1
EXHIBIT 10.1
CREDIT AGREEMENT
AMONG
KIRKLAND HOLDINGS L.L.C.
THE BORROWERS SPECIFIED HEREIN,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTIES HERETO,
THE FIRST NATIONAL BANK OF BOSTON,
AS ADMINISTRATIVE AGENT
AND
XXXXXX COMMERCIAL PAPER INC.,
AS ADVISOR AND ARRANGER
DATED AS OF JUNE 12, 1996
2
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS..................................................... 2
1.1 Defined Terms.................................................. 2
1.2 Other Definitional Provisions.................................. 22
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS................................. 22
2.1 Tranche A Term Loans........................................... 22
2.2 Procedure for Tranche A Term Loan Borrowing.................... 22
2.3 Tranche B Term Loans........................................... 23
2.4 Procedure for Tranche B Term Loan Borrowing.................... 23
2.5 Revolving Credit Commitments................................... 23
2.6 Procedure for Revolving Credit Borrowing....................... 24
2.7 Clean-Up....................................................... 24
2.8 Commitment Fees, etc. ......................................... 25
2.9 Repayment of Loans; Evidence of Debt........................... 25
2.10 Termination or Reduction of Revolving Credit Commitments...... 26
2.11 Optional Prepayments.......................................... 26
2.12 Mandatory Prepayments and Commitment Reductions............... 27
2.13 Conversion and Continuation Options........................... 28
2.14 Minimum Amounts and Maximum Number of Eurodollar Tranches..... 29
2.15 Interest Rates and Payment Dates.............................. 29
2.16 Computation of Interest and Fees.............................. 30
2.17 Inability to Determine Interest Rate.......................... 30
2.18 Pro Rata Treatment and Payments; Use of Proceeds.............. 31
2.19 Illegality.................................................... 32
2.20 Requirements of Law........................................... 32
2.21 Taxes ........................................................ 33
2.22 Indemnity..................................................... 35
2.23 Change of Lending Office...................................... 35
2.24 Right of Contribution......................................... 35
2.25 Swing Line Commitment......................................... 36
2.26 Procedure for Swing Line Borrowing............................ 36
2.27 Refunded Swing Line Loans; Swing Line Loan Participations..... 37
SECTION 3. LETTERS OF CREDIT............................................... 38
3.1 L/C Commitment................................................. 38
3.2 Procedure for Issuance of Letter of Credit..................... 39
3.3 Fees, Commissions and Other Charges............................ 39
3.4 L/C Participations............................................. 40
3.5 Reimbursement Obligation of the Borrowers...................... 41
3.6 Obligations Absolute........................................... 41
3.7 Letter of Credit Payments...................................... 41
3.8 Applications................................................... 42
-i-
3
Page
SECTION 4. REPRESENTATIONS AND WARRANTIES.................................. 42
4.1 Financial Condition............................................ 42
4.2 No Change...................................................... 43
4.3 Corporate Existence; Compliance with Law....................... 43
4.4 Corporate Power; Authorization; Enforceable Obligations........ 43
4.5 No Legal Bar................................................... 44
4.6 No Material Litigation......................................... 44
4.7 No Default..................................................... 44
4.8 Ownership of Property; Liens................................... 44
4.9 Intellectual Property.......................................... 44
4.10 No Burdensome Restrictions.................................... 45
4.11 Taxes ........................................................ 45
4.12 Federal Regulations........................................... 45
4.13 ERISA ........................................................ 45
4.14 Investment Company Act; Other Regulations..................... 46
4.15 Subsidiaries.................................................. 46
4.16 Purpose of Loans; Limitations on Use.......................... 46
4.17 Environmental Matters......................................... 46
4.18 Accuracy of Information....................................... 47
4.19 Security Documents............................................ 48
4.20 Solvency...................................................... 48
4.21 Purchase Agreement Representations and Warranties............. 48
SECTION 5. CONDITIONS PRECEDENT............................................ 48
5.1 Conditions to Initial Extension of Credit...................... 48
5.2 Conditions to Each Extension of Credit......................... 53
SECTION 6. AFFIRMATIVE COVENANTS........................................... 54
6.1 Financial Statements........................................... 54
6.2 Certificates; Other Information................................ 55
6.3 Payment of Obligations......................................... 56
6.4 Conduct of Business and Maintenance of Existence, etc. ........ 56
6.5 Maintenance of Property; Insurance............................. 56
6.6 Inspection of Property; Books and Records; Discussions......... 57
6.7 Notices........................................................ 57
6.8 Environmental Laws............................................. 58
6.9 Interest Rate Protection....................................... 58
6.10 Further Assurances............................................ 58
6.11 Additional Collateral......................................... 58
6.12 Key Man Life Insurance........................................ 59
6.13 Store Locations............................................... 59
6.14 Landlord Waivers.............................................. 59
6.15 Purchase Agreement Affirmative Covenants...................... 59
6.16 Termination of Series C Preferred Voting Rights............... 60
SECTION 7. NEGATIVE COVENANTS.............................................. 60
-ii-
4
Page
7.2 Limitation on Indebtedness..................................... 63
7.3 Limitation on Liens............................................ 64
7.4 Limitation on Guarantee Obligations............................ 65
7.5 Limitation on Fundamental Changes.............................. 65
7.6 Limitation on Sale of Assets................................... 66
7.7 Limitation on Restricted Payments.............................. 66
7.8 Limitation on Capital Expenditures............................. 67
7.9 Limitation on Investments, Loans and Advances.................. 67
7.10 Limitation on Optional Payments and Modifications
of Debt Instruments and Preferred Stock, etc................. 68
7.11 Limitation on Transactions with Affiliates.................... 68
7.12 Limitation on Sales and Leasebacks............................ 68
7.13 Limitation on Changes in Fiscal Year.......................... 69
7.14 Limitation on Negative Pledge Clauses......................... 69
7.15 Limitation on Lines of Business............................... 69
7.16 Limitation on Activities of the Parent........................ 69
7.17 Purchase Agreement Negative Covenants......................... 69
SECTION 8. EVENTS OF DEFAULT............................................... 70
SECTION 9. THE ADMINISTRATIVE AGENT........................................ 73
9.1 Appointment.................................................... 73
9.2 Delegation of Duties........................................... 74
9.3 Exculpatory Provisions......................................... 74
9.4 Reliance by Administrative Agent............................... 74
9.5 Notice of Default.............................................. 75
9.6 Non-Reliance on Administrative Agent and Other Lenders......... 75
9.7 Indemnification................................................ 75
9.8 Administrative Agent in Its Individual Capacity................ 76
9.9 Successor Administrative Agent................................. 76
9.10 The Arranger.................................................. 76
SECTION 10. GUARANTEE...................................................... 77
10.1 Guarantee..................................................... 77
10.2 No Subrogation, Contribution, Reimbursement or Indemnity...... 77
10.3 Amendments, etc. with respect to the Obligations.............. 77
10.4 Guarantee Absolute and Unconditional.......................... 78
10.5 Reinstatement................................................. 79
10.6 Payments...................................................... 79
SECTION 11. MISCELLANEOUS.................................................. 79
11.1 Amendments and Waivers........................................ 79
11.2 Notices....................................................... 80
11.3 No Waiver; Cumulative Remedies................................ 82
11.4 Survival...................................................... 82
11.5 Payment of Expenses and Taxes................................. 82
-iii-
5
Page
11.6 Successors and Assigns; Participations and Assignments........ 83
11.7 Adjustments; Set-off.......................................... 86
11.8 Counterparts.................................................. 87
11.9 Severability.................................................. 87
11.10 Integration.................................................. 87
11.11 GOVERNING LAW................................................ 87
11.12 Submission To Jurisdiction; Waivers.......................... 87
11.13 Acknowledgements............................................. 88
11.14 WAIVERS OF JURY TRIAL........................................ 88
11.15 Confidentiality.............................................. 89
11.16 Reliance on Representations and Actions of Designated
Borrower.................................................... 89
-iv-
6
SCHEDULES:
1.1A Schedule of Borrowers
1.1B Commitments and Addresses of Lenders
1.1C Mortgaged Property
1.1D Tranche A Term Loan Amortization Schedule
1.1E Tranche B Term Loan Amortization Schedule
4.4 Consents, Authorizations, Filings and Notices
4.19(b) UCC Filing Jurisdictions
4.19(c) Mortgage Filing Jurisdiction
5.1(y) Prior Credit Facilities
7.2(d) Existing Indebtedness
7.3(f) Existing Liens
7.4(a) Existing Guarantee Obligations
7.11 Transactions with Affiliates
EXHIBITS:
A-1 Form of Revolving Credit Note
A-2 Form of Tranche A Term Note
A-3 Form of Tranche B Term Note
A-4 Form of Swing Line Note
B Form of Borrowers Security Agreement
C Form of Mortgage
D Form of Assignment and Acceptance
E-1 Form of Parent Pledge Agreement
E-2 Form of Management Pledge Agreement
F Form of Assignment of Insurance
G Form of Closing Certificate
H-1 Legal Opinion of Pepper, Xxxxxxxx & Xxxxxxx
H-2 Legal Opinion of Baker, Donelson, Bearman & Xxxxxxxx
I-1 Form of Alternative Revolving Credit Note
I-2 Form of Alternative Tranche A Term Note
I-3 Form of Alternative Tranche B Term Note
J Form of Swing Line Loan Participation Certificate
-v-
7
CREDIT AGREEMENT, dated as of June 12, 1996, among Kirkland's Holdings
L.L.C., a Delaware limited liability company (the "Parent"), the entities listed
on Schedule 1.1A hereto, as joint and several borrowers hereunder (the
"Borrowers"), the several banks and other financial institutions or entities
from time to time parties to this Agreement (the "Lenders"), The First National
Bank of Boston, as Administrative Agent (as hereinafter defined) for the Lenders
hereunder, and Xxxxxx Commercial Paper Inc., as advisor and arranger with
respect to the credit facilities contained herein (the "Arranger").
W I T N E S S E T H
WHEREAS, funds (the "Advent Funds") affiliated with Advent International
Corporation ("Advent") own 64.26% of the membership interests of the Parent;
WHEREAS, the Parent has agreed to acquire all of the Class A Preferred
Stock and common stock from each of the Borrowers which after the transactions
contemplated by the Recapitalization Agreement (as defined herein) will comprise
approximately 68.4% of the common stock of each of the Borrowers;
WHEREAS, immediately following the Parent's investment in the Borrowers, a
portion of the capital stock of the Borrowers owned by Xxxx Xxxxxxxx, Xxxxx
Xxxxx, Xxxxxx Xxxxxxxx (collectively, the "Management Shareholders") and Xxxxxx
Xxxxxxxx (together with the Management Shareholders, the "Individual
Shareholders") will be redeemed (the "Redemptions");
WHEREAS, the Redemptions will be financed by (a) the issuance by the
Borrowers of: (i) $20,000,000 of 12.25% to 12.50% senior subordinated notes (the
"Subordinated Debt") to Capital Resource Lenders II, L.P., Allied Capital
Corporation, Allied Capital Corporation II and The Marlboro Capital Investment
Fund, L.P., and Capital Trust Investments, Ltd. (collectively, the "Subordinated
Debt Holders"); (ii) at least $30,749,220 of Series A Redeemable Preferred Stock
(the "Series A Preferred") to the Parent; and (iii) at least $14,205,780 of
Series B Redeemable Preferred Stock (the "Series B Preferred") to the Individual
Shareholders and (b) borrowings under the credit facilities provided for herein
in an amount not to exceed $52,000,000;
WHEREAS, following the Redemptions, certain Individual Shareholders will
purchase common stock of the Borrowers and the Borrowers will recapitalize so
that each of the Individual Shareholders owns 25% of the outstanding Class B
Preferred Stock and 7.9% of the outstanding common stock of the Borrowers;
WHEREAS, in connection with the issuance of the Subordinated Debt, the
Borrowers have issued to the Subordinated Debt Holders the Warrants (as defined
below);
WHEREAS, the Borrowers have requested that the Lenders make the Loans and
issue and participate in the Letters of Credit (as defined herein) to provide
for a portion of the financing required for the Redemptions and the ongoing
working capital needs of the Borrowers;
8
2
WHEREAS, all the obligations of the Borrowers under the Loan Documents (as
defined herein) will be secured by, among other things, (i) a security interest
in and perfected lien on certain assets and property of the Borrowers and (ii) a
pledge of all the issued and outstanding capital stock of each Borrower, and all
such obligations will be unconditionally guaranteed by the Parent;
NOW, THEREFORE, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following terms shall
have the following meanings:
"Affiliate": as to any Person, any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control
with, such Person. For purposes of this definition, "control" of a Person
means the power, directly or indirectly, either to (a) vote 10% or more of
the securities having ordinary voting power for the election of directors
of such Person or (b) direct or cause the direction of the management and
policies of such Person, whether by contract or otherwise.
"Administrative Agent": The First National Bank of Boston, together
with its affiliates, as the administrative agent for the Lenders under
this Agreement and the other Loan Documents, and together with any of
their respective successors.
"Advent": as defined in the recitals hereto.
"Advent Funds": as defined in the recitals hereto.
"Aggregate Outstanding Revolving Extensions of Credit": as to any
Revolving Credit Lender at any time, an amount equal to the sum of (a) the
aggregate principal amount of all Revolving Credit Loans made by such
Lender then outstanding, (b) such Lender's Revolving Credit Percentage of
the L/C Obligations then outstanding and (c) such Lender's Revolving
Credit Percentage of the aggregate principal amount of Swing Line Loans
then outstanding.
"Agreement": this Credit Agreement, as amended, supplemented or
otherwise modified from time to time.
"Alternative Note": as defined in Section 11.6(d).
"Alternative Noteholder": as defined in Section 11.6(e).
9
3
"Applicable Margin": for each Type of Loan, the rate per annum set
forth under the relevant column heading below:
Eurodollar
Base Rate Loans Loans
--------------- ----------
Revolving Credit Loans 2-1/4% 3-1/4%
Tranche A Loans 2-1/4% 3-1/4%
Tranche B Term Loans 2-3/4% 3-3/4%
"Application": an application, in such form as the Issuing Lender
may specify from time to time, requesting the Issuing Lender to open a
Letter of Credit.
"Arranger": as defined in the preamble hereto.
"Asset Sale": any sale or other disposition by the Parent, any
Borrower or any of their Subsidiaries of any asset or assets of the
Parent, such Borrower or such Subsidiary (including any sale and leaseback
of assets and any mortgage of real property other than pursuant to a
Mortgage); provided, that any sale of assets expressly permitted by
clauses (a), (b), (c) or (d) of Section 7.6 shall not constitute an "Asset
Sale" hereunder.
"Assignee": as defined in Section 11.6(c).
"Assignment of Insurance": the Assignments of Insurance, each
executed and delivered by [the appropriate Borrower], substantially in the
form of Exhibit F, as the same may be amended, supplemented or otherwise
modified from time to time.
"Available Revolving Credit Commitment": as to any Lender at any
time, an amount equal to the excess, if any, of (a) such Lender's
Revolving Credit Commitment over (b) such Lender's Aggregate Outstanding
Revolving Extensions of Credit; provided, that in calculating any Lender's
Aggregate Outstanding Revolving Extensions of Credit for the purpose of
determining such Lender's Available Revolving Credit Commitment pursuant
to Section 2.8(a), the aggregate unpaid principal amount of Swing Line
Loans then outstanding shall be deemed to be zero.
"Base Rate": for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the greater of (a) the Prime
Rate in effect on such day, and (b) the Federal Funds Effective Rate in
effect on such day plus 1/2 of 1%. For purposes hereof: "Prime Rate" shall
mean the rate of interest per annum publicly announced from time to time
by the Administrative Agent as its prime or base rate in effect at its
principal office in Boston, Massachusetts; and "Federal Funds Effective
Rate" shall mean, for any day, the weighted average of the rates on
overnight federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day which is a Business Day, the
average of the quotations for the day of such transactions received
10
4
by the Administrative Agent from three federal funds brokers of recognized
standing selected by it. Any change in the Base Rate due to a change in
the Prime Rate or the Federal Funds Effective Rate shall be effective as
of the opening of business on the effective day of such change in the
Prime Rate or the Federal Funds Effective Rate, respectively.
"Base Rate Loans": Loans the rate of interest applicable to which is
based upon the Base Rate.
"Board": the Board of Governors of the Federal Reserve System of the
United States (or any successor).
"Borrowers Security Agreement": the Borrowers Security Agreement to
be executed and delivered by each Borrower, substantially in the form of
Exhibit B, as the same may be amended, supplemented or otherwise modified
from time to time.
"Borrowing Date": any Business Day specified in a notice pursuant to
Section 2.2, 2.4, 2.6 or 2.26 as a date on which the Designated Borrower
requests the Lenders to make Loans hereunder.
"Business": as defined in Section 4.17.
"Business Day": a day other than a Saturday, Sunday or other day on
which commercial banks in Boston, Massachusetts are authorized or required
by law to close.
"Capital Expenditures": for any period, with respect to any Person,
the aggregate of all expenditures by such Person and its Subsidiaries for
the acquisition or leasing (pursuant to a capital lease) of fixed or
capital assets or additions to equipment (including replacements,
capitalized repairs and improvements during such period) which should be
capitalized under GAAP on a combined balance sheet of such Person and its
Subsidiaries.
"Capital Lease Obligations": as to any Person, the obligations of
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under
GAAP and, for the purposes of this Agreement, the amount of such
obligations at any time shall be the capitalized amount thereof at such
time determined in accordance with GAAP.
"Capital Stock": any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation,
any and all equivalent ownership interests in a Person (other than a
corporation) and any and all warrants, rights or options to purchase any
of the foregoing.
11
5
"Cash Equivalents": (a) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States Government or issued by
any agency thereof and backed by the full faith and credit of the United
States, in each case maturing within one year from the date of
acquisition; (b) certificates of deposit, time deposits, eurodollar time
deposits or overnight bank deposits having maturities of six months or
less from the date of acquisition issued by any Lender or by any
commercial bank organized under the laws of the United States or any state
thereof having combined capital and surplus of not less than $250,000,000;
and (c) commercial paper of (i) an issuer rated at least A-1 by Standard &
Poor's Ratings Services or P-1 by Xxxxx'x Investors Service, Inc., or
carrying an equivalent rating by a nationally recognized rating agency, if
both of the two named rating agencies cease publishing ratings of
commercial paper issuers generally or (ii) the holding company of any
Lender, and, in either case, maturing within six months from the date of
acquisition.
"C/D Assessment Rate": for any day as applied to any Base Rate Loan,
the annual assessment rate in effect on such day which is payable by a
member of the Bank Insurance Fund maintained by the Federal Deposit
Insurance Corporation (the "FDIC") classified as well-capitalized and
within supervisory subgroup "B" (or a comparable successor assessment risk
classification) within the meaning of 12 C.F.R. Section 327.3(d) (or any
successor provision) to the FDIC (or any successor) for the FDIC's (or
such successor's) insuring time deposits at offices of such institution in
the United States.
"C/D Reserve Percentage": for any day as applied to any Base
Rate Loan, that percentage (expressed as a decimal) which is in effect
on such day, as prescribed by the Board, for determining the maximum
reserve requirement for a Depositary Institution (as defined in
Regulation D of the Board as in effect from time to time) in respect of
new non-personal time deposits in Dollars having a maturity of 30 days
or more.
"Certificate of Designations": the Certificate of Designations,
dated June 7, 1996 and effective as of June 12, 1996 at 12:01 a.m., of
each Borrower.
"Closing Date": the date on which the conditions precedent set forth
in Section 5.1 shall be satisfied.
"Code": the Internal Revenue Code of 1986, as amended from time to
time.
"Collateral": all assets of the Loan Parties or the Individual
Shareholders, now owned or hereafter acquired, upon which a Lien is
purported to be created by any Security Document.
"Combined Current Assets": at a particular date, all amounts (other
than cash and Cash Equivalents) which would, in conformity with GAAP, be
set forth opposite
12
6
the caption "total current assets" (or any like caption) on a combined
balance sheet of the Borrowers and their Subsidiaries at such date.
"Combined Current Liabilities": at a particular date, all amounts
which would, in conformity with GAAP, be set forth opposite the caption
"total current liabilities" (or any like caption) on a combined balance
sheet of the Borrowers and their Subsidiaries at such date, but excluding
(a) the current portion of any Funded Debt of the Borrowers and their
Subsidiaries and (b) without duplication of clause (a) above, all
Indebtedness consisting of Revolving Credit Loans or Swing Line Loans to
the extent otherwise included therein.
"Combined EBITDA": for any period, Combined Net Income for such
period plus, without duplication and to the extent reflected as a charge
in the statement of such Combined Net Income for such period, the sum of
(a) total income tax expense, (b) interest expense, amortization or
writeoff of debt discount and debt issuance costs and commissions,
discounts and other fees and charges associated with Indebtedness
(including the Loans), (c) depreciation and amortization expense, (d)
amortization of intangibles (including, but not limited to, goodwill) and
organization costs, (e) any extraordinary expenses or losses (including,
whether or not otherwise includable as a separate item in the statement of
such Combined Net Income for such period, losses on sales of assets
outside of the ordinary course of business), (f) any other noncash charges
(excluding inventory writedowns and LIFO charges) and (g) if applicable,
restructuring charges, write-off of goodwill and licensing agreements and
minus, to the extent included in the statement of such Combined Net Income
for such period, the sum of (a) non-cash interest income, (b) any
extraordinary income or gains (including, whether or not otherwise
includable as a separate item in the statement of such Combined Net Income
for such period, gains on the sales of assets outside of the ordinary
course of business) and (c) any other noncash income, all as determined on
a combined basis.
"Combined Fixed Charge Coverage Ratio": for any period, the ratio of
(a) (i) the sum of (without duplication) (A) Combined EBITDA for such
period, (B) any Management Fee accrued during such period and (C) Combined
Lease Expense minus (ii) the sum of (without duplication) (A) any
provision for cash income taxes made by the Borrowers or any of their
Subsidiaries on a combined basis in respect of such period, and (B)
Capital Expenditures actually paid in cash for such period to (b) the sum
(without duplication) of (I) Combined Interest Expense for such period,
(II) any Management Fee accrued during such period, (III) scheduled
payments required to have been made during such period on account of
principal of Indebtedness of the Borrowers or any of their Subsidiaries
(including the Loans but excluding optional principal prepayments in
respect of Revolving Credit Loans) and (IV) Combined Lease Expense,
determined without duplication of items included in Combined Interest
Expense.
13
7
"Combined Interest Coverage Ratio": for any period, the ratio of (a)
Combined EBITDA plus the Management Fee for such period to (b) Combined
Interest Expense for such period.
"Combined Interest Expense": for any period, total interest expense
(including that attributable to Capital Lease Obligations), both expensed
and capitalized, of the Borrowers and their Subsidiaries for such period
with respect to all outstanding Indebtedness of the Borrowers and their
Subsidiaries (including, without limitation, all commissions, discounts
and other fees and charges owed with respect to letters of credit and
bankers' acceptance financing and net costs under Interest Rate Protection
Agreements to the extent such net costs are allocable to such period in
accordance with GAAP), determined on a combined basis in accordance with
GAAP.
"Combined Lease Expense": for any period, the aggregate amount of
fixed and contingent rentals payable by the Borrowers and their
Subsidiaries, determined on a combined basis in accordance with GAAP, for
such period with respect to leases of real and personal property; provided
that amounts included in Capital Lease Obligations shall be excluded from
Combined Lease Expense.
"Combined Management Fee Ratio": for any fiscal year, the ratio of
(a) Combined EBITDA plus the Management Fee for such fiscal year to (b)
the sum of (I) Combined Interest Expense for such fiscal year plus (II)
any Management Fee accrued during such fiscal year.
"Combined Net Income": for any period, the combined net income (or
loss) of the Borrowers and their Subsidiaries, determined on a combined
basis in accordance with GAAP; provided that there shall be excluded (a)
the income (or deficit) of any Person accrued prior to the date it becomes
a Subsidiary of the Borrowers or is merged into or combined with the
Borrowers or any of their Subsidiaries, (b) the income (or deficit) of any
Person (other than a Subsidiary of the Borrowers) in which the Borrowers
or any of their Subsidiaries has an ownership interest, except to the
extent that any such income is actually received by the Borrowers or such
Subsidiary in the form of dividends or similar distributions and (c) the
undistributed earnings of any Subsidiary of the Borrowers to the extent
that the declaration or payment of dividends or similar distributions by
such Subsidiary is not at the time permitted by the terms of any
Contractual Obligation (other than under any Loan Document) or Requirement
of Law applicable to such Subsidiary.
"Combined Net Worth": at a particular date, all amounts which would,
in conformity with GAAP, be included on a combined balance sheet of the
Borrowers and their Subsidiaries as at such date for Preferred Stock plus
any increase or decrease in retained earnings between the Closing Date and
such date.
"Combined Total Debt": at any date, the aggregate principal amount
of all Funded Debt (other than Revolving Credit Loans, Swing Line Loans
and
14
8
Reimbursement Obligations) of the Borrowers and their Subsidiaries at such
date, determined on a combined basis in accordance with GAAP.
"Combined Total Debt Ratio": as of the last day of any period, the
ratio of (a) Combined Total Debt as of such day to (b) Combined EBITDA
plus the Management Fee for such period.
"Combined Working Capital": the excess of Combined Current Assets
over Combined Current Liabilities.
"Commercial Letter of Credit": as defined in Section 3.1(a).
"Commitment": as to any Lender, the sum of the Tranche A Term Loan
Commitment, the Tranche B Term Loan Commitment and the Revolving Credit
Commitment of such Lender.
"Commonly Controlled Entity": an entity, whether or not
incorporated, which is under common control with any Borrower within the
meaning of Section 4001 of ERISA or is part of a group which includes any
Borrower and which is treated as a single employer under Section 414 of
the Code.
"Confidential Information Memorandum": the Confidential Information
Memorandum dated as of May, 1996 with respect to the Borrowers and the
credit facilities provided for herein.
"Consulting Agreement": the consulting agreement dated June 12,
1996, between Xxxxxxxx'x Inc. and Xxxxxx Xxxxxxxx.
"Contractual Obligation": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Default": any of the events specified in Section 8, whether or not
any requirement for the giving of notice, the lapse of time, or both, has
been satisfied.
"Designated Borrower": Xxxxxxxx'x Inc., a Tennessee corporation, on
behalf of itself or any of the other Borrowers in accordance with the
terms hereof.
"Dollars" and "$": dollars in lawful currency of the United States.
"Environmental Laws": any and all foreign, Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, requirements of any Governmental Authority or other Requirements
of Law (including common law) regulating, relating to or imposing
liability or standards of conduct concerning the protection of human
health or the environment, as now or may at any time hereafter be in
effect.
15
9
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the rates
(expressed as a decimal fraction) of reserve requirements in effect on
such day (including, without limitation, basic, supplemental, marginal and
emergency reserves under any regulations of the Board or other
Governmental Authority having jurisdiction with respect thereto) dealing
with reserve requirements prescribed for eurocurrency funding (currently
referred to as "Eurocurrency Liabilities" in Regulation D of the Board)
maintained by a member bank of the Federal Reserve System.
"Eurodollar Base Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, the rate of interest
determined on the basis of the rate for deposits in dollars for a period
equal to such Interest Period commencing on the first day of such Interest
Period appearing on Page 3750 of the Telerate Service as of 11:00 A.M.,
London time, two Business Days prior to the beginning of such Interest
Period. In the event that such rate does not appear on Page 3750 of the
Telerate Service (or otherwise on such service), the "Eurodollar Base
Rate" shall be determined by reference to such other publicly available
service for displaying eurodollar rates as may be agreed upon by the
Administrative Agent and the Designated Borrower or, in the absence of
such agreement, the "Eurodollar Base Rate" shall instead be the rate per
annum equal to the rate at which the Administrative Agent is offered
Dollar deposits at or about 10:00 A.M., New York City time, two Business
Days prior to the beginning of such Interest Period in the interbank
eurodollar market where the eurodollar and foreign currency and exchange
operations in respect of its Eurodollar Loans are then being conducted for
delivery on the first day of such Interest Period for the number of days
comprised therein and in an amount comparable to the amount of its
Eurodollar Loans to be outstanding during such Interest Period.
"Eurodollar Loans": Loans the rate of interest applicable to which
is based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, a rate per annum determined for
such day in accordance with the following formula (rounded upward to the
nearest 1/100th of 1%):
Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Eurodollar Tranche": the collective reference to Eurodollar Loans
that are Tranche A Term Loans, Tranche B Term Loans or Revolving Credit
Loans, as the case may be, the then current Interest Periods with respect
to all of which begin on the same date and end on the same later date
(whether or not such Loans shall originally have been made on the same
day).
16
10
"Event of Default": any of the events specified in Section 8,
provided that any requirement for the giving of notice, the lapse of time,
or both, has been satisfied.
"Excess Cash Flow": for any period, Combined Net Income for such
period, plus the sum of (i) depreciation expense and amortization expense
deducted from earnings in determining such Combined Net Income, (ii) the
net increase during such period (if any) in deferred tax accounts, (iii)
any proceeds received by the Borrowers during such period in respect of
the key man life insurance policies required hereunder and (iv) the
decrease during such period (if any) in Combined Working Capital minus the
sum of (i) the net decrease during such period (if any) in deferred tax
accounts, (ii) the aggregate amount actually paid in cash during such
period on account of Capital Expenditures permitted hereunder (but only to
the extent not financed by Indebtedness or capital contributions), in each
case, determined on a consolidated basis in accordance with GAAP, (iii)
the increase during such period (if any) in Combined Working Capital and
(iv) scheduled principal payments on Indebtedness of the Borrowers and
their Subsidiaries not prohibited hereunder during such period (not
including optional principal prepayments in respect of Revolving Credit
Loans or Swing Line Loans). For purposes of calculating Excess Cash Flow
for the fiscal year ending December 31, 1996, (i) any change in Combined
Working Capital shall be calculated for the entire fiscal year ending
December 31, 1996, and (ii) all other amounts shall be calculated based on
the period from the Closing Date through December 31, 1996.
"Excess Cash Flow Application Date": as defined in Section 2.12(c).
"Financing Lease": any lease of property, real or personal, the
obligations of the lessee in respect of which are required in accordance
with GAAP to be capitalized on a balance sheet of the lessee.
"Funded Debt": as to any Person, all Indebtedness of such Person
that matures more than one year from the date of its creation or matures
within one year from such date but is renewable or extendible, at the
option of such Person, to a date more than one year from such date or
arises under a revolving credit or similar agreement that obligates the
lender or lenders to extend credit during a period of more than one year
from such date, including, without limitation, all current maturities and
current sinking fund payments in respect of such Indebtedness whether or
not required to be paid within one year from the date of its creation and,
in the case of the Borrowers, all current maturities in respect of the
Loans.
"GAAP": generally accepted accounting principles in the United
States in effect from time to time.
"Governmental Authority": any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government.
17
11
"Guarantee Obligation": as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another
Person (including, without limitation, any bank under any letter of
credit) to induce the creation of which the guaranteeing person has issued
a reimbursement, counterindemnity or similar obligation, in either case
guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends
or other obligations (the "primary obligations") of any other third Person
(the "primary obligor") in any manner, whether directly or indirectly,
including, without limitation, any obligation of the guaranteeing person,
whether or not contingent, (i) to purchase any such primary obligation or
any property constituting direct or indirect security therefor, (ii) to
advance or supply funds (1) for the purchase or payment of any such
primary obligation or (2) to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth or solvency of
the primary obligor, (iii) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such
primary obligation or (iv) otherwise to assure or hold harmless the owner
of any such primary obligation against loss in respect thereof; provided,
however, that the term Guarantee Obligation shall not include endorsements
of instruments for deposit or collection in the ordinary course of
business. The amount of any Guarantee Obligation of any guaranteeing
person shall be deemed to be the lower of (a) an amount equal to the
stated or determinable amount of the primary obligation in respect of
which such Guarantee Obligation is made and (b) the maximum amount for
which such guaranteeing person may be liable pursuant to the terms of the
instrument embodying such Guarantee Obligation, unless such primary
obligation and the maximum amount for which such guaranteeing person may
be liable are not stated or determinable, in which case the amount of such
Guarantee Obligation shall be such guaranteeing person's maximum
reasonably anticipated liability in respect thereof as determined by the
Borrowers in good faith.
"Incur": as defined in Section 7.2.
"Indebtedness": of any Person at any date, without duplication, (a)
all indebtedness of such Person for borrowed money, (b) all obligations of
such Person for the deferred purchase price of property or services (other
than current trade payables incurred in the ordinary course of such
Person's business), (c) all obligations of such Person evidenced by notes,
bonds, debentures or other similar instruments, (d) all indebtedness
created or arising under any conditional sale or other title retention
agreement with respect to property acquired by such Person (even though
the rights and remedies of the seller or lender under such agreement in
the event of default are limited to repossession or sale of such
property), (e) all Capital Lease Obligations (and not operating lease
obligations) of such Person, (f) all obligations, contingent or otherwise,
of such Person as an account party under acceptance, letter of credit or
similar facilities, (g) all obligations of such Person to purchase,
redeem, retire or otherwise acquire for value any Capital Stock of such
Person, (h) all Guarantee Obligations of such Person and (i) all
obligations of the kind referred to in clauses (a) through (h) above
secured by any Lien on property (including, without limitation,
18
12
accounts and contract rights) owned by such Person, whether or not such
Person has assumed or become liable for the payment of such obligation.
"Individual Shareholders": as defined in the recitals hereto.
"Insolvency": with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Insurance Policies": (i) key man life insurance policies on each of
the three Management Shareholders in the amount of $3,000,000 per person,
on terms satisfactory to the Arranger, (ii) the insurance policies the
Borrowers are required to maintain pursuant to Sections 6.5 and 6.12 and
(iii) the insurance policies the Borrowers are required to maintain
pursuant to Section 4.2 of the Borrowers Security Agreement.
"Interest Payment Date": (a) as to any Base Rate Loan, the last day
of each March, June, September and December to occur while such Loan is
outstanding, (b) as to any Eurodollar Loan having an Interest Period of
three months or less, the last day of such Interest Period, (c) as to any
Eurodollar Loan having an Interest Period longer than three months, each
day which is three months, or a whole multiple thereof, after the first
day of such Interest Period and the last day of such Interest Period.
"Interest Period": as to any Eurodollar Loan, (a) initially, the
period commencing on the borrowing or conversion date, as the case may be,
with respect to such Eurodollar Loan and ending one, two, three or six
months thereafter, as selected by the Borrowers in their notice of
borrowing or notice of conversion, as the case may be, given with respect
thereto; and (b) thereafter, each period commencing on the last day of the
next preceding Interest Period applicable to such Eurodollar Loan and
ending one, two, three or six months thereafter, as selected by the
Borrowers by irrevocable notice to the Administrative Agent not less than
three Business Days prior to the last day of the then current Interest
Period with respect thereto; provided that, all of the foregoing
provisions relating to Interest Periods are subject to the following:
(i) if any Interest Period would otherwise end on a day that is not
a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month in which event such
Interest Period shall end on the immediately preceding Business Day;
(ii) any Interest Period that would otherwise extend beyond the
Revolving Credit Termination Date (in the case of Revolving Credit Loans)
or beyond the date final payment is due on the Tranche A Term Loans or the
Tranche B Term Loans (in the case of the Term Loans) shall end on the
Revolving Credit Termination Date or such date of final payment, as
applicable;
19
13
(iii) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of a calendar month; and
(iv) the Borrowers shall select Interest Periods so as not to
require a payment or prepayment of any Eurodollar Loan during an Interest
Period for such Loan.
"Interest Rate Protection Agreement": any interest rate protection
agreement, interest rate futures contract, interest rate option, interest
rate cap or other interest rate hedge arrangement, to or under which the
Borrowers or any Subsidiary is a party or a beneficiary on the date hereof
or becomes a party or a beneficiary after the date hereof.
"Issuing Lender": The First National Bank of Boston, in its capacity
as issuer of any Letter of Credit and any other Lender designated as
"Issuing Lender" hereunder by the Designated Borrower with the consent of
the Arranger, the Administrative Agent and such Lender.
"L/C Commitment": $5,000,000.
"L/C Fee Payment Date": the last day of each March, June, September
and December and the last day of the Revolving Credit Commitment Period.
"L/C Obligations": at any time, an amount equal to the sum of (a)
the aggregate then undrawn and unexpired amount of the then outstanding
Letters of Credit and (b) the aggregate amount of drawings under Letters
of Credit which have not then been reimbursed pursuant to Section 3.5.
"L/C Participants": the collective reference to all the Revolving
Credit Lenders other than the Issuing Lender.
"Letters of Credit": as defined in Section 3.1(a).
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement
or preferential arrangement of any kind or nature whatsoever (including,
without limitation, any conditional sale or other title retention
agreement and any capital lease having substantially the same economic
effect as any of the foregoing).
"Loan": any loan made by any Lender pursuant to this Agreement.
"Loan Documents": this Agreement, the Notes, the Applications and
the Security Documents.
20
14
"Loan Parties": the Parent, the Borrowers and each other Subsidiary
of the Parent or the Borrowers which is a party to a Loan Document.
"Management Contracts": the collective reference to the letter
agreements, each dated June 12, 1996, between Xxxxxxxx'x, Inc. and each of
the Management Shareholders.
"Management Fee": the amount payable to (a) the Management
Shareholders pursuant to clause (b) of the third sentence of Section 2 of
the Management Contracts and (b) to Xxxxxx Xxxxxxxx pursuant to Section 3
of the Consulting Agreement.
"Management Pledge Agreement": the Pledge Agreement to be executed
and delivered by the Management Shareholders substantially in the form of
Exhibit E-2, as the same may be amended, supplemented or otherwise
modified from time to time.
"Management Shareholders": as defined in the recitals hereto.
"Material Adverse Effect": a material adverse effect on (a) the
consummation of the Recapitalization in accordance with the
Recapitalization Documents, (b) the business, assets, results of
operations, financial condition or prospects of the Parent, the Borrowers
and their Subsidiaries taken as a whole or (c) the validity or
enforceability of this Agreement or any of the other Loan Documents or the
rights or remedies of the Administrative Agent or the Lenders hereunder or
thereunder.
"Material Environmental Amount": an amount payable by the Borrowers
and/or their Subsidiaries in excess of $250,000 for remedial costs,
compliance costs, compensatory damages, punitive damages, fines, penalties
or any combination thereof.
"Materials of Environmental Concern": any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated
as such in or under any Environmental Law, including, without limitation,
asbestos, polychlorinated biphenyls and urea-formaldehyde insulation.
"Mortgage": the mortgage or deed of trust made by the appropriate
Loan Party in favor of, or for the benefit of, the Administrative Agent
for the benefit of the Lenders, substantially in the form of Exhibit C
(with such changes thereto as shall be advisable under the law of the
jurisdiction in which such mortgage or deed of trust is to be recorded),
as the same may be amended, supplemented or otherwise modified from time
to time.
"Mortgaged Property": the real property listed on Schedule 1.1C, as
to which the Administrative Agent for the benefit of the Lenders shall be
granted a Lien pursuant to each Mortgage.
21
15
"Multiemployer Plan": a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds": (a) in connection with any Asset Sale or any
Recovery Event, the proceeds thereof in the form of cash and Cash
Equivalents (including any such proceeds received by way of deferred
payment of principal pursuant to a note or installment receivable or
purchase price adjustment receivable or otherwise, but only as and when
received) of such Asset Sale or Recovery Event, net of attorneys' fees,
accountants' fees, investment banking fees, amounts required to be applied
to the repayment of Indebtedness secured by a Lien expressly permitted
hereunder on any asset which is the subject of such Asset Sale or Recovery
Event (other than any Lien in favor of the Administrative Agent for the
benefit of the Lenders) and other customary fees and expenses actually
incurred in connection therewith and net of taxes paid or reasonably
estimated to be payable as a result thereof (after taking into account any
available tax credits or deductions and any tax sharing arrangements) and
(b) in connection with any issuance or sale of equity securities or debt
securities or instruments or the incurrence of loans, the cash proceeds
received from such issuance or incurrence, net of attorneys' fees,
investment banking fees, accountants' fees, underwriting discounts and
commissions and other customary fees and expenses actually incurred in
connection therewith.
"Non-Excluded Taxes": as defined in Section 2.21(a).
"Non-U.S. Lender": as defined in Section 2.21(b).
"Notes": the collective reference to the Tranche A Term Notes, the
Tranche B Term Notes, the Revolving Credit Notes and the Swing Line Notes.
"Obligations": the unpaid principal of and interest on (including,
without limitation, interest accruing after the maturity of the Loans and
Reimbursement Obligations and interest accruing after the filing of any
petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Borrowers, whether or
not a claim for post-filing or post-petition interest is allowed in such
proceeding) the Notes and all other obligations and liabilities of the
Borrowers to the Administrative Agent or to any Lender, whether direct or
indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection with,
this Agreement, any other Loan Document, the Letters of Credit, any
Interest Rate Protection Agreement entered into with any Lender or any
other document made, delivered or given in connection herewith or
therewith, whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses (including, without
limitation, all fees, charges and disbursements of counsel to the
Administrative Agent or to any Lender that are required to be paid by the
Borrowers pursuant hereto).
22
16
"Parent Pledge Agreement": the Parent Pledge Agreement to be
executed and delivered by the Parent, substantially in the form of Exhibit
E, as the same may be amended, supplemented or otherwise modified from
time to time.
"Participant": as defined in Section 11.6(b).
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA (or any successor).
"Person": an individual, partnership, corporation, business trust,
joint stock company, trust, unincorporated association, joint venture,
Governmental Authority or other entity of whatever nature.
"Plan": at a particular time, any employee benefit plan which is
covered by ERISA and in respect of which the Borrowers or a Commonly
Controlled Entity is (or, if such plan were terminated at such time, would
under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.
"Pledge Agreements": the collective reference to the Management
Pledge Agreement and the Parent Pledge Agreement.
"Preferred Stock": the collective reference to the Series A
Preferred, the Series B Preferred and the Series C Preferred, in each
case, as defined in the recitals hereto.
"Prior Credit Facilities": the debt obligations referred to on
Schedule 5.1(y).
"Pro Forma Balance Sheet": as defined in Section 4.1(a).
"Projections": as defined in Section 6.2(c).
"Properties": the collective reference to the real property owned,
leased or operated by the Parent, the Borrowers or any of their
Subsidiaries.
"Purchase Agreement": the Senior Subordinated Note and Warrant
Purchase Agreement dated as of June 12, 1996 among the Subordinated Debt
Holders and the Borrowers.
"Recapitalization": as defined in the Recapitalization Agreement.
"Recapitalization Agreement": the Recapitalization Agreement dated
April 26, 1996 among the Parent, the Borrowers and the Individual
Shareholders, together with such amendments, waivers, supplements and
other modifications thereto as shall be reasonably satisfactory to the
Administrative Agent and the Lenders (the consent of the Administrative
Agent and the Lenders shall only be required with respect to material
amendments, waivers, supplements and other modifications).
23
17
"Recapitalization Documents": the Recapitalization Agreement and any
agreement or other document entered into or executed by any Loan Party in
connection with the Recapitalization Agreement.
"Recovery Event": any settlement of or payment in respect of a
property or casualty insurance claim relating to any asset of the Parent,
the Borrowers or any of their Subsidiaries.
"Refunded Swing Line Loans": as defined in Section 2.27(a).
"Register": as defined in Section 11.6(g).
"Registration Rights Agreement" the Registration Rights Agreement
dated as of June 12, 1996 among the Parent, Xxxxxxxx'x Inc., the other
corporations listed on the signature pages thereto, the Subordinated Debt
Holders and the Individual Shareholders, as amended, supplemented or
otherwise modified from time to time.
"Reimbursement Obligation": the obligation of the Borrowers to
reimburse the Issuing Lender pursuant to Section 3.5 for amounts drawn
under Letters of Credit.
"Reinvestment Deferred Amount": with respect to any Reinvestment
Event, the aggregate Net Cash Proceeds received by the Parent, the
Borrowers or any of their Subsidiaries in connection therewith which are
not applied to prepay the Term Loans or reduce the Revolving Credit
Commitments pursuant to Section 2.12(b) as a result of the delivery of a
Reinvestment Notice.
"Reinvestment Event": any Recovery Event in respect of which the
Designated Borrower has delivered a Reinvestment Notice.
"Reinvestment Notice": a written notice executed by a Responsible
Officer of the Designated Borrower to the Administrative Agent within 30
days of the Reinvestment Event to which it relates stating that no Event
of Default has occurred and is continuing and that the Borrowers (directly
or indirectly through another Subsidiary), in good faith, intend and
expect to use all or a specified portion of the Net Cash Proceeds of a
Recovery Event to restore or replace the assets in respect of which such
Recovery Event occurred within twelve months from the date of receipt of
such Net Cash Proceeds (provided that if the affected assets constituted
Collateral, such restored or replacement assets shall also constitute
Collateral).
"Reinvestment Prepayment Amount": with respect to any Reinvestment
Event, the Reinvestment Deferred Amount relating thereto less any amount
expended prior to the relevant Reinvestment Prepayment Date to restore or
replace the assets in respect of which a Recovery Event has occurred.
"Reinvestment Prepayment Date": with respect to any Reinvestment
Event, the earliest of (a) the first date occurring after such
Reinvestment Event on which an
24
18
Event of Default shall have occurred, (b) the date occurring twelve months
after such Reinvestment Event and (c) the date on which the applicable
Borrower shall have determined not to, or shall have otherwise ceased to,
restore or replace the assets in respect of which a Recovery Event has
occurred.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of
Section 4241 of ERISA.
"Reportable Event": any of the events set forth in Section 4043(b)
of ERISA, other than those events as to which the thirty day notice period
is waived under subsection .13, .14, .16, .18, .19 or .20 of PBGC Reg.
Section 2615.
"Required Lenders": at any date shall mean the holders of 66-2/3% or
more of (a) until the Closing Date, the Commitments and (b) thereafter,
the sum of (i) the aggregate unpaid principal amount of the Term Loans and
(ii) the aggregate Revolving Credit Commitments, or, if the Revolving
Credit Commitments have been terminated, the Aggregate Outstanding
Revolving Extensions of Credit of the Revolving Credit Lenders.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents
of such Person, and any law, treaty, rule or regulation or determination
of an arbitrator or a court or other Governmental Authority, in each case
applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
"Responsible Officer": the chief executive officer, president or
chief financial officer of the Parent, the Designated Borrower or any
other Borrower, as the case may be, but in any event, with respect to
financial matters, the chief financial officer of the Parent, the
Designated Borrower or any other Borrower, as the case may be.
"Revolving Credit Commitment": as to any Lender, the obligation of
such Lender, if any, to make Revolving Credit Loans to and/or issue or
participate in Letters of Credit issued on behalf of a Borrower hereunder
in an aggregate principal and/or face amount not to exceed the amount set
forth under the heading "Revolving Credit Commitment" opposite such
Lender's name on Schedule 1.1B, as the same may be changed from time to
time pursuant to the terms hereof.
"Revolving Credit Commitment Period": the period from and including
the Closing Date to but not including the Revolving Credit Termination
Date, or such earlier date on which the Revolving Credit Commitments shall
have been terminated.
"Revolving Credit Lender": each Lender which has a Revolving Credit
Commitment or which has made Revolving Credit Loans.
"Revolving Credit Loans": as defined in Section 2.5(a).
25
19
"Revolving Credit Note": as defined in Section 2.9(e).
"Revolving Credit Percentage": as to Revolving Credit Lender at any
time, the percentage which such Lender's Revolving Credit Commitment then
constitutes of the aggregate Revolving Credit Commitments (or, at any time
after the Revolving Credit Commitments shall have expired or terminated,
the percentage which the aggregate principal amount of such Lender's
Revolving Credit Loans then outstanding constitutes of the aggregate
principal amount of the Revolving Credit Loans then outstanding).
"Revolving Credit Termination Date": June 30, 2001.
"Security Documents": the collective reference to each Mortgage, the
Borrowers Security Agreement, the Pledge Agreements, the Assignments of
Insurance and all other security documents hereafter delivered to the
Administrative Agent granting a Lien on any asset or assets of any Person
to secure the obligations and liabilities of the Borrowers hereunder
and/or under any of the other Loan Documents or to secure any guarantee of
any such obligations and liabilities.
"Series C Preferred": the $20,000,000 of Series C Redeemable
Preferred Stock issued by the Borrowers pursuant to the Recapitalization
Agreement.
"Shareholders Agreement": the Shareholders Agreement dated as of
June 12, 1996 among the Parent, the Borrowers, the Individual Shareholders
and the Subordinated Debt Holders, as amended, supplemented or otherwise
modified from time to time.
"Single Employer Plan": any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan.
"Solvent": when used with respect to any Person, means that, as of
any date of determination, (a) the amount of the "present fair saleable
value" of the assets of such Person will, as of such date, exceed the
amount of all "liabilities of such Person, contingent or otherwise", as of
such date, as such quoted terms are determined in accordance with
applicable federal and state laws governing determinations of the
insolvency of debtors, (b) the present fair saleable value of the assets
of such Person will, as of such date, be greater than the amount that will
be required to pay the liability of such Person on its debts as such debts
become absolute and matured, (c) such Person will not have, as of such
date, an unreasonably small amount of capital with which to conduct its
business, and (d) such Person will be able to pay its debts as they
mature. For purposes of this definition, (i) "debt" means liability on a
"claim", and (ii) "claim" means any (x) right to payment, whether or not
such a right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable,
secured or unsecured or (y) right to an equitable remedy for breach of
performance if such breach gives rise to a right to payment, whether or
not such right to an equitable remedy is reduced to judgment, fixed,
contingent, matured or unmatured, disputed, undisputed, secured or
unsecured.
26
20
"Standby Letter of Credit": as defined in Section 3.1(a).
"Subordinated Debt": as defined in the recitals hereto.
"Subordinated Debt Holders": as defined in the recitals hereto.
"Subordination Agreement": the Subordination and Intercreditor
Agreement dated as of June 12, 1996 by and among the Administrative Agent,
on behalf of the Lenders, and the Subordinated Debt Holders.
"Subsidiary": as to any Person, a corporation, partnership or other
entity of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership interests
having such power only by reason of the happening of a contingency) to
elect a majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly
through one or more intermediaries, or both, by such Person. Unless
otherwise qualified, all references to a "Subsidiary" or to "Subsidiaries"
in this Agreement shall refer to a Subsidiary or Subsidiaries of a
Borrower.
"Swing Line Commitment": the obligation of the Swing Line Lender to
make Swing Line Loans pursuant to Section 2.25 in an aggregate principal
amount at any one time outstanding not to exceed $2,500,000.
"Swing Line Lender": as defined in Section 2.25.
"Swing Line Loan Participation Certificate": a certificate
substantially in the form of Exhibit J.
"Swing Line Loans": as defined in Section 2.25.
"Swing Line Note": as defined in Section 2.9(e).
"Swing Line Participation Amount": as defined in Section 2.27(c).
"Term Loan Lenders": the collective reference to the Tranche A Term
Loan Lenders and the Tranche B Term Loan Lenders.
"Term Loans": the collective reference to the Tranche A Term Loans
and Tranche B Term Loans.
"Tranche A Loans": the collective reference to the Tranche A Term
Loans, the Revolving Credit Loans and Swing Line Loans.
"Tranche A Term Loan": as defined in Section 2.1.
27
21
"Tranche A Term Loan Commitment": as to any Lender, the obligation
of such Lender, if any, to make a Tranche A Term Loan to the Borrowers
hereunder in a principal amount not to exceed the amount set forth under
the heading "Tranche A Term Loan Commitment" opposite such Lender's name
on Schedule 1.1B.
"Tranche A Term Loan Lender": each Lender which has a Tranche A Term
Loan Commitment or which has made a Tranche A Term Loan.
"Tranche A Term Loan Percentage": as to any Tranche A Term Loan
Lender at any time, the percentage which such Lender's Tranche A Term Loan
Commitment then constitutes of the aggregate Tranche A Term Loan
Commitments (or, at any time after the Closing Date, the percentage which
the aggregate principal amount of such Lender's Tranche A Term Loans then
outstanding constitutes of the aggregate principal amount of the Tranche A
Term Loans then outstanding).
"Tranche A Term Note": as defined in Section 2.9(e).
"Tranche B Term Loan": as defined in Section 2.3.
"Tranche B Term Loan Commitment": as to any Tranche B Term Loan
Lender, the obligation of such Lender, if any, to make a Tranche B Term
Loan to the Borrowers hereunder in a principal amount not to exceed the
amount set forth under the heading "Tranche B Term Loan Commitment"
opposite such Lender's name on Schedule 1.1B.
"Tranche B Term Loan Lender": each Lender which has a Tranche B Term
Loan Commitment or which has made a Tranche B Term Loan.
"Tranche B Term Loan Percentage": as to any Lender at any time, the
percentage which such Lender's Tranche B Term Loan Commitment then
constitutes of the aggregate Tranche B Term Loan Commitments (or, at any
time after the Closing Date, the percentage which the aggregate principal
amount of such Lender's Tranche B Term Loans then outstanding constitutes
of the aggregate principal amount of the Tranche B Term Loans then
outstanding).
"Tranche B Term Note": as defined in Section 2.9(e).
"Transferee": as defined in Section 11.6(i).
"Type": as to any Loan, its nature as a Base Rate Loan or a
Eurodollar Loan.
"Uniform Customs": the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce Publication No.
500, as the same may be amended from time to time.
"United States": the United States of America.
28
22
"U.S. Taxes": as defined in Section 11.6(d).
"Warrants": collectively, (a) the warrants to purchase up to 10% of
the common stock of each of the Borrowers and (b) the Contingent Warrants
(as defined in the Purchase Agreement) to purchase up to 3.5% of the
common stock of each of the Borrowers, in each case, pursuant to the
Purchase Agreement.
"Wholly Owned Subsidiary": as to any Person, any other Person all of
the Capital Stock of which (other than directors' qualifying shares
required by law) is owned by such Person directly and/or through other
Wholly Owned Subsidiaries.
1.2 Other Definitional Provisions. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined
meanings when used in the other Loan Documents or any certificate or other
document made or delivered pursuant hereto or thereto.
(b) As used herein and in the other Loan Documents, and any certificate or
other document made or delivered pursuant hereto or thereto, accounting terms
relating to the Parent, the Borrowers and their Subsidiaries not defined in
Section 1.1 and accounting terms partly defined in Section 1.1, to the extent
not defined, shall have the respective meanings given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Section, Schedule and
Exhibit references are to this Agreement unless otherwise specified.
(d) The meanings given to terms defined herein shall be equally applicable
to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 Tranche A Term Loans. Subject to the terms and conditions hereof, each
Tranche A Term Loan Lender severally agrees to make term loans (a "Tranche A
Term Loan") to the Borrowers, jointly and severally, on the Closing Date in an
amount not to exceed the amount of the Tranche A Term Loan Commitment of such
Lender. The Tranche A Term Loans may from time to time be (a) Eurodollar Loans,
(b) Base Rate Loans or (c) a combination thereof, as determined by the
Designated Borrower and notified to the Administrative Agent in accordance with
Sections 2.2 and 2.13.
2.2 Procedure for Tranche A Term Loan Borrowing. The Designated Borrower,
as agent for the Borrowers, shall give the Administrative Agent irrevocable
notice (which notice must be received by the Administrative Agent prior to 10:00
A.M., New York City time, one Business Day prior to the anticipated Closing
Date) requesting that the Tranche A Term Loan Lenders make Tranche A Term
Loan(s) on the Closing Date and specifying (a)
29
23
the amount to be borrowed, (b) the account to which the proceeds of such Loans
should be deposited and (c) the Closing Date. The Tranche A Term Loans made on
the Closing Date shall initially be Base Rate Loans and no Tranche A Term Loan
may be converted into or continued as a Eurodollar Loan having an Interest
Period in excess of one month prior to the date which is 60 days after the
Closing Date. Upon receipt of such notice, the Administrative Agent shall
promptly notify each Tranche A Term Loan Lender thereof. Not later than 12:00
Noon, New York City time, on the Closing Date, each Tranche A Term Loan Lender
shall make available to the Administrative Agent at its office specified in
Section 11.2 an amount in immediately available funds equal to the Tranche A
Term Loan to be made by such Lender. The Administrative Agent shall on such date
by 2:00 P.M., New York City time, deposit to the designated account, in
accordance with the instructions of the Designated Borrower, the aggregate of
the amounts made available to the Administrative Agent by the Tranche A Term
Loan Lenders in immediately available funds.
2.3 Tranche B Term Loans. Subject to the terms and conditions hereof, each
Tranche B Term Loan Lender severally agrees to make term loans (a "Tranche B
Term Loan") to the Borrowers, jointly and severally, on the Closing Date in an
amount not to exceed the amount of the Tranche B Term Loan Commitment of such
Lender then in effect. The Tranche B Term Loans may from time to time be (a)
Eurodollar Loans, (b) Base Rate Loans or (c) a combination thereof, as
determined by the Designated Borrower and notified to the Administrative Agent
in accordance with Sections 2.4 and 2.13.
2.4 Procedure for Tranche B Term Loan Borrowing. The Designated Borrower,
as agent for the Borrowers, shall give the Administrative Agent irrevocable
notice (which notice must be received by the Administrative Agent prior to 10:00
A.M., New York City time, one Business Day prior to the anticipated Closing
Date) requesting that the Tranche B Term Loan Lenders make the Tranche B Term
Loan(s) on the Closing Date and specifying (a) the amount to be borrowed, (b)
the account to which the proceeds of such Loans shall be deposited and (c) the
Closing Date. The Tranche B Term Loans made on the Closing Date shall initially
be Base Rate Loans and no Tranche B Term Loan may be converted into or continued
as a Eurodollar Loan having an Interest Period in excess of one month prior to
the date which is 60 days after the Closing Date. Upon receipt of such notice,
the Administrative Agent shall promptly notify each Tranche B Term Loan Lender
thereof. Not later than 12:00 Noon, New York City time, on the Closing Date,
each Tranche B Term Loan Lender shall make available to the Administrative Agent
at its office specified in Section 11.2 an amount in immediately available funds
equal to the Tranche B Term Loan to be made by such Lender. The Administrative
Agent shall on such date by 2:00 P.M., New York City time, deposit to the
designated account, in accordance with the instructions of the Designated
Borrower, the aggregate of the amounts made available to the Administrative
Agent by the Tranche B Term Loan Lenders in immediately available funds.
2.5 Revolving Credit Commitments. (a) Subject to the terms and conditions
hereof, each Revolving Credit Lender severally agrees to make revolving credit
loans ("Revolving Credit Loans") to the Borrowers, jointly and severally, from
time to time during the Revolving Credit Commitment Period in an aggregate
principal amount at any one time outstanding which, when added to such Lender's
Revolving Credit Percentage of the sum of
30
24
(i) the L/C Obligations then outstanding and (ii) the aggregate principal amount
of the Swing Line Loans then outstanding, does not exceed the amount of such
Lender's Revolving Credit Commitment. During the Revolving Credit Commitment
Period, the Borrowers may use the Revolving Credit Commitments by borrowing,
prepaying the Revolving Credit Loans in whole or in part, and reborrowing, all
in accordance with the terms and conditions hereof.
(b) The Revolving Credit Loans may from time to time be (i)
Eurodollar Loans, (ii) Base Rate Loans or (iii) a combination thereof, as
determined by the Designated Borrower and notified to the Administrative Agent
in accordance with Sections 2.6 and 2.13, provided that no Revolving Credit Loan
shall be made as a Eurodollar Loan after the day that is one month prior to the
Revolving Credit Termination Date.
2.6 Procedure for Revolving Credit Borrowing. The Borrowers
may borrow under the Revolving Credit Commitments during the Revolving Credit
Commitment Period on any Business Day, provided that the Designated Borrower
shall give the Administrative Agent irrevocable notice (which notice must be
received by the Administrative Agent prior to 12:00 Noon, New York City time,
(a) three Business Days prior to the requested Borrowing Date, if all or any
part of the requested Revolving Credit Loans are to be Eurodollar Loans or (b)
one Business Day prior to the requested Borrowing Date, otherwise), specifying
(i) the amount to be borrowed, (ii) the requested Borrowing Date, (iii) whether
the borrowing is to be of Eurodollar Loans, Base Rate Loans, or a combination
thereof, (iv) the identity of the Borrower or Borrowers to which the proceeds of
the Revolving Credit Loan should be made available and (v) if the borrowing is
to be entirely or partly of Eurodollar Loans, the respective amounts of each
such Type of Loan and the respective lengths of the initial Interest Periods
therefor; provided that prior to the date which is 60 days after the Closing
Date no Revolving Credit Loan may be made, converted or continued as a
Eurodollar Loan having an Interest Period in excess of one month. Each borrowing
under the Revolving Credit Commitments shall be in an amount equal to (x) in the
case of Base Rate Loans, $1,000,000 or a whole multiple thereof (or, if the then
Available Revolving Credit Commitments are less than $1,000,000, such lesser
amount) and (y) in the case of Eurodollar Loans, $2,500,000 or a whole multiple
of $1,000,000 in excess thereof; provided, that the Swing Line Lender may
request, on behalf of the Borrowers, borrowings under the Revolving Credit
Commitments which are Base Rate Loans in other amounts pursuant to Section
2.27(a). Upon receipt of any such notice from the Designated Borrower, the
Administrative Agent shall promptly notify each Revolving Credit Lender thereof.
Each Revolving Credit Lender will make the amount of its pro rata share of each
borrowing available to the Administrative Agent for the account of the
appropriate Borrower at the office of the Administrative Agent specified in
Section 11.2 prior to 11:00 A.M., New York City time, on the Borrowing Date
requested by the Designated Borrower in funds immediately available to the
Administrative Agent. The aggregate of the amounts made available to the
Administrative Agent by the Revolving Credit Lenders will then be made available
to the appropriate Borrower by the Administrative Agent in accordance with the
instructions of the Designated Borrower in like funds as received by the
Administrative Agent.
2.7 Clean-Up. Notwithstanding the foregoing provisions of this
Section 2 for a period of not less than 30 consecutive days during each period
from December 1 to
31
25
March 1 during the term of this Agreement the aggregate outstanding principal
amount of the Revolving Credit Loans and Swing Line Loans shall be reduced to
zero.
2.8 Commitment Fees, etc. (a) The Borrowers jointly and
severally agree to pay to the Administrative Agent for the account of each
Revolving Credit Lender a commitment fee for the period from and including the
Closing Date to the last day of the Revolving Credit Commitment Period, computed
at the rate of 1/2 of 1% per annum on the average daily amount of the Available
Revolving Credit Commitment of such Lender during the period for which payment
is made, payable quarterly in arrears on the last day of each March, June,
September and December and on the last day of the Revolving Credit Commitment
Period, commencing on the first of such dates to occur after the date hereof.
(b) The Borrowers jointly and severally agree to pay to the
Arranger the fees in the amounts and on the dates previously agreed to in
writing by Advent and the Arranger.
(c) The Borrowers jointly and severally agree to pay to the
Administrative Agent the fees in the amounts and on the dates previously agreed
to in writing by the Administrative Agent and the Borrowers.
2.9 Repayment of Loans; Evidence of Debt. (a) The Borrowers
jointly and severally hereby unconditionally promise to pay to the
Administrative Agent for the account of the appropriate Lender (i) the then
unpaid principal amount of each Revolving Credit Loan of such Revolving Credit
Lender on the last day of the Revolving Credit Commitment Period (or such
earlier date on which the Revolving Credit Loans become due and payable pursuant
to Section 8), (ii) the principal amount of the Tranche A Term Loans of such
Tranche A Term Loan Lender, in 20 consecutive quarterly installments, according
to the amortization schedule set forth on Schedule 1.1D, commencing on September
30, 1996 (or on such earlier date on which the then unpaid principal amount of
the Tranche A Term Loans become due and payable pursuant to Section 8) and (iii)
the principal amount of the Tranche B Term Loans of such Tranche B Term Loan
Lender, in 24 consecutive quarterly installments, according to the amortization
schedule set forth on Schedule 1.1E, commencing on September 30, 1996 (or on
such earlier date on which the then unpaid principal amount of such Tranche B
Term Loans become due and payable pursuant to Section 8). The Borrowers jointly
and severally hereby further agree to pay interest on the unpaid principal
amount of the Loans from time to time outstanding from the date hereof until
payment in full thereof at the rates per annum, and on the dates, set forth in
Section 2.15.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing indebtedness of the Borrowers to such
Lender resulting from each Loan of such Lender from time to time, including the
amounts of principal and interest payable and paid to such Lender from time to
time under this Agreement.
(c) The Administrative Agent, on behalf of the Borrowers,
shall maintain the Register pursuant to Section 11.6(g), and a subaccount
therein for each Lender, in which shall be recorded (i) the amount of each
Revolving Credit Loan, Tranche A Term Loan and Tranche B Term Loan made
hereunder, the Type thereof and each Interest Period applicable
32
26
thereto, (ii) the amount of any principal or interest due and payable or to
become due and payable from the Borrowers to each Lender hereunder and (iii)
both the amount of any sum received by the Administrative Agent hereunder from
the Borrowers and each Lender's share thereof.
(d) The entries made in the Register and the accounts of each
Lender maintained pursuant to Section 2.9(b) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrowers therein recorded; provided, however, that the
failure of any Lender or the Administrative Agent to maintain the Register or
any such account, or any error therein, shall not in any manner affect the
obligation of the Borrowers to repay (with applicable interest) the Loans made
to such Borrowers by such Lender in accordance with the terms of this Agreement.
(e) Each of the Borrowers agrees that, upon the request to the
Administrative Agent by any Lender, the Borrowers will execute and deliver to
such Lender (i) a promissory note of the Borrowers evidencing any Revolving
Credit Loans of such Lender, substantially in the form of Exhibit A-1 with
appropriate insertions as to date and principal amount (together with any
alternative note substantially in the form of Exhibit I-1 issued in lieu thereof
or in exchange therefor, a "Revolving Credit Note"), and/or (ii) a promissory
note of the Borrowers evidencing any Tranche A Term Loan of such Lender,
substantially in the form of Exhibit A-2with appropriate insertions as to date
and principal amount (together with any alternative note substantially in the
form of Exhibit I-2 issued in lieu thereof or in exchange therefor, a "Tranche A
Term Note") and/or (iii) a promissory note of the Borrowers evidencing any
Tranche B Term Loans of such Lender, substantially in the form of Exhibit A-3
with appropriate insertions as to date and principal amount (together with any
alternative note substantially in the form of Exhibit I-3 issued in lieu thereof
or in exchange therefor, a "Tranche B Term Note") and/or (iv) in the case of a
request by the Swing Line Lender, a promissory note of the Borrowers evidencing
any Swing Line Loans of the Swing Line Lender, substantially in the form of
Exhibit A-4 with appropriate insertions as to the date and principal amount (a
"Swing Line Note").
2.10 Termination or Reduction of Revolving Credit Commitments.
The Designated Borrower shall have the right, upon not less than three Business
Days' notice to the Administrative Agent, to terminate the Revolving Credit
Commitments or, from time to time, to reduce the amount of the Revolving Credit
Commitments; provided that no such termination or reduction of Revolving Credit
Commitments shall be permitted if, after giving effect thereto and to any
prepayments of the Revolving Credit Loans and Swing Line Loans made on the
effective date thereof, the sum of the Aggregate Outstanding Revolving
Extensions of Credit of all Revolving Credit Lenders would exceed the Revolving
Credit Commitments then in effect. Any such reduction shall be in an amount
equal to $500,000, or a whole multiple thereof, and shall reduce permanently the
Revolving Credit Commitments then in effect.
2.11 Optional Prepayments. The Borrowers may at any time and
from time to time prepay the Loans, in whole or in part, without premium or
penalty, upon at least three Business Days' irrevocable notice to the
Administrative Agent by the Designated Borrower,
33
27
specifying the date and amount of prepayment and whether the prepayment is of
Eurodollar Loans, Base Rate Loans or a combination thereof, and, if of a
combination thereof, the amount allocable to each, provided, that if a
Eurodollar Loan is prepaid on any day other than the last day of the Interest
Period applicable thereto, the Borrowers shall also pay any amounts owing
pursuant to Section 2.22. Upon receipt of any such notice, the Administrative
Agent shall promptly notify each Lender thereof. If any such notice is given,
the amount specified in such notice shall be due and payable on the date
specified therein, together with accrued interest to such date on the amount
prepaid. Partial prepayments of the Term Loans shall be applied pro rata to the
Tranche A Term Loans and the Tranche B Term Loans, and to the remaining
installments of principal thereof pro rata in accordance with the remaining
outstanding principal amounts thereof. Notwithstanding the foregoing, so long as
any Tranche A Term Loans are outstanding, each Tranche B Term Loan Lender shall
have the right to refuse all or any portion of any prepayment pursuant to this
Section 2.11 allocable to such Lender's Tranche B Term Loans, and the amount so
refused shall be applied to prepay the Tranche A Term Loans in accordance with
the preceding sentence. Amounts prepaid on account of the Term Loans may not be
reborrowed. Partial prepayments of Term Loans and Revolving Credit Loans shall
be in an aggregate principal amount of $500,000 or a whole multiple thereof.
Partial prepayments of Swing Line Loans shall be in an aggregate principal
amount of $100,000 or a whole multiple thereof.
2.12 Mandatory Prepayments and Commitment Reductions.
(a) If any class of equity or debt securities or instruments of the Parent, the
Borrowers or any of their Subsidiaries shall be issued or sold or the Parent,
the Borrowers or any of their Subsidiaries shall incur or permit the incurrence
of loans (except (i) any Capital Stock issued pursuant to the Recapitalization
or to an employee of a Borrower in connection with a Guarantee Obligation or a
loan or advance permitted by Sections 7.4(e) or 7.9(c)(ii), respectively, (ii)
any debt securities or instruments issued or loans incurred in accordance with
Section 7.2 and (iii) so long as such equity investment is not for the purpose
of and does not have the effect of curing a Default or Event of Default, any
Person who owns Capital Stock in the Parent, the Borrowers or any of their
Subsidiaries on the date hereof (subsequent to the Recapitalization) may make a
one-time equity investment in the Parent, which the Parent shall invest in the
equity of the Borrowers, in the aggregate amount of up to $5,000,000), an amount
equal to 100% of the Net Cash Proceeds thereof shall be applied on the date of
such issuance or incurrence toward the prepayment of the Term Loans and the
reduction of the Revolving Credit Commitments as set forth in paragraph (d) of
this Section 2.12.
(b) If on any date the Parent, the Borrowers or any of their
Subsidiaries shall receive Net Cash Proceeds from any Asset Sale or from any
Recovery Event (other than, if no Event of Default shall have occurred and be
continuing, to the extent that such Net Cash Proceeds are to be used to restore
or replace the assets in respect of which such Recovery Event occurred within
twelve months from the date of such Recovery Event, as certified by a
Responsible Officer of the Designated Borrower pursuant to a Reinvestment
Notice), such Net Cash Proceeds shall be applied on such date toward the
prepayment of the Term Loans and the reduction of the Revolving Credit
Commitments as set forth in paragraph (d) of this Section 2.12; provided, that,
notwithstanding the foregoing, on each Reinvestment Prepayment Date, an amount
equal to the Reinvestment Prepayment Amount with respect to the relevant
34
28
Reinvestment Event shall be applied toward the prepayment of the Term Loans and
the reduction of the Revolving Credit Commitments as set forth in paragraph (d)
of this Section 2.12.
(c) If, for any fiscal year of the Borrowers ending after the
Closing Date, there shall be Excess Cash Flow, the Borrowers shall, on the
relevant Excess Cash Flow Application Date, apply toward the prepayment of the
Term Loans and the reduction of the Revolving Credit Commitments as set forth in
paragraph (d) of this Section 2.12 a percentage of such Excess Cash Flow equal
to 75%. Each such prepayment and commitment reduction shall be made on a date
(an "Excess Cash Flow Application Date") no later than five days after the
earlier of (i) the date on which the financial statements of the Borrowers
referred to in Section 6.1(a), for the fiscal year with respect to which such
prepayment is made, are required to be delivered to the Lenders and (ii) the
date such financial statements are actually delivered.
(d) Amounts to be applied in connection with prepayments and
Commitment reductions made pursuant to this Section 2.12 shall be applied,
first, to the prepayment of the Term Loans and, second, to reduce permanently
the Revolving Credit Commitments. Any such reduction of the Revolving Credit
Commitments shall be accompanied by prepayment of the Revolving Credit Loans
and/or Swing Line Loans to the extent, if any, that the sum of the Aggregate
Outstanding Revolving Extensions of Credit of all Revolving Credit Lenders
exceeds the amount of the aggregate Revolving Credit Commitments as so reduced,
provided that if the aggregate principal amount of Revolving Credit Loans and
Swing Line Loans then outstanding is less than the amount of such excess
(because L/C Obligations constitute a portion thereof), the Borrowers shall, to
the extent of the balance of such excess, replace outstanding Letters of Credit
and/or deposit an amount in cash in a cash collateral account established with
the Administrative Agent for the benefit of the Lenders on terms and conditions
satisfactory to the Administrative Agent. The application of any prepayment
pursuant to this Section 2.12 shall be made, within each category of Loans to be
prepaid as provided above, first to Base Rate Loans and second to Eurodollar
Loans. Each prepayment of the Loans under this Section 2.12 shall be accompanied
by accrued interest to the date of such prepayment on the amount prepaid. All
prepayments of the Term Loans pursuant to this Section 2.12 shall be applied pro
rata to the Tranche A Term Loans and the Tranche B Term Loans and to the
remaining installments of principal thereof in the inverse order of scheduled
maturity. Notwithstanding the foregoing, so long as any Tranche A Term Loans are
outstanding, each Tranche B Term Loan Lender shall have the right to refuse all
or any portion of any prepayment pursuant to this Section 2.12 allocable to such
Lender's Tranche B Term Loans and the amount so refused shall be applied first
pro rata to prepay the Tranche A Term Loans and second to reduce permanently the
Revolving Credit Commitments as provided above. Amounts prepaid on account of
the Term Loans may not be reborrowed.
2.13 Conversion and Continuation Options. (a) The Borrowers
may elect from time to time to convert Eurodollar Loans to Base Rate Loans by
the Designated Borrower giving the Administrative Agent at least two Business
Days' prior irrevocable notice of such election, provided that any such
conversion of Eurodollar Loans may only be made on the last day of an Interest
Period with respect thereto. The Borrowers may elect from time to time to
35
29
convert Base Rate Loans to Eurodollar Loans by the Designated Borrower giving
the Administrative Agent at least three Business Days' prior irrevocable notice
of such election. Any such notice of conversion to Eurodollar Loans shall
specify the length of the initial Interest Period therefor. Upon receipt of any
such notice, the Administrative Agent shall promptly notify each Lender thereof.
All or any part of outstanding Eurodollar Loans and Base Rate Loans may be
converted as provided herein, provided that (i) no Loan may be converted into a
Eurodollar Loan when any Event of Default has occurred and is continuing and the
Administrative Agent has or the Required Lenders have determined in its or their
sole discretion not to permit such a conversion and (ii) no Loan may be
converted into a Eurodollar Loan after the date that is one month prior to (i)
the Revolving Credit Termination Date, with respect to the Tranche A Loans and
(ii) the Tranche B Termination Date, with respect to the Tranche B Term Loans.
(b) Any Eurodollar Loans may be continued as such upon the
expiration of the then current Interest Period with respect thereto by the
Designated Borrower giving irrevocable notice to the Administrative Agent, in
accordance with the applicable provisions of the term "Interest Period" set
forth in Section 1.1, of the length of the next Interest Period to be applicable
to such Loans, provided that no Eurodollar Loan may be continued as such (i)
when any Event of Default has occurred and is continuing and the Administrative
Agent has or the Required Lenders have determined in its or their sole
discretion not to permit such a continuation or (ii) after the date that is one
month prior to (A) the Revolving Credit Termination Date, with respect to the
Tranche A Loans or (B) the Tranche B Termination Date, with respect to the
Tranche B Term Loans, and provided, further, that if the Designated Borrower
shall fail to give any required notice as described above in this paragraph or
if such continuation is not permitted pursuant to the preceding proviso such
Loans shall be automatically converted to Base Rate Loans on the last day of
such then expiring Interest Period.
2.14 Minimum Amounts and Maximum Number of Eurodollar
Tranches. Notwithstanding anything to the contrary in this Agreement, all
borrowings, conversions, continuations and optional prepayments of Loans
hereunder and all selections of Interest Periods hereunder shall be in such
amounts and be made pursuant to such elections so that, (a) after giving effect
thereto, the aggregate principal amount of the Loans comprising each Eurodollar
Tranche shall be equal to $2,500,000 or a whole multiple of $1,000,000 in excess
thereof, (b) no more than two Eurodollar Tranches in respect of the Revolving
Credit Loans shall be outstanding at any one time and (c) no more than seven
Eurodollar Tranches in respect of all Loans (including the Revolving Credit
Loans) shall be outstanding at any one time.
2.15 Interest Rates and Payment Dates. (a) Each Eurodollar
Loan shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined for such day
plus the Applicable Margin.
(b) Each Base Rate Loan shall bear interest at a rate per
annum equal to the Base Rate plus the Applicable Margin.
36
30
(c) If all or a portion of (i) any principal of any Loan or
Reimbursement Obligations, (ii) any interest payable thereon, (iii) any
commitment fee or (iv) any other amount payable hereunder shall not be paid when
due (whether at the stated maturity, by acceleration or otherwise), the
principal of the Loans and Reimbursement Obligations and any such overdue
interest, commitment fee or other amount shall bear interest at a rate per annum
which is (x) in the case of principal of the Loans, the rate that would
otherwise be applicable thereto pursuant to the foregoing provisions of this
Section plus 2% and (y) in the case of Reimbursement Obligations, and any
overdue interest, commitment fee or other amount, the rate applicable to Tranche
A Loans which are Base Rate Loans plus 2%, in each case from the date of such
non-payment until such overdue principal, interest, commitment fee or other
amount is paid in full (as well after as before judgment).
(d) Interest shall be payable in arrears on each Interest
Payment Date, provided that interest accruing pursuant to paragraph (c) of this
Section 2.15 shall be payable from time to time on demand.
2.16 Computation of Interest and Fees. (a) Interest on Loans
and Reimbursement Obligations, commitment fees, letter of credit commissions and
interest on overdue interest, commitment fees and other amounts payable
hereunder shall be calculated on the basis of a 360-day year for the actual days
elapsed, except that, with respect to Base Rate Loans the rate of interest on
which is calculated on the basis of the Prime Rate, the interest thereon shall
be calculated on the basis of a 365- (or 366-, as the case may be) day year for
the actual days elapsed. The Administrative Agent shall as soon as practicable
notify the Designated Borrower and the Lenders of each determination of a
Eurodollar Rate. Any change in the interest rate on a Loan resulting from a
change in the Base Rate or the Eurocurrency Reserve Requirements shall become
effective as of the opening of business on the day on which such change becomes
effective. The Administrative Agent shall as soon as practicable notify the
Designated Borrower and the Lenders of the effective date and the amount of each
such change in interest rate.
(b) Each determination of an interest rate by the
Administrative Agent pursuant to any provision of this Agreement shall be
conclusive and binding on the Borrowers and the Lenders in the absence of
manifest error. The Administrative Agent shall, at the request of the Designated
Borrower, deliver to the Designated Borrower a statement showing the quotations
used by the Administrative Agent in determining any interest rate pursuant to
Section 2.15(a).
2.17 Inability to Determine Interest Rate. If prior to the
first day of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrowers) that,
by reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the Eurodollar Rate for
such Interest Period, or
37
31
(b) the Administrative Agent shall have received notice from
the Required Lenders that the Eurodollar Rate determined or to be
determined for such Interest Period will not adequately and fairly
reflect the cost to such Lenders (as conclusively certified by such
Lenders) of making or maintaining their affected Loans during such
Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to the
Designated Borrower and the Lenders as soon as practicable thereafter. If such
notice is given (x) any Eurodollar Loans requested to be made on the first day
of such Interest Period shall be made as Base Rate Loans, (y) any Loans that
were to have been converted on the first day of such Interest Period to
Eurodollar Loans shall be continued as Base Rate Loans and (z) any outstanding
Eurodollar Loans shall be converted, on the first day of such Interest Period,
to Base Rate Loans. Until such notice has been withdrawn by the Administrative
Agent, no further Eurodollar Loans shall be made or continued as such, nor shall
the Borrowers have the right to convert Loans to Eurodollar Loans.
2.18 Pro Rata Treatment and Payments; Use of Proceeds. (a)
Each borrowing by the Borrowers from the Lenders hereunder, each payment by the
Borrowers on account of any commitment fee and any reduction of the Commitments
of the Lenders shall be made pro rata according to the respective Tranche A Term
Loan Percentages, Tranche B Term Loan Percentages or Revolving Credit
Percentages, as the case may be, of the relevant Lenders. Except as provided in
Section 2.11 and 2.12, each payment (including each prepayment) by the Borrowers
on account of principal of and interest on the Term Loans shall be made pro rata
according to the respective outstanding principal amounts of the Term Loans then
held by the Term Loan Lenders (or, in the case of installment payments made
pursuant to Section 2.9 or payments of accrued interest in respect thereof, the
affected Term Loans then held by the relevant Term Loan Lenders). Each payment
(including each prepayment) by the Borrowers on account of principal of and
interest on the Revolving Credit Loans shall be made pro rata according to the
respective outstanding principal amounts of the Revolving Credit Loans then held
by the Revolving Credit Lenders. All payments (including prepayments) to be made
by the Borrowers hereunder and under the Notes, whether on account of principal,
interest, fees or otherwise, shall be made without setoff or counterclaim and
shall be made prior to 12:00 Noon, New York City time, on the due date thereof
to the Administrative Agent, for the account of the Lenders, at the
Administrative Agent's office specified in Section 11.2, in Dollars and in
immediately available funds. The Administrative Agent shall distribute such
payments to the Lenders promptly upon receipt in like funds as received. If any
payment hereunder (other than payments on the Eurodollar Loans) becomes due and
payable on a day other than a Business Day, such payment shall be extended to
the next succeeding Business Day. If any payment on a Eurodollar Loan becomes
due and payable on a day other than a Business Day, the maturity thereof shall
be extended to the next succeeding Business Day unless the result of such
extension would be to extend such payment into another calendar month, in which
event such payment shall be made on the immediately preceding Business Day. In
the case of any extension of any payment of principal pursuant to the preceding
two sentences, interest thereon shall be payable at the then applicable rate
during such extension.
38
32
(b) Unless the Administrative Agent shall have been notified
in writing by any Lender prior to a borrowing that such Lender will not make the
amount that would constitute its share of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the Administrative
Agent may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. If such amount is not made available to the Administrative
Agent by the required time on the Borrowing Date therefor, such Lender shall pay
to the Administrative Agent, on demand, such amount with interest thereon at a
rate equal to the daily average Federal Funds Effective Rate for the period
until such Lender makes such amount immediately available to the Administrative
Agent. A certificate of the Administrative Agent submitted to any Lender with
respect to any amounts owing under this Section 2.18(b) shall be conclusive in
the absence of manifest error. If such Lender's share of such borrowing is not
made available to the Administrative Agent by such Lender within three Business
Days of such Borrowing Date, the Administrative Agent shall also be entitled to
recover such amount with interest thereon at the rate per annum applicable to
Base Rate Loans hereunder, on demand, from the Borrowers.
(c) The Borrowers shall use the proceeds of the Loans only in
the manner expressly contemplated by Section 4.16.
2.19 Illegality. Notwithstanding any other provision herein,
if the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof shall make it unlawful for any Lender to
make or maintain Eurodollar Loans as contemplated by this Agreement, (a) the
commitment of such Lender hereunder to make Eurodollar Loans, continue
Eurodollar Loans as such and convert Base Rate Loans to Eurodollar Loans shall
forthwith be cancelled and (b) such Lender's Loans then outstanding as
Eurodollar Loans, if any, shall be converted automatically to Base Rate Loans on
the respective last days of the then current Interest Periods with respect to
such Loans or within such earlier period as required by law. If any such
conversion of a Eurodollar Loan occurs on a day which is not the last day of the
then current Interest Period with respect thereto, the Borrowers shall pay to
such Lender such amounts, if any, as may be required pursuant to Section 2.22.
2.20 Requirements of Law. (a) If the adoption of or any change
in any Requirement of Law or in the interpretation or application thereof or
compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority made
subsequent to the date hereof:
(i) shall subject any Lender to any tax of any kind
whatsoever with respect to this Agreement, any Note, any Letter of
Credit, any Application or any Eurodollar Loan made by it, or change
the basis of taxation of payments to such Lender in respect thereof
(except for Non-Excluded Taxes covered by Section 2.21 and changes in
the rate of tax on the overall net income of such Lender);
(ii) shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar requirement
against assets held by, deposits or other liabilities in or for the
account of, advances, loans or other extensions of credit by, or
39
33
any other acquisition of funds by, any office of such Lender which
is not otherwise included in the determination of the Eurodollar
Rate hereunder; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit, or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the Borrowers shall promptly pay such Lender,
upon its demand, any additional amounts necessary to compensate such Lender for
such increased cost or reduced amount receivable. If any Lender becomes entitled
to claim any additional amounts pursuant to this Section 2.20, it shall promptly
notify the Designated Borrower (with a copy to the Administrative Agent) of the
event by reason of which it has become so entitled.
(b) If any Lender shall have determined that the adoption of
or any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder or under or in respect of any Letter of
Credit to a level below that which such Lender or such corporation could have
achieved but for such adoption, change or compliance (taking into consideration
such Lender's or such corporation's policies with respect to capital adequacy)
by an amount deemed by such Lender to be material, then from time to time, after
submission by such Lender to the Designated Borrower (with a copy to the
Administrative Agent) of a written request therefor, the Designated Borrower
shall pay to such Lender such additional amount or amounts as will compensate
such Lender for such reduction.
(c) If any Lender becomes entitled to claim any additional
amounts pursuant to this subsection, it shall promptly notify the Designated
Borrower (with a copy to the Administrative Agent) of the event by reason of
which it has become so entitled. A certificate as to any additional amounts
payable pursuant to this Section 2.20 submitted by any Lender to the Designated
Borrower (with a copy to the Administrative Agent) shall be conclusive in the
absence of manifest error. The obligations of the Borrowers pursuant to this
Section 2.20 shall survive the termination of this Agreement and the payment of
the Notes and all other amounts payable hereunder.
2.21 Taxes. (a) All payments made by the Borrowers under this
Agreement and the Notes shall be made free and clear of, and without deduction
or withholding for or on account of, any present or future income, stamp or
other taxes, levies, imposts, duties, charges, fees, deductions or withholdings,
now or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority, excluding net income taxes and franchise taxes (imposed
in lieu of net income taxes) imposed on the Administrative Agent or any Lender
as a result of a present or former connection between the Administrative Agent
or
40
34
such Lender and the jurisdiction of the Governmental Authority imposing such
tax or any political subdivision or taxing authority thereof or therein (other
than any such connection arising solely from the Administrative Agent or such
Lender having executed, delivered or performed its obligations or received a
payment under, or enforced, this Agreement or any other Loan Document). If any
such non-excluded taxes, levies, imposts, duties, charges, fees, deductions or
withholdings ("Non-Excluded Taxes") are required to be withheld from any amounts
payable to the Administrative Agent or any Lender hereunder or under the Notes,
the amounts so payable to the Administrative Agent or such Lender shall be
increased to the extent necessary to yield to the Administrative Agent or such
Lender (after payment of all Non-Excluded Taxes) interest or any such other
amounts payable hereunder at the rates or in the amounts specified in this
Agreement and the Notes, provided, however, that the Borrowers shall make
payments net of and after deduction for Non-Excluded Taxes and shall not be
required to increase any such amounts payable to any Lender if, (i) at the time
such Lender becomes a party to this Agreement such Lender fails to establish a
complete exemption from such withholding, or (ii) such Lender fails to comply
with its obligations under subsection 2.21(b) on an ongoing basis. Whenever any
Non-Excluded Taxes are payable by the Borrowers, as promptly as possible
thereafter the Designated Borrower shall send to the Administrative Agent for
its own account or for the account of such Lender, as the case may be, a
certified copy of an original official receipt received by the Borrowers showing
payment thereof. If the Borrowers fail to pay any Non-Excluded Taxes when due
to the appropriate taxing authority or fails to remit to the Administrative
Agent the required receipts or other required documentary evidence, the
Borrowers shall indemnify the Administrative Agent and the Lenders for any
incremental Non-Excluded Taxes and related interest or penalties that may become
payable by the Administrative Agent or any Lender as a result of any such
failure. The agreements in this Section 2.21 shall survive the termination of
this Agreement and the payment of the Notes and all other amounts payable
hereunder.
(b) Each Lender (or Transferee) that is not a citizen or
resident of the United States, a corporation, partnership or other entity
created or organized in or under the laws of the United States, or any estate or
trust that is subject to federal income taxation regardless of the source of its
income (a "Non-U.S. Lender") shall deliver to the Designated Borrower and the
Administrative Agent (or, in the case of a Participant, to the Lender from which
the related participation shall have been purchased) two copies of either U.S.
Internal Revenue Service Form 1001 or Form 4224, or any subsequent versions
thereof or successors thereto or, in the case of a Non-U.S. Lender claiming
exemption from U.S. federal withholding tax under Section 871(h) or 881(c) of
the Code with respect to payments of "portfolio interest", a Form W-8, or any
subsequent versions thereof or successors thereto (and, if such Non-U.S. Lender
delivers a Form W-8 claiming the payments constitute "portfolio interest", an
annual certificate representing that such Non-U.S. Lender is not a "bank" (or
other prohibited recipient, as may be defined in the Code or regulations
promulgated under the Code for purposes of Section 881(c) of the Code, is not a
10-percent shareholder (within the meaning of Section 871(h)(3)(B) of the Code)
of any Borrower and is not a controlled foreign corporation related to the
Borrowers (within the meaning of Section 864(d)(4) of the Code) (such Sections
to include any successor Sections covering similar items)), properly completed
and duly executed by such Non-U.S. Lender claiming complete exemption from, or a
reduced rate of, U.S. federal withholding tax on all payments by the Borrowers
under this Agreement
41
35
and the other Loan Documents. Such forms shall be delivered by each Non-U.S.
Lender on or before the date it becomes a party to this Agreement (or, in the
case of any Participant, on or before the date such Participant purchases the
related participation). In addition, each Non-U.S. Lender shall deliver such
forms promptly upon the obsolescence or invalidity of any form previously
delivered by such Non-U.S. Lender. Each Non-U.S. Lender shall promptly notify
the Designated Borrower at any time it determines that it is no longer in a
position to provide any previously delivered certificate to the Borrowers (or
any other form of certification adopted by the U.S. taxing authorities for such
purpose). Notwithstanding any other provision of this Section 2.21(b), a
Non-U.S. Lender shall not be required to deliver any form pursuant to this
Section 2.21(b) that such Non-U.S. Lender is not legally able to deliver.
2.22 Indemnity. The Borrowers agree to indemnify each Lender
and to hold each Lender harmless from any loss or expense which such Lender may
sustain or incur as a consequence of (a) default by the Borrowers in making a
borrowing of, conversion into or continuation of Eurodollar Loans after the
Designated Borrower has given a notice requesting the same in accordance with
the provisions of this Agreement, (b) default by the Borrowers in making any
prepayment after the Designated Borrower has given a notice thereof in
accordance with the provisions of this Agreement or (c) the making of a
prepayment of Eurodollar Loans on a day which is not the last day of an Interest
Period with respect thereto. Such indemnification may include an amount equal to
the excess, if any, of (i) the amount of interest which would have accrued on
the amount so prepaid, or not so borrowed, converted or continued, for the
period from the date of such prepayment or of such failure to borrow, convert or
continue to the last day of such Interest Period (or, in the case of a failure
to borrow, convert or continue, the Interest Period that would have commenced on
the date of such failure) in each case at the applicable rate of interest for
such Loans provided for herein (excluding, however, the Applicable Margin
included therein, if any) over (ii) the amount of interest (as reasonably
determined by such Lender) which would have accrued to such Lender on such
amount by placing such amount on deposit for a comparable period with leading
banks in the interbank eurodollar market. A certificate as to any amounts
payable pursuant to this Section 2.22 submitted to the Designated Borrower by
any Lender shall be conclusive in the absence of manifest error. This covenant
shall survive the termination of this Agreement and the payment of the Notes and
all other amounts payable hereunder.
2.23 Change of Lending Office. Each Lender (or Transferee)
agrees that, upon the occurrence of any event giving rise to the operation of
Section 2.19, 2.20(a) or 2.21 with respect to such Lender (or Transferee), it
will, if requested by the Designated Borrower, use reasonable efforts (subject
to overall policy considerations of such Lender (or Transferee)) to designate
another lending office for any Loans affected by such event with the object of
avoiding the consequences of such event; provided, that such designation is made
on terms that, in the sole judgment of such Lender, cause such Lender and its
lending office(s) to suffer no material economic, legal or regulatory
disadvantage, and provided, further, that nothing in this Section 2.23 shall
affect or postpone any of the obligations of any Borrowers or the rights of any
Lender (or Transferee) pursuant to Section 2.19, 2.20(a) or 2.21.
2.24 Right of Contribution. Each Borrower hereby agrees that
to the extent a Borrower shall have paid more than its proportionate share of
any payment made hereunder,
42
36
such Borrower shall be entitled to seek and receive contribution from and
against any other Borrower hereunder who has not paid its proportionate share of
such payment; provided however such Borrower shall not seek any such
contribution from any other Borrower until all Obligations have been paid in
full and all Commitments of the Lenders hereunder have been terminated. The
provisions of this Section 2.24 shall in no respect limit the obligations and
liabilities of any Borrower to the Administrative Agent and the Lenders, and
each Borrower shall remain liable to the Administrative Agent and the Lenders
for the full amount of its obligations hereunder.
2.25 Swing Line Commitment. Subject to the terms and
conditions hereof, The First National Bank of Boston (in such capacity, the
"Swing Line Lender") agrees to make a portion of the credit otherwise available
to the Borrowers under the Revolving Credit Lenders' Revolving Credit
Commitments from time to time during the Revolving Credit Commitment Period by
making swing line loans ("Swing Line Loans") to the Borrowers in an aggregate
principal amount not to exceed at any one time outstanding the Swing Line
Commitment; provided that (a) the aggregate principal amount of Swing Line Loans
outstanding at any time shall not exceed the Swing Line Commitment then in
effect (notwithstanding that the Swing Line Loans outstanding at any time, when
aggregated with the Swing Line Lender's other outstanding Loans hereunder, may
exceed the Swing Line Commitment then in effect) and (b) the Designated Borrower
shall not request, and the Swing Line Lender shall not make, any Swing Line Loan
if, after giving effect to the making of such Swing Line Loan, the aggregate
amount of the Available Revolving Credit Commitments would be less than zero.
During the Revolving Credit Commitment Period, the Borrowers may use the Swing
Line Commitment by borrowing, repaying and reborrowing, all in accordance with
the terms and conditions hereof. Swing Line Loans shall be Base Rate Loans only.
The Borrower shall repay all outstanding Swing Line Loans on the last day of the
Revolving Credit Commitment Period.
2.26 Procedure for Swing Line Borrowing. Whenever the
Designated Borrower desires that the Swing Line Lender make Swing Line Loans
under Section 2.25 it shall give the Swing Line Lender irrevocable telephonic
notice confirmed promptly in writing (which telephonic notice must be received
by the Swing Line Lender not later than 1:00 P.M., New York City time, on the
proposed Borrowing Date), specifying (a) the amount to be borrowed, (b) the
requested Borrowing Date (which shall be a Business Day during the Revolving
Credit Commitment Period) and (c) the identity of the Borrower or Borrowers to
which the proceeds of the Swing Line Loans should be made available. Each
borrowing under the Swing Line Commitment shall be in an amount equal to
$100,000 or a whole multiple thereof. Not later than 3:00 P.M., New York City
time, on the Borrowing Date specified in the notice in respect of Swing Line
Loans, the Swing Line Lender shall make available to the Administrative Agent at
its office specified in Section 11.2 an amount in immediately available funds
equal to the amount of the Swing Line Loan to be made by the Swing Line Lender.
The Administrative Agent shall make the proceeds of such Swing Line Loan
available to the appropriate Borrower on such Borrowing Date in accordance with
the instructions of the Designated Borrower in like funds as received by the
Administrative Agent.
43
37
2.27 Refunded Swing Line Loans; Swing Line Loan
Participations. (a) The Swing Line Lender, at any time and from time to time in
its sole and absolute discretion may, on behalf of the Borrowers (which hereby
irrevocably direct the Swing Line Lender to act on their behalf), on one
Business Day's notice given by the Swing Line Lender no later than 10:00 A.M.,
New York City time, request each Revolving Credit Lender to make, and each
Revolving Credit Lender hereby agrees to make, a Revolving Credit Loan, in an
amount equal to such Revolving Credit Lender's Revolving Credit Percentage of
the aggregate amount of the Swing Line Loans (the "Refunded Swing Line Loans")
outstanding on the date of such notice, to repay the Swing Line Lender. Unless
any of the events described in Section 8(f) shall have occurred and be
continuing (in which case the procedures of Section 2.27(c) shall apply), each
Revolving Credit Lender shall make the amount of such Revolving Credit Loan
available to the Administrative Agent at its office set forth in Section 11.2 in
immediately available funds, not later than 10:00 A.M., New York City time, one
Business Day after the date of such notice. The proceeds of such Revolving
Credit Loans shall be immediately applied by the Swing Line Lender to repay the
Refunded Swing Line Loans. Effective on the day such Revolving Credit Loans are
made, the portion of the Swing Line Loans so paid shall no longer be outstanding
as Swing Line Loans and shall be due as Revolving Credit Loans in accordance
with their respective Revolving Credit Percentages. The Borrowers irrevocably
authorize the Swing Line Lender to charge the Borrowers' accounts with the
Administrative Agent (up to the amount available in each such account) to
immediately pay the amount of such Refunded Swing Line Loans to the extent
amounts received from the Revolving Credit Lenders are not sufficient to repay
in full such Refunded Swing Line Loans.
(b) The making of any Swing Line Loan hereunder shall be
subject to the satisfaction of the applicable conditions precedent thereto set
forth in Section 5 (unless otherwise waived in accordance with Section 11.1).
The Swing Line Lender shall notify the Designated Borrower of its election not
to make Swing Line Loans hereunder as a result of the failure to satisfy such
conditions precedent, unless an Event of Default of the type specified in
Section 8(f) shall have occurred and be continuing.
(c) If prior to the time a Revolving Credit Loan would have
otherwise been made pursuant to Section 2.27(a), one of the events described in
Section 8(f) shall have occurred and be continuing, each Revolving Credit Lender
shall, on the date such Revolving Credit Loan was to have been made pursuant to
the notice referred to in Section 2.27(a) (the "Refunding Date"), purchase an
undivided participating interest in an amount equal to (i) its Revolving Credit
Percentage times (ii) the aggregate principal amount of Swing Line Loans then
outstanding which were to have been repaid with such Revolving Credit Loans (the
"Swing Line Participation Amount"). On the Refunding Date, each Revolving Credit
Lender shall transfer to the Swing Line Lender, in immediately available funds,
such Lender's Swing Line Participation Amount and upon receipt thereof the Swing
Line Lender shall deliver to such Lender a Swing Line Loan Participation
Certificate dated the date of the Swing Line Lender's receipt of such funds and
in such Swing Line Participation Amount.
(d) Whenever, at any time after the Swing Line Lender has
received from any Revolving Credit Lender such Lender's Swing Line Participation
Amount, the Swing Line
44
38
Lender receives any payment on account of the Swing Line Loans, the Swing Line
Lender will distribute to such Lender its Swing Line Participation Amount
(appropriately adjusted, in the case of interest payments, to reflect the period
of time during which such Lender's participating interest was outstanding and
funded and, in the case of principal and interest payments, to reflect such
Lender's pro rata portion of such payment if such payment is not sufficient to
pay the principal of and interest on all Swing Line Loans then due); provided,
however, that in the event that such payment received by the Swing Line Lender
is required to be returned, such Revolving Credit Lender will return to the
Swing Line Lender any portion thereof previously distributed to it by the Swing
Line Lender.
(e) Each Revolving Credit Lender's obligation to make the
Loans referred to in Section 2.27(a) and to purchase participating interests
pursuant to Section 2.27(c) shall be absolute and unconditional and shall not be
affected by any circumstance, including, without limitation, (i) any setoff,
counterclaim, recoupment, defense or other right which such Revolving Credit
Lender or the Borrowers may have against the Swing Line Lender, the Borrowers or
any other Person for any reason whatsoever; (ii) the occurrence or continuance
of a Default or an Event of Default or the failure to satisfy any of the other
conditions specified in Section 5; (iii) any adverse change in the condition
(financial or otherwise) of the Borrowers; (iv) any breach of this Agreement or
any other Loan Document by the Borrowers, any other Loan Party or any other
Revolving Credit Lender; or (v) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing.
SECTION 3. LETTERS OF CREDIT
3.1 L/C Commitment. (a) Subject to the terms and conditions
hereof, the Issuing Lender, in reliance on the agreements of the other Revolving
Credit Lenders set forth in Section 3.4(a), agrees to issue letters of credit
("Letters of Credit") for the account of the Borrowers on any Business Day
during the Revolving Credit Commitment Period in such form as may be approved
from time to time by the Issuing Lender; provided that the Issuing Lender shall
have no obligation to issue any Letter of Credit if, after giving effect to such
issuance, (i) the L/C Obligations would exceed the L/C Commitment or (ii) the
aggregate amount of the aggregate Available Revolving Credit Commitments would
be less than zero. Each Letter of Credit shall (i) be denominated in Dollars,
(ii) be either (x) a standby letter of credit issued to support (I) obligations
of the Borrowers or any of their Subsidiaries, contingent or otherwise, which
finance the working capital and business needs of the Borrowers or their
Subsidiaries or (II) performance obligations of the Borrowers and their
Subsidiaries, in each case, incurred in the ordinary course of business (a
"Standby Letter of Credit"), or (y) a commercial letter of credit in respect of
the purchase of goods or services by the Borrowers or any of their Subsidiaries
in the ordinary course of business (a "Commercial Letter of Credit"), (iii)
expire no later than five Business Days prior to the Revolving Credit
Termination Date and (iv) expire no later than 365 days after its date of
issuance, provided that any Letter of Credit with a 365-day duration may provide
for the renewal thereof at the election of the Designated Borrower (in
accordance with procedures to be established by the Issuing Lender) for
additional 365-day periods (which shall not expire later than the Revolving
Credit Termination Date).
45
39
(b) Each Letter of Credit shall be subject to the Uniform
Customs and, to the extent not inconsistent therewith, the laws of the State of
New York.
(c) The Issuing Lender shall not at any time be obligated to
issue any Letter of Credit hereunder if such issuance would conflict with, or
cause the Issuing Lender or any L/C Participant to exceed any limits imposed by,
any applicable Requirement of Law.
3.2 Procedure for Issuance of Letter of Credit. The Designated
Borrower may from time to time request that the Issuing Lender issue a Letter of
Credit by delivering to the Issuing Lender at its address for notices specified
herein an Application therefor, completed to the satisfaction of the Issuing
Lender, and such other certificates, documents and other papers and information
as the Issuing Lender may request. Upon receipt of any Application, the Issuing
Lender will process such Application and the certificates, documents and other
papers and information delivered to it in connection therewith in accordance
with its customary procedures and shall promptly issue the Letter of Credit
requested thereby (but in no event shall the Issuing Lender be required to issue
any Letter of Credit earlier than three Business Days after its receipt of the
Application therefor and all such other certificates, documents and other papers
and information relating thereto) by issuing the original of such Letter of
Credit to the beneficiary thereof or as otherwise may be agreed to by the
Issuing Lender and the Designated Borrower. The Issuing Lender shall furnish a
copy of such Letter of Credit to the Designated Borrower promptly following the
issuance thereof. The Issuing Lender shall promptly furnish to the
Administrative Agent, which shall in turn promptly furnish to the Lenders,
notice of the issuance of each Standby Letter of Credit (including the amount
thereof). On each L/C Fee Payment Date, the Issuing Lender shall promptly
furnish to the Administrative Agent, which shall in turn promptly furnish to the
Lenders, notice of the aggregate face amount of the Commercial Letters of Credit
outstanding on such date.
3.3 Fees, Commissions and Other Charges. (a) The Borrowers
jointly and severally agree that they will pay a commission on all outstanding
Standby Letters of Credit at the rate of 3-1/2% per annum of the face amount of
each such Letter of Credit, of which 1/4 of 1% per annum will be a fronting fee
for the account of the Issuing Lender, and the remainder will be shared ratably
among the Revolving Credit Lenders in accordance with their Revolving Credit
Percentage, payable quarterly in arrears on each L/C Fee Payment Date after the
issuance date. The Borrowers jointly and severally agree that they will pay a
commission on all outstanding Commercial Letters of Credit at the rate of 3-1/2%
per annum of the average daily face amount of such Letters of Credit during the
period for which such payment is made, of which 1/4 of 1% per annum will be a
fronting fee for the account of the Issuing Lender, and the remainder will be
shared ratably among the Revolving Credit Lenders in accordance with the
Revolving Credit Percentage, payable quarterly in arrears on each L/C Fee
Payment Date.
(b) In addition to the foregoing fees and commissions, the
Borrowers jointly and severally agree that they shall pay or reimburse the
Issuing Lender for such normal and customary costs and expenses as are incurred
or charged by the Issuing Lender in issuing, negotiating, effecting payment
under, amending or otherwise administering any Letter of Credit.
46
40
(c) The Administrative Agent shall, promptly following its
receipt thereof, distribute to the Issuing Lender and the L/C Participants all
fees and commissions received by the Administrative Agent for their respective
accounts pursuant to this Section.
3.4 L/C Participations. (a) The Issuing Lender irrevocably
agrees to grant and hereby grants to each L/C Participant, and, to induce the
Issuing Lender to issue Letters of Credit hereunder, each L/C Participant
irrevocably agrees to accept and purchase and hereby accepts and purchases from
the Issuing Lender, on the terms and conditions hereinafter stated, for such L/C
Participant's own account and risk an undivided interest equal to such L/C
Participant's Revolving Credit Percentage in the Issuing Lender's obligations
and rights under each Letter of Credit issued hereunder and the amount of each
draft paid by the Issuing Lender thereunder. Each L/C Participant
unconditionally and irrevocably agrees with the Issuing Lender that, if a draft
is paid under any Letter of Credit for which the Issuing Lender is not
reimbursed in full by the Borrowers in accordance with the terms of this
Agreement, such L/C Participant shall pay to the Issuing Lender upon demand at
the Issuing Lender's address for notices specified herein an amount equal to
such L/C Participant's Revolving Credit Percentage of the amount of such draft,
or any part thereof, which is not so reimbursed.
(b) If any amount required to be paid by any L/C Participant
to the Issuing Lender pursuant to Section 3.4(a) in respect of any unreimbursed
portion of any payment made by the Issuing Lender under any Letter of Credit is
paid to the Issuing Lender within three Business Days after the date such
payment is due, such L/C Participant shall pay to the Issuing Lender on demand
an amount equal to the product of (i) such amount, times (ii) the daily average
Federal Funds Effective Rate during the period from and including the date such
payment is required to the date on which such payment is immediately available
to the Issuing Lender, times (iii) a fraction the numerator of which is the
number of days that elapse during such period and the denominator of which is
360. If any such amount required to be paid by any L/C Participant pursuant to
Section 3.4(a) is not made available to the Issuing Lender by such L/C
Participant within three Business Days after the date such payment is due, the
Issuing Lender shall be entitled to recover from such L/C Participant, on
demand, such amount with interest thereon calculated from such due date at the
rate per annum applicable to Base Rate Loans hereunder. A certificate of the
Issuing Lender submitted to any L/C Participant with respect to any amounts
owing under this Section shall be conclusive in the absence of manifest error.
(c) Whenever, at any time after the Issuing Lender has made
payment under any Letter of Credit and has received from any L/C Participant its
pro rata share of such payment in accordance with Section 3.4(a), the Issuing
Lender receives any payment related to such Letter of Credit (whether directly
from the Designated Borrower or otherwise, including proceeds of collateral
applied thereto by the Issuing Lender), or any payment of interest on account
thereof, the Issuing Lender will distribute to such L/C Participant its pro rata
share thereof; provided, however, that in the event that any such payment
received by the Issuing Lender shall be required to be returned by the Issuing
Lender, such L/C Participant shall return to the Issuing Lender the portion
thereof previously distributed by the Issuing Lender to it.
47
41
3.5 Reimbursement Obligation of the Borrowers. The Borrowers
jointly and severally agree to reimburse the Issuing Lender on each date on
which the Issuing Lender notifies the Designated Borrower of the date and amount
of a draft presented under any Letter of Credit and paid by the Issuing Lender
for the amount of (a) such draft so paid and (b) any taxes, fees, charges or
other costs or expenses incurred by the Issuing Lender in connection with such
payment. Each such payment shall be made to the Issuing Lender at its address
for notices specified herein in lawful money of the United States and in
immediately available funds. Interest shall be payable on any and all amounts
remaining unpaid by the Borrowers under this Section from the date such amounts
become payable (whether at stated maturity, by acceleration or otherwise) until
payment in full at the rate set forth in Section 2.15(c). Each drawing under any
Letter of Credit shall constitute a request by the Designated Borrower to the
Administrative Agent for a borrowing pursuant to Section 2.6 of Base Rate Loans
(or, at the option of the Administrative Agent and the Swing Line Lender in
their sole discretion, a borrowing pursuant to Section 2.25 of Swing Line Loans)
in the amount of such drawing, the proceeds of such Loans to be applied to
reimburse such drawing. The Borrowing Date with respect to such borrowing shall
be the date of such drawing.
3.6 Obligations Absolute. The Borrowers' obligations under
this Section 3 shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to payment
which the Borrowers may have or have had against the Issuing Lender, any
beneficiary of a Letter of Credit or any other Person. The Borrowers jointly and
severally also agree with the Issuing Lender that the Issuing Lender shall not
be responsible for, and the Borrowers' Reimbursement Obligations under Section
3.5 shall not be affected by, among other things, the validity or genuineness of
documents or of any endorsements thereon, even though such documents shall in
fact prove to be invalid, fraudulent or forged, or any dispute between or among
any Borrower and any beneficiary of any Letter of Credit or any other party to
which such Letter of Credit may be transferred or any claims whatsoever of any
Borrower against any beneficiary of such Letter of Credit or any such
transferee. The Issuing Lender shall not be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any message or
advice, however transmitted, in connection with any Letter of Credit, except for
errors or omissions found by a final and nonappealable decision of a court of
competent jurisdiction to have resulted from the gross negligence or willful
misconduct of the Issuing Lender. The Borrowers jointly and severally agree that
any action taken or omitted by the Issuing Lender under or in connection with
any Letter of Credit or the related drafts or documents, if done in the absence
of gross negligence or willful misconduct and in accordance with the standards
or care specified in the Uniform Commercial Code of the State of New York, shall
be binding on the Borrowers jointly and severally and shall not result in any
liability of the Issuing Lender to the Borrowers.
3.7 Letter of Credit Payments. If any draft shall be presented
for payment under any Letter of Credit, the Issuing Lender shall promptly notify
the Designated Borrower of the date and amount thereof. The responsibility of
the Issuing Lender to the Borrowers in connection with any draft presented for
payment under any Letter of Credit shall, in addition to any payment obligation
expressly provided for in such Letter of Credit, be limited to
48
42
determining that the documents (including each draft) delivered under such
Letter of Credit in connection with such presentment are substantially in
conformity with such Letter of Credit.
3.8 Applications. To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the provisions
of this Section 3, the provisions of this Section 3 shall apply.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter
into this Agreement and to make the Loans and issue or participate in the
Letters of Credit, the Parent and the Borrowers hereby jointly and severally
represent and warrant to the Administrative Agent and each Lender that:
4.1 Financial Condition. (a) The unaudited pro forma combined
balance sheet of the Borrowers as at April 30, 1996 (including the notes
thereto) (the "Pro Forma Balance Sheet"), copies of which have heretofore been
furnished to each Lender, has been prepared giving effect (as if such events had
occurred on such date) to (i) the Recapitalization, (ii) the borrowings under
this Agreement contemplated to be made on the Closing Date and the use of
proceeds thereof, (iii) the incurrence of the Subordinated Debt, (iv) the
issuance of the Preferred Stock, (v) the other transactions contemplated by the
Recapitalization Agreement and (vi) the payment of fees and expenses in
connection with the foregoing. The Pro Forma Balance Sheet has been prepared
based on the best information available to the Borrowers as of the date of
delivery thereof, and presents fairly on a pro forma basis the estimated
combined financial position of the Borrowers as of April 30, 1996, assuming that
the events specified in the preceding sentence had actually occurred at such
date.
(b) The combined balance sheet of the Borrowers as at December
31, 1995 and December 31, 1994 and the related combined statements of income and
of cash flows for the fiscal years ended on such dates, reported on by KPMG Peat
Marwick LLP, copies of which have heretofore been furnished to each Lender, are
complete and correct and present fairly the combined financial condition of the
Borrowers as at such dates, and the combined results of their operations and
their combined cash flows for the fiscal years then ended. The unaudited
combined balance sheet of the Borrowers as at April 30, 1996 and the related
unaudited combined statements of income and of cash flows for the four-month
period ended on such date, certified by a Responsible Officer of the Designated
Borrower, copies of which have heretofore been furnished to each Lender, are
complete and correct and present fairly the combined financial condition of the
Borrowers as at such date, and the combined results of their operations and
their combined cash flows for the four-month period then ended (subject to
normal year-end audit adjustments (including adjustments for inventory
capitalization and depreciation). All such financial statements, including the
related schedules and notes thereto, have been prepared in accordance with GAAP
applied consistently throughout the periods involved (except as approved by such
accountants or Responsible Officer of the Designated Borrower, as the case may
be, and as disclosed therein and except for the absence of
49
43
adjustments for inventory capitalization and depreciation in the case of the
April 30, 1996 financial statements). None of the Borrowers had, at the date of
the most recent balance sheet referred to above, any undisclosed liabilities,
any material Guarantee Obligation, contingent liability or liability for taxes,
or any long-term lease or unusual forward or long-term commitment, including,
without limitation, any interest rate or foreign currency swap or exchange
transaction, which is not reflected in the foregoing statements or in the notes
thereto and not required to be disclosed by GAAP. During the period from
December 31, 1995 to and including the date hereof there has been no sale,
transfer or other disposition by the Borrowers or any of their combined
Subsidiaries of any material part of their business or property and no purchase
or other acquisition of any business or property (including any Capital Stock of
any other Person) material in relation to the combined financial condition of
the Borrowers at December 31, 1995, other than pursuant to the Recapitalization
Agreement.
4.2 No Change. (a) Since December 31, 1995, there has been no
development or event which has had or could reasonably be expected to have a
Material Adverse Effect, and (b) during the period from December 31, 1995 to and
including the date hereof no dividends or other distributions have been
declared, paid or made upon the Capital Stock of the Parent, the Borrowers or
any Subsidiary nor has any of the Capital Stock of the Parent, the Borrowers or
any Subsidiary been redeemed, retired, purchased or otherwise acquired for value
by the Parent, the Borrowers any or any of their Subsidiaries, other than
pursuant to the Recapitalization Agreement.
4.3 Corporate Existence; Compliance with Law. Each of the
Parent, the Borrowers and their Subsidiaries (a) is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization, (b) has the power and authority, and the legal right, to own and
operate its property, to lease the property it operates as lessee and to conduct
the business in which it is currently engaged, (c) is duly qualified and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such qualification
and (d) is in compliance with all Requirements of Law except to the extent that
the failure to comply therewith could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect.
4.4 Corporate Power; Authorization; Enforceable Obligations.
Each Loan Party has the power and authority, and the legal right, to make,
deliver and perform each Loan Document to which it is a party and, in the case
of the Borrowers, to borrow hereunder. Each Loan Party has taken all necessary
action to authorize the execution, delivery and performance of the Loan
Documents to which it is a party and, in the case of the Borrowers, to authorize
the borrowings on the terms and conditions of this Agreement and the Notes. No
material consent or authorization of, filing with, notice to or other act by or
in respect of, any Governmental Authority or any other Person is required in
connection with the Recapitalization, the borrowings hereunder or with the
execution, delivery, performance, validity or enforceability of this Agreement
or any of the Loan Documents, except (i) consents, authorizations, filings and
notices described in Schedule 4.4, which consents, authorizations, filings and
notices have been obtained or made and are in full force and effect and (ii) the
filings referred to in Section 4.19(b). Each Loan Document has been duly
50
44
executed and delivered on behalf of each Loan Party thereto. This Agreement
constitutes, and each other Loan Document upon execution will constitute, a
legal, valid and binding obligation of each Loan Party thereto, enforceable
against each such Loan Party in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
4.5 No Legal Bar. The execution, delivery and performance of
this Agreement and the other Loan Documents, the issuance of Letters of Credit,
the borrowings hereunder and the use of the proceeds thereof will not violate
any Requirement of Law or Contractual Obligation of the Parent, the Borrowers or
of any of their Subsidiaries and will not result in, or require, the creation or
imposition of any Lien on any of their respective properties or revenues
pursuant to any such Requirement of Law or Contractual Obligation (other than
the Liens created by the Security Documents).
4.6 No Material Litigation. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of the Parent or the Borrowers, threatened by or against the
Parent, the Borrowers or any of their Subsidiaries or against any of its or
their respective properties or revenues (a) with respect to any of the Loan
Documents or any of the transactions contemplated hereby or thereby, or (b)
which could reasonably be expected to have a Material Adverse Effect.
4.7 No Default. Neither the Parent, the Borrowers nor any of
their Subsidiaries is in default under or with respect to any of its Contractual
Obligations in any respect which could reasonably be expected to have a Material
Adverse Effect. No Default or Event of Default has occurred and is continuing.
4.8 Ownership of Property; Liens. Each of the Parent, the
Borrowers and their Subsidiaries has title in fee simple to, or a valid
leasehold interest in, all its real property, and good title to, or a valid
leasehold interest in, all its other property, and none of such property is
subject to any Lien except as permitted by Section 7.3. The Parent, the
Borrowers and their Subsidiaries have title in fee simple to no real property
other than the Mortgaged Property.
4.9 Intellectual Property. The Parent, the Borrowers and each
of their Subsidiaries owns, or is licensed to use, all trademarks, tradenames,
copyrights, technology, know-how and processes necessary for the conduct of its
business as currently conducted, except for those the failure to own or license
which could not reasonably be expected to have a Material Adverse Effect
("Intellectual Property"). No material claim has been asserted and is pending by
any Person challenging or questioning the use of any Intellectual Property or
the validity or effectiveness of any Intellectual Property, nor does the Parent
or any of the Borrowers know of any valid basis for any such claim. The use of
Intellectual Property by the Parent, the Borrowers and their Subsidiaries does
not infringe on the rights of any Person in any material respect.
51
45
4.10 No Burdensome Restrictions. No Requirement of Law or Contractual
Obligation of the Parent, the Borrowers or any of their Subsidiaries could
reasonably be expected to have a Material Adverse Effect.
4.11 Taxes. Each of the Parent, the Borrowers and their Subsidiaries
has filed or caused to be filed all Federal, state and other material tax
returns which are required to be filed and has paid all taxes shown to be due
and payable on said returns or on any assessments made against it or any of its
property and all other taxes, fees or other charges imposed on it or any of its
property by any Governmental Authority (other than any the amount or validity of
which are currently being contested in good faith by appropriate proceedings and
with respect to which reserves in conformity with GAAP have been provided on the
books of the Borrowers); no tax Lien has been filed, and, to the knowledge of
the Parent and the Borrowers, no claim is being asserted, with respect to any
such tax, fee or other charge.
4.12 Federal Regulations. No part of the proceeds of any Loans will be
used for "purchasing" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms under Regulation G or Regulation U of the
Board as now and from time to time hereafter in effect or for any purpose which
violates the provisions of the Regulations of the Board. If requested by any
Lender or the Administrative Agent, the Borrowers will furnish to the
Administrative Agent and each Lender a statement to the foregoing effect in
conformity with the requirements of FR Form G-1 or FR Form U-1 referred to in
said Regulation G or Regulation U, as the case may be.
4.13 ERISA. Neither a Reportable Event nor an "accumulated funding
deficiency" (within the meaning of Section 412 of the Code or Section 302 of
ERISA) has occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan, and each Plan
has complied in all material respects with the applicable provisions of ERISA
and the Code. No termination of a Single Employer Plan has occurred, and no Lien
in favor of the PBGC or a Plan has arisen, during such five-year period. The
present value of all accrued benefits under each Single Employer Plan (based on
those assumptions used to fund such Plans) did not, as of the last annual
valuation date prior to the date on which this representation is made or deemed
made, exceed the value of the assets of such Plan allocable to such accrued
benefits by a material amount. Neither any Borrower nor any Commonly Controlled
Entity has had a complete or partial withdrawal from any Multiemployer Plan
which has resulted or could reasonably be expected to result in a material
liability under ERISA, and neither any Borrower nor any Commonly Controlled
Entity would become subject to any material liability under ERISA if any
Borrower or any such Commonly Controlled Entity were to withdraw completely from
all Multiemployer Plans as of the valuation date most closely preceding the date
on which this representation is made or deemed made. No such Multiemployer Plan
is in Reorganization or Insolvent. The present value (determined using actuarial
and other assumptions which are reasonable in respect of the benefits provided
and the employees participating) of the liability of the Borrowers and each
Commonly Controlled Entity for post retirement benefits to be provided to their
current and former employees under Plans which are welfare benefit plans (as
defined
52
46
in Section 3(1) of ERISA) does not, in the aggregate, exceed the assets under
all such Plans allocable to such benefits by an amount in excess of $50,000.
4.14 Investment Company Act; Other Regulations. No Loan Party is an
"investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended. No Loan
Party is subject to regulation under any Federal or State statute or regulation
(other than Regulation X of the Board) which limits its ability to incur
Indebtedness.
4.15 Subsidiaries. The Borrowers listed on Schedule 1.1A constitute all
the direct or indirect Subsidiaries of the Parent.
4.16 Purpose of Loans; Limitations on Use. The proceeds of the Term
Loans shall be used to finance the Recapitalization and to pay related fees and
expenses. The Revolving Credit Loans shall be used to finance the working
capital needs of the Borrowers and their Subsidiaries.
4.17 Environmental Matters.
(a) The Properties do not contain, and have not previously contained,
any Materials of Environmental Concern in amounts or concentrations or
under circumstances which (i) constitute or constituted a violation of, or
(ii) could give rise to liability under, any Environmental Law, except in
either case insofar as such violation or liability, or any aggregation
thereof, could not reasonably be expected to result in the payment of a
Material Environmental Amount.
(b) The Properties and all operations at the Properties are in
material compliance, and have in the last five years been in material
compliance, with all applicable Environmental Laws, and there is no
contamination at, under or about the Properties or violation of any
Environmental Law with respect to the Properties or the business operated
by the Parent, the Borrowers or any of their Subsidiaries (the "Business")
which could reasonably be expected to materially interfere with the
continued operation of the Properties or materially impair the fair
saleable value thereof. Neither the Parent, the Borrowers nor any of their
Subsidiaries has assumed any liability of any other Person under
Environmental Laws.
(c) Neither the Parent, the Borrowers nor any of their Subsidiaries
has received or is aware of any notice of violation, alleged violation,
non-compliance, liability or potential liability regarding environmental
matters or compliance with Environmental Laws with regard to any of the
Properties or the Business, nor does the Parent, the Borrowers or any of
their Subsidiaries have knowledge or reason to believe that any such notice
will be received or is being threatened, except insofar as such notice or
threatened notice, or any aggregation thereof, does not involve a matter or
matters that could reasonably be expected to result in the payment of a
Material Environmental Amount.
53
47
(d) Materials of Environmental Concern have not been transported or
disposed of from the Properties in violation of, or in a manner or to a
location which could reasonably be expected to give rise to liability
under, any Environmental Law, nor have any Materials of Environmental
Concern been generated, treated, stored or disposed of at, on or under any
of the Properties in violation of, or in a manner that could give rise to
liability under, any applicable Environmental Law, except insofar as any
such violation or liability referred to in this paragraph, or any
aggregation thereof, could not reasonably be expected to result in the
payment of a Material Environmental Amount.
(e) No judicial proceeding or governmental or administrative action is
pending or, to the knowledge of the Parent, the Borrowers or any of their
Subsidiaries, threatened, under any Environmental Law to which the Parent,
the Borrowers or any of their Subsidiaries is or will be named as a party
with respect to the Properties or the Business, nor are there any consent
decrees or other decrees, consent orders, administrative orders or other
orders, or other administrative or judicial requirements outstanding under
any Environmental Law with respect to the Properties or the Business,
except insofar as such proceeding, action, decree, order or other
requirement, or any aggregation thereof, could not reasonably be expected
to result in the payment of a Material Adverse Amount.
(f) There has been no release or threat of release of Materials of
Environmental Concern at or from the Properties, or arising from or related
to the operations of the Parent, the Borrowers or any of their Subsidiaries
in connection with the Properties or otherwise in connection with the
Business, in violation of or in amounts or in a manner that could give rise
to liability under Environmental Laws, except insofar as any such violation
or liability referred to in this paragraph, or any aggregation thereof,
could not reasonably be expected to result in the payment of a Material
Environmental Amount.
4.18 Accuracy of Information. No statement or information contained in
this Agreement, any other Loan Document, the Confidential Information Memorandum
or any other document, certificate or statement furnished to the Administrative
Agent or the Lenders, by or on behalf of any Loan Party for use in connection
with the transactions contemplated by this Agreement or the other Loan
Documents, contained as of the date such statement, information, document or
certificate was so furnished any untrue statement of a material fact or omitted
to state a material fact necessary in order to make the statements contained
herein or therein not misleading. The projections and pro forma financial
information contained in the materials referenced above are based upon good
faith estimates and assumptions believed by management of the Parent, the
Borrowers and their Subsidiaries to be reasonable at the time made, it being
recognized by the Lenders that such financial information as it relates to
future events is not to be viewed as fact and that actual results during the
period or periods covered by such financial information may differ from the
projected results set forth therein by a material amount. There is no fact known
to the Parent, the Borrowers or any of their Subsidiaries that could reasonably
be expected to have a Material Adverse Effect that has not been expressly
disclosed herein, in the other Loan Documents, or in such other documents,
54
48
certificates and statements furnished to the Administrative Agent and the
Lenders for use in connection with the transactions contemplated hereby and by
the other Loan Documents.
4.19 Security Documents. (a) Each of the Pledge Agreements is effective
to create in favor of the Administrative Agent, for the benefit of the Lenders,
a legal, valid and enforceable security interest in the Pledged Stock described
therein and proceeds thereof and, when the stock certificates representing the
Pledged Stock described therein are delivered to the Administrative Agent, each
such Pledge Agreement shall constitute a fully perfected first priority Lien on,
and security interest in, all right, title and interest of the relevant pledgor
in such Pledged Stock and the proceeds thereof, as security for the Obligations
(as defined in the relevant Pledge Agreement), in each case prior and superior
in right to any other Person.
(b) The Borrowers Security Agreement is effective to create in favor
of the Administrative Agent, for the benefit of the Lenders, a legal, valid and
enforceable security interest in the Collateral described therein and proceeds
thereof, and when financing statements in appropriate form are filed in the
offices specified on Schedule 4.19(b), the Borrowers Security Agreement shall
constitute a fully perfected Lien on, and security interest in, all right, title
and interest of the Loan Parties in such Collateral and the proceeds thereof, as
security for the Obligations (as defined in the Borrowers Security Agreement),
in each case prior and superior in right to any other Person, other than with
respect to Liens expressly permitted by Section 7.3.
(c) Each Mortgage, when executed and delivered by the relevant Loan
Party, shall be effective to create in favor of the Administrative Agent, for
the benefit of the Lenders, a legal, valid and enforceable Lien on the Mortgaged
Property described therein and proceeds thereof, and when each Mortgage is filed
in the office(s) specified on Schedule 4.19(c), each Mortgage shall constitute a
fully perfected Lien on, and security interest in, all right, title and interest
of the Loan Parties in the Mortgaged Property and the proceeds thereof, as
security for the Obligations (as defined in the relevant Mortgage), in each case
prior and superior in right to any other Person, other than with respect to
Liens expressly permitted by Section 7.3.
4.20 Solvency. Each Loan Party is, and after giving effect to the
consummation of the Recapitalization and to the incurrence of all Indebtedness
and obligations being incurred in connection herewith and therewith will be and
will continue to be, taking into account the provisions of Section 2.24,
Solvent.
4.21 Purchase Agreement Representations and Warranties. On the Closing
Date, each of the representatives and warranties of the Borrowers set forth in
Article VI of the Purchase Agreement are true and correct in all material
respects.
SECTION 5. CONDITIONS PRECEDENT
5.1 Conditions to Initial Extension of Credit. The agreement of each
Lender to make the initial extension of credit requested to be made by it is
subject to the satisfaction,
55
49
prior to or concurrently with the making of such extension of credit on the
Closing Date, of the following conditions precedent:
(a) Loan Documents. The Arranger shall have received (i) this
Agreement, executed and delivered by a duly authorized officer of the
Parent and each of the Borrowers, with a counterpart for each Lender, (ii)
for the account of any Lender requesting Notes in accordance with Section
2.9(e), Notes conforming to the requirements hereof and executed and
delivered by a duly authorized officer of the Borrowers, (iii) each of the
Pledge Agreements, each executed and delivered by a duly authorized officer
of each party thereto, with a counterpart or a conformed copy for each
Lender, (iv) the Borrowers Security Agreement, executed and delivered by a
duly authorized officer of each Borrower, with a counterpart or a conformed
copy for each Lender, (v) (except as provided in subsection 6.12) each of
the Assignments of Insurance, each executed and delivered by a duly
authorized officer of each party thereto, with a counterpart or a conformed
copy for each Lender, and (vi) each Mortgage, executed and delivered by a
duly authorized officer of each party thereto, with a counterpart for each
Lender.
(b) Related Agreements. The Arranger shall have received, in form and
substance satisfactory to it, with a copy for each Lender, true and correct
copies, certified as to authenticity by the Designated Borrower, of (i) the
Recapitalization Agreement and any of the other Recapitalization Documents
reasonably requested by the Arranger (ii) the Management Contracts, (iii)
the Shareholders Agreement, (iv) the Certificate of Designations for each
series of the Preferred Stock, (v) the Registration Rights Agreement (vi)
the Purchase Agreement, (vii) the limited liability company agreement for
the Parent, and (viii) the Subordination Agreement. Except as provided in
subsection 6.12, the Arranger shall have received (in a form reasonably
satisfactory to the Arranger), with a copy for each Lender, true and
correct copies, certified as to authenticity by the Designated Borrower, of
the Insurance Policies (or certificates evidencing the effectiveness of
such Insurance Policies and the material terms thereof) and such other
documents or instruments as may be reasonably requested by the Arranger,
including, without limitation, a copy of any other debt instrument,
security agreement or other material contract to which any Borrower may be
a party.
(c) Recapitalization. On or prior to the Closing Date, the
Recapitalization shall have been consummated for an aggregate purchase
price not exceeding $125,000,000 (which amount may be increased or
decreased in accordance with certain purchase price adjustments described
in section 4.3 of the Recapitalization Agreement, including all fees,
costs, and expenses incurred in connection therewith, pursuant to the
Recapitalization Documents, any conditions precedent set forth in the
Recapitalization Agreement shall have been satisfied or waived, and no
material provision of the Recapitalization Documents shall have been
amended, supplemented, waived or otherwise modified without the prior
written consent of the Arranger.
(d) Capitalization; Capital Structure. The Borrowers shall have
received (i) at least $30,780,000 from the issuance of the Series A
Preferred, (ii) at least $20,000,000
56
50
from the issuance of the Subordinated Debt pursuant to the Purchase
Agreement and (iii) at least $14,200,000 and at least $20,000,000 from the
issuance of the Series B Preferred and the Series C Preferred,
respectively, to the Individual Shareholders. The capital structure of the
Parent, the Borrowers and each of their Subsidiaries after the
Recapitalization shall be satisfactory to the Arranger and the Lenders in
all respects.
(e) Pro Forma Balance Sheet; Financial Statements. The Lenders shall
have received (i) the Pro Forma Balance Sheet, which Pro Forma Balance
Sheet shall be in form and substance satisfactory to the Lenders and (ii)
satisfactory unaudited interim combined financial statements of the
Borrowers for each fiscal month of the Borrowers ended in the 1996 fiscal
year of the Borrowers as to which such financial statements are available
prior to the Closing Date and such financial statements shall not reflect
any material adverse change in the combined financial condition of the
Borrowers as reflected in the financial statements previously delivered to
the Lenders.
(f) Approvals. All governmental and third party approvals (including
landlords' and other consents) necessary or advisable in connection with
the Recapitalization, the transactions contemplated hereby and the
continuing operations of the Borrowers shall have been obtained and be in
full force and effect, and all applicable waiting periods shall have
expired without any action being taken or threatened by any competent
authority which would restrain, prevent or otherwise impose adverse
conditions on the Recapitalization, the financing thereof, the financing
contemplated hereby or the continuing operations of the Borrowers.
Notwithstanding the foregoing requirement with respect to third party
approvals, the Borrowers shall not be required to have obtained landlords'
waivers in form and substance satisfactory to the Arranger relating to the
Lender's security interest in the Borrower's assets for more than 20% of
the Borrowers' leases on the Closing Date.
(g) Business Plan. The Lenders shall have received a satisfactory
detailed business plan of the Borrowers for fiscal years 1996 - 2002 and a
satisfactory written analysis of the business and prospects of the
Borrowers for the period from the Closing Date through the final maturity
of the Term Loans.
(h) Lien Searches. The Arranger shall have received the results of a
recent lien search in each of the relevant jurisdictions where assets of
the Borrowers are located, and such search shall reveal no liens on any of
the assets of the Borrowers except for liens permitted by Section 7.3 or
liens to be discharged on or prior to the Closing Date pursuant to
documentation satisfactory to the Arranger.
(i) Expenses. The expenses incurred in connection with the
Recapitalization and the financing thereof shall not exceed $7,000,000 in
the aggregate.
(j) Valuation of Inventory. The Lenders shall have received copies of
a valuation, prepared by a firm satisfactory to the Arranger and in form
and substance satisfactory to the Arranger, of the inventory of the
Borrowers.
57
51
(k) Management. The Lenders shall be satisfied that senior managers
acceptable to them shall be available to manage the Borrowers.
(l) Working Capital. The Lenders shall be satisfied with the
sufficiency of amounts available to the Borrowers pursuant to the aggregate
Revolving Credit Commitments to meet the ongoing working capital needs of
the Borrowers following the Recapitalization and the consummation of the
other transactions contemplated hereby.
(m) Officers. The Lenders shall be satisfied with the results of an
independent background investigation concerning certain key officers,
directors and managers of the Borrowers.
(n) Closing Certificate. The Arranger shall have received, with a
counterpart for each Lender, a certificate of each Loan Party (other than
the Individual Shareholders), dated the Closing Date, substantially in the
form of Exhibit G, with appropriate insertions and attachments, executed by
the President or any Vice President and the Secretary or any Assistant
Secretary of such Loan Party.
(o) Corporate Proceedings of Loan Parties. The Arranger shall have
received, with a counterpart for each Lender, a copy of the resolutions of
the Board of Directors of each Loan Party authorizing (i) the execution,
delivery and performance of the Loan Documents to which it is a party, and
(ii) in the case of the Borrowers, the borrowings contemplated hereunder.
(p) Fees. The Arranger shall have received all fees, expenses and
other consideration required to be paid on or before the Closing Date.
(q) Legal Opinions. The Arranger shall have received, with a
counterpart for each Lender, the following executed legal opinions:
(i) the executed legal opinion of Pepper, Xxxxxxxx & Xxxxxxx,
counsel to the Parent, substantially in the form of Exhibit H-1;
(ii) the executed legal opinion of Baker, Donelson, Bearman &
Xxxxxxxx, counsel of the Borrowers and the other Loan Parties,
substantially in the form of Exhibit H-2; and
(iii) the executed legal opinion of Xxxxxxx Xxxxxxx &
Xxxxxxxx, in form and substance satisfactory to the Arranger;
Each such legal opinion shall be in form and substance satisfactory to the
Lenders and shall cover such matters incident to the transactions
contemplated by this Agreement as the Arranger may reasonably require.
58
52
(r) Pledged Stock; Stock Powers. The Arranger shall have received the
certificates representing the shares pledged pursuant to each of the Pledge
Agreements, together with an undated stock power for each such certificate
executed in blank by a duly authorized officer of the pledgor thereof.
(s) Filings, Registrations and Recordings. Each document (including,
without limitation, any Uniform Commercial Code financing statement)
required by the Security Documents or under law or reasonably requested by
the Arranger to be filed, registered or recorded in order to create in
favor of the Arranger, for the benefit of the Lenders, a perfected Lien on
the Collateral described therein, prior and superior in right to any other
Person (other than with respect to Liens expressly permitted by Section
7.3), shall be in proper form for filing, registration or recordation in
each jurisdiction in which the filing, registration or recordation thereof
is so required or requested.
(t) Surveys. The Arranger shall have received, and the title insurance
company issuing the policy referred to in Section 5.1(u) (the "Title
Insurance Company") shall have received, maps or plats of an as-built
survey of the sites of the property covered by each Mortgage certified to
the Administrative Agent and the Title Insurance Company in a manner
satisfactory to them, dated a date satisfactory to the Arranger and the
Title Insurance Company by an independent professional licensed land
surveyor satisfactory to the Arranger and the Title Insurance Company,
which maps or plats and the surveys on which they are based shall be made
in accordance with the Minimum Standard Detail Requirements for Land Title
Surveys jointly established and adopted by the American Land Title
Association and the American Congress on Surveying and Mapping in 1992,
and, without limiting the generality of the foregoing, there shall be
surveyed and shown on such maps, plats or surveys the following: (i) the
locations on such sites of all the buildings, structures and other
improvements and the established building setback lines; (ii) the lines of
streets abutting the sites and width thereof; (iii) all access and other
easements appurtenant to the sites or necessary or desirable to use the
sites; (iv) all roadways, paths, driveways, easements, encroachments and
overhanging projections and similar encumbrances affecting the site,
whether recorded, apparent from a physical inspection of the sites or
otherwise known to the surveyor; (v) any encroachments on any adjoining
property by the building structures and improvements on the sites; and (vi)
if the site is described as being on a filed map, a legend relating the
survey to said map.
(u) Title Insurance Policy. The Arranger shall have received in
respect of each parcel covered by each Mortgage a mortgagee's title policy
(or policies) or marked up unconditional binder for such insurance dated
the Closing Date. Each such policy shall (i) be in an amount satisfactory
to the Arranger; (ii) be issued at ordinary rates; (iii) insure that the
Mortgage insured thereby creates a valid first Lien on such parcel free and
clear of all defects and encumbrances, except such as may be approved by
the Arranger; (iv) name the Administrative Agent for the benefit of the
Lenders as the insured thereunder; (v) be in the form of ALTA Loan Policy -
1992; (vi) contain such endorsements and affirmative coverage as the
Arranger may request and (vii) be
59
53
issued by title companies satisfactory to the Arranger (including any such
title companies acting as co-insurers or reinsurers, at the option of the
Arranger). The Arranger shall have received evidence satisfactory to it
that all premiums in respect of each such policy, and all charges for
mortgage recording tax, if any, have been paid.
(v) Flood Insurance. If requested by the Arranger, the Arranger shall
have received (i) a policy of flood insurance which (A) covers any parcel
of improved real property which is encumbered by any Mortgage, (B) is
written in an amount not less than the outstanding principal amount of the
indebtedness secured by such Mortgage which is reasonably allocable to such
real property or the maximum limit of coverage made available with respect
to the particular type of property under the National Flood Insurance Act
of 1968, whichever is less, and (C) has a term ending not earlier than the
maturity of the indebtedness secured by such Mortgage and (ii) confirmation
that the Company has received the notice requirement pursuant to Section
208(e)(3) of Regulation H of the Board.
(w) Copies of Documents. The Arranger shall have received a copy of
all recorded documents referred to, or listed as exceptions to title in,
the title policy or policies referred to in Section 5.1(u) and a copy,
certified by such parties as the Arranger may deem appropriate, of all
other documents affecting the property covered by each Mortgage.
(x) Solvency Opinion. The Arranger shall have received, with a copy
for each Lender, an opinion from an independent valuation firm satisfactory
to the Arranger documenting the solvency of the Borrowers after giving
effect to the Recapitalization (including the fair market value of the
Borrower's assets) and the other transactions contemplated hereby.
(y) Termination of Prior Credit Facilities. The Arranger shall have
received evidence satisfactory to it that the Prior Credit Facilities shall
have been terminated and all amounts payable thereunder shall have been
paid in full.
5.2 Conditions to Each Extension of Credit. The agreement of each
Lender to make any extension of credit requested to be made by it on any date
(including, without limitation, its initial extension of credit) is subject to
the satisfaction of the following conditions precedent:
(a) Representations and Warranties. Each of the representations and
warranties made by any Loan Party in or pursuant to the Loan Documents
shall be true and correct in all material respects on and as of such date
as if made on and as of such date.
(b) No Default. No Default or Event of Default shall have occurred and
be continuing on such date or after giving effect to the extensions of
credit requested to be made on such date.
60
54
(c) Additional Matters. All proceedings, and all documents,
instruments and other legal matters in connection with the transactions
contemplated by this Agreement, the other Loan Documents and the
Recapitalization shall be reasonably satisfactory in form and substance to
the Administrative Agent, and the Administrative Agent shall have received
such other documents and legal opinions in respect of any aspect or
consequence of the transactions contemplated hereby or thereby as it shall
reasonably request.
Each borrowing by and issuance of a Letter of Credit on behalf of the Borrowers
hereunder shall constitute a representation and warranty by the Borrowers as of
the date of such extension of credit that the conditions contained in this
Section 5.2 have been satisfied.
SECTION 6. AFFIRMATIVE COVENANTS
The Parent and the Borrowers hereby jointly and severally agree that,
so long as the Commitments remain in effect, any Note or Letter of Credit
remains outstanding and unpaid or any other amount is owing to any Lender or the
Administrative Agent hereunder, the Parent and the Borrowers shall and shall
cause each of their respective Subsidiaries to:
6.1 Financial Statements. Furnish to each Lender:
(a) as soon as available, but in any event within 120 days after the
end of each fiscal year of the Borrowers, a copy of the combined balance
sheet of the Borrowers and their Subsidiaries as at the end of such year
and the related combined statements of income and retained earnings and of
cash flows for such year, setting forth in each case in comparative form
the figures for the previous year, reported on without a "going concern" or
like qualification or exception, or qualification arising out of the scope
of the audit, by KPMG Peat Marwick LLP or other independent certified
public accountants of nationally recognized standing;
(b) as soon as available, but in any event not later than 45 days
after the end of each of the first three quarterly periods of each fiscal
year of the Borrowers, the unaudited combined balance sheet of the
Borrowers and their Subsidiaries as at the end of such quarter and the
related unaudited combined statements of income and retained earnings and
of cash flows of the Borrowers and their Subsidiaries for such quarter and
the portion of the fiscal year through the end of such quarter, setting
forth in each case in comparative form the figures for the previous year,
certified by a Responsible Officer of the Parent and of the Designated
Borrower as being fairly stated in all material respects (subject to normal
year-end audit adjustments); and
(c) as soon as available, but in any event not later than 45 days
after the end of each month occurring during each fiscal year of the
Borrowers (other than the third, sixth, ninth and twelfth such month), the
unaudited combined balance sheets of the Borrowers and their Subsidiaries
as at the end of such month and the related unaudited combined statements
of income and retained earnings and of cash flows of the
61
55
Borrowers and their Subsidiaries for such month and the portion of the
fiscal year through the end of such month, setting forth in each case in
comparative form the figures for the previous year;
all such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except for any change in accounting principle in accordance with GAAP
(A) as approved (i) by such accountants (in the case of audited financial
statements) or (ii) by a Responsible Officer of the Designated Borrower (in the
case of unaudited financial statements), (B) as disclosed therein, (C) as
approved in writing by the Required Lenders if such change results in a
significant increase in Combined EBITDA for the periods reflected therein and,
(D) in the case of interim financial statements, subject to normal year-end
adjustments, including adjustments for inventory capitalization and
depreciation).
6.2 Certificates; Other Information. Furnish to each Lender:
(a) concurrently with the delivery of the financial statements
referred to in Section 6.1(a), (i) a certificate of the independent
certified public accountants reporting on such financial statements stating
that in making the examination necessary therefor no knowledge was obtained
of any Default or Event of Default, except as specified in such certificate
and (ii) copies of all reports or written communications providing advice,
recommendations or analysis to the management of the Borrowers from such
independent certified public accountants with regard to their audit of the
financial statements referred to in Section 6.1 or the internal financial
controls and systems of the Borrowers;
(b) concurrently with the delivery of any financial statement pursuant
to Section 6.1, (y) a certificate of a Responsible Officer of each of the
Parent and the Designated Borrower stating that, to the best of each such
Responsible Officer's knowledge, during such period (i) no Subsidiary has
been formed or acquired (or, if any such Subsidiary has been formed or
acquired, the Borrowers have complied with the requirements of Section 6.11
with respect thereto), (ii) neither the Parent, the Borrowers nor any of
their Subsidiaries has changed its name, its principal place of business,
its chief executive office or the location of any material item of tangible
Collateral without complying with the requirements of this Agreement and
the Security Documents with respect thereto and (iii) each Loan Party has
observed or performed all of its covenants and other agreements, and
satisfied every condition, contained in this Agreement and the other Loan
Documents to which it is a party to be observed, performed or satisfied by
it, and that such Responsible Officer has obtained no knowledge of any
Default or Event of Default except as specified in such certificate and (z)
in the case of quarterly or annual financial statements, a certificate
containing all information reasonably necessary for determining compliance
by the Parent, the Borrowers and their Subsidiaries with the provisions of
this Agreement (including but not limited to Sections 2.12 and 7.1) as of
the last day of such fiscal quarter or fiscal year of the Borrowers as the
case may be;
62
56
(c) as soon as available, and in any event no later than 30 days after
the end of each fiscal year of the Borrowers, a projected combined balance
sheet of the Borrowers as of the end of the following fiscal year, and the
related combined statements of projected cash flow, projected changes in
financial position and projected income for the following fiscal year,
together with an operating budget with respect to the following fiscal
year, and, as soon as available, significant revisions, if any, of such
projections with respect to such fiscal year (the "Projections"), which
Projections shall in each case be accompanied by a certificate of a
Responsible Officer of the Parent stating that such Projections are based
on reasonable estimates, information and assumptions and that such
Responsible Officer has no reason to believe that such Projections are
incorrect or misleading in any material respect;
(d) within 45 days after the end of each month of each fiscal year of
the Parent, a narrative discussion and analysis of the financial condition
and results of operations of the Borrowers for such month and for the
period from the beginning of the then current fiscal year to the end of
such month, as compared to the portion of the Projections covering such
periods and to the comparable periods of the previous year;
(e) within five days after the same are filed, copies of all financial
statements and reports which the Parent or the Borrowers may make to, or
file with, the Securities and Exchange Commission or any successor or
analogous Governmental Authority; and
(f) promptly, such additional financial and other information as any
Lender may from time to time reasonably request.
6.3 Payment of Obligations. Pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may be, all its
material obligations of whatever nature, except where the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and reserves in conformity with GAAP with respect thereto have been provided on
the books of the Parent, the Borrowers or their Subsidiaries, as the case may
be.
6.4 Conduct of Business and Maintenance of Existence, etc. (a)
Continue to engage in business of the same general type as now conducted by it,
(b) preserve, renew and keep in full force and effect its existence and (c) take
all reasonable action to maintain all rights, privileges and franchises
necessary or desirable in the normal conduct of its business, except, in each
case, as otherwise permitted pursuant to Section 7.5 and except, in the case of
clause (c) above, to the extent that failure to do so could not reasonably be
expected to have a Material Adverse Effect; and comply with all Contractual
Obligations and Requirements of Law except to the extent that failure to comply
therewith could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.
6.5 Maintenance of Property; Insurance. (a) Keep all material property
useful and necessary in its business in good working order and condition,
ordinary wear and tear
63
57
excepted; (b) maintain with financially sound and
reputable insurance companies insurance on all its property in at least such
amounts and against at least such risks (but including in any event public
liability, product liability and business interruption) as are usually insured
against in the same general area by companies engaged in the same or a similar
business; and (c) furnish to each Lender, upon written request, full information
as to the insurance carried.
6.6 Inspection of Property; Books and Records; Discussions. Keep
proper books of records and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities; and upon reasonable
notice permit representatives of any Lender to visit and inspect any of its
properties and examine and make abstracts from any of its books and records at
any reasonable time and as often as may reasonably be desired and to discuss the
business, operations, properties and financial and other condition of the
Parent, the Borrowers and their Subsidiaries with senior officers of the Parent,
the Borrowers and their Subsidiaries and with its independent certified public
accountants.
6.7 Notices. Promptly give notice to the Administrative Agent of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of the Parent, the Borrowers or any of their Subsidiaries or
(ii) litigation, investigation or proceeding which may exist at any time
between the Parent, the Borrowers or any of their Subsidiaries and any
Governmental Authority, which in either case, if not cured or if adversely
determined, as the case may be, could reasonably be expected to have a
Material Adverse Effect;
(c) any litigation or proceeding affecting the Parent, the Borrowers
or any of their Subsidiaries in which the amount involved is $250,000 or
more and not covered by insurance or in which injunctive or similar relief
is sought;
(d) the following events, as soon as possible and in any event within
30 days after the Parent, the Borrowers or any of their Subsidiaries knows
or has reason to know thereof: (i) the occurrence or expected occurrence of
any Reportable Event with respect to any Plan, a failure to make any
required contribution to a Plan, the creation of any Lien in favor of the
PBGC or a Plan or any withdrawal from, or the termination, Reorganization
or Insolvency of, any Multiemployer Plan or (ii) the institution of
proceedings or the taking of any other action by the PBGC or the Borrowers
or any Commonly Controlled Entity or any Multiemployer Plan with respect to
the withdrawal from, or the terminating, Reorganization or Insolvency of,
any Plan; and
(e) any development or event which could reasonably be expected to
have a Material Adverse Effect.
64
58
Each notice pursuant to this Section 6.7 shall be accompanied by a statement of
a Responsible Officer of the Designated Borrower setting forth details of the
occurrence referred to therein and stating what action the Parent, the relevant
Borrower or the relevant Subsidiary proposes to take with respect thereto.
6.8 Environmental Laws. (a) Comply in all material respects with, and
ensure compliance in all material respects by all tenants and subtenants, if
any, with, all applicable Environmental Laws, and obtain and comply in all
material respects with and maintain, and ensure that all tenants and subtenants
obtain and comply in all material respects with and maintain, any and all
licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws.
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws.
6.9 Interest Rate Protection. In the case of the Borrowers, within 90
days after the Closing Date, enter into Interest Rate Protection Agreements with
one or more of the Lenders providing interest rate protection with respect to at
least $25,000,000 of the Term Loans for a period of at least 24 months at an
interest rate not higher than 3% above the Eurodollar Rate that would be
applicable to a six-month Interest Period commencing on the Closing Date.
6.10 Further Assurances. Upon the request of the Administrative Agent,
promptly perform or cause to be performed any and all acts and execute or cause
to be executed any and all documents (including, without limitation, financing
statements and continuation statements) for filing under the provisions of the
Uniform Commercial Code or any other Requirement of Law which are necessary or
advisable to maintain in favor of the Administrative Agent, for the benefit of
the Lenders, Liens on the Collateral that are duly perfected in accordance with
all applicable Requirements of Law.
6.11 Additional Collateral. (a) With respect to any assets acquired
after the Closing Date by the Parent, the Borrowers or any of their Subsidiaries
that are intended to be subject to the Lien created by any of the Security
Documents but which are not so subject (other than (y) any assets described in
paragraph (b) of this Section and (z) immaterial assets a Lien on which cannot
be perfected by filing UCC-1 financing statements), promptly (and in any event
within 30 days after the acquisition thereof): (i) execute and deliver to the
Administrative Agent such amendments to the relevant Security Documents or such
other documents as the Administrative Agent shall deem necessary or advisable to
grant to the Administrative Agent, for the benefit of the Lenders, a Lien on
such assets, (ii) take all actions necessary or advisable to cause such Lien to
be duly perfected in accordance with all applicable Requirements of Law,
including, without limitation, the filing of financing statements in such
jurisdictions as may be requested by the Administrative Agent, and (iii) if
requested by the Administrative Agent, with respect to any material fee real
property acquired by the Parent, the Borrowers or their Subsidiaries after the
Closing Date, deliver to the
65
59
Administrative Agent legal opinions relating to the matters described in
clauses (i) and (ii) immediately preceding, which opinions shall be in form
and substance and from counsel reasonably satisfactory to the
Administrative Agent.
(b) With respect to any Person that, subsequent to the Closing Date,
becomes a Subsidiary, promptly upon the request of the Administrative
Agent: (i) execute and deliver to the Administrative Agent, for the benefit
of the Lenders, a new pledge agreement or such amendments to the relevant
Pledge Agreement as the Administrative Agent shall deem necessary or
advisable to grant to the Administrative Agent, for the benefit of the
Lenders, a Lien on the Capital Stock of such Subsidiary which is owned by
the Parent, the Individual Shareholders, the Borrowers or any of their
Subsidiaries, (ii) deliver to the Administrative Agent the certificates
representing such Capital Stock, together with undated stock powers duly
executed and delivered in blank, (iii) cause such new Subsidiary (A) to
become a Borrower party hereto (in the case of a Subsidiary of the Parent)
or a party to a guarantee and a security agreement (in the case of a
Subsidiary of the Borrowers), in each case pursuant to documentation which
is in form and substance satisfactory to the Administrative Agent, and (B)
to take all actions necessary or advisable to cause the Lien created by
such security agreement to be duly perfected in accordance with all
applicable Requirements of Law, including, without limitation, the filing
of financing statements in such jurisdictions as may be requested by the
Administrative Agent and (iv) if requested by the Administrative Agent,
deliver to the Administrative Agent legal opinions relating to the matters
described in clauses (i), (ii) and (iii) immediately preceding, which
opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Administrative Agent.
6.12 Key Man Life Insurance. Obtain within 30 days after the Closing
Date and maintain at all times thereafter key man life insurance policies
in the amount of $3,000,000 on each of the Management Shareholders; and
upon obtaining such policies, execute and deliver all documents and take
all actions in respect thereof that would be required by subsection 5.1(b)
if such policies were in effect on the Closing Date.
6.13 Store Locations. Maintain leases in accordance with past
practices with respect to all store locations for the Borrowers and their
Subsidiaries.
6.14 Landlord Waivers. Obtain landlords' waivers in form and substance
satisfactory to the Arranger and/or the Administrative Agent relating to
the Lender's security interest in the Borrower's assets for at least 20% of
the leases on the Closing Date, 40% of the leases within 60 days after the
Closing Date, 60% of the leases within 120 days after the Closing Date, 80%
of the leases within 180 days after the Closing Date and 90% of the leases
within one year after the Closing Date and thereafter.
6.15 Purchase Agreement Affirmative Covenants. Comply with Sections
7.01(a) - (o) and 7.03 of the Purchase Agreement, which Sections, together
with all definitions of defined terms used in such Sections, are hereby
incorporated by reference herein (without giving effect to any subsequent
amendment or other modification thereof not consented to by the Required
Lenders) as if such provisions were set forth in full herein.
66
60
6.16 Termination of Series C Preferred Voting Rights. Within five
Business Days of the Closing Date, cause the Certificate of Designations of
each Borrower to be amended to provide that (i) all voting rights of the
Series C Preferred may be terminated by the Parent at any time during the
continuance of an Event of Default if the Parent has been directed to do so
by the Administrative Agent and (ii) all voting rights of the Series C
Preferred will terminate automatically upon the occurrence of an Event of
Default pursuant to Section 8(f). Upon receipt of a demand by the
Administrative Agent to such effect at any time during the continuance of
an Event of Default, the Parent shall immediately take all actions
necessary to terminate all voting rights of the Series C Preferred.
SECTION 7. NEGATIVE COVENANTS
The Parent and the Borrowers hereby jointly and severally agree that,
so long as the Commitments remain in effect, any Note or Letter of Credit
remains outstanding and unpaid or any other amount is owing to any Lender
or the Administrative Agent hereunder, the Parent and the Borrowers shall
not, and shall not permit any of their respective Subsidiaries to, directly
or indirectly:
7.1 Financial Condition Covenants.
(a) Combined Total Debt Ratio. Permit the Combined Total Debt Ratio of
the Borrowers and their Subsidiaries for any period of four consecutive
fiscal quarters of the Borrowers ending with any fiscal quarter set forth
below to exceed the ratio set forth below opposite such fiscal quarter:
Combined
Fiscal Quarter Total Debt Ratio
---------------------- ----------------------
Third Quarter 1996 N.A.
Fourth Quarter 1996 4.50 to 1.0
First Quarter 1997 4.50 to 1.0
Second Quarter 1997 4.50 to 1.0
Third Quarter 1997 4.25 to 1.0
Fourth Quarter 1997 3.50 to 1.0
First Quarter 1998 3.50 to 1.0
Second Quarter 1998 3.50 to 1.0
Third Quarter 1998 3.50 to 1.0
Fourth Quarter 1998 2.75 to 1.0
First Quarter 1999 2.75 to 1.0
Second Quarter 1999 2.75 to 1.0
Third Quarter 1999 2.50 to 1.0
Fourth Quarter 1999 2.15 to 1.0
First Quarter 2000 2.15 to 1.0
67
61
Combined
Fiscal Quarter Total Debt Ratio
---------------------- ----------------------
Second Quarter 2000 2.15 to 1.0
Third Quarter 2000 1.90 to 1.0
Fourth Quarter 2000 1.60 to 1.0
First Quarter 2001 1.60 to 1.0
Second Quarter 2001 1.60 to 1.0
Third Quarter 2001 1.35 to 1.0
Fourth Quarter 2001 1.00 to 1.0
First Quarter 2002 1.00 to 1.0
Second Quarter 2002 .75 to 1.0
(b) Maintenance of Net Worth. Permit Combined Net Worth of the
Borrowers and their Subsidiaries at any time during any fiscal quarter of
the Borrowers set forth below to be less than the amount set forth below
opposite such fiscal quarter:
Fiscal Quarter Net Worth
-------------- ------------
Third Quarter 1996 $ 63,000,000
Fourth Quarter 1996 65,000,000
First Quarter 1997 65,000,000
Second Quarter 1997 65,000,000
Third Quarter 1997 65,000,000
Fourth Quarter 1997 72,000,000
First Quarter 1998 70,000,000
Second Quarter 1998 70,000,000
Third Quarter 1998 70,000,000
Fourth Quarter 1998 77,000,000
First Quarter 1999 75,000,000
Second Quarter 1999 75,000,000
Third Quarter 1999 75,000,000
Fourth Quarter 1999 85,000,000
First Quarter 2000 83,000,000
Second Quarter 2000 83,000,000
Third Quarter 2000 83,000,000
Fourth Quarter 2000 95,000,000
First Quarter 2001 93,000,000
Second Quarter 2001 93,000,000
Third Quarter 2001 93,000,000
Fourth Quarter 2001 105,000,000
First Quarter 2002 105,000,000
68
62
Fiscal Quarter Net Worth
-------------- ------------
Second Quarter 2002 105,000,000
(c) Combined Interest Coverage Ratio. Permit the Combined Interest
Coverage Ratio of the Borrowers and their Subsidiaries for any period of
four consecutive fiscal quarters of the Borrowers ending with any fiscal
quarter set forth below to be less than the ratio set forth below opposite
such fiscal quarter:
Combined Interest
Fiscal Quarter Coverage Ratio
---------------------- --------------
Third Quarter 1996 N.A.
Fourth Quarter 1996 3.75 to 1.0
First Quarter 1997 2.50 to 1.0
Second Quarter 1997 2.20 to 1.0
Third Quarter 1997 2.20 to 1.0
Fourth Quarter 1997 2.40 to 1.0
First Quarter 1998 2.40 to 1.0
Second Quarter 1998 2.40 to 1.0
Third Quarter 1998 2.65 to 1.0
Fourth Quarter 1998 3.00 to 1.0
First Quarter 1999 3.00 to 1.0
Second Quarter 1999 3.00 to 1.0
Third Quarter 1999 3.25 to 1.0
Fourth Quarter 1999 3.75 to 1.0
First Quarter 2000 3.75 to 1.0
Second Quarter 2000 3.75 to 1.0
Third Quarter 2000 4.00 to 1.0
Fourth Quarter 2000 4.75 to 1.0
First Quarter 2001 4.75 to 1.0
Second Quarter 2001 4.75 to 1.0
Third Quarter 2001 5.00 to 1.0
Fourth Quarter 2001 5.75 to 1.0
First Quarter 2002 5.75 to 1.0
Second Quarter 2002 6.00 to 1.0
(d) Combined Fixed Charge Coverage Ratio. Permit the Combined Fixed
Charge Coverage Ratio of the Borrowers and their Subsidiaries for any
period of four consecutive fiscal quarters of the Borrowers ending with any
fiscal quarter set forth below to be less than the ratio set forth below
opposite such fiscal quarter:
69
63
Fiscal Quarter Combined Fixed Charge
-------------- Coverage Ratio
---------------------
Third Quarter 1996 N.A.
Fourth Quarter 1996 1.35 to 1.00
First Quarter 1997 1.00 to 1.00
Second Quarter 1997 1.00 to 1.00
Third Quarter 1997 1.00 to 1.00
Fourth Quarter 1997 1.05 to 1.00
First Quarter 1998 1.00 to 1.00
Second Quarter 1998 1.00 to 1.00
Third Quarter 1998 1.00 to 1.00
Fourth Quarter 1998 1.05 to 1.00
First Quarter 1999 1.00 to 1.00
Second Quarter 1999 1.00 to 1.00
Third Quarter 1999 1.00 to 1.00
Fourth Quarter 1999 1.05 to 1.00
First Quarter 2000 1.00 to 1.00
Second Quarter 2000 1.00 to 1.00
Third Quarter 2000 1.00 to 1.00
Fourth Quarter 2000 1.10 to 1.00
First Quarter 2001 1.00 to 1.00
Second Quarter 2001 1.00 to 1.00
Third Quarter 2001 1.00 to 1.00
Fourth Quarter 2001 0.85 to 1.00
First Quarter 2002 0.85 to 1.00
Second Quarter 2002 0.75 to 1.00
7.2 Limitation on Indebtedness. Create, incur, assume or suffer to
exist (in each case, to "Incur") any Indebtedness, except:
(a) Indebtedness of the Borrowers under the Loan Documents and the
Subordinated Debt;
(b) Indebtedness of a Borrower to a Borrower or a Wholly Owned
Subsidiary and of a Wholly Owned Subsidiary to a Borrower or any other
Wholly Owned Subsidiary;
(c) Indebtedness of a Borrower or any Subsidiary incurred to finance
the acquisition of fixed or capital assets (whether pursuant to a loan, a
Financing Lease or otherwise) in an aggregate principal amount not
exceeding as to the Borrowers and their Subsidiaries $2,500,000 at any time
outstanding; and
70
64
(d) Indebtedness outstanding on the date hereof and listed on Schedule
7.2(d).
7.3 Limitation on Liens. Create, incur, assume or suffer to exist any
Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, except for:
(a) Liens for taxes not yet due or which are being contested in good
faith by appropriate proceedings, provided that adequate reserves with
respect thereto are maintained on the books of the Parent, the Borrowers or
their Subsidiaries, as the case may be, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's
or other like Liens arising in the ordinary course of business which are
not overdue for a period of more than 60 days or which are being contested
in good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation;
(d) deposits to secure the performance of bids, trade contracts (other
than for borrowed money), leases, statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like nature incurred in
the ordinary course of business;
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount and which do not in any case
materially detract from the value of the property subject thereto or
materially interfere with the ordinary conduct of the business of the
Parent, the Borrowers or any Subsidiary;
(f) Liens in existence on the date hereof listed on Schedule 7.3(f),
securing Indebtedness permitted by Section 7.2(d), provided that no such
Lien is spread to cover any additional property after the Closing Date and
that the amount of Indebtedness secured thereby is not increased;
(g) Liens securing Indebtedness of a Borrower or any Subsidiary
incurred to finance the acquisition of fixed or capital assets, provided
that (i) such Liens shall be created substantially simultaneously with the
acquisition of such fixed or capital assets, (ii) such Liens do not at any
time encumber any property other than the property financed by such
Indebtedness, (iii) the amount of Indebtedness secured thereby is not
increased and (iv) the proceeds of the Indebtedness secured by any such
Lien shall at no time exceed 100% of the original purchase price of such
property;
(h) Liens created pursuant to the Security Documents; and
71
65
(i) Liens of landlords arising by operation of law, and Liens of a
lessor under any lease entered into by a Borrower or any Subsidiary in the
ordinary course of its business, to the extent the provisions of such
leases relating to such Liens are standard and customary in the relevant
market.
7.4 Limitation on Guarantee Obligations. Create, incur, assume or
suffer to exist any Guarantee Obligation except:
(a) Guarantee Obligations in existence on the date hereof and listed
on Schedule 7.4(a);
(b) guarantees made in the ordinary course of its business by the
Parent or any Borrower of obligations of any of their respective
Subsidiaries or a Borrower, as the case may be, which obligations are
otherwise permitted under this Agreement;
(c) Guarantee Obligations in respect of Standby Letters of Credit; and
(d) the Guarantee Obligation of the Parent pursuant to Section 10; and
(e) Guarantee Obligations in respect of loans by a third party to an
employee of a Borrower or Subsidiary for the purchase of the Capital Stock
of the Parent in an aggregate amount not to exceed at any one time
outstanding (i) $1,000,000 minus (ii) the aggregate principal amount of any
loans or advances made by the Parent or the Borrowers pursuant to Section
7.9(c)(ii).
7.5 Limitation on Fundamental Changes. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer
or otherwise dispose of, all or substantially all of its property, business or
assets, or make any material change in its present method of conducting
business, except:
(a) any Wholly Owned Subsidiary of the Parent or Borrower may be
merged or combined with or into any Borrower (provided that such Borrower
shall be the continuing or surviving corporation);
(b) any Wholly Owned Subsidiary or Borrower may sell, lease, transfer
or otherwise dispose of any or all of its assets (upon voluntary
liquidation or otherwise) to any Borrower or any other Wholly Owned
Subsidiary of a Borrower; and
(c) the Recapitalization, and
(d) the Parent may liquidate, wind-up or dissolve itself so long as
(i) at such time no Default or Event of Default shall have occurred and be
continuing, (ii) the Parent has no material assets at the time of such
transaction other than assets subject to the Lien of a Security Document
and (iii) the distribution of such assets in such transaction is made
subject to the Liens of the Security Documents and at the time of
72
66
such transaction the Borrowers and such recipients enter into such
instruments and take such actions (including delivery to the Administrative
Agent of appropriate legal opinions) as shall be reasonably requested by
the Administrative Agent to ensure and evidence that the Liens of the
Security Documents on such assets are unaffected by such transaction.
7.6 Limitation on Sale of Assets. Convey, sell, lease, assign,
transfer or otherwise dispose of any of its property, business or assets
(including, without limitation, receivables and leasehold interests), whether
now owned or hereafter acquired, or, in the case of any Subsidiary of the Parent
or any Borrower, issue or sell any shares of such Subsidiary's Capital Stock to
any Person, except:
(a) the sale or other disposition of obsolete or worn out property in
the ordinary course of business having a fair market value not to exceed,
in the aggregate, $500,000 in any period of twelve consecutive months;
(b) the sale or other disposition of any property in the ordinary
course of business, provided that (other than inventory) the aggregate book
value of all assets so sold or disposed of in any period of twelve
consecutive months shall not exceed $500,000;
(c) the sale of inventory in the ordinary course of business; and
(d) as permitted by Section 7.5(b).
7.7 Limitation on Restricted Payments. Declare or pay any dividend
(other than dividends payable solely in common stock of the Person making such
dividend) on, or make any payment on account of, or set apart assets for a
sinking or other analogous fund for, the purchase, redemption, defeasance,
retirement or other acquisition of, any shares of any class of Capital Stock of
the Parent, the Borrowers or any Subsidiary or any warrants or options to
purchase any such Capital Stock, whether now or hereafter outstanding, or make
any other distribution in respect thereof, either directly or indirectly,
whether in cash or property or in obligations of the Parent, the Borrowers or
any Subsidiary (collectively, "Restricted Payments"), except:
(a) payments of interest on the Subordinated Debt in accordance with
the Subordination Agreement and the Purchase Agreement;
(b) so long as (i) no Default or Event of Default shall have occurred
and be continuing, (ii) there is Excess Cash Flow for the most recently
ended fiscal year of the Borrowers and (iii) the Combined Management Fee
Ratio for such fiscal year is greater than 3.25 to 1.00 in the case of the
1996 fiscal year, 2.25 to 1.00 in the case of the 1997 fiscal year, 2.75 to
1.00 in the case of the 1998 fiscal year, 3.50 to 1.00 in the case of the
1999 fiscal year, 4.50 to 1.00 in the case of the 2000 fiscal year, and
5.50 to 1.00 in the case of the 2001 and 2002 fiscal years, then the
Borrowers may pay Management Fees to the Individual Shareholders in an
amount not to exceed
73
67
$1,000,000 per year in the case of the 1996 fiscal year and $1,800,000 per
year otherwise in the aggregate during the thirty-day period after the date
on which the financial statements of the Borrowers referred to in Section
6.1(a) with respect to the fiscal year ending with such fourth fiscal
quarter are delivered to the Lenders; and
(c) so long as no Default or Event of Default shall have occurred and
be continuing, purchases or redemptions of the Capital Stock of the Parent,
the Borrowers or their Subsidiaries held by employees of the Borrowers,
other than the Individual Shareholders, in an aggregate amount not to
exceed $500,000 per year and $1,000,000 in total.
7.8 Limitation on Capital Expenditures. Make or commit to make (by way
of the acquisition of securities of a Person or otherwise) any Capital
Expenditure (excluding any such asset acquired in connection with normal
replacement and maintenance programs properly charged to current operations)
except for expenditures in the ordinary course of business not exceeding, in the
aggregate for the Borrowers and their Subsidiaries during any of the fiscal
years of the Borrowers set forth below, the amount set forth opposite such
fiscal year below:
Fiscal Year Amount
----------- -----------
Closing Date-FYE 1996 $3,500,000
1997 $5,000,000
1998 $5,500,000
1999 $5,500,000
2000 $6,000,000
2001 $6,500,000
2002 $6,500,000
provided that not more than 20 new retail store locations on premises owned by
the Borrowers in fee or subject to a long-term lease shall be opened in fiscal
year 1996; not more than 22 new retail store locations on premises owned by the
Borrowers in fee or subject to a long-term lease shall be opened in fiscal year
1997; and not more than 25 new retail store locations on premises owned by the
Borrowers in fee or subject to a long-term lease may be opened in any fiscal
year after 1997.
7.9 Limitation on Investments, Loans and Advances. Make any advance,
loan, extension of credit or capital contribution to, or purchase any stock,
bonds, notes, debentures or other securities of or any assets constituting a
business unit of, or make any other investment in, any Person, except:
(a) extensions of trade credit in the ordinary course of business;
(b) investments in Cash Equivalents;
74
68
(c) loans and advances to employees of a Borrower or Subsidiary for
(i) travel, entertainment and relocation expenses in the ordinary course of
business in an aggregate amount for the Borrowers and their Subsidiaries
not to exceed $250,000 at any one time outstanding and (ii) the purchase of
the Capital Stock of the Parent in an aggregate principal amount not to
exceed at any one time outstanding (A) $1,000,000 minus (B) the aggregate
principal amount of any loans guaranteed by the Parent or the Borrowers
pursuant to Section 7.4(e); and
(d) investments by any Borrower in any Borrower or a Wholly Owned
Subsidiary and investments by any Wholly Owned Subsidiary in any Borrower
and in other Wholly Owned Subsidiaries.
7.10 Limitation on Optional Payments and Modifications of Debt
Instruments and Preferred Stock, etc. (a) Make any optional payment or
prepayment on or redemption or purchase of any material Indebtedness (other than
the Loans) or preferred stock, including, without limitation, the Subordinated
Debt and the Preferred Stock, (b) amend, modify or change, or consent or agree
to any amendment, modification or change to any of the terms of any such
Indebtedness, including but not limited to the Subordinated Debt (other than any
such amendment, modification or change which would extend the maturity or reduce
the amount of any payment of principal thereof or which would reduce the rate or
extend the date for payment of interest or dividends thereon), (c) amend the
Subordination Agreement, (d) amend, modify or change in any material respect, or
consent or agree to any amendment, modification, or change in any material
respect to the terms of the Preferred Stock or any other capitalization or
organizational documents, except as contemplated by Section 6.4.2 of the amended
and restated charter of the Borrowers as in effect on the Closing Date; (e)
amend, modify or change, the Shareholders Agreement or the Registration Rights
Agreement in a manner that would adversely affect the rights or interests of the
Borrowers, the Administrative Agent or the Lenders or (f) amend, modify, renew
or extend the Management Contracts in a manner which (i) would have the effect
of increasing the compensation due the Management Shareholders in the aggregate
to an amount in excess of $750,000 in any fiscal year or (ii) otherwise would
adversely affect the rights or interests of the Administrative Agent or the
Lenders.
7.11 Limitation on Transactions with Affiliates. Except as set forth
on Schedule 7.11, enter into any transaction, including, without limitation, any
purchase, sale, lease or exchange of property or the rendering of any service,
with any Affiliate (other than the Parent or the Borrowers) unless such
transaction (a) is otherwise permitted under this Agreement, (b) is in the
ordinary course of the Parent's, the Borrowers or such Subsidiary's business,
(c) is upon fair and reasonable terms no less favorable to the Parent, the
Borrowers or such Subsidiary, as the case may be, than it would obtain in a
comparable arm's length transaction with a Person which is not an Affiliate and
(d) is (unless immaterial) disclosed in writing to the Administrative Agent.
7.12 Limitation on Sales and Leasebacks. Enter into any arrangement
with any Person providing for the leasing by the Parent, the Borrowers or any
Subsidiary of real or personal property which has been or is to be sold or
transferred by the Parent, the Borrowers
75
69
or such Subsidiary 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 rental
obligations of the Parent, the Borrowers or such Subsidiary.
7.13 Limitation on Changes in Fiscal Year. Permit the fiscal year of
the Parent, the Borrowers or any of their respective Subsidiaries to end on a
day other than December 31.
7.14 Limitation on Negative Pledge Clauses. Enter into with any
Person, or suffer to exist, any agreement, other than (a) this Agreement and the
other Loan Documents and the Purchase Agreement or (b) any industrial revenue
bonds, purchase money mortgages or Financing Leases permitted by this Agreement
(in which cases, any prohibition or limitation shall only be effective against
the assets financed thereby) which prohibits or limits the ability of the
Parent, the Borrowers or any of their Subsidiaries to create, incur, assume or
suffer to exist any Lien upon any of its property, assets or revenues, whether
now owned or hereafter acquired.
7.15 Limitation on Lines of Business. Enter into any business, either
directly or through any Subsidiary, except for those businesses in which the
Borrowers and their Subsidiaries are engaged on the date of this Agreement or
which are reasonably related thereto.
7.16 Limitation on Activities of the Parent. In the case of the
Parent, notwithstanding anything to the contrary in this Agreement or any other
Loan Document, (a) conduct, transact or otherwise engage in, or commit to
conduct, transact or otherwise engage in, any business or operations other than
those incidental to its ownership of the Capital Stock of the Borrowers, (b)
incur, create, assume or suffer to exist any Indebtedness or other liabilities
or financial obligations, except (i) nonconsensual obligations imposed by
operation of law, (ii) pursuant to the Loan Documents to which it is a party and
(iii) obligations with respect to its Capital Stock (other than any such
obligations constituting Indebtedness), (c) own, lease, manage or otherwise
operate any properties or assets (including cash (other than cash received in
connection with dividends made by the Borrowers in accordance with Section 7.7
pending application in the manner contemplated by said Section) and cash
equivalents) other than the ownership of shares of Capital Stock of the
Borrowers or (d) create or permit to exist any Subsidiary of the Parent or any
Borrower other than a wholly owned Subsidiary.
7.17 Purchase Agreement Negative Covenants. Fail to comply with
Section 7.02 of the Purchase Agreement, which Section, together with all
definitions of defined terms used in such Section, are hereby incorporated by
reference herein (without giving effect to any subsequent amendment or other
modification thereof not consented to by the Required Lenders) as if such
provisions were set forth in full herein.
76
70
SECTION 8. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrowers shall fail to pay any principal of any Loan or
Reimbursement Obligation when due in accordance with the terms hereof; or
the Borrowers shall fail to pay any interest on any Loan or Reimbursement
Obligation, or any other amount payable hereunder or under any other Loan
Document, within five days after any such interest or other amount becomes
due in accordance with the terms hereof; or
(b) Any representation or warranty made or deemed made by the Parent,
a Borrower or any other Loan Party herein or in any other Loan Document or
which is contained in any certificate, document or financial or other
statement furnished by it at any time under or in connection with this
Agreement or any such other Loan Document shall prove to have been
incorrect in any material respect on or as of the date made or deemed made;
or
(c) (i) The Parent, a Borrower or any other Loan Party shall default
in the observance or performance of any agreement contained in Section 2.7,
6.1(a), 6.7, 6.9, or 7, Section 5(b) of the Parent Pledge Agreement,
Section 5(b) of the Management Pledge Agreement or Section 4.4 of the
Borrowers Security Agreement or (ii) an Event of Default (as defined in the
Mortgage) shall occur under any Mortgage; or
(d) The Parent, a Borrower or any other Loan Party shall default in
the observance or performance of any other agreement contained in this
Agreement or any other Loan Document (other than as provided in paragraphs
(a) through (c) of this Section), and such default shall continue
unremedied for a period of 30 days after notice to the Parent, Borrower or
other Loan Party, as applicable, from the Administrative Agent or the
Required Lenders; or
(e) The Parent, a Borrower or any Subsidiary shall (i) default in
making any payment of any principal of any Indebtedness (including, without
limitation, any Guarantee Obligation) on the scheduled or original due date
with respect thereto; or (ii) default in making any payment of any interest
on any such Indebtedness beyond the period of grace, if any, provided in
the instrument or agreement under which such Indebtedness was created; or
(iii) default in the observance or performance of any other agreement or
condition relating to any such Indebtedness or contained in any instrument
or agreement evidencing, securing or relating thereto, or any other event
shall occur or condition exist, the effect of which default or other event
or condition is to cause, or to permit the holder or beneficiary of such
Indebtedness (or a trustee or agent on behalf of such holder or
beneficiary) to cause, with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity or (in the case of
any such Indebtedness constituting a Guarantee Obligation) to become
payable; provided, that a default, event or condition described in clause
(i), (ii) or (iii) of this paragraph (e) shall not at any time constitute
an Event of Default under this
77
71
Agreement unless, at such time, one or more defaults, events or conditions
of the type described in clauses (i), (ii) and (iii) of this paragraph (e)
shall have occurred and be continuing with respect to Indebtedness and/or
Guarantee Obligations of the Parent, the Borrowers and all Subsidiaries the
outstanding principal amount of which exceeds in the aggregate $250,000; or
(f) (i) The Parent, a Borrower or any Subsidiary shall commence any
case, proceeding or other action (A) under any existing or future law of
any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief
entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or
its debts, or (B) seeking appointment of a receiver, trustee, custodian,
conservator or other similar official for it or for all or any substantial
part of its assets, or the Parent, a Borrower or any Subsidiary shall make
a general assignment for the benefit of its creditors; or (ii) there shall
be commenced against the Parent, a Borrower or any Subsidiary any case,
proceeding or other action of a nature referred to in clause (i) above
which (A) results in the entry of an order for relief or any such
adjudication or appointment or (B) remains undismissed, undischarged or
unbonded for a period of 60 days; or (iii) there shall be commenced against
the Parent, a Borrower or any Subsidiary any case, proceeding or other
action seeking issuance of a warrant of attachment, execution, distraint or
similar process against all or any substantial part of its assets which
results in the entry of an order for any such relief which shall not have
been vacated, discharged, or stayed or bonded pending appeal within 60 days
from the entry thereof; or (iv) the Parent, a Borrower or any Subsidiary
shall take any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the acts set forth in clause (i),
(ii), or (iii) above; or (v) the Parent, a Borrower or any Subsidiary shall
generally not, or shall be unable to, or shall admit in writing its
inability to, pay its debts as they become due; or
(g) (i) Any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302
of ERISA), whether or not waived, shall exist with respect to any Plan or
any Lien in favor of the PBGC or a Plan shall arise on the assets of a
Borrower, a Subsidiary or any Commonly Controlled Entity, (iii) a
Reportable Event shall occur with respect to, or proceedings shall commence
to have a trustee appointed, or a trustee shall be appointed, to administer
or to terminate, any Single Employer Plan, which Reportable Event or
commencement of proceedings or appointment of a trustee is, in the
reasonable opinion of the Required Lenders, likely to result in the
termination of such Plan for purposes of Title IV of ERISA, (iv) any Single
Employer Plan shall terminate for purposes of Title IV of ERISA, (v) a
Borrower, a Subsidiary or any Commonly Controlled Entity shall, or in the
reasonable opinion of the Required Lenders is likely to, incur any
liability in connection with a withdrawal from, or the Insolvency or
Reorganization of, a Multiemployer Plan or (vi) any other event or
condition shall occur or exist with respect to a Plan; and in each case in
clauses (i) through (vi) above, such event or
78
72
condition, together with all other such events or conditions, if any,
could, in the sole judgment of the Required Lenders, reasonably be expected
to have a Material Adverse Effect; or
(h) One or more judgments or decrees shall be entered against the
Parent, the Borrowers or any of their Subsidiaries involving in the
aggregate a liability (not paid or fully covered by insurance) of $250,000
or more, and all such judgments or decrees shall not have been vacated,
discharged, stayed or bonded pending appeal within 60 days from the entry
thereof; or
(i) Any of the Security Documents shall cease, for any reason, to be
in full force and effect, or any Loan Party or any Affiliate of any Loan
Party shall so assert, or any Lien created by any of the Security Documents
shall cease to be enforceable and of the same effect and priority purported
to be created thereby; or
(j) Section 10 shall cease, for any reason, to be in full force and
effect or the Parent shall so assert; or
(k) (i) The Parent and the Management Shareholders shall cease to have
the power (whether or not exercised) to elect a majority of the directors
of any of the Borrowers, (ii) the Parent shall cease to own and control, of
record and beneficially, directly, 60% of the outstanding Capital Stock of
each Borrower, (iii) the Advent Funds and the Management Shareholders shall
cease to own and control, directly or indirectly, 60% of the outstanding
Capital Stock of each Borrower, (iv) the Advent Funds shall cease to own
and control, of record and beneficially, directly, 55% of the member
interests of the Parent, (v) the Advent Funds shall cease to own and
control, directly or indirectly, 35% of the outstanding Capital Stock of
each Borrower; provided, that (A) each of the foregoing ownership
percentages in respect of the Borrower will be reduced to give effect to
the dilution resulting from the exercise of the Warrants and (B) each of
the foregoing shall be amended by the Administrative Agent and the
Borrowers at the time of any transaction permitted by Section 7.5(d) to
provide for such transaction or (vi) a "Change of Control" as defined in
the Purchase Agreement shall occur and be continuing; or
(l) (i) There shall have occurred any amendment, supplement or other
modification of the Purchase Agreement or the Subordination Agreement,
which in any such case shall not have been consented to in advance in
writing by the Administrative Agent and the Required Lenders, except to the
extent such amendment, supplement or modification is expressly permitted by
Section 7.10 or (ii) the Subordination Agreement shall cease, for any
reason, to be valid or any Loan Party or any of its Subsidiaries shall so
assert in writing; or
(m) There shall have occurred an "Event of Default" as defined in the
Purchase Agreement;
79
73
then, and in any such event, (A) if such event is an Event of Default
specified in clause (i) or (ii) of paragraph (f) above with respect to the
Parent, a Borrower or any Subsidiary, automatically the Commitments shall
immediately terminate and the Loans hereunder (with accrued interest
thereon) and all other amounts owing under this Agreement and the other
Loan Documents (including, without limitation, all amounts of L/C
Obligations, whether or not the beneficiaries of the then outstanding
Letters of Credit shall have presented the documents required thereunder)
shall immediately become due and payable, and (B) if such event is any
other Event of Default, either or both of the following actions may be
taken: (i) with the consent of the Required Lenders, the Administrative
Agent may, or upon the request of the Required Lenders, the Administrative
Agent shall, by notice to the Designated Borrower declare the Commitments
to be terminated forthwith, whereupon the Commitments shall immediately
terminate; and (ii) with the consent of the Required Lenders, the
Administrative Agent may, or upon the request of the Required Lenders, the
Administrative Agent shall, by notice to the Designated Borrower, declare
the Loans hereunder (with accrued interest thereon) and all other amounts
owing under this Agreement and the other Loan Documents (including, without
limitation, all amounts of L/C Obligations, whether or not the
beneficiaries of the then outstanding Letters of Credit shall have
presented the documents required thereunder) to be due and payable
forthwith, whereupon the same shall immediately become due and payable.
With respect to all Letters of Credit with respect to which presentment for
honor shall not have occurred at the time of an acceleration pursuant to
this paragraph, the Borrowers shall at such time deposit in a cash
collateral account opened by the Administrative Agent an amount equal to
the aggregate then undrawn and unexpired amount of such Letters of Credit.
Amounts held in such cash collateral account shall be applied by the
Administrative Agent to the payment of drafts drawn under such Letters of
Credit, and the unused portion thereof after all such Letters of Credit
shall have expired or been fully drawn upon, if any, shall be applied to
repay other obligations of the Borrowers hereunder and under the other Loan
Documents. After all such Letters of Credit shall have expired or been
fully drawn upon, all Reimbursement Obligations shall have been satisfied
and all other obligations of the Borrowers hereunder and under the other
Loan Documents shall have been paid in full, the balance, if any, in such
cash collateral account shall be returned to the Borrowers (or such other
Person as may be lawfully entitled thereto). Except as expressly provided
above in this Section, presentment, demand, protest and all other notices
of any kind are hereby expressly waived.
SECTION 9. THE ADMINISTRATIVE AGENT
9.1 Appointment. Each Lender hereby irrevocably designates and appoints the
Administrative Agent as the agent of such Lender under this Agreement and
the other Loan Documents, and each Lender irrevocably authorizes the
Administrative Agent, in such capacity, to take such action on its behalf
under the provisions of this Agreement and the other Loan Documents and to
exercise such powers and perform such duties as are expressly delegated to
the Administrative Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary elsewhere in this
Agreement, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set
80
74
forth herein, or any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities
shall be read into this Agreement or any other Loan Document or otherwise
exist against the Administrative Agent.
9.2 Delegation of Duties. The Administrative Agent may execute any of
its duties under this Agreement and the other Loan Documents by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent
shall not be responsible for the negligence or misconduct of any agents or
attorneys in-fact selected by it with reasonable care.
9.3 Exculpatory Provisions. Neither the Administrative Agent nor 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 it or such Person under or in connection with this Agreement or
any other Loan Document (except to the extent that any of the foregoing are
found by a final and nonappealable decision of a court of competent
jurisdiction to have resulted from its or such Person's own gross
negligence or willful misconduct) or (ii) responsible in any manner to any
of the Lenders for any recitals, statements, representations or warranties
made by any Loan Party or any officer thereof contained in this Agreement
or any other Loan Document or in any certificate, report, statement or
other document referred to or provided for in, or received by the
Administrative Agent under or in connection with, this Agreement or any
other Loan Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or the Notes or any other
Loan Document or for any failure of any Loan Party a party thereto to
perform its obligations hereunder or thereunder. The Administrative Agent
shall not be under any obligation to any Lender to ascertain or to inquire
as to the observance or performance of any of the agreements contained in,
or conditions of, this Agreement or any other Loan Document, or to inspect
the properties, books or records of any Loan Party. The Administrative
Agent shall not be responsible for any actions or approvals taken or
granted by the Arranger.
9.4 Reliance by Administrative Agent. The Administrative Agent shall
be entitled to rely, and shall be fully protected in relying, upon any
Note, writing, resolution, notice, consent, certificate, affidavit, letter,
telecopy, telex or teletype message, statement, order or other document or
conversation believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to the
Parent or the Borrowers), independent accountants and other experts
selected by the Administrative Agent. The Administrative Agent may deem and
treat the payee of any Note as the owner thereof for all purposes unless a
written notice of assignment, negotiation or transfer thereof shall have
been filed with the Administrative Agent. The Administrative Agent shall be
fully justified in failing or refusing to take any action under this
Agreement or any other Loan Document unless it shall first receive such
advice or concurrence of the Required Lenders (or, if so specified by this
Agreement, all Lenders) as it deems appropriate or it shall first be
indemnified to its satisfaction by the Lenders against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Administrative Agent shall in all
cases be fully protected in acting, or in refraining from acting, under
this Agreement and the other Loan Documents in accordance with a request of
81
75
the Required Lenders (or, if so specified by this Agreement, all Lenders),
and such request and any action taken or failure to act pursuant thereto
shall be binding upon all the Lenders and all future holders of the Notes.
9.5 Notice of Default. The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless the Administrative Agent has received written
notice from a Lender, the Parent or the Borrowers referring to this
Agreement, describing such Default or Event of Default and stating that
such notice is a "notice of default". In the event that the Administrative
Agent receives such a notice, the Administrative Agent shall give notice
thereof to the Lenders. The Administrative Agent shall take such action
with respect to such Default or Event of Default as shall be reasonably
directed by the Required Lenders (or, if so specified by this Agreement,
all Lenders); provided that unless and until the Administrative Agent shall
have received such directions, the Administrative Agent may (but shall not
be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in
the best interests of the Lenders.
9.6 Non-Reliance on Administrative Agent and Other Lenders. Each
Lender expressly acknowledges that neither the Administrative Agent nor any
of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates has made any representations or warranties to it and that no act
by the Administrative Agent hereinafter taken, including any review of the
affairs of a Loan Party or any Affiliate of a Loan Party, shall be deemed
to constitute any representation or warranty by the Administrative Agent to
any Lender. Each Lender represents to the Administrative Agent that it has,
independently and without reliance upon the Administrative Agent or any
other Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of
the Loan Parties and their Affiliates and made its own decision to make its
Loans hereunder and enter into this Agreement. Each Lender also represents
that it will, independently and without reliance upon the Administrative
Agent or any other Lender, and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit
analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigation
as it deems necessary to inform itself as to the business, operations,
property, financial and other condition and creditworthiness of the Loan
Parties and their Affiliates. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, property, condition
(financial or otherwise), prospects or creditworthiness of any Loan Party
or any Affiliate of a Loan Party which may come into the possession of the
Administrative Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates.
9.7 Indemnification. The Lenders agree to indemnify the Administrative
Agent in its capacity as such (to the extent not reimbursed by the Parent
or the Borrowers and without limiting the obligation of the Parent or the
Borrowers to do so), ratably according to their respective Revolving Credit
Percentages, Tranche A Term Loan Percentages and
82
76
Tranche B Term Loan Percentages in effect on the date on which
indemnification is sought under this Section 9.7, from and against any and
all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind whatsoever
which may at any time (including, without limitation, at any time following
the payment of the Notes) be imposed on, incurred by or asserted against
the Administrative Agent in any way relating to or arising out of, the
Commitments, this Agreement, any of the other Loan Documents or any
documents contemplated by or referred to herein or therein or the
transactions contemplated hereby or thereby or any action taken or omitted
by the Administrative Agent under or in connection with any of the
foregoing; provided that no Lender shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements which are found
by a final and nonappealable decision of a court of competent jurisdiction
to have resulted from the Administrative Agent's gross negligence or
willful misconduct. The agreements in this Section 9.7 shall survive the
payment of the Notes and all other amounts payable hereunder.
9.8 Administrative Agent in Its Individual Capacity. The
Administrative Agent and its Affiliates may make loans to, accept deposits
from and generally engage in any kind of business with any Loan Party as
though the Administrative Agent were not the Administrative Agent hereunder
and under the other Loan Documents. With respect to its Loans made or
renewed by it and any Note issued to it and with respect to any Letter of
Credit issued or participated in by it, the Administrative Agent shall have
the same rights and powers under this Agreement and the other Loan
Documents as any Lender and may exercise the same as though it were not the
Administrative Agent, and the terms "Lender" and "Lenders" shall include
the Administrative Agent in its individual capacity.
9.9 Successor Administrative Agent. The Administrative Agent may
resign as Administrative Agent upon 10 days' notice to the Lenders. If the
Administrative Agent shall resign as Administrative Agent under this
Agreement and the other Loan Documents, then the Required Lenders shall
appoint from among the Lenders a successor agent for the Lenders, which
successor agent shall have been approved by the Parent and the Borrowers
(which approval shall not be unreasonably withheld or delayed), whereupon
such successor agent shall succeed to the rights, powers and duties of the
Administrative Agent hereunder. Effective upon such apportionment and
approval, the term "Administrative Agent" shall mean such successor agent
and the former Administrative Agent's rights, powers and duties as
Administrative Agent shall be terminated, without any other or further act
or deed on the part of such former Administrative Agent or any of the
parties to this Agreement or any holders of the Notes. After any retiring
Administrative Agent's resignation as Administrative Agent, the provisions
of this Section 9 shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Administrative Agent under this
Agreement and the other Loan Documents. The Required Lenders, with the
consent of the Designated Borrower, may replace the Administrative Agent,
provided, however, that if a Default or an Event of Default shall occur and
be continuing the consent of the Designated Borrower shall not be required.
9.10 The Arranger. The Arranger, in its capacity as such,
shall not have any duties or responsibilities hereunder or under any Loan
Document nor any fiduciary
83
77
relationship with any Lender, and no implied covenants, functions,
responsibilities duties, obligations or liabilities shall be read into this
Agreement or otherwise exist against the Arranger in its capacity as such.
SECTION 10. GUARANTEE
10.1 Guarantee. To induce the Administrative Agent and the Lenders to
execute and deliver this Agreement and to make or maintain the Loans
hereunder, and in consideration thereof, the Parent hereby unconditionally
and irrevocably guarantees to the Administrative Agent, for the ratable
benefit of the Lenders, the prompt and complete payment and performance by
the Borrowers when due (whether at stated maturity, by acceleration or
otherwise) of the Obligations, and the Parent further agrees to pay any and
all expenses (including, without limitation, all reasonable fees, charges
and disbursements of counsel) which may be paid or incurred by the
Administrative Agent or by the Lenders in enforcing, or obtaining advice of
counsel in respect of, any of their rights under the guarantee contained in
this Section 10. The guarantee contained in this Section 10, subject to
Section 10.5, shall remain in full force and effect until the Obligations
are paid in full, the Revolving Credit Commitments are terminated and no
Letters of Credit are outstanding, notwithstanding that from time to time
prior thereto the Borrowers may be free from any Obligations.
10.2 No Subrogation, Contribution, Reimbursement or Indemnity.
Notwithstanding any payment or payments made by the Parent hereunder or any
set-off or application of funds of the Parent by any Lender, the Parent
shall not be entitled to be subrogated to any of the rights of the
Administrative Agent or any Lender against the Borrowers or any collateral
security or guarantee or right of offset held by any Lender for the payment
of the Obligations, nor shall the Parent seek or be entitled to seek any
contribution or reimbursement from the Borrowers in respect of payments
made by the Parent hereunder, until all amounts owing to the Administrative
Agent and the Lenders by the Borrowers on account of the Obligations are
paid in full, no Letters of Credit are outstanding and the Revolving Credit
Commitments are terminated. If any amount shall be paid to the Parent on
account of such subrogation rights at any time when all of the Obligations
shall not have been paid in full, any Letter of Credit shall be outstanding
or the Revolving Credit Commitments shall not have been terminated, such
amount shall be held by the Parent in trust for the Administrative Agent
and the Lenders, segregated from other funds of the Parent, and shall,
forthwith upon receipt by the Parent, be turned over to the Administrative
Agent in the exact form received by the Parent (duly indorsed by the Parent
to the Administrative Agent, if required), to be applied against the
Obligations, whether matured or unmatured, in such order as the
Administrative Agent may determine. The Parent hereby further irrevocably
waives all contractual, common law, statutory and other rights of
reimbursement, contribution, exoneration or indemnity (or any similar
right) from or against the Borrowers or any other Person which may have
arisen in connection with the guarantee contained in this Section 10.
10.3 Amendments, etc. with respect to the Obligations. The Parent
shall remain obligated under this Section 10 notwithstanding that, without
any reservation of rights against the Parent, and without notice to or
further assent by the Parent, any demand for
84
78
payment of or reduction in the principal amount of any of the Obligations
made by the Administrative Agent or any Lender may be rescinded by the
Administrative Agent or such Lender, and any of the Obligations continued,
and the Obligations, or the liability of any other party upon or for any
part thereof, or any collateral security or guarantee therefor or right of
offset with respect thereto, may, from time to time, in whole or in part,
be renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered or released by the Administrative Agent or any Lender, and this
Agreement, any other Loan Document, and any other documents executed and
delivered in connection therewith may be amended, modified, supplemented or
terminated, in whole or in part, as the Lenders (or the Required Lenders,
as the case may be) may deem advisable from time to time, and any
collateral security, guarantee or right of offset at any time held by the
Administrative Agent or any Lender for the payment of the Obligations may
be sold, exchanged, waived, surrendered or released. Neither the
Administrative Agent nor any Lender shall have any obligation to protect,
secure, perfect or insure any Lien at any time held by it as security for
the Obligations or for the guarantee contained in this Section 10 or any
property subject thereto.
10.4 Guarantee Absolute and Unconditional. The Parent waives any and
all notice of the creation, renewal, extension or accrual of any of the
Obligations and notice of or proof of reliance by the Administrative Agent
or any Lender upon the guarantee contained in this Section 10 or acceptance
of the guarantee contained in this Section 10; the Obligations, and any of
them, shall conclusively be deemed to have been created, contracted or
incurred, or renewed, extended, amended or waived, in reliance upon the
guarantee contained in this Section 10; and all dealings between any
Borrower or the Parent, on the one hand, and the Administrative Agent and
the Lenders, on the other, shall likewise be conclusively presumed to have
been had or consummated in reliance upon the guarantee contained in this
Section 10. The Parent waives diligence, presentment, protest, demand for
payment and notice of default or nonpayment to or upon the Borrowers or the
Parent with respect to the Obligations. The guarantee contained in this
Section 10 shall be construed as a continuing, absolute and unconditional
guarantee of payment without regard to (a) the validity or enforceability
of this Agreement or any other Loan Document, any of the Obligations or any
collateral security therefor or guarantee or right of offset with respect
thereto at any time or from time to time held by the Administrative Agent
or any Lender, (b) any defense, setoff or counterclaim (other than a
defense of payment or performance) which may at any time be available to or
be asserted by any Borrower against the Administrative Agent or any Lender,
or (c) any other circumstance whatsoever (with or without notice to or
knowledge of any Borrower or the Parent) which constitutes, or might be
construed to constitute, an equitable or legal discharge of any Borrower
for the Obligations, or of the Parent under the guarantee contained in this
Section 10, in bankruptcy or in any other instance. When the Administrative
Agent or any Lender is pursuing its rights and remedies under this Section
10 against the Parent, the Administrative Agent or any Lender may, but
shall be under no obligation to, pursue such rights and remedies as it may
have against any Borrower or any other Person or against any collateral
security or guarantee for the Obligations or any right of offset with
respect thereto, and any failure by the Administrative Agent or any Lender
to pursue such other rights or remedies or to collect any payments from any
Borrower or any such other Person or to realize upon any such collateral
security or guarantee or to exercise any such right of offset, or any
release of the Borrowers or any such other Person or of any such collateral
security, guarantee
85
79
or right of offset, shall not relieve the Parent of any liability under
this Section 10, and shall not impair or affect the rights and remedies,
whether express, implied or available as a matter of law, of the
Administrative Agent and the Lenders against the Parent.
10.5 Reinstatement. The guarantee contained in this Section 10 shall
continue to be effective, or be reinstated, as the case may be, if at any
time payment, or any part thereof, of any of the Obligations is rescinded
or must otherwise be restored or returned by the Administrative Agent or
any Lender upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of any Borrower or upon or as a result of the appointment of
a receiver, intervenor or conservator of, or trustee or similar officer
for, any Borrower or any substantial part of its property, or otherwise,
all as though such payments had not been made.
10.6 Payments. The Parent hereby agrees that any payments in respect
of the Obligations pursuant to this Section 10 will be paid to the
Administrative Agent without setoff or counterclaim in Dollars at the
office of the Administrative Agent specified in Section 11.2.
SECTION 11. MISCELLANEOUS
11.1 Amendments and Waivers. Neither this Agreement, any other Loan
Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section 11.1. The
Required Lenders and each Loan Party to the relevant Loan Documents may,
or, with the written consent of the Required Lenders, the Administrative
Agent and each Loan Party to the relevant Loan Document may, from time to
time, (a) enter into written amendments, supplements or modifications
hereto and to the other Loan Documents for the purpose of adding any
provisions to this Agreement or the other Loan Documents or changing in any
manner the rights of the Lenders or of the Loan Parties hereunder or
thereunder or (b) waive, on such terms and conditions as the Required
Lenders or the Administrative Agent, as the case may be, may specify in
such instrument, any of the requirements of this Agreement or the other
Loan Documents or any Default or Event of Default and its consequences;
provided, however, that no such waiver and no such amendment, supplement or
modification shall (i) forgive the principal amount or extend the final
scheduled date of maturity of any Note, or reduce the stated rate of any
interest, fee or letter of credit commission payable hereunder or extend
the scheduled date of any payment thereof or increase the amount or extend
the expiration date of any Lender's Revolving Credit Commitment, or make
any change in the application of any prepayment of the Loans specified in
the first sentence of Section 2.12(d) or in Section 2.18(a), in each case
without the consent of each Lender directly affected thereby, (ii) extend
the scheduled date of any amortization payment in respect of the Tranche A
Term Loans referred to in Section 2.9 without the consent of each Lender
affected thereby or extend the scheduled date of any amortization payment
in respect of the Tranche B Term Loans referred to in Section 2.9 without
the consent of each Lender affected thereby, (iii) amend, modify or waive
any provision of this Section 11.1 or reduce any percentage specified in
the definition of Required Lenders, or consent to the assignment or
transfer by any Loan Party of any of its rights and obligations under this
Agreement and the other Loan Documents or release all or a
86
80
substantial portion of the Collateral (other than in connection with any
sale or other disposition of assets permitted by Section 7.6) or any
guarantee of the Obligations, in each case without the written consent of
all the Lenders, (iv) amend, modify or waive any provision of Section 9
without the written consent of the Administrative Agent, (v) amend, modify
or waive any provision of Section 3 without the written consent of the
Issuing Lender, (vi) amend, modify or waive any provision of Section 2.25,
2.26, or 2.27 without the written consent of the Swing Line Lender or (vii)
amend, modify or waive any provision of Section 2.7 without the written
consent of (A) the holders of 85% or more of the aggregate Revolving Credit
Commitments, or, if the Revolving Credit Commitments have been terminated,
the aggregate outstanding Revolving Extensions of Credit and (B) the
Required Lenders. Any such waiver and any such amendment, supplement or
modification shall apply equally to each of the Lenders and shall be
binding upon the Loan Parties, the Lenders, the Administrative Agent and
all future holders of the Notes. In the case of any waiver, the Loan
Parties, the Lenders and the Administrative Agent shall be restored to
their former position and rights hereunder and under the other Loan
Documents, and any Default or Event of Default waived shall be deemed to be
cured and not continuing; but no such waiver shall extend to any subsequent
or other Default or Event of Default, or impair any right consequent
thereon.
11.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed
to have been duly given or made when delivered, or three Business Days
after being deposited in the mail, postage prepaid, or, in the case of
telecopy notice, when received, addressed as follows in the case of the
Parent, the Designated Borrower and the Administrative Agent, and as set
forth in Schedule 1.1B in the case of the other parties hereto, or to such
other address as may be hereafter notified by the respective parties hereto
and any future holders of the Notes:
The Parent: Kirklands Holdings L.L.C.
Advent International Corporation
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
87
81
The Designated
Borrower: Xxxxxxxx'x, Inc.
000 Xxxxx Xxxxxxx
Xxxxxxx, Xxxxxxxxx 00000
Attention: Xxxx Xxxxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
with a copy to:
Baker, Donelson, Bearman & Xxxxxxxx
Tennessee Building
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxx, Esq.
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
and
Pepper, Xxxxxxxx & Xxxxxxx
3000 Two Xxxxx Square
00xx xxx Xxxx Xxxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxxx, Esq.
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
The Administrative
Agent: The First National Bank of Boston
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxx Xxxxxxxx
Telecopy: (000) 000 0000
Telephone: (000) 000-0000
provided that any notice, request or demand to or upon the Administrative
Agent or the Lenders pursuant to Section 2.2, 2.4, 2.6, 2.10, 2.11, 2.13 or
2.26 shall not be effective until received. Any notice or delivery to or
from or consent required of the Borrowers hereunder or pursuant to any
other Loan Document may be made to or by the Designated Borrower on behalf
of the Borrowers.
88
82
11.3 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the Administrative Agent or any Lender,
any right, remedy, power or privilege hereunder or under the other Loan
Documents shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and
privileges herein provided are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by law.
11.4 Survival. All representations and warranties made hereunder, in
the other Loan Documents and in any document, certificate or statement
delivered pursuant hereto or in connection herewith shall survive the
execution and delivery of this Agreement and the Notes and the making of
the Loans hereunder.
11.5 Payment of Expenses and Taxes. The Borrowers jointly and
severally agree (a) to pay or reimburse the Administrative Agent for all
its reasonable out-of-pocket costs and expenses incurred in connection with
the development, preparation and execution of, and any amendment,
supplement or modification to, this Agreement and the other Loan Documents
and any other documents prepared in connection herewith or therewith, and
the consummation and administration of the transactions contemplated hereby
and thereby, including, without limitation, the reasonable fees and
disbursements of counsel to the Administrative Agent, (b) to pay or
reimburse each Lender and the Administrative Agent for all its costs and
expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement, the other Loan Documents and any such other
documents, including, without limitation, the fees and disbursements of
counsel (including the allocated fees and expenses of in-house counsel) to
each Lender and counsel to the Administrative Agent, (c) to pay, indemnify,
and hold each Lender and the Administrative Agent harmless from, any and
all recording and filing fees and any and all liabilities with respect to,
or resulting from any delay in paying, stamp, excise and other taxes, if
any, which may be payable or determined to be payable in connection with
the execution and delivery of, or consummation or administration of any of
the transactions contemplated by, or any amendment, supplement or
modification of, or any waiver or consent under or in respect of, this
Agreement, the other Loan Documents and any such other documents, and (d)
to pay, indemnify, and hold each Lender and the Administrative Agent and
their respective officers, directors, trustees, employees, affiliates,
agents and controlling persons (each, an "indemnitee") harmless from and
against any and all other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of
any kind or nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of this Agreement, the other
Loan Documents and any such other documents, including, without limitation,
any of the foregoing relating to the use of proceeds of the Loans or the
violation of, noncompliance with or liability under, any Environmental Law
applicable to the operations of the Parent, the Borrowers any of their
Subsidiaries or any of the Properties (all the foregoing in this clause
(d), collectively, the "indemnified liabilities"), provided, that the
Borrowers shall have no obligation hereunder to any indemnitee with respect
to indemnified liabilities to the extent such indemnified liabilities are
found by a final and nonappealable decision of a court of competent
jurisdiction to have resulted from the gross negligence or willful
misconduct of such indemnitee. The agreements in this Section
89
83
11.5 shall survive repayment of the Notes and all other amounts
payable hereunder and the termination of the Commitments and, in the case
of any Lender that may assign any interest in its Commitments, Loans or
Letter of Credit Interest hereunder, shall survive the making of such
assignment, notwithstanding that such assigning Lender may cease to be a
"Lender" hereunder.
11.6 Successors and Assigns; Participations and Assignments. (a) This
Agreement shall be binding upon and inure to the benefit of the Parent, the
Borrowers, the Lenders, the Administrative Agent, all future holders of the
Notes and their respective successors and assigns, except that neither the
Parent nor the Borrowers may assign or transfer any of its rights or
obligations under this Agreement without the prior written consent of each
Lender.
(b) Any Lender may, without the consent of the Borrowers, in the
ordinary course of its business and in accordance with applicable law, at
any time sell to one or more banks, financial institutions or funds that
regularly invest in loans and/or loan participations or, with the consent
of the Borrowers and the Administrative Agent (which, in each case, shall
not be unreasonably withheld or delayed), any other entities (each, a
"Participant") participating interests in any Loan owing to such Lender,
any Note held by such Lender, any Commitment of such Lender or any other
interest of such Lender hereunder and under the other Loan Documents. In
the event of any such sale by a Lender of a participating interest to a
Participant, such Lender's obligations under this Agreement to the other
parties to this Agreement shall remain unchanged, such Lender shall remain
solely responsible for the performance thereof, such Lender shall remain
the holder of any such Note for all purposes under this Agreement and the
other Loan Documents, and the Borrowers and the Administrative Agent shall
continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement and the other
Loan Documents. In no event shall any Participant under any such
participation have any right to approve any amendment or waiver of any
provision of any Loan Document, or any consent to any departure by any Loan
Party therefrom, except to the extent that such amendment, waiver or
consent would reduce the principal of, or interest on, the Notes or any
fees payable hereunder, postpone the date of the final maturity of the
Notes, consent to the assignment or transfer by any Borrower of any of its
rights and obligations under this Agreement and the other Loan Documents,
release all or a substantial portion of the Collateral (other than in
connection with any sale or other disposition of assets permitted by
Section 7.6) or any guarantee of the Obligations, in each case to the
extent subject to such participation. The Borrowers agree that if amounts
outstanding under this Agreement and the Notes are due or unpaid, or shall
have been declared or shall have become due and payable upon the occurrence
of an Event of Default, each Participant shall, to the maximum extent
permitted by applicable law, be deemed to have the right of setoff in
respect of its participating interest in amounts owing under this Agreement
and any Note to the same extent as if the amount of its participating
interest were owing directly to it as a Lender under this Agreement or any
Note, provided that, in purchasing such participating interest, such
Participant shall be deemed to have agreed to share with the Lenders the
proceeds thereof as provided in Section 11.7(a) as fully as if it were a
Lender hereunder. The Borrowers also agree that each Participant shall be
entitled to the benefits of Sections 2.20, 2.21 and 2.22
90
84
with respect to its participation in the Commitments and the Loans
outstanding from time to time as if it was a Lender; provided that, in the
case of Section 2.21, such Participant shall have complied with the
requirements of said Section and provided, further, that no Participant
shall be entitled to receive any greater amount pursuant to any such
Section than the transferor Lender would have been entitled to receive in
respect of the amount of the participation transferred by such transferor
Lender to such Participant had no such transfer occurred.
(c) Any Lender may, in the ordinary course of its business and in
accordance with applicable law, at any time and from time to time assign to
any Lender or any affiliate thereof or, with the consent of the Designated
Borrower and the Administrative Agent (which, in each case, shall not be
unreasonably withheld or delayed) (provided that no such consent need be
obtained by Xxxxxx Commercial Paper Inc. for a period of 120 days following
the Closing Date), to an additional bank, financial institution or other
entity (an "Assignee") all or any part of its rights and obligations under
this Agreement, the Letters of Credit and the Notes pursuant to an
Assignment and Acceptance, substantially in the form of Exhibit D, executed
by such Assignee, such assigning Lender (and, in the case of an Assignee
that is not then a Lender or an affiliate thereof, by the Designated
Borrower and the Administrative Agent) and delivered to the Administrative
Agent for its acceptance and recording in the Register; provided that no
such assignment to an Assignee (other than any Lender or any affiliate
thereof) shall be in an aggregate principal amount of less than $2,000,000
(other than in the case of an assignment of all of a Lender's interests
under this Agreement and the Notes). Such assignment need not be ratable as
among any Tranche A Term Loan Commitments and/or Tranche A Term Loans,
Tranche B Term Loan Commitments and/or Tranche B Term Loans and Revolving
Credit Commitments and/or Revolving Credit Loans of the assigning Lender.
Upon such execution, delivery, acceptance and recording, from and after the
effective date determined pursuant to such Assignment and Acceptance, (x)
the Assignee thereunder shall be a party hereto and, to the extent provided
in such Assignment and Acceptance, have the rights and obligations of a
Lender hereunder with a Commitment as set forth therein, and (y) the
assigning Lender thereunder shall, to the extent provided in such
Assignment and Acceptance, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering all or
the remaining portion of an assigning Lender's rights and obligations under
this Agreement, such assigning Lender shall cease to be a party hereto).
Notwithstanding any provision of this paragraph (c) and paragraph (g) of
this Section 11.6, the consent of the Designated Borrower shall not be
required, and, unless requested by the Assignee and/or the assigning
Lender, new Notes shall not be required to be executed and delivered by the
Borrowers, for any assignment which occurs at any time when any of the
events described in Section 8(f) shall have occurred and be continuing.
(d) Any Non-U.S. Lender that could become completely exempt from
withholding of any tax, assessment or other charge or levy imposed by or on
behalf of the United States or any taxing authority thereof ("U.S. Taxes")
in respect of payment of any Obligations due to such Non-U.S. Lender under
this Agreement if the Obligations were in registered form for U.S. federal
income tax purposes may request the Borrowers (through the Administrative
Agent), and the Borrowers agree thereupon, to exchange any promissory
91
85
note(s) evidencing such Obligations for promissory note(s) registered as
provided in paragraph (f) below and substantially in the form of Exhibit
I-1 (in the case of Obligations in respect of Tranche A Term Loans),
Exhibit I-2 (in the case of Obligations in respect of Tranche B Term
Loans), or Exhibit I-3 (in the case of Obligations in respect of Revolving
Credit Loans) (each, an "Alternative Note"). Alternative Notes may not be
exchanged for promissory notes that are not Alternative Notes.
(e) Each Non-U.S. Lender that holds Alternative Note(s) (an
"Alternative Noteholder") (or, if such Alternative Noteholder is not the
beneficial owner thereof, such beneficial owner) shall deliver to the
Borrowers prior to or at the time such Non-U.S. Lender becomes an
Alternative Noteholder each of the forms and certifications required by
Section 2.21(b).
(f) An Alternative Note and the Obligation(s) evidenced thereby may be
assigned or otherwise transferred in whole or in part only by registration
of such assignment or transfer of such Alternative Note and the
Obligation(s) evidenced thereby on the Register (and each Alternative Note
shall expressly so provide). Any assignment or transfer of all or part of
such Obligation(s) and the Alternative Note(s) evidencing the same shall be
registered on the Register only upon surrender for registration of
assignment or transfer of the Alternative Note(s) evidencing such
Obligation(s), duly endorsed by (or accompanied by a written instrument of
assignment or transfer duly executed by) the Alternative Noteholder
thereof, and thereupon one or more new Alternative Note(s) in the same
aggregate principal amount shall be issued to the designated Assignee(s).
No assignment of an Alternative Note and the Obligation(s) evidenced
thereby shall be effective unless it has been recorded in the Register as
provided in this Section 11.6(f).
(g) The Administrative Agent shall maintain at its address referred to
in Section 11.2 a copy of each Assignment and Acceptance delivered to it
and a register (the "Register") for the recordation of the names and
addresses of the Lenders (including Alternative Noteholders) and the
Commitment of, and principal amount of the Loans owing to, each Lender from
time to time. The entries in the Register shall be conclusive, in the
absence of manifest error, and the Borrowers, the Administrative Agent and
the Lenders shall treat each Person whose name is recorded in the Register
as the owner of the Loan recorded therein for all purposes of this
Agreement. The Register shall be available for inspection by the Borrowers
or any Lender at any reasonable time and from time to time upon reasonable
prior notice.
(h) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an Assignee (and, in the case of an Assignee that is
not then a Lender or an affiliate thereof, by the Designated Borrower and
the Administrative Agent) together with payment to the Administrative Agent
of a registration and processing fee of $2,000 (except that no such
registration and processing fee shall be payable (y) by Xxxxxx Commercial
Paper Inc. for a period of 120 days following the Closing Date or (z) in
the case of an Assignee which is already a Lender or is an affiliate of a
Lender), the Administrative Agent shall (i) promptly accept such Assignment
and Acceptance and (ii) on the effective date determined pursuant thereto
record the information contained therein in the Register and
92
86
give notice of such acceptance and recordation to the Lenders and the
Designated Borrower. On or prior to such effective date, the Borrowers, at
their own expense, shall execute and deliver to the Administrative Agent
(in exchange for the Revolving Credit Note, Tranche A Term Note and/or
Tranche B Term Note, as the case may be, of the assigning Lender) a new
Revolving Credit Note, Tranche A Term Note and/or Tranche B Term Note, as
the case may be, to the order of such Assignee (or, in the case of any
Alternative Note, payable to such Assignee or its registered assigns) in an
amount equal to the Revolving Credit Commitment, Tranche A Loan and/or
Tranche B Loan, as the case may be, assumed by it pursuant to such
Assignment and Acceptance and, if the assigning Lender has retained a
Revolving Credit Commitment, Tranche A Loan and/or Tranche B Loan, as the
case may be, a new Revolving Credit Note, Tranche A Term Note and/or
Tranche B Term Note, as the case may be, to the order of the assigning
Lender (or, in the case of any Alternative Note, payable to such assigning
Lender or its registered assigns) in an amount equal to the Revolving
Credit Commitment, Tranche A Loan and/or Tranche B Loan, as the case may
be, retained by it hereunder. Such new Notes shall be dated the Closing
Date and shall otherwise be in the form of the Note replaced thereby.
(i) Each of the Parent and the Borrowers authorizes each Lender to
disclose to any Participant or Assignee (each, a "Transferee") and any
prospective Transferee any and all financial information in such Lender's
possession concerning the Parent, the Borrowers and their respective
Affiliates which has been delivered to such Lender by or on behalf of the
Parent or the Borrowers pursuant to this Agreement or which has been
delivered to such Lender by or on behalf of the Parent or the Borrowers in
connection with such Lender's credit evaluation of the Parent, the
Borrowers and their respective Affiliates prior to becoming a party to this
Agreement.
(j) Nothing herein shall prohibit or restrict any Lender from (i)
pledging or assigning any Note to any Federal Reserve Bank in accordance
with applicable law or (ii) with the prior consent of the Administrative
Agent and the Borrowers (which, in each case, shall not be unreasonably
withheld or delayed), pledging its rights in connection with any Loan or
Note to any other Person.
11.7 Adjustments; Set-off. (a) If any Lender (a "Benefitted Lender")
shall at any time receive any payment of all or part of its Loans or the
Reimbursement Obligations owing to it, or interest thereon, or receive any
collateral in respect thereof (whether voluntarily or involuntarily, by
set-off, pursuant to events or proceedings of the nature referred to in
Section 8(f), or otherwise), in a greater proportion than any such payment
to or collateral received by any other Lender, if any, in respect of such
other Lender's Loans or the Reimbursement Obligations owing to such other
Lender, or interest thereon, such Benefitted Lender shall purchase for cash
from the other Lenders a participating (or, at the option of such Lender, a
direct) interest in such portion of each such other Lender's Loan and/or of
the Reimbursement Obligations owing to each such other Lender, or shall
provide such other Lenders with the benefits of any such collateral, or the
proceeds thereof, as shall be necessary to cause such Benefitted Lender to
share the excess payment or benefits of such collateral or proceeds ratably
with each of the Lenders; provided, however, that if all or any portion of
such excess payment or benefits is thereafter recovered from such
Benefitted Lender, such
93
87
purchase shall be rescinded, and the purchase price and benefits returned,
to the extent of such recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders provided by
law, each Lender shall have the right, without prior notice to the Parent
or the Borrowers, any such notice being expressly waived by the Parent and
the Borrowers to the extent permitted by applicable law, upon any amount
becoming due and payable by the Parent or the Borrowers hereunder or under
the Notes (whether at the stated maturity, by acceleration or otherwise) to
set off and appropriate and apply against such amount any and all deposits
(general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency,
in each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Lender or any branch or agency
thereof to or for the credit or the account of the Parent or the Borrowers.
Each Lender agrees promptly to notify the Parent, the Designated Borrower
and the Administrative Agent after any such setoff and application made by
such Lender, provided that the failure to give such notice shall not affect
the validity of such setoff and application.
11.8 Counterparts. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts
(including by telecopy), and all of said counterparts taken together shall
be deemed to constitute one and the same instrument. A set of the copies of
this Agreement signed by all the parties shall be lodged with the Borrowers
and the Administrative Agent.
11.9 Severability. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
11.10 Integration. This Agreement and the other Loan Documents
represent the agreement of the Parent, the Borrowers, the Administrative
Agent and the Lenders with respect to the subject matter hereof, and there
are no promises, undertakings, representations or warranties by the
Administrative Agent or any Lender relative to subject matter hereof not
expressly set forth or referred to herein or in the other Loan Documents.
11.11 GOVERNING LAW. THIS AGREEMENT AND THE NOTES AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND THE NOTES SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF
THE STATE OF NEW YORK.
11.12 Submission To Jurisdiction; Waivers. Each of the Parent and the
Borrowers hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which
it is a party, or for
94
88
recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the Courts of the State of New York,
the courts of the United States for the Southern District of New York and
the courts of the Commonwealth of Massachusetts and the courts of the
United States for the District of Massachusetts, and appellate courts from
any thereof;
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to the Parent
or the Borrowers, as the case may be at its address set forth in Section
11.2 or at such other address of which the Administrative Agent shall have
been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to xxx in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to
in this Section 11.12 any special, exemplary, punitive or consequential
damages.
11.13 Acknowledgements. Each of the Parent and the Borrowers hereby
acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;
(b) neither the Administrative Agent nor any Lender has any fiduciary
relationship with or duty to the Parent or any Borrower arising out of or
in connection with this Agreement or any of the other Loan Documents, and
the relationship between Administrative Agent and Lenders, on one hand, and
the Parent and the Borrowers, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan Documents
or otherwise exists by virtue of the transactions contemplated hereby among
the Lenders or among the Parent, the Borrowers and the Lenders.
11.14 WAIVERS OF JURY TRIAL. THE PARENT, THE BORROWERS, THE
ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVE TRIAL BY JURY IN ANY
95
89
LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
11.15 Confidentiality. Each of the Administrative Agent and each
Lender agrees to keep confidential all non-public information provided to
it by any Loan Party pursuant to this Agreement that is designated by such
Loan Party as confidential; provided that nothing herein shall prevent the
Administrative Agent or any Lender from disclosing any such information (a)
to the Administrative Agent, any other Lender or any affiliate of any
Lender, (b) to any Transferee or prospective Transferee which agrees to
comply with the provisions of this Section 11.15, (c) to the employees,
directors, agents, attorneys, accountants and other professional advisors
of such Lender or its affiliates, (d) upon the request or demand of any
Governmental Authority having jurisdiction over the Administrative Agent or
such Lender, (e) in response to any order of any court or other
Governmental Authority or as may otherwise be required pursuant to any
Requirement of Law, (f) if requested or required to do so in connection
with any litigation or similar proceeding, (g) which has been publicly
disclosed other than in breach of this Section 11.15, or (h) in connection
with the exercise of any remedy hereunder or under any other Loan Document.
11.16 Reliance on Representations and Actions of Designated Borrower.
The Borrowers hereby appoint the Designated Borrower as the Borrowers'
agent to execute, deliver and perform, on behalf of the Borrowers, any and
all notices, certificates, documents and actions to be executed, delivered
or performed hereunder or under any of the other Loan Documents, and the
Borrowers hereby agree that the Administrative Agent and the Lenders may
rely upon any representation, warranty, certificate, notice, document or
telephone request which purports to be executed or made or which the
Administrative Agent or the Lenders in good faith believe to have been
executed or made by the Designated Borrower or any of its executive
officers, and the Borrowers hereby further, jointly and severally, agree to
indemnify and hold the Administrative Agent and the Lenders harmless for
any action, including the making of Loans hereunder, and any loss or
expense, taken or incurred by any of them as a result of their good faith
reliance upon any such representation, warranty, certificate, notice,
document or telephone request.
96
90
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
KIRKLANDS HOLDINGS L.L.C.
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------
Title: President
XXXXXXXX'X, INC.
KIRKLAND'S OF CAROLINA, INC.
KIRKLAND'S OF CHARLOTTE, EASTLAND MALL, INC.
KIRKLAND'S OF TENNESSEE, INC.
K. C. CORP. INC.
KIRKLAND'S OF GREENSBORO, FOUR SEASONS MALL, INC.
KIRKLAND'S OF FAYETTEVILLE, CROSS CREEK MALL, INC.
KIRKLAND'S OF WILMINGTON, INDEPENDENCE MALL, INC.
KIRKLAND'S III, JACKSON-METRO CENTER, INC.
KIRKLAND'S OF MEMPHIS, TENNESSEE, LAURELWOOD
SHOPPING CENTER, INC.
KIRKLAND'S OF RIDGELAND, MISSISSIPPI, NORTHPARK
MALL, INC.
KIRKLAND'S OF KNOXVILLE, EAST TOWNE MALL, INC.
KIRKLAND'S OF HUNTSVILLE, MADISON SQUARE MALL, INC.
KIRKLAND'S OF VALLEY VIEW MALL, ROANOKE, VA, INC.
KIRKLAND'S OF NASHVILLE, HICKORY HOLLOW MALL, INC.
KIRKLAND'S OF BIRMINGHAM, RIVERCHASE GALLERIA, INC.
KIRKLAND'S OF BRIARCLIFFE MALL, MYRTLE BEACH, SOUTH
CAROLINA, INC.
KIRKLAND'S OF PECANLAND MALL, MONROE, LA, INC.
KIRKLAND'S XX XXXXX XXXXXX XX XXXX, XXXXXXX, XX, INC.
KIRKLAND'S XX XXXXXXXX XXXXX, XXXXXXX, XX, INC.
KIRKLAND'S OF RIVERGATE MALL, NASHVILLE, TN, INC.
KIRKLAND'S OF PEACHTREE MALL, COLUMBUS, GA, INC.
KIRKLAND'S OF CUMBERLAND MALL, ATLANTA, GA, INC.
KIRKLAND'S XX XXXXXXXX XXXXX XXXX, XXXXXXXXXXX,
XX, INC.
KIRKLAND'S OF HOUSTON GALLERIA, HOUSTON, TX, INC.
KIRKLAND'S OF MALL OF MEMPHIS, MEMPHIS, TN, INC.
KIRKLAND'S OF WOODLAND HILLS MALL, TULSA, OK, INC.
KIRKLAND'S OF DAYTON MALL, DAYTON, OH, INC.
KIRKLAND'S OF OXMOOR CENTER, LOUISVILLE, KY, INC.
97
00
XXXXXXXX'X XX XXXXX XXXXXX XXXX, XXXXXX, XX, INC.
KIRKLAND'S OF VALLEY VIEW CENTER, DALLAS, TX, INC.
KIRKLAND'S OF CHESTERFIELD TOWNE CENTER, RICHMOND,
VA, INC.
KIRKLAND'S OF PARK PLAZA, LITTLE ROCK, AR, INC.
KIRKLAND'S OF MONTGOMERY MALL, MONTGOMERY, AL,
INC.
KIRKLAND'S OF SOUTHLAKE MALL, ATLANTA, GA, INC.
KIRKLAND'S OF SOUTHPARK MALL, RICHMOND, VA, INC.
KIRKLAND'S OF EASTLAND MALL, EVANSVILLE, IN, INC.
KIRKLAND'S XX XXXXXXX XXXX, XXXXXXXXX, XX, INC.
KIRKLAND'S OF HICKORY RIDGE MALL, MEMPHIS, TN, INC.
KIRKLAND'S OF REGENCY SQUARE MALL, JACKSONVILLE,
FL, INC.
KIRKLAND'S OF MCCAIN MALL, LITTLE ROCK, AR, INC.
KIRKLAND'S OF RIVER RIDGE MALL, LYNCHBURG, VA, INC.
XXXXXXXX'X OF BEL AIR MALL, MOBILE, AL, INC.
KIRKLAND'S OF THE MALL AT XXXXXX CROSSING, TUPELO,
MS, INC.
KIRKLAND'S XX XXXXXXX XXXX, XXXXX XXXXX, XX, INC.
KIRKLAND'S OF BELLEVUE CENTER, NASHVILLE, TN, INC.
KIRKLAND'S OF TRI-COUNTY MALL, CINCINNATI, OH, INC.
KIRKLAND'S OF XXX XXXX XX XXX XXXXXXX,
XXXXXXXXXXXX, XX, INC.
KIRKLAND'S OF XXXXXXXX MALL, BIRMINGHAM, AL, INC.
KIRKLAND'S XX XXXXXXXX XXXX, XXX XXXXXXX, XX, INC.
XXXXXXXX'X XX XXXXXXXX XXXXX, XXXXXXXXX, X.X., INC.
KIRKLAND'S XX XXXX XXXXXXX XXXX, XXXXXXX, X.X., INC.
KIRKLAND'S OF COOL SPRINGS GALLERIA, NASHVILLE, TN,
INC.
KIRKLAND'S OF KENWOOD TOWNE CENTRE, CINCINNATI,
OH, INC.
KIRKLAND'S OF ST. LOUIS GALLERIA, ST. LOUIS, MO, INC.
KIRKLAND'S OF WIREGRASS COMMONS MALL, DOTHAN, AL,
INC.
KIRKLAND'S OF REGENCY MALL, RICHMOND, VA, INC.
KIRKLAND'S OF FLORENCE, FLORENCE, KY, INC.
KIRKLAND'S OF ACADIANA MALL, LAFAYETTE, LA, INC.
KIRKLAND'S OF PADRE STAPLES MALL, CORPUS CHRISTI, TX,
INC.
KIRKLAND'S OF XXXXXX VILLAGE, CANTON, OH, INC.
KIRKLAND'S OF WEST OAKS MALL, HOUSTON, TX, INC.
KIRKLAND'S OF CHARLESTON TOWN CENTER, CHARLESTON,
W. VA, INC.
KIRKLAND'S OF CRESTWOOD PLAZA, ST. LOUIS, MO, INC.
KIRKLAND'S OF WHITE XXXXX MALL, BALTIMORE, MD, INC.
98
00
XXXXXXXX'X XX XXXXXX XXXXX XXXX, XXXXXX, XX, INC.
KIRKLAND'S OF BAYBROOK MALL, HOUSTON, TX, INC.
KIRKLAND'S OF GOVERNOR'S SQUARE MALL, TALLAHASSEE,
FL, INC.
KIRKLAND'S OF XXXXXX CREEK MALL, AUSTIN, TX, INC.
KIRKLAND'S OF HIGHLAND MALL, AUSTIN, TX, INC.
KIRKLAND'S OF BATTLEFIELD MALL, SPRINGFIELD, MO, INC.
KIRKLAND'S OF PENN SQUARE MALL, OKLAHOMA CITY, OK,
INC.
KIRKLAND'S XX XXX XXXX XXXX, XXXXXX XXXX, XX, INC.
KIRKLAND'S XX XXXX XX. XXXXXXX, XXXXXXXXXX, XX, INC.
KIRKLAND'S OF XXXXXX XXXXX MALL, BALTIMORE, MD, INC.
KIRKLAND'S OF OAKWOOD CENTER, NEW ORLEANS, LA, INC.
KIRKLAND'S OF XXX XXXX XX XXXXXXX XXXX, XXXXXXX
XXXX, XX, INC.
KIRKLAND'S OF GLENBROOK MALL, FT. XXXXX, IN, INC.
KIRKLAND'S XX XXXXX XXXXXX XXXX, XXXXXXX, XX, INC.
KIRKLAND'S OF NORTHPARK MALL, JOPLIN, MO, INC.
KIRKLAND'S OF ORLANDO FASHION SQUARE, ORLANDO, FL,
INC.
KIRKLAND'S OF XXX XXXX XX XXXXXXXXX XXXXXXX,
XXXXXX, XX, INC.
KIRKLAND'S OF ST. XXXXXXX XXXXX CENTER, WALDORF,
MD INC.
KIRKLAND'S OF REGENCY MALL, FLORENCE, AL, INC.
KIRKLAND'S OF SOUTH PLAINS MALL, LUBBOCK, TX, INC.
KIRKLAND'S OF THE PARKS AT ARLINGTON, FT. WORTH, TX,
INC.
KIRKLAND'S XX XXXXX XXXX XXXX, XXXXXXXXX, XX, INC.
KIRKLAND'S OF ST. CLAIR SQUARE, ST. LOUIS, MO, INC.
KIRKLAND'S OF TURTLE CREEK MALL, HATTIESBURG, MS,
INC.
KIRKLAND'S OF THE WOODLANDS, HOUSTON, TX, INC.
KIRKLAND'S OF XXXXXXX TOWN CENTER, TAMPA, FL, INC.
KIRKLAND'S OF MEMORIAL CITY MALL, HOUSTON, TX, INC.
KIRKLAND'S OF UNIVERSITY MALL, TUSCALOOSA, AL, INC.
KIRKLAND'S XX XXXXX XXXX XXXX, XXXX XXXXXX, XX, INC.
KIRKLAND'S XX XXXXXX XXXX XXXX, XXXXXX XXXX, XX,
INC.
KIRKLAND'S OF TOWN EAST MALL, MESQUITE, TX, INC.
KIRKLAND'S XX XXXXXXXX XXXX XXXX, XXXXXXX, XX, INC.
KIRKLAND'S XX XXXXXXXX XXXXXX XXXX, XXXXXXX, X.X.,
INC.
KIRKLAND'S XX XXX XXXXXX XXXX, XXXX XXXXX, X.X., INC.
KIRKLAND'S OF XXX VALLEY MALL, CHICAGO, IL, INC.
KIRKLAND'S OF HAWTHORNE MALL, CHICAGO, IL, INC.
99
00
XXXXXXXX'X XX XXXXXXXXX XXXXXX, XXXXXXX, XX, INC.
KIRKLAND'S OF ORLAND SQUARE, CHICAGO, IL, INC.
KIRKLAND'S OF COASTLAND MALL, NAPLES, FL, INC.
KIRKLAND'S OF EDGEWATER MALL, BILOXI, MS, INC.
KIRKLAND'S XX XXXX XXXXXX XXXXX, XXXXXX XXXX, XX,
INC.
KIRKLAND'S OF CASTLETON SQUARE, INDIANAPOLIS, IN.,
INC.
KIRKLAND'S OF XXXXXXX MALL, PENSACOLA, FL, INC.
KIRKLAND'S OF UNIVERSITY PARK, SOUTH BEND, IN, INC.
KIRKLAND'S OF WESTGATE MALL, AMARILLO, TX, INC.
KIRKLAND'S OF WESTGATE MALL, SPARTANBURG, SC, INC.
KIRKLAND'S OF MERIDIAN MALL, LANSING, MI, INC.
KIRKLAND'S OF COTTONWOOD MALL, ALBUQUERQUE, NM,
INC.
KIRKLAND'S OF UNIVERSITY MALL, TAMPA, FL, INC.
ATTEST:
By: /s/ Xxxxxx Xxxxxxxx By: /s/ Xxxx Xxxxxxxx
--------------------- ---------------------
Title: Vice President Title: President
and Secretary
100
94
XXXXXX COMMERCIAL PAPER INC., as Arranger and as a Lender
By: /s/ Xxxxxx X. Xxx
------------------------------------------
Title: Authorized Signatory
THE FIRST NATIONAL BANK OF BOSTON,
as Administrative Agent and as a Lender
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------------
Title: Vice President
FIRST AMERICAN NATIONAL BANK
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------------
Title: Assistant Vice President
HIBERNIA NATIONAL BANK
By: /s/ Xxxx X. Xxxxxxxxxx
------------------------------------------
Title: Vice President
101
95
MITSUI LEASING (U.S.A.) INC.
By: /s/ R. Xxxxx Xxxxxx
------------------------------------------
Title: Vice President
PRIME INCOME TRUST
By: /s/ Xxxxxx Xxxxxxx
------------------------------------------
Title: V.P. Portfolio Manager
CRESCENT/MACH I PARTNERS, L.P.
by: TCW Asset Management Company
Its Investment Manager
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------------
Title: Vice President
UNION PLANTERS BANK OF
XXXXXXX, X.X.
By: /s/ Xxxxx Xxxxxxx
------------------------------------------
Title: Vice President
VOLUNTEER BANK OF
JACKSON, TENNESSEE
By: /s/ Xxxxx X. Xxxxx
------------------------------------------
Title: Executive Vice President
102
SCHEDULE 1.1A TO CREDIT AGREEMENT
---------------------------------
SCHEDULE OF BORROWERS
Xxxxxxxx'x, Inc.
101 Kirkland's of Carolina, Inc.
000 Xxxxxxxx'x xx Xxxxxxxxx, Xxxxxxxx Mall, Inc.
103 Kirkland's of Tennessee, Inc.
104 K. C. Corp. Inc.
107 Kirkland's of Greensboro, Four Seasons Mall, Inc.
109 Kirkland's of Fayetteville, Cross Creek Mall, Inc.
110 Kirkland's of Wilmington, Independence Mall, Inc.
111 Kirkland's III, Jackson-Metro Center, Inc.
000 Xxxxxxxx'x xx Xxxxxxx, Xxxxxxxxx, Laurelwood Shopping Center, Inc.
000 Xxxxxxxx'x xx Xxxxxxxxx, Xxxxxxxxxxx, Northpark Mall, Inc.
116 Kirkland's of Knoxville, East Towne Mall, Inc.
117 Kirkland's of Huntsville, Madison Square Mall, Inc.
000 Xxxxxxxx'x xx Xxxxxx Xxxx Xxxx, Xxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxxxx, Xxxxxxx Hollow Mall, Inc.
120 Kirkland's of Birmingham, Riverchase Galleria, Inc.
122 Kirkland's of XxxxxXxxxxx Xxxx, Xxxxxx Xxxxx, Xxxxx Xxxxxxxx, Inc.
000 Xxxxxxxx'x xx Xxxxxxxxx Xxxx, Xxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxx Xxxxxx xx Xxxx, Xxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxxx Xxxxx, Xxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxxxx Xxxx, Xxxxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxxxx Xxxx, Xxxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxxxxx Xxxx, Xxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxxx Xxxxx Xxxx, Xxxxxxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxx Xxxxxxxx, Xxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxx xx Xxxxxxx, Xxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxxx Xxxxx Xxxx, Xxxxx, XX, Inc.
135 Kirkland's of Dayton Mall, Dayton, OH, Inc.
000 Xxxxxxxx'x xx Xxxxxx Xxxxxx, Xxxxxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxx Xxxxxx Xxxx, Xxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxx Xxxx Xxxxxx, Xxxxxx, XX, Inc.
139 Kirkland's of Chesterfield Towne Center, Richmond, VA, Inc.
000 Xxxxxxxx'x xx Xxxx Xxxxx, Xxxxxx Xxxx, XX, Inc.
141 Kirkland's of Montgomery Mall, Montgomery, AL, Inc.
000 Xxxxxxxx'x xx Xxxxxxxxx Xxxx, Xxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxxxx Xxxx, Xxxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxxx Xxxx, Xxxxxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxx Xxxx, Xxxxxxxxx, XX, Inc.
146 Kirkland's of Hickory Ridge Mall, Memphis, TN, Inc.
000 Xxxxxxxx'x xx Xxxxxxx Xxxxxx Xxxx, Xxxxxxxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx XxXxxx Xxxx, Xxxxxx Xxxx, XX, Inc.
150 Kirkland's of River Ridge Mall, Lynchburg, VA, Inc.
103
151 Kirkland's of Bel Air Mall, Mobile, AL, Inc.
152 Kirkland's of The Mall at Xxxxxx Crossing, Tupelo, MS, Inc.
000 Xxxxxxxx'x xx Xxxxxxx Xxxx, Xxxxx Xxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxxx Xxxxxx, Xxxxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxx-Xxxxxx Xxxx, Xxxxxxxxxx, XX, Inc.
156 Kirkland's of Xxx Xxxx xx xxx Xxxxxxx, Xxxxxxxxxxxx, XX, Inc.
157 Kirkland's of Xxxxxxxx Mall, Birmingham, AL, Inc.
000 Xxxxxxxx'x xx Xxxxxxxx Xxxx, Xxx Xxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxxx Xxxxx, Xxxxxxxxx, X.X., Inc.
160 Kirkland's of Xxxx Xxxxxxx Xxxx, Xxxxxxx, X.X., Inc.
161 Kirkland's of Cool Springs Galleria, Nashville, TN, Inc.
162 Kirkland's of Kenwood Towne Centre, Cincinnati, OH, Inc.
163 Kirkland's of St. Louis Galleria, St. Louis, MO, Inc.
164 Kirkland's of Wiregrass Commons Mall, Dothan, AL, Inc.
000 Xxxxxxxx'x xx Xxxxxxx Xxxx, Xxxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxxx, Xxxxxxxx, XX, Inc.
167 Kirkland's of Acadiana Mall, Lafayette, LA, Inc.
000 Xxxxxxxx'x xx Xxxxx Xxxxxxx Xxxx, Xxxxxx Xxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxx Xxxxxxx, Xxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxx Xxxx Xxxx, Xxxxxxx, XX, Inc.
171 Kirkland's of Charleston Town Center, Charleston, W. VA, Inc.
000 Xxxxxxxx'x xx Xxxxxxxxx Xxxxx, Xx. Xxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxx Xxxxx Xxxx, Xxxxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxx Xxxxx Xxxx, Xxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxxx Xxxx, Xxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxxx'x Xxxxxx Xxxx, Xxxxxxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxx Xxxxx Xxxx, Xxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxxx Xxxx, Xxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxxxxxx Xxxx, Xxxxxxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxx Xxxxxx Xxxx, Xxxxxxxx Xxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxx Xxxx Xxxx, Xxxxxx Xxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxx Xx. Xxxxxxx, Xxxxxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxx Xxxxx Xxxx, Xxxxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxx Xxxxxx, Xxx Xxxxxxx, XX, Inc.
186 Kirkland's of Xxx Xxxx xx Xxxxxxx Xxxx, Xxxxxxx Xxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxxxx Xxxx, Xx. Xxxxx, IN, Inc.
000 Xxxxxxxx'x xx Xxxxx Xxxxxx Xxxx, Xxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxxxx Xxxx, Xxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxx Xxxxxxx Xxxxxx, Xxxxxxx, XX, Inc.
191 Kirkland's of Xxx Xxxx xx Xxxxxxxxx Xxxxxxx, Xxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xx. Xxxxxxx Xxxxx Xxxxxx, Xxxxxxx, XX Inc.
000 Xxxxxxxx'x xx Xxxxxxx Xxxx, Xxxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxx Xxxxxx Xxxx, Xxxxxxx, XX, Inc.
195 Kirkland's of The Parks at Arlington, Ft. Worth, TX, Inc.
196 Kirkland's of Xxxxx Xxxx Xxxx, Xxxxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xx. Xxxxx Xxxxxx, Xx. Xxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxx Xxxxx Xxxx, Xxxxxxxxxxx, XX, Inc.
104
000 Xxxxxxxx'x xx Xxx Xxxxxxxxx, Xxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxx Xxxx Xxxxxx, Xxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxxx Xxxx Xxxx, Xxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxxxxx Xxxx, Xxxxxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxx Xxxx Xxxx, Xxxx Xxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxx Xxxx Xxxx, Xxxxxx Xxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxx Xxxx Xxxx, Xxxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxxx Xxxx Xxxx, Xxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxxx Xxxxxx Xxxx, Xxxxxxx, X.X., Inc.
208 Kirkland's of Xxx Xxxxxx Xxxx, Xxxx Xxxxx, X.X., Inc.
209 Kirkland's of Xxx Valley Mall, Chicago, IL, Inc.
000 Xxxxxxxx'x xx Xxxxxxxxx Xxxx, Xxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxxxx Xxxxxx, Xxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxx Xxxxxx, Xxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxxxx Xxxx, Xxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxxxx Xxxx, Xxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxx Xxxxxx Xxxxx, Xxxxxx Xxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxxxx Xxxxxx, Xxxxxxxxxxxx, XX., Inc.
000 Xxxxxxxx'x xx Xxxxxxx Xxxx, Xxxxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxxxxx Xxxx, Xxxxx Xxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxxx Xxxx, Xxxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxxx Xxxx, Xxxxxxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxxx Xxxx, Xxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxxxxx Xxxx, Xxxxxxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxxxxx Xxxx, Xxxxx, XX, Inc.
105
--------------------------------------------------------------------------
FIRST AMENDMENT TO
CREDIT AGREEMENT
Among
KIRKLAND HOLDINGS L.L.C.,
THE BORROWERS SPECIFIED HEREIN,
THE LENDERS PARTY HERETO,
THE FIRST NATIONAL BANK OF BOSTON,
AS ADMINISTRATIVE AGENT
and
XXXXXX COMMERCIAL PAPER, INC.,
AS ARRANGER
Dated as of December 5, 1996
--------------------------------------------------------------------------
106
FIRST AMENDMENT TO CREDIT AGREEMENT
This FIRST AMENDMENT TO CREDIT AGREEMENT is dated as of December 5, 1996 by
and among KIRKLAND'S HOLDINGS L.L.C., a Delaware limited liability company (the
"Parent"), the entities listed on Schedule 1.1A of that certain Credit Agreement
referred to below (the "Borrowers"), THE FIRST NATIONAL BANK OF BOSTON (the
"Administrative Agent"), XXXXXX COMMERCIAL PAPER, INC., (the "Arranger") and the
several banks and financial institutions which are Lenders under the Credit
Agreement (the "Lenders").
Recitals
The Parent, the Borrowers, the Administrative Agent, the Arranger and the
Lenders are party to a Credit Agreement dated as of June 12, 1996 (the "Credit
Agreement"). Capitalized terms used herein and not otherwise defined shall have
the meanings set forth in the Credit Agreement. The Parent and the Borrowers
desire to amend the Credit Agreement in certain respects to be relieved of
certain obligations to obtain landlord consents, to postpone the time for
delivery of key-man life insurance required thereunder and to provide for the
joinder of all Subsidiaries to the Credit Agreement as borrowers. The
Administrative Agent, the Arranger and the Lenders are willing to agree to such
amendments on the terms set forth herein.
NOW, THEREFORE, in consideration of the premises contained herein and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
Section 1. Release of Requirement of Landlord Waivers. Section 6 of the
Credit Agreement is hereby amended by deleting Section 6.14 thereof in its
entirety.
Section 2. Key Man Life Insurance. Section 6 of the Credit Agreement is
hereby further amended by deleting Section 6.12 thereof in its entirety and
substituting therefor the following:
"6.12 Key Man Life Insurance. Obtain by December 31, 1996 and
maintain at all times thereafter key man life insurance
policies in the amount of $3,000,000 on each of the Management
Shareholders; and upon obtaining such policies, execute and
deliver all documents and take all actions in respect thereof
that would be required by subsection 5.1(b) if such policies
were in effect on the Closing Date."
107
Section 3. Subsidiaries. Section 4 of the Credit Agreement is hereby
amended by deleting Section 4.15 in its entirety and substituting therefor the
following:
"4.15 Subsidiaries. The Borrowers listed on Schedule 1.1A, as
the same may be amended from time to time with consent of the
Administrative Agent, constitute all of the direct and indirect
Subsidiaries of the Parent."
Section 4. Joinder of Subsidiaries. Section 6.11(b) of the Credit
Agreement is hereby amended by deleting clause (iii)(A) thereof in its entirety
and substituting therefor the following:
"(A) to become a Borrower party hereto or, with consent of the
Administrative Agent, a party to a guaranty and a security
agreement, in each case pursuant to documentation which is in form
and substance satisfactory to the Administrative Agent, and"
Section 5. Change of Control. Section 8(k) of the Credit Agreement is
hereby amended by deleting clause (i) thereof and substituting therefor the
following:
"(i) The Parent and the Management Shareholders shall cease to
have the power (whether or not exercised) to elect a majority of
the directors of any of the Borrowers which is a direct Subsidiary
of the Parent, or the Designated Borrower shall cease to have the
power (whether or not exercised) to elect all of the directors of
any of the Borrowers which is an indirect Subsidiary of the
Parent,"
Section 6. Representations and Warranties: No Default. The Parent and
the Borrowers hereby confirm to the Bank the representations and warranties of
the Parent and the Borrowers set forth in Section 4 of the Credit Agreement (as
amended hereby) as of the date hereof, as if set forth herein in full. The
Parent and the Borrowers hereby certify that, after giving effect to this First
Amendment to Credit Agreement, no Default exists under the Credit Agreement.
Section 7. Miscellaneous The Parent and the Borrowers agree, jointly
and severally, to pay on demand all the Administrative Agent's reasonable
expenses in preparing, executing and delivering this First Amendment to Credit
Agreement, and all related instruments and documents, including, without
limitation, the reasonable fees and out-of-pocket expenses of the
Administrative Agent's special counsel, Xxxxxxx, Procter &
2
108
Xxxx LLP. This First Amendment to Credit Agreement shall be considered a Loan
Document and shall be governed by and construed and enforced under the laws of
the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this First Amendment
to Credit Agreement to be duly executed as an instrument under seal as of the
date first written above.
KIRKLANDS HOLDINGS LLC
By: /s/ Xxxxx Xxxxxxxx
------------------------------
Name: Xxxxx Xxxxxxxx
Title:
XXXXXXXX'X INC.
KIRKLAND'S OF CAROLINA, INC.
KIRKLAND'S OF CHARLOTTE, EASTLAND MALL, INC.
KIRKLAND'S OF TENNESSEE, INC.
K.C. CORP. INC.
KIRKLAND'S OF GREENSBORO, FOUR SEASONS MALL, INC.
KIRKLAND'S OF FAYETTEVILLE, CROSS CREEK MALL, INC.
KIRKLAND'S OF WILMINGTON, INDEPENDENCE MALL, INC.
KIRKLAND'S III, JACKSON-METRO CENTER, INC.
KIRKLAND'S OF MEMPHIS, TENNESSEE, LAURELWOOD SHOPPING CENTER, INC.
KIRKLAND'S OF RIDGELAND, MISSISSIPPI, NORTHPARK MALL, INC.
KIRKLAND'S KNOXVILLE, EAST TOWNE MALL, INC.
KIRKLAND'S HUNTSVILLE, MADISON SQUARE MALL, INC.
KIRKLAND'S OF VALLEY VIEW MALL, ROANOKE, VA, INC.
KIRKLAND'S OF BIRMINGHAM, RIVERCHASE GALLERIA, INC.
KIRKLAND'S NASHVILLE, HICKORY HOLLOW MALL, INC.
KIRKLAND'S OF BRIARCLIFFE MALL, MYRTLE BEACH, SOUTH CAROLINA, INC.
KIRKLAND'S OF PECANLAND MALL, MONROE, LA, INC.
KIRKLAND'S XX XXXXX XXXXXX XX XXXX, XXXXXXX XX, INC.
KIRKLAND'S OF GWINNETT PLACE, MONROE, LA, INC.
KIRKLAND'S OF RIVERGATE MALL, NASHVILLE, TN, INC.
KIRKLAND'S OF PEACHTREE MALL, COLUMBUS, GA, INC.
KIRKLAND'S OF CUMBERLAND MALL, ATLANTA, GA, INC.
3
000
XXXXXXXX'X XX XXXXXXXX XXXXX XXXX, XXXXXXXXXXX, XX, INC.
KIRKLAND'S OF HOUSTON GALLERIA, HOUSTON, TX, INC.
KIRKLAND'S OF MALL OF MEMPHIS, MEMPHIS, TN, INC.
KIRKLAND'S OF WOODLAND HILLS MALL, TULSA, OK, INC.
KIRKLAND'S OF DAYTON MALL, DAYTON, OH, INC.
KIRKLAND'S OF OXMOOR CENTER, LOUISVILLE, KY, INC.
KIRKLAND'S XX XXXXX XXXXXX XXXX, XXXXXX, XX, INC.
KIRKLAND'S OF VALLEY VIEW CENTER, DALLAS, TX, INC.
KIRKLAND'S OF CHESTERFIELD TOWNE CENTER, RICHMOND, VA, INC.
KIRKLAND'S OF PARK PLAZA, LITTLE ROCK, AR, INC.
KIRKLAND'S OF MONTGOMERY MALL, MONTGOMERY, AL, INC.
KIRKLAND'S OF SOUTHLAKE MALL, ATLANTA, GA, INC.
KIRKLAND'S OF SOUTHPARK MALL, RICHMOND, VA, INC.
KIRKLAND'S OF EASTLAND MALL, EVANSVILLE, INC, INC.
KIRKLAND'S XX XXXXXXX XXXX, XXXXXXXXX, XX, INC.
KIRKLAND'S OF HICKORY RIDGE MALL, MEMPHIS, TN, INC.
KIRKLAND'S OF REGENCY SQUARE MALL, JACKSONVILLE, FL, INC.
KIRKLAND'S OF MCCAIN MALL, LITTLE ROCK, AR, INC.
KIRKLAND'S OF RIVER RIDGE MALL, LYNCHBURG, VA, INC.
KIRKLAND'S OF BEL AIR MALL, MOBILE, AL, INC.
KIRKLAND'S OF THE MALL AT XXXXXX CROSSING, TUPELO, MS, INC.
KIRKLAND'S XX XXXXXXX XXXX, XXXXX XXXXX, XX, INC.
KIRKLAND'S OF BELLEVUE CENTER, NASHVILLE, TN, INC.
KIRKLAND'S OF TRI-COUNTY MALL, CINCINNATI, OH, INC.
KIRKLAND'S OF XXX XXXX XX XXX XXXXXXX, XXXXXXXXXXXX, XX, INC.
KIRKLAND'S OF XXXXXXXX MALL, BIRMINGHAM, AL, INC.
KIRKLAND'S XX XXXXXXXX XXXX, XXX XXXXXXX, XX, INC.
XXXXXXXX'X XX XXXXXXXX XXXXX, XXXXXXXXX, X.X., INC.
KIRKLAND'S XX XXXX XXXXXXX XXXX, XXXXXXX, X.X., INC.
KIRKLAND'S OF COOL SPRINGS GALLERIA, NASHVILLE, TN, INC.
KIRKLAND'S OF KENWOOD TOWNE CENTRE, CINCINNATI, OH, INC.
KIRKLAND'S OF ST. LOUIS GALLERIA, ST. LOUIS, MO, INC.
KIRKLAND'S OF WIREGRASS COMMONS MALL, DOTHAN, AL, INC.
KIRKLAND'S OF REGENCY MALL, RICHMOND, VA, INC.
KIRKLAND'S OF FLORENCE, FLORENCE, KY, INC.
KIRKLAND'S OF ACADIANA MALL, LAFAYETTE, LA, INC.
KIRKLAND'S OF PADRE STAPLES MALL, CORPUS CHRISTI, TX, INC.
4
000
XXXXXXXX'X XX XXXXXX XXXXXXX, XXXXXX, XX, INC.
KIRKLAND'S OF WEST OAKS MALL, HOUSTON, TX, INC.
KIRKLAND'S OF CHARLESTON TOWN CENTER, CHARLESTON, W. VA, INC.
KIRKLAND'S OF CRESTWOOD PLAZA, ST. LOUIS, MO, INC.
KIRKLAND'S OF WHITE XXXXX MALL, BALTIMORE, MD, INC.
KIRKLAND'S OF XXXXXX CREEK MALL, DALLAS, TX, INC.
KIRKLAND'S OF BAYBROOK MALL, HOUSTON, TX, INC.
KIRKLAND'S OF GOVERNOR'S SQUARE MALL, TALLAHASSEE, FL, INC.
KIRKLAND'S OF XXXXXX CREEK MALL, AUSTIN, TX, INC.
KIRKLAND'S OF HIGHLAND MALL, AUSTIN, TX, INC.
KIRKLAND'S OF BATTLEFIELD MALL, SPRINGFIELD, MO, INC.
KIRKLAND'S OF PENN SQUARE MALL, OKLAHOMA CITY, OK, INC.
KIRKLAND'S XX XXXX XX. XXXXXX, XXXXXXXXXX, XX, INC.
KIRKLAND'S OF XXXXXX XXXXX MALL, BALTIMORE, MD, INC.
KIRKLAND'S OF OAKWOOD CENTER, NEW ORLEANS, LA, INC.
KIRKLAND'S OF XXX XXXX XX XXXXXXX XXXX, XXXXXXX XXXX, XX, INC.
KIRKLAND'S OF GLENNBROOK MALL, FT. XXXXX, IN, INC.
KIRKLAND'S XX XXXXX XXXXXX XXXX, XXXXXXX, XX, INC.
KIRKLAND'S OF NORTHPARK MALL, JOPLIN, MO, INC.
KIRKLAND'S OF ORLANDO FASHION SQUARE, ORLANDO, FL, INC.
KIRKLAND'S OF XXX XXXX XX XXXXXXXXX XXXXXXX, XXXXXX, XX, INC.
KIRKLAND'S OF ST. XXXXXXX XXXXX CENTER, WALDORF, MD, INC.
KIRKLAND'S OF REGENCY MALL, FLORENCE, AL, INC.
KIRKLAND'S OF SOUTH PLAINS MALL, LUBBOCK, TX, INC.
KIRKLAND'S OF THE PARKS AT ARLINGTON, FT. WORTH, TX, INC.
KIRKLAND'S XX XXXXX XXXX XXXX, XXXXXXXXX, XX, INC.
KIRKLAND'S OF ST. CLAIR SQUARE, ST. LOUIS, MO, INC.
KIRKLAND'S OF TURTLE CREEK MALL, HATTIESBURG, MS, INC.
KIRKLAND'S OF THE WOODLANDS, HOUSTON, TX, INC.
KIRKLAND'S OF XXXXXXX TOWN CENTER, TAMPA, FL, INC.
KIRKLAND'S OF MEMORIAL CITY MALL, HOUSTON, TX, INC.
KIRKLAND'S OF UNIVERSITY MALL, TUSCALOOSA, AL, INC.
KIRKLAND'S XX XXXXX XXXX XXXX, XXXX XXXXXX, XX, INC.
KIRKLAND'S XX XXXXXX XXXX XXXX, XXXXXX XXXX, XX, INC.
KIRKLAND'S OF TOWN EAST MALL, MESQUITE, TX, INC.
KIRKLAND'S XX XXXXXXXX XXXX XXXX, XXXXXXX, XX, INC.
5
000
XXXXXXXX'X XX XXXXXXXX XXXXXX XXXX, XXXXXXX, X.X., INC.
KIRKLAND'S XX XXX XXXXXX XXXX, XXXX XXXXX, X.X., INC.
KIRKLAND'S OF XXX VALLEY MALL, CHICAGO, IL, INC.
KIRKLAND'S OF XXXXXXXXX MALL, CHICAGO, IL, INC.
KIRKLAND'S OF STRAFTFORD SQUARE, CHICAGO, IL, INC.
KIRKLAND'S OF ORLAND SQUARE, CHICAGO, IL, INC.
KIRKLAND'S OF COASTLAND MALL, NAPLES, FL, INC.
KIRKLAND'S OF EDGEWATER MALL, BILOXI, MS, INC.
KIRKLAND'S XX XXXX XXXXXX XXXXX, XXXXXX XXXX, XX, INC.
KIRKLAND'S OF CASTLETON SQUARE, INDIANAPOLIS, IN, INC.
KIRKLAND'S OF XXXXXXX MALL, PENSACOLA, FL, INC.
KIRKLAND'S OF UNIVERSITY PARK, SOUTH BEND IN, INC.
KIRKLAND'S OF WESTGATE MALL, AMARILLO, TX, INC.
KIRKLAND'S OF WESTGATE MALL, SPARTANBURG, SC, INC.
KIRKLAND'S OF MERIDIAN MALL, LANSING, MI, INC.
KIRKLAND'S OF COTTONWOOD MALL, ALBUQUERQUE, NM, INC.
KIRKLAND'S OF UNIVERSITY MALL, TAMPA, FL, INC.
ATTEST:
By:/s/ Xxxxxx X. Xxxxxxxx By:/s/ Xxxx Xxxxxxxx
------------------------ -----------------------
Name: Name:
Title: Title:
XXXXXX COMMERCIAL PAPER INC.
By:/s/ Xxxxxxxx Xxxxxxx
------------------------
Name: Xxxxxxxx Xxxxxxx
Title: Authorized Signatory
6
112
THE FIRST NATIONAL BANK OF BOSTON
By: /s/ Xxxxxx X. Xxxxxxxx
______________________________
Name: Xxxxxx X. Xxxxxxxx, Xx.
Title: Vice President
FIRST AMERICAN NATIONAL BANK
By: /s/ Xxxxxx X. Xxxxxxxxxx
______________________________
Name: Xxxxxx X. Xxxxxxxxxx
Title: Assistant Vice President
HIBERNIA NATIONAL BANK
By: /s/ Xxxx X. Xxxxxxxxxx
______________________________
Name: Xxxx X. Xxxxxxxxxx
Title: Vice President
MITSUI LEASING (U.S.A.) INC.
By: /s/ R. Xxxxx Xxxxxx
______________________________
Name: R. Xxxxx Xxxxxx
Title: Senior Vice President
PRIME INCOME TRUST
By: ______________________________
Name:
Title:
7
113
CRESCENT/MACH I PARTNERS, L.P.
By: TCW Asset Management Company
Its Investment Manager
By: _______________________________
Name:
Title:
UNION PLANTERS BANK OF XXXXXXX, X.X.
By: /s/ Xxxxx Xxxxxxx
______________________________
Name: Xxxxx Xxxxxxx
Title: Vice President
VOLUNTEER BANK OF JACKSON, TENNESSEE
By: /s/ Xxxxx X. Xxxxx
______________________________
Name: Xxxxx X. Xxxxx
Title: Executive Vice President
XXX XXXXXX AMERICAN CAPITAL PRIME
RATE INCOME TRUST
By: /s/ Xxxxxxx X. Xxxxxxx
______________________________
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President & Director
143110.d1
11/12/96
8
114
-------------------------------------------------------------------------------
SECOND AMENDMENT TO
CREDIT AGREEMENT
Dated as of May 2, 1997
Among
Kirkland Holdings L.L.C.
and
The Borrowers Specified Herein,
the Borrowers
and
The Several Lenders Party Hereto,
the Lenders
and
BankBoston, N.A., as Administrative Agent,
the Agent
-------------------------------------------------------------------------------
115
SECOND AMENDMENT TO CREDIT AGREEMENT
This SECOND AMENDMENT TO CREDIT AGREEMENT is entered into as of May 2,
1997, by and among KIRKLAND HOLDINGS L.L.C., a Delaware limited liability
company (the "Parent"), the Borrowers specified herein (the "Borrowers"), the
Lenders party hereto (the "Lenders") and BANKBOSTON, N.A. (f/k/a The First
National Bank of Boston), as Administrative Agent (the "Agent") under the
Credit Agreement referred to below.
Recitals
The Parent, the Borrowers, the Lenders and the Agent are parties to a
Credit Agreement dated as of June 12, 1996 (as amended the "Credit Agreement").
The Parent and the Borrowers have requested that the Lenders (a) waive the
prepayment of the Term Loans required to be made under Section 2.12(c) of the
Credit Agreement from Excess Cash Flow for their fiscal year ended December 31,
1996, (b) waive the Borrower's premature payment of certain Management Fees and
(c) provide additional availability under the revolving credit facility during
the period from September 5, through December 5, 1997. The Lenders are willing
to amend the Credit Agreement to provide for such waiver and additional
revolving credit availability on the terms and conditions set forth herein. All
capitalized terms used herein and not otherwise defined shall have the meanings
set forth in the Credit Agreement.
NOW, THEREFORE, subject to the satisfaction of the conditions to
effectiveness specified in Section 5, the Parent, the Borrowers, the Lenders
and the Agent hereby agree as follows:
Section 1. Waiver of Excess Cash Flow Prepayment. The Lenders and the
Agent hereby waive the prepayment required under Section 2.12(c) of the Credit
Agreement with respect to the Excess Cash Flow for the fiscal year ending
December 31, 1996; provided, however, that this waiver shall not be deemed to
modify or amend any provisions of said Section 2.12(c) with respect to required
prepayments from Excess Cash Flow for future fiscal years.
Section 2. Waiver of Premature Payment of Management Fees. The Lenders
and the Agent hereby waive the Event of Default outstanding under the Credit
Agreement resulting from the Borrowers' payment of Management Fees to the
Management Shareholders prior to delivery to the Lenders of the Borrowers'
financial statements for their fiscal year ending December 31, 1996. The
Lenders and the Agent hereby consent to the payment to Xxxxxx Xxxxxxxx, in
connection with amendment of the Consulting Agreement, of an amount not be
exceed $8,500.
Section 3. Amendment of Schedules. Schedule 1.1A to the Credit
Agreement is hereby amended by adding at the end of said Schedule the
information contained on the Amendment to Schedule 1.1A attached hereto.
Schedule 1.1B to the Credit Agreement is hereby deleted in its entirety and the
new Schedule 1.1B attached hereto is substituted therefor.
116
Section 4. Amendment and Extension Fee. The Borrowers, jointly and
severally, agree to pay to the Agent, for the account of the Lenders in
proportion to the (a) Revolving Credit Commitments of the Revolving Credit
Lenders and (b) the principal amount of the Obligations owing to each Term Loan
Lender, an amendment and extension fee of $76,000, which shall be due and
payable and deemed earned in full by the Lenders upon execution and delivery of
this Second Amendment. The Lenders hereby agree that the amendment and
extension fee shall be deducted from Combined Interest Expense for purposes of
determining the Combined Management Fee Ratio for the Borrower's current fiscal
year.
Section 5. Effectiveness; Conditions to Effectiveness. This Second
Amendment to Credit Agreement shall become effective as of the date hereof upon
execution hereof by the Parent, the Borrowers, the Lenders and the Agent and
satisfaction of the following conditions:
(a) Officers' Certificate. The Borrowers shall have delivered to
the Agent an Officers' Certificate in the form of Exhibit A hereto.
(b) Opinion of Counsel. The Borrowers shall have delivered to
the Agent an opinion of Baker, Donelson, Bearman & Xxxxxxxx, counsel to
the Borrowers, and an opinion from Pepper, Xxxxxxxx & Xxxxxxx, counsel to
Parent and special counsel to the Borrowers, in form and substance
satisfactory to the Bank.
(c) Fee. The Borrowers shall have paid the fee referred to in
Section 4 above.
(d) Acknowledgment of Subordination. Xxxx Xxxxxxxx, Xxxxx
Xxxxx, Xxxxxx Xxxxxxxx, and Xxxxxx Xxxxxxxx shall have executed and
delivered to the Agent the Acknowledgments of Subordination in the form of
Exhibit B hereto.
Section 6. Representations and Warranties; No Default. The Borrowers
hereby confirm to the Agent and the Lenders, the representations and warranties
of the Borrowers set forth in Section 4 of the Credit Agreement (as amended
hereby) as of the date hereof, as if set forth herein in full. The Borrowers
hereby certify that, after giving effect hereto, no Default exists under the
Credit Agreement.
Section 7. Miscellaneous. The Borrowers agree to pay on demand all the
Agent's reasonable expenses in preparing, executing and delivering this Second
Amendment to Credit Agreement, and all related instruments and documents,
including, without limitation, the reasonable fees and out-of-pocket expenses
of the Agent's special counsel, Xxxxxxx, Procter & Xxxx LLP. This Second
Amendment to Credit Agreement shall be a Loan Document and shall be governed by
and construed and enforced under the laws of the State of New York.
2
117
IN WITNESS WHEREOF, the Parent, the Borrowers, the Lenders and the Agent
have caused this Second Amendment to Credit Agreement to be executed by their
duly authorized officers as of the date first set forth above.
KIRKLAND HOLDINGS L.L.C.
By: /s/ Xxxxx Xxxxxxxx
------------------------------
Name: Xxxxx Xxxxxxxx
Title: President
THE BORROWERS
XXXXXXXX'X, INC.
KIRKLAND'S OF CAROLINA, INC.
KIRKLAND'S OF CHARLOTTE, XXXXXXXX MALL, INC.
KIRKLAND'S OF TENNESSEE, INC.
K.C. CORP. INC.
KIRKLAND'S OF GREENSBORO, FOUR SEASONS MALL, INC.
KIRKLAND'S OF FAYETTEVILLE, CROSS CREEK MALL, INC.
KIRKLAND'S OF WILMINGTON, INDEPENDENCE MALL, INC.
KIRKLAND'S III, JACKSON-METRO CENTER, INC.
KIRKLAND'S OF MEMPHIS, TENNESSEE, LAURELWOOD
SHOPPING CENTER, INC.
KIRKLAND'S OF RIDGELAND, MISSISSIPPI, NORTHPARK
MALL, INC.
KIRKLAND'S OF KNOXVILLE, EAST TOWNE MALL, INC.
KIRKLAND'S OF HUNTSVILLE, MADISON SQUARE MALL, INC.
KIRKLAND'S OF VALLEY VIEW MALL, ROANOKE, VA, INC.
KIRKLAND'S OF NASHVILLE, HICKORY HOLLOW MALL, INC.
KIRKLAND'S OF BIRMINGHAM, RIVERCHASE GALLERIA, INC.
KIRKLAND'S XX XXXXXXXXXXX XXXX, XXXXXX XXXXX,
XXXXX XXXXXXXX, INC.
KIRKLAND'S OF PEACANLAND MALL, MONROE, LA. INC.
KIRKLAND'S XX XXXXX XXXXXX XX XXXX, XXXXXXX, XX,
INC.
KIRKLAND'S XX XXXXXXXX XXXXX, XXXXXXX, XX, INC.
KIRKLAND'S OF RIVERGATE MALL, NASHVILLE, TN, INC.
KIRKLAND'S OF PEACHTREE MALL, COLUMBUS, GA, INC.
KIRKLAND'S OF CUMBERLAND MALL, ATLANTA, GA, INC.
KIRKLAND'S XX XXXXXXXX XXXXX XXXX, XXXXXXXXXXX,
XX, INC.
KIRKLAND'S OF HOUSTON GALLERIA, HOUSTON, TX, INC.
KIRKLAND'S OF MALL OF MEMPHIS, MEMPHIS, TN, INC.
3
000
XXXXXXXX'X XX XXXXXXXX XXXXX XXXX, XXXXX, XX, INC.
KIRKLAND'S OF DAYTON MALL, DAYTON, OH, INC.
KIRKLAND'S OF OXMOOR CENTER, LOUISVILLE, KY, INC.
KIRKLAND'S XX XXXXX XXXXXX XXXX, XXXXXX, XX, INC.
KIRKLAND'S OF VALLEY VIEW CENTER, DALLAS, TX, INC.
KIRKLAND'S OF CHESTERFIELD TOWNE CENTER, RICHMOND, VA, INC.
KIRKLAND'S OF PARK PLAZA, LITTLE ROCK, AR, INC.
KIRKLAND'S OF MONTGOMERY MALL, MONTGOMERY, AL, INC.
KIRKLAND'S OF SOUTHLAKE MALL, ATLANTA, GA, INC.
KIRKLAND'S OF SOUTHPARK MALL, RICHMOND, VA, INC.
KIRKLAND'S OF EASTLAND MALL, EVANSVILLE, IN, INC.
KIRKLAND'S XX XXXXXXX XXXX, XXXXXXXXX, XX, INC.
KIRKLAND'S OF HICKORY RIDGE MALL, MEMPHIS, TN, INC.
KIRKLAND'S OF REGENCY SQUARE MALL, JACKSONVILLE, FL, INC.
KIRKLAND'S OF MCCAIN MALL, LITTLE ROCK, AR, INC.
KIRKLAND'S OF RIVER RIDGE MALL, LYNCHBURG, VA, INC.
KIRKLAND'S OF BEL AIR MALL, MOBILE, AL, INC.
KIRKLAND'S OF THE MALL AT XXXXXX CROSSING, TUPELO, MS, INC.
KIRKLAND'S XX XXXXXXX XXXX, XXXXX XXXXX, XX, INC.
KIRKLAND'S OF BELLEVUE CENTER, NASHVILLE, TN, INC.
KIRKLAND'S OF TRI-COUNTY MALL, CINCINNATI, OH, INC.
KIRKLAND'S OF XXX XXXX XX XXX XXXXXXX, XXXXXXXXXXXX, XX, INC.
KIRKLAND'S OF XXXXXXXX MALL, BIRMINGHAM, AL, INC.
KIRKLAND'S XX XXXXXXXX XXXX, XXX XXXXXXX, XX, INC.
XXXXXXXX'X XX XXXXXXXX XXXXX, XXXXXXXXX, X.X., INC.
KIRKLAND'S XX XXXX XXXXXXX XXXX, XXXXXXX, X.X., INC.
KIRKLAND'S OF COOL SPRINGS GALLERIA, NASHVILLE, TN, INC.
KIRKLAND'S OF KENWOOD TOWNE CENTRE, CINCINNATI, OH, INC.
KIRKLAND'S OF ST. LOUIS GALLERIA, ST. LOUIS, MO, INC.
KIRKLAND'S OF WIREGRASS COMMONS MALL, DOTHAN, AL, INC.
KIRKLAND'S OF REGENCY MALL, RICHMOND, VA, INC.
KIRKLAND'S OF FLORENCE, FLORENCE, KY, INC.
KIRKLAND'S OF ACADIANA MALL, LAFAYETTE, LA, INC.
KIRKLAND'S OF PADRE STAPLES MALL, CORPUS CHRISTI, TX, INC.
KIRKLAND'S OF XXXXXX VILLAGE, CANTON, OH, INC.
4
000
XXXXXXXX'X XX XXXX XXXX XXXX, XXXXXXX, XX, INC.
KIRKLAND'S OF CHARLESTON TOWN CENTER, CHARLESTON, W. VA, INC.
KIRKLAND'S OF CRESTWOOD PLAZA, ST. LOUIS, MO, INC.
KIRKLAND'S OF WHITE XXXXX MALL, BALTIMORE, MD, INC.
KIRKLAND'S OF XXXXXX CREEK MALL, DALLAS, TX, INC.
KIRKLAND'S OF BAYBROOK MALL, HOUSTON, TX, INC.
KIRKLAND'S OF GOVERNOR'S SQUARE MALL, TALLAHASSEE, FL, INC.
KIRKLAND'S OF XXXXXX CREEK MALL, AUSTIN, TX, INC.
KIRKLAND'S OF HIGHLAND MALL, AUSTIN, TX, INC.
KIRKLAND'S OF BATTLEFIELD MALL, SPRINGFIELD, MO, INC.
KIRKLAND'S OF PENN SQUARE MALL, OKLAHOMA CITY, OK, INC.
KIRKLAND'S XX XXX XXXX XXXX, XXXXXX XXXX, XX, INC.
KIRKLAND'S XX XXXX XX. XXXXXXX, XXXXXXXXXX, XX, INC.
KIRKLAND'S OF XXXXXX XXXXX MALL, BALTIMORE, MD, INC.
KIRKLAND'S OF OAKWOOD CENTER, NEW ORLEANS, LA, INC.
KIRKLAND'S OF XXX XXXX XX XXXXXXX XXXX, XXXXXXX XXXX, XX, INC.
KIRKLAND'S OF GLENBROOK MALL, FT. XXXXX, IN, INC.
KIRKLAND'S XX XXXXX XXXXXX XXXX, XXXXXXX, XX, INC.
KIRKLAND'S OF NORTHPARK MALL, JOPLIN, MO, INC.
KIRKLAND'S OF ORLANDO FASHION SQUARE, ORLANDO, FL, INC.
KIRKLAND'S OF XXX XXXX XX XXXXXXXXX XXXXXXX, XXXXXX, XX, INC.
KIRKLAND'S OF ST. XXXXXXX XXXXX CENTER, WALDORF, MD, INC.
KIRKLAND'S OF REGENCY MALL, FLORENCE, AL, INC.
KIRKLAND'S OF SOUTH PLAINS MALL, LUBBOCK, TX, INC.
KIRKLAND'S OF THE PARKS AT ARLINGTON, FT. WORTH, TX, INC.
KIRKLAND'S XX XXXXX XXXX XXXX, XXXXXXXXX, XX, INC.
KIRKLAND'S OF ST. CLAIR SQUARE, ST. LOUIS, MO, INC.
KIRKLAND'S OF TURTLE CREEK MALL, HATTIESBURG, MS, INC.
KIRKLAND'S OF THE WOODLANDS, HOUSTON, TX, INC.
KIRKLAND'S OF XXXXXXX TOWN CENTER, TAMPA, FL, INC.
KIRKLAND'S OF MEMORIAL CITY MALL, HOUSTON, TX, INC.
KIRKLAND'S OF UNIVERSITY MALL, TUSCALOOSA, AL, INC.
KIRKLAND'S XX XXXXX XXXX XXXX, XXXX XXXXXX, XX, INC.
5
000
XXXXXXXX'X XX XXXXXX XXXX XXXX, XXXXXX XXXX, XX, INC.
KIRKLAND'S OF TOWN EAST MALL, MESQUITE, TX, INC.
KIRKLAND'S XX XXXXXXXX XXXX XXXX, XXXXXXX, XX, INC.
KIRKLAND'S XX XXXXXXXX XXXXXX XXXX, XXXXXXX, X.X., INC.
KIRKLAND'S XX XXX XXXXXX XXXX, XXXX XXXXX, X.X., INC.
KIRKLAND'S OF XXX VALLEY MALL, CHICAGO, IL, INC.
KIRKLAND'S OF HAWTHORNE MALL, CHICAGO, IL, INC.
KIRKLAND'S OF STRATFORD SQUARE, CHICAGO, IL, INC.
KIRKLAND'S OF ORLAND SQUARE, CHICAGO, IL, INC.
KIRKLAND'S OF COASTLAND MALL, NAPLES, FL, INC.
KIRKLAND'S OF EDGEWATER MALL, BILOXI, MS, INC.
KIRKLAND'S XX XXXX XXXXXX XXXXX, XXXXXX XXXX, XX, INC.
KIRKLAND'S OF CASTLETON SQUARE, INDIANAPOLIS, IN, INC.
KIRKLAND'S OF XXXXXXX MALL, PENSACOLA, FL, INC.
KIRKLAND'S OF UNIVERSITY PARK, SOUTH BEND, IN, INC.
KIRKLAND'S OF WESTGATE MALL, AMARILLO, TX, INC.
KIRKLAND'S OF WESTGATE MALL, SPARTANBURG, SC, INC.
KIRKLAND'S OF MERIDIAN MALL, LANSING, MI, INC.
KIRKLAND'S OF COTTONWOOD MALL, ALBUQUERQUE, NM, INC.
KIRKLAND'S OF UNIVERSITY MALL, TAMPA, FL, INC.
KIRKLAND'S OF XXXXXXXXX XXXXXXXX XXXX, XXXXXXXXXXXX, XX, INC.
KIRKLAND'S OF INDIAN RIVER MALL, VERO BEACH, FL, INC.
KIRKLAND'S OF XXXXXX SQUARE, ST. PETERSBURG, FL, INC.
KIRKLAND'S OF NORTHGATE MALL, CINCINNATI, OH, INC.
KIRKLAND'S OF WEST OAKS MALL, ORLANDO, FL, INC.
KIRKLAND'S OF PARK CITY CENTER, LANCASTER, PA, INC.
KIRKLAND'S OF PERIMETER MALL, ATLANTA, GA, INC.
KIRKLAND'S OF WOLFCHASE GALLERIA, MEMPHIS, TN, INC.
KIRKLAND'S OF NORTHPARK MALL, DAVENPORT, IA, INC.
KIRKLAND'S OF LINDALE MALL, CEDAR RAPIDS, IA, INC.
KIRKLAND'S OF XXXXXXXX MALL, ALBUQUERQUE, NM, INC.
KIRKLAND'S OF WILLOWBROOK MALL, HOUSTON, TX, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President/Secretary
6
121
BANKBOSTON, N.A.,
as Administrative Agent and as a Lender
By: /s/ Xxxxxx X. Xxxxxxxx, Xx.
-----------------------------------
Name: Xxxxxx X. Xxxxxxxx, Xx.
Title: Director
XXXXXX COMMERCIAL PAPER INC.
By: /s/ Xxxxxxx Xxxxxxx
-----------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Authorized Signatory
HIBERNIA NATIONAL BANK
By: /s/ Xxxx X. Xxxxxxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxxxxxx
Title: Vice President
FIRST AMERICAN NATIONAL BANK
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Assistant Vice President
MITSUI LEASING (U.S.A.) INC.
By: /s/ R. Xxxxx Xxxxxx
-----------------------------------
Name: R. Xxxxx Xxxxxx
Title: Senior Vice President
UNION PLANTERS BANK OF JACKSON, TENNESSEE
By: /s/ Xxxxx Xxxxxxx, VP
-----------------------------------
Name: Xxxxx Xxxxxxx
Title: Vice President
7
000
XXXXXXXXX XXXX XX XXXXXXX, XXXXXXXXX
By: /s/ Xxxxx X. Xxxxx
--------------------------------------
Name: Xxxxx X. Xxxxx
Title: Executive Vice President
CRESCENT/MACH I PARTNERS, L.P.
By: TCW Asset Management Company
Its Investment Manager
By: Xxxxxx Xxxxxxxx
--------------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Vice President
INDOSUEZ CAPITAL FUNDING II, LTD.
By Indosuez Capital as Portfolio Advisor
By: /s/ Xxxxxxxxx Xxxxxxxxx
--------------------------------------
Name: XXXXXXXXX XXXXXXXXX
Title: VICE PRESIDENT
XXX XXXXXX AMERICAN CAPITAL PRIME RATE INCOME
TRUST
By: [Illegible Signature]
--------------------------------------
Name:
Title:
The ING CAPITAL Senior Secured High
Income Fund, L.P.
By: ING CAPITAL ADVISORS, INC. AS INVESTMENT ADVISOR
By: /s/ Xxxxxxx X. XxXxxxx
--------------------------------------
Name: XXXXXXX X. XXXXXXX
Title: MANAGING DIRECTOR
8
123
Amendment of Schedule 1.1A
1. Additional Borrowers. The following additional Borrowers have been
added to the Credit Agreement:
Kirkland's of Xxxxxxxxx Xxxxxxxx Xxxx, Xxxxxxxxxxxx, XX, Inc.
Kirkland's of Indian River Mall, Vero Beach, FL, Inc.
Kirkland's of Xxxxxx Square, St. Petersburg, FL, Inc.
Kirkland's of Northgate Mall, Cincinnati, OH, Inc.
Kirkland's of Xxxx Xxxx Xxxx, Xxxxxxx, XX, Inc.
Kirkland's of Park City Center, Lancaster, PA, Inc.
Kirkland's of Perimeter Mall, Atlanta, GA, Inc.
Kirkland's of Wolfchase Galleria, Memphis, TN, Inc.
Kirkland's of Northpark Mall, Davenport, IA, Inc.
Kirkland's of Lindale Mall, Cedar Rapids, IA, Inc.
Kirkland's of Xxxxxxxx Mall, Albuquerque, NM, Inc.
Kirkland's of Willowbrook Mall, Houston TX, Inc.
2. Additional Subsidiaries. The following Persons are additional
Subsidiaries of the Parent, which have been formed in anticipation of the
opening of new stores but which have not yet commenced any operations. Section
4.14 of the Credit Agreement shall be modified to include reference to these
Persons as additional Subsidiaries of the Parent:
Kirkland's of Honey Creek Mall, Terre Haute, IN, Inc.
Kirkland's of Southpark Mall, Moline, IL, Inc.
Kirkland's of Valley West Mall, Des Moines, IA, Inc.
Kirkland's of Greenbrier Mall, Chesapeake, VA, Inc.
Kirkland's of Cielo Vista Mall, El Paso, TX, Inc.
Kirkland's of Tuttle Crossing, Columbus, OH, Inc.
Kirkland's of Leigh Mall, Columbus, MS, Inc.
Kirkland's of North Shore Square, Slidell, LA, Inc.
Kirkland's of Post Oak Mall, College Station, TX, Inc.
Kirkland's of Bonita Lakes Mall, Meridian, MS, Inc.
Kirkland's of Huntington Mall, Huntington, WV, Inc.
Kirkland's of Mall of Louisiana, Baton Rouge, LA, Inc.
Kirkland's of Mill Creek Mall, Erie, PA, Inc.
Kirkland's of Volusia Mall, Daytona Beach, FL, Inc.
Kirkland's of Gateway Mall, Lincoln, NB, Inc.
9
124
-----------------------------------------------------------------------------
THIRD AMENDMENT TO
CREDIT AGREEMENT
Dated as of January 5, 1998
Among
Kirkland Holdings L.L.C.
and
The Borrowers Specified Herein,
the Borrowers
and
The Several Lenders Party Hereto,
the Lenders
and
BankBoston, N.A., as Administrative Agent,
the Agent
-----------------------------------------------------------------------------
125
THIRD AMENDMENT TO CREDIT AGREEMENT
This THIRD AMENDMENT TO CREDIT AGREEMENT is entered into as of January 5,
1998, by and among KIRKLAND HOLDINGS L.L.C., a Delaware limited liability
company (the "Parent"), the Borrowers specified herein (the "Borrowers"), the
Lenders party hereto (the "Lenders") and BANKBOSTON, N.A. (f/k/a The First
National Bank of Boston), as Administrative Agent (the "Agent") under the Credit
Agreement referred to below.
Recitals
The Parent, the Borrowers, the Lenders and the Agent are parties to a
Credit Agreement dated as of June 12, 1996 (as amended, the "Credit Agreement").
All capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the Credit Agreement. The Parent and the Borrowers have
requested that the Lenders (a) waive the restrictions under Sections 7.7, 7.10
and 7.11 of the Credit Agreement to permit the redemption by the Borrowers from
Bruce Moore pursuant to and in accordance with the Redemption Agreement dated
December __, 1997 by and among Bruce Moore, Kirkland's, Inc. and the other
corporations party thereto (the "Moore Redemption Agreement") of all of his
stock of the Borrowers and as set forth on Schedule 1 hereto (the "Redeemed
Moore Stock") representing not more than seven million one hundred forty-seven
thousand five hundred sixty-six dollars ($7,147,566) aggregate value (the "Moore
Redemption"), and (b) provide an additional seven million dollars ($7,000,000)
under the Tranche B Term Loan facility, the proceeds of which are to be used for
the Moore Redemption. The Lenders are willing to amend the Credit Agreement to
provide for such waiver and additional Tranche B Term Loans on the terms and
conditions set forth herein.
NOW, THEREFORE, subject to the satisfaction of the conditions to
effectiveness specified in Section 4, the Parent, the Borrowers, the Lenders and
the Agent hereby agree as follows:
Section 1. Waiver. The Lenders and the Agent hereby waive (a) the
limitation on Restricted Payments under Section 7.7 of the Credit Agreement, (b)
the limitation on optional payments and modifications of debt instruments and
preferred stock, etc. under Section 7.10 of the Credit Agreement and (c) the
limitation on transactions with affiliates under Section 7.11 of the Credit
Agreement to the extent required to permit the Moore Redemption and the payment
to Bruce Moore, in connection with the Moore Redemption and pursuant to and in
accordance with the Moore Redemption Agreement, of an amount not to exceed seven
million one hundred forty-seven thousand five hundred sixty-six dollars
($7,147,566). Additionally, the Lenders and the Agent hereby release Bruce Moore
as a Pledgor under the Management Pledge Agreement and the New Management Pledge
Agreement and the Agent will return the certificates representing the Redeemed
Moore Stock to the Borrowers. The Parent and the Borrowers hereby acknowledge
that pursuant to Section 7.6 of the Credit Agreement, the Parent, the Borrowers
and their respective Subsidiaries may not, directly or indirectly, issue,
126
convey, sell, lease, assign, transfer or otherwise dispose of the Redeemed Moore
Stock redeemed pursuant to the Moore Redemption.
Section 2. Amendment of Schedules. Schedule 1.1A to the Credit Agreement is
hereby amended by adding at the end of said Schedule the information contained
on the Amendment to Schedule 1.1A attached hereto. Schedules 1.1B and 1.1E to
the Credit Agreement are hereby deleted in their entirety and the new Schedules
1.1B and 1.1E attached hereto are substituted therefor.
Section 3. Amendment of Capital Expenditures Covenant. Section 7.8 of the
Credit Agreement is hereby amended by deleting the number "$5,000,000" appearing
in the second line of the chart for Fiscal Year 1997 and substituting therefor
the number "$5,800,000".
Section 4. Effectiveness: Conditions to Effectiveness. This Third Amendment
to Credit Agreement shall become effective as of January 7, 1998 upon execution
hereof by the Parent, the Borrowers, the Lenders and the Agent and satisfaction
of the following conditions:
(a) Officers' Certificate. The Borrowers shall have delivered to
the Agent an Officers' Certificate in the form of Exhibit A hereto.
(b) Opinion of Counsel. The Borrowers shall have delivered to the
Agent an opinion of Baker, Donelson, Bearman & Caldwell, counsel to the
Borrowers, and an opinion from Pepper, Hamilton & Scheetz, counsel to
Parent and special counsel to the Borrowers, in form and substance
satisfactory to the Agent.
(c) Financials. The Borrowers shall have delivered to the Agent,
and the Lenders shall have reviewed and approved, the following financial
information, in form and substance satisfactory to the Lenders:
(i) Unaudited financial information required under Sections
6.1(c) and 6.2(d) of the Credit Agreement for November 1997.
(ii) Unaudited, internally prepared, pro forma financial
information for fiscal year 1997 consisting of the combined balance
sheet and income statement of the Borrowers and their Subsidiaries.
Such pro forma financial information to contain actual results through
December 23, 1997 and projected results from December 24, 1997 through
December 31, 1997.
(iii) Analysis for fiscal year 1997, pro forma for actual
results through December 23, 1997 and projected results from December
24, 1997 through December 31, 1997, showing each Loan Party has
observed or performed all of its covenants and other agreements, and
satisfied every condition, contained in the Credit Agreement and the
other Loan
2
127
Documents to which it is a party to be observed, performed or
satisfied by it, including showing all calculations in determining
compliance with each covenant.
(d) Consent of Subordinated Debt Holders. The Borrowers shall have
delivered to the Agent evidence of the consent of the Subordinated Debt
Holders to this Third Amendment to the Credit Agreement, including the
$7,000,000 increase of the Trance B Term Loan in form and substance
satisfactory to the Agent.
(e) Moore Redemption. All conditions precedent to the consummation of
the Moore Redemption, except for payment of the redemption price, shall
have been satisfied without waiver.
(f) Moore Redemption Agreement. The Borrowers shall have delivered to
the Agent a certified copy of the Moore Redemption Agreement evidencing the
Moore Redemption as duly executed by all the parties thereto, which Moore
Redemption Agreement shall be on terms and conditions acceptable to the
Agent.
(g) Amendment to Management Pledge Agreement and New Management Pledge
Agreement. The Borrowers shall have delivered to the Agent an amendment to
the Management Pledge Agreement and the New Management Pledge Agreement,
dated as of January 5, 1998, in the form of Exhibit B hereto.
Section 5. Representations and Warranties; No Default. The Borrowers hereby
confirm to the Agent and the Lenders, the representations and warranties of the
Borrowers set forth in Section 4 of the Credit Agreement (as amended) as of the
date hereof, as if set forth herein in full. The Borrowers hereby certify that,
after giving effect hereto, no Default exists under the Credit Agreement.
Section 6. Miscellaneous. The Borrowers agree to pay on demand all the
Agent's reasonable expenses in preparing, executing and delivering this Third
Amendment to Credit Agreement, and all related instruments and documents,
including, without limitation, the reasonable fees and out-of-pocket expenses of
the Agent's special counsel, Goodwin, Procter & Hoar LLP. This Third Amendment
to Credit Agreement shall be a Loan Document and shall be governed by and
construed and enforced under the laws of the State of New York.
3
128
IN WITNESS WHEREOF, the Parent, the Borrowers, the Lenders and Agent have
caused this Third Amendment to Credit Agreement to be executed by their duly
authorized officers as of the date first set forth above.
KIRKLAND HOLDINGS L.L.C.
By: /s/ David Mussafer
---------------------------
Name: David Mussafer
Title: President
THE BORROWERS
-------------
KIRKLAND'S, INC.
KIRKLAND'S OF CAROLINA, INC.
KIRKLAND'S OF CHARLOTTE, EASTLAND MALL, INC.
KIRKLAND'S OF TENNESSEE, INC.
K.C. CORP, INC.
KIRKLAND'S OF GREENSBORO, FOUR SEASONS MALL, INC.
KIRKLAND'S OF FAYETTEVILLE, CROSS CREEK MALL, INC.
KIRKLAND'S OF WILMINGTON, INDEPENDENCE MALL, INC.
KIRKLAND'S III, JACKSON-METRO CENTER, INC.
KIRKLAND'S OF MEMPHIS, TENNESSEE, LAURELWOOD
SHOPPING CENTER, INC.
KIRKLAND'S OF RIDGELAND, MISSISSIPPI, NORTHPARK
MALL, INC.
KIRKLAND'S OF KNOXVILLE, EAST TOWNE MALL, INC.
KIRKLAND'S OF HUNTSVILLE, MADISON SQUARE MALL, INC.
KIRKLAND'S OF VALLEY VIEW MALL, ROANOKE, VA, INC.
KIRKLAND'S OF NASHVILLE, HICKORY HOLLOW MALL, INC.
KIRKLAND'S OF BIRMINGHAM, RIVERCHASE GALLERIA, INC.
KIRKLAND'S OF BRIARCLIFFE MALL, MYRTLE BEACH,
SOUTH CAROLINA, INC.
KIRKLAND'S OF PEACANLAND MALL, MONROE, LA, INC.
KIRKLAND'S OF TOWNE CENTER AT COBB, ATLANTA, GA, INC.
KIRKLAND'S OF GWINNETT PLACE, ATLANTA, GA, INC.
KIRKLAND'S OF RIVERGATE MALL, NASHVILLE, TN, INC.
KIRKLAND'S OF PEACHTREE MALL, COLUMBUS, GA, INC.
KIRKLAND'S OF CUMBERLAND MALL, ATLANTA, GA, INC.
KIRKLAND'S OF HAMILTON PLACE MALL, CHATTANOOGA,
TN, INC.
KIRKLAND'S OF HOUSTON GALLERIA, HOUSTON, TX, INC.
KIRKLAND'S OF MALL OF MEMPHIS, MEMPHIS, TN, INC.
4
129
KIRKLAND'S OF WOODLAND HILLS MALL, TULSA, OK, INC.
KIRKLAND'S OF DAYTON MALL, DAYTON, OH, INC.
KIRKLAND'S OF OXMOOR CENTER, LOUISVILLE, KY, INC.
KIRKLAND'S OF SOUTH SQUARE MALL, DURHAM, NC, INC.
KIRKLAND'S OF VALLEY VIEW CENTER, DALLAS, TX, INC.
KIRKLAND'S OF CHESTERFIELD TOWNE CENTER,
RICHMOND, VA, INC.
KIRKLAND'S OF PARK PLAZA, LITTLE ROCK, AR, INC.
KIRKLAND'S OF MONTGOMERY MALL, MONTGOMERY, AL, INC.
KIRKLAND'S OF SOUTHLAKE MALL, ATLANTA, GA, INC.
KIRKLAND'S OF SOUTHPARK MALL, RICHMOND, VA, INC.
KIRKLAND'S OF EASTLAND MALL, EVANSVILLE, IN, INC.
KIRKLAND'S OF FAYETTE MALL, LEXINGTON, KY, INC.
KIRKLAND'S OF HICKORY RIDGE MALL, MEMPHIS, TN, INC.
KIRKLAND'S OF REGENCY SQUARE MALL, JACKSONVILLE,
FL, INC.
KIRKLAND'S OF MCCAIN MALL, LITTLE ROCK, AR, INC.
KIRKLAND'S OF RIVER RIDGE MALL, LYNCHBURG, VA, INC.
KIRKLAND'S OF BEL AIR MALL, MOBILE, AL, INC.
KIRKLAND'S OF THE MALL AT BARNES CROSSING, TUPELO,
MS, INC.
KIRKLAND'S OF CORTANA MALL, BATON ROUGE, LA, INC.
KIRKLAND'S OF BELLEVUE CENTER, NASHVILLE, IN, INC.
KIRKLAND'S OF TRI-COUNTY MALL, CINCINNATI, OH, INC.
KIRKLAND'S OF THE MALL OF THE ANENUES,
JACKSONVILLE, FL, INC.
KIRKLAND'S OF EASTWOOD MALL, BIRMINGHAM, AL, INC.
KIRKLAND'S OF LAKESIDE MALL, NEW ORLEANS, LA, INC.
KIRKLAND'S OF CAROLINA PLACE, CHARLOTTE, N.C., INC.
KIRKLAND'S OF CARY VILLAGE MALL, RALEIGH, N.C., INC.
KIRKLAND'S OF COOL SPRINGS GALLERIA, NASHVILLE, TN,
INC.
KIRKLAND'S OF KENWOOD TOWNE CENTRE, CINCINNATI,
OH, INC.
KIRKLAND'S OF ST. LOUIS GALLERIA, ST. LOUIS, MO, INC.
KIRKLAND'S OF WIREGRASS COMMONS MALL, DOTHAN, AL,
INC.
KIRKLAND'S OF REGENCY MALL, RICHMOND, VA, INC.
KIRKLAND'S OF FLORENCE, FLORENCE, KY, INC.
KIRKLAND'S OF ACADIANA MALL, LAFAYETTE, LA, INC.
KIRKLAND'S OF PADRE STAPLES MALL, CORPUS CHRISTI, TX,
INC.
KIRKLAND'S OF BELDEN VILLAGE, CANTON, OH, INC.
5
130
KIRKLAND'S OF WEST OAKS MALL, HOUSTON, TX, INC.
KIRKLAND'S OF CHARLESTON TOWN CENTER, CHARLESTON,
W. VA, INC.
KIRKLAND'S OF CRESTWOOD PLAZA, ST. LOUIS, MO, INC.
KIRKLAND'S OF WHITE MARSH MALL, BALTIMORE, MD, INC.
KIRKLAND'S OF COLLIN CREEK MALL, DALLAS, TX, INC.
KIRKLAND'S OF BAYBROOK MALL, HOUSTON, TX, INC.
KIRKLAND'S OF GOVERNOR'S SQUARE MALL, TALLAHASSEE,
FL, INC.
KIRKLAND'S OF BARTON CREEK MALL, AUSTIN, TX, INC.
KIRKLAND'S OF HIGHLAND MALL, AUSTIN, TX, INC.
KIRKLAND'S OF BATTLEFIELD MALL, SPRINGFIELD, MO, INC.
KIRKLAND'S OF PENN SQUARE MALL, OKLAHOMA CITY, OK,
INC.
KIRKLAND'S OF OAK PARK MALL, KANSAS CITY, KS, INC.
KIRKLAND'S OF MALL ST. VINCENT, SHREVEPORT, LA, INC.
KIRKLAND'S OF OWINGS MILLS MALL, BALTIMORE, MD, INC.
KIRKLAND'S OF OAKWOOD CENTER, NEW ORLEANS, LA,
INC.
KIRKLAND'S OF THE MALL AT JOHNSON CITY, JOHNSON
CITY, TN, INC.
KIRKLAND'S OF GLENBROOK MALL, FT. WAYNE, IN, INC.
KIRKLAND'S OF NORTH POINTE MALL, ATLANTA, GA, INC.
KIRKLAND'S OF NORTHPARK MALL, JOPLIN, MO, INC.
KIRKLAND'S OF ORLANDO FASHION SQUARE, ORLANDO, FL,
INC.
KIRKLAND'S OF THE MALL AT FAIRFIELD COMMONS,
DAYTON, OH, INC.
KIRKLAND'S OF ST. CHARLES TOWNE CENTER, WALFDORF,
MD, INC.
KIRKLAND'S OF REGENCY MALL, FLORENCE, AL, INC.
KIRKLAND'S OF SOUTH PLAINS MALL, LUBOCK, TX, INC.
KIRKLAND'S OF THE PARKS AT ARLINGTON, FT. WORTH, TX,
INC.
KIRKLAND'S OF PARMA TOWN MALL, CLEVELAND, OH, INC.
KIRKLAND'S OF ST. CLAIR SQUARE, ST. LOUIS, MO, INC.
KIRKLAND'S OF TURTLE CREEK MALL, HATTIESBURG, MS,
INC.
KIRKLAND'S OF THE WOODLANDS, HOUSTON, TX, INC.
KIRKLAND'S OF BRANDON TOWN CENTER, TAMPA, FL, INC.
KIRKLAND'S OF MEMORIAL CITY MALL, HOUSTON, TX, INC.
KIRKLAND'S OF UNIVERSITY MALL, TUSCALOOSA, AL, INC.
KIRKLAND'S OF SANTA ROSA MALL, FORT WALTON, FL, INC.
6
131
KIRKLAND'S OF PANAMA CITY MALL, PANAMA CITY, FL, INC.
KIRKLAND'S OF TOWN EAST MALL, MESQUITE, TX, INC.
KIRKLAND'S OF KENTUCKY OAKS MALL, PADUCAH, KY, INC.
KIRKLAND'S OF CRABTREE VALLEY MALL, RALEIGH, N.C., INC.
KIRKLAND'S OF OAK HOLLOW MALL, HIGH POINT, N.C., INC.
KIRKLAND'S OF FOX VALLEY MALL, CHICAGO, IL, INC.
KIRKLAND'S OF HAWTHORNE MALL, CHICAGO, IL, INC.
KIRKLAND'S OF STRATFORD SQUARE, CHICAGO, IL, INC.
KIRKLAND'S OF ORLAND SQUARE, CHICAGO, IL, INC.
KIRKLAND'S OF COASTLAND MALL, NAPLES, FL, INC.
KIRKLAND'S OF EDGEWATER MALL, BILOXI, MS, INC.
KIRKLAND'S OF TOWN CENTER PLAZA, KANSAS CITY, KS, INC.
KIRKLAND'S OF CASTLETON SQUARE, INDIANAPOLIS, IN., INC.
KIRKLAND'S OF CORDOVA MALL, PENSACOLA, FL, INC.
KIRKLAND'S OF UNIVERSITY PARK, SOUTH BEND, IN, INC.
KIRKLAND'S OF WESTGATE MALL, AMARILLO, TX, INC.
KIRKLAND'S OF WESTGATE MALL, SPARTANBURG, SC, INC.
KIRKLAND'S OF MERIDIAN MALL, LANSING, MI, INC.
KIRKLAND'S OF COTTONWOOD MALL, ALBUQUERQUE, NM, INC.
KIRKLAND'S OF UNIVERSITY MALL, TAMPA, FL, INC.
KIRKLAND'S OF NORTHWEST ARKANSAS MALL, FAYETTEVILLE, AR, INC.
KIRKLAND'S OF INDIAN RIVER MALL, VERO BEACH, FL, INC.
KIRKLAND'S OF TYRONE SQUARE, ST. PETERSBURG, FL, INC.
KIRKLAND'S OF NORTHGATE MALL, CINCINNATI, OH, INC.
KIRKLAND'S OF WEST OAKS MALL, ORLANDO, FL, INC.
KIRKLAND'S OF PARK CITY CENTER, LANCASTER, PA, INC.
KIRKLAND'S OF PERIMETER MALL, ATLANTA, GA, INC.
KIRKLAND'S OF WOLFCHASE GALLERIA, MEMPHIS, TN, INC.
KIRKLAND'S OF NORTHPARK MALL, DAVENPORT, IA, INC.
KIRKLAND'S OF LINDALE MALL, CEDAR RAPIDS, IA, INC.
KIRKLAND'S OF CORONADO MALL, ALBUQUERQUE, NM, INC.
KIRKLAND'S OF WILLOWBROOK MALL, HOUSTON, TX, INC.
KIRKLAND'S OF HONEY CREEK MALL, TERRE HAUTE, IN, INC.
KIRKLAND'S OF SOUTHPARK MALL, MOLINE, IL, INC.
KIRKLAND'S OF VALLEY WEST MALL, DES MOINES, IA, INC.
KIRKLAND'S OF GREENBRIER MALL, CHESAPEAKE, VA, INC.
7
132
KIRKLAND'S OF CIELO VISTA MALL, EL PASO, TX, INC.
KIRKLAND'S OF TUTTLE CROSSING, COLUMBUS, OH, INC.
KIRKLAND'S OF LEIGH MALL, COLUMBUS, MS, INC.
KIRKLAND'S OF NORTH SHORE SQUARE, SLIDELL, LA, INC.
KIRKLAND'S OF POST OAK MALL, COLLEGE STATION, TX, INC.
KIRKLAND'S OF BONITA LAKES MALL, MERIDIAN, MS, INC.
KIRKLAND'S OF HUNTINGTON MALL, HUNTINGTON, WV, INC.
KIRKLAND'S OF MALL OF LOUISIANA, BATON ROUGE, LA, INC.
KIRKLAND'S OF MILL CREEK MALL, ERIE, PA, INC.
KIRKLAND'S OF VOLUSIA MALL, DAYTONA BEACH, FL, INC.
KIRKLAND'S OF GATEWAY MALL, LINCOLN, NE, INC.
KIRKLAND'S OF GRAPEVINE MILLS, GRAPEVINE, TX, INC.
By: /s/ R. E. Alderson
---------------------------------------
Name: R. E. Alderson
Title: VP/Sec
BANKBOSTON, N.A.,
as Administrative Agent and as a Lender
By: /s/ Christopher S. Allen
---------------------------------------
Name: Christopher S. Allen
Title: Director
LEHMAN COMMERCIAL PAPER INC.
By: /s/ Michele Swanson
---------------------------------------
Name: Michele Swanson
Title: Authorized Signatory
HIBERNIA NATIONAL BANK
By: /s/ Troy J. Villafarra
---------------------------------------
Name: Troy J. Villafarra
Title: Vice President
8
133
FIRST AMERICAN NATIONAL BANK
By: /s/ John W. Teasley
---------------------------------------
Name: John W. Teasley
Title: Assistant Vice President
MITSUI LEASING CAPITAL CORPORATION
By: /s/ R. Wayne Hutton
---------------------------------------
Name: R. Wayne Hutton
Title: Senior Vice President
UNION PLANTERS BANK OF JACKSON, TENNESSEE
By: /s/ Frank Hudacek
---------------------------------------
Name: Frank Hudacek
Title: Vice President
VOLUNTEER BANK OF JACKSON, TENNESSEE
By:
---------------------------------------
Name:
Title:
CRESCENT/MACH I PARTNERS, L.P.
By: TCW Asset Management Company
Its Investment Manager
By:
---------------------------------------
Name:
Title:
INDOSUEZ CAPITAL FUNDING II, LTD.
By:
---------------------------------------
Name:
Title:
9
134
HIBERNIA NATIONAL BANK
By:
------------------------------
Name:
Title:
FIRST AMERICAN NATIONAL BANK
By:
------------------------------
Name:
Title:
MITSUI LEASING CAPITAL CORPORATION
By:
------------------------------
Name:
Title:
UNION PLANTERS BANK OF JACKSON, TENNESSEE
By:
------------------------------
Name:
Title:
VOLUNTEER BANK OF JACKSON, TENNESSEE
By: /s/ James N. Craft
------------------------------
Name: James N. Craft
Title: Executive Vice President
CRESCENT/MACH I PARTNERS, L.P.
By: TCW Asset Management Company
Its Investment Manager
By: /s/ Justin L. Driscoll
------------------------------
Name: Justin L. Driscoll
Title: Senior Vice President
10
135
FIRST AMERICAN NATIONAL BANK
By: ______________________________
Name:
Title:
MITSUI LEASING CAPITAL CORPORATION
By: ______________________________
Name:
Title:
UNION PLANTERS BANK OF JACKSON, TENNESSEE
By: ______________________________
Name:
Title:
VOLUNTEER BANK OF JACKSON, TENNESSEE
By: ______________________________
Name:
Title:
CRESCENT/MACH I PARTNERS, L.P.
By: TCW Asset Management Company
Its Investment Manager
By:______________________________
Name:
Title:
INDOSUEZ CAPITAL FUNDING II, LTD.
By: /s/ Francoise Berthelot
______________________________
Name: Francoise Berthelot
Title: Vice President
11
136
VAN KAMPEN AMERICAN CAPITAL PRIME RATE INCOME TRUST
By: /s/ Jeffrey W. Maillet
______________________________
Name: Jeffrey W. Maillet
Title: Senior Vice President & Director
12
137
SCHEDULE 1
SHARES OF STOCK
------------------------------------------------------
Corporation Shares Class of Stock Certificate
------------------------------------------------------
Group A and 7,250 Common 4
B Companies (Voting)
------------------------------------------------------
650 Common 1
(Non-Voting)
---------------------------------------
7,900 Class B 3
Preferred
---------------------------------------
2,878 Class C 3
Preferred
------------------------------------------------------
Group C 7,900 Common 1
Companies (Non-Voting)
------------------------------------------------------
3,000 Class B 3
Preferred
(Voting)
---------------------------------------
4,900 Class B 1
Preferred
(Non-Voting)
------------------------------------------------------
Group D 7,900 Common 4
Companies (Voting)
---------------------------------------
7,900 Class B 3
Preferred
------------------------------------------------------
Group E 79 Common 4
Companies
------------------------------------------------------
The listing of Group A, B, C, D, and E Companies begins on the next page
(Schedule 1-2).
Schedule 1-1
138
A
Kirkland's, Inc.
Kirkland's of Pecanland Mall, Monroe, LA, Inc.
Kirkland's of Town Center at Cobb, Atlanta, GA, Inc.
Kirkland's of Gwinnett Place, Atlanta, GA, Inc.
Kirkland's of Peachtree Mall, Columbus, GA, Inc.
Kirkland's of Cumberland Mall, Atlanta, GA, Inc.
Kirkland's of Hamilton Place Mall, Chattanooga, TN, Inc.
Kirkland's of Houston Galleria, Houston, TX, Inc.
Kirkland's of Mall of Memphis, Memphis, TN, Inc.
Kirkland's of Woodland Hills Mall, Tulsa, OK, Inc.
Kirkland's of Dayton Mall, Dayton, OH, Inc.
Kirkland's of Oxmoor Center, Louisville, KY, Inc.
Kirkland's of South Square Mall, Durham, NC, Inc.
Kirkland's of Valley View Center, Dallas, TX, Inc.
Kirkland's of Chesterfield Towne Center, Richmond, VA, Inc.
Kirkland's of Park Plaza Mall, Little Rock, AR, Inc.
Kirkland's of Montgomery Mall, Montgomery, AL, Inc.
Kirkland's of Southlake Mall, Atlanta, GA, Inc.
Kirkland's of Southpark Mall, Richmond, VA, Inc.
Kirkland's of Eastland Mall, Evansville, IN, Inc.
Kirkland's of Fayette Mall, Lexington, KY, Inc.
Kirkland's of Hickory Ridge Mall, Memphis, TN, Inc.
Kirkland's of Regency Square Mall, Jacksonville, FL, Inc.
Kirkland's of McCain Mall, Little Rock, AR, Inc.
Kirkland's of River Ridge Mall, Lynchburg, VA, Inc.
Kirkland's of Bel Air Mall, Mobile, AL, Inc.
Kirkland's of The Mall at Barnes Crossing, Tupelo, MS, Inc.
Kirkland's of Cortana Mall, Baton Rouge, LA, Inc.
Kirkland's of Bellevue Center, Nashville, TN, Inc.
Kirkland's of Tri-County Mall, Cincinnati, OH, Inc.
Kirkland's of The Mall of the Avenues, Jacksonville, FL, Inc.
Kirkland's of Eastwood Mall, Birmingham, AL, Inc.
Kirkland's of Lakeside Mall, New Orleans, LA, Inc.
Kirkland's of Carolina Place, Charlotte, N.C., Inc.
Kirkland's of Cary Village Mall, Raleigh, N.C., Inc.
Kirkland's of Cool Springs Galleria, Nashville, TN, Inc.
Kirkland's of Kenwood Towne Centre, Cincinnati, OH, Inc.
Kirkland's of St. Louis Galleria, St. Louis, MO, Inc.
Kirkland's of Wiregrass Commons Mall, Dothan, AL, Inc.
Kirkland's of Regency Mall, Richmond, VA, Inc.
Kirkland's of Florence Mall, Florence, KY, Inc.
Kirkland's of Acadiana Mall, Lafayette, LA, Inc.
Kirkland's of Padre Staples Mall, Corpus Christi, TX, Inc.
Kirkland's of Belden Village, Canton, OH, Inc.
Kirkland's of West Oaks Mall, Houston, TX, Inc.
Kirkland's of Charleston Town Center, Charleston, W. VA. Inc.
Kirkland's of Crestwood Plaza, St. Louis, MO, Inc.
Kirkland's of White Marsh Mall, Baltimore, MD, Inc.
Kirkland's of Collin Creek Mall, Dallas, TX, Inc.
Schedule 1-2
139
Kirkland's of Baybrook Mall, Houston, TX, Inc.
Kirkland's of Governor's Square Mall, Tallahassee, FL, Inc.
Kirkland's of Barton Creek Mall, Austin, TX, Inc.
Kirkland's of Highland Mall, Austin, TX, Inc.
Kirkland's of Battlefield Mall, Springfield, MO, Inc.
Kirkland's of Penn Square Mall, Oklahoma City, OK, Inc.
Kirkland's of Oak Park Mall, Kansas City, KS, Inc.
Kirkland's of Mall St. Vincent, Shreveport, LA, Inc.
Kirkland's of Owings Mills Mall, Baltimore, MD, Inc.
Kirkland's of Oakwood Center, New Orleans, LA, Inc.
Kirkland's of The Mall at Johnson City, Johnson City, TN, Inc.
Kirkland's of Glenbrook Mall, Ft. Wayne, IN, Inc.
Kirkland's of North Pointe Mall, Atlanta, GA, Inc.
Kirkland's of Northpark Mall, Joplin, MO, Inc.
Kirkland's of Orlando Fashion Square, Orlando, FL, Inc.
Kirkland's of The Mall at Fairfield Commons, Dayton, OH, Inc.
Kirkland's of St. Charles Towne Center, Waldorf, MD, Inc.
Kirkland's of Regency Mall, Florence, AL, Inc.
Kirkland's of South Plains Mall, Lubbock, TX, Inc.
Kirkland's of The Parks at Arlington, Ft. Worth, TX, Inc.
Kirkland's of Parma Town Mall, Cleveland, OH, Inc.
Kirkland's of St. Clair Square, St. Louis, MO, Inc.
Kirkland's of Turtle Creek Mall, Hattiesburg, MS, Inc.
Kirkland's of The Woodlands, Houston, TX, Inc.
Kirkland's of Brandon Town Center, Tampa, FL, Inc.
Kirkland's of Memorial City Mall, Houston, TX, Inc.
Kirkland's of University Mall, Tuscaloosa, AL, Inc.
Kirkland's of Santa Rosa Mall, Fort Walton, FL, Inc.
Kirkland's of Panama City Mall, Panama City, FL, Inc.
B
Kirkland's of Town East Mall, Mesquite, TX, Inc.
Kirkland's of Kentucky Oaks Mall, Paducah, KY, Inc.
Kirkland's of Crabtree Valley Mall, Raleigh, N.C., Inc.
Kirkland's of Oak Hollow Mall, Highpoint, N.C., Inc.
Kirkland's of Fox Valley Mall, Chicago, IL, Inc.
Kirkland's of Hawthorne Mall, Chicago, IL, Inc.
Kirkland's of Stratford Square, Chicago, IL, Inc.
Kirkland's of Orland Square, Chicago, IL, Inc.
Kirkland's of Coastland Mall, Naples, FL, Inc.
C
Kirkland's of Carolina, Inc.
Kirkland's of Charlotte, Eastland Mall, Inc.
Kirkland's of Tennessee, Inc.
K. C. Corp., Inc.
Kirkland's of Greensboro, Four Seasons Mall, Inc.
Schedule 1-3
140
Kirkland's of Fayetteville, Cross Creek Mall, Inc.
Kirkland's of Wilmington, Independence Mall, Inc.
Kirkland's III, Jackson-Metro Center, Inc.
Kirkland's of Memphis, Tennessee, Laurelwood Shopping Center, Inc.
Kirkland's of Ridgeland, Mississippi, Northpark Mall, Inc.
Kirkland's of Knoxville, East Towne Mall, Inc.
Kirkland's of Huntsville, Madison Square Mall, Inc.
Kirkland's of Valley View Mall, Roanoke, VA, Inc.
Kirkland's of Nashville, Hickory Hollow Mall, Inc.
Kirkland's of Birmingham, Riverchase Galleria, Inc.
Kirkland's of Briar Cliffe Mall, Myrtle Beach, South Carolina, Inc.
Kirkland's of Rivergate Mall, Nashville, TN, Inc.
D
Kirkland's of Edgewater Mall, Biloxi, MS, Inc.
Kirkland's of Town Center Plaza, Kansas City, KS, Inc.
Kirkland's of Castleton Square, Indianapolis, IN, Inc.
Kirkland's of Cordova Mall, Pensacola, FL, Inc.
Kirkland's of University Park, South Bend, IN, Inc.
Kirkland's of Westgate Mall, Spartanburg, SC, Inc.
Kirkland's of Westgate Mall, Amarillo, TX, Inc.
Kirkland's of Meridian Mall, Lansing, MI,
Kirkland's of Cottonwood Mall, Albuquerque, NM, Inc.
Kirkland's of University Mall, Tampa, FL, Inc.
E
Kirkland's of Northwest Arkansas Mall, Fayetteville, Ar, Inc.
Kirkland's of Indian River Mall, Vero Beach, Fl, Inc.
Kirkland's of Tyrone Square, St. Petersburg, Fl, Inc.
Kirkland's of Northgate Mall, Cincinnati, Oh, Inc.
Kirkland's of West Oaks Mall, Orlando, Fl, Inc.
Kirkland's of Park City Center, Lancaster, Pa, Inc.
Kirkland's of Northpark Mall, Davenport, Ia, Inc.
Kirkland's of Perimeter Mall, Atlanta, Ga, Inc.
Kirkland's of Wolfchase Galleria, Memphis, Tn, Inc.
Kirkland's of Lindale Mall, Cedar Rapids, Ia, Inc.
Kirkland's of Coronado Mall, Albuquerque, Nm, Inc.
Kirkland's of Willowbrook Mall, Houston, Tx, Inc.
Schedule 1 - 4
141
Amendment of Schedule 1.1A
1. Additional Borrowers. The following additional Borrowers have been
added to the Credit Agreement:
Kirkland's of Honey Creek Mall, Terre Haute, IN, Inc.
Kirkland's of Southpark Mall, Moline, IL, Inc.
Kirkland's of Valley West Mall, Des Moines, IA, Inc.
Kirkland's of Greenbrier Mall, Chesapeake, VA, Inc.
Kirkland's of Cielo Vista Mall, El Paso, TX, Inc.
Kirkland's of Tuttle Crossing, Columbus, OH, Inc.
Kirkland's of Leigh Mall, Columbus, MS, Inc.
Kirkland's of North Shore Square, Slidell, LA, Inc.
Kirkland's of Post Oak Mall, College Station, TX, Inc.
Kirkland's of Bonita Lakes Mall, Meridian, MS, Inc.
Kirkland's of Huntington Mall, Huntington, WV, Inc.
Kirkland's of Mall of Louisiana, Baton Rouge, LA, Inc.
Kirkland's of Mill Creek Mall, Erie, PA, Inc.
Kirkland's of Volusia Mall, Daytona Beach, FL, Inc.
Kirkland's of Gateway Mall, Lincoln, NE, Inc.
Kirkland's of Grapevine Mills, Grapevine, TX, Inc.
2. Additional Subsidiaries. The following Persons are additional
Subsidiaries of the Parent, which have been formed in anticipation of the
opening of new stores but which have not yet commenced any operations. Section
4.14 of the Credit Agreement shall be modified to include reference to these
Persons as additional Subsidiaries of the Parent:
Kirkland's of Southland Mall, Houma, LA, Inc.
Kirkland's of First Colony Mall, Houston, TX, Inc.
Kirkland's of Oviedo Marketplace, Orlando, FL, Inc.
Kirkland's of Coral Springs, Coral Springs, FL, Inc.
11
