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EXHIBIT 10.32
CREDIT AGREEMENT
Dated as of August 25, 1999
among
THE GYMBOREE CORPORATION
THE FINANCIAL INSTITUTIONS PARTY HERETO
and
BANK OF AMERICA, N.A.,
as Agent, Lead Arranger, and Sole Book Manager
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS.......................................................................1
1.01 Certain Defined Terms...............................................................1
1.02 Other Interpretive Provisions......................................................17
1.03 Accounting Principles..............................................................18
1.04 Currency Equivalents Generally.....................................................19
ARTICLE II THE CREDITS.....................................................................19
2.01 Amounts and Terms of Commitments...................................................19
2.02 Loan Accounts......................................................................19
2.03 Procedure for Borrowing............................................................20
2.04 Conversion and Continuation Elections..............................................21
2.05 Voluntary Termination or Reduction of Commitments..................................22
2.06 Optional Prepayments...............................................................22
2.07 Mandatory Prepayments of Loans.....................................................23
2.08 Repayment..........................................................................23
2.09 Interest...........................................................................23
2.11 Fees...............................................................................24
2.12 Computation of Fees and Interest...................................................24
2.13 Payments by the Company............................................................25
2.14 Payments by the Banks to the Agent.................................................25
2.15 Sharing of Payments, Etc...........................................................26
2.16 Subsidiary Co-Borrowers............................................................26
ARTICLE III THE LETTERS OF CREDIT..........................................................27
3.01 The Letter of Credit Subfacility...................................................27
3.02 Issuance, Amendment and Renewal of Letters of Credit...............................28
3.03 Existing Letters of Credit; Risk Participations, Drawings and Reimbursements.......30
3.04 Repayment of Participations........................................................32
3.05 Role of the Issuing Bank...........................................................32
3.06 Obligations Absolute...............................................................33
3.07 Cash Collateral Pledge.............................................................34
3.08 Letter of Credit Fees..............................................................34
3.09 Uniform Customs and Practice.......................................................35
ARTICLE IV TAXES, YIELD PROTECTION AND ILLEGALITY..........................................35
4.01 Taxes..............................................................................35
4.02 Illegality.........................................................................37
4.03 Increased Costs and Reduction of Return............................................37
4.04 Funding Losses.....................................................................38
4.05 Inability to Determine Rates.......................................................38
4.06 Reserves on Eurodollar Rate Loans..................................................39
4.07 Certificates of Banks..............................................................39
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4.08 Substitution of Banks..............................................................39
4.09 Survival...........................................................................39
ARTICLE V CONDITIONS PRECEDENT.............................................................40
5.01 Conditions of Initial Loans........................................................40
5.02 Conditions to All Borrowings.......................................................41
ARTICLE VI REPRESENTATIONS AND WARRANTIES..................................................42
6.01 Corporate Existence and Power......................................................42
6.02 Corporate Authorization; No Contravention..........................................42
6.03 Governmental Authorization.........................................................43
6.04 Binding Effect.....................................................................43
6.05 Litigation.........................................................................43
6.06 No Default.........................................................................43
6.07 ERISA Compliance...................................................................44
6.08 Use of Proceeds; Margin Regulations................................................44
6.09 Title to Properties................................................................44
6.10 Taxes..............................................................................44
6.11 Financial Condition................................................................45
6.12 Environmental Matters..............................................................45
6.13 Regulated Entities.................................................................45
6.14 No Burdensome Restrictions.........................................................45
6.15 Copyrights, Patents, Trademarks and Licenses, etc..................................45
6.16 Subsidiaries.......................................................................46
6.17 Insurance..........................................................................46
6.18 Swap Obligations...................................................................46
6.19 Subsidiary Guaranty................................................................46
6.20 Full Disclosure....................................................................46
ARTICLE VII AFFIRMATIVE COVENANTS..........................................................47
7.01 Financial Statements...............................................................47
7.02 Certificates; Other Information....................................................48
7.03 Notices............................................................................48
7.04 Preservation of Corporate Existence, Etc...........................................49
7.05 Maintenance of Property............................................................50
7.06 Insurance..........................................................................50
7.07 Payment of Obligations.............................................................50
7.08 Compliance with Laws...............................................................50
7.09 Compliance with ERISA..............................................................51
7.10 Inspection of Property and Books and Records.......................................51
7.11 Environmental Laws.................................................................51
7.12 Use of Proceeds....................................................................51
7.13 Subsidiary Guaranty................................................................51
7.14 Pari-Passu Obligations.............................................................51
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ARTICLE VIII NEGATIVE COVENANTS............................................................52
8.01 Limitation on Liens................................................................52
8.02 Disposition of Assets..............................................................53
8.03 Consolidations and Mergers.........................................................54
8.04 Loans and Investments..............................................................54
8.05 Limitation on Indebtedness.........................................................55
8.06 Transactions with Affiliates.......................................................56
8.07 Use of Proceeds....................................................................56
8.08 Contingent Obligations.............................................................56
8.09 Joint Ventures.....................................................................57
8.10 Operating Lease Obligations........................................................57
8.11 Restricted Payments................................................................57
8.12 ERISA..............................................................................58
8.13 Change in Business.................................................................58
8.14 Accounting Changes.................................................................58
8.15 LiquidityRatio......................................................................58
8.16 Tangible Net Worth..................................................................58
8.17 Capital Expenditures................................................................58
8.18 Restrictive Agreements..............................................................58
ARTICLE IX EVENTS OF DEFAULT...............................................................58
9.01 Event of Default...................................................................58
9.02 Remedies...........................................................................61
9.03 Rights Not Exclusive...............................................................61
ARTICLE X THE AGENT........................................................................61
10.01 Appointment and Authorization;....................................................61
10.02 Delegation of Duties..............................................................62
10.03 Liability of Agent................................................................62
10.04 Reliance by Agent.................................................................62
10.05 Notice of Default.................................................................63
10.06 Credit Decision...................................................................63
10.07 Indemnification of Agent..........................................................64
10.08 Agent in Individual Capacity......................................................64
10.09 Successor Agent...................................................................64
10.10 Withholding Tax...................................................................65
ARTICLE XI MISCELLANEOUS...................................................................66
11.01 Amendments and Waivers............................................................66
11.02 Notices...........................................................................67
11.03 No Waiver; Cumulative Remedies....................................................68
11.04 Costs and Expenses................................................................68
11.05 Company Indemnification...........................................................68
11.06 Payments Set Aside................................................................69
11.07 Successors and Assigns............................................................69
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11.08 Assignments, Participations, etc..................................................69
11.09 Confidentiality...................................................................70
11.10 Set-off...........................................................................71
11.11 Automatic Debits of Fees..........................................................71
11.12 Notification of Addresses, Lending Offices, Etc...................................72
11.13 Counterparts......................................................................72
11.14 Severability......................................................................72
11.15 No Third Parties Benefitted.......................................................72
11.16 Governing Law and Jurisdiction....................................................72
11.17 Waiver of Jury Trial..............................................................73
11.18 Joint and Several Liability of the Company and the Subsidiary Co-Borrowers;
Waiver of Certain Defenses......................................................73
11.19 Judgment..........................................................................74
11.20 Entire Agreement..................................................................75
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SCHEDULES
Schedule 1.01 Pricing Schedule
Schedule 2.01 Commitments
Schedule 3.03 Existing Letters of Credit
Schedule 11.02 Lending Offices; Addresses for Notices
EXHIBITS
Exhibit A Notice of Borrowing
Exhibit B Notice of Conversion/Continuation
Exhibit C Compliance Certificate
Exhibit D Legal Opinion of Company's Counsel
Exhibit E Assignment and Acceptance
Exhibit F Promissory Note
Exhibit G Subsidiary Guaranty
Exhibit H Subsidiary Co-Borrower Agreement
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This CREDIT AGREEMENT, dated as of August 25, 1999, is among THE
GYMBOREE CORPORATION, a Delaware corporation (the "Company"), the several
financial institutions from time to time party to this Agreement (collectively,
the "Banks"; individually, a "Bank"), and BANK OF AMERICA, N.A., as letter of
credit issuing bank and agent for the Banks.
In consideration of the mutual agreements, provisions and covenants
contained herein, the parties agree as follows:
ARTICLE I DEFINITIONS
1.01 Certain Defined Terms. The following terms have the following
meanings:
"Acquisition" means any transaction or series of related
transactions for the purpose of or resulting, directly or indirectly, in
(a) the acquisition of all or substantially all of the assets of a
Person, or of any business or division of a Person, (b) the acquisition
of in excess of 50% of the capital stock, partnership interests,
membership interests or equity of any Person, or otherwise causing any
Person to become a Subsidiary, or (c) a merger or consolidation or any
other combination with another Person (other than a Person that is a
Subsidiary) provided that the Company or the Subsidiary is the surviving
entity.
"Affiliate" means, 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. A Person shall be deemed to control
another Person if the controlling Person possesses, directly or
indirectly, the power to direct or cause the direction of the management
and policies of the other Person, whether through the ownership of
voting securities, membership interests, by contract, or otherwise.
"Agent" means Bank of America in its capacity as agent for the
Banks hereunder, and any successor agent arising under Section 10.09.
"Agent-Related Persons" means Bank of America, any successor
agent arising under Section 10.09, any subagents or other delegatees
under Section 10.02, and any replacement Issuing Bank, together with
their respective Affiliates, and the officers, directors, employees,
agents and attorneys-in-fact of such Persons and Affiliates.
"Agent's Payment Office" means the office for payments set forth
on Schedule 11.02 or such other address as the Agent may from time to
time notify to the Company and the Banks.
"Agreement" means this Credit Agreement.
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"Applicable Margin" means
(a) with respect to Base Rate Loans, 0%;
(b) with respect to Eurodollar Rate Loans, (A)
0.750% during any Level I Period, (B) 1.000% during any Level II
Period, and (C) 1.500% during any Level III Period; and
(c) with respect to Commercial Letters of Credit,
(A) 0.100% during any Level I Period, (B) 0.125% during any
Level II Period, and (C) 0.150% during any Level III Period
"Assignee" has the meaning specified in subsection 11.08(a).
"Attorney Costs" means and includes all fees and disbursements
of any law firm or other external counsel, the allocated cost of
internal legal services and all disbursements of internal counsel.
"Bank" has the meaning specified in the introductory clause
hereto. References to the "Banks" shall include references to Bank of
America in its capacity as Issuing Bank; for purposes of clarification
only, to the extent that Bank of America may have any rights or
obligations in addition to those of the Banks due to its status as
Issuing Bank, its status as such will be specifically referenced.
"Bankruptcy Code" means the Federal Bankruptcy Reform Act of
1978 (11 U.S.C. '101, et seq.).
"Base Rate" means, for any day the higher of: (i) 0.50% per
annum above the latest Federal Funds Rate; and (ii) the Reference Rate.
"Base Rate Loan" means a Loan that bears interest based on the
Base Rate.
"Bank of America" means Bank of America, N.A.
"Borrowing" means a borrowing hereunder consisting of Revolving
Loans of the same Type made to the Company on the same day by the Banks
under Article II, and, other than in the case of Base Rate Loans, having
the same Interest Period.
"Borrowing Date" means any date on which a Borrowing occurs
under Section 2.03.
"Business Day" means any day other than a Saturday, Sunday or
other day on which commercial banks in New York City or San Francisco
are authorized or required by law to close and with respect to
Eurodollar Rate Loans, a day on which dealings are carried on in the
applicable Eurodollar Dollar interbank market.
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"Capital Adequacy Regulation" means any guideline, request or
directive of any central bank or other Governmental Authority, or any
other law, rule or regulation, whether or not having the force of law,
in each case, regarding capital adequacy of any bank or of any
corporation controlling a bank.
"Capital Expenditures" means, for any period, the capital
expenditures of the Company and its Subsidiaries for such period, as the
same are (or would in accordance with GAAP be) set forth in a
consolidated statement of changes in financial position or cash flows of
the Company and its Subsidiaries for such period.
"Cash Collateralize" means to pledge and deposit with or deliver
to the Agent, for the benefit of the Agent, the Issuing Bank and the
Banks, as collateral for the L/C Obligations, cash or deposit account
balances pursuant to documentation in form and substance satisfactory to
the Agent and the Issuing Bank (which documents are hereby consented to
by the Banks). Derivatives of such term shall have corresponding
meaning. The Company hereby grants the Agent, for the benefit of the
Agent, the Issuing Bank and the Banks, a security interest in all such
cash and deposit account balances. Cash collateral shall be maintained
in blocked, deposit accounts at Bank of America, which, unless otherwise
agreed between the Company and Bank of America, shall bear interest at
the overnight corporate deposit rate generally offered by Bank of
America for overnight corporate deposits of equivalent amounts.
"Cash Equivalents" means (a) securities issued or directly and
fully guaranteed or insured by the United States of America or any
agency or instrumentality thereof (provided that the full faith and
credit of the United States of America is pledged in support thereof)
having maturities of not more than one year from the date of
acquisition, (b) U.S. dollar denominated time deposits, certificates of
deposits and bankers' acceptances of (i) any Bank or (ii) any bank whose
short term commercial paper rating from S&P is at least A-1 or the
equivalent thereof or from Xxxxx'x is at least P-1 or the equivalent
thereof (any such bank, an "Approved Lender"), in each case with
maturities of note more than 270 days from the date of acquisition, (c)
commercial paper issued by any Bank or any Approved Lender or by the
parent company of any Bank or any Approved Lender and commercial paper
issued by, or guaranteed by, any company with a short-term commercial
paper rating of at least A-1 or the equivalent thereof by S&P or at
least P-1 or the equivalent by Moody's, or guaranteed by a company with
a long term unsecured debt rating of at least A or A2 or the equivalent
thereof from S&P or Moody's, as the case may be, in each case maturing
not more than 270 days after the date of acquisition, and (d)
investments in money market funds substantially all of the assets of
which are comprised of the securities of the types described in clauses
(a) through (c) above.
"Change of Control" means that any Person or two or more Persons
acting in concert shall have acquired beneficial ownership (within the
meaning of Rule 13d-3 of the SEC under the Exchange Act) of 50% or more
of the outstanding shares of voting
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stock of the Company and shall have the right to elect or designate a
majority of the directors of the Company.
"Closing Date" means the date on which all conditions precedent
set forth in Section 5.01 are satisfied or waived by all Banks (or, in
the case of subsection 5.01(f), waived by the Person entitled to receive
such payment).
"Commercial Letter of Credit" means a letter of credit used in
connection with the purchase of inventory by the Company or its
Subsidiaries.
"Commitment", as to each Bank, has the meaning specified in
Section 2.01.
"Compliance Certificate" means a certificate substantially in
the form of Exhibit C.
"Contingent Obligation" means, as to any Person, any direct or
indirect liability of that Person, whether or not contingent, with or
without recourse, (a) with respect to any Indebtedness, lease, dividend,
letter of credit or other obligation (the "primary obligations") of
another Person (the "primary obligor"), including any obligation of that
Person (i) to purchase, repurchase or otherwise acquire such primary
obligations or any security therefor, (ii) to advance or provide funds
for the payment or discharge of any such primary obligation, or to
maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency or any balance sheet
item, level of income or financial condition 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 holder of
any such primary obligation against loss in respect thereof (each, a
"Guaranty Obligation"); (b) with respect to any Surety Instrument (other
than a Letter of Credit) issued for the account of that Person or as to
which that Person is otherwise liable for reimbursement of drawings or
payments; (c) to purchase any materials, supplies or other property
from, or to obtain the services of, another Person if the relevant
contract or other related document or obligation requires that payment
for such materials, supplies or other property, or for such services,
shall be made regardless of whether delivery of such materials, supplies
or other property is ever made or tendered, or such services are ever
performed or tendered, or (d) in respect of any Swap Contract. The
amount of any Contingent Obligation shall, in the case of Guaranty
Obligations, be deemed equal to the stated or determinable amount of the
primary obligation in respect of which such Guaranty Obligation is made
or, if not stated or if indeterminable, the maximum reasonably
anticipated liability in respect thereof, and in the case of other
Contingent Obligations other than in respect of Swap Contracts, shall be
equal to the maximum reasonably anticipated liability in respect thereof
and, in the case of Contingent Obligations in respect of Swap Contracts,
shall be equal to the Swap Termination Value.
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"Contractual Obligation" means, as to any Person, any provision
of any security issued by such Person or of any agreement, undertaking,
contract, indenture, mortgage, deed of trust or other instrument,
document or agreement to which such Person is a party or by which it or
any of its property is bound.
"Conversion/Continuation Date" means any date on which, under
Section 2.04, the Company (a) converts Loans of one Type to another
Type, or (b) continues as Loans of the same Type, but with a new
Interest Period, Loans having Interest Periods expiring on such date.
"Credit Extension" means and includes (a) the making of any
Loans hereunder, and (b) the Issuance of any Letters of Credit.
"Default" means any Event of Default or any event or
circumstance which, with the giving of notice, the lapse of time, or
both, would (if not cured or otherwise remedied during such time)
constitute an Event of Default.
"Disclosure Letter" means the letter from the Company to the
Agent dated as of the Closing Date and disclosing certain information
concerning the Company in form and substance acceptable to the Banks in
their sole and absolute discretion.
"Dollars", "dollars" and "$" each mean lawful money of the
United States.
"Eligible Assignee" means (i) a Bank; (ii) an Affiliate of a
Bank; and (iii) any other Person approved by the Agent and, unless an
Event of Default has occurred and is continuing at the time any
assignment is effected in accordance with Section 11.8, the Company,
such approval not to be unreasonably withheld or delayed by the Company
and such approval to be deemed given by the Company if no objection is
received by the assigning Bank and the Agent from the Company within two
Business Days after notice of such proposed assignment has been provided
by the assigning Bank to the Company; provided that neither the Company
nor an affiliate of the Company shall qualify as an Eligible Assignee.
"Environmental Claims" means all claims, however asserted, by
any Governmental Authority or other Person alleging potential liability
or responsibility for violation of any Environmental Law, or for release
or injury to the environment.
"Environmental Laws" means all federal, state or local laws,
statutes, common law duties, rules, regulations, ordinances and codes,
together with all administrative orders, directed duties, requests,
licenses, authorizations and permits of, and agreements with, any
Governmental Authorities, in each case relating to environmental,
health, safety and land use matters.
"ERISA" means the Employee Retirement Income Security Act of
1974, and regulations promulgated thereunder.
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"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with the Company within the meaning
of Section 414(b) or (c) of the IRC (and Sections 414(m) and (o) of the
IRC for purposes of provisions relating to Section 412 of the IRC).
"ERISA Event" means (a) a Reportable Event with respect to a
Pension Plan; (b) a withdrawal by the Company or any ERISA Affiliate
from a Pension Plan subject to Section 4063 of ERISA during a plan year
in which it was a substantial employer (as defined in Section 4001(a)(2)
of ERISA) or a cessation of operations which is treated as such a
withdrawal under Section 4062(e) of ERISA; (c) a complete or partial
withdrawal by the Company or any ERISA Affiliate from a Multiemployer
Plan or notification that a Multiemployer Plan is in reorganization; (d)
the filing of a notice of intent to terminate, the treatment of a Plan
amendment as a termination under Section 4041 or 4041A of ERISA, or the
commencement of proceedings by the PBGC to terminate a Pension Plan or
Multiemployer Plan; (e) an event or condition which might reasonably be
expected to constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any
Pension Plan or Multiemployer Plan; or (f) the imposition of any
liability under Title IV of ERISA, other than PBGC premiums due but not
delinquent under Section 4007 of ERISA, upon the Company or any ERISA
Affiliate.
"Eurodollar Rate" means, for any Eurodollar Rate Loan for any
Interest Period therefor, the rate per annum (rounded upwards if
necessary, to the nearest 1/100 of 1%) appearing on Telerate Page 3750
(or any successor page) as the London interbank offered rate for
deposits in Dollars at approximately 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period. If for any reason such rate is not
available, the term "Eurodollar Rate" shall mean, for any Eurodollar
Rate Loan for any Interest Period therefor, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) appearing on Reuters
Screen LIBO Page as the London interbank offered rate for deposits in
Dollars at approximately 11:00 a.m. (London time) two Business Days
prior to the first day of such Interest Period for a term comparable to
such Interest Period; provided that, if more than one rate is specified
on Reuters Screen LIBO Page, the applicable rate shall be the arithmetic
mean of all such rates (rounded upwards, if necessary, to the nearest
1/100 of 1%).
"Eurodollar Rate Loan" means a Loan that bears interest based on
the Eurodollar Rate.
"Event of Default" means any of the events or circumstances
specified in Section 9.01.
"Exchange Act" means the Securities Exchange Act of 1934, and
regulations promulgated thereunder.
"Existing Letters of Credit" means the letters of credit
described in Schedule 3.03.
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"FDIC" means the Federal Deposit Insurance Corporation, and any
Governmental Authority succeeding to any of its principal functions.
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds
brokers on such day, as published by the Federal Reserve Bank of New
York on the Business Day next succeeding such day; provided that (a) if
such day is not a Business Day, the Federal Funds Rate for such day
shall be such rate on such transactions on the next preceding Business
Day as so published on the next succeeding Business Day, and (b) if no
such rate is so published on such next succeeding Business Day, the
Federal Funds Rate for such day shall be the average rate charged to the
Agent (in its individual capacity) on such day on such transactions as
determined by the Agent.
"Fee Letter" has the meaning specified in subsection 2.11(a).
"Financial Projections" means, with respect to any period, the
Company's and its consolidated Subsidiaries' consolidated financial plan
and projected results of operations for such period prepared in summary
form showing on a fiscal year basis, beginning and ending balance
sheets, projected source and application of funds, projected expenses
and sales and other revenues, a statement of the assumptions on which
such projections are based, anticipated compliance levels with respect
to the financial tests of Sections 8.15, 8.16, and 8.17, and such other
matters and in such detail as Agent shall reasonably request, all
prepared on a basis consistent with the financial statements most
recently delivered to Lender pursuant to Section 7.01 and in form and
substance satisfactory to Agent.
"FX Trading Office" means the Foreign Exchange Trading Center
#5193, San Francisco, California, of Bank of America, or such other of
Bank of America's offices as Bank of America may designate from time to
time.
"Further Taxes" means any and all present or future taxes,
levies, assessments, imposts, duties, deductions, fees, withholdings or
similar charges (including, without limitation, net income taxes and
franchise taxes), and all liabilities with respect thereto, imposed by
any jurisdiction on account of Taxes or Other Taxes payable or paid
pursuant to Section 4.01.
"GAAP" means generally accepted accounting principles set forth
from time to time in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial
Accounting Standards Board (or agencies with similar functions of
comparable stature and authority within the U.S. accounting profession).
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"Governmental Authority" means any nation or government, any
state or other political subdivision thereof, any central bank (or
similar monetary or regulatory authority) thereof, any entity exercising
executive, legislative, judicial, regulatory or administrative functions
of or pertaining to government, and any corporation or other entity
owned or controlled, through stock or capital ownership or otherwise, by
any of the foregoing.
"Guarantor" means any Subsidiary Guarantor and any other
guarantor under any Guaranty.
"Guaranty" means the Subsidiary Guaranty and any other guaranty
of all or any part of the Obligations.
"Guaranty Obligation" has the meaning specified in the
definition of "Contingent Obligation."
"Honor Date" has the meaning specified in subsection 3.03(c).
"Indebtedness" of any Person means, without duplication, (a) all
indebtedness for borrowed money; (b) all obligations issued, undertaken
or assumed as the deferred purchase price of property or services (other
than trade payables entered into in the ordinary course of business on
ordinary terms); (c) all non-contingent reimbursement or payment
obligations with respect to Surety Instruments; (d) all obligations
evidenced by notes, bonds, debentures or similar instruments, including
obligations so evidenced incurred in connection with the acquisition of
property, assets or businesses; (e) all indebtedness created or arising
under any conditional sale or other title retention agreement, or
incurred as financing, in either case with respect to property acquired
by the Person (even though the rights and remedies of the seller or bank
under such agreement in the event of default are limited to repossession
or sale of such property); (f) all obligations with respect to capital
leases; (g) all indebtedness referred to in clauses (a) through (f)
above secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien upon
or in property (including accounts and contracts rights) owned by such
Person, even though such Person has not assumed or become liable for the
payment of such Indebtedness; and (h) all Guaranty Obligations in
respect of indebtedness or obligations of others of the kinds referred
to in clauses (a) through (g) above. For all purposes of this Agreement,
the Indebtedness of any Person shall include all recourse Indebtedness
of any partnership or joint venture (which is a partnership) in which
such Person is a general partner or a joint venturer.
"Indemnified Liabilities" has the meaning specified in Section
11.05.
"Indemnified Person" has the meaning specified in Section 11.05.
"Independent Auditor" has the meaning specified in subsection
7.01(a).
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"Insolvency Proceeding" means, with respect to any Person, (a)
any case, action or proceeding with respect to such Person before any
court or other Governmental Authority relating to bankruptcy,
reorganization, insolvency, liquidation, receivership, dissolution,
winding-up or relief of debtors, or (b) any general assignment for the
benefit of creditors, composition, marshalling of assets for creditors,
or other, similar arrangement in respect of its creditors generally or
any substantial portion of its creditors; undertaken under U.S. Federal,
state or foreign law, including the Bankruptcy Code.
"Interest Payment Date" means, as to any Loan other than a Base
Rate Loan, the last day of each Interest Period applicable to such Loan
and, as to any Base Rate Loan, the last Business Day of each calendar
month; provided that if any Interest Period exceeds three months, the
date that falls three months after the beginning of such Interest Period
and after each Interest Payment Date thereafter is also an Interest
Payment Date.
"Interest Period" means: (a) as to any Eurodollar Rate Loan, the
period commencing on the Borrowing Date of such Loan or on the
Conversion/Continuation Date on which the Loan is converted (in the case
of a Loan in Dollars) into or continued as an Eurodollar Rate Loan, and
ending on the date two weeks or one, two, three or six months thereafter
(and any other period that is 12 months or less and is consented to by
the Majority Banks in the given instance) as selected by the Company in
its Notice of Borrowing or Notice of Conversion/Continuation;
provided that:
(i) if any Interest Period would otherwise end on a
day that is not a Business Day, that Interest Period shall be
extended to the following Business Day unless, in the case of an
Eurodollar Rate Loan, 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 preceding Business
Day;
(ii) any Interest Period longer than two weeks
pertaining to an Eurodollar Rate Loan 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 the calendar month at the end of such Interest Period; and
(iii) no Interest Period for any Loan shall extend
beyond the Revolving Termination Date as in effect on the date
such Interest Period is determined.
"IRC" means the Internal Revenue Code of 1986, and regulations
promulgated thereunder.
"IRS" means the Internal Revenue Service, and any Governmental
Authority succeeding to any of its principal functions under the IRC.
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"Issuance Date" has the meaning specified in subsection 3.01(a).
"Issue" means, with respect to any Letter of Credit, to
incorporate the Existing Letters of Credit into this Agreement, or to
issue or to extend the expiry of, or to renew or increase the amount of,
such Letter of Credit; and the terms "Issued," "Issuing" and "Issuance"
have corresponding meanings.
"Issuing Bank" means Bank of America in its capacity as issuer
of one or more Letters of Credit hereunder, together with any
replacement letter of credit issuer arising under subsection 10.01(b) or
Section 10.09.
"Joint Venture" means a partnership, limited liability company,
joint venture or other similar legal arrangement (whether created by
contract or conducted through a separate legal entity) now or hereafter
formed by the Company or any of its Subsidiaries with another Person in
order to conduct a common venture or enterprise with such Person.
"L/C Advance" means each Bank's participation in any L/C
Borrowing in accordance with its Pro Rata Share.
"L/C Amendment Application" means an application form for
amendment of an outstanding Letter of Credit as shall at any time be in
use at the Issuing Bank, as the Issuing Bank shall request.
"L/C Application" means an application form for the issuance of
a Letter of Credit as shall at any time be in use at the Issuing Bank,
as the Issuing Bank shall request.
"L/C Borrowing" means an extension of credit resulting from a
drawing under any Letter of Credit which shall not have been reimbursed
on the date when made nor converted into a Borrowing of Revolving Loans
under subsection 3.03(c).
"L/C Commitment" means the commitment of the Issuing Bank to
Issue, and the commitment of the Banks severally to participate in,
Letters of Credit (including the Existing Letters of Credit) from time
to time Issued or outstanding under Article III, in an aggregate amount
not to exceed on any date the amounts set forth in Section 3.01, as the
same shall be reduced as a result of a reduction in the Commitments
pursuant to Section 2.05; provided that the L/C Commitment is a part of
the combined Commitments, rather than a separate, independent
commitment.
"L/C Obligations" means with respect to all Letters of Credit or
any category thereof at any time the sum of (a) the aggregate undrawn
amount of all such Letters of Credit then outstanding, plus (b) the
amount of all unreimbursed drawings under all such Letters of Credit,
including all outstanding L/C Borrowings.
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"L/C-Related Documents" means the Letters of Credit, the L/C
Applications, the L/C Amendment Applications and any other document
relating to any Letter of Credit, including any of the Issuing Bank's
standard form documents for letter of credit issuances.
"Lending Office" means, as to any Bank, the office or offices of
such Bank specified as its "Lending Office" or "Domestic Lending Office"
in the case of Base Rate Loans and its "Eurodollar Lending Office" in
the case of Eurodollar Rate Loans, as the case may be, on Schedule
11.02.
"Letters of Credit" means the Existing Letters of Credit and any
letters of credit (whether a Standby Letter of Credit, Usance Letter of
Credit, or Commercial Letter of Credit, each being a "Class" of Letter
of Credit) Issued by the Issuing Bank pursuant to Article III.
"Level I Period" means a period commencing (x) on the Closing
Date or (y) five days after the Agent has received a Compliance
Certificate pursuant to Section 7.02(b) which shows a Tangible Net Worth
for the preceding fiscal quarter which equals or exceeds the correlative
amount set forth below for such fiscal quarter on Schedule 1.01 and, in
the case of (x) or (y), continuing until the earlier of (A) five days
after the next such Compliance Certificate is received by the Agent and
(B) five days after the next such Compliance Certificate and
accompanying financial statements are required to be delivered to the
Agent under Sections 7.01(a) or (b) (as applicable) and 7.02(b).
"Level II Period" means a period (i) commencing five days after
the Agent has received a Compliance Certificate pursuant to Section
6.02(b) which shows a Tangible Net Worth for the preceding fiscal
quarter which equals or exceeds the correlative amount set forth below
for such fiscal quarter on Schedule 1.01 continuing until the earlier of
(A) five days after the next such Compliance Certificate is received by
the Agent and (B) five days after the next such Compliance Certificate
and accompanying financial statements are required to be delivered to
the Agent under Sections 7.01(a) or (b) (as applicable) and 7.02(b) and
(ii) which is not a Level I Period.
"Level III Period" means any period which is not a Level I
Period or a Level II Period.
"Lien" means any security interest, mortgage, deed of trust,
pledge, hypothecation, assignment, charge or deposit arrangement,
encumbrance, lien (statutory or other) or preferential arrangement of
any kind or nature whatsoever in respect of any property (including
those created by, arising under or evidenced by any conditional sale or
other title retention agreement, the interest of a lessor under a
capital lease, any financing lease having substantially the same
economic effect as any of the foregoing, or the filing of any financing
statement naming the owner of the asset to which such lien relates as
debtor, under the Uniform Commercial Code or any comparable law) and any
contingent or other agreement to provide any of the foregoing, but not
including the interest of a lessor under an operating lease.
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"Liquidity Ratio" means at any time the ratio of (a) the cash,
readily marketable securities, and credit card receivables (but not
exceeding $5,000,000 with respect to such receivables) of the Company on
a consolidated basis to (b) the total of all outstanding L/C Obligations
and Revolving Loans.
"Loan" means an extension of credit by a Bank to the Company
under Article II or Article III in the form of a Revolving Loan or L/C
Advance.
"Loan Documents" means this Agreement, any Notes, the Fee
Letters, the Disclosure Letter, the Subsidiary Co-Borrower Agreements,
the L/C-Related Documents, the Subsidiary Guaranty and all other
documents delivered to the Agent or any Bank in connection herewith.
"Majority Banks" means at any time (a) if there is just one
Bank, then that Bank or (b) if there is more than one Bank, then at
least two Banks then holding at least 66-2/3% of the then aggregate
unpaid principal amount of the Loans, or, if no such principal amount is
then outstanding, at least two Banks then having at least 66-2/3% of the
Commitments.
"Margin Stock" means "margin stock" as such term is defined in
Regulation T, U or X of the FRB.
"Material Adverse Effect" means (a) a material adverse change
in, or a material adverse effect upon, the operations, business,
properties, condition (financial or otherwise) or prospects of the
Company or the Company and its Subsidiaries taken as a whole; (b) a
material impairment of the ability of the Company or any Subsidiary to
perform under any Loan Document and to avoid any Event of Default; or
(c) a material adverse effect upon the legality, validity, binding
effect or enforceability against the Company or any Subsidiary of any
Loan Document.
"Material Subsidiary" means, at any time, any Subsidiary of the
Company designated as a "Subsidiary Guarantor" on Schedule 6.16 to the
Disclosure Letter and any other Subsidiary having at such time (on a
sub-consolidated basis, i.e., for such Subsidiary and its Subsidiaries)
either (i) total net revenues for the preceding four fiscal quarter
period equal to or greater than 5% of the Company's consolidated total
net revenues for the same period or (ii) total assets, as of the last
day of the preceding fiscal quarter, equal to or greater than 5% of the
Company's consolidated total assets on the same date, in each case,
based upon the Company's most recent annual or quarterly financial
statements delivered under Section 7.01.
"Minimum Tranche" means, in respect of Revolving Loans
comprising part of the same Borrowing, or to be converted or continued
under Section 2.04, (a) in the case of Base Rate Loans, $1,000,000 or
any multiple of $100,000 in excess thereof, and (b) in the case of
Eurodollar Rate Loans, $2,000,000 or any multiple of $100,000 in excess
thereof.
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"Moody's" means Xxxxx'x Investors Service, Inc., and its
successors.
"Multiemployer Plan" means a "multiemployer plan", within the
meaning of Section 4001(a)(3) of ERISA, to which the Company or any
ERISA Affiliate makes, is making, or is obligated to make contributions
or, during the preceding three calendar years, has made, or been
obligated to make, contributions.
"Note" means a promissory note executed by the Company in favor
of a Bank pursuant to subsection 2.02(b), in substantially the form of
Exhibit F.
"Notice of Borrowing" means a notice in substantially the form
of Exhibit A.
"Notice of Conversion/Continuation" means a notice in
substantially the form of Exhibit B.
"Obligations" means all Loans, L/C Obligations and other
advances, debts, liabilities, obligations, covenants and duties arising
under any Loan Document owing by the Company to any Bank, the Agent, or
any Indemnified Person, whether direct or indirect (including those
acquired by assignment), absolute or contingent, due or to become due,
now existing or hereafter arising.
"Organization Documents" means, for any corporation, the
certificate or articles of incorporation, the bylaws, any certificate of
determination or instrument relating to the rights of preferred
shareholders of such corporation, any shareholder rights agreement, and
all applicable resolutions of the board of directors (or any committee
thereof) of such corporation.
"Other Taxes" means any present or future stamp, court or
documentary taxes or any other excise or property taxes, charges or
similar levies which arise from any payment made hereunder or from the
execution, delivery, performance, enforcement or registration of, or
otherwise with respect to, this Agreement or any other Loan Documents,
excluding, in the case of each Bank and the Agent, respectively, taxes
imposed on or measured by its net income by the jurisdiction (or any
political subdivision thereof) under the laws of which such Bank or the
Agent, as the case may be, is organized or maintains a Lending Office.
"PBGC" means the Pension Benefit Guaranty Corporation, or any
Governmental Authority succeeding to any of its principal functions
under ERISA.
"Pension Plan" means a pension plan (as defined in Section 3(2)
of ERISA) subject to Title IV of ERISA which the Company sponsors,
maintains, or to which it makes, is making, or is obligated to make
contributions, or in the case of a multiple employer plan (as described
in Section 4064(a) of ERISA) has made contributions at any time during
the immediately preceding five (5) plan years.
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"Permitted Liens" has the meaning specified in Section 8.01.
"Permitted Swap Obligations" means all obligations (contingent
or otherwise) of the Company or any Subsidiary existing or arising under
Swap Contracts, provided that each of the following criteria is
satisfied: (a) such obligations are (or were) entered into by such
Person in the ordinary course of business for the purpose of directly
mitigating risks associated with liabilities, commitments or assets held
or reasonably anticipated by such Person, or changes in the value of
securities issued by such Person in conjunction with a securities
repurchase program not otherwise prohibited hereunder, and not for
purposes of speculation or taking a "market view"; and (b) such Swap
Contracts do not contain any provision ("walk-away" provision)
exonerating the non-defaulting party from its obligation to make
payments on outstanding transactions to the defaulting party.
"Person" means an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust,
unincorporated association, joint venture or Governmental Authority.
"Plan" means an employee benefit plan (as defined in Section
3(3) of ERISA) which the Company sponsors or maintains or to which the
Company makes, is making, or is obligated to make contributions and
includes any Pension Plan.
"Pro Rata Share" means, as to any Bank at any time, the
percentage equivalent (expressed as a decimal, rounded to the ninth
decimal place) at such time of such Bank's Commitment divided by the
combined Commitments of all Banks.
"Quarterly Date" means the last Business Day of each January,
April, July, and October.
"Reference Rate" means the rate of interest in effect for such
day as publicly announced from time to time by Bank of America in San
Francisco, California, as its "reference rate." (The "reference rate" is
a rate set by Bank of America based upon various factors including Bank
of America's costs and desired return, general economic conditions and
other factors, and is used as a reference point for pricing some loans,
which may be priced at, above, or below such announced rate.) Any change
in the reference rate announced by Bank of America shall take effect at
the opening of business on the day specified in the public announcement
of such change.
"Replacement Bank" has the meaning specified in Section 4.08.
"Reportable Event" means, any of the events set forth in Section
4043(b) of ERISA or the regulations thereunder, other than any such
event for which the 30-day notice requirement under ERISA has been
waived in regulations issued by the PBGC.
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"Requirement of Law" means, as to any Person, any law (statutory
or common), treaty, rule or regulation or determination of an arbitrator
or of a Governmental Authority, in each case applicable to or binding
upon the Person or any of its property or to which the Person or any of
its property is subject.
"Responsible Officer" means the chief executive officer or the
president of the Company, any other officer having substantially the
same authority and responsibility, or any officer having the title of
senior or executive vice president; or, with respect to compliance with
financial covenants, the chief financial officer, the treasurer, or the
chief accounting officer of the Company, or any other officer having
substantially the same authority and responsibility.
"Revolving Loan" has the meaning specified in Section 2.01
whether an Eurodollar Rate Loan or Base Rate Loan.
"Revolving Termination Date" means the earlier to occur of:
(a) May 31, 2000; and
(b) the date on which the Commitments otherwise
terminate in accordance with the provisions of this Agreement.
"S&P" means Standard & Poor's Ratings Group, a division of
XxXxxx-Xxxx, Inc., and its successors.
"SEC" means the Securities and Exchange Commission, or any
Governmental Authority succeeding to any of its principal functions.
"Spot Rate" for a currency means the rate quoted by Bank of
America as the spot rate for the purchase by Bank of America of such
currency with another currency through its FX Trading Office at
approximately 8:00 a.m. (San Francisco time) on the date two Banking
Days prior to the date as of which the foreign exchange computation is
made.
"Standby Letter of Credit" means a letter of credit, other than
a Commercial Letter of Credit, given to provide assurances of payment or
performance.
"Subsidiary" of a Person means any corporation, association,
partnership, limited liability company, joint venture or other business
entity of which more than 50% of the voting stock, membership interests
or other equity interests (in the case of Persons other than
corporations), is owned or controlled directly or indirectly by the
Person, or one or more of the Subsidiaries of the Person, or a
combination thereof. Unless the context otherwise clearly requires,
references herein to a "Subsidiary" refer to a Subsidiary of the
Company.
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"Subsidiary Co-Borrower" means any Subsidiary of the Company
designated as a "Subsidiary Co-Borrower" on Schedule 6.16 to the
Disclosure Letter which has executed and delivered a Subsidiary
Co-Borrower Agreement pursuant to Section 2.16.
"Subsidiary Co-Borrower Agreement" means a Subsidiary
Co-Borrower Agreement in the form of Exhibit H, with such changes as the
Agent shall have approved.
"Subsidiary Guarantor" means any Subsidiary of the Company which
has become a party to the Subsidiary Guaranty.
"Subsidiary Guaranty" means the Guaranty by certain Subsidiaries
of the Company substantially in the form of Exhibit G with such changes
as the Agent shall have approved or otherwise acceptable to Majority
Banks.
"Surety Instruments" means all letters of credit, banker's
acceptances, bank guaranties, shipside bonds, surety bonds and similar
instruments.
"Swap Contract" means any agreement, whether or not in writing,
relating to any transaction that is a rate swap, basis swap, forward
rate transaction, commodity swap, commodity option, equity or equity
index swap or option, bond, note or xxxx option, interest rate option,
forward foreign exchange transaction, cap, collar or floor transaction,
currency swap, cross-currency rate swap, swaption, currency option or
any other, similar transaction (including any option to enter into any
of the foregoing) or any combination of the foregoing, and, unless the
context otherwise clearly requires, any master agreement relating to or
governing any or all of the foregoing.
"Swap Termination Value" means, in respect of any one or more
Swap Contracts, after taking into account the effect of any legally
enforceable netting agreement relating to such Swap Contracts, (a) for
any date on or after the date such Swap Contracts have been closed out
and termination value(s) determined in accordance therewith, such
termination value(s), and (b) for any date prior to the date referenced
in clause (a) the amount(s) determined as the xxxx-to-market value(s)
for such Swap Contracts, as determined by the Company based upon one or
more mid-market or other readily available quotations provided by any
recognized dealer in such Swap Contracts (which may include any Bank.)
"Tangible Net Worth" means at any time, on a consolidated basis,
the gross book value of the Company's assets (excluding goodwill,
patents, trademarks, trade names, organization expense, treasury stock,
unamortized debt discount and expense, capitalized or deferred research
and development costs, deferred marketing expenses, deferred
receivables, and other like intangibles, and monies due from affiliates,
officers, directors, or shareholders of the Company) less total
liabilities (including but not limited to accrued and deferred income
taxes and excluding liabilities related to redeemable preferred stock)
and any reserves against assets; in calculating the Company's Tangible
Net Worth in accordance with the foregoing definition, the gross book
value of the Company's assets
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shall include the aggregate gross book value of the Company's lease
rights up to a maximum aggregate value of $2,500,000 for all such lease
rights; provided that Tangible Net Worth shall not include any amount
received by the Company with respect to the issuance of its equity
securities after the end of the 1998 fiscal year.
"Taxes" means any and all present or future taxes, levies,
assessments, imposts, duties, deductions, fees, withholdings or similar
charges, and all liabilities with respect thereto, excluding, in the
case of each Bank and the Agent, respectively, taxes imposed on or
measured by its net income by the jurisdiction (or any political
subdivision thereof) under the laws of which such Bank or the Agent, as
the case may be, is organized or maintains a Lending Office.
"Type" of Loan means a Base Rate Loan or an Eurodollar Rate
Loan.
"UCC" means the California Uniform Commercial Code.
"Unfunded Pension Liability" means the excess of a Plan's
benefit liabilities under Section 4001(a)(16) of ERISA, over the current
value of that Plan's assets, determined in accordance with the
assumptions used for funding the Pension Plan pursuant to Section 412 of
the IRC for the applicable plan year.
"Unused Commitments" means at any time, the amount by which the
total of the Commitments exceeds the sum of the outstanding principal
balance of the Revolving Loans and the L/C Obligations.
"Usance Letter of Credit" means a Commercial Letter of Credit
under which the drafts are payable other than at sight.
"United States" and "U.S." each means the United States of
America.
"Wholly-Owned Subsidiary" means any corporation in which (other
than directors' qualifying shares required by law) 100% of the capital
stock of each class having ordinary voting power, and 100% of the
capital stock of every other class, in each case, at the time as of
which any determination is being made, is owned, beneficially and of
record, by the Company, or by one or more of the other Wholly-Owned
Subsidiaries, or both.
1.02 Other Interpretive Provisions. (a) The meanings of defined terms
are equally applicable to the singular and plural forms of the defined terms.
(b) The words "hereof", "herein", "hereunder" and similar
words refer to this Agreement as a whole and not to any particular provision of
this Agreement; and subsection, Section, Schedule and Exhibit references are to
this Agreement unless otherwise specified.
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(c) (i) The term "documents" includes any and all
instruments, documents, agreements, certificates, indentures, notices
and other writings, however evidenced.
(ii) The term "including" is not limiting and means
"including without limitation."
(iii) In the computation of periods of time from a
specified date to a later specified date, the word "from" means "from
and including"; the words "to" and "until" each mean "to but excluding",
and the word "through" means "to and including."
(d) Unless otherwise expressly provided herein, (i)
references to agreements (including this Agreement) and other contractual
instruments shall be deemed to include all subsequent amendments and other
modifications thereto, but only to the extent such amendments and other
modifications are not prohibited by the terms of any Loan Document, and (ii)
references to any statute or regulation are to be construed as including all
statutory and regulatory provisions consolidating, amending, replacing,
supplementing or interpreting the statute or regulation.
(e) The captions and headings of this Agreement are for
convenience of reference only and shall not affect the interpretation of this
Agreement.
(f) This Agreement and other Loan Documents may use several
different limitations, tests or measurements to regulate the same or similar
matters. All such limitations, tests and measurements are cumulative and shall
each be performed in accordance with their terms. Unless otherwise expressly
provided, any reference to any action of the Agent or the Banks by way of
consent, approval or waiver shall be deemed modified by the phrase "in its/their
sole discretion."
(g) This Agreement and the other Loan Documents are the
result of negotiations among, and have been reviewed by counsel to, the Agent,
the Company and the other parties, and are the products of all parties.
Accordingly, they shall not be construed against the Banks or the Agent merely
because of the Agent's or Banks' involvement in their preparation.
1.03 Accounting Principles. (a) Unless the context otherwise clearly
requires, all accounting terms not expressly defined herein shall be construed,
and all financial computations required under this Agreement shall be made, in
accordance with GAAP, consistently applied.
(b) References herein to "fiscal year" and "fiscal quarter"
refer to such fiscal periods of the Company. References to a fiscal year are
based on the calendar year in which the first day of the fiscal year occurs
(e.g., a fiscal year which begins on January 31, 1999, is the "1999 fiscal
year").
(c) If GAAP changes during the term of this Agreement such
that the covenants contained in Article VIII would then be calculated in a
different manner or with different components (i) the parties to this Agreement
will amend this Agreement in such respects as are
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necessary to conform those covenants as criteria for evaluating the Company's
financial condition to substantially the same criteria as were effective prior
to such change in GAAP and (ii) the Company will be deemed to be in compliance
with the covenant contained in such sections following any such change in GAAP
until such amendment is entered into if and to the extent that the Company would
have been in compliance therewith under GAAP as in effect immediately prior to
such change.
1.04 Currency Equivalents Generally. For all purposes of this
Agreement (but not for purposes of the preparation of any financial statements
delivered pursuant hereto), the equivalent in any non-Dollar currency of an
amount in Dollars, and the equivalent in Dollars of an amount in any non-Dollar
currency, shall be determined at the Spot Rate.
ARTICLE II THE CREDITS
2.01 Amounts and Terms of Commitments. Each Bank severally agrees, on
the terms and conditions set forth herein, to make loans to the Company (each
such loan, a "Revolving Loan") from time to time on any Business Day during the
period from the Closing Date to the Revolving Termination Date and to
participate in the L/C Obligations, in an aggregate principal amount not to
exceed at any time outstanding the amount set forth opposite the Bank's name
with respect to such time in Schedule 2.01 under the heading "Commitment" (such
amount as the same may be reduced pursuant to Section 2.05 or as a result of one
or more assignments pursuant to Section 11.08, the Bank's "Commitment");
provided that, after giving effect to any Borrowing of Revolving Loans, (x) the
amount of all outstanding Revolving Loans, and the amount of all L/C Obligations
at any time shall not exceed the combined Commitments as in effect at such time,
and (y) the amount of all outstanding Revolving Loans and the amount of all L/C
Obligations in respect of Usance Letters of Credit shall not at any time exceed
$15,000,000. Within the limits of each Bank's Commitment, and subject to the
other terms and conditions hereof, the Company may borrow under this Section
2.01, prepay pursuant to Section 2.06 and reborrow pursuant to this Section
2.01.
2.02 Loan Accounts. (a) The Loans made by each Bank and Letters of
Credit Issued by the Issuing Bank shall be evidenced by one or more loan
accounts or records maintained by such Bank or Issuing Bank, as the case may be,
in the ordinary course of business. The loan accounts or records maintained by
the Agent, the Issuing Bank, and each Bank shall be conclusive absent manifest
error of the amount of the Loans made by the Banks to the Company and the
Letters of Credit Issued for the account of the Company, and the interest and
payments thereon. Any failure so to record or any error in doing so shall not,
however, limit or otherwise affect the obligation of the Company hereunder to
pay any amount owing with respect to the Loans or the Letters of Credit.
(b) Upon the request of any Bank made through the Agent, the
Loans made by such Bank may be evidenced by one or more Notes, instead of or in
addition to loan accounts. Each such Bank shall endorse on the schedules annexed
to its Note(s) the date, amount and maturity of each Loan made by it and the
amount of each payment of principal made by the
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Company with respect thereto. Each such Bank is irrevocably authorized by the
Company to endorse its Note(s) and each Bank's record shall be conclusive absent
manifest error; provided that the failure of a Bank to make, or an error in
making, a notation thereon with respect to any Loan shall not limit or otherwise
affect the obligations of the Company hereunder or under any such Note to such
Bank.
2.03 Procedure for Borrowing. (a) Each Borrowing shall be made upon
the Company's notice to the Agent in the form of a Notice of Borrowing (which
notice must be received by the Agent prior to 11:00 a.m. (San Francisco time)
(i) three Business Days prior to the requested Borrowing Date, in the case of
Eurodollar Rate Loans; and (ii) one Business Day prior to the requested
Borrowing Date, in the case of Base Rate Loans (provided that if a Notice of
Borrowing is given in respect of Base Rate Loans in Dollars by 9:00 a.m. San
Francisco time on any Business Day, such Loans shall be made on the same day),
specifying:
(A) the amount of the Borrowing, which shall be in
an aggregate amount not less than the Minimum Tranche;
(B) the requested Borrowing Date, which shall be a
Business Day;
(C) the Type of Loans comprising the Borrowing;
(D) other than in the case of Base Rate Loans, the
duration of the requested Interest Period; and
(E) the name of the Subsidiary Co-Borrower, if any,
with respect to such Borrowing.
Each such Notice of Borrowing shall be irrevocable.
(b) Upon receipt of the Notice of Borrowing, the Agent will
promptly notify each Bank thereof and of the amount of such Bank's Pro Rata
Share of the Borrowing.
(c) Each Bank will make the amount of its Pro Rata Share of
each Borrowing available to the Agent for the account of the Company at the
Agent's Payment Office on the Borrowing Date requested by the Company in
immediately available funds by 11:00 a.m. (San Francisco time). The proceeds of
all such Loans will then be made available to the Company or the Subsidiary
Co-Borrower, as the case may be, by the Agent at such office by crediting the
account of the Company (or the Subsidiary Co-Borrower, as the case may be) on
the books of Bank of America with, or by wire transfer in accordance with
written instructions provided to the Agent by the Company at the time of giving
the relevant Notice of Borrowing of, the aggregate of the amounts made available
to the Agent by the Banks and in like funds as received by the Agent.
(d) After giving effect to any Borrowing, unless the Agent
and Majority Banks shall otherwise consent, there may not be more than 7
different Interest Periods in effect.
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2.04 Conversion and Continuation Elections. (a) The Company may, upon
irrevocable written notice to the Agent in accordance with subsection 2.04(b):
(i) elect, as of any Business Day, in the case of
Base Rate Loans other than L/C Advances, or as of the last day of the
applicable Interest Period, in the case of Eurodollar Rate Loans, to
convert any such Loans (or any part thereof in an amount not less than
the Minimum Tranche) into Loans of another Type; or
(ii) elect, as of the last day of the applicable
Interest Period, to continue any Loans other than L/C Advances having
Interest Periods expiring on such day as Eurodollar Rate Loans (or any
part thereof in an amount not less than the Minimum Tranche);
provided that if at any time the aggregate amount of Eurodollar Rate Loans in
respect of any Borrowing is reduced, by payment, prepayment, or conversion of
part thereof to be less than $2,000,000, such Eurodollar Rate Loans shall
automatically convert into Base Rate Loans, and on and after such date the right
of the Company to continue such Loans as, and convert such Loans into,
Eurodollar Rate Loans shall terminate; the Agent will promptly notify the
Company and the Banks of any such automatic conversion and provided further so
long as any Event of Default has occurred and is continuing, Loans may be
converted or continued only into or as Base Rate Loans.
(b) The Company shall deliver a Notice of
Conversion/Continuation to be received by the Agent not later than 11:00 a.m.
(or 10:00 a.m. in the case of clause (i) below)(San Francisco time) at least (i)
three Business Days in advance of the Conversion/Continuation Date, if the Loans
are to be converted into or continued as Eurodollar Rate Loans; and (ii) one
Business Day in advance of the Conversion/Continuation Date, if the Loans are to
be converted into Base Rate Loans (provided that if a Notice of
Conversion/Continuation is given in respect of Base Rate Loans by 9:00 a.m. San
Francisco time on any Business Day, such Loans shall be made on the same day),
specifying:
(A) the proposed Conversion/Continuation Date;
(B) the aggregate amount of Loans to be converted or
continued;
(C) the Type of Loans resulting from the proposed
conversion or continuation;
(D) other than in the case of conversions into Base
Rate Loans, the duration of the requested Interest Period; and
(E) the Subsidiary Co-Borrower, if any, with respect
to such Borrowing.
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(c) If upon the expiration of any Interest Period applicable
to Eurodollar Rate Loans in Dollars, the Company has failed to select timely a
new Interest Period to be applicable to such Eurodollar Rate Loans, or if any
Event of Default then exists, the Company shall be deemed to have elected to
continue such Eurodollar Rate Loans as Eurodollar Rate Loans with an Interest
Period of one month. The Agent, on a courtesy basis, shall notify the Company of
the expiration of each Interest Period, but shall have no liability for its
failure to do so.
(d) The Agent will promptly notify each Bank of its receipt
of a Notice of Conversion/Continuation, or, if no timely notice is provided by
the Company, the Agent will promptly notify each Bank and the Company of the
details of any automatic conversion. All conversions and continuations shall be
made ratably among the Banks according to the respective outstanding principal
amounts of the Loans with respect to which the notice was given.
(e) After giving effect to any conversion or continuation of
Loans, unless the Agent and Majority Banks shall otherwise consent, there may
not be more than 7 different Interest Periods in effect.
2.05 Voluntary Termination or Reduction of Commitments. The Company
may, upon not less than five Business Days' prior notice to the Agent, terminate
the Commitments or permanently reduce the Commitments by an aggregate minimum
amount of $1,000,000 or any multiple of $1,000,000 in excess thereof; unless,
after giving effect thereto and to any prepayments of Loans made on the
effective date thereof, the amount of all Loans and L/C Obligations would exceed
the amount of the combined Commitments then in effect. Any reduction of the
Commitments shall be applied to each Bank according to its Pro Rata Share. All
accrued but unpaid commitment and letter of credit fees to, but not including
the effective date of any reduction or termination of Commitments and any
termination fee associated therewith, shall be paid on the effective date of
such reduction or termination.
2.06 Optional Prepayments. Subject to Section 4.04, the Company may,
at any time or from time to time, ratably prepay Loans in whole or in part, in
minimum amounts of $1,000,000 or any multiple of $100,000 in excess thereof, or
in other amounts with the consent of Majority Banks. The Company shall deliver a
notice of prepayment in accordance with Section 11.02 to be received by the
Agent not later than 11:00 a.m. (San Francisco time) (i) at least three Business
Days in advance of the prepayment date if the Loans to be prepaid are Eurodollar
Rate Loans, and (ii) at least one Business Day in advance of the prepayment date
if the Loans to be prepaid are Base Rate Loans (provided that if a notice of
prepayment is given in respect of Base Rate Loans in Dollars by 9:00 a.m. San
Francisco time on any Business Day, such Loans may be prepaid on the same day).
Such notice of prepayment shall specify the date and amount of such prepayment
and whether such prepayment is of Base Rate Loans, Eurodollar Rate Loans, or any
combination thereof. Such notice shall not thereafter be revocable by the
Company and the Agent will promptly notify each Bank thereof and of such Bank's
Pro Rata Share of such prepayment. If such notice is given by the Company, the
Company shall make such prepayment and the payment amount specified in such
notice shall be due and payable on the date specified therein, together with
accrued interest to each such date on the amount prepaid and any amounts
required pursuant to Section 4.04.
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2.07 Mandatory Prepayments of Loans. If on any date the amount of L/C
Obligations of any Class exceeds the L/C Commitment of that Class, the Company
shall Cash Collateralize on such date the outstanding Letters of Credit in an
amount equal to the excess of the maximum amount then available to be drawn
under such Letters of Credit over such L/C Commitment until such excess no
longer exists. Subject to Section 4.04, if on any date after giving effect to
any Cash Collateralization made on such date pursuant to the preceding sentence,
the amount of all Loans then outstanding plus the amount of all L/C Obligations
exceeds the combined Commitments, the Company shall upon demand by the Agent
made at the request of any Bank, prepay the outstanding principal amount of the
Loans, by an amount equal to the applicable excess.
2.08 Repayment. The Company shall repay to the Banks on the Revolving
Termination Date the aggregate principal amount of Revolving Loans outstanding
on such date.
2.09 Interest.
(a) Each Revolving Loan shall bear interest on the
outstanding principal amount thereof from the applicable Borrowing Date to the
date repaid or prepaid at a rate per annum equal to the Eurodollar Rate or the
Base Rate, as the case may be, plus the Applicable Margin.
(b) Interest on each Revolving Loan shall be paid in arrears
on each Interest Payment Date. Interest shall also be paid on the date of any
prepayment of Loans under Section 2.06, 2.07 or 2.10 for the portion of the
Loans so prepaid and upon payment (including prepayment) in full thereof and,
during the existence of any Event of Default, interest shall be paid on demand
of the Agent at the request or with the consent of the Majority Banks.
Notwithstanding subsection (a) of this Section, while any Event of Default
exists or after acceleration, the Borrower shall pay interest (after as well as
before entry of judgment thereon to the extent permitted by law) on the
principal amount of all outstanding Obligations, at a rate per annum which is
determined by adding 2% per annum to the Applicable Margin then in effect for
such Loans and, in the case of Obligations not subject to an Applicable Margin,
at a rate per annum equal to the Base Rate plus 2%; provided that, on and after
the expiration of any Interest Period applicable to any Eurodollar Rate Loan
outstanding on the date of occurrence of such Event of Default or acceleration,
the principal amount of such Loan shall, during the continuation of such Event
of Default or after acceleration, bear interest at a rate per annum equal to the
Base Rate plus 2%.
(c) Anything herein to the contrary notwithstanding, the
obligations of the Company to any Bank hereunder shall be subject to the
limitation that payments of interest shall not be required for any period for
which interest is computed hereunder, to the extent (but only to the extent)
that contracting for or receiving such payment by such Bank would be contrary to
the provisions of any law applicable to such Bank limiting the highest rate of
interest that may be lawfully contracted for, charged or received by such Bank,
and in such event the Company shall pay such Bank interest at the highest rate
permitted by applicable law.
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2.11 Fees. In addition to the fees specified in Section 3.08:
(a) Arrangement, Agency Fees. The Company shall pay an
agency fee to the Agent for the Agent's own account, as required by the letter
agreement ("Fee Letter") between the Company and the Agent dated August 25,
1999.
(b) Commitment Fees. Upon the occurrence and during the
continuance of an Event of Default, the Company shall pay to the Agent for the
ratable account of the Banks in proportion to their Pro Rata Shares, a
commitment fee on the average daily Unused Commitments equal to 0.50% per annum.
Such commitment fee shall be due and payable quarterly in arrears on each
Quarterly Date after the Closing Date and before the Revolving Termination Date,
with the final payment to be made on the Revolving Termination Date; provided
that, in connection with any reduction or termination of Commitments under
Section 2.05, the accrued commitment fee calculated for the period ending on
such date shall also be paid on the date of such reduction or termination, with
the following quarterly payment being calculated on the basis of the period from
such reduction or termination date to the next Quarterly Date. The commitment
fees under this subsection accrue and are payable without regard to whether one
or more conditions in Article V are not met.
(c) Termination Fee. Upon any termination or reduction of
the Commitments pursuant to Section 2.05, the Company shall, on the effective
date of such reduction or termination, pay to the Agent for the ratable account
of the Banks a termination fee equal to 0.250 % of the amount of the Commitments
being so terminated or reduced.
(d) Non-Renewal Fee. On the Revolving Termination Date, the
Company shall pay to the Agent for the ratable account of the Banks a
termination fee equal to 0.250 % of the amount of the Commitments as in effect
immediately prior to the Revolving Termination Date; provided that such fee
shall not be payable if (a) the Revolving Termination Date has been extended to
on or after May 31, 2001, or (b) the Company has obtained a fully committed
replacement credit facility of not less than $50,000,000 from Bank of America or
its Affiliates; provided further that neither Bank of America nor any of its
Affiliates shall be under any obligation to make any such replacement facility
available to the Company.
(e) Accrual. All fees, including fees under Section 3.08 are
fully-earned when due and non-refundable when paid.
2.12 Computation of Fees and Interest. (a) All computations of fees
and of interest for Base Rate Loans when the Base Rate is determined by Bank of
America's "reference rate" shall be made on the basis of a year of 365 or 366
days, as the case may be, and actual days elapsed. All other computations of
interest shall be made on the basis of a 360-day year and actual days elapsed
(which results in more interest being paid than if computed on the basis of a
365-day year). Interest and fees shall accrue during each period during which
interest or such fees are computed from the first day thereof to the last day
thereof.
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(b) Each determination of an interest rate by the Agent
shall be conclusive and binding on the Company and the Banks in the absence of
manifest error.
2.13 Payments by the Company. (a) All payments to be made by the
Company shall be made without set-off, recoupment or counterclaim. Except as
otherwise expressly provided herein, all payments by the Company shall be made
to the Agent for the account of the Banks at the Agent's Payment Office. Such
payments shall be made in immediately available funds no later than 11:00 a.m.
(San Francisco time) on the date specified herein. The Agent will promptly
distribute to each Bank its Pro Rata Share (or other applicable share as
expressly provided herein) of such principal, interest, fees or other amounts,
in like funds as received. Any payment which is received by the Agent later than
11:00 a.m. (San Francisco time) shall be deemed to have been received on the
following Business Day and any applicable interest or fee shall continue to
accrue.
(b) All payments to be made by the Company to any Issuing
Bank on account of drawings, interest, fees and other amounts required hereunder
with respect to any Letter of Credit issued by it shall be made without set-off
or counterclaim and shall be made to the Agent for the account of such Issuing
Bank in accordance with Article III, except in each case to the extent that a
Bank is entitled to share in any such payment as a result of its participation
therein in accordance with the provisions of Section 2.10 or 3.03, as the case
may be.
(c) Subject to the provisions set forth in the definition of
"Interest Period" herein, whenever any payment is due on a day other than a
Business Day, such payment shall be made on the following Business Day, and such
extension of time shall in such case be included in the computation of interest
or fees, as the case may be.
(d) Unless the Agent receives notice from the Company prior
to the date on which any payment is due to the Banks that the Company will not
make such payment in full as and when required, the Agent may assume that the
Company has made such payment in full to the Agent on such date in immediately
available funds and the Agent may (but shall not be so required), in reliance
upon such assumption, distribute to each Bank on such due date an amount equal
to the amount then due such Bank. If and to the extent the Company has not made
such payment in full to the Agent, each Bank shall repay to the Agent on demand
such amount distributed to such Bank, together with interest thereon at the
Federal Funds Rate for each day from the date such amount is distributed to such
Bank until the date repaid.
2.14 Payments by the Banks to the Agent. (a) Unless the Agent
receives notice from a Bank on or prior to the Closing Date or, with respect to
any Borrowing after the Closing Date, at least one Business Day prior to the
date of such Borrowing, that such Bank will not make available as and when
required hereunder to the Agent for the account of the Company the amount of
that Bank's Pro Rata Share of the Borrowing, the Agent may assume that each Bank
has made such amount available to the Agent in immediately available funds on
the Borrowing Date and the Agent may (but shall not be so required), in reliance
upon such assumption, make available to the Company on such date a corresponding
amount. If and to the extent any Bank shall not have made its full amount
available to the Agent in immediately available funds and the
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Agent in such circumstances has made available to the Company such amount, that
Bank shall on the Business Day following such Borrowing Date make such amount
available to the Agent, together with interest at the Federal Funds Rate for
each day during such period. A notice of the Agent submitted to any Bank with
respect to amounts owing under this subsection (a) shall be conclusive, absent
manifest error. If such amount is so made available, such payment to the Agent
shall constitute such Bank's Loan on the date of Borrowing for all purposes of
this Agreement. If such amount is not made available to the Agent on the
Business Day following the Borrowing Date, the Agent will notify the Company of
such failure to fund and, upon demand by the Agent, the Company shall pay such
amount to the Agent for the Agent's account, together with interest thereon for
each day elapsed since the date of such Borrowing, at a rate per annum equal to
the interest rate applicable at the time to the Loans comprising such Borrowing.
(b) The failure of any Bank to make any Loan on any
Borrowing Date shall not relieve any other Bank of any obligation hereunder to
make a Loan on such Borrowing Date, but no Bank shall be responsible for the
failure of any other Bank to make the Loan to be made by such other Bank on any
Borrowing Date.
2.15 Sharing of Payments, Etc. If, other than as expressly provided
elsewhere herein, any Bank shall obtain on account of its Loans, any payment
(whether voluntary, involuntary, through the exercise of any right of set-off,
or otherwise) in excess of its ratable share (or other share contemplated
hereunder), such Bank shall immediately (a) notify the Agent of such fact, and
(b) purchase from the other Banks such participations in the Loans made by them
as shall be necessary to cause such purchasing Bank to share the excess payment
pro rata with each of them; provided that if all or any portion of such excess
payment is thereafter recovered from the purchasing Bank, such purchase shall to
that extent be rescinded and each other Bank shall repay to the purchasing Bank
the purchase price paid therefor, together with an amount equal to such paying
Bank's ratable share (according to the proportion of (i) the amount of such
paying Bank's required repayment to (ii) the total amount so recovered from the
purchasing Bank) of any interest or other amount paid or payable by the
purchasing Bank in respect of the total amount so recovered. The Company agrees
that any Bank so purchasing a participation from another Bank may, to the
fullest extent permitted by law, exercise all its rights of payment (including
the right of set-off, but subject to Section 10.10) with respect to such
participation as fully as if such Bank were the direct creditor of the Company
in the amount of such participation. The Agent will keep records (which shall be
conclusive and binding in the absence of manifest error) of participations
purchased under this Section and will in each case notify the Banks following
any such purchases or repayments.
2.16 Subsidiary Co-Borrowers.
(a) Subject to the terms and conditions of subsection (b) of
this Section, the Company may, upon giving any Notice of Borrowing or request
for Issuance, designate as a part thereof, one of the Subsidiary Co-Borrowers to
be a co-borrower with the Company with respect to such Borrowing or Issuance, as
the case may be. A Subsidiary Co-Borrower in respect of a Borrowing or Letter of
Credit shall be jointly and severally liable with the Company for the
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payment of all principal, interest, L/C Obligations, and other sums (including
amounts owing under Articles IV and XI) in connection with such Borrowing or
Letter of Credit.
(b) No Person shall become a Subsidiary Co-Borrower with
respect to any Borrowing or Letter of Credit unless the Agent has received
counterparts of a Subsidiary Co-Borrower Agreement, signed by each of the
Company and such Subsidiary Guarantor (or, in the case of any party as to which
an executed counterpart shall have been received, receipt by the Agent in form
satisfactory to it of telegraphic, telex, facsimile transmission or other
written confirmation from such party of execution of a counterpart hereof by
such party).
(c) The Company shall from time to time provide to the
Agent, with sufficient copies for each Bank, all documents, if any, the Majority
Banks may reasonably request relating to the existence, status, and capacity of
the Subsidiary Co-Borrowers and the corporate authority for, and the validity,
force, and effect of the Subsidiary Co-Borrower Agreement and other Loan
Documents and any other matters relevant hereto or thereto, all in form and
substance satisfactory to the Majority Banks.
ARTICLE III THE LETTERS OF CREDIT
3.01 The Letter of Credit Subfacility. (a) On the terms and
conditions set forth herein (i) the Issuing Bank agrees, (A) from time to time
on any Business Day during the period from the Closing Date to the Revolving
Termination Date to issue Letters of Credit for the account of the Company, and
to amend or renew Letters of Credit previously issued by it, in accordance with
subsections 3.02(c) and 3.02(d), and (B) to honor drafts under the Letters of
Credit; and (ii) the Banks severally agree to participate in Letters of Credit
Issued for the account of the Company; provided that the Issuing Bank shall not
be obligated to Issue, and no Bank shall be obligated to participate in, any
Letter of Credit if as of the Issuance Date of such Letter of Credit (the
"Issuance Date"): (1) the amount of all L/C Obligations plus the amount of all
Revolving Loans exceeds the combined Commitments, (2) the participation of any
Bank in the amount of all L/C Obligations plus the amount of the Revolving Loans
of such Bank exceeds such Bank's Commitment, (3) the amount of L/C Obligations
in respect of Usance Letters of Credit plus the amount of Revolving Loans
exceeds $15,000,000, or (4) the amount of L/C Obligations in respect of Standby
Letters of Credit exceeds $8,000,000. Within the foregoing limits, and subject
to the other terms and conditions hereof, the Company's ability to obtain
Letters of Credit shall be fully revolving, and, accordingly, the Company may,
during the foregoing period, obtain Letters of Credit to replace Letters of
Credit which have expired or which have been drawn upon and reimbursed.
(b) The Issuing Bank is under no obligation to Issue any
Letter of Credit if:
(i) any order, judgment or decree of any
Governmental Authority or arbitrator shall by its terms purport to
enjoin or restrain the Issuing Bank from Issuing such Letter of Credit,
or any Requirement of Law applicable to the Issuing Bank or any request
or directive (whether or not having the force of law) from any
Governmental
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Authority with jurisdiction over the Issuing Bank shall prohibit, or
request that the Issuing Bank refrain from, the Issuance of letters of
credit generally or such Letter of Credit in particular or shall impose
upon the Issuing Bank with respect to such Letter of Credit any
restriction, reserve or capital requirement (for which the Issuing Bank
is not otherwise compensated hereunder) not in effect on the Closing
Date, or shall impose upon the Issuing Bank any unreimbursed loss, cost
or expense which was not applicable on the Closing Date and which the
Issuing Bank in good xxxxx xxxxx material to it;
(ii) the Issuing Bank has received written notice
from any Bank, the Agent or the Company, on or prior to the Business Day
prior to the requested Issuance Date of such Letter of Credit, that one
or more of the applicable conditions contained in Article V is not then
satisfied;
(iii) the expiry date of any requested Letter of
Credit, (A) if a Standby Letter of Credit, is more than one year after
the Revolving Termination Date or from its Issuance Date, or (B) if a
Commercial Letter of Credit (including a Usance Letter of Credit), is
more than six months after its Issuance Date;
(iv) any requested Letter of Credit does not provide
for drafts, provides for drafts payable other than at sight (except that
Usance Letters of Credit may provide for drafts payable up to 180 days
after the earlier of sight or the Revolving Termination Date) or is not
otherwise in form and substance acceptable to the Issuing Bank, or the
Issuance of a Letter of Credit shall violate any applicable policies of
the Issuing Bank;
(v) any Standby Letter of Credit is for the purpose
of supporting the issuance of any letter of credit by any other Person
other than, in the case of Letters of Credit as to which there is a
Subsidiary Co-Borrower, trade finance and performance guaranty letters
of credit, bonds, guarantees and indemnities; or
(vi) such Letter of Credit is in a face amount less
than $100,000 or more than $10,000,000 or to be denominated in a
currency other than Dollars unless Issuing Bank has otherwise agreed.
3.02 Issuance, Amendment and Renewal of Letters of Credit. (a) Each
Letter of Credit shall be issued upon the irrevocable written request of the
Company received by the Issuing Bank (with a copy sent by the Issuing Bank to
the Agent) at least four days (or such shorter time as the Issuing Bank may
agree in a particular instance in its sole discretion) prior to the proposed
Issuance Date. Each such request for issuance of a Letter of Credit shall be by
facsimile, confirmed promptly in an original writing, in the form of an L/C
Application, and shall specify in form and detail satisfactory to the Issuing
Bank: (i) the proposed date of issuance of the Letter of Credit (which shall be
a Business Day); (ii) the face amount of the Letter of Credit; (iii) the expiry
date of the Letter of Credit; (iv) the name and address of the beneficiary
thereof; (v) the documents to be presented by the beneficiary of the Letter of
Credit in case of any drawing thereunder; (vi) the full text of any certificate
to be presented by the beneficiary in case of any drawing thereunder; and (vii)
such other matters as the Issuing Bank may require.
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(b) Unless on or before the Business Day immediately
preceding the requested Issuance Date, the Issuing Bank has received notice from
the Agent directing the Issuing Bank not to issue such Letter of Credit because
such issuance is not then permitted under Section 3.01, then, subject to the
terms and conditions hereof, the Issuing Bank shall, on the requested date,
issue a Letter of Credit for the account of the Company in accordance with the
Issuing Bank's usual and customary business practices.
(c) From time to time while a Letter of Credit is
outstanding and prior to the Revolving Termination Date, the Issuing Bank will,
upon the written request of the Company received by the Issuing Bank (with a
copy sent by the Issuing Bank to the Agent) at least four days (or such shorter
time as the Issuing Bank may agree in a particular instance in its sole
discretion) prior to the proposed date of amendment, amend any Letter of Credit
issued by it. Each such request for amendment of a Letter of Credit shall be
made by facsimile, confirmed promptly in an original writing, made in the form
of an L/C Amendment Application and shall specify in form and detail
satisfactory to the Issuing Bank: (i) the Letter of Credit to be amended; (ii)
the proposed date of amendment of the Letter of Credit (which shall be a
Business Day); (iii) the nature of the proposed amendment; and (iv) such other
matters as the Issuing Bank may require. The Issuing Bank shall be under no
obligation to amend any Letter of Credit if: (A) the Issuing Bank would have no
obligation at such time to issue such Letter of Credit in its amended form under
the terms of this Agreement; or (B) the beneficiary of any such Letter of Credit
does not accept the proposed amendment to the Letter of Credit. The Agent will
promptly notify the Banks of the receipt by it of notice by the Issuing Bank of
the Issuance of any amendment.
(d) The Issuing Bank and the Banks agree that, while a
Letter of Credit is outstanding and prior to the Revolving Termination Date, at
the option of the Company and upon the written request of the Company received
by the Issuing Bank (with a copy sent by the Issuing Bank to the Agent) at least
four days (or such shorter time as the Issuing Bank may agree in a particular
instance in its sole discretion) prior to the proposed date of notification of
renewal, the Issuing Bank shall be entitled to authorize the automatic renewal
of any Letter of Credit issued by it. Each such request for renewal of a Letter
of Credit shall be made by facsimile, confirmed promptly in an original writing,
in the form of an L/C Amendment Application, and shall specify in form and
detail satisfactory to the Issuing Bank: (i) the Letter of Credit to be renewed;
(ii) the revised expiry date of the Letter of Credit; and (iii) such other
matters as the Issuing Bank may require. The Issuing Bank shall be under no
obligation so to renew any Letter of Credit if: (A) the Issuing Bank would have
no obligation at such time to issue or amend such Letter of Credit in its
renewed form under the terms of this Agreement; or (B) the beneficiary of any
such Letter of Credit does not accept the proposed renewal of the Letter of
Credit. If any outstanding Letter of Credit shall provide that it shall be
automatically renewed unless the beneficiary thereof receives notice from the
Issuing Bank that such Letter of Credit shall not be renewed, and if at the time
of renewal the Issuing Bank would be entitled to authorize the automatic renewal
of such Letter of Credit in accordance with this subsection 3.02(d) upon the
request of the Company but the Issuing Bank shall not have received any L/C
Amendment Application from the Company with respect to such renewal or other
written direction by the Company with respect thereto, the Issuing Bank shall
nonetheless be permitted to allow such Letter of Credit to renew,
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and the Company and the Banks hereby authorize such renewal, and, accordingly,
the Issuing Bank shall be deemed to have received an L/C Amendment Application
from the Company requesting such renewal.
(e) The Issuing Bank may, at its election (or as required by
the Agent at the direction of the Majority Banks), deliver any notices of
termination or other communications to any Letter of Credit beneficiary or
transferee, and take any other action, subject to the provisions of such Letter
of Credit, as necessary or appropriate, at any time and from time to time, in
order to cause the expiry date of such Letter of Credit to be a date not later
than the Revolving Termination Date or such later date in respect of such Letter
of Credit as shall have been approved under Section 3.01(b)(iii).
(f) This Agreement shall control in the event of any
conflict with any L/C-Related Document (other than any Letter of Credit).
(g) The Issuing Bank will also deliver to the Agent,
concurrently or promptly following its delivery of a Letter of Credit, or
amendment to or renewal of a Letter of Credit, to an advising bank or a
beneficiary, a true and complete copy of each such Letter of Credit or amendment
to or renewal of a Letter of Credit.
3.03 Existing Letters of Credit; Risk Participations, Drawings and
Reimbursements. (a) On and after the Closing Date, the Existing Letters of
Credit shall be deemed for all purposes, including for purposes of the fees to
be collected pursuant to subsections 3.08(a) and 3.08(b), and reimbursement of
costs and expenses to the extent provided herein, Letters of Credit outstanding
under this Agreement and entitled to the benefits of this Agreement and the
other Loan Documents, and shall be governed by the applications and agreements
pertaining thereto and by this Agreement. Each Bank shall be deemed to, and
hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank
on the Closing Date a participation in each such Letter of Credit and each
drawing thereunder in an amount equal to the product of (i) such Bank's Pro Rata
Share times (ii) the maximum amount available to be drawn under such Letter of
Credit and the amount of such drawing, respectively. For purposes of Section
2.01 and subsection 2.11(b), the Existing Letters of Credit shall be deemed to
utilize pro rata the Commitment of each Bank. With respect to any Existing
Letter of Credit issued for the account of any Subsidiary of the Company (and
whether or not such Subsidiary is or becomes a Subsidiary Co-Borrower
hereunder), the Company agrees that from and after the Closing Date, the Company
hereby assumes, and shall be jointly and severally liable with respect to, all
obligations of the account party under such Existing Letter of Credit, and that
such obligations shall be part of the Obligations hereunder and shall be subject
to the provisions hereof.
(b) Immediately upon the Issuance of each Letter of Credit
in addition to those described in subsection 3.03(a), each Bank shall be deemed
to, and hereby irrevocably and unconditionally agrees to, purchase from the
Issuing Bank a participation in such Letter of Credit and each drawing
thereunder in an amount equal to the product of (i) the Pro Rata Share of such
Bank, times (ii) the maximum amount available to be drawn under such Letter of
Credit and the amount of such drawing, respectively. For purposes of Section
2.01, each Issuance of a Letter of
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Credit shall be deemed to utilize the Commitment of each Bank by an amount equal
to the amount of such participation.
(c) In the event of any request for a drawing under a Letter
of Credit by the beneficiary or transferee thereof, the Issuing Bank will
promptly, and in any case within one Business Day prior to payment unless
presentment and payment are required to be made on the same day, notify the
Company; provided that the failure of the Issuing Bank to give such notice shall
not excuse the Company or any Subsidiary Co-Borrower from any of its obligations
hereunder. The Company shall reimburse the Issuing Bank prior to 11:00 a.m. (San
Francisco time), on each date that any amount is paid by the Issuing Bank under
any Letter of Credit (each such date, an "Honor Date"), in an amount equal to
the amount so paid by the Issuing Bank. In the event the Company fails to
reimburse the Issuing Bank for the full amount of any drawing under any Letter
of Credit by 11:00 a.m. (San Francisco time) on the Honor Date, the Issuing Bank
will promptly notify the Agent and the Agent will promptly notify each Bank
thereof, and the Company shall be deemed to have requested that Base Rate Loans
in the amount of such drawing be made by the Banks, which shall be disbursed on
the Honor Date under such Letter of Credit, subject to the amount of the
unutilized portion of the Revolving Commitment and subject to the conditions set
forth in Section 5.02. Any notice given by the Issuing Bank or the Agent
pursuant to this subsection 3.03(c) may be oral if immediately confirmed in
writing (including by facsimile); provided that the lack of such an immediate
confirmation shall not affect the conclusiveness or binding effect of such
notice.
(d) Each Bank shall upon any notice pursuant to subsection
3.03(c) make available to the Agent for the account of the relevant Issuing Bank
an amount in Dollars and in immediately available funds equal to its Pro Rata
Share of the amount of the drawing, whereupon the participating Banks shall
(subject to subsection 3.03(e)) each be deemed to have made a Revolving Loan
consisting of a Base Rate Loan to the Company in that amount. If any Bank so
notified fails to make available to the Agent for the account of the Issuing
Bank the amount of such Bank's Pro Rata Share of the amount of the drawing by no
later than 12:00 noon (San Francisco time) on the Honor Date, then interest
shall accrue on such Bank's obligation to make such payment, from the Honor Date
to the date such Bank makes such payment, at a rate per annum equal to the
Federal Funds Rate, as applicable, in effect from time to time during such
period. The Agent will promptly give notice of the occurrence of the Honor Date,
but failure of the Agent to give any such notice on the Honor Date or in
sufficient time to enable any Bank to effect such payment on such date shall not
relieve such Bank from its obligations under this Section 3.03.
(e) With respect to any unreimbursed drawing that is not
converted into Revolving Loans to the Company in whole or in part, because of
the Company's failure to satisfy the conditions set forth in Section 5.02 or for
any other reason, the Company shall be deemed to have incurred from the Issuing
Bank an L/C Borrowing in the amount of such drawing, which L/C Borrowing shall
be due and payable on demand (together with interest) and shall bear interest at
a rate per annum equal to the Base Rate plus 2% per annum, and each Bank's
payment to the Issuing Bank pursuant to subsection 3.03(d) shall be deemed
payment in respect of its
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participation in such L/C Borrowing and shall constitute an L/C Advance from
such Bank in satisfaction of its participation obligation under this Section
3.03.
(f) Each Bank's obligation in accordance with this Agreement
to make the Revolving Loans or L/C Advances, as contemplated by this Section
3.03, as a result of a drawing under a Letter of Credit, shall be absolute and
unconditional and without recourse to the Issuing Bank and shall not be affected
by any circumstance, including (i) any set-off, counterclaim, recoupment,
defense or other right which such Bank may have against the Issuing Bank, the
Company or any other Person for any reason whatsoever; (ii) the occurrence or
continuance of a Default or a Material Adverse Effect; or (iii) any other
circumstance, happening or event whatsoever, whether or not similar to any of
the foregoing; provided that each Bank's obligation to make Revolving Loans
under this Section 3.03 is subject to the conditions set forth in Section 5.02.
3.04 Repayment of Participations. (a) Upon (and only upon) receipt by
the Agent for the account of the Issuing Bank of immediately available funds
from the Company (i) in reimbursement of any payment made by the Issuing Bank
under the Letter of Credit with respect to which any Bank has paid the Agent for
the account of the Issuing Bank for such Bank's participation in the Letter of
Credit pursuant to Section 3.03 or (ii) in payment of interest thereon, the
Agent will pay to each Bank, in the same funds as those received by the Agent
for the account of the Issuing Bank, the amount of such Bank's Pro Rata Share of
such funds, and the Issuing Bank shall receive the amount of the Pro Rata Share
of such funds of any Bank that did not so pay the Agent for the account of the
Issuing Bank.
(b) If the Agent or the Issuing Bank is required at any time
to return to the Company, or to a trustee, receiver, liquidator, custodian, or
any official in any Insolvency Proceeding, any portion of the payments made by
the Company to the Agent for the account of the Issuing Bank pursuant to
subsection 3.04(a) in reimbursement of a payment made under the Letter of Credit
or interest or fee thereon, each Bank shall, on demand of the Agent, forthwith
return to the Agent or the Issuing Bank the amount of its Pro Rata Share of any
amounts so returned by the Agent or the Issuing Bank plus interest thereon from
the date such demand is made to the date such amounts are returned by such Bank
to the Agent or the Issuing Bank, at a rate per annum equal to the Federal Funds
Rate in effect from time to time.
3.05 Role of the Issuing Bank. (a) Each Bank and the Company agree
that, in paying any drawing under a Letter of Credit, the Issuing Bank shall not
have any responsibility to obtain any document (other than any sight draft and
certificates expressly required by the Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such document or the authority of
the Person executing or delivering any such document.
(b) No Agent-Related Person nor any of the respective
correspondents, participants or assignees of the Issuing Bank shall be liable to
any Bank for: (i) any action taken or omitted in connection herewith at the
request or with the approval of the Banks (including the Majority Banks, as
applicable); (ii) any action taken or omitted in the absence of gross negligence
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or willful misconduct; or (iii) the due execution, effectiveness, validity or
enforceability of any L/C-Related Document.
(c) The Company hereby assumes all risks of the acts or
omissions of any beneficiary or transferee with respect to its use of any Letter
of Credit; provided that this assumption is not intended to, and shall not,
preclude the Company's pursuing such rights and remedies as it may have against
the beneficiary or transferee at law or under any other agreement. No
Agent-Related Person, nor any of the respective correspondents, participants or
assignees of the Issuing Bank, shall be liable or responsible for any of the
matters described in clauses (i) through (vii) of Section 3.06; provided further
anything in such clauses to the contrary notwithstanding, that the Company may
have a claim against the Issuing Bank, and the Issuing Bank may be liable to the
Company, to the extent, but only to the extent, of any direct, as opposed to
consequential or exemplary, damages suffered by the Company which the Company
proves were caused by the Issuing Bank's willful misconduct or gross negligence
or the Issuing Bank's willful failure to pay under any Letter of Credit after
the presentation to it by the beneficiary of a sight draft and certificate(s)
strictly complying with the terms and conditions of a Letter of Credit. In
furtherance and not in limitation of the foregoing: (i) the Issuing Bank may
accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary (except for actual knowledge of fraud); and (ii) the
Issuing Bank shall not be responsible for the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign a
Letter of Credit or the rights or benefits thereunder or proceeds thereof, in
whole or in part, which may prove to be invalid or ineffective for any reason.
3.06 Obligations Absolute. The obligations of the Company under this
Agreement and any L/C-Related Document to reimburse the Issuing Bank for a
drawing under a Letter of Credit, and to repay any L/C Borrowing and any drawing
under a Letter of Credit converted into Revolving Loans, shall be unconditional
and irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement and each such other L/C-Related Document under all circumstances,
including the following:
(i) any lack of validity or enforceability of this
Agreement or any L/C-Related Document;
(ii) any change in the time, manner or place of
payment of, or in any other term of, all or any of the obligations of
the Company in respect of any Letter of Credit or any other amendment or
waiver of or any consent to departure from all or any of the L/C-Related
Documents;
(iii) the existence of any claim, set-off, defense or
other right that the Company may have at any time against any
beneficiary or any transferee of any Letter of Credit (or any Person for
whom any such beneficiary or any such transferee may be acting), the
Issuing Bank or any other Person, whether in connection with this
Agreement, the transactions contemplated hereby or by the L/C-Related
Documents or any unrelated transaction;
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(iv) any draft, demand, certificate or other document
presented under any Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being
untrue or inaccurate in any respect (except for actual knowledge of
fraud by the Issuing Bank under circumstances where the Issuing Bank
would be authorized to dishonor the presentation under UCC Section
5109(a)(2)); or any loss or delay in the transmission or otherwise of
any document required in order to make a drawing under any Letter of
Credit;
(v) any payment by the Issuing Bank under any Letter
of Credit against presentation of a draft or certificate that does not
strictly comply with the terms of any Letter of Credit; or any payment
made by the Issuing Bank under any Letter of Credit to any Person
purporting to be a trustee in bankruptcy, debtor-in-possession, assignee
for the benefit of creditors, liquidator, receiver or other
representative of or successor to any beneficiary or any transferee of
any Letter of Credit, including any arising in connection with any
Insolvency Proceeding;
(vi) any exchange, release or non-perfection of any
collateral, or any release or amendment or waiver of or consent to
departure from any other guarantee, for all or any of the obligations of
the Company in respect of any Letter of Credit; or
(vii) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing, including any other
circumstance that might otherwise constitute a defense available to, or
a discharge of, the Company or a guarantor.
3.07 Cash Collateral Pledge. Upon (a) the request of the Agent, (i)
if the Issuing Bank has honored any full or partial drawing request on any
Letter of Credit and such drawing has resulted in an L/C Borrowing hereunder, or
(ii) if, as of the Revolving Termination Date, any Letters of Credit may for any
reason remain outstanding and partially or wholly undrawn, or (b) the occurrence
of the circumstances described in subsection 2.07(a) requiring the Company to
Cash Collateralize Letters of Credit, then, the Company shall immediately Cash
Collateralize the L/C Obligations in an amount equal to (x) such L/C Obligations
in the case of clause (a) above or (y) the amount required by Section 2.07(a) in
the case of clause (b) above.
3.08 Letter of Credit Fees. (a) The Company shall pay to the Agent a
letter of credit fee with respect to Standby Letters of Credit at the rate of
1.000% per annum on the aggregate maximum amount available for drawings under
each such Standby Letter of Credit from time to time, and such fee shall (i)
commence to accrue on the Issuance Date as to any Standby Letter of Credit other
than Existing Letters of Credit and on the Closing Date as to Existing Letters
of Credit which are Standby Letters of Credit, (ii) be payable for the account
of each of the Banks ratably in proportion to its Pro Rata Share, and (iii) be
payable (A) as to each Standby Letter of Credit other than Existing Letters of
Credit, in advance on the Issuance Date of such Letter of Credit, with respect
to the period from the Issuance Date to the first Quarterly Date thereafter, and
quarterly in advance on each Quarterly Date after the Issuance Date so long as
such Letter of Credit is outstanding, and (B) as to each Existing Letter of
Credit which is a Standby Letter of
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Credit, in advance on the Closing Date, with respect to the period from the
Closing Date to the first Quarterly Date thereafter, and quarterly in advance on
each Quarterly Date after the Closing Date so long as such Existing Letter of
Credit is outstanding; provided that the minimum fee in respect of any Standby
Letter of Credit shall be $500 and provided further that while any Event of
Default exists or after acceleration, such letter of credit fee shall be
increased by an adding 1.00% per annum to the rate otherwise applicable.
(b) The Company shall pay to the Agent a letter of credit
fee with respect to Commercial Letters of Credit at a rate per annum equal to
the Applicable Margin on the aggregate maximum amount available for drawings
under each such Commercial Letter of Credit from time to time, and such fee
shall (i) commence to accrue on the Issuance Date as to any Commercial Letter of
Credit other than Existing Letters of Credit and on the Closing Date as to
Existing Letters of Credit which are Commercial Letters of Credit, (ii) be
payable for the account of each of the Banks ratably in proportion to its Pro
Rata Share, and (iii) be payable (A) as to each Commercial Letter of Credit
other than Existing Letters of Credit, in advance on the Issuance Date of such
Letter of Credit, with respect to the period from the Issuance Date to the first
Quarterly Date thereafter, and quarterly in advance on each Quarterly Date after
the Issuance Date so long as such Letter of Credit is outstanding, and (B) as to
each Existing Letter of Credit which is a Commercial Letter of Credit, in
advance on the Closing Date, with respect to the period from the Closing Date to
the first Quarterly Date thereafter, and quarterly in advance on each Quarterly
Date after the Closing Date so long as such Existing Letter of Credit is
outstanding; provided that while any Event of Default exists or after
acceleration, such letter of credit fee shall be 0.500% per annum.
(c) Other fees for Usance Letters of Credit and other
Commercial Letters of Credit shall be on a negotiated basis between the Company
and the Issuing Bank.
(d) The Company shall pay to the Issuing Bank from time to
time on demand the normal issuance, presentation, amendment and other processing
fees, and other standard costs and charges, of the Issuing Bank relating to
letters of credit as from time to time in effect and shall pay the Issuing Bank
the fronting fees specified in the Fee Letter.
3.09 Uniform Customs and Practice. The Uniform Customs and Practice
for Documentary Credits as published by the International Chamber of Commerce
most recently at the time of issuance of any Letter of Credit shall (unless
otherwise expressly provided in the Letters of Credit) apply to the Letters of
Credit.
ARTICLE IV TAXES, YIELD PROTECTION AND ILLEGALITY
4.01 Taxes. (a) Any and all payments by the Company to each Bank or
the Agent under this Agreement and any other Loan Document shall be made free
and clear of, and without deduction or withholding for, any Taxes. In addition,
the Company shall pay all Other Taxes.
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(b) If the Company shall be required by law to deduct or
withhold any Taxes, Other Taxes or Further Taxes from or in respect of any sum
payable hereunder to any Bank or the Agent, then:
(i) the sum payable shall be increased as necessary
so that, after making all required deductions and withholdings
(including deductions and withholdings applicable to additional sums
payable under this Section), such Bank or the Agent, as the case may be,
receives and retains an amount equal to the sum it would have received
and retained had no such deductions or withholdings been made;
(ii) the Company shall make such deductions and
withholdings;
(iii) the Company shall pay the full amount deducted
or withheld to the relevant taxing authority or other authority in
accordance with applicable law; and
(iv) the Company shall also pay to each Bank or the
Agent for the account of such Bank, at the time interest is paid,
Further Taxes in the amount that the respective Bank specifies as
necessary to preserve the after-tax yield the Bank would have received
if such Taxes, Other Taxes or Further Taxes had not been imposed.
(c) The Company agrees to indemnify and hold harmless each
Bank and the Agent for the full amount of i) Taxes, ii) Other Taxes, and iii)
Further Taxes in the amount that the respective Bank specifies as necessary to
preserve the after-tax yield the Bank would have received if such Taxes, Other
Taxes or Further Taxes had not been imposed, and any liability (including
penalties, interest, additions to tax and expenses) arising therefrom or with
respect thereto, whether or not such Taxes, Other Taxes or Further Taxes were
correctly or legally asserted. Payment under this indemnification shall be made
within 30 days after the date the Bank or the Agent makes written demand
therefor.
(d) Within 30 days after the date of any payment by the
Company of Taxes, Other Taxes or Further Taxes pursuant to this Section 4.01,
the Company shall furnish to each Bank or the Agent the original or a certified
copy of a receipt evidencing payment thereof, or other evidence of payment
satisfactory to such Bank or the Agent.
(e) If the Company is required to pay any amount to any Bank
or the Agent pursuant to subsection (b) or (c) of this Section, then such Bank
shall use reasonable efforts (consistent with legal and regulatory restrictions)
to change the jurisdiction of its Lending Office so as to eliminate any such
additional payment by the Company which may thereafter accrue, if such change in
the sole judgment of such Bank is not otherwise disadvantageous to such Bank.
(f) In the event any Bank or the Agent shall receive any
refund with respect to any Taxes, Other Taxes, or Further Taxes paid by the
Company for the account of such Bank or the Agent, as the case may be, such Bank
or the Agent shall pay the amount of such refund to the Company within 90 days
after the receipt thereof. The determination of the existence and amount
(including any methods of allocation or apportionment used to determine any such
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amount) shall be made in good faith by such Bank or the Agent, as the case may
be, but otherwise shall be in the sole and absolute discretion of such Bank or
the Agent.
4.02 Illegality. (a) If any Bank determines that the introduction of
any applicable Requirement of Law, or any change in any applicable Requirement
of Law, or in the interpretation or administration of any Requirement of Law,
has made it unlawful, or that any central bank or other Governmental Authority
has asserted that it is unlawful, for any Bank or its applicable Lending Office
to make Eurodollar Rate Loans, then, on notice thereof by the Bank to the
Company through the Agent, any obligation of that Bank to make Eurodollar Rate
Loans shall be suspended until the Bank notifies the Agent and the Company that
the circumstances giving rise to such determination no longer exist.
(b) If a Bank determines that it is unlawful to maintain any
Eurodollar Rate Loan, the Company shall, upon its receipt of notice of such fact
and demand from such Bank (with a copy to the Agent), prepay in full such
Eurodollar Rate Loans of that Bank then outstanding, together with interest
accrued thereon and amounts required under Section 4.04, either on the last day
of the Interest Period thereof, if the Bank may lawfully continue to maintain
such Eurodollar Rate Loans to such day, or immediately, if the Bank may not
lawfully continue to maintain such Eurodollar Rate Loan. If the Company is
required to so prepay any Eurodollar Rate Loan, then concurrently with such
prepayment, the Company shall borrow from the affected Bank, in the amount of
such repayment, a Base Rate Loan in the amount of such prepaid Loan.
(c) Before giving any notice to the Agent under this
Section, the affected Bank shall designate a different Lending Office with
respect to its Eurodollar Rate Loans if such designation will avoid the need for
giving such notice or making such demand and will not, in the judgment of the
Bank, be illegal or otherwise disadvantageous to the Bank.
4.03 Increased Costs and Reduction of Return. (a) If any Bank
determines that, due to either (i) the introduction of or any change (other than
any change by way of imposition of or increase in reserve requirements included
in the calculation of the Eurodollar Rate or in respect of the assessment rate
payable by any Bank to the FDIC for insuring U.S. deposits) in or in the
interpretation of any law or regulation or (ii) the compliance by that Bank with
any guideline or request from any central bank or other Governmental Authority
(whether or not having the force of law), there shall be any increase in the
cost to such Bank of agreeing to make or making, funding or maintaining any
Eurodollar Rate Loans or participating in Letters of Credit, or, in the case of
the Issuing Bank, any increase in the cost to the Issuing Bank of agreeing to
issue, issuing or maintaining any Letter of Credit or of agreeing to make or
making, funding or maintaining any unpaid drawing under any Letter of Credit,
then the Company shall be liable for, and shall from time to time, upon demand
(with a copy of such demand to be sent to the Agent), pay to the Agent for the
account of such Bank, additional amounts as are sufficient to compensate such
Bank for such increased costs.
(b) If any Bank shall have determined that (i) the
introduction of any Capital Adequacy Regulation, (ii) any change in any Capital
Adequacy Regulation, (iii) any change in the interpretation or administration of
any Capital Adequacy Regulation by any central bank or
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other Governmental Authority charged with the interpretation or administration
thereof, or (iv) compliance by the Bank (or its Lending Office) or any
corporation controlling the Bank with any Capital Adequacy Regulation, affects
or would affect the amount of capital required or expected to be maintained by
the Bank or any corporation controlling the Bank and (taking into consideration
such Bank's or such corporation's policies with respect to capital adequacy and
such Bank's desired return on capital) determines that the amount of such
capital is increased as a consequence of its Commitment, loans, credits or
obligations under this Agreement, then, upon demand of such Bank to the Company
through the Agent, the Company shall pay to the Bank, from time to time as
specified by the Bank, additional amounts sufficient to compensate the Bank for
such increase.
4.04 Funding Losses. The Company shall reimburse (through the Agent)
each Bank and hold each Bank harmless from any loss or expense which the Bank
may sustain or incur as a consequence of:
(a) the failure of the Company to make on a timely basis any
payment of principal of any Eurodollar Rate Loan;
(b) the failure of the Company to borrow, continue or
convert a Loan after the Company has given (or is deemed to have given) a Notice
of Borrowing or a Notice of Conversion/ Continuation;
(c) the failure of the Company to make any prepayment in
accordance with any notice delivered under Section 2.06;
(d) the prepayment (including pursuant to Section 2.06 or
2.07) or other payment (including after acceleration thereof) of an Eurodollar
Rate Loan on a day that is not the last day of the relevant Interest Period; or
(e) the automatic conversion under Section 2.04 of any
Eurodollar Rate Loan to a Base Rate Loan on a day that is not the last day of
the relevant Interest Period;
including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain its Eurodollar Rate Loans bearing interest
at a fixed rate or from fees payable to terminate the deposits from which such
funds were obtained.
4.05 Inability to Determine Rates. If the Agent determines that for
any reason adequate and reasonable means do not exist for determining the
Eurodollar Rate for any requested Interest Period with respect to a proposed
Eurodollar Rate Loan, or that the Eurodollar Rate applicable pursuant to
subsection 2.09(a) for any requested Interest Period with respect to a proposed
Eurodollar Rate Loan does not adequately and fairly reflect the cost to the
Banks of funding such Loan, the Agent will promptly so notify the Company and
each Bank. Thereafter, the obligation of the Banks to make or maintain
Eurodollar Rate Loans, as the case may be, hereunder shall be suspended until
the Agent upon the instruction of the Majority Banks revokes such notice in
writing. Upon receipt of such notice, the Company may revoke any Notice of
Borrowing or
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Notice of Conversion/Continuation then submitted by it. If the Company does not
revoke such Notice, then the Banks shall make, convert or continue the Loans, as
proposed by the Company, in the amount specified in the applicable notice
submitted by the Company, but such Loans shall be made, converted or continued
as Base Rate Loans instead of Eurodollar Rate Loans.
4.06 Reserves on Eurodollar Rate Loans. The Company shall pay to each
Bank, as long as such Bank shall be required under any applicable regulations of
the central bank or other relevant Governmental Authority to maintain any
reserves in respect of any Eurodollar Rate Loan, additional costs on the unpaid
principal amount of each Eurodollar Rate Loan equal to the actual costs of such
reserves allocated to such Loan by the Bank (as determined by the Bank in good
faith, which determination shall be conclusive), payable on each date on which
interest is payable on such Loan, provided the Company shall have received at
least 15 days' prior written notice (with a copy to the Agent) of such
additional interest from the Bank. If a Bank fails to give notice 15 days prior
to the relevant Interest Payment Date, such additional interest shall be payable
15 days from receipt of such notice.
4.07 Certificates of Banks. Any Bank claiming reimbursement or
compensation under this Article IV shall deliver to the Agent (who shall notify
the Company) a certificate setting forth in reasonable detail the amount payable
to the Bank hereunder and such certificate shall be conclusive and binding on
the Company in the absence of manifest error. If such Bank fails to notify the
Company that the Bank intends to claim any such reimbursement or compensation
within six months after the Bank has knowledge of its claim therefor, the
Company will not be obligated to compensate the Bank for the amount of the
Bank's claim accruing prior to the date which is six months before the date on
which the Bank first notifies the Company that it intends to make such claim; it
being understood that the calculation of the actual amounts may not be possible
within such period and the Bank may provide such calculation as soon as
reasonably practicable thereafter without affecting or limiting the Company's
payment obligations hereunder.
4.08 Substitution of Banks. Upon the receipt by the Company from any
Bank or from the Agent on behalf of any Bank (an "Affected Bank") of a claim for
compensation or other payments under Sections 4.01, 4.02, 4.03, or 4.06 the
Company may: (i) request the Affected Bank to use its best efforts to obtain a
replacement bank or financial institution satisfactory to the Company to acquire
and assume all or a ratable part of all of such Affected Bank's Loans and
Commitment (a "Replacement Bank"); (ii) request one or more of the other Banks
to acquire and assume all or part of such Affected Bank's Loans and Commitment;
or (iii) designate a Replacement Bank. Any such designation of a Replacement
Bank under clause (i) or (iii) shall be subject to the prior written consent of
the Agent and Issuing Bank, which consent shall not be unreasonably withheld or
delayed. Notwithstanding the foregoing provisions of this Section, however, the
Company shall not have the right to remove a Bank that is the Issuing Bank at
such time unless such Bank shall also simultaneously be replaced as "Issuing
Bank" pursuant to documentation in form and substance reasonably satisfactory to
such Issuing Bank.
4.09 Survival. The agreements and obligations of the Company in this
Article IV shall survive the payment of all other Obligations.
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ARTICLE V CONDITIONS PRECEDENT
5.01 Conditions of Initial Loans. The obligation of each Bank to make
its initial Credit Extension hereunder is subject to the condition that the
Agent shall have received on or before the date of the initial Credit Extension
all of the following, in form and substance satisfactory to the Agent and each
Bank, and in sufficient copies for each Bank:
(a) Credit Agreement. This Agreement executed by each party
thereto;
(b) Subsidiary Guaranty. The Subsidiary Guaranty executed by
each Material Subsidiary as of the Closing Date;
(c) Resolutions; Incumbency.
(i) Copies of the resolutions of the board of
directors of the Company and each Subsidiary that may become party to a
Loan Document authorizing the transactions contemplated hereby,
certified as of the Closing Date by the Secretary or an Assistant
Secretary of such Person; and
(ii) A certificate of the Secretary or Assistant
Secretary of the Company, and each Subsidiary that may become party to a
Loan Document certifying the names and true signatures of the officers
of the Company or such Subsidiary authorized to execute, deliver and
perform, as applicable, this Agreement, and all other Loan Documents to
be delivered by it hereunder;
(d) Organization Documents; Good Standing. Each of the
following documents:
(i) the articles or certificate of incorporation and
the bylaws of the Company and each Subsidiary party to any Loan Document
as in effect on the Closing Date, certified by the Secretary or
Assistant Secretary of the Company or such Subsidiary as of the Closing
Date; and
(ii) a good standing certificate for the Company and
each Subsidiary party to any Loan Document from the Secretary of State
(or similar, applicable Governmental Authority) of its state of
incorporation and for the Company from the Secretary of State of the
State of California as to the qualification of the Company to do
business as a foreign corporation in California, all as of a recent
date;
(e) Legal Opinions. The opinion of Wilson, Sonsini, Xxxxxxxx
& Xxxxxx, Professional Corporation, counsel to the Company, addressed to the
Agent and the Banks, substantially in the form of Exhibit D;
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(f) Payment of Fees. Evidence of payment by the Company of
all accrued and unpaid fees, costs and expenses to the extent then due and
payable on the Closing Date, together with Attorney Costs of Bank of America to
the extent invoiced prior to or on the Closing Date, plus such additional
amounts of Attorney Costs as shall constitute Bank of America's reasonable
estimate of Attorney Costs incurred or to be incurred by it through the closing
proceedings (provided that such estimate shall not thereafter preclude final
settling of accounts between the Company and Bank of America); including any
such costs, fees and expenses arising under or referenced in Sections 2.11 and
11.04;
(g) Certificate. A certificate signed by a Responsible
Officer, dated as of the Closing Date, stating that:
(i) the representations and warranties contained in
Article V are true and correct on and as of such date, as though made on
and as of such date (except to the extent such representations and
warranties expressly refer to an earlier date in which case they shall
be true and correct as of such earlier date); and
(ii) no Default exists or would result from the
initial Credit Extension;
(i) Indebtedness and Liens. Receipt by the Agent (or it
being established to Agent's reasonable satisfaction that immediately upon the
making of the first Credit Extension, the Agent will be in receipt) of evidence
reasonably satisfactory to it that any Indebtedness, Contingent Obligation,
commitment, or Lien with respect to the Company, its Subsidiaries or their
respective assets, the existence of which would violate Sections 8.01, 8.05, or
8.08 shall have been repaid, terminated, or released, as the case may be;
(j) Disclosure Letter. Receipt by the Agent of the
Disclosure Letter;
(k) Subsidiary Co-Borrower Agreements. A Subsidiary
Co-Borrower Agreement for each Subsidiary of the Borrower which is an account
party under any Existing Letter of Credit; and
(l) Other Documents. Such other approvals, opinions,
documents or materials as the Agent or any Bank may request.
5.02 Conditions to All Borrowings. The obligation of each Bank to
make any Credit Extension to be made by it (including its initial Credit
Extension) is subject to the satisfaction of the following conditions precedent
on the relevant Borrowing Date or Issuance Date:
(a) Notice of Borrowing. The Agent shall have received a
Notice of Borrowing or in the case of any Issuance of any Letter of Credit, the
Issuing Bank and the Agent shall have received an L/C Application or L/C
Amendment Application, as required under Section 3.02;
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(b) Continuation of Representations and Warranties. The
representations and warranties in Article V shall be true and correct on and as
of such Borrowing Date or Issuance Date with the same effect as if made on and
as of such Borrowing Date or Issuance Date (except to the extent such
representations and warranties expressly refer to an earlier date, in which case
they shall be true and correct as of such earlier date);
(c) No Existing Default. No Default shall exist or shall
result from such Borrowing or Issuance; and
(d) No Overadvance. After giving effect to such Borrowing or
Issuance, the Revolving Loans and L/C Obligations shall be within the limits
specified by Sections 2.01 and 3.01.
Each Notice of Borrowing and L/C Application or L/C Amendment Application
submitted by the Company hereunder shall constitute a representation and
warranty by the Company hereunder, as of the date of each such notice and as of
each Borrowing Date or Issuance Date that the conditions in Section 5.02 are
satisfied.
ARTICLE VI REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Agent and each Bank that:
6.01 Corporate Existence and Power. The Company and each of its
Subsidiaries:
(a) is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation;
(b) has the power and authority and all governmental
licenses, authorizations, consents and approvals to own its assets, carry on its
business and to execute, deliver, and perform its obligations under the Loan
Documents;
(c) is duly qualified as a foreign corporation and is
licensed 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 or license except where the failure to be so
qualified or licensed could not reasonable be expected to have a Material
Adverse Effect; and
(d) is in compliance with all applicable Requirements of
Law; except, in each case referred to in clause (c) or clause (d), to the extent
that the failure to do so could not reasonably be expected to have a Material
Adverse Effect.
6.02 Corporate Authorization; No Contravention. The execution,
delivery and performance by the Company and its Subsidiaries of this Agreement
and each other Loan Document to which such Person is party, have been duly
authorized by all necessary corporate action, and do not and will not:
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(a) contravene the terms of any of such Person's
Organization Documents;
(b) conflict with or result in any breach or contravention
of, or the creation of any Lien under, any document evidencing any Contractual
Obligation to which such Person is a party or any order, injunction, writ or
decree of any Governmental Authority to which such Person or its property is
subject; or
(c) violate any applicable Requirement of Law.
6.03 Governmental Authorization. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority is necessary or required in connection with the
execution, delivery or performance by, or enforcement against, the Company or
any of its Subsidiaries of the Agreement or any other Loan Document.
6.04 Binding Effect. This Agreement and each other Loan Document to
which the Company or any of its Subsidiaries is a party constitute the legal,
valid and binding obligations of the Company and any of its Subsidiaries to the
extent it is a party thereto, enforceable against such Person in accordance with
their respective terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, or similar laws affecting the enforcement of creditors'
rights generally or by equitable principles relating to enforceability
(regardless of whether enforcement is sought in equity or at law).
6.05 Litigation. Except as specifically disclosed in Schedule 6.05 to
the Disclosure Letter, there are no actions, suits, proceedings, claims or
disputes pending, or to the best knowledge of the Company, threatened or
contemplated, at law, in equity, in arbitration or before any Governmental
Authority, against the Company, or its Subsidiaries or any of their respective
properties which:
(a) purport to affect or pertain to this Agreement or any
other Loan Document, or any of the transactions contemplated hereby or thereby;
or
(b) if determined adversely to the Company or its
Subsidiaries, would reasonably be expected to have a Material Adverse Effect. No
injunction, writ, temporary restraining order or any order of any nature has
been issued by any court or other Governmental Authority purporting to enjoin or
restrain the execution, delivery or performance of this Agreement or any other
Loan Document, or directing that the transactions provided for herein or therein
not be consummated as herein or therein provided.
6.06 No Default. No Default exists or would result from the incurring
of any Obligations by the Company. Neither the Company nor any Subsidiary is in
default under or with respect to any Contractual Obligation in any respect
which, individually or together with all such defaults, could reasonably be
expected to have a Material Adverse Effect.
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6.07 ERISA Compliance. Except as specifically disclosed in Schedule
6.07 to the Disclosure Letter:
(a) Each Plan is in compliance in all material respects with
the applicable provisions of ERISA, the IRC and other federal or state law. Each
Plan which is intended to qualify under Section 401(a) of the IRC has received a
favorable determination letter from the IRS and to the best knowledge of the
Company, nothing has occurred which would cause the loss of such qualification.
The Company and each ERISA Affiliate has made all required contributions to any
Plan subject to Section 412 of the IRC, and no application for a funding waiver
or an extension of any amortization period pursuant to Section 412 of the IRC
has been made with respect to any Plan.
(b) There are no pending or, to the best knowledge of
Company, threatened claims, actions or lawsuits, or action by any Governmental
Authority, with respect to any Plan which has resulted or could reasonably be
expected to result in a Material Adverse Effect. There has been no prohibited
transaction or violation of the fiduciary responsibility rules with respect to
any Plan which has resulted or could reasonably be expected to result in a
Material Adverse Effect.
(c) (i) No ERISA Event has occurred or is reasonably
expected to occur; (ii) no Pension Plan has any Unfunded Pension Liability;
(iii) neither the Company nor any ERISA Affiliate has incurred, or reasonably
expects to incur, any liability under Title IV of ERISA with respect to any
Pension Plan (other than premiums due and not delinquent under Section 4007 of
ERISA); (iv) neither the Company nor any ERISA Affiliate has incurred, or
reasonably expects to incur, any liability (and no event has occurred which,
with the giving of notice under Section 4219 of ERISA, would result in such
liability) under Section 4201 or 4243 of ERISA with respect to a Multiemployer
Plan; and (v) neither the Company nor any ERISA Affiliate has engaged in a
transaction that could be subject to Section 4069 or 4212(c) of ERISA.
6.08 Use of Proceeds; Margin Regulations. The proceeds of the Loans
are to be used solely for the purposes set forth in and permitted by Section
7.12 and Section 8.07. Neither the Company nor any Subsidiary is generally
engaged in the business of purchasing or selling Margin Stock or extending
credit for the purpose of purchasing or carrying Margin Stock.
6.09 Title to Properties. The Company and each Subsidiary have good
record and marketable title in fee simple to, or valid leasehold interests in,
all real property necessary or used in the ordinary conduct of their respective
businesses, except for such defects in title as could not, individually or in
the aggregate, have a Material Adverse Effect. As of the Closing Date, the
property of the Company and its Subsidiaries is subject to no Liens, other than
Permitted Liens.
6.10 Taxes. The Company and its Subsidiaries have filed all Federal
and other material tax returns and reports required to be filed, and have paid
all Federal and other material taxes, assessments, fees and other governmental
charges levied or imposed upon them or their properties, income or assets
otherwise due and payable, except those which are being contested in good faith
by appropriate proceedings and for which adequate reserves have been provided in
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accordance with GAAP. There is no proposed tax assessment against the Company or
any Subsidiary that would, if made, have a Material Adverse Effect.
6.11 Financial Condition. (a) The audited consolidated financial
statements of the Company and its Subsidiaries dated January 30, 1999, and the
related consolidated statements of income or operations, shareholders' equity
and cash flows for the 12 month fiscal period ended on that date:
(i) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein;
(ii) fairly present in all material respects the
financial condition of the Company and its Subsidiaries as of the date
thereof and results of operations for the period covered thereby; and
(iii) except as specifically disclosed in Schedule
6.11 to the Disclosure Letter, show all material indebtedness and other
liabilities, direct or contingent, of the Company and its consolidated
Subsidiaries as of the date thereof, including liabilities for taxes,
material commitments and Contingent Obligations.
(b) Since January 30, 1999, there has been no Material
Adverse Effect.
6.12 Environmental Matters. The Company conducts in the ordinary
course of business a review of the effect of existing Environmental Laws and
existing Environmental Claims on its business, operations and properties, and as
a result thereof the Company has reasonably concluded that, except as
specifically disclosed in Schedule 6.12 to the Disclosure Letter, such
Environmental Laws and Environmental Claims could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
6.13 Regulated Entities. None of the Company, any Person controlling
the Company, or any Subsidiary, is an "Investment Company" within the meaning of
the Investment Company Act of 1940. The Company is not subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act, any state public utilities code, or any other Federal
or state statute or regulation limiting its ability to incur Indebtedness.
6.14 No Burdensome Restrictions. Neither the Company nor any
Subsidiary is a party to or bound by any Contractual Obligation, or subject to
any restriction in any Organization Document, or any Requirement of Law, which
could reasonably be expected to have a Material Adverse Effect.
6.15 Copyrights, Patents, Trademarks and Licenses, etc. The Company
or its Subsidiaries own or are licensed or otherwise have the right to use all
of the patents, trademarks, service marks, trade names, copyrights, contractual
franchises, authorizations and other rights that are reasonably necessary for
the operation of their respective businesses, without conflict with the rights
of any other Person. To the best knowledge of the Company, no slogan or other
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advertising device, product, process, method, substance, part or other material
now employed, or now contemplated to be employed, by the Company or any
Subsidiary infringes upon any rights held by any other Person. Except as
specifically disclosed in Schedule 6.05 to the Disclosure Letter, no claim or
litigation regarding any of the foregoing is pending or threatened, and no
patent, invention, device, application, principle or any statute, law, rule,
regulation, standard or code is pending or, to the knowledge of the Company,
proposed, which, in either case, could reasonably be expected to have a Material
Adverse Effect.
6.16 Subsidiaries. As of the Closing Date, the Company (a) has no
Subsidiaries other than those specifically disclosed in part (a) of Schedule
6.16 to the Disclosure Letter hereto, (b) has no equity investments in any other
corporation or entity other than those specifically disclosed in part (b) of
Schedule 6.16 to the Disclosure Letter, and (c) has no Material Subsidiaries
except as noted on part (a) of Schedule 6.16 to the Disclosure Letter.
6.17 Insurance. Except as specifically disclosed in Schedule 6.17 to
the Disclosure Letter, the properties of the Company and its Subsidiaries are
insured with financially sound and reputable insurance companies not Affiliates
of the Company, in such amounts, with such deductibles and covering such risks
as are customarily carried by companies engaged in similar businesses and owning
similar properties in localities where the Company or such Subsidiary operates.
6.18 Swap Obligations. Neither the Company nor any of its
Subsidiaries has incurred any outstanding obligations under any Swap Contracts,
other than Permitted Swap Obligations. The Company has undertaken its own
independent assessment of its consolidated assets, liabilities and commitments
and has considered appropriate means of mitigating and managing risks associated
with such matters and has not relied on any swap counterparty or any Affiliate
of any swap counterparty in determining whether to enter into any Swap Contract.
6.19 Subsidiary Guaranty. Every Material Subsidiary is a Subsidiary
Guarantor under, and bound pursuant to the provisions of, the Subsidiary
Guaranty.
6.20 Full Disclosure. None of the representations or warranties made
by the Company or any Subsidiary in the Loan Documents as of the date such
representations and warranties are made or deemed made, and none of the
statements contained in any exhibit, report, statement or certificate furnished
by or on behalf of the Company or any Subsidiary in connection with the Loan
Documents (including the offering and disclosure materials delivered by or on
behalf of the Company to the Banks prior to the Closing Date), contains any
untrue statement of a material fact or omits any material fact required to be
stated therein or necessary to make the statements made therein, in light of the
circumstances under which they are made, not misleading as of the time when made
or delivered.
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ARTICLE VII AFFIRMATIVE COVENANTS
So long as any Bank shall have any Commitment, or the Issuing Bank shall
have any L/C Commitment, or any Loan or other Obligation (other than inchoate
indemnity obligations) shall remain unpaid or unsatisfied or any Letter of
Credit shall remain outstanding, unless the Majority Banks waive compliance in
writing:
7.01 Financial Statements. The Company shall deliver to the Agent, in
form and detail satisfactory to the Agent and the Majority Banks, with
sufficient copies for each Bank:
(a) as soon as available, but not later than 120 days after
the end of each fiscal year, a copy of the audited consolidated balance sheet of
the Company and its Subsidiaries as at the end of such year and the related
consolidated statements of income or operations, shareholders' equity and cash
flows for such year, setting forth in each case in comparative form the figures
for the previous fiscal year, and accompanied by the opinion of Deloitte &
Touche LLP or another nationally-recognized independent public accounting firm
("Independent Auditor") which report shall state that such consolidated
financial statements present fairly in all material respects the financial
position for the periods indicated in conformity with GAAP applied on a basis
consistent with prior years. Such opinion shall not be qualified or limited
because of a restricted or limited examination by the Independent Auditor of any
material portion of the Company's or any Subsidiary's records;
(b) as soon as available, but not later than 45 days after
the end of each of the first three fiscal quarters of each fiscal year, a copy
of the unaudited consolidated balance sheet of the Company and its Subsidiaries
as of the end of such quarter and the related consolidated statements of income,
shareholders' equity and cash flows for the period commencing on the first day
and ending on the last day of such quarter, and certified by a Responsible
Officer as fairly presenting in all material respects, in accordance with GAAP
(subject to ordinary, good faith year-end audit adjustments and the absence of
footnotes), the financial position and the results of operations of the Company
and the Subsidiaries;
(c) as soon as available, but not later than 30 days after
the end of each of the first eleven months of each fiscal year and not later
than 60 days after the end of the last month of each fiscal year, a copy of the
unaudited consolidated balance sheet of the Company and its Subsidiaries as of
the end of such month and the related consolidated statements of income,
shareholders' equity and cash flows for the period commencing on the first day
and ending on the last day of such month;
(d) as soon as available, but not later than 120 days after
the end of each fiscal year, a copy of an unaudited consolidating balance sheet
of the Company and its Subsidiaries as at the end of such year and the related
consolidating statement of income for such fiscal year;
(e) as soon as available, but not later than 45 days after
the end of each of the first three fiscal quarters of each fiscal year, a copy
of the unaudited consolidating balance sheets of
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the Company and its Subsidiaries, and the related consolidating statements of
income for such fiscal quarter;
(f) by November 30 of each year, a budget detailing sources
and uses of funds for projected Capital Expenditures for the following fiscal
year; and
(g) within 60 days after the beginning of each fiscal year,
Financial Projections for such fiscal year, certified by a Responsible Officer
as being prepared in good faith and based on assumptions believed to be
reasonable.
7.02 Certificates; Other Information. The Company shall furnish to
the Agent, with sufficient copies for each Bank:
(a) concurrently with the delivery of the financial
statements referred to in subsections 7.01(a) and (b), a Compliance Certificate
executed by a Responsible Officer;
(b) promptly, copies of all financial statements and reports
that the Company sends to its shareholders, and copies of all financial
statements and regular, periodical or special reports (including Forms 10K, 10Q
and 8K) that the Company or any Subsidiary may make to, or file with, the SEC
(other than exhibits thereto and any registration statement on Form S-8 or its
equivalent); and
(c) promptly upon receipt thereof, copies of each report
submitted to the Board of Directors (or the Audit Committee thereof) of the
Company by independent public accountants in connection with any annual,
interim, or special audit made by them of the consolidated financial statements
of the Company and its consolidated Subsidiaries including each report submitted
to the Board of Directors (or the Audit Committee thereof) of the Company
concerning its accounting practices and systems and any final "management
letter" submitted by such accountants to management in connection with the
annual audit of the Company and its consolidated Subsidiaries;
(d) promptly, such additional information regarding the
business, financial or corporate affairs of the Company or any Subsidiary as the
Agent, at the reasonable request of any Bank, may from time to time request.
7.03 Notices. The Company shall promptly notify the Agent:
(a) of the occurrence of any Default;
(b) of any matter that has resulted or could reasonably be
expected to result in a Material Adverse Effect, including (i) breach or
non-performance of, or any default under, a Contractual Obligation of the
Company or any Subsidiary; (ii) any dispute, litigation, investigation,
proceeding or suspension between the Company or any Subsidiary and any
Governmental Authority; or (iii) the commencement of, or any material
development in, any
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litigation or proceeding affecting the Company or any Subsidiary; including any
litigation involving a claim of $1,000,000 or more or pursuant to any applicable
Environmental Laws;
(c) of the occurrence of any of the following events
affecting the Company or any ERISA Affiliate (but in no event more than 10 days
after such event), and deliver to the Agent and each Bank a copy of any notice
with respect to such event that is filed with a Governmental Authority and any
notice delivered by a Governmental Authority to the Company or any ERISA
Affiliate with respect to such event:
(i) an ERISA Event;
(ii) a material increase in the Unfunded Pension
Liability of any Pension Plan;
(iii) the adoption of, or the commencement of
contributions to, any Plan subject to Section 412 of the IRC by the
Company or any ERISA Affiliate; or
(iv) the adoption of any amendment to a Plan subject
to Section 412 of the IRC, if such amendment results in a material
increase in contributions or Unfunded Pension Liability;
(d) of any material change in accounting policies or
financial reporting practices by the Company or any of its consolidated
Subsidiaries;
(e) upon the request from time to time of the Agent, the
Swap Termination Values, together with a description of the method by which such
values were determined, relating to any then-outstanding Swap Contracts to which
the Company or any of its Subsidiaries is party;
(f) of any change of the location of the corporate
headquarters of the Company; and
(g) any Investments of the type described in Section
8.04(d), if the amount of such Investments in any Person in any transaction or
related series of transactions exceeds $1,000,000.
Each notice under this Section shall be accompanied by a written statement by a
Responsible Officer setting forth details of the occurrence referred to therein,
and stating what action the Company or any affected Subsidiary proposes to take
with respect thereto and at what time such action is proposed to be taken. Each
notice under subsection 7.03(a) shall describe with particularity any and all
clauses or provisions of this Agreement or other Loan Document that have been
(or foreseeably will be) breached or violated.
7.04 Preservation of Corporate Existence, Etc. The Company shall, and
shall cause each Subsidiary and Subsidiary Co-Borrower to:
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(a) preserve and maintain in full force and effect its
corporate existence and good standing under the laws of its state or
jurisdiction of incorporation;
(b) preserve and maintain in full force and effect all
governmental rights, privileges, qualifications, permits, licenses and
franchises necessary or desirable in the normal conduct of its business except
in connection with transactions permitted by Section 8.03 and sales of assets
permitted by Section 8.02;
(c) use reasonable efforts, in the ordinary course of
business, to preserve its business organization and goodwill; and
(d) preserve or renew all of its registered patents,
trademarks, trade names and service marks, the non-preservation of which could
reasonably be expected to have a Material Adverse Effect.
7.05 Maintenance of Property. The Company shall maintain, and shall
cause each Subsidiary to maintain, and preserve all its property which is used
or useful in its business in good working order and condition, ordinary wear and
tear and obsolescence excepted. The Company and each Subsidiary shall use the
standard of care typical in the industry in the operation and maintenance of its
facilities.
7.06 Insurance. The Company shall maintain, and shall cause each
Subsidiary to maintain, with financially sound and reputable independent
insurers, insurance with respect to its properties and business against loss or
damage of the kinds customarily insured against by Persons engaged in the same
or similar business, of such types and in such amounts as are customarily
carried under similar circumstances by such other Persons.
7.07 Payment of Obligations. The Company shall, and shall cause each
Subsidiary to, pay and discharge as the same shall become due and payable, all
their respective obligations and liabilities, including:
(a) all tax liabilities, assessments and governmental
charges or levies upon it or its properties or assets, unless the same are being
contested in good faith by appropriate proceedings and adequate reserves in
accordance with GAAP are being maintained by the Company or such Subsidiary; and
(b) all lawful claims which, if unpaid, would by law become
a Lien (other than a Permitted Lien) upon its property.
7.08 Compliance with Laws. The Company shall comply, and shall cause
each Subsidiary to comply, in all material respects with all applicable
Requirements of Law of any Governmental Authority having jurisdiction over it or
its business (including the Federal Fair Labor Standards Act), except such as
may be contested in good faith or as to which a bona fide dispute may exist.
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7.09 Compliance with ERISA. The Company shall, and shall cause each of
its ERISA Affiliates to: (a) maintain each Plan in compliance in all material
respects with the applicable provisions of ERISA, the IRC and other federal or
state law; (b) cause each Plan which is qualified under Section 401(a) of the
IRC to maintain such qualification; and (c) make all required contributions to
any Plan subject to Section 412 of the IRC.
7.10 Inspection of Property and Books and Records. The Company shall
maintain and shall cause each Subsidiary to maintain proper books of record and
account, in which full, true and correct entries in conformity with GAAP
consistently applied shall be made of all financial transactions and matters
involving the assets and business of the Company and such Subsidiary. The
Company shall permit, and shall cause each Subsidiary to permit, representatives
and independent contractors of the Agent or any Bank to visit and inspect any of
their respective properties, to examine their respective corporate, financial
and operating records, and make copies thereof or abstracts therefrom, and to
discuss their respective affairs, finances and accounts with their respective
directors, officers, and independent public accountants (provided that an
officer of the Company is provided an opportunity to be present), all at such
reasonable times during normal business hours and as often as may be reasonably
desired, upon reasonable advance notice to the Company; provided when an Event
of Default exists the Agent or any Bank may do any of the foregoing without
advance notice and without an officer of the Company being present.
7.11 Environmental Laws. The Company shall, and shall cause each
Subsidiary to, conduct its operations and keep and maintain its property in
compliance with all applicable Environmental Laws.
7.12 Use of Proceeds. The Company shall use the proceeds of the Loans
for working capital and other general corporate purposes other than for purposes
of undertaking an Acquisition in contravention of any Requirement of Law or of
any Loan Document.
7.13 Subsidiary Guaranty. The Company shall cause (a) each Material
Subsidiary in existence on the Closing Date to become a party to the Subsidiary
Guaranty as a Subsidiary Guarantor on the Closing Date, and (b) with respect to
the period after the Closing Date, immediately upon any of the Subsidiaries of
the Company becoming a Material Subsidiary or upon the acquisition by the
Company of a Material Subsidiary, the Company shall cause such Subsidiary to
become a party to the Subsidiary Guaranty as a Subsidiary Guarantor.
7.14 Pari-Passu Obligations. The Company shall, and shall cause the
Material Subsidiaries to, at all times maintain the Obligations on a pari-passu
basis with all other Indebtedness of the Company or the Material Subsidiaries.
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ARTICLE VIII NEGATIVE COVENANTS
So long as any Bank shall have any Commitment, or the Issuing Bank shall
have any L/C Commitment, or any Loan or other Obligation (other than inchoate
indemnity obligations) shall remain unpaid or unsatisfied or any Letter of
Credit shall remain outstanding, unless the Majority Banks waive compliance in
writing:
8.01 Limitation on Liens. The Company shall not, and shall not suffer
or permit any Subsidiary to, directly or indirectly, make, create, incur, assume
or suffer to exist any Lien upon or with respect to any part of its property,
whether now owned or hereafter acquired, other than the following ("Permitted
Liens"):
(a) any Lien existing on property of the Company or any
Subsidiary on the Closing Date and set forth in Schedule 8.01 to the Disclosure
Letter securing Indebtedness outstanding on such date;
(b) any Lien created under any Loan Document;
(c) Liens for taxes, fees, assessments or other governmental
charges (including customs and regulatory charges) which are not delinquent or
remain payable without penalty, or to the extent that non-payment thereof is
permitted by Section 6.07; provided that no notice of lien has been filed or
recorded under the IRC;
(d) carriers', warehousemen's, mechanics', landlords',
materialmen's, repairmen's or other similar Liens arising in the ordinary course
of business which are not delinquent or remain payable without penalty or which
are being contested in good faith and by appropriate proceedings, which
proceedings have the effect of preventing the forfeiture or sale of the property
subject thereto;
(e) Liens (other than any Lien imposed by ERISA) consisting
of pledges or deposits required in the ordinary course of business in connection
with workers' compensation, unemployment insurance and other social security
legislation;
(f) Liens on the property of the Company or its Subsidiary
securing (i) the non-delinquent performance of bids, trade contracts (other than
for borrowed money), leases, statutory obligations, (ii) contingent obligations
on surety and appeal bonds, and (iii) other non-delinquent obligations of a like
nature; in each case, incurred in the ordinary course of business; provided that
all such Liens in the aggregate would not (even if enforced) cause a Material
Adverse Effect and that none of such Liens secure Indebtedness;
(g) Liens consisting of judgment or judicial attachment
liens, provided that the enforcement of such Liens is effectively stayed and all
such liens in the aggregate at any time outstanding for the Company and its
Subsidiaries do not exceed $500,000;
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(h) 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 interfere
with the ordinary conduct of the businesses of the Company and its Subsidiaries;
(i) Liens on assets acquired after the Closing Date
(including assets of corporations which become Subsidiaries after Closing Date);
provided that such Liens existed at the time such assets were respectively
acquired or such corporations respectively became Subsidiaries and were not
created in anticipation thereof; provided that any Indebtedness secured by such
Liens shall not exceed that permitted by Section 8.05(e).
(j) purchase money security interests on any property
acquired or held by the Company or any of its Subsidiaries in the ordinary
course of business, securing Indebtedness incurred or assumed for the purpose of
financing all or any part of the cost of acquiring such property; provided that
(i) any such Lien attaches to such property concurrently with or within 20 days
after the acquisition thereof, (ii) such Lien attaches solely to the property so
acquired in such transaction, (iii) the principal amount of the debt secured
thereby does not exceed 100% of the cost of such property, and (iv) the
principal amount of the Indebtedness secured by any and all such purchase money
security interests shall not at any time exceed that permitted by Section
8.05(e);
(k) Liens securing obligations in respect of capital leases
on assets subject to such leases; provided that such capital leases are
otherwise permitted hereunder and that the Indebtedness secured by such Liens
shall not exceed that permitted by Section 8.05(e);
(l) Liens arising solely by virtue of any statutory or
common law provision relating to banker's liens, rights of set-off or similar
rights and remedies as to deposit accounts or other funds maintained with a
creditor depository institution; provided that (i) such deposit account is not a
dedicated cash collateral account and is not subject to restrictions against
access by the Company in excess of those set forth by regulations promulgated by
the FRB, and (ii) such deposit account is not intended by the Company or any
Subsidiary to provide collateral to the depository institution;
(m) Liens to secure Indebtedness permitted under Section
8.05(f), provided that such Lien does not extend to any property other than the
property securing the Indebtedness being refinanced pursuant to Section 8.05(f);
and
(n) Liens on the proceeds of insurance granted to insurance
carriers solely to secure the payment of financed premiums due to that carrier;
8.02 Disposition of Assets. The Company shall not, and shall not
suffer or permit any Subsidiary to, directly or indirectly, sell, assign, lease,
convey, transfer or otherwise dispose of (whether in one or a series of
transactions) any property (including accounts and notes receivable, with or
without recourse) or enter into any agreement to do any of the foregoing,
except:
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(a) dispositions of inventory, or used, worn-out or surplus
equipment, all in the ordinary course of business;
(b) the sale of equipment to the extent that such equipment
is exchanged for credit against the purchase price of similar replacement
equipment, or the proceeds of such sale are reasonably promptly applied to the
purchase price of such replacement equipment;
(c) disposition of fixed assets in connection with sale and
leaseback transactions; provided that (i) such transactions are on reasonable
business terms, and (ii) such transactions, taken together, do not involve all
or substantially all of the unconsolidated fixed assets of the Company or any of
its subsidiaries; and
(d) dispositions of insignificant Subsidiaries or minor
assets not exceeding $1,000,000 in aggregate book value for all such
dispositions in any fiscal year.
8.03 Consolidations and Mergers. The Company shall not, and shall not
suffer or permit any Subsidiary to, merge, consolidate with or into, or convey,
transfer, lease or otherwise dispose of (whether in one transaction or in a
series of transactions all or substantially all of its assets (whether now owned
or hereafter acquired) to or in favor of any Person, except:
(a) (i) the Company may consolidate with or merge within
or into another Person, so long as the Company is the surviving corporation and
(ii) any Subsidiary of the Company may consolidate with or merge with or into
another Person so long as a Wholly-Owned Subsidiary of the Company is the
surviving corporation; provided that, in the case of (i) or (ii), (x) no Default
shall have occurred and be continuing after giving effect to such merger or
consolidation, and (y) to the extent such merger or consolidation is with a
Person other than the Company and its Subsidiaries, such Person is in the same
line of business as the Company and its Subsidiaries; and
(b) any Subsidiary may sell all or substantially all of its
assets (upon voluntary liquidation or otherwise), to the Company or a
Wholly-Owned Subsidiary.
8.04 Loans and Investments. The Company shall not purchase or
acquire, or suffer or permit any Subsidiary to purchase or acquire, or make any
commitment therefor, any capital stock, equity interest, or any obligations or
other securities of, or any interest in, any Person, or make or commit to make
any Acquisitions, or make or commit to make any advance, loan, extension of
credit or capital contribution to or any other investment in, any Person
including any Affiliate of the Company (together, "Investments"), except for:
(a) Investments held by the Company or Subsidiary in the
form of cash, Cash Equivalents, or readily marketable securities in accordance
with investment policies acceptable to Majority Banks;
(b) extensions of credit in the nature of accounts
receivable or notes receivable arising from the sale or lease of goods or
services in the ordinary course of business;
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(c) extensions of credit by the Company to any of its
Wholly-Owned Subsidiaries or by any of its Wholly-Owned Subsidiaries to the
Company or to another of its Wholly-Owned Subsidiaries to the extent permitted
by Sections 8.05 and 8.06;
(d) Investments incurred in order to consummate Acquisitions
for a total consideration not exceeding $5,000,000 in any fiscal year and
otherwise permitted herein, provided that (i) such Acquisitions are undertaken
in accordance with all applicable Requirements of Law; and (ii) the prior,
effective written consent or approval to such Acquisition of the board of
directors or equivalent governing body of the acquisition target is obtained;
(e) Investments constituting Permitted Swap Obligations or
payments or advances under Swap Contracts relating to Permitted Swap
Obligations;
(f) Investments consisting of loans and advances to
employees for business-related travel expenses, moving expenses, costs of
replacement homes and other similar expenses, in each case incurred in the
ordinary course of business and not at any time exceeding $1,000,000 in total
amount outstanding for all such loans and advances;
(g) Existing Investments in Subsidiaries set forth on
Schedule 6.16 to the Disclosure Letter;
(h) Existing Investments described on Schedule 8.04 to the
Disclosure Letter;
(i) Investments acquired by the Company or any of its
Subsidiaries (i) in exchange for any other Investment held by the Company or any
such Subsidiary and permitted hereunder in connection with or as a result of a
bankruptcy, workout, reorganization or recapitalization of the issuer of such
other Investment, or (ii) as a result of a foreclosure by the Company or any of
its Subsidiaries with respect to any secured Investment permitted hereunder or
other transfer of title with respect to any such Investment which is in default;
(j) Any endorsement of a check or other medium of payment
for deposit or collection or other similar transaction in the ordinary course of
business; and
(k) Investments consisting of loans and advances to
manufacturers of apparel for sale by the Company or any of its Subsidiaries to
enable such manufacturer to purchase supplies to manufacture such apparel and
not at any time exceeding $500,000 in total amount outstanding for all such
loans and advances and all Contingent Obligations of the type described in
Section 8.08(e).
8.05 Limitation on Indebtedness. The Company shall not, and shall not
suffer or permit any Subsidiary to, create, incur, assume, suffer to exist, or
otherwise become or remain directly or indirectly liable with respect to, or
acquire or maintain any Commitment from any Person to extend financial
accommodations which if extended would result in, any Indebtedness, except:
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(a) Indebtedness incurred pursuant to this Agreement;
(b) Indebtedness consisting of Contingent Obligations
permitted pursuant to Section 8.08;
(c) Indebtedness existing on the Closing Date and set forth
in Schedule 8.05 to the Disclosure Letter;
(d) Indebtedness secured by Liens permitted by subsection
8.1(i), (j) and (m) which do not require total payments to be made by the
Company and its Subsidiaries in excess of $2,000,000 in any fiscal year;
(e) Indebtedness incurred in connection with leases
permitted pursuant to Section 8.10;
(f) any refinancing, extension, renewal or refunding of any
Indebtedness under clause (c) above not involving an increase in the principal
amount thereof or a reduction of more than 10% in the remaining weighted average
life to maturity thereof (computed in accordance with standard financial
practice); and
(g) Indebtedness of the Company to any Subsidiary Guarantor
and Indebtedness of any Wholly-Owned Subsidiary to the Company or to another
Wholly-Owned Subsidiary, in each case to the extent permitted by Section
8.04(c).
8.06 Transactions with Affiliates. The Company shall not, and shall
not suffer or permit any Subsidiary to, enter into any transaction with any
Affiliate of the Company except upon prudent and reasonable business terms.
8.07 Use of Proceeds. The Company shall not, and shall not suffer or
permit any Subsidiary to, use any portion of the Loan proceeds, directly or
indirectly, (a) to purchase or carry Margin Stock, (b) to repay or otherwise
refinance indebtedness of the Company or others incurred to purchase or carry
Margin Stock, (c) to extend credit for the purpose of purchasing or carrying any
Margin Stock, or (d) to acquire any security in any transaction that is subject
to Section 13 or 14 of the Exchange Act unless, prior to the time such
transaction becomes subject to Section 13 or 14, the board of directors or other
applicable governing body of the Person that is the issuer of such securities
has adopted a resolution approving such transaction.
8.08 Contingent Obligations. The Company shall not, and shall not
suffer or permit any Subsidiary to, create, incur, assume or suffer to exist any
Contingent Obligations except:
(a) endorsements for collection or deposit in the ordinary
course of business;
(b) Permitted Swap Obligations;
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(c) Contingent Obligations of the Company and its
Subsidiaries existing as of the Closing Date and listed in Schedule 8.08 to the
Disclosure Letter;
(d) Contingent Obligations with respect to Surety
Instruments incurred in the ordinary course of business in the aggregate in
respect of the Company and its Subsidiaries together; and
(e) Contingent Obligations incurred with respect to
manufacturers of apparel for sale by the Company or any of its Subsidiaries to
enable such manufacturer to purchase supplies to manufacture such apparel and
not at any time exceeding $500,000 in total amount outstanding for all such
Contingent Obligations and all loans and advances of the type described in
Section 8.04(k).
8.09 Joint Ventures. The Company shall not, and shall not suffer or
permit any Subsidiary to enter into any Joint Venture, other than in the
ordinary course of business.
8.10 Operating Lease Obligations. The Company shall not, and shall
not suffer or permit any Subsidiary to, create or suffer to exist any
obligations for the payment of rent for any property under an operating lease or
an agreement to enter into an operating lease, except for:
(a) leases of the Company and of Subsidiaries in existence
on the Closing Date and any renewal or extension thereof; and
(b) operating leases entered into by the Company or any
Subsidiary after the Closing Date in the ordinary course of business, including
leases for retail selling venues, distribution centers, and office space.
8.11 Restricted Payments. The Company shall not, and shall not suffer
or permit any Subsidiary to, declare or make any dividend payment or other
distribution of assets, properties, cash, rights, obligations or securities on
account of any shares of any class of its capital stock, or purchase, redeem or
otherwise acquire for value any shares of its capital stock or any warrants,
rights or options to acquire such shares, now or hereafter outstanding; except
that the Company and any Wholly-Owned Subsidiary may:
(a) declare and make dividend payments or other
distributions payable solely in its common stock;
(b) purchase, redeem or otherwise acquire shares of its
common stock or warrants or options to acquire any such shares (i) with the
proceeds received from the substantially concurrent issue of new shares of its
common stock or (ii) in connection with employee benefit or executive
compensation plans approved by the Company's Board of Directors; and
(c) purchase, redeem or otherwise acquire shares of its
capital stock or warrants, rights or options to acquire any such shares for
cash; provided that (i) the total of all payments do
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not exceed $3,000,000 in any fiscal year and (ii) immediately after giving
effect to such proposed action, no Default would exist.
8.12 ERISA. The Company shall not, and shall not suffer or permit any
of its ERISA Affiliates to: (a) engage in a prohibited transaction or violation
of the fiduciary responsibility rules with respect to any Plan; or (b) engage in
a transaction that could be subject to Section 4069 or 4212(c) of ERISA.
8.13 Change in Business. The Company shall not, and shall not suffer
or permit any Subsidiary to, engage in any material line of business
substantially different from those lines of business carried on by the Company
and its Subsidiaries on the date hereof.
8.14 Accounting Changes. The Company shall not, and shall not suffer
or permit any Subsidiary to, make any significant change in accounting treatment
or reporting practices, except as required by GAAP, or change the fiscal year of
the Company or of any Subsidiary.
8.15 Liquidity Ratio. The Company shall not permit its Liquidity
Ratio to be less than (a) 0.50 to 1.00 at any time during the periods from
August 1, 1999 through November 30, 1999, or from April 1, 2000, through the
Revolving Termination Date or (b) 1.00 to 1.00 at any time during the period
from December 1, 1999, through March 31, 2000.
8.16 Tangible Net Worth. The Company shall not permit its Tangible
Net Worth to be less than: (a) $156,000,000 as at its July 31, 0000, xxxxxx
xxxxxxx xxx, (x) $158,000,000 as at its October 31, 1999, fiscal quarter end,
and (c) $168,000,000 as at its January 31, 2000, fiscal quarter end, and each
fiscal quarter end thereafter.
8.17 Capital Expenditures. Capital Expenditures shall not exceed (a)
$40,000,000 in the 1999 fiscal year and (b) $20,000,000 in the 2000 fiscal year.
8.18 Restrictive Agreements. The Company will not, and will not
permit any Subsidiary of the Company to, agree to restrict or otherwise limit or
condition (a) the payment of dividends by any Subsidiary of the Company to the
Company or to a Wholly-Owned Subsidiary of the Company, or (b) the grant of
Liens by the Company or any Subsidiary of the Company to secure the Obligations.
ARTICLE IX EVENTS OF DEFAULT
9.01 Event of Default. Any of the following shall constitute an
"Event of Default":
(a) Non-Payment. The Company fails to pay, within 10 days
after the same becomes due, any principal, interest, fee or any other amount
payable hereunder or under any other Loan Document; or
(b) Representation or Warranty. Any representation or
warranty by the Company or any Subsidiary made or deemed made herein, in any
other Loan Document, or which is
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contained in any certificate, document or financial or other statement by the
Company, any Subsidiary, or any Responsible Officer, furnished at any time under
this Agreement, or in or under any other Loan Document, is incorrect in any
material respect on or as of the date made or deemed made; or
(c) Specific Defaults. The Company fails to perform or
observe any term, covenant or agreement (i) contained in Article VIII or (ii)
contained in any of Sections 7.01, 7.02, 7.03, 7.04, or 7.12, for 10 days after
notice thereof has been given to the Company by the Agent at the request of any
Bank; or
(d) Other Defaults. The Company or any Subsidiary party
thereto fails to perform or observe any other term or covenant contained in this
Agreement or any other Loan Document, and such default shall continue unremedied
for a period of 30 days after the earlier of (i) the date upon which a
Responsible Officer knew or reasonably should have known of such failure or (ii)
the date upon which written notice thereof is given to the Company by the Agent
at the request of any Bank; or
(e) Cross-Default. The Company or any Subsidiary (i) fails
to make any payment in respect of any Indebtedness or Contingent Obligation,
having an aggregate principal amount (including undrawn committed or available
amounts and including amounts owing to all creditors under any combined or
syndicated credit arrangement) of more than $1,000,000 when due (whether by
scheduled maturity, required prepayment, acceleration, demand, or otherwise) and
such failure continues after the applicable grace or notice period, if any,
specified in the relevant document on the date of such failure; or (ii) fails to
perform or observe any other condition or covenant, or any other event shall
occur or condition exist, under any agreement or instrument relating to any such
Indebtedness or Contingent Obligation, and such failure continues after the
applicable grace or notice period, if any, specified in the relevant document on
the date of such failure if the effect of such failure, event or condition is to
cause, or to permit the holder or holders of such Indebtedness or beneficiary or
beneficiaries of such Indebtedness (or a trustee or agent on behalf of such
holder or holders or beneficiary or beneficiaries) to cause such Indebtedness to
be declared to be due and payable prior to its stated maturity, or such
Contingent Obligation to become payable or cash collateral in respect thereof to
be demanded; or
(f) Insolvency; Voluntary Proceedings. The Company or any
Subsidiary (i) ceases or fails to be solvent, or generally fails to pay, or
admits in writing its inability to pay, its debts as they become due, subject to
applicable grace periods, if any, whether at stated maturity or otherwise; (ii)
voluntarily ceases to conduct its business in the ordinary course; (iii)
commences any Insolvency Proceeding with respect to itself; or (iv) takes any
action to effectuate or authorize any of the foregoing; or
(g) Involuntary Proceedings. (i) Any involuntary Insolvency
Proceeding is commenced or filed against the Company or any Subsidiary, or any
writ, judgment, warrant of attachment, execution or similar process, is issued
or levied against a substantial part of the Company's or any Subsidiary's
properties, and any such proceeding or petition shall not be dismissed, or such
writ, judgment, warrant of attachment, execution or similar process shall not
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be released, vacated or fully bonded within 60 days after commencement, filing
or levy; (ii) the Company or any Subsidiary admits the material allegations of a
petition against it in any Insolvency Proceeding, or an order for relief (or
similar order under non-U.S. law) is ordered in any Insolvency Proceeding; or
(iii) the Company or any Subsidiary acquiesces in the appointment of a receiver,
trustee, custodian, conservator, liquidator, mortgagee in possession (or agent
therefor), or other similar Person for itself or a substantial portion of its
property or business; or
(h) ERISA. (i) An ERISA Event shall occur with respect to a
Pension Plan or Multiemployer Plan which has resulted or could reasonably be
expected to result in liability of the Company under Title IV of ERISA to the
Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess of
$1,000,000; (ii) the aggregate amount of Unfunded Pension Liability among all
Pension Plans at any time exceeds $1,000,000; or (iii) the Company or any ERISA
Affiliate shall fail to pay when due, after the expiration of any applicable
grace period, any installment payment with respect to its withdrawal liability
under Section 4201 of ERISA under a Multiemployer Plan in an aggregate amount in
excess of $1,000,000, unless in the case of (i), (ii), or (iii) the Majority
Banks determine that such event or condition does not constitute, and cannot
result in, a Material Adverse Change; or
(i) Monetary Judgment. One or more non-interlocutory
judgments, non-interlocutory orders, decrees or arbitration awards is entered
against the Company or any Subsidiary involving in the aggregate a liability (to
the extent not covered by independent third-party insurance as to which the
insurer does not dispute coverage) as to any single or related series of
transactions, incidents or conditions, of $1,000,000 or more, and the same shall
remain unsatisfied, unvacated and unstayed pending appeal for a period of 10
days after the entry thereof, unless the Majority Banks determine that any such
non-interlocutory judgments, non-interlocutory orders, decrees or arbitration
awards, taken together, do not constitute, and cannot result in, a Material
Adverse Change; or
(j) Non-Monetary Judgments. Any non-monetary judgment, order
or decree is entered against the Company or any Subsidiary which does or would
reasonably be expected to have a Material Adverse Effect, and there shall be any
period of 10 consecutive days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise, shall not be in
effect; or
(k) Change of Control. There occurs any Change of Control;
or
(l) Guarantor Defaults. Any Guarantor fails in any material
respect to perform or observe any term, covenant or agreement in any Guaranty;
or any Guaranty is for any reason partially (including with respect to future
advances) or wholly revoked or invalidated, or otherwise ceases to be in full
force and effect, or any Guarantor or any other Person contests in any manner
the validity or enforceability thereof or denies that it has any further
liability or obligation thereunder; or any event described at subsections (f) or
(g) of this Section occurs with respect to any Guarantor.
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9.02 Remedies. If any Event of Default occurs, the Agent shall, at
the request of, or may, with the consent of, the Majority Banks,
(a) declare the Commitments and L/C Commitment to be
terminated, whereupon such commitments shall be terminated;
(b) declare an amount equal to the maximum aggregate amount
that is or at any time thereafter may become available for drawing under any
outstanding Letters of Credit (whether or not any beneficiary shall have
presented, or shall be entitled at such time to present, the drafts or other
documents required to draw under such Letters of Credit) to be immediately due
and payable, and declare the unpaid principal amount of all outstanding Loans,
all interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan Document to be immediately due and payable,
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived by the Company; and
(c) exercise on behalf of itself and the Banks all rights
and remedies available to it and the Banks under the Loan Documents or
applicable law;
provided that upon the occurrence of any event specified in subsection (f) or
(g) of Section 9.01 (in the case of clause (i) of subsection (g) upon the
expiration of the 60-day period mentioned therein), the obligation of each Bank
to make Loans and any obligation of the Issuing Bank to Issue Letters of Credit
shall automatically terminate and the unpaid principal amount of all outstanding
Loans and all interest and other amounts as aforesaid shall automatically become
due and payable without further act of the Agent, Issuing Bank or any Bank.
9.03 Rights Not Exclusive. The rights provided for in this Agreement
and the other Loan Documents are cumulative and are not exclusive of any other
rights, powers, privileges or remedies provided by law or in equity, or under
any other instrument, document or agreement now existing or hereafter arising.
ARTICLE X THE AGENT
10.01 Appointment and Authorization; "Agent". (a) Each Bank hereby
irrevocably (subject to Section 10.09) appoints, designates and authorizes the
Agent to take such action on its behalf under the provisions of this Agreement
and each other Loan Document and to exercise such powers and perform such duties
as are expressly delegated to it by the terms of this Agreement or any other
Loan Document, together with such powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained elsewhere in this
Agreement or in any other Loan Document, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein, nor shall the Agent
have or be deemed to have any fiduciary relationship with any Bank, 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 Agent. Without limiting the generality of the
foregoing sentence, the use of the term "agent" in this Agreement with reference
to the Agent is not intended to connote
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any fiduciary or other implied (or express) obligations arising under agency
doctrine of any applicable law. Instead, such term is used merely as a matter of
market custom, and is intended to create or reflect only an administrative
relationship between independent contracting parties.
(b) The Issuing Bank shall act on behalf of the Banks with
respect to any Letters of Credit Issued by it and the documents associated
therewith until such time and except for so long as the Agent may agree at the
request of the Majority Lenders to act for such Issuing Bank with respect
thereto; provided that the Issuing Bank shall have all of the benefits and
immunities (i) provided to the Agent in this Article X with respect to any acts
taken or omissions suffered by the Issuing Bank in connection with Letters of
Credit Issued by it or proposed to be Issued by it and the application and
agreements for letters of credit pertaining to the Letters of Credit as fully as
if the term "Agent", as used in this Article X, included the Issuing Bank with
respect to such acts or omissions, and (ii) as additionally provided in this
Agreement with respect to the Issuing Bank.
10.02 Delegation of Duties. The Agent may execute any of its duties
under this Agreement or any other Loan Document by or through agents, employees
or attorneys-in-fact, and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects with
reasonable care.
10.03 Liability of Agent. None of the Agent-Related Persons shall (i)
be liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct),
or (ii) be responsible in any manner to any of the Banks for any recital,
statement, representation or warranty made by the Company or any Subsidiary or
Affiliate of the Company, or any officer thereof, contained in this Agreement or
in any other Loan Document, or in any certificate, report, statement or other
document referred to or provided for in, or received by the Agent under or in
connection with, this Agreement or any other Loan Document, or the validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document, or for any failure of the Company or any other party to
any Loan Document to perform its obligations hereunder or thereunder. No
Agent-Related Person shall be under any obligation to any Bank 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 the Company or any of the Company's
Subsidiaries or Affiliates.
10.04 Reliance by Agent. (a) The Agent shall be entitled to rely, and
shall be fully protected in relying, upon any writing, resolution, notice,
consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone
message, statement or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons, and upon advice and statements of legal counsel (including counsel
to the Company), independent accountants and other experts selected by the
Agent. The 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 Majority Banks as it
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deems appropriate and, if it so requests, it shall first be indemnified to its
satisfaction by the Banks 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
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement or any other Loan Document in accordance with a
request or consent of the Majority Banks and such request and any action taken
or failure to act pursuant thereto shall be binding upon all of the Banks.
(b) For purposes of determining compliance with the
conditions specified in Section 5.01, each Bank that has executed this Agreement
shall be deemed to have consented to, approved or accepted or to be satisfied
with, each document or other matter either sent by the Agent to such Bank for
consent, approval, acceptance or satisfaction, or required thereunder to be
consented to or approved by or acceptable or satisfactory to the Bank.
10.05 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default, except with respect to
defaults in the payment of principal, interest and fees required to be paid to
the Agent for the account of the Banks, unless the Agent shall have received
written notice from a Bank or the Company referring to this Agreement,
describing such Default and stating that such notice is a "notice of default".
The Agent will notify the Banks of its receipt of any such notice. The Agent
shall take such action with respect to such Default as may be requested by the
Majority Banks in accordance with Article IX; provided that unless and until the
Agent has received any such request, the Agent may (but shall not be obligated
to) take such action, or refrain from taking such action, with respect to such
Default as it shall deem advisable or in the best interest of the Banks.
10.06 Credit Decision. Each Bank acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that no
act by the Agent hereinafter taken, including any review of the affairs of the
Company and its Subsidiaries, shall be deemed to constitute any representation
or warranty by any Agent-Related Person to any Bank. Each Bank represents to the
Agent that it has, independently and without reliance upon any Agent-Related
Person and based on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business, prospects,
operations, property, financial and other condition and creditworthiness of the
Company and its Subsidiaries, and all applicable bank regulatory laws relating
to the transactions contemplated hereby, and made its own decision to enter into
this Agreement and to extend credit to the Company and its Subsidiaries
hereunder. Each Bank also represents that it will, independently and without
reliance upon any Agent-Related Person and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigations as
it deems necessary to inform itself as to the business, prospects, operations,
property, financial and other condition and creditworthiness of the Company.
Except for notices, reports and other documents expressly herein required to be
furnished to the Banks by the Agent, the Agent shall not have any duty or
responsibility to provide any Bank with any credit or other information
concerning the business, prospects, operations, property, financial and other
condition or creditworthiness of the Company which may come into the possession
of any of the Agent-Related Persons.
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10.07 Indemnification of Agent. Whether or not the transactions
contemplated hereby are consummated, the Banks shall indemnify upon demand the
Agent-Related Persons (to the extent not reimbursed by or on behalf of the
Company and without limiting the obligation of the Company to do so), pro rata,
from and against any and all Indemnified Liabilities; provided that no Bank
shall be liable for the payment to the Agent-Related Persons of any portion of
such Indemnified Liabilities resulting solely from such Person's gross
negligence or willful misconduct. Without limitation of the foregoing, each Bank
shall reimburse the Agent upon demand for its ratable share of any costs or
out-of-pocket expenses (including Attorney Costs) incurred by the Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any document
contemplated by or referred to herein, to the extent that the Agent is not
reimbursed for such expenses by or on behalf of the Company. The undertaking in
this Section shall survive the payment of all Obligations hereunder and the
resignation or replacement of the Agent.
10.08 Agent in Individual Capacity. Bank of America and its Affiliates
may make loans to, issue letters of credit for the account of, accept deposits
from, acquire equity interests in and generally engage in any kind of banking,
trust, financial advisory, underwriting or other business with the Company and
its Subsidiaries and Affiliates as though Bank of America were not the Agent
hereunder and without notice to or consent of the Banks. The Banks acknowledge
that, pursuant to such activities, Bank of America or its Affiliates may receive
information regarding the Company or its Affiliates (including information that
may be subject to confidentiality obligations in favor of the Company or such
Subsidiary) and acknowledge that the Agent shall be under no obligation to
provide such information to them. With respect to its Loans, Bank of America
shall have the same rights and powers under this Agreement as any other Bank and
may exercise the same as though it were not the Agent or Issuing Bank, and the
terms "Bank" and "Banks" include Bank of America in its individual capacity as a
Bank.
10.09 Successor Agent. The Agent may, and at the request of the
Majority Banks shall, resign as Agent upon 30 days' notice to the Banks. If the
Agent resigns under this Agreement, the Majority Banks shall appoint from among
the Banks a successor agent for the Banks. If no successor agent is appointed
prior to the effective date of the resignation of the Agent, the Agent may
appoint, after consulting with the Banks and the Company, a successor agent from
among the Banks. Upon the acceptance of its appointment as successor agent
hereunder, such successor agent shall succeed to all the rights, powers and
duties of the retiring Agent and the term "Agent" shall mean such successor
agent and the retiring Agent's appointment, powers and duties as Agent shall be
terminated. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Article X and Sections 11.04 and 11.05 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent
under this Agreement. If no successor agent has accepted appointment as Agent by
the date which is 30 days following a retiring Agent's notice of resignation,
the retiring Agent's resignation shall nevertheless thereupon become effective
and the Banks shall perform all of the duties of the Agent hereunder until such
time, if any, as the Majority Banks appoint a successor agent as provided for
above. Notwithstanding the foregoing, however, Bank of America may not be
removed as the Agent at
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the request of the Majority Banks unless Bank of America shall also
simultaneously be replaced as Issuing Bank hereunder pursuant to documentation
in form and substance reasonably satisfactory to Bank of America.
10.10 Withholding Tax. (a) If any Bank is a "foreign corporation,
partnership or trust" within the meaning of the IRC and such Bank claims
exemption from, or a reduction of, U.S. withholding tax under Sections 1441 or
1442 of the IRC, such Bank agrees with and in favor of the Agent, to deliver to
the Agent:
(i) if such Bank claims an exemption from, or a
reduction of, withholding tax under a United States tax treaty, two
properly completed and executed copies of IRS Form 1001 before the
payment of any interest in the first calendar year and before the
payment of any interest in each third succeeding calendar year during
which interest may be paid under this Agreement;
(ii) if such Bank claims that interest paid under
this Agreement is exempt from United States withholding tax because it
is effectively connected with a United States trade or business of such
Bank, two properly completed and executed copies of IRS Form 4224 before
the payment of any interest is due in the first taxable year of such
Bank and in each succeeding taxable year of such Bank during which
interest may be paid under this Agreement; and
(iii) such other form or forms as may be required
under the IRC or other laws of the United States as a condition to
exemption from, or reduction of, United States withholding tax.
Such Bank agrees to promptly notify the Agent of any change in
circumstances which would modify or render invalid any claimed exemption or
reduction.
(b) If any Bank claims exemption from, or reduction of,
withholding tax under a United States tax treaty by providing IRS Form 1001 and
such Bank sells, assigns, grants a participation in, or otherwise transfers all
or part of the Obligations of the Company to such Bank, such Bank agrees to
notify the Agent of the percentage amount in which it is no longer the
beneficial owner of Obligations of the Company to such Bank. To the extent of
such percentage amount, the Agent will treat such Bank's IRS Form 1001 as no
longer valid.
(c) If any Bank claiming exemption from United States
withholding tax by filing IRS Form 4224 with the Agent sells, assigns, grants a
participation in, or otherwise transfers all or part of the Obligations of the
Company to such Bank, such Bank agrees to undertake sole responsibility for
complying with the withholding tax requirements imposed by Sections 1441 and
1442 of the IRC.
(d) If any Bank is entitled to a reduction in the applicable
withholding tax, the Agent may withhold from any interest payment to such Bank
an amount equivalent to the applicable withholding tax after taking into account
such reduction. However, if the forms or
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other documentation required by subsection (a) of this Section are not delivered
to the Agent, then the Agent may withhold from any interest payment to such Bank
not providing such forms or other documentation an amount equivalent to the
applicable withholding tax imposed by Sections 1441 and 1442 of the IRC, without
reduction.
(e) If the IRS or any other Governmental Authority of the
United States or other jurisdiction asserts a claim that the Agent did not
properly withhold tax from amounts paid to or for the account of any Bank
(because the appropriate form was not delivered or was not properly executed, or
because such Bank failed to notify the Agent of a change in circumstances which
rendered the exemption from, or reduction of, withholding tax ineffective, or
for any other reason) such Bank shall indemnify the Agent fully for all amounts
paid, directly or indirectly, by the Agent as tax or otherwise, including
penalties and interest, and including any taxes imposed by any jurisdiction on
the amounts payable to the Agent under this Section, together with all costs and
expenses (including Attorney Costs). The obligation of the Banks under this
subsection shall survive the payment of all Obligations and the resignation or
replacement of the Agent.
ARTICLE XI MISCELLANEOUS
11.01 Amendments and Waivers. No amendment or waiver of any provision
of this Agreement or any other Loan Document, and no consent with respect to any
departure by the Company or any applicable Subsidiary therefrom, shall be
effective unless the same shall be in writing and signed by the Majority Banks
(or by the Agent at the written request of the Majority Banks) and the Company
and acknowledged by the Agent, and then any such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided that no such waiver, amendment, or consent shall, unless in
writing and signed by all the Banks and the Company and acknowledged by the
Agent, do any of the following:
(a) increase or extend the Commitment of any Bank (or
reinstate any Commitment terminated pursuant to Section 9.02);
(b) postpone or delay any date fixed by this Agreement or
any other Loan Document for any payment of principal, interest, fees or other
amounts due to the Banks (or any of them) hereunder or under any other Loan
Document;
(c) reduce the principal of, or the rate of interest
specified herein on any Loan, or (subject to clause (ii) below) any fees or
other amounts payable hereunder or under any other Loan Document;
(d) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Loans which is required for the Banks
or any of them to take any action hereunder; or
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(e) amend this Section, or Section 2.13, or any provision
herein providing for consent or other action by all Banks;
and, provided further that (i) no amendment, waiver or consent shall, unless in
writing and signed by the Issuing Bank in addition to the Majority Banks or all
the Banks, as the case may be, affect the rights or duties of the Issuing Bank
under this Agreement or any L/C-Related Document relating to any Letter of
Credit Issued or to be Issued by it, (ii) no amendment, waiver or consent shall,
unless in writing and signed by the Agent in addition to the Majority Banks or
all the Banks, as the case may be, affect the rights or duties of the Agent
under this Agreement or any other Loan Document, and (iii) the Fee Letters may
be amended, or rights or privileges thereunder waived, in a writing executed by
the parties thereto.
11.02 Notices. (a) All notices, requests, consents, approvals, waivers
and other communications shall be in writing (including, unless the context
expressly otherwise provides, by facsimile transmission, provided that any
matter transmitted by the Company by facsimile (i) shall be immediately
confirmed by a telephone call to the recipient at the number specified on
Schedule 11.02, and (ii) shall be followed promptly by delivery of a hard copy
original thereof) and mailed, faxed or delivered, to the address or facsimile
number specified for notices on Schedule 11.02; or, as directed to the Company
or the Agent, to such other address as shall be designated by such party in a
written notice to the other parties, and as directed to any other party, at such
other address as shall be designated by such party in a written notice to the
Company and the Agent.
(b) All such notices, requests and communications shall,
when transmitted by overnight delivery, or faxed, be effective when delivered
for overnight (next-day) delivery, or transmitted in legible form by facsimile
machine, respectively, or if mailed, upon the third Business Day after the date
deposited into the U.S. mail certified or registered mail, return receipt
requested, or if delivered, upon delivery; except that notices pursuant to
Article II, III, or X to the Agent shall not be effective until actually
received by the Agent and notices pursuant to Article III to the Issuing Bank
shall not be effective until actually received by the Issuing Bank at the
address specified for the "Issuing Bank" on the applicable signature page
hereof.
(c) Any agreement of the Agent and the Banks herein to
receive certain notices by telephone or facsimile is solely for the convenience
and at the request of the Company. The Agent and the Banks shall be entitled to
rely on the authority of any Person purporting to be a Person authorized by the
Company to give such notice and the Agent and the Banks shall not have any
liability to the Company or other Person on account of any action taken or not
taken by the Agent or the Banks in reliance upon such telephonic or facsimile
notice. The obligation of the Company to repay the Loans and L/C Obligations
shall not be affected in any way or to any extent by any failure by the Agent
and the Banks to receive written confirmation of any telephonic or facsimile
notice or the receipt by the Agent and the Banks of a confirmation which is at
variance with the terms understood by the Agent and the Banks to be contained in
the telephonic or facsimile notice.
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11.03 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the Agent or any Bank, any right, remedy,
power or privilege hereunder, 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.
11.04 Costs and Expenses. The Company shall:
(a) whether or not the transactions contemplated hereby are
consummated, pay or reimburse Bank of America (including in its capacity as
Agent and Issuing Bank ) within five Business Days after demand (subject to
subsection 5.01(f)) for all reasonable costs and expenses incurred by Bank of
America (including in its capacity as Agent and Issuing Bank) in connection with
the development, preparation, delivery, administration and execution of, and any
amendment, supplement, waiver or modification to (in each case, whether or not
consummated), this Agreement, any Loan Document and any other documents prepared
in connection herewith or therewith, and the consummation of the transactions
contemplated hereby and thereby, including reasonable Attorney Costs incurred by
Bank of America (including in its capacity as Agent and Issuing Bank) with
respect thereto; and
(b) pay or reimburse the Agent and each Bank within five
Business Days after demand (subject to subsection 5.01(f)) for all costs and
expenses (including Attorney Costs) incurred by them in connection with the
enforcement, attempted enforcement, or preservation of any rights or remedies
under this Agreement or any other Loan Document during the existence of an Event
of Default or after acceleration of the Loans (including in connection with any
"workout" or restructuring regarding the Loans, and including in any Insolvency
Proceeding or appellate proceeding).
11.05 Company Indemnification. Whether or not the transactions
contemplated hereby are consummated, the Company shall indemnify, defend and
hold the Agent-Related Persons, and each Bank and each of its respective
officers, directors, employees, counsel, agents and attorneys-in-fact (each, an
"Indemnified Person") harmless from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
charges, expenses and disbursements (including Attorney Costs) of any kind or
nature whatsoever which may at any time (including at any time following
repayment of the Loans, the termination of the Letter of Credit and the
termination, resignation or replacement of the Agent or replacement of any Bank)
be imposed on, incurred by or asserted against any such Person in any way
relating to or arising out of this Agreement or any document contemplated by or
referred to herein, or the transactions contemplated hereby, or any action taken
or omitted by any such Person under or in connection with any of the foregoing,
including with respect to any investigation, litigation or proceeding (including
any Insolvency Proceeding or appellate proceeding) related to or arising out of
this Agreement or the Loans or Letters of Credit or the use of the proceeds
thereof, whether or not any Indemnified Person is a party thereto (all the
foregoing, collectively, the "Indemnified Liabilities"); provided that the
Company shall have no obligation hereunder to any Indemnified Person with
respect to Indemnified Liabilities resulting solely from the gross
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negligence or willful misconduct of such Indemnified Person. The agreements in
this Section shall survive payment of all other Obligations.
11.06 Payments Set Aside. To the extent that the Company makes a
payment to the Agent or the Banks, or the Agent or the Banks exercise their
right of set-off, and such payment or the proceeds of such set-off or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential,
set aside or required (including pursuant to any settlement entered into by the
Agent or such Bank in its discretion) to be repaid to a trustee, receiver or any
other party, in connection with any Insolvency Proceeding or otherwise, then (a)
to the extent of such recovery the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such set-off had not occurred, and (b)
each Bank severally agrees to pay to the Agent upon demand its pro rata share of
any amount so recovered from or repaid by the Agent.
11.07 Successors and Assigns. The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, except that the Company may not
assign or transfer any of its rights or obligations under this Agreement without
the prior written consent of the Agent and each Bank.
11.08 Assignments, Participations, etc. (a) Each Bank may assign to
one or more Eligible Assignees all or a portion of its rights and obligations
under this Agreement (including, without limitation, all or a portion of its
Loans, its Note, and its Commitment); provided that
(i) each such assignment shall be to an Eligible Assignee;
(ii) except in the case of an assignment to another Bank or
an assignment of all of a Bank's rights and obligations under this Agreement,
any such partial assignment shall be in an amount at least equal to $5,000,000
or an integral multiple of $1,000,000 in excess thereof;
(iii) each such assignment by a Bank shall be of a constant,
and not varying, percentage of all of its rights and obligations under this
Agreement and the Note; and
(iv) the parties to such assignment shall execute and deliver
to the Agent for its acceptance an Assignment and Acceptance in the form of
Exhibit E hereto, together with any Note subject to such assignment and a
processing fee of $3,500.
Upon execution, delivery, and acceptance of such Assignment and Acceptance, the
assignee thereunder shall be a party hereto and, to the extent of such
assignment, have the obligations, rights, and benefits of a Bank hereunder and
the assigning Bank shall, to the extent of such assignment, relinquish its
rights and be released from its obligations under this Agreement. Upon the
consummation of any assignment pursuant to this Section, the assignor, the Agent
and the Company shall make appropriate arrangements so that if required, new
Notes are issued to the assignor and the assignee. If the assignee is not
incorporated under the laws of the United States of America or a state thereof,
it shall deliver to the Company and the Agent certification as to exemption from
deduction or withholding of Taxes in accordance with Section 10.10.
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(b) The Agent shall maintain at its address referred to in Section
11.02 a copy of each Assignment and Acceptance delivered to and accepted by it
and a register for the recordation of the names and addresses of the Banks and
the Commitment of, and principal amount of the Loans owing to, each Bank from
time to time (the "Register"). The entries in the Register shall be conclusive
and binding for all purposes, absent manifest error, and the Company, the Agent
and the Banks may treat each Person whose name is recorded in the Register as a
Bank hereunder for all purposes of this Agreement. The Register shall be
available for inspection by the Company or any Bank at any reasonable time and
from time to time upon reasonable prior notice.
(c) Upon its receipt of an Assignment and Acceptance executed by the
parties thereto, together with any Note subject to such assignment and payment
of the processing fee, the Agent shall, if such Assignment and Acceptance has
been completed and is in substantially the form of Exhibit E hereto, (i) accept
such Assignment and Acceptance, (ii) record the information contained therein in
the Register and (iii) give prompt notice thereof to the parties thereto.
(d) Each Bank may sell participations to one or more Persons in all
or a portion of its rights and obligations under this Agreement (including all
or a portion of its Commitment and its Loans); provided that (i) such Bank's
obligations under this Agreement shall remain unchanged, (ii) such Bank shall
remain solely responsible to the other parties hereto for the performance of
such obligations, (iii) the participant shall be entitled to the benefit of the
yield protection provisions contained in Article IV and the right of set-off
contained in Section 11.10, and (iv) the Company shall continue to deal solely
and directly with such Bank in connection with such Bank's rights and
obligations under this Agreement, and such Bank shall retain the sole right to
enforce the obligations of the Company relating to its Loans and its Note and to
approve any amendment, modification, or waiver of any provision of this
Agreement (other than amendments, modifications, or waivers decreasing the
amount of principal of or the rate at which interest is payable on such Loans or
Note, extending any scheduled principal payment date or date fixed for the
payment of interest on such Loans or Note, or extending its Commitment).
(e) Notwithstanding any other provision set forth in this Agreement,
any Bank may at any time assign and pledge all or any portion of its Loans and
its Note to any Federal Reserve Bank as collateral security pursuant to
Regulation A and any Operating Circular issued by such Federal Reserve Bank. No
such assignment shall release the assigning Bank from its obligations hereunder.
(f) Any Bank may furnish any information concerning the Company or
any of its Subsidiaries in the possession of such Bank from time to time to
assignees and participants (including prospective assignees and participants),
subject, however, to the provisions of Section 11.09.
11.09 Confidentiality. Each Bank agrees to take and to cause its
Affiliates to take normal and reasonable precautions and exercise due care to
maintain the confidentiality of all information either identified as
"confidential" or "secret" by the Company, or known in fact by such Bank to be
confidential, and provided to it by the Company or any Subsidiary, or by the
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Agent on the Company's or such Subsidiary's behalf, under this Agreement or any
other Loan Document, and neither it nor any of its Affiliates shall use any such
information other than in connection with or in enforcement of this Agreement
and the other Loan Documents or in connection with other business now or
hereafter existing or contemplated with the Company or any Subsidiary; except to
the extent such information (i) was or becomes generally available to the public
other than as a result of disclosure by the Bank, or (ii) was or becomes
available on a non-confidential basis from a source other than the Company,
provided that such source is not bound by a confidentiality agreement with the
Company known to the Bank; provided that any Bank may disclose such information
(A) at the request or pursuant to any requirement of any Governmental Authority
to which the Bank is subject or in connection with an examination of such Bank
by any such authority; (B) pursuant to subpoena or other court process; (C) when
required to do so in accordance with the provisions of any applicable
Requirement of Law; (D) to the extent reasonably required in connection with any
litigation or proceeding to which the Agent, any Bank or their respective
Affiliates may be party; (E) to the extent reasonably required in connection
with the exercise of any remedy hereunder or under any other Loan Document; (F)
to such Bank's independent auditors and other professional advisors; (G) to any
participant or Assignee, actual or potential, provided that such Person agrees
in writing to keep such information confidential to the same extent required of
the Banks hereunder; (H) as to any Bank or its Affiliate, as expressly permitted
under the terms of any other document or agreement regarding confidentiality to
which the Company or any Subsidiary is party or is deemed party with such Bank
or such Affiliate; and (I) to its Affiliates.
11.10 Set-off. In addition to any rights and remedies of the Banks
provided by law, if an Event of Default exists or the Loans have been
accelerated, each Bank is authorized at any time and from time to time, without
prior notice to the Company, any such notice being waived by the Company to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held by,
and other indebtedness at any time owing by, such Bank to or for the credit or
the account of the Company against any and all Obligations owing to such Bank,
now or hereafter existing, irrespective of whether or not the Agent or such Bank
shall have made demand under this Agreement or any Loan Document and although
such Obligations may be contingent or unmatured. Each Bank agrees promptly to
notify the Company and the Agent after any such set-off and application made by
such Bank; provided that the failure to give such notice shall not affect the
validity of such set-off and application or affect any rights and remedies of
the Company with respect thereto.
11.11 Automatic Debits of Fees. With respect to any commitment fee,
arrangement fee, letter of credit fee, or other fee, or any other cost or
expense (including Attorney Costs) due and payable to the Agent, Issuing Bank,
or Bank of America under the Loan Documents, the Company hereby irrevocably
authorizes Bank of America to debit any deposit account of the Company with Bank
of America in an amount such that the aggregate amount debited from all such
deposit accounts does not exceed such fee or other cost or expense. If there are
insufficient funds in such deposit accounts to cover the amount of the fee or
other cost or expense then due, such debits will be reversed (in whole or in
part, in Bank of America's sole discretion) and such amount not debited shall be
deemed to be unpaid. No such debit under this Section shall be deemed a set-off.
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11.12 Notification of Addresses, Lending Offices, Etc. Each Bank shall
notify the Agent in writing of any changes in the address to which notices to
the Bank should be directed, of addresses of any Lending Office, of payment
instructions in respect of all payments to be made to it hereunder and of such
other administrative information as the Agent shall reasonably request.
11.13 Counterparts. This Agreement may be executed in any number of
separate counterparts, each of which, when so executed, shall be deemed an
original, and all of said counterparts taken together shall be deemed to
constitute but one and the same instrument. Delivery of an executed counterpart
of the signature page to this Agreement by telecopier shall be effective as
delivery of a manually executed counterpart of this Agreement. Any party
delivering an executed counterpart of the signature page to this Agreement by
telecopier shall thereafter also promptly deliver a manually executed
counterpart of this Agreement, but the failure to deliver such manually executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Agreement.
11.14 Severability. The illegality or unenforceability of any
provision of this Agreement or any instrument or agreement required hereunder
shall not in any way affect or impair the legality or enforceability of the
remaining provisions of this Agreement or any instrument or agreement required
hereunder.
11.15 No Third Parties Benefitted. This Agreement is made and entered
into for the sole protection and legal benefit of the Company, the Banks, the
Agent and the Agent-Related Persons, and their permitted successors and assigns,
and no other Person shall be a direct or indirect legal beneficiary of, or have
any direct or indirect cause of action or claim in connection with, this
Agreement or any of the other Loan Documents.
11.16 Governing Law and Jurisdiction. (a) THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
CALIFORNIA; PROVIDED THAT THE AGENT AND THE BANKS SHALL RETAIN ALL RIGHTS
ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE
OF CALIFORNIA OR OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF CALIFORNIA,
AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE COMPANY, THE AGENT
AND THE BANKS CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE
NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE COMPANY, THE AGENT AND
THE BANKS IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE
LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY
NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH
JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. THE
COMPANY, THE AGENT AND THE BANKS EACH WAIVE PERSONAL SERVICE OF ANY
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SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS
PERMITTED BY CALIFORNIA LAW.
11.17 Waiver of Jury Trial. THE COMPANY, THE BANKS AND THE AGENT EACH
WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN
DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION,
PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST
ANY OTHER PARTY OR ANY AGENT-RELATED PERSON, PARTICIPANT OR ASSIGNEE, WHETHER
WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE COMPANY, THE
BANKS AND THE AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE
TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE
PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED
BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING
WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF
THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF.
THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
11.18 Joint and Several Liability of the Company and the Subsidiary
Co-Borrowers; Waiver of Certain Defenses.
(a) The Company acknowledges and agrees that its obligations
to pay all the Obligations under this Agreement is a direct, primary, separate,
and independent obligation, is not in whole or in part a surety relationship, is
absolute and unconditional, and is not dependent in whole or in part upon the
obligations of any Subsidiary Co-Borrower. The Company agrees that it is liable
to the Agent and the Banks for the entire amount of the Obligations, and that a
separate action may be brought against the Company whether such action is
brought against any Subsidiary Co-Borrower or any guarantor or whether any
Subsidiary Co-Borrower or any such guarantor is jointed in such action. The
Company agrees that its liability hereunder shall be immediate and shall not be
contingent upon the exercise or enforcement by the Agents or the Banks of
whatever remedies they may have against Subsidiary Co-Borrower or any guarantor,
or the enforcement of any lien or realization upon any security the Agent or the
Banks may at any time possess. The Company agrees that any release which may be
given by the Agent and the Banks to any Subsidiary Co-Borrower or any guarantor
shall not release the Company. The Company consents and agrees that the Agents
and the Banks shall be under no obligation to xxxxxxxx any assets of any
Subsidiary Co-Borrower or any guarantor in favor of the Company or against or in
payment of any or all of the Obligations.
(b) To the maximum extent permitted by applicable law, the
Company hereby waives, solely in respect of any claims or defenses which the
Company might otherwise have by
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reason of being determined to be a surety for or guarantor of the obligations of
the Subsidiary Co-Borrowers with respect to the Obligations:
(i) any rights to assert against the Agent or the Banks any
defense (legal or equitable), set-off, counterclaim, or claim which the
Company may now or at any time hereafter have against any Subsidiary
Co-Borrower;
(ii) any defense, set-off, counterclaim, or claim, or any
kind or nature, arising directly or indirectly from the present or
future lack of perfection, sufficiency, validity, or enforceability of
the Obligations or any security therefor or the legal liability of any
Subsidiary Co-Borrower therefor;
(iii) any defense arising by reason of any claim or defense
based upon an election of remedies by the Agent or the Banks, including
any defense based upon an election of remedies by the Agent or the Banks
under the provisions of Section 580d and 726 of the California Code of
Civil Procedure, or any similar law of California or any other
jurisdiction;
(iv) any defense based on any alteration, impairment or
release of the Obligations or any security therefor, whether or not
resulting from any act or failure to act by the Agent or the Banks; and
(v) any right to require the Agent or the Banks to institute
suit against any Subsidiary Co-Borrower or to exhaust any rights and
remedies which the Agent or the Banks has or may have against any
Subsidiary Co-Borrower;
(c) The Company consents and agrees that, without notice to
or by the Company and without affecting or impairing the obligations of the
Company hereunder, the Agent and the Banks may, by action or inaction,
compromise or settle, extend the period of duration or time for the payment, or
discharge the performance of, or may refuse to, or otherwise not enforce, or
may, by action or inaction, release all or any one or more parties to, any one
or more of the Loan Documents or may grant other indulgences to any Subsidiary
Co-Borrower in respect thereof, or may agree to amend or modify in any manner
and at any time (or from time to time) any one or more of the Loan Documents, or
may, by action or inaction, release or substitute any guarantor, if any, of the
Obligations, or may enforce, exchange, release, or waive, by action or inaction,
any security for the Obligations or any guaranty of the Obligations, or any
portion thereof.
11.19 Judgment. If, for the purposes of obtaining judgment in any
court, it is necessary to convert a sum due hereunder or any other Loan Document
in one currency into another currency, the rate of exchange used shall be that
at which in accordance with normal banking procedures the Agent could purchase
the first currency with such other currency on the Business Day preceding that
on which final judgment is given. The obligation of the Company in respect of
any such sum due from it to the Agent hereunder or under the other Loan
Documents shall, notwithstanding any judgment in a currency (the "Judgment
Currency") other than that in which
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such sum is denominated in accordance with the applicable provisions of this
Agreement (the "Agreement Currency"), be discharged only to the extent that on
the Business Day following receipt by the Agent of any sum adjudged to be so due
in the Judgment Currency, the Agent may in accordance with normal banking
procedures purchase the Agreement Currency with the Judgment Currency. If the
amount of the Agreement Currency so purchased is less than the sum originally
due to the Agent in the Agreement Currency, the Company agrees, as a separate
obligation and notwithstanding any such judgment, to indemnify the Agent or the
Person to whom such obligation was owing against such loss. If the amount of the
Agreement currency so purchased is greater than the sum originally due to the
Agent in such currency, the Agent agrees to return the amount of any excess to
the Company (or to any other Person who may be entitled thereto under applicable
law).
11.20 Entire Agreement. This Agreement, together with the other Loan
Documents, embodies the entire agreement and understanding among the Company,
the Banks and the Agent, and supersedes all prior or contemporaneous agreements
and understandings of such Persons, verbal or written, relating to the subject
matter hereof and thereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered in San Francisco, California, by their proper and
duly authorized officers as of the day and year first above written.
COMPANY: THE GYMBOREE CORPORATION
By /s/ F. Xxxxx Xxxxxxxx
--------------------------------------
Title: Vice President
----------------------------------
By
--------------------------------------
Title:
----------------------------------
AGENT: BANK OF AMERICA, N.A., as Agent
By /s/ Xxxxx X. Xxxxxx
--------------------------------------
Title: Vice President
----------------------------------
BANKS: BANK OF AMERICA, N.A., as a Bank and as
Issuing Bank
By /s/ Xxxxx X. Xxxxxx
--------------------------------------
Title: Vice President
----------------------------------
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Schedule 1.01 -- Pricing Schedule
----------------------------------------------------------------------------------------------
Fiscal Quarter ending Level I Period amount Level II Period amount
----------------------------------------------------------------------------------------------
07/31/1999 $173,000,000 $171,000,000
----------------------------------------------------------------------------------------------
10/31/1999 $176,000,000 $172,000,000
----------------------------------------------------------------------------------------------
01/31/2000 $187,000,000 $183,000,000
----------------------------------------------------------------------------------------------
04/30/2000 $191,000,000 $187,000,000
----------------------------------------------------------------------------------------------
07/31/2000 $191,000,000 $187,000,000
----------------------------------------------------------------------------------------------
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Schedule 2.01 -- Commitments
----------------------------------------------------------------------------------------------
Commitment during period
Commitment during period from January 1, 2000, Pro
from the Closing Date through the Revolving Rata
Bank through December 31, 1999 Termination Date Share
----------------------------------------------------------------------------------------------
Bank of America, N.A. $60,000,000 $50,000,000 100%
----------------------------------------------------------------------------------------------
Total $60,000,000 $50,000,000 100%
----------------------------------------------------------------------------------------------
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Schedule 11.02 -- Lending Offices; Addresses for Notices
BANK OF AMERICA, N.A., as Agent
Agency Management #10831
Attn: Xxxxxxx Xxxxxxx
0000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Tel: 000.000.0000
Fax: 000.000.0000
Agent's Payment Office:
Agency Administrative Services #5596
0000 Xxxxxxx Xxxxxxxxx, Xxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
BANK OF AMERICA, N.A., as a Bank
Domestic and Offshore Lending Office:
0000 Xxxxxxx Xxxxxxxxx, Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Notices (other than Borrowing notices and Notices of
Conversion/Continuation):
Attn: Xxxxx Xxxxxx
San Francisco Regional Commercial
Banking Office (#1499)
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Tel: 000.000.0000
Fax: 000.000.0000
