Agent to enforce this Agreement shall at any
time or in any way be prejudiced or impaired by any act or failure to act on the
part of any Guarantor, or by any noncompliance by any Guarantor with the terms,
provisions and covenants herein, and the Agent is hereby expressly authorized to
extend, waive, renew, increase, decrease, modify or amend the terms of the
Obligations or any collateral security therefor, and to waive any default,
modify, amend, rescind or waive any provision of any document executed and
delivered in connection with the Obligations and to release, sell or exchange
any such collateral security and otherwise deal freely with the Borrowers, all
without notice to or consent of any Guarantor and without affecting the
liabilities and obligations of the parties hereto.
(g) Each Borrower and each Guarantor waives notice of acceptance of
this Agreement by the Agent and the Lenders, and each Guarantor waives notice of
and consents to the making, amount and terms of the Obligations which may exist
from time to time and any renewal, extension, increase, amendment or
modification thereof and any other action which the Agent or any Lender in its
sole and absolute discretion, may take or omit to take with respect thereto.
This section shall constitute a continuing offer to the Agent and the Lenders,
its provisions are made for the benefit of the Agent and the Lenders, and the
Agent and the Lenders are made obligees hereunder and may enforce such
provisions.
(h) No Guarantor shall sell, assign, transfer or otherwise dispose
of all or any part of the Subordinated Debt without having first obtained the
prior written consent of the Agent.
(i) Each Borrower agrees that it will not make any payment of any of
the Subordinated Debt, or take any other action, in contravention of the
provisions of this Agreement.
(j) Each Guarantor agrees that the provisions of this Agreement
shall be applicable to the Obligations whenever the same may arise and
notwithstanding the fact that no Obligations may be outstanding from time to
time and may have paid down to zero at any time or from time to time, it being
understood that the Credit Agreement permits the Borrowers to borrow, repay and
reborrow from time to time subject to the terms and conditions thereof, all or
any of which terms and conditions may be waived.
(k) All rights and interests of the Agent hereunder, and all
agreements and obligations of the Borrowers and the Guarantors under this
Agreement, shall remain
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in full force and effect irrespective of (i) any lack of validity or
enforceability of any of the Loan Documents; (ii) any change in the time, manner
or place of payment of, or any other term of, all or any of the Obligations, or
any other amendment or waiver of or any consent to departure from any of the
Obligations; (iii) any exchange, release or non-perfection of the Collateral, or
any release or amendment or waiver of or consent to or departure from any
guaranty, for all or any of the Obligations; or (iv) any other circumstance
which might otherwise constitute a defense available to, or a discharge of, any
Borrower in respect of the Obligations or this Agreement. This Agreement shall
continue to be effective or be reinstated, as the case may be, if at any time
any payment of any of the Obligations is rescinded or must otherwise be returned
by the Agent upon the insolvency, bankruptcy or reorganization of any Borrower
or otherwise, all as though such payment had not been made.
(l) Each Guarantor authorizes the Agent, without notice or demand
and without affecting or impairing the obligations of any Guarantor, from time
to time to (i) renew, compromise, extend, increase, accelerate or otherwise
change the time for payment of, or otherwise change the terms of the
Obligations, or any part thereof, including, without limitation, to increase or
decrease the rate of interest thereon or the principal amount thereof; (ii) take
or hold security for the payment of the Obligations and exchange, enforce,
foreclose upon, waive and release any such security; (iii) apply such security
and direct the order or manner of sale thereof as the Agent, in its sole
discretion, may determine; (iv) release and substitute one or more endorsers,
warrantors, borrowers or other obligors; and (v) exercise or refrain from
exercising any rights against the Borrowers or any other Person.
11. Miscellaneous
(a) Each Guarantor expressly waives any and all rights of
subrogation, reimbursement, indemnity, exoneration, contribution or any other
claim which such Guarantor may now or hereafter have against the Borrowers, or
against or with respect to the Borrowers' Property, arising from the existence
or performance of this Agreement until Payment of all of the Obligations has
occurred and the Credit Agreement has been terminated.
(b) Except as otherwise expressly provided in this Agreement, each
Guarantor hereby waives presentment, demand for payment, notice of default,
nonperformance and dishonor, protest and notice of protest of or in respect of
this Agreement, the other Loan Documents, and the Borrower Obligations, notice
of acceptance of this Agreement and reliance hereupon by the Agent and each
Lender, and the incurrence of any of the Borrower Obligations, notice of any
sale of collateral security or any default of any sort.
(c) No Guarantor is relying upon the Agent or any Lender to provide
to such Guarantor any information concerning the Borrowers or any Subsidiary,
and each Guarantor has made arrangements satisfactory to such Guarantor to
obtain from the Borrowers on a continuing basis such information concerning the
Borrowers and their Subsidiaries as such Guarantor may desire.
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(d) Each Guarantor agrees that any statement of account with respect
to the Borrower Obligations from the Agent or any Lender to the Borrowers which
binds the Borrowers shall also be binding upon such Guarantor, and that copies
of said statements of account maintained in the regular course of the Agent's or
such Lender's business, as the case may be, may be used in evidence against such
Guarantor in order to establish its Guarantor Obligations.
(e) Each Guarantor acknowledges that it has received a copy of the
Loan Documents and has approved of the same. In addition, such Guarantor
acknowledges having read each Loan Document and having had the advice of counsel
in connection with all matters concerning its execution and delivery of this
Agreement.
(f) No Guarantor may assign any right, or delegate any duty, it may
have under this Agreement.
(g) Subject to the limitations set forth in Section 2(b), the
Guarantor Obligations shall be joint and several.
(h) This Agreement is the "SUBSIDIARY GUARANTY" under, and as such
term is defined in, the Credit Agreement, and is subject to, and should be
construed in accordance with, the provisions thereof. Each of the Agent and the
Borrowers acknowledges that certain provisions of the Credit Agreement,
including, without limitation, Sections 1.2 (Principles of Construction), 12.1
(Amendments, Waivers, Etc.), 12.3 (No Waiver; Cumulative Remedies), 12.4
(Survival of Representations and Warranties), 12.7 (Successors and Assigns),
12.8 (Counterparts), 12.9 (Set-off and Sharing of Payments), 12.10 (Indemnity),
12.11 (Governing Law), 12.12 (Severability), 12.13 (Integration), 12.15
(Acknowledgments), 12.16 (Consent to Jurisdiction), 12.17 (Service of Process),
12.18 (No Limitation on Service or Suit) and 12.19 (WAIVER OF TRIAL BY JURY)
thereof, are made applicable to this Agreement and all such provisions are
incorporated by reference herein as if fully set forth herein.
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IN EVIDENCE of the agreement by the parties hereto to the terms and
conditions herein contained, each such party has caused this Subsidiary Guaranty
and Subordination Agreement to be duly executed on its behalf.
Each of the Persons listed on Schedule A
of Annex A attached hereto
By:_________________________________________
Name:_______________________________________
Title:______________________________
Each of the persons listed on Schedule B of
Annex A hereto
By:_________________________________________
Name:_______________________________________
Title:______________________________
LINENS 'N THINGS, INC., on behalf of itself
and all Borrowers
By:_________________________________________
Name:_______________________________________
Title:______________________________
THE BANK OF NEW YORK, as Agent
By:_________________________________________
Name:_______________________________________
Title:______________________________
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ANNEX A TO THE SUBSIDIARY GUARANTY
AND SUBORDINATION AGREEMENT
DATED AS OF ___________, 1996
LIST OF CURRENT GUARANTORS
SEE SCHEDULE A AND SCHEDULE B ATTACHED HERETO.
136
ANNEX B TO THE SUBSIDIARY GUARANTY
AND SUBORDINATION AGREEMENT
DATED AS OF ___________, 1996
FORM OF SUBSIDIARY GUARANTY ADDENDUM
SUBSIDIARY GUARANTY ADDENDUM, dated as of _____ __, 199_, made by
_____________, a __________ corporation (the "ADDITIONAL GUARANTOR") to the
Subsidiary Guaranty and Subordination Agreement, dated as of ________, 1996 (as
the same may be amended, supplemented or otherwise modified from time to time,
(the "AGREEMENT"), by and among each Guarantor party thereto, LINENS 'N THINGS,
INC. (the "COMPANY") and THE BANK OF NEW YORK, as Agent (in such capacity, the
"AGENT") under the Credit Agreement referred to below.
I. Reference is made to the Credit Agreement, dated as of
November __, 1996, by and among the Company, the Subsidiary Borrowers party
thereto, the Lenders party thereto, and The Bank of New York, as Agent (as the
same may be amended, supplemented or otherwise modified from time to time, the
"Credit Agreement").
II. Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to such terms in the Agreement and the Credit
Agreement.
III. The Guarantors and the Company have entered into the Agreement
in order to induce the Agent and the Lenders to enter into the Credit Agreement
and make the Loans, the Swing Line Lender to make the Swing Line Loans, the
Issuer to issue the Letters of Credit and the Lenders to participate therein.
IV. The Additional Guarantor is executing this Subsidiary Guaranty
Addendum in accordance with the requirements of the Credit Agreement and the
Agreement, to become a Guarantor under the Agreement in order to induce the
Lenders to make additional Loans, the Swing Line Lender to make additional Swing
Line Loans, the Issuer to issue additional Letters of Credit and the Lenders to
participate therein and as consideration for Loans previously made and Letters
of Credit previously issued.
Accordingly, the Agent and the Additional Guarantor agree as
follows:
1. In accordance with Section 9 of the Agreement, by signing this
Subsidiary Guaranty Addendum and delivering the other instruments and documents
required by the Credit Agreement, the Additional Guarantor becomes a Guarantor
under the Agreement with the same force and effect as if originally named
therein as a Guarantor and the Additional Guarantor hereby agrees to all the
terms and provisions of the Agreement applicable to it as a Guarantor
thereunder.
2. The Additional Guarantor hereby makes all of the representations
and warranties made by the Guarantors in Section 4 of the Agreement, which
provisions are hereby incorporated herein by reference.
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The Additional Guarantor and the Agent have duly executed this
Subsidiary Guaranty Addendum to the Agreement as of the day and year first above
written.
[ADDITIONAL GUARANTOR]
By:____________________________________
Name:__________________________________
Title:_____________________
Accepted:
THE BANK OF NEW YORK, as Agent
By:___________________________________
Name:_________________________________
Title:____________________
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ANNEX C TO THE SUBSIDIARY GUARANTY
AND SUBORDINATION AGREEMENT
DATED AS OF ____________, 1996
A. SUBSIDIARY GUARANTORS:
ALL SUBSIDIARY GUARANTORS
B. ADDRESS FOR NOTICES:
c/o Linens 'n Things
0 Xxxxxxxx Xxxx
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxxxxx,
Senior Vice President/CFO
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
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